Good day, ladies and gentlemen, and welcome to the Vicor Earnings Results Quarter 3 and 9 months Ended September 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 take this time to turn the conference over to your host for today, Mr. Jamie Simms, CFO; and Dr. Patrizio Vinciarelli, CEO of Vicor Corporation. Please proceed, sirs.

Thank you, Jody. Good afternoon, everyone, and welcome to our conference call for the third quarter ended September 30. I'm Jamie Simms, Chief Financial Officer and with me here in Andover is Patrizio Vinciarelli, Vicor's Chief Executive Officer. Today we answered a press release summarizing our financial results for the third quarter. This press release is available on the investor page of our website, vicorpower.com. We also filed a Form 8K with the Securities and Exchange Commission in association with 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 may make during this call 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 any of the statements made during this call and you should not rely upon them after the conclusion of the call. A replay of the call will be available beginning at midnight tonight through November 7. The replay dial-in number is (888) 286-8010, and a listener pass code is 36807908. In addition, a webcast replay of the conference call will be available on the IR page of our website. Patrizio and I have each prepared remarks and after which we will take your questions. Patrizio.

Good afternoon, and welcome to our third quarter earnings call. As set forth in this afternoon's press release, Vicor reported third quarter net income of $191,000, essentially breaking even on a per share basis, versus $220,000 which rounded out to $0.01 per diluted share for the second quarter of 2012. For the third quarter 2011, we end $1,080,000 or $0.03 per diluted share. Third quarter performance was in line with recent expectations and consistent with last quarter's results deflecting ongoing witness in certain markets and geographies and slower than expected growth from new initiatives and new opportunities. As I communicated throughout the year in prior earnings conference calls and at our annual shareholders meeting in June, we are committed to our strategy despite economic challenges that have led to our 4 consecutive quarters of essentially breakeven performance. We're staying at strategic costs as we're confident our sanctions are correct and present headwinds are temporary. In the interim, our financial performance has been supported by the stability of our traditional BRICK business, which is driven by diverse global customer base and a highly efficient [indiscernible] for manufacturing costs. The third quarter was similar to the second quarter in that incremental progress was made with major new OEM customers in terms of finalizing new design wins and for some OEMs for which the new product designs are progressing and we’re sharing supply agreements. We have received the initial orders associated with the first Intel VF12 [indiscernible] opportunity and expect to start shipping these products in volume starting in 2013 when other volumes should begin a sustained ramp. This VF4K volt to processor, we achieve [ph] solution, consisting of a PRM regulator and a VTM car [ph] multiplier, delivers the most efficient power conversion solution for Intel processor applications from a 48-volt [ph]…

Thank you, Patrizio. As disclosed, Vicor's consolidated revenue for the third quarter decreased to $53 million compared to $55.5 million for the second quarter, representing a sequential decline of 4.5%. The third quarter figure compares to a revenue of $58.6 million for the third quarter of 2011, representing a decline of 9.6%. International revenue increased 2.9% quarter-to-quarter as an increase in BBU exports of modules, primarily to Asia, was offset by lower V-I Chip shipments also to Asia. International revenue represented just over 52% of total revenue, up from 48.4% for the second quarter. We experienced another sequential increase in recognized sell-through revenue associated with shipments by our stocking distributors, future electronics and digit key. The absolute figures are relatively small, but the trend continues to be positive. Recognized sell-through revenue totaled $745,000 for the third quarter, compared to $367,000 for the second quarter, a sequential increase of over 100%. Consolidated gross margin at 43.4 was essentially unchanged sequentially compared to 41.7 for the third quarter of 2011. The year-over-year increase reflects a shift in relative mix made up of a higher percentage of higher-margin bricks as V-I chip shipments declined. As we've discussed, V-I chip has increased efficiencies and lowered material costs, contribute to potentially higher product gross margins at sustained high volumes. However, at current low volumes, overhead absorption is weak and higher incremental material costs is reflected in V-I chips margins. With the anticipated volumes of Q4 and 2013, we expect V-I chip gross margins to improve somewhat. In addition, our new panel molded packaging process should begin contributing to improved V-I chip [indiscernible] gross margins in late 2013 when volumes of panel molded products are expected to begin to ramp. Consolidated operating expenses for the third quarter declined sequentially. Largely reflecting lower variable costs associated with…

[Operator instructions] And our first question comes from John Dillon [ph].

Patrizio, I’ve got a question on the Intel-VR opportunity. I was wondering if you could just give us a little more color on that. You said you’ve got some initial bookings on that. Was that for production units, and was that in last quarter or did that come in, in October? And how do you see this going forward, a little more granularity on that if that’s possible?

We expected to start ramping early in 2013. I think we’re still in the initial phase. I don’t know if I can characterize it as full production, it’s not. I think it’s pre-production. But full production is expected to start relatively soon.

Okay, good. And on the IBCs is there anything new on the lawsuit. You said they were picking up again. Can you give us just a little more color on that?

In the patent office, I believe at this point all of the Syncor patents have been asserted against us have been rejected. It’s effectively valid by each of, I think, 4 different examiners. Some of these patents are already coming up for appeal by Syncor, and their appeal will be heard by the patent board in due course. There has been some power developments involving defendants in the earlier litigations [indiscernible] action. The Philips [ph] circuit has taken on a review and is held in our argument regarding the appeal from the earlier case, the Syncor [ph] court case. So there’s a lot of moving pieces, but to boil it down to the key points, we’re confident that all of the Syncor patents will be found to be invalid, as all of the examiners that have been involved in each of 4 different [indiscernible] have found them to be. You know we’re very powerful arguments, stronger than the arguments that were advanced by the earlier defendants, and we believe that on the side of those arguments that there will not be any balance left.

Okay, and it sounded like you said in your opening remarks that the IBCs are picking up, so I guess does that mean you’re still getting new designs for them? That they have gone into production? Is that what we can draw from that?

We have had growing level of production, it has been muted by Syncor’s concerted efforts to confuse and scare customers across the globe in this country, Europe and in Asia. We are documenting this evidence and in due course we are going to bring it to bear with respect to the damages caused to us. So the effect has been a significant delay with respect to converting a strong interest in products through [indiscernible] and clearly different [indiscernible] and superior in a respect efficiency, density, the key attributes. So the competitor, Syncor, has been using a portfolio patents that really boil down to a common denominator, specific action which did not project the capabilities they are now claiming. They are asserting it in a way that we believe is totally inappropriate, but in spite of that, in part I believe because of their initial preliminary success against others, they have been repeatedly [ph] effective in scaring off some customers. But as we discussed in power polls with the passage of time, I think more and more customers are seeing that the Emperor has no clothes and their pressing needs for density and efficiency are driving them to our different [ph] solutions.

Back to the question of, you’re still seeing new designs then even with this?

Yes, we’re getting new designs and some of the design activity that have been going on earlier on that was put on hold is converting into programs that are going into production. So we’re expecting to see a significant pickup in activity in 2013. Unfortunately 2013, that could have been 2011, in terms of level of revenues and profits derived out of this call [ph].

Your next question comes from the line of Don McKenna.

I wanted to ask you. I have been hearing what I thought was 2015, then Jamie was using 2013. Patrizio am I misunderstanding you? Were you talking of 2013, 1-3, in your prepared remarks?

2013, yes. Apologies for the Italian accent.

That’s okay, it’s my ears. The other thing I wanted to ask too was in one of your press releases it looked like you were preparing something with Emerson. Is Emerson a partner now? I always saw them as a competitor?

I don’t know that we’d characterize this activity in any particular way other than, there was a collaboration for a specific purpose that generated significant interest of a recent shop.

Are they a customer?

I’m not going to say anything more than what I just said about that.

Your next question comes from the line of Jim Bartlett.

Just getting back to John’s [ph] question on the IBCs, if there’s one very large customer with that product, where do they stand?

Well, I think potentially there is a multiplicity of very substantial customers. I’m not going to provide any detailed information with respect to any one of them beyond giving you an overall perspective on IBC power line. The revenues to date have been very disappointing for the reasons that we’ve discussed. However, with the delay caused by the issues that I’ve summarized earlier in this call, we are seeing growing traction and we’re expecting, I think with the delay of a couple of years to start seeing the ramp that we anticipated beginning in 2011. So this will have obviously measuring impact with respect to the value and the position in terms of revenues and bottom line. Because, as we all know revenues defer, this is more than the impact of the revenues at a particular time. It has the effect of shifting the whole revenue curve to the right. So it’s been a significant impact in terms of what we expected to be able to accomplish. But at least with a significant delay we are now seeing it beginning to get accomplished.

On the Intel VR12 you have one customer there. What are the chances of getting more customers for that product?

The chances are very good. I think it’s a compelling solution that has a significant advantage in terms of reduction in energy cost, and overall cost effectiveness accounting for all of the key considerations. It’s a high performance solution. It’s a solution that enables efficient power distribution within [indiscernible] that can be achieved using a 4k vault pass, which is much more efficient than lower voltage busses. We have seen a great deal of interest in it. There’s been a great deal of effort internally to scale it down [ph] in terms of projecting it to other customers in Asia and other parts of the world. So we see a significant long-term opportunity in that general direction.

You also mentioned the opportunity in automotive and hybrids, and some initial, I think trial shipments. Could you sort of expand on the potential there and the timing?

So we are in a phase to contract with our customers having gone through phase one. We have a lot of interest by other customers, and potential customers. We’re also having discussion with suppliers to automotive reamps [ph]. So it’s multifaceted activity that involves a group, a team effort in the front end of the business as well as in terms of engineering activities with respect to taking BCMs as the building blocks of the power system into a complete power system for use in particular vehicles. Also there’s ongoing activity with respect to refine the performance of the car, BCM building blocks. So we invest a significant effort in this initiative because we see a tremendous opportunity with it. This is an area where our solution is differentiated in a number of key attributes including [indiscernible], scalability, density, efficiency and overall cost effectiveness. So given those attributes, it represents a compelling alternative to traditional power systems that are anchored in older technology custom developments that tend to be very bulky, not scalable, more predictable in a variety of ways. So we’re taking it to new potential customers and looking to build momentum over the next 6 to 12 months.

Would there be anything meaningful in terms of orders or revenues in 2013, or is this more 2014?

I think this is more of a 2014, and to be more specific about that probably second half of 2014.

[Operator Instructions] At this present time, gentlemen, we have no further questions.

Very well. Thank you very much. Talk to you in a few months.

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