James Simms - CFO Dr. Patrizio Vinciarelli - CEO Dick Nagel - CAO :

John Dillon - D&B Capital Jim Bartlett - Bartlett Investors

Good day, ladies and gentlemen. And welcome to the Vicor Earnings Results for the Second Quarter Ended June 30, 2014. My name is Sarah, and I’ll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). I would now like to turn the conference over to James Simms, CFO and Dr. Patrizio Vinciarelli, CEO.

Thanks Sarah. Good afternoon and welcome to Vicor Corporation’s conference call for the second quarter ended June 30, 2014. I am Jamie Simms, CFO and with me here in Andover is Patrizio Vinciarelli, Chief Executive Officer and Dick Nagel, Chief Accounting Officer. As we always have, we issued a press release today summarizing our financial results for the second quarter. This press release is available on the Investor page of our website, vicorpower.com. We have also have filed a Form 8-K with the Securities and Exchange Commission in association with issuing this press release. I remind listeners this conference call is being recorded and is the copyrighted property of Vicor Corporation. I also remind you various remarks we may make during this call may constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those explicitly set forth or implied in our statements. Such risks and uncertainties are discussed in our most recent Forms 10-K and 10-Q filed with the SEC. Please note the information provided during this conference call is accurate only as of the date of the call. Vicor undertakes no obligation to update statements made during this call and you should not rely upon them after the conclusion of this call. A replay will be available beginning at midnight tonight through August 6, 2014. The replay dial-in number is 888-286-8010 and the listener pass code is 49359584. In addition, a webcast replay of the conference call will be available on the Investor Relations page of our Web site, beginning shortly after we conclude today. I will start this afternoon’s discussion with a review of our financial performance for the second…

Thank you, Jamie. As Jamie said, Q2 was characterized by a significant reduction in VI chip revenues caused by the transition from VR12 to VR12.5. However, we are hopeful of being on the verge of a sustained ramping volume of chips and fix (ph) for VR12.5 applications and other [indiscernible]. We are making progress towards expanding our share of board-level spend related to powering memory in addition to Intel processors. We believe this is an important development; this is in absence of value proposition and competitive position. We are also making progress with datacenter computing customers for a differentiated 48 volt system and our unique solution is gaining momentum with targeted prospects. Similarly, we’re encouraged by the momentum building with customers across the range of even the SiPs (ph) and applications. Now that we’re in wireless communications, automotive and transportation; where we would be in concentrating our recent efforts. With the release new chips and SiP (ph) products, we are pursuing a critical strategic goal of diversifying our base of markets, applications and customers. I reaffirm the enthusiasm expressed of our recent Annual Shareholders Meeting to achieve our strategic goal of leading a transformation of the industry toward modular solution to power system requirements; with this intellectual property knowhow in the arrival of cost effective high performance modular building blocks. Vicor is very well positioned to make the most of this multibillion dollar market opportunity. Turning to [indiscernible] over the last three and a half years, we have been defending against [indiscernible] infringement of accusations rolled by a competitor was territory actions and [Indiscernible]. Evolving claims to the [indiscernible] or IDA at cost of thousands millions of dollars in lost business and [indiscernible]. We remain confident that Vicor would prevail on the merits but we note with irony that the competitors behavior in excess of litigations that cost customers to make it a faster rate away from IDA and towards FDA our proprietary power distribution architecture, which are first efficiency industry levels far exceeding the fear of this figures for IDA. As such, migration away from IDA excludes the FDA market segment for which our superior bus converters standard choose [ph] the infringement to shrink to the point in our percents and meet the fraction with our revenues. It is in conference that we look forward to our case going to trial at the end of September or early October. This concludes my prepared remarks. And Jimmy and I will now take your questions. Operator?

(Operator Instructions) Our first question comes from John Dillon. John Dillon - D&B Capital: Patrizio and Jimmy, congratulations on the bookings increase, that’s a really nice bump up from last quarter. Going forward you gave us little guidance on next quarter. I am just wondering to like in the two to four quarters, do you expect continued increase in bookings and also revenue growth.

Generally, yes, we are looking forward as we get into 2015 to a number of programs that we’ve been working on coming to position. And one way of looking at it in terms of revenues bookings and overall financial performance we think of this phase as sort of [indiscernible] and what’s been a relatively long tunnel. We can see the light at the end of the tunnel. But as suggested by Jimmy, we are looking at Q3 of this year still being a last quarter for us. As we progress from that into the fourth quarter and into 2015, we expect to be able to leverage our model which I think as you know is very much dependent on incremental revenues in terms of profitability because of the fixed cost structure or largely fixed cost structure associated with the good [Indiscernible] price. And so in terms of looking at the bottom line we anticipate that the very high rate of legal expenses which will be at its peak at this quarter to essentially subside to relatively low level as of the end of the fourth quarter that will make a significant difference for the balance in terms of the bottom line. But more importantly the expansion in revenues with a significant share of that drop into the bottom line will get us into [Indiscernible]. John Dillon - D&B Capital: So I think the light at the end of the tunnel that reminds me on a number of conference calls before we’ve been -- its’ couple of quarters out. This kind of feels lot different to me and in particular I think because you had cross card that you haven’t had before in the industry in your markets are lot bigger. But I really wanted to get your input on that. Why is it different this time than the other times can you talk about that that revenue and bookings are going up and in a couple of quarters can you give us still more confidence on that?

I think we talk to some degree about this kind of issues of the shareholders meeting and I maybe repeating myself so some degree. But as discussed at the shareholders meeting VI Chip technology and the VI Chip products that have characterized Vicor’s opportunity in terms of new customers, new markets and potential growth over many years did not in terms of this cost structure support the broad market transaction that we were seeking. And what is different about today is that with the arrival of chip products and you’ve seen a growing rate of new product introductions and you’ll be seeing that rate further accelerating in the weeks and months to come. With those products we are achieving a cost structure measure in terms of sense for what that is follower than we’ve had with our first generation VI Chips. So whether it’s the center applications or the modular applications or wireless applications or other kinds of applications we’re going to be able to leverage chips into more cost sensitive applications while [Indiscernible] being able to enjoy margins that with first generation of VI Chips, we were unable to deliver. We’re beginning to see this with SiPs as suggested by Jamie in his opening remarks of the level or idea of mid 50s and I expect that rate to go substantially higher over the next several months, as the rate of production of those products increases. And likewise I see similar opportunities for chips in a variety of functions ranging from building blocks that span the AC source, DC source, high voltage, low voltage of the variety of upper voltages from front end applications all the way to the point of low. So we believe we are after having made a major investment that has characterized the life of the Company for the last 10 years in brand new technology packaging platform, control systems, base engines all quite propriety. We are well equipped at this point to address cost sensitive market needs with very high performance products that we would be able to address - discuss plenty of applications with better margins. And we’re frankly very excited about that. This excitement is supported by the reception that we’re getting from a growing most of this year customers in a multi this year end markets. John Dillon - D&B Capital: It seems to me Patrizio that the memory real opportunity that you’ve won is really a validation of everything that you’ve been saying because with what I am second hearing is that you are winning an opportunity to power the memory in an x86 architecture, which in the past is really not been available to you because of the cross card and now you’ve got that opportunity?

Well, I think the proof as I said has been delivered with powering the processors themselves because the processor themselves in the competitive alternative of multi phase backed regulator, has been the commodity market for as long as, I get to remember. So our ability to penetrate processors, Intel processor in particular, which are obviously very different type of devices from, let’s say the end (ph) processors [indiscernible] servers that characterized our first generation VI Chip entry. With Intel processor, we already demonstrated that we can play in a cost sensitive a portion of the market where the opportunity for growth is far greater if all the conditions have rise and these conditions involve performance measure in terms of efficiency and density that delivers a certain value proposition for customer that is in view of the high efficiency and density is still very mindful of the cross card. John Dillon - D&B Capital: So that’s great. It sounds really good, I think we’re pretty close, I think we hear and I’ll get back in the queue. Thank you.

Thank you.

All right. Great. Our next question comes from Jim Bartlett.

Yes. Patrizio, you mentioned diversification could you address that a little bit more and how important like, one in getting more datacenter customers, which give us may be sometime line on when the prospects for that will happen? And then two, I haven’t heard you mention, you mentioned wireless and transportation auto, which I heard you mentioned wireless before in the transportation auto, I was thought was way out there. Could you address those two questions? Thanks.

Yes. So accessing with the center applications, we are seeing the same level of motivation in without the datacenter customers that they are very cautious of their total operating cost, the energy cost, the efficiency that can be have with 40 volt infrastructure with the x48 to the point of load processor voltages and memory voltages. And the same compelling rationales are visible to growing multiplicity of customers and potential customers. Turning to other opportunities, we are beginning to get some meaningful traction in other mode within Asia with our VCMs and these are chips that we recently introduced. And we’re looking forward to being able to build on that with new cemeteries that are scheduled in the works and scheduled to come out in the foreseeable future, which will further raise the performance bar and further reduce the cost curve very significantly. We’ve discussed in the past AC in put products and specifically the PFM and again we got an traction with opportunities such as microcells with a first generation PFM. We’re on the verge of introducing next generation PFMs that will increase the power capability while reducing once again the cost structure of the product significantly. We’re also combining that with introduction of a system level packaging technology that is going to be referred to as APT is proprietary packaging technology to deliver consistent capability. And we again look at that as delivering dry combination of thus the efficiency and cost effectiveness that will add momentum to the early traction and interest that we get and in some of the markets you referenced.

One of the latitude with the auto ACM, is this revenue for like 2016?

No, there is going to be some revenue in 2015 it’s up to assess a precise level for that but it involves a multiplicity of competing companies in Asia. These are not ultra volume application they are lower volume applications that is more than one of them and we’ll see as we get into next year what the world after.

And would you expect more datacenter customers, is that something can happen this year or in 2015 (ph).

Sorry, and too often this year but there are things in the works on the variety of fronts. And when it comes to let’s say powering memory and those are first as I said earlier or powering other type of points of low devices we’re also making new role jump on other fronts because the issues of the datacenter really not unique when it comes to power systems they’re not unique to datacenter. So, there is an opportunity not just to go across the competitive landscape in their end market but there is also an opportunity to grow across from their end market to other markets with similar kinds of issues and challenges. And the market we’re seeing for I will say the first time from very large potential customers a multinational somewhat [indiscernible] to adopt the kind of power conform methodologies the Vicor is uniquely advocated for many years. But for which we have not have the world we go in terms of where being all the necessary building blocks and most significantly having them with sense for what so you have some merit [indiscernible] that are attractive us from a cost perspective.

Okay, one other issue. Did you just addressed I guess piece of the distribution is up 8% I assume that’s sequentially Jamie pension?

Yes.

Did you just addressed and where you are in this distribution strategy it’s for us and [indiscernible] less than originally anticipated and any changes and your thoughts about it or sort of these inflection point of when that might accelerate?

So we put infrastructure in place I think there has been progress I think of the in terms of inflection point or accelerating the rate of progress we are counting on new products from Vicor and VI Chip to make major impact on acceleration and inflection with this factor to the share revenues they’re going to be provided through distribution because this products unlike our earlier generation products that breaks other kinds of legacy products are extremely well suited for distribution. Picor regulators being a part of example of that but also a variety of chips PFMs. So all of these type of devices land themselves to a distributor or distributors acting as intermediaries to customers wishing to configure and implement a power system or subsystem or complete system in a sharp time frame from devices that can be purchased from stock for overnight delivery.

So could you see that just in 2015 even where you could see acceleration?

The Picor regulators had been to some degree a 2015 I think as we approach the product part of this year there is going to be new major point of actions from Picor that greatly sent the range of capabilities of [indiscernible] where you have a product line with boost and buck entries overtime coming out different part of levels again these are well aligned with distribution channels as an effective way to get products to customers and as we suggested earlier we are on the verge of introducing 6123 the FM chips of asset packages and those again from a [indiscernible] distribution as an effective means of getting the products into the market place.

All right. We do have another question from John Dillon. John Dillon - D&B Capital : Hi Patrizio I’m trying to get a little sense of the total available market here and I know that’s really difficult but one example is Intel came out with their numbers and mix of their processor numbers for their servers, data centers was about $35 billion so I’m wondering what percentage would be available to Vicor like for every dollar of processor $0.10 the power supplies is a $0.20 or a rule of thumb or ballpark you could give us.

Well, it depends on what share of the policy spin that we have and I think as early this cash we're working to expand this year John Dillon - D&B Capital : Let say this for argument (ph) just the processors if you’re just powering the processors would it be $0.10 on the dollar would be $0.20 on the dollar just the rough number?

Well we talk about it in terms of just dollars for processor and I’m going to be purposefully big because to say obvious I don’t want to give a target to competitors to share, it’s just as not the money of estimate which would by definition of one world to the other by a factor of two or three I just to give you sort of in order of magnitude estimate which I believe what you’re looking for. John Dillon - D&B Capital : Yes, for process of the event of

[Indiscernible] solution could be let say are the more factor of $20. John Dillon - D&B Capital : Okay. So $20 per processor and that’s just the [Indiscernible].

Well not just [indiscernible] I’m not going to go there John Dillon - D&B Capital : Okay.

Just to asses as not the many of you put into the. John Dillon - D&B Capital : Okay.

Customer significant with respect to these in terms of the actual opportunity, the ability to finish rate across as suggested earlier multiplicity customers’ multiplicity around markets and we are executing on a strategy to accomplish that toward the science that going to enable larger multiplicity of customers to leverage our solutions. There is a gradual interest in the market place for a number of good reasons ranging from performance to other reasons for customers to embrace our solution and as you can imagine we are working and partnering with leading companies in that space to facilitate to reference designs the adoption of our process and power solution. And we may have announcements with respect to developments on the trial front later this year. John Dillon - D&B Capital : Are you teaming with Intel where they’re actually promoting your product because they’re the best solution for powering your chips?

I can’t comment with respect to any specific company or initiative. John Dillon - D&B Capital : I can’t remember if I ask this question already, your gross margins at the percentage of revenue going forward, do you expect to see those to continually step up I think I heard in opening comments you expect next quarter to be up as Vicor is up, do you expect continually to go up for the next several quarters?

Well, at this again I say obvious, I think invested the quarter $1 billion there a round numbers being technology of the foundation of chips and [indiscernible] we want to see a return of that investment well they follow us on that and that gives measure for us in traction with customers revenue growth but significantly a margin level, profitability level that is commensurate (ph) to the level of investment we have made in the technology. So the good news in this regard is that we are finally with SiPs first and chips second getting to 12 platforms that can support the low cost structure that enables our customers towards the competitive pricing they seek while at the same time enabling us to achieve return on investment that by way of healthy margin and that’s the making of [indiscernible] for our customers across us. John Dillon - D&B Capital: Fairly good expected. Second gross margin as a percentage of revenue to continue to go up in the next several quarters?

Let me answer in this way I am, I know I’m repeating myself but in the early days of our big power consumption project I am now going back to the 80’s early 90’s. Vicor enjoyed margins in the 60% to 65% range routinely. To develop the different line with this spend nearly as much as we have invested in every way not just dollars but invented [indiscernible] whatever you want to call it is to develop the technology, top platforms, intellectual property this of the foundation of SiPs and Chips. So, we would definitely expected to see a very investment measure in terms of margin at least this is good in time as we are seeing [indiscernible]. John Dillon - D&B Capital: Sounds, great. Thank you very much for comparative better results, this sounds great. Thank you.

Thank you.

Alright, and it looks like there are no further questions in queue.

Thank you. We will be talking to you in approximately three (ph) months. Have a good day.

This concludes today’s conference. You may disconnect and have a great day.