8-K

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

October 28, 2019

Date of Report (date of earliest event reported)

 

 

INTEVAC, INC.

(Exact name of Registrant as specified in its charter)

 

 

 

State of Delaware   0-26946   94-3125814

(State or other jurisdiction of

incorporation or organization)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

3560 Bassett Street

Santa Clara, CA 95054

(Address of principal executive offices)

(408) 986-9888

(Registrant’s telephone number, including area code)

N/A

(Former name or former address if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition

On October 28, 2019, Intevac, Inc. issued a press release reporting its financial results for the three and nine months ended September 28, 2019. A copy of the press release issued by the Company concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The foregoing information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01.

Financial Statements and Exhibits

 

  (d)

Exhibits

 

99.1   Press Release.


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      INTEVAC, INC.
Date: October 28, 2019      

/s/ JAMES MONIZ

      James Moniz
      Executive Vice President, Finance and Administration,
      Chief Financial Officer and Treasurer
EX-99.1

Exhibit 99.1

 

LOGO

 

 

3560 Bassett Street, Santa Clara CA 95054

 

James Moniz

 

Claire McAdams

Chief Financial Officer

 

Investor Relations

(408) 986-9888

 

(530) 265-9899

INTEVAC ANNOUNCES THIRD QUARTER 2019 FINANCIAL RESULTS

Santa Clara, Calif.—October 28, 2019—Intevac, Inc. (Nasdaq: IVAC) today reported financial results for the quarter and nine months ended September 28, 2019.

“In the third quarter, we continued to gain momentum as we drove our strategies for revenue growth and profitability,” commented Wendell Blonigan, president and chief executive officer of Intevac. “In Photonics, we booked a record order in July, which drove Photonics backlog to a new record of $76 million at quarter-end. We continue to see quarter-on-quarter revenue growth – and increasing operating profitability – for our Photonics business in 2019. In our Thin-film Equipment (“TFE”) growth initiatives, we continued to gain momentum through the successful installation of one VERTEX Spectra evaluation system, progress in the agreement finalization for a second VERTEX display cover glass evaluation system, the delivery of the remaining five ENERGi® systems in backlog, and steady progress in the build and test of our first MATRIX® PVD evaluation system for advanced semiconductor packaging, which we expect will be delivered in the fourth quarter. Meanwhile, Q3 revenues and profitability exceeded our forecast, primarily due to a stronger level of upgrades in our hard disk drive (“HDD”) equipment business, coupled with favorable gross margins in Photonics. Our progress to date increases our confidence for year-over-year revenue growth, both for Photonics and for TFE, as well as a return to profitable results for fiscal 2019.”

 

($Millions, except per share amounts)    Q3 2019     Q3 2018  
     GAAP Results     Non-GAAP Results     GAAP Results     Non-GAAP Results  

Net Revenues

   $ 26.3     $ 26.3     $ 19.5     $ 19.5  

Operating Loss

   $ (0.4   $ (0.4   $ (1.1   $ (1.1

Net Loss

   $ (0.5   $ (0.5   $ (1.1   $ (1.1

Net Loss per Share

   $ (0.02   $ (0.02   $ (0.05   $ (0.05
     Nine Months Ended     Nine Months Ended  
     September 28, 2019     September 29, 2018  
     GAAP Results     Non-GAAP Results     GAAP Results     Non-GAAP Results  

Net Revenues

   $ 73.4     $ 73.4     $ 63.5     $ 63.5  

Operating Loss

   $ (3.4   $ (3.4   $ (6.1   $ (6.0

Net Loss

   $ (4.1   $ (4.0   $ (6.4   $ (6.3

Net Loss per Share

   $ (0.18   $ (0.18   $ (0.29   $ (0.28

Intevac’s non-GAAP adjusted results exclude the impact of the following, where applicable: (1) changes in fair value of contingent consideration liabilities associated with business combinations; and (2) restructuring charges. 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 2019 Summary

The net loss for the quarter was $480,000, or $0.02 per diluted share, compared to a net loss of $1.1 million, or $0.05 per diluted share, in the third quarter of 2018.

Revenues were $26.3 million, including $17.1 million of TFE revenues and $9.2 million of Photonics revenues. TFE revenues consisted of five solar implant ENERGi systems, upgrades, spares and service. Photonics revenues included $5.2 million of research and development contracts and $4.0 million of product sales. In the third quarter of 2018, revenues were $19.5 million, including $12.1 million of TFE revenues, which consisted of upgrades, spares and service, and Photonics revenues of $7.4 million, which included $5.1 million of product sales and $2.3 million of research and development contracts.

TFE gross margin was 28.2% compared to 40.2% in the third quarter of 2018 and 38.9% in the second quarter of 2019. The decline from the third quarter of 2018 and the second quarter of 2019 reflected unfavorable product mix.

Photonics gross margin was 43.1% compared to 35.5% in the third quarter of 2018 and 35.4% in the second quarter of 2019. The improvement from the second quarter of 2019 was primarily due to improved margins on both product sales and research and development contracts. The improvement from the third quarter of 2018 was primarily due to improved margins on research and development contracts. Consolidated gross margin was 33.4%, compared to 38.5% in the third quarter of 2018 and 37.5% in the second quarter of 2019.

R&D and SG&A expenses were $9.2 million, compared to $8.6 million in the third quarter of 2018 and $9.3 million in the second quarter of 2019.

Order backlog totaled $115.4 million on September 28, 2019, compared to $93.7 million on June 29, 2019 and $72.2 million on September 29, 2018. Backlog at September 28, 2019 included four 200 Lean® HDD systems. Backlog at June 28, 2019 included four 200 Lean HDD systems and five ENERGi solar ion implant systems. Backlog at September 29, 2018 included three 200 Lean HDD systems and twelve ENERGi solar ion implant systems.

The Company ended the quarter with $37.1 million of total cash, restricted cash and investments and $88.8 million in tangible book value.

First Nine Months 2019 Summary

The net loss was $4.1 million, or $0.18 per diluted share, compared to a net loss of $6.4 million, or $0.29 per diluted share, for the first nine months of 2018. The non-GAAP net loss was $4.0 million or $0.18 per diluted share. This compares to the first nine months of 2018 non-GAAP net loss of $6.3 million or $0.28 per diluted share.

Revenues were $73.4 million, including $49.3 million of TFE revenues and $24.1 million of Photonics revenues, compared to revenues of $63.5 million, which included $45.7 million of TFE revenues and $17.8 million of Photonics revenues, for the first nine months of 2018.

TFE gross margin was 32.4%, a decline compared to 39.6% in the first nine months of 2018, as a result of less favorable product mix. Photonics gross margin was 34.9% compared to 22.5% in the first nine months of 2018. The improvement from the first nine months of 2018 was primarily due to higher revenue levels and improved margins on both product sales and research and development contracts. Consolidated gross margin was 33.2%, compared to 34.8%, in the first nine months of 2018.

R&D and SG&A expenses were $27.7 million compared to $28.3 million in the first nine months of 2018. The lower level of expenses reflects lower spending on development costs.


Use of Non-GAAP Financial Measures

Intevac’s non-GAAP results exclude the impact of the following, where applicable: changes in fair value of contingent consideration liabilities associated with business combinations and restructuring. 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) 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. EDT. You may access the replay by calling (855) 859-2056 or, for international callers, (404) 537-3406, and providing Conference ID 6083599.

About Intevac

Intevac was founded in 1991 and has two businesses: Thin-film Equipment and Photonics.

In our Thin-film Equipment business, we are a leader in the design and development of high-productivity, thin-film processing systems. Our production-proven platforms are designed for high-volume manufacturing of substrates with precise thin film properties, such as the hard drive media, display cover panel, and solar photovoltaic markets we serve currently.

In our Photonics business, we are a recognized leading developer of advanced high-sensitivity digital sensors, cameras and systems that primarily serve the defense industry. We are the provider of integrated digital imaging systems for most U.S. military night vision programs.

For more information call 408-986-9888, or visit the Company’s website at www.intevac.com.

200 Lean®, INTEVAC MATRIX®, INTEVAC VERTEX®, oDLC® and ENERGi® are registered trademarks and VERTEX Spectra 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: customer adoption of our products, timing of shipments in TFE, future revenue growth potential for Photonics, and the future financial performance of Intevac, such as achieving growth and profitability. 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: technology risk and challenges achieving customer adoption and revenue recognition in Thin-film Equipment markets and delays in Photonics programs, 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.


INTEVAC, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share amounts)

 

     Three months ended     Nine months ended  
     September 28,
2019
    September 29,
2018
    September 28,
2019
    September 29,
2018
 

Net revenues

        

TFE

   $ 17,116     $ 12,108     $ 49,325     $ 45,745  

Photonics

     9,183       7,358       24,116       17,793  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     26,299       19,466       73,441       63,538  

Gross profit

     8,778       7,486       24,375       22,122  

Gross margin

        

TFE

     28.2     40.2     32.4     39.6

Photonics

     43.1     35.5     34.9     22.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

     33.4     38.5     33.2     34.8

Operating expenses

        

Research and development

     3,596       3,737       11,013       12,889  

Selling, general and administrative

     5,615       4,842       16,720       15,382  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     9,211       8,579       27,733       28,271  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating loss

     (433     (1,093     (3,358     (6,149

Operating income (loss)

        

TFE

     (1,542     (907     (3,434     (2,197

Photonics

     2,268       688       3,114       (966

Corporate

     (1,159     (874     (3,038     (2,986
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating loss

     (433     (1,093     (3,358     (6,149

Interest income and other income (expense), net

     126       186       448       464  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss before income taxes

     (307     (907     (2,910     (5,685

Provision for income taxes

     173       192       1,144       717  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (480   $ (1,099   $ (4,054   $ (6,402
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share

        

Basic and Diluted

   $ (0.02   $ (0.05   $ (0.18   $ (0.29

Weighted average common shares outstanding

        

Basic and Diluted

     23,130       22,719       22,992       22,429  


INTEVAC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

 

     September 28,
2019
    December 29,
2018
 
     (Unaudited)     (see Note)  

ASSETS

    

Current assets

    

Cash, cash equivalents and short-term investments

   $ 30,299     $ 34,791  

Accounts receivable, net

     24,884       27,717  

Inventories

     29,851       30,597  

Prepaid expenses and other current assets

     1,872       2,528  
  

 

 

   

 

 

 

Total current assets

     86,906       95,633  

Long-term investments

     5,447       4,372  

Restricted cash

     1,355       1,169  

Property, plant and equipment, net

     11,980       11,198  

Operating lease right-of-use assets

     9,920       —    

Intangible assets, net

     428       889  

Other long-term assets

     8,248       8,809  
  

 

 

   

 

 

 

Total assets

   $ 124,284     $ 122,070  
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities

    

Current operating lease liabilities

   $ 2,394     $ —    

Accounts payable

     5,544       6,053  

Accrued payroll and related liabilities

     5,258       4,689  

Other accrued liabilities

     3,650       4,952  

Customer advances

     8,740       14,314  
  

 

 

   

 

 

 

Total current liabilities

     25,586       30,008  

Non-current liabilities

    

Non-current operating lease liabilities

     9,354       —    

Other long-term liabilities

     158       2,438  
  

 

 

   

 

 

 

Total non-current liabilities

     9,512       2,438  

Stockholders’ equity

    

Common stock ($0.001 par value)

     23       23  

Additional paid-in capital

     186,938       183,204  

Treasury stock, at cost

     (29,158     (29,047

Accumulated other comprehensive income

     371       378  

Accumulated deficit

     (68,988     (64,934
  

 

 

   

 

 

 

Total stockholders’ equity

     89,186       89,624  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 124,284     $ 122,070  
  

 

 

   

 

 

 

Note: Amounts as of December 29, 2018 are derived from the December 29, 2018 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 28,
2019
    September 29,
2018
    September 28,
2019
    September 29,
2018
 

Non-GAAP Loss from Operations

        

Reported operating loss (GAAP basis)

   $ (433   $ (1,093   $ (3,358   $ (6,149

Change in fair value of contingent consideration obligations1

     —         —         7       8  

Restructuring charges2

     —         —         —         95  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Operating Loss

   $ (433   $ (1,093   $ (3,351   $ (6,046
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net Loss

        

Reported net loss (GAAP basis)

   $ (480   $ (1,099   $ (4,054   $ (6,402

Change in fair value of contingent consideration obligations1

     —         —         7       8  

Restructuring charges2

     —         —         —         95  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net Loss

   $ (480   $ (1,099   $ (4,047   $ (6,299
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net Loss Per Diluted Share

        

Reported net loss per diluted share (GAAP basis)

   $ (0.02   $ (0.05   $ (0.18   $ (0.29

Change in fair value of contingent consideration obligations1

     —         —         —         —    

Restructuring charges2

     —         —         —         —    

Non-GAAP Net Loss Per Diluted Share

   $ (0.02   $ (0.05   $ (0.18   $ (0.28

Weighted average number of diluted shares

     23,130       22,719       22,992       22,429  

 

1 

Results for all periods presented include changes in fair value of contingent consideration obligations associated with the Solar Implant Technology (SIT) acquisition in 2010.

2 

Results for the nine months ended September 29, 2018 include severance and other employee-related costs related to a restructuring program.