Intevac: Fiscal 4Q22 Financial Results

Intevac, Inc. reported financial results for the fiscal fourth quarter and year ended December 31, 2022.

FY22 highlights

• Exceeded financial performance objectives for the year, with $36 million in revenues, 42% gross margins, and solid cash flow performance, resulting in $113 million in total cash, cash equivalents, restricted cash, and investments at year end
• Record-level orders of $133 million for the year, contributing to year-end backlog of $122 million, establishing the foundation for future revenue growth
• Entered into a joint development agreement (JDA) with a provider of glass and glass ceramic materials, adding a significant new revenue opportunity in the CE display industry

“The fourth quarter marked a great finish to 2022, culminating in the completion of the joint development agreement for our ground-breaking TRIO platform,” said Nigel Hunton, president and CEO. “The TRIO provides an innovation in technology for the coating of glass and glass ceramic materials on consumer devices that builds upon our decades of materials science expertise in high-productivity manufacturing environments. The agreement includes approximately $100 million in system revenue over five years, in order for our customer to maintain exclusive access to the TRIO platform for consumer electronics applications.”

“The record level of orders and backlog for our HDD business in 2022 established a solid foundation for growth for the next several years, and we look forward to gaining momentum in both businesses in 2023 in order to position Intevac for a major growth year in 2024, which is when we expect to return to a full year of profitable and cash-flow positive results. Finally, the strength of our balance sheet remains critically important to our customers, partners, suppliers, and stockholders, and we are pleased to report a net use of cash of only $8 million over the course of 2022.” he concluded. “We will continue to maintain a strong balance sheet as we make the necessary investments for transformational growth ahead.”

4FQ22 Summary
Revenues were $11.3 million, compared to $15.9 million in 4FQ21 and $10.8 million in 3FQ22, and consisted of HDD upgrades, spares and service for each period. Gross margin was 44.3%, compared to 3.6% in 4FQ21 and 45.5% in 3FQ22. 4FQ21 balances reflected additional inventory reserves of $8.4 million. Operating expenses were $8.3 million, compared to $7.3 million in 4FQ21 and $8.1 million in 3FQ22.

The net loss for the quarter was $3.2 million, or $0.12 per diluted share, compared to net income of $43.5 million, or $1.77 per diluted share, in 4FQ21. The non-GAAP net loss for 4FQ22 was $3.2 million, or $0.13 per diluted share, compared to the non-GAAP net loss for 4FQ21 of $6.3 million, or $0.25 per diluted share.

FY22 Summary
Revenues were $35.8 million, compared to 2021 revenues of $38.5 million, and consisted of HDD upgrades, spares and service in 2022, compared to HDD upgrades, spares and service and one Intevac MATRIX system in 2021. Gross margin was 42.2% compared to 18.3% in 2021, and operating expenses were $31.6 million compared to $29.5 million in 2021. The net loss was $17.1 million, or $0.68 per diluted share, compared to net income of $26.6 million, or $1.09 per diluted share, for FY21. The non-GAAP net loss was $14.1 million or $0.56 per diluted share, compared to the non-GAAP net loss of $21.7 million or $0.89 per diluted share for FY21.

Order backlog was $121.7 million on December 31, 2022, compared to $110.4 million on October 1, 2022 and $24.7 million on January 1, 2022. Backlog at December 31, 2022 and October 1, 2022 included eleven 200 Lean HDD systems. Backlog at January 1, 2022 included one 200 Lean HDD system.

The company ended the year with $112.8 million of total cash, cash equivalents, restricted cash and investments and $122.4 million in tangible book value.