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
February 2, 2010
Date of Report (date of earliest event reported)
INTEVAC, INC.
 
(Exact name of Registrant as specified in its charter)
         
State of California   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))
 
 

 

 

Item 2.02. Results of Operations and Financial Condition
     On February 2, 2010, Intevac, Inc. issued a press release reporting its financial results for the three months and full year ended December 31, 2009. 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.

 

 

     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: February 2, 2010  /s/ JEFFREY ANDRESON    
  Jeffrey Andreson   
  Executive Vice President, Finance and Administration,
Chief Financial Officer, Treasurer and Secretary  		 
 

 

Exhibit 99.1
3560 Bassett Street, Santa Clara CA 95054
(INTEVAC LOGO)
 
         
Jeff Andreson
      Claire McAdams
Chief Financial Officer
      Investor Relations
(408) 986-9888
      (530) 265-9899
INTEVAC ANNOUNCES FOURTH QUARTER AND FULL YEAR 2009 FINANCIAL RESULTS
Santa Clara, Calif.—February 2, 2010—Intevac, Inc. (Nasdaq: IVAC) today reported financial results for the fourth quarter and year ended December 31, 2009.
Net income for the quarter was $2.0 million, or $0.09 per diluted share, on 22.7 million weighted-average shares outstanding. Net income included $546,000 of equity-based compensation expense, equivalent to $0.02 per diluted share. For the fourth quarter of 2008, the net loss was $12.6 million, or $0.58 per diluted share, on 21.8 million weighted-average shares outstanding, which included goodwill and intangible asset impairment charges of $10.5 million, equivalent to $0.34 per diluted share, and $1.6 million of equity-based compensation expense, equivalent to $0.06 per diluted share.
Revenues for the quarter were $34.2 million, including $26.9 million of Equipment revenues and Intevac Photonics revenues of $7.3 million. Equipment revenues included three 200 Lean ® systems, as well as upgrades, spares and service. Intevac Photonics revenues consisted of $4.6 million of research and development contracts and $2.7 million of product sales or 37.1% of Photonics revenues. For the fourth quarter of 2008, revenues were $16.4 million, including $11.9 million of Equipment revenues and $4.5 million of Intevac Photonics revenues, which included $1.6 million of product sales or 36.4% of Photonics revenues.
Equipment gross margin was 48.8%, compared to 48.2% in the third quarter of 2009 and 41.4% in the fourth quarter of 2008. The sequential improvement in Equipment gross margin reflected increased business levels partially offset by a higher mix of systems, while the year-over-year increase reflected increased business levels and improved system margins. Intevac Photonics gross margin was 29.2%, compared to 40.1% in the third quarter of 2009 and 19.5% in the fourth quarter of 2008. The sequential decrease in Photonics gross margin reflected initial higher costs as we began to ramp to high-volume production of our digital night-vision camera module to our NATO customer, while the year-over-year increase reflected improved overall product margins. Consolidated gross margin was 44.6%, compared to 45.3% in the third quarter of 2009 and 35.3% in the fourth quarter of 2008.
Research and development and selling, general and administrative expenses for the quarter totaled $11.2 million, a decline of 25.9% compared to $15.1 million, in the fourth quarter of 2008 and a decline of 9.9% compared to $12.4 million in the third quarter of 2009. These declines resulted from our global cost reduction plan.
The net loss for the full year 2009 was $10.1 million, or $0.46 per diluted share, on 22.0 million weighted-average shares outstanding. The net loss included $4.3 million of equity-based compensation expense, equivalent to $0.14 per diluted share. The net loss for the full year 2008 was $15.3 million, or $0.71 per diluted share, on 21.7 million weighted-average shares outstanding. The 2008 net loss included the goodwill and intangibles asset impairment charges of $10.5 million, equivalent to $0.34 per diluted share. The 2008 net loss also included $6.6 million of equity-based compensation expense, equivalent to $0.22 per diluted share.

 

 

Revenues for the full year 2009 were $78.0 million, including $51.4 million of Equipment revenues and $26.6 million of Intevac Photonics revenues. Equipment revenues consisted of four 200 Lean ® systems as well as disk lubrication systems, equipment upgrades, spares and service. Intevac Photonics revenues consisted of $16.1 million of research and development contracts and $10.5 million of product sales or 39.5% of Photonics revenues. For the full year 2008, revenues were $110.3 million, including $87.5 million of Equipment revenues and $22.8 million of Intevac Photonics revenues, which included $8.5 million of product sales or 37.2% of Photonics revenues.
Equipment and Intevac Photonics gross margins for the year were 45.3% and 35.6%, respectively, compared to 40.9% and 33.0% in 2008. The improvement in Equipment gross margin reflected changes in product mix to higher-margin technology upgrades partially offset by lower revenues and factory absorption. The increase in Intevac Photonics margin reflected higher-margin development contracts and an increased percentage of revenue derived from higher-margin product shipments. Consolidated gross margins were 42.0%, compared to 39.3% in 2008.
Research and development and selling, general and administrative expenses for the full year totaled $50.1 million, and declined 20.9% from $63.3 million in 2008, primarily due to decreased spending on development of new Equipment products as well as cost savings resulting from our global cost reduction plan. Total operating expenses in 2008 were $73.8 million and included non-cash asset impairment charges of $10.5 million.
Order backlog totaled $73.8 million on December 31, 2009, compared to $52.2 million on September 26, 2009 and $20.2 million on December 31, 2008. Backlog at year end includes ten 200 Lean ® systems, compared to five on September 26, 2009 and one on December 31, 2008.
“We are pleased to report our return to profitability in the fourth quarter of 2009,” commented Kevin Fairbairn, president and chief executive officer of Intevac. “2009 started off as a challenging year for the hard drive industry, yet by the second half the industry was struggling to keep up with demand with our customers’ factories running at record utilization rates. Customers and analysts are predicting ongoing growth for 2010 and indicative of these positive market dynamics are our recently-announced multiple-system orders for incremental new capacity and legacy tool retirements.
“Further, we continued to demonstrate our operational capabilities in the fourth quarter, exceeding guidance in profitability, by focusing on driving short term incremental business while exercising tight control of expenses. Finally, our Intevac Photonics business achieved record revenues for the fourth quarter and full year, and made positive progress in 2009 with several new contracts and higher-volume production ramps on multiple platforms utilizing our digital low-light camera and Raman system technologies,” concluded Mr. Fairbairn.
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 (888) 397-5351 prior to the start time. For international callers, the dial-in number is (719) 325-2350. 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. EST. You may access the replay by calling (888) 203-1112 or, for international callers, (719) 457-0820, and providing Replay Passcode 4509151.

 

 

About Intevac
Intevac was founded in 1991 and has two businesses: Equipment and Intevac Photonics.
Equipment Business: We are a leader in the design, development 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 processing systems to the hard drive industry and offer highly efficient technology solutions to the photovoltaic and semiconductor industries.
Intevac Photonics: We are a leader in the development and manufacture of leading edge, high-sensitivity imaging products and vision systems, as well as table-top and handheld 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; tightness in media supply and expected momentum of the Photonics business. 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: oversupply in the media industry, failure to achieve historical growth rates for the Photonics business, 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     Year ended  
    December 31,     December 31,     December 31,     December 31,  
    2009     2008     2009     2008  
Net revenues
                               
Equipment
  $ 26,912     $ 11,911     $ 51,389     $ 87,469  
Intevac Photonics
    7,288       4,529       26,592       22,838  
         
Total net revenues
    34,200       16,440       77,981       110,307  
 
                               
Gross profit
    15,264       5,810       32,720       43,339  
Gross margin
                               
Equipment
    48.8 %     41.4 %     45.3 %     40.9 %
 
                               
Intevac Photonics
    29.2 %     19.5 %     35.6 %     33.0 %
         
Consolidated
    44.6 %     35.3 %     42.0 %     39.3 %
 
                               
Operating expenses
                               
Research and development
    5,808       8,657       28,064       35,083  
Selling, general and administrative
    5,351       6,411       22,003       28,229  
Impairment of goodwill and intangible assets
    —       10,498       —       10,498  
         
Total operating expenses
    11,159       25,566       50,067       73,810  
 
                               
Operating income (loss)
                               
Equipment
    5,480       (5,430 )     (8,826 )     (9,924 )
Intevac Photonics
    (886 )     (2,959 )     (4,133 )     (6,674 )
Corporate 1
    (489 )     (11,367 )     (4,388 )     (13,873 )
         
Total operating profit (loss)
    4,105       (19,756 )     (17,347 )     (30,471 )
 
                               
Interest and other income
    475       831       1,254       3,932  
         
Profit (loss) before income taxes
    4,580       (18,925 )     (16,093 )     (26,539 )
Provision (benefit) for income taxes
    2,605       (6,307 )     (6,016 )     (11,194 )
         
Net income (loss)
  $ 1,975     $ (12,618 )   $ (10,077 )   $ (15,345 )
 
                       
 
                               
Income (loss) per share
                               
Basic
  $ 0.09     $ (0.58 )   $ (0.46 )   $ (0.71 )
Diluted
  $ 0.09     $ (0.58 )   $ (0.46 )   $ (0.71 )
Weighted average common shares outstanding
                               
Basic
    22,073       21,796       21,975       21,724  
Diluted
    22,668       21,796       21,975       21,724  
 
1           Q408 and FY 2008 Include goodwill and intangibles impairment charges of $10.5 million.

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                 
    December 31,     December 31,  
    2009     2008  
    (Unaudited)     (see Note)  
ASSETS
               
Current assets
               
Cash, cash equivalents and short-term investments
  $ 23,592     $ 39,201  
Accounts receivable, net
    44,756       15,014  
Inventories
    19,100       17,674  
Deferred tax assets
    1,515       3,204  
Prepaid expenses and other current assets
    6,687       4,806  
     
Total current assets
    95,650       79,899  
 
               
Long-term investments
    66,249       66,328  
Property, plant and equipment, net
    12,351       14,886  
Deferred tax assets
    16,541       14,765  
Goodwill
    7,905       7,905  
Other intangible assets, net
    3,537       4,054  
Other long-term assets
    1,145       1,332  
     
Total assets
  $ 203,378     $ 189,169  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
Current liabilities
               
Note payable
  $ —     $ 2,000  
Accounts payable
    4,701       4,214  
Accrued payroll and related liabilities
    2,784       3,395  
Other accrued liabilities
    11,104       3,175  
Customer advances
    13,180       2,807  
     
Total current liabilities
    31,769       15,591  
 
               
Other long-term liabilities
    252       509  
Stockholders’ equity
               
Common stock ($0.001 par value)
    22       22  
Additional paid in capital
    134,071       128,686  
Accumulated other comprehensive loss
    (1,828 )     (4,808 )
Retained earnings
    39,092       49,169  
     
Total stockholders’ equity
    171,357       173,069  
     
Total liabilities and stockholders’ equity
  $ 203,378     $ 189,169  
 
           
Note: Amounts as of December 31, 2008 are derived from the December 31, 2008 audited consolidated financial statements.

 

 

SUPPLEMENTAL INFORMATION REGARDING EQUITY-BASED COMPENSATION EXPENSE
(In thousands, except per share amounts)
(Unaudited)
The effects of recording equity-based compensation for the three months and years ended December 31, 2009, and December, 2008 were as follows:
                                 
    Three months ended     Year ended  
    December 31,     December 31,     December 31,     December 31,  
    2009     2008     2009     2008  
Equity-based compensation by type of award:
                               
Stock options
  $ 366     $ 1,290     $ 3,418     $ 5,252  
Employee Stock Purchase Plan
    153       270       776       1,247  
Amounts (capitalized as inventory) released to cost of sales
    27       13       61       78  
 
                       
Total equity-based compensation
    546       1,573       4,255       6,577  
Tax effect on equity-based compensation
    (147 )     (286 )     (1,224 )     (1,785 )
 
                       
Net effect on net income (loss)
  $ 399     $ 1,287     $ 3,031     $ 4,792  
 
                       
 
                               
Effect on earnings per share:
                               
Basic
  $ 0.02     $ 0.06     $ 0.14     $ 0.22  
Diluted
  $ 0.02     $ 0.06     $ 0.14     $ 0.22