IVAC - Earnings call transcript Q4 2021

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Operator

Good day, and welcome to Intevac's Fourth Quarter 2021 Financial Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. And please note that this conference call is being recorded today, February 9, 2022. would Investor turn Relations I to call time, McAdams, Claire for this like the to over At Intevac. Please go ahead.

Claire McAdams

Thank Thank you discuss good which ended afternoon us year X, and and for to XXXX. January quarter results Intevac's you, today financial XXXX, fourth full on for John, joining the everyone.

the discussing company's will to results, addition we our discuss In recent outlook looking forward.

fiscal these call. include X update I of conference quarterly the factors forward-looking These The today. and on February to risks made materially by could XX-K uncertainties Moniz, remarks, no connection as of and that of call well as Nigel. to begin undertake call of are our before Chief remind Intevac. regarding over result not Jim and and I'd report Form Securities call certain including Jim obligation conference forward-looking and XX-K, with review to turn for Nigel Executive but current will statements with are our various contains statements, upon like us the subject today's discussed Nigel Form regarding now the during time-sensitive risk and comments XX-Q. prepared of comments financial in to the President represent statements today's projections Chief Hunton, and documents including on financial financial to reports Officer. differ annual adjustment which me actual on call about turning projections the with then We a year, over relating other future remains based Joining Form forward-looking will statements recently expectations preparation the Commission, our in to the statements events future will results his limited completed as results Financial to this that company's forward-looking Officer; and results our most filed Exchange everyone call our this performance as Q&A. contents

Nigel Hunton

and talent focus creating press priorities small volume, and of company's Singapore, legacy in I've leadership impressed three applications. and ago, depth on fully both committed been the equipment excited and good business other objective the the Fab thin-film by Wafer and I Component serving outlined capital Most relationships and on by drive equipment initial that the companies order in the a in revenues tech substrate I of semiconductor to I CEO long technology value. years our Control, a a strong Intevac building successful Intevac’s history recent My XXX% I've grown high be sale was building fully $XXX past processing ultra-high this Thanks I of Claire term stockholder company's dollars. to Santa expertise joining of very U.S. joined mandates in understand execute long afternoon. and Critical Intevac of strong I to based the in over I'm to CEO the and Photon Company was the in completed Equipment. especially able commitment in years in to and fact in the my supplies working company and to create mid-XXXX in employees areas company thin-film several in Since to weeks to and of joining to key talk have ensure release. to customers been leading for in Clara processing leveraging had process and around they my business. recently, the Instruments value am expertise a stockholders. the industry one the two of for very were million in our MKS later key industries

meeting entails potential growth on prospective. which key customers, of each end of markets existing assessing First, our in both and each our

I'm for third, cost added with term without we And resources to streamlining return different Photonics as given with preserving our possible, met internally I've growth positioning revenue balance of as priorities. running a also quickly business. are the organization. that prospects to the complexity strength and the of wholly developing and are Aligning multiple company and the capital structure, the equipment company group profitability while our soon times leadership Next, a the working now understand fully a sheet. the near we targets standalone

XX end meet customer attuned customer our to my is an and technology identify experienced centric and key road is each within days that customers’ culture to growth both future first solutions meetings commitment map, markets. our as processing the their team a have understand Intevac’s and with CEO. The highly customer to revenue to opportunities. expect every our in We size objective I for of to and of thin-film needs these challenges

it as operations. Next, relates to streamlining

technology As a the upgrade plans with begin we their for tool our and we years; customer-by-customer, three to next growth build optimizing company's of resources a forecast, two our purchase will clear gaining prospects. understanding

with We company Number preserving simplified including profitability are that for costs fiscal be three, newly and can the balance reserves. strong Prudent significant also including management, our identifying our reduced sheet, structure. cash the positioning

streamline May. my and term efforts a revenue provide early to We our our My review are as Greenhill in growth term near on earnings the is strategic with well to in work with as continuing operations. call the next objective longer with objectives immediate forecast, you concert size

the said, time today’s assume focused be as that similar look be the for be personally to In deferring HDD will later we the at that XXXX of the in our an So laser cash given use Intevac. customers year. of minimizing pretty the can official system believe with delivered all until financials, timing this to we streamline to XXXX, That make I prudent first meantime, meet I'll are I business and our key HDD of new it's for call assessment. on being

equipment today. make and thin-film guided XXXX business. particular, markets. more difference discontinued taken additional a quarter results were QX to with what I'll our inventory few QX non-HDD took in a business to on comments The we other moving about Jim, press fiscal our than the the reserves published results that our the P&L in most call over turnover ago some part operations, for the had against Photonics Before conservative turning line company inventory the viewpoint for some in is a the the in to release I've to main of The ability on revenue. our

recently. two were of working be for example, we for the tools the glass require modifications more back significant we’ve cover VERTEX intended For will decorative coatings applications and three built on

the these our forward associated meeting with my the entire to our product I forward. working I take energy reserve to That the our of with our as investors, customers, also has as our last much get continued the team and look management in turn for reserves in prepared solar will out implant, and line forecast remarks, for the and concludes to Jim. inventory company with two over taken that prudent to with We inventory additional Absent expected. QX, board, the Intevac organization results we feel years. call now pretty the the which for year it's pushed came

Jim Moniz

Nigel. you, Thank

QX. out GAAP the for above drove revenues the the reflects forecast business, guidance per what $XX.X Fourth QX, upgrades gross accounting, which into QX release given My as profit business reports full and equipment our was as revenue, results total which was Photonics XXXX $XX.X and equipment for to earnings QX XXXX XXXX year for financial prior margin, were will business loss. quarter operations. the year remarks forecast million Our discontinued compared and or the our close slightly were OpEx revenues pull-in and HDD This a of for million. from here

Nigel been The forecasts spending of $X.X to or a million QX been absence Without business. driven service. of gross forecast revenues those the Photonics upgrades, due the operating for above as below would million margin QX million was included forecast, expenses cost reserves excluded would margin that the spares $X and included expenses is year inventory plus were was for XX%. higher reserves equipment and margin Full our net we and of described. operating settlement from and per of full took operations efforts the reserves was gross XX.X% million expenses have The our was results. mix litigation inventory non-GAAP from $X.XX less the $X.X have in operating excluding QX of taken $X.X favorable a our continuing X%, loss HDD share R&D QX net gross margin upgrades. on MATRIX, For million by XX% year $X.X additional loss quarter. business HDD from the one our below as

net was the reported per sale share, net quarter Excluding would or the income were the million of $X.XX on equivalent which operations $XX.X litigation settlement, continuing as a of as to impact business, a per QX. Photonics share. $X.XX of share as which contributed for recorded we per our result for have of net inventory the the $X.XX profit share from per gain the GAAP income well $X.XX of reserves,

at shares was the per end. about and grew For the and Lean Driven to approximately year of increase in about the year system, $X.XX one HDD quarter less these equivalent business. restricted year-over-year, was strongest Photonics as GAAP million and cash million in million, our year million. to years, last associated costs end per $XX.X Photonic year transaction at sale million and as ended The gross upgrades on the million with share. We including cash We $XX.X incurred full $XX net $X were sale, share service bookings our with QX. for backlog $XXX.X the income paid XXX of the in of by of three equipment well cash includes proceeds from $X.XX investments, based $X

made $XXX,XXX amortization QX Cash end generated the So reflected investments quarter. and payment settlement quarter for $XXX,XXX year. was operations $XXX,XXX QX. for and during depreciation in balance and the by the capital at and sheet these The expenditures will this of in the be the be was quarter. costs litigation $XXX,XXX will were flow

million depreciation $X.X full the was year CapEx $X.X amortization For was and and million.

QX, to Now moving XXXX guidance.

around projecting be QX fuel HDD equipment $X million. thin-film and to and includes no The revenue revenues systems. We upgrades, spares service projection are

typically The a QX largest upgrades. our upgrades into As fourth for a lowest is quarter quarter quarter quarter first reminder, of is typically we upgrades the and did for see pool-in QX. our from

first around which around affect typical QX in some volumes $X will expenses are be margin revenue expected to lower million XX%. expect QX factory we operating gross utilization, seasonal quarter increases. the Given with to be

to more on working call. have reduce quarterly will earnings are OpEx our We next and our to report

about $XX,XXX and income in expense interest about GAAP tax expect quarter. We $XXX,XXX the of of

on of our part per formal we completes questions. a are XX net ready the million shares loss around presentation. We projecting for $X.XX share of outstanding. John, This based are

Operator

Thank [Operator you. Instructions].

Intro-act. with Our comes first Wright from line question the Peter of

your with proceed question. may You

Peter Wright

question and Great! my you on role. the guys Thank new for taking position Nigel, and congratulations

Nigel Hunton

you. Thank

Peter Wright

My kind start I've equipment a as first is your And question are at kind you're questions. is, two to can question. around line if then the business at normalized that's to is kind the you about thoughts number good your of comment the size – the that's with million got the of I'm think if and frame a $XX annualized, first sales right that, of I was question hoping first assumption, base looking around to when look that business, of reference. question looking second My

generally comment more guess that kind think So think I is company, my complete, that you you Photonics you off do now as business the how organically can and past which if is of points are a ongoing of opportunity question light salient and sold two is with fitting XXX% is, commentary something or your in of that? experience, a and expertise of the your thoughts else, are growing being second still equipment more your in if and noted course selling you then is into the strategic in review it. it growing business? what there Do that, standalone, around of

Nigel Hunton

so review And cover do understanding Clearly, next the have through of Okay, I of it, at is that's not where in the through multiple a the just thank part the What questions. you locked moment been about but ways. we're those going days business. over I’ll really is them its years, try opportunities the process. is and at business, for suppose understanding of this last pretty XX that core couple

against overall bolting sizing we at XXXX breakeven; get far, base annualized and need if is said XX believe some, on can cost that to reduction my XXXX, beyond XXXX a time having analysis mid-XXs any profitability. then that. on of I will company, be initial this doesn't do back as But So very and they this it’s and in right capacity a suppose not get level opening days much the in have platform revenue well. a business initiatives But as sales, does the for XXXX about to a beyond so And equipment a it need business leading operations, looked of streamlining will need sort that But as this getting to discussions first in of business of to return at flat therefore in needs level the with customers’ sales profitability. in a year. shows the HDD increased my just a my I year look to business delivering remarks, I pretty the and the

business shape, we and razor the with me good sure the focused to the we very cash, a at into so business, through to So focus forward year on flat, XXXX. ensure and with focused it’s we hit structure, this XXXX making different for great company profitability but opportunity in get keep getting as go base streamlining actually sharp take the we very but organization look a a being a into

think baseline, $XX So million that with analyze, of you sort that’s business. so think a okay I'm the good equipment I as a about

of of at opening in remarks, on it, opportunities terms what right the terms are. this at the touched reference, of look growth I’ve my is the look the at to look business, sizing In rest

days final through go over and any that want to strategic say don't So that, you XX but part as first the the of conclusion the really to it's is, we’ll too I know of that shut of early down what business. review

forecast that process. the what strategic conclude beyond as I what certainly revenue to conclude to years, two I feed talk, on we’ll does As we’ll look need, and restructuring that I we as then mean out one

make as to returns it can develop that new the a company as stockholders. delivers just is fast So reference profitability to and is Greenhill our but plans, will therefore sure the returns and of talk for right is I for build we – standalone to shape terms is still, more I the that my possible, business as the sized

excited. but to lot a I'm So do,

a that's and is We commitment. for and going lot getting coming we are lot of my a is get a passion But company see the change focus; future are build of thing important to you'll and where the my through. drive and that's

Peter Wright

that, Thank it, look understand Without at add that one you necessarily a million, time can I versus if know number a How the much help $XX if you. in more different a systems you could cycle the If next envision each and you the category? follow-up, around it's backwards upgrades in we of looking. systems little that what us how is at like. systems, would look you frame from of do than perspective maybe look

Nigel Hunton

least be looking I at level say delivering business mean we're could would system at year. that I overall sort but million upgrades, $XX of similar I think of next

$XXX think over on about prior years. talked was three So whether calls it million I we've

if can the think for two initial of in and I become years business, revenue just over think HDD of that million sales systems, to XXXX. do look visibility you I sort now, the has years $XXX says two over my think from majority we I

Peter Wright

very you much. Thank

Nigel Hunton

Thank you, Peter.

Operator

Miller Our the next line Benchmark Company. with of comes Mark from question

question. with You may your proceed

Mark Miller

of in least the equipment broaden terms Through in at the for of yourself devices. attempted you've coatings to in solar, also years terms mobile business

thoughts just market. the you about future charge tool, I'm took broadening complete wondering, you matrix of did have inventory your the which Now tool VERTEX an onto a and you any evaluation. solar

Nigel Hunton

again, to not I’m me, focuses understand the very to the of what Yeah, to business. the things customers. to internally not key the into mean early are, just It's understand review I I but mean, repeat

key to has we Intevac know to their customer requirements and solving the You things value understands understands become that problems. are customer the a driven can that business add what

with hence soul of I'm we've to the some the So got right really as see meet opportunities, understand I at the there. excited market, within I about we’ve – get of the to I decisions. customers, look coatings, those pretty partners opportunities to got meet those key but are see with If made I the future company, we’ve what really a that look to and don't

understanding for for coatings days the me early it's are what So mobile.

having excitement not for there’s there, technology; our a the about it’s there’s pull I that think challenges some just but the require it’s other and processing technology. making me has sure that has customer or

and for of into sort going be into over then to feeding and strategy focus say I'm days renewed feeding the meeting the I'd involved So customers the to our that that first in XX sector, our that talking business. and

it's too that the on lot comment and I call maybe So say to make color more that. I’d a final a next add to early on can

Mark Miller

so We should this follow-on expect from and if orders matrix evaluation a when?

Nigel Hunton

advanced talking that a evaluation couple order. follow-on packaging think matrix that The I’m of was for you’re assuming on about, I years could a away be

strategic it's So therefore off evaluation some well. it be and that part is stage, will review in as of still my but way

Jim Moniz

It's not an evaluation.

sold a production. know You not bring in we considered evaluation just an know going unit, into sold it the to it's $X are question when they so is engineering, million. unit, you but for It’s the

Mark Miller

Okay. I wanted to just clarify.

correct – without miss income charge, or something? of inventory you reported and add per a for did I adjustment would have of Photonic in net the share. You said litigation $X.XX something sale Is the or that

Jim Moniz

yes. is for quarter, That correct the

Mark Miller

you. Thank

Jim Moniz

you, Thank Mark.

Operator

Our from Vidich line question the comes Joseph of Manalapan Oracle. next with

your question. with proceed may You

Joseph Vidich

wondering taking that's gross HDD for feel reasonable you year the know, that you're if three thanks next a three XX% That’s I basically little still forecasted the or call. just expectation. you and my a years. over last the don't – I Yeah, guess, in last if for I was years reviewing guys

Nigel Hunton

my from had still years, have The the probably say first into not over initial days. I four I customers, recognize feedback my million that that my – XX Yeah, discussions with in maybe $XXX I’m three.

HDD think future. got is market long a I clearly that’s there

the capacity to require over three additions next will We five years.

growth I'm our the think to be and it’s XX, could looking So future. Where my is that sales that I term, it that this the as there in on be sort will market remarks, still going into looking I on level. flat XXXX, system XX, drive in and year today, is long the sat in prepared of that touched XXXX

two but customers give pretty and a been CapEx, won't vision will have probably on I've So I first doesn't years. key I over I've But it in is think the year all I'm four will million clear I clear $XXX and XXXX growth a on is therefore the alive, on and firm think and HDD a until What clear bit that’s pretty about that. met still XX% a throughout my need outlook actually spend two, business need days. XX you that time the priority more three, with investments,

Joseph Vidich

great. appreciate That's Thanks all Okay, it. I much. I very have.

Nigel Hunton

Thank you. you, Joe. Thank

Operator

questions. there this conclude ladies today's much your participation. are for gentlemen, further no At time and teleconference. very does Thank And you this

lines much day! disconnect this a your may and you great Thank You have at time. very

Jim Moniz

you. Thank

Intevac (IVAC) 10 Feb 222021 Q4 Earnings call transcript