Intevac: Fiscal 1Q12 Financial Results

Intevac, Inc. reported financial results for the first quarter ended March 31, 2012.

"We are pleased with the progress made in the first quarter on our growth objectives, in addition to booking two 200 Lean systems for the hard drive industry," commented Kevin Fairbairn, president and chief executive officer of Intevac. "In our solar business, we won a competitive selection and finalized an agreement to ship our first beta system for solar ion implant, which, if successful, could lead to production system shipments in 2013.

"As we look forward, our hard drive customers are currently in the process of completing both their merger integration and capacity planning for the remainder of the year, and we continue to see 2012 as a largely back-end loaded year for our hard drive business. In the solar industry, while the overcapacity affecting the overall industry continues to limit investment by smaller manufacturers, we believe our strategy to focus on the leading manufacturers with efficiency-enhancing solutions will lead to further shipment opportunities in 2012. In Photonics, we recently were awarded a $10 million contract by the U.S. Army to develop and supply our night vision cameras for use on the Apache helicopter, demonstrating the continued support of our sensor technology by the U.S. Military and providing yet another revenue growth driver for this business."

First Quarter 2012 Summary
The net loss for the quarter was $3.2 million, or $0.14 per diluted share, compared to a net loss of $7.0 million, or $0.31 per diluted share, in the first quarter of 2011.

Revenues for the quarter were $17.3 million, including $10.7 million of Equipment revenues and Intevac Photonics revenues of $6.6 million. Equipment revenues consisted of upgrades, spares and service. Intevac Photonics revenues consisted of $2.5 million of research and development contracts and $4.0 million of product sales or 61.3% of Photonics revenues. In the first quarter of 2011, revenues were $17.4 million, including $10.2 million of Equipment revenues and $7.2 million of Intevac Photonics revenues which included $5.3 million of product sales or 73.3% of Photonics revenues.

Equipment gross margin in the quarter was 45.1%, essentially flat to 45.3% in the first quarter of 2011. Intevac Photonics gross margin was 30.1% compared to 24.5% in the first quarter of 2011. The increase was primarily a result of improved yields on our night vision camera modules and higher development program margins. Consolidated gross margin was 39.4%, compared to 36.6% in the first quarter of 2011.

Operating expenses for the quarter totaled $16.0 million, up slightly from $15.9 million in the first quarter of 2011. The operating loss of $7.0 million for the quarter is net of a $2.2 million gain on the sale of our mainframe technology.

Order backlog totaled $41.3 million on March 31, 2012, compared to $32.9 million on December 31, 2011 and $41.7 million on April 2, 2011. Backlog at quarter end included one Solar system and two 200 Lean systems, compared to one Solar system and no 200 Lean systems on December 31, 2011 and two 200 Lean systems on April 2, 2011.