0001193125-22-146253 10-Q 79 20220402 20220510 20220510 INTEVAC INC 0001001902 3559 943125814 DE 1231 10-Q 34 000-26946 22909467 3560 BASSETT STREET SANTA CLARA CA 95054 4089869888 3560 BASSETT STREET SANTA CLARA CA 95054 10-Q 1 d332648d10q.htm 10-Q 10-Q
3falseQ10001001902--01-01 0001001902 2022-01-02 2022-04-02 0001001902 2021-01-03 2021-04-03 0001001902 2022-04-02 0001001902 2022-01-01 0001001902 2013-11-21 0001001902 2018-08-15 0001001902 2018-08-15 2018-08-15 0001001902 2020-07-03 2020-09-26 0001001902 2021-10-02 0001001902 2020-08-01 0001001902 2020-12-31 0001001902 2022-05-10 0001001902 2021-07-03 2021-10-02 0001001902 2021-01-03 2022-01-01 0001001902 2022-01-10 2022-01-10 0001001902 2021-01-02 0001001902 2022-01-10 0001001902 2021-04-03 0001001902 us-gaap:UnbilledRevenuesMember ivac:ThinfilmEquipmentSegmentMember 2022-04-02 0001001902 us-gaap:AssetBackedSecuritiesMember 2022-04-02 0001001902 us-gaap:CertificatesOfDepositMember 2022-04-02 0001001902 us-gaap:CorporateDebtSecuritiesMember 2022-04-02 0001001902 us-gaap:USStatesAndPoliticalSubdivisionsMember 2022-04-02 0001001902 us-gaap:USTreasurySecuritiesMember 2022-04-02 0001001902 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel2Member us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel1Member us-gaap:USTreasurySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel2Member us-gaap:USTreasurySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:AssetBackedSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel1Member us-gaap:AssetBackedSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel2Member us-gaap:AssetBackedSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:CertificatesOfDepositMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel1Member us-gaap:CertificatesOfDepositMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel2Member us-gaap:CertificatesOfDepositMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel1Member us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel1Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel1Member us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel2Member us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2022-04-02 0001001902 us-gaap:CashAndCashEquivalentsMember us-gaap:CashMember 2022-04-02 0001001902 us-gaap:CashAndCashEquivalentsMember us-gaap:MoneyMarketFundsMember 2022-04-02 0001001902 us-gaap:CashAndCashEquivalentsMember us-gaap:CertificatesOfDepositMember 2022-04-02 0001001902 us-gaap:CashAndCashEquivalentsMember us-gaap:CommercialPaperMember 2022-04-02 0001001902 us-gaap:CashAndCashEquivalentsMember us-gaap:USTreasuryAndGovernmentMember 2022-04-02 0001001902 us-gaap:CashAndCashEquivalentsMember 2022-04-02 0001001902 us-gaap:ShortTermInvestmentsMember us-gaap:CertificatesOfDepositMember 2022-04-02 0001001902 us-gaap:ShortTermInvestmentsMember us-gaap:CommercialPaperMember 2022-04-02 0001001902 us-gaap:ShortTermInvestmentsMember us-gaap:CorporateDebtSecuritiesMember 2022-04-02 0001001902 us-gaap:ShortTermInvestmentsMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2022-04-02 0001001902 us-gaap:ShortTermInvestmentsMember us-gaap:USTreasuryAndGovernmentMember 2022-04-02 0001001902 us-gaap:ShortTermInvestmentsMember 2022-04-02 0001001902 us-gaap:OtherLongTermInvestmentsMember us-gaap:AssetBackedSecuritiesMember 2022-04-02 0001001902 us-gaap:OtherLongTermInvestmentsMember us-gaap:CorporateDebtSecuritiesMember 2022-04-02 0001001902 us-gaap:OtherLongTermInvestmentsMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2022-04-02 0001001902 us-gaap:OtherLongTermInvestmentsMember us-gaap:USTreasuryAndGovernmentMember 2022-04-02 0001001902 us-gaap:OtherLongTermInvestmentsMember 2022-04-02 0001001902 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2022-04-02 0001001902 us-gaap:NondesignatedMember 2022-04-02 0001001902 ivac:DeferredRevenueMember ivac:ThinfilmEquipmentSegmentMember 2022-04-02 0001001902 ivac:CustomerAdvancesMember ivac:ThinfilmEquipmentSegmentMember 2022-04-02 0001001902 ivac:ThinfilmEquipmentSegmentMember 2022-04-02 0001001902 ivac:SeveranceAndOtherEmployeeRelatedCostsMember 2022-04-02 0001001902 us-gaap:OtherRestructuringMember 2022-04-02 0001001902 ivac:PhotonicsMember ivac:EotechLlcMember 2022-04-02 0001001902 ivac:EotechLlcMember 2022-04-02 0001001902 us-gaap:UnbilledRevenuesMember ivac:ThinfilmEquipmentSegmentMember 2022-01-01 0001001902 us-gaap:CashAndCashEquivalentsMember us-gaap:CashMember 2022-01-01 0001001902 us-gaap:CashAndCashEquivalentsMember us-gaap:MoneyMarketFundsMember 2022-01-01 0001001902 us-gaap:CashAndCashEquivalentsMember 2022-01-01 0001001902 us-gaap:ShortTermInvestmentsMember us-gaap:CertificatesOfDepositMember 2022-01-01 0001001902 us-gaap:ShortTermInvestmentsMember us-gaap:CommercialPaperMember 2022-01-01 0001001902 us-gaap:ShortTermInvestmentsMember us-gaap:CorporateDebtSecuritiesMember 2022-01-01 0001001902 us-gaap:ShortTermInvestmentsMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2022-01-01 0001001902 us-gaap:ShortTermInvestmentsMember us-gaap:USTreasuryAndGovernmentMember 2022-01-01 0001001902 us-gaap:ShortTermInvestmentsMember 2022-01-01 0001001902 us-gaap:OtherLongTermInvestmentsMember us-gaap:AssetBackedSecuritiesMember 2022-01-01 0001001902 us-gaap:OtherLongTermInvestmentsMember us-gaap:CertificatesOfDepositMember 2022-01-01 0001001902 us-gaap:OtherLongTermInvestmentsMember us-gaap:CorporateDebtSecuritiesMember 2022-01-01 0001001902 us-gaap:OtherLongTermInvestmentsMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2022-01-01 0001001902 us-gaap:OtherLongTermInvestmentsMember us-gaap:USTreasuryAndGovernmentMember 2022-01-01 0001001902 us-gaap:OtherLongTermInvestmentsMember 2022-01-01 0001001902 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2022-01-01 0001001902 us-gaap:NondesignatedMember 2022-01-01 0001001902 ivac:DeferredRevenueMember ivac:ThinfilmEquipmentSegmentMember 2022-01-01 0001001902 ivac:CustomerAdvancesMember ivac:ThinfilmEquipmentSegmentMember 2022-01-01 0001001902 ivac:ThinfilmEquipmentSegmentMember 2022-01-01 0001001902 us-gaap:RestrictedStockUnitsRSUMember 2022-01-02 2022-04-02 0001001902 ivac:EmployeeStockPurchasePlanMember 2022-01-02 2022-04-02 0001001902 us-gaap:EmployeeStockOptionMember 2022-01-02 2022-04-02 0001001902 ivac:HardDiskDriveMember ivac:SystemUpgradeAndSparePartsMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:DisplayCoverPanelMember ivac:SystemUpgradeAndSparePartsMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:PhotovoltaicMember ivac:SystemUpgradeAndSparePartsMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:SystemUpgradeAndSparePartsMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:FieldServiceMember ivac:HardDiskDriveMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:FieldServiceMember ivac:DisplayCoverPanelMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:FieldServiceMember ivac:PhotovoltaicMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:FieldServiceMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:ThinfilmEquipmentSegmentMember ivac:HardDiskDriveMember 2022-01-02 2022-04-02 0001001902 ivac:ThinfilmEquipmentSegmentMember ivac:DisplayCoverPanelMember 2022-01-02 2022-04-02 0001001902 ivac:ThinfilmEquipmentSegmentMember ivac:PhotovoltaicMember 2022-01-02 2022-04-02 0001001902 country:US 2022-01-02 2022-04-02 0001001902 srt:AsiaMember 2022-01-02 2022-04-02 0001001902 srt:EuropeMember 2022-01-02 2022-04-02 0001001902 us-gaap:TransferredAtPointInTimeMember 2022-01-02 2022-04-02 0001001902 us-gaap:TransferredOverTimeMember 2022-01-02 2022-04-02 0001001902 us-gaap:UnbilledRevenuesMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:DeferredRevenueMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:CustomerAdvancesMember ivac:ThinfilmEquipmentSegmentMember 2022-01-02 2022-04-02 0001001902 ivac:ESPPPurchaseRightsMember 2022-01-02 2022-04-02 0001001902 us-gaap:AccumulatedTranslationAdjustmentMember 2022-01-02 2022-04-02 0001001902 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2022-01-02 2022-04-02 0001001902 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-02 2022-04-02 0001001902 us-gaap:ForeignCountryMember country:SG 2022-01-02 2022-04-02 0001001902 ivac:CommonStockAndAdditionalPaidInCapitalMember 2022-01-02 2022-04-02 0001001902 ivac:AccumulatedDeficitMember 2022-01-02 2022-04-02 0001001902 us-gaap:GrantMember us-gaap:CostOfSalesMember 2022-01-02 2022-04-02 0001001902 us-gaap:GrantMember us-gaap:ResearchAndDevelopmentExpenseMember 2022-01-02 2022-04-02 0001001902 us-gaap:GrantMember us-gaap:SellingGeneralAndAdministrativeExpensesMember 2022-01-02 2022-04-02 0001001902 ivac:SeveranceAndOtherEmployeeRelatedCostsMember 2022-01-02 2022-04-02 0001001902 us-gaap:OtherRestructuringMember 2022-01-02 2022-04-02 0001001902 us-gaap:SellingGeneralAndAdministrativeExpensesMember ivac:PhotonicsMember 2022-01-02 2022-04-02 0001001902 ivac:PhotonicsMember 2022-01-02 2022-04-02 0001001902 ivac:EotechLlcMember 2022-01-02 2022-04-02 0001001902 ivac:SeveranceAndOtherEmployeeRelatedTerminationCostsMember 2022-01-02 2022-04-02 0001001902 ivac:ForfeitureAwardsMember 2022-01-02 2022-04-02 0001001902 ivac:StockBasedAwardsMember 2022-01-02 2022-04-02 0001001902 us-gaap:SegmentDiscontinuedOperationsMember 2022-01-02 2022-04-02 0001001902 us-gaap:SegmentContinuingOperationsMember 2022-01-02 2022-04-02 0001001902 us-gaap:RestrictedStockUnitsRSUMember 2021-01-03 2021-04-03 0001001902 ivac:EmployeeStockPurchasePlanMember 2021-01-03 2021-04-03 0001001902 us-gaap:EmployeeStockOptionMember 2021-01-03 2021-04-03 0001001902 ivac:HardDiskDriveMember ivac:SystemUpgradeAndSparePartsMember ivac:ThinfilmEquipmentSegmentMember 2021-01-03 2021-04-03 0001001902 ivac:DisplayCoverPanelMember ivac:SystemUpgradeAndSparePartsMember ivac:ThinfilmEquipmentSegmentMember 2021-01-03 2021-04-03 0001001902 ivac:PhotovoltaicMember ivac:SystemUpgradeAndSparePartsMember ivac:ThinfilmEquipmentSegmentMember 2021-01-03 2021-04-03 0001001902 ivac:AdvancedSemiconductorPackagingMemberMember ivac:SystemUpgradeAndSparePartsMember ivac:ThinfilmEquipmentSegmentMember 2021-01-03 2021-04-03 0001001902 ivac:HardDiskDriveMember ivac:FieldServiceMember ivac:ThinfilmEquipmentSegmentMember 2021-01-03 2021-04-03 0001001902 ivac:DisplayCoverPanelMember ivac:FieldServiceMember ivac:ThinfilmEquipmentSegmentMember 2021-01-03 2021-04-03 0001001902 ivac:FieldServiceMember ivac:PhotovoltaicMember ivac:ThinfilmEquipmentSegmentMember 2021-01-03 2021-04-03 0001001902 ivac:AdvancedSemiconductorPackagingMemberMember ivac:FieldServiceMember ivac:ThinfilmEquipmentSegmentMember 2021-01-03 2021-04-03 0001001902 ivac:AdvancedSemiconductorPackagingMemberMember ivac:ThinfilmEquipmentSegmentMember 2021-01-03 2021-04-03 0001001902 ivac:ThinfilmEquipmentSegmentMember ivac:SystemUpgradeAndSparePartsMember 2021-01-03 2021-04-03 0001001902 ivac:ThinfilmEquipmentSegmentMember ivac:FieldServiceMember 2021-01-03 2021-04-03 0001001902 ivac:ThinfilmEquipmentSegmentMember ivac:HardDiskDriveMember 2021-01-03 2021-04-03 0001001902 ivac:ThinfilmEquipmentSegmentMember ivac:DisplayCoverPanelMember 2021-01-03 2021-04-03 0001001902 ivac:ThinfilmEquipmentSegmentMember ivac:PhotovoltaicMember 2021-01-03 2021-04-03 0001001902 ivac:ThinfilmEquipmentSegmentMember 2021-01-03 2021-04-03 0001001902 country:US 2021-01-03 2021-04-03 0001001902 srt:AsiaMember 2021-01-03 2021-04-03 0001001902 srt:EuropeMember 2021-01-03 2021-04-03 0001001902 us-gaap:TransferredAtPointInTimeMember 2021-01-03 2021-04-03 0001001902 us-gaap:TransferredOverTimeMember 2021-01-03 2021-04-03 0001001902 ivac:ESPPPurchaseRightsMember 2021-01-03 2021-04-03 0001001902 us-gaap:AccumulatedTranslationAdjustmentMember 2021-01-03 2021-04-03 0001001902 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2021-01-03 2021-04-03 0001001902 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-03 2021-04-03 0001001902 country:SG us-gaap:ForeignCountryMember 2021-01-03 2021-04-03 0001001902 ivac:CommonStockAndAdditionalPaidInCapitalMember 2021-01-03 2021-04-03 0001001902 ivac:AccumulatedDeficitMember 2021-01-03 2021-04-03 0001001902 ivac:SystemsAndComponentsMember ivac:PhotonicsMember 2021-01-03 2021-04-03 0001001902 ivac:TechnologyDevelopmentMember ivac:PhotonicsMember 2021-01-03 2021-04-03 0001001902 ivac:PhotonicsMember 2021-01-03 2021-04-03 0001001902 us-gaap:ResearchAndDevelopmentExpenseMember ivac:PhotonicsMember 2021-01-03 2021-04-03 0001001902 us-gaap:SellingGeneralAndAdministrativeExpensesMember ivac:PhotonicsMember 2021-01-03 2021-04-03 0001001902 us-gaap:SegmentDiscontinuedOperationsMember 2021-01-03 2021-04-03 0001001902 us-gaap:SegmentContinuingOperationsMember 2021-01-03 2021-04-03 0001001902 ivac:PhotonicsMember ivac:EotechLlcMember 2021-12-30 0001001902 ivac:PhotonicsMember ivac:EotechLlcMember us-gaap:SubsequentEventMember 2024-12-31 0001001902 srt:ScenarioForecastMember 2022-12-31 0001001902 srt:ScenarioForecastMember 2023-12-31 0001001902 ivac:InducementPlanMember 2022-01-19 0001001902 ivac:SeveranceAndOtherEmployeeRelatedCostsMember 2022-01-01 0001001902 us-gaap:OtherRestructuringMember 2022-01-01 0001001902 us-gaap:RestrictedStockUnitsRSUMember 2022-01-01 0001001902 us-gaap:AccumulatedTranslationAdjustmentMember 2022-01-01 0001001902 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2022-01-01 0001001902 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01 0001001902 us-gaap:RestrictedStockUnitsRSUMember 2022-04-02 0001001902 us-gaap:AccumulatedTranslationAdjustmentMember 2022-04-02 0001001902 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2022-04-02 0001001902 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-04-02 0001001902 ivac:CommonStockAndAdditionalPaidInCapitalMember 2022-01-01 0001001902 us-gaap:TreasuryStockMember 2022-01-01 0001001902 ivac:AccumulatedDeficitMember 2022-01-01 0001001902 ivac:CommonStockAndAdditionalPaidInCapitalMember 2022-04-02 0001001902 us-gaap:TreasuryStockMember 2022-04-02 0001001902 ivac:AccumulatedDeficitMember 2022-04-02 0001001902 ivac:SeveranceAndOtherEmployeeRelatedTerminationCostsMember 2022-01-01 0001001902 ivac:SeveranceAndOtherEmployeeRelatedTerminationCostsMember 2022-04-02 0001001902 us-gaap:AccumulatedTranslationAdjustmentMember 2021-01-02 0001001902 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2021-01-02 0001001902 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-02 0001001902 us-gaap:AccumulatedTranslationAdjustmentMember 2021-04-03 0001001902 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2021-04-03 0001001902 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-04-03 0001001902 ivac:CommonStockAndAdditionalPaidInCapitalMember 2021-01-02 0001001902 us-gaap:TreasuryStockMember 2021-01-02 0001001902 ivac:AccumulatedDeficitMember 2021-01-02 0001001902 ivac:CommonStockAndAdditionalPaidInCapitalMember 2021-04-03 0001001902 us-gaap:TreasuryStockMember 2021-04-03 0001001902 ivac:AccumulatedDeficitMember 2021-04-03 iso4217:USD xbrli:shares xbrli:pure utr:Year utr:Month ivac:Installment iso4217:USD xbrli:shares
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
FORM
10-Q
 
 
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 2, 2022
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
                    
to
                    
Commission file number
0-26946
 
 
INTEVAC, INC.
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
94-3125814
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer
Identification No.)
3560 Bassett Street
Santa Clara, California 95054    
(Address of principal executive office, including Zip Code)
Registrant’s telephone number, including area code: (408)
986-9888
 
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Common Stock ($0.001 par value)
 
IVAC
 
The Nasdaq Stock Market LLC (Nasdaq) Global Select
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒  Yes    ☐  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes    ☐  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
Rule 12b-2
of the Exchange Act:
 
Large accelerated filer
 
  
Accelerated filer
 
       
Non-accelerated
filer
 
  
Smaller reporting company
 
       
        
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2
of the Act).    ☐  Yes      No
On May 10, 2022, 25,059,237 shares of the registrant’s Common Stock, $0.001 par value, were
outstanding.
 
 
 

INTEVAC, INC.
INDEX
 
No.
 
 
  
Page
 
  
Item 1.
 
  
 
  
 
3
 
 
  
 
4
 
 
  
 
5
 
 
  
 
6
 
 
  
 
7
 
Item 2.
 
  
 
20
 
Item 3.
 
  
 
27
 
Item 4.
 
  
 
27
 
  
Item 1.
 
  
 
28
 
Item 1A.
 
  
 
28
 
Item 2.
 
  
 
34
 
Item 3.
 
  
 
34
 
Item 4.
 
  
 
34
 
Item 5.
 
  
 
34
 
Item 6.
 
  
 
35
 
  
 
36
 
 
2

PART I. FINANCIAL INFORMATION
 
Item 1.
Financial Statements
INTEVAC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
    
April 2,

2022
   
January 1,

2022
 
              
    
(Unaudited)
 
    
(In thousands, except par value)
 
ASSETS
 
     
Current assets:
                
Cash and cash equivalents
   $ 98,034     $ 102,728  
Short-term investments
     8,941       10,221  
Trade and other accounts receivable, net of allowances of $0 at both April 2, 2022 and January 1, 2022
     17,054       14,261  
Inventories
     8,908       5,791  
Prepaid expenses and other current assets
     1,778       1,827  
    
 
 
   
 
 
 
Total current assets
     134,715       134,828  
Long-term investments
     9,407       7,427  
Restricted cash
     786       786  
Property, plant and equipment, net
     3,372       4,759  
Operating lease
right-of-use-assets
     3,966       4,520  
Deferred income taxes and other long-term assets
     5,406       5,449  
    
 
 
   
 
 
 
Total assets
   $ 157,652     $ 157,769  
    
 
 
   
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
     
Current liabilities:
                
Current operating lease liabilities
   $ 3,188     $ 3,119  
Accounts payable
     3,915       5,320  
Accrued payroll and related liabilities
     3,319       5,505  
Other accrued liabilities
     2,971       3,665  
Customer advances
     15,320       2,107  
    
 
 
   
 
 
 
Total current liabilities
     28,713       19,716  
Noncurrent liabilities:
 
Noncurrent operating lease liabilities
     2,854       3,675  
Other long-term liabilities
     270       363  
    
 
 
   
 
 
 
Total noncurrent liabilities
     3,124       4,038  
Stockholders’ equity:
 
Common stock, $0.001 par value
     25       25  
Additional
paid-in
capital
     198,935       199,073  
Treasury stock, 5,087 shares at both April 2, 2022 and at January 1, 2022
     (29,551     (29,551
Accumulated other comprehensive income
     371       578  
Accumulated deficit
     (43,965     (36,110
    
 
 
   
 
 
 
Total stockholders’ equity
     125,815       134,015  
    
 
 
   
 
 
 
Total liabilities and stockholders’ equity
   $ 157,652     $ 157,769  
    
 
 
   
 
 
 
Note: Amounts as of January 1, 2022 are derived from the January 1, 2022 audited consolidated financial statements.
See accompanying notes.
 
3

INTEVAC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
    
Three Months Ended
 
    
April 2,

2022
   
April 3,

2021
 
              
    
(Unaudited)
    
(In thousands, except per
share amounts)
Net revenues
   $ 4,445     $ 9,238  
Cost of net revenues
     3,722       7,104  
    
 
 
   
 
 
 
Gross profit
     723       2,134  
Operating expenses:
                
Research and development
     4,160       3,365  
Selling, general and administrative
     4,249       4,334  
    
 
 
   
 
 
 
Total operating expenses
     8,409       7,699  
    
 
 
   
 
 
 
Loss from operations
     (7,686     (5,565
Interest income and other income (expense), net
     (8     29  
    
 
 
   
 
 
 
Loss from continuing operations before provision for income taxes
     (7,694     (5,536
Provision for income taxes
     26       32  
    
 
 
   
 
 
 
Net loss from continuing operations
     (7,720     (5,568
    
 
 
   
 
 
 
Net loss from discontinued operations, net of taxes
     (135     (936
    
 
 
   
 
 
 
Net loss
     (7,855     (6,504
    
 
 
   
 
 
 
Net loss per share:
                
Basic and diluted – continuing operations
   $ (0.31   $ (0.23
Basic and diluted – discontinued operations
   $ (0.01   $ (0.04
Basic and diluted – net loss
   $ (0.32   $ (0.27
Weighted average common shares outstanding:
                
Basic and diluted
     24,800       24,033  
See accompanying notes.
 
4

INTEVAC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
 
    
Three Months Ended
 
    
April 2,
2022
   
April 3,
2021
 
    
(Unaudited)
 
    
(In thousands)
 
Net loss
   $ (7,855   $ (6,504
    
 
 
   
 
 
 
Other comprehensive loss, before tax:
                
Change in unrealized net gain (loss) on
available-for-sale
investments
     (174     (20
Foreign currency translation losses
     (33     (68
    
 
 
   
 
 
 
Other comprehensive loss, before tax
     (207     (88
    
 
 
   
 
 
 
Income tax provision related to items in other comprehensive loss
     —         —    
    
 
 
   
 
 
 
Other comprehensive loss, net of tax
     (207     (88
    
 
 
   
 
 
 
Comprehensive loss
   $ (8,062   $ (6,592
    
 
 
   
 
 
 
See accompanying notes.
 
5

INTEVAC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
    
Three Months Ended
 
    
April 2,
2022
   
April 3,
2021
 
    
(Unaudited)
 
    
(In thousands)
 
Operating activities
                
Net loss
   $ (7,855   $ (6,504
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
                
Depreciation and amortization
     445       791  
Net amortization (accretion) of investment premiums and discounts
     17       33  
Equity-based compensation
     (1,036     968  
Straight-line rent adjustment and amortization of lease incentives
     (198     (115
Loss on disposal of fixed assets
     1,453      
 
Deferred income taxes
     (6     (40
Changes in operating assets and liabilities
     3,130       7,399  
    
 
 
   
 
 
 
Total adjustments
     3,805       9,036  
    
 
 
   
 
 
 
Net cash provided by (used in) operating activities
     (4,050     2,532  
Investing activities
                
Purchases of investments
     (6,525     (5,962
Proceeds from sales and maturities of investments
     5,634       6,140  
Purchases of leasehold improvements and equipment
     (618     (243
    
 
 
   
 
 
 
Net cash used in investing activities
     (1,509     (65
Financing activities
                
Proceeds from issuance of common stock
     1,033       1,096  
Taxes paid related to net share settlement
     (135     (20
    
 
 
   
 
 
 
Net cash provided by financing activities
     898       1,076  
    
 
 
   
 
 
 
Effect of exchange rate changes on cash and cash equivalents
     (33     (68
    
 
 
   
 
 
 
Net increase (decrease) in cash, cash equivalents and restricted cash
     (4,694     3,475  
Cash, cash equivalents and restricted cash at beginning of period
     103,514       30,128  
    
 
 
   
 
 
 
Cash, cash equivalents and restricted cash at end of period
   $ 98,820     $ 33,603  
    
 
 
   
 
 
 
See accompanying notes.
 
6

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
1.
Description of Business and Basis of Presentation
Description of Business
Intevac, Inc. (together with its subsidiaries, “Intevac”, the “Company” or “we”) is a leader in the design and development of high-productivity, thin-film processing systems. Intevac’s production-proven platforms are designed for high-volume manufacturing of substrates with precise thin-film properties, such as for the hard disk drive (“HDD”) and display cover panel (“DCP”) markets.
Principles of Consolidation and Basis of Presentation
The condensed consolidated financial statements include the accounts of Intevac, Inc. and its subsidiaries after elimination of inter-company balances and transactions.
In the opinion of management, the unaudited interim condensed consolidated financial statements of Intevac included herein have been prepared on a basis consistent with the January 1, 2022 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments, necessary to fairly present the information set forth therein.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.
Reportable Segment
During fiscal 2021, we sold the business of one of our reporting segments, Photonics. Therefore, we have one reportable segment remaining. See Note 2 for additional disclosure related to discontinued operations.
The remaining segment, Thin Film Equipment (“TFE”), designs, develops and markets vacuum process equipment solutions for high-volume manufacturing of small substrates with precise thin-film properties, such as for the HDD, and DCP markets, as well as other adjacent thin-film markets. The TFE segment also previously designed, developed and marketed manufacturing equipment for the photovoltaic (“PV”) solar cell and advanced semiconductor packaging industries.
In March 2022, the Company’s management approved a restructuring plan to realign the Company’s operational focus, scale the business and improve costs. The restructuring program includes (i) reducing the Company’s headcount and (ii) eliminating several research and development (“R&D”) programs and product offerings. As part of this realignment effort, the Company will no longer be pursuing several DCP projects, including the coating of the backside covers of smartphones, PV solar ion implantation (also known as ENERGi
®
), and advanced semiconductor packaging.
Reclassification of Prior Periods
On December 30, 2021, the Company completed the sale of its Photonics business to EOTECH, LLC, a Michigan limited liability company (“EOTECH” or the “Buyer”). Due to the sale of the Photonics business during the fourth quarter of 2021, we have classified the results of the Photonics business as discontinued operations in our condensed consolidated statements of operations for all periods presented. See Note 2 for additional disclosure related to discontinued operations. All amounts included in the Notes to Condensed Consolidated Financial Statements relate to continuing operations unless otherwise noted.
 
2.
Divestiture and Discontinued Operations
Sale of Photonics
On December 30, 2021, the Company entered into an asset purchase agreement (the “Purchase Agreement”) with EOTECH, governing the sale of the Company’s Photonics business to EOTECH in exchange for (i) $70.0 million in cash consideration (as may be increased or decreased by certain closing net working capital adjustments), (ii) up to $30.0 million in earnout payments and (iii) the assumption by EOTECH of certain liabilities of the Photonics business as specified in the Purchase Agreement. The transaction closed
 
7

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
on December 30, 2021. Under the Purchase Agreement, EOTECH has also agreed to pay to the Company, if earned, earnout payments of up to an aggregate of $30.0 million based on achievement of fiscal year 2023, 2024 and 2025 Photonics segment revenue targets for the Integrated Visual Augmentation System (“IVAS”) program as specified in the Purchase Agreement. At any time prior to December 31, 2024, EOTECH may elect to pay to the Company $14.0 million, which would terminate EOTECH’s obligations with respect to any remaining earnout payments. The cash proceeds do not include any estimated future payments from the revenue earnout as the Company has elected to record the proceeds when the consideration is deemed realizable. The Company believes this disposition will allow it to benefit from a streamlined business model, simplified operating structure, and enhanced management focus.
In connection with the Photonics sale, the Company and EOTECH have entered into a Transition Service Agreement (“TSA”) and a Lease Assignment Agreement. The TSA outlines the information technology, people, and facility support the parties will provide to each other for a period anticipated to be up to six months after the closing of the sale. The Lease Assignment Agreement assigns the lease obligation for two buildings in the Company’s California campus to EOTECH. As part of the assignment, the Company has agreed to subsidize a portion of EOTECH’s lease payments through the remainder of the lease term which expires in March 2024.
TSA fees earned since the divestiture were $787,000
 
for the three months ended April 2, 2022. The agreed-upon charges for such services are generally intended to allow the service provider to recover all costs and expenses of providing such services. The TSA fees were included in selling, general and administrative expenses and cost of sales, respectively, in the Company’s condensed consolidated statement of operations. Additionally, during the three months ended April 2, 2022, the Company sold inventory in the amount of $117,000
 
to EOTECH. As of April 2, 2022, accounts receivable from EOTECH of $370,000
 
were included in trade and other accounts receivable in the Company’s condensed consolidated balance sheets.
Based on its magnitude and because the Company exited certain markets, the sale of the Photonics segment represents a significant strategic shift that has a material effect on the Company’s operations and financial results, and the Company has separately reported the results of its Photonics segment as discontinued operations in the condensed consolidated statements of operations for the three months ended April 2, 2022 and April 3, 2021.
The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the Photonics segment that have been eliminated from continuing operations. Previously reported expenses for the Photonics segment have been recast to exclude certain allocated expenses that are not directly attributable to the Photonics segment. The key components from discontinued operations related to the Photonics segment are as follows:
 
    
Three Months
Ended
 
    
April 2,
2022
   
April 3,
2021
 
    
(in thousands)
 
Net revenues:
                
Systems and components
   $ —       $ 3,822  
Technology development
     —         3,181  
    
 
 
   
 
 
 
Total net revenues
     —         7,003  
Cost of net revenues:
                
Systems and components
     —         2,860  
Technology development
     —         3,223  
    
 
 
   
 
 
 
Total cost of net revenues
     —         6,083  
Gross profit
     —         920  
Operating expenses:
                
Research and development
     —         260  
Selling, general and administrative
     135       1,596  
    
 
 
   
 
 
 
Total operating expenses
     135       1,856  
    
 
 
   
 
 
 
Operating loss – discontinued operations
     (135     (936
Other income (expense) – discontinued operations
     —         —    
    
 
 
   
 
 
 
Loss from discontinued operations before provision for (benefit from) income taxes
     (135     (936
Provision for (benefit from) income taxes
                  
    
 
 
   
 
 
 
Net loss from discontinued operations net of taxes
   $ (135   $ (936
    
 
 
   
 
 
 
 
8

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
The cash flows related to discontinued operations have not been segregated and are included in the condensed consolidated statements of cash flows. The following table presents cash flow and
non-cash
information related to discontinued operations for the three months ended April 2, 2022 and April 3, 2021:
 
    
Three Months Ended
 
              
    
April 2,
   
April 3,
 
    
2022
   
2021
 
              
    
(in thousands)
 
Depreciation and amortization
   $ —       $ 285  
Equity-based compensation
   $ (330   $ 272  
Purchase of leasehold improvements and equipment
   $ —       $ 73  
 
3.
Revenue
The following tables represent a disaggregation of revenue from contracts with customers for the three months ended April 2, 2022 and April 3, 2021.
Major Products and Service Lines
 
    
Three Months Ended April 2, 2022
    
Three Months Ended April 3, 2021
 
                                                                
    
(in thousands)
 
    
HDD
    
DCP
    
PV
    
Total
    
HDD
    
DCP
    
PV
    
ASP
    
Total
 
                                                                
Systems, upgrades and spare parts
   $ 3,123      $         $ 53      $ 3,176      $ 3,585      $         $ 111      $ 3,850      $ 7,546  
Field service
     1,263                  6        1,269        1,636        14        42                  1,692  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Total TFE net revenues
   $ 4,386      $         $ 59      $ 4,445      $ 5,221      $ 14      $ 153      $ 3,850      $ 9,238  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Revenue by Geographic Region
 
    
Three Months Ended
 
               
    
April 2, 2022
    
April 3, 2021
 
               
    
(in thousands)
 
United States
   $ 294      $ 367  
Asia
     4,151        5,021  
Europe
               3,850  
    
 
 
    
 
 
 
Total net revenues
   $ 4,445      $ 9,238  
    
 
 
    
 
 
 
Timing of Revenue Recognition
 
    
Three Months Ended
 
               
    
April 2, 2022
    
April 3, 2021
 
               
    
(in thousands)
 
Products transferred at a point in time
   $ 4,445      $ 9,238  
Products and services transferred over time
                   
    
 
 
    
 
 
 
Total net revenues
   $ 4,445      $ 9,238  
    
 
 
    
 
 
 
 
9

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
The following table reflects the changes in our contract assets, which we classify as accounts receivable, unbilled, and our contract liabilities, which we classify as deferred revenue and customer advances, for the three months ended April 2 2022.
 
    
April 2,
2022
    
January 1,
2022
    
Three Months

Change
 
                      
    
(in thousands)
 
Contract assets:
                          
Accounts receivable, unbilled
   $         $ 99      $ (99
    
 
 
    
 
 
    
 
 
 
Contract liabilities:
                          
Deferred revenue
   $ 55      $ 65      $ (10
Customer advances
     15,320        2,107        13,213  
    
 
 
    
 
 
    
 
 
 
     $ 15,375      $ 2,172      $ 13,203  
    
 
 
    
 
 
    
 
 
 
Accounts receivable, unbilled represents a contract asset for revenue that has been recognized in advance of billing the customer. For our system and certain upgrade sales, our customers generally pay in three installments, with a portion of the system price billed upon receipt of an order, a portion of the price billed upon shipment, and the balance of the price due upon completion of installation and acceptance of the system at the customer’s factory. Accounts receivable, unbilled generally represents the balance of the system price that is due upon completion of installation and acceptance, less, the amount that has been deferred as revenue for the performance of the installation tasks. During the three months ended April 2, 2022, contract assets decreased by $99,000 primarily due to the billing of accrued revenue related to spare parts sold to a customer as of January 1, 2022.
Customer advances generally represent a contract liability for amounts billed to the customer prior to transferring goods. The Company has elected to use the practical expedient to disregard the effect of the time value of money in a significant financing component when its payment terms are less than one year. These contract advances are liquidated when revenue is recognized. Deferred revenue generally represents a contract liability for amounts billed to a customer for completed systems at the customer site that are undergoing installation and acceptance testing where transfer of control has not yet occurred as Intevac does not yet have a demonstrated history of meeting the acceptance criteria upon the customer’s receipt of product. During the three months ended April 2, 2022, we recognized revenue of $59,000 and $10,000 that was included in customer advances and deferred revenue, respectively, at the beginning of the period.
On April 2, 2022, we had $87.2 million of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 36% of our remaining performance obligations as revenue in 2022 and 64% in 2023.
 
4.
Inventories
Inventories are stated at the lower of average cost or net realizable value and consist of the following:
 
    
April 2,
    
January 1,
 
    
2022
    
2022
 
               
    
(in thousands)
 
Raw materials
   $ 6,346      $ 5,323  
Work-in-progress
     2,562        468  
    
 
 
    
 
 
 
     $ 8,908      $ 5,791  
    
 
 
    
 
 
 
 
5.
Equity-Based Compensation
At April 2, 2022, Intevac had equity-based awards outstanding under the 2020 Equity Incentive Plan, the 2012 Equity Incentive Plan, the 2022 Inducement Equity Incentive Plan (the “Inducement Plan”) (together, the “Plans”) and the 2003 Employee Stock Purchase Plan (the “ESPP”). Intevac’s stockholders approved the 2020 Equity Incentive Plan, the 2012 Equity Incentive Plan and the ESPP. The Plans permit the grant of incentive or
non-statutory
stock options, performance-based stock options (“PSOs”), restricted stock, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and performance shares.
 
10

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
On January 19, 2022, Intevac’s Board of Directors adopted the Inducement Plan and, subject to the adjustment provisions of the Inducement Plan, reserved 1,200,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan. The Inducement Plan provides for the grant of equity-based awards, including nonstatutory stock options, restricted stock units, restricted stock, stock appreciation rights, performance shares and performance units, and its terms are substantially similar to the Company’s 2020 Equity Incentive Plan. The Inducement Plan was adopted without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. In accordance with that rule, awards under the Inducement Plan may only be made to individuals not previously employees or
non-employee
directors of the Company (or following such individuals’ bona fide period of
non-employment
with the Company), as an inducement material to the individuals’ entry into employment with the Company.
The ESPP provides that eligible employees may purchase Intevac’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market value at the entry date of the applicable offering period or at the end of each applicable purchase interval. Offering periods are generally two years in length and consist of a series of
six-month
purchase intervals. Eligible employees may join the ESPP at the beginning of any
six-month
purchase interval. Under the terms of the ESPP, employees can choose to have up to 50% of their base earnings withheld to purchase Intevac common stock (not to exceed $25,000 per year).
Compensation Expense
The effect of recording equity-based compensation for the three-month periods ended April 2, 2022 and April 3, 2021 was as follows:
 
    
Three Months Ended
 
              
    
April 2, 2022
   
April 3, 2021
 
              
    
(In thousands)
 
Equity-based compensation by type of award:
                
Stock options
   $ (171   $ 75  
RSUs
     (728     543  
ESPP purchase rights
     (137     350  
    
 
 
   
 
 
 
Total equity-based compensation
   $ (1,036   $ 968  
Included in the table above are:
 
  (a)
A reversal of $1.3 million in equity-based compensation expense related to forfeitures of awards due to our reduction in workforce and a $37,000 benefit related to the modification of certain stock-based awards for the three months ended April 2, 2022. (See Note
13. Restructuring and Other Costs, Net.); and
 
  (b)
Equity-based compensation reported in discontinued operations of ($330,000) and $272,000 for the three months ended April
2, 2022 and April 3, 2021, respectively. Equity-based compensation expense allocated to discontinued operations for the three months ended April 2, 2022 includes $75,000 related to the modification of certain stock-based awards and is net of a divestiture-related forfeiture benefit of $446,000 that was recognized when employees were conveyed to the Buyer upon closing. (See Note 2. Divestiture and Discontinued Operations.)
Stock Options and ESPP
The fair value of stock options and ESPP awards is estimated at the grant date using the Black-Scholes option valuation model. The determination of the fair value of stock options and ESPP awards on the date of grant using an option-pricing model is affected by Intevac’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual employee stock option exercise behavior.
 
11

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
Option activity as of April 2, 2022 and changes during the three months ended April 2, 2022 were as follows:
 
    
Shares
   
Weighted-Average

Exercise Price
 
Options outstanding at January 1, 2022
     1,457,587     $ 6.55  
Options granted
            $     
Options cancelled and forfeited
     (102,152   $ 5.43  
Options exercised
     (65,563   $ 5.06  
    
 
 
   
 
 
 
Options outstanding at April 2, 2022
     1,289,872     $ 6.72  
    
 
 
         
Options exercisable at April 2, 2022
     1,223,472     $ 6.79  
Intevac issued 146,344 shares of common stock under the ESPP during the three months ended April 2, 2022.
Intevac estimated the weighted-average fair value of ESPP purchase rights using the following weighted-average assumptions:
 
    
Three Months Ended
 
    
April 2,
2022
   
April 3,
2021
 
ESPP Purchase Rights:
                
Weighted-average fair value of grants per share
   $ 1.85     $ 2.69  
Expected volatility
     60.36     58.56
Risk-free interest rate
     0.98     0.08
Expected term of purchase rights (in years)
     1.2       1.0  
Dividend yield
     None       None  
The computation of the expected volatility assumptions used in the Black-Scholes calculations for ESPP purchase rights is based on the historical volatility of Intevac’s stock price, measured over a period equal to the expected term of purchase right. The risk-free interest rate is based on the yield available on U.S. Treasury Strips with an equivalent remaining term. The expected term of purchase rights represents the period of time remaining in the current offering period. The dividend yield assumption is based on Intevac’s history of not paying dividends and the assumption of not paying dividends in the future. Intevac accounts for forfeitures as they occur, rather than by estimating expected forfeitures.
RSUs
A summary of the RSU activity is as follows:
 
    
Shares
   
Weighted-Average

Grant Date

Fair Value
 
Non-vested
RSUs at January 1, 2022
     1,033,436     $ 5.59  
Granted
     300,928     $ 5.11  
Vested
     (66,704   $ 5.45  
Cancelled and forfeited
     (533,199   $ 5.65  
    
 
 
         
Non-vested
RSUs at April 2, 2022
     734,461     $ 5.37  
    
 
 
         
Time-based RSUs are converted into shares of Intevac common stock upon vesting on a
one-for-one
basis. Time-based RSUs typically are scheduled to vest over four years. Vesting of time-based RSUs is subject to the grantee’s continued service with Intevac. The compensation expense related to these awards is determined using the fair market value of Intevac common stock on the date of the grant, and the compensation expense is recognized over the vesting period.
 
6.
Warranty
Intevac provides for the estimated cost of warranty when revenue is recognized. Intevac’s warranty is subject to contract terms and, for its HDD manufacturing DCP manufacturing, solar cell manufacturing and advanced semiconductor packaging systems, the warranty typically ranges between 12 and 24 months from customer acceptance. During this warranty period any defective
non-consumable
parts are replaced and installed at no charge to the customer. Intevac uses estimated repair or replacement costs along with its historical warranty experience to determine its warranty obligation. The provision for the estimated future costs of warranty is based upon historical cost and product performance experience. Intevac exercises judgment in determining the underlying estimates.
 
12

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
On the condensed consolidated balance sheets, the short-term portion of the warranty provision is included in other accrued liabilities, while the long-term portion is included in other long-term liabilities. The expense associated with product warranties issued or adjusted is included in cost of net revenues on the condensed consolidated statements of operations.
The following table displays the activity in the warranty provision account for the three-month periods ended April 2, 2022 and April 3, 2021.
 
    
Three Months Ended
 
    
        April 2,        
2022
   
        April 3,    
2021
 
    
(in thousands)
 
Opening balance
   $ 346     $ 480  
Expenditures incurred under warranties
     (171     (153
Expenditures incurred under warranties included in discontinued operations
              (46
Accruals for product warranties issued during the reporting period
     36       255  
Accruals for product warranties issued during the reporting period included in discontinued operations
              20  
Adjustments to previously existing warranty accruals
     38       (10
Adjustments to previously existing warranty accruals included in discontinued operations
              44  
    
 
 
   
 
 
 
Closing balance
   $ 249     $ 590  
    
 
 
   
 
 
 
The following table displays the balance sheet classification of the warranty provision account at April 2, 2022 and at January 1, 2022.
 
    
        April 2    
2022
    
        January 1    
2022
 
    
(in thousands)
 
Other accrued liabilities
   $ 219      $ 301  
Other long-term liabilities
     30        45  
    
 
 
    
 
 
 
Total warranty provision
   $ 249      $ 346  
    
 
 
    
 
 
 
 
7.
Guarantees
Officer and Director Indemnifications
As permitted or required under Delaware law and to the maximum extent allowable under that law, Intevac has certain obligations to indemnify its current and former officers and directors for certain events or occurrences while the officer or director is, or was, serving at Intevac’s request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The maximum potential amount of future payments Intevac could be required to make under these indemnification obligations is unlimited; however, Intevac has a director and officer insurance policy that mitigates Intevac’s exposure and enables Intevac to recover a portion of any future amounts paid. As a result of Intevac’s insurance policy coverage, Intevac believes the estimated fair value of these indemnification obligations is not material.
Other Indemnifications
As is customary in Intevac’s industry, many of Intevac’s contracts provide remedies to certain third parties such as defense, settlement, or payment of judgments for intellectual property claims related to the use of its products. Such indemnification obligations may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial.
Letters of Credit
As of April 2, 2022, we had letters of credit and bank guarantees outstanding totaling $786,000, including the standby letter of credit outstanding under the Santa Clara, California facility lease and various other guarantees with our bank. These letters of credit and bank guarantees are collateralized by $786,000 of restricted cash.
 
13

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
8.
Cash, Cash Equivalents and Investments
Cash and cash equivalents, short-term investments and long-term investments consist of:
 
   
April 2, 2022
 
   
Amortized Cost
    
Unrealized
Holding Gains
    
Unrealized
Holding Losses
    
Fair Value
 
   
(in thousands)
 
Cash and cash equivalents:
                                  
Cash
  $ 93,662      $         $         $ 93,662  
Money market funds
    3,042                            3,042  
Certificates of deposit
    500                            500  
Commercial paper
    300                            300  
U.S. treasury securities
    530                            530  
   
 
 
    
 
 
    
 
 
    
 
 
 
Total cash and cash equivalents
  $ 98,034      $         $         $ 98,034  
Short-term investments:
                                  
Certificates of deposit
  $ 2,750      $         $ 11      $ 2,739  
Commercial paper
    898                            898  
Corporate bonds and medium-term notes
    3,293                  27        3,266  
Municipal bonds
    145                  2        143  
U.S. treasury securities
    1,909                  14        1,895  
   
 
 
    
 
 
    
 
 
    
 
 
 
Total short-term investments
  $ 8,995      $         $ 54      $ 8,941  
Long-term investments:
                                  
Asset backed securities
  $ 3,745      $         $ 30      $ 3,715  
Corporate bonds and medium-term notes
    1,718                  22        1,696  
Municipal bonds
    347                  2        345  
U.S. treasury securities
    3,747                  96        3,651  
   
 
 
    
 
 
    
 
 
    
 
 
 
Total long-term investments
  $ 9,557      $         $ 150      $ 9,407  
   
 
 
    
 
 
    
 
 
    
 
 
 
Total cash, cash equivalents, and investments
  $ 116,586      $         $ 204      $ 116,382  
   
 
 
    
 
 
    
 
 
    
 
 
 
 
   
January 1, 2022
 
   
Amortized Cost
    
Unrealized
Holding Gains
    
Unrealized
Holding Losses
    
Fair Value
 
   
(in thousands)
 
Cash and cash equivalents:
                                  
Cash
  $ 102,494      $         $         $ 102,494  
Money market funds
    234                            234  
   
 
 
    
 
 
    
 
 
    
 
 
 
Total cash and cash equivalents
  $ 102,728      $         $         $ 102,728  
Short-term investments:
                                  
Certificates of deposit
  $ 4,300      $         $         $ 4,300  
Commercial paper
    400                            400  
Corporate bonds and medium-term notes
    2,916                  3        2,913  
Municipal bonds
    700                            700  
U.S. treasury securities
    1,910                  2        1,908  
   
 
 
    
 
 
    
 
 
    
 
 
 
Total short-term investments
  $ 10,226      $         $ 5      $ 10,221  
Long-term investments:
                                  
Asset backed securities
  $ 2,040      $         $ 3      $ 2,037  
Certificates of deposit
    500                  3        497  
Corporate bonds and medium-term notes
    1,521                  6        1,515  
Municipal bonds
    145                  1        144  
U.S. treasury securities
    3,246                  12        3,234  
   
 
 
    
 
 
    
 
 
    
 
 
 
Total long-term investments
  $ 7,452      $         $ 25      $ 7,427  
   
 
 
    
 
 
    
 
 
    
 
 
 
Total cash, cash equivalents, and investments
  $ 120,406      $         $ 30      $ 120,376  
   
 
 
    
 
 
    
 
 
    
 
 
 
 
14

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
The contractual maturities of investment securities at April 2, 2022 are presented in the following table.
 
    
Amortized Cost
    
Fair Value
 
    
(in thousands)
 
Due in one year or less
   $ 13,367      $ 13,313  
Due after one through five years
     9,557        9,407  
    
 
 
    
 
 
 
     $ 22,924      $ 22,720  
    
 
 
    
 
 
 
The following table provides the fair market value of Intevac’s investments with unrealized losses that are not deemed to be other-than temporarily impaired as of April 2, 2022.
 
    
April 2, 2022
 
    
In Loss Position for

Less than 12 Months
    
In Loss Position for

Greater than 12 Months
 
    
Fair Value
    
Gross

Unrealized
Losses
    
Fair Value
    
Gross

Unrealized
Losses
 
    
(in thousands)
 
Asset backed securities
   $ 3,715      $ 30      $         $     
Certificates of deposit
     2,739        11                      
Corporate bonds and medium-term notes
     4,460        44        502        5  
Municipal bonds
     488        4                      
U.S. treasury securities
     5,546        110                      
    
 
 
    
 
 
    
 
 
    
 
 
 
     $ 16,948      $ 199      $ 502      $ 5  
    
 
 
    
 
 
    
 
 
    
 
 
 
All prices for the fixed maturity securities including U.S. treasury and agency securities, certificates of deposit, commercial paper, corporate bonds, asset backed securities and municipal bonds are received from independent pricing services utilized by Intevac’s outside investment manager. This investment manager performs a review of the pricing methodologies and inputs utilized by the independent pricing services for each asset type priced by the vendor. In addition, on at least an annual basis, the investment manager conducts due diligence visits and interviews with each pricing vendor to verify the inputs utilized for each asset class. The due diligence visits include a review of the procedures performed by each vendor to ensure that pricing evaluations are representative of the price that would be received if a security were sold in an orderly transaction. Any pricing where the input is based solely on a broker price is deemed to be a Level 3 price. Intevac uses the pricing data obtained from its outside investment manager as the primary input to make its assessments and determinations as to the ultimate valuation of the above-mentioned securities and has not made, during the periods presented, any material adjustments to such inputs.
The following table represents the fair value hierarchy of Intevac’s investment securities measured at fair value on a recurring basis as of April 2, 2022.
 
    
Fair Value Measurements
at April 2, 2022
 
    
Total
    
Level 1
    
Level 2
 
    
(in thousands)
 
Recurring fair value measurements:
                          
Investment securities
                          
Money market funds
   $ 3,042      $ 3,042      $     
U.S. treasury securities
     6,076        6,076            
Asset backed securities
     3,715                  3,715  
Certificates of deposit
     3,239                  3,239  
Commercial paper
     1,198                  1,198  
Corporate bonds and medium-term notes
     4,962                  4,962  
Municipal bonds
     488                  488  
    
 
 
    
 
 
    
 
 
 
Total recurring fair value measurements
   $ 22,720      $ 9,118      $ 13,602  
    
 
 
    
 
 
    
 
 
 
 
15

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
9.
Derivative Instruments
The Company uses foreign currency forward contracts to mitigate variability in gains and losses generated from the
re-measurement
of certain monetary assets and liabilities denominated in foreign currencies and to offset certain operational exposures from the impact of changes in foreign currency exchange rates. These derivatives are carried at fair value with changes recorded in interest income and other income (expense), net in the condensed consolidated statements of operations. Changes in the fair value of these derivatives are largely offset by
re-measurement
of the underlying assets and liabilities. Cash flows from such derivatives are classified as operating activities. The derivatives have maturities of approximately 30 days.
The following table summarizes the Company’s outstanding derivative instruments on a gross basis as recorded in its condensed consolidated balance sheets as of April 2, 2022 and January 1, 2022.
 
 
  
Notional Amounts
 
  
Derivative Liabilities
 
  
Derivative Assets
 
Derivative Instrument
  
April 2,
2022
 
  
January 1,
2022
 
  
April 2,
2022
 
  
January 1,
2022
 
 
  
 
 
  
 
 
  
Balance

Sheet

Line
 
  
Fair

Value
 
  
Balance

Sheet

Line
 
  
Fair

Value
 
 
  
(in thousands)
 
  
 
 
  
 
 
  
 
 
  
 
 
Undesignated Hedges:
  
  
  
  
  
  
Forward Foreign Currency Contracts
   $ 1,179        815       
(b
)
 
     $          
(a
 
 
 
   $ 1  
    
 
 
    
 
 
             
 
 
             
 
 
 
Total Hedges
   $ 1,179        815               $                  $ 1  
    
 
 
    
 
 
             
 
 
             
 
 
 
(a) Other current assets
(b) Other accrued liabilities
10. Equity
Condensed Consolidated Statements of Changes in Equity
The changes in stockholders’ equity by component for the three months ended April 2, 2022 and April 3, 2021, are as follows (in thousands):
 
    
Three Months Ended April 2, 2022
 
    
Common
Stock and
Additional
Paid-in

Capital
   
Treasury
Stock
   
Accumulated
Other
Comprehensive
Income
   
Accumulated
Deficit
   
Total
Stockholders’
Equity
 
Balance at January 1, 2022
   $ 199,098     $ (29,551   $ 578     $ (36,110   $ 134,015  
Common stock issued under employee plans
     1,033       —         —         —         1,033  
Shares withheld for net share settlement of RSUs
     (135     —         —         —         (135
Equity-based compensation expense
     (1,036     —         —         —         (1,036
Net loss
     —         —         —         (7,855     (7,855
Other comprehensive loss
     —         —         (207     —         (207
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance at April 2, 2022
   $ 198,960     $ (29,551   $ 371     $ (43,965   $ 125,815  
   
    
Three Months Ended April 3, 2021
 
    
Common
Stock and
Additional
Paid-in

Capital
   
Treasury
Stock
   
Accumulated
Other
Comprehensive
Income
   
Accumulated
Deficit
   
Total
Stockholders’
Equity
 
Balance at January 2, 2021
   $ 193,197     $ (29,551   $ 640     $ (62,730   $ 101,556  
Common stock issued under employee plans
     1,243       —         —         —         1,243  
Shares withheld for net share settlement of RSUs
     (20     —         —         —         (20
Equity-based compensation expense
     968       —         —         —         968  
Net loss
     —         —         —         (6,504     (6,504
Other comprehensive loss
     —         —         (88     —         (88
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance at April 3, 2021
   $ 195,388     $ (29,551   $ 552     $ (69,234   $ 97,155  
 
16

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
Accumulated Other Comprehensive Income
The changes in accumulated other comprehensive income by component for the three months ended April 2, 2022 and April 3, 2021, are as follows:
 
    
Three Months Ended
 
    
April 2, 2022
   
April 3, 2021
 
    
Foreign
currency
   
Unrealized
holding gains
(losses) on
available-for-sale

investments
   
Total
   
Foreign
currency
   
Unrealized
holding gains
(losses) on
available-for-sale

investments
   
Total
 
    
(in thousands)
 
Beginning balance
   $ 608     $ (30   $ 578     $ 602     $ 38     $ 640  
Other comprehensive income (loss) before reclassification
     (33     (174     (207     (68     (20     (88
Amounts reclassified from other comprehensive income (loss)
                                                      
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Net current-period other comprehensive income (loss)
     (33     (174     (207     (68     (20     (88
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Ending balance
   $ 575     $ (204   $ 371     $ 534     $ 18     $ 552  
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Stock Repurchase Program
On November 21, 2013, Intevac announced that its Board of Directors approved a stock repurchase program authorizing up to $30.0 million in repurchases. On August 20, 2018, Intevac’s Board of Directors approved a $10.0 million increase to the original stock repurchase program for an aggregate authorized amount of up to $40.0 million. At April 2, 2022, $10.4 million remains available for future stock repurchases under the repurchase program. Intevac did not make any common stock repurchases during the three months ended April 2, 2022 and April 3, 2021.
Intevac records treasury stock purchases under the cost method using the
first-in,
first-out
(FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional
paid-in
capital. If Intevac reissues treasury stock at an amount below its acquisition cost and additional
paid-in
capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against accumulated deficit.
 
11.
Net Loss Per Share
The following table sets forth the computation of basic and diluted net loss per share.
 
    
Three Months Ended
 
    
April 2,

2022
    
April 3,

2021
 
    
(in thousands)
 
Net loss from continuing operations
   $ (7,720    $ (5,568
Net loss from discontinued operations, net of tax
     (135      (936
    
 
 
    
 
 
 
Net loss
   $ (7,855    $ (6,504
    
 
 
    
 
 
 
Weighted-average shares – basic
     24,800        24,033  
Effect of dilutive potential common shares
                   
    
 
 
    
 
 
 
Weighted-average shares – diluted
     24,800        24,033  
    
 
 
    
 
 
 
Basic and diluted net loss per share:
                 
Continuing operations
   $ (0.31    $ (0.23
    
 
 
    
 
 
 
Discontinued operations
   $ (0.01    $ (0.04
    
 
 
    
 
 
 
Net loss per share
   $ (0.32    $ (0.27
    
 
 
    
 
 
 
As the Company is in a net loss position, all of the Company’s equity instruments are considered antidilutive.
 
17

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
12.
Income Taxes
Intevac recorded income tax provisions of $26,000 for the three months ended April 2, 2022 and $32,000 for the three months ended April 3, 2021. The income tax provisions for the three-month periods are based upon estimates of annual income (loss), annual permanent differences and statutory tax rates in the various jurisdictions in which Intevac operates. For the three-month period ended April 2, 2022 Intevac recorded a $26,000 income tax benefit on losses of its international subsidiaries and recorded $51,000 for withholding taxes on royalties paid to the United States from Intevac’s Singapore subsidiary as a discrete item. For the three-month period ended April 3, 2021 Intevac recorded a $19,000 income tax benefit on losses of its international subsidiaries and recorded $48,000 for withholding taxes on royalties paid to the United States from Intevac’s Singapore subsidiary as a discrete item. Intevac’s tax rate differs from the applicable statutory rates due primarily to establishment of a valuation allowance, the utilization of deferred and current credits and the effect of permanent differences and adjustments of prior permanent differences. Intevac’s future effective income tax rate depends on various factors, including the level of Intevac’s projected earnings, the geographic composition of worldwide earnings, tax regulations governing each region, net operating loss carry-forwards, availability of tax credits and the effectiveness of Intevac’s tax planning strategies. Management carefully monitors these factors and timely adjusts the effective income tax rate.
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States. The CARES Act includes several significant provisions for corporations, including the usage of net operating losses and payroll benefits. Several foreign
(non-U.S.)
jurisdictions in which we operate have taken similar economic stimulus measures. The Company evaluated the provisions of the CARES Act and other
non-U.S.
economic measures and determined the impact on our financial position at April 2, 2022 and on the results of operations and cash flows for the three months then ended to be as follows.
Under the CARES Act, we elected to defer payment, on an interest-free basis, of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020.
One-half
of such deferral amount became due on December 31, 2021.
One-half
of such deferral amount will become due on December 31, 2022. We elected to utilize this deferral program to delay payment of $764,000 of the employer portion of payroll taxes which were incurred between March 27, 2020 and December 31, 2020. On the condensed consolidated balance sheets, the deferred payroll tax liability in the amount of $407,000 as of April 2, 2022 is included in accrued payroll and related liabilities. The Company also utilized the employee retention tax credit under the CARES Act for certain qualifying employee salary and wage expenditures. Tax benefits under the employee retention tax credit are not significant.
In Singapore, Intevac received government assistance under the Job Support Scheme (“JSS”). The purpose of the JSS is to provide wage support to employers to help them retain their local employees. During the first quarter of fiscal 2021, the Company received $66,000 in JSS grants, of which $39,000 is reported as a reduction of cost of net revenues, $10,000 is reported as a reduction of research and development expenses and $17,000 is reported as a reduction of selling, general and administrative expenses on the condensed consolidated statement of operations. The Company did not receive any JSS grants in the first quarter of fiscal 2022.
 
13.
Restructuring and Other Costs, Net
During the first quarter of fiscal 2022, Intevac substantially completed implementation of the 2022 cost reduction plan (the “2022 Cost Reduction Plan”), which was intended to reduce our overall cost structure and optimize our operational design, inclusive of the stranded overhead associated with the divestiture of the Photonics business. The restructuring program includes management reorganization and the right sizing of certain technology development, marketing and administrative functions. We incurred restructuring costs of $1.2 million in estimated severance and the related modification of certain stock-based awards. Other costs incurred as part of the 2022 Cost Reduction Plan include: (i) a benefit of $1.3 million related to the stock-based compensation forfeitures related to the employees affected by the reduction in workforce, (ii) $1.5 million for fixed asset disposals and (iii) $755,000 for write-offs of excess inventory. The 2022 Cost Reduction Plan reduced the workforce by 6 percent. The cost of implementing the 2022 Cost Reduction Plan was reported under cost of net revenues and operating expenses in the condensed consolidated statements of operations. Implementation of the 2022 Cost Reduction Plan is expected to reduce salary, wages and other employee-related expenses by approximately $2.1 million on an annual basis.
 
18

INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
 
The changes in restructuring reserves, which resulted from cash-based severance payments and other employee-related costs, associated with the 2022 Cost Reduction Plan for the three months ended April 2, 2022 were as follows.
 
    
Employee
Termination
Costs
 
    
(in thousands)
 
Balance at January 1, 2022
   $     
Provision for restructuring charges under the 2022 Cost Reduction Plan
     1,232  
Cash payments made
     (757
Non-cash
utilization (a)
     37  
    
 
 
 
Balance at April 2, 2022 (b)
   $ 512