SANTA CLARA, Calif. — BUSINESS WIRE — April 30, 2007
April 30, 2007--Intevac, Inc. (Nasdaq:IVAC) reported financial results for the quarter ended March 31, 2007.
Net income for the first quarter was $9.8 million, or $0.44 per diluted share, on 22.2 million weighted-average shares outstanding. Net income included $1.4 million of stock-based compensation expense, equivalent to $0.04 per diluted share; $1.4 million of flat panel license fees, equivalent to $0.04 per diluted share; and $101,000 of intangible amortization expense, related to the Company's acquisition of certain assets of Delta Nu, LLC on January 31, 2007. For first-quarter 2006, net income was $7.0 million, or $0.32 per diluted share, on 21.8 million weighted average shares outstanding, which included $428,000 of stock-based compensation expense, equivalent to $0.02 per diluted share.
Revenues for the quarter were $76.4 million, including $72.5 million of Equipment revenues and record Imaging revenues of $3.9 million. Equipment revenues consisted of thirteen magnetic media manufacturing systems, equipment upgrades, spares, consumables, and service. Imaging revenues consisted of $2.8 million of research and development contracts and $1.1 million of product sales. In first-quarter 2006, net revenues were $49.6 million, including $47.6 million of Equipment revenues and $2.0 million of Imaging revenues, which included $501,000 of product sales.
Equipment gross margins for the quarter rose to a record 43.3% from 35.2% in first quarter 2006, and Imaging gross margins increased to 36.6% from 26.2% in first-quarter 2006. Equipment margins improved primarily due to lower manufacturing costs, and higher sales of spares and upgrades. Imaging margins improved primarily as the result of higher margins on development contracts and favorable adjustments related to contract closeouts. Consolidated gross margins improved to 42.9% from 34.9% in first-quarter 2006.
Operating expenses for the quarter totaled $19.7 million, or 25.8% of revenues, versus $10.7 million, or 21.5% of revenues, in first-quarter 2006. Operating expenses grew primarily as the result of increased spending on development of new Equipment products, increased business development expense and higher stock based compensation expense.
Order backlog totaled $92.8 million on March 31, 2007, compared to $125.0 million on December 31, 2006, and $124.8 million on April 1, 2006. Backlog as of March 31, 2007 includes fourteen 200 Lean systems.
Intevac Chief Executive Kevin Fairbairn commented: "We are pleased to report another solid quarter of financial results with earnings per share exceeding expectations. We delivered all 200 Lean® systems on time and continued to generate cash. The integration of our new DeltaNu subsidiary went smoothly and DeltaNu is executing ahead of plan. We continue to make good progress developing new Imaging and semiconductor products for the future growth of the business. The expansion of our Asian operations continues to track according to plan."
The Company will discuss its financial results in a conference call today 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.earnings.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 today at 3:30 p.m. PDT. You may access the playback by calling (800) 642-1687 or, for international callers (706) 645-9291, and providing conference ID 5955930.
Intevac is the world's leading supplier of disk sputtering equipment to manufacturers of magnetic media used in hard disk drives and a developer and provider of leading edge extreme low light imaging sensors, cameras and systems. For more information please visit our website at www.intevac.com.
200 Lean® is a registered trademark of Intevac, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
3 months ended
-----------------------
March 31, April 1,
2007 2006
----------- -----------
(Unaudited) (Unaudited)
Net revenues
Equipment $72,446 $47,573
Imaging 3,928 2,047
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Total net revenues 76,374 49,620
Gross profit
Gross margin
Equipment 43.3% 35.2%
Imaging 36.6% 26.2%
----------- -----------
Consolidated 42.9% 34.9%
Operating expenses
Research and development 12,192 5,561
Selling, general and administrative 7,513 5,114
----------- -----------
Total operating expenses 19,705 10,675
Operating income/(loss)
Equipment Products 14,989 8,480
Imaging (1,600) (1,869)
Corporate (312) 20
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Total operating profit 13,077 6,631
Other income 1,320 598
----------- -----------
Profit before provision for income taxes 14,397 7,229
Provision for income taxes 4,552 218
----------- -----------
Net income $9,845 $7,011
=========== ===========
Income per share
Basic $0.46 $0.34
Diluted $0.44 $0.32
Weighted average common shares outstanding
Basic 21,293 20,832
Diluted 22,188 21,793
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS March 31, Dec. 31,
2007 2006
----------- ---------
(Unaudited)
Current assets
Cash, cash equivalents and short term
investments $102,496 $95,035
Accounts receivable, net 33,298 39,927
Inventories 33,926 37,942
Deferred tax assets 4,100 3,269
Prepaid expenses and other current assets 2,134 2,506
----------- ---------
Total current assets 175,954 178,679
Long term investments 12,000 8,000
Property, plant and equipment, net 14,511 13,546
Investment in 601 California Avenue LLC 2,431 2,431
Deferred tax assets 1,312 1,312
Goodwill 5,434 -
Other long-term assets 2,653 2,035
----------- ---------
Total assets $214,295 $206,003
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $1,921 -
Accounts payable 16,287 $15,994
Accrued payroll and related liabilities 5,189 11,769
Other accrued liabilities 9,796 6,612
Customer advances 20,404 26,243
----------- ---------
Total current liabilities 53,597 60,618
Other long-term liabilities 2,892 1,075
Shareholders' equity
Common stock 101,096 99,468
Paid in Capital 9,321 7,319
Accumulated other comprehensive income 375 354
Retained earnings 47,014 37,169
----------- ---------
Total shareholders' equity 157,806 144,310
----------- ---------
Total liabilities and shareholders' equity $214,295 $206,003
=========== =========
SUPPLEMENTAL INFORMATION REGARDING IMPACT OF THE ADOPTION OF SFAS 123R
(In Thousands, except per share amounts)
(Unaudited)
The effect of recording stock-based compensation for the three-month
periods ended March 31, 2007 and April 1, 2006 were as follows:
Three Mos. Three Mos.
ended ended
Mar. 31, 2007 Apr. 1, 2006
------------- -------------
Stock-based compensation by type of award:
Stock options $1,145 $344
Employee stock purchase plan 213 116
Amounts capitalized as inventory (4) (32)
------------- -------------
Total stock-based compensation 1,354 428
Tax effect on stock-based compensation (428) (13)
------------- -------------
Net effect on net income $926 $415
Effect on earnings per share:
Basic $0.04 $0.02
Diluted $0.04 $0.02
Approximately $73 and $32 of stock-based compensation is included in
inventory as of March 31, 2007 and April 1, 2006, respectively.
