Segment Reporting

9 Months Ended

Oct. 01, 2011

Segment Reporting [Abstract]

Segment Reporting

11. Segment Reporting

Intevac’s two reportable segments are Equipment and Intevac Photonics. Intevac’s chief operating decision-maker has been identified as the President and CEO, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Segment information is presented based upon Intevac’s management organization structure as of October 1, 2011 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to the reportable segments disclosed.

Each reportable segment is separately managed and has separate financial results that are reviewed by Intevac’s chief operating decision-maker. Each reportable segment contains closely related products that are unique to the particular segment. Segment operating profit is determined based upon internal performance measures used by the chief operating decision-maker.

Intevac derives the segment results from its internal management reporting system. The accounting policies Intevac uses to derive reportable segment results are substantially the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics, including orders, net revenues and operating income. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. Intevac manages certain operating expenses separately at the corporate level. Intevac allocates certain of these corporate expenses to the segments in an amount equal to 3% of net revenues. Segment operating income excludes interest income/expense and other financial charges and income taxes according to how a particular reportable segment’s management is measured. Management does not consider impairment charges and unallocated costs in measuring the performance of the reportable segments.

The Equipment segment designs, develops and markets manufacturing equipment and solutions to the hard disk drive industry and offers high-productivity technology solutions to the photovoltaic (“PV”) and semiconductor industries. Historically, the majority of Intevac’s revenue has been derived from the Equipment segment and Intevac expects that the majority of its revenues for at least the next several years will continue to be derived from the Equipment segment.

The Intevac Photonics segment develops compact, cost-effective, high-sensitivity, digital-optical products for the capture and display of low-light images and the optical analysis of materials. Intevac provides sensors, cameras and systems for government applications such as night vision and long-range target identification and for commercial applications in the inspection, law enforcement, scientific and medical industries.

Information for each reportable segment for the three and nine months ended October 1, 2011 and October 2, 2010 is as follows:

Net Revenues

	Three Months Ended				Nine Months Ended
	October 1, 2011		October 2, 2010		October 1, 2011		October 2, 2010
	(in thousands)
Equipment	$	12,384	$	55,868	$	42,379	$	141,453
Intevac Photonics		6,937		8,759		21,950		24,914
Total segment net revenues	$	19,321	$	64,627	$	64,329	$	166,367

Operating Income (Loss)

	Three Months Ended						Nine Months Ended
	October 1, 2011			October 2, 2010			October 1, 2011			October 2, 2010
	(in thousands)
Equipment	$	(5,358	)	$	16,878		$	(14,423	)	$	37,534
Intevac Photonics		(948	)		(876	)		(3,023	)		(3,501	)
Total segment operating income (loss)		(6,306	)		16,002			(17,446	)		34,033
Unallocated costs		(1,767	)		(629	)		(4,805	)		(2,828	)
Income (loss) from operations		(8,073	)		15,373			(22,251	)		31,205
Interest income and other, net		140			(84	)		438			379
Income (loss) before income taxes	$	(7,933	)	$	15,289		$	(21,813	)	$	31,584

Total assets for each reportable segment as of October 1, 2011 and December 31, 2010 are as follows:

Assets

	October 1, 2011		December 31, 2010
	(In thousands)
Equipment	$	49,064	$	57,130
Intevac Photonics		29,292		31,275
Total segment assets		78,356		88,405
Cash, cash equivalents and investments		122,056		137,380
Deferred income taxes		23,851		17,718
Other current assets		6,679		5,889
Common property, plant and equipment		1,427		1,803
Other assets		728		576
Consolidated total assets	$	233,097	$	251,771