Good day, ladies and gentlemen, and welcome to the Vicor Earnings Results for the 3 and 6 Months Ended June 30, 2012 Conference Call. My name is Jody and I will be your operator for today. [Operator instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. James Simms, CFO of Vicor Corporation. Mr. Simms, please proceed.

Thank you, Jody. Good afternoon. and welcome to our conference call for Vicor Corporation’s Q2 ended June 30, 2012. I’m Jamie Simms, Chief Financial Officer, and with me here in Andover is Patrizio Vinciarelli, Vicor’s Chief Executive Officer; and Dick Nagel, our Chief Accounting Officer. Today we issued a press release summarizing our financial results for Q2. This press release is available on the investor page of our website, www.vicorpower.com. We also have filed a Form 8-K with the Securities and Exchange Commission in association with issuing this press release. I remind all of you today’s conference call is being recorded and is the copyrighted property of Vicor Corporation. I also remind you various remarks we 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 that the information provided during this conference call is accurate only as of the day of the call. Vicor undertakes no obligation to update any of the statements made during this call and you should not rely upon them after the conclusion of the call. A reply will be available beginning at midnight tonight through August 7, 2012. The replay dial-in number is (888) 286-8010 and the listener passcode is 37541014. In addition, a webcast replay of the conference call will be available on the investor relations page of our website beginning shortly after this call’s conclusion. Patrizio and I each have prepared remarks after which we will take your questions. Patrizio?

Good afternoon and welcome to our Q2 earnings call. As set forth in this afternoon’s press release, Vicor reported Q2 earnings of $0.01 per share, unchanged from Q1 earnings of $0.01 per share but a decline from the $0.07 per share we earned for Q2 2011. This quarter’s performance was in line with recent expectations given ongoing weakness in certain applications, markets, and geographies and slower than expected growth from new opportunities. As communicated in my remarks at our recent Annual Shareholders Meeting, we are staying as per the course [ph] despite headwinds as we believe current conditions are temporary and our strategy remains valid. Jaime will provide segment information as well as income statement and balance sheet specifics, so I will focus my remarks to updating listeners on where we stand with our growth-oriented new product initiatives. As I highlighted at our Shareholders Meeting, we have numerous new products in our pipeline. We made 2 product announcements this month, and we expect to be sampling other significant products later this year. Of particular note, we formally announced earlier this month at the Techo Frontier Conference in Tokyo our Direct 48 Volt dual [ph] processor, the achieved solution for datacenters, cloud computing and telephone markets. Compliant with Intel’s VR12 voltage regression specification, our PRM Regulator and VTM current multiplier delivered the most efficient power conversion solution for Intel processor applications from a 48 volt input source, yielding more than 5% greater overall efficiency in a package that is 3x smaller than competitive offerings. This efficiency gain can reduce per processor power loss by about 10 watts or upwards of 30%, which can yield annual electricity savings of approximately $500,000 across a datacenter with 30,000 onsite processors. This is a value proposition that goes beyond the typical cents per watt metric…

Thank you. I’ll now review our quarterly financial performance providing some background and business unit specifics. As disclosed, Vicor’s consolidated revenue for Q2 decreased to $55.5 million compared to $59.7 million for Q1, representing a sequential decline of 7%. The Q2 figure compares to revenue of $65.4 million for Q2 2011 representing a decline year-over-year of 15.2%. Both sequentially and year-over-year, revenue declines were spread across all business units. International revenue fell 15% quarter-to-quarter, primarily due to the lower shipments of VI Chip and Picor components to Asian contract manufacturers utilized by our significant supercomputing customer. International revenue represented just over 48% of total revenue down from 53% for Q1. We experienced another sequential increase in recognized sell through revenue associated with shipments by our stocking distributors Future Electronics and DigiKey. The absolute figures are relatively small but the trend is positive. Sell through revenue totaled $367,000 for Q2 compared to $281,000 for Q1, an increase of 31%. Consolidated gross margin increased to 43.5% for Q2 compared to 41.0% for Q1 and 41.8% for Q2 2011, reflecting a shift in relative mix made up of a higher percentage of higher margin bricks as VI Chip shipments declined. As we have addressed, VI Chip has made much progress in increasing efficiencies and lowering material costs contributing to higher product gross margins. However, at low volumes, overhead absorption is weak and higher incremental cost is reflected in VI Chip’s margins. With the anticipated volumes of late in the year 2012 and into 2013, we expect VI Chip will recover. In addition, the improved manufacturing cost effectiveness of our new panel molding process should begin to be seen in VI Chip gross margins in 2013 when volumes of panel molded products ramp. Consolidated operating expenses for Q2 declined sequentially, largely reflecting the fact…

[Operator Instructions] Your first question comes from Jim Bartlett from Bartlett Investors.

Hi. Yes, can you give us some indication of the level of your defense business now; and on a relative base what is happening so far this year and in comparison to last year?

I will not quantify the percentage but in relative terms it has been under pressure, and that pressure is not about to relent until there’s a solution to the budget constraints in particular related to this whole cliff that is forthcoming [ph]. So we don’t see any near-term relief; likely not until sometime after the upcoming elections.

And in that regard, the outlook for new defense electronics orders, that might help out with some of your defense business. What is the outlook there either later this year or early next year?

Well, until the general cloud that I referenced lifts, and presumably it will have to lift given the ramifications of that constraint, it’s hard to have a specific forecast. I think in general terms we are continuing to do well in terms of penetration with our traditional bricks, early generations of products which have a very pervasive acceptance in the defense market. We’re also doing well with VI Chip designing activity. We won some significant programs using high density, high efficiency VI Chip-based solutions and that activity is ongoing. So it is hard for us obviously to predict the evolution of the market, in particular in the very short term, but from a different perspective, with respect to market share I would say that our market share is expanding particularly as we more and more effectively deploy next generation solutions leveraging the more vast technology of VI Chips and eventually Picor products.

Could you give us some sort of size of the Buck regulator market, of what kinds of opportunity this is and where you might hope to sell Buck regulators, both earlier and later; and the type of products that you would be displacing?

Yes, so that opportunity is very substantial. It is quite substantial, let’s say on the scale of Vicor as a whole. It is particularly substantial when you look at the aggregate opportunity that goes beyond the specific reference you made to Buck regulators. You will recall that the complete and comprehensive [ph] offering that Vicor is executing on and about to deliver involves more than Buck regulators. It involves Buck devices as the 60 watts that were recently introduced, Boost devices, Buck/Boost devices; and it involves entries with voltage capability beyond the voltage capability of the initial family of products that were very recently introduced. So as we look at that whole capability at lower voltages, higher voltages with the ability to regulate up, down, and sideways, and the differentiation of these products and their objective figures are met [ph] and the ability to compete against the established competitors like Elien Technology [ph], TI and others who have historically played a major role in this market, we see tremendous opportunity. We see the opportunity further enhanced by the ability to deliver a tall [ph] solution that goes beyond the point of load where these kinds of regulators typically operate, because unlike the competitors I referenced we will have a wherewithal expense [ph], the power processing requirements from the wall plug to the point of load. And that’s a very unique value proposition to customers.

[Operator instructions] At the present time, you have no more questions.

Very well, thank you very much. We will be talking to you in 2 [ph] months. Have a good day.

Ladies and gentlemen that conclude today’s conference. Thank you for your participation. You may now disconnect, have a great day.