Intevac Announces First Quarter 2017 Financial Results
Mon, May 1 2017
First Quarter Highlights
- Revenues recognized on INTEVAC VERTEX™ volume production systems for display cover panel;
- Follow-on order received for 12 ENERGi™ solar ion implant systems for 1-Gigawatt capacity expansion;
- Stronger non-system order activity in our core HDD (hard disk drive) business, leading to revenues exceeding guidance;
- Approval of the DELTA-I program, which provides multi-national government funding of our ISIE 19 night-vision sensor in Photonics;
- Favorable gross margin performance and operating profitability in both our Thin-film Equipment and Photonics business segments; and
- Order and evaluation activity leading to a strengthened outlook for full-year revenues and profitability.
“Recent traction in orders and revenue in new markets reflect important
milestones in the future growth trajectory of our company,” commented
“In the first quarter, our Photonics business continued to deliver
results favorable to our long-term model for this business, with 16%
operating profitability. We are also pleased to report an important
development, which is the approval of the DELTA-I program under the
Department of Defense’s Coalition Warfare Program. This program is
funded by the
| ($ Millions, except per share amounts) | Q1 2017 | Q1 2016 | ||||||||||||||||
| GAAP Results | Non-GAAP Results | GAAP Results | Non-GAAP Results | |||||||||||||||
| Net Revenues | $ | 30.4 | $ | 30.4 | $ | 13.7 | $ | 13.7 | ||||||||||
| Operating Income (Loss) | $ | 2.1 | $ | 2.2 | $ | (6.3 | ) | $ | (6.3 | ) | ||||||||
| Net Income (Loss) | $ | 1.8 | $ | 1.9 | $ | (6.3 | ) | $ | (6.3 | ) | ||||||||
| Net Income (Loss) per Diluted Share | $ | 0.08 | $ | 0.08 | $ | (0.31 | ) | $ | (0.31 | ) | ||||||||
Intevac’s non-GAAP adjusted results exclude the impact of the following, where applicable: 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.
First Quarter 2017 Summary
Net income was
Revenues were
Thin-film Equipment gross margin was 43.1%, compared to 9.0% in the first quarter of 2016, and compared to 38.9% in the fourth quarter of 2016. The improvement from the first quarter of 2016 and from the fourth quarter of 2016 was primarily due to higher revenue levels, improved factory absorption and lower inventory provisions. Photonics gross margin was 42.6%, compared to 41.5% in the first quarter of 2016 and 45.5% in the fourth quarter of 2016. The improvement from the first quarter of 2016 was due to higher margins on technology development contracts and lower inventory provisions. The decline from the fourth quarter of 2016 was due to lower margins on technology development contracts. Consolidated gross margin was 42.9%, compared to 28.2% in the first quarter of 2016 and 41.1% in the fourth quarter of 2016.
R&
Order backlog totaled
The Company ended the quarter with
Use of Non-GAAP Financial Measures
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.
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
About
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
For more information call 408-986-9888, or visit the Company's website at www.intevac.com.
200 Lean® is a registered trademark and
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”).
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| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
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(Unaudited, in thousands, except per share amounts) |
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| Three months ended | ||||||||||
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| 2017 | 2016 | |||||||||
| Net revenues | ||||||||||
| Thin-film Equipment | $ | 21,484 | $ | 5,580 | ||||||
| Photonics | 8,904 | 8,084 | ||||||||
| Total net revenues | 30,388 | 13,664 | ||||||||
| Gross profit | 13,047 | 3,856 | ||||||||
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Gross margin |
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| Thin-film Equipment | 43.1 | % | 9.0 | % | ||||||
| Photonics | 42.6 | % | 41.5 | % | ||||||
| Consolidated | 42.9 | % | 28.2 | % | ||||||
| Operating expenses | ||||||||||
| Research and development | 4,682 | 5,176 | ||||||||
| Selling, general and administrative | 6,194 | 4,980 | ||||||||
| Acquisition-related1 | 80 | 16 | ||||||||
| Total operating expenses | 10,956 | 10,172 | ||||||||
| Total operating income (loss) | 2,091 | (6,316 | ) | |||||||
| Operating income (loss) | ||||||||||
| Thin-film Equipment | 1,859 | (5,445 | ) | |||||||
| Photonics | 1,465 | 407 | ||||||||
| Corporate | (1,233 | ) | (1,278 | ) | ||||||
| Total operating income (loss) | 2,091 | (6,316 | ) | |||||||
| Interest and other income | 110 | 37 | ||||||||
| Income (loss) before income taxes | 2,201 | (6,279 | ) | |||||||
| Provision for income taxes | 372 | 26 | ||||||||
| Net income (loss) | $ | 1,829 | $ | (6,305 | ) | |||||
| Net income (loss) per share | ||||||||||
| Basic | $ | 0.09 | $ | (0.31 | ) | |||||
| Diluted | $ | 0.08 | $ | (0.31 | ) | |||||
| Weighted average common shares outstanding | ||||||||||
| Basic | 21,216 | 20,551 | ||||||||
| Diluted | 22,790 | 20,551 | ||||||||
1 Amounts 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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| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
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(In thousands, except par value) |
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| 2017 | 2016 | |||||||||
| (Unaudited) | (see Note) | |||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash, cash equivalents and short-term investments | $ | 40,804 | $ | 44,645 | ||||||
| Accounts receivable, net | 21,630 | 17,447 | ||||||||
| Inventories | 24,077 | 24,876 | ||||||||
| Prepaid expenses and other current assets | 2,103 | 1,768 | ||||||||
| Total current assets | 88,614 | 88,736 | ||||||||
| Long-term investments | 4,038 | 3,593 | ||||||||
| Restricted cash | 1,450 | 1,602 | ||||||||
| Property, plant and equipment, net | 11,883 | 11,237 | ||||||||
| Intangible assets, net | 2,045 | 2,258 | ||||||||
| Other long-term assets | 698 | 898 | ||||||||
| Total assets | $ | 108,728 | $ | 108,324 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable | $ | 6,824 | $ | 5,323 | ||||||
| Accrued payroll and related liabilities | 4,029 | 4,220 | ||||||||
| Other accrued liabilities | 6,429 | 17,011 | ||||||||
| Customer advances | 11,572 | 5,422 | ||||||||
| Total current liabilities | 28,854 | 31,976 | ||||||||
| Other long-term liabilities | 3,288 | 3,082 | ||||||||
| Stockholders’ equity | ||||||||||
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Common stock ( |
21 | 21 | ||||||||
| Additional paid in capital | 173,865 | 171,314 | ||||||||
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(28,489 | ) | (28,489 | ) | ||||||
| Accumulated other comprehensive income | 359 | 321 | ||||||||
| Accumulated deficit | (69,170 | ) | (69,901 | ) | ||||||
| Total stockholders’ equity | 76,586 | 73,266 | ||||||||
| Total liabilities and stockholders’ equity | $ | 108,728 | $ | 108,324 | ||||||
Note: Amounts as of
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| RECONCILIATION OF GAAP TO NON-GAAP RESULTS | |||||||||
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(Unaudited, in thousands, except per share amounts) |
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| Three months ended | |||||||||
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| 2017 | 2016 | ||||||||
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Non-GAAP Income (Loss) from Operations |
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| Reported operating income (loss) (GAAP basis) | $ | 2,091 | $ | (6,316 | ) | ||||
| Change in fair value of contingent consideration obligations1 | 80 | 16 | |||||||
| Non-GAAP Operating Income (Loss) | $ | 2,171 | $ | (6,300 | ) | ||||
| Non-GAAP Net Income (Loss) | |||||||||
| Reported net income (loss) (GAAP basis) | $ | 1,829 | $ | (6,305 | ) | ||||
| Change in fair value of contingent consideration obligations1 | 80 | 16 | |||||||
| Income tax effect of non-GAAP adjustments2 | — | — | |||||||
| Non-GAAP Net Income (Loss) | $ | 1,909 | $ | (6,289 | ) | ||||
| Non-GAAP Net Income (Loss) Per Share | |||||||||
| Reported net income (loss) per share (GAAP basis) | $ | 0.08 | $ | (0.31 | ) | ||||
| Change in fair value of contingent consideration obligations1 | — | — | |||||||
| Non-GAAP Net Income (Loss) Per Share | $ | 0.08 | $ | (0.31 | ) | ||||
| Weighted average number of diluted shares outstanding | 22,790 | 20,551 | |||||||
1Results for all periods presented include changes in fair value of contingent consideration obligations associated with the Solar Implant Technology (SIT) acquisition in 2010.
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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