INTEVAC INC (Form: 8-K, Received: 05/01/2006 16:07:17)

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

Date of Report (Date of earliest event reported): May 1, 2006

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:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ 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 May 1, 2006, Intevac, Inc. issued a press release reporting its financial results for the three months ended April 1, 2006. 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

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: May 1, 2006	By:	/s/ CHARLES B. EDDY III
		Charles B. Eddy III
		Vice President, Finance and Administration, Chief Financial Officer, Treasurer and Secretary

Exhibit Index


Exhibit
No.		Description
99.1		Press Release.

Exhibit 99.1

3560 Bassett Street, Santa Clara CA 95054


Charles Eddy		Dan Matsui/Gene Heller
Chief Financial Officer		Silverman Heller Associates
(408) 986-9888		(310) 208-2550

INTEVAC INC. REPORTS FINANCIAL RESULTS FOR FIRST-QUARTER 2006
Quarterly Backlog Rises 48% to $125 Million on Orders for 200 Lean ^{^®} Disk Sputtering Systems

Santa Clara, Calif.—May 1, 2006—Intevac, Inc. (Nasdaq: IVAC) reported financial results for the first quarter ended April 1, 2006.

Net income for the quarter was $7.0 million, or 32 cents per diluted share on 21.9 million weighted-average shares outstanding. Included in these results is $428,000 of non-cash stock based compensation expense. This compares to first-quarter 2005 net loss of $3.9 million, or 19 cents per share on 20.2 million weighted-average shares outstanding, which did not include non-cash stock based compensation expense.

Revenues for the quarter were $49.6 million, including $47.6 million of Equipment revenues and $2.0 million of Imaging revenues. Equipment revenues consisted of nine magnetic media manufacturing systems, disk lubrication systems, equipment upgrades, spares, consumables, and service. Imaging revenues consisted of $1.5 million of research and development contracts and $501,000 of product sales. In first-quarter 2005, net revenues were $10.6 million, including $8.5 million of Equipment revenues and $2.1 million of Imaging revenues.

Equipment and Imaging gross margins for the quarter increased to 35.2% and 26.2%, respectively, from 19.7% and 15.0%, respectively, in first-quarter 2005. Equipment margins for the quarter improved primarily from lower manufacturing costs and higher average selling prices for 200 Lean ^{^®} systems. Imaging margins improved primarily as the result of higher product sales compared to revenues from cost-sharing development contracts. Consolidated gross margins improved to 34.9% from 18.8% in first-quarter 2005.

Operating expenses for the quarter totaled $10.7 million, or 22% of revenues, versus $6.3 million, or 60% of revenues, in first-quarter 2005. Operating expenses increased as the result of higher R&D spending in Imaging and Equipment, provisions for employee profit sharing and bonus plans, the inclusion of stock compensation expense in first-quarter 2006 results, and higher costs in Equipment related to business development, customer service, and support.

Order backlog totaled $124.8 million on April 1, 2006, compared to $84.5 million on December 31, 2005, and $66.0 million on April 2, 2005. Backlog increased primarily as a result of orders received for 200 Lean systems. Backlog at April 1, 2006, included twenty-seven 200 Lean systems, of which twenty-five are scheduled for delivery and revenue recognition in 2006.

Intevac Chief Executive Kevin Fairbairn commented: “I am pleased to report excellent first-quarter financial results. Revenues were higher than anticipated at the beginning of the quarter primarily as a result of delivery of an additional 200 Lean and strong orders during the quarter for 200 Lean spares and upgrades. We were able to “turn” these orders into significant revenue upside as the result of excellent execution by our operations group. Gross margin increased by 16 percentage points year-over-year, and we exceeded our beginning-of-quarter earnings

guidance while continuing to invest in new products in both our Equipment and Imaging businesses.”

Conference Call Information
The Company will discuss its financial results 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 3:30 p.m. PDT. You may access the playback by calling (800) 642-1687 or, for international callers (706) 645-9291, and providing conference ID 7320518.

About Intevac
Intevac is the world’s leading supplier of disk sputtering equipment to manufacturers of magnetic media used in hard disk drives and a developer and provider of leading edge extreme low light imaging sensors, cameras and systems. For more information please visit our website at www.intevac.com .

200 Lean ^{^®} is a registered trademark of Intevac, Inc.

[Financial tables on following pages]

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)


	3 months ended
	April 1,			April 2,
	2006			2005
	(Unaudited)			(Unaudited)
Net revenues
Equipment	$	47,573		$	8,536
Imaging		2,047			2,069

Total net revenues		49,620			10,605

Gross profit		17,306			1,995
Gross margin
Equipment		35.2	%		19.7	%
Imaging		26.2	%		15.0	%

Consolidated		34.9	%		18.8	%

Operating expenses
Research and development		5,561			3,125
Selling, general and administrative		5,114			3,191

Total operating expenses		10,675			6,316

Operating income/(loss)
Equipment Products		8,480			(2,671	)
Imaging		(1,869	)		(1,181	)
Corporate		20			(469	)

Total operating profit/(loss)		6,631			(4,321	)

Other income		598			431

Profit/(Loss) before provision for income taxes		7,229			(3,890	)
Provision for income taxes		218			7

Net income/(Loss)		7,011			($3,897	)


Income (loss) per share
Basic	$	0.34			($0.19	)
Diluted	$	0.32			($0.19	)
Weighted average common shares outstanding
Basic		20,832			20,243
Diluted		21,920			20,243

-more-

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)


ASSETS	April 1,			Dec. 31,
	2006			2005
	(Unaudited)
Current assets
Cash, cash equivalents and short term investments	$	45,576		$	49,731
Accounts receivable, net		57,635			42,847
Inventories – production		31,465			21,373
Inventories – pending acceptance at customer site		440			3,464
Prepaid expenses and other current assets		1,888			1,814

Total current assets		137,004			119,229

Property, plant and equipment, net		8,494			7,980
Investment in 601 California Avenue LLC		2,431			2,431
Other long-term assets		1,105			804

Total assets	$	149,034		$	130,444


LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities
Accounts payable	$	13,915		$	7,049
Accrued payroll and related liabilities		3,438			5,509
Other accrued liabilities		4,598			6,182
Customer advances		29,185			23,136

Total current liabilities		51,136			41,876

Other long-term liabilities		816			694
Shareholders’ equity
Common stock		98,873			97,165
Paid in Capital – Stock Compensation		460			—
Accumulated other comprehensive income		267			238
Retained earnings (deficit)		(2,518	)		(9,529	)

Total shareholders’ equity		97,082			87,874

Total liabilities and shareholders’ equity	$	149,034		$	130,444

-more-

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS RECONCILIATION
TO GAAP
(in thousands, except per share data)
(Unaudited)


	Three Months Ended April 1, 2006
				Non-GAAP
	GAAP			Adjustment				Non-GAAP
Revenues	$	49,620						$	49,620

Cost of revenue		32,314			(46	)	A		32,268

Gross profit		17,306			46				17,352
Gross margin		34.9	%						35.0	%

Operating expense
Research and development		5,561			(204	)	A		5,357
Selling, general and administrative		5,114			(178	)	A		4,936

Total operating expense		10,675			(382	)			10,293

Operating income		6,631			428				7,059

Other income		598							598

Profit before provision for income taxes		7,229			428				7,657
Provision for income taxes		218			13				231

Net Income	$	7,011		$	415			$	7,426


Income per share
Basic	$	0.34						$	0.36
Diluted	$	0.32						$	0.34

Weighted average common shares outstanding
Basic		20,832							20,832
Diluted		21,920							21,920

The non-GAAP measures provided herein exclude the impact of non-cash charges related to stock-based compensation expense. We believe these measures are useful to investors because they provide an alternative method for measuring the operating performance of the Company’s business, excluding stock based compensation expense.

The non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

Footnotes — for the three months ended April 1, 2006


A		To exclude stock-based compensation expense (Cost of Revenue $46, Research and Development $204, Marketing and Administrative $178 for the quarter ended April 1, 2006.

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