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Intevac Announces Fourth Quarter and Full Year 2013 Financial Results
"The limited amount of capital expenditures in both our hard drive media
and solar cell manufacturing markets resulted in a difficult year for
our Equipment business. However, the long-term growth drivers for both
of these markets remain positive," commented
"Over the course of 2013, the company implemented actions that reduced operating expenses by 25% and cash burn by more than 50% from the prior year. In November, we announced a $30 million stock repurchase plan that allows the company to return capital to our stockholders while retaining the flexibility to effectively manage and grow the business. Our market share and technology leadership position in the hard disk drive media manufacturing market, innovative new equipment products for solar cell manufacturing, a growing Photonics business, reduced operating expenditure levels, and solid balance sheet provide a strong foundation for the future."
($ Millions, except per share amounts) | Q4 2013 | Q4 2012 | ||||||||||||||||||||
GAAP Results | Non-GAAP Results | GAAP Results | Non-GAAP Results | |||||||||||||||||||
Net Revenues | $ | 20.6 | $ | 20.6 | $ | 17.5 | $ | 17.5 | ||||||||||||||
Operating Income (Loss) | $ | 1.2 | $ | (2.5 | ) | $ | (23.9 | ) | $ | (6.1 | ) | |||||||||||
Net Income (Loss) | $ | 1.7 | $ | (2.0 | ) | $ | (42.7 | ) | $ | (4.2 | ) | |||||||||||
Net Income (Loss) per Share |
$ | 0.07 | $ | (0.08 | ) | $ | (1.82 | ) | $ | (0.18 | ) | |||||||||||
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Year Ended | Year Ended | ||||||||||||||||||||
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GAAP Results | Non-GAAP Results | GAAP Results | Non-GAAP Results | |||||||||||||||||||
Net Revenues | $ | 69.6 | $ | 69.6 | $ | 83.4 | $ | 83.4 | ||||||||||||||
Operating Loss | $ | (17.8 | ) | $ | (20.6 | ) | $ | (42.5 | ) | $ | (23.5 | ) | ||||||||||
Net Loss | $ | (15.7 | ) | $ | (18.5 | ) | $ | (55.3 | ) | $ | (16.2 | ) | ||||||||||
Net Loss per Share | $ | (0.66 | ) | $ | (0.78 | ) | $ | (2.37 | ) | $ | (0.69 | ) | ||||||||||
Fourth Quarter 2013 Summary
Net income for the quarter was
Revenues were
Equipment gross margin was 38.1% compared to 46.0% in the fourth quarter of 2012 as a result of a lower mix of higher-margin upgrades. Photonics gross margin was 36.8% compared to 37.4% in the fourth quarter of 2012, reflecting lower overhead absorption as a result of lower program activity. Consolidated gross margin was 37.6%, compared to 42.0% in the fourth quarter of 2012.
R&D and SG&A expenses were
Order backlog totaled
The company ended the year with
Fiscal Year 2013 Summary
The net loss was
Revenues were
Equipment gross margin was 31.0%, compared to 44.9% in 2012, primarily due to the lower level of revenue from upgrades, lower factory absorption, a refurbishment provision for a solar evaluation system, and the lower system margin on the first solar implant ENERGi system recognized for revenue. Photonics gross margin was 32.3% compared to 34.2% in 2012, reflecting lower margins on our technology development programs. Consolidated gross margin was 31.6%, compared to 40.9% in 2012.
R&D and SG&A expenses were
Use of Non-GAAP Financial Measures
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.
Conference Call Information
The company will discuss its financial results and outlook in a conference call today at 1:30 p.m. PST (4:30 p.m. EST). To participate in the teleconference, please call toll-free (877) 334-0811 prior to the start time. For international callers, the dial-in number is (408) 427-3734. You may also listen live via the Internet at the company's website, www.intevac.com, under the Investors link, or at www.earnings.com. For those unable to attend, these web sites will host an archive of the call. Additionally, a telephone replay of the call will be available for 48 hours beginning today at 7:30 p.m. EST. You may access the replay by calling (855) 859-2056 or, for international callers, (404) 537-3406, and providing Replay Passcode 31095997.
About
In our Equipment business, we are a leader in the design, development and manufacturing of high-productivity process equipment solutions. Our systems are production-proven for high-volume manufacturing of substrates with precise thin film properties, such as those required in the hard drive and solar cell markets we currently serve.
In the hard drive industry, our 200 Lean® systems process approximately 60% of all magnetic disk media produced worldwide. In the solar cell manufacturing industry, our high-throughput thin film process equipment enables increased conversion efficiency of silicon solar cells while also reducing manufacturing costs.
In our Photonics business, we are a leader in the development and manufacture of leading-edge, high-sensitivity imaging products and vision systems. Our products primarily address the defense markets.
For more information call 408-986-9888, or visit the company's website at www.intevac.com.
200 Lean® is a registered trademark and ENERGi™
is a trademark of
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").
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CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||
(Unaudited, in thousands, except percentages and per share amounts) |
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Three months ended |
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Year ended |
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Net revenues | ||||||||||||||||||||||
Equipment | $ | 12,843 | $ | 9,358 | $ | 39,135 | $ | 52,538 | ||||||||||||||
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7,709 | 8,125 | 30,497 |
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30,886 | |||||||||||||||||
Total net revenues | 20,552 | 17,483 | 69,632 | 83,424 | ||||||||||||||||||
Gross profit | 7,737 | 7,348 | 21,973 | 34,158 | ||||||||||||||||||
Gross margin | ||||||||||||||||||||||
Equipment | 38.1 | % | 46.0 | % | 31.0 | % | 44.9 | % | ||||||||||||||
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36.8 | % | 37.4 | % | 32.3 | % | 34.2 | % | ||||||||||||||
Consolidated | 37.6 | % | 42.0 | % | 31.6 | % | 40.9 | % | ||||||||||||||
Operating expenses | ||||||||||||||||||||||
Research and development | 4,845 | 6,949 | 21,037 | 31,762 | ||||||||||||||||||
Selling, general and administrative | 5,420 | 6,532 | 22,278 | 25,919 | ||||||||||||||||||
Acquisition-related1 | (3,703 | ) | (662 | ) | (3,727 | ) | (219 | ) | ||||||||||||||
Impairment of goodwill and intangible assets | — | 18,419 | — | 18,419 | ||||||||||||||||||
Bad debt expense | — | — | — | 3,017 | ||||||||||||||||||
Total operating expenses | 6,562 | 31,238 | 39,588 | 78,898 | ||||||||||||||||||
Gain (loss) on divestitures | — | — | (208 | ) | 2,207 | |||||||||||||||||
Total operating income (loss) | 1,175 | (23,890 | ) | (17,823 | ) | (42,533 | ) | |||||||||||||||
Operating income (loss) | ||||||||||||||||||||||
Equipment1 | 1,657 | (4,442 | ) | (12,951 | ) | (19,934 | ) | |||||||||||||||
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804 | 733 | 1,058 | (206 | ) | |||||||||||||||||
Corporate2,3,4 | (1,286 | ) | (20,181 | ) | (5,930 | ) | (22,393 | ) | ||||||||||||||
Total operating income (loss) | 1,175 | (23,890 | ) | (17,823 | ) | (42,533 | ) | |||||||||||||||
Interest and other income | 12 | 43 | 405 | 454 | ||||||||||||||||||
Income (loss) before income taxes | 1,187 | (23,847 | ) | (17,418 | ) | (42,079 | ) | |||||||||||||||
Provision (benefit) for income taxes | (538 | ) | 18,811 | (1,722 | ) | 13,240 | ||||||||||||||||
Net income (loss) | $ | 1,725 | $ | (42,658 | ) | $ | (15,696 | ) | $ | (55,319 | ) | |||||||||||
Income (loss) per share | ||||||||||||||||||||||
Basic and Diluted | $ | 0.07 | $ | (1.82 | ) | $ | (0.66 | ) | $ | (2.37 | ) | |||||||||||
Weighted average common shares outstanding |
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Basic | 23,948 | 23,465 | 23,832 | 23,336 | ||||||||||||||||||
Diluted | 24,158 | 23,465 | 23,832 | 23,336 | ||||||||||||||||||
1The three months and year ended December 31, 2013 include
2The year ended December 31, 2013 includes the loss on sale
of the Raman spectroscopy product line of
3The year ended December 31, 2012 includes the gain on sale
of the mainframe technology of
4The three months and year ended December 31, 2012 include
the goodwill and intangibles impairment charges of
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CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
(In thousands, except par value) |
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2013 | 2012 | ||||||||||
(Unaudited) | (see Note) | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash, cash equivalents and short-term investments | $ | 69,096 | $ | 64,852 | |||||||
Accounts receivable, net | 15,037 | 19,822 | |||||||||
Inventories | 22,762 | 26,193 | |||||||||
Prepaid expenses and other current assets | 1,237 | 2,120 | |||||||||
Total current assets | 108,132 | 112,987 | |||||||||
Long-term investments | 12,318 | 27,317 | |||||||||
Property, plant and equipment, net | 12,945 | 13,426 | |||||||||
Deferred income tax assets | 9,502 | 12,176 | |||||||||
Intangible assets, net | 4,902 | 5,868 | |||||||||
Other long-term assets | 477 | 729 | |||||||||
Total assets | $ | 148,276 | $ | 172,503 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 4,011 | $ | 4,479 | |||||||
Accrued payroll and related liabilities | 5,034 | 4,194 | |||||||||
Deferred income tax liabilities | 939 | 1,281 | |||||||||
Other accrued liabilities | 3,263 | 8,489 | |||||||||
Customer advances | 3,743 | 2,193 | |||||||||
Total current liabilities | 16,990 | 20,636 | |||||||||
Other long-term liabilities | 1,715 | 9,232 | |||||||||
Stockholders' equity | |||||||||||
Common stock ( |
24 | 23 | |||||||||
Additional paid in capital | 156,359 | 151,996 | |||||||||
Treasury stock, at cost | (1,688 | ) | — | ||||||||
Accumulated other comprehensive income | 725 | 769 | |||||||||
Accumulated deficit | (25,849 | ) | (10,153 | ) | |||||||
Total stockholders' equity | 129,571 | 142,635 | |||||||||
Total liabilities and stockholders' equity | $ | 148,276 | $ | 172,503 | |||||||
Note: Amounts as of December 31, 2012 are derived from the December 31, 2012 audited consolidated financial statements.
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RECONCILIATION OF GAAP TO NON-GAAP RESULTS | |||||||||||||||||||||
(Unaudited, in thousands, except per share amounts) |
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2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Non-GAAP Income (Loss) from Operations | |||||||||||||||||||||
Reported operating income (loss) (GAAP basis) | $ | 1,175 | $ | (23,890 | ) | $ | (17,823 | ) | $ | (42,533 | ) | ||||||||||
Change in fair value of contingent consideration obligations1 | (3,703 | ) | (662 | ) | (3,727 | ) | (219 | ) | |||||||||||||
Restructuring charges2 | — | — | 742 | — | |||||||||||||||||
Loss on sale of Raman spectroscopy product line3 | — | — | 208 | — | |||||||||||||||||
Impairment of goodwill and intangible assets | — | 18,419 | — | 18,419 | |||||||||||||||||
Gain on sale of mainframe technology4 | — | — | — | (2,207 | ) | ||||||||||||||||
Bad debt expense5 | — | — | — | 3,017 | |||||||||||||||||
Non-GAAP Operating Loss | $ | (2,528 | ) | $ | (6,133 | ) | $ | (20,600 | ) | $ | (23,523 | ) | |||||||||
Non-GAAP Net Loss | |||||||||||||||||||||
Reported net income (loss) (GAAP basis) | $ | 1,725 | $ | (42,658 | ) | $ | (15,696 | ) | $ | (55,319 | ) | ||||||||||
Change in fair value of contingent consideration obligations1 | (3,703 | ) | (662 | ) | (3,727 | ) | (219 | ) | |||||||||||||
Restructuring charges2 | — | — | 742 | — | |||||||||||||||||
Loss on sale of Raman spectroscopy product line3 | — | — | 208 | — | |||||||||||||||||
Impairment of goodwill and intangible assets | — | 18,419 | — | 18,419 | |||||||||||||||||
Gain on sale of mainframe technology4 | — | — | — | (2,207 | ) | ||||||||||||||||
Bad debt expense5 | — | — | — | 3,017 | |||||||||||||||||
Valuation allowance on deferred tax assets6 | — | 23,437 | — | 23,437 | |||||||||||||||||
Income tax effect of non-GAAP adjustments7 | — | (2,777 | ) | (42 | ) | (3,279 | ) | ||||||||||||||
Non-GAAP Net Loss | $ | (1,978 | ) | $ | (4,241 | ) | $ | (18,515 | ) | $ | (16,151 | ) | |||||||||
Non-GAAP Loss Per Diluted Share | |||||||||||||||||||||
Reported income (loss) per diluted share (GAAP basis) | $ | 0.07 | $ | (1.82 | ) | $ | (0.66 | ) | $ | (2.37 | ) | ||||||||||
Change in fair value of contingent consideration obligations1 | (0.15 | ) | (0.03 | ) | (0.16 | ) | (0.01 | ) | |||||||||||||
Restructuring charges2 | — | — | 0.03 | — | |||||||||||||||||
Loss on sale of Raman spectroscopy product line3 | — | — | 0.01 | — | |||||||||||||||||
Impairment of goodwill and intangible assets | — | 0.67 | — | 0.67 | |||||||||||||||||
Gain on sale of mainframe technology4 | — | — | — | (0.07 | ) | ||||||||||||||||
Bad debt expense5 | — | — | — | 0.08 | |||||||||||||||||
Valuation allowance on deferred tax assets6 | — | 1.00 | — | 1.00 | |||||||||||||||||
Non-GAAP Loss Per Diluted Share | $ | (0.08 | ) | $ | (0.18 | ) | $ | (0.78 | ) | $ | (0.69 | ) | |||||||||
Weighted average number of diluted shares | 24,158 | 23,465 | 23,832 | 23,336 | |||||||||||||||||
1Results for all periods presented include changes in fair value of contingent consideration obligations associated with the Solar Implant Technology (SIT) acquisition in 2010.
2Results for the year ended December 31, 2013 include
severance and other employee-related costs
3The year ended December 31, 2013 includes the loss on sale
of the Raman spectroscopy product line of
4The year ended December 31, 2012 includes the gain on sale
of the mainframe technology of
5The year ended December 31, 2012 includes a write-off of a
promissory note from a customer in the amount of
6In accordance with ASC Topic 740, Income Taxes, the company determined based upon an evaluation of all available objectively verifiable evidence, including but not limited to the company's U.S. operations falling into a cumulative three year loss, that a non-cash valuation allowance should be established against its U.S. deferred tax assets which are comprised of accumulated and unused U.S. tax credits, and net operating losses and other temporary book-tax differences. The establishment of a non-cash valuation allowance on the company's U.S. deferred tax assets does not have any impact on its cash, nor does such an allowance preclude the company from utilizing its tax losses, tax credits or other deferred tax assets in future periods.
7The 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.
Chief Financial
Officer
Investor Relations
Source:
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