Intevac: Fiscal 1Q13 Financial Results

Intevac, Inc. reported financial results for the first quarter ended March 30, 2013.

"As expected, Q1 was a challenging quarter for our equipment business. In early February, we implemented a global cost reduction plan that is expected to lower our expenditure levels by $12 million to $14 million on an annual basis," commented Norman Pond, COB and CEO of Intevac. "Backlog in our HDD business has grown since quarter-end with the receipt of orders for two 200 Lean systems, in line with our expectations entering the year.
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"In the first quarter, we received and shipped our first production order for our solar implant ENERGi system, for which we expect to recognize revenue by mid-year. In our Photonics business, we made the strategic decision to sell our Raman Instrumentation product line in order to focus on the larger opportunity for our military-based night-vision products. Excluding the Raman Instrumentation results, our Photonics business remained profitable for the third consecutive quarter and remains well-positioned for growth."

First Quarter 2013 Summary
The net loss was $8.3 million, or $0.35 per diluted share, compared to a net loss of $3.2 million, or $0.14 per diluted share, in the first quarter of 2012. The non-GAAP net loss, which excludes a $0.5 million restructuring charge and a $0.2 million divestiture loss, was $7.6 million or $0.32 per share. This compares to the first quarter 2012 non-GAAP net loss of $4.8 million, or $0.21 per share, which excludes a $2.2 million divestiture gain.

Revenues were $13.0 million, including $5.4 million of Equipment revenues and Photonics revenues of $7.6 million. Equipment revenues consisted of upgrades, spares and service. Photonics revenues consisted of $4.1 million of R&D contracts and $3.5 million of product sales comprising 46% of Photonics revenues. In the first quarter of 2012, revenues were $17.3 million, including $10.7 million of Equipment revenues and $6.6 million of Photonics revenues, which included $4.0 million of product sales comprising 61% of Photonics revenues.

Equipment gross margin was 22.4%, compared to 45.1% in the first quarter of 2012 and 46.0% in the fourth quarter of 2012. The decrease compared to both quarters was primarily due to lower factory absorption and a lower level of upgrade revenue. Intevac Photonics gross margin was 30.4%, compared to 30.1% in the first quarter of 2012 and 37.4% in the fourth quarter of 2012. The reduction from the fourth quarter was driven by lower yields for our low-light sensor and lower margins on our technology development programs. Consolidated gross margin was 27.1%, compared to 39.4% in the first quarter of 2012 and 42.0% in the fourth quarter of 2012.

Operating expenses were $12.3 million, which includes approximately $0.3 million in severance costs related to our global cost reduction plan, and were down from $12.8 million in the prior quarter and $16.0 million in the first quarter of 2012. The operating loss of $9.0 million also included a $0.2 million loss on the sale of our Raman spectroscopy product line. The operating loss of $7.0 million for the first quarter of 2012 included a $2.2 million gain on the sale of our mainframe technology.

Order backlog totaled $35.1 million on March 30, 2013, compared to $35.2 million on December 31, 2012 and $41.3 million on March 31, 2012. Backlog at quarter end included one ENERGi Solar system and no 200 Lean systems, compared to no Solar systems and no 200 Lean systems on December 31, 2012 and one Solar system and two 200 Lean systems on March 31, 2012.

Balance sheet remains strong, with $93.6 million of cash and investments and $130.4 million in tangible book value.

To read the earnings call transcript