Intevac(US:IVAC)2024-02-05 23:42Financial Data and Key Metrics Changes - Intevac reported Q4 revenues of nearly $13 million, exceeding expectations, and full-year revenues of $52.7 million, a 47% increase from $35.8 million in 2022 [20][31][22] - Gross margin for Q4 was 46%, surpassing guidance, while the full-year gross margin was 38.4% [21][31] - The company ended the year with over $72 million in cash and investments, slightly below previous guidance due to delayed receivables [22][32] Business Line Data and Key Metrics Changes - The HDD business saw a significant revenue ramp in 2023, driven by strong demand for HAMR upgrades, resulting in a record level of upgrades [17][20] - Total backlog at year-end was $42 million, reflecting strong order activity for HAMR upgrades [22] Market Data and Key Metrics Changes - The HDD market is transitioning to HAMR technology, with Intevac positioned as a key technology partner, benefiting from the industry's upgrade initiatives [17][20] - The company noted a significant interest from Western Digital, indicating a broader industry shift towards HAMR [36][46] Company Strategy and Development Direction - Intevac is focusing on long-term growth and profitability, temporarily withdrawing near-term financial guidance to prioritize strategic initiatives [24][29] - The TRIO platform is seen as a key growth opportunity, with an estimated $1 billion market potential, and the company aims to diversify its product portfolio [23][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in cash collection and the impact of large customers on short-term financial results, emphasizing a focus on improving long-term financial performance [24][46] - The company expects to maintain a similar cash balance at the end of 2024 as at year-end 2023, despite halting certain resource deployments [29] Other Important Information - The company has decided to temporarily suspend HDD order fulfillment to align with standard payment terms and improve cash flow [25] - The display market has become more challenging, but there is significant customer interest in deploying TRIO systems across various applications [27][88] Q&A Session Summary Question: Can you provide clarity on the receivables collection process? - Management indicated that the issue is more about timing rather than a dispute over the receivable amount [102] Question: What is the outlook for the 2024 HDD market and HAMR upgrades? - Management expects a significant HAMR opportunity over the next few years, with ongoing interest from major customers [46][78] Question: How will the TRIO system negotiations impact future sales? - Management is confident that negotiations will conclude positively, with expectations to ship multiple systems in 2024 [99][103] Question: What are the best uses of cash moving forward? - The focus will be on protecting the balance sheet while considering minor investments to enhance in-house capabilities [91]