##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from
 Commission File Number 0-18277
 VICOR CORPORATION
  Delaware
    
    04-2742817(State of Incorporation)
    
    (I.R.S. Employer Identification No.)
 
 
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
  Common Stock, $.01 par value
    
    29,898,010Class B Common Stock, $.01 par value
    
    11,767,052




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##### 



PagePart I  Financial Information:Item 1 - Financial Statements (Unaudited)Condensed Consolidated Balance Sheets at September 30, 2009 and December 31, 2008
    
    
    1Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2009 and 2008
    
    
    2Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and 2008
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2 - Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3 - Quantitative and Qualitative Disclosures About Market Risk
    
    
    29Item 4 - Controls and Procedures
    
    
    29Part II  Other Information:Item 1 - Legal Proceedings
    
    
    31Item 1A  Risk Factors
    
    
    31Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    31Item 3 - Defaults Upon Senior Securities
    
    
    31Item 4 - Submission of Matters to a Vote of Security Holders
    
    
    31Item 5 - Other Information
    
    
    31Item 6  Exhibits
    
    
    31Signature(s)
    
    
    33EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO




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##### Table of Contents



Item 1.
Financial Statements
 September 30, 2009
    
    
    December 31, 2008AssetsCurrent assets:Cash and cash equivalents
    
    $
    35,895
    
    
    $
    22,639Restricted cash equivalents
    
    
    377
    
    
    
    176Short-term investments
    
    
    706
    
    
    
    1,773Accounts receivable, less allowance of $261 in 2009 and $300 in 2008
    
    
    27,838
    
    
    
    28,757Inventories, net
    
    
    22,190
    
    
    
    26,681Deferred tax assets
    
    
    451
    
    
    
    451Other current assets
    
    
    2,986
    
    
    
    2,279Total current assets
    
    
    90,443
    
    
    
    82,756Restricted cash and cash equivalents
    
    
    210
    
    
    
    561Long-term investments, net
    
    
    33,957
    
    
    
    33,735Auction rate securities rights
    
    
    1,428
    
    
    
    1,926Property, plant and equipment, net
    
    
    45,023
    
    
    
    48,254Other assets
    
    
    5,052
    
    
    
    4,690$
    176,113
    
    
    $
    171,922Liabilities and EquityCurrent liabilities:Accounts payable
    
    $
    6,625
    
    
    $
    5,592Accrued compensation and benefits
    
    
    6,269
    
    
    
    6,783Accrued expenses
    
    
    2,788
    
    
    
    3,073Accrued severance charges
    
    
    813
    
    
    
    -Income taxes payable
    
    
    -
    
    
    
    1,349Deferred revenue
    
    
    2,069
    
    
    
    662Total current liabilities
    
    
    18,564
    
    
    
    17,459Long-term deferred revenue
    
    
    1,300
    
    
    
    1,118Long-term income taxes payable
    
    
    280
    
    
    
    259Deferred income taxes
    
    
    1,649
    
    
    
    1,660Equity:Vicor Corporation stockholders equity:Class B Common Stock
    
    
    118
    
    
    
    118Common Stock
    
    
    384
    
    
    
    384Additional paid-in capital
    
    
    161,594
    
    
    
    161,089Retained earnings
    
    
    110,663
    
    
    
    110,174Accumulated other comprehensive loss
    
    
    (1,364
    )
    
    
    (2,767
    )Treasury stock, at cost
    
    
    (121,827
    )
    
    
    (121,827
    )Total Vicor Corporation stockholders equity
    
    
    149,568
    
    
    
    147,171Noncontrolling interest
    
    
    4,752
    
    
    
    4,255Total equity
    
    
    154,320
    
    
    
    151,426$
    176,113
    
    
    $
    171,922
  -1-




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net revenues
    
    $
    47,746
    
    
    $
    51,278
    
    
    $
    148,821
    
    
    $
    154,044Cost of revenues
    
    
    27,078
    
    
    
    29,375
    
    
    
    83,724
    
    
    
    88,568Gross margin
    
    
    20,668
    
    
    
    21,903
    
    
    
    65,097
    
    
    
    65,476Operating expenses:Selling, general and administrative
    
    
    11,625
    
    
    
    13,703
    
    
    
    36,467
    
    
    
    41,730Research and development
    
    
    7,831
    
    
    
    7,801
    
    
    
    23,193
    
    
    
    23,392Severance charges
    
    
    126
    
    
    
    -
    
    
    
    4,083
    
    
    
    -Gain from litigation-related and other settlements, net
    
    
    (846
    )
    
    
    -
    
    
    
    (846
    )
    
    
    (177
    )Total operating expenses
    
    
    18,736
    
    
    
    21,504
    
    
    
    62,897
    
    
    
    64,945Income from operations
    
    
    1,932
    
    
    
    399
    
    
    
    2,200
    
    
    
    531Other income (expense), net:Total other than temporary impairment gains on
available-for-sale securities
    
    
    183
    
    
    
    -
    
    
    
    886
    
    
    
    -Portion of gain recognized in Other
comprehensive income
    
    
    (177
    )
    
    
    -
    
    
    
    (1,353
    )
    
    
    -Net
impairment gains (losses) recognized in earnings
    
    
    6
    
    
    
    -
    
    
    
    (467
    )
    
    
    -Other income (expense), net
    
    
    245
    
    
    
    271
    
    
    
    1,029
    
    
    
    1,941Total other income (expense), net
    
    
    251
    
    
    
    271
    
    
    
    562
    
    
    
    1,941Income before income taxes
    
    
    2,183
    
    
    
    670
    
    
    
    2,762
    
    
    
    2,472Provision (benefit) for income taxes
    
    
    193
    
    
    
    (527
    )
    
    
    1,165
    
    
    
    65Loss from equity method investment (net of tax)
    
    
    -
    
    
    
    87
    
    
    
    -
    
    
    
    1,049Consolidated net income
    
    
    1,990
    
    
    
    1,110
    
    
    
    1,597
    
    
    
    1,358Less: Net income attributable to
noncontrolling interest
    
    
    299
    
    
    
    501
    
    
    
    1,108
    
    
    
    1,452Net income (loss) attributable to Vicor Corporation
    
    $
    1,691
    
    
    $
    609
    
    
    $
    489
    
    
    $
    (94
    )Net income (loss) per common share attributable to
Vicor Corporation:Basic
    
    $
    0.04
    
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    (0.00
    )Diluted
    
    $
    0.04
    
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    (0.00
    )Shares used to compute net income (loss) per share
attributable to Vicor Corporation:Basic
    
    
    41,665
    
    
    
    41,660
    
    
    
    41,665
    
    
    
    41,646Diluted
    
    
    41,675
    
    
    
    41,685
    
    
    
    41,668
    
    
    
    41,646Cash dividends declared per share
    
    $
    
    
    
    $
    0.15
    
    
    $
    
    
    
    $
    0.30
  -2-




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Nine Months EndedSeptember 30, 2009
    
    
    September 30, 2008Operating activities:Net income (loss)
    
    $
    489
    
    
    $
    (94
    )Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation and amortization
    
    
    7,741
    
    
    
    7,824Severance charges
    
    
    4,083
    
    
    
    -Unrealized gain on trading securities
    
    
    (696
    )
    
    
    -Stock compensation expense
    
    
    505
    
    
    
    881Credit loss on available for sale securities
    
    
    467
    
    
    
    -Unrealized loss on auction rate security rights
    
    
    402
    
    
    
    -Increase in long-term deferred revenue
    
    
    182
    
    
    
    1,082Deferred income taxes
    
    
    (6
    )
    
    
    -Gain on disposal of equipment
    
    
    (25
    )
    
    
    (22
    )Loss from equity method investee (net of tax)
    
    
    -
    
    
    
    1,049Change in current assets and liabilities, net
    
    
    1,793
    
    
    
    (2,749
    )Net cash provided by operating activities
    
    
    14,935
    
    
    
    7,971Investing activities:Purchases of investments
    
    
    (1,515
    )
    
    
    (10,263
    )Sales and maturities of investments
    
    
    4,037
    
    
    
    26,964Additions to property, plant and equipment
    
    
    (4,282
    )
    
    
    (6,557
    )Purchase of equity method investment
    
    
    -
    
    
    
    (1,000
    )Proceeds from sale of equipment
    
    
    5
    
    
    
    22Change in restricted cash
    
    
    150
    
    
    
    54Increase in other assets
    
    
    (566
    )
    
    
    (197
    )Net cash (used in) provided by investing activities
    
    
    (2,171
    )
    
    
    9,023Financing activities:Net income attributable to noncontrolling interest
    
    
    1,108
    
    
    
    1,452Proceeds from issuance of Common Stock
    
    
    -
    
    
    
    197Common Stock dividends paid
    
    
    (612
    )
    
    
    (13,152
    )Net cash provided by (used in) financing activities
    
    
    496
    
    
    
    (11,503
    )Effect of foreign exchange rates on cash
    
    
    (4
    )
    
    
    (72
    )Net increase in cash and cash equivalents
    
    
    13,256
    
    
    
    5,419Cash and cash equivalents at beginning of period
    
    
    22,639
    
    
    
    20,017Cash and cash equivalents at end of period
    
    $
    35,895
    
    
    $
    25,436
  -3-




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1.
    
    Basis of Presentation
    2.
    
    Short-Term and Long-Term Investments
    Gross
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Unrealized
    
    
    FairSeptember 30, 2009
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueAuction rate
securities - student loans
    
    $
    19,800
    
    
    $
    -
    
    
    $
    2,465
    
    
    $
    17,335Certificates of deposit
    
    
    2,637
    
    
    
    38
    
    
    
    -
    
    
    
    2,675$
    22,437
    
    
    $
    38
    
    
    $
    2,465
    
    
    $
    20,010
 -4-




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Gross
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Unrealized
    
    
    FairDecember 31, 2008
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueAuction rate securities - student loans
    
    $
    20,025
    
    
    $
    -
    
    
    $
    3,334
    
    
    $
    16,691Certificates of deposit
    
    
    2,735
    
    
    
    20
    
    
    
    -
    
    
    
    2,755$
    22,760
    
    
    $
    20
    
    
    $
    3,334
    
    
    $
    19,446
  EstimatedCost
    
    
    Fair ValueDue in one year or less
    
    $
    1,107
    
    
    $
    1,113Due in two to ten years
    
    
    1,530
    
    
    
    1,562Due in ten to twenty years
    
    
    -
    
    
    
    -Due in twenty to forty years
    
    
    19,800
    
    
    
    17,335$
    22,437
    
    
    $
    20,010
  Gross
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Unrealized
    
    
    FairSeptember 30, 2009
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueAuction rate securities - student loans
    
    $
    16,100
    
    
    $
    -
    
    
    $
    1,446
    
    
    $
    14,654December 31,
2008Auction rate securities - student loans
    
    $
    18,300
    
    
    $
    -
    
    
    $
    2,238
    
    
    $
    16,062
  EstimatedCost
    
    
    Fair ValueDue in one year or less
    
    $
    -
    
    
    $
    -Due in two to ten years
    
    
    -
    
    
    
    -Due in ten to twenty years
    
    
    -
    
    
    
    -Due in twenty to forty years
    
    
    16,100
    
    
    
    14,654$
    16,100
    
    
    $
    14,654
 -5-




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-6-




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2009Balance at the beginning of the period
    
    $
    473
    
    
    $
    -Reductions for securities sold during the period
    
    
    (5
    )Reduction for accretion of subsequent credit
loss recovery
    
    
    (1
    )Additions for the amount related to credit
(gain) loss for which
other-than-temporary impairment was not
previously recognized
    
    
    -
    
    
    
    467Balance at the end of the period
    
    $
    467
    
    
    $
    467
   Fair Value Measurements
  -7-




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Fair Value Measurements at September 30, 2009 UsingSignificantQuoted Prices
    
    
    Other
    
    
    Significantin Active
    
    
    Observable
    
    
    Unobservable
    
    
    Total FairMarkets
    
    
    Inputs
    
    
    Inputs
    
    
    Value as of(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    September 30, 2009Cash Equivalents:Money market funds
    
    $
    15,209
    
    
    $
    
    
    
    $
    
    
    
    $
    15,209Restricted money market
    
    
    377
    
    
    
    
    
    
    
    
    
    
    
    377Short term investments:Certificate of deposit
    
    
    656
    
    
    
    
    
    
    
    
    
    
    
    656Auction rate securities
    
    
    
    
    
    
    50
    
    
    
    
    
    
    
    50Long term investments:Auction rate securities
    
    
    
    
    
    
    
    
    
    
    31,939
    
    
    
    31,939Auction rate security rights
    
    
    
    
    
    
    
    
    
    
    1,428
    
    
    
    1,428Certificate of deposit
    
    
    2,018
    
    
    
    
    
    
    
    
    
    
    
    2,018Restricted long term investment
    
    
    210
    
    
    
    
    
    
    
    
    
    
    
    210
  -8-




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Level 3Balance at the beginning of the period
    
    $
    34,654Transfers into Level 3 categorization
    
    
    Redemptions
    
    
    (2,400
    )Transfers into Level 2 categorization
    
    
    (50
    )Unrealized loss on trading securities included in Other income (expense), net
    
    
    294Credit losses on available for sales securities included in Other income(expense), net
    
    
    (467
    )Unrealized gain (loss) included in Other comprehensive (loss) income
    
    
    1,336Balance at the end of the period
    
    $
    33,367
 Stock Based Compensation
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Cost of revenues
    
    $
    7
    
    
    $
    24
    
    
    $
    15
    
    
    $
    69Selling, general and
administrative
    
    
    96
    
    
    
    218
    
    
    
    357
    
    
    
    649Research and development
    
    
    39
    
    
    
    51
    
    
    
    133
    
    
    
    163Total stock based compensation
    
    $
    142
    
    
    $
    293
    
    
    $
    505
    
    
    $
    881
 -9-




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Net Income (Loss) per Share
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Numerator:Net income (loss) attributable to Vicor Corporation
    
    $
    1,691
    
    
    $
    609
    
    
    $
    489
    
    
    $
    (94
    )Denominator:Denominator
for basic income (loss) per share-weighted average shares (1)
    
    
    41,665
    
    
    
    41,660
    
    
    
    41,665
    
    
    
    41,646Effect of dilutive securities:Employee stock options (2)
    
    
    10
    
    
    
    25
    
    
    
    3
    
    
    
    -Denominator for diluted income (loss) per share - adjusted
weighted-average shares and assumed conversions
    
    
    41,675
    
    
    
    41,685
    
    
    
    41,668
    
    
    
    41,646Basic income (loss) per share
    
    $
    0.04
    
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    (0.00
    )Diluted income (loss) per share
    
    $
    0.04
    
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    (0.00
    )
 
 (1)
    
    Denominator represents weighted average number of Common Shares and Class B Common Shares outstanding.(2)
    
    Options to purchase 728,469 and 1,020,897 shares of Common
Stock for the three months ended September 30, 2009 and September 30, 2008, respectively, and options to purchase 845,860 shares of Common Stock for the nine months ended
September 30, 2009 were not included in the computation of diluted income per share because the options exercise prices
were greater than the average market price of the Common Stock and, therefore, the effect would be antidilutive. Options
to purchase 1,036,656 shares of Common Stock were outstanding for the nine months ended September 30, 2008
but were not included in the calculation of net loss per share as the effect would have been antidilutive. Inventories
  -10-




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##### Table of Contents



September 30, 2009
    
    
    December 31, 2008Raw materials
    
    $
    19,262
    
    
    $
    23,275Work-in-process
    
    
    3,738
    
    
    
    3,152Finished goods
    
    
    4,840
    
    
    
    6,61227,840
    
    
    
    33,039Inventory reserves
    
    
    (5,650
    )
    
    
    (6,358
    )Net balance
    
    $
    22,190
    
    
    $
    26,681
 Other Investments
    -11-




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Allocation of losses
from equity method
investment (net of
tax)
    
    $
    
    
    
    $
    54
    
    
    $
    
    
    
    $
    228Amortization of
intangible assets and
other (net of tax)
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    115Other than temporary
decline in investment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    706$
    
    
    
    $
    87
    
    
    $
    
    
    
    $
    1,049
 Severance Charges
   BBU
    
    
    V*I Chip
    
    
    TotalBalance as of December 31, 2008
    
    $
    -
    
    
    $
    -
    
    
    $
    -Charges relating to first quarter of 2009 workforce reduction
    
    
    2,485
    
    
    
    613
    
    
    
    3,098Charges relating to second quarter of 2009 workforce reduction
    
    
    859
    
    
    
    -
    
    
    
    859Charges relating to third quarter of 2009 workforce reduction
    
    
    126
    
    
    
    -
    
    
    
    126Payments
    
    
    (2,694
    )
    
    
    (576
    )
    
    
    (3,270
    )Balance as of September 30, 2009
    
    $
    776
    
    
    $
    37
    
    
    $
    813
 Product Warranties
  -12-




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Balance at the beginning of the period
    
    $
    899
    
    
    $
    806
    
    
    $
    896
    
    
    $
    679Accruals for warranties for products
sold in the period
    
    
    (1
    )
    
    
    32
    
    
    
    102
    
    
    
    300Fulfillment of warranty obligations
    
    
    (13
    )
    
    
    (70
    )
    
    
    (95
    )
    
    
    (141
    )Revisions of estimated obligations
    
    
    (167
    )
    
    
    80
    
    
    
    (185
    )
    
    
    10Balance at the end of the period
    
    $
    718
    
    
    $
    848
    
    
    $
    718
    
    
    $
    848
 Income Taxes
    Three Months Ended
    
    
    Nine Months EndedSeptember 30
    
    
    September 302009
    
    
    2008
    
    
    2009
    
    
    2008Provision (benefit) for income taxes
    
    $
    193
    
    
    $
    (527
    )
    
    $
    1,165
    
    
    $
    65Effective income tax rate
    
    
    8.8
    %
    
    
    (78.7
    %)
    
    
    42.2
    %
    
    
    2.6
    %
  -13-




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11.
    
    Comprehensive Income (Loss)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Consolidated
net income (loss) attributable to Vicor Corporation
    
    $
    1,691
    
    
    $
    609
    
    
    $
    489
    
    
    $
    (94
    )Foreign currency translation gains (losses)
    
    
    144
    
    
    
    (19
    )
    
    
    49
    
    
    
    55Unrealized
(losses) gains (net of tax) on available-for-sale securities
    
    
    178
    
    
    
    (35
    )
    
    
    1,354
    
    
    
    (2,285
    )Comprehensive income (loss)
    
    
    2,013
    
    
    
    555
    
    
    
    1,892
    
    
    
    (2,324
    )Less:
comprehensive income (loss) attributable to noncontrolling interest
    
    
    13
    
    
    
    -
    
    
    
    18
    
    
    
    -Comprehensive income (loss) attributable to Vicor Corporation
    
    $
    2,000
    
    
    $
    555
    
    
    $
    1,874
    
    
    $
    (2,324
    )
  Commitments and Contingencies
    -14-




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Segment Information
  -15-




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BBU
    
    V*I Chip
    
    Picor
    
    Corporate
    
    Eliminations
    
    Total2009:Net revenues
    
    $
    44,382
    
    
    $
    4,492
    
    
    $
    1,557
    
    
    $
    -
    
    
    $
    (2,685
    )
    
    $
    47,746Income (loss) from operations
    
    
    5,851
    
    
    
    (4,191
    )
    
    
    (1,030
    )
    
    
    (179
    )
    
    
    1,481
    
    
    
    1,932Total assets
    
    
    192,190
    
    
    
    14,815
    
    
    
    9,316
    
    
    
    100,016
    
    
    
    (140,223
    )
    
    
    176,113Depreciation and amortization
    
    
    1,274
    
    
    
    750
    
    
    
    106
    
    
    
    378
    
    
    
    -
    
    
    
    2,5082008:Net revenues
    
    $
    46,673
    
    
    $
    4,971
    
    
    $
    1,289
    
    
    $
    -
    
    
    $
    (1,655
    )
    
    $
    51,278Income (loss) from operations
    
    
    6,976
    
    
    
    (5,937
    )
    
    
    (683
    )
    
    
    (134
    )
    
    
    177
    
    
    
    399Total assets
    
    
    168,453
    
    
    
    16,846
    
    
    
    8,915
    
    
    
    94,103
    
    
    
    (109,296
    )
    
    
    179,021Depreciation and amortization
    
    
    1,457
    
    
    
    678
    
    
    
    96
    
    
    
    382
    
    
    
    -
    
    
    
    2,613
  BBU
    
    V*I Chip
    
    Picor
    
    Corporate
    
    Eliminations
    
    Total2009:Net revenues
    
    $
    140,764
    
    
    $
    11,454
    
    
    $
    4,456
    
    
    $
    -
    
    
    $
    (7,853
    )
    
    $
    148,821Income (loss) from operations
    
    
    19,702
    
    
    
    (16,064
    )
    
    
    (3,329
    )
    
    
    (518
    )
    
    
    2,409
    
    
    
    2,200Total assets
    
    
    192,190
    
    
    
    14,815
    
    
    
    9,316
    
    
    
    100,016
    
    
    
    (140,223
    )
    
    
    176,113Depreciation and amortization
    
    
    4,081
    
    
    
    2,213
    
    
    
    294
    
    
    
    1,153
    
    
    
    -
    
    
    
    7,7412008:Net revenues
    
    $
    141,646
    
    
    $
    12,479
    
    
    $
    3,624
    
    
    $
    -
    
    
    $
    (3,705
    )
    
    $
    154,044Income (loss) from operations
    
    
    20,773
    
    
    
    (18,694
    )
    
    
    (1,906
    )
    
    
    (243
    )
    
    
    601
    
    
    
    531Total assets
    
    
    168,453
    
    
    
    16,846
    
    
    
    8,915
    
    
    
    94,103
    
    
    
    (109,296
    )
    
    
    179,021Depreciation and amortization
    
    
    4,467
    
    
    
    1,927
    
    
    
    287
    
    
    
    1,143
    
    
    
    -
    
    
    
    7,824
  Impact of Recently Issued Accounting Standards
   -16-




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Subsequent Events
   -17-




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Item 2  Managements Discussion and Analysis of Financial Condition and Results of
Operations
 *
 Overview
   -18-




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-19-




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Critical Accounting Policies and Estimates
  Three months ended September 30, 2009 compared to three months ended September 30, 2008
   Three Months EndedSeptember 30,
    
    
    Increase (decrease)2009
    
    
    2008
    
    
    $
    
    
    %BBU
    
    $
    44,347
    
    
    $
    46,673
    
    
    $
    (2,326
    )
    
    
    (5.0
    )%V*I Chip
    
    
    2,919
    
    
    
    4,315
    
    
    
    (1,396
    )
    
    
    (32.4
    )%Picor
    
    
    480
    
    
    
    290
    
    
    
    190
    
    
    
    65.5
    %Total
    
    $
    47,746
    
    
    $
    51,278
    
    
    $
    (3,532
    )
    
    
    (6.9
    )%Book-to-Bill Ratio
    
    
    1.19:1
    
    
    
    1.20:1
    -20-




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Increase (decrease)Compensation
    
    $
    (799
    )
    
    
    (13.5)
    % (1)Advertising expenses
    
    
    (285
    )
    
    
    (36.1)
    % (2)Legal fees
    
    
    (185
    )
    
    
    (38.0)
    % (3)Travel expenses
    
    
    (152
    )
    
    
    (29.1)
    % (4)Commissions expense
    
    
    (132
    )
    
    
    (11.1)
    % (5)Stockholder reporting
    
    
    (75
    )
    
    
    (69.2
    )%Audit and tax fees
    
    
    (63
    )
    
    
    (14.5
    )%Depreciation and amortization
    
    
    (58
    )
    
    
    (6.9
    )%Project materials
    
    
    (53
    )
    
    
    (84.3
    )%Training expenses
    
    
    (47
    )
    
    
    (13.4
    )%Facilities expenses
    
    
    (43
    )
    
    
    (14.7
    )%Other, net
    
    
    (186
    )
    
    
    (6.8
    )%$
    (2,078
    )
    
    
    (15.2
    )%
 
 (1)
    
    Decrease primarily attributable to the workforce reductions completed in the first, second
and third quarters of 2009.(2)
    
    Decrease is primarily attributed to decreased advertising in trade publications.(3)
    
    Decrease primarily attributed to a decrease in activity associated with the Companys
lawsuit brought against certain of its insurance carriers with respect to the Ericsson, Inc.
settlement of product liability litigation in the third quarter of 2009 compared to 2008.(4)
    
    Represents an overall reduction in travel across all business units and functional groups.(5)
    
    Decrease primarily attributed to the decrease in net revenues and changes in the mix of
revenues subject to commissions.  -21-




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Increase (decrease)Project materials
    
    $
    323
    
    
    
    51.4
    % (1)Vicor Custom Power related expenses
    
    
    233
    
    
    
    40.2
    % (2)Facility expenses
    
    
    (49
    )
    
    
    (11.9
    )%Compensation
    
    
    (273
    )
    
    
    (5.1)
    % (3)Deferred costs
    
    
    (130
    )
    
    
    100.0
    % (4)Other, net
    
    
    (74
    )
    
    
    (8.7
    )%$
    30
    
    
    
    (0.4
    )%
 
 (1)
    
    Increase primarily attributed to a increase in project materials associated with V*I Chip
and Picor products.(2)
    
    Increase primarily attributed to increased outside services of $148,000 and an increase in
compensation expense of $79,000.(3)
    
    Decrease primarily attributed to the workforce reduction that was completed in the first
quarter of 2009.(4)
    
    Decrease primarily attributed to an increase in deferred costs capitalized for certain
non-recurring engineering projects for which the related revenues have been deferred.    Increase2009
    
    
    2008
    
    
    (decrease)Interest income
    
    $
    132
    
    
    $
    356
    
    
    $
    (224
    )Foreign currency gains (losses)
    
    
    89
    
    
    
    (124
    )
    
    
    213Unrealized loss on auction rate securities
rights
    
    
    (257
    )
    
    
    -
    
    
    
    (257
    )Unrealized gain on trading securities
    
    
    271
    
    
    
    -
    
    
    
    271Credit gain on available for sale securities
    
    
    6
    
    
    
    -
    
    
    
    6Other
    
    
    10
    
    
    
    39
    
    
    
    (29
    )$
    251
    
    
    $
    271
    
    
    $
    (20
    )
  -22-




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Three Months EndedSeptember 30,2009
    
    2008Provision (benefit) for income taxes
    
    $
    193
    
    
    $
    (527
    )Effective income tax rate
    
    
    8.8
    %
    
    
    (78.7
    %)
     Nine months ended September 30, 2009 compared to nine months ended September 30, 2008
  -23-




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Nine Months EndedSeptember 30,
    
    
    Increase (decrease)2009
    
    
    2008
    
    
    $
    
    
    %BBU
    
    $
    140,729
    
    
    $
    141,646
    
    
    $
    (917
    )
    
    
    (0.6
    )%V*I Chip
    
    
    6,626
    
    
    
    11,722
    
    
    
    (5,096
    )
    
    
    (43.5
    )%Picor
    
    
    1,466
    
    
    
    676
    
    
    
    790
    
    
    
    116.9
    %Total
    
    $
    148,821
    
    
    $
    154,044
    
    
    $
    (5,223
    )
    
    
    (3.4
    )%Book-to-Bill Ratio
    
    
    0.99:1
    
    
    
    1.06:1
    -24-




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Increase (decrease)Compensation
    
    $
    (1,853
    )
    
    
    (10.3
    )%
    
    
    (1
    )Legal fees
    
    
    (1,038
    )
    
    
    (53.4
    )%
    
    
    (2
    )Audit and tax fees
    
    
    (673
    )
    
    
    (37.7
    )%
    
    
    (3
    )Advertising expenses
    
    
    (575
    )
    
    
    (26.6
    )%
    
    
    (4
    )Travel expenses
    
    
    (528
    )
    
    
    (31.8
    )%
    
    
    (5
    )Commissions expense
    
    
    (377
    )
    
    
    (10.8
    )%
    
    
    (6
    )Training expenses
    
    
    (239
    )
    
    
    (21.1
    )%Depreciation and amortization
    
    
    (127
    )
    
    
    (5.0
    )%International office expenses
    
    
    (105
    )
    
    
    (37.2
    )%Employment advertising and recruiting
    
    
    (92
    )
    
    
    (89.0
    )%Facilities Expense
    
    
    (54
    )
    
    
    (6.2
    )%Vicor Custom Power related expenses
    
    
    640
    
    
    
    19.7
    %
    
    
    (7
    )Other, net
    
    
    (242
    )
    
    
    (5.5
    )%$
    (5,263
    )
    
    
    (12.6
    )%
 
 (1)
    
    Decrease primarily attributable to the workforce reductions completed in the first, second and third quarters
of 2009.(2)
    
    Decrease primarily attributed to a decrease in activity associated with the Companys lawsuit brought against
certain of its insurance carriers with respect to the Ericsson, Inc. settlement of product liability
litigation in the first three quarters of 2009 compared to 2008.(3)
    
    Decrease primarily attributed to the late filings of our 2007 Forms 10-Q and additional work related to
accounting for our investment in GWS in the first quarter of 2008.(4)
    
    Decrease primarily attributed to decreased advertising in trade publications.(5)
    
    Represents an overall reduction in travel across all business units and functional groups.(6)
    
    Decrease primarily attributed to lower revenues and the changes in the mix of revenues subject to commissions.(7)
    
    Increase primarily attributed to $669,000 in increased commissions expense due to increased revenues at Vicor
Custom Power subsidiaries.  -25-




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Increase (decrease)Deferred costs
    
    $
    (706
    )
    
    
    100.0
    %
    
    
    (1
    )Compensation
    
    
    (345
    )
    
    
    (2.2
    )%
    
    
    (2
    )Travel expenses
    
    
    (61
    )
    
    
    (29.4
    )%Vicor Custom Power related expenses
    
    
    654
    
    
    
    38.5
    %
    
    
    (3
    )Picor non-recurring engineering charges
    
    
    375
    
    
    
    (82.2
    )%
    
    
    (4
    )Facilities expenses
    
    
    80
    
    
    
    6.9
    %Other, net
    
    
    (196
    )
    
    
    (4.0
    )%$
    (199
    )
    
    
    (0.9
    )%
 
 (1)
    
    Decrease primarily attributed to an increase in deferred
costs capitalized for certain non-recurring engineering projects for which the related revenues have been deferred.(2)
    
    Decrease primarily attributable to the workforce reduction completed in the first quarter of 2009.(3)
    
    Increase primarily attributed to increases in compensation
expense of $229,000, outside services of $293,000 and engineering supplies of $66,000.(4)
    
    The Picor business unit provides engineering services to BBU
and V*I Chip to support certain manufacturing processes and research
and development activities. A decline in services related to manufacturing processes resulted in an increase in the amount of charges allocated to
research and development expense.   -26-




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Increase2009
    
    
    2008
    
    
    (decrease)Interest income
    
    $
    578
    
    
    $
    1,779
    
    
    $
    (1,201
    )Foreign currency (losses) gains
    
    
    87
    
    
    
    79
    
    
    
    8Unrealized loss on auction rate securities
rights
    
    
    (402
    )
    
    
    -
    
    
    
    (402
    )Unrealized gain on trading securities
    
    
    696
    
    
    
    -
    
    
    
    696Credit losses on available for sale securities
    
    
    (467
    )
    
    
    -
    
    
    
    (467
    )Other
    
    
    70
    
    
    
    83
    
    
    
    (13
    )$
    562
    
    
    $
    1,941
    
    
    $
    (1,379
    )
    Nine Months EndedSeptember 30,2009
    
    
    2008Provision for income taxes
    
    $
    1,165
    
    
    $
    65Effective income tax rate
    
    
    42.2
    %
    
    
    2.6
    %
     Liquidity and Capital Resources
  -27-




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-28-




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Item 3  Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4  Controls and Procedures
     -29-




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-30-




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Item 1  Legal Proceedings
 Commitments and Contingencies
 
 Item 1A  Risk Factors
 
 
 Item 2  Unregistered Sales of Equity Securities and Use of Proceeds
 Maximum NumberIssuer Purchases of Equity Securities

    
    
    (of ApproximateTotal Number of
    
    
    Dollar Value) ofShares (or Units)
    
    
    Shares (or Units)Total Number
    
    
    Average Price
    
    
    Purchased as Part
    
    
    that May Yet Beof Shares
    
    
    Paid
    
    
    of Publicly
    
    
    Purchased Under(or Units)
    
    
    per Share
    
    
    Announced Plans
    
    
    the Plans orPeriod
    
    Purchased
    
    
    (or Unit)
    
    
    or Programs
    
    
    ProgramsJuly 1 - 31, 2009
    
    
    -
    
    
    $
    -
    
    
    
    -
    
    
    $
    8,541,000August 1 - 31, 2009
    
    
    -
    
    
    $
    -
    
    
    
    -
    
    
    $
    8,541,000September 1 - 30,
2009
    
    
    -
    
    
    $
    -
    
    
    
    -
    
    
    $
    8,541,000Total
    
    
    -
    
    
    $
    -
    
    
    
    -
    
    
    $
    8,541,000
 
 
 Item 3  Defaults Upon Senior Securities
  
 Item 4  Submission of Matters to a Vote of Security Holders
  
 Item 5  Other Information
  
 Item 6  Exhibits
 -31-




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Exhibit Number
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 193431.2
    
    Certification of Chief Financial Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 193432.1
    
    Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
 -32-




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SIGNATURES
  VICOR CORPORATIONDate: November 4, 2009
    By:
    /s/ Patrizio VinciarelliPatrizio VinciarelliChairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)Date: November 4, 2009
    By:
    /s/ James A. SimmsJames A. SimmsVice President, Chief Financial Officer
(Principal Financial Officer) -33-