UNITED STATES
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 27, 2009
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))
 
 

 

 

Item 2.02. Results of Operations and Financial Condition
     On July 27, 2009, Intevac, Inc. issued a press release reporting its financial results for the three and six months ended June 27, 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: July 27, 2009  /s/ JEFFREY ANDRESON    
  Jeffrey Andreson   
  Executive 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
  Investor Relations
(408) 986-9888
  (530) 265-9899
INTEVAC ANNOUNCES RESULTS FOR THE SECOND QUARTER OF 2009
Santa Clara, Calif.—July 27, 2009—Intevac, Inc. (Nasdaq: IVAC) today reported financial results for the quarter and six months ended June 27, 2009.
The net loss for the quarter was $4.5 million, or $0.20 per diluted share, on 21.9 million weighted-average shares outstanding. The net loss included $1.3 million of equity-based compensation expense, equivalent to $0.04 per diluted share. For the second quarter of 2008, the net loss was $937,000, or $0.04 per diluted share, on 21.7 million weighted average shares outstanding, which included $1.6 million of equity-based compensation expense, equivalent to $0.05 per diluted share.
Revenues for the quarter were $12.3 million, including $6.1 million of Equipment revenues and Intevac Photonics revenues of $6.3 million. Equipment revenues consisted of one disk lubrication system, equipment upgrades, spares and service. Intevac Photonics revenues consisted of $3.3 million of research and development contracts and $2.9 million of product sales or 46.6% of Photonics revenues. In the second quarter of 2008, revenues were $32.1 million, including $25.7 million of Equipment revenues and $6.4 million of Intevac Photonics revenues, which included $2.4 million of product sales or 37.4% of Photonics revenues.
Equipment gross margin was 39.2%, compared to 29.9% in the first quarter of 2009 and 42.4% in the second quarter of 2008. The sequential improvement in Equipment gross margin reflected changes in product mix to higher-margin technology upgrades, while the year-over-year decrease reflected lower revenues and lower factory utilization. Intevac Photonics gross margin was 34.1%, compared to 39.4% in the first quarter of 2009 and 34.9% in the second quarter of 2008. The decrease in Photonics gross margin reflected higher manufacturing and contract research and development costs. Consolidated gross margin was 36.6%, compared to 40.9% in the second quarter of 2008.
Operating expenses for the quarter totaled $12.8 million, a decline of 19.3% compared to $15.8 million in the second quarter of 2008 and a decline of 7.0% compared to $13.7 million in the first quarter of 2009. Operating expenses declined compared to the first quarter of 2009 and the second quarter of 2008 as a result of the cost savings from the global cost reduction plan initiated in the fourth quarter of 2008.
The net loss for the first six months of 2009 was $10.3 million, or $0.47 per diluted share, on 21.9 million weighted-average shares outstanding. The net loss included $2.7 million of equity-based compensation expense, equivalent to $0.09 per diluted share. For the first six months of 2008, net income was $626,000, or $0.03 per diluted share, on 22.1 million weighted average shares outstanding, which included $3.2 million of equity-based compensation expense, equivalent to $0.10 per diluted share.
Revenues for the first six months of 2009 were $24.6 million, including $12.2 million of Equipment revenues and $12.4 million of Intevac Photonics revenues. Equipment revenues consisted of disk lubrication systems, equipment upgrades, spares and service and did not include any 200 Lean ® systems. Intevac Photonics revenues consisted of $7.0 million of

 

 

research and development contracts and $5.5 million of product sales or 44.0% of Photonics revenues. In the first six months of 2008, revenues were $65.3 million, including $52.7 million of Equipment revenues and $12.6 million of Intevac Photonics revenues, which included $4.4 million of product sales or 35.2% of Photonics revenues.
Equipment and Intevac Photonics gross margins for the first six months of 2009 were 34.5% and 36.7%, respectively, compared to 44.8% and 38.4% in the first six months of 2008. The decrease in Equipment gross margin reflected lower revenues and lower factory utilization. The decrease in Intevac Photonics margin reflected higher manufacturing and warranty costs. Consolidated gross margin was 35.6%, compared to 43.6% in first six months of 2008.
Operating expenses for the first six months of 2009 totaled $26.5 million and declined 17.9% from $32.3 million in the first six months of 2008. Operating expenses declined primarily as the result of decreased spending on development of new Equipment products as well as the result of cost savings from the global cost reduction plan initiated in the fourth quarter of 2008.
Order backlog totaled $44.0 million on June 27, 2009, compared to $17.0 million on March 28, 2009 and $27.7 million on June 28, 2008. Backlog as of June 27, 2009 includes five 200 Lean ® systems, compared to one on March 28, 2009 and four on June 28, 2008.
“After several quarters of limited bookings and visibility from our hard disk customers, we are pleased to see an increase in order activity during the second quarter,” commented Kevin Fairbairn, president and chief executive officer of Intevac. “Our hard disk customers are investing in technology as evidenced by our recent announcements of the industry’s first two high-productivity Etch and Deposition systems for use in Patterned media development, as well as two additional research and development systems. Additionally, our Photonics business continues its positive momentum and generated record-level product sales this quarter.”
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 (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. EDT. You may access the playback by calling (800) 642-1687, or for international callers (706) 645-9291, and providing conference ID 18907718.
About Intevac
Intevac was founded in 1991 and has two businesses: 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 processing systems, and offer advanced etch technology systems as well as high productivity solutions for other non-magnetic thin film applications.
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; our hard disk customers’ investments in technology, impact of the company’s global cost reduction plan, and new product development success. 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 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 27,   June 28,   June 27,   June 28,
    2009   2008   2009   2008
         
Net revenues
                               
Equipment
  $ 6,066     $ 25,730     $ 12,184     $ 52,703  
Intevac Photonics
    6,252       6,402       12,442       12,604  
         
Total net revenues
    12,318       32,132       24,626       65,307  
 
                               
Gross profit
    4,513       13,133       8,778       28,444  
Gross margin
                               
Equipment
    39.2 %     42.4 %     34.5 %     44.8 %
Intevac Photonics
    34.1 %     34.9 %     36.7 %     38.4 %
         
Consolidated
    36.6 %     40.9 %     35.6 %     43.6 %
 
                               
Operating expenses
                               
Research and development
    7,385       8,418       15,415       17,806  
Selling, general and administrative
    5,394       7,413       11,103       14,477  
         
Total operating expenses
    12,779       15,831       26,518       32,283  
 
                               
Loss from operations
                               
Equipment
    (5,659 )     (633 )     (12,470 )     (137 )
Intevac Photonics
    (1,399 )     (1,070 )     (2,620 )     (1,891 )
Corporate
    (1,208 )     (995 )     (2,650 )     (1,811 )
         
Total operating loss
    (8,266 )     (2,698 )     (17,740 )     (3,839 )
 
                               
Interest and other income
    228       806       658       2,217  
         
Loss before income tax benefit
    (8,038 )     (1,892 )     (17,082 )     (1,622 )
Benefit for income taxes
    3,551       955       6,822       2,248  
         
Net income (loss)
  $ (4,487 )   $ (937 )   $ (10,260 )   $ 626  
 
                       
 
                               
Income (loss) per share
                               
Basic
  $ (0.20 )   $ (0.04 )   $ (0.47 )   $ 0.03  
Diluted
  $ (0.20 )   $ (0.04 )   $ (0.47 )   $ 0.03  
Weighted average common shares outstanding
                               
Basic
    21,930       21,691       21,906       21,669  
Diluted
    21,930       21,691       21,906       22,115  

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amount)
                 
    June 27,   Dec. 31,
    2009   2008
    (Unaudited)   (see Note)
ASSETS
               
Current assets
               
Cash, cash equivalents and short-term investments
  $ 29,980     $ 39,201  
Accounts receivable, net
    17,051       15,014  
Inventories
    19,627       17,674  
Deferred income tax assets
    3,935       3,204  
Prepaid expenses and other current assets
    6,877       4,806  
       
Total current assets
    77,470       79,899  
 
               
Long-term investments
    66,187       66,328  
Property, plant and equipment, net
    14,013       14,886  
Deferred income tax assets
    17,557       14,765  
Goodwill
    7,905       7,905  
Other intangible assets, net
    3,744       4,054  
Other long-term assets
    1,090       1,332  
       
Total assets
  $ 187,966     $ 189,169  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
Current liabilities
               
Note payable
  $ —     $ 2,000  
Accounts payable
    4,502       4,214  
Accrued payroll and related liabilities
    3,849       3,395  
Other accrued liabilities
    6,823       3,175  
Customer advances
    4,481       2,807  
       
Total current liabilities
    19,655       15,591  
 
               
Other long-term liabilities
    286       509  
 
               
Stockholders’ equity
               
Common stock ($0.001 par value)
    22       22  
Paid in capital
    131,866       128,686  
Accumulated other comprehensive loss
    (2,772 )     (4,808 )
Retained earnings
    38,909       49,169  
       
Total stockholders’ equity
    168,025       173,069  
       
Total liabilities and stockholders’ equity
  $ 187,966     $ 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 effect of recording equity-based compensation expense for the three- and six-month periods ended June 27, 2009, and June 28, 2008 were as follows:
                                 
    Three Months Ended     Six Months Ended  
    June 27,     June 28,     June 27,     June 28,  
    2009     2008     2009     2008  
         
Equity-based compensation by type of award:
                               
Stock options
  $ 1,105     $ 1,325     $ 2,217     $ 2,649  
Employee Stock Purchase Plan
    216       297       450       500  
Amounts (capitalized as inventory) released to cost of sales, net
    (9 )     20       42       89  
 
                       
Total equity-based compensation
    1,312       1,642       2,709       3,238  
Tax effect on equity-based compensation
    (382 )     (494 )     (786 )     (987 )
 
                       
Net effect on net income (loss)
  $ 930     $ 1,148     $ 1,923     $ 2,251  
 
                       
 
                               
Effect on earnings per share:
                               
Basic
  $ 0.04     $ 0.05     $ 0.09     $ 0.10  
Diluted
  $ 0.04     $ 0.05     $ 0.09     $ 0.10