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 3, 2009
Date of Report (date of earliest event reported)
INTEVAC, INC.
(Exact name of Registrant as specified in its charter)
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State of Delaware
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0-26946
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94-3125814
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(State or other jurisdiction
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(Commission File Number)
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(IRS Employer
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of incorporation or organization)
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Identification Number)
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3560 Bassett Street
Santa Clara, CA 95054
(Address of principal executive offices)
(408) 986-9888
(Registrants 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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
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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
On February 3, 2009, Intevac, Inc. issued a press release reporting its financial results for
the three months and full year ended December 31, 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
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.
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INTEVAC, INC.
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Date: February 3, 2009
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By:
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/s/ JEFFREY ANDRESON
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Jeffrey Andreson
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Vice President, Finance and Administration,
Chief Financial Officer, Treasurer and Secretary
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Exhibit 99.1
3560 Bassett Street, Santa Clara CA 95054
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Jeff Andreson
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Claire McAdams
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Chief Financial Officer
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Investor Relations
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(408) 986-9888
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(530) 265-9899
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INTEVAC ANNOUNCES FOURTH QUARTER AND
FULL YEAR 2008 FINANCIAL RESULTS
Santa Clara, Calif.February 3, 2009Intevac, Inc. (Nasdaq: IVAC) today reported financial
results for the fourth quarter and year ended December 31, 2008.
The net loss for the quarter was $12.6 million, or $0.58 per diluted share, on 21.8 million
weighted-average shares outstanding. The net loss included a goodwill and intangible asset
impairment charge of $10.5 million, equivalent to $0.34 per diluted share. The net loss also
included $1.6 million of equity-based compensation expense, equivalent to $0.04 per diluted share.
For the fourth quarter of 2007, the net loss was $2.4 million, or $0.11 per diluted share, on 21.6
million weighted-average shares outstanding, which included $1.7 million of equity-based
compensation expense, equivalent to $0.05 per diluted share.
Revenues for the quarter were $16.4 million, including $11.9 million of Equipment revenues and
Intevac Photonics revenues of $4.5 million. Equipment revenues included one 200 Lean
®
system. Intevac Photonics revenues consisted of $2.9 million of research and development contracts
and $1.6 million of product sales. For the fourth quarter of 2007, revenues were $16.8 million,
including $10.8 million of Equipment revenues and $6.0 million of Intevac Photonics revenues, which
included $1.9 million of product sales.
Equipment and Intevac Photonics gross margins for the fourth quarter of 2008 were 41.4% and 19.5%,
respectively, compared to 46.7% and 46.7% in the fourth quarter of 2007. The decrease in Equipment
gross margin was primarily due to a lower mix of upgrades and spares revenue. The decrease in gross
margin for Intevac Photonics reflected lower research and development contract revenues, lower
factory absorption and higher warranty expense. Consolidated gross margins were 35.3%, compared to
46.7% in the fourth quarter of 2007.
Research and development and selling, general and administrative expenses for the quarter totaled
$15.1 million, or 91.7% of revenues, compared to $14.9 million, or 89.0% of revenues, in the fourth
quarter of 2007. Total operating expenses in the fourth quarter of 2008 were $25.6 million and
included a non-cash asset impairment charge of $10.5 million relating to the carrying amount of the
goodwill on the Equipment business segment and certain other intangible assets. Excluding the
impairment charge, operating expenses increased slightly compared to the fourth quarter of 2007 but
declined nearly $900,000 from the third quarter of 2008 as a result of the previously announced
Global Cost Reduction Plan.
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 net loss included the goodwill and intangibles asset
impairment charges of $10.5 million, equivalent to $0.34 per diluted share. The net loss also
included $6.6 million of equity-based compensation expense, equivalent to $0.18 per diluted share.
For the full year 2007, net income was $27.3 million, or $1.23 per diluted share, on 22.2 million
weighted average shares outstanding, which included $6.3 million of equity-based compensation
expense, equivalent to $0.22 per diluted share.
Revenues for the full year 2008 were $110.3 million, including $87.5 million of Equipment revenues
and $22.8 million of Intevac Photonics revenues. Equipment revenues consisted of eleven 200
Lean
®
systems. Intevac Photonics revenues consisted of $14.3 million of research and
development contracts and $8.5 million of product sales. For the full year 2007, revenues were
$215.8 million, including $196.7 million of Equipment revenues and $19.1 million of Intevac
Photonics revenues, which included $5.2 million of product sales.
Equipment and Intevac Photonics gross margins for the year were 40.9% and 33.0%, respectively,
compared to 44.7% and 42.6% in 2007. Lower Equipment margins reflect lower revenues and unabsorbed
factory costs. Intevac Photonics margins decreased primarily as a result of lower factory
absorption, product mix and higher warranty expense. Consolidated gross margins were 39.3%,
compared to 44.5% in 2007.
Total operating expenses for the fiscal year totaled $73.8 million, or 66.9% of revenues, compared
to $68.6 million, or 31.8% of revenues, in 2007. Excluding the goodwill and intangible asset
impairment charge taken in the fourth quarter of 2008, operating expenses for the year declined by
$5.3 million as a result of decreased spending on development of new Equipment products, decreased
legal expenses associated with patent litigation, global headcount reductions and overall cost
reduction initiatives.
Order backlog totaled $20.2 million on December 31, 2008, compared to $18.5 million on September
27, 2008 and $34.2 million on December 31, 2007. Backlog at year end includes one 200
Lean
®
system, compared to one on September 27, 2008 and two on December 31, 2007.
We exceeded our revenue guidance for the quarter and lowered our cost structure demonstrating our
commitment to effectively manage the business through this challenging economic environment. During
the quarter we implemented a Global Cost Reduction program which is expected to achieve
approximately $10 to $12 million in annual savings, commented Kevin Fairbairn, president and chief
executive officer of Intevac. In 2009, Intevac will focus on developing the first Hard Disk Drive
Patterned Media 200 Lean production tool, qualifying our Lean Etch tool through our alliance with
TES in Korea and continuing to ramp our strong Photonics product portfolio.
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 companys 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 81361001.
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 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 companys website at www.intevac.com.
200 Lean
®
is a registered trademark, and Lean Etch
TM
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; expected success of the
companys alliance with TES Co., Ltd., impact of the companys 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 companys 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 companys stock price. These risks and other factors are detailed in the companys 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)
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Three months ended
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Year ended
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December 31,
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December 31,
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December 31,
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December 31,
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2008
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2007
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2008
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2007
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Net revenues
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Equipment
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$
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11,911
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$
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10,801
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$
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87,469
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$
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196,686
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Intevac Photonics
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4,529
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5,950
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22,838
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19,148
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Total net revenues
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16,440
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16,751
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110,307
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215,834
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Gross profit
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5,810
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7,819
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43,339
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96,043
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Gross margin
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Equipment
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41.4
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%
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46.7
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%
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40.9
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%
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44.7
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%
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Intevac Photonics
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19.5
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%
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46.7
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%
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33.0
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%
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42.6
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%
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Consolidated
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35.3
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%
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46.7
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%
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39.3
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%
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44.5
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%
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Operating expenses
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Research and development
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8,657
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8,860
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35,083
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40,137
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Selling, general and
administrative
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6,411
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6,056
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28,229
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28,470
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Impairment of goodwill
and intangible assets
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10,498
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10,498
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Total operating expenses
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25,566
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14,916
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73,810
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68,607
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Operating income (loss)
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Equipment
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(5,430
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)
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(6,405
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)
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(9,924
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)
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32,903
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Intevac Photonics
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(2,959
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)
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161
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(6,674
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)
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(2,919
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)
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Corporate
1
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(11,367
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)
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(853
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(13,873
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)
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(2,548
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)
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Total operating profit
(loss)
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(19,756
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)
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(7,097
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)
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(30,471
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)
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27,436
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Interest and other income
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831
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3,487
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3,932
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8,142
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Profit (loss) before income
taxes
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(18,925
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)
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(3,610
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)
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(26,539
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)
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35,578
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Provision (benefit) for
income taxes
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(6,307
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)
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(1,194
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)
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(11,194
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)
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8,233
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Net income (loss)
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$
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(12,618
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)
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$
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(2,416
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)
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$
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(15,345
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)
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$
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27,345
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Income (loss) per share
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Basic
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$
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(0.58
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)
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$
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(0.11
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)
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$
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(0.71
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)
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$
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1.28
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Diluted
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$
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(0.58
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)
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$
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(0.11
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)
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$
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(0.71
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)
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$
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1.23
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Weighted average common
shares outstanding
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Basic
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21,796
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21,580
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21,724
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21,447
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Diluted
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21,796
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21,580
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21,724
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22,150
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1
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Q408 and FY 2008 Include goodwill and intangibles impairment charges of $10.5 million.
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-more-
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
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December 31,
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December 31,
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2008
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2007
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(Unaudited)
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(see Note)
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ASSETS
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Current assets
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Cash, cash equivalents and short-term investments
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$
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39,201
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$
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138,658
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Accounts receivable, net
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15,014
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14,142
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Inventories
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17,674
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22,133
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Deferred tax assets
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3,204
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3,609
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Prepaid expenses and other current assets
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4,806
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4,162
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Total current assets
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79,899
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182,704
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Long-term investments
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66,328
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|
2,009
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Property, plant and equipment, net
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14,886
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|
15,402
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Deferred tax assets
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|
14,765
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|
3,740
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Goodwill
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7,905
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|
7,905
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Other intangible assets, net
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|
|
4,054
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|
|
1,782
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Other long-term assets
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|
|
1,332
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|
1,871
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|
Total assets
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|
$
|
189,169
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|
|
$
|
215,413
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|
|
|
|
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|
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|
|
|
|
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|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
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|
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|
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|
|
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|
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Current liabilities
|
|
|
|
|
|
|
|
|
Note payable
|
|
$
|
2,000
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|
|
$
|
1,992
|
|
Accounts payable
|
|
|
4,214
|
|
|
|
7,678
|
|
Accrued payroll and related liabilities
|
|
|
3,395
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|
|
|
8,610
|
|
Other accrued liabilities
|
|
|
3,175
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|
|
|
4,163
|
|
Customer advances
|
|
|
2,807
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|
|
|
5,631
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|
|
|
|
Total current liabilities
|
|
|
15,591
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|
|
|
28,074
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|
|
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
|
509
|
|
|
|
2,176
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|
Stockholders equity
|
|
|
|
|
|
|
|
|
Common stock ($0.001 par value)
|
|
|
22
|
|
|
|
22
|
|
Paid in capital
|
|
|
128,686
|
|
|
|
120,022
|
|
Accumulated other comprehensive income (loss)
|
|
|
(4,808
|
)
|
|
|
605
|
|
Retained earnings
|
|
|
49,169
|
|
|
|
64,514
|
|
|
|
|
Total stockholders equity
|
|
|
173,069
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|
|
|
185,163
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
189,169
|
|
|
$
|
215,413
|
|
|
|
|
|
|
|
|
Note: Amounts as of December 31, 2007 are derived from the December 31, 2007 audited consolidated
financial statements.
-more-
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, 2008, and December, 2007 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
Equity-based
compensation by
type of award:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
$
|
1,290
|
|
|
$
|
1,525
|
|
|
$
|
5,252
|
|
|
$
|
5,517
|
|
Employee
Stock
Purchase Plan
|
|
|
270
|
|
|
|
246
|
|
|
|
1,247
|
|
|
|
864
|
|
Amounts
(capitalized as
inventory) released
to cost of sales
|
|
|
13
|
|
|
|
(80
|
)
|
|
|
78
|
|
|
|
(111
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity-based
compensation
|
|
|
1,573
|
|
|
|
1,691
|
|
|
|
6,577
|
|
|
|
6,270
|
|
Tax effect on
equity-based
compensation
|
|
|
(613
|
)
|
|
|
(580
|
)
|
|
|
(2,565
|
)
|
|
|
(1,451
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net effect on net
income (loss)
|
|
$
|
960
|
|
|
$
|
1,111
|
|
|
$
|
4,012
|
|
|
$
|
4,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect on earnings
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
0.18
|
|
|
$
|
0.22
|
|
Diluted
|
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
0.18
|
|
|
$
|
0.22
|
|