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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 13, 2004

Date of Report (date of earliest event reported)

INTEVAC, INC.

(Exact name of Registrant as specified in its charter)
         
State of California
(State or other jurisdiction
of incorporation or organization) 		  0-26946
(Commission File Number) 		  94-3125814
(IRS Employer
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)

 

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Item 12. Results of Operations and Financial Condition
Item 7. Financial Statements and Exhibits
Exhibit Index
EXHIBIT 99.1

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Item 12. Results of Operations and Financial Condition

     On July 13, 2004, Intevac, Inc. issued a press release reporting its financial results for the three and six months ended June 26, 2004. 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.

Item 7. 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: July 13, 2004   By:   /s/ CHARLES B. EDDY III  
      Charles B. Eddy III  
      Vice President, Finance and Administration,
Chief Financial Officer, Treasurer and Secretary  		 

 

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EXHIBIT INDEX

     
Exhibit No.
  Description
99.1
  Press Release
 

Exhibit 99.1

     
(INTEVAC LOGO)
  3560 Bassett Street, Santa Clara CA 95054
 
     
Charles Eddy
  Dan Matsui/Eugene Heller
Chief Financial Officer
  Silverman Heller Associates
(408) 986-9888
  (310) 208-2550
  dmatsui@sha-ir.com

INTEVAC REPORTS SECOND-QUARTER 2004 FINANCIAL RESULTS

Higher Sales, Improved Margins, Ten Disk Sputtering Systems Shipped

Santa Clara, Calif.—July 13, 2004—Intevac, Inc. (Nasdaq: IVAC) reported financial results for the second quarter and six months ended June 26, 2004.

Total revenues for the quarter were $18.0 million, compared to $4.6 million in the second quarter of 2003. Equipment revenues were $15.4 million, versus $2.4 million in second quarter last year; the increase resulting from the sale of two next-generation Intevac®200 Lean disk sputtering systems and one Intevac®MDP-250B disk sputtering system. Imaging revenues were $2.6 million, up from $2.2 million, due to higher revenues from research and development contracts.

Net income for the second quarter of 2004 was $781,000 or $0.04 per diluted share on 20,678,000 weighted-average shares outstanding, compared to a net loss of $4.8 million, or $0.39 per diluted share on 12,187,000 weighted-average shares, in second quarter 2003. The improvement was primarily attributable to higher Equipment sales, higher gross margins on Equipment sales and relatively flat operating expenses.

Total revenues for the first six-months of 2004 were $24.5 million, up from $16.6 million in the first six-months of 2003. Equipment revenues were $19.6 million, compared to $12.8 million in the prior year period. The increase was attributable to higher sales of disk sputtering systems and components, which were partially offset by a reduction in sales from flat panel display manufacturing equipment. Imaging revenues were $4.9 million, up from $3.8 million in the prior year period, due to higher revenues from research and development contracts.

Net loss for the first six-months of 2004 fell to $2.5 million, or $0.13 per diluted share on 19,373,000 weighted-average shares outstanding, from net losses of $8.8 million, or $0.72 per diluted share on 12,176,000 weighted-average shares, for the same period in 2003. The improvement was primarily attributable to higher equipment sales, higher gross margins on equipment sales and lower operating expense ratios. Also contributing was the absence of fixed-asset write-offs of $639,000 included in 2003 results.

Order backlog totaled $46.4 million on June 26, 2004, compared to $52.0 million on March 27, 2004, and $14.3 million on June 28, 2003.

Intevac Chief Executive Kevin Fairbairn commented: “We delivered nine next-generation 200 Lean disk sputtering systems and one MDP-250B disk sputtering systems to a total of three customers this quarter. This was a dramatic increase in our production rate from the two systems that we delivered in all of 2003. This was our first volume production of the 200 Lean and we completed it on an accelerated schedule driven by our customer’s desire to produce large volumes of thin-film media on the 200 Lean during Q3. This demonstrated our ability to

 

 

quickly ramp production to a rate of nearly one system per week. However, the acceleration and rapid ramp negatively impacted our ability to achieve our cost goals, which will result in lower gross margins as this initial batch of systems is recognized for revenue. Our operations group is now addressing our supply chain and manufacturing processes and we expect to achieve our cost targets on future builds of the 200 Lean.”

Fairbairn continued. “We also continue to make excellent progress in our Imaging business, with increased revenues, strong order bookings and good progress in operations building the foundation for low-cost production of imaging devices.”

Conference Call Information

The Company will discuss its financial results in a conference call July 13, 2004 at 8:00 a.m. PDT (11:00 a.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.FullDisclosure.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 beginning at 11 a.m. PDT on July 13 through midnight July 15. You may access the playback by calling (800) 642-1687 or, for international callers (706) 645-9291, and providing conference ID 8530733.

About Intevac

Intevac is the world’s leading supplier of disk sputtering equipment for the thin-film disk industry and a developer of leading technology for extreme low light imaging sensors, cameras and systems.

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 projected gross margins on 200 Lean systems, ability to achieve cost targets on 200 Lean systems and low cost production of imaging devices. 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 and other factors are detailed 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)

                                 
    3 months ended
  6 months ended
    June 26,   June 28,   June 26,   June 28,
    2004
  2003
  2004
  2003
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
Net revenues
                               
Equipment
  $ 15,403     $ 2,396     $ 19,556     $ 12,813  
Imaging
    2,577       2,191       4,923       3,789  
 
   
  		     
  		     
  		     
  		 
Total net revenues
    17,980       4,587       24,479       16,602  
Gross profit
    5,791       1,119       7,456       2,279  
Gross margin
                               
Equipment
    34.3 %     26.8 %     33.5 %     11.7 %
Imaging
    19.8 %     21.8 %     18.2 %     20.5 %
 
   
  		     
  		     
  		     
  		 
Consolidated
    32.2 %     24.4 %     30.5 %     13.7 %
Operating expenses
                               
Research and development
    3,083       3,114       6,141       5,743  
Selling, general and administrative
    2,223       2,146       4,393       4,071  
 
   
  		     
  		     
  		     
  		 
Total operating expenses
    5,306       5,260       10,534       9,814  
Operating income/(loss)
                               
Equipment
    1,415       (1,937 )     (803 )     (3,157 )
Imaging
    (726 )     (1,394 )     (1,551 )     (3,021 )
Corporate
    (204 )     (810 )     (724 )     (1,357 )
 
   
  		     
  		     
  		     
  		 
Total operating income/(loss)
    485       (4,141 )     (3,078 )     (7,535 )
Other income/(expense)
    296       (646 )     534       (1,264 )
 
   
  		     
  		     
  		     
  		 
Profit/(loss) before provision for income taxes
    781       (4,787 )     (2,544 )     (8,799 )
Provision for/(benefit from) income taxes
    —       —       (12 )     —  
 
   
  		     
  		     
  		     
  		 
Net income/(loss)
  $ 781       ($4,787 )     ($2,532 )     ($8,799 )
 
   
  		     
  		     
  		     
  		 
Income/(loss) per share
                               
Basic
  $ 0.04       ($0.39 )     ($0.13 )     ($0.72 )
Diluted a
  $ 0.04       ($0.39 )     ($0.13 )     ($0.72 )
Weighted average common shares
                               
Basic
    20,010       12,187       19,373       12,176  
Diluted a
    20,678       12,187       19,373       12,176  

a Diluted earnings per share exclude “as converted” treatment of our 6 1/2% Convertible Subordinated Notes Due 2004 through the period ending March 27, 2004 and our 6 1/2% Convertible Subordinated Notes Due 2009 through the period ending December 31, 2003 and the effect of outstanding stock options when these potentially dilutive securites are anti-dilutive to earnings per share

-more-

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

                 
    June 26,   Dec. 31,
    2004
  2003
ASSETS   (unaudited)    
Current assets
               
Cash, cash equivalents and short term investments
  $ 37,512     $ 19,507  
Accounts receivable, net
    15,597       14,016  
Inventories — stores and production
    10,621       7,677  
Inventories — pending acceptance at customer site
    28,286       5,431  
Prepaid expenses and other current assets
    737       1,113  
 
   
  		     
  		 
Total current assets
    92,753       47,744  
Property, plant and equipment, net
    5,848       5,796  
Long term investments
    12,187       —  
Investment in 601 California Ave LLC
    2,431       2,431  
Other
    3       4  
 
   
  		     
  		 
Total assets
  $ 113,222     $ 55,975  
 
   
  		     
  		 
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current liabilities
               
Convertible notes
  $ —     $ 1,025  
Accounts payable
    7,222       3,396  
Accrued payroll and related liabilities
    1,687       1,610  
Other accrued liabilities
    3,134       2,643  
Customer advances
    30,635       16,432  
 
   
  		     
  		 
Total current liabilities
    42,678       25,106  
Shareholders’ equity
               
Common stock
    94,189       51,982  
Retained earnings (deficit)
    (23,645 )     (21,113 )
 
   
  		     
  		 
Total shareholders’ equity
    70,544       30,869  
 
   
  		     
  		 
Total liabilities and shareholders’ equity
  $ 113,222     $ 55,975  
 
   
  		     
  		 

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