Segment Reporting

3 Months Ended

Mar. 29, 2014

Segment Reporting

13. Segment Reporting

Intevac’s two reportable segments are: Equipment and 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 March 29, 2014 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 as well as other adjacent thin film deposition applications.

The 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.

Information for each reportable segment for the three months ended March 29, 2014 and March 30, 2013 is as follows:

Net Revenues

	Three Months Ended
	March 29, 2014		March 30, 2013
	(In thousands)
Equipment	$	9,047	$	5,368
Photonics		7,968		7,614
Total segment net revenues	$	17,015	$	12,982

Operating Loss

	Three Months Ended
	March 29, 2014			March 30, 2013
	(In thousands)
Equipment	$	(4,141	)	$	(7,341	)
Photonics		908			(192	)
Total segment operating profit (loss)		(3,233	)		(7,533	)
Unallocated costs		(1,491	)		(1,282	)
Loss on divestiture		—			(208	)
Loss from operations		(4,724	)		(9,023	)
Interest income and other, net		73			80
Loss before income taxes	$	(4,651	)	$	(8,943	)

Total assets for each reportable segment as of March 29, 2014 and December 30, 2013 are as follows:

Assets

	March 29, 2014		December 31, 2013
	(In thousands)
Equipment	$	31,309	$	33,428
Photonics		21,762		21,120
Total segment assets		53,071		54,548
Cash, cash equivalents and investments		75,033		81,414
Deferred income taxes		9,768		9,605
Other current assets		1,009		982
Common property, plant and equipment		1,309		1,302
Other assets		370		425
Consolidated total assets	$	140,560	$	148,276