Intevac, Inc. (Nasdaq: IVAC) today reported financial results for the first quarter ended March 30, 2013.
“As expected, Q1 was a challenging quarter for our equipment business. In early February, we implemented a global cost reduction plan that is expected to lower our expenditure levels by $12 million to $14 million on an annual basis,” commented Norman Pond, chairman of the board and chief executive officer of Intevac. “Backlog in Intevac's hard drive business has grown since quarter-end with the receipt of orders for two 200 Lean systems, in line with our expectations entering the year.
“In the first quarter, we received and shipped our first production order for our solar implant ENERGi™ system, for which we expect to recognize revenue by mid-year. In our Photonics business, we made the strategic decision to sell our Raman Instrumentation product line in order to focus on the larger opportunity for our military-based night-vision products. Excluding the Raman Instrumentation results, our Photonics business remained profitable for the third consecutive quarter and remains well-positioned for growth.”
($ Millions, except per share amounts) Q1 2013 Q1 2012
GAAP Results Non-GAAP Results GAAP Results Non-GAAP Results
Net Revenues $ 13.0 $ 13.0 $ 17.3 $ 17.3
Operating Loss $ (9.0 ) $ (8.3 ) $ (7.0 ) $ (9.2 )
Net Loss $ (8.3 ) $ (7.6 ) $ (3.2 ) $ (4.8 )
Net Loss per Share $ (0.35 ) $ (0.32 ) $ (0.14 ) $ (0.21 )
First Quarter 2013 Summary
The net loss was $8.3 million, or $0.35 per diluted share, compared to a net loss of $3.2 million, or $0.14 per diluted share, in the first quarter of 2012. The non-GAAP net loss, which excludes a $0.5 million restructuring charge and a $0.2 million divestiture loss, was $7.6 million or $0.32 per share. This compares to the first quarter 2012 non-GAAP net loss of $4.8 million, or $0.21 per share, which excludes a $2.2 million divestiture gain.
Revenues were $13.0 million, including $5.4 million of Equipment revenues and Intevac Photonics revenues of $7.6 million. Equipment revenues consisted of upgrades, spares and service. Intevac Photonics revenues consisted of $4.1 million of research and development contracts and $3.5 million of product sales comprising 46% of Photonics revenues. In the first quarter of 2012, revenues were $17.3 million, including $10.7 million of Equipment revenues and $6.6 million of Intevac Photonics revenues, which included $4.0 million of product sales comprising 61% of Photonics revenues.
Equipment gross margin was 22.4%, compared to 45.1% in the first quarter of 2012 and 46.0% in the fourth quarter of 2012. The decrease compared to both quarters was primarily due to lower factory absorption and a lower level of upgrade revenue. Intevac Photonics gross margin was 30.4%, compared to 30.1% in the first quarter of 2012 and 37.4% in the fourth quarter of 2012. The reduction from the fourth quarter was driven by lower yields for our low-light sensor and lower margins on our technology development programs. Consolidated gross margin was 27.1%, compared to 39.4% in the first quarter of 2012 and 42.0% in the fourth quarter of 2012.
Operating expenses were $12.3 million, which includes approximately $0.3 million in severance costs related to our global cost reduction plan, and were down from $12.8 million in the prior quarter and $16.0 million in the first quarter of 2012. The operating loss of $9.0 million also included a $0.2 million loss on the sale of our Raman spectroscopy product line. The operating loss of $7.0 million for the first quarter of 2012 included a $2.2 million gain on the sale of Intevac's mainframe technology.
Order backlog totaled $35.1 million on March 30, 2013, compared to $35.2 million on December 31, 2012 and $41.3 million on March 31, 2012. Backlog at quarter end included one ENERGi™ Solar system and no 200 Lean® systems, compared to no Solar systems and no 200 Lean systems on December 31, 2012 and one Solar system and two 200 Lean systems on March 31, 2012.
Intevac's balance sheet remains strong, with $93.6 million of cash and investments and $130.4 million in tangible book value.
Use of Non-GAAP Financial Measures
Intevac's non-GAAP results exclude the impact of the following, where applicable: (1) restructuring charges; and (2) gains or losses on sales of product lines and technology assets. A reconciliation of the GAAP and non-GAAP results is provided in the financial tables included in this release.
Management uses non-GAAP results to evaluate the company’s operating and financial performance in light of business objectives and for planning purposes. These measures are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. Intevac believes these measures enhance investors’ ability to review the company’s business from the same perspective as the company’s management and facilitate comparisons of this period’s results with prior periods. The presentation of this additional information should not be considered a substitute for results prepared in accordance with GAAP.