Intevac, Inc. (Nasdaq: IVAC) today reported financial results
for the quarter and six months ended July 1, 2023.
“2023 has been a year of both immense change for Intevac, as
well as tremendous opportunity,” commented Nigel Hunton, president
and chief executive officer. “We are excited about continued
progress in our joint development program for our groundbreaking
TRIO™ platform year to date. Our JDA partner, one of the world’s
leading innovators in glass and glass-ceramic materials for mobile
consumer electronics applications, with whom we entered a joint
development agreement for the TRIO platform in fiscal 2022, is
currently evaluating the TRIO tool built by Intevac. The next step
will be to move into the formal qualification cycle planned for
this month. This partnership presents significant potential for
revenue growth for Intevac as we look toward the next few years.
During this period, while visibility in the hard disk drive (HDD)
industry continues to present operational challenges for a company
of our size, there is no doubt that our differentiated position as
a key technology enabler is reinforcing the importance of our
partnerships with our customers in the critical advancements of the
industry’s technology roadmap. Finally, we expect our current
restructuring efforts, which are anticipated to be completed by the
end of the third quarter, will enable the Company to be cash-flow
neutral from the P&L for fiscal 2024.”
($ Millions, except per share amounts)
Three Months Ended
Three Months Ended
July 1, 2023
July 2, 2022
GAAP Results
Non-GAAP Results
GAAP Results
Non-GAAP Results
Net Revenues
$
10.3
$
10.3
$
9.3
$
9.3
Operating Loss
$
(5.5
)
$
(5.5
)
$
(2.4
)
$
(2.4
)
Net Loss
$
(4.9
)
$
(4.9
)
$
(2.8
)
$
(2.6
)
Net Loss per Share
$
(0.19
)
$
(0.19
)
$
(0.11
)
$
(0.10
)
Six Months Ended
Six Months Ended
July 1, 2023
July 2, 2022
GAAP Results
Non-GAAP Results
GAAP Results
Non-GAAP Results
Net Revenues
$
21.8
$
21.8
$
13.8
$
13.8
Operating Loss
$
(9.9)
$
(9.9)
$
(10.1)
$
(7.4)
Net Loss
$
(8.8)
$
(9.1)
$
(10.7)
$
(7.6)
Net Loss per Share
$
(0.34)
$
(0.35)
$
(0.43)
$
(0.30)
Intevac’s non-GAAP adjusted results exclude the impact of the
following, where applicable: (i) restructuring charges, (ii) fixed
asset disposals associated with a restructuring program and (iii)
discontinued operations. 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 2023 Summary
Revenues were $10.3 million, compared to $9.3 million in the
second quarter of 2022, and consisted of one 200 Lean HDD system,
one refurbished 200 Lean HDD system, HDD upgrades, spares and
service. Gross margin was 24.9%, compared to 48.2%, in the second
quarter of 2022, and was lower than forecast due to approximately
$0.9 million of incremental materials, labor and overhead charges
during the quarter. Operating expenses were $8.0 million, compared
to $6.9 million in the second quarter of 2022. The operating loss
was $5.5 million compared to $2.4 million in the second quarter of
2022.
The net loss for the quarter was $4.9 million, or $0.19 per
diluted share, compared to a net loss of $2.8 million, or $0.11 per
diluted share, in the second quarter of 2022. The non-GAAP net loss
for the second quarter of 2023 was $4.9 million, or $0.19 per
diluted share, compared to a non-GAAP net loss of $2.6 million, or
$0.10 per diluted share, in the second quarter of 2022.
Order backlog was $58.2 million on July 1, 2023, compared to
$120.7 million on April 1, 2023 and $100.2 million on July 2, 2022.
Backlog at July 1, 2023 included two 200 Lean HDD systems. Backlog
at April 1, 2023 and at July 2, 2022 included eleven 200 Lean HDD
systems.
The Company ended the quarter with $73.9 million of total cash,
cash equivalents, restricted cash and investments and $116.0
million in tangible book value.
First Six Months 2023 Summary
Revenues were $21.8 million, compared to first-half 2022
revenues of $13.8 million, and consisted of one 200 Lean HDD
system, one refurbished 200 Lean HDD system, HDD upgrades, spares
and service. Gross margin was 33.4%, compared to 37.9% in the first
six months of 2022. Operating expenses were $17.2 million, compared
to $15.3 million in the first six months of 2022. The net loss was
$8.8 million, or $0.34 per diluted share, compared to a net loss of
$10.7 million, or $0.43 per diluted share, for the first six months
of 2022.
Subsequent Event
During the third quarter of fiscal 2023, Intevac substantially
completed implementation of a cost reduction plan (the “2023 Cost
Reduction Plan”), which is intended to reduce expenses by reducing
our workforce by approximately 25 percent including employees and
contractors. Intevac expects to incur restructuring costs of $1.8
million in estimated severance and other employee-related expenses
associated with the 2023 Cost Reduction Plan. Substantially all
cash outlays in connection with the 2023 Cost Reduction Plan are
expected to occur in the third quarter of fiscal 2023.
Implementation of the 2023 Cost Reduction Plan is expected to
reduce salary, wages, and other employee-related expenses and
contractor payments by approximately $4.0 million on an annual
basis.
Use of Non-GAAP Financial Measures
Intevac’s non-GAAP results exclude the impact, where applicable,
of restructuring charges, fixed asset disposals associated with a
restructuring program and discontinued operations. 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
13739934. 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/register/intevac080223/en or on the
Company's investor relations website at https://ir.intevac.com/.
For those unable to attend live, an archived webcast of the call
will be available at the same link.
About Intevac
Founded in 1991, we are a leading provider of thin-film process
technology and manufacturing platforms for high-volume
manufacturing environments. As a long-time supplier to the hard
disk drive (HDD) industry, over the last 20 years we have delivered
over 180 of our industry-leading 200 Lean® systems, which currently
represent the majority of the world’s capacity for HDD disk media
production. Today, we believe that all of the technology upgrade
initiatives for next-generation media for the HDD industry are
being deployed on our 200 Lean platform. With over 30 years of
leadership in designing, developing, and manufacturing
high-productivity, thin-film processing systems, we also are
leveraging our technology and know-how for additional applications,
such as coatings for consumer devices.
For more information call 408-986-9888, or visit the Company's
website at www.intevac.com.
200 Lean® is a registered trademark of Intevac, Inc. and TRIO™
is a trademark 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 Company’s revenue growth potential and future financial
performance. 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 shipment delays, availability of components,
supply chain constraints and other disruptions related to COVID-19,
and changes in market dynamics that could change the delivery
schedule of our systems and upgrades, 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.
All forward-looking statements in this press release are based
on information available to the Company as of the date hereof, and
Intevac does not assume any obligation to update the
forward-looking statements provided to reflect events that occur or
circumstances that exist after the date on which they were made,
except as required by law. Any future product, service, feature, or
related specification that may be referenced in this release is for
informational purposes only and is not a commitment to deliver any
offering, technology or enhancement.
INTEVAC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited, in thousands, except per share
amounts)
Three months ended
Six months ended
July 1,
2023
July 2,
2022
July 1,
2023
July 2,
2022
Net revenues
$
10,301
$
9,307
$
21,843
$
13,752
Gross profit
2,570
4,487
7,289
5,209
Gross margin
24.9
%
48.2
%
33.4
%
37.9
%
Operating expenses
Research and development
3,647
2,868
7,620
7,028
Selling, general and administrative
4,375
4,016
9,575
8,265
Total operating expenses
8,022
6,884
17,195
15,293
Total operating loss
(5,452
)
(2,397
)
(9,906
)
(10,084
)
Interest and other income (expense),
net
650
317
1,322
310
Loss from continuing operations before
provision for income taxes
(4,802
)
(2,080
)
(8,584
)
(9,774
)
Provision for income taxes
116
500
502
526
Net loss from continuing operations
(4,918
)
(2,580
)
(9,086
)
(10,300
)
Net income (loss) from discontinued
operations, net of taxes
40
(238
)
317
(373
)
Net loss
$
(4,878
)
$
(2,818
)
$
(8,769
)
$
(10,673
)
Net income (loss) per share
Basic and diluted - continuing
operations
$
(0.19
)
$
(0.10
)
$
(0.35
)
$
(0.41
)
Basic and diluted - discontinued
operations
$
0.00
$
(0.01
)
$
0.01
$
(0.01
)
Basic and diluted - net loss
$
(0.19
)
$
(0.11
)
$
(0.34
)
$
(0.43
)
Weighted average common shares
outstanding
Basic and diluted
26,032
25,141
25,907
24,970
INTEVAC, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except par value)
July 1,
2023
December 31,
2022
(Unaudited)
(see Note)
ASSETS
Current assets
Cash, cash equivalents and short-term
investments
$
67,602
$
94,445
Accounts receivable, net
20,211
15,823
Inventories
46,293
30,003
Prepaid expenses and other current
assets
1,914
1,898
Total current assets
136,020
142,169
Long-term investments
5,550
17,585
Restricted cash
785
786
Property, plant and equipment, net
7,288
3,658
Operating lease right-of-use-assets
2,266
3,390
Intangible assets, net
1,022
1,090
Deferred income tax and other long-term
assets
4,187
4,381
Total assets
$
157,118
$
173,059
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current operating lease liabilities
$
2,456
$
3,404
Accounts payable
10,421
11,610
Accrued payroll and related
liabilities
3,416
3,087
Other accrued liabilities
1,376
5,430
Contract advances
20,248
2,444
Total current liabilities
37,917
25,975
Non-current liabilities
Non-current operating lease
liabilities
687
1,417
Contract advances
1,482
22,215
Other non-current liabilities
29
—
Total non-current liabilities
2,198
23,632
Stockholders’ equity
Common stock ($0.001 par value)
26
26
Additional paid-in capital
208,672
206,355
Treasury stock, at cost
(29,551
)
(29,551
)
Accumulated other comprehensive loss
(190
)
(193
)
Accumulated deficit
(61,954
)
(53,185
)
Total stockholders’ equity
117,003
123,452
Total liabilities and stockholders’
equity
$
157,118
$
173,059
Note: Amounts as of December 31, 2022 are derived from the
December 31, 2022 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 1,
2023
July 2,
2022
July 1,
2023
July 2,
2022
Non-GAAP Loss from Operations
Reported operating loss (GAAP basis)
$
(5,452
)
$
(2,397
)
$
(9,906
)
$
(10,084
)
Restructuring charges 1
—
—
—
1,232
Loss on fixed asset disposals2
—
—
—
1,453
Non-GAAP Operating Loss
$
(5,452
)
$
(2,397
)
$
(9,906
)
$
(7,399
)
Non-GAAP Net Loss
Reported net loss (GAAP basis)
$
(4,878
)
$
(2,818
)
$
(8,769
)
$
(10,673
)
Continuing operations:
Restructuring charges 1
—
—
—
1,232
Loss on fixed asset disposals2
—
—
—
1,453
Income tax effect of non-GAAP
adjustments3
—
—
—
—
Discontinued operations4
(40
)
238
(317
)
373
Non-GAAP Net Loss
$
(4,918
)
$
(2,580
)
$
(9,086
)
$
(7,615
)
Non-GAAP Net Loss Per Diluted Share
Reported net loss per diluted share (GAAP
basis)
$
(0.19
)
$
(0.11
)
$
(0.34
)
$
(0.43
)
Continuing operations:
Restructuring charges 1
$
—
$
—
$
—
$
0.05
Loss on fixed asset disposals2
—
—
—
0.06
Discontinued operations4
(0.00
)
0.01
(0.01
)
0.01
Non-GAAP Net Loss Per Diluted Share
$
(0.19
)
$
(0.10
)
$
(0.35
)
$
(0.30
)
Weighted average number of diluted
shares
26,032
25,141
25,907
24,970
1Results for the six months ended July 2, 2022 include severance
and other employee-related costs related to a restructuring
program. Restructuring costs for the six months ended July 2, 2022
include $1.2 million for estimated severance and the related
modification of certain stock-based awards.
2The amount represents fixed asset disposals under the 2022
restructuring plan.
3The 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.
4The amount represents discontinued operations of the Photonics
business that was sold on December 30, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230802623945/en/
James Moniz Chief Financial Officer (408) 986-9888
Claire McAdams Investor Relations (530) 265-9899
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