Intevac, Inc. (Nasdaq: IVAC) today reported financial results
for the fiscal fourth quarter and year ended January 2, 2021.
Fiscal 2020 Highlights
- Record Photonics revenues of $45.7 million, up 30%
year-over-year - Record sales of system upgrades to our hard disk
drive (HDD) customers - Profitable results, with GAAP EPS of $0.04
and non-GAAP EPS of $0.05 for the year - Significant cash flow
generation, ending fiscal 2020 with $50.4 million in total cash,
cash equivalents, restricted cash and investments, an increase of
$7.5 million over year-end 2019
“Given the immense challenges faced in 2020, we are pleased to
report profitable results and strong cash flow generation for the
year,” commented Wendell Blonigan, president and chief executive
officer of Intevac. “Our profitable results were driven primarily
by our Photonics business, which reported strong growth and a
record year as a result of significant development revenues for the
IVAS program, the first all-digital solution for the ground
soldier. In our Thin-film Equipment (TFE) business, we achieved
strong gross margin performance, primarily as a result of record
sales of HDD upgrades for both the fourth quarter and full year.
While total sales declined year-over-year as a result of
COVID-related impacts to our TFE growth initiatives, our combined
Photonics and HDD businesses actually grew 5% for the year,
exceeding our expectations entering 2020.
“As we look forward, the IVAS program continues to be the
primary revenue growth opportunity for Photonics. We expect to
transition from the development stage into production over the
course of this year, setting the stage for significant growth
potential in our Photonics business for 2022 and beyond. In TFE, we
expect the investment cycle for HDD media capacity expansions to
begin by mid-2021, and accelerate into next year, in support of
strong demand for mass-capacity data center storage and growth in
high-performance computing. Finally, we believe the multiple
evaluation and demo programs in our TFE growth initiatives will
contribute to our overall growth story, and continue to support the
long-term revenue growth and profitability objectives for Intevac,”
concluded Mr. Blonigan.
($ Millions, except per share amounts)
Q4 2020
Q4 2019
GAAP Results
Non-GAAP Results
GAAP Results
Non-GAAP Results
Net Revenues
$
28.6
$
28.6
$
35.4
$
35.4
Operating Income
$
1.7
$
1.7
$
7.3
$
7.3
Net Income
$
1.1
$
1.1
$
5.2
$
5.2
Net Income per Diluted Share
$
0.05
$
0.05
$
0.22
$
0.22
Year Ended
Year Ended
January 2, 2021
December 28, 2019
GAAP Results
Non-GAAP Results
GAAP Results
Non-GAAP Results
Net Revenues
$
97.8
$
97.8
$
108.9
$
108.9
Operating Income
$
2.6
$
2.7
$
3.9
$
3.9
Net Income
$
1.1
$
1.2
$
1.1
$
1.2
Net Income per Diluted Share
$
0.04
$
0.05
$
0.05
$
0.05
Intevac’s non-GAAP adjusted results exclude the impact of the
following, where applicable: (1) restructuring charges; and (2)
changes in fair value of contingent consideration liabilities
associated with business combinations. 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.
Fourth Quarter Fiscal 2020 Summary
Net income for the quarter was $1.1 million, or $0.05 per
diluted share, compared to net income of $5.2 million, or $0.22 per
diluted share, in the fourth quarter of 2019. Non-GAAP net income
for the fourth quarter of 2020 was $1.1 million, or $0.05 per
diluted share, compared to non-GAAP net income of $5.2 million, or
$0.22 per diluted share, in the fourth quarter of 2019.
Revenues were $28.6 million, including $18.2 million of TFE
revenues and $10.4 million of Photonics revenues. TFE revenues
consisted of upgrades, spares and service. Photonics revenues
included $5.3 million of research and development contracts and
$5.1 million of product sales. In the fourth quarter of 2019,
revenues were $35.4 million, including $24.4 million of TFE
revenues which consisted of two 200 Lean® HDD systems, upgrades,
spares and service, and Photonics revenues of $11.1 million, which
included $6.2 million of research and development contracts and
$4.9 million of product sales.
TFE gross margin was 48.3%, compared to 46.9% in the fourth
quarter of 2019 and 43.5% in the third quarter of 2020. The
improvement from the fourth quarter of 2019 and the third quarter
of 2020 was primarily due to favorable product mix. Photonics gross
margin was 27.7%, compared to 45.7% in the fourth quarter of 2019
and 42.8% in the third quarter of 2020. The decline from the fourth
quarter of 2019 and the third quarter of 2020 was primarily due to
lower margins on research and development contracts. Consolidated
gross margin was 40.8%, compared to 46.5% in the fourth quarter of
2019 and 43.1% in the third quarter of 2020.
R&D and SG&A expenses were $10.0 million, compared to
$9.2 million in the fourth quarter of 2019 and $9.4 million in the
third quarter of 2020.
Order backlog totaled $46.9 million on January 2, 2021, compared
to $63.3 million on September 26, 2020 and $92.4 million on
December 28, 2019. Backlog at January 2, 2021 and September 26,
2020 did not include any 200 Lean HDD systems. Backlog at December
28, 2019 included two 200 Lean HDD systems.
The Company ended the year with $50.4 million of total cash,
cash equivalents, restricted cash and investments and $101.6
million in tangible book value.
Fiscal Year 2020 Summary
Net income was $1.1 million, or $0.04 per diluted share,
compared to $1.1 million, or $0.05 per diluted share, for fiscal
2019. Non-GAAP net income was $1.2 million or $0.05 per diluted
share, compared to non-GAAP net income of $1.2 million or $0.05 per
diluted share for fiscal 2019.
Revenues were $97.8 million, including $52.1 million of TFE
revenues and $45.7 million of Photonics revenues, of which $22.9
million was contract R&D revenues, compared to 2019 revenues of
$108.9 million, which included $73.7 million of TFE revenues and
$35.2 million of Photonics revenues, of which $19.7 million was
contract R&D revenues.
TFE gross margin was 43.0%, compared to 37.2% in 2019, while
Photonics gross margin was 39.7%, compared to 38.3% in 2019.
Consolidated gross margin was 41.4%, compared to 37.5% in 2019.
Total R&D and SG&A expenses were $38.0 million, compared to
$36.9 million in 2019.
Use of Non-GAAP Financial Measures
Intevac's non-GAAP results exclude the impact of the following,
where applicable: restructuring charges and changes in fair value
of contingent consideration liabilities associated with business
combinations. 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. PST (4:30 p.m. EST). To
participate in the teleconference, please call toll-free (877)
407-0989 prior to the start time, and reference meeting number
13714463. For international callers, the dial-in number is +1 (201)
389-0921. You may also listen live via the Internet on the
Company's investor relations website at ir.intevac.com. For those
unable to attend live, an archived webcast of the call will be
available at ir.intevac.com.
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, such as the hard drive media, display cover panel, and
solar photovoltaic markets we serve currently.
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®, INTEVAC MATRIX®, INTEVAC VERTEX®, ENERGi®, DIAMOND
DOG®, DiamondClad®, VERTEX Marathon®, and VERTEX Spectra® are
registered 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:
impacts related to the COVID-19 global pandemic, customer adoption
of our products, future revenue growth potential, and the future
financial performance of Intevac. 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: global
economic impacts of COVID-19 including delays in customer
evaluations, supply chain constraints and disruptions related to
COVID-19, technology risk, challenges achieving customer adoption
and revenue growth in Thin-film Equipment markets, and delays in
Photonics programs, 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.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(Unaudited, in thousands, except
percentages and per share amounts)
Three months ended
Year ended
January 2,
December 28,
January 2,
December 28,
2021
2019
2021
2019
Net revenues
TFE
$
18,204
$
24,352
$
52,128
$
73,678
Photonics
10,372
11,092
45,696
35,207
Total net revenues
28,576
35,444
97,824
108,885
Gross profit
11,669
16,493
40,545
40,868
Gross margin
TFE
48.3
%
46.9
%
43.0
%
37.2
%
Photonics
27.7
%
45.7
%
39.7
%
38.3
%
Consolidated
40.8
%
46.5
%
41.4
%
37.5
%
Operating expenses
Research and development
3,499
3,296
14,093
14,309
Selling, general and administrative
6,471
5,913
23,897
22,634
Total operating expenses
9,970
9,209
37,990
36,943
Total operating income
1,699
7,284
2,555
3,925
Operating income (loss)
TFE
2,388
5,181
(1,978
)
1,747
Photonics
584
3,321
10,064
6,434
Corporate
(1,273
)
(1,218
)
(5,531
)
(4,256
)
Total operating income
1,699
7,284
2,555
3,925
Interest income and other income
(expense), net
—
133
212
582
Income before provision for income
taxes
1,699
7,417
2,767
4,507
Provision for income taxes
586
2,215
1,711
3,359
Net income
$
1,113
$
5,202
$
1,056
$
1,148
Net income per share
Basic
$
0.05
$
0.22
$
0.04
$
0.05
Diluted
$
0.05
$
0.22
$
0.04
$
0.05
Weighted average common shares
outstanding
Basic
23,862
23,275
23,669
23,063
Diluted
24,456
23,677
24,151
23,340
INTEVAC, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except par value)
January 2,
December 28,
2021
2019
(Unaudited)
(see Note)
ASSETS
Current assets
Cash, cash equivalents and short-term
investments
$
44,180
$
36,487
Accounts receivable, net
28,646
28,619
Inventories
21,689
24,907
Prepaid expenses and other current
assets
1,893
1,504
Total current assets
96,408
91,517
Long-term investments
5,388
5,537
Restricted cash
787
787
Property, plant and equipment, net
11,004
11,598
Operating lease right-of-use assets
8,165
10,279
Intangible assets, net
—
274
Other long-term assets
5,486
6,330
Total assets
$
127,238
$
126,322
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current operating lease liabilities
$
2,853
$
2,524
Accounts payable
4,259
4,199
Accrued payroll and related
liabilities
7,679
6,488
Other accrued liabilities
3,598
3,593
Customer advances
33
4,007
Total current liabilities
18,422
20,811
Non-current liabilities
Non-current operating lease
liabilities
6,803
9,532
Other long-term liabilities
457
186
Total non-current liabilities
7,260
9,718
Stockholders’ equity
Common stock ($0.001 par value)
24
23
Additional paid-in capital
193,173
188,290
Treasury stock, at cost
(29,551
)
(29,158
)
Accumulated other comprehensive income
640
424
Accumulated deficit
(62,730
)
(63,786
)
Total stockholders’ equity
101,556
95,793
Total liabilities and stockholders’
equity
$
127,238
$
126,322
Note: Amounts as of December 28, 2019 are derived from the
December 28, 2019 audited consolidated financial statements.
INTEVAC, INC.
RECONCILIATION OF GAAP TO NON-GAAP
RESULTS
(Unaudited, in thousands, except per share
amounts)
Three months ended
Year ended
January 2, 2021
December 28, 2019
January 2, 2021
December 28, 2019
Non-GAAP Income from Operations
Reported operating income (GAAP basis)
$
1,699
$
7,284
$
2,555
$
3,925
Restructuring charges1
—
—
103
—
Change in fair value of contingent
consideration obligations2
—
—
—
7
Non-GAAP Operating Income
$
1,699
$
7,284
$
2,658
$
3,932
Non-GAAP Net Income
Reported net income (GAAP basis)
$
1,113
$
5,202
$
1,056
$
1,148
Restructuring charges1
—
—
103
—
Change in fair value of contingent
consideration obligations2
—
—
—
7
Income tax effect of non-GAAP
adjustments3
—
—
—
—
Non-GAAP Net Income
$
1,113
$
5,202
$
1,159
$
1,155
Non-GAAP Net Income Per Diluted
Share
Reported net income per diluted share
(GAAP basis)
$
0.05
$
0.22
$
0.04
$
0.05
Restructuring charges1
$
—
$
—
$
0.00
$
—
Change in fair value of contingent
consideration obligations2
$
—
$
—
$
—
$
0.00
Non-GAAP Net Income Per Diluted Share
$
0.05
$
0.22
$
0.05
$
0.05
Weighted average number of diluted
shares
24,456
23,677
24,151
23,340
1
Results for the year ended January 2, 2021
include severance and other employee-related costs related to a
restructuring program.
2
Results for the year ended December 28,
2019 include changes in fair value of contingent consideration
obligations associated with the Solar Implant Technology (SIT)
acquisition in 2010.
3
The amount represents the estimated income
tax effect of the non-GAAP adjustments. The Company calculated the
tax effect of non-GAAP adjustments by applying an applicable
estimated jurisdictional tax rate to each specific non-GAAP
item.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210203005323/en/
James Moniz Chief Financial Officer (408) 986-9888
Claire McAdams Investor Relations (530) 265-9899
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