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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
July 28, 2008
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   (Commission File Number)   (IRS Employer
of incorporation or organization)       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:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

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Item 2.02. Results of Operations and Financial Condition
Item 9.01. Financial Statements and Exhibits
EXHIBIT 99.1

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Item 2.02. Results of Operations and Financial Condition
     On July 28, 2008, Intevac, Inc. issued a press release reporting its financial results for the three and six months ended June 28, 2008. 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
     (c) Exhibits
          99.1 Press Release.

 

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     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: June 28, 2008  By:   /s/ JEFFREY ANDRESON    
    Jeffrey Andreson   
    Vice President, Finance and Administration,
Chief Financial Officer, Treasurer and Secretary   		 

 

         
EXHIBIT 99.1
     
(INTEVAC LOGO)   3560 Bassett Street, Santa Clara CA 95054
     
Jeff Andreson
  Claire McAdams
Chief Financial Officer
  Headgate Partners LLC
(408) 986-9888
  (530) 274-0551
INTEVAC ANNOUNCES RESULTS FOR THE SECOND QUARTER OF 2008
Santa Clara, Calif.—July 28, 2008—Intevac, Inc. (Nasdaq: IVAC) today reported financial results for the quarter and six months ended June 28, 2008.
Net loss for the quarter was $937,000, or $0.04 per diluted share, on 21.7 million weighted-average shares outstanding. The net loss included $1.6 million of equity-based compensation expense, equivalent to $0.05 per diluted share. For the second quarter of 2007, net income was $11.6 million, or $0.52 per diluted share, on 22.1 million weighted average shares outstanding, which included $1.4 million of equity-based compensation expense, equivalent to $0.05 per diluted share. Effective in the second quarter of 2008, Intevac renamed the Imaging Instrumentation segment to Intevac Photonics.
Revenues for the quarter were $32.1 million, including $25.7 million of Equipment revenues and Intevac Photonics revenues of $6.4 million. Equipment revenues consisted of four 200 Lean ® systems, as well as upgrades, spares and service. Intevac Photonics revenues consisted of $4.0 million of research and development contracts and $2.4 million of product sales. In the second quarter of 2007, revenues were $72.1 million, including $68.5 million of Equipment revenues and $3.6 million of Intevac Photonics revenues, which included $1.1 million of product sales.
Equipment and Intevac Photonics gross margins for the second quarter of 2008 were 42.4% and 34.9%, respectively, compared to 43.0% and 38.9% in the second quarter of 2007. The decrease in Equipment gross margin reflected lower revenues and factory absorption, partially offset by higher-margin technology upgrades. The decrease in gross margin for Intevac Photonics reflected lower factory utilization in our Creative Display Systems business. Consolidated gross margins were 40.9%, compared to 42.8% in the second quarter of 2007.
Operating expenses for the quarter totaled $15.8 million, or 49.3% of revenues, compared to $17.5 million, or 24.3% of revenues, in the second quarter of 2007 and $16.5 million, or 50.0% of revenues, in the first quarter of 2008. Operating expenses declined compared to the first quarter of 2008 and the second quarter of 2007 as a result of lower R&D expenditures and legal costs as well as overall cost-reduction initiatives.
Net income for the first six months of 2008 was $626,000, or $0.03 per diluted share, on 22.1 million weighted-average shares outstanding. Net income included $3.2 million of equity-based compensation expense, equivalent to $0.09 per diluted share. For the first six months of 2007, net income was $21.4 million, or $0.97 per diluted share, on 22.2 million weighted average shares outstanding, which included $2.7 million of equity-based compensation expense, equivalent to $0.09 per diluted share.
Revenues for the first six months of 2008 were $65.3 million, including $52.7 million of Equipment revenues and $12.6 million of Intevac Photonics revenues. Equipment revenues consisted of six 200 Lean ® systems as well as disk lubrication systems, equipment upgrades, spares, consumables and service. Intevac Photonics revenues consisted of $8.2 million of research and development contracts and $4.4 million of product sales. In the first six months of

 

 

2007, revenues were $148.5 million, including $141.0 million of Equipment revenues and $7.5 million of Intevac Photonics revenues, which included $2.2 million of product sales.
Equipment and Intevac Photonics gross margins for the first six months of 2008 increased to 44.8% and 38.4%, respectively, from 43.1% and 37.7% in the first six months of 2007. Equipment margins improved primarily due to the high proportion of technology upgrades and spares relative to system sales. Intevac Photonics margins increased primarily as a result of an increased percentage of revenue derived from higher-margin product shipments. Consolidated gross margins improved to 43.6%, from 42.8% in first six months of 2007.
Operating expenses for the first six months of 2008 totaled $32.3 million, or 49.4% of revenues, compared to $37.2 million, or 25.0% of revenues, in the first six months of 2007. Operating expenses declined primarily as the result of decreased spending on development of new Equipment products and decreased legal expenses associated with patent litigation, partially offset by increased business development expense and higher equity-based compensation expense.
Order backlog totaled $27.7 million on June 28, 2008, compared to $43.5 million on March 29, 2008 and $57.5 million on June 30, 2007. Backlog as of June 28, 2008 includes four 200 Lean ® systems, compared to seven on March 29, 2008 and four on June 30, 2007.
“In this challenging business climate, we delivered better than expected results for the quarter. Our first 200 Lean ® Gen II system shipped in the first quarter and was accepted by the customer ahead of our original schedule,” commented Kevin Fairbairn, president and chief executive officer of Intevac. “Intevac Photonics revenues continue to grow each quarter, and we are receiving positive feedback on our digital night vision products across our customer base.”
Conference Call Information
The company will discuss its financial results and outlook in a conference call today at 1:30 p.m. PT (4:30 p.m. ET). To participate in the teleconference, please call toll-free (800) 291-8929 prior to the start time. For international callers, the dial-in number is (706) 634-0478. 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. ET. You may access the playback by calling (800) 642-1687, or for international callers (706) 645-9291, and providing conference ID 55160186.
About Intevac
Intevac was founded in 1991 and has two businesses: Intevac Equipment and Intevac Photonics.
Equipment Business: We are a leader in the design, manufacture and marketing of high-productivity lean manufacturing systems and have been producing Lean Thinking platforms since 1994. We are the leading supplier of magnetic media sputtering equipment to the hard disk drive industry and offer advanced etch technology systems to the semiconductor industry.
Intevac Photonics: We are a leader in the development of leading edge, high-sensitivity imaging products, vision systems and miniature Raman instruments. Markets addressed include military, industrial, physical science and life science.
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.
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; expected revenue growth of its products, success of night vision products and management of the company’s operating expenses. 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: failure to increase Intevac Photonics revenues, manage operating expenses or introduce new products, 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 regular filings with the U.S. Securities and Exchange Commission.
[Financial tables on following pages]

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                                 
    Three months ended     Six months ended  
    June 28,     June 30,     June 28,     June 30,  
    2008     2007     2008     2007  
         
Net revenues
                               
Equipment
  $ 25,730     $ 68,519     $ 52,703     $ 140,965  
Intevac Photonics
    6,402       3,586       12,604       7,514  
         
Total net revenues
    32,132       72,105       65,307       148,479  
 
                               
Gross profit
    13,133       30,827       28,444       63,609  
Gross margin
                               
Equipment
    42.4 %     43.0 %     44.8 %     43.1 %
Intevac Photonics
    34.9 %     38.9 %     38.4 %     37.7 %
         
Consolidated
    40.9 %     42.8 %     43.6 %     42.8 %
 
                               
Operating expenses
                               
Research and development
    8,418       9,648       17,806       21,840  
Selling, general and administrative
    7,413       7,839       14,477       15,352  
         
Total operating expenses
    15,831       17,487       32,283       37,192  
 
Operating income (loss)
                               
Equipment
    (633 )     15,842       (137 )     30,831  
Intevac Photonics
    (1,070 )     (1,515 )     (1,891 )     (3,115 )
Corporate
    (995 )     (987 )     (1,811 )     (1,299 )
         
Total operating profit (loss)
    (2,698 )     13,340       (3,839 )     26,417  
 
                               
Interest and other income
    806       1,538       2,217       2,858  
         
Profit (loss) before provision for income taxes
    (1,892 )     14,878       (1,622 )     29,275  
Provision (benefit) for income taxes
    (955 )     3,326       (2,248 )     7,878  
         
Net income (loss)
  $ (937 )   $ 11,552     $ 626     $ 21,397  
 
                       
 
                               
Income (loss) per share
                               
Basic
  $ (0.04 )   $ 0.54     $ 0.03     $ 1.00  
Diluted
  $ (0.04 )   $ 0.52     $ 0.03     $ 0.97  
Weighted average common shares outstanding
                               
Basic
    21,691       21,396       21,669       21,345  
Diluted
    21,691       22,146       22,115       22,167  
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CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                 
    June 28,     Dec. 31,  
    2008     2007  
            (see Note)  
    (Unaudited)          
ASSETS
               
 
               
Current assets
               
Cash, cash equivalents and short-term investments
  $ 37,908     $ 138,658  
Accounts receivable, net
    29,111       14,142  
Inventories
    25,730       22,133  
Deferred tax assets
    4,981       3,609  
Prepaid expenses and other current assets
    3,189       4,162  
     
Total current assets
    100,919       182,704  
 
               
Long-term investments
    78,195       2,009  
Property, plant and equipment, net
    15,404       15,402  
Deferred tax assets
    5,168       3,740  
Goodwill
    7,905       7,905  
Other long-term assets
    3,220       3,653  
     
Total assets
  $ 210,811     $ 215,413  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
Current liabilities
               
Note payable
  $ 1,952     $ 1,992  
Accounts payable
    6,155       7,678  
Accrued payroll and related liabilities
    4,971       8,610  
Other accrued liabilities
    4,912       5,454  
Customer advances
    3,858       4,340  
     
Total current liabilities
    21,848       28,074  
 
               
Other long-term liabilities
    271       2,176  
Stockholders’ equity
               
Common stock ($0.001 par value)
    22       22  
Paid in Capital
    124,153       120,056  
Accumulated other comprehensive income (loss)
    (623 )     571  
Retained earnings
    65,140       64,514  
     
Total stockholders’ equity
    188,692       185,163  
     
Total liabilities and stockholders’ equity
  $ 210,811     $ 215,413  
 
           
Note: Amounts as of December 31, 2007 are derived from the December 31, 2007 audited consolidated financial statements.
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SUPPLEMENTAL INFORMATION REGARDING EQUITY-BASED COMPENSATION EXPENSE
(In thousands, except per share amounts)
(Unaudited)
The effect of recording equity-based compensation for the three- and six-month periods ended June 28, 2008, and June 30, 2007 were as follows:
                                 
    Three Months Ended     Six Months Ended  
    June 28,     June 30,     June 28,     June 30,  
    2008     2007     2008     2007  
Equity-based compensation by type of award:
                               
Stock options
  $ 1,325     $ 1,169     $ 2,649     $ 2,314  
Employee Stock Purchase Plan
    297       214       500       427  
Amounts (capitalized as inventory) released to cost of sales
    20       1       89       (3 )
 
                       
Total equity-based compensation
    1,642       1,384       3,238       2,738  
Tax effect on equity-based compensation
    (640 )     (305 )     (1,263 )     (737 )
 
                       
Net effect on net income
  $ 1,002     $ 1,079     $ 1,975     $ 2,001  
 
                       
 
                               
Effect on earnings per share:
                               
Basic
  $ 0.05     $ 0.05     $ 0.09     $ 0.09  
Diluted
  $ 0.05     $ 0.05     $ 0.09     $ 0.09