Intevac, Inc. (Nasdaq: IVAC) today reported financial results
for the first quarter ended April 3, 2021.
“As expected, the first quarter of 2021 was challenging, as we
experienced a pause in revenue momentum within both of our
businesses,” commented Wendell Blonigan, president and chief
executive officer of Intevac. “In Photonics, the pause was chiefly
related to the completion of night vision camera deliveries for the
funded R&D stage of the IVAS program, and in our Thin-film
Equipment (TFE) business, we are in a period of reduced capital
investments by our hard disk drive (HDD) customers. At the same
time, highlights of the quarter included the successful completion
of our INTEVAC MATRIX® evaluation program for advanced
semiconductor packaging, which resulted in our first purchase
order, and first revenues, in this new market for Intevac. We
announced an incremental new $7 million development program in
Photonics that demonstrates the U.S. military’s continued
commitment to Intevac’s gated SWIR LIVAR® technology for new weapon
systems applications. We also demonstrated our ability to manage
our cash and discretionary spending during a difficult quarter.
Notably, we improved upon our already strong balance sheet by
generating positive cash flow from operations, ending the first
quarter with $53.6 million in total cash, cash equivalents,
restricted cash, and investments, an increase of $3.2 million since
year-end 2020.
“While these pauses in revenue momentum will be challenging to
our financial results in the near term, our longer-term outlook
remains strong. We continue to expect Intevac will participate in a
meaningful way in the major programs and technology trends that are
positively impacting the outlooks for both Photonics and TFE. These
include being a supplier of digital night vision technology for our
U.S. military ground soldiers, and being the world’s leading
provider of HDD media production systems as the industry moves
forward with capacity expansion plans in support of strong secular
growth in data center and cloud storage. Our continued progress in
MATRIX and VERTEX evaluation programs and demos provide additional
growth potential, incremental to the strong growth expected in our
two core markets. Our demonstrated ability to preserve our balance
sheet as we navigate through these lean periods will serve us well,
as we expect a return to growth in 2022.”
($ Millions, except per share amounts)
Q1 2021
Q1 2020
GAAP Results
Non-GAAP Results
GAAP Results
Non-GAAP Results
Net Revenues
$
16.2
$
16.2
$
18.8
$
18.8
Operating Loss
$
(6.5
)
$
(6.5
)
$
(1.1
)
$
(1.1
)
Net Loss
$
(6.5
)
$
(6.5
)
$
(1.2
)
$
(1.2
)
Net Loss per Diluted Share
$
(0.27
)
$
(0.27
)
$
(0.05
)
$
(0.05
)
Intevac’s non-GAAP adjusted results
exclude the impact, where of applicable, 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.
First Quarter 2021 Summary
The net loss was $6.5 million, or $0.27 per diluted share,
compared to a net loss of $1.2 million, or $0.05 per diluted share,
in the first quarter of 2020.
Revenues were $16.2 million, including $9.2 million of TFE
revenues and $7.0 million of Photonics revenues. TFE revenues
consisted of one MATRIX PVD system for advanced semiconductor
packaging, as well as HDD upgrades, spares and service. Photonics
revenues consisted of $3.8 million of product sales and $3.2
million of research and development contracts. In the first quarter
of 2020, revenues were $18.8 million, including $8.0 million of TFE
revenues which consisted of upgrades, spares and service. Photonics
revenues consisted of $5.9 million of product sales and $5.0
million of research and development contracts.
TFE gross margin was 23.1%, compared to 44.0% in the first
quarter of 2020. The decline was primarily due to product mix,
given the lower-margin contribution from the first MATRIX PVD
system in the first quarter of 2021 and the higher mix of
higher-margin HDD upgrades in the first quarter of 2020. Photonics
gross margin was 13.1%, compared to 42.8% in the first quarter of
2020. The decline was primarily due to lower margins on research
and development contracts resulting from higher costs related to
additional work needed in order to complete the integration of our
camera into the IVAS platform as we neared the end of the
development program. Consolidated gross margin was 18.8%, compared
to 43.3% in the first quarter of 2020.
R&D and SG&A expenses were $9.6 million, compared to
$9.3 million in the first quarter of 2020.
Order backlog totaled $43.1 million on April 3, 2021, compared
to $46.9 million on January 2, 2021 and $87.2 million on March 28,
2020. Backlog at both April 3, 2021 and January 2, 2021 did not
include any 200 Lean® HDD systems. Backlog at March 28, 2020
included two 200 Lean HDD systems.
The Company ended the quarter with $53.6 million of total cash,
cash equivalents, restricted cash and investments and $97.2 million
in tangible book value.
Use of Non-GAAP Financial Measures
Intevac's non-GAAP results exclude the impact, where applicable,
of 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)
407-0989 prior to the start time, and reference meeting number
13718576. For international callers, the dial-in number is +1 (201)
389-0921. You may also listen live via the Internet at
https://www.webcast-eqs.com/intevac20210503/en or 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,
solar photovoltaic, and advanced semiconductor packaging 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®, LIVAR®,
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.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited, in thousands, except per share
amounts)
Three months ended
April 3, 2021
March 28, 2020
Net revenues
TFE
$
9,238
$
7,962
Photonics
7,003
10,878
Total net revenues
16,241
18,840
Gross profit
3,054
8,156
Gross margin
TFE
23.1
%
44.0
%
Photonics
13.1
%
42.8
%
Consolidated
18.8
%
43.3
%
Operating expenses
Research and development
3,625
3,284
Selling, general and administrative
5,930
5,972
Total operating expenses
9,555
9,256
Total operating loss
(6,501
)
(1,100
)
Operating income (loss)
TFE
(4,002
)
(2,531
)
Photonics
(1,146
)
2,912
Corporate
(1,353
)
(1,481
)
Total operating loss
(6,501
)
(1,100
)
Interest and other income
29
142
Loss before provision for income taxes
(6,472
)
(958
)
Provision for income taxes
32
266
Net loss
$
(6,504
)
$
(1,224
)
Net loss per share
Basic and Diluted
$
(0.27
)
$
(0.05
)
Weighted average common shares
outstanding
Basic and Diluted
24,033
23,483
INTEVAC, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except par value)
April 3, 2021
January 2, 2021
(Unaudited)
(see Note)
ASSETS
Current assets
Cash, cash equivalents and short-term
investments
$
48,893
$
44,180
Accounts receivable, net
18,229
28,646
Inventories
20,501
21,689
Prepaid expenses and other current
assets
1,789
1,893
Total current assets
89,412
96,408
Long-term investments
3,919
5,388
Restricted cash
787
787
Property, plant and equipment, net
10,456
11,004
Operating lease right-of-use-assets
7,582
8,165
Deferred income tax and other long-term
assets
5,485
5,486
Total assets
$
117,641
$
127,238
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current operating lease liabilities
$
2,913
$
2,853
Accounts payable
2,765
4,259
Accrued payroll and related
liabilities
5,150
7,679
Other accrued liabilities
3,136
3,598
Customer advances
42
33
Total current liabilities
14,006
18,422
Non-current liabilities
Non-current operating lease
liabilities
6,045
6,803
Other long-term liabilities
435
457
Total non-current liabilities
6,480
7,260
Stockholders’ equity
Common stock ($0.001 par value)
24
24
Additional paid-in capital
195,364
193,173
Treasury stock, at cost
(29,551
)
(29,551
)
Accumulated other comprehensive income
552
640
Accumulated deficit
(69,234
)
(62,730
)
Total stockholders’ equity
97,155
101,556
Total liabilities and stockholders’
equity
$
117,641
$
127,238
Note: Amounts as of January 2, 2021 are derived from the January
2, 2021 audited consolidated financial statements.
INTEVAC, INC.
RECONCILIATION OF GAAP TO NON-GAAP
RESULTS
(Unaudited, in thousands, except per share
amounts)
Three months ended
April 3, 2021
March 28, 2020
Non-GAAP Loss from Operations
Reported operating loss (GAAP basis)
$
(6,501
)
$
(1,100
)
Restructuring charges1
43
—
Non-GAAP Operating Loss
$
(6,458
)
$
(1,100
)
Non-GAAP Net Loss
Reported net loss (GAAP basis)
$
(6,504
)
$
(1,224
)
Restructuring charges1
43
—
Income tax effect of non-GAAP
adjustments2
—
—
Non-GAAP Net Loss
$
(6,461
)
$
(1,224
)
Non-GAAP Net Loss Per Share
Reported net loss per share (GAAP
basis)
$
(0.27
)
$
(0.05
)
Restructuring charges1
—
—
Non-GAAP Net Loss Per Share
$
(0.27
)
$
(0.05
)
Weighted average number of diluted shares
outstanding
24,033
23,483
1Results for the three months ended April
3, 2021 include severance and other employee-related costs related
to a restructuring program.
2The 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20210503005356/en/
James Moniz Chief Financial Officer (408) 986-9888
Claire McAdams Investor Relations (530) 265-9899
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