☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
June 27, 2020
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Identification No.)
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 |
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
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Non-accelerated filer | ☐ | Smaller reporting company | ☒ | |||
Emerging growth company | ☐ |
No. | Page | ||||||||
PART I. FINANCIAL INFORMATION | |||||||||
Item 1. | Financial Statements (unaudited) | ||||||||
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3 | |||||||||
4 | |||||||||
5 | |||||||||
6 | |||||||||
7 | |||||||||
Item 2. | 24 | ||||||||
Item 3. | 31 | ||||||||
Item 4. | 32 | ||||||||
PART II. OTHER INFORMATION | |||||||||
Item 1. | 33 | ||||||||
Item 1A. | 33 | ||||||||
Item 2. | 39 | ||||||||
Item 3. | 39 | ||||||||
Item 4. | 39 | ||||||||
Item 5. | 40 | ||||||||
Item 6. | 40 | ||||||||
41 |
Item 1. |
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September 28, 2019 | December 29, 2018 | |||||||
(Unaudited) | ||||||||
(In thousands, except par value) | ||||||||
ASSETS |
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Current assets: | ||||||||
Cash and cash equivalents | $ | 14,997 | $ | 18,715 | ||||
Short-term investments | 15,302 | 16,076 | ||||||
Trade and other accounts receivable, net of allowances of $0 at both September 28, 2019 and at December 29, 2018 | 24,884 | 27,717 | ||||||
Inventories | 29,851 | 30,597 | ||||||
Prepaid expenses and other current assets | 1,872 | 2,528 | ||||||
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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 leaseright-of-use assets | 9,920 | — | ||||||
Intangible assets, net of accumulated amortization of $7,959 at September 28, 2019 and $7,498 at December 29, 2018 | 428 | 889 | ||||||
Deferred income taxes and other long-term assets | 8,248 | 8,809 | ||||||
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Total assets | $ | 124,284 | $ | 122,070 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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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 | ||||||
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Total current liabilities | 25,586 | 30,008 | ||||||
Noncurrent liabilities: | ||||||||
Noncurrent operating lease liabilities | 9,354 | — | ||||||
Other long-term liabilities | 158 | 2,438 | ||||||
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Total noncurrent liabilities | 9,512 | 2,438 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value | 23 | 23 | ||||||
Additionalpaid-in capital | 186,938 | 183,204 | ||||||
Treasury stock, 4,989 shares September 28, 2019 and 4,965 shares December 29, 2018 | (29,158 | ) | (29,047 | ) | ||||
Accumulated other comprehensive income | 371 | 378 | ||||||
Accumulated deficit | (68,988 | ) | (64,934 | ) | ||||
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89,186 | 89,624 | |||||||
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Total liabilities and stockholders’ equity | �� | $ | 124,284 | $ | 122,070 | |||
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June 27, 2020 | December 28, 2019 | |||||||
(Unaudited) | ||||||||
(In thousands, except par value) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 23,944 | $ | 19,767 | ||||
Short-term investments | 14,435 | 16,720 | ||||||
Trade and other accounts receivable, net of allowances of $0 at both June 27, 2020 and at December 28, 2019 | 28,957 | 28,619 | ||||||
Inventories | 22,210 | 24,907 | ||||||
Prepaid expenses and other current assets | 1,853 | 1,504 | ||||||
Total current assets | 91,399 | 91,517 | ||||||
Long-term investments | 5,604 | 5,537 | ||||||
Restricted cash | 787 | 787 | ||||||
Property, plant and equipment, net | 11,897 | 11,598 | ||||||
Operating lease right-of-use-assets | 9,302 | 10,279 | ||||||
Intangible assets, net of accumulated amortization of $8,373 at June 27, 2020 and $8,113 at December 28, 2019 | 14 | 274 | ||||||
Deferred income taxes and other long-term assets | 5,826 | 6,330 | ||||||
Total assets | $ | 124,829 | $ | 126,322 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current operating lease liabilities | $ | 2,709 | $ | 2,524 | ||||
Accounts payable | 5,135 | 4,199 | ||||||
Accrued payroll and related liabilities | 6,316 | 6,488 | ||||||
Other accrued liabilities | 3,916 | 3,593 | ||||||
Customer advances | 433 | 4,007 | ||||||
Total current liabilities | 18,509 | 20,811 | ||||||
Noncurrent liabilities: | ||||||||
Noncurrent operating lease liabilities | 8,228 | 9,532 | ||||||
Other long-term liabilities | 437 | 186 | ||||||
Total noncurrent liabilities | 8,665 | 9,718 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value | 24 | 23 | ||||||
Additional paid-in capital | 190,266 | 188,290 | ||||||
Treasury stock, 5,087 shares at June 27, 2020 and 4,989 shares at December 28, 2019 | (29,551 | ) | (29,158 | ) | ||||
Accumulated other comprehensive income | 402 | 424 | ||||||
Accumulated deficit | (63,486 | ) | (63,786 | ) | ||||
Total stockholders’ equity | 97,655 | 95,793 | ||||||
Total liabilities and stockholders’ equity | $ | 124,829 | $ | 126,322 | ||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Net revenues: | ||||||||||||||||
Systems and components | $ | 21,090 | $ | 17,140 | $ | 59,965 | $ | 55,947 | ||||||||
Technology development | 5,209 | 2,326 | 13,476 | 7,591 | ||||||||||||
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Total net revenues | 26,299 | 19,466 | 73,441 | 63,538 | ||||||||||||
Cost of net revenues: | ||||||||||||||||
Systems and components | 14,180 | 9,765 | 39,741 | 34,362 | ||||||||||||
Technology development | 3,341 | 2,215 | 9,325 | 7,054 | ||||||||||||
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Total cost of net revenues | 17,521 | 11,980 | 49,066 | 41,416 | ||||||||||||
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Gross profit | 8,778 | 7,486 | 24,375 | 22,122 | ||||||||||||
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 | ||||||||||||
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Total operating expenses | 9,211 | 8,579 | 27,733 | 28,271 | ||||||||||||
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Loss from operations | (433 | ) | (1,093 | ) | (3,358 | ) | (6,149 | ) | ||||||||
Interest income and other income (expense), net | 126 | 186 | 448 | 464 | ||||||||||||
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Loss before income taxes | (307 | ) | (907 | ) | (2,910 | ) | (5,685 | ) | ||||||||
Provision for income taxes | 173 | 192 | 1,144 | 717 | ||||||||||||
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Net loss | $ | (480 | ) | $ | (1,099 | ) | $ | (4,054 | ) | $ | (6,402 | ) | ||||
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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 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Net revenues: | ||||||||||||||||
Systems and components | $ | 22,725 | $ | 17,237 | $ | 36,561 | $ | 38,874 | ||||||||
Technology development | 6,117 | 5,077 | 11,121 | 8,267 | ||||||||||||
Total net revenues | 28,842 | 22,314 | 47,682 | 47,141 | ||||||||||||
Cost of net revenues: | ||||||||||||||||
Systems and components | 13,812 | 10,462 | 21,579 | 25,560 | ||||||||||||
Technology development | 3,610 | 3,495 | 6,526 | 5,984 | ||||||||||||
Total cost of net revenues | 17,422 | 13,957 | 28,105 | 31,544 | ||||||||||||
Gross profit | 11,420 | 8,357 | 19,577 | 15,597 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 3,707 | 3,431 | 6,991 | 7,417 | ||||||||||||
Selling, general and administrative | 5,609 | 5,854 | 11,581 | 11,105 | ||||||||||||
Total operating expenses | 9,316 | 9,285 | 18,572 | 18,522 | ||||||||||||
Income (loss) from operations | 2,104 | (928 | ) | 1,005 | (2,925 | ) | ||||||||||
Interest income and other income (expense), net | 62 | 163 | 204 | 322 | ||||||||||||
Income (loss) before provision for income taxes | 2,166 | (765 | ) | 1,209 | (2,603 | ) | ||||||||||
Provision for income taxes | 642 | 417 | 909 | 971 | ||||||||||||
Net income (loss) | $ | 1,524 | $ | (1,182 | ) | $ | 300 | $ | (3,574 | ) | ||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | 0.06 | $ | (0.05 | ) | $ | 0.01 | $ | (0.16 | ) | ||||||
Diluted | $ | 0.06 | $ | (0.05 | ) | $ | 0.01 | $ | (0.16 | ) | ||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 23,561 | 22,991 | 23,522 | 22,923 | ||||||||||||
Diluted | 23,906 | 22,991 | 23,953 | 22,923 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands) | ||||||||||||||||
Net loss | $ | (480 | ) | $ | (1,099 | ) | $ | (4,054 | ) | $ | (6,402 | ) | ||||
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Other comprehensive loss, before tax | ||||||||||||||||
Change in unrealized net loss onavailable-for-sale investments | 3 | 13 | 80 | 7 | ||||||||||||
Foreign currency translation losses | (87 | ) | (86 | ) | (87 | ) | (126 | ) | ||||||||
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Other comprehensive loss, before tax | (84 | ) | (73 | ) | (7 | ) | (119 | ) | ||||||||
Income tax (expense) benefit related to items in other comprehensive loss | — | — | — | — | ||||||||||||
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Other comprehensive loss, net of tax | (84 | ) | (73 | ) | (7 | ) | (119 | ) | ||||||||
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Comprehensive loss | $ | (564 | ) | $ | (1,172 | ) | $ | (4,061 | ) | $ | (6,521 | ) | ||||
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Three Months Ended | Six Months Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands) | ||||||||||||||||
Net income (loss) | $ | 1,524 | $ | (1,182 | ) | $ | 300 | $ | (3,574 | ) | ||||||
Other comprehensive income (loss), before tax: | ||||||||||||||||
Change in unrealized net gain on available-for-sale investments | 51 | 32 | 53 | 77 | ||||||||||||
Foreign currency translation gains (losses) | 20 | (61 | ) | (75 | ) | — | ||||||||||
Other comprehensive income (loss), before tax | 71 | (29 | ) | (22 | ) | 77 | ||||||||||
Income taxes related to items in other comprehensive income (loss) | — | — | — | — | ||||||||||||
Other comprehensive income (loss), net of tax | 71 | (29 | ) | (22 | ) | 77 | ||||||||||
Comprehensive income (loss) | $ | 1,595 | $ | (1,211 | ) | $ | 278 | $ | (3,497 | ) | ||||||
Nine months ended | ||||||||
September 28, 2019 | September 29, 2018 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Operating activities | ||||||||
Net loss | $ | (4,054 | ) | $ | (6,402 | ) | ||
Adjustments to reconcile net loss to net cash and cash equivalents provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 2,778 | 3,587 | ||||||
Net amortization (accretion) of investment premiums and discounts | (55 | ) | (67 | ) | ||||
Equity-based compensation | 2,260 | 2,454 | ||||||
Straight-line rent adjustment and amortization of lease incentives | (238 | ) | (114 | ) | ||||
Change in the fair value of acquisition-related contingent consideration | 7 | 8 | ||||||
Deferred income taxes | 552 | — | ||||||
Loss on disposal of equipment | 87 | 442 | ||||||
Changes in operating assets and liabilities | (2,470 | ) | 2,156 | |||||
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Total adjustments | 2,921 | 8,466 | ||||||
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Net cash and cash equivalents provided by (used in) operating activities | (1,133 | ) | 2,064 | |||||
Investing activities | ||||||||
Purchases of investments | (18,917 | ) | (24,640 | ) | ||||
Proceeds from sales and maturities of investments | 18,751 | 24,922 | ||||||
Purchases of leasehold improvements and equipment | (3,279 | ) | (2,219 | ) | ||||
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Net cash and cash equivalents used in investing activities | (3,445 | ) | (1,937 | ) | ||||
Financing activities | ||||||||
Net proceeds from issuance of common stock | 1,770 | 3,199 | ||||||
Common stock repurchases | (111 | ) | — | |||||
Taxes paid related to net share settlement | (296 | ) | (819 | ) | ||||
Payment of acquisition-related contingent consideration | (230 | ) | — | |||||
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Net cash and cash equivalents provided by financing activities | 1,133 | 2,380 | ||||||
Effect of exchange rate changes on cash | (87 | ) | (126 | ) | ||||
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Net increase (decrease) in cash, cash equivalents and restricted cash | (3,532 | ) | 2,381 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 19,884 | 20,941 | ||||||
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Cash, cash equivalents and restricted cash at end of period | $ | 16,352 | $ | 23,322 | ||||
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Six months ended | ||||||||
June 27, 2020 | June 29, 2019 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Operating activities | ||||||||
Net income (loss) | $ | 300 | $ | (3,574 | ) | |||
Adjustments to reconcile the net income (loss) to net cash and cash equivalents provided by operating activities: | ||||||||
Depreciation and amortization | 1,797 | 1,920 | ||||||
Net amortization (accretion) of investment premiums and discounts | (26 | ) | (34 | ) | ||||
Equity-based compensation | 1,328 | 1,509 | ||||||
Straight-line rent adjustment and amortization of lease incentives | (142 | ) | (158 | ) | ||||
Change in the fair value of acquisition-related contingent consideration | — | 7 | ||||||
Deferred income taxes | 426 | 517 | ||||||
Loss on disposal of fixed assets | — | 45 | ||||||
Changes in operating assets and liabilities | (148 | ) | 776 | |||||
Total adjustments | 3,235 | 4,582 | ||||||
Net cash and cash equivalents provided by operating activities | 3,535 | 1,008 | ||||||
Investing activities | ||||||||
Purchases of investments | (12,213 | ) | (10,150 | ) | ||||
Proceeds from sales and maturities of investments | 14,510 | �� | 14,961 | |||||
Purchases of leasehold improvements and equipment | (1,837 | ) | (1,398 | ) | ||||
Net cash and cash equivalents provided by investing activities | 460 | 3,413 | ||||||
Financing activities | ||||||||
Net proceeds from issuance of common stock | 994 | 1,021 | ||||||
Common stock repurchases | (393 | ) | (42 | ) | ||||
Taxes paid related to net share settlement | (345 | ) | (268 | ) | ||||
Payment of acquisition-related contingent consideration | — | (230 | ) | |||||
Net cash and cash equivalents provided by financing activities | 256 | 481 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (74 | ) | — | |||||
Net increase in cash, cash equivalents and restricted cash | 4,177 | 4,902 | ||||||
Cash, cash equivalents and restricted cash at beginning of period | 20,554 | 19,884 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 24,731 | $ | 24,786 | ||||
Non-cash investing and financing activity | ||||||||
Additions to right-of-use-assets obtained from new operating lease liabilities | $ | 128 | $ | — | ||||
1. | Description of Business, |
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Adoption Actual results could differ materially from those estimates.
We adopted ASUNo. 2016-02, Leases (Topic 842),eligible expenditures pursuant to government assistance programs are recorded as reductions of December 30, 2018, usingoperating costs when the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the beginningrelated costs have been incurred and there is reasonable assurance regarding collection of the periodclaim. Grant claims not settled by the balance sheet date are recorded as receivables, provided their receipt is reasonably assured. The determination of adoption.the amount of the claim, and accordingly the receivable amount, requires management to make calculations based on its interpretation of eligible expenditures in accordance with the terms of the programs. The reimbursement claims submitted by the Company are subject to review by the relevant government agencies. In addition, we elected the package of practical expedients permittedSingapore, Intevac receives government assistance under the transition guidance withinJob Support Scheme (“JSS”). During the new standard,quarter ended June 27, 2020, the Company received $310,000 in JSS grants, of which among other things, allowed us to carry forward the historical lease classification, and we elected the hindsight practical expedient to determine the lease term for existing leases. We determined that most renewal options would not be reasonably certain in determining the expected lease term. The comparative information has not been restated and continues to be$180,000 is reported under the accounting standards in effect for those periods.
Adoptionas a reduction of the new standard resulted in the recordingcost of net lease assetsrevenues, $49,000 is reported as a reduction of $11.6 millionresearch and lease liabilitiesdevelopment (“R&D”) expenses and $81,000 is reported as a reduction of $13.7 million, asselling, general and administrative expenses on the condensed consolidated statements of December 30, 2018. The standard did not have an impact on our consolidated resultsoperations.
The effect of the changes made to our consolidated December 30, 2018 balance sheet for the adoption of the new lease standard was as follows (in thousands):
Balance at December 29, 2018 | Adjustments Due to ASC 842 | Balance at December 30, 2018 | ||||||||||
Prepaid expenses and other current assets | $ | 2,528 | $ | (221 | )1 | $ | 2,307 | |||||
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Total current assets | $ | 95,633 | $ | (221 | )1 | $ | 95,412 | |||||
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Operating leaseright-of-use assets | $ | — | $ | 11,635 | 1,2,3 | $ | 11,635 | |||||
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Total assets | $ | 122,070 | $ | 11,414 | 1,2,3 | $ | 133,484 | |||||
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Current operating lease liabilities | $ | — | $ | 2,581 | 5 | $ | 2,581 | |||||
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Accounts payable | $ | 6,053 | $ | (4 | )4 | $ | 6,049 | |||||
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Other accrued liabilities | $ | 4,952 | $ | (13 | )3 | $ | 4,939 | |||||
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Total current liabilities | $ | 30,008 | $ | 2,564 | 3,4,5 | $ | 32,572 | |||||
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Noncurrent operating lease liabilities | $ | — | $ | 11,120 | 5 | $ | 11,120 | |||||
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Other long-term liabilities | $ | 2,438 | $ | (2,270 | )3 | $ | 168 | |||||
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Totalnon-current liabilities | $ | 2,438 | $ | 8,850 | 3,4,5 | $ | 11,288 | |||||
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Total liabilities and stockholders’ equity | $ | 122,070 | $ | 11,414 | ,4,5 | $ | 133,484 | |||||
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Revenue |
TFE | Three Months Ended September 28, 2019 | Three Months Ended September 29, 2018 | ||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
HDD | DCP | PV | Total | HDD | DCP | PV | Total | |||||||||||||||||||||||||
Systems, upgrades and spare parts | $ | 7,737 | $ | — | $ | 8,225 | $ | 15,962 | $ | 9,476 | $ | — | $ | 51 | $ | 9,527 | ||||||||||||||||
Field service | 1,109 | — | 45 | 1,154 | 2,581 | — | — | 2,581 | ||||||||||||||||||||||||
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Total TFE net revenues | $ | 8,846 | $ | — | $ | 8,270 | $ | 17,116 | $ | 12,057 | $ | — | $ | 51 | $ | 12,108 | ||||||||||||||||
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Nine Months Ended September 28, 2019 | Nine Months Ended September 29, 2018 | |||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
HDD | DCP | PV | Total | HDD | DCP | PV | Total | |||||||||||||||||||||||||
Systems, upgrades and spare parts | $ | 31,210 | $ | — | $ | 14,616 | $ | 45,826 | $ | 39,090 | $ | 1 | $ | 54 | $ | 39,145 | ||||||||||||||||
Field service | 3,452 | 2 | 45 | 3,499 | 6,561 | — | 39 | 6,600 | ||||||||||||||||||||||||
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Total TFE net revenues | $ | 34,662 | $ | 2 | $ | 14,661 | $ | 49,325 | $ | 45,651 | $ | 1 | $ | 93 | $ | 45,745 | ||||||||||||||||
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Three Months Ended | Nine Months Ended | |||||||||||||||
Photonics | September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||||
(In thousands) | ||||||||||||||||
Products: | ||||||||||||||||
Military products | $ | 3,320 | $ | 4,202 | $ | 8,115 | $ | 8,601 | ||||||||
Commercial products | 81 | 84 | 581 | 138 | ||||||||||||
Repair and other services | 573 | 746 | 1,944 | 1,463 | ||||||||||||
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Total Photonics product net revenues | 3,974 | 5,032 | 10,640 | 10,202 | ||||||||||||
Technology development: | ||||||||||||||||
Firm Fixed Price (“FFP”) | 3,218 | 494 | 7,995 | 1,726 | ||||||||||||
Cost Plus Fixed Fee (“CPFF”) | 1,991 | 1,819 | 5,479 | 5,829 | ||||||||||||
Time and materials | — | 13 | 2 | 36 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total technology development net revenues | 5,209 | 2,326 | 13,476 | 7,591 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Photonics net revenues | $ | 9,183 | $ | 7,358 | $ | 24,116 | $ | 17,793 | ||||||||
|
|
|
|
|
|
|
|
TFE | Three Months Ended June 27, 2020 | Three Months Ended June 29, 2019 | ||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
HDD | DCP | PV | Total | HDD | DCP | PV | Total | |||||||||||||||||||||||||
Systems, upgrades | $ | 15,226 | $ | — | $ | 61 | $ | 15,287 | $ | 12,423 | $ | — | $ | 18 | $ | 12,441 | ||||||||||||||||
Field service | 1,306 | — | 2 | 1,308 | 821 | 2 | — | 823 | ||||||||||||||||||||||||
Total TFE net revenues | $ | 16,532 | $ | — | $ | 63 | $ | 16,595 | $ | 13,244 | $ | 2 | $ | 18 | $ | 13,264 | ||||||||||||||||
Six Months Ended June 27, 2020 | Six Months Ended June 29, 2019 | |||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
HDD | DCP | PV | Total | HDD | DCP | PV | Total | |||||||||||||||||||||||||
Systems, upgrades and spare parts | $ | 21,587 | $ | — | $ | 269 | $ | 21,856 | $ | 23,473 | $ | — | $ | 6,391 | $ | 29,864 | ||||||||||||||||
Field service | 2,699 | — | 2 | 2,701 | 2,343 | 2 | — | 2,345 | ||||||||||||||||||||||||
Total TFE net revenues | $ | 24,286 | $ | — | $ | 271 | $ | 24,557 | $ | 25,816 | $ | 2 | $ | 6,391 | $ | 32,209 |
Three Months Ended | Six Months Ended | |||||||||||||||
Photonics | June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | ||||||||||||
(In thousands) | ||||||||||||||||
Products: | ||||||||||||||||
Military products | $ | 5,446 | $ | 2,981 | $ | 10,811 | $ | 4,794 | ||||||||
Commercial products | 39 | 182 | 118 | 500 | ||||||||||||
Repair and other services | 645 | 810 | 1,075 | 1,371 | ||||||||||||
Total Photonics product net revenues | 6,130 | 3,973 | 12,004 | 6,665 | ||||||||||||
Technology development: | ||||||||||||||||
Firm Fixed Price (“FFP”) | 5,462 | 3,085 | 9,892 | 4,777 | ||||||||||||
Cost Plus Fixed Fee (“CPFF”) | 655 | 1,992 | 1,229 | 3,488 | ||||||||||||
Time and materials | — | — | — | 2 | ||||||||||||
Total technology development net revenues | 6,117 | 5,077 | 11,121 | 8,267 | ||||||||||||
Total Photonics net revenues | $ | 12,247 | $ | 9,050 | $ | 23,125 | $ | 14,932 | ||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | Photonics | Total | TFE | Photonics | Total | |||||||||||||||||||
United States | $ | 478 | $ | 9,050 | $ | 9,528 | $ | 287 | $ | 6,868 | $ | 7,155 | ||||||||||||
Asia | 16,638 | — | 16,638 | 11,821 | — | 11,821 | ||||||||||||||||||
Europe | — | 133 | 133 | — | 457 | 457 | ||||||||||||||||||
Rest of World | — | — | — | — | 33 | 33 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total net revenues | $ | 17,116 | $ | 9,183 | $ | 26,299 | $ | 12,108 | $ | 7,358 | $ | 19,466 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | Photonics | Total | TFE | Photonics | Total | |||||||||||||||||||
United States | $ | 313 | $ | 12,125 | $ | 12,438 | $ | 356 | $ | 8,811 | $ | 9,167 | ||||||||||||
Asia | 16,282 | — | 16,282 | 12,908 | — | 12,908 | ||||||||||||||||||
Europe | — | 122 | 122 | — | 239 | 239 | ||||||||||||||||||
Total net revenues | $ | 16,595 | $ | 12,247 | $ | 28,842 | $ | 13,264 | $ | 9,050 | $ | 22,314 | ||||||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | Photonics | Total | TFE | Photonics | Total | |||||||||||||||||||
United States | $ | 995 | $ | 23,578 | $ | 24,573 | $ | 3,549 | $ | 16,628 | $ | 20,177 | ||||||||||||
Asia | 48,330 | — | 48,330 | 42,196 | 31 | 42,227 | ||||||||||||||||||
Europe | — | 538 | 538 | — | 937 | 937 | ||||||||||||||||||
Rest of World | — | — | — | — | 197 | 197 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total net revenues | $ | 49,325 | $ | 24,116 | $ | 73,441 | $ | 45,745 | $ | 17,793 | $ | 63,538 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended | Six Months Ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | Photonics | Total | TFE | Photonics | Total | |||||||||||||||||||
United States | $ | 832 | $ | 22,981 | $ | 23,813 | $ | 517 | $ | 14,527 | $ | 15,044 | ||||||||||||
Asia | 23,725 | — | 23,725 | 31,692 | — | 31,692 | ||||||||||||||||||
Europe | — | 144 | 144 | — | 405 | 405 | ||||||||||||||||||
Total net revenues | $ | 24,557 | $ | 23,125 | $ | 47,682 | $ | 32,209 | $ | 14,932 | $ | 47,141 | ||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | Photonics | Total | TFE | Photonics | Total | |||||||||||||||||||
Products transferred at a point in time | $ | 17,116 | $ | 573 | $ | 17,689 | $ | 12,108 | $ | 746 | $ | 12,854 | ||||||||||||
Products and services transferred over time | — | 8,610 | 8,610 | — | 6,612 | 6,612 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 17,116 | $ | 9,183 | $ | 26,299 | $ | 12,108 | $ | 7,358 | $ | 19,466 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | Photonics | Total | TFE | Photonics | Total | |||||||||||||||||||
Products transferred at a point in time | $ | 49,325 | $ | 1,944 | $ | 51,269 | $ | 45,745 | $ | 1,463 | $ | 47,208 | ||||||||||||
Products and services transferred over time | — | 22,172 | 22,172 | — | 16,330 | 16,330 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 49,325 | $ | 24,116 | $ | 73,441 | $ | 45,745 | $ | 17,793 | $ | 63,538 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | Photonics | Total | TFE | Photonics | Total | |||||||||||||||||||
Products transferred at a point in time | $ | 16,595 | $ | 645 | $ | 17,240 | $ | 13,264 | $ | 810 | $ | 14,074 | ||||||||||||
Products and services transferred over time | — | 11,602 | 11,602 | — | 8,240 | 8,240 | ||||||||||||||||||
$ | 16,595 | $ | 12,247 | $ | 28,842 | $ | 13,264 | $ | 9,050 | $ | 22,314 | |||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | Photonics | Total | TFE | Photonics | Total | |||||||||||||||||||
Products transferred at a point in time | $ | 24,557 | $ | 1,075 | $ | 25,632 | $ | 32,209 | $ | 1,371 | $ | 33,580 | ||||||||||||
Products and services transferred over time | — | 22,050 | 22,050 | — | 13,561 | 13,561 | ||||||||||||||||||
$ | 24,557 | $ | 23,125 | $ | 47,682 | $ | 32,209 | $ | 14,932 | $ | 47,141 | |||||||||||||
September 28, 2019 | December 29, 2018 | Nine Months Change | ||||||||||
(In thousands) | ||||||||||||
TFE: | ||||||||||||
Contract assets: | ||||||||||||
Accounts receivable, unbilled | $ | 919 | $ | 514 | $ | 405 | ||||||
|
|
|
|
|
| |||||||
Contract liabilities: | ||||||||||||
Deferred revenue | $ | 778 | $ | 633 | $ | 145 | ||||||
Customer advances | 8,740 | 14,314 | (5,574 | ) | ||||||||
|
|
|
|
|
| |||||||
$ | 9,518 | $ | 14,947 | $ | (5,429 | ) | ||||||
|
|
|
|
|
| |||||||
Photonics: | ||||||||||||
Contract assets: | ||||||||||||
Accounts receivable, unbilled | $ | 2,525 | $ | 1,493 | $ | 1,032 | ||||||
Retainage | 95 | 157 | (62 | ) | ||||||||
|
|
|
|
|
| |||||||
$ | 2,620 | $ | 1,650 | $ | 970 | |||||||
|
|
|
|
|
| |||||||
Contract liabilities: | ||||||||||||
Deferred revenue | $ | 221 | $ | 1,101 | $ | (880 | ) | |||||
|
|
|
|
|
|
June 27, 2020 | December 28, 2019 | Six Months Change | ||||||||||
(In thousands) | ||||||||||||
TFE: | ||||||||||||
Contract assets: | ||||||||||||
Accounts receivable, unbilled | $ | 560 | $ | 760 | $ | (200 | ) | |||||
Contract liabilities: | ||||||||||||
Deferred revenue | $ | 464 | $ | 320 | $ | 144 | ||||||
Customer advances | 433 | 4,007 | (3,574 | ) | ||||||||
$ | 897 | $ | 4,327 | $ | (3,430 | ) | ||||||
Photonics: | ||||||||||||
Contract assets: | ||||||||||||
Accounts receivable, unbilled | $ | 574 | $ | 3,210 | $ | (2,636 | ) | |||||
Retainage | 121 | 99 | 22 | |||||||||
$ | 695 | $ | 3,309 | $ | (2,614 | ) | ||||||
Contract liabilities: | ||||||||||||
Deferred revenue | $ | 1,259 | $ | — | $ | 1,259 | ||||||
28, 2019.
is recognized.
Inventories |
September 28, 2019 | December 29, 2018 | |||||||
(In thousands) | ||||||||
Raw materials | $ | 15,700 | $ | 16,354 | ||||
Work-in-progress | 11,843 | 9,134 | ||||||
Finished goods | 2,308 | 5,109 | ||||||
|
|
|
| |||||
$ | 29,851 | $ | 30,597 | |||||
|
|
|
|
Finished goods inventory
June 27, 2020 | December 28, 2019 | |||||||
(In thousands) | ||||||||
Raw materials | $ | 11,280 | $ | 15,286 | ||||
Work-in-progress | 4,363 | 4,748 | ||||||
Finished goods | 6,567 | 4,873 | ||||||
$ | 22,210 | $ | 24,907 | |||||
Equity-Based Compensation |
Equity-based Beginning August 1, 2020, under the terms of the ESPP, employees can choose to have up to 50% of their base earnings withheld to purchase Intevac common stock (not to exceed $25,000 per year).
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Equity-based compensation by type of award: | ||||||||||||||||
Stock options | $ | 213 | $ | 213 | $ | 610 | $ | 563 | ||||||||
RSUs | 375 | 309 | 1,018 | 945 | ||||||||||||
ESPP awards | 163 | 330 | 632 | 946 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total equity-based compensation | $ | 751 | $ | 852 | $ | 2,260 | $ | 2,454 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended | Six Months Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
Equity-based compensation by type of award: | ||||||||||||||||
Stock options | $ | 149 | $ | 191 | $ | 364 | $ | 398 | ||||||||
RSUs | 450 | 352 | 816 | 642 | ||||||||||||
Employee stock purchase plan | 57 | 210 | 148 | 469 | ||||||||||||
Total equity-based compensation | $ | 656 | $ | 753 | $ | 1,328 | $ | 1,509 | ||||||||
Shares | Weighted-Average Exercise Price | |||||||
Options outstanding at December 29, 2018 | 2,070,749 | $ | 6.76 | |||||
Options granted | 354,000 | $ | 5.43 | |||||
Options cancelled and forfeited | (130,892 | ) | $ | 7.52 | ||||
Options exercised | (72,122 | ) | $ | 4.22 | ||||
|
| |||||||
Options outstanding at September 28, 2019 | 2,221,735 | $ | 6.58 | |||||
|
| |||||||
Options exercisable at September 28, 2019 | 1,414,115 | $ | 6.67 |
Shares | Weighted-Average Exercise Price | |||||||
Options outstanding at December 28, 2019 | 2,096,610 | $ | 6.63 | |||||
Options granted | 6,000 | $ | 4.88 | |||||
Options cancelled and forfeited | (13,742 | ) | $ | 5.80 | ||||
Options exercised | (51,097 | ) | $ | 4.69 | ||||
Options outstanding at June 27, 2020 | 2,037,771 | $ | 6.68 | |||||
Options exercisable at June 27, 2020 | 1,541,989 | $ | 6.78 |
June 27, 2020.
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
Stock Options: | ||||||||||||||||
Weighted-average fair value of grants per share | $ | 1.84 | $ | 1.81 | $ | 2.05 | $ | 1.98 | ||||||||
Expected volatility | 43.87 | % | 44.10 | % | 43.22 | % | 43.83 | % | ||||||||
Risk-free interest rate | 1.57 | % | 2.87 | % | 1.86 | % | 2.58 | % | ||||||||
Expected term of options (in years) | 4.32 | 3.90 | 4.56 | 4.41 | ||||||||||||
Dividend yield | None | None | None | None |
Three Months Ended | Six Months Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
Stock Options: | ||||||||||||||||
Weighted-average fair value of grants per share | — | $ | 2.05 | $ | 1.82 | $ | 2.06 | |||||||||
Expected volatility | — | 43.19 | % | 46.06 | % | 43.20 | % | |||||||||
Risk-free interest rate | — | 1.86 | % | 0.44 | % | 1.88 | % | |||||||||
Expected term of options (in years) | — | 4.6 | 4.39 | 4.6 | ||||||||||||
Dividend yield | NaN | NaN | NaN | NaN |
INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
Stock Purchase Rights: | ||||||||||||||||
Weighted-average fair value of grants per share | $ | 1.45 | $ | 1.87 | $ | 1.73 | $ | 2.24 | ||||||||
Expected volatility | 38.27 | % | 50.64 | % | 45.81 | % | 47.64 | % | ||||||||
Risk-free interest rate | 1.85 | % | 2.58 | % | 2.28 | % | 2.01 | % | ||||||||
Expected term of purchase rights (in years) | 0.75 | 1.58 | 0.91 | 1.33 | ||||||||||||
Dividend yield | None | None | None | None |
Six Months Ended | ||||||||
June 27, 2020 | June 29, 2019 | |||||||
ESPP Purchase Rights: | ||||||||
Weighted-average fair value of grants per share | $ | 1.66 | $ | 1.89 | ||||
Expected volatility | 36.69 | % | 50.00 | % | ||||
Risk-free interest rate | 1.56 | % | 2.53 | % | ||||
Expected term of purchase rights (in years) | 0.5 | 1.0 | ||||||
Dividend yield | NaN | NaN |
PSOs
Nine Months Ended September 28, 2019 | ||||
Weighted-average fair value of grants per share | $ | 1.75 | ||
Expected volatility | 43.43 | % | ||
Risk free interest rate | 1.96 | % | ||
Expected term (in years) | 4.60 | |||
Dividend yield | None |
Three Months Ended | ||||
June 29, 2019 | ||||
Weighted-average fair value of grants per share | $ | 1.75 | ||
Expected volatility | 43.43 | % | ||
Risk-free interest rate | 1.96 | % | ||
Expected term (in years) | 4.6 | |||
Dividend yield | NaN |
Shares | Weighted-Average Grant Date Fair Value | |||||||
Non-vested RSUs at December 29, 2018 | 462,409 | $ | 6.92 | |||||
Granted | 256,703 | $ | 5.62 | |||||
Vested | (136,366 | ) | $ | 7.88 | ||||
Cancelled and forfeited | (21,482 | ) | $ | 6.23 | ||||
|
| |||||||
Non-vested RSUs at September 28, 2019 | 561,264 | $ | 6.12 | |||||
|
|
Shares | Weighted -Average Grant Date Fair Value | |||||||
Non-vested RSUs at December 28, 2019 | 553,355 | $ | 6.15 | |||||
Granted | 584,289 | $ | 4.72 | |||||
Vested | (212,848 | ) | $ | 6.54 | ||||
Cancelled and forfeited | (6,304 | ) | $ | 6.13 | ||||
Non-vested RSUs at June 27, 2020 | 918,492 | $ | 5.15 | |||||
Three Months Ended | ||||
June 27, 2020 | ||||
Weighted-average fair value of grants per share | $ | 3.16 | ||
Expected volatility | 46.7 | % | ||
Risk-free interest rate | 0.25 | % | ||
Dividend yield | NaN |
Purchased Intangible Assets |
September 28, 2019 | ||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
(In thousands) | ||||||||||||
TFE | $ | 7,172 | $ | (6,791 | ) | $ | 381 | |||||
Photonics | 1,215 | (1,168 | ) | 47 | ||||||||
|
|
|
|
|
| |||||||
$ | 8,387 | $ | (7,959 | ) | $ | 428 | ||||||
|
|
|
|
|
|
June 27, 2020 | ||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
(In thousands) | ||||||||||||
TFE | $ | 7,172 | $ | (7,172 | ) | $ | — | |||||
Photonics | 1,215 | (1,201 | ) | 14 | ||||||||
$ | 8,387 | $ | (8,373 | ) | $ | 14 | ||||||
INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
(In thousands) | ||||
2019 | $ | 154 | ||
2020 | 274 | |||
|
| |||
$ | 428 | |||
|
|
(In thousands) | ||||
2020 | $ | 14 | ||
Acquisition-Related Contingent Consideration |
Three Months End | Six Months End | |||||||
June 29, 2019 | June 29, 2019 | |||||||
(In thousands) | ||||||||
Opening balance | $ | 132 | $ | 223 | ||||
Changes in fair value | — | 7 | ||||||
Cash payments made | (132 | ) | (230 | ) | ||||
Closing balance | $ | — | $ | — | ||||
7. | Warranty |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Opening balance | $ | — | $ | 370 | $ | 223 | $ | 362 | ||||||||
Changes in fair value | — | — | 7 | 8 | ||||||||||||
Cash payments made | — | — | (230 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Closing balance | $ | — | $ | 370 | $ | — | $ | 370 | ||||||||
|
|
|
|
|
|
|
|
The contingent consideration liability of $223,000 at December 29, 2018 is included in other accrued liabilities on the condensed consolidated balance sheets.
|
Forfor its HDD manufacturing, DCP manufacturing and solar cell manufacturing systems, the warranty typically ranges between 12 and 24 months from customer acceptance. During this warranty period any defective
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Opening balance | $ | 948 | $ | 911 | $ | 997 | $ | 994 | ||||||||
Expenditures incurred under warranties | (167 | ) | (51 | ) | (592 | ) | (469 | ) | ||||||||
Accruals for product warranties issued during the reporting period | 427 | 68 | 829 | 347 | ||||||||||||
Adjustments to previously existing warranty accruals | (72 | ) | (139 | ) | (98 | ) | (83 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Closing balance | $ | 1,136 | $ | 789 | $ | 1,136 | $ | 789 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended | Six Months Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
Opening balance | $ | 725 | $ | 1,297 | $ | 1,022 | $ | 997 | ||||||||
Expenditures incurred under warranties | (189 | ) | (257 | ) | (308 | ) | (424 | ) | ||||||||
Accruals for product warranties issued during the reporting period | 135 | 78 | 159 | 402 | ||||||||||||
Adjustments to previously existing warranty accruals | (9 | ) | (170 | ) | (211 | ) | (27 | ) | ||||||||
Closing balance | $ | 662 | $ | 948 | $ | 662 | $ | 948 | ||||||||
INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
September 28, 2019 | December 29, 2018 | |||||||
(In thousands) | ||||||||
Other accrued liabilities | $ | 988 | $ | 839 | ||||
Other long-term liabilities | 148 | 158 | ||||||
|
|
|
| |||||
Total warranty provision | $ | 1,136 | $ | 997 | ||||
|
|
|
|
June 27, | December 28, | |||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Other accrued liabilities | $ | 487 | $ | 846 | ||||
Other long-term liabilities | 175 | 176 | ||||||
Total warranty provision | $ | 662 | $ | 1,022 | ||||
Guarantees |
September 28, 2019,June 27, 2020, we had letters of credit and bank guarantees outstanding totaling $1.4 million,$787,000, including athe standby letter of credit outstanding under the Santa Clara, California facility lease and various other guarantees with our bank. These letters of credit and bank guarantees are collateralized by $1.4 million$787,000 of restricted cash.10.9.Leases
Intevac leases certain manufacturing facilities, warehouses, office space, and equipment undernon-cancelable operating leases that expire at various times up to March 2024 and has options to renew most leases, with rentals to be negotiated. Certain of Intevac’s leases contain provisions for rental adjustments. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date we take possession of the property. At lease inception, we determine the lease term by assuming the exercise of those renewal options that are reasonably assured. The exercise of lease renewal options is at our sole discretion. The lease term is used to determine whether a lease is financing or operating and is used to calculate straight-line rent expense. Additionally, the depreciable life of leasehold improvements is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.
INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
The following table reflects our lease assets and our lease liabilities at September 28, 2019 and December 30, 2018.
September 28, 2019 | December 30, 2018 | |||||||
(In thousands) | ||||||||
Assets: | ||||||||
Operating leaseright-of-use assets | $ | 9,920 | $ | 11,635 | ||||
|
|
|
| |||||
Liabilities: | ||||||||
Current operating lease liabilities | $ | 2,394 | $ | 2,581 | ||||
Noncurrent operating lease liabilities | 9,354 | 11,120 | ||||||
|
|
|
| |||||
$ | 11,748 | $ | 13,701 | |||||
|
|
|
|
Lease Costs:
The components of lease costs were as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Operating lease cost | $ | 780 | $ | 755 | $ | 2,344 | $ | 2,270 | ||||||||
Short-term lease cost | 20 | 20 | 57 | 62 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total lease cost | $ | 800 | $ | 775 | $ | 2,401 | $ | 2,332 | ||||||||
|
|
|
|
|
|
|
|
As of September 28, 2019, the maturity of operating lease liabilities was as follows:
(In thousands) | ||||
2019 | $ | 830 | ||
2020 | 2,991 | |||
2021 | 2,989 | |||
2022 | 3,074 | |||
2023 | 3,161 | |||
2024 | 528 | |||
|
| |||
Total lease payments | 13,573 | |||
Less: Interest | (1,825 | ) | ||
|
| |||
Present value of lease liabilities | $ | 11,748 | ||
|
|
Lease Term and Discount Rate:
| ||||
|
Other information:
Supplemental cash flow information related to leases was as follows (in thousands):
Nine Months Ended | ||||
September 28, 2019 | ||||
Operating cash outflows from operating leases | $ | 2,622 | ||
|
| |||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | — | ||
|
|
INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Cash, Cash Equivalents and Investments |
September 28, 2019 | ||||||||||||||||
Amortized Cost | Unrealized Holding Gains | Unrealized Holding Losses | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Cash | $ | 10,371 | $ | — | $ | — | $ | 10,371 | ||||||||
Money market funds | 3,028 | — | — | 3,028 | ||||||||||||
Certificates of deposit | 600 | — | — | 600 | ||||||||||||
Commercial paper | 499 | — | — | 499 | ||||||||||||
U.S. treasury and agency securities | 499 | — | — | 499 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total cash and cash equivalents | $ | 14,997 | $ | — | $ | — | $ | 14,997 | ||||||||
Short-term investments: | ||||||||||||||||
Certificates of deposit | $ | 3,000 | $ | 3 | $ | — | $ | 3,003 | ||||||||
Commercial paper | 1,392 | 2 | — | 1,394 | ||||||||||||
Corporate bonds and medium-term notes | 5,971 | 27 | — | 5,998 | ||||||||||||
U.S. treasury and agency securities | 4,905 | 2 | — | 4,907 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total short-term investments | $ | 15,268 | $ | 34 | $ | — | $ | 15,302 | ||||||||
Long-term investments: | ||||||||||||||||
Certificates of deposit | $ | 499 | $ | 1 | $ | — | $ | 500 | ||||||||
Corporate bonds and medium-term notes | 2,436 | 18 | — | 2,454 | ||||||||||||
U.S. treasury and agency securities | 2,493 | 1 | 1 | 2,493 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total long-term investments | $ | 5,428 | $ | 20 | $ | 1 | $ | 5,447 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total cash, cash equivalents, and investments | $ | 35,693 | $ | 54 | $ | 1 | $ | 35,746 | ||||||||
|
|
|
|
|
|
|
|
December 29, 2018 | ||||||||||||||||
Amortized Cost | Unrealized Holding Gains | Unrealized Holding Losses | Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Cash | $ | 13,334 | $ | — | $ | — | $ | 13,334 | ||||||||
Money market funds | 3,335 | — | — | 3,335 | ||||||||||||
U.S. treasury and agency securities | 2,046 | — | — | 2,046 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total cash and cash equivalents | $ | 18,715 | $ | — | $ | — | $ | 18,715 | ||||||||
Short-term investments: | ||||||||||||||||
Certificates of deposit | $ | 5,299 | $ | 1 | $ | 1 | $ | 5,299 | ||||||||
Commercial paper | 2,242 | — | 1 | 2,241 | ||||||||||||
Corporate bonds and medium-term notes | 4,759 | — | 13 | 4,746 | ||||||||||||
Municipal bonds | 500 | — | 2 | 498 | ||||||||||||
U.S. treasury and agency securities | 3,297 | — | 5 | 3,292 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total short-term investments | $ | 16,097 | $ | 1 | $ | 22 | $ | 16,076 | ||||||||
Long-term investments: | ||||||||||||||||
Certificates of deposit | $ | 500 | $ | — | $ | — | $ | 500 | ||||||||
Corporate bonds and medium-term notes | 2,879 | 4 | 4 | 2,879 | ||||||||||||
U.S. treasury and agency securities | 999 | — | 6 | 993 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total long-term investments | $ | 4,378 | $ | 4 | $ | 10 | $ | 4,372 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total cash, cash equivalents, and investments | $ | 39,190 | $ | 5 | $ | 32 | $ | 39,163 | ||||||||
|
|
|
|
|
|
|
|
June 27, 2020 | ||||||||||||||||
Amortized Cost | Unrealized Holding Gains | Unrealized Holding Losses | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Cash | $ | 19,185 | $ | — | $ | — | $ | 19,185 | ||||||||
Money market funds | 4,759 | — | — | 4,759 | ||||||||||||
Total cash and cash equivalents | $ | 23,944 | $ | — | $ | — | $ | 23,944 | ||||||||
Short-term investments: | ||||||||||||||||
Certificates of deposit | $ | 5,200 | $ | 10 | $ | 1 | $ | 5,209 | ||||||||
Commercial paper | 1,897 | 2 | — | 1,899 | ||||||||||||
Corporate bonds and medium-term notes | 3,846 | 33 | 1 | 3,878 | ||||||||||||
U.S. treasury and agency securities | 3,448 | 1 | — | 3,449 | ||||||||||||
Total short-term investments | $ | 14,391 | $ | 46 | $ | 2 | $ | 14,435 | ||||||||
Long-term investments: | ||||||||||||||||
Certificates of deposit | $ | 1,000 | $ | — | $ | — | $ | 1,000 | ||||||||
Corporate bonds and medium-term notes | 2,056 | 9 | — | 2,065 | ||||||||||||
U.S. treasury and agency securities | 2,496 | 43 | — | 2,539 | ||||||||||||
Total long-term investments | $ | 5,552 | $ | 52 | $ | — | $ | 5,604 | ||||||||
Total cash, cash equivalents, and investments | $ | 43,887 | $ | 98 | $ | 2 | $ | 43,983 | ||||||||
December 28, 2019 | ||||||||||||||||
Amortized Cost | Unrealized Holding Gains | Unrealized Holding Losses | Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Cash | $ | 16,512 | $ | — | $ | — | $ | 16,512 | ||||||||
Money market funds | 3,255 | — | — | 3,255 | ||||||||||||
Total cash and cash equivalents | $ | 19,767 | $ | — | $ | — | $ | 19,767 | ||||||||
Short-term investments: | ||||||||||||||||
Certificates of deposit | $ | 3,000 | $ | 1 | $ | — | $ | 3,001 | ||||||||
Commercial paper | 1,891 | 2 | — | 1,893 | ||||||||||||
Corporate bonds and medium-term notes | 6,383 | 25 | — | 6,408 | ||||||||||||
U.S. treasury and agency securities | 5,417 | 1 | — | 5,418 | ||||||||||||
Total short-term investments | $ | 16,691 | $ | 29 | $ | — | $ | 16,720 | ||||||||
Long-term investments: | ||||||||||||||||
Certificates of deposit | $ | 499 | $ | 1 | $ | — | $ | 500 | ||||||||
Corporate bonds and medium-term notes | 2,530 | 12 | — | 2,542 | ||||||||||||
U.S. treasury and agency securities | 2,494 | 1 | — | 2,495 | ||||||||||||
Total long-term investments | $ | 5,523 | $ | 14 | $ | — | $ | 5,537 | ||||||||
Total cash, cash equivalents, and investments | $ | 41,981 | $ | 43 | $ | — | $ | 42,024 | ||||||||
September 28, 2019 | ||||||||
Amortized Cost | Fair Value | |||||||
(In thousands) | ||||||||
Due in one year or less | $ | 19,894 | $ | 19,928 | ||||
Due after one through two years | 5,428 | 5,447 | ||||||
|
|
|
| |||||
$ | 25,322 | $ | 25,375 | |||||
|
|
|
|
Amortized Cost | Fair Value | |||||||
(In thousands) | ||||||||
Due in one year or less | $ | 19,150 | $ | 19,194 | ||||
Due after one through five years | 5,552 | 5,604 | ||||||
$ | 24,702 | $ | 24,798 | |||||
September 28, 2019 | ||||||||||||||||
In Loss Position for Less than 12 Months | In Loss Position for Greater than 12 Months | |||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||
(In thousands) | ||||||||||||||||
U.S. treasury and agency securities | $ | 1,994 | $ | 1 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
June 27, 2020.
June 27, 2020 | ||||||||||||||||
In Loss Position for Less than 12 Months | In Loss Position for Greater than 12 Months | |||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||
(In thousands) | ||||||||||||||||
Certificates of deposit | $ | 2,199 | $ | 1 | $ | — | $ | — | ||||||||
Corporate bonds and medium-term notes | 1,027 | 1 | — | — | ||||||||||||
$ | 3,226 | $ | 2 | $ | — | $ | — | |||||||||
Fair Value Measurements at September 28, 2019 | ||||||||||||
Total | Level 1 | Level 2 | ||||||||||
(In thousands) | ||||||||||||
Recurring fair value measurements: | ||||||||||||
Available-for-sale securities | ||||||||||||
Money market funds | $ | 3,028 | $ | 3,028 | $ | — | ||||||
U.S. treasury and agency securities | 7,899 | 7,899 | — | |||||||||
Certificates of deposit | 4,103 | — | 4,103 | |||||||||
Commercial paper | 1,893 | — | 1,893 | |||||||||
Corporate bonds and medium-term notes | 8,452 | — | 8,452 | |||||||||
|
|
|
|
|
| |||||||
Total recurring fair value measurements | $ | 25,375 | $ | 10,927 | $ | 14,448 | ||||||
|
|
|
|
|
|
Fair Value Measurements at June 27, 2020 | ||||||||||||
Total | Level 1 | Level 2 | ||||||||||
(In thousands) | ||||||||||||
Recurring fair value measurements: | ||||||||||||
Available-for-sale securities | ||||||||||||
Money market funds | $ | 4,759 | $ | 4,759 | $ | — | ||||||
U.S. treasury and agency securities | 5,988 | 5,988 | — | |||||||||
Certificates of deposit | 6,209 | — | 6,209 | |||||||||
Commercial paper | 1,899 | — | 1,899 | |||||||||
Corporate bonds and medium-term notes | 5,943 | — | 5,943 | |||||||||
Total recurring fair value measurements | $ | 24,798 | $ | 10,747 | $ | 14,051 | ||||||
Derivative Instruments |
INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Notional Amounts | Derivative Liabilities | |||||||||||||||||||||||
Derivative Instrument | September 28 2019 | December 29, 2018 | September 28, 2019 | December 29, 2018 | ||||||||||||||||||||
Balance Sheet Line | Fair Value | Balance Sheet Line | Fair Value | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Undesignated Hedges: | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 1,018 | $ | 1,764 | (a) | $ | 5 | (a) | $ | 8 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Total Hedges | $ | 1,018 | $ | 1,764 | $ | 5 | $ | 8 | ||||||||||||||||
|
|
|
|
|
|
|
|
Notional Amounts | Derivative Liabilities | |||||||||||||||||||||||
Derivative Instrument | June 27, 2020 | December 28, 2019 | June 27, 2020 | December 28, 2019 | ||||||||||||||||||||
Balance Sheet Line | Fair Value | Balance Sheet Line | Fair Value | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Undesignated Hedges: | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 574 | $ | 1,035 | * | $ | 2 | * | $ | 4 | ||||||||||||||
Total Hedges | $ | 574 | $ | 1,035 | $ | 2 | $ | 4 | ||||||||||||||||
Other accrued liabilities |
Equity |
Condensed Consolidated Statement of Changes in Equity
The changes in stockholders’ equity by component for the three and nine months ended September 28, 2019 and September 29, 2018, are as follows (in thousands):
Three months ended September 28, 2019 | ||||||||||||||||||||
Common Stock and Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||
Balance at June 29, 2019 | $ | 185,489 | $ | (29,089 | ) | $ | 455 | $ | (68,508 | ) | $ | 88,347 | ||||||||
Common stock issued under employee plans | 749 | — | — | — | 749 | |||||||||||||||
Shares withheld for net share settlement of RSUs | (28 | ) | — | — | — | (28 | ) | |||||||||||||
Equity-based compensation expense | 751 | — | — | — | 751 | |||||||||||||||
Net loss | — | — | — | (480 | ) | (480 | ) | |||||||||||||
Other comprehensive loss | — | — | (84 | ) | — | (84 | ) | |||||||||||||
Common stock repurchases | — | (69 | ) | — | — | (69 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Balance at September 28, 2019 | $ | 186,961 | $ | (29,158 | ) | $ | 371 | $ | (68,988 | ) | $ | 89,186 | ||||||||
|
|
|
|
|
|
|
|
|
|
Nine months ended September 28, 2019 | ||||||||||||||||||||
Common Stock and Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||
Balance at December 29, 2018 | $ | 183,227 | $ | (29,047 | ) | $ | 378 | $ | (64,934 | ) | $ | 89,624 | ||||||||
Common stock issued under employee plans | 1,770 | — | — | — | 1,770 | |||||||||||||||
Shares withheld for net share settlement of RSUs | (296 | ) | — | — | — | (296 | ) | |||||||||||||
Equity-based compensation expense | 2,260 | — | — | — | 2,260 | |||||||||||||||
Net loss | — | — | — | (4,054 | ) | (4,054 | ) | |||||||||||||
Other comprehensive loss | — | — | (7 | ) | — | (7 | ) | |||||||||||||
Common stock repurchases | — | (111 | ) | — | — | (111 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Balance at September 28, 2019 | $ | 186,961 | $ | (29,158 | ) | $ | 371 | $ | (68,988 | ) | $ | 89,186 | ||||||||
|
|
|
|
|
|
|
|
|
|
INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Three months ended September 29, 2018 | ||||||||||||||||||||
Common Stock and Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||
Balance at June 30, 2018 | $ | 180,449 | $ | (28,489 | ) | $ | 444 | $ | (73,818 | ) | $ | 78,586 | ||||||||
Common stock issued under employee plans | 1,081 | — | — | — | 1,081 | |||||||||||||||
Shares withheld for net share settlement of RSUs | (5 | ) | — | — | — | (5 | ) | |||||||||||||
Equity-based compensation expense | 852 | — | — | — | 852 | |||||||||||||||
Net loss | — | — | — | (1,099 | ) | (1,099 | ) | |||||||||||||
Other comprehensive loss | — | — | (73 | ) | — | (73 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Balance at September 29, 2018 | $ | 182,377 | $ | (28,489 | ) | $ | 371 | $ | (74,917 | ) | $ | 79,342 | ||||||||
|
|
|
|
|
|
|
|
|
|
Nine months ended September 29, 2018 | ||||||||||||||||||||
Common Stock and Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||
Balance at December 30, 2017 | $ | 177,543 | $ | (28,489 | ) | $ | 490 | $ | (66,881 | ) | $ | 82,663 | ||||||||
Cumulative effect of accounting change | — | — | — | (1,634 | ) | (1,634 | ) | |||||||||||||
Common stock issued under employee plans | 3,199 | — | — | — | 3,199 | |||||||||||||||
Shares withheld for net share settlement of RSUs | (819 | ) | — | — | — | (819 | ) | |||||||||||||
Equity-based compensation expense | 2,454 | — | — | — | 2,454 | |||||||||||||||
Net loss | — | — | — | (6,402 | ) | (6,402 | ) | |||||||||||||
Other comprehensive loss | — | — | (119 | ) | — | (119 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Balance at September 29, 2018 | $ | 182,377 | $ | (28,489 | ) | $ | 371 | $ | (74,917 | ) | $ | 79,342 | ||||||||
|
|
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income
The changes in accumulated other comprehensive income by component for the three and nine months ended September 28, 2019 and September 29, 2018, are as follows.
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 28, 2019 | ||||||||||||||||||||||||
Foreign currency | Unrealized holding gains on available-for-sale investments | Total | Foreign currency | Unrealized holding gains on available-for-sale investments | Total | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Beginning balance | $ | 405 | $ | 50 | $ | 455 | $ | 405 | $ | (27 | ) | $ | 378 | |||||||||||
Other comprehensive income (loss) before reclassification | (87 | ) | 3 | (84 | ) | (87 | ) | 80 | (7 | ) | ||||||||||||||
Amounts reclassified from other comprehensive income (loss) | — | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net current-period other comprehensive loss | (87 | ) | 3 | (84 | ) | (87 | ) | 80 | (7 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ending balance | $ | 318 | $ | 53 | $ | 371 | $ | 318 | $ | 53 | $ | 371 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 29, 2018 | ||||||||||||||||||||||||
Foreign currency | Unrealized holding losses on available-for-sale investments | Total | Foreign currency | Unrealized holding losses on available-for-sale investments | Total | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Beginning balance | $ | 495 | $ | (51 | ) | $ | 444 | $ | 535 | $ | (45 | ) | $ | 490 | ||||||||||
Other comprehensive income (loss) before reclassification | (86 | ) | 13 | (73 | ) | (126 | ) | 7 | (119 | ) | ||||||||||||||
Amounts reclassified from other comprehensive income (loss) | — | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net current-period other comprehensive loss | (86 | ) | 13 | (73 | ) | (126 | ) | 7 | (119 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ending balance | $ | 409 | $ | (38 | ) | $ | 371 | $ | 409 | $ | (38 | ) | $ | 371 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Shares of common stock repurchased | 15 | — | 24 | — | ||||||||||||
Cost of stock repurchased | $ | 69 | $ | — | $ | 111 | $ | — | ||||||||
Average price paid per share | $ | 4.65 | $ | — | $ | 4.67 | $ | — |
Three Months Ended | Six Months Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Shares of common stock repurchased | — | 9 | 98 | 9 | ||||||||||||
Cost of stock repurchased | $ | — | $ | 42 | $ | 393 | $ | 42 | ||||||||
Average price paid per share | $ | — | $ | 4.69 | $ | 3.97 | $ | 4.69 |
Three months ended June 27, 2020 | ||||||||||||||||||||
Common Stock and Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||
Balance at March 28, 2020 | $ | 189,899 | $ | (29,551 | ) | $ | 331 | $ | (65,010 | ) | $ | 95,669 | ||||||||
Common stock issued under employee plans | 44 | — | — | — | 44 | |||||||||||||||
Shares withheld for net share settlement of RSUs | (309 | ) | — | — | — | (309 | ) | |||||||||||||
Equity-based compensation expense | 656 | — | — | — | 656 | |||||||||||||||
Net income | — | — | — | 1,524 | 1,524 | |||||||||||||||
Other comprehensive income | — | — | 71 | — | 71 | |||||||||||||||
Balance at June 27, 2020 | $ | 190,290 | $ | (29,551 | ) | $ | 402 | $ | (63,486 | ) | $ | 97,655 | ||||||||
Six months ended June 27, 2020 | ||||||||||||||||||||
Common Stock and Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||
Balance at December 28, 2019 | $ | 188,313 | $ | (29,158 | ) | $ | 424 | $ | (63,786 | ) | $ | 95,793 | ||||||||
Common stock issued under employee plans | 994 | — | — | — | 994 | |||||||||||||||
Shares withheld for net share settlement of RSUs | (345 | ) | — | — | — | (345 | ) | |||||||||||||
Equity-based compensation expense | 1,328 | — | — | — | 1,328 | |||||||||||||||
Net income | — | — | — | 300 | 300 | |||||||||||||||
Other comprehensive loss | — | — | (22 | ) | — | (22 | ) | |||||||||||||
Common stock repurchases | — | (393 | ) | — | — | (393 | ) | |||||||||||||
Balance at June 27, 2020 | $ | 190,290 | $ | (29,551 | ) | $ | 402 | $ | (63,486 | ) | $ | 97,655 | ||||||||
Three months ended June 29, 2019 | ||||||||||||||||||||
Common Stock and Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||
Balance at March 30, 2019 | $ | 184,976 | $ | (29,047 | ) | $ | 484 | $ | (67,326 | ) | $ | 89,087 | ||||||||
Shares withheld for net share settlement of RSUs | (240 | ) | — | — | — | (240 | ) | |||||||||||||
Equity-based compensation expense | 753 | — | — | — | 753 | |||||||||||||||
Net loss | — | — | — | (1,182 | ) | (1,182 | ) | |||||||||||||
Other comprehensive loss | — | — | (29 | ) | — | (29 | ) | |||||||||||||
Common stock repurchases | — | (42 | ) | — | — | (42 | ) | |||||||||||||
Balance at June 29, 2019 | $ | 185,489 | $ | (29,089 | ) | $ | 455 | $ | (68,508 | ) | $ | 88,347 | ||||||||
Six months ended June 29, 2019 | ||||||||||||||||||||
Common Stock and Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||
Balance at December 29, 2018 | $ | 183,227 | $ | (29,047 | ) | $ | 378 | $ | (64,934 | ) | $ | 89,624 | ||||||||
Common stock issued under employee plans | 1,021 | — | — | — | 1,021 | |||||||||||||||
Shares withheld for net share settlement of RSUs | (268 | ) | — | — | — | (268 | ) | |||||||||||||
Equity-based compensation expense | 1,509 | — | — | — | 1,509 | |||||||||||||||
Net loss | — | — | — | (3,574 | ) | (3,574 | ) | |||||||||||||
Other comprehensive income | — | — | 77 | — | 77 | |||||||||||||||
Common stock repurchases | — | (42 | ) | — | — | (42 | ) | |||||||||||||
Balance at June 29, 2019 | $ | 185,489 | $ | (29,089 | ) | $ | 455 | $ | (68,508 | ) | $ | 88,347 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 27, 2020 | ||||||||||||||||||||||||
Foreign currency | Unrealized holding gain ons available-for-sale investments | Total | Foreign currency | Unrealized holding gains onavailable-for-sale investments | Total | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Beginning balance | $ | 286 | $ | 45 | $ | 331 | $ | 381 | $ | 43 | $ | 424 | ||||||||||||
Other comprehensive income (loss) before reclassification | 20 | 51 | 71 | (75 | ) | 53 | (22 | ) | ||||||||||||||||
Amounts reclassified from other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||
Net current-period other comprehensive income (loss) | 20 | 51 | 71 | (75 | ) | 53 | (22 | ) | ||||||||||||||||
Ending balance | $ | 306 | $ | 96 | $ | 402 | $ | 306 | $ | 96 | $ | 402 | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 29, 2019 | ||||||||||||||||||||||||
Foreign currency | Unrealized holding gains on available-for-sale investments | Total | Foreign currency | Unrealized holding gains (losses) on available-for-sale investments | Total | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Beginning balance | $ | 466 | $ | 18 | $ | 484 | $ | 405 | $ | (27 | ) | $ | 378 | |||||||||||
Other comprehensive income (loss) before reclassification | (61 | ) | 32 | (29 | ) | — | 77 | 77 | ||||||||||||||||
Amounts reclassified from other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||
Net current-period other comprehensive income (loss) | (61 | ) | 32 | (29 | ) | — | 77 | 77 | ||||||||||||||||
Ending balance | $ | 405 | $ | 50 | $ | 455 | $ | 405 | $ | 50 | $ | 455 | ||||||||||||
Net |
Three Months Ended | Six Months Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Net income (loss) | $ | 1,524 | $ | (1,182 | ) | $ | 300 | $ | (3,574 | ) | ||||||
Weighted-average shares – basic | 23,561 | 22,991 | 23,522 | 22,923 | ||||||||||||
Effect of dilutive potential common shares | 345 | — | 431 | — | ||||||||||||
Weighted-average shares – diluted | 23,906 | 22,991 | 23,953 | 22,923 | ||||||||||||
Net income (loss) per share – basic | $ | 0.06 | $ | (0.05 | ) | $ | 0.01 | $ | (0.16 | ) | ||||||
Net income (loss) per share –diluted | $ | 0.06 | $ | (0.05 | ) | $ | 0.01 | $ | (0.16 | ) | ||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Net loss | $ | (480 | ) | $ | (1,099 | ) | $ | (4,054 | ) | $ | (6,402 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
Weighted-average shares – basic | 23,130 | 22,719 | 22,992 | 22,429 | ||||||||||||
Effect of dilutive potential common shares | — | — | — | — | ||||||||||||
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| |||||||||
Weighted-average shares – diluted | 23,130 | 22,719 | 22,992 | 22,429 | ||||||||||||
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|
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| |||||||||
Net loss per share – basic | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.18 | ) | $ | (0.29 | ) | ||||
|
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|
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|
| |||||||||
Net loss per share – diluted | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.18 | ) | $ | (0.29 | ) | ||||
|
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|
|
|
|
|
As the Company is in a net loss position, all of the Company’s equity instruments are considered antidilutive.
Three Months Ended | Six Months Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
Stock options to purchase common stock | 1,596 | 2,211 | 1,596 | 2,211 | ||||||||||||
RSUs | 19 | 583 | 19 | 583 | ||||||||||||
Employee stock purchase plan | 2 | 64 | 2 | 64 |
INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Segment Reporting |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
TFE | $ | 17,116 | $ | 12,108 | $ | 49,325 | $ | 45,745 | ||||||||
Photonics | 9,183 | 7,358 | 24,116 | 17,793 | ||||||||||||
|
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|
|
|
|
|
| |||||||||
Total segment net revenues | $ | 26,299 | $ | 19,466 | $ | 73,441 | $ | 63,538 | ||||||||
|
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|
|
|
|
| |||||||||
Operating Income (Loss)
| ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
TFE | $ | (1,542 | ) | $ | (907 | ) | $ | (3,434 | ) | $ | (2,197 | ) | ||||
Photonics | 2,268 | 688 | 3,114 | (966 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total segment operating income (loss) | 726 | (219 | ) | (320 | ) | (3,163 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Unallocated costs | (1,159 | ) | (874 | ) | (3,038 | ) | (2,986 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Loss from operations | (433 | ) | (1,093 | ) | (3,358 | ) | (6,149 | ) | ||||||||
Interest income and other income (expense), net | 126 | 186 | 448 | 464 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Loss before income taxes | $ | (307 | ) | $ | (907 | ) | $ | (2,910 | ) | $ | (5,685 | ) | ||||
|
|
|
|
|
|
|
|
Three Months Ended | Six Months Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
TFE | $ | 16,595 | $ | 13,264 | $ | 24,557 | $ | 32,209 | ||||||||
Photonics | 12,247 | 9,050 | 23,125 | 14,932 | ||||||||||||
Total segment net revenues | $ | 28,842 | $ | 22,314 | $ | 47,682 | $ | 47,141 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
TFE | $ | (174 | ) | $ | (1,291 | ) | $ | (2,705 | ) | $ | (1,892 | ) | ||||
Photonics | 3,536 | 1,487 | 6,448 | 846 | ||||||||||||
Total income (loss) from segment operations | 3,362 | 196 | 3,743 | (1,046 | ) | |||||||||||
Unallocated costs | (1,258 | ) | (1,124 | ) | (2,738 | ) | (1,879 | ) | ||||||||
Income (loss) from operations | 2,104 | (928 | ) | 1,005 | (2,925 | ) | ||||||||||
Interest income and other income (expense), net | 62 | 163 | 204 | 322 | ||||||||||||
Income (loss) before provision for income taxes | $ | 2,166 | $ | (765 | ) | $ | 1,209 | $ | (2,603 | ) | ||||||
September 28, 2019 | December 29, 2018 | |||||||
(In thousands) | ||||||||
TFE | $ | 52,541 | $ | 53,867 | ||||
Photonics | 22,158 | 16,721 | ||||||
|
|
|
| |||||
Total segment assets | 74,699 | 70,588 | ||||||
|
|
|
| |||||
Cash, cash equivalents and investments | 35,746 | 39,163 | ||||||
Restricted cash | 1,355 | 1,169 | ||||||
Deferred income taxes | 7,361 | 7,913 | ||||||
Other current assets | 1,071 | 1,341 | ||||||
Common property, plant and equipment | 1,178 | 1,017 | ||||||
Common operating leaseright-of-use assets | 2,005 | — | ||||||
Other assets | 869 | 879 | ||||||
|
|
|
| |||||
Consolidated total assets | $ | 124,284 | $ | 122,070 | ||||
|
|
|
|
June 27, 2020 | December 28, 2019 | |||||||
(In thousands) | ||||||||
TFE | $ | 43,175 | $ | 51,153 | ||||
Photonics | 26,622 | 22,071 | ||||||
Total segment assets | 69,797 | 73,244 | ||||||
Cash, cash equivalents and investments | 43,983 | 42,024 | ||||||
Restricted cash | 787 | 787 | ||||||
Deferred income taxes | 5,826 | 6,252 | ||||||
Other current assets | 1,207 | 752 | ||||||
Common property, plant and equipment | 1,414 | 1,307 | ||||||
Common operating lease right-of-use assets | 1,815 | 1,898 | ||||||
Other assets | — | 78 | ||||||
Consolidated total assets | $ | 124,829 | $ | 126,322 | ||||
Income Taxes |
|
During the first quarterreported as a reduction of fiscal 2018, Intevac substantially completed implementation of the 2018 cost reduction plan (the “Plan”), which was intended to reduce expenses and reduce its workforce by 6 percent. The cost of implementing the Plan was reported under cost of net revenues, $49,000 is reported as a reduction of R&D expenses and operating$81,000 is reported as a reduction of selling, general and administrative expenses inon the condensed consolidated statementsstatement of operations. Substantially all cash outlays in connection with the Plan occurred in the first quarter of fiscal 2018. Implementation of the Plan is expected to reduce salary, wages and other employee-related expenses by approximately $1.8 million on an annual basis.
INTEVAC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
The changes in restructuring reserves associated with the Plan for the nine months ended September 29, 2018 are as follows.
15. | ||||
| ||||
| ||||
| ||||
| ||||
Contingencies |
|
A Board member of the Company also serves as the Chief Executive Officer of a supplier. The Company made inventory purchases in the amount of $16,000 and $191,000, respectively, for the three and nine months ended September 28, 2019 and $6,000 and $129,000, respectively, for the three and nine months ended September 29, 2018 from this supplier.
|
Item 2. |
|
Three months ended | Nine months ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | Change over prior period | September 28, 2019 | September 29, 2018 | Change over prior period | |||||||||||||||||||
(In thousands, except percentages and per share amounts) | ||||||||||||||||||||||||
Net revenues | $ | 26,299 | $ | 19,466 | $ | 6,833 | $ | 73,441 | $ | 63,538 | $ | 9,903 | ||||||||||||
Gross profit | $ | 8,778 | $ | 7,486 | $ | 1,292 | $ | 24,375 | $ | 22,122 | $ | 2,253 | ||||||||||||
Gross margin percent | 33.4 | % | 38.5 | % | (5.1) points | 33.2 | % | 34.8 | % | (1.6) points | ||||||||||||||
Loss from operations | $ | (433 | ) | $ | (1,093 | ) | $ | 660 | $ | (3,358 | ) | $ | (6,149 | ) | $ | 2,791 | ||||||||
Net loss | $ | (480 | ) | $ | (1,099 | ) | $ | 619 | $ | (4,054 | ) | $ | (6,402 | ) | $ | 2,348 | ||||||||
Net loss per diluted share | $ | (0.02 | ) | $ | (0.05 | ) | $ | 0.03 | $ | (0.18 | ) | $ | (0.29 | ) | $ | 0.11 |
2019:
Three months ended | Six months ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Change over prior period | June 27, 2020 | June 29, 2019 | Change over prior period | |||||||||||||||||||
(In thousands, except percentages and per share amounts) | ||||||||||||||||||||||||
Net revenues | $ | 28,842 | $ | 22,314 | $ | 6,528 | $ | 47,682 | $ | 47,141 | $ | 541 | ||||||||||||
Gross profit | $ | 11,420 | $ | 8,357 | $ | 3,063 | $ | 19,577 | $ | 15,597 | $ | 3,980 | ||||||||||||
Gross margin percent | 39.6 | % | 37.5 | % | 2.1 points | 41.1 | % | 33.1 | % | 8.0 points | ||||||||||||||
Income (loss) from operations | $ | 2,104 | $ | (928 | ) | $ | 3,032 | $ | 1,005 | $ | (2,925 | ) | $ | 3,930 | ||||||||||
Net income (loss) | $ | 1,524 | $ | (1,182 | ) | $ | 2,706 | $ | 300 | $ | (3,574 | ) | $ | 3,874 | ||||||||||
Net income (loss) per diluted share | $ | 0.06 | $ | (0.05 | ) | $ | 0.11 | $ | 0.01 | $ | (0.16 | ) | $ | 0.17 |
Net revenues for the first ninesix months of fiscal 20192020 increased compared to the same period in the prior year primarily due to higher Photonics product sales and higher Photonics contract R&D, offset in part by lower equipment sales to PV manufacturers higher Photonics contract R&D and higher Photonics product sales, offset in part by lower equipment sales to HDD manufacturers. TFE recognized revenue in the first nine monthshalf of fiscal 20192020 on two 200 Lean
Intevac’s trademarks
The purpose of the JSS is to provide wage support to employers to help them retain their local employees. Under the JSS, Intevac expects to receive approximately $535,000 in JSS grants in fiscal 2020. During the quarter ended June 27, 2020, the Company received $310,000 in JSS grants. As previously mentioned, under the CARES Act we have elected to defer the payment of the employer portion of payroll taxes and will receive tax benefits from the
Three months ended | Nine months ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | Change over prior period | September 28, 2019 | September 29, 2018 | Change over prior period | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | $ | 17,116 | $ | 12,108 | $ | 5,008 | $ | 49,325 | $ | 45,745 | $ | 3,580 | ||||||||||||
Photonics: | ||||||||||||||||||||||||
Contract R&D | 5,209 | 2,326 | 2,883 | 13,476 | 7,591 | 5,885 | ||||||||||||||||||
Products | 3,974 | 5,032 | (1,058 | ) | 10,640 | 10,202 | 438 | |||||||||||||||||
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9,183 | 7,358 | 1,825 | 24,116 | 17,793 | 6,323 | |||||||||||||||||||
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| |||||||||||||
Total net revenues | $ | 26,299 | $ | 19,466 | $ | 6,833 | $ | 73,441 | $ | 63,538 | $ | 9,903 | ||||||||||||
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Three months ended | Six months ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Change over prior period | June 27, 2020 | June 29, 2019 | Change over prior period | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | $ | 16,595 | $ | 13,264 | $ | 3,331 | $ | 24,557 | $ | 32,209 | $ | (7,652 | ) | |||||||||||
Photonics: | ||||||||||||||||||||||||
Products | 6,130 | 3,973 | 2,157 | 12,004 | 6,665 | 5,339 | ||||||||||||||||||
Contract R&D | 6,117 | 5,077 | 1,040 | 11,121 | 8,267 | 2,854 | ||||||||||||||||||
12,247 | 9,050 | 3,197 | 23,125 | 14,932 | 8,193 | |||||||||||||||||||
Total net revenues | $ | 28,842 | $ | 22,314 | $ | 6,528 | $ | 47,682 | $ | 47,141 | $ | 541 | ||||||||||||
June 27, 2020 | December 28, 2019 | June 29, 2019 | ||||||||||
(In thousands) | ||||||||||||
TFE | $ | 14,567 | $ | 21,391 | $ | 50,251 | ||||||
Photonics | 54,424 | 71,015 | 43,403 | |||||||||
Total backlog | $ | 68,991 | $ | 92,406 | $ | 93,654 | ||||||
Photonics revenue for the three month period ended September 28, 2019 increased compared to the same period in the prior year as a result of higher contract R&D work, offset in part by lower product sales revenues. Photonics revenue for the nine month period ended September 28, 2019 increased compared to the same period in the prior year as a result of higher contract R&D work and higher product sales revenues.
Backlog
September 28, 2019 | December 29, 2018 | September 29, 2018 | ||||||||||
(In thousands) | ||||||||||||
TFE | $ | 39,310 | $ | 64,803 | $ | 63,628 | ||||||
Photonics | 76,123 | 43,711 | 8,606 | |||||||||
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| |||||||
Total backlog | $ | 115,433 | $ | 108,514 | $ | 72,234 | ||||||
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|
TFE backlog at SeptemberDecember 28, 2019 included fourtwo 200 Lean HDD systems. TFE backlog at DecemberJune 29, 20182019 included sixfour 200 Lean HDD systems and ninefive ENERG TFE backlog at September 29, 2018 includes three 200 Lean HDD systems and twelve ENERGi solar ion implant systems.
United States Asia Europe Rest of World Total net revenues United States Asia Europe Rest of World Total net revenues Three Months Ended Three Months Ended September 28, 2019 September 29, 2018 (In thousands) TFE Photonics Total TFE Photonics Total $ 478 $ 9,050 $ 9,528 $ 287 $ 6,868 $ 7,155 16,638 — 16,638 11,821 — 11,821 — 133 133 — 457 457 — — — — 33 33 $ 17,116 $ 9,183 $ 26,299 $ 12,108 $ 7,358 $ 19,466 Nine Months Ended Nine Months Ended September 29, 2018 September 29, 2018 (In thousands) TFE Photonics Total TFE Photonics Total $ 995 $ 23,578 $ 24,573 $ 3,549 $ 16,628 $ 20,177 48,330 — 48,330 42,196 31 42,227 — 538 538 — 937 937 — — — — 197 197 $ 49,325 $ 24,116 $ 73,441 $ 45,745 $ 17,793 $ 63,538
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | Photonics | Total | TFE | Photonics | Total | |||||||||||||||||||
United States | $ | 313 | $ | 12,125 | $ | 12,438 | $ | 356 | $ | 8,811 | $ | 9,167 | ||||||||||||
Asia | 16,282 | — | 16,282 | 12,908 | — | 12,908 | ||||||||||||||||||
Europe | — | 122 | 122 | — | 239 | 239 | ||||||||||||||||||
Total net revenues | $ | 16,595 | $ | 12,247 | $ | 28,842 | $ | 13,264 | $ | 9,050 | $ | 22,314 | ||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
TFE | Photonics | Total | TFE | Photonics | Total | |||||||||||||||||||
United States | $ | 832 | $ | 22,981 | $ | 23,813 | $ | 517 | $ | 14,527 | $ | 15,044 | ||||||||||||
Asia | 23,725 | — | 23,725 | 31,692 | — | 31,692 | ||||||||||||||||||
Europe | — | 144 | 144 | — | 405 | 405 | ||||||||||||||||||
Total net revenues | $ | 24,557 | $ | 23,125 | $ | 47,682 | $ | 32,209 | $ | 14,932 | $ | 47,141 | ||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | Change over prior period | September 28, 2019 | September 29, 2018 | Change over prior period | |||||||||||||||||||
(In thousands, except percentages) | ||||||||||||||||||||||||
TFE gross profit | $ | 4,825 | $ | 4,871 | $ | (46 | ) | $ | 15,958 | $ | 18,113 | $ | (2,155 | ) | ||||||||||
% of TFE net revenues | 28.2 | % | 40.2 | % | 32.4 | % | 39.6 | % | ||||||||||||||||
Photonics gross profit | $ | 3,953 | $ | 2,615 | $ | 1,338 | $ | 8,417 | $ | 4,009 | $ | 4,408 | ||||||||||||
% of Photonics net revenues | 43.1 | % | 35.5 | % | 34.9 | % | 22.5 | % | ||||||||||||||||
Total gross profit | $ | 8,778 | $ | 7,486 | $ | 1,292 | $ | 24,375 | $ | 22,122 | $ | 2,253 | ||||||||||||
% of net revenues | 33.4 | % | 38.5 | % | 33.2 | % | 34.8 | % |
Three months ended | Six months ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Change over prior period | June 27, 2020 | June 29, 2019 | Change over prior period | |||||||||||||||||||
(In thousands, except percentages) | ||||||||||||||||||||||||
TFE gross profit | $ | 6,047 | $ | 5,156 | $ | 891 | $ | 9,547 | $ | 11,134 | $ | (1,587 | ) | |||||||||||
% of TFE net revenues | 36.4 | % | 38.9 | % | 38.9 | % | 34.6 | % | ||||||||||||||||
Photonics gross profit | $ | 5,373 | $ | 3,201 | $ | 2,172 | $ | 10,030 | $ | 4,463 | $ | 5,567 | ||||||||||||
% of Photonics net revenues | 43.9 | % | 35.4 | % | 43.4 | % | 29.9 | % | ||||||||||||||||
Total gross profit | $ | 11,420 | $ | 8,357 | $ | 3,063 | $ | 19,577 | $ | 15,597 | $ | 3,980 | ||||||||||||
% of net revenues | 39.6 | % | 37.5 | % | 41.1 | % | 33.1 | % |
Research and development expense expense Three months ended Nine months ended September 28,
2019 September 29,
2018 Change over
prior period September 28,
2019 September 29,
2018 Change over
prior period (In thousands) $ 3,596 $ 3,737 $ (141 ) $ 11,013 $ 12,889 $ (1,876 )
Three months ended | Six months ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Change over prior period | June 27, 2020 | June 29, 2019 | Change over prior period | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Research and development expense | $ | 3,707 | $ | 3,431 | $ | 276 | $ | 6,991 | $ | 7,417 | $ | (426 | ) |
Three months ended | Nine months ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | Change over prior period | September 28, 2019 | September 29, 2018 | Change over prior period | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Selling, general and administrative expense | $ | 5,615 | $ | 4,842 | $ | 773 | $ | 16,720 | $ | 15,382 | $ | 1,338 |
expense
Three months ended | Six months ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Change over prior period | June 27, 2020 | June 29, 2019 | Change over prior period | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Selling, general and administrative expense | $ | 5,609 | $ | 5,854 | $ | (245 | ) | $ | 11,581 | $ | 11,105 | $ | 476 |
Cost reduction plans
During same period in the first quarter of fiscal 2018, Intevac substantially completed implementation of the 2018 cost reduction plan (the “Plan”), which was intendedprior year primarily due to reducehigher variable compensation expenses and reduce its workforce by 6 percent. The total cost of implementing the Plan was $95,000 of which $61,000 was reported under cost of net revenues and $34,000 was reported under operating expenses. Substantially all cash outlaysincremental
lower spending to support a customer evaluation.
Three months ended | Nine months ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | Change over prior period | September 28, 2019 | September 29, 2018 | Change over prior period | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Interest income and other income (expense), net | $ | 126 | $ | 186 | $ | (60 | ) | $ | 448 | $ | 464 | $ | (16 | ) |
Three months ended | Six months ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Change over prior period | June 27, 2020 | June 29, 2019 | Change over prior period | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Interest income and other, income (expense), net | $ | 62 | $ | 163 | $ | (101 | ) | $ | 204 | $ | 322 | $ | (118 | ) |
a divestiture and various other income of $35,000, offset in part by $35,000 of foreign currency losses. The decrease in interest income in the three and six months ended June 27, 2020 resulted from lower interest rates and lower invested balances compared to the same period in 2019.
Three months ended | Nine months ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | Change over prior period | September 28, 2019 | September 29, 2018 | Change over prior period | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Provision for income taxes | $ | 173 | $ | 192 | $ | (19 | ) | $ | 1,144 | $ | 717 | $ | 427 |
Three months ended | Six months ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Change over prior period | June 27, 2020 | June 29, 2019 | Change over prior period | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Provision for income taxes | $ | 642 | $ | 417 | $ | 225 | $ | 909 | $ | 971 | $ | (62 | ) |
plans, offset in part by purchases of fixed assets and tax payments for net share settlement.
September 28, 2019 | December 29, 2018 | |||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 14,997 | $ | 18,715 | ||||
Restricted cash | 1,355 | 1,169 | ||||||
Short-term investments | 15,302 | 16,076 | ||||||
Long-term investments | 5,447 | 4,372 | ||||||
|
|
|
| |||||
Total cash, cash equivalents, restricted cash and investments | $ | 37,101 | $ | 40,332 | ||||
|
|
|
|
June 27, 2020 | December 28, 2019 | |||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 23,944 | $ | 19,767 | ||||
Restricted cash | 787 | 787 | ||||||
Short-term investments | 14,435 | 16,720 | ||||||
Long-term investments | 5,604 | 5,537 | ||||||
Total cash, cash equivalents, restricted cash and investments | $ | 44,770 | $ | 42,811 | ||||
return to profitability.
In connection with the acquisition
2020.
Beginning December 30, 2018, we implemented ASC 842, Leases.
Item 3. |
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Item 4. |
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Procedures
June 27, 2020.
Disclosure Controls
Controls
Beginning December 30, 2018, we implemented ASC 842, Leases. We implemented changes that occurred during the period covered by this Quarterly Report on Form
Item 1. |
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Item 1A. |
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Item 2. |
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Total Number of Shares Purchased | Average Price Paid per Share | Aggregate Price Paid | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Dollar Value of Shares That May Yet be Purchased Under the Program | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
June 30, 2019 to July 27, 2019 | 15 | $ | 4.65 | $ | 69 | 15 | $ | 10,838 | ||||||||||||
July 28, 2019 to August 24, 2019 | — | $ | 4.70 | $ | — | — | $ | 10,838 | ||||||||||||
August 25, 2019 to September 28, 2019 | — | $ | — | $ | — | — | $ | 10,838 |
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Item 4. |
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Item 5. |
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Item 6. |
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Previously filed as an exhibit to the Registrant’s Definitive Proxy Statement filed April 6, 2020. |
** | Previously filed as an exhibit to the Registrant’s Registration Statement on Form S-8 filed May 14, 2020. |
*** | The certification attached as Exhibit 32.1 is deemed “furnished” and not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of Intevac, Inc. under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof, irrespective of any general incorporation by reference language contained in any such filing, except to the extent that the registrant specifically incorporates it by reference. |
INTEVAC, INC. | ||||||
Date: July 28, 2020 | By: | /s/ WENDELL BLONIGAN | ||||
Wendell Blonigan | ||||||
President and Chief Executive Officer | ||||||
(Principal Executive Officer) |
Date: July 28, 2020 | By: | /s/ JAMES MONIZ | ||||||
James Moniz | ||||||||
| ||||||||
Executive Vice President, Finance and Administration, | ||||||||
Chief Financial Officer, Secretary and Treasurer | ||||||||
(Principal Financial and Accounting Officer) |
38