Intevac Announces Third Quarter 2023 Financial Results

SANTA CLARA, Calif.--()--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.

 

Contacts

Kevin Soulsby
Interim Chief Financial Officer
(408) 986-9888

Claire McAdams
Investor Relations
(530) 265-9899

Contacts

Kevin Soulsby
Interim Chief Financial Officer
(408) 986-9888

Claire McAdams
Investor Relations
(530) 265-9899