Intevac(US:IVAC)2023-11-02 20:01Financial Performance - Net revenues for Q3 2023 were $17.915 million, a 66.7% increase from $10.750 million in Q3 2022[126]. - Gross profit for Q3 2023 was $6.999 million, up from $4.890 million in Q3 2022, resulting in a gross margin of 39.1%[126]. - The net loss for Q3 2023 decreased to $1.576 million from $3.236 million in Q3 2022, reflecting improved revenues and gross profit[126]. - Revenue for the nine months ended September 30, 2023, was $39.758 million, compared to $24.502 million for the same period in 2022, marking a 62.1% increase[126]. - Gross profit for the three months ended September 30, 2023 was $6.999 million, a 42.9% increase from $4.890 million in the prior year[136]. - The gross margin for the nine months ended September 30, 2023, was 35.9%, down from 41.2% in the same period of 2022, due to higher inventory obsolescence charges[126]. Backlog and Revenue Recognition - The backlog as of September 30, 2023, was $46.497 million, significantly down from $121.743 million at the end of 2022, primarily due to a $54.6 million reduction from a cancelled order[134]. - The company expects to recognize 25.3% of its backlog as revenue in 2023, 50.2% in 2024, and 24.5% in 2025[134]. - The company recognized revenue from one 200 Lean HDD system and one refurbished 200 Lean HDD system in the first nine months of 2023[128]. Cost Management and Expenses - The company recorded $2.0 million in severance costs associated with its 2023 Cost Reduction Plan, partially offset by $462,000 in stock-based compensation forfeitures[127]. - Research and development expenses increased to $3.720 million in Q3 2023 from $3.311 million in Q3 2022, driven by higher spending on TRIO[138]. - Selling, general and administrative expenses decreased slightly to $4.707 million in Q3 2023 from $4.741 million in Q3 2022, despite higher severance charges and legal fees[139]. - The 2023 Cost Reduction Plan is expected to reduce annual expenses by approximately $4.6 million, following a 23% workforce reduction[140]. - The company incurred $1.9 million in restructuring costs related to the 2023 Cost Reduction Plan, including severance and stock-based compensation[140]. Cash Flow and Liquidity - As of September 30, 2023, Intevac had $66.2 million in cash, cash equivalents, restricted cash, and investments, down from $112.8 million at December 31, 2022, reflecting a decrease of $46.6 million primarily due to cash used in operating activities[149]. - Operating activities used cash of $40.9 million during the first nine months of fiscal 2023, compared to cash generated of $3.8 million during the same period in fiscal 2022[150]. - Accounts receivable increased to $28.0 million at September 30, 2023, up from $15.8 million at December 31, 2022, due to extended payment terms offered to customers[151]. - Net inventories rose to $42.8 million at September 30, 2023, compared to $30.0 million at December 31, 2022, driven by purchases to support TRIO inventory and HDD backlog[151]. - Investing activities generated cash of $16.6 million during the first nine months of fiscal 2023, with proceeds from sales and maturities of investments totaling $21.4 million[152]. - Financing activities used cash of $568,000 in the first nine months of fiscal 2023, with $1.4 million generated from the sale of common stock to employees[153]. Tax and Income - Provision for income taxes for Q3 2023 was $796,000, compared to $467,000 in Q3 2022, based on estimates of annual income and statutory tax rates[145]. - Income from discontinued operations for the nine months ended September 30, 2023 was $365,000, a significant improvement from a loss of $394,000 in the prior year[148]. Other Financial Commitments - Intevac agreed to make contingent consideration payments of up to $500,000 related to the acquisition of Hia Inc., with the first milestone payment of $250,000 made on January 17, 2023[154]. - Capital expenditures for the nine months ended September 30, 2023, were $4.9 million, with an additional $1.0 million projected for the remainder of fiscal 2023[152][157]. - Approximately $22.4 million of cash and cash equivalents were domiciled in foreign tax jurisdictions as of September 30, 2023, with expectations for a significant portion to remain offshore in the short term[156]. - Off-balance sheet firm commitments related to outstanding letters of credit amounted to approximately $700,000 as of September 30, 2023[158].