☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware |
94-3125814 | |
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
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 |
Large accelerated filer |
☐ |
Accelerated filer |
☒ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
☒ | |||
Emerging growth company |
☐ |
No. |
Page |
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Item 1. |
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3 |
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4 |
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5 |
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6 |
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7 |
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Item 2. |
20 |
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Item 3. |
27 |
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Item 4. |
27 |
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Item 1. |
28 |
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Item 1A. |
28 |
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Item 2. |
34 |
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Item 3. |
34 |
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Item 4. |
34 |
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Item 5. |
34 |
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Item 6. |
35 |
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36 |
Item 1. |
Financial Statements |
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 | ||||||
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|
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Gross profit |
723 | 2,134 | ||||||
Operating expenses: |
||||||||
Research and development |
4,160 | 3,365 | ||||||
Selling, general and administrative |
4,249 | 4,334 | ||||||
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|
|
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Total operating expenses |
8,409 | 7,699 | ||||||
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|
|
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Loss from operations |
(7,686 | ) | (5,565 | ) | ||||
Interest income and other income (expense), net |
(8 | ) | 29 | |||||
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|
|
|
|||||
Loss from continuing operations before provision for income taxes |
(7,694 | ) | (5,536 | ) | ||||
Provision for income taxes |
26 | 32 | ||||||
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|
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Net loss from continuing operations |
(7,720 | ) | (5,568 | ) | ||||
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|
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Net loss from discontinued operations, net of taxes |
(135 | ) | (936 | ) | ||||
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|
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Net loss |
(7,855 | ) | (6,504 | ) | ||||
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|
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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 |
Three Months Ended |
||||||||
April 2, 2022 |
April 3, 2021 |
|||||||
(Unaudited) |
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(In thousands) |
||||||||
Net loss |
$ | (7,855 | ) | $ | (6,504 | ) | ||
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|
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Other comprehensive loss, before tax: |
||||||||
Change in unrealized net gain (loss) on available-for-sale |
(174 | ) | (20 | ) | ||||
Foreign currency translation losses |
(33 | ) | (68 | ) | ||||
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|
|
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Other comprehensive loss, before tax |
(207 | ) | (88 | ) | ||||
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|
|||||
Income tax provision related to items in other comprehensive loss |
— | — | ||||||
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|
|
|
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Other comprehensive loss, net of tax |
(207 | ) | (88 | ) | ||||
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Comprehensive loss |
$ | (8,062 | ) | $ | (6,592 | ) | ||
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Three Months Ended |
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April 2, 2022 |
April 3, 2021 |
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(Unaudited) |
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(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 | ||||||
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|
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Total adjustments |
3,805 | 9,036 | ||||||
|
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|
|
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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 | ) | ||||
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|
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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 | ) | ||||
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|
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Net cash provided by financing activities |
898 | 1,076 | ||||||
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|
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Effect of exchange rate changes on cash and cash equivalents |
(33 | ) | (68 | ) | ||||
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|
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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 | ||||||
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|
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Cash, cash equivalents and restricted cash at end of period |
$ | 98,820 | $ | 33,603 | ||||
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1. |
Description of Business and Basis of Presentation |
2. |
Divestiture and Discontinued Operations |
Three Months Ended |
||||||||
April 2, 2022 |
April 3, 2021 |
|||||||
(in thousands) |
||||||||
Net revenues: |
||||||||
Systems and components |
$ | — | $ | 3,822 | ||||
Technology development |
— | 3,181 | ||||||
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|
|
|
|||||
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 | ||||||
|
|
|
|
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Total operating expenses |
135 | 1,856 | ||||||
|
|
|
|
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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 | ) | ||
|
|
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|
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 |
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 | |||||||||||||||||||||||||||
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Total TFE net revenues |
$ | 4,386 | $ | — | $ | 59 | $ | 4,445 | $ | 5,221 | $ | 14 | $ | 153 | $ | 3,850 | $ | 9,238 | ||||||||||||||||||
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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 | ||||
|
|
|
|
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 | ||||
|
|
|
|
April 2, 2022 |
January 1, 2022 |
Three Months Change |
||||||||||
(in thousands) |
||||||||||||
Contract assets: |
||||||||||||
Accounts receivable, unbilled |
$ | — | $ | 99 | $ | (99 | ) | |||||
|
|
|
|
|
|
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Contract liabilities: |
||||||||||||
Deferred revenue |
$ | 55 | $ | 65 | $ | (10 | ) | |||||
Customer advances |
15,320 | 2,107 | 13,213 | |||||||||
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|||||||
$ | 15,375 | $ | 2,172 | $ | 13,203 | |||||||
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4. |
Inventories |
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 |
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 |
(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 |
(b) | Equity-based compensation reported in discontinued operations of ($330,000) and $272,000 for the three months ended April |
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 | ||||
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|
|
|
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Options outstanding at April 2, 2022 |
1,289,872 | $ | 6.72 | |||||
|
|
|||||||
Options exercisable at April 2, 2022 |
1,223,472 | $ | 6.79 |
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 |
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 | |||||
|
|
6. |
Warranty |
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 | ||||||
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|
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Closing balance |
$ | 249 | $ | 590 | ||||
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|
|
April 2 2022 |
January 1 2022 |
|||||||
(in thousands) |
||||||||
Other accrued liabilities |
$ | 219 | $ | 301 | ||||
Other long-term liabilities |
30 | 45 | ||||||
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|
|
|||||
Total warranty provision |
$ | 249 | $ | 346 | ||||
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|
|
|
7. |
Guarantees |
8. |
Cash, Cash Equivalents and Investments |
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 | ||||||||||||
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|
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|
|
|||||||||
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 | ||||||||||||
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|
|
|
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|
|
|||||||||
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 | ||||||||||||
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|
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|
|||||||||
Total long-term investments |
$ | 9,557 | $ | — | $ | 150 | $ | 9,407 | ||||||||
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|
|
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|
|
|
|||||||||
Total cash, cash equivalents, and investments |
$ | 116,586 | $ | — | $ | 204 | $ | 116,382 | ||||||||
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|
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 | ||||||||||||
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|
|
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|
|
|||||||||
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 | ||||||||
|
|
|
|
|
|
|
|
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 | |||||
|
|
|
|
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 | |||||||||
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|
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 | ||||||
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9. |
Derivative Instruments |
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 | |||||||||||||||
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|
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Total Hedges |
$ | 1,179 | 815 | $ | — | $ | 1 | |||||||||||||||||
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|
|
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 |
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 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
11. |
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 | ) | ||
|
|
|
|
12. |
Income Taxes |
13. |
Restructuring and Other Costs, Net |
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 | ||
|
|
Employee Termination Costs |
Other Exit Costs |
Total |
||||||||||
(in thousands) |
||||||||||||
Balance at January 1, 2022 |
$ | 358 | $ | 665 | $ | 1,023 | ||||||
Provision for restructuring charges associated with Photonics divestiture (a) |
112 | 2 | 114 | |||||||||
Cash payments made |
(137 | ) | (128 | ) | (265 | ) | ||||||
Non-cash utilization (b) |
(75 | ) | — | (75 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at April 2, 2022 |
$ | 258 | (c) | $ | 539 | $ | 797 | |||||
|
|
|
|
|
|
Three Months Ended April 3, 2021 |
||||
(in thousands) |
||||
Beginning balance |
$ | — | ||
Provision for restructuring reserves |
43 | |||
Cash payments made |
(43 | ) | ||
|
|
|||
Ending balance |
$ | — | ||
|
|
14. |
Commitments and Contingencies |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended |
||||||||||||
April 3, 2021 |
April 3, 2021 |
Change over prior period |
||||||||||
(In thousands, except percentages and per share amounts) |
||||||||||||
Net revenues |
$ | 4,445 | $ | 9,238 | $ | (4,793 | ) | |||||
Gross profit |
$ | 723 | $ | 2,134 | $ | (1,411 | ) | |||||
Gross margin percent |
16.3 | % | 23.1 | % | (6.8) points | |||||||
Loss from operations |
$ | (7,686 | ) | $ | (5,565 | ) | $ | (2,121 | ) | |||
Net loss from continuing operations |
$ | (7,720 | ) | $ | (5,568 | ) | $ | (2,152 | ) | |||
Net loss from discontinued operations, net of taxes |
$ | (135 | ) | $ | (936 | ) | $ | 801 | ||||
Net loss |
$ | (7,855 | ) | $ | (6,504 | ) | $ | (1,351 | ) | |||
Net loss per diluted share |
$ | (0.32 | ) | $ | (0.27 | ) | $ | (0.05 | ) |
Three Months Ended |
||||||||||||
April 2, 2022 |
April 3, 2021 |
Change over prior period |
||||||||||
(In thousands) |
||||||||||||
Total net revenues |
$ | 4,445 | $ | 9,238 | $ | (4,793 | ) | |||||
|
|
|
|
|
|
April 2, 2022 |
January 1, 2022 |
April 3, 2021 |
||||||||||
(In thousands) |
||||||||||||
Total backlog |
$ | 87,162 | $ | 24,725 | $ | 4,221 | ||||||
|
|
|
|
|
|
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 | ||||
|
|
|
|
Three Months Ended |
||||||||||||
April 2, 2022 |
April 3, 2021 |
Change over prior period |
||||||||||
(In thousands, except percentages) |
||||||||||||
TFE gross profit |
$ | 723 | $ | 2,134 | $ | (1,411 | ) | |||||
% of TFE net revenues |
16.3 | % | 23.1 | % |
Three Months Ended |
||||||||||||
April 2, 2022 |
April 3, 2021 |
Change over prior period |
||||||||||
(In thousands) |
||||||||||||
Research and development expense |
$ | 4,160 | $ | 3,365 | $ | 795 |
Three Months Ended |
||||||||||||
April 2, 2022 |
April 3, 2021 |
Change over prior period |
||||||||||
(In thousands) |
||||||||||||
Selling, general and administrative expense |
$ | 4,249 | $ | 4,334 | $ | (85 | ) |
Three Months Ended |
||||||||||||
April 3, 2021 |
April 3, 2021 |
Change over prior period |
||||||||||
(In thousands) |
||||||||||||
Interest income and other income (expense), net |
$ | (8 | ) | $ | 29 | $ | (37 | ) |
Three Months Ended |
||||||||||||
April 2, 2022 |
April 3, 2021 |
Change over prior period |
||||||||||
(In thousands) |
||||||||||||
Income tax provision |
$ | 26 | $ | 32 | $ | (6 | ) |
Three Months Ended |
||||||||||||
April 2, 2022 |
April 3, 2021 |
Change over prior period |
||||||||||
(In thousands) |
||||||||||||
Loss from discontinued operations, net of taxes |
$ | 135 | $ | 936 | $ | (801 | ) |
April 2, 2022 |
January 2, 2021 |
|||||||
(In thousands) |
||||||||
Cash and cash equivalents |
$ | 98,034 | $ | 102,728 | ||||
Restricted cash |
786 | 786 | ||||||
Short-term investments |
8,941 | 10,221 | ||||||
Long-term investments |
9,407 | 7,427 | ||||||
|
|
|
|
|||||
Total cash, cash equivalents, restricted cash and investments |
$ | 117,168 | $ | 121,162 | ||||
|
|
|
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. |
Defaults upon Senior Securities |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Other Information |
Item 6. |
Exhibits |
* | The certification attached as Exhibit 32.1 is deemed “furnished” and not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of Intevac, Inc. under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof, irrespective of any general incorporation by reference language contained in any such filing, except to the extent that the registrant specifically incorporates it by reference. |
INTEVAC, INC. | ||||||
Date: May 10, 2022 |
||||||
By: |
/s/ NIGEL D. HUNTON | |||||
Nigel D. Hunton | ||||||
President, Chief Executive Officer and Director | ||||||
(Principal Executive Officer) | ||||||
Date: May 10, 2022 |
||||||
By: |
/s/ JAMES MONIZ | |||||
James Moniz | ||||||
Executive Vice President, Finance and Administration, | ||||||
Chief Financial Officer, Secretary and Treasurer | ||||||
(Principal Financial and Accounting Officer) |
Exhibit 2.1
FIRST AMENDMENT
TO
ASSET PURCHASE AGREEMENT
This First Amendment (Amendment), dated March 7, 2022, is by and among INTEVAC PHOTONICS, INC., a Delaware corporation (Seller), INTEVAC, INC., a Delaware corporation (Shareholder) and EOTECH, LLC, a Michigan limited liability company (Buyer).
RECITALS
WHEREAS, on December 30, 2021, Buyer, Seller and the Shareholder entered into that certain Asset Purchase Agreement (the Agreement);
WHEREAS, the Buyer, Seller and the Shareholder desire to amend the Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
1. Section 2.8(b) of the Agreement is hereby amended and restated in its entirety as follows:
(b) As soon as practicable, but in no event later than one hundred twenty (120) days following the Closing Date, Buyer shall prepare a calculation of the Net Working Capital as of the Closing Date (the Closing Net Working Capital). Buyer shall deliver a written statement of the Closing Net Working Capital (the Closing Net Working Capital Statement) to Seller promptly after it has been prepared.
2. Except as otherwise amended hereby, the remaining terms, conditions and provisions of the Agreement shall remain in full force and effect as provided therein. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. Signature pages delivered by facsimile to this Amendment shall be binding to the same extent as an original. This Amendment shall be construed as to both validity and performance and enforced in accordance with and governed by the laws of the State of Delaware, without giving effect to the choice of law principles thereof.
[Signature Page Follows]
1
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the date set forth above.
SELLER: | ||
INTEVAC PHOTONICS, INC., a Delaware corporation | ||
By: |
/s/ James Moniz | |
Name: James Moniz Title: CFO | ||
SHAREHOLDER: | ||
INTEVAC, INC., | ||
By: |
/s/ James Moniz | |
Name: James Moniz | ||
Title: CFO | ||
BUYER: | ||
EOTECH, LLC, a Michigan limited liability company | ||
By: |
/s/ Matthew Van Haaren | |
Name: Matt Van Haaren | ||
Title: CEO |
2
Exhibit 31.1
I, Nigel D. Hunton, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Intevac, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 10, 2022
/s/ NIGEL D. HUNTON |
Nigel D, Hunton |
President, Chief Executive Officer and Director |
Exhibit 31.2
I, James Moniz, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Intevac, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 10, 2022
/s/ JAMES MONIZ |
James Moniz |
Executive Vice President, Finance and Administration, |
Chief Financial Officer, Secretary and Treasurer |
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Nigel D. Hunton, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Intevac, Inc. on Form 10-Q for the quarterly period ended April 2, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Intevac, Inc.
Date: May 10, 2022
/s/ NIGEL D. HUNTON |
Nigel D. Hunton |
President, Chief Executive Officer and Director |
I, James Moniz, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Intevac, Inc. on Form 10-Q for the quarterly period ended April 2, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Intevac, Inc.
Date: May 10, 2022
/s/ JAMES MONIZ |
James Moniz |
Executive Vice President, Finance and Administration, |
Chief Financial Officer, Secretary and Treasurer |
A signed original of this written statement required by Section 906 has been provided to Intevac, Inc. and will be retained by Intevac, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
This certification accompanies the report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Intevac, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.