Segment Reporting

6 Months Ended

Jun. 27, 2020

Segment Reporting [Abstract]

Segment Reporting

13. 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 June 27, 2020 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, or 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 and six months ended June 27, 2020 and June 29, 2019 is as follows:

Net Revenues

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)
TFE	$	16,595	$	13,264	$	24,557	$	32,209
Photonics		12,247		9,050		23,125		14,932
Total segment net revenues	$	28,842	$	22,314	$	47,682	$	47,141

Operating Income (Loss)

	Three Months Ended						Six Months Ended
	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
	(In thousands)
TFE	$	(174	)	$	(1,291	)	$	(2,705	)	$	(1,892	)
Photonics		3,536			1,487			6,448			846
Total income (loss) from segment operations		3,362			196			3,743			(1,046	)
Unallocated costs		(1,258	)		(1,124	)		(2,738	)		(1,879	)
Income (loss) from operations		2,104			(928	)		1,005			(2,925	)
Interest income and other income (expense), net		62			163			204			322
Income (loss) before provision for income taxes	$	2,166		$	(765	)	$	1,209		$	(2,603	)

Total assets for each reportable segment as of June 27, 2020 and December 28, 2019 are as follows:

Assets

	June 27, 2020		December 28, 2019
	(In thousands)
TFE	$	43,175	$	51,153
Photonics		26,622		22,071
Total segment assets		69,797		73,244
Cash, cash equivalents and investments		43,983		42,024
Restricted cash		787		787
Deferred income taxes		5,826		6,252
Other current assets		1,207		752
Common property, plant and equipment		1,414		1,307
Common operating lease right-of-use assets		1,815		1,898
Other assets		—		78
Consolidated total assets	$	124,829	$	126,322