Charles Eddy | Dan Matsui/Eugene Heller | |
Chief Financial Officer | Silverman Heller Associates | |
(408) 986-9888 | (310) 208-2550 | |
dmatsui@sha-ir.com |
INTEVAC REPORTS
FOURTH-QUARTER, YEAR-END 2003 FINANCIAL RESULTS
Santa Clara, Calif.—January 30, 2004—Intevac, Inc. (Nasdaq: IVAC), today reported financial results for the three- and twelve-month periods ended December 31, 2003.
Revenues for the three-month period ended December 31, 2003, were $12.1 million compared to $12.0 million in 2002. The $12.1 million included $9.0 million of Equipment revenues, which included two MDP-250B disk sputtering systems; and $3.1 million of Imaging revenues (which consists of revenues from Commercial Imaging and from Photonics Technology). Net loss for the fourth quarter of 2003 was $588,000 or $0.04 per diluted share. The $588,000 net loss included $287,000 of other income related to deferred payments received by the company related to the sale of our rapid thermal processing equipment product line in 2002, a credit to inventory provisions of $199,000, and $204,000 of other expense related to the disposition of fixed assets. The $588,000 net loss compares to net income of $14.0 million, or $0.86 per diluted share in the comparable prior year period. The $14.0 million of net income included a $15.4 million gain on the sale of our rapid thermal processing product line, $638,000 of inventory provisions, a $324,000 gain from the disposition of fixed assets, and a $214,000 tax refund.
Revenues for the twelve-month period ended December 31, 2003, were $36.3 million, versus $33.8 million in 2002. The $36.3 million included $26.7 million of Equipment revenues, which included two MDP-250B disk sputtering systems; and $9.6 million of Imaging revenues. Net loss for the twelve-month period ended December 31, 2003, was $12.3 million, or $0.95 per diluted share, and included $843,000 of other expense related to the disposition of fixed assets, $743,000 of inventory provisions and $287,000 of other income related to the sale of our rapid thermal processing equipment product line in 2002. For the year-earlier period, we reported net income of $8.8 million, or $0.66 per diluted share, which included a $15.4 million gain on the sale of our rapid thermal processing product line, $6.6 million of tax refunds and $1.3 million of inventory provisions.
During the quarter, we converted $29.5 million of our 6 1/2% Convertible Notes due 2009 into 4.2 million shares of Intevac Common Stock. 16,953,464 shares of our common stock were outstanding as of December 31, 2003.
Backlog totaled $43.3 million at December 31, 2003, compared to $24.1 million at September 27, 2003, and $18.2 million at December 31, 2002. The increase in backlog was primarily the result of orders for eight Intevac® 200 Lean disk sputtering systems.
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Kevin Fairbairn, Intevac’s President and CEO, commented. “I am very pleased with the progress we made during the quarter. In our Equipment business we delivered our first 200 Lean disk sputtering system on schedule, which was a major accomplishment by our engineering and operations people. We also received an order for eight more of these systems, which increased our 200 Lean backlog to a total of ten systems. All of this backlog is scheduled for delivery by the end of Q2. In our Imaging business, increased activity on our funded development programs and shipments of LIVAR cameras contributed to profitable operations in the Photonics Technology Division. Additionally, the conversion of our 2009 convertible note to equity eliminated all but $1 million of the debt on our balance sheet and significantly increased our net worth.”
Conference Call Information
The Company will discuss its financial results in a conference call January 30, 2004, at 8:00 a.m. PST (11:00 a.m. EST).
To participate in the teleconference, please call toll-free (800) 291-8929 prior to the start time. For international callers, the dial-in number is (706) 634-0478. You may also listen live via the Internet at the Company’s website, www.Intevac.com, under the Investors link, or www.FullDisclosure.com. For those unable to attend, these web sites will host an archive of the call.
Additionally, a telephone replay of the call will be available for 48 hours beginning at 11 a.m. PST on January 30. You may access the playback by calling (800) 642-1687 or, for international callers (706) 645-9291, and providing Conference ID 4979682.
About Intevac
Intevac is the world’s leading supplier of thin-film disk sputtering equipment for the hard disk drive industry and a developer of leading technology for extreme low light imaging sensors, cameras and systems.
Safe Harbor Statement
This press release includes statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Intevac claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are often characterized by the terms “may,” “believes,” “projects,” “expects,” or “anticipates,” and do not reflect historical facts. Specific forward-looking statements contained in this press release include, but are not limited to, comments regarding expected delivery of our products. The forward-looking statements contained herein involve risks and uncertainties that could cause actual results to differ materially from the Company’s expectations, including the risk of our inability to accurately forecast the size of markets and timing of orders and deliveries and acceptances for our products and services and the possibility that orders in backlog may be cancelled, delayed or rescheduled. These risks and other factors are detailed the Company’s regular filings with the Securities and Exchange Commission.
[Financial tables on following pages]
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
3 months ended | 12 months ended | |||||||||||||||||||
Dec 31, 2003 | Dec 31, 2002 | Dec 31, 2003 | Dec 31, 2002 | |||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
Net revenues | ||||||||||||||||||||
Equipment Products | $ | 8,972 | $ | 10,824 | $ | 26,748 | $ | 27,100 | ||||||||||||
Commercial Imaging | 30 | 6 | 36 | 43 | ||||||||||||||||
Photonics Technology | 3,074 | 1,162 | 9,510 | 6,641 | ||||||||||||||||
Total net revenues | 12,076 | 11,992 | 36,294 | 33,784 | ||||||||||||||||
Gross profit (loss) | 4,671 | 3,001 | 9,830 | 7,309 | ||||||||||||||||
Gross margin | ||||||||||||||||||||
Equipment Products | 40.2 | % | 28.5 | % | 27.5 | % | 24.4 | % | ||||||||||||
Commercial Imaging | 36.7 | % | 100.0 | % | 47.2 | % | 90.7 | % | ||||||||||||
Photonics Technology | 34.3 | % | (7.9 | %) | 25.9 | % | 9.9 | % | ||||||||||||
Consolidated | 38.7 | % | 25.0 | % | 27.1 | % | 21.6 | % | ||||||||||||
Operating expenses | ||||||||||||||||||||
Research and development | 3,121 | 2,455 | 12,037 | 10,846 | ||||||||||||||||
Selling, general and administrative | 2,161 | 2,230 | 8,448 | 7,752 | ||||||||||||||||
Total operating expenses | 5,282 | 4,685 | 20,485 | 18,598 | ||||||||||||||||
Operating income/(loss) | ||||||||||||||||||||
Equipment Products | 133 | 807 | (3,993 | ) | (5,139 | ) | ||||||||||||||
Commercial Imaging | (509 | ) | (682 | ) | (3,041 | ) | (1,656 | ) | ||||||||||||
Photonics Technology | 287 | (1,102 | ) | (1,114 | ) | (2,173 | ) | |||||||||||||
Corporate | (522 | ) | (707 | ) | (2,507 | ) | (2,321 | ) | ||||||||||||
Total operating loss | (611 | ) | (1,684 | ) | (10,655 | ) | (11,289 | ) | ||||||||||||
Other income (expense) | ||||||||||||||||||||
Gain from sale of RTP product line | 287 | 15,428 | 287 | 15,428 | ||||||||||||||||
Gain from repurchase of 6 1/2% Convertible Notes due 2004a | — | 23 | — | 23 | ||||||||||||||||
Otherb | (226 | ) | (33 | ) | (1,863 | ) | (1,913 | ) | ||||||||||||
Profit/(Loss) before provision for income taxes | ($550 | ) | 13,734 | ($12,231 | ) | 2,249 | ||||||||||||||
Provision for (Benefit from) income taxes | 38 | (223 | ) | 38 | (6,592 | ) | ||||||||||||||
Net Income/(Loss) | ($588 | ) | $ | 13,957 | ($12,269 | ) | $ | 8,841 | ||||||||||||
Income (loss) per share | ||||||||||||||||||||
Basic | ($0.04 | ) | $ | 1.15 | ($0.95 | ) | $ | 0.73 | ||||||||||||
Dilutedc | ($0.04 | ) | $ | 0.86 | ($0.95 | ) | $ | 0.66 | ||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||
Basic | 15,174 | 12,114 | 12,948 | 12,077 | ||||||||||||||||
Dilutedc | 15,174 | 16,542 | 12,948 | 15,262 |
a | The Company adopted SFAS 145 in Q4 2002, which resulted in the reclassification of the $803 gain on repurchase of 6 1/2% Convertible Notes from extraordinary income to other income. | |
b | Other income and expense in the twelve month period ended December 31, 2002 includes $508 of offering expenses related to the exchange in July 2002 of $36,270 of the Company’s 6 1/2% Convertible Notes due 2004 for $29,543 of the Company’s Convertible Notes due 2009 and $6,727 of cash. | |
c | Diluted earnings per share exclude “as converted” treatment of the Company’s 6 1/2% Convertible Subordinated Notes Due 2004 and the Company’s 6 1/2% Convertible Subordinated Notes Due 2009 and the effect of outstanding stock options when these potentially dilutive securities are anti-dilutive to earnings per share |
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Dec. 31, 2003 | Dec. 31, 2002 | |||||||||
ASSETS | ||||||||||
Current assets | ||||||||||
Cash, cash equivalents and short term investments | $ | 19,507 | $ | 28,457 | ||||||
Accounts receivable, net | 14,016 | 4,991 | ||||||||
Income taxes recoverable | — | 214 | ||||||||
Inventories – production | 7,533 | 5,957 | ||||||||
Inventories – pending acceptance at customer site | 5,575 | 9,914 | ||||||||
Prepaid expenses and other current assets | 1,113 | 961 | ||||||||
Total current assets | 47,744 | 50,494 | ||||||||
Property, plant and equipment, net | 5,796 | 6,793 | ||||||||
Investment in 601 California Avenue LLC | 2,431 | 2,431 | ||||||||
Debt issuance costs and other | 4 | 580 | ||||||||
Total assets | $ | 55,975 | $ | 60,298 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
Current liabilities Convertible notes | $ | 1,025 | — | |||||||
Accounts payable | 3,396 | $ | 1,739 | |||||||
Accrued payroll and related liabilities | 1,610 | 1,379 | ||||||||
Other accrued liabilities | 2,643 | 3,723 | ||||||||
Customer advances | 16,432 | 12,344 | ||||||||
Total current liabilities | 25,106 | 19,185 | ||||||||
Convertible notes | — | 30,568 | ||||||||
Shareholders’ equity | ||||||||||
Common stock | 51,982 | 19,389 | ||||||||
Retained earnings (deficit) | (21,113 | ) | (8,844 | ) | ||||||
Total shareholders’ equity | 30,869 | 10,545 | ||||||||
Total liabilities and shareholders’ equity | $ | 55,975 | $ | 60,298 | ||||||
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