SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

August 3, 2015

Date of Report (date of earliest event reported)

 

 

INTEVAC, INC.

(Exact name of Registrant as specified in its charter)

 

 

 

State of Delaware   0-26946   94-3125814

(State or other jurisdiction

of incorporation or organization)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

3560 Bassett Street

Santa Clara, CA 95054

(Address of principal executive offices)

(408) 986-9888

(Registrant’s telephone number, including area code)

N/A

(Former name or former address if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition

On August 3, 2015, Intevac, Inc. issued a press release reporting its financial results for the three and six months ended July 4, 2015. A copy of the press release issued by the Company concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The foregoing information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits

 

  (d) Exhibits

99.1 Press Release.


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

              INTEVAC, INC.
Date: August 3, 2015      

 /s/ JAMES MONIZ

      James Moniz
      Executive Vice President, Finance and Administration,
      Chief Financial Officer, Treasurer and Secretary


Exhibit 99.1

 

LOGO   3560 Bassett Street, Santa Clara CA 95054

 

James Moniz

Chief Financial Officer

(408) 986-9888

      

 

Claire McAdams

Investor Relations

(530) 265-9899

INTEVAC ANNOUNCES SECOND QUARTER 2015 FINANCIAL RESULTS

Santa Clara, Calif.—August 3, 2015—Intevac, Inc. (Nasdaq: IVAC) today reported financial results for the quarter and six months ended July 4, 2015.

“We made significant progress in our Thin-Film Equipment growth strategy during the second quarter,” commented Wendell Blonigan, Intevac’s president and chief executive officer. “The proprietary protective carbon film we’ve engineered for our production VERTEX PVD system has demonstrated outstanding performance as a cost-effective, optically-transparent, scratch-protective solution for cell phone display cover panels. We won a new Tier 1 customer for this marketplace, in which we generated excitement for our film by working together with our customer to market the film directly to mobile phone manufacturers, culminating in the new system order announced in July.

“Our Photonics business continued to perform well, achieving favorable yields in our production programs, while we invest in our next-generation low-light sensor technology,” added Mr. Blonigan. “We were also pleased to experience an uptick in demand for strategic hard drive media upgrades, which boosted both revenues and gross margin in the quarter as well as our outlook for the year.”

 

($ Millions, except per share amounts)    Q2 2015     Q2 2014  
     GAAP Results      Non-GAAP Results     GAAP Results     Non-GAAP Results  

Net Revenues

   $ 20.5       $ 20.5      $ 14.7      $ 14.7   

Operating Income (Loss)

   $ 0.3       $ 0.1      $ (5.2   $ (5.1

Net Income (Loss)

   $ 0.0       $ (0.2   $ (5.0   $ (4.9

Net Income (Loss) per Share

   $ 0.00       $ (0.01   $ (0.21   $ (0.20

 

     Six Months Ended     Six Months Ended  
     July 4, 2015     June 28, 2014  
     GAAP Results     Non-GAAP Results     GAAP Results     Non-GAAP Results  

Net Revenues

   $ 40.3      $ 40.3      $ 31.7      $ 31.7   

Operating Loss

   $ (2.7   $ (2.7   $ (10.0   $ (9.6

Net Loss

   $ (2.9   $ (2.9   $ (9.5   $ (9.1

Net Loss per Share

   $ (0.13   $ (0.13   $ (0.40   $ (0.38

Intevac’s non-GAAP adjusted results exclude the impact of the following, where applicable: (1) changes in fair value of contingent consideration liabilities associated with business combinations; and (2) restructuring charges. A reconciliation of the GAAP and non-GAAP adjusted results is provided in the financial table included in this release. See also “Use of Non-GAAP Financial Measures” section.


Second Quarter 2015 Summary

Net income for the quarter was $12,000, or $0.00 per share, compared to a net loss of $5.0 million, or $0.21 per share, in the second quarter of 2014. The non-GAAP net loss was $0.2 million or $0.01 per share, compared to the second-quarter 2014 non-GAAP net loss of $4.9 million or $0.20 per share.

Revenues were $20.5 million, including $11.5 million of Thin-film Equipment revenues and Photonics revenues of $9.0 million. Thin-film Equipment revenues included upgrades, spares and service, as well as some customer-funded NRE for passing key technical milestones during the quarter. Photonics revenues consisted of $1.8 million of research and development contracts and $7.2 million of product sales. In the second quarter of 2014, revenues were $14.7 million, including $3.8 million of Thin-film Equipment revenues and Photonics revenues of $11.0 million, which included $2.7 million of research and development contracts.

Thin-film Equipment gross margin was 41.0% compared to 8.3% in the second quarter of 2014 and 28.5% in the first quarter of 2015. Equipment margins in the second quarter of 2015 were higher primarily due to a higher mix of higher-margin upgrades and improved factory absorption.

Photonics gross margin was 34.5% compared to 44.7% in the second quarter of 2014 and 42.1% in the first quarter of 2015. The decline from the second quarter of 2014 and the first quarter of 2015 was due to lower contractual pricing on shipments of the Apache helicopter camera and higher factory overhead expenses. Consolidated gross margin was 38.2%, compared to 35.4% in the second quarter of 2014 and 34.8% in the first quarter of 2015.

R&D and SG&A expenses of $7.7 million decreased 22.2% compared to the first quarter of 2015. Lower R&D spending in the second quarter was due primarily to costs recovered under customer-funded NRE in Thin-film Equipment.

Order backlog totaled $43.5 million on July 4, 2015, compared to $39.2 million on April 4, 2015 and $46.4 million on June 28, 2014. Backlog at both July 4, 2015 and April 4, 2015 included two solar systems, compared to backlog as of June 28, 2014 which included one solar system and one PVD display cover glass coating system.

The company ended the quarter with $58.8 million of total cash, restricted cash and investments and $85.7 million in tangible book value. The company repurchased 1.1 million shares of common stock for $6.3 million during the second quarter. As of July 4, 2015 the company has repurchased 3.0 million shares for $19.3 million out of the $30 million plan announced in November of 2013.

First Six Months 2015 Summary

The net loss was $2.9 million, or $0.13 per share, compared to a net loss of $9.5 million, or $0.40 per share, for the first six months of 2014. The non-GAAP net loss was $2.9 million or $0.13 per share. This compares to the first half 2014 non-GAAP net loss of $9.1 million or $0.38 per share.

Revenues were $40.3 million, including $22.1 million of Thin-film Equipment revenues and Photonics revenues of $18.2 million, compared to revenues of $31.7 million, including $12.8 million of Thin-film Equipment revenues and Photonics revenues of $18.9 million, for the first six months of 2014.

Thin-film Equipment gross margin was 35.0%, compared to 18.1% in the first six months of 2014, primarily due to higher mix of higher-margin upgrades, lower factory overhead expenses


and lower inventory charges. We recognized revenue on one 200 Lean system in both the first half of 2015 and 2014. Photonics gross margin was 38.3% compared to 40.7% in the first six months of 2014, reflecting lower contractual pricing on Apache camera shipments, lower margins on technology development programs and higher factory overhead costs. Consolidated gross margin was 36.5%, compared to 31.6% in the first six months of 2014.

R&D and SG&A expenses were $17.6 million and were down 11.6% from $19.9 million in the first six months of 2014 primarily due to costs recovered under customer-funded NRE in Thin-film Equipment.

Use of Non-GAAP Financial Measures

Intevac’s non-GAAP results exclude the impact of the following, where applicable: (1) changes in fair value of contingent consideration liabilities associated with business combinations; and (2) restructuring charges. A reconciliation of the GAAP and non-GAAP results is provided in the financial tables included in this release.

Management uses non-GAAP results to evaluate the company’s operating and financial performance in light of business objectives and for planning purposes. These measures are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. Intevac believes these measures enhance investors’ ability to review the company’s business from the same perspective as the company’s management and facilitate comparisons of this period’s results with prior periods. The presentation of this additional information should not be considered a substitute for results prepared in accordance with GAAP.

Conference Call Information

The company will discuss its financial results and outlook in a conference call today at 1:30 p.m. PDT (4:30 p.m. EDT). To participate in the teleconference, please call toll-free (877) 334-0811 prior to the start time. For international callers, the dial-in number is (408) 427-3734. You may also listen live via the Internet at the company’s website, www.intevac.com, under the Investors link, or at www.earnings.com. For those unable to attend, these web sites will host an archive of the call. Additionally, a telephone replay of the call will be available for 48 hours beginning today at 7:30 p.m. EDT. You may access the replay by calling (855) 859-2056 or, for international callers, (404) 537-3406, and providing Replay Passcode 80851895.

About Intevac

Intevac was founded in 1991 and has two businesses: Thin-film Equipment and Photonics.

In our Thin-film Equipment business, we are a leader in the design and development of high-productivity, thin film processing systems. Our production-proven platforms are designed for high-volume manufacturing of substrates with precise thin-film properties.

Intevac is the market and technology leader in the hard drive industry, with our systems processing approximately 60% of all magnetic disk media produced worldwide. Our high-performance, high-throughput technology solutions continue to expand into additional markets – including solar and adjacent thin-film deposition applications.

In our Photonics business, we are a recognized leading developer of advanced high-sensitivity digital sensors, cameras and systems that primarily serve the defense industry. We are the provider of integrated digital imaging systems for most U.S. military night vision programs.


For more information call 408-986-9888, or visit the company’s website at www.intevac.com.

200 Lean® is a registered trademark and INTEVAC MATRIX™ and INTEVAC VERTEX™ are trademarks of Intevac, Inc.

Safe Harbor Statement

This press release includes statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Intevac claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are often characterized by the terms “may,” “believes,” “projects,” “expects,” or “anticipates,” and do not reflect historical facts. Specific forward-looking statements contained in this press release include, but are not limited to: the ability to leverage technology into new markets, customer penetration and adoption, and future revenue growth and profitability. The forward-looking statements contained herein involve risks and uncertainties that could cause actual results to differ materially from the company’s expectations. These risks include, but are not limited to: technology risk and challenges achieving customer adoption and commercial success in adjacent markets and delays in shipping deposition systems or Photonics cameras, each of which could have a material impact on our business, our financial results, and the company’s stock price. These risks and other factors are detailed in the company’s periodic filings with the U.S. Securities and Exchange Commission.


INTEVAC, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share amounts)

 

     Three months ended     Six months ended  
     July 4,
2015
    June 28,
2014
    July 4,
2015
    June 28,
2014
 

Net revenues

      

Thin-film Equipment

   $ 11,494      $ 3,762      $ 22,122      $ 12,809   

Photonics

     8,964        10,953        18,221        18,921   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     20,458        14,715        40,343        31,730   

Gross profit

     7,806        5,211        14,727        10,021   

Gross margin

      

Thin-film Equipment

     41.0     8.3     35.0     18.1

Photonics

     34.5     44.7     38.3     40.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

     38.2     35.4     36.5     31.6

Operating expenses

      

Research and development

     2,947        4,558        7,555        8,831   

Selling, general and administrative

     4,750        5,853        10,029        11,063   

Acquisition-related1

     (174     46        (200     97   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     7,523        10,457        17,384        19,991   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income (loss)

     283        (5,246     (2,657     (9,970

Income (loss) from operations

      

Thin-film Equipment

     6        (5,667     (3,291     (9,808

Photonics

     1,275        2,567        2,752        3,475   

Corporate

     (998     (2,146     (2,118     (3,637
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income (loss)

     283        (5,246     (2,657     (9,970

Interest and other income (expense)

     (13     120        66        192   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     270        (5,126     (2,591     (9,778

Provision for (benefit from) income taxes

     258        (119     290        (250
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 12      $ (5,007   $ (2,881   $ (9,528
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share

      

Basic and Diluted

   $ 0.00      $ (0.21   $ (0.13   $ (0.40

Weighted average common shares outstanding

      

Basic

     22,630        23,927        22,929        23,892   

Diluted

     22,912        23,927        22,929        23,892   

 

1  Results for all periods presented include changes in fair value of contingent consideration obligations associated with the Solar Implant Technology (SIT) acquisition in 2010.


INTEVAC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

 

     July 4,
2015
    January 3,
2015
 
     (Unaudited)     (see Note)  

ASSETS

  

Current assets

  

Cash, cash equivalents and short-term investments

   $ 47,756      $ 51,080   

Accounts receivable, net

     11,363        12,087   

Inventories

     18,517        19,212   

Prepaid expenses and other current assets

     1,728        1,727   
  

 

 

   

 

 

 

Total current assets

     79,364        84,106   

Long-term investments

     9,264        17,542   

Restricted cash

     1,780        1,780   

Property, plant and equipment, net

     12,360        12,826   

Intangible assets, net

     3,539        3,966   

Other long-term assets

     426        55   
  

 

 

   

 

 

 

Total assets

   $ 106,733      $ 120,275   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

  

Current liabilities

  

Accounts payable

   $ 4,169      $ 4,640   

Accrued payroll and related liabilities

     3,949        3,977   

Other accrued liabilities

     6,249        8,277   

Customer advances

     557        2,551   
  

 

 

   

 

 

 

Total current liabilities

     14,924        19,445   

Other long-term liabilities

     2,586        2,200   

Stockholders’ equity

  

Common stock ($0.001 par value)

     22        23   

Additional paid in capital

     164,035        161,271   

Treasury stock, at cost

     (19,268     (9,989

Accumulated other comprehensive income

     609        619   

Accumulated deficit

     (56,175     (53,294
  

 

 

   

 

 

 

Total stockholders’ equity

     89,223        98,630   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 106,733      $ 120,275   
  

 

 

   

 

 

 

Note: Amounts as of January 3, 2015 are derived from the January 3, 2015 audited consolidated financial statements.


INTEVAC, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(Unaudited, in thousands, except per share amounts)

 

     Three months ended     Six months ended  
     July 4,
2015
    June 28,
2014
    July 4,
2015
    June 28,
2014
 

Non-GAAP Income (Loss) from Operations

        

Reported operating income (loss) (GAAP basis)

   $ 283      $ (5,246   $ (2,657   $ (9,970

Restructuring charges1

            61        148        288   

Change in fair value of contingent consideration obligations2

     (174     46        (200     97   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Operating Income (Loss)

   $ 109      $ (5,139   $ (2,709   $ (9,585
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net Loss

        

Reported net income (loss) (GAAP basis)

   $ 12      $ (5,007   $ (2,881   $ (9,528

Restructuring charges1

     —          61        148        288   

Change in fair value of contingent consideration obligations2

     (174     46        (200     97   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net Loss

   $ (162   $ (4,900   $ (2,933   $ (9,143
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Loss Per Diluted Share

        

Reported net income (loss) per diluted share (GAAP basis)

   $ 0.00      $ (0.21   $ (0.13   $ (0.40

Restructuring charges1

   $ 0.00      $ 0.00      $ 0.01      $ 0.01   

Change in fair value of contingent consideration obligations2

   $ (0.01   $ 0.00      $ (0.01   $ 0.00   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Loss Per Diluted Share

   $ (0.01   $ (0.20   $ (0.13   $ (0.38
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of diluted shares

     22,912        23,927        22,929        23,892   

 

1  Results for all periods presented include severance and other employee-related costs related to various restructuring programs.
2  Results for all periods presented include changes in fair value of contingent consideration obligations associated with the Solar Implant Technology (SIT) acquisition in 2010.
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