Segment Reporting

9 Months Ended

Sep. 28, 2013

Segment Reporting

15. 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 September 28, 2013 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, gains and losses on divestitures and sales of intellectual property, and unallocated costs in measuring the performance of the reportable segments.

The Equipment segment designs, develops and markets vacuum process equipment solutions for high-volume manufacturing of small substrates with precise thin film properties for hard drive and solar cell manufacturers.

The Intevac Photonics segment develops compact, cost-effective, high-sensitivity digital-optical products for the capture and display of low-light images. Intevac provides sensors, cameras and systems for government applications such as night vision and long-range target identification.

Information for each reportable segment for the three and nine months ended September 28, 2013 and September 29, 2012 is as follows:

Net Revenues

	Three Months Ended				Nine Months Ended
	September 28, 2013		September 29, 2012		September 28, 2013		September 29, 2012
	(in thousands)
Equipment	$	11,760	$	7,401	$	26,293	$	43,179
Intevac Photonics		7,355		9,433		22,788		22,762
Total segment net revenues	$	19,115	$	16,834	$	49,081	$	65,941

Operating Income (Loss)

	Three Months Ended						Nine Months Ended
	September 28, 2013			September 29, 2012			September 28, 2013			September 29, 2012
	(in thousands)
Equipment	$	(1,423	)	$	(10,298	)	$	(14,607	)	$	(15,493	)
Intevac Photonics		192			717			254			(939	)
Total segment operating income (loss)		(1,231	)		(9,581	)		(14,353	)		(16,432	)
Unallocated costs		(1,751	)		(1,429	)		(4,436	)		(4,417	)
Gain (loss) on divestitures		—			—			(208	)		2,207
Loss from operations		(2,982	)		(11,010	)		(18,997	)		(18,642	)
Interest income and other, net		220			(8	)		392			411
Loss before income taxes	$	(2,762	)	$	(11,018	)	$	(18,605	)	$	(18,231	)

Total assets for each reportable segment as of September 28, 2013 and December 31, 2012 are as follows:

Assets

	September 28, 2013		December 31, 2012
	(In thousands)
Equipment	$	39,825	$	37,376
Intevac Photonics		19,847		27,052
Total segment assets		59,672		64,428
Cash, cash equivalents and investments		85,720		92,169
Deferred income taxes		13,189		12,176
Other current assets		1,011		1,870
Common property, plant and equipment		1,283		1,211
Other assets		478		649
Consolidated total assets	$	161,353	$	172,503