Intevac, Inc. (Nasdaq: IVAC) today reported financial results
for the quarter and nine months ended September 30, 2023.
“We are pleased to deliver third-quarter 2023 results well above
our prior expectations, reflecting media technology upgrade
initiatives currently underway in the hard disk drive (HDD)
industry,” commented Nigel Hunton, president and chief executive
officer. “Industry leaders are focused on executing the ramp of
next-generation media technology, and within this evolving
landscape Intevac has emerged as the enabling technology partner
for HDD media production. The revenue upside we achieved in Q3 also
demonstrates our operational agility and ability to execute to meet
customer timelines for technology upgrades. We expect the
collection of HDD receivables in Q4 will drive an increase in our
total cash balance by year-end, which we continue to expect will be
within the range of $75 to $80 million, as communicated
previously.
“We are also very pleased to announce that during Q3 we entered
the formal qualification cycle for our groundbreaking TRIO™
platform with our JDA partner Corning Incorporated, which is one of
the world’s leading innovators in glass and glass-ceramic materials
for mobile consumer electronics applications,” continued Mr.
Hunton. “We expect to complete the qualification stage in Q4 and
advance to delivery of the TRIO system to Corning. We continue to
believe that our JDA with Corning represents significant potential
for Intevac’s future revenue growth. As we look towards 2024 in
particular, we expect the results of the recently-completed
restructuring process will enable the Company to deliver improved
operating performance and preserve the strength of our balance
sheet.”
($ Millions, except per share amounts)
Three Months Ended
Three Months Ended
September 30, 2023
October 1, 2022
GAAP Results
Non-GAAP Results
GAAP Results
Non-GAAP Results
Net Revenues
$
17.9
$
17.9
$
10.8
$
10.8
Operating Income (Loss)
$
(1.4
)
$
0.5
$
(3.2
)
$
(3.2
)
Net Income (Loss)
$
(1.6
)
$
0.1
$
(3.2
)
$
(3.2
)
Net Income (Loss) per Share – Basic and
Diluted
$
(0.06
)
$
0.00
$
(0.13
)
$
(0.13
)
Nine Months Ended
Nine Months Ended
September 30, 2023
October 1, 2022
GAAP Results
Non-GAAP Results
GAAP Results
Non-GAAP Results
Net Revenues
$
39.8
$
39.8
$
24.5
$
24.5
Operating Loss
$
(11.3
)
$
(9.4
)
$
(13.2
)
$
(10.6
)
Net Loss
$
(10.3
)
$
(9.0
)
$
(13.9
)
$
(10.8
)
Net Loss per Share – Basic and Diluted
$
(0.40
)
$
(0.35
)
$
(0.55
)
$
(0.43
)
Intevac’s non-GAAP adjusted results exclude the impact of the
following, where applicable: (i) restructuring charges, (ii) fixed
asset disposals associated with a restructuring program and (iii)
discontinued operations. A reconciliation of the GAAP and non-GAAP
adjusted results is provided in the financial table included in
this release. See also “Use of Non-GAAP Financial Measures”
section.
Third Quarter 2023 Summary
Revenues were $17.9 million, compared to $10.8 million in the
third quarter of 2022, and consisted of HDD upgrades, spares and
service. Gross margin was 39.1%, compared to 45.5%, in the third
quarter of 2022. Operating expenses were $8.4 million, compared to
$8.1 million in the third quarter of 2022. The operating loss was
$1.4 million compared to $3.2 million in the third quarter of 2022.
The operating loss of $1.4 million included $2.0 million of
restructuring-related costs, including severance.
The net loss for the quarter was $1.6 million, or $0.06 per
diluted share, compared to a net loss of $3.2 million, or $0.13 per
diluted share, in the third quarter of 2022. Non-GAAP net income
for the third quarter of 2023 was $0.1 million, or $0.00 per
diluted share, compared to a non-GAAP net loss of $3.2 million, or
$0.13 per diluted share, in the third quarter of 2022.
Order backlog was $46.5 million on September 30, 2023 compared
to $58.2 million on July 1, 2023 and $110.4 million on October 1,
2022. Backlog at September 30, 2023 and July 1, 2023 included two
200 Lean HDD systems. Backlog at October 1, 2022 included eleven
200 Lean HDD systems.
The Company ended the quarter with $66.2 million of total cash,
cash equivalents, restricted cash and investments and $115.2
million in tangible book value.
First Nine Months 2023 Summary
Revenues were $39.8 million, compared to first nine months of
2022 revenues of $24.5 million, and consisted of one 200 Lean HDD
system, one refurbished 200 Lean HDD system, HDD upgrades, spares
and service. Gross margin was 35.9%, compared to 41.2% in the first
nine months of 2022. Operating expenses were $25.6 million,
compared to $23.3 million in the first nine months of 2022. The
operating loss of $11.3 million included $2.0 million of
restructuring-related costs, including severance. The net loss was
$10.3 million, or $0.40 per diluted share, compared to a net loss
of $13.9 million, or $0.55 per diluted share, for the first nine
months of 2022. On a non-GAAP basis, the net loss was $9.0 million,
or $0.35 per diluted share, compared to a net loss of $10.8
million, or $0.43 per diluted share, for the first nine months of
2022.
Use of Non-GAAP Financial Measures
Intevac’s non-GAAP results exclude the impact, where applicable,
of restructuring charges, fixed asset disposals associated with a
restructuring program and discontinued operations. A reconciliation
of the GAAP and non-GAAP results is provided in the financial
tables included in this release.
Management uses non-GAAP results to evaluate the Company’s
operating and financial performance in light of business objectives
and for planning purposes. These measures are not in accordance
with GAAP and may differ from non-GAAP methods of accounting and
reporting used by other companies. Intevac believes these measures
enhance investors’ ability to review the Company’s business from
the same perspective as the Company’s management and facilitate
comparisons of this period’s results with prior periods. The
presentation of this additional information should not be
considered a substitute for results prepared in accordance with
GAAP.
Conference Call Information
The Company will discuss its financial results and outlook in a
conference call today at 1:30 p.m. PDT (4:30 p.m. EDT). To
participate in the teleconference, please call toll-free (877)
407-0989 prior to the start time, and reference meeting number
13741623. For international callers, the dial-in number is +1 (201)
389-0921. You may also listen live via the Internet at
https://www.webcast-eqs.com/register/intevac110123/en or on the
Company's investor relations website at https://ir.intevac.com/.
For those unable to attend live, an archived webcast of the call
will be available at the same link.
About Intevac
Founded in 1991, we are a leading provider of thin-film process
technology and manufacturing platforms for high-volume
manufacturing environments. As a long-time supplier to the hard
disk drive (HDD) industry, our industry-leading 200 Lean® platform
supports the majority of the world’s capacity for HDD disk media
production, as well as all technology upgrade initiatives currently
underway in support of next-generation HDD media. With over 30
years of leadership in designing, developing, and manufacturing
high-productivity, thin-film processing systems, we also are
leveraging our technology and know-how for additional applications,
such as coatings for consumer devices.
For more information call 408-986-9888, or visit the Company's
website at www.intevac.com.
200 Lean® is a registered trademark of Intevac, Inc. and TRIO™
is a trademark of Intevac, Inc.
Safe Harbor Statement
This press release includes statements that constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 (the “Reform Act”).
Intevac claims the protection of the safe-harbor for
forward-looking statements contained in the Reform Act. These
forward-looking statements are often characterized by the terms
“may,” “believes,” “projects,” “expects,” or “anticipates,” and do
not reflect historical facts. Specific forward-looking statements
contained in this press release include, but are not limited to:
the Company’s revenue growth potential, expected collection of
receivables, the completion of the TRIO qualification process, and
future financial performance, including improved operating results
and preserving the strength of the balance sheet. The
forward-looking statements contained herein involve risks and
uncertainties that could cause actual results to differ materially
from the Company’s expectations. These risks include, but are not
limited to, global macroeconomic conditions and supply chain
challenges including shipment delays, availability of components,
and freight, logistics and other disruptions, and changes in market
dynamics that could change the forecasts and delivery schedules for
both our systems and upgrades, each of which could have a material
impact on our business, our financial results, and the Company’s
stock price. These risks and other factors are detailed in the
Company’s periodic filings with the U.S. Securities and Exchange
Commission.
All forward-looking statements in this press release are based
on information available to the Company as of the date hereof, and
Intevac does not assume any obligation to update the
forward-looking statements provided to reflect events that occur or
circumstances that exist after the date on which they were made,
except as required by law. Any future product, service, feature, or
related specification that may be referenced in this release is for
informational purposes only and is not a commitment to deliver any
offering, technology or enhancement.
INTEVAC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited, in thousands, except per share
amounts)
Three months ended
Nine months ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Net revenues
$
17,915
$
10,750
$
39,758
$
24,502
Gross profit
6,999
4,890
14,287
10,100
Gross margin
39.1
%
45.5
%
35.9
%
41.2
%
Operating expenses
Research and development
3,720
3,311
11,340
10,339
Selling, general and administrative
4,707
4,741
14,281
13,007
Total operating expenses
8,427
8,052
25,621
23,346
Total operating loss
(1,428
)
(3,162
)
(11,334
)
(13,246
)
Interest and other income (expense),
net
600
413
1,922
723
Loss from continuing operations before
provision for income taxes
(828
)
(2,749
)
(9,412
)
(12,523
)
Provision for income taxes
796
467
1,298
992
Net loss from continuing operations
(1,624
)
(3,216
)
(10,710
)
(13,515
)
Net income (loss) from discontinued
operations, net of taxes
48
(20
)
365
(394
)
Net loss
$
(1,576
)
$
(3,236
)
$
(10,345
)
$
(13,909
)
Net income (loss) per share
Basic and diluted - continuing
operations
$
(0.06
)
$
(0.13
)
$
(0.41
)
$
(0.54
)
Basic and diluted - discontinued
operations
$
0.00
$
(0.00
)
$
0.01
$
(0.02
)
Basic and diluted - net loss
$
(0.06
)
$
(0.13
)
$
(0.40
)
$
(0.55
)
Weighted average common shares
outstanding
Basic and diluted
26,287
25,370
26,033
25,104
INTEVAC, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except par value)
September 30, 2023
December 31, 2022
(Unaudited)
(see Note)
ASSETS
Current assets
Cash, cash equivalents and short-term
investments
$
61,627
$
94,445
Accounts receivable, net
27,980
15,823
Inventories
42,837
30,003
Prepaid expenses and other current
assets
1,905
1,898
Total current assets
134,349
142,169
Long-term investments
3,855
17,585
Restricted cash
700
786
Property, plant and equipment, net
7,536
3,658
Operating lease right-of-use-assets
1,772
3,390
Intangible assets, net
988
1,090
Deferred income tax and other long-term
assets
3,877
4,381
Total assets
$
153,077
$
173,059
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Current operating lease liabilities
$
1,694
$
3,404
Accounts payable
5,538
11,610
Accrued payroll and related
liabilities
3,196
3,087
Other accrued liabilities
2,732
5,430
Contract advances
21,523
2,444
Total current liabilities
34,683
25,975
Non-current liabilities
Non-current operating lease
liabilities
646
1,417
Contract advances
1,482
22,215
Other non-current liabilities
29
—
Total non-current liabilities
2,157
23,632
Stockholders’ equity
Common stock ($0.001 par value)
26
26
Additional paid-in capital
209,396
206,355
Treasury stock, at cost
(29,551
)
(29,551
)
Accumulated other comprehensive loss
(104
)
(193
)
Accumulated deficit
(63,530
)
(53,185
)
Total stockholders’ equity
116,237
123,452
Total liabilities and stockholders’
equity
$
153,077
$
173,059
Note: Amounts as of December 31, 2022 are derived from the
December 31, 2022 audited consolidated financial statements.
INTEVAC, INC.
RECONCILIATION OF GAAP TO NON-GAAP
RESULTS
(Unaudited, in thousands, except per share
amounts)
Three months ended
Nine months ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Non-GAAP Income (Loss) from
Operations
Reported operating loss (GAAP basis)
$
(1,428
)
$
(3,162
)
$
(11,334
)
$
(13,246
)
Restructuring charges 1
1,950
—
1,950
1,232
Loss on fixed asset disposals2
—
—
—
1,453
Non-GAAP Operating Income (Loss)
$
522
$
(3,162
)
$
(9,384
)
$
(10,561
)
Non-GAAP Net Income (Loss)
Reported net loss (GAAP basis)
$
(1,576
)
$
(3,236
)
$
(10,345
)
$
(13,909
)
Continuing operations:
Restructuring charges 1
1,950
—
1,950
1,232
Loss on fixed asset disposals2
—
—
—
1,453
Income tax effect of non-GAAP
adjustments3
(275
)
—
(275
)
—
Discontinued operations4
(48
)
20
(365
)
394
Non-GAAP Net Income (Loss)
$
51
$
(3,216
)
$
(9,035
)
$
(10,830
)
Non-GAAP Net Income (Loss) Per Diluted
Share
Reported net loss per diluted share (GAAP
basis)
$
(0.06
)
$
(0.13
)
$
(0.40
)
$
(0.55
)
Continuing operations:
Restructuring charges 1
$
0.06
$
—
$
0.06
$
0.05
Loss on fixed asset disposals2
$
—
$
—
$
—
$
0.06
Discontinued operations4
$
(0.00
)
$
0.00
$
(0.01
)
$
0.02
Non-GAAP Net Income (Loss) Per Diluted
Share
$
0.00
$
(0.13
)
$
(0.35
)
$
(0.43
)
Weighted average number of basic
shares
26,287
25,370
26,033
25,104
Weighted average number of diluted
shares
26,799
25,370
26,033
25,104
1
Results for the three and nine months
ended September 30, 2023 and the nine months ended October 1, 2022
include severance and other employee-related costs related to
various restructuring programs. Restructuring costs for the three
and nine months ended September 30, 2023 include $2.0 million for
severance. Restructuring costs for the nine months ended October 1,
2022 include $1.2 million for severance and the related
modification of certain stock-based awards.
2
The amount represents fixed asset
disposals under the 2022 restructuring plan.
3
The amount represents the estimated income
tax effect of the non-GAAP adjustments. The Company calculated the
tax effect of non-GAAP adjustments by applying an applicable
estimated jurisdictional tax rate to each specific non-GAAP
item.
4
The amount represents discontinued
operations of the Photonics business that was sold on December 30,
2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101730637/en/
Kevin Soulsby Interim Chief Financial Officer (408) 986-9888
Claire McAdams Investor Relations (530) 265-9899
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