SANTA CLARA, Calif. — BUSINESS WIRE — February 9, 2005
Intevac, Inc. (Company) (Nasdaq:IVAC) reported financial results for the fourth quarter and twelve months ended December 31, 2004.
Total revenues for the quarter were $10.3 million, compared to $12.1 million in the fourth quarter of 2003. Equipment revenues, which included one 200 Lean system, were $8.3 million, versus $9.0 million in the fourth quarter last year. The decrease resulted from lower sales of spares and upgrades. Imaging revenues were $2.0 million, down from $3.1 million in the previous year, due to lower revenues from research and development contracts. Net loss for the quarter was $3.2 million, or $0.16 per diluted share on 20.1 million weighted-average shares outstanding, compared to a net loss of $601,000, or $0.04 per diluted share on 15.2 million weighted-average shares, in the fourth quarter of 2003. The increase in net loss was primarily attributable to lower gross margins in the Equipment and Imaging business and lower net revenues in the Equipment business. Equipment margins were lowered by the 200 Lean system recognized for revenue, which was manufactured during the second quarter of 2004 when 200 Lean costs were high. Imaging margins were reduced by a cost-sharing program related to development of military head mounted night vision cameras. The number of shares outstanding rose primarily as a result of conversion of the Company's 6 1/2% convertible notes dues 2009 in November 2003 and the Company's secondary offering in February 2004. Total revenues for the year were $69.6 million, up from $36.3 million in 2003. Equipment revenues were $60.5 million, compared to $26.7 million in the prior-year period. The increase was attributable primarily to higher sales of disk sputtering systems and components in 2004, which were partially offset by a reduction in sales from flat panel display manufacturing equipment. Imaging revenues were $9.1 million, down from $9.5 million in the prior-year period. Net loss for the twelve months of 2004 narrowed to $4.3 million, or $0.22 per diluted share on 19.7 million weighted-average shares outstanding, from net losses of $12.3 million, or $0.95 per diluted share on 12.9 million weighted-average shares, for the same period in 2003. The improvement was primarily due to the large increase in equipment sales with only a slight increase in operating expenses. Also contributing was a reduction of interest expense due to conversion of the Company's 6 1/2% convertible notes. Order backlog totaled $10.5 million on December 31, 2004, compared to $16.2 million on September 25, 2004, and $43.3 million on December 31, 2003. Year-end backlog does not include orders for three 200 Lean systems received early in 2005. Intevac Chief Executive Kevin Fairbairn commented: "In 2002 we laid out the roadmap for Intevac's transition into a growing and profitable company. Based on this roadmap, in 2003 we began designing market-leading products that address large markets. In 2004 we began to reap the benefits of this strategy. "In Equipment, we began deploying our new 200 Lean disk sputtering system," Fairbairn continued. "The 200 Lean was key to enabling a 92% increase in our 2004 revenues and a significant narrowing of our consolidated net loss. "In Imaging, we achieved a critical design win for our low light imaging technology on a major military head mounted display program for a NATO ally," added Fairbairn. "The NATO program should provide us with a production base for our sensors and cameras and put us in a stronger position to compete for the U.S. military's head mounted night vision business." Conference Call Information The Company will discuss its financial results in a conference call February 9, 2005, at 1:30 p.m. PDT (4:30 p.m. EDT). To participate in the teleconference, please call toll-free 800-291-8929 prior to the start time. For international callers, the dial-in number is 706-634-0478. You may also listen live via the Internet at the Company's website, www.Intevac.com, under the Investors link, or at www.FullDisclosure.com. For those unable to attend, these web sites will host an archive of the call. Additionally, a telephone replay of the call will be available for 48 hours beginning at 3:30 p.m. PDT on February 9. You may access the playback by calling 800-642-1687 or, for international callers 706-645-9291, and providing conference ID 3553874. About Intevac Intevac is the world's leading supplier of disk sputtering equipment for the thin-film disk industry and a provider of leading edge extreme low light imaging sensors, cameras and systems. For more information please visit our website at www.intevac.com. Safe Harbor Statement This press release includes statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Intevac claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are often characterized by the terms "may," "believes," "projects," "expects," or "anticipates," and do not reflect historical facts. Specific forward-looking statements contained in this press release include, but are not limited to, our ability to design market-leading products that address large markets and our ability to use our head mounted night-vision program for a NATO ally to build a production base for sensors and to enhance our ability to compete for US military head mounted night-vision business. The forward-looking statements contained herein involve risks and uncertainties that could cause actual results to differ materially from the Company's expectations. These risks include, but are not limited to, failure to identify markets into which we can sell significant volumes of products, failure to develop products that address our target markets, failure to establish cost-effective sensor manufacturing and failure to achieve sales of our head mounted night-vision products to the US Military and other customers. Any of these risks could have a material impact on our business, our financial results and our stock price. These risks and other factors are detailed in the Company's regular filings with the U.S. Securities and Exchange Commission. CONTACT: Intevac, Inc. SOURCE: Intevac, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
3 months ended 12 months ended
----------------------- ------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2004 2003 2004 2003
----------- ----------- -------- ---------
(unaudited) (unaudited)
Net revenues
Equipment $8,298 $8,972 $60,490 $26,748
Imaging 1,967 3,104 9,125 9,546
----------- ----------- -------- ---------
Total net revenues 10,265 12,076 69,615 36,294
Gross profit 2,025 4,671 15,856 9,830
Gross margin
Equipment 25.4% 40.2% 24.8% 27.5%
Imaging (4.2%) 34.3% 9.2% 25.9%
----------- ----------- -------- ---------
Consolidated 19.7% 38.7% 22.8% 27.1%
Operating expenses
Research and development 2,608 3,121 11,580 12,037
Selling, general and
administrative 2,816 2,161 9,525 8,448
----------- ----------- -------- ---------
Total operating expenses 5,424 5,282 21,105 20,485
Operating income/(loss)
Equipment (1,500) 133 (377) (3,993)
Imaging (1,500) (222) (4,114) (4,155)
Corporate (399) (522) (758) (2,507)
----------- ----------- -------- ---------
Total operating
income/(loss) (3,399) (611) (5,249) (10,655)
Other income/(expense)
----------- ----------- -------- ---------
Gain from sale of RTP
product line - 287 - 287
Other 252 (239) 1,015 (1,897)
----------- -------------------- ---------
Profit/(loss) before
provision for income taxes (3,147) (563) (4,234) (12,265)
Provision for/(benefit
from) income taxes 7 38 110 38
----------- ----------- -------- ---------
Net income/(loss) ($3,154) ($601) ($4,344) ($12,303)
=========== =========== ======== =========
Income/(loss) per share
Basic ($0.16) ($0.04) ($0.22) ($0.95)
Diluted(a) ($0.16) ($0.04) ($0.22) ($0.95)
Weighted average common
shares
Basic 20,145 15,174 19,749 12,948
Diluted(a) 20,145 15,174 19,749 12,948
(a) Diluted earnings per share exclude "as converted" treatment of our
6 1/2% Convertible Subordinated Notes Due 2004 through the period
ending March 27, 2004 and our 6 1/2% Convertible Subordinated
Notes Due 2009 through the period ending December 31, 2003, and
the effect of outstanding stock options when these potentially
dilutive securities are anti-dilutive to earnings per share.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Dec. 31, Dec. 31,
2004 2003
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ASSETS
Current assets
Cash, cash equivalents and short term investments $42,034 $19,507
Accounts receivable, net 4,775 14,016
Inventories - stores and production 9,120 7,677
Inventories - pending acceptance at customer site 6,255 5,431
Prepaid expenses and other current assets 956 1,113
-------- --------
Total current assets 63,140 47,744
Property, plant and equipment, net 5,996 5,796
Long term investments 8,052 -
Investment in 601 California Ave LLC 2,431 2,431
Other 3 4
-------- --------
Total assets $79,622 $55,975
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Convertible notes $- $1,025
Accounts payable 1,647 3,396
Accrued payroll and related liabilities 1,617 1,610
Other accrued liabilities 3,150 2,643
Customer advances 3,833 16,432
-------- --------
Total current liabilities 10,247 25,106
Shareholders' equity
Common stock 94,802 51,982
Accumulated other comprehensive income 253 223
Retained earnings (deficit) (25,680) (21,336)
-------- --------
Total shareholders' equity 69,375 30,869
-------- --------
Total liabilities and shareholders' equity $79,622 $55,975
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Charles Eddy, 408-986-9888
or
Silverman Heller Associates
Dan Matsui/Gene Heller, 310-208-2550
