Intevac Reports $63.98 Million Revenue with Significant Operating Loss and Merger Agreement

Intevac, Inc. reported a net revenue of $63.98 million for the fiscal year ending December 28, 2024, marking an increase of $11.31 million from the previous year's revenue of $52.67 million. However, the company experienced a significant operating loss of $43.25 million, compared to a loss of $13.24 million in fiscal 2023. The increase in revenue was primarily attributed to $15.8 million in cancellation fees and higher sales of spare parts and field services, although there were no system sales recognized during the year. The gross profit margin also declined sharply to 4.0% from 38.4% in the prior year, largely due to higher inventory obsolescence charges and lower-margin contributions from cancellation fees.

Intevac has undergone strategic changes, including a shift away from its TRIO product line, which culminated in a restructuring program that included a workforce reduction of approximately 24%. This restructuring resulted in $1.3 million in severance costs, $19 million in inventory write-offs, and $12.8 million in asset impairment charges. The company also announced a merger agreement with Seagate Technology Holdings plc, which is expected to close in the first half of 2025, with a cash offer of $4.00 per share for all outstanding shares. In connection with the merger, Intevac plans to pay a one-time special dividend of $0.052 per share.

Operationally, Intevac's customer base remains concentrated, with Seagate Technology accounting for 91% of its consolidated net revenues in both fiscal 2024 and 2023. The company reported a total backlog of $42.6 million as of December 28, 2024, with expectations to recognize 99.5% of this backlog as revenue in 2025. Foreign sales constituted 95% of total revenue in fiscal 2024, reflecting the company's strong international presence, particularly in Asia.

Looking ahead, Intevac anticipates improved profitability in fiscal 2025, driven by enhanced margins and cost savings from its restructuring efforts. However, the company remains cautious about potential impacts from macroeconomic conditions, including inflation and interest rates, which could affect demand for its products and services. The management's outlook emphasizes the importance of adapting to market conditions and maintaining operational efficiency to support future growth.