10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 0-26946

INTEVAC, INC.

(Exact name of registrant as specified in its charter)

Delaware	94-3125814
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

3560 Bassett Street

Santa Clara, California 95054

(Address of principal executive office, including Zip Code)

Registrant’s telephone number, including area code: (408) 986-9888

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒  Yes    ☐  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes    ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    ☐  Yes    ☒  No

On April 30, 2019, 22,960,131 shares of the Registrant’s Common Stock, $0.001 par value, were outstanding.

INTEVAC, INC.

INDEX

No.		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets		3
	Condensed Consolidated Statements of Operations		4
	Condensed Consolidated Statements of Comprehensive Income (Loss)		5
	Condensed Consolidated Statements of Cash Flows		6
	Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		28
Item 4.	Controls and Procedures		28
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		29
Item 1A.	Risk Factors		29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3.	Defaults Upon Senior Securities		35
Item 4.	Mine Safety Disclosures		35
Item 5.	Other Information		35
Item 6.	Exhibits		35
SIGNATURES			36

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

INTEVAC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 30, 2019			December 29, 2018
	(Unaudited)
	(In thousands, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	23,537		$	18,715
Short-term investments		11,764			16,076
Trade and other accounts receivable, net of allowances of $0 at both March 30, 2019 and at December 29, 2018		19,996			27,717
Inventories		30,329			30,597
Prepaid expenses and other current assets		2,173			2,528
Total current assets		87,799			95,633
Long-term investments		5,394			4,372
Restricted cash		1,254			1,169
Property, plant and equipment, net		10,550			11,198
Operating lease right-of-use-assets		11,076			—
Intangible assets, net of accumulated amortization of $7,652 at March 30, 2019 and $7,498 at December 29, 2018		735			889
Deferred income taxes and other long-term assets		8,485			8,809
Total assets	$	125,293		$	122,070
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current operating lease liabilities	$	2,569		$	—
Accounts payable		4,867			6,053
Accrued payroll and related liabilities		3,457			4,689
Other accrued liabilities		4,327			4,952
Customer advances		10,335			14,314
Total current liabilities		25,555			30,008
Noncurrent liabilities:
Noncurrent operating lease liabilities		10,491			—
Other long-term liabilities		160			2,438
Total noncurrent liabilities		10,651			2,438
Stockholders’ equity:
Common stock, $0.001 par value		23			23
Additional paid-in capital		184,953			183,204
Treasury stock, 4,965 shares at both March 30, 2019 and December 29, 2018		(29,047	)		(29,047	)
Accumulated other comprehensive income		484			378
Accumulated deficit		(67,326	)		(64,934	)
Total stockholders’ equity		89,087			89,624
Total liabilities and stockholders’ equity	$	125,293		$	122,070

Note: Amounts as of December 29, 2018 are derived from the December 29, 2018 audited consolidated financial statements.

See accompanying notes.

3

INTEVAC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended
	March 30, 2019			March 31, 2018
	(Unaudited)
	(In thousands, except per share amounts)
Net revenues:
Systems and components	$	21,637		$	15,472
Technology development		3,190			2,502
Total net revenues		24,827			17,974
Cost of net revenues:
Systems and components		15,100			10,728
Technology development		2,488			2,371
Total cost of net revenues		17,588			13,099
Gross profit		7,239			4,875
Operating expenses:
Research and development		3,986			4,167
Selling, general and administrative		5,252			5,829
Total operating expenses		9,238			9,996
Loss from operations		(1,999	)		(5,121	)
Interest income and other income (expense), net		160			145
Loss before income taxes		(1,839	)		(4,976	)
Provision for income taxes		553			160
Net loss	$	(2,392	)	$	(5,136	)
Net loss per share:
Basic and Diluted	$	(0.10	)	$	(0.23	)
Weighted average common shares outstanding:
Basic and Diluted		22,855			22,107

See accompanying notes.

4

INTEVAC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Three Months Ended
	March 30, 2019			March 31, 2018
	(Unaudited)
	(In thousands)
Net loss	$	(2,392	)	$	(5,136	)
Other comprehensive income, before tax:
Change in unrealized net gain (loss) on available-for-sale investments		45			(28	)
Foreign currency translation gains		61			104
Other comprehensive income, before tax		106			76
Income tax provision related to items in other comprehensive income		—			—
Other comprehensive income, net of tax		106			76
Comprehensive loss	$	(2,286	)	$	(5,060	)

See accompanying notes.

5

INTEVAC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended
	March 30, 2019			March 31, 2018
	(Unaudited)
	(In thousands)
Operating activities
Net loss	$	(2,392	)	$	(5,136	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		1,036			1,043
Net amortization (accretion) of investment premiums and discounts		(16	)		(18	)
Equity-based compensation		756			817
Straight-line rent adjustment and amortization of lease incentives		(85	)		(19	)
Deferred income taxes		332			—
Change in the fair value of acquisition-related contingent consideration		7			(1	)
Loss on disposal of equipment		45			—
Changes in operating assets and liabilities		1,286			(733	)
Total adjustments		3,361			1,089
Net cash provided by (used in) operating activities		969			(4,047	)
Investing activities
Purchases of investments		(5,045	)		(10,161	)
Proceeds from sales and maturities of investments		8,396			9,328
Purchases of leasehold improvements and equipment		(371	)		(592	)
Net cash provided by (used in) investing activities		2,980			(1,425	)
Financing activities
Proceeds from issuance of common stock		1,021			2,065
Taxes paid related to net share settlement		(28	)		(333	)
Payment of acquisition-related contingent consideration		(98	)		—
Net cash provided by financing activities		895			1,732
Effect of exchange rate changes on cash and cash equivalents		63			105
Net increase (decrease) in cash, cash equivalents and restricted cash		4,907			(3,635	)
Cash, cash equivalents and restricted cash at beginning of period		19,884			20,941
Cash, cash equivalents and restricted cash at end of period	$	24,791		$	17,306

See accompanying notes.

6

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of Business and Basis of Presentation

Intevac, Inc. (together with its subsidiaries “Intevac,” the “Company” or “we”) is a provider of vacuum deposition equipment for a wide variety of thin-film applications, and a leading provider of digital night-vision technologies and products to the defense industry. The Company leverages its core capabilities in high-volume manufacturing of small substrates to provide process manufacturing equipment solutions to the hard disk drive (“HDD”), display cover panel (“DCP”), and photovoltaic (“PV”) solar cell industries. Intevac also provides sensors, cameras and systems for government applications such as night vision. Intevac’s customers include manufacturers of hard disk media, DCPs and solar cells as well as the U.S. government and its agencies, allies and contractors. Intevac reports two segments: Thin-film Equipment (“TFE”) and Photonics.

In the opinion of management, except for the changes below, the unaudited interim condensed consolidated financial statements of Intevac included herein have been prepared on a basis consistent with the December 29, 2018 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments, necessary to fairly present the information set forth therein. The Company adopted Accounting Standards Codification (“ASC”) 842, Leases, with a date of the initial application of December 30, 2018. As a result, the Company has changed its accounting policy for leases as detailed in Note 10. Leases. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Intevac’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 (“2018 Form 10-K”). Intevac’s results of operations for the three months ended March 30, 2019 are not necessarily indicative of future operating results.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates.

2. Recent Accounting Pronouncement

Adoption of New Accounting Standard

We adopted ASU No. 2016-02, Leases (Topic 842), as of December 30, 2018, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the beginning of the period of adoption. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and we elected the hindsight practical expedient to determine the lease term for existing leases. We determined that most renewal options would not be reasonably certain in determining the expected lease term. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

Adoption of the new standard resulted in the recording of net lease assets of $11.6 million and lease liabilities of $13.7 million, as of December 30, 2018. The standard did not have an impact on our consolidated results of operations or cash flows.

7

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

The effect of the changes made to our consolidated December 30, 2018 balance sheet for the adoption of the new lease standard was as follows (in thousands):

	Balance at December 29, 2018		Adjustments Due to ASC 842			Balance at December 30, 2018
Prepaid expenses and other current assets	$	2,528	$	(221	)1	$	2,307
Total current assets	$	95,633	$	(221	)1	$	95,412
Operating lease right-of-use assets	$	—	$	11,635	1,2,3	$	11,635
Total assets	$	122,070	$	11,414	1,2,3	$	133,484
Current operating lease liabilities	$	—	$	2,581	5	$	2,581
Accounts payable	$	6,053	$	(4	)4	$	6,049
Other accrued liabilities	$	4,952	$	(13	)3	$	4,939
Total current liabilities	$	30,008	$	2,564	3,4,5	$	32,572
Noncurrent operating lease liabilities	$	—	$	11,120	5	$	11,120
Other long-term liabilities	$	2,438	$	(2,270	)3	$	168
Total non-current liabilities	$	2,438	$	8,850	3,4,5	$	11,288
Total liabilities and stockholders’ equity	$	122,070	$	11,414	,4,5	$	133,484

¹  Represents prepaid rent reclassified to operating lease right-of-use assets.

²  Represents capitalization of operating lease right-of-use assets and reclassification of straight-line rent accrual, and tenant incentives.

³  Represents reclassification of straight-line rent accrual to operating lease right-of-use assets.

⁴  Represents accrued rent reclassified to operating lease right-of-use assets.

⁵  Represents recognition of operating lease liabilities.

3. Revenue

The following tables represent a disaggregation of revenue from contracts with customers for the three months ended March 30, 2019 and March 31, 2018 along with the reportable segment for each category.

Major Products and Service Lines

TFE	Three Months Ended March 30, 2019								Three Months Ended March 31, 2018
	(In thousands)
	HDD		DCP		PV		Total		HDD		DCP		PV		Total
Systems, upgrades and spare parts	$	11,050	$	—	$	6,373	$	17,423	$	10,393	$	1	$	2	$	10,396
Field service		1,522		—		—		1,522		2,355		—		38		2,393
Total TFE net revenues	$	12,572	$	—	$	6,373	$	18,945	$	12,748	$	1	$	40	$	12,789

8

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

	Three Months Ended
Photonics	March 30, 2019		March 31, 2018
	(In thousands)
Products:
Military products	$	1,813	$	2,254
Commercial products		318		—
Repair and other services		561		429
Total Photonics product net revenues		2,692		2,683
Technology development:
Firm Fixed Price (“FFP”)		1,692		692
Cost Plus Fixed Fee (“CPFF”)		1,496		1,790
Time and materials		2		20
Total technology development net revenues		3,190		2,502
Total Photonics net revenues	$	5,882	$	5,185

Primary Geographical Markets

	Three Months Ended
	March 30, 2019						March 31, 2018
	(In thousands)
	TFE		Photonics		Total		TFE		Photonics		Total
United States	$	161	$	5,716	$	5,877	$	1,911	$	4,762	$	6,673
Asia		18,784		—		18,784		10,878		—		10,878
Europe		—		166		166		—		293		293
Rest of World		—		—		—		—		130		130
Total net revenues	$	18,945	$	5,882	$	24,827	$	12,789	$	5,185	$	17,974

Timing of Revenue Recognition

	Three Months Ended
	March 30, 2019						March 31, 2018
	(In thousands)
	TFE		Photonics		Total		TFE		Photonics		Total
Products transferred at a point in time	$	18,945	$	561	$	19,506	$	12,789	$	429	$	13,218
Products and services transferred over time		—		5,321		5,321		—		4,756		4,756
	$	18,945	$	5,882	$	24,827	$	12,789	$	5,185	$	17,974

9

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

The following table reflects the changes in our contract assets, which we classify as accounts receivable, unbilled or retainage, and our contract liabilities, which we classify as deferred revenue and customer advances, for the three months ended March 30 2019.

	March 30, 2019		December 29, 2018		Three Months Change
	(In thousands)
TFE:
Contract assets:
Accounts receivable, unbilled	$	897	$	514	$	383
Contract liabilities:
Deferred revenue	$	713	$	633	$	80
Customer advances		10,335		14,314		(3,979	)
	$	11,048	$	14,947	$	(3,899	)
Photonics:
Contract assets:
Accounts receivable, unbilled	$	2,561	$	1,493	$	1,068
Retainage		131		157		(26	)
	$	2,692	$	1,650	$	1,042
Contract liabilities:
Deferred revenue	$	784	$	1,101	$	(317	)

Accounts receivable, unbilled in our TFE segment represents a contract asset for revenue that has been recognized in advance of billing the customer. For our system and certain upgrade sales, our TFE customers generally pay in three installments, with a portion of the system price billed upon receipt of an order, a portion of the price billed upon shipment, and the balance of the price due upon completion of installation and acceptance of the system at the customer’s factory. Accounts receivable, unbilled in our TFE segment generally represents the balance of the system price that is due upon completion of installation and acceptance less, the amount that has been deferred as revenue for the performance of the installation tasks. During the three months ended March 30, 2019, contract assets in our TFE segment increased by $383,000 primarily due to the accrual of revenue for four systems delivered in the quarter that were pending acceptance as of March 30, 2019.

Customer advances in our TFE segment generally represent a contract liability for amounts billed to the customer prior to transferring goods. The Company has elected to use the practical expedient to disregard the effect of the time value of money in a significant financing component when its payment terms are less than one year. These contract advances are liquidated when revenue is recognized. Deferred revenue in our TFE segment generally represents a contract liability for amounts billed to a customer for completed systems at the customer site that are undergoing installation and acceptance testing where transfer of control has not yet occurred as Intevac does not yet have a demonstrated history of meeting the acceptance criteria upon the customer’s receipt of product. During the three months ended March 30, 2019, we recognized revenue in our TFE segment of $6.5 million and $209,000 that was included in customer advances and deferred revenue, respectively, at the beginning of the period.

Accounts receivable, unbilled in our Photonics segment represents a contract asset for revenue that has been recognized in advance of billing the customer, which is common for contracts in the defense industry. In our Photonics segment, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. Our contracts with the U.S. government may also contain retainage provisions. Retainage represents a contract asset for the portion of the contract price earned by us for work performed, but held for payment by the U.S. government as a form of security until satisfactory completion of the contract. The retainage is billable upon completion of the contract performance and approval of final indirect expense rates by the government. During the three months ended March 30, 2019, contract assets in our Photonics segment increased by $1.0 million primarily due to the accrual of revenue for incurred costs under FFP and CPFF contracts.

Deferred revenue in our Photonics segment includes $784,000 deferred for the impact of the allocation and the timing of the recognition of revenue for a military product agreement with a tiered pricing structure. During the three months ended March 30, 2019, we recognized revenue in our Photonics segment of $317,000 that was included in deferred revenue at the beginning of the period.

10

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

On March 30, 2019 we had $102.6 million of remaining performance obligations, which we also refer to as total backlog. Backlog at March 30, 2019 consisted of $59.3 million of TFE backlog and $43.3 million of Photonics backlog. We expect to recognize approximately 69% of our remaining performance obligations as revenue in 2019, and the balance in 2020.

4. Inventories

Inventories are stated at the lower of average cost or net realizable value and consist of the following:

	March 30, 2019		December 29, 2018
	(In thousands)
Raw materials	$	16,815	$	16,354
Work-in-progress		11,933		9,134
Finished goods		1,581		5,109
	$	30,329	$	30,597

Finished goods inventory at December 29, 2018 included three completed systems at Intevac’s factory and shipped to the customer in January 2019.

5. Equity-Based Compensation

At March 30, 2019, Intevac had equity-based awards outstanding under the 2012 Equity Incentive Plan and the 2004 Equity Incentive Plan (together, the “Plans”) and the 2003 Employee Stock Purchase Plan (the “ESPP”). Intevac’s stockholders approved all of these plans. The Plans permit the grant of incentive or non-statutory stock options, restricted stock, stock appreciation rights, restricted stock units (“RSUs”) and performance shares.

The ESPP provides that eligible employees may purchase Intevac’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market value at the entry date of the applicable offering period or at the end of each applicable purchase interval. Offering periods are generally two years in length, and consist of a series of six-month purchase intervals. Eligible employees may join the ESPP at the beginning of any six-month purchase interval. Under the terms of the ESPP, employees can choose to have up to 15% of their base earnings withheld to purchase Intevac common stock.

Compensation Expense

The effect of recording equity-based compensation for the three-month periods ended March 30, 2019 and March 31, 2018 was as follows:

	Three Months Ended
	March 30, 2019		March 31, 2018
	(In thousands)
Equity-based compensation by type of award:
Stock options	$	206	$	134
RSUs		291		406
Employee stock purchase plan		259		277
Total equity-based compensation	$	756	$	817

Stock Options and ESPP

The fair value of stock options and ESPP awards is estimated at the grant date using the Black-Scholes option valuation model. The determination of fair value of stock options and ESPP awards on the date of grant using an option-pricing model is affected by Intevac’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual employee stock option exercise behavior.

11

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

Option activity as of March 30, 2019 and changes during the three months ended March 30, 2019 were as follows:

	Shares			Weighted Average Exercise Price
Options outstanding at December 29, 2018		2,070,749		$	6.76
Options granted		13,125		$	6.08
Options cancelled and forfeited		(8,992	)	$	7.43
Options exercised		(72,122	)	$	4.22
Options outstanding at March 30, 2019		2,002,760		$	6.84
Options exercisable at March 30, 2019		1,300,175		$	6.72

Intevac issued 181,431 shares under the ESPP during the three months ended March 30, 2019.

Intevac estimated the weighted-average fair value of stock options and ESPP purchase rights using the following weighted-average assumptions:

	Three Months Ended
	March 30, 2019			March 31, 2018
Stock Options:
Weighted-average fair value of grants per share	$	2.28		$	2.30
Expected volatility		43.40	%		41.97	%
Risk free interest rate		2.21	%		2.48	%
Expected term of options (in years)		4.32			4.23
Dividend yield		None			None
ESPP Purchase Rights:
Weighted-average fair value of grants per share	$	1.89		$	2.36
Expected volatility		50.00	%		46.60	%
Risk free interest rate		2.53	%		1.82	%
Expected term of purchase rights (in years)		1.0			1.25
Dividend yield		None			None

The computation of the expected volatility assumptions used in the Black-Scholes calculations for new stock option grants and ESPP purchase rights is based on the historical volatility of Intevac’s stock price, measured over a period equal to the expected term of the stock option grant or purchase right. The risk-free interest rate is based on the yield available on U.S. Treasury Strips with an equivalent remaining term. The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the equity-based awards and vesting schedules. The expected term of purchase rights represents the period of time remaining in the current offering period. The dividend yield assumption is based on Intevac’s history of not paying dividends and the assumption of not paying dividends in the future. Intevac accounts for forfeitures as they occur, rather than by estimating expected forfeitures.

RSUs

A summary of the RSU activity is as follows:

	Shares			Weighted-Average Grant Date Fair Value
Non-vested RSUs at December 29, 2018		462,409		$	6.92
Granted		8,563		$	6.11
Vested		(11,924	)	$	6.92
Cancelled and forfeited		(8,737	)	$	6.38
Non-vested RSUs at March 30, 2019		450,311		$	6.91

12

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

Time-based RSUs are converted into shares of Intevac common stock upon vesting on a one-for-one basis. Time-based RSUs typically are scheduled to vest over four years. Vesting of time-based RSUs is subject to the grantee’s continued service with Intevac. The compensation expense related to these awards is determined using the fair market value of Intevac common stock on the date of the grant, and the compensation expense is recognized over the vesting period.

6. Purchased Intangible Assets

Details of finite-lived intangible assets by segment as of March 30, 2019, are as follows:

	March 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)
TFE	$	7,172	$	(6,505	)	$	667
Photonics		1,215		(1,147	)		68
	$	8,387	$	(7,652	)	$	735

Total amortization expense of finite-lived intangibles for the three months ended March 30, 2019 was $154,000.

As of March 30, 2019, future amortization expense is expected to be as follows:

(In thousands)
2019	$	461
2020		274
	$	735

7. Acquisition-Related Contingent Consideration

In connection with the acquisition of Solar Implant Technologies, Inc. (“SIT”), Intevac also agreed to pay to the selling shareholders in cash a revenue earnout on Intevac’s net revenue from commercial sales of certain products over a specified period up to an aggregate of $9.0 million. Intevac estimated the fair value of this contingent consideration on March 30, 2019 based on forecasted revenues reflecting Intevac’s own assumptions concerning future revenue from such products. The earnout period terminates on June 30, 2019.

The fair value measurement of contingent consideration is based on significant inputs not observable in the market and thus represents a Level 3 measurement. Significant increases or decreases in these inputs would result in a significantly lower (higher) fair value measurement. Any change in fair value of the contingent consideration subsequent to the acquisition date is recognized in operating income within the consolidated statement of income. The following table represents a reconciliation of the change in the fair value measurement of the contingent consideration liability for the three-month periods ended March 30, 2019 and March 31, 2018.

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
Opening balance	$	223		$	362
Changes in fair value		7			(1	)
Cash payments made		(98	)		—
Closing balance	$	132		$	361

The contingent consideration liability of $132,000 at March 30, 2019 and $223,000 at December 29, 2018 is included in other accrued liabilities on the condensed consolidated balance sheets.

13

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

8. Warranty

Intevac provides for the estimated cost of warranty when revenue is recognized. Intevac’s warranty is per contract terms and, for its HDD manufacturing, DCP manufacturing and solar cell manufacturing systems, the warranty typically ranges between 12 and 24 months from customer acceptance. During this warranty period any defective non-consumable parts are replaced and installed at no charge to the customer. Intevac uses estimated repair or replacement costs along with its historical warranty experience to determine its warranty obligation. The provision for the estimated future costs of warranty is based upon historical cost and product performance experience. Intevac exercises judgment in determining the underlying estimates.

On the condensed consolidated balance sheets, the short-term portion of the warranty provision is included in other accrued liabilities, while the long-term portion is included in other long-term liabilities. The expense associated with product warranties issued or adjusted is included in cost of net revenues on the condensed consolidated statements of operations.

The following table displays the activity in the warranty provision account for the three-month periods ended March 30, 2019 and March 31, 2018.

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
Opening balance	$	997		$	994
Expenditures incurred under warranties		(167	)		(236	)
Accruals for product warranties issued during the reporting period		324			104
Adjustments to previously existing warranty accruals		143			4
Closing balance	$	1,297		$	866

The following table displays the balance sheet classification of the warranty provision account at March 30, 2019 and at December 29, 2018.

	March 30, 2019		December 29, 2018
	(In thousands)
Other accrued liabilities	$	1,147	$	839
Other long-term liabilities		150		158
Total warranty provision	$	1,297	$	997

9. Guarantees

Officer and Director Indemnifications

As permitted or required under Delaware law and to the maximum extent allowable under that law, Intevac has certain obligations to indemnify its current and former officers and directors for certain events or occurrences while the officer or director is, or was, serving at Intevac’s request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The maximum potential amount of future payments Intevac could be required to make under these indemnification obligations is unlimited; however, Intevac has a director and officer insurance policy that mitigates Intevac’s exposure and enables Intevac to recover a portion of any future amounts paid. As a result of Intevac’s insurance policy coverage, Intevac believes the estimated fair value of these indemnification obligations is not material.

Other Indemnifications

As is customary in Intevac’s industry, many of Intevac’s contracts provide remedies to certain third parties such as defense, settlement, or payment of judgments for intellectual property claims related to the use of its products. Such indemnification obligations may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial.

14

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

Letters of Credit

As of March 30, 2019, we had letters of credit and bank guarantees outstanding totaling $1.3 million, including the standby letter of credit outstanding under the Santa Clara, California facility lease and various other guarantees with our bank. These letters of credit and bank guarantees are collateralized by $1.3 million of restricted cash.

10. Leases

Intevac leases certain manufacturing facilities, warehouses, office space, and equipment under non-cancelable operating leases that expire at various times up to March 2024 and has options to renew most leases, with rentals to be negotiated. Certain of Intevac’s leases contain provisions for rental adjustments. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date we take possession of the property. At lease inception, we determine the lease term by assuming the exercise of those renewal options that are reasonably assured. The exercise of lease renewal options is at our sole discretion. The lease term is used to determine whether a lease is financing or operating and is used to calculate straight-line rent expense. Additionally, the depreciable life of leasehold improvements is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

The following table reflects our lease assets and our lease liabilities at March 30, 2019 and December 30, 2018.

	March 30, 2019		December 30, 2018
	(In thousands)
Assets:
Operating lease right-of-use assets	$	11,076	$	11,635
Liabilities:
Current operating lease liabilities	$	2,569	$	2,581
Noncurrent operating lease liabilities		10,491		11,120
	$	13,060	$	13,701

Lease Costs:

The components of lease costs were as follows:

	Three Months Ended
	March 30, 2019		March 31, 2018
	(In thousands)
Operating lease cost	$	782	$	759
Short-term lease cost		19		21
Total lease cost	$	801	$	780

As of March 30, 2019, the maturity of operating lease liabilities was as follows:

(In thousands)
2019	$	2,543
2020		2,992
2021		2,989
2022		3,074
2023		3,161
2024		529
Total lease payments		15,288
Less: Interest		(2,228	)
Present value of lease liabilities	$	13,060

15

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

Lease Term and Discount Rate:

	March 30, 2019
Weighted-average remaining lease term (in years)		4.8
Weighted-average discount rate		6.48	%

Other information:

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
	March 30, 2019
Operating cash outflows from operating leases	$	886
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—

11. Cash, Cash Equivalents and Investments

Cash and cash equivalents, short-term investments and long-term investments consist of:

	March 30, 2019
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses		Fair Value
	(In thousands)
Cash and cash equivalents:
Cash	$	14,671	$	—	$	—	$	14,671
Money market funds		5,064		—		—		5,064
Commercial paper		1,497		—		—		1,497
Municipal bonds		500		—		—		500
U.S. treasury and agency securities		1,804		1		—		1,805
Total cash and cash equivalents	$	23,536	$	1	$	—	$	23,537
Short-term investments:
Certificates of deposit	$	3,000	$	4	$	—	$	3,004
Commercial paper		1,899		—		—		1,899
Corporate bonds and medium-term notes		2,807		2		3		2,806
Municipal bonds		500		—		—		500
U.S. treasury and agency securities		3,560		—		5		3,555
Total short-term investments	$	11,766	$	6	$	8	$	11,764
Long-term investments:
Certificates of deposit	$	500	$	—	$	—	$	500
Corporate bonds and medium-term notes		4,875		20		1		4,894
Total long-term investments	$	5,375	$	20	$	1	$	5,394
Total cash, cash equivalents, and investments	$	40,677	$	27	$	9	$	40,695

16

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

	December 29, 2018
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses		Fair Value
	(In thousands)
Cash and cash equivalents:
Cash	$	13,334	$	—	$	—	$	13,334
Money market funds		3,335		—		—		3,335
U.S. treasury and agency securities		2,046		—		—		2,046
Total cash and cash equivalents	$	18,715	$	—	$	—	$	18,715
Short-term investments:
Certificates of deposit	$	5,299	$	1	$	1	$	5,299
Commercial paper		2,242		—		1		2,241
Corporate bonds and medium-term notes		4,759		—		13		4,746
Municipal bonds		500		—		2		498
U.S. treasury and agency securities		3,297		—		5		3,292
Total short-term investments	$	16,097	$	1	$	22	$	16,076
Long-term investments:
Certificates of deposit	$	500	$	—	$	—	$	500
Corporate bonds and medium-term notes		2,879		4		4		2,879
U.S. treasury and agency securities		999		—		6		993
Total long-term investments	$	4,378	$	4	$	10	$	4,372
Total cash, cash equivalents, and investments	$	39,190	$	5	$	32	$	39,163

The contractual maturities of available-for-sale securities at March 30, 2019 are presented in the following table.

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	20,631	$	20,630
Due after one through five years		5,375		5,394
	$	26,006	$	26,024

The following table provides the fair market value of Intevac’s investments with unrealized losses that are not deemed to be other-than temporarily impaired as of March 30, 2019.

	March 30, 2019
	In Loss Position for Less than 12 Months				In Loss Position for Greater than 12 Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In thousands)
Corporate bonds and medium-term notes	$	—	$	—	$	1,097	$	4
U.S. treasury and agency securities		—		—		1,994		5
	$	—	$	—	$	3,091	$	9

All prices for the fixed maturity securities including U.S. treasury and agency securities, certificates of deposit, commercial paper, corporate bonds, asset backed securities and municipal bonds are received from independent pricing services utilized by Intevac’s outside investment manager. This investment manager performs a review of the pricing methodologies and inputs utilized by the independent pricing services for each asset type priced by the vendor. In addition, on at least an annual basis, the investment manager conducts due diligence visits and interviews with each pricing vendor to verify the inputs utilized for each asset class. The due diligence visits include a review of the procedures performed by each vendor to ensure that pricing evaluations are representative of the price that would be received to sell a security in an orderly transaction. Any pricing where the input is based solely on a broker

17

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

price is deemed to be a Level 3 price. Intevac uses the pricing data obtained from its outside investment manager as the primary input to make its assessments and determinations as to the ultimate valuation of the above-mentioned securities and has not made, during the periods presented, any material adjustments to such inputs.

The following table represents the fair value hierarchy of Intevac’s available-for-sale securities measured at fair value on a recurring basis as of March 30, 2019.

	Fair Value Measurements at March 30, 2019
	Total		Level 1		Level 2
	(In thousands)
Recurring fair value measurements:
Available-for-sale securities
Money market funds	$	5,064	$	5,064	$	—
U.S. treasury and agency securities		5,360		5,360		—
Certificates of deposit		3,504		—		3,504
Commercial paper		3,396		—		3,396
Corporate bonds and medium-term notes		7,700		—		7,700
Municipal bonds		1,000		—		1,000
Total recurring fair value measurements	$	26,024	$	10,424	$	15,600

12. Derivative Instruments

The Company uses foreign currency forward contracts to mitigate variability in gains and losses generated from the re-measurement of certain monetary assets and liabilities denominated in foreign currencies and to offset certain operational exposures from the impact of changes in foreign currency exchange rates. These derivatives are carried at fair value with changes recorded in interest income and other, net in the condensed consolidated statements of operations. Changes in the fair value of these derivatives are largely offset by re-measurement of the underlying assets and liabilities. Cash flows from such derivatives are classified as operating activities. The derivatives have maturities of approximately 30 days.

The following table summarizes the Company’s outstanding derivative instruments on a gross basis as recorded in its condensed consolidated balance sheets as of March 30, 2019 and December 29, 2018.

	Notional Amounts				Derivative Liabilities
Derivative Instrument	March 30, 2019		December 29, 2018		March 30, 2019				December 29, 2018
					Balance Sheet Line		Fair Value		Balance Sheet Line		Fair Value
	(In thousands)
Undesignated Hedges:
Forward Foreign Currency Contracts	$	1,558		1,764		*	$	8		*	$	8
Total Hedges	$	1,558		1,764			$	8			$	8

* Other accrued liabilities

18

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

13. Equity

Condensed Consolidated Statements of Changes in Equity

The changes in stockholders’ equity by component for the three months ended March 30, 2019 and March 31, 2018, are as follows (in thousands):

	Three Months Ended March 30, 2019
	Common
	Stock and					Accumulated
	Additional					Other					Total
	Paid-in		Treasury			Comprehensive		Accumulated			Stockholders’
	Capital		Stock			Income		Deficit			Equity
Balance at December 29, 2018	$	183,227	$	(29,047	)	$	378	$	(64,934	)	$	89,624
Common stock issued under employee plans		993		—			—		—			993
Equity-based compensation expense		756		—			—		—			756
Net loss		—		—			—		(2,392	)		(2,392	)
Other comprehensive income		—		—			106		—			106
Balance at March 30, 2019	$	184,976	$	(29,047	)	$	484	$	(67,326	)	$	89,087
	Three Months Ended March 31, 2018
	Common
	Stock and					Accumulated
	Additional					Other					Total
	Paid-in		Treasury			Comprehensive		Accumulated			Stockholders’
	Capital		Stock			Income		Deficit			Equity
Balance at December 30, 2017	$	177,543	$	(28,489	)	$	490	$	(66,881	)	$	82,663
Cumulative effect of accounting change		—		—			—		(1,634	)		(1,634	)
Common stock issued under employee plans		1,732		—			—		—			1,732
Equity-based compensation expense		817		—			—		—			817
Net loss		—		—			—		(5,136	)		(5,136	)
Other comprehensive income		—		—			76		—			76
Balance at March 30, 2018	$	180,092	$	(28,489	)	$	566	$	(73,651	)	$	78,518

Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income by component for the three months ended March 30, 2019 and March 31, 2018, are as follows:

	Three Months Ended
	March 30, 2019							March 31, 2018
	Foreign currency		Unrealized holding gains (losses) on available- for-sale investments			Total		Foreign currency		Unrealized holding gains (losses) on available- for-sale investments			Total
	(In thousands)
Beginning balance	$	405	$	(27	)	$	378	$	535	$	(45	)	$	490
Other comprehensive income before reclassification		61		45			106		104		(28	)		76
Amounts reclassified from other comprehensive income		—		—			—		—		—			—
Net current-period other comprehensive income		61		45			106		104		(28	)		76
Ending balance	$	466	$	18		$	484	$	639	$	(73	)	$	566

Stock Repurchase Program

On November 21, 2013, Intevac’s Board of Directors approved a stock repurchase program authorizing up to $30.0 million in repurchases. On August 15, 2018, Intevac’s Board of Directors approved a $10.0 million increase to the original stock repurchase

19

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

program for an aggregate authorized amount of up to $40.0 million. At March 30, 2019, $10.9 million remains available for future stock repurchases under the repurchase program. Intevac did not make any stock repurchases during the three months ended March 30, 2019 and March 30, 2018, respectively.

Intevac records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital. If Intevac reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings.

14. Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share.

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
Net loss	$	(2,392	)	$	(5,136	)
Weighted-average shares — basic		22,855			22,107
Effect of dilutive potential common shares		—			—
Weighted-average shares — diluted		22,855			22,107
Net loss per share — basic and diluted	$	(0.10	)	$	(0.23	)

As the Company is in a net loss position, all of the Company’s equity instruments are considered antidilutive.

15. Segment Reporting

Intevac’s two reportable segments are: TFE 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 30, 2019 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 TFE segment designs, develops and markets vacuum process equipment solutions for high-volume manufacturing of small substrates with precise thin-film properties, such as for the hard drive, solar cell and DCP industries, as well as other adjacent thin-film markets.

The 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.

20

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

Information for each reportable segment for the three months ended March 30, 2019 and March 31, 2018 is as follows:

Net Revenues

	Three Months Ended
	March 30, 2019		March 31, 2018
	(In thousands)
TFE	$	18,945	$	12,789
Photonics		5,882		5,185
Total segment net revenues	$	24,827	$	17,974

Operating Loss

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
TFE	$	(603	)	$	(2,509	)
Photonics		(640	)		(1,210	)
Total segment operating loss		(1,243	)		(3,719	)
Unallocated costs		(756	)		(1,402	)
Loss from operations		(1,999	)		(5,121	)
Interest income and other income (expense), net		160			145
Loss before income taxes	$	(1,839	)	$	(4,976	)

Total assets for each reportable segment as of March 30, 2019 and December 29, 2018 are as follows:

Assets

	March 30, 2019		December 29, 2018
	(In thousands)
TFE	$	52,417	$	53,867
Photonics		18,115		16,721
Total segment assets		70,532		70,588
Cash, cash equivalents and investments		40,695		39,163
Restricted cash		1,254		1,169
Deferred income taxes		7,581		7,913
Other current assets		1,124		1,341
Common property, plant and equipment		1,026		1,017
Common operating lease right-of-use assets		2,194		—
Other assets		887		879
Consolidated total assets	$	125,293	$	122,070

16. Income Taxes

Intevac recorded income tax provisions of $553,000 for the three months ended March 30, 2019 and $160,000 for the three months ended March 31, 2018. The income tax provisions for the three month periods are based upon estimates of annual income (loss), annual permanent differences and statutory tax rates in the various jurisdictions in which Intevac operates. For the three-month period ended March 30, 2019 Intevac recorded a $362,000 income tax provision on earnings of its international subsidiaries and

21

INTEVAC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

recorded $191,000 for withholding taxes on royalties paid to the United States from Intevac’s Singapore subsidiary as a discrete item. For the three-month period ended March 31, 2018 Intevac recorded $145,000 for withholding taxes as a discrete item. For all periods presented Intevac utilized net operating loss carry-forwards to offset the impact of the global intangible low-taxed income (“GILTI”). Intevac’s tax rate differs from the applicable statutory rates due primarily to establishment of a valuation allowance, the utilization of deferred and current credits and the effect of permanent differences and adjustments of prior permanent differences. Intevac’s future effective income tax rate depends on various factors, including the level of Intevac’s projected earnings, the geographic composition of worldwide earnings, tax regulations governing each region, net operating loss carry-forwards, availability of tax credits and the effectiveness of Intevac’s tax planning strategies. Management carefully monitors these factors and timely adjusts the effective income tax rate.

The Inland Revenue Authority of Singapore (“IRAS”) is currently conducting a review of various fiscal year tax returns of the Company’s wholly-owned subsidiary, Intevac Asia Pte. Ltd. in 2009 and 2010. IRAS has challenged the Company’s tax position with respect to certain aspects of the Company’s transfer pricing. Under Singapore tax law, the Company must pay all contested taxes and the related interest to have the right to defend its position. The contested tax deposits of $730,000 at March 30, 2019 and $723,000 at December 29, 2018 are included in other long-term assets on the condensed consolidated balance sheets. The Company’s management and its advisors continue to believe that the Company is “more likely than not” to successfully defend that the tax treatment was proper and in accordance with Singapore tax regulations. Presently, there are no other active income tax examinations in the jurisdictions where Intevac operates.

17. Restructuring Charges

During the first quarter of fiscal 2018, Intevac substantially completed implementation of the 2018 cost reduction plan (the “Reduction Plan”), which was intended to reduce expenses and reduce its workforce by 6 percent. The cost of implementing the Reduction Plan was reported under cost of net revenues and operating expenses in the condensed consolidated statements of operations. Substantially all cash outlays in connection with the Reduction Plan occurred in the first quarter of fiscal 2018. Implementation of the Reduction Plan reduced salary, wages and other employee-related expenses by approximately $1.8 million on an annual basis.

The changes in restructuring reserves associated with the Reduction Plan for the three months ended March 31, 2018 are as follows:

	Three Months Ended
	March 31, 2018
	Severance and other employee- related costs (In thousands)
Beginning balance	$	—
Provision for restructuring reserves		95
Cash payments made		(95	)
Ending balance	$	—

18. Related Party Transaction

A Board member of the Company also serves as the Chief Executive Officer of a supplier. The Company made inventory purchases in the amount of $152,000 for the three months ended March 30, 2019 and $85,000 for the three months ended March 31, 2018, respectively from this supplier.

19. Commitments and Contingencies

From time to time, Intevac may have certain contingent liabilities that arise in the ordinary course of its business activities. Intevac accounts for contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

22

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements, which involve risks and uncertainties. Words such as “believes,” “expects,” “anticipates” and the like indicate forward-looking statements. These forward-looking statements include comments related to Intevac’s shipments, projected revenue recognition, product costs, gross margin, operating expenses, interest income, income taxes, cash balances and financial results in 2019 and beyond; projected customer requirements for Intevac’s new and existing products, and when, and if, Intevac’s customers will place orders for these products; Intevac’s ability to proliferate its Photonics technology into major military programs and to develop and introduce commercial imaging products; the timing of delivery and/or acceptance of the systems and products that comprise Intevac’s backlog for revenue and the Company’s ability to achieve cost savings. Intevac’s actual results may differ materially from the results discussed in the forward-looking statements for a variety of reasons, including those set forth under “Risk Factors” and in other documents we file from time to time with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed on February 13, 2019, and our periodic reports on Form 10-Q and current reports on Form 8-K.

Overview

Intevac is a provider of vacuum deposition equipment for a wide variety of thin-film applications, and a leading provider of digital night-vision technologies and products to the defense industry. The Company leverages its core capabilities in high-volume manufacturing of small substrates to provide process manufacturing equipment solutions to the hard disk drive (“HDD”), display cover panel (“DCP”), and photovoltaic (“PV”) solar cell industries. Intevac also provides sensors, cameras and systems for government applications such as night vision. Intevac’s customers include manufacturers of hard disk media, DCPs and solar cells as well as the U.S. government and its agencies, allies and contractors. Intevac reports two segments: Thin-film Equipment (“TFE”) and Photonics.

Product development and manufacturing activities occur in North America and Asia. Intevac has field offices in Asia to support its TFE customers. Intevac’s products are highly technical and are sold primarily through Intevac’s direct sales force. Intevac also sells its products through distributors in Japan and China.

Intevac’s results are driven by a number of factors including success in its equipment growth initiatives in the DCP and solar markets and by worldwide demand for HDDs. Demand for HDDs depends on the growth in digital data creation and storage, the rate of areal density improvements, and the end-user demand for PCs, enterprise data storage, nearline “cloud” applications, video players and video game consoles that include such drives. Intevac continues to execute its strategy of equipment diversification into new markets by introducing new products, such as for a thin-film physical vapor deposition (“PVD”) application for protective coating for DCP manufacturing and a thin-film PVD application for PV solar cell manufacturing. Intevac believes that expansion into these markets will result in incremental equipment revenues for Intevac and decrease Intevac’s dependence on the HDD industry. Intevac’s equipment business is subject to cyclical industry conditions, as demand for manufacturing equipment and services can change depending on supply and demand for HDDs, cell phones, and PV cells, as well as other factors such as global economic conditions and technological advances in fabrication processes.

The following table presents certain significant measurements for the three months ended March 30, 2019 and March 31, 2018.

	Three Months Ended
	March 30, 2019			March 31, 2018			Change over prior period
	(In thousands, except percentages and per share amounts)
Net revenues	$	24,827		$	17,974		$	6,853
Gross profit	$	7,239		$	4,875		$	2,364
Gross margin percent		29.2	%		27.1	%		2.1 points
Net loss	$	(2,392	)	$	(5,136	)	$	2,744
Net loss per diluted share	$	(0.10	)	$	(0.23	)	$	0.13

Net revenues increased during the first quarter of fiscal 2019 compared to the same period in the prior year primarily due to higher TFE sales and higher Photonics contract research and development (“R&D”) revenue. TFE recognized revenue on one 200 Lean^® HDD system and four ENERGi^® solar ion implant systems in the first quarter of fiscal 2019 compared to one 200 Lean HDD system in the first quarter of fiscal 2018. The Company reported a smaller net loss for the first quarter of fiscal 2019 compared to the first quarter of fiscal 2018 due to higher revenues, higher gross margins and lower operating expenses as a result of lower legal and consulting expenses and lower spending on R&D materials.

Intevac expects that HDD equipment sales in 2019 will be similar to slightly down from the levels in 2018 as a HDD manufacturer may take delivery of only four of the six 200 Lean HDD systems in backlog at the beginning of 2019. In 2019, we

23

expect additional 200 Lean HDD system orders. In 2019, Intevac expects higher sales of new TFE products as we expect follow on production orders for our VERTEX coating system for DCPs and we recognize revenue on the nine ENERGi solar ion implant systems that were in backlog at the beginning of 2019, four of which shipped in the first quarter. In 2019, we expect increased product shipments in Photonics as shipments for the Apache camera will resume in the second half of 2019 and we continue to deliver production shipments of the night-vision camera modules for the F35 Joint Strike Fighter program. In 2019, we expect increased contract R&D revenue as development work begins on the multi-year $28.6 million contract award for the development and production of digital night-vision cameras to support the U.S. Army’s Integrated Visual Augmentation System (“IVAS”) program. For fiscal 2019, Intevac expects that Photonics profits will be higher than fiscal 2018 as Photonics results will reflect higher revenue levels.

Intevac’s trademarks include the following: “200 Lean®,” “EBAPS^®,” “ENERGi^®,” “LIVAR®,” “INTEVAC LSMA^®,” “INTEVAC MATRIX®,” “MicroVista®,” “NightVista®,” “oDLC®,” “INTEVAC VERTEX®” and “VERTEX SPECTRA™.”

Results of Operations

Net revenues

	Three Months Ended
	March 30, 2019		March 31, 2018		Change over prior period
	(In thousands)
TFE	$	18,945	$	12,789	$	6,156
Photonics
Products		2,692		2,683		9
Contract R&D		3,190		2,502		688
		5,882		5,185		697
Total net revenues	$	24,827	$	17,974	$	6,853

TFE revenue for the three months ended March 30, 2019 included revenue recognized for one 200 Lean HDD system, four ENERGi solar ion implant systems, disk equipment technology upgrades and spare parts. TFE revenue for the three months ended March 31, 2018 included revenue recognized for one 200 Lean HDD system, disk equipment technology upgrades and spare parts.

Photonics revenue for the three months ended March 30, 2019 increased compared to the same period in the prior year as a result of higher contract R&D work.

Backlog

	March 30, 2019		December 29, 2018		March 31, 2018
	(In thousands)
TFE	$	59,346	$	64,803	$	55,589
Photonics		43,294		43,711		11,261
Total backlog	$	102,640	$	108,514	$	66,850

TFE backlog at March 30, 2019 included five 200 Lean HDD systems and five ENERGi solar ion implant systems. TFE backlog at December 29, 2018 included six 200 Lean HDD systems and nine ENERGi solar ion implant systems. TFE backlog at March 31, 2018 includes two 200 Lean HDD systems and twelve ENERGi solar ion implant systems.

Revenue by geographic region

	Three Months Ended
	March 30, 2019						March 31, 2018
	(In thousands)
	TFE		Photonics		Total		TFE		Photonics		Total
United States	$	161	$	5,716	$	5,877	$	1,911	$	4,762	$	6,673
Asia		18,784		—		18,784		10,878		—		10,878
Europe		—		166		166		—		293		293
Rest of World		—		—		—		—		130		130
Total net revenues	$	18,945	$	5,882	$	24,827	$	12,789	$	5,185	$	17,974

24

International sales include products shipped to overseas operations of U.S. companies. The increase in sales to the U.S. region in 2019 versus 2018 reflected higher Photonics contract R&D work. Sales to the Asia region in 2019 included one 200 Lean system and four ENERGi solar ion implant systems versus one 200 Lean system in 2018. Sales to the Europe region and Rest of World in 2019 and 2018 were not significant.

Gross profit

	Three Months Ended
	March 30, 2019			March 31, 2018			Change over prior period
	(In thousands, except percentages)
TFE gross profit	$	5,977		$	4,555		$	1,422
% of TFE net revenues		31.5	%		35.6	%
Photonics gross profit	$	1,262		$	320		$	942
% of Photonics net revenues		21.5	%		6.2	%
Total gross profit	$	7,239		$	4,875		$	2,364
% of net revenues		29.2	%		27.1	%

Cost of net revenues consists primarily of purchased materials and costs attributable to contract R&D, and also includes fabrication, assembly, test and installation labor and overhead, customer-specific engineering costs, warranty costs, royalties, provisions for inventory reserves and scrap.

TFE gross margin was 31.5% in the three months ended March 30, 2019 compared to 35.6% in the three months ended March 31, 2018. The decrease in margins was due to lower margins on four ENERGi solar ion implant systems. Gross margins in the TFE business will vary depending on a number of factors, including revenue levels, product mix, product cost, system configuration and pricing, factory utilization, and provisions for excess and obsolete inventory.

Photonics gross margin was 21.5% in the three months ended March 30, 2019 compared to 6.2% in the three months ended March 31, 2018. Higher Photonics gross margins for the three months ended March 31, 2018 reflected higher revenue levels and improved margins on contract R&D work.

Research and development expense

	Three Months Ended
	March 30, 2019		March 31, 2018		Change over prior period
	(In thousands)
Research and development expense	$	3,986	$	4,167	$	(181	)

Research and development spending in TFE during the three months ended March 30, 2019 decreased compared to the three months ended March 31, 2018 due to lower spending on semiconductor Fan-out development. TFE spending consisted primarily of HDD, DCP, semiconductor Fan-out and PV development. Research and development spending increased in Photonics during the three months ended March 30, 2019 as compared to the three months ended March 31, 2018 primarily related to the development of the next generation of our low light level CMOS camera. Research and development expenses do not include costs of $2.5 million and $2.4 million for the three-month periods ended March 30, 2019 and March 31, 2018, respectively, which are related to customer-funded contract R&D programs in Photonics and therefore included in cost of net revenues.

Selling, general and administrative expense

	Three Months Ended
	March 30, 2019		March 31, 2018		Change over prior period
	(In thousands)
Selling, general and administrative expense	$	5,252	$	5,829	$	(577	)

Selling, general and administrative expense consists primarily of selling, marketing, customer support, financial and management costs. Selling, general and administrative expense for the three months ended March 30, 2019 decreased compared to the three months ended March 31, 2018 as a result of lower legal and consulting fees. Also selling, general and administrative expense for the three months ended March 31, 2018 included a $202,000 charge for the write-off of certain engineering software and a $148,000 charge for a lump sum separation payment.

25

Cost reduction plans

During the first quarter of fiscal 2018, Intevac substantially completed implementation of the 2018 cost reduction plan (the “Reduction Plan”), which was intended to reduce expenses and reduce its workforce by 6 percent. The total cost of implementing the Reduction Plan was $95,000 of which $61,000 was reported under cost of net revenues and $34,000 was reported under operating expenses. Substantially all cash outlays in connection with the Reduction Plan were completed in the first quarter of fiscal 2018. Implementation of the Plan reduced salary, wages and other employee-related expenses by approximately $1.8 million on an annual basis.

Interest income and other income (expense), net

	Three Months Ended
	March 30, 2019		March 31, 2018		Change over prior period
	(In thousands)
Interest income and other income (expense), net	$	160	$	145	$	15

Interest income and other income (expense), net in the three months ended March 30, 2019 included $148,000 of interest income on investments, $20,000 of earnout income from a divestiture and various other income of $23,000, offset in part by $32,000 of foreign currency losses. Interest income and other income (expense), net in the three months ended March 31, 2018 included $102,000 of interest income on investments, $55,000 of earnout income from a divestiture and various other income of $17,000, offset in part by $29,000 of foreign currency losses. The increase in interest income in the three months ended March 30, 2019 resulted from higher interest rates offset in part by lower invested balances.

Income tax provision

	Three Months Ended
	March 30, 2019		March 31, 2018		Change over prior period
	(In thousands)
Income tax provision	$	553	$	160	$	393

Intevac recorded income tax provisions of $553,000 for the three months ended March 30, 2019 and $160,000 for the three months ended March 31, 2018. The income tax provisions for the three-month periods are based upon estimates of annual income (loss), annual permanent differences and statutory tax rates in the various jurisdictions in which Intevac operates. For the three-month period ended March 30, 2019 Intevac recorded a $362,000 income tax provision on earnings of our international subsidiaries and recorded $191,000 for withholding taxes on royalties paid to the United States from Intevac’s Singapore subsidiary as a discrete item. For the three-month period ended March 31, 2018 Intevac recorded $145,000 for withholding taxes as a discrete item. For all periods presented Intevac utilized net operating loss carry-forwards to offset the impact of the GILTI. Intevac’s tax rate differs from the applicable statutory rates due primarily to establishment of a valuation allowance, the utilization of deferred and current credits and the effect of permanent differences and adjustments of prior permanent differences. Intevac’s future effective income tax rate depends on various factors, including the level of Intevac’s projected earnings, the geographic composition of worldwide earnings, tax regulations governing each region, net operating loss carry-forwards, availability of tax credits and the effectiveness of Intevac’s tax planning strategies. Management carefully monitors these factors and timely adjusts the effective income tax rate.

Liquidity and Capital Resources

At March 30, 2019, Intevac had $41.9 million in cash, cash equivalents, restricted cash and investments compared to $40.3 million at December 29, 2018. During the first three months of 2019, cash, cash equivalents, restricted cash and investments increased by $1.6 million due primarily to cash generated by operating activities and cash received from the sale of Intevac common stock to Intevac’s employees through Intevac’s employee benefit plans, partially offset by purchases of fixed assets.

Cash, cash equivalents, restricted cash and investments consist of the following:

	March 30, 2019		December 29, 2018
	(In thousands)
Cash and cash equivalents	$	23,537	$	18,715
Restricted cash		1,254		1,169
Short-term investments		11,764		16,076
Long-term investments		5,394		4,372
Total cash, cash equivalents, restricted cash and investments	$	41,949	$	40,332

26

Operating activities generated cash of $969,000 during the first three months of 2019 and used cash of $4.0 million during the first three months of 2018. Improved operating cash flow in the first three months of 2019 was a result of a smaller net loss and lower investments in working capital.

Accounts receivable totaled $20.0 million at March 30, 2019 compared to $27.7 million at December 29, 2018. At March 30, 2019 and December 29, 2018 customer advances for products that had not been shipped to customers and included in accounts receivable were $2.1 million and $3.7 million, respectively. Net inventories totaled $30.3 million at March 30, 2019 compared to $30.6 million at December 29, 2018. Net inventories at December 29, 2018 included three ENERGi implant systems in finished goods and one ENERGi implant system in work in process that were virtually complete and shipped to the customer in January 2019. Net inventories at both March 30, 2019 and December 29, 2018 included an additional five ENERGi implant systems in work in process that are partially built and are scheduled to ship to the customer in the second half of 2019. Accounts payable decreased to $4.9 million at March 30, 2019 from $6.1 million at December 29, 2018 due to the timing of payments. Accrued payroll and related liabilities decreased to $3.5 million at March 30, 2019 compared to $4.7 million at December 29, 2018 due primarily to the settlement of 2018 bonuses. Other accrued liabilities decreased to $4.3 million at March 30, 2019 compared to $5.0 million at December 29, 2018. Customer advances decreased from $14.3 million at December 29, 2018 to $10.3 million at March 30, 2019, primarily due the recognition of revenue offset in part by the recognition of new orders.

Investing activities generated cash of $3.0 million during the first three months of 2019. Proceeds from sales of investments net of purchases totaled $3.4 million. Capital expenditures for the three months ended March 30, 2019 were $371,000.

Financing activities generated cash of $895,000 in the first three months of 2019. The sale of Intevac common stock to Intevac’s employees through Intevac’s employee benefit plans generated cash of $1.0 million. Tax payments related to the net share settlement of restricted stock units were $28,000.

In connection with the acquisition of SIT, Intevac agreed to pay to the selling shareholders in cash a revenue earnout on Intevac’s net revenue from commercial sales of certain solar implant products over a specified period up to an aggregate of $9.0 million. The earnout period terminates on June 30, 2019. Payments made associated with the revenue earnout obligation were $98,000 in the first three months of 2019.

Intevac’s investment portfolio consists principally of investment grade money market mutual funds, U.S. Treasury and agency securities, certificates of deposit, commercial paper, municipal bonds and corporate bonds. Intevac regularly monitors the credit risk in its investment portfolio and takes measures, which may include the sale of certain securities, to manage such risks in accordance with its investment policies.

As of March 30, 2019, approximately $12.6 million of cash and cash equivalents and $1.6 million of short term investments were domiciled in foreign tax jurisdictions. Intevac expects a significant portion of these funds to remain offshore in the short term. If the Company chose to repatriate these funds to the United States, it would be required to accrue and pay additional taxes on any portion of the repatriation subject to foreign withholding taxes.

Intevac believes that its existing cash, cash equivalents and investments will be sufficient to meet its cash requirements for the foreseeable future. Intevac intends to undertake approximately $6.0 million to $8.0 million in capital expenditures during the remainder of 2019.

Off-Balance Sheet Arrangements

Off-balance sheet firm commitments relating to outstanding letters of credit amounted to approximately $1.3 million as of March 30, 2019. These letters of credit and bank guarantees are collateralized by $1.3 million of restricted cash. We do not maintain any other off-balance sheet arrangements, transactions, obligations, or other relationships that would be expected to have a material current or future effect on the consolidated financial statements.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make judgments, assumptions and estimates that affect the amounts reported. Intevac’s significant accounting policies are described in Note 1 to the consolidated financial statements included in Item 8 of Intevac’s Annual Report on Form 10-K filed on February 13, 2019. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the presentation of Intevac’s financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on Intevac’s financial

27

conditions and results of operations. Specifically, critical accounting estimates have the following attributes: 1) Intevac is required to make assumptions about matters that are highly uncertain at the time of the estimate; and 2) different estimates Intevac could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on Intevac’s financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. Intevac bases its estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as Intevac’s operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they become known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. Many of these uncertainties are discussed in the section below entitled “Risk Factors.” Based on a critical assessment of Intevac’s accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that Intevac’s consolidated financial statements are fairly stated in accordance with US GAAP, and provide a meaningful presentation of Intevac’s financial condition and results of operation.

Beginning December 30, 2018, we implemented ASC 842, Leases. For a description of our critical accounting policies and estimates affecting accounting for leases, see Note 10. “Leases” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. For a description of other critical accounting policies that affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements, refer to our Annual Report on Form 10-K for the year ended December 29, 2018 filed with the SEC on February 13, 2019. With the exception of the changes to our lease accounting policies referenced above, there have been no material changes to our critical accounting policies during the three months ended March 30, 2019.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable to smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

Intevac maintains a set of disclosure controls and procedures that are designed to ensure that information relating to Intevac required to be disclosed in periodic filings under the Securities Exchange Act of 1934, or Exchange Act, is recorded, processed, summarized and reported in a timely manner under the Exchange Act. In connection with the filing of this Form 10-Q for the quarter ended March 30, 2019, as required under Rule 13a-15(e) of the Exchange Act, an evaluation was carried out under the supervision and with the participation of management, including the Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), of the effectiveness of Intevac’s disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on this evaluation, Intevac’s CEO and CFO concluded that our disclosure controls and procedures were effective as of March 30, 2019.

Attached as exhibits to this Quarterly Report are certifications of the CEO and the CFO, which are required in accordance with Rule 13a-14 of the Exchange Act. This Controls and Procedures section includes the information concerning the controls evaluation referred to in the certifications, and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

Definition of disclosure controls

Disclosure controls are controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls are also designed to ensure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls include components of our internal control over financial reporting, which consists of control processes designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles in the U.S. To the extent that components of our internal control over financial reporting are included within our disclosure controls, they are included in the scope of our quarterly controls evaluation.

Limitations on the effectiveness of controls

Intevac’s management, including the CEO and CFO, does not expect that Intevac’s disclosure controls or Intevac’s internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can

28

provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Intevac have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in internal controls over financial reporting

Beginning December 30, 2018, we implemented ASC 842, Leases. We implemented changes to our processes related to lease recognition and the control activities within them. These included the development of new policies, ongoing lease review requirements, and gathering of information provided for disclosures.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, Intevac is involved in claims and legal proceedings that arise in the ordinary course of business. Intevac expects that the number and significance of these matters will increase as Intevac’s business expands. Any claims or proceedings against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time, result in the diversion of significant operational resources, or require us to enter into royalty or licensing agreements which, if required, may not be available on terms favorable to us or at all. Intevac is not presently a party to any lawsuit or proceeding that, in Intevac’s opinion, is likely to seriously harm Intevac’s business.

Item 1A. Risk Factors

The following factors could materially affect Intevac’s business, financial condition or results of operations and should be carefully considered in evaluating the Company and its business, in addition to other information presented elsewhere in this report.

The industries we serve are cyclical, volatile and unpredictable.

A significant portion of our revenue is derived from the sale of equipment used to manufacture commodity technology products such as disk drives, PV solar cells and cell phones. This subjects us to business cycles, the timing, length and volatility of which can be difficult to predict. When demand for commodity technology products exceeds production capacity, then demand for new capital equipment such as ours tends to be amplified. Conversely, when supply of commodity technology products exceeds demand, then demand for new capital equipment such as ours tends to be depressed. For example, sales of systems for magnetic disk production were depressed from late 2007 through 2009. The number of new systems delivered increased in 2010 as customers increased their production capacity in response to increased demand for data storage, but decreased in 2011 through 2015 as the hard disk drive industry did not add the same level of capacity that it did in 2010. We cannot predict with any certainty when these cycles will begin or end. Our sales of systems for magnetic disk production increased in 2016 as a customer began upgrading the technology level of its manufacturing capacity. Sales of systems and upgrades for magnetic disk production in 2017 and 2018 were higher than in 2016 as this customer’s technology upgrade continued.

Our equipment represents only a portion of the capital expenditure that our customers incur when they upgrade or add production capacity. Accordingly, our customers generally commit to making large capital expenditures far in excess of the cost of our systems alone when they decide to purchase our systems. The magnitude of these capital expenditures requires our customers to have access to large amounts of capital. Our customers generally reduce their level of capital investment during downturns in the overall economy or during a downturn in their industries.

In recent years the photovoltaic (solar) market has undergone a downturn, which is likely to impact our sales of PV equipment. The solar industry from time to time experiences periods of structural imbalance between supply and demand, and such periods put intense pressure on our customers’ pricing. The solar industry is currently in such a period. Competition in solar markets globally and across the solar value chain is intense, and could remain that way for an extended period of time. During any such period, solar module manufacturers may reduce their sales prices in response to competition, even below their manufacturing costs, in order to

29

generate sales and may do so for a sustained period of time. As a result, our customers may be unable to sell their solar modules or systems at attractive prices or for a profit during a period of excess supply of solar modules, which would adversely affect their results of operations and their ability to make capital investments such as purchasing our products.

We must effectively manage our resources and production capacity to meet rapidly changing demand. Our business experiences rapid growth and contraction, which stresses our infrastructure, internal systems and managerial resources. During periods of increasing demand for our products, we must have sufficient manufacturing capacity and inventory to meet customer demand; attract, retain and motivate a sufficient number of qualified individuals; and effectively manage our supply chain. During periods of decreasing demand for our products, we must be able to align our cost structure with prevailing market conditions; motivate and retain key employees and effectively manage our supply chain.

Sales of our equipment are primarily dependent on our customers’ upgrade and capacity expansion plans and whether our customers select our equipment.

We have no control over our customers’ upgrade and capacity expansion plans, and we cannot be sure they will select, or continue to select, our equipment when they upgrade or expand their capacity. The sales cycle for our equipment systems can be a year or longer, involving individuals from many different areas of Intevac and numerous product presentations and demonstrations for our prospective customers. Our sales process also commonly includes production of samples and customization of our products. We do not typically enter into long-term contracts with our customers, and until an order is actually submitted by a customer there is no binding commitment to purchase our systems. In some cases, orders are also subject to customer acceptance or other criteria even in the case of a binding agreement.

Sales of new manufacturing systems are also dependent on obsolescence and replacement of the installed base of our customers’ existing equipment with newer, more capable equipment. If upgrades are developed that extend the useful life of the installed base of systems, then we tend to sell more upgrade products and fewer new systems, which can significantly reduce total revenue.

Our 200 Lean HDD customers also experience competition from companies that produce alternative storage technologies like flash memory, which offer smaller size, lower power consumption and more rugged designs. These storage technologies are being used increasingly in enterprise applications and smaller form factors such as tablets, smart-phones, ultra-books, and notebook PCs instead of hard disk drives. Tablet computing devices and smart-phones have never contained, nor are they likely in the future to contain, a disk drive. Products using alternative technologies, such as flash memory, optical storage and other storage technologies are becoming increasingly common and could become a significant source of competition to particular applications of the products of our 200 Lean HDD customers, which could adversely affect our results of operations. If alternative technologies, such as flash memory, replace hard disk drives as a significant method of digital storage, then demand for our hard disk manufacturing products would decrease.

The Photonics business is also subject to long sales cycles because many of its products, such as our military imaging products, often must be designed into the customers’ end products, which are often complex state-of-the-art products. These development cycles are typically multi-year, and our sales are contingent on our customers successfully integrating our product into their product, completing development of their product and then obtaining production orders for their product from the U.S. government or its allies.

We operate in an intensely competitive marketplace, and our competitors have greater resources than we do.

In the market for our disk sputtering systems, we experience competition primarily from Canon Anelva, which has sold a substantial number of systems worldwide. In the PV equipment market, Intevac faces competition from large established competitors including Applied Materials, Centrotherm Photovoltaics, Amtech, Jusung and Von Ardenne. In the market for our military imaging products we experience competition from companies such as Harris Corporation and L-3 Communications. Some of our competitors have substantially greater financial, technical, marketing, manufacturing and other resources than we do, especially in the DCP and PV equipment markets. Our competitors may develop enhancements to, or future generations of, competitive products that offer superior price or performance features, and new competitors may enter our markets and develop such enhanced products. Moreover, competition for our customers is intense, and our competitors have historically offered substantial pricing concessions and incentives to attract our customers or retain their existing customers.

Our growth depends on development of technically advanced new products and processes.

We have invested heavily, and continue to invest, in the development of new products, such as our 200 Lean HDD and other PVD systems, our coating systems for DCP, our solar systems for PV applications, our digital night-vision products and our near-eye display products. Our success in developing and selling new products depends upon a variety of factors, including our ability to: predict future customer requirements; make technological advances; achieve a low total cost of ownership for our products; introduce

30

new products on schedule; manufacture products cost-effectively including transitioning production to volume manufacturing; commercialize and attain customer acceptance of our products; and achieve acceptable and reliable performance of our new products in the field. Our new product decisions and development commitments must anticipate continuously evolving industry requirements significantly in advance of sales. In addition, we are attempting to expand into new or related markets, including the PV and display cover glass markets. Our expansion into the PV and cover glass markets is dependent upon the success of our customers’ development plans. To date we have not recognized material revenue from such products. Failure to correctly assess the size of the markets, to successfully develop cost effective products to address the markets or to establish effective sales and support of the new products would have a material adverse effect on future revenues and profits. In addition, if we invest in products for which the market does not develop as anticipated, we may incur significant charges related to such investments.

Rapid technological change in our served markets requires us to rapidly develop new technically advanced products. Our future success depends in part on our ability to develop and offer new products with improved capabilities and to continue to enhance our existing products. If new products have reliability or quality problems, our performance may be impacted by reduced orders, higher manufacturing costs, delays in acceptance and payment for new products and additional service and warranty expenses.

We are exposed to risks associated with a highly concentrated customer base.

Historically, a significant portion of our revenue in any particular period has been attributable to sales of our disk sputtering systems to a limited number of customers. This concentration of customers, when combined with changes in the customers’ specific capacity plans and market share shifts can lead to extreme variability in our revenue and financial results from period to period.

The concentration of our customer base may enable our customers to demand pricing and other terms unfavorable to Intevac, and makes us more vulnerable to changes in demand by or issues with a given customer. Orders from a relatively limited number of manufacturers have accounted for, and will likely continue to account for, a substantial portion of our revenues. The loss of one of these large customers, or delays in purchasing by them, could have a material and adverse effect on our revenues.

Our operating results fluctuate significantly from quarter to quarter, which can lead to volatility in the price of our common stock.

Our quarterly revenues and common stock price have fluctuated significantly. We anticipate that our revenues, operating margins and common stock price will continue to fluctuate for a variety of reasons, including: (1) changes in the demand, due to seasonality, cyclicality and other factors in the markets for computer systems, storage subsystems and consumer electronics containing disks as well as cell phones and PV solar cells our customers produce with our systems; (2) delays or problems in the introduction and acceptance of our new products, or delivery of existing products; (3) timing of orders, acceptance of new systems by our customers or cancellation or delay of those orders; (4) new products, services or technological innovations by our competitors or us; (5) changes in our manufacturing costs and operating expense; (6) changes in general economic, political, stock market and industry conditions; and (7) any failure of our operating results to meet the expectations of investment research analysts or investors.

Any of these, or other factors, could lead to volatility and/or a rapid change in the trading price of our common shares. In the past, securities class action litigation has been instituted against companies following periods of volatility in the market price of their securities. Any such litigation, if instituted against Intevac, could result in substantial costs and diversion of management time and attention.

We may not be able to obtain export licenses from the U.S. government permitting delivery of our products to international customers.

Many of our products, especially Photonics products, require export licenses from U.S. government agencies under the Export Administration Act, the Trading with the Enemy Act of 1917, the Arms Export Act of 1976 or the International Traffic in Arms Regulations. These regulations limit the potential market for some of our products. We can give no assurance that we will be successful in obtaining all the licenses necessary to export our products. Heightened government scrutiny of export licenses for defense related products has resulted in lengthened review periods for our license applications. Exports to countries that are not considered by the U.S. government to be allies are likely to be prohibited, and even sales to U.S. allies may be limited. Failure to comply with export control laws, including identification and reporting of all exports and re-exports of controlled technology or exports made without correct license approval or improper license use could result in severe penalties and revocation of licenses. Failure to obtain export licenses, delays in obtaining licenses, or revocation of previously issued licenses would prevent us from selling the affected products outside the United States and could negatively impact our results of operations.

31

The Photonics business is dependent on U.S. government contracts, which are subject to fixed pricing, immediate termination and a number of procurement rules and regulations.

We sell our Photonics products and services directly to the U.S. government, as well as to prime contractors for various U.S. government programs. The U.S government is considering significant changes in the level of existing, follow-on or replacement programs. We cannot predict the impact of potential changes in priorities due to military transformations and/or the nature of future war-related activities. A shift of government priorities to programs in which we do not participate and/or reductions in funding for or the termination of programs in which we do participate, unless offset by other programs and opportunities, could have a material adverse effect on our financial position, results of operations, or cash flows.

Funding of multi-year government programs is subject to congressional appropriations, and there is no guarantee that the U.S. government will make further appropriations. Sales to the U.S. government and its prime contractors may also be affected by changes in procurement policies, budget considerations and political developments in the United States or abroad. For example, if the U.S. government is less focused on defense spending or there is a decrease in hostilities, demand for our products could decrease. The loss of funding for a government program would result in a loss of future revenues attributable to that program. The influence of any of these factors, which are beyond our control, could negatively impact our results of operations.

A significant portion of our U.S. government revenue is derived from fixed-price development and production contracts. Under fixed-price contracts, unexpected increases in the cost to develop or manufacture a product, whether due to inaccurate estimates in the bidding process, unanticipated increases in material costs, reduced production volumes, inefficiencies or other factors, are borne by us. We have experienced cost overruns in the past that have resulted in losses on certain contracts, and may experience additional cost overruns in the future. We are required to recognize the total estimated impact of cost overruns in the period in which they are first identified. Such cost overruns could have a material adverse effect on our results of operations.

Generally, government contracts contain provisions permitting termination, in whole or in part, without prior notice at the government’s convenience upon the payment of compensation only for work done and commitments made at the time of termination. We cannot ensure that one or more of the government contracts under which we, or our customers, operate will not be terminated under these circumstances. Also, we cannot ensure that we, or our customers, would be able to procure new government contracts to offset the revenues lost as a result of any termination of existing contracts, nor can we ensure that we, or our customers, will continue to remain in good standing as federal contractors.

As a U.S. government contractor we must comply with specific government rules and regulations and are subject to routine audits and investigations by U.S. government agencies. If we fail to comply with these rules and regulations, the results could include: (1) reductions in the value of our contracts; (2) reductions in amounts previously billed and recognized as revenue; (3) contract modifications or termination; (4) the assessment of penalties and fines; and (5) suspension or debarment from government contracting or subcontracting for a period of time or permanently.

Our business could be negatively impacted by cyber and other security threats or disruptions.

As a defense contractor, we face various cyber and other security threats, including espionage and attempts to gain unauthorized access to sensitive information and networks. Although we utilize various procedures and controls to monitor and mitigate the risk of these threats, there can be no assurance that these procedures and controls will be sufficient. These threats could lead to losses of sensitive information or capabilities; financial liabilities and damage to our reputation. If we are unable to maintain compliance with security standards applicable to defense contractors, we could lose business or suffer reputational harm.

Cyber threats to businesses in general are evolving and include, but are not limited to, malicious software, destructive malware, attempts to gain unauthorized access to data, disruption or denial of service attacks, and other electronic security breaches that could lead to disruptions in our systems, unauthorized release of confidential, personal or otherwise protected information (ours or that of our employees, customers or partners), and corruption of data, networks or systems. In addition, we could be impacted by cyber threats or other disruptions or vulnerabilities found in products we use or in our partners’ or customers’ systems that are used in connection with our business. These events, if not prevented or effectively mitigated, could damage our reputation, require remedial actions and lead to loss of business, regulatory actions, potential liability and other financial losses.

Changes to our effective tax rate affect our results of operations.

As a global company, we are subject to taxation in the United States, Singapore and various other countries. Significant judgment is required to determine and estimate worldwide tax liabilities. Our future effective tax rate could be affected by: (1) changes in tax laws; (2) the allocation of earnings to countries with differing tax rates; (3) changes in worldwide projected annual earnings in current and future years: (4) accounting pronouncements; or (5) changes in the valuation of our deferred tax assets and liabilities. Although we believe our tax estimates are reasonable, there can be no assurance that any final determination will not be different from the treatment reflected in our historical income tax provisions and accruals, which could result in additional payments by Intevac.

32

Our success depends on international sales and the management of global operations.

In previous years, the majority of our revenues have come from regions outside the United States. Most of our international sales are to customers in Asia, which includes products shipped to overseas operations of U.S. companies. We currently have manufacturing facilities in California and Singapore and international customer support offices in Singapore, China, and Malaysia. We expect that international sales will continue to account for a significant portion of our total revenue in future years. Certain of our suppliers are also located outside the United States.

Managing our global operations presents challenges including, but not limited to, those arising from: (1) global trade issues; (2) variations in protection of intellectual property and other legal rights in different countries; (3) concerns of U.S. governmental agencies regarding possible national commercial and/or security issues posed by growing manufacturing business in Asia; (4) fluctuation of interest rates, raw material costs, labor and operating costs, and exchange rates; (5) variations in the ability to develop relationships with suppliers and other local businesses; (6) changes in the laws and regulations of the United States, including export restrictions, and other countries, as well as their interpretation and application; (7) the need to provide technical and spares support in different locations; (8) political and economic instability; (9) cultural differences; (10) varying government incentives to promote development; (11) shipping costs and delays; (12) adverse conditions in credit markets; (13) variations in tariffs, quotas, tax codes and other market barriers; and (14) barriers to movement of cash.

We must regularly assess the size, capability and location of our global infrastructure and make appropriate changes to address these issues.

Difficulties in integrating past or future acquisitions could adversely affect our business.

We have completed a number of acquisitions and dispositions during our operating history. We have spent and may continue to spend significant resources identifying and pursuing future acquisition opportunities. Acquisitions involve numerous risks including: (1) difficulties in integrating the operations, technologies and products of the acquired companies; (2) the diversion of our management’s attention from other business concerns; and (3) the potential loss of key employees of the acquired companies. Failure to achieve the anticipated benefits of the prior and any future acquisitions or to successfully integrate the operations of the companies we acquire could have a material and adverse effect on our business, financial condition and results of operations. Any future acquisitions could also result in potentially dilutive issuance of equity securities, acquisition or divestiture-related write-offs or the assumption of debt and contingent liabilities. In addition, we have made and will continue to consider making strategic divestitures. With any divestiture, there are risks that future operating results could be unfavorably impacted if targeted objectives, such as cost savings, are not achieved or if other business disruptions occur as a result of the divestiture or activities related to the divestiture.

Our success is dependent on recruiting and retaining a highly talented work force.

Our employees are vital to our success, and our key management, engineering and other employees are difficult to replace. We do not maintain key person life insurance on any of our employees. The expansion of high technology companies worldwide has increased demand and competition for qualified personnel, and has made companies increasingly protective of prior employees. It may be difficult for us to locate employees who are not subject to non-competition agreements and other restrictions.

The majority of our U.S. operations are located in California where the cost of living and of recruiting employees is high. Our operating results depend, in large part, upon our ability to retain and attract qualified management, engineering, marketing, manufacturing, customer support, sales and administrative personnel. Furthermore, we compete with industries such as the hard disk drive, semiconductor, and solar industries for skilled employees. Failure to retain existing key personnel, or to attract, assimilate or retain additional highly qualified employees to meet our needs in the future, could have a material and adverse effect on our business, financial condition and results of operations.

We are dependent on certain suppliers for parts used in our products.

We are a manufacturing business. Purchased parts constitute the largest component of our product cost. Our ability to manufacture depends on the timely delivery of parts, components and subassemblies from suppliers. We obtain some of the key components and subassemblies used in our products from a single supplier or a limited group of suppliers. If any of our suppliers fail to deliver quality parts on a timely basis, we may experience delays in manufacturing, which could result in delayed product deliveries, increased costs to expedite deliveries or develop alternative suppliers, or require redesign of our products to accommodate alternative suppliers. Some of our suppliers are thinly capitalized and may be vulnerable to failure.

Our business depends on the integrity of our intellectual property rights.

The success of our business depends upon the integrity of our intellectual property rights, and we cannot ensure that: (1) any of our pending or future patent applications will be allowed or that any of the allowed applications will be issued as patents or will issue

33

with claims of the scope we sought; (2) any of our patents will not be invalidated, deemed unenforceable, circumvented or challenged; (3) the rights granted under our patents will provide competitive advantages to us; (4) other parties will not develop similar products, duplicate our products or design around our patents; or (5) our patent rights, intellectual property laws or our agreements will adequately protect our intellectual property or competitive position.

From time to time, we have received claims that we are infringing third parties’ intellectual property rights or seeking to invalidate our rights. We cannot ensure that third parties will not in the future claim that we have infringed current or future patents, trademarks or other proprietary rights relating to our products. Any claims, with or without merit, could be time-consuming, result in costly litigation, cause product shipment delays or require us to enter into royalty or licensing agreements. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us.

We could be involved in litigation.

From time to time we may be involved in litigation of various types, including litigation alleging infringement of intellectual property rights and other claims and customer disputes. Litigation is expensive, subjects us to the risk of significant damages and requires significant management time and attention and could have a material and adverse effect on our business, financial condition and results of operations.

We are subject to risks of non-compliance with environmental and other governmental regulations.

We are subject to a variety of governmental regulations relating to the use, storage, discharge, handling, emission, generation, manufacture, treatment and disposal of toxic or otherwise hazardous substances, chemicals, materials or waste. If we fail to comply with current or future regulations, such failure could result in suspension of our operations, alteration of our manufacturing process, remediation costs or substantial civil penalties or criminal fines against us or our officers, directors or employees. Additionally, these regulations could require us to acquire expensive remediation or abatement equipment and incur substantial expenses to comply with them.

Business interruptions could adversely affect our operations.

Our operations are vulnerable to interruption by fire, earthquake, floods or other natural disaster, quarantines or other disruptions associated with infectious diseases, national catastrophe, terrorist activities, war, disruptions in our computing and communications infrastructure due to power loss, telecommunications failure, human error, physical or electronic security breaches and computer viruses, and other events beyond our control. We do not have a detailed disaster recovery plan. Despite our implementation of network security measures, our tools and servers may be vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering with our computer systems and tools located at customer sites. Political instability could cause us to incur increased costs in transportation, make such transportation unreliable, increase our insurance costs or cause international currency markets to fluctuate. All these unforeseen disruptions and instabilities could have the same effects on our suppliers and their ability to timely deliver their products. In addition, we do not carry sufficient business interruption insurance to compensate us for all losses that may occur, and any losses or damages incurred by us could have a material adverse effect on our business and results of operations. For example, we self-insure earthquake risks because we believe this is the prudent financial decision based on the high cost of the limited coverage available in the earthquake insurance market. An earthquake could significantly disrupt our operations, most of which are conducted in California. It could also significantly delay our research and engineering effort on new products, most of which is also conducted in California. We take steps to minimize the damage that would be caused by business interruptions, but there is no certainty that our efforts will prove successful.

We could be negatively affected as a result of a proxy contest and the actions of activist stockholders.

A proxy contest with respect to election of our directors, or other activist stockholder activities, could adversely affect our business because: (1) responding to a proxy contest and other actions by activist stockholders can be costly and time-consuming, disruptive to our operations and divert the attention of management and our employees; (2) perceived uncertainties as to our future direction caused by activist activities may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel and business partners; and (3) if individuals are elected to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plans.

We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, our management must perform evaluations of our internal control over financial reporting. Beginning in 2004, our Form 10-K has included a report by management of their assessment of the adequacy

34

of such internal control. Additionally, our independent registered public accounting firm must publicly attest to the effectiveness of our internal control over financial reporting. We have completed the evaluation of our internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act. Although our assessment, testing, and evaluation resulted in our conclusion that as of December 29, 2018, our internal controls over financial reporting were effective, we cannot predict the outcome of our testing in future periods. Ongoing compliance with this requirement is complex, costly and time-consuming. If Intevac fails to maintain effective internal control over financial reporting; our management does not timely assess the adequacy of such internal control; or our independent registered public accounting firm does not deliver an unqualified opinion as to the effectiveness of our internal control over financial reporting, then we could be subject to restatement of previously reported financial results, regulatory sanctions and a decline in the public’s perception of Intevac, which could have a material and adverse effect on our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Repurchases of Intevac Common Stock

On November 21, 2013, Intevac’s Board of Directors approved a stock repurchase program authorizing up to $30.0 million in repurchases. On August 15, 2018, Intevac’s Board of Directors approved a $10.0 million increase to the original stock repurchase program for an aggregate authorized amount of $40.0 million. At March 30, 2019, $10.9 million remains available for future stock repurchases under the repurchase program. Intevac did not make any common stock repurchases during the three months ended March 30, 2019.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The following exhibits are filed herewith:

Exhibit Number	Description
10.1	The Registrant’s 2003 Employee Stock Purchase Plan, as amended (1) +
10.2	Form of Outside Director Restricted Stock Unit Agreement for 2012 Equity Incentive Plan +
31.1	Certification of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Executive Vice President, Finance and Administration, Chief Financial Officer, and Treasurer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications Pursuant to U.S.C. 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

(1) Previously filed as an exhibit to the Company’s Definitive Proxy Statement filed April 10, 2019.

+ Management compensatory plan or arrangement required to be filed as an exhibit.

* The certification attached as Exhibit 32.1 is deemed “furnished” and not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of Intevac, Inc. under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof, irrespective of any general incorporation by reference language contained in any such filing, except to the extent that the registrant specifically incorporates it by reference.

35

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		INTEVAC, INC.
Date: April 30, 2019	By:	/s/ WENDELL T. BLONIGAN
	Wendell T. Blonigan
	President, Chief Executive Officer and Director
	(Principal Executive Officer)
Date: April 30, 2019	By:	/s/ JAMES MONIZ
	James Moniz
	Executive Vice President, Finance and Administration,     Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)

36

EX-10.2

Exhibit 10.2

Form of Outside Director Restricted Stock Unit Agreement

INTEVAC, INC.

2012 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

Unless otherwise defined herein, the terms defined in the Intevac, Inc. 2012 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Restricted Stock Unit Agreement (the “Agreement”), which includes the Notice of Restricted Stock Unit Grant (the “Notice of Grant”) and Terms and Conditions of Restricted Stock Unit Grant, attached hereto as Exhibit A.

I.    NOTICE OF RESTRICTED STOCK UNIT GRANT

Participant:

Address:

Participant has been granted the right to receive an Award of Restricted Stock Units, subject to the terms and conditions of the Plan and this Agreement, as follows:

Grant Number

Date of Grant

Vesting Commencement Date

Number of Restricted Stock Units

Vesting Schedule:

Subject to any acceleration provisions contained in the Plan or set forth below, the Restricted Stock Units will vest in accordance with the following schedule:

One hundred percent (100%) of the Restricted Stock Units will vest on the one (1) year anniversary of the Date of Grant (the “One-Year Anniversary”), provided Participant remains a Director through such date.

Except as provided by the following paragraph, in the event Participant ceases to be a Director for any or no reason before Participant vests in the Restricted Stock Units, the Restricted Stock Units and Participant’s right to acquire any Shares hereunder will immediately terminate.

Notwithstanding anything in the Plan or this Agreement to the contrary, if, on or following the six (6)-month anniversary of the Date of Grant, Participant’s service as a Director terminates under honorable circumstances and such termination is a “separation from service” within the meaning of Section 409A (as defined below), one hundred percent (100%) of the Restricted Stock Units will vest immediately prior to such separation from service. The Board, excluding Participant for this purpose, will determine in its sole, good faith discretion, whether Participant’s termination as a Director was under honorable circumstances; provided, however, that the Board’s determination that Participant willfully breached the Company’s Director Code of Ethics, as in effect at the time of such breach, automatically will be deemed to be a determination that any termination of Participant’s service as a Director is not under honorable circumstances. For the avoidance of doubt, that Participant’s termination as a Director was not under honorable circumstances may be determined after Participant’s termination as a Director, and any Shares issued pursuant to this Agreement shall, upon such a determination, be immediately forfeited to the Company for no consideration.

-1-

By Participant’s signature and the signature of the representative of Intevac, Inc. (the “Company”) below, Participant and the Company agree that this Award of Restricted Stock Units is granted under and governed by the terms and conditions of the Plan and this Agreement, including the Terms and Conditions of Restricted Stock Unit Grant, attached hereto as Exhibit A, all of which are made a part of this document. Participant has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of the Plan and Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Agreement. Participant further agrees to notify the Company upon any change in the residence address indicated below.

PARTICIPANT:	INTEVAC, INC.
Signature	By
Print Name	Title
Residence Address:

-2-

EXHIBIT A

TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT GRANT

1.    Grant. The Company hereby grants to the individual named in the Notice of Grant attached as Part I of this Agreement (the “Participant”) under the Plan an Award of Restricted Stock Units, subject to all of the terms and conditions in this Agreement and the Plan, which is incorporated herein by reference. Subject to Section 20 of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan will prevail.

2.    Company’s Obligation to Pay. Each Restricted Stock Unit represents the right to receive a Share on the date it vests. Unless and until the Restricted Stock Units will have vested in the manner set forth in Section 3 or 4, Participant will have no right to payment of any such Restricted Stock Units. Prior to actual payment of any vested Restricted Stock Units, such Restricted Stock Units will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. Any Restricted Stock Units that vest in accordance with Sections 3 or 4 will be paid to Participant (or in the event of Participant’s death, to his or her estate) in whole Shares, subject to Participant satisfying any applicable tax withholding obligations as set forth in Section 7. Subject to the provisions of Section 4, such vested Restricted Stock Units will be paid in whole Shares as soon as practicable after vesting, but in each such case within thirty (30) days following the vesting date. In no event will Participant be permitted, directly or indirectly, to specify the taxable year of the payment of any Restricted Stock Units payable under this Agreement. No fractional Shares will be issued under this Agreement.

3.    Vesting Schedule. Except as provided in Section 4, and subject to any acceleration provisions contained in the Plan or set forth in this Agreement, and subject to Section 5, the Restricted Stock Units awarded by this Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant. Except as provided in the Notice of Grant, Restricted Stock Units scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of this Agreement, unless Participant will have been continuously a Director from the Date of Grant until the date such vesting occurs.

4.    Administrator Discretion. The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the unvested Restricted Stock Units at any time, subject to the terms of the Plan. If so accelerated, such Restricted Stock Units will be considered as having vested as of the date specified by the Administrator. The payment of Shares vesting pursuant to this Section 4 shall in all cases be paid at a time or in a manner that is exempt from or complies with Section 409A.

Notwithstanding anything in the Plan or this Agreement to the contrary, if the vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units is accelerated in connection with Participant’s termination as a Director (provided that such termination is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to death, and if (x) Participant is a “specified employee” within the meaning of Section 409A at the time of such separation from service and (y) the payment of such accelerated Restricted Stock Units will result in the imposition of additional tax under Section 409A if paid to Participant on or within the six (6) month period following Participant’s separation from service, then the payment of such accelerated Restricted Stock Units will not be made until the date six (6) months and one (1) day following the date of Participant’s separation from service, unless the Participant dies following his or her termination as a Director, in which case, the Restricted Stock Units will be paid in Shares to the Participant’s estate as soon as practicable following his or her death. It is the intent of this Agreement that it and all payments and benefits hereunder be exempt from or comply with the requirements of Section 409A so that none of the Restricted Stock Units provided under this Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to be so exempt or so comply. Each payment payable under this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). For purposes of this Agreement, “Section 409A” means Section 409A of the Code, and any final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.

5.    Forfeiture upon Termination of Status as a Director. Except as provided in the Notice of Grant, the balance of the Restricted Stock Units that have not vested as of the time of Participant’s termination as a Director for any or no reason and Participant’s right to acquire any Shares hereunder will immediately terminate.

6.    Death of Participant. Any distribution or delivery to be made to Participant under this Agreement will, if Participant is then deceased, be made to Participant’s designated beneficiary, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate. Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

-3-

7.    Withholding of Taxes. Currently, the Company typically is not required to withhold taxes from non-employee directors. However, applicable rules may change, Participant’s non-employee status may change, and/or special circumstances may require withholding. Regardless of any action the Company or Participant’s employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding which the Company determines must be withheld or collected with respect to this Award and/or the Shares thereunder (“Tax-Related Items”), Participant acknowledges that the ultimate liability for all Tax-Related Items legally due by him or her is and remains Participant’s responsibility and that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Unit grant, including the grant, vesting or settlement of the Restricted Stock Units, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends; and (2) do not commit to structure the terms of the grant or any aspect of the Restricted Stock Units to reduce or eliminate Participant’s liability for Tax-Related Items.

Notwithstanding any contrary provision of this Agreement, no certificate representing the Shares will be issued to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of Tax-Related Items. Prior to vesting and/or settlement of the Restricted Stock Units, Participant will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all obligations of the Company and/or the Employer for Tax-Related Items. In this regard, Participant authorizes the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by Participant from his or her wages or other cash compensation paid to Participant by the Company and/or the Employer or from proceeds of the sale of Shares. Alternatively, or in addition, if permissible under applicable local law, the Company may, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit or require Participant to satisfy such Tax-Related Items, in whole or in part (without limitation) by (a) paying cash, (b) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum amount required to be withheld, (c) delivering to the Company already vested and owned Shares having a Fair Market Value equal to the amount required to be withheld for Tax-Related Items, or (d) selling a sufficient number of such Shares otherwise deliverable to Participant through such means as the Company may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld for Tax-Related Items. The Company in its sole discretion, will have the right (but not the obligation) to satisfy any Tax-Related Items by reducing the number of Shares otherwise deliverable to Participant and, until determined otherwise by the Company, this will be the method by which such obligations for Tax-Related Items are satisfied. If Participant fails to make satisfactory arrangements for the payment of any required Tax-Related Items hereunder at the time any applicable Restricted Stock Units otherwise are scheduled to vest pursuant to Sections 3 or 4 or Tax-Related Items related to the Restricted Stock Units otherwise are due, Participant will permanently forfeit such Restricted Stock Units and any right to receive Shares thereunder and the Restricted Stock Units will be returned to the Company at no cost to the Company.

8.    Acknowledgements.

(a)    Participant acknowledges receipt of a copy of the Plan (including any applicable appendixes or sub-plans thereunder) and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Award of Restricted Stock Units subject to all of the terms and provisions thereof. Participant has reviewed the Plan (including any applicable appendixes or sub-plans thereunder) and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of the Award. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Agreement. Participant further agrees to notify the Company upon any change in the residence address indicated in the Notice of Grant.

(b)    The Company (which may or may not be Participant’s Employer) is granting the Restricted Stock Units. The Company may administer the Plan from outside Participant’s country of residence, and United States law will govern all Restricted Stock Units granted under the Plan.

(c)    Participant acknowledges that benefits and rights provided under the Plan are wholly discretionary and, although provided by the Company, do not constitute regular or periodic payments. Unless otherwise required by Applicable Laws, the benefits and rights provided under the Plan are not to be considered part of Participant’s salary or compensation for purposes of calculating any severance, resignation, redundancy or other end of service payments, vacation, bonuses, long-term service awards, indemnification, pension or retirement benefits, or any other payments, benefits or rights of any kind. Participant waives any and all rights to compensation or damages as a result of the termination of employment with the Company for any reason whatsoever insofar as those rights result or may result from:

(i)    the loss or diminution in value of such rights under the Plan, or

(ii)    Participant ceasing to have any rights under, or ceasing to be entitled to any rights under the Plan as a result of such termination.

-4-

(d)    The grant of the Restricted Stock Units, and any future grant of Restricted Stock Units under the Plan is entirely voluntary, and at the complete discretion of the Company. Neither the grant of the Restricted Stock Units nor any future grant of Restricted Stock Units by the Company will be deemed to create any obligation to grant any further Restricted Stock Units, whether or not such a reservation is explicitly stated at the time of such a grant. The Company has the right, at any time to amend, suspend or terminate the Plan.

(e)    The Plan will not be deemed to constitute, and will not be construed by Participant to constitute, part of the terms and conditions of employment, and the Company will not incur any liability of any kind to Participant as a result of any change or amendment, or any cancellation, of the Plan at any time.

(f)    Participation in the Plan will not be deemed to constitute, and will not be deemed by Participant to constitute, an employment or labor relationship of any kind with the Company.

9.    Data Privacy. By entering into this Agreement, and as a condition of the grant of the Restricted Stock Units, Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Employer, and Company and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.

Participant understands that the Company and the Employer, its Parent or any Subsidiary may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). Participant understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in Participant’s country or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting Participant’s local human resources representative. Participant authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing Participant’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Participant may elect to deposit any shares of stock acquired upon settlement of the Restricted Stock Units. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative. Participant understands, however, that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.

10.    English Language. Participant has received the terms and conditions of this Agreement and any other related communications, and Participant consents to having received these documents in English. If Participant has received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.

11.    Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant. After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

12.    No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE RESTRICTED STOCK UNITS PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A DIRECTOR AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OF RESTRICTED STOCK UNITS OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A DIRECTOR FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT

-5-

INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A DIRECTOR AT ANY TIME, WITH OR WITHOUT CAUSE.

13.    Address for Notices. Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company, in care of its Secretary at Intevac, Inc., 3560 Bassett Street, Santa Clara CA 95054, or at such other address as the Company may hereafter designate in writing.

14.    Grant is Not Transferable. Except to the limited extent provided in Section 6, this grant and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

15.    Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

16.    Additional Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the listing, registration, qualification or rule compliance of the Shares upon any securities exchange or under any state, federal or foreign law, the tax code and related regulations or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to Participant (or his or her estate) hereunder, such issuance will not occur unless and until such listing, registration, qualification, rule compliance, consent or approval will have been completed, effected or obtained free of any conditions not acceptable to the Company. Where the Company determines that the delivery of the payment of any Shares will violate federal securities laws or other applicable laws, the Company will defer delivery until the earliest date at which the Company reasonably anticipates that the delivery of Shares will no longer cause such violation. The Company will make all reasonable efforts to meet the requirements of any such state, federal or foreign law or securities exchange and to obtain any such consent or approval of any such governmental authority or securities exchange.

17.    Plan Governs. This Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. Capitalized terms used and not defined in this Agreement will have the meaning set forth in the Plan.

18.    Administrator Authority. The Administrator will have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Restricted Stock Units have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement.

19.    Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to Restricted Stock Units awarded under the Plan or future Restricted Stock Units that may be awarded under the Plan by electronic means or request Participant’s consent to participate in the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.

20.    Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

21.    Agreement Severable. In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.

22.    Modifications to the Agreement. This Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly warrants that he or she is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise this Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A in connection to this Award of Restricted Stock Units.

-6-

23.    Amendment, Suspension or Termination of the Plan. By accepting this Award, Participant expressly warrants that he or she has received an Award of Restricted Stock Units under the Plan, and has received, read and understood a description of the Plan. Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.

24.    Governing Law. This Agreement will be governed by the laws of the State of California, without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under this Award of Restricted Stock Units or this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation will be conducted in the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this Award of Restricted Stock Units is made and/or to be performed.

-7-

EX-31.1

Exhibit 31.1

I, Wendell Blonigan certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Intevac, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2019
	/s/ WENDELL T. BLONIGAN
	Wendell T. Blonigan
	President, Chief Executive Officer and Director

EX-31.2

Exhibit 31.2

I, James Moniz certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Intevac, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2019
	/s/ JAMES MONIZ
	James Moniz
	Executive Vice President, Finance and Administration, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Wendell Blonigan, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Intevac, Inc. on Form 10-Q for the quarterly period ended March 30, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Intevac, Inc.

Date: April 30, 2019
	/s/ WENDELL T. BLONIGAN
	Wendell T. Blonigan
	President, Chief Executive Officer and Director

I, James Moniz, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Intevac, Inc. on Form 10-Q for the quarterly period ended March 30, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Intevac, Inc.

Date: April 30, 2019
	/s/ JAMES MONIZ
	James Moniz
	Executive Vice President, Finance and Administration, Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 906 has been provided to Intevac, Inc. and will be retained by Intevac, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Intevac, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 30, 2019	Apr. 30, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Registrant Name	INTEVAC INC
Entity Central Index Key	0001001902
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	IVAC
Entity Common Stock, Shares Outstanding		22,960,131
Entity Emerging Growth Company	false
Entity Small Business	true

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 29, 2018
Current assets:
Cash and cash equivalents	$ 23,537	$ 18,715
Short-term investments	11,764	16,076
Trade and other accounts receivable, net of allowances of $0 at both March 30, 2019 and at December 29, 2018	19,996	27,717
Inventories	30,329	30,597
Prepaid expenses and other current assets	2,173	2,528
Total current assets	87,799	95,633
Long-term investments	5,394	4,372
Restricted cash	1,254	1,169
Property, plant and equipment, net	10,550	11,198
Operating lease right-of-use-assets	11,076
Intangible assets, net of accumulated amortization of $7,652 at March 30, 2019 and $7,498 at December 29, 2018	735	889
Deferred income taxes and other long-term assets	8,485	8,809
Total assets	125,293	122,070
Current liabilities:
Current operating lease liabilities	2,569
Accounts payable	4,867	6,053
Accrued payroll and related liabilities	3,457	4,689
Other accrued liabilities	4,327	4,952
Customer advances	10,335	14,314
Total current liabilities	25,555	30,008
Noncurrent liabilities:
Noncurrent operating lease liabilities	10,491
Other long-term liabilities	160	2,438
Total noncurrent liabilities	10,651	2,438
Stockholders' equity:
Common stock, $0.001 par value	23	23
Additional paid-in capital	184,953	183,204
Treasury stock, 4,965 shares at both March 30, 2019 and December 29, 2018	(29,047)	(29,047)
Accumulated other comprehensive income	484	378
Accumulated deficit	(67,326)	(64,934)
Total stockholders' equity	89,087	89,624
Total liabilities and stockholders' equity	$ 125,293	$ 122,070

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 30, 2019	Dec. 29, 2018
Net of allowances of trade, note and other accounts receivable	$ 0	$ 0
Net of amortization of intangible assets	$ 7,652	$ 7,498
Common stock, par value	$ 0.001	$ 0.001
Treasury stock, shares	4,965	4,965

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Net revenues:
Total net revenues	$ 24,827	$ 17,974
Cost of net revenues:
Total cost of net revenues	17,588	13,099
Gross profit	7,239	4,875
Operating expenses:
Research and development	3,986	4,167
Selling, general and administrative	5,252	5,829
Total operating expenses	9,238	9,996
Loss from operations	(1,999)	(5,121)
Interest income and other income (expense), net	160	145
Loss before income taxes	(1,839)	(4,976)
Provision for income taxes	553	160
Net loss	$ (2,392)	$ (5,136)
Net loss per share:
Basic and Diluted	$ (0.10)	$ (0.23)
Weighted average shares outstanding:
Basic and Diluted	22,855	22,107
Systems and components
Net revenues:
Total net revenues	$ 21,637	$ 15,472
Cost of net revenues:
Total cost of net revenues	15,100	10,728
Technology development
Net revenues:
Total net revenues	3,190	2,502
Cost of net revenues:
Total cost of net revenues	$ 2,488	$ 2,371

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Net loss	$ (2,392)	$ (5,136)
Other comprehensive income, before tax:
Change in unrealized net gain (loss) on available-for-sale investments	45	(28)
Foreign currency translation gains	61	104
Other comprehensive income, before tax	106	76
Income tax provision related to items in other comprehensive income	0	0
Other comprehensive income, net of tax	106	76
Comprehensive loss	$ (2,286)	$ (5,060)

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Operating activities
Net loss	$ (2,392)	$ (5,136)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	1,036	1,043
Net amortization (accretion) of investment premiums and discounts	(16)	(18)
Equity-based compensation	756	817
Straight-line rent adjustment and amortization of lease incentives	(85)	(19)
Deferred income taxes	332	0
Change in the fair value of acquisition-related contingent consideration	7	(1)
Loss on disposal of equipment	45	0
Changes in operating assets and liabilities	1,286	(733)
Total adjustments	3,361	1,089
Net cash provided by (used in) operating activities	969	(4,047)
Investing activities
Purchases of investments	(5,045)	(10,161)
Proceeds from sales and maturities of investments	8,396	9,328
Purchases of leasehold improvements and equipment	(371)	(592)
Net cash provided by (used in) investing activities	2,980	(1,425)
Financing activities
Proceeds from issuance of common stock	1,021	2,065
Taxes paid related to net share settlement	(28)	(333)
Payment of acquisition-related contingent consideration	(98)	0
Net cash provided by financing activities	895	1,732
Effect of exchange rate changes on cash and cash equivalents	63	105
Net increase (decrease) in cash, cash equivalents and restricted cash	4,907	(3,635)
Cash, cash equivalents and restricted cash at beginning of period	19,884	20,941
Cash, cash equivalents and restricted cash at end of period	$ 24,791	$ 17,306

XML

Description of Business and Basis of Presentation

3 Months Ended

Mar. 30, 2019

Accounting Policies [Abstract]

Business Description and Basis of Presentation [Text Block]

1. Description of Business and Basis of Presentation

Intevac, Inc. (together with its subsidiaries “Intevac,” the “Company” or “we”) is a provider of vacuum deposition equipment for a wide variety of thin-film applications, and a leading provider of digital night-vision technologies and products to the defense industry. The Company leverages its core capabilities in high-volume manufacturing of small substrates to provide process manufacturing equipment solutions to the hard disk drive (“HDD”), display cover panel (“DCP”), and photovoltaic (“PV”) solar cell industries. Intevac also provides sensors, cameras and systems for government applications such as night vision. Intevac’s customers include manufacturers of hard disk media, DCPs and solar cells as well as the U.S. government and its agencies, allies and contractors. Intevac reports two segments: Thin-film Equipment (“TFE”) and Photonics.

In the opinion of management, except for the changes below, the unaudited interim condensed consolidated financial statements of Intevac included herein have been prepared on a basis consistent with the December 29, 2018 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments, necessary to fairly present the information set forth therein. The Company adopted Accounting Standards Codification (“ASC”) 842, Leases, with a date of the initial application of December 30, 2018. As a result, the Company has changed its accounting policy for leases as detailed in Note 10. Leases. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Intevac’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 (“2018 Form 10-K”). Intevac’s results of operations for the three months ended March 30, 2019 are not necessarily indicative of future operating results.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates.

XML

Recent Accounting Pronouncements

3 Months Ended

Mar. 30, 2019

Recent Accounting Pronouncements

2. Recent Accounting Pronouncement

Adoption of New Accounting Standard

We adopted ASU No. 2016-02, Leases (Topic 842), as of December 30, 2018, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the beginning of the period of adoption. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and we elected the hindsight practical expedient to determine the lease term for existing leases. We determined that most renewal options would not be reasonably certain in determining the expected lease term. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

Adoption of the new standard resulted in the recording of net lease assets of $11.6 million and lease liabilities of $13.7 million, as of December 30, 2018. The standard did not have an impact on our consolidated results of operations or cash flows.

The effect of the changes made to our consolidated December 30, 2018 balance sheet for the adoption of the new lease standard was as follows (in thousands):

	Balance at December 29, 2018		Adjustments Due to ASC 842			Balance at December 30, 2018
Prepaid expenses and other current assets	$	2,528	$	(221	)1	$	2,307
Total current assets	$	95,633	$	(221	)1	$	95,412
Operating lease right-of-use assets	$	—	$	11,635	1,2,3	$	11,635
Total assets	$	122,070	$	11,414	1,2,3	$	133,484
Current operating lease liabilities	$	—	$	2,581	5	$	2,581
Accounts payable	$	6,053	$	(4	)4	$	6,049
Other accrued liabilities	$	4,952	$	(13	)3	$	4,939
Total current liabilities	$	30,008	$	2,564	3,4,5	$	32,572
Noncurrent operating lease liabilities	$	—	$	11,120	5	$	11,120
Other long-term liabilities	$	2,438	$	(2,270	)3	$	168
Total non-current liabilities	$	2,438	$	8,850	3,4,5	$	11,288
Total liabilities and stockholders’ equity	$	122,070	$	11,414	,4,5	$	133,484

1	Represents prepaid rent reclassified to operating lease right-of-use assets.
2	Represents capitalization of operating lease right-of-use assets and reclassification of straight-line rent accrual, and tenant incentives.
3	Represents reclassification of straight-line rent accrual to operating lease right-of-use assets.
4	Represents accrued rent reclassified to operating lease right-of-use assets.
5	Represents recognition of operating lease liabilities.

XML

Revenue

3 Months Ended

Mar. 30, 2019

Revenue

3. Revenue

The following tables represent a disaggregation of revenue from contracts with customers for the three months ended March 30, 2019 and March 31, 2018 along with the reportable segment for each category.

Major Products and Service Lines

TFE	Three Months Ended March 30, 2019								Three Months Ended March 31, 2018
	(In thousands)
	HDD		DCP		PV		Total		HDD		DCP		PV		Total
Systems, upgrades and spare parts	$	11,050	$	—	$	6,373	$	17,423	$	10,393	$	1	$	2	$	10,396
Field service		1,522		—		—		1,522		2,355		—		38		2,393
Total TFE net revenues	$	12,572	$	—	$	6,373	$	18,945	$	12,748	$	1	$	40	$	12,789

	Three Months Ended
Photonics	March 30, 2019		March 31, 2018
	(In thousands)
Products:
Military products	$	1,813	$	2,254
Commercial products		318		—
Repair and other services		561		429
Total Photonics product net revenues		2,692		2,683
Technology development:
Firm Fixed Price (“FFP”)		1,692		692
Cost Plus Fixed Fee (“CPFF”)		1,496		1,790
Time and materials		2		20
Total technology development net revenues		3,190		2,502
Total Photonics net revenues	$	5,882	$	5,185

Primary Geographical Markets

	Three Months Ended
	March 30, 2019						March 31, 2018
	(In thousands)
	TFE		Photonics		Total		TFE		Photonics		Total
United States	$	161	$	5,716	$	5,877	$	1,911	$	4,762	$	6,673
Asia		18,784		—		18,784		10,878		—		10,878
Europe		—		166		166		—		293		293
Rest of World		—		—		—		—		130		130
Total net revenues	$	18,945	$	5,882	$	24,827	$	12,789	$	5,185	$	17,974

Timing of Revenue Recognition

	Three Months Ended
	March 30, 2019						March 31, 2018
	(In thousands)
	TFE		Photonics		Total		TFE		Photonics		Total
Products transferred at a point in time	$	18,945	$	561	$	19,506	$	12,789	$	429	$	13,218
Products and services transferred over time		—		5,321		5,321		—		4,756		4,756
	$	18,945	$	5,882	$	24,827	$	12,789	$	5,185	$	17,974

The following table reflects the changes in our contract assets, which we classify as accounts receivable, unbilled or retainage, and our contract liabilities, which we classify as deferred revenue and customer advances, for the three months ended March 30 2019.

	March 30, 2019		December 29, 2018		Three Months Change
	(In thousands)
TFE:
Contract assets:
Accounts receivable, unbilled	$	897	$	514	$	383
Contract liabilities:
Deferred revenue	$	713	$	633	$	80
Customer advances		10,335		14,314		(3,979	)
	$	11,048	$	14,947	$	(3,899	)
Photonics:
Contract assets:
Accounts receivable, unbilled	$	2,561	$	1,493	$	1,068
Retainage		131		157		(26	)
	$	2,692	$	1,650	$	1,042
Contract liabilities:
Deferred revenue	$	784	$	1,101	$	(317	)

Accounts receivable, unbilled in our TFE segment represents a contract asset for revenue that has been recognized in advance of billing the customer. For our system and certain upgrade sales, our TFE customers generally pay in three installments, with a portion of the system price billed upon receipt of an order, a portion of the price billed upon shipment, and the balance of the price due upon completion of installation and acceptance of the system at the customer’s factory. Accounts receivable, unbilled in our TFE segment generally represents the balance of the system price that is due upon completion of installation and acceptance less, the amount that has been deferred as revenue for the performance of the installation tasks. During the three months ended March 30, 2019, contract assets in our TFE segment increased by $383,000 primarily due to the accrual of revenue for four systems delivered in the quarter that were pending acceptance as of March 30, 2019.

Customer advances in our TFE segment generally represent a contract liability for amounts billed to the customer prior to transferring goods. The Company has elected to use the practical expedient to disregard the effect of the time value of money in a significant financing component when its payment terms are less than one year. These contract advances are liquidated when revenue is recognized. Deferred revenue in our TFE segment generally represents a contract liability for amounts billed to a customer for completed systems at the customer site that are undergoing installation and acceptance testing where transfer of control has not yet occurred as Intevac does not yet have a demonstrated history of meeting the acceptance criteria upon the customer’s receipt of product. During the three months ended March 30, 2019, we recognized revenue in our TFE segment of $6.5 million and $209,000 that was included in customer advances and deferred revenue, respectively, at the beginning of the period.

Accounts receivable, unbilled in our Photonics segment represents a contract asset for revenue that has been recognized in advance of billing the customer, which is common for contracts in the defense industry. In our Photonics segment, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. Our contracts with the U.S. government may also contain retainage provisions. Retainage represents a contract asset for the portion of the contract price earned by us for work performed, but held for payment by the U.S. government as a form of security until satisfactory completion of the contract. The retainage is billable upon completion of the contract performance and approval of final indirect expense rates by the government. During the three months ended March 30, 2019, contract assets in our Photonics segment increased by $1.0 million primarily due to the accrual of revenue for incurred costs under FFP and CPFF contracts.

Deferred revenue in our Photonics segment includes $784,000 deferred for the impact of the allocation and the timing of the recognition of revenue for a military product agreement with a tiered pricing structure. During the three months ended March 30, 2019, we recognized revenue in our Photonics segment of $317,000 that was included in deferred revenue at the beginning of the period.

On March 30, 2019 we had $102.6 million of remaining performance obligations, which we also refer to as total backlog. Backlog at March 30, 2019 consisted of $59.3 million of TFE backlog and $43.3 million of Photonics backlog. We expect to recognize approximately 69% of our remaining performance obligations as revenue in 2019, and the balance in 2020.

XML

Inventories

3 Months Ended

Mar. 30, 2019

Inventory Disclosure [Abstract]

Inventories

4. Inventories

Inventories are stated at the lower of average cost or net realizable value and consist of the following:

	March 30, 2019		December 29, 2018
	(In thousands)
Raw materials	$	16,815	$	16,354
Work-in-progress		11,933		9,134
Finished goods		1,581		5,109
	$	30,329	$	30,597

Finished goods inventory at December 29, 2018 included three completed systems at Intevac’s factory and shipped to the customer in January 2019.

XML

Equity-Based Compensation

3 Months Ended

Mar. 30, 2019

Equity-Based Compensation

5. Equity-Based Compensation

At March 30, 2019, Intevac had equity-based awards outstanding under the 2012 Equity Incentive Plan and the 2004 Equity Incentive Plan (together, the “Plans”) and the 2003 Employee Stock Purchase Plan (the “ESPP”). Intevac’s stockholders approved all of these plans. The Plans permit the grant of incentive or non-statutory stock options, restricted stock, stock appreciation rights, restricted stock units (“RSUs”) and performance shares.

The ESPP provides that eligible employees may purchase Intevac’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market value at the entry date of the applicable offering period or at the end of each applicable purchase interval. Offering periods are generally two years in length, and consist of a series of six-month purchase intervals. Eligible employees may join the ESPP at the beginning of any six-month purchase interval. Under the terms of the ESPP, employees can choose to have up to 15% of their base earnings withheld to purchase Intevac common stock.

Compensation Expense

The effect of recording equity-based compensation for the three-month periods ended March 30, 2019 and March 31, 2018 was as follows:

	Three Months Ended
	March 30, 2019		March 31, 2018
	(In thousands)
Equity-based compensation by type of award:
Stock options	$	206	$	134
RSUs		291		406
Employee stock purchase plan		259		277
Total equity-based compensation	$	756	$	817

Stock Options and ESPP

The fair value of stock options and ESPP awards is estimated at the grant date using the Black-Scholes option valuation model. The determination of fair value of stock options and ESPP awards on the date of grant using an option-pricing model is affected by Intevac’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual employee stock option exercise behavior.

Option activity as of March 30, 2019 and changes during the three months ended March 30, 2019 were as follows:

	Shares			Weighted Average Exercise Price
Options outstanding at December 29, 2018		2,070,749		$	6.76
Options granted		13,125		$	6.08
Options cancelled and forfeited		(8,992	)	$	7.43
Options exercised		(72,122	)	$	4.22
Options outstanding at March 30, 2019		2,002,760		$	6.84
Options exercisable at March 30, 2019		1,300,175		$	6.72

Intevac issued 181,431 shares under the ESPP during the three months ended March 30, 2019.

Intevac estimated the weighted-average fair value of stock options and ESPP purchase rights using the following weighted-average assumptions:

	Three Months Ended
	March 30, 2019			March 31, 2018
Stock Options:
Weighted-average fair value of grants per share	$	2.28		$	2.30
Expected volatility		43.40	%		41.97	%
Risk free interest rate		2.21	%		2.48	%
Expected term of options (in years)		4.32			4.23
Dividend yield		None			None
ESPP Purchase Rights:
Weighted-average fair value of grants per share	$	1.89		$	2.36
Expected volatility		50.00	%		46.60	%
Risk free interest rate		2.53	%		1.82	%
Expected term of purchase rights (in years)		1.0			1.25
Dividend yield		None			None

The computation of the expected volatility assumptions used in the Black-Scholes calculations for new stock option grants and ESPP purchase rights is based on the historical volatility of Intevac’s stock price, measured over a period equal to the expected term of the stock option grant or purchase right. The risk-free interest rate is based on the yield available on U.S. Treasury Strips with an equivalent remaining term. The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the equity-based awards and vesting schedules. The expected term of purchase rights represents the period of time remaining in the current offering period. The dividend yield assumption is based on Intevac’s history of not paying dividends and the assumption of not paying dividends in the future. Intevac accounts for forfeitures as they occur, rather than by estimating expected forfeitures.

RSUs

A summary of the RSU activity is as follows:

	Shares			Weighted-Average Grant Date Fair Value
Non-vested RSUs at December 29, 2018		462,409		$	6.92
Granted		8,563		$	6.11
Vested		(11,924	)	$	6.92
Cancelled and forfeited		(8,737	)	$	6.38
Non-vested RSUs at March 30, 2019		450,311		$	6.91

Time-based RSUs are converted into shares of Intevac common stock upon vesting on a one-for-one basis. Time-based RSUs typically are scheduled to vest over four years. Vesting of time-based RSUs is subject to the grantee’s continued service with Intevac. The compensation expense related to these awards is determined using the fair market value of Intevac common stock on the date of the grant, and the compensation expense is recognized over the vesting period.

XML

Purchased Intangible Assets, Net

3 Months Ended

Mar. 30, 2019

Purchased Intangible Assets, Net

6. Purchased Intangible Assets

Details of finite-lived intangible assets by segment as of March 30, 2019, are as follows:

	March 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)
TFE	$	7,172	$	(6,505	)	$	667
Photonics		1,215		(1,147	)		68
	$	8,387	$	(7,652	)	$	735

Total amortization expense of finite-lived intangibles for the three months ended March 30, 2019 was $154,000.

As of March 30, 2019, future amortization expense is expected to be as follows:

(In thousands)
2019	$	461
2020		274
	$	735

XML

Acquisition-Related Contingent Consideration

3 Months Ended

Mar. 30, 2019

Acquisition-Related Contingent Consideration

7. Acquisition-Related Contingent Consideration

In connection with the acquisition of Solar Implant Technologies, Inc. (“SIT”), Intevac also agreed to pay to the selling shareholders in cash a revenue earnout on Intevac’s net revenue from commercial sales of certain products over a specified period up to an aggregate of $9.0 million. Intevac estimated the fair value of this contingent consideration on March 30, 2019 based on forecasted revenues reflecting Intevac’s own assumptions concerning future revenue from such products. The earnout period terminates on June 30, 2019.

The fair value measurement of contingent consideration is based on significant inputs not observable in the market and thus represents a Level 3 measurement. Significant increases or decreases in these inputs would result in a significantly lower (higher) fair value measurement. Any change in fair value of the contingent consideration subsequent to the acquisition date is recognized in operating income within the consolidated statement of income. The following table represents a reconciliation of the change in the fair value measurement of the contingent consideration liability for the three-month periods ended March 30, 2019 and March 31, 2018.

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
Opening balance	$	223		$	362
Changes in fair value		7			(1	)
Cash payments made		(98	)		—
Closing balance	$	132		$	361

The contingent consideration liability of $132,000 at March 30, 2019 and $223,000 at December 29, 2018 is included in other accrued liabilities on the condensed consolidated balance sheets.

XML

Warranty

3 Months Ended

Mar. 30, 2019

Guarantees [Abstract]

Product Warranty Disclosure [Text Block]

8. Warranty

Intevac provides for the estimated cost of warranty when revenue is recognized. Intevac’s warranty is per contract terms and, for its HDD manufacturing, DCP manufacturing and solar cell manufacturing systems, the warranty typically ranges between 12 and 24 months from customer acceptance. During this warranty period any defective non-consumable parts are replaced and installed at no charge to the customer. Intevac uses estimated repair or replacement costs along with its historical warranty experience to determine its warranty obligation. The provision for the estimated future costs of warranty is based upon historical cost and product performance experience. Intevac exercises judgment in determining the underlying estimates.

On the condensed consolidated balance sheets, the short-term portion of the warranty provision is included in other accrued liabilities, while the long-term portion is included in other long-term liabilities. The expense associated with product warranties issued or adjusted is included in cost of net revenues on the condensed consolidated statements of operations.

The following table displays the activity in the warranty provision account for the three-month periods ended March 30, 2019 and March 31, 2018.

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
Opening balance	$	997		$	994
Expenditures incurred under warranties		(167	)		(236	)
Accruals for product warranties issued during the reporting period		324			104
Adjustments to previously existing warranty accruals		143			4
Closing balance	$	1,297		$	866

The following table displays the balance sheet classification of the warranty provision account at March 30, 2019 and at December 29, 2018.

	March 30, 2019		December 29, 2018
	(In thousands)
Other accrued liabilities	$	1,147	$	839
Other long-term liabilities		150		158
Total warranty provision	$	1,297	$	997

XML

Guarantees

3 Months Ended

Mar. 30, 2019

Guarantees [Abstract]

Guarantees [Text Block]

9. Guarantees

Officer and Director Indemnifications

As permitted or required under Delaware law and to the maximum extent allowable under that law, Intevac has certain obligations to indemnify its current and former officers and directors for certain events or occurrences while the officer or director is, or was, serving at Intevac’s request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The maximum potential amount of future payments Intevac could be required to make under these indemnification obligations is unlimited; however, Intevac has a director and officer insurance policy that mitigates Intevac’s exposure and enables Intevac to recover a portion of any future amounts paid. As a result of Intevac’s insurance policy coverage, Intevac believes the estimated fair value of these indemnification obligations is not material.

Other Indemnifications

As is customary in Intevac’s industry, many of Intevac’s contracts provide remedies to certain third parties such as defense, settlement, or payment of judgments for intellectual property claims related to the use of its products. Such indemnification obligations may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial.

Letters of Credit

As of March 30, 2019, we had letters of credit and bank guarantees outstanding totaling $1.3 million, including the standby letter of credit outstanding under the Santa Clara, California facility lease and various other guarantees with our bank. These letters of credit and bank guarantees are collateralized by $1.3 million of restricted cash.

XML

Leases

3 Months Ended

Mar. 30, 2019

Disclosure Text Block [Abstract]

Lessee, Operating Leases [Text Block]

10. Leases

Intevac leases certain manufacturing facilities, warehouses, office space, and equipment under non-cancelable operating leases that expire at various times up to March 2024 and has options to renew most leases, with rentals to be negotiated. Certain of Intevac’s leases contain provisions for rental adjustments. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date we take possession of the property. At lease inception, we determine the lease term by assuming the exercise of those renewal options that are reasonably assured. The exercise of lease renewal options is at our sole discretion. The lease term is used to determine whether a lease is financing or operating and is used to calculate straight-line rent expense. Additionally, the depreciable life of leasehold improvements is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

The following table reflects our lease assets and our lease liabilities at March 30, 2019 and December 30, 2018.

	March 30, 2019		December 30, 2018
	(In thousands)
Assets:
Operating lease right-of-use assets	$	11,076	$	11,635
Liabilities:
Current operating lease liabilities	$	2,569	$	2,581
Noncurrent operating lease liabilities		10,491		11,120
	$	13,060	$	13,701

Lease Costs:

The components of lease costs were as follows:

	Three Months Ended
	March 30, 2019		March 31, 2018
	(In thousands)
Operating lease cost	$	782	$	759
Short-term lease cost		19		21
Total lease cost	$	801	$	780

As of March 30, 2019, the maturity of operating lease liabilities was as follows:

(In thousands)
2019	$	2,543
2020		2,992
2021		2,989
2022		3,074
2023		3,161
2024		529
Total lease payments		15,288
Less: Interest		(2,228	)
Present value of lease liabilities	$	13,060

Lease Term and Discount Rate:

	March 30, 2019
Weighted-average remaining lease term (in years)		4.8
Weighted-average discount rate		6.48	%

Other information:

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
	March 30, 2019
Operating cash outflows from operating leases	$	886
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—

XML

Cash, Cash Equivalents and Investments

3 Months Ended

Mar. 30, 2019

Cash, Cash Equivalents and Investments

11. Cash, Cash Equivalents and Investments

Cash and cash equivalents, short-term investments and long-term investments consist of:

	March 30, 2019
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses		Fair Value
	(In thousands)
Cash and cash equivalents:
Cash	$	14,671	$	—	$	—	$	14,671
Money market funds		5,064		—		—		5,064
Commercial paper		1,497		—		—		1,497
Municipal bonds		500		—		—		500
U.S. treasury and agency securities		1,804		1		—		1,805
Total cash and cash equivalents	$	23,536	$	1	$	—	$	23,537
Short-term investments:
Certificates of deposit	$	3,000	$	4	$	—	$	3,004
Commercial paper		1,899		—		—		1,899
Corporate bonds and medium-term notes		2,807		2		3		2,806
Municipal bonds		500		—		—		500
U.S. treasury and agency securities		3,560		—		5		3,555
Total short-term investments	$	11,766	$	6	$	8	$	11,764
Long-term investments:
Certificates of deposit	$	500	$	—	$	—	$	500
Corporate bonds and medium-term notes		4,875		20		1		4,894
Total long-term investments	$	5,375	$	20	$	1	$	5,394
Total cash, cash equivalents, and investments	$	40,677	$	27	$	9	$	40,695

	December 29, 2018
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses		Fair Value
	(In thousands)
Cash and cash equivalents:
Cash	$	13,334	$	—	$	—	$	13,334
Money market funds		3,335		—		—		3,335
U.S. treasury and agency securities		2,046		—		—		2,046
Total cash and cash equivalents	$	18,715	$	—	$	—	$	18,715
Short-term investments:
Certificates of deposit	$	5,299	$	1	$	1	$	5,299
Commercial paper		2,242		—		1		2,241
Corporate bonds and medium-term notes		4,759		—		13		4,746
Municipal bonds		500		—		2		498
U.S. treasury and agency securities		3,297		—		5		3,292
Total short-term investments	$	16,097	$	1	$	22	$	16,076
Long-term investments:
Certificates of deposit	$	500	$	—	$	—	$	500
Corporate bonds and medium-term notes		2,879		4		4		2,879
U.S. treasury and agency securities		999		—		6		993
Total long-term investments	$	4,378	$	4	$	10	$	4,372
Total cash, cash equivalents, and investments	$	39,190	$	5	$	32	$	39,163

The contractual maturities of available-for-sale securities at March 30, 2019 are presented in the following table.

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	20,631	$	20,630
Due after one through five years		5,375		5,394
	$	26,006	$	26,024

The following table provides the fair market value of Intevac’s investments with unrealized losses that are not deemed to be other-than temporarily impaired as of March 30, 2019.

	March 30, 2019
	In Loss Position for Less than 12 Months				In Loss Position for Greater than 12 Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In thousands)
Corporate bonds and medium-term notes	$	—	$	—	$	1,097	$	4
U.S. treasury and agency securities		—		—		1,994		5
	$	—	$	—	$	3,091	$	9

All prices for the fixed maturity securities including U.S. treasury and agency securities, certificates of deposit, commercial paper, corporate bonds, asset backed securities and municipal bonds are received from independent pricing services utilized by Intevac’s outside investment manager. This investment manager performs a review of the pricing methodologies and inputs utilized by the independent pricing services for each asset type priced by the vendor. In addition, on at least an annual basis, the investment manager conducts due diligence visits and interviews with each pricing vendor to verify the inputs utilized for each asset class. The due diligence visits include a review of the procedures performed by each vendor to ensure that pricing evaluations are representative of the price that would be received to sell a security in an orderly transaction. Any pricing where the input is based solely on a broker price is deemed to be a Level 3 price. Intevac uses the pricing data obtained from its outside investment manager as the primary input to make its assessments and determinations as to the ultimate valuation of the above-mentioned securities and has not made, during the periods presented, any material adjustments to such inputs.

The following table represents the fair value hierarchy of Intevac’s available-for-sale securities measured at fair value on a recurring basis as of March 30, 2019.

	Fair Value Measurements at March 30, 2019
	Total		Level 1		Level 2
	(In thousands)
Recurring fair value measurements:
Available-for-sale securities
Money market funds	$	5,064	$	5,064	$	—
U.S. treasury and agency securities		5,360		5,360		—
Certificates of deposit		3,504		—		3,504
Commercial paper		3,396		—		3,396
Corporate bonds and medium-term notes		7,700		—		7,700
Municipal bonds		1,000		—		1,000
Total recurring fair value measurements	$	26,024	$	10,424	$	15,600

XML

Derivative Instruments

3 Months Ended

Mar. 30, 2019

Derivative Instruments

12. Derivative Instruments

The Company uses foreign currency forward contracts to mitigate variability in gains and losses generated from the re-measurement of certain monetary assets and liabilities denominated in foreign currencies and to offset certain operational exposures from the impact of changes in foreign currency exchange rates. These derivatives are carried at fair value with changes recorded in interest income and other, net in the condensed consolidated statements of operations. Changes in the fair value of these derivatives are largely offset by re-measurement of the underlying assets and liabilities. Cash flows from such derivatives are classified as operating activities. The derivatives have maturities of approximately 30 days.

The following table summarizes the Company’s outstanding derivative instruments on a gross basis as recorded in its condensed consolidated balance sheets as of March 30, 2019 and December 29, 2018.

		Notional Amounts			Derivative Liabilities
Derivative Instrument		March 30, 2019	December 29, 2018		March 30, 2019				December 29, 2018
						Balance Sheet Line		Fair Value		Balance Sheet Line		Fair Value
		(In thousands)
Undesignated Hedges:
Forward Foreign Currency Contracts	$	1,558		1,764		*	$	8		*	$	8
Total Hedges	$	1,558		1,764			$	8				8

* Other accrued liabilities

XML

Equity

3 Months Ended

Mar. 30, 2019

Equity

13. Equity

Condensed Consolidated Statements of Changes in Equity

The changes in stockholders’ equity by component for the three months ended March 30, 2019 and March 31, 2018, are as follows (in thousands):

	Three Months Ended March 30, 2019
	Common
	Stock and					Accumulated
	Additional					Other					Total
	Paid-in		Treasury			Comprehensive		Accumulated			Stockholders’
	Capital		Stock			Income		Deficit			Equity
Balance at December 29, 2018	$	183,227	$	(29,047	)	$	378	$	(64,934	)	$	89,624
Common stock issued under employee plans		993		—			—		—			993
Equity-based compensation expense		756		—			—		—			756
Net loss		—		—			—		(2,392	)		(2,392	)
Other comprehensive income		—		—			106		—			106
Balance at March 30, 2019	$	184,976	$	(29,047	)	$	484	$	(67,326	)	$	89,087

	Three Months Ended March 31, 2018
	Common
	Stock and					Accumulated
	Additional					Other					Total
	Paid-in		Treasury			Comprehensive		Accumulated			Stockholders’
	Capital		Stock			Income		Deficit			Equity
Balance at December 30, 2017	$	177,543	$	(28,489	)	$	490	$	(66,881	)	$	82,663
Cumulative effect of accounting change		—		—			—		(1,634	)		(1,634	)
Common stock issued under employee plans		1,732		—			—		—			1,732
Equity-based compensation expense		817		—			—		—			817
Net loss		—		—			—		(5,136	)		(5,136	)
Other comprehensive income		—		—			76		—			76
Balance at March 30, 2018	$	180,092	$	(28,489	)	$	566	$	(73,651	)	$	78,518

Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income by component for the three months ended March 30, 2019 and March 31, 2018, are as follows:

	Three Months Ended
	March 30, 2019							March 31, 2018
	Foreign currency		Unrealized holding gains (losses) on available- for-sale investments			Total		Foreign currency		Unrealized holding gains (losses) on available- for-sale investments			Total
	(In thousands)
Beginning balance	$	405	$	(27	)	$	378	$	535	$	(45	)	$	490
Other comprehensive income before reclassification		61		45			106		104		(28	)		76
Amounts reclassified from other comprehensive income		—		—			—		—		—			—
Net current-period other comprehensive income		61		45			106		104		(28	)		76
Ending balance	$	466	$	18		$	484	$	639	$	(73	)	$	566

Stock Repurchase Program

On November 21, 2013, Intevac’s Board of Directors approved a stock repurchase program authorizing up to $30.0 million in repurchases. On August 15, 2018, Intevac’s Board of Directors approved a $10.0 million increase to the original stock repurchase program for an aggregate authorized amount of up to $40.0 million. At March 30, 2019, $10.9 million remains available for future stock repurchases under the repurchase program. Intevac did not make any stock repurchases during the three months ended March 30, 2019 and March 30, 2018, respectively.

Intevac records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital. If Intevac reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings.

XML

Net Loss Per Share

3 Months Ended

Mar. 30, 2019

Net Loss Per Share

14. Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share.

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
Net loss	$	(2,392	)	$	(5,136	)
Weighted-average shares — basic		22,855			22,107
Effect of dilutive potential common shares		—			—
Weighted-average shares — diluted		22,855			22,107
Net loss per share — basic and diluted	$	(0.10	)	$	(0.23	)

As the Company is in a net loss position, all of the Company’s equity instruments are considered antidilutive.

XML

Segment Reporting

3 Months Ended

Mar. 30, 2019

Segment Reporting

15. Segment Reporting

Intevac’s two reportable segments are: TFE 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 30, 2019 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 TFE segment designs, develops and markets vacuum process equipment solutions for high-volume manufacturing of small substrates with precise thin-film properties, such as for the hard drive, solar cell and DCP industries, as well as other adjacent thin-film markets.

The 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.

Information for each reportable segment for the three months ended March 30, 2019 and March 31, 2018 is as follows:

Net Revenues

	Three Months Ended
	March 30, 2019		March 31, 2018
	(In thousands)
TFE	$	18,945	$	12,789
Photonics		5,882		5,185
Total segment net revenues	$	24,827	$	17,974

Operating Loss

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
TFE	$	(603	)	$	(2,509	)
Photonics		(640	)		(1,210	)
Total segment operating loss		(1,243	)		(3,719	)
Unallocated costs		(756	)		(1,402	)
Loss from operations		(1,999	)		(5,121	)
Interest income and other income (expense), net		160			145
Loss before income taxes	$	(1,839	)	$	(4,976	)

Total assets for each reportable segment as of March 30, 2019 and December 29, 2018 are as follows:

Assets

	March 30, 2019		December 29, 2018
	(In thousands)
TFE	$	52,417	$	53,867
Photonics		18,115		16,721
Total segment assets		70,532		70,588
Cash, cash equivalents and investments		40,695		39,163
Restricted cash		1,254		1,169
Deferred income taxes		7,581		7,913
Other current assets		1,124		1,341
Common property, plant and equipment		1,026		1,017
Common operating lease right-of-use assets		2,194		—
Other assets		887		879
Consolidated total assets	$	125,293	$	122,070

XML

Income Taxes

3 Months Ended

Mar. 30, 2019

Income Taxes

16. Income Taxes

Intevac recorded income tax provisions of $553,000 for the three months ended March 30, 2019 and $160,000 for the three months ended March 31, 2018. The income tax provisions for the three month periods are based upon estimates of annual income (loss), annual permanent differences and statutory tax rates in the various jurisdictions in which Intevac operates. For the three-month period ended March 30, 2019 Intevac recorded a $362,000 income tax provision on earnings of its international subsidiaries and recorded $191,000 for withholding taxes on royalties paid to the United States from Intevac’s Singapore subsidiary as a discrete item. For the three-month period ended March 31, 2018 Intevac recorded $145,000 for withholding taxes as a discrete item. For all periods presented Intevac utilized net operating loss carry-forwards to offset the impact of the global intangible low-taxed income (“GILTI”). Intevac’s tax rate differs from the applicable statutory rates due primarily to establishment of a valuation allowance, the utilization of deferred and current credits and the effect of permanent differences and adjustments of prior permanent differences. Intevac’s future effective income tax rate depends on various factors, including the level of Intevac’s projected earnings, the geographic composition of worldwide earnings, tax regulations governing each region, net operating loss carry-forwards, availability of tax credits and the effectiveness of Intevac’s tax planning strategies. Management carefully monitors these factors and timely adjusts the effective income tax rate.

The Inland Revenue Authority of Singapore (“IRAS”) is currently conducting a review of various fiscal year tax returns of the Company’s wholly-owned subsidiary, Intevac Asia Pte. Ltd. in 2009 and 2010. IRAS has challenged the Company’s tax position with respect to certain aspects of the Company’s transfer pricing. Under Singapore tax law, the Company must pay all contested taxes and the related interest to have the right to defend its position. The contested tax deposits of $730,000 at March 30, 2019 and $723,000 at December 29, 2018 are included in other long-term assets on the condensed consolidated balance sheets. The Company’s management and its advisors continue to believe that the Company is “more likely than not” to successfully defend that the tax treatment was proper and in accordance with Singapore tax regulations. Presently, there are no other active income tax examinations in the jurisdictions where Intevac operates.

XML

Restructuring Charges

3 Months Ended

Mar. 30, 2019

Restructuring Charges

17. Restructuring Charges

During the first quarter of fiscal 2018, Intevac substantially completed implementation of the 2018 cost reduction plan (the “Reduction Plan”), which was intended to reduce expenses and reduce its workforce by 6 percent. The cost of implementing the Reduction Plan was reported under cost of net revenues and operating expenses in the condensed consolidated statements of operations. Substantially all cash outlays in connection with the Reduction Plan occurred in the first quarter of fiscal 2018. Implementation of the Reduction Plan reduced salary, wages and other employee-related expenses by approximately $1.8 million on an annual basis.

The changes in restructuring reserves associated with the Reduction Plan for the three months ended March 31, 2018 are as follows:

	Three Months Ended
	March 31, 2018
	Severance and other employee- related costs (In thousands)
Beginning balance	$	—
Provision for restructuring reserves		95
Cash payments made		(95	)
Ending balance	$	—

XML

Related Party Transaction

3 Months Ended

Mar. 30, 2019

Related Party Transaction

18. Related Party Transaction

A Board member of the Company also serves as the Chief Executive Officer of a supplier. The Company made inventory purchases in the amount of $152,000 for the three months ended March 30, 2019 and $85,000 for the three months ended March 31, 2018, respectively from this supplier.

XML

Commitments and Contingencies

3 Months Ended

Mar. 30, 2019

Commitments and Contingencies

19. Commitments and Contingencies

From time to time, Intevac may have certain contingent liabilities that arise in the ordinary course of its business activities. Intevac accounts for contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

XML

Recent Accounting Pronouncements (Tables)

3 Months Ended

Mar. 30, 2019

Effect of Changes in Financial Statements Due to Adoption of New Lease Standard

The effect of the changes made to our consolidated December 30, 2018 balance sheet for the adoption of the new lease standard was as follows (in thousands):

	Balance at December 29, 2018		Adjustments Due to ASC 842			Balance at December 30, 2018
Prepaid expenses and other current assets	$	2,528	$	(221	)1	$	2,307
Total current assets	$	95,633	$	(221	)1	$	95,412
Operating lease right-of-use assets	$	—	$	11,635	1,2,3	$	11,635
Total assets	$	122,070	$	11,414	1,2,3	$	133,484
Current operating lease liabilities	$	—	$	2,581	5	$	2,581
Accounts payable	$	6,053	$	(4	)4	$	6,049
Other accrued liabilities	$	4,952	$	(13	)3	$	4,939
Total current liabilities	$	30,008	$	2,564	3,4,5	$	32,572
Noncurrent operating lease liabilities	$	—	$	11,120	5	$	11,120
Other long-term liabilities	$	2,438	$	(2,270	)3	$	168
Total non-current liabilities	$	2,438	$	8,850	3,4,5	$	11,288
Total liabilities and stockholders’ equity	$	122,070	$	11,414	,4,5	$	133,484

1	Represents prepaid rent reclassified to operating lease right-of-use assets.
2	Represents capitalization of operating lease right-of-use assets and reclassification of straight-line rent accrual, and tenant incentives.
3	Represents reclassification of straight-line rent accrual to operating lease right-of-use assets.
4	Represents accrued rent reclassified to operating lease right-of-use assets.
5	Represents recognition of operating lease liabilities.

XML

Revenue (Tables)

3 Months Ended

Mar. 30, 2019

Disaggregation of Revenue from Contracts with Customers

The following tables represent a disaggregation of revenue from contracts with customers for the three months ended March 30, 2019 and March 31, 2018 along with the reportable segment for each category.

Major Products and Service Lines

TFE	Three Months Ended March 30, 2019								Three Months Ended March 31, 2018
	(In thousands)
	HDD		DCP		PV		Total		HDD		DCP		PV		Total
Systems, upgrades and spare parts	$	11,050	$	—	$	6,373	$	17,423	$	10,393	$	1	$	2	$	10,396
Field service		1,522		—		—		1,522		2,355		—		38		2,393
Total TFE net revenues	$	12,572	$	—	$	6,373	$	18,945	$	12,748	$	1	$	40	$	12,789

	Three Months Ended
Photonics	March 30, 2019		March 31, 2018
	(In thousands)
Products:
Military products	$	1,813	$	2,254
Commercial products		318		—
Repair and other services		561		429
Total Photonics product net revenues		2,692		2,683
Technology development:
Firm Fixed Price (“FFP”)		1,692		692
Cost Plus Fixed Fee (“CPFF”)		1,496		1,790
Time and materials		2		20
Total technology development net revenues		3,190		2,502
Total Photonics net revenues	$	5,882	$	5,185

Primary Geographical Markets

	Three Months Ended
	March 30, 2019						March 31, 2018
	(In thousands)
	TFE		Photonics		Total		TFE		Photonics		Total
United States	$	161	$	5,716	$	5,877	$	1,911	$	4,762	$	6,673
Asia		18,784		—		18,784		10,878		—		10,878
Europe		—		166		166		—		293		293
Rest of World		—		—		—		—		130		130
Total net revenues	$	18,945	$	5,882	$	24,827	$	12,789	$	5,185	$	17,974

Timing of Revenue Recognition

	Three Months Ended
	March 30, 2019						March 31, 2018
	(In thousands)
	TFE		Photonics		Total		TFE		Photonics		Total
Products transferred at a point in time	$	18,945	$	561	$	19,506	$	12,789	$	429	$	13,218
Products and services transferred over time		—		5,321		5,321		—		4,756		4,756
	$	18,945	$	5,882	$	24,827	$	12,789	$	5,185	$	17,974

Changes in Contract Assets and Contract Liabilities

The following table reflects the changes in our contract assets, which we classify as accounts receivable, unbilled or retainage, and our contract liabilities, which we classify as deferred revenue and customer advances, for the three months ended March 30 2019.

	March 30, 2019		December 29, 2018		Three Months Change
	(In thousands)
TFE:
Contract assets:
Accounts receivable, unbilled	$	897	$	514	$	383
Contract liabilities:
Deferred revenue	$	713	$	633	$	80
Customer advances		10,335		14,314		(3,979	)
	$	11,048	$	14,947	$	(3,899	)
Photonics:
Contract assets:
Accounts receivable, unbilled	$	2,561	$	1,493	$	1,068
Retainage		131		157		(26	)
	$	2,692	$	1,650	$	1,042
Contract liabilities:
Deferred revenue	$	784	$	1,101	$	(317	)

XML

Inventories (Tables)

3 Months Ended

Mar. 30, 2019

Summary of Inventories

Inventories are stated at the lower of average cost or net realizable value and consist of the following:

	March 30, 2019		December 29, 2018
	(In thousands)
Raw materials	$	16,815	$	16,354
Work-in-progress		11,933		9,134
Finished goods		1,581		5,109
	$	30,329	$	30,597

XML

Equity-Based Compensation (Tables)

3 Months Ended

Mar. 30, 2019

Effect of Recording Equity-Based Compensation

The effect of recording equity-based compensation for the three-month periods ended March 30, 2019 and March 31, 2018 was as follows:

	Three Months Ended
	March 30, 2019		March 31, 2018
	(In thousands)
Equity-based compensation by type of award:
Stock options	$	206	$	134
RSUs		291		406
Employee stock purchase plan		259		277
Total equity-based compensation	$	756	$	817

Summary of Stock Option Activity

Option activity as of March 30, 2019 and changes during the three months ended March 30, 2019 were as follows:

	Shares			Weighted Average Exercise Price
Options outstanding at December 29, 2018		2,070,749		$	6.76
Options granted		13,125		$	6.08
Options cancelled and forfeited		(8,992	)	$	7.43
Options exercised		(72,122	)	$	4.22
Options outstanding at March 30, 2019		2,002,760		$	6.84
Options exercisable at March 30, 2019		1,300,175		$	6.72

Employee Stock Options Weighted-Average Assumptions

Intevac estimated the weighted-average fair value of stock options and ESPP purchase rights using the following weighted-average assumptions:

	Three Months Ended
	March 30, 2019			March 31, 2018
Stock Options:
Weighted-average fair value of grants per share	$	2.28		$	2.30
Expected volatility		43.40	%		41.97	%
Risk free interest rate		2.21	%		2.48	%
Expected term of options (in years)		4.32			4.23
Dividend yield		None			None
ESPP Purchase Rights:
Weighted-average fair value of grants per share	$	1.89		$	2.36
Expected volatility		50.00	%		46.60	%
Risk free interest rate		2.53	%		1.82	%
Expected term of purchase rights (in years)		1.0			1.25
Dividend yield		None			None

Summary of Restricted Stock Units Activity

A summary of the RSU activity is as follows:

	Shares			Weighted-Average Grant Date Fair Value
Non-vested RSUs at December 29, 2018		462,409		$	6.92
Granted		8,563		$	6.11
Vested		(11,924	)	$	6.92
Cancelled and forfeited		(8,737	)	$	6.38
Non-vested RSUs at March 30, 2019		450,311		$	6.91

XML

Purchased Intangible Assets, Net (Tables)

3 Months Ended

Mar. 30, 2019

Information Regarding Other Acquisition Related Intangible Assets

Details of finite-lived intangible assets by segment as of March 30, 2019, are as follows:

	March 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)
TFE	$	7,172	$	(6,505	)	$	667
Photonics		1,215		(1,147	)		68
	$	8,387	$	(7,652	)	$	735

Estimated Future Amortization Expense Related to Finite-Lived Purchased Intangible Assets

As of March 30, 2019, future amortization expense is expected to be as follows:

(In thousands)
2019	$	461
2020		274
	$	735

XML

Acquisition-Related Contingent Consideration (Tables)

3 Months Ended

Mar. 30, 2019

Reconciliation of Change in Fair Value Measurement of Contingent Consideration Liability

The following table represents a reconciliation of the change in the fair value measurement of the contingent consideration liability for the three-month periods ended March 30, 2019 and March 31, 2018.

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
Opening balance	$	223		$	362
Changes in fair value		7			(1	)
Cash payments made		(98	)		—
Closing balance	$	132		$	361

XML

Warranty (Tables)

3 Months Ended

Mar. 30, 2019

Guarantees [Abstract]

Schedule of Product Warranty Liability [Table Text Block]

The following table displays the activity in the warranty provision account for the three-month periods ended March 30, 2019 and March 31, 2018.

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
Opening balance	$	997		$	994
Expenditures incurred under warranties		(167	)		(236	)
Accruals for product warranties issued during the reporting period		324			104
Adjustments to previously existing warranty accruals		143			4
Closing balance	$	1,297		$	866

The following table displays the balance sheet classification of the warranty provision account at March 30, 2019 and at December 29, 2018.

	March 30, 2019		December 29, 2018
	(In thousands)
Other accrued liabilities	$	1,147	$	839
Other long-term liabilities		150		158
Total warranty provision	$	1,297	$	997

XML

Leases (Table)

3 Months Ended

Mar. 30, 2019

Disclosure Text Block [Abstract]

Schedule of Lease Assets and Lease Liabilities[Table text block]

The following table reflects our lease assets and our lease liabilities at March 30, 2019 and December 30, 2018.

	March 30, 2019		December 30, 2018
	(In thousands)
Assets:
Operating lease right-of-use assets	$	11,076	$	11,635
Liabilities:
Current operating lease liabilities	$	2,569	$	2,581
Noncurrent operating lease liabilities		10,491		11,120
	$	13,060	$	13,701

Lease, Cost [Table Text Block]

The components of lease costs were as follows:

	Three Months Ended
	March 30, 2019		March 31, 2018
	(In thousands)
Operating lease cost	$	782	$	759
Short-term lease cost		19		21
Total lease cost	$	801	$	780

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

As of March 30, 2019, the maturity of operating lease liabilities was as follows:

(In thousands)
2019	$	2,543
2020		2,992
2021		2,989
2022		3,074
2023		3,161
2024		529
Total lease payments		15,288
Less: Interest		(2,228	)
Present value of lease liabilities	$	13,060

Schedule of Lease Term and Discount Rate[table text block]

	March 30, 2019
Weighted-average remaining lease term (in years)		4.8
Weighted-average discount rate		6.48	%

Schedule of Supplemental Cash Flow Information Related to Leases[table text block]

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
	March 30, 2019
Operating cash outflows from operating leases	$	886
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—

XML

Cash, Cash Equivalents and Investments (Tables)

3 Months Ended

Mar. 30, 2019

Cash, Cash Equivalents and Short-Term Investments and Long-Term Investments

Cash and cash equivalents, short-term investments and long-term investments consist of:

	March 30, 2019
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses		Fair Value
	(In thousands)
Cash and cash equivalents:
Cash	$	14,671	$	—	$	—	$	14,671
Money market funds		5,064		—		—		5,064
Commercial paper		1,497		—		—		1,497
Municipal bonds		500		—		—		500
U.S. treasury and agency securities		1,804		1		—		1,805
Total cash and cash equivalents	$	23,536	$	1	$	—	$	23,537
Short-term investments:
Certificates of deposit	$	3,000	$	4	$	—	$	3,004
Commercial paper		1,899		—		—		1,899
Corporate bonds and medium-term notes		2,807		2		3		2,806
Municipal bonds		500		—		—		500
U.S. treasury and agency securities		3,560		—		5		3,555
Total short-term investments	$	11,766	$	6	$	8	$	11,764
Long-term investments:
Certificates of deposit	$	500	$	—	$	—	$	500
Corporate bonds and medium-term notes		4,875		20		1		4,894
Total long-term investments	$	5,375	$	20	$	1	$	5,394
Total cash, cash equivalents, and investments	$	40,677	$	27	$	9	$	40,695

	December 29, 2018
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses		Fair Value
	(In thousands)
Cash and cash equivalents:
Cash	$	13,334	$	—	$	—	$	13,334
Money market funds		3,335		—		—		3,335
U.S. treasury and agency securities		2,046		—		—		2,046
Total cash and cash equivalents	$	18,715	$	—	$	—	$	18,715
Short-term investments:
Certificates of deposit	$	5,299	$	1	$	1	$	5,299
Commercial paper		2,242		—		1		2,241
Corporate bonds and medium-term notes		4,759		—		13		4,746
Municipal bonds		500		—		2		498
U.S. treasury and agency securities		3,297		—		5		3,292
Total short-term investments	$	16,097	$	1	$	22	$	16,076
Long-term investments:
Certificates of deposit	$	500	$	—	$	—	$	500
Corporate bonds and medium-term notes		2,879		4		4		2,879
U.S. treasury and agency securities		999		—		6		993
Total long-term investments	$	4,378	$	4	$	10	$	4,372
Total cash, cash equivalents, and investments	$	39,190	$	5	$	32	$	39,163

Contractual Maturities of Available-for-Sale Securities

The contractual maturities of available-for-sale securities at March 30, 2019 are presented in the following table.

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	20,631	$	20,630
Due after one through five years		5,375		5,394
	$	26,006	$	26,024

Fair Market Value of Investments with Unrealized Losses Not Deemed to be Other-Than Temporarily Impaired

The following table provides the fair market value of Intevac’s investments with unrealized losses that are not deemed to be other-than temporarily impaired as of March 30, 2019.

	March 30, 2019
	In Loss Position for Less than 12 Months				In Loss Position for Greater than 12 Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In thousands)
Corporate bonds and medium-term notes	$	—	$	—	$	1,097	$	4
U.S. treasury and agency securities		—		—		1,994		5
	$	—	$	—	$	3,091	$	9

Fair Value Hierarchy of Available-for-Sale Securities Measured at Fair Value on Recurring Basis

The following table represents the fair value hierarchy of Intevac’s available-for-sale securities measured at fair value on a recurring basis as of March 30, 2019.

	Fair Value Measurements at March 30, 2019
	Total		Level 1		Level 2
	(In thousands)
Recurring fair value measurements:
Available-for-sale securities
Money market funds	$	5,064	$	5,064	$	—
U.S. treasury and agency securities		5,360		5,360		—
Certificates of deposit		3,504		—		3,504
Commercial paper		3,396		—		3,396
Corporate bonds and medium-term notes		7,700		—		7,700
Municipal bonds		1,000		—		1,000
Total recurring fair value measurements	$	26,024	$	10,424	$	15,600

XML

Derivative Instruments (Tables)

3 Months Ended

Mar. 30, 2019

Summary of Outstanding Derivative Instruments on Gross Basis as Recorded in Consolidated Balance Sheets

The following table summarizes the Company’s outstanding derivative instruments on a gross basis as recorded in its condensed consolidated balance sheets as of March 30, 2019 and December 29, 2018.

		Notional Amounts			Derivative Liabilities
Derivative Instrument		March 30, 2019	December 29, 2018		March 30, 2019				December 29, 2018
						Balance Sheet Line		Fair Value		Balance Sheet Line		Fair Value
		(In thousands)
Undesignated Hedges:
Forward Foreign Currency Contracts	$	1,558		1,764		*	$	8		*	$	8
Total Hedges	$	1,558		1,764			$	8				8

* Other accrued liabilities

XML

Equity (Tables)

3 Months Ended

Mar. 30, 2019

Schedule of Changes in Stockholders' Equity

The changes in stockholders’ equity by component for the three months ended March 30, 2019 and March 31, 2018, are as follows (in thousands):

	Three Months Ended March 30, 2019
	Common
	Stock and					Accumulated
	Additional					Other					Total
	Paid-in		Treasury			Comprehensive		Accumulated			Stockholders’
	Capital		Stock			Income		Deficit			Equity
Balance at December 29, 2018	$	183,227	$	(29,047	)	$	378	$	(64,934	)	$	89,624
Common stock issued under employee plans		993		—			—		—			993
Equity-based compensation expense		756		—			—		—			756
Net loss		—		—			—		(2,392	)		(2,392	)
Other comprehensive income		—		—			106		—			106
Balance at March 30, 2019	$	184,976	$	(29,047	)	$	484	$	(67,326	)	$	89,087

	Three Months Ended March 31, 2018
	Common
	Stock and					Accumulated
	Additional					Other					Total
	Paid-in		Treasury			Comprehensive		Accumulated			Stockholders’
	Capital		Stock			Income		Deficit			Equity
Balance at December 30, 2017	$	177,543	$	(28,489	)	$	490	$	(66,881	)	$	82,663
Cumulative effect of accounting change		—		—			—		(1,634	)		(1,634	)
Common stock issued under employee plans		1,732		—			—		—			1,732
Equity-based compensation expense		817		—			—		—			817
Net loss		—		—			—		(5,136	)		(5,136	)
Other comprehensive income		—		—			76		—			76
Balance at March 30, 2018	$	180,092	$	(28,489	)	$	566	$	(73,651	)	$	78,518

Changes in Accumulated Other Comprehensive Income by Component

The changes in accumulated other comprehensive income by component for the three months ended March 30, 2019 and March 31, 2018, are as follows:

	Three Months Ended
	March 30, 2019							March 31, 2018
	Foreign currency		Unrealized holding gains (losses) on available- for-sale investments			Total		Foreign currency		Unrealized holding gains (losses) on available- for-sale investments			Total
	(In thousands)
Beginning balance	$	405	$	(27	)	$	378	$	535	$	(45	)	$	490
Other comprehensive income before reclassification		61		45			106		104		(28	)		76
Amounts reclassified from other comprehensive income		—		—			—		—		—			—
Net current-period other comprehensive income		61		45			106		104		(28	)		76
Ending balance	$	466	$	18		$	484	$	639	$	(73	)	$	566

XML

Net Loss Per Share (Tables)

3 Months Ended

Mar. 30, 2019

Computation of Basic and Diluted Net loss Per Share

The following table sets forth the computation of basic and diluted net loss per share.

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
Net loss	$	(2,392	)	$	(5,136	)
Weighted-average shares — basic		22,855			22,107
Effect of dilutive potential common shares		—			—
Weighted-average shares — diluted		22,855			22,107
Net loss per share — basic and diluted	$	(0.10	)	$	(0.23	)

XML

Segment Reporting (Tables)

3 Months Ended

Mar. 30, 2019

Information for Each Reportable Segment

Information for each reportable segment for the three months ended March 30, 2019 and March 31, 2018 is as follows:

Net Revenues

	Three Months Ended
	March 30, 2019		March 31, 2018
	(In thousands)
TFE	$	18,945	$	12,789
Photonics		5,882		5,185
Total segment net revenues	$	24,827	$	17,974

Operating Loss

	Three Months Ended
	March 30, 2019			March 31, 2018
	(In thousands)
TFE	$	(603	)	$	(2,509	)
Photonics		(640	)		(1,210	)
Total segment operating loss		(1,243	)		(3,719	)
Unallocated costs		(756	)		(1,402	)
Loss from operations		(1,999	)		(5,121	)
Interest income and other income (expense), net		160			145
Loss before income taxes	$	(1,839	)	$	(4,976	)

Segment Assets

Total assets for each reportable segment as of March 30, 2019 and December 29, 2018 are as follows:

Assets

	March 30, 2019		December 29, 2018
	(In thousands)
TFE	$	52,417	$	53,867
Photonics		18,115		16,721
Total segment assets		70,532		70,588
Cash, cash equivalents and investments		40,695		39,163
Restricted cash		1,254		1,169
Deferred income taxes		7,581		7,913
Other current assets		1,124		1,341
Common property, plant and equipment		1,026		1,017
Common operating lease right-of-use assets		2,194		—
Other assets		887		879
Consolidated total assets	$	125,293	$	122,070

XML

Restructuring Charges (Tables)

3 Months Ended

Mar. 30, 2019

Changes in Restructuring Reserves

The changes in restructuring reserves associated with the Reduction Plan for the three months ended March 31, 2018 are as follows:

	Three Months Ended
	March 31, 2018
	Severance and other employee- related costs (In thousands)
Beginning balance	$	—
Provision for restructuring reserves		95
Cash payments made		(95	)
Ending balance	$	—

XML

Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 30, 2018	Dec. 29, 2018
net lease assets	$ 11,076	$ 11,635
lease liabilities	$ 13,060	$ 13,701

XML

Effect of Changes in Balance Sheet Due to Adoption of New Revenue Standard (Detail) - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 30, 2018	Dec. 29, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Prepaid expenses and other current assets	$ 2,173		$ 2,528
Total current assets	87,799		95,633
Operating lease right-of-use assets	11,076	$ 11,635
Total assets	125,293		122,070
Current operating lease liabilities	2,569	2,581
Accounts payable	4,867		6,053
Other accrued liabilities	4,327		4,952
Total current liabilities	25,555		30,008
Noncurrent operating lease liabilities	10,491	11,120
Other long-term liabilities	160		2,438
Total non-current liabilities	10,651		2,438
Total liabilities and stockholders' equity	$ 125,293		122,070
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Prepaid expenses and other current assets		2,307
Total current assets		95,412
Operating lease right-of-use assets		11,635
Total assets		133,484
Current operating lease liabilities		2,581
Accounts payable		6,049
Other accrued liabilities		4,939
Total current liabilities		32,572
Noncurrent operating lease liabilities		11,120
Other long-term liabilities		168
Total non-current liabilities		11,288
Total liabilities and stockholders' equity		133,484
Previously Reported | Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Prepaid expenses and other current assets			2,528
Total current assets			95,633
Operating lease right-of-use assets
Total assets			122,070
Current operating lease liabilities
Accounts payable			6,053
Other accrued liabilities			4,952
Total current liabilities			30,008
Noncurrent operating lease liabilities
Other long-term liabilities			2,438
Total non-current liabilities			2,438
Total liabilities and stockholders' equity			$ 122,070
Restatement Adjustment | Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Prepaid expenses and other current assets		(221)
Total current assets		(221)
Operating lease right-of-use assets		11,635
Total assets		11,414
Current operating lease liabilities		2,581
Accounts payable		(4)
Other accrued liabilities		(13)
Total current liabilities		2,564
Noncurrent operating lease liabilities		11,120
Other long-term liabilities		(2,270)
Total non-current liabilities		8,850
Total liabilities and stockholders' equity		$ 11,414

XML

Revenue -Disaggregation of Revenue from Contracts with Customers (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Total net revenues	$ 24,827	$ 17,974
TFE
Disaggregation of Revenue [Line Items]
Total net revenues	18,945	12,789
TFE | Systems, Upgrades and Spare Parts
Disaggregation of Revenue [Line Items]
Total net revenues	17,423	10,396
TFE | Field Service
Disaggregation of Revenue [Line Items]
Total net revenues	1,522	2,393
Photonics
Disaggregation of Revenue [Line Items]
Total net revenues	5,882	5,185
HDD | TFE
Disaggregation of Revenue [Line Items]
Total net revenues	12,572	12,748
HDD | TFE | Systems, Upgrades and Spare Parts
Disaggregation of Revenue [Line Items]
Total net revenues	11,050	10,393
HDD | TFE | Field Service
Disaggregation of Revenue [Line Items]
Total net revenues	1,522	2,355
DCP | TFE
Disaggregation of Revenue [Line Items]
Total net revenues		1
DCP | TFE | Systems, Upgrades and Spare Parts
Disaggregation of Revenue [Line Items]
Total net revenues		1
PV | TFE
Disaggregation of Revenue [Line Items]
Total net revenues	6,373	40
PV | TFE | Systems, Upgrades and Spare Parts
Disaggregation of Revenue [Line Items]
Total net revenues	6,373	2
PV | TFE | Field Service
Disaggregation of Revenue [Line Items]
Total net revenues		38
Military Products | Photonics
Disaggregation of Revenue [Line Items]
Total net revenues	1,813	2,254
Commercial Products | Photonics
Disaggregation of Revenue [Line Items]
Total net revenues	318
Repair and Other Services | Photonics
Disaggregation of Revenue [Line Items]
Total net revenues	561	429
Product | Photonics
Disaggregation of Revenue [Line Items]
Total net revenues	2,692	2,683
FFP | Photonics
Disaggregation of Revenue [Line Items]
Total net revenues	1,692	692
CPFF | Photonics
Disaggregation of Revenue [Line Items]
Total net revenues	1,496	1,790
Times and Materials | Photonics
Disaggregation of Revenue [Line Items]
Total net revenues	2	20
Technology Development | Photonics
Disaggregation of Revenue [Line Items]
Total net revenues	$ 3,190	$ 2,502

XML

Revenue - Primary Geography Markets (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Total net revenues	$ 24,827	$ 17,974
Products Transferred at a Point in Time
Disaggregation of Revenue [Line Items]
Total net revenues	19,506	13,218
Products and Services Transferred Over Time
Disaggregation of Revenue [Line Items]
Total net revenues	5,321	4,756
United States
Disaggregation of Revenue [Line Items]
Total net revenues	5,877	6,673
Asia
Disaggregation of Revenue [Line Items]
Total net revenues	18,784	10,878
Europe
Disaggregation of Revenue [Line Items]
Total net revenues	166	293
Rest of World
Disaggregation of Revenue [Line Items]
Total net revenues		130
TFE
Disaggregation of Revenue [Line Items]
Total net revenues	18,945	12,789
TFE | Products Transferred at a Point in Time
Disaggregation of Revenue [Line Items]
Total net revenues	18,945	12,789
TFE | United States
Disaggregation of Revenue [Line Items]
Total net revenues	161	1,911
TFE | Asia
Disaggregation of Revenue [Line Items]
Total net revenues	18,784	10,878
Photonics
Disaggregation of Revenue [Line Items]
Total net revenues	5,882	5,185
Photonics | Products Transferred at a Point in Time
Disaggregation of Revenue [Line Items]
Total net revenues	561	429
Photonics | Products and Services Transferred Over Time
Disaggregation of Revenue [Line Items]
Total net revenues	5,321	4,756
Photonics | United States
Disaggregation of Revenue [Line Items]
Total net revenues	5,716	4,762
Photonics | Asia
Disaggregation of Revenue [Line Items]
Total net revenues
Photonics | Europe
Disaggregation of Revenue [Line Items]
Total net revenues	166	293
Photonics | Rest of World
Disaggregation of Revenue [Line Items]
Total net revenues		$ 130

XML

Revenue - Changes in Contract Assets and Contract Liabilities (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Dec. 29, 2018
TFE
Contract liabilities:
Contract liabilities	$ 11,048	$ 14,947
Contract liabilities:
Change in contract liabilities	(3,899)
TFE | Accounts Receivable, Unbilled
Contract assets:
Contract assets	897	514
Contract assets:
Change in contract assets	383
TFE | Deferred Revenue
Contract liabilities:
Contract liabilities	713	633
Contract liabilities:
Change in contract liabilities	80
TFE | Customer Advances
Contract liabilities:
Contract liabilities	10,335	14,314
Contract liabilities:
Change in contract liabilities	(3,979)
Photonics
Contract assets:
Contract assets	2,692	1,650
Contract assets:
Change in contract assets	1,042
Photonics | Accounts Receivable, Unbilled
Contract assets:
Contract assets	2,561	1,493
Contract assets:
Change in contract assets	1,068
Photonics | Deferred Revenue
Contract liabilities:
Contract liabilities	784	1,101
Contract liabilities:
Change in contract liabilities	(317)
Photonics | Retainage
Contract assets:
Contract assets	131	$ 157
Contract assets:
Change in contract assets	$ (26)

XML

Revenue - Additional Information (Detail)	3 Months Ended
	Mar. 30, 2019 USD ($) Installment	Dec. 29, 2018 USD ($)
Revenue From Contract With Customers [Line Items]
Revenue remaining performance obligation	$ 102,600,000
Revenue performance obligation, description of timing	We expect to recognize approximately 69% of our remaining performance obligations as revenue in 2019, and the balance in 2020.
TFE
Revenue From Contract With Customers [Line Items]
Contract liabilities	$ 11,048,000	$ 14,947,000
Revenue remaining performance obligation	$ 59,300,000
TFE | Accounts Receivable, Unbilled
Revenue From Contract With Customers [Line Items]
Number of installments | Installment	3
Change in contract assets	$ 383,000
TFE | Customer Advances
Revenue From Contract With Customers [Line Items]
Contract with customer liability revenue recognized	6,500,000
Contract liabilities	10,335,000	14,314,000
TFE | Deferred Revenue
Revenue From Contract With Customers [Line Items]
Contract with customer liability revenue recognized	209,000
Contract liabilities	713,000	633,000
Photonics
Revenue From Contract With Customers [Line Items]
Change in contract assets	1,042,000
Revenue remaining performance obligation	43,300,000
Photonics | Accounts Receivable, Unbilled
Revenue From Contract With Customers [Line Items]
Change in contract assets	1,068,000
Photonics | Deferred Revenue
Revenue From Contract With Customers [Line Items]
Contract with customer liability revenue recognized	317,000
Contract liabilities	$ 784,000	$ 1,101,000

XML

Inventories Stated at Lower of Average Cost or Net Realizable Value (Detail) - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 29, 2018
Inventory [Line Items]
Raw materials	$ 16,815	$ 16,354
Work-in-progress	11,933	9,134
Finished goods	1,581	5,109
Inventories	$ 30,329	$ 30,597

XML

Equity-Based Compensation - Additional information (Detail)	12 Months Ended
	Dec. 29, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase of common stock through payroll deductions	85.00%
Maximum employee salary withholdings for purchase of common stock under the terms of the ESPP	15.00%

XML

Effect of Recording Equity-Based Compensation (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation	$ 756	$ 817
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation	206	134
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation	291	406
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation	$ 259	$ 277

XML

Option Activity and Changes (Detail)	3 Months Ended
	Mar. 30, 2019 $ / shares shares
Shares
Options outstanding at December 29, 2018 | shares	2,070,749
Options granted | shares	13,125
Options cancelled and forfeited | shares	(8,992)
Options exercised | shares	(72,122)
Options outstanding at March 30, 2019 | shares	2,002,760
Options exercisable at March 30, 2019 | shares	1,300,175
Weighted Average Exercise Price
Options outstanding at December 29, 2018 | $ / shares	$ 6.76
Options granted | $ / shares	6.08
Options cancelled and forfeited | $ / shares	7.43
Options exercised | $ / shares	4.22
Options outstanding at March 30, 2019 | $ / shares	6.84
Options exercisable at March 30, 2019 | $ / shares	$ 6.72

XML

Weighted-Average Fair Value of Stock Options and Employee Stock Purchase Rights using Weighted-Average Assumptions (Detail) - $ / shares	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Stock Options
Weighted-average assumptions
Weighted-average fair value of grants per share	$ 2.28	$ 2.30
Expected volatility	43.40%	41.97%
Risk free interest rate	2.21%	2.48%
Expected term of options (in years)	4 years 3 months 25 days	4 years 2 months 23 days
Dividend yield	0.00%	0.00%
Stock Purchase Rights
Weighted-average assumptions
Weighted-average fair value of grants per share	$ 1.89	$ 2.36
Expected volatility	50.00%	46.60%
Risk free interest rate	2.53%	1.82%
Expected term of options (in years)	1 year	1 year 3 months
Dividend yield	0.00%	0.00%

XML

Summary of Restricted Stock Units Activity (Detail) - Restricted Stock Units (RSUs)	3 Months Ended
	Mar. 30, 2019 $ / shares shares
Shares
Non-vested RSUs at December 29, 2018 | shares	462,409
Granted | shares	8,563
Vested | shares	(11,924)
Cancelled | shares	(8,737)
Non-vested RSUs at March 30, 2019 | shares	450,311
Weighted Average Grant Date Fair Value
Non-vested RSUs at December 29, 2018 | $ / shares	$ 6.92
Granted | $ / shares	6.11
Vested | $ / shares	6.92
Cancelled | $ / shares	6.38
Non-vested RSUs at March 30, 2019 | $ / shares	$ 6.91

XML

Purchased Intangible Assets, Net - Additional Information (Detail)	3 Months Ended
	Mar. 30, 2019 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Total amortization expense of finite-lived intangibles	$ 154,000

XML

Details of Finite-lived Intangible Assets by Segment (Detail) - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 29, 2018
Finite-Lived Intangible Assets [Line Items]
Finite Lived, Gross Carrying Amount	$ 8,387
Accumulated Amortization	(7,652)	$ (7,498)
Finite Lived, Net Carrying Amount	735	$ 889
TFE
Finite-Lived Intangible Assets [Line Items]
Finite Lived, Gross Carrying Amount	7,172
Accumulated Amortization	(6,505)
Finite Lived, Net Carrying Amount	667
Photonics
Finite-Lived Intangible Assets [Line Items]
Finite Lived, Gross Carrying Amount	1,215
Accumulated Amortization	(1,147)
Finite Lived, Net Carrying Amount	$ 68

XML

Future Amortization Expense (Detail) - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 29, 2018
Finite-Lived Intangible Assets [Line Items]
2019	$ 461
2020	274
Finite Lived, Net Carrying Amount	$ 735	$ 889

XML

Acquisition-Related Contingent Consideration - Additional Information (Detail) - USD ($)	Mar. 30, 2019	Dec. 29, 2018	Nov. 19, 2010
Business Acquisition [Line Items]
contingent consideration liability	$ 132,000	$ 223,000
Solar Implant Technologies | Revenue Earnout
Business Acquisition [Line Items]
Maximum amount of cash potentially earned in contingent compensation arrangements			$ 9,000,000

XML

Reconciliation of Change in Fair Value Measurement of Contingent Consideration Liability (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Business Acquisition, Contingent Consideration [Line Items]
Opening balance	$ 223	$ 362
Changes in fair value	7	(1)
Cash payments made	(98)	0
Closing balance	$ 132	$ 361

XML

Warranty - Additional Information (Detail)	3 Months Ended
	Mar. 30, 2019
Warranties [Line Items]
Minimum Product Warranty Range	12 months
Maximum Product Warranty Range	24 months

XML

Activity in Warranty Provision Account (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Accrued Warranty [Line Items]
Opening balance	$ 997	$ 994
Expenditures incurred under warranties	(167)	(236)
Accruals for product warranties issued during the reporting period	324	104
Adjustments to previously existing warranty accruals	143	4
Closing balance	$ 1,297	$ 866

XML

Balance Sheet Classification of Warranty Provision Account (Detail) - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 29, 2018	Mar. 31, 2018	Dec. 31, 2017
Product Warranty Liability [Line Items]
Other accrued liabilities	$ 1,147	$ 839
Other long-term liabilities	150	158
Total warranty provision	$ 1,297	$ 997	$ 866	$ 994

XML

Guarantees - Additional Information (Detail) $ in Millions	Mar. 30, 2019 USD ($)
Guarantor Obligations [Line Items]
Letters of credit and bank guarantees outstanding, amount	$ 1.3
Letters of credit and bank guarantees collateralized by restricted cash	$ 1.3

XML

Leases - lease assets and our lease liabilities (Detail) - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 30, 2018	Dec. 29, 2018
Assets:
Operating lease right-of-use assets	$ 11,076	$ 11,635
Liabilities:
Current operating lease liabilities	2,569	2,581
Noncurrent operating lease liabilities	10,491	11,120
Operating Lease, Liability	$ 13,060	$ 13,701

XML

Leases - lease costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Operating lease cost	$ 782	$ 759
Short-term lease cost	19	21
Total lease cost	$ 801	$ 780

XML

Leases - Future Minimum Lease Payments (Detail) - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 30, 2018
Operating Leased Assets [Line Items]
2019	$ 2,543
2020	2,992
2021	2,989
2022	3,074
2023	3,161
2024	529
Total lease payments	15,288
Less: Interest	(2,228)
Present value of lease liabilities	$ 13,060	$ 13,701

XML

Leases - Lease Term and Discount Rate (Detail)	Mar. 30, 2019
Weighted-average remaining lease term (in years)	4 years 9 months 18 days
Weighted-average discount rate	6.48%

XML

Leases - Supplemental cash flow information related to leases (Detail) $ in Thousands	3 Months Ended
	Mar. 30, 2019 USD ($)
Operating cash outflows from operating leases	$ 886
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 0

XML

Cash, Cash Equivalents and Short-Term Investments and Long-Term Investments (Detail) - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 29, 2018
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 40,677	$ 39,190
Unrealized Holdings Gains	27	5
Unrealized Holdings Losses	9	32
Fair Value	40,695	39,163
Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	23,536	18,715
Unrealized Holdings Gains	1
Fair Value	23,537	18,715
Cash and Cash Equivalents | Municipal bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	500
Fair Value	500
Cash and Cash Equivalents | U.S. treasury and agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,804	2,046
Unrealized Holdings Gains	1
Fair Value	1,805	2,046
Cash and Cash Equivalents | Cash
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	14,671	13,334
Fair Value	14,671	13,334
Cash and Cash Equivalents | Money market funds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	5,064	3,335
Fair Value	5,064	3,335
Cash and Cash Equivalents | Commercial paper
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,497
Fair Value	1,497
Short-term Investments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	11,766	16,097
Unrealized Holdings Gains	6	1
Unrealized Holdings Losses	8	22
Fair Value	11,764	16,076
Short-term Investments | Corporate bonds and medium-term notes
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,807	4,759
Unrealized Holdings Gains	2
Unrealized Holdings Losses	3	13
Fair Value	2,806	4,746
Short-term Investments | Municipal bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	500	500
Unrealized Holdings Losses		2
Fair Value	500	498
Short-term Investments | U.S. treasury and agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	3,560	3,297
Unrealized Holdings Losses	5	5
Fair Value	3,555	3,292
Short-term Investments | Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	3,000	5,299
Unrealized Holdings Gains	4	1
Unrealized Holdings Losses		1
Fair Value	3,004	5,299
Short-term Investments | Commercial paper
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,899	2,242
Unrealized Holdings Losses		1
Fair Value	1,899	2,241
Other Long-term Investments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	5,375	4,378
Unrealized Holdings Gains	20	4
Unrealized Holdings Losses	1	10
Fair Value	5,394	4,372
Other Long-term Investments | Corporate bonds and medium-term notes
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	4,875	2,879
Unrealized Holdings Gains	20	4
Unrealized Holdings Losses	1	4
Fair Value	4,894	2,879
Other Long-term Investments | U.S. treasury and agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost		999
Unrealized Holdings Losses		6
Fair Value		993
Other Long-term Investments | Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	500	500
Fair Value	$ 500	$ 500

XML

Contractual Maturities of Available-For-Sale Securities (Detail) $ in Thousands	Mar. 30, 2019 USD ($)
Investments, Debt and Equity Securities [Abstract]
Amortized Cost, Due in one year or less	$ 20,631
Amortized Cost, Due after one through five years	5,375
Amortized Cost	26,006
Fair Value, Due in one year or less	20,630
Fair Value, Due after one through five years	5,394
Fair Value	$ 26,024

XML

Fair Market Value of Investments with Unrealized Losses Not Deemed to be Other-Than Temporarily Impaired (Detail) $ in Thousands	Mar. 30, 2019 USD ($)
Debt Securities, Available-for-sale [Line Items]
Unrealized Loss Position, Less than 12 Months, Fair Value	$ 0
Unrealized Loss Position, Less than 12 Months, Gross Unrealized Losses	0
Unrealized Loss Position, Greater than 12 Months, Fair Value	3,091
Unrealized Loss Position, Greater than 12 Months, Gross Unrealized Losses	9
Corporate bonds and medium-term notes
Debt Securities, Available-for-sale [Line Items]
Unrealized Loss Position, Less than 12 Months, Fair Value	0
Unrealized Loss Position, Less than 12 Months, Gross Unrealized Losses	0
Unrealized Loss Position, Greater than 12 Months, Fair Value	1,097
Unrealized Loss Position, Greater than 12 Months, Gross Unrealized Losses	4
U.S. treasury and agency securities
Debt Securities, Available-for-sale [Line Items]
Unrealized Loss Position, Less than 12 Months, Fair Value	0
Unrealized Loss Position, Less than 12 Months, Gross Unrealized Losses	0
Unrealized Loss Position, Greater than 12 Months, Fair Value	1,994
Unrealized Loss Position, Greater than 12 Months, Gross Unrealized Losses	$ 5

XML

Fair Value Hierarchy of Available-for-Sale Securities Measured at Fair Value on Recurring Basis (Detail) $ in Thousands	Mar. 30, 2019 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	$ 26,024
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	26,024
Fair Value, Measurements, Recurring | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	5,064
Fair Value, Measurements, Recurring | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	3,504
Fair Value, Measurements, Recurring | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	3,396
Fair Value, Measurements, Recurring | U.S. treasury and agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	5,360
Fair Value, Measurements, Recurring | Corporate bonds and medium-term notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	7,700
Fair Value, Measurements, Recurring | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	1,000
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	10,424
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	5,064
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | U.S. treasury and agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	5,360
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	15,600
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	3,504
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	3,396
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Corporate bonds and medium-term notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	7,700
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring fair value measurements	$ 1,000

XML

Derivative Instruments - Additional Information (Detail)	3 Months Ended
	Mar. 30, 2019
Derivative [Line Items]
Maturity of foreign currency derivative	30 days

XML

Summary of Outstanding Derivative Instruments on Gross Basis as Recorded in Consolidated Balance Sheets (Detail) - Undesignated Hedges - USD ($) $ in Thousands		Mar. 30, 2019	Dec. 29, 2018
Derivatives, Fair Value [Line Items]
Notional Amounts		$ 1,558	$ 1,764
Derivative Liabilities		8	8
Forward foreign currency contracts
Derivatives, Fair Value [Line Items]
Notional Amounts		1,558	1,764
Derivative Liabilities	[1],[2]	$ 8	$ 8

[1] Other accrued liabilities

[2] Represents recognition of operating lease liabilities.

XML

Equity - Schedule of Changes in Stockholders' Equity (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Class of Stock [Line Items]
Beginning balance	$ 89,624	$ 82,663
Cumulative effect of accounting change		(1,634)
Common stock issued under employee plans	993	1,732
Equity-based compensation expense	756	817
Net loss	(2,392)	(5,136)
Other comprehensive income	106	76
Ending balance	89,087	78,518
Common Stock and Additional Paid-in Capital
Class of Stock [Line Items]
Beginning balance	183,227	177,543
Common stock issued under employee plans	993	1,732
Equity-based compensation expense	756	817
Ending balance	184,976	180,092
Treasury Stock
Class of Stock [Line Items]
Beginning balance	(29,047)	(28,489)
Ending balance	(29,047)	(28,489)
Accumulated Other Comprehensive Income
Class of Stock [Line Items]
Beginning balance	378	490
Other comprehensive income	106	76
Ending balance	484	566
Accumulated Deficit
Class of Stock [Line Items]
Beginning balance	(64,934)	(66,881)
Cumulative effect of accounting change		(1,634)
Net loss	(2,392)	(5,136)
Ending balance	$ (67,326)	$ (73,651)

XML

Changes in Accumulated Other Comprehensive Income by Component (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 89,624	$ 82,663
Other comprehensive income, net of tax	106	76
Ending balance	89,087	78,518
Foreign currency
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	405	535
Other comprehensive income (loss) before reclassification	61	104
Amounts reclassified from other comprehensive income (loss)	0	0
Other comprehensive income, net of tax	61	104
Ending balance	466	639
Unrealized holding gains (losses) on available- for-sale investments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(27)	(45)
Other comprehensive income (loss) before reclassification	45	(28)
Amounts reclassified from other comprehensive income (loss)	0	0
Other comprehensive income, net of tax	45	(28)
Ending balance	18	(73)
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	378	490
Other comprehensive income (loss) before reclassification	106	76
Amounts reclassified from other comprehensive income (loss)	0	0
Other comprehensive income, net of tax	106	76
Ending balance	$ 484	$ 566

XML

Equity - Additional Information (Detail) - USD ($) $ in Millions		3 Months Ended
	Aug. 15, 2018	Mar. 30, 2019	Mar. 31, 2018	Nov. 21, 2013
Equity, Class of Treasury Stock [Line Items]
Stock repurchase authorized amount	$ 40.0			$ 30.0
Stock repurchase remained available for future stock repurchase		$ 10.9
Increase in stock repurchase program	$ 10.0
Stock repurchased		0	0

XML

Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items]
Net loss	$ (2,392)	$ (5,136)
Weighted-average shares - basic	22,855	22,107
Effect of dilutive potential common shares	0	0
Weighted-average shares - diluted	22,855	22,107
Net loss per share - basic and diluted	$ (0.10)	$ (0.23)

XML

Segment Reporting - Additional Information (Detail)	3 Months Ended
	Mar. 30, 2019
Segment Reporting Disclosure [Line Items]
Number of reportable segments	2
Allocation of corporate expenses to the segments	3.00%

XML

Information for Each Reportable Segment (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Segment Reporting Information [Line Items]
Total segment net revenues	$ 24,827	$ 17,974
Loss from operations	(1,999)	(5,121)
Interest income and other income (expense), net	160	145
Loss before income taxes	(1,839)	(4,976)
TFE
Segment Reporting Information [Line Items]
Total segment net revenues	18,945	12,789
Photonics
Segment Reporting Information [Line Items]
Total segment net revenues	5,882	5,185
Operating Segments
Segment Reporting Information [Line Items]
Loss from operations	(1,243)	(3,719)
Operating Segments | TFE
Segment Reporting Information [Line Items]
Loss from operations	(603)	(2,509)
Operating Segments | Photonics
Segment Reporting Information [Line Items]
Loss from operations	(640)	(1,210)
Unallocated Amount to Segment
Segment Reporting Information [Line Items]
Unallocated costs	$ (756)	$ (1,402)

XML

Assets for Each Reportable Segment (Detail) - USD ($) $ in Thousands	Mar. 30, 2019	Dec. 29, 2018
Segment Reporting, Asset Reconciling Item [Line Items]
Cash, cash equivalents and investments	$ 40,695	$ 39,163
Restricted cash	1,254	1,169
Deferred income taxes	7,581	7,913
Other current assets	1,124	1,341
Common property, plant and equipment	1,026	1,017
Common operating lease right-of-use assets	2,194	0
Other assets	887	879
Consolidated total assets	125,293	122,070
Operating Segments
Segment Reporting, Asset Reconciling Item [Line Items]
Consolidated total assets	70,532	70,588
Operating Segments | TFE
Segment Reporting, Asset Reconciling Item [Line Items]
Consolidated total assets	52,417	53,867
Operating Segments | Photonics
Segment Reporting, Asset Reconciling Item [Line Items]
Consolidated total assets	$ 18,115	$ 16,721

XML

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018	Dec. 29, 2018
Income Taxes [Line Items]
Provision for income taxes	$ 553,000	$ 160,000
Income tax provision on earnings of subsidiaries	362,000
Inland Revenue, Singapore (IRAS)
Income Taxes [Line Items]
Deposit for contested taxes and related interest	730,000		$ 723,000
Foreign Tax Authority | Singapore
Income Taxes [Line Items]
Income tax charge (benefit)	$ 191,000	$ 145,000

XML

Restructuring Charges - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Restructuring Cost and Reserve [Line Items]
Percentage of reduction of global workforce	6.00%
Reduction in salary, wages and other employee-related expenses due to implementation of plan	$ 1.8

XML

Changes in Restructuring Reserves (Detail) - Severance And Other Employee Related Costs $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($)
Restructuring Cost and Reserve [Line Items]
Beginning balance	$ 0
Provision for restructuring reserves	95
Cash payments made	(95)
Ending balance	$ 0

XML

Related Party Transaction - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 30, 2019	Mar. 31, 2018
Related party transaction, purchases from related party	$ 152,000	$ 85,000