XNAS:IVAC Intevac Inc Quarterly Report 10-Q Filing - 3/31/2012

Effective Date 3/31/2012

XNAS:IVAC (Intevac Inc): Fair Value Estimate
Premium
XNAS:IVAC (Intevac Inc): Consider Buying
Premium
XNAS:IVAC (Intevac Inc): Consider Selling
Premium
XNAS:IVAC (Intevac Inc): Fair Value Uncertainty
Premium
XNAS:IVAC (Intevac Inc): Economic Moat
Premium
XNAS:IVAC (Intevac Inc): Stewardship
Premium
 
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(MARK ONE)

 

  þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

OR

 

  ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to

Commission file number 0-26946

INTEVAC, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   94-3125814

(State or other jurisdiction of

incorporation or organization)

  (IRS Employer Identification No.)

3560 Bassett Street

Santa Clara, California 95054

(Address of principal executive office, including Zip Code)

Registrant’s telephone number, including area code: (408) 986-9888

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ¨   Accelerated filer þ   Non-accelerated filer ¨

(Do not check if a smaller reporting company)

  Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes þ No

On May 1, 2012, 23,263,009 shares of the Registrant’s Common Stock, $0.001 par value, were outstanding.


Table of Contents

INTEVAC, INC.

INDEX

 

          Page No.  
PART I.  FINANCIAL INFORMATION       
Item 1.    Financial Statements (unaudited)   
   Condensed Consolidated Balance Sheets      3   
   Condensed Consolidated Statements of Operations      4   
   Condensed Consolidated Statements of Comprehensive Income (Loss)      5   
   Condensed Consolidated Statements of Cash Flows      6   
   Notes to Condensed Consolidated Financial Statements      7   
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations      21   
Item 3.    Quantitative and Qualitative Disclosures About Market Risk      28   
Item 4.    Controls and Procedures      29   

PART II.  OTHER INFORMATION

  
Item 1.    Legal Proceedings      30   
Item 1A.    Risk Factors      30   
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds      37   
Item 3.    Defaults Upon Senior Securities      37   
Item 4.    Mine Safety Disclosures      37   
Item 5.    Other Information      37   
Item 6.    Exhibits      38   

SIGNATURES

     39   

 

2


Table of Contents

PART I. FINANCIAL INFORMATION

 

Item 1.   Financial Statements

INTEVAC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

     March 31,
2012
     December 31,
2011
 
     (Unaudited)  
    

(In thousands, except

par value)

 

ASSETS

     

Current assets:

     

Cash and cash equivalents

   $ 18,043       $ 23,560   

Short-term investments

     60,891         58,585   

Trade, note and other accounts receivable, net of allowances of $0 at March 31, 2012 and of $41 at December 31, 2011

     19,600         18,561   

Inventories

     19,843         18,070   

Prepaid expenses and other current assets

     7,696         7,114   

Deferred income tax assets

     2,546         2,202   
  

 

 

    

 

 

 

Total current assets

     128,619         128,092   

Property, plant and equipment, net

     14,018         14,449   

Long-term investments

     32,792         32,677   

Goodwill

     18,389         18,389   

Other intangible assets, net of amortization of $2,480 at March 31, 2012 and $2,344 at December 31, 2011

     6,305         6,441   

Deferred income taxes and other long-term assets

     28,478         25,773   
  

 

 

    

 

 

 

Total assets

   $ 228,601       $ 225,821   
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities:

     

Accounts payable

   $ 5,029       $ 4,857   

Accrued payroll and related liabilities

     4,745         4,205   

Other accrued liabilities

     12,314         9,887   

Customer advances

     5,797         5,040   
  

 

 

    

 

 

 

Total current liabilities

     27,885         23,989   

Other long-term liabilities

     9,953         9,922   

Stockholders’ equity:

     

Common stock, $0.001 par value

     23         23   

Additional paid-in capital

     148,224         146,307   

Accumulated other comprehensive income

     511         414   

Retained earnings

     42,005         45,166   
  

 

 

    

 

 

 

Total stockholders’ equity

     190,763         191,910   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 228,601       $ 225,821   
  

 

 

    

 

 

 

Note: Amounts as of December 31, 2011 are derived from the December 31, 2011 audited consolidated financial statements.

See accompanying notes.

 

3


Table of Contents

INTEVAC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

     Three months ended  
     March 31,
2012
    April 2,
2011
 
     (Unaudited)  
    

(In thousands, except

per share amounts)

 

Net revenues:

    

Systems and components

   $ 14,768      $ 15,491   

Technology development

     2,547        1,932   
  

 

 

   

 

 

 

Total net revenues

     17,315        17,423   

Cost of net revenues:

    

Systems and components

     8,819        9,614   

Technology development

     1,672        1,429   
  

 

 

   

 

 

 

Total cost of net revenues

     10,491        11,043   
  

 

 

   

 

 

 

Gross profit

     6,824        6,380   

Operating expenses:

    

Research and development

     9,213        9,012   

Selling, general and administrative

     6,773        6,885   
  

 

 

   

 

 

 

Total operating expenses

     15,986        15,897   

Gain on sale of mainframe technology

     2,207          
  

 

 

   

 

 

 

Loss from operations

     (6,955     (9,517

Interest income and other, net

     372        129   
  

 

 

   

 

 

 

Loss before income taxes

     (6,583     (9,388

Benefit from income taxes

     3,422        2,357   
  

 

 

   

 

 

 

Net loss

   $ (3,161   $ (7,031
  

 

 

   

 

 

 

Net loss per share:

    

Basic and Diluted

   $ (0.14   $ (0.31

Weighted average common shares outstanding:

    

Basic and Diluted

     23,218        22,727   

See accompanying notes.

 

4


Table of Contents

INTEVAC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 

     Three months ended  
     March 31,
2012
    April 2,
2011
 
     (Unaudited)  
     (In thousands)  

Net loss

   $ (3,161   $ (7,031
  

 

 

   

 

 

 

Other comprehensive income (loss), before tax

    

Change in unrealized net loss on available-for-sale investments

     130        (26

Foreign currency translation gains

     12        9   
  

 

 

   

 

 

 

Other comprehensive income (loss), before tax

     142        (17
  

 

 

   

 

 

 

Income tax provision (benefit) related to items in other comprehensive income

     45        (9
  

 

 

   

 

 

 

Other comprehensive income (loss), net of tax

     97        (8
  

 

 

   

 

 

 

Comprehensive loss

   $ (3,064   $ (7,039
  

 

 

   

 

 

 

See accompanying notes.

 

5


Table of Contents

INTEVAC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

     Three months ended  
     March 31,
2012
    April 2,
2011
 
     (Unaudited)  
     (In thousands)  

Operating activities

    

Net loss

   $ (3,161   $ (7,031

Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:

    

Depreciation and amortization

     1,241        1,388   

Net amortization of investment premiums and discounts

     395        222   

Equity-based compensation

     1,054        962   

Change in the fair value of acquisition-related contingent consideration

     278        300   

Deferred income taxes

     (3,258     (2,385

Gain on sale of mainframe technology

     (2,207       

Loss on disposal of equipment

            31   

Changes in operating assets and liabilities

     (196     (1,070
  

 

 

   

 

 

 

Total adjustments

     (2,693     (552
  

 

 

   

 

 

 

Net cash and cash equivalents used in operating activities

     (5,854     (7,583

Investing activities

    

Purchases of investments

     (16,091     (76,940

Proceeds from sales and maturities of investments

     13,405        1,995   

Proceeds from sale of mainframe technology

     3,000          

Purchases of leasehold improvements and equipment

     (852     (2,617
  

 

 

   

 

 

 

Net cash and cash equivalents used in investing activities

     (538     (77,562

Financing activities

    

Proceeds from issuance of common stock

     863        1,495   
  

 

 

   

 

 

 

Net cash and cash equivalents provided by financing activities

     863        1,495   
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     12        9   
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (5,517     (83,641

Cash and cash equivalents at beginning of period

     23,560        109,520   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 18,043      $ 25,879   
  

 

 

   

 

 

 

See accompanying notes.

 

6


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

In the opinion of management, the unaudited interim condensed consolidated financial statements of Intevac, Inc. and its subsidiaries (Intevac or the Company) included herein have been prepared on a basis consistent with the December 31, 2011 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments, necessary to fairly present the information set forth therein. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Intevac’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (2011 Form 10-K). Intevac’s results of operations for the three months ended March 31, 2012 are not necessarily indicative of future operating results.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates.

2. Inventories

Inventories are stated at the lower of average cost or market and consist of the following:

 

     March 31,      December 31,  
     2012      2011  
     (In thousands)  

Raw materials

   $ 11,709       $ 12,662   

Work-in-progress

     4,589         3,020   

Finished goods

     3,545         2,388   
  

 

 

    

 

 

 
   $ 19,843       $ 18,070   
  

 

 

    

 

 

 

Finished goods inventory consists primarily of completed systems at customer sites that are undergoing installation and acceptance testing.

 

7


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

3. Equity-Based Compensation

At March 31, 2012, Intevac had equity-based awards outstanding under the 2004 Equity Incentive Plan (the “2004 Plan”) and the 2003 Employee Stock Purchase Plan (the “ESPP”). Intevac’s stockholders approved both of these plans.

The 2004 Plan permits the grant of incentive or non-statutory stock options, restricted stock, stock appreciation rights, restricted stock units (“RSUs” also referred to as performance units) and performance shares. During the three months ended March 31, 2012, Intevac granted 51,000 stock options with an estimated total grant-date fair value of $231,000 and 7,500 RSUs with an estimated total grant-date fair value of $61,000. During the three months ended April 2, 2011, Intevac granted 26,000 stock options with an estimated total grant-date fair value of $185,000.

The ESPP provides that eligible employees may purchase Intevac’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market value at the beginning of the applicable offering period or at the end of each applicable purchase interval. Offering periods are generally two years in length, and consist of a series of six-month purchase intervals. Eligible employees may join the ESPP at the beginning of any six-month purchase interval. Under the terms of the ESPP, employees can choose to have up to 15% of their base earnings withheld to purchase Intevac common stock. During the three months ended March 31, 2012, Intevac granted purchase rights with an estimated total grant-date fair value of $872,000. During the three months ended April 2, 2011, Intevac granted purchase rights with an estimated total grant-date fair value of $1.3 million.

Compensation Expense

The effect of recording equity-based compensation for the three-month periods ended March 31, 2012 and April 2, 2011 was as follows:

 

     Three Months Ended  
     March 31,
2012
    April 2,
2011
 
     (In thousands)  

Equity-based compensation by type of award:

    

Stock options

   $ 733      $ 731   

RSUs

     6          

Employee stock purchase plan

     315        231   
  

 

 

   

 

 

 

Total equity-based compensation

     1,054        962   

Tax effect on equity-based compensation

     (279     (269
  

 

 

   

 

 

 

Net effect on net loss

   $ 775      $ 693   
  

 

 

   

 

 

 

Equity-based compensation expense is based on awards ultimately expected to vest and such amount has been reduced for estimated forfeitures. Forfeitures were estimated based on Intevac’s historical experience, which Intevac believes to be indicative of Intevac’s future experience.

Stock Options and ESPP

The fair value of stock options and ESPP awards is estimated at the grant date using the Black-Scholes option valuation model. The determination of fair value of stock options and ESPP awards on the date of grant using an option-pricing model is affected by Intevac’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual employee stock option exercise behavior.

 

8


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

The weighted-average estimated fair value of employee stock options granted during the three months ended March 31, 2012 and April 2, 2011 was $4.53 per share and $7.11 per share, respectively. The weighted-average estimated fair value of employee stock purchase rights granted pursuant to the ESPP during the three months ended March 31, 2012 and April 2, 2011 was $3.49 per share and $5.18 per share, respectively. The fair value of each option and employee stock purchase right grant is estimated on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:

 

      Three Months Ended  
      March 31,
2012
    April 2,
2011
 

Stock Options:

    

Expected volatility

     65.25     64.89

Risk free interest rate

     1.10     2.00

Expected term of options (in years)

     5.2        4.6   

Dividend yield

     None        None   

Stock Purchase Rights:

    

Expected volatility

     61.77     52.40

Risk free interest rate

     0.33     0.51

Expected term of purchase rights (in years)

     1.56        1.23   

Dividend yield

     None        None   

The computation of the expected volatility assumptions used in the Black-Scholes calculations for new stock option grants and purchase rights is based on the historical volatility of Intevac’s stock price, measured over a period equal to the expected term of the stock option grant or purchase right. The risk-free interest rate is based on the yield available on U.S. Treasury Strips with an equivalent remaining term. The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the equity-based awards and vesting schedules. The expected term of purchase rights represents the period of time remaining in the current offering period. The dividend yield assumption is based on Intevac’s history of not paying dividends and the assumption of not paying dividends in the future.

RSUs

RSUs are converted into shares of Intevac common stock upon vesting on a one-for-one basis. RSUs typically are scheduled to vest over four years. Vesting of RSUs is subject to the grantee’s continued service with Intevac. The compensation expense related to these awards is determined using the fair market value of Intevac common stock on the date of the grant, and the compensation expense is recognized over the vesting period.

4. Goodwill and Purchased Intangible Assets

Goodwill and indefinite-life intangible assets are tested for impairment on an annual basis or more frequently upon the occurrence of circumstances that indicate that goodwill and indefinite-life intangible assets may be impaired. In the fourth quarter of fiscal 2011, Intevac performed its annual impairment analysis and the results of the analysis indicated that Intevac’s goodwill and purchased intangible assets with an indefinite useful life were not impaired. At March 31, 2012, Intevac had a total of $18.4 million of goodwill and $4.1 million of indefinite-life intangible assets. At March 31, 2012, $10.5 million of goodwill is attributed to the Equipment segment and $7.9 million of goodwill is attributed to the Intevac Photonics segment.

Total amortization expense of finite-lived intangibles for the three months ended March 31, 2012 was $136,000. As of March 31, 2012, future amortization expense is expected to be $406,000 for the remainder of 2012, $541,000 for 2013, $363,000 for 2014, $284,000 for 2015, $281,000 for 2016 and $310,000 thereafter. Intangible assets by segment are as follows: Equipment: $5.5 million and Intevac Photonics: $840,000.

 

9


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

5. Acquisition-Related Contingent Consideration

In connection with the acquisition of Solar Implant Technologies, Inc. (“SIT”) on November 19, 2010, Intevac agreed to pay up to an aggregate of $7.0 million in cash to the selling shareholders if certain milestones are achieved over a specified period. On July 21, 2011, Intevac made $2.4 million in payments to the selling shareholders for achievement of the first milestone. Intevac estimated the fair value of this contingent consideration on March 31, 2012 to be in the amount of $3.9 million using a discounted cash flow model based on the probabilities that the remaining milestones would be met and the payments would be made on the targeted dates outlined in the acquisition agreement, as amended. On April 12, 2012, Intevac made $2.4 million in payments to the selling shareholders for achievement of the second milestone.

In connection with the acquisition of SIT, Intevac also agreed to pay a revenue earnout on Intevac’s net revenue from commercial sales of certain products over a specified period up to an aggregate of $9.0 million in cash to the selling shareholders. Intevac estimated the fair value of this contingent consideration on March 31, 2012 to be in the amount of $5.1 million based on probability-based forecasted revenues reflecting Intevac’s own assumptions concerning future revenue of SIT. A change in the estimated probabilities of revenue achievement could have a material effect on the statement of operations and balance sheets in the period of change.

The fair value measurement of contingent consideration is based on significant inputs not observed in the market and thus represents a Level 3 measurement. Any change in fair value of the contingent consideration subsequent to the acquisition date is recognized in operating income within the statement of operations. The following table represents a reconciliation of the change in the fair value measurement of the contingent consideration liability for the three-month periods ended March 31, 2012 and April 2, 2011:

 

     Three months ended  
     March 31,
2012
     April 2,
2011
 
     (In thousands)  

Opening balance

   $ 8,715       $ 9,857   

Changes in fair value

     278         300   
  

 

 

    

 

 

 

Closing balance

   $ 8,993       $ 10,157   
  

 

 

    

 

 

 

The following table displays the balance sheet classification of the contingent consideration liability account at March 31, 2012 and at December 31, 2011:

 

     March 31,      December 31,  
     2012      2011  
     (In thousands)  

Other accrued liabilities

   $ 4,035       $ 3,942   

Other long-term liabilities

     4,958         4,773   
  

 

 

    

 

 

 

Total acquisition-related contingent consideration

   $ 8,993       $ 8,715   
  

 

 

    

 

 

 

The following table represents the quantitative range of the significant unobservable inputs used in the calculation of fair value of the continent consideration liability as of March 31, 2012. Significant increases or decreases in any of these inputs in isolation would result in a significantly lower (higher) fair value measurement.

 

10


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

Quantitative Information about Level 3 Fair Value Measurements at March 31, 2012

     Fair Value     

Valuation Technique

  

            Unobservable Input             

  

Range (Weighted Average)

     (In thousands, except for percentages)

Milestone Payable

   $ 3,900       Discounted cash flow       

Discount rate

   5.3%
        

 

Probabilities of achieving remaining milestones

   80.0% - 100.0% (92.2%)

Revenue Earnout

   $ 5,093       Discounted cash flow       

Weighted average cost of capital

   16.7%
        

 

Probability weighting of achieving revenue forecasts

   10.0% - 35.0% (27.1%)

6. Sale of Mainframe Technology

On January 6, 2012, the Company sold certain assets including intellectual property and residual assets which comprised its semiconductor mainframe technology for $3.0 million in cash to Brooks Automation Inc. (“Brooks”) and recorded a gain of $2.2 million.

The following table summarizes the components of the gain (in thousands):

 

Cash proceeds

   $ 3,000   
  

 

 

 

Assets sold:

  

Inventories

     589   

Property, plant and equipment

     178   

Transaction and other costs

     26   
  

 

 

 

Gain on sale

   $ 2,207   
  

 

 

 

7. Warranty

Intevac provides for the estimated cost of warranty when revenue is recognized. Intevac’s warranty is per contract terms, and for systems sold directly the warranty typically ranges between 12 and 24 months from customer acceptance. For systems sold through a distributor, Intevac offers a 3 month warranty. The remainder of any warranty period is the responsibility of the distributor. During this warranty period any defective non-consumable parts are replaced and installed at no charge to the customer. The warranty period on consumable parts is limited to their reasonable usable lives. Intevac uses estimated repair or replacement costs along with its historical warranty experience to determine its warranty obligation. Intevac generally provides a twelve month warranty on its Intevac Photonics products. The provision for the estimated future costs of warranty is based upon historical cost and product performance experience. Intevac exercises judgment in determining the underlying estimates.

On the condensed consolidated balance sheets, the short-term portion of the warranty provision is included in other accrued liabilities, while the long-term portion is included in other long-term liabilities. The expense associated with product warranties issued or adjusted is included in cost of net revenues on the condensed consolidated statements of operations.

 

11


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

The following table displays the activity in the warranty provision account for the three-month periods ended March 31, 2012 and April 2, 2011:

 

     Three months ended  
     March 31,
2012
    April 2,
2011
 
     (In thousands)  

Opening balance

   $ 2,724      $ 3,415   

Expenditures incurred under warranties

     (781     (817

Accruals for product warranties issued during the reporting period

     428        380   

Adjustments to previously existing warranty accruals

     123        114   
  

 

 

   

 

 

 

Closing balance

   $ 2,494      $ 3,092   
  

 

 

   

 

 

 

The following table displays the balance sheet classification of the warranty provision account at March 31, 2012 and at December 31, 2011:

 

     March 31,      December 31,  
     2012      2011  
     (In thousands)  

Other accrued liabilities

   $ 2,423       $ 2,586   

Other long-term liabilities

     71         138   
  

 

 

    

 

 

 

Total warranty provision

   $ 2,494       $ 2,724   
  

 

 

    

 

 

 

8. Guarantees

Officer and Director Indemnifications

As permitted or required under Delaware law and to the maximum extent allowable under that law, Intevac has certain obligations to indemnify its current and former officers and directors for certain events or occurrences while the officer or director is, or was serving, at Intevac’s request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The maximum potential amount of future payments Intevac could be required to make under these indemnification obligations is unlimited; however, Intevac has a director and officer insurance policy that mitigates Intevac’s exposure and enables Intevac to recover a portion of any future amounts paid. As a result of Intevac’s insurance policy coverage, Intevac believes the estimated fair value of these indemnification obligations is not material.

Other Indemnifications

As is customary in Intevac’s industry, many of Intevac’s contracts provide remedies to certain third parties such as defense, settlement, or payment of judgments for intellectual property claims related to the use of its products. Such indemnification obligations may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial.

 

12


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

9. Cash, Cash Equivalents and Investments

Cash and cash equivalents, short-term investments and long-term investments consist of:

 

     March 31, 2012  
     Amortized
Cost
     Unrealized
Holding
Gains
     Unrealized
Holding
Losses
     Fair Value  
     (In thousands)  

Cash and cash equivalents:

           

Cash

   $ 11,888       $       $       $ 11,888   

Money market funds

     3,755                         3,755   

Certificates of deposit

     1,200                         1,200   

Commercial paper

     1,200                         1,200   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cash and cash equivalents

   $ 18,043                       $ 18,043   

Short-term investments:

           

Certificates of deposit

   $ 1,200       $       $       $ 1,200   

Corporate bonds and medium-term notes

     30,332         59         7         30,384   

FDIC insured corporate bonds

     8,053         14                 8,067   

Municipal bonds

     4,871         7                 4,878   

U.S. treasury and agency securities

     13,991         51                 14,042   

Variable rate demand notes (“VRDNs”)

     2,320                         2,320   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total short-term investments

   $ 60,767       $ 131       $ 7       $ 60,891   

Long-term investments:

           

Corporate bonds and medium-term notes

   $ 10,319       $ 11       $ 15       $ 10,315   

U.S. treasury and agency securities

     17,978         12         3         17,987   

Auction rate securities (“ARS”)

     4,900                 410         4,490   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total long-term investments

   $ 33,197       $ 23       $ 428       $ 32,792   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cash, cash equivalents, and investments

   $ 112,007       $ 154       $ 435       $ 111,726   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

13


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

     December 31, 2011  
     Amortized
Cost
     Unrealized
Holding
Gains
     Unrealized
Holding
Losses
     Fair Value  
     (In thousands)  

Cash and cash equivalents:

           

Cash

   $ 14,268       $       $       $ 14,268   

Money market funds

     4,845                         4,845   

Commercial paper

     4,447                         4,447   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cash and cash equivalents

   $ 23,560       $       $       $ 23,560   

Short-term investments:

           

Commercial paper

   $ 1,050       $       $       $ 1,050   

Corporate bonds and medium-term notes

     26,665         28         78         26,615   

FDIC insured corporate bonds

     9,596         23                 9,619   

Municipal bonds

     4,898         10                 4,908   

U.S. treasury and agency securities

     13,987         56                 14,043   

VRDNs

     2,350                         2,350   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total short-term investments

   $ 58,546       $ 117       $ 78       $ 58,585   

Long-term investments:

           

Corporate bonds and medium-term notes

   $ 14,761       $ 16       $ 77       $ 14,700   

U.S. treasury and agency securities

     13,466         22         1         13,487   

ARS

     4,900                 410         4,490   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total long-term investments

   $ 33,127       $ 38       $ 488       $ 32,677   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cash, cash equivalents, and investments

   $ 115,233       $ 155       $ 566       $ 114,822   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

14


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

The contractual maturities of available-for-sale securities at March 31, 2012 are presented in the following table.

 

     Amortized
Cost
     Fair Value  
     (In thousands)  

Due in one year or less

   $ 62,538       $ 62,662   

Due after one through two years (1)

     28,872         28,877   

Due after ten years (2)

     8,709         8,299   
  

 

 

    

 

 

 
   $ 100,119       $ 99,838   
  

 

 

    

 

 

 

 

 

(1) Includes $575,000 in par value of VRDNs.

 

(2) Includes $1.7 million in par value of VRDNs and $4.9 million in par value of ARS.

The following table provides the fair market value of Intevac’s investments with unrealized losses that are not deemed to be other-than temporarily impaired as of March 31, 2012.

 

     March 31, 2012  
     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)  

Corporate bonds and medium-term notes

   $ 14,973       $ 22       $       $   

U.S. treasury and agency securities

     10,202         3                   

ARS

                     4,490         410   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 25,175       $ 25       $ 4,490       $ 410   
  

 

 

    

 

 

    

 

 

    

 

 

 

All prices for the fixed maturity securities including U.S. Treasury and agency securities, certificates of deposit, commercial paper, FDIC insured corporate bonds, corporate bonds, VRDNs and municipal bonds are received from independent pricing services utilized by Intevac’s outside investment manager. This investment manager performs a review of the pricing methodologies and inputs utilized by the independent pricing services for each asset type priced by the vendor. In addition, on at least an annual basis, the investment manager conducts due diligence visits and interviews with each pricing vendor to verify the inputs utilized for each asset class. The due diligence visits include a review of the procedures performed by each vendor to ensure that pricing evaluations are representative of the price that would be received to sell a security in an orderly transaction. Any pricing where the input is based solely on a broker price is deemed to be a Level 3 price. Intevac uses the pricing data obtained from its outside investment manager as the primary input to make its assessments and determinations as to the ultimate valuation of the above-mentioned securities and has not made, during the periods presented, any material adjustments to such inputs.

VRDNs are long-term floating rate municipal bonds with embedded put options that allow the bondholder to sell the security at par plus accrued interest. Intevac’s VRDN portfolio is comprised of investments in many municipalities, which are secured by irrevocable letters of credit from major financial institutions or other highly rated companies that serve as the pledged liquidity source. Intevac can tender these VRDN securities for sale upon notice to the broker and receive payment for the tendered securities within seven days.

 

15


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

As of March 31, 2012, all of the Company’s Level 3 financial instruments consisted of ARS with an aggregate par value of $4.9 million that failed at auction. There was insufficient observable market information to determine fair value for these financial instruments. The Company estimated the fair values for these securities by incorporating assumptions that it believes market participants would use in their estimates of fair value. Some of these assumptions included credit quality, collateralization, final stated maturity, estimates of the probability of being called or becoming liquid prior to final maturity, redemptions of similar ARS, previous market activity for the same investment security, impact due to extended periods of maximum auction rates and valuation models. As a result of this review, the Company determined its ARS to have a temporary impairment of $410,000 as of March 31, 2012. The estimated fair value could change significantly based on future market conditions. The Company will continue to assess the fair value of its ARS for substantive changes in relevant market conditions, changes in its financial condition or other changes that may alter its estimates described above. Failed ARS represent approximately 4.0% of the Company’s total cash, cash equivalents and investments as of March 31, 2012.

The following table represents the quantitative range of the significant unobservable inputs used in the calculation of fair value of the ARS as of March 31, 2012. Significant increases or decreases in any of these inputs in isolation would result in a significantly lower (higher) fair value measurement.

 

     Quantitative Information about Level 3 Fair Value Measurements at March 31, 2012
     Fair Value     

Valuation Technique

  

Unobservable Input

  

Range (Weighted Average)

     (In thousands, except for percentages)

ARS

   $  4,490       Discounted cash flow    Probability of default    1.21% - 15.01% (6.18%)
         Probability of earning maximum rate to maturity    0% - 0.16% (0.05%)
         Probability of principal returned prior to maturity    84.83% - 98.79% (93.77%)
         Liquidity risk premium    3.50% - 5.00% (4.19%)
         Recovery rate in default    40.00% - 90.00% (68.37%)

The following table represents the fair value hierarchy of Intevac’s available-for-sale securities measured at fair value on a recurring basis as of March 31, 2012.

 

     Fair Value Measurements at March 31, 2012  
     Total      Level 1      Level 2      Level 3  
     (In thousands)  

Recurring fair value measurements:

           

Available-for-sale securities

           

Money market funds

   $ 3,755       $ 3,755       $       $   

U.S. treasury and agency securities

     32,029         10,717         21,312           

Certificates of deposit

     2,400                 2,400           

Commercial paper

     1,200                 1,200           

Corporate bonds and medium-term notes

     40,699                 40,699           

FDIC insured corporate bonds

     8,067                 8,067           

Municipal bonds

     4,878                 4,878           

VRDNs

     2,320                 2,320           

ARS

     4,490                         4,490   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total recurring fair value measurements

   $ 99,838       $ 14,472       $ 80,876       $ 4,490   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

16


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

The following table presents the changes in Level 3 instruments measured on a recurring basis for the three months ended March 31, 2012 and April 2, 2011. These balances consist of ARS classified as available-for-sale with changes in fair value recorded in stockholders’ equity.

 

     Three months ended  
     March 31,
2012
     April 2,
2011
 
     (In thousands)  

Opening balance

   $ 4,490       $ 10,273   

Total gains for the period included in other comprehensive income

             8   
  

 

 

    

 

 

 

Closing balance

   $ 4,490       $ 10,281   
  

 

 

    

 

 

 

10. Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income at March 31, 2012 and December 31, 2011 were as follows:

 

     March 31,
2012
    December 31,
2011
 
     (In thousands)  

Accumulated net unrealized holding loss on available-for-sale investments, net of tax

   $ (182   $ (267

Foreign currency translation gains

     693        681   
  

 

 

   

 

 

 

Total accumulated other comprehensive income

   $ 511      $ 414   
  

 

 

   

 

 

 

11. Net Loss Per Share

The following table sets forth the computation of basic and diluted loss per share:

 

     Three months ended  
     March 31,
2012
    April 2,
2011
 
     (In thousands)  

Net loss

   $ (3,161   $ (7,031
  

 

 

   

 

 

 

Weighted-average shares — basic

     23,218        22,727   

Effect of dilutive potential common shares

              
  

 

 

   

 

 

 

Weighted-average shares — diluted

     23,218        22,727   
  

 

 

   

 

 

 

Net loss per share — basic

   $ (0.14   $ (0.31
  

 

 

   

 

 

 

Net loss per share — diluted

   $ (0.14   $ (0.31
  

 

 

   

 

 

 

Antidilutive shares based on employee awards excluded

     2,951        1,793   
  

 

 

   

 

 

 

Potentially dilutive common shares consist of shares issuable upon exercise of employee stock options and vesting of RSUs and are excluded from the calculation of diluted EPS when their effect would be anti-dilutive.

 

17


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

12. Segment Reporting

Intevac’s two reportable segments are: Equipment and Intevac Photonics. Intevac’s chief operating decision-maker has been identified as the President and CEO, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Segment information is presented based upon Intevac’s management organization structure as of March 31, 2012 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to the reportable segments disclosed.

Each reportable segment is separately managed and has separate financial results that are reviewed by Intevac’s chief operating decision-maker. Each reportable segment contains closely related products that are unique to the particular segment. Segment operating profit is determined based upon internal performance measures used by the chief operating decision-maker.

Intevac derives the segment results from its internal management reporting system. The accounting policies Intevac uses to derive reportable segment results are substantially the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics, including orders, net revenues and operating income. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. Intevac manages certain operating expenses separately at the corporate level. Intevac allocates certain of these corporate expenses to the segments in an amount equal to 3% of net revenues. Segment operating income excludes interest income/expense and other financial charges and income taxes according to how a particular reportable segment’s management is measured. Management does not consider impairment charges, gains and losses on divestitures and sales of intellectual property, and unallocated costs in measuring the performance of the reportable segments.

The Equipment segment designs, develops and manufactures equipment and solutions to the hard disk drive industry and offers high-productivity technology solutions to the photovoltaic (“PV”) industry. Historically, the majority of Intevac’s revenue has been derived from the Equipment segment and Intevac expects that the majority of its revenues for the next several years will continue to be derived from the Equipment segment.

The Intevac Photonics segment develops and manufactures leading-edge, high-sensitivity imaging products and vision systems as well as materials identification instruments utilizing Raman technology. Intevac provides sensors, cameras and systems for government applications such as night vision and long-range target identification and for commercial applications in the inspection, scientific and medical industries.

Information for each reportable segment for the three months ended March 31, 2012 and April 2, 2011 is as follows:

Net Revenues

 

     Three months ended  
     March 31,
2012
     April 2,
2011
 
     (In thousands)  

Equipment

   $ 10,719       $ 10,180   

Intevac Photonics

     6,596         7,243   
  

 

 

    

 

 

 

Total segment net revenues

   $ 17,315       $ 17,423   
  

 

 

    

 

 

 

 

18


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

Operating Loss

 

     Three months ended  
     March 31,
2012
    April 2,
2011
 
     (In thousands)  

Equipment

   $ (6,325   $ (6,270

Intevac Photonics

     (1,039     (1,583
  

 

 

   

 

 

 

Loss from segment operations

     (7,364     (7,853

Unallocated costs

     (1,798     (1,664

Gain on sale of mainframe technology

     2,207          
  

 

 

   

 

 

 

Loss from operations

     (6,955     (9,517

Interest income, net

     211        246   

Other income and expense, net

     161        (117
  

 

 

   

 

 

 

Loss before income taxes

   $ (6,583   $ (9,388
  

 

 

   

 

 

 

Total assets for each reportable segment as of March 31, 2012 and December 31, 2011 are as follows:

Assets

 

     March 31,
2012
     December 31,
2011
 
     (In thousands)  

Equipment

   $ 51,036       $ 48,133   

Intevac Photonics

     29,387         29,947   
  

 

 

    

 

 

 

Total segment assets

     80,423         78,080   
  

 

 

    

 

 

 

Cash, cash equivalents and investments

     111,726         114,822   

Deferred income taxes

     27,590         23,919   

Other current assets

     6,766         6,848   

Common property, plant and equipment

     1,255         1,366   

Other assets

     841         786   
  

 

 

    

 

 

 

Consolidated total assets

   $ 228,601       $ 225,821   
  

 

 

    

 

 

 

13. Income Taxes

Intevac recorded income tax benefits of $3.4 million and $2.4 million for the three months ended March 31, 2012 and April 2, 2011, respectively. The income tax provision for the three month periods are based upon estimates of annual income (loss), annual permanent differences and statutory tax rates in the various jurisdictions in which Intevac operates, except that certain discrete items are treated separately. The income tax benefit for the three months ended March 31, 2012 was reduced by a net $252,000 discrete income tax charge related to the gain on the sale of the mainframe technology, which was partially offset by the release of a valuation allowance related to certain deferred tax assets and tax refunds received from Singapore and California. The effective tax rates for the three months ended March 31, 2012 and April 2, 2011 differ from the U.S. federal statutory tax rate of 35% primarily due to foreign income taxed in lower rate jurisdictions. Intevac’s future effective income tax rate depends on various factors including, the level of Intevac’s projected earnings, the geographic composition of worldwide earnings, tax regulations governing each region, net operating loss carryforwards, availability of tax credits and the effectiveness of Intevac’s tax planning strategies. Management carefully monitors these factors and timely adjusts the effective income tax rate accordingly.

 

19


Table of Contents

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

 

Intevac enjoys a tax holiday in Singapore through the tax years ending in 2015. The tax holiday provides a lower income tax rate on certain classes of income and the agreement requires that certain thresholds of business investment and employment levels be met in Singapore in order to maintain this holiday.

Intevac is subject to income taxes in the U.S. federal jurisdiction, and various state and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, Intevac is not subject to U.S. federal, state and local, or international jurisdictions income tax examinations by tax authorities for the years before 2006. Tax years 1999 through 2006 are subject to income tax examinations by U.S. federal and California tax authorities to the extent of tax credit carry forwards remaining or utilized in an otherwise open year. During fiscal 2011, the California income tax examination for fiscal years ended 2005, 2006 and 2007 was completed. Due to an income tax refund generated by a carry-back claim, the Internal Revenue Service is currently conducting a review of the Company’s fiscal year 2009 tax return. Additionally, the Singapore Inland Revenue Authority is conducting an examination of the fiscal 2009 tax return of the Company’s wholly-owned subsidiary, Intevac Asia Pte. Ltd. Presently, there are no other active income tax examinations in the jurisdictions where Intevac operates.

14. Contingencies

From time to time, Intevac may have certain contingent liabilities that arise in the ordinary course of its business activities. Intevac accounts for contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

 

20


Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements, which involve risks and uncertainties. Words such as “believes,” “expects,” “anticipates” and the like indicate forward-looking statements. These forward-looking statements include comments related to Intevac’s shipments, projected revenue recognition, product costs, gross margin, operating expenses, interest income, income taxes, cash balances and financial results in 2012 and beyond; projected customer requirements for Intevac’s new and existing products, and when, and if, Intevac’s customers will place orders for these products; Intevac’s ability to proliferate its Photonics technology into major military programs and to develop and introduce commercial imaging products; the timing of delivery and/or acceptance of the systems and products that comprise Intevac’s backlog for revenue; legal proceedings; and internal controls. Intevac’s actual results may differ materially from the results discussed in the forward-looking statements for a variety of reasons, including those set forth under “Risk Factors” and in other documents we file from time to time with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed on February 21, 2012, and our periodic Form 10-Q’s and Form 8-K’s.

Overview

Intevac provides process manufacturing equipment solutions to the hard disk drive industry and high-productivity process manufacturing equipment and inspection solutions to the PV industry. Intevac also provides sensors, cameras and systems for government applications such as night vision and long-range target identification and for commercial applications in the inspection, medical, scientific and security industries. Intevac’s customers include manufacturers of hard disk drives and PV cells; the U.S. government and its agencies and contractors; and medical, scientific and security companies. Intevac reports two segments: Equipment and Intevac Photonics. During the first quarter of 2012, Intevac sold certain assets comprising its semiconductor mainframe technology to Brooks.

Product development and manufacturing activities occur in North America and Asia. Intevac has field offices in Asia to support its equipment customers. Intevac’s equipment and service products are highly technical and, with the exception of Japan, are sold primarily through a direct sales force. In Japan, sales are typically made by Intevac’s Japanese distributor, Matsubo.

Intevac’s results are driven by worldwide demand for hard disk drives, which in turn depends on end-user demand for personal computers, enterprise data storage, including on-line, cloud storage and near-line applications, personal audio and video players and video game platforms that include such drives. Demand for Intevac’s equipment is impacted by Intevac’s customers’ relative market share positions and production capacity needs. Intevac continues to execute its equipment diversification strategy into new markets by introducing products for PV solar cell manufacturing. Intevac believes that expansion into this market, which is significantly larger than the hard disk drive deposition equipment market, will result in incremental equipment revenues for Intevac and decrease Intevac’s dependence on the hard disk drive industry. Intevac’s business is subject to cyclical industry conditions, as demand for manufacturing equipment and services can change depending on supply and demand for hard disk drives and PV cells, as well as other factors such as global economic conditions and technological advances in fabrication processes.

 

21


Table of Contents

The following table presents certain significant measurements for the three months ended March 31, 2012 and April 2, 2011:

 

     Three months ended  
     March 31,
2012
    April 2,
2011
    Change over
prior period
 
     (In thousands, except percentages and
per share amounts)
 

Net revenues

   $ 17,315      $ 17,423      $ (108

Gross profit

   $ 6,824      $ 6,380      $ 444   

Gross margin percent

     39.4     36.6     2.8 points   

Net loss

   $ (3,161   $ (7,031   $ 3,870   

Loss per diluted share

   $ (0.14   $ (0.31   $ 0.17   

Net revenues decreased during the first quarter of fiscal 2012 compared to the same period in the prior year primarily due to lower Intevac Photonics’ product sales offset in part by higher equipment sales to disk manufacturers and higher Intevac Photonics’ technology development contracts. Intevac’s Equipment customers did not take delivery of any 200 Lean systems in the first quarter of either fiscal 2012 or fiscal 2011. The net loss for the first quarter of fiscal 2012 decreased compared to the same period in the prior year due to the gain recognized on a sale of semiconductor mainframe technology to Brooks and recognition of a larger income tax benefit, offset in part by lower net sales and increased operating expenses.

In fiscal 2012, Intevac expects to see a recovery in the hard drive business in the second half of the year as the acquisitions in the hard drive industry are completed and as the industry recovers from the effects of the Thailand flooding in the fourth quarter of fiscal 2011. Intevac continues to believe that long-term demand for hard disk drives will increase, driven by growth in demand for digital storage, the need for corporations to replace and update employee computers, increased information technology spending, declining growth rate in areal density improvements and the proliferation of personal computers into emerging economies. The number of disk manufacturing systems needed to support this growth is expected to vary from year to year depending on the factors noted above. In fiscal 2012, Intevac expects to complete additional customer qualifications on its PV manufacturing products and start to obtain repeat orders from customers.

In fiscal 2012, Intevac expects that Intevac Photonics business levels will grow driven primarily by the recovery of the contract research and development (“R&D”) business, as several key U.S. defense programs received budgetary funding in the fourth quarter of 2011 and the U.S. military continues to develop night vision solutions based on Intevac’s digital low-light sensor technology.

Intevac’s trademarks, include the following: “200 Lean®,” “AccuLuber™,” “DeltaNu®,” “EBAPS®,” “ENERGi™,” “ExaminerR™,” “I-Port™,” “LEAN SOLAR™,” “LithoPrime™,” “LIVAR®,” “MicroVista®,” “NanoVista™”, “LEAN SOLAR NanoTexture™,” “NightVista®,” “Night Port™,” “PHARMA-ID™,” and “RAPID-ID™”.

Results of Operations

Net revenues

 

     Three months ended  
     March 31,
2012
     April 2,
2011
     Change over
prior period
 
     (In thousands)  

Equipment

   $ 10,719       $ 10,180       $ 539   

Intevac Photonics

     6,596         7,243         (647
  

 

 

    

 

 

    

 

 

 

Total net revenues

   $ 17,315       $ 17,423       $ (108
  

 

 

    

 

 

    

 

 

 

 

22


Table of Contents

Equipment revenue for the three months ended March 31, 2012 included revenue recognized for four AccuLuberTM systems, disk equipment technology upgrades and spare parts. Equipment revenue for the three months ended April 2, 2011 included revenue recognized for three AccuLuber systems, disk equipment technology upgrades and spare parts. Equipment revenue for both the three months ended March 31, 2012 and April 2, 2011 did not include any sales of 200 Lean systems. Equipment revenues in 2012 are expected to be higher than 2011 levels due to increased capital spending by hard drive customers for capacity additions and increased revenue from Intevac’s new PV equipment products. Intevac believes that once the supply chain constraints which resulted from the Thailand floods are lifted and the consolidations in the hard drive industry are complete, Intevac’s customers will need new equipment to ramp media capacity, which will result in increased demand for Intevac’s equipment. However, because the situation in Thailand is still evolving, uncertainty remains regarding the ultimate impact of this event on the Company. Demand for hard disk drives in the long term is expected to increase driven by the need for corporations to replace and update employee computers, increased information technology spending, growth in digital storage and the proliferation of personal computers into emerging economies.

Intevac Photonics revenue for the three months ended March 31, 2012 consisted of $4.0 million of product sales and $2.5 million of contract R&D revenue. Intevac Photonics revenue for the three months ended April 2, 2011 consisted of $5.3 million of product sales and $1.9 million of contract R&D revenue. The decrease in product revenue resulted from lower sales of low-light sensors and cameras used in military night vision and long-range imaging as well as commercial applications such as Intevac’s near-eye display and Raman spectroscopy products. The increase in contract R&D revenue was the result of a higher volume of contracts due to the resumption of U.S. government defense spending and due to the continued expansion of Intevac’s low-light camera and sensor products in military and commercial applications. Substantial growth in future Intevac Photonics revenues is dependent on the proliferation of Intevac’s technology into major military programs, continued defense spending, the ability to obtain export licenses for foreign customers, obtaining production subcontracts for these programs, and Intevac’s development and market acceptance of commercial products.

Intevac’s backlog of orders at March 31, 2012 was $41.3 million, as compared to $32.9 million at December 31, 2011 and $41.7 million at April 2, 2011. The $41.3 million of backlog at March 31, 2012 consisted of $25.0 million of Equipment backlog and $16.2 million of Intevac Photonics backlog. The $32.9 million of backlog at December 31, 2011 consisted of $17.9 million of Equipment backlog and $15.0 million of Intevac Photonics backlog. Backlog at March 31, 2012 included two 200 Lean systems and one LEAN SOLAR system, compared to one LEAN SOLAR system at December 31, 2011 and two 200 Lean systems at April 2, 2011.

International sales increased by 11.6% to $11.5 million for the three months ended March 31, 2012 from $10.3 million for the three months ended April 2, 2011. International sales include products shipped to overseas operations of U.S. companies. The increase in international sales was primarily due to an increase in net revenues from disk sputtering systems and upgrades. Substantially all of Intevac’s international sales are to customers in Asia. International sales constituted 66.2% of net revenues for the three months ended March 31, 2012 and 59.0% of net revenues for the three months ended April 2, 2011. The mix of domestic versus international sales will change from period to period depending on the location of Intevac’s largest customers in each period.

Gross profit

 

     Three months ended  
     March 31,
2012
    April 2,
2011
    Change over
prior period
 
     (In thousands, except percentages)  

Equipment gross profit

   $ 4,836      $ 4,608      $ 228   

% of Equipment net revenues

     45.1     45.3  

Intevac Photonics gross profit

   $ 1,988      $ 1,772      $ 216   

% of Intevac Photonics net revenues

     30.1     24.5  

Total gross profit

   $ 6,824      $ 6,380      $ 444   

% of net revenues

     39.4     36.6  

 

23


Table of Contents

Cost of net revenues consists primarily of purchased materials and costs attributable to contract R &D, and also includes fabrication, assembly, test and installation labor and overhead, customer-specific engineering costs, warranty costs, royalties, provisions for inventory reserves and scrap.

Equipment gross margin of 45.1% in the three months ended March 31, 2012 was slightly lower compared to 45.3% in the three months ended April 2, 2011. The lower gross margin was due primarily to lower factory utilization, offset in part by higher revenues and favorable product mix. Gross margins in the Equipment business will vary depending on a number of factors, including revenue levels, product mix, product cost, system configuration and pricing, factory utilization, and provisions for excess and obsolete inventory.

Intevac Photonics gross margin was 30.1% in the three months ended March 31, 2012 compared to 24.5% in the three months ended April 2, 2011. The improvement in gross margin resulted primarily from higher margins on contract R&D and cost reductions associated with Intevac Photonics’ high-volume production contract for its digital night-vision camera with a NATO customer offset in part by lower revenues. Also, during the three months ended April 2, 2011 Intevac Photonics recognized a charge for inventory write-offs that did not reoccur during the three months ended March 31, 2012.

Research and development

 

     Three months ended  
     March 31,
2012
     April 2,
2011
     Change over
prior period
 
     (In thousands)  

Research and development expense

   $ 9,213       $ 9,012       $ 201   

Research and development spending increased in Equipment and decreased in Intevac Photonics during the three months ended March 31, 2012 as compared to the three months ended April 2, 2011. The increase in Equipment spending was due primarily to increased PV development. The decrease in Intevac Photonics research and development was due to cost containment efforts and reflected a higher volume of billable contract research and development efforts. Research and development expenses do not include costs of $1.7 million and $1.4 million for the three-month periods ended March 31, 2012 and April 2, 2011, respectively, which are related to customer-funded contract R&D programs at Intevac Photonics and therefore included in cost of net revenues.

Selling, general and administrative

 

     Three months ended  
     March 31,
2012
     April 2,
2011
     Change over
prior period
 
     (In thousands)  

Selling, general and administrative expense

   $ 6,773       $ 6,885       $ (112

Selling, general and administrative expense consists primarily of selling, marketing, customer support, financial and management costs. The decrease in selling, general and administrative spending in the three months ended March 31, 2012 was primarily the result of lower Equipment marketing spending, offset in part by increased equity compensation expense.

Gain on sale of mainframe technology

On January 6, 2012, the Company sold certain assets including intellectual property and residual assets which comprised its semiconductor mainframe technology for $3.0 million in cash to Brooks and recorded a gain of $2.2 million. See Note 6 “Sale of Mainframe Technology” in the notes to the condensed consolidated financial statements for additional information related to the gain on sale of the mainframe technology.

 

24


Table of Contents

Interest income and other, net

 

     Three months ended  
     March 31,
2012
     April 2,
2011
     Change over
prior period
 
     (In thousands)  

Interest income and other, net

   $ 372       $ 129       $ 243   

Interest income and other, net in the three months ended March 31, 2012 included $211,000 of interest income on investments, forfeiture of a customer deposit of $97,000 and various other income of $94,000 partially offset by $30,000 of foreign currency losses. Interest income and other, net in the three months ended April 2, 2011 included $246,000 of interest income on investments partially offset by $117,000 of foreign currency losses. The decrease in interest income in the three months ended March 31, 2012 resulted from lower interest rates.

Income tax benefit

 

     Three months ended  
     March 31,
2012
     April 2,
2011
     Change over
prior period
 
     (In thousands)  

Income tax benefit

   $ 3,422       $ 2,357       $ 1,065   

Intevac recorded income tax benefits of $3.4 million and $2.4 million for the three months ended March 31, 2012 and April 2, 2011, respectively. The income tax provision for the three month periods are based upon estimates of annual income (loss), annual permanent differences and statutory tax rates in the various jurisdictions in which Intevac operates, except that certain discrete items are treated separately. The income tax benefit for the three months ended March 31, 2012 was reduced by a net $252,000 discrete income tax charge related to the gain on the sale of the mainframe technology, which was partially offset by the release of a valuation allowance related to certain deferred tax assets and tax refunds received from Singapore and California. The effective tax rates for the three months ended March 31, 2012 and April 2, 2011 differ from the U.S. federal statutory tax rate of 35% primarily due to foreign income taxed in lower rate jurisdictions. Intevac’s future effective income tax rate depends on various factors including, the level of Intevac’s projected earnings, the geographic composition of worldwide earnings, tax regulations governing each region, net operating loss carryforwards, availability of tax credits and the effectiveness of Intevac’s tax planning strategies. Management carefully monitors these factors and timely adjusts the effective income tax rate accordingly.

Intevac enjoys a tax holiday in Singapore through the tax years ending in 2015. The tax holiday provides a lower income tax rate on certain classes of income and the agreement requires that certain thresholds of business investment and employment levels be met in Singapore in order to maintain this holiday.

Liquidity and Capital Resources

At March 31, 2012, Intevac had $111.7 million in cash, cash equivalents, and investments compared to $114.8 million at December 31, 2011. During the first three months of 2012, cash, cash-equivalents and investments decreased by $3.1 million due primarily to cash used by operating activities and purchases of fixed assets partially offset by cash received from the sale of the Company’s semiconductor mainframe technology and the sale of Intevac common stock to Intevac’s employees through Intevac’s employee benefit plans.

 

25


Table of Contents

Cash, cash-equivalents and investments consist of the following:

 

     March 31,
2012
     December 31,
2011
 
     (In thousands)  

Cash and cash equivalents

   $ 18,043       $ 23,560   

Short-term investments

     60,891         58,585   

Long-term investments

     32,792         32,677   
  

 

 

    

 

 

 

Total cash, cash equivalents and investments

   $ 111,726       $ 114,822   
  

 

 

    

 

 

 

Operating activities used cash of $5.9 million during the first three months of 2012 and of $7.6 million during the first three months of 2011. The decrease in cash used by operating activities was due primarily to a smaller net loss and changes in working capital during the first three months of 2012.

Accounts receivable totaled $19.6 million at March 31, 2012, compared to $18.6 million at December 31, 2011. The increase of $1.0 million in the receivable balance was due primarily to invoicing of AccuLuber and other shipments and customer deposits. Total net inventories increased to $19.8 million at March 31, 2012, compared to $18.1 million at December 31, 2011 as the Company began building systems for delivery in the second and third quarters of fiscal 2012. Accounts payable increased to $5.0 million at March 31, 2012 compared to $4.9 million at December 31, 2011 in line with business levels. Customer deposits increased to $5.8 million at March 31, 2012 compared to $5.0 million at December 31, 2011 in line with increased backlog.

Investing activities in the first three months of 2012 used cash of $538,000. Purchases of investments net of proceeds from sales of investments totaled $2.7 million. On January 6, 2012, the Company sold certain assets which comprised its semiconductor mainframe technology for $3.0 million in cash to Brooks. Capital expenditures for the three months ended March 31, 2012 were $852,000.

Financing activities in the first three months of 2012 generated cash of $863,000 from the sale of Intevac common stock to Intevac’s employees through Intevac’s employee benefit plans.

Intevac’s investment portfolio consists principally of investment grade money market mutual funds, FDIC insured corporate bonds, U.S. Treasury and agency securities, certificates of deposit, commercial paper, municipal bonds, corporate bonds and VRDNs. Intevac regularly monitors the credit risk in its investment portfolio and takes measures, which may include the sale of certain securities, to manage such risks in accordance with its investment policies.

As of March 31, 2012, Intevac’s available-for-sale securities included $4.9 million par value of ARS, less a temporary valuation adjustment of $410,000 to reflect their current lack of liquidity. Management believes that the impairment of the ARS investments is temporary. Due to current market conditions, these investments have experienced failed auctions beginning in mid-February 2008. These failed auctions result in a lack of liquidity in the securities, but do not affect the underlying collateral of the securities. Intevac does not anticipate that any potential lack of liquidity in these ARS will affect its ability to finance its operations and planned capital expenditures. Intevac continues to monitor efforts by the financial markets to find alternative means for restoring the liquidity of these investments. These investments are classified as non-current assets until Intevac has better visibility as to when their liquidity will be restored. The classification and valuation of these securities will continue to be reviewed quarterly.

As described in note 9 of notes to condensed consolidated financial statements, the fair value of the ARS was estimated at $4.5 million using discounted cash flow models. The estimates of future cash flows are based on certain key assumptions, such as discount rates appropriate for the type of asset and risk, which are significant unobservable inputs. There was insufficient observable market information for the ARS held by Intevac to determine the fair value. Therefore Level 3 fair values were estimated for these securities by incorporating assumptions that market participants would use in their estimates of fair value. Some of these assumptions included

 

26


Table of Contents

credit quality, collateralization, final stated maturity, estimates of the probability of being called or becoming liquid prior to final maturity, redemptions of similar ARS, previous market activity for the same investment security, impact due to extended periods of maximum auction rates and valuation models.

In connection with the acquisition of SIT, Intevac agreed to pay up to an aggregate of $7.0 million in cash to the selling shareholders if certain milestones are achieved over a specified period. The first milestone in the amount of $2.4 million was paid in fiscal 2011 and on April 12, 2012, Intevac made $2.4 million in payments to the selling shareholders of SIT for achievement of the second milestone.

As of March 31, 2012, approximately $3.3 million of cash and cash equivalents and $17.4 million of investments were domiciled in foreign tax jurisdictions. Intevac expects a significant portion of these funds to remain off shore in the short term. If the Company chose to repatriate these funds to the United States, it would be required to accrue and pay additional taxes on any portion of the repatriation where no United States income tax had been previously provided.

Intevac believes that its existing cash, cash equivalents and investments will be sufficient to meet its cash requirements for the foreseeable future. Intevac intends to undertake approximately $6.0 million in capital expenditures during the remainder of 2012.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make judgments, assumptions and estimates that affect the amounts reported. Intevac’s significant accounting policies are described in Note 1 to the consolidated financial statements included in Item 8 of Intevac’s Annual Report on Form 10-K filed on February 21, 2012. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the presentation of Intevac’s financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on Intevac’s financial conditions and results of operations. Specifically, critical accounting estimates have the following attributes: 1) Intevac is required to make assumptions about matters that are highly uncertain at the time of the estimate; and 2) different estimates Intevac could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on Intevac’s financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. Intevac bases its estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as Intevac’s operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they become known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. Many of these uncertainties are discussed in the section below entitled “Risk Factors.” Based on a critical assessment of Intevac’s accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that Intevac’s consolidated financial statements are fairly stated in accordance with US GAAP, and provide a meaningful presentation of Intevac’s financial condition and results of operation.

For further information about Intevac’s other critical accounting policies, see the discussion of critical accounting policies in Intevac’s 2011 Form 10-K. Management believes that there has been no significant change during the three months ended March 31, 2012 to the items identified as critical accounting policies in Intevac’s 2011 Form 10-K.

 

27


Table of Contents
Item 3.     Quantitative and Qualitative Disclosures About Market Risk

Interest rate risk. Intevac’s exposure to market risk for changes in interest rates relates primarily to its investment portfolio. Intevac does not use derivative financial instruments in Intevac’s investment portfolio. The Company has adopted an investment policy and established guidelines relating to credit quality, diversification and maturities of its investments in order to preserve principal and maintain liquidity. All investment securities in Intevac’s portfolio have an investment grade credit rating. Investments typically consist of commercial paper, certificates of deposit, FDIC insured corporate bonds, obligations of the U.S. government and its agencies, corporate debt securities, municipal bonds, VRDNs and ARS.

The table below presents principal amounts and related weighted-average interest rates by year of expected maturity for Intevac’s investment portfolio at March 31, 2012.

 

     2012     2013     2014     2015      2016      Beyond     Total      Fair
Value
 
     (In thousands, except percentages)  

Cash equivalents

                   

Fixed rate amounts

   $ 2,400        —          —          —           —           —        $ 2,400       $ 2,400   

Weighted-average rate

     0.38     —          —          —           —           —          

Variable rate amounts

   $ 3,755        —          —          —           —           —        $ 3,755       $ 3,755   

Weighted-average rate

     0.16     —          —          —           —           —          

Short-term investments

                   

Fixed rate amounts

   $ 42,189      $ 14,710        —          —           —           —        $ 56,899       $ 57,021   

Weighted-average rate

     2.90     2.95     —          —           —           —          

Variable rate amounts

   $ 3,868        —          —          —           —           —        $ 3,868       $ 3,870   

Weighted-average rate

     0.46     —          —          —           —           —          

Long-term investments

                   

Fixed rate amounts

     —        $ 22,944      $ 5,353        —           —         $ 4,900      $ 33,197       $ 32,792   

Weighted-average rate

     —          1.71     1.45     —           —           1.36     

Total investment portfolio

   $ 52,212      $ 37,654      $ 5,353        —           —         $ 4,900      $ 100,119       $ 99,838   

At March 31, 2012, Intevac held investments in ARS. With the liquidity issues experienced in global credit and capital markets, Intevac’s ARS have experienced multiple failed auctions. Intevac continues to earn interest at the maximum contractual rate for each security. The estimated values of the ARS held by Intevac are no longer at par. As of March 31, 2012, Intevac had $4.5 million in ARS in the condensed consolidated balance sheet, which is net of an unrealized loss of $410,000. The unrealized loss is included in other comprehensive income, as the decline in value is deemed to be temporary due primarily to Intevac’s ability and intent to hold these securities long enough to recover their values and that it is more likely than not that Intevac would not be required to sell these ARS before recovery in their par values.

Intevac continues to monitor the market for ARS and consider its impact (if any) on the fair market value of its investments. If the current market conditions continue, or the anticipated recovery in market values does not occur, Intevac may be required to record additional unrealized losses or record an impairment charge in 2012.

Based on Intevac’s ability to access its cash, its expected operating cash flows, and other sources of cash, Intevac does not anticipate that the lack of liquidity of these investments will affect Intevac’s ability to operate its business in the ordinary course.

Foreign exchange risk. From time to time, Intevac enters into foreign currency forward exchange contracts to economically hedge certain of anticipated foreign currency transaction, translation and re-measurement exposures. The objective of these contracts is to minimize the impact of foreign currency exchange rate movements on Intevac’s operating results. As of March 31, 2012, Intevac had no foreign currency forward exchange contracts.

 

28


Table of Contents
Item 4.     Controls and Procedures

Evaluation of disclosure controls and procedures

Intevac maintains a set of disclosure controls and procedures that are designed to ensure that information relating to Intevac, Inc. required to be disclosed in periodic filings under the Securities Exchange Act of 1934, or Exchange Act, is recorded, processed, summarized and reported in a timely manner under the Exchange Act. In connection with the filing of this Form 10-Q for the quarter ended March 31, 2012, as required under Rule 13a-15(b) of the Exchange Act, an evaluation was carried out under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of Intevac’s disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on this evaluation, Intevac’s Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2012.

Attached as exhibits to this Quarterly Report are certifications of the CEO and the CFO, which are required in accordance with Rule 13a-14 of the Exchange Act. This Controls and Procedures section includes the information concerning the controls evaluation referred to in the certifications, and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

Definition of disclosure controls

Disclosure Controls are controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure Controls are also designed to ensure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Our Disclosure Controls include components of our internal control over financial reporting, which consists of control processes designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles in the U.S. To the extent that components of our internal control over financial reporting are included within our Disclosure Controls, they are included in the scope of our quarterly controls evaluation.

Limitations on the effectiveness of controls

Intevac’s management, including the CEO and CFO, does not expect that Intevac’s Disclosure Controls or Intevac’s internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Intevac have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in internal controls over financial reporting

There were no changes in our internal controls over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, Intevac’s internal control over financial reporting.

 

29


Table of Contents

PART II. OTHER INFORMATION

 

Item 1.     Legal Proceedings

From time to time, Intevac is involved in claims and legal proceedings that arise in the ordinary course of business. Intevac expects that the number and significance of these matters will increase as Intevac’s business expands. Any claims or proceedings against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time, result in the diversion of significant operational resources, or require us to enter into royalty or licensing agreements which, if required, may not be available on terms favorable to us or at all. Intevac is not presently a party to any lawsuit or proceeding that, in Intevac’s opinion, is likely to seriously harm Intevac’s business.

 

Item 1A.     Risk Factors

The following factors could materially affect Intevac’s business, financial condition or results of operations and should be carefully considered in evaluating the Company and its business, in addition to other information presented elsewhere in this report.

The industries we serve are cyclical, volatile and unpredictable.

The majority of our revenue is derived from the sale of equipment used to manufacture commodity technology products such as disk drives and PV solar cells. This subjects us to business cycles, the timing, length and volatility of which can be difficult to predict. When demand for commodity technology products exceeds production capacity, then demand for new capital equipment such as ours tends to be amplified. Conversely, when supply of commodity technology products exceeds demand, then demand for new capital equipment such as ours tends to be depressed. For example, sales of systems for magnetic disk production were severely depressed from mid-1998 until mid-2003 and grew rapidly from 2004 through 2006, followed by a downturn in the cycle in late 2007 which continued through 2009. The number of new systems delivered increased in 2010 as customers increased their production capacity in response to increased demand for digital storage, but decreased in 2011, as the hard disk drive industry did not add the same level of capacity that it did in 2010. While we currently believe there will be an increase in demand in 2012 as our customers recover from the effects of the flooding in Thailand, we cannot predict with any certainty when these cycles will begin or end.

Our equipment represents only a portion of the capital expenditure that our customers incur when they upgrade or add production capacity. Accordingly, our customers generally commit to making large capital expenditures far in excess of the cost of our systems alone when they decide to purchase our systems. The magnitude of these capital expenditures requires our customers to have access to large amounts of capital. Our customers generally reduce their level of capital investment during downturns in the overall economy or during a downturn in their industries.

We must effectively manage our resources and production capacity to meet rapidly changing demand. Our business experiences rapid growth and contraction, which stresses our infrastructure, internal systems and managerial resources. During periods of increasing demand for our products, we must have sufficient manufacturing capacity and inventory to meet customer demand; attract, retain and motivate a sufficient number of qualified individuals; and effectively manage our supply chain. During periods of decreasing demand for our products, we must be able to align our cost structure with prevailing market conditions; motivate and retain key employees and effectively manage our supply chain.

Sales of our equipment are primarily dependent on our customers’ upgrade and capacity expansion plans and whether our customers select our equipment.

We have no control over our customers’ upgrade and capacity expansion plans, and we cannot be sure they will select, or continue to select, our equipment when they upgrade or expand their capacity. The sales cycle for

 

30


Table of Contents

our equipment systems can be a year or longer, involving individuals from many different areas of Intevac and numerous product presentations and demonstrations for our prospective customers. Our sales process also commonly includes production of samples, customization of our products, and installation of evaluation systems in the factories of our prospective customers. We do not enter into long-term contracts with our customers, and until an order is actually submitted by a customer there is no binding commitment to purchase our systems.

Intevac Photonics’ business is also subject to long sales cycles because many of its products, such as our military imaging products, often must be designed into the customers’ end products, which are often complex state-of-the-art products. These development cycles are typically multi-year, and our sales are contingent on our customers successfully integrating our product into their product, completing development of their product and then obtaining production orders for their product from the U.S. government or its allies.

Sales of new manufacturing systems are also dependent on obsolescence and replacement of the installed base of our customers’ existing equipment with newer, more capable equipment. If upgrades are developed that extend the useful life of the installed base of systems, then we tend to sell more upgrade products and fewer new systems, which can significantly reduce total revenue. For example, some of our 200 Lean customers continue to use legacy systems for the production of perpendicular media, which delayed the replacement of such systems with new 200 Lean systems.

Our 200 Lean customers also experience competition from companies that produce alternative storage technologies like flash memory, which offer smaller size, lower power consumption and more rugged designs. These storage technologies are being used increasingly in personal computers and other electronics devices instead of disk drives, and new classes of such products, including Internet appliances, tablet computing devices, netbooks or mobile phones with advanced capabilities, or “smartphones,” have never contained, nor are they likely in the future to contain, a disk drive. Products using alternative technologies, such as flash memory, optical storage and other storage technologies, are becoming increasingly common and could become a significant source of competition to particular applications of the products of our 200 Lean customers, which could adversely affect our results of operations. If alternative technologies, such as flash memory, replace hard disk drives as a significant method of digital storage, then demand for our hard disk manufacturing products would decrease.

We operate in an intensely competitive marketplace, and our competitors have greater resources than we do.

In the market for our disk sputtering systems, we experience competition from Canon Anelva, which has sold a substantial number of systems worldwide. Intevac is attempting to enter the PV equipment market, and faces competition from large established competitors including Applied Materials, Veeco Instruments, Centrotherm Photovoltaics, Roth & Rau AG, Von Ardenne and cell module manufacturers that are internally developing manufacturing equipment that may be sold externally in the future. In the market for our military imaging products we experience competition from companies such as ITT Industries and BAE Systems. In the markets for our commercial imaging products we compete with companies such as Andor, Dalsa, E2V, Hamamatsu and Roper Industries for sensor and camera products, and with companies such as Ahura, B&W Tek, GE Security, Horiba–Jobin Yvon, Ocean Optics, Renishaw, Thermo Scientific and Smiths Detection for Raman spectrometer products. Some of our competitors have substantially greater financial, technical, marketing, manufacturing and other resources than we do, especially in the PV equipment market. Our competitors may develop enhancements to, or future generations of, competitive products that offer superior price or performance features, and new competitors may enter our markets and develop such enhanced products. Moreover, competition for our customers is intense, and our competitors have historically offered substantial pricing concessions and incentives to attract our customers or retain their existing customers.

We are exposed to risks associated with a highly concentrated customer base and industry consolidation.

Historically, a significant portion of our revenue in any particular period has been attributable to sales of our disk sputtering systems to a limited number of customers. This concentration of customers, when combined with changes in the customers’ specific capacity plans and market share shifts, can lead to extreme variability in our revenue and financial results from period to period.

 

31


Table of Contents

Industry consolidation can limit the number of potential customers for our products. Seagate acquired Maxtor in 2006 and Samsung’s hard disk drive business in 2011. Western Digital acquired Komag in 2007, Hoya’s magnetic media operations in 2010 and Hitachi Global Storage Technology in 2012. The concentration of our customer base may enable our customers to demand pricing and other terms unfavorable to Intevac, and makes us more vulnerable to changes in demand by a given customer. Orders from a relatively limited number of manufacturers have accounted for, and will likely continue to account for, a substantial portion of our revenues. The loss of one of these large customers, or delays in purchasing by them, could have a material and adverse effect on our revenues.

Our growth depends on development of technically advanced new products and processes.

We have invested heavily, and continue to invest, in the development of new products, such as our 200 Lean Gen II system, our LEAN SOLAR systems for PV applications, our digital night-vision products, our Raman system products and our near-eye display products. Our success in developing and selling new products depends upon a variety of factors, including our ability to: predict future customer requirements, make technological advances, achieve a low total cost of ownership for our products, introduce new products on schedule, manufacture products cost-effectively including transitioning production to volume manufacturing; commercialize and attain customer acceptance of our products; and achieve acceptable and reliable performance of our new products in the field. Our new product decisions and development commitments must anticipate continuously evolving industry requirements significantly in advance of sales. In addition, we are attempting to expand into new or related markets, including the PV market. Our expansion into the PV market is dependent upon the success of our customers’ development plans, some of which are start-ups and in their preliminary stages of development, as well as their ability to raise capital to fund their future development and capacity expansion. To date we have not recognized material revenue from such products. Failure to correctly assess the size of the markets, to successfully develop cost effective products to address the markets or to establish effective sales and support of the new products would have a material adverse effect on future revenues and profits.

Rapid technological change in our served markets requires us to rapidly develop new technically advanced products. Our future success depends in part on our ability to develop and offer new products with improved capabilities and to continue to enhance our existing products. If new products have reliability or quality problems, our performance may be impacted by reduced orders, higher manufacturing costs, delays in acceptance and payment for new products and additional service and warranty expenses.

Our operating results fluctuate significantly from quarter to quarter, which can lead to volatility in the price of our common stock.

Our quarterly revenues and common stock price have fluctuated significantly. We anticipate that our revenues, operating margins and common stock price will continue to fluctuate for a variety of reasons, including: (1) changes in the demand, due to seasonality, cyclicality and other factors in the markets for computer systems, storage subsystems and consumer electronics containing disks our customers produce with our systems; (2) delays or problems in the introduction and acceptance of our new products, or delivery of existing products; (3) timing of orders, acceptance of new systems by our customers or cancellation of those orders; (4) new products, services or technological innovations by our competitors or us; (5) changes in our manufacturing costs and operating expense; (6) changes in general economic, political, stock market and industry conditions; and (7) any failure of our operating results to meet the expectations of investment research analysts or investors.

Any of these, or other factors, could lead to volatility and/or a rapid change in the trading price of our common shares. In the past, securities class action litigation has been instituted against companies following periods of volatility in the market price of their securities. Any such litigation, if instituted against Intevac, could result in substantial costs and diversion of management time and attention.

 

32


Table of Contents

Adverse economic conditions and volatility and disruption of the capital and credit markets may negatively impact our revenues and our ability to access financing.

Economic conditions worldwide have contributed to decreased spending by our customers and a slowdown in the hard disk drive industry. These factors have adversely impacted our operating results in prior periods and have caused us to be cautious about our future outlook. Our customers also continue to remain cautious about the economy. Negative macroeconomic and global recessionary factors, further volatility or disruption in the capital and credit markets or further uncertainty or weakening in key markets could negatively impact spending for our products and may materially adversely affect our business, operating results and financial condition.

In addition, while we intend to finance operations with existing cash and cash flow from operations, if necessary, we may require financing to support our continued operations. Due to the existing uncertainty in the capital and credit markets, our access to capital may not be available on terms acceptable to us or at all.

We may not be able to obtain export licenses from the U.S. government permitting delivery of our products to international customers.

Many of our products, especially Intevac Photonics’ products, require export licenses from U.S. government agencies under the Export Administration Act, the Trading with the Enemy Act of 1917, the Arms Export Act of 1976 or the International Traffic in Arms Regulations. These regulations limit the potential market for some of our products. We can give no assurance that we will be successful in obtaining all the licenses necessary to export our products. Heightened government scrutiny of export licenses for defense related products has resulted in lengthened review periods for our license applications. Exports to countries that are not considered by the U.S. government to be allies are likely to be prohibited, and even sales to U.S. allies may be limited. Failure to comply with export control laws, including identification and reporting of all exports and re-exports of controlled technology or exports made without correct license approval or improper license use could result in severe penalties and revocation of licenses. Failure to obtain export licenses, delays in obtaining licenses, or revocation of previously issued licenses would prevent us from selling the affected products outside the United States and could negatively impact our results of operations.

The Intevac Photonics business is dependent on U.S. government contracts, which are subject to fixed pricing, immediate termination and a number of procurement rules and regulations.

We sell our Photonics products and services directly to the U.S. government, as well as to prime contractors for various U.S. government programs. The U.S government is considering significant changes in the level of existing, follow-on or replacement programs. We cannot predict the impact of potential changes in priorities due to military transformations and/or the nature of future war-related activities. A shift of government priorities to programs in which we do not participate and/or reductions in funding for or the termination of programs in which we do participate, unless offset by other programs and opportunities, could have a material adverse effect on our financial position, results of operations, or cash flows.

Funding of multi-year government programs is subject to congressional appropriations, and there is no guarantee that the U.S. government will make further appropriations, particularly given the U.S. government’s recent focus on spending in other areas. Sales to the U.S. government and its prime contractors may also be affected by changes in procurement policies, budget considerations and political developments in the United States or abroad. For example, if the U.S. government is less focused on defense spending or there is a decrease in hostilities, demand for our products could decrease. The loss of funding for a government program would result in a loss of future revenues attributable to that program. The influence of any of these factors, which are beyond our control, could negatively impact our results of operations.

A significant portion of our U.S. government revenue is derived from fixed-price development and production contracts. Under fixed-price contracts, unexpected increases in the cost to develop or manufacture a product, whether due to inaccurate estimates in the bidding process, unanticipated increases in material costs, reduced production volumes, inefficiencies or other factors, are borne by us. We have experienced cost overruns in the past that have resulted in losses on certain contracts, and may experience additional cost overruns in the future. We are required to recognize the total estimated impact of cost overruns in the period in which they are first identified. Such cost overruns could have a material adverse effect on our results of operations.

 

33


Table of Contents

Generally, government contracts contain provisions permitting termination, in whole or in part, without prior notice at the government’s convenience upon the payment of compensation only for work done and commitments made at the time of termination. We cannot ensure that one or more of the government contracts under which we, or our customers, operate will not be terminated under these circumstances. Also, we cannot ensure that we, or our customers, would be able to procure new government contracts to offset the revenues lost as a result of any termination of existing contracts, nor can we ensure that we, or our customers, will continue to remain in good standing as federal contractors.

As a U.S. government contractor we must comply with specific government rules and regulations and are subject to routine audits and investigations by U.S. government agencies. If we fail to comply with these rules and regulations, the results could include: (1) reductions in the value of our contracts; (2) reductions in amounts previously billed and recognized as revenue; (3) contract modifications or termination; (4) the assessment of penalties and fines; and (5) suspension or debarment from government contracting or subcontracting for a period of time or permanently.

Changes to our effective tax rate affect our results of operations.

As a global company, we are subject to taxation in the United States and various other countries. Significant judgment is required to determine and estimate worldwide tax liabilities. Our future effective tax rate could be affected by: (1) changes in tax laws; (2) the allocation of earnings to countries with differing tax rates; (3) changes in worldwide projected annual earnings in current and future years: (4) accounting pronouncements; or (5) changes in the valuation of our deferred tax assets and liabilities. Although we believe our tax estimates are reasonable, there can be no assurance that any final determination will not be different from the treatment reflected in our historical income tax provisions and accruals, which could result in additional payments by Intevac.

Intevac enjoys a tax holiday in Singapore through the tax years ending in 2015. The tax holiday provides a lower income tax rate on certain classes of income so long as certain thresholds of business investment and employment levels are met in Singapore. We may lose our eligibility for such benefits if, among other things, these requirements are not met or if Intevac incurs net losses in Singapore for which it cannot claim a deduction. Loss of these tax benefits could result in our income in Singapore being taxed at the statutory rate of 17% instead of the agreed Pioneer Tax Holiday rate of 0%. A loss of all or part of these tax benefits would adversely affect our results of operations and cash flows.

We booked significant tax benefits in 2008, 2009, 2011 and 2012 based on our belief that we could both carry back losses and tax credits to years Intevac paid income taxes and carry forward losses and tax credits to future years where we believe we may generate taxable income. Intevac will need to generate approximately $65.7 million of taxable income in the United States in order to fully realize the Federal deferred tax assets and $27.1 million of taxable income in Singapore in order to fully realize the foreign deferred tax assets, each as recorded as of March 31, 2012. If our expectations of future income are incorrect, we could be required to establish a valuation allowance against some or all of the deferred tax assets.

Our success depends on international sales and the management of global operations.

The majority of our revenues come from regions outside the United States. Most of our international sales are to customers in Asia, which includes products shipped to overseas operations of U.S. companies. We currently have manufacturing facilities in California, Wyoming and Singapore and international customer support offices in Singapore, Taiwan, China, and Malaysia. We expect that international sales will continue to account for a significant portion of our total revenue in future years. Certain of our suppliers are also located outside the United States.

Managing our global operations presents challenges including, but not limited to, those arising from: (1) global trade issues; (2) variations in protection of intellectual property and other legal rights in different countries; (3) concerns of U.S. governmental agencies regarding possible national commercial and/or security issues posed by growing manufacturing business in Asia; (4) fluctuation of interest rates, raw material costs, labor and operating costs, and exchange rates, including the weakening relative position of the U.S. dollar; (5) variations in

 

34


Table of Contents

the ability to develop relationships with suppliers and other local businesses; (6) changes in the laws and regulations of the United States, including export restrictions, and other countries, as well as their interpretation and application; (7) the need to provide technical and spares support in different locations; (8) political and economic instability; (9) cultural differences; (10) varying government incentives to promote development; (11) shipping costs and delays; (12) adverse conditions in credit markets; (13) variations in tariffs, quotas, tax codes and other market barriers; and (14) barriers to movement of cash.

We must regularly assess the size, capability and location of our global infrastructure and make appropriate changes to address these issues.

We may be subject to additional impairment charges due to potential declines in the fair value of our assets.

As a result of our acquisitions, we have significant goodwill and intangible assets on our balance sheet. We test goodwill and intangible assets for impairment on a periodic basis as required, and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The events or changes that could require us to test our goodwill and intangible assets for impairment include: a significant reduction in our stock price, and as a result market capitalization, changes in our estimated future cash flows, as well as changes in rates of growth in our industry or in any of our reporting units. In the fourth quarter of 2008, we recorded an impairment charge of $10.5 million for goodwill due to a decline in our market capitalization and certain purchased technology intangible assets due to lower revenue expectations. We will continue to evaluate the carrying value of our remaining goodwill and intangible assets and if we determine in the future that there is a potential further impairment in any of our reporting units, we may be required to record additional charges to earnings which could materially adversely affect our financial results and could also materially adversely affect our business. See Note 4 “Goodwill and Purchased Intangible Assets” in the notes to the condensed consolidated financial statements for additional information related to impairment of goodwill and intangible assets.

Our success is dependent on recruiting and retaining a highly talented work force.

Our employees are vital to our success, and our key management, engineering and other employees are difficult to replace. We generally do not have employment contracts with our key employees. Further, we do not maintain key person life insurance on any of our employees. The expansion of high technology companies worldwide has increased demand and competition for qualified personnel, and has made companies increasingly protective of prior employees. It may be difficult for us to locate employees who are not subject to non-competition agreements and other restrictions.

The majority of our U.S. operations are located in California where the cost of living and of recruiting employees is high. Our operating results depend, in large part, upon our ability to retain and attract qualified management, engineering, marketing, manufacturing, customer support, sales and administrative personnel. Furthermore, we compete with industries such as the hard disk drive, semiconductor, and solar industries for skilled employees. Failure to retain existing key personnel, or to attract, assimilate or retain additional highly qualified employees to meet our needs in the future, could have a material and adverse effect on our business, financial condition and results of operations.

We are dependent on certain suppliers for parts used in our products.

We are a manufacturing business. Purchased parts constitute the largest component of our product cost. Our ability to manufacture depends on the timely delivery of parts, components and subassemblies from suppliers. We obtain some of the key components and subassemblies used in our products from a single supplier or a limited group of suppliers. If any of our suppliers fail to deliver quality parts on a timely basis, we may experience delays in manufacturing, which could result in delayed product deliveries, increased costs to expedite deliveries or develop alternative suppliers, or require redesign of our products to accommodate alternative suppliers. Some of our suppliers are thinly capitalized and may be vulnerable to failure given recent economic conditions.

 

35


Table of Contents

Our business depends on the integrity of our intellectual property rights.

The success of our business depends upon the integrity of our intellectual property rights, and we cannot ensure that: (1) any of our pending or future patent applications will be allowed or that any of the allowed applications will be issued as patents or will issue with claims of the scope we sought; (2) any of our patents will not be invalidated, deemed unenforceable, circumvented or challenged; (3) the rights granted under our patents will provide competitive advantages to us; (4) other parties will not develop similar products, duplicate our products or design around our patents; or (5) our patent rights, intellectual property laws or our agreements will adequately protect our intellectual property or competitive position.

From time to time, we have received claims that we are infringing third parties’ intellectual property rights or seeking to invalidate our rights. We cannot ensure that third parties will not in the future claim that we have infringed current or future patents, trademarks or other proprietary rights relating to our products. Any claims, with or without merit, could be time-consuming, result in costly litigation, cause product shipment delays or require us to enter into royalty or licensing agreements. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us.

We could be involved in litigation.

From time to time we may be involved in litigation of various types, including litigation alleging infringement of intellectual property rights and other claims. Litigation is expensive, subjects us to the risk of significant damages and requires significant management time and attention and could have a material and adverse effect on our business, financial condition and results of operations.

Difficulties in integrating past or future acquisitions could adversely affect our business.

We have completed a number of acquisitions during our operating history. For example, in 2007, we acquired certain assets of DeltaNu, LLC and certain assets of Creative Display Systems, LLC, in 2008 we acquired certain assets of OC Oerlikon Balzers Ltd., in 2010 we acquired the outstanding shares of Solar Implant Technologies, Inc., and in 2012 we completed the sale of certain semiconductor mainframe technology assets to Brooks. We have spent and may continue to spend significant resources identifying and pursuing future acquisition opportunities. Acquisitions involve numerous risks including: (1) difficulties in integrating the operations, technologies and products of the acquired companies; (2) the diversion of our management’s attention from other business concerns; and (3) the potential loss of key employees of the acquired companies. Failure to achieve the anticipated benefits of the prior and any future acquisitions or to successfully integrate the operations of the companies we acquire could have a material and adverse effect on our business, financial condition and results of operations. Any future acquisitions could also result in potentially dilutive issuance of equity securities, acquisition- or divestiture-related write-offs or the assumption of debt and contingent liabilities. In addition, we have made and will continue to consider making strategic divestitures. With any divestiture, there are risks that future operating results could be unfavorably impacted if targeted objectives, such as cost savings, are not achieved or if other business disruptions occur as a result of the divestiture or activities related to the divestiture.

We use hazardous materials and are subject to risks of non-compliance with environmental and safety regulations.

We are subject to a variety of governmental regulations relating to the use, storage, discharge, handling, emission, generation, manufacture, treatment and disposal of toxic or otherwise hazardous substances, chemicals, materials or waste. If we fail to comply with current or future regulations, such failure could result in suspension of our operations, alteration of our manufacturing process, or substantial civil penalties or criminal fines against us or our officers, directors or employees. Additionally, these regulations could require us to acquire expensive remediation or abatement equipment or to incur substantial expenses to comply with them.

 

36


Table of Contents

Business interruptions could adversely affect our operations.

Our operations are vulnerable to interruption by fire, earthquake, floods or other natural disaster, quarantines or other disruptions associated with infectious diseases, national catastrophe, terrorist activities, war, disruptions in our computing and communications infrastructure due to power loss, telecommunications failure, human error, physical or electronic security breaches and computer viruses, and other events beyond our control. We do not have a detailed disaster recovery plan. Despite our implementation of network security measures, our tools and servers may be vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering with our computer systems and tools located at customer sites. Political instability could cause us to incur increased costs in transportation, make such transportation unreliable, increase our insurance costs or cause international currency markets to fluctuate. Any of these disruptions and instabilities could have the same effects on our suppliers and their ability to timely deliver their products. In addition, we do not carry sufficient business interruption insurance to compensate us for all losses that may occur, and any losses or damages incurred by us could have a material adverse effect on our business and results of operations. For example, we self-insure earthquake risks because we believe this is the prudent financial decision based on the high cost of the limited coverage available in the earthquake insurance market. An earthquake could significantly disrupt our operations, most of which are conducted in California. It could also significantly delay our research and engineering effort on new products, most of which is also conducted in California. We take steps to minimize the damage that would be caused by business interruptions, but there is no certainty that our efforts will prove successful.

We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, our management must perform evaluations of our internal control over financial reporting. Beginning in 2004, our Form 10-K has included a report by management of their assessment of the adequacy of such internal control. Additionally, our independent registered public accounting firm must publicly attest to the effectiveness of our internal control over financial reporting.

We have completed the evaluation of our internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act. Although our assessment, testing, and evaluation resulted in our conclusion that as of December 31, 2011, our internal controls over financial reporting were effective, we cannot predict the outcome of our testing in future periods. Ongoing compliance with this requirement is complex, costly and time-consuming. If Intevac fails to maintain effective internal control over financial reporting; our management does not timely assess the adequacy of such internal control; or our independent registered public accounting firm does not deliver an unqualified opinion as to the effectiveness of our internal control over financial reporting, then we could be subject to restatement of previously reported financial results, regulatory sanctions and a decline in the public’s perception of Intevac, which could have a material and adverse effect on our business, financial condition and results of operations.

 

  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

 

  Item 3. Defaults upon Senior Securities

None.

 

  Item 4. Mine Safety Disclosures

Not applicable.

 

  Item 5. Other Information

None.

 

37


Table of Contents
  Item 6. Exhibits

The following exhibits are filed herewith:

 

Exhibit
Number
   Description
3.1    The Registrant’s Amended and Restated Bylaws (1)
10.2    The Registrant’s 2003 Employee Stock Purchase Plan, as amended
10.3    The Registrant’s 2012 Equity Incentive Plan
10.4    Form of Restricted Stock Unit Agreement for 2012 Equity Incentive Plan
10.5    Form of Restricted Stock Agreement for 2012 Equity Incentive Plan
10.6    Form of Stock Option Agreement for 2012 Equity Incentive Plan
31.1    Certification of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification of Executive Vice President, Finance and Administration, Chief Financial Officer, Treasurer and Secretary Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1    Certifications Pursuant to U.S.C. 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS    XBRL Instance Document *
101.SCH    XBRL Taxonomy Extension Schema *
101.CAL    XBRL Taxonomy Extension Calculation Linkbase Document *
101.LAB    XBRL Taxonomy Extension Label Linkbase Document *
101.PRE    XBRL Taxonomy Extension Presentation Linkbase Document *

 

 

(1) Previously filed as an exhibit to the Company’s Report on Form 8-K filed March 15, 2012
* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

 

38


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    INTEVAC, INC.
Date: May 1, 2012     By:  

  /S/ KEVIN FAIRBAIRN         

        Kevin Fairbairn
     

  President, Chief Executive Officer and Director

  (Principal Executive Officer)

 

Date: May 1, 2012     By:  

  /S/ JEFFREY ANDRESON         

        Jeffrey Andreson
     

  Executive Vice President, Finance and

  Administration, Chief Financial Officer,

  Treasurer and Secretary

  (Principal Financial and Accounting Officer)

 

39

XNAS:IVAC Intevac Inc Quarterly Report 10-Q Filling

Intevac Inc XNAS:IVAC Stock - Get Quarterly Report SEC Filing of Intevac Inc XNAS:IVAC stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

Content Partners
XNAS:IVAC Intevac Inc Quarterly Report 10-Q Filing - 3/31/2012
Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol |  Title Star Rating |  Category |  Total Assets |  Top Holdings |  Top Sectors |  Symbol |  Name Title |  Date |  Author |  Collection |  Interest |  Popularity Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol / Ticker |  Title Star Rating |  Category |  Total Assets |  Symbol / Ticker |  Name Title |  Date |  Author |  Collection |  Popularity |  Interest Title |  Date |  Company |  Symbol |  Interest |  Popularity Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Title |  Date |  Company |  Symbol |  Interest |  Popularity

Previous: XNAS:IVAC Intevac Inc Insider Activity 4 Filing - 9/7/2012  |  Next: XNAS:IVAC Intevac Inc Quarterly Report 10-Q Filing - 6/30/2012