Intevac Inc. (NASDAQ:IVAC) Q3 2019 Earnings Conference Call - Final Transcript

Oct 28, 2019 • 04:30 pm ET

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Intevac Inc. (NASDAQ:IVAC) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, and welcome to Intevac's Third Quarter 2019 Financial Results Conference Call. At this time, all participants' lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please note that this conference call is being recorded today, October 28, 2019.

At this time, I'd like to turn the call over to Claire McAdams, Intevac's Investor Relations Counsel. Please go ahead.

Executive
Claire McAdams

Thank you, and good afternoon, everyone. Thank you for joining us today to discuss Intevac's financial results for the third quarter of 2019, which ended on September 28. In addition to discussing the Company's recent results, we will provide financial guidance for the remainder of 2019.

Joining me on today's call are Wendell Blonigan, President and Chief Executive Officer; and Jim Moniz, Chief Financial Officer. Wendell will start with a review of each of our businesses and our outlook going forward, and then Jim will review third quarter results and discuss our financial outlook before turning the call over to Q&A.

I'd like to remind everyone that today's conference call contains certain forward-looking statements, including but not limited to, statements regarding financial results for the Company's most recently completed fiscal quarter, which remain subject to adjustment in connection with the preparation of our Form 10-Q, as well as comments regarding future events and projections about the future financial performance of Intevac.

These forward-looking statements are based upon our current expectations and actual results could differ materially as a result of various risks and uncertainties relating to these comments and other risk factors discussed in documents filed by us with the Securities and Exchange Commission, including our annual report on Form 10-K and quarterly reports on Form 10-Q. The contents of this October 28th call include time-sensitive forward-looking statements that represent our projections as of today. We undertake no obligation to update the forward-looking statements made during this conference call.

I will now turn the call over to Wendell.

Executive
Wendell Blonigan

Thanks, Claire, and good afternoon. Today, we reported Q3 results above the high-end of guidance. Revenues of $26.3 million were above expectations due primarily to stronger-than-expected levels of hard drive upgrades during the quarter. Favorable gross margin in Photonics helped to drive a smaller net loss than forecast at $0.02 per share. In the third quarter, we continue to gain momentum driving our strategies for revenue growth and profitability. Last quarter, we discussed the multiple critical milestones we achieved in the first half of the year, laying the groundwork for future growth trajectory.

In Photonics, the new record order announced in July drove backlog to an also record level of $76 million at quarter end. We continue to see quarter-on-quarter revenue growth and increasing operating profitability for the Photonics business in 2019. And our order momentum through the third quarter signals another year of strong growth is expected for Photonics in 2020.

In our Thin-Film Equipment or TFE business in third quarter, in response to our customers' request to accelerate their installations, we delivered