ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer | ☐ | ☒ | ||||
Non-accelerated filer |
☐ |
Smaller reporting company | ||||
Emerging growth company |
Item 1. |
Business |
TFE Products |
Applications and Features | |
HDD Equipment Market | ||
200 Lean ® Disk Sputtering System |
• Uses PVD and chemical vapor deposition (“CVD”) technologies. • Deposits magnetic films, non-magnetic films and protective carbon-based overcoats.• Provides high-throughput for small-substrate processing. • Over 164 units installed. | |
Upgrades, spares, consumables and services (non-systems business) |
• Upgrades to the installed base to support the continued growth in areal density or reduce the manufacturing cost per disk. | |
DCP Market | ||
INTEVAC VERTEX ® System |
• Utilizes vertical sputtering for multiple film types. • Provides high-throughput for small-substrate processing. • Uses patented carbon deposition source. • Modular design enables expandability. • Enables low-temperature processing. | |
INTEVAC VERTEX ® Spectra System |
• Extension of the VERTEX system. • Incorporates multiple source technologies in a single system. • Uses proprietary ion beam processing for deposition and etching. • Enables unique patterned NCVM and hard AR coatings. | |
INTEVAC VERTEX ® Marathon System |
• Versatile platform for high volume manufacturing of multi-step, multi-layer optical coatings. • Enables diverse coatings - DiamondClad, patterned NCVM and AR films. | |
Solar PV Market | ||
INTEVAC MATRIX PVD System |
• Deposits electrical contacts and conductor layers, reflective layers, and transparent conductive oxide layers, all of which are critical to the efficiency of solar cells. • Includes patented Linear Scanning Magnetic Array (“LSMA”) magnetron source, with industry-leading target utilization rate of over 65 percent. • Provides high-throughput for small-substrate processing. | |
INTEVAC MATRIX Implant System |
• Utilizes the chambers and transport mechanism of the MATRIX platform while using the implant sources from the ENERG i | |
ENERG i ® Implant System |
• Supports both phosphorus and boron dopant technologies. • Extendable to new advanced solar cell structures. |
TFE Products |
Applications and Features | |
ASP Market | ||
INTEVAC MATRIX PVD System |
• Deposits barrier/seed layers for fan-out RDL.• Includes LSMA magnetron source, with industry-leading target utilization rate of over 65 percent. • Provides high-throughput and low cost of ownership for small-substrate or large panel processing. • Provides flexibility for handling round, square, or rectangular substrates for fan-out packaging. | |
Adjacent Markets | ||
INTEVAC MATRIX System |
• Incorporates multiple thin-film deposition techniques such as PVD, CVD, Etch, Implant, heating and cooling. • Consists of high-speed linear transport. • Flexible design enables handling of various different small substrate sizes and shapes. • Performs double-sided coating within vacuum. |
2021 |
2020 |
|||||||
Seagate Technology |
60 | % | 79 | % | ||||
Western Digital Corporation |
25 | % | 18 | % | ||||
Amkor Technology, Inc. |
10 | % | * |
Name |
Age |
Position | ||||
Executive Officers: |
||||||
Nigel D. Hunton |
61 | President and Chief Executive Officer | ||||
James Moniz |
64 | Executive Vice President, Finance and Administration, Chief Financial Officer, Secretary and Treasurer | ||||
Jay Cho |
57 | Executive Vice President and General Manager, TFE | ||||
Other Key Officers: |
||||||
Terry Bluck |
62 | Chief Technology Officer, TFE | ||||
Kimberly Burk |
56 | Senior Vice President, Global Human Resources |
Item 1A. |
Risk Factors |
Item 1B. |
Unresolved Staff Comments |
Item 2. |
Properties |
Location |
Square Footage |
Principal Use | ||||
Santa Clara, California |
169,583 | * | Corporate Headquarters; Marketing, Manufacturing, Engineering and Customer Support | |||
Singapore |
31,947 | Manufacturing and Customer Support | ||||
Malaysia |
1,291 | Customer Support | ||||
Shenzhen, China |
2,568 | Customer Support |
* | In connection with the disposition of our Photonics business, we entered into a lease assignment agreement with EOTECH that assigns the lease obligation for two buildings in our California campus consisting of 94,890 square feet of rentable space to EOTECH. As part of the assignment, we agreed to subsidize a portion of EOTECH’s lease payments through the remainder of the lease term which expires in March 2024. |
Item 3. |
Legal Proceedings |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Item 6. |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Overview: |
• | Results of Operations: |
• | Liquidity and Capital Resources: |
• | Critical Accounting Policies and Estimates: |
Fiscal Year |
2021 |
2020 |
Change 2021 vs. 2020 |
|||||||||
(in thousands, except percentages and per share amounts) |
||||||||||||
Net revenues |
$ | 38,524 | $ | 52,128 | $ | (13,604 | ) | |||||
Gross profit |
$ | 7,067 | $ | 22,417 | $ | (15,350 | ) | |||||
Gross margin percent |
18.3 | % | 43.0 | % | (24.7) points | |||||||
Operating loss |
$ | (22,476 | ) | $ | (8,880 | ) | $ | (13,596 | ) | |||
Net loss from continuing operations |
$ | (23,057 | ) | $ | (10,435 | ) | $ | (12,622 | ) | |||
Net income from discontinued operations, net of tax |
$ | 49,677 | $ | 11,491 | $ | 38,186 | ||||||
Net income |
$ | 26,620 | $ | 1,056 | $ | 25,564 | ||||||
Net income per basic and diluted share |
$ | 1.09 | $ | 0.04 | $ | 1.05 |
2021 |
2020 |
Change 2021 vs. 2020 |
||||||||||
(in thousands) |
||||||||||||
Total net revenues |
$ | 38,524 | $ | 52,128 | $ | (13,604 | ) | |||||
|
|
|
|
|
|
January 1, 2022 |
January 2, 2021 |
|||||||
(in thousands) |
||||||||
Total backlog |
$ | 24,725 | $ | 5,623 | ||||
|
|
|
|
2021 |
2020 |
|||||||
Seagate Technology |
60 | % | 79 | % | ||||
Western Digital Corporation |
25 | % | 18 | % | ||||
Amkor Technology, Inc. |
10 | % | * |
2021 |
2020 |
|||||||
(in thousands) |
||||||||
United States |
$ | 3,670 | $ | 6,450 | ||||
Asia |
31,004 | 45,611 | ||||||
Europe |
3,850 | 67 | ||||||
|
|
|
|
|||||
Total net revenues |
$ | 38,524 | $ | 52,128 | ||||
|
|
|
|
Fiscal Year |
Change 2021 vs. 2020 |
|||||||||||
2021 |
2020 |
|||||||||||
(in thousands, except percentages) |
||||||||||||
Total gross profit |
$ | 7,067 | $ | 22,417 | $ | (15,350 | ) | |||||
% of net revenues |
18.3 | % | 43.0 | % |
Fiscal Year |
Change 2021 vs. 2020 |
|||||||||||
2021 |
2020 |
|||||||||||
(in thousands) |
||||||||||||
Research and development expense |
$ | 12,176 | $ | 13,205 | $ | (1,029 | ) |
Fiscal Year |
Change 2021 vs. 2020 |
|||||||||||
2021 |
2020 |
|||||||||||
(in thousands) |
||||||||||||
Selling, general and administrative expense |
$ | 17,367 | $ | 18,092 | $ | (725 | ) |
Fiscal Year |
Change 2021 vs. 2020 |
|||||||||||
2021 |
2020 |
|||||||||||
(in thousands) |
||||||||||||
Interest income and other income (expense), net |
$ | (6 | ) | $ | 156 | $ | (162 | ) |
Fiscal Year |
Change 2021 vs. 2020 |
|||||||||||
2021 |
2020 |
|||||||||||
(in thousands) |
||||||||||||
Provision for income taxes |
$ | 575 | $ | 1,711 | $ | (1,136 | ) |
Fiscal Year |
Change 2021 vs. 2020 |
|||||||||||
2021 |
2020 |
|||||||||||
(in thousands) |
||||||||||||
Income from discontinued operations, net of tax |
$ | 49,677 | $ | 11,491 | $ | 38,186 |
January 1, 2022 |
January 2, 2021 |
|||||||
(in thousands) |
||||||||
Cash and cash equivalents |
$ | 102,728 | $ | 29,341 | ||||
Restricted cash |
786 | 787 | ||||||
Short-term investments |
10,221 | 14,839 | ||||||
Long-term investments |
7,427 | 5,388 | ||||||
|
|
|
|
|||||
Total cash, cash-equivalents, restricted cash and investments |
$ | 121,162 | $ | 50,355 | ||||
|
|
|
|
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 8. |
Financial Statements and Supplementary Data |
Page |
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30 | ||||
32 | ||||
33 | ||||
34 | ||||
35 | ||||
36 | ||||
37 |
/s/ BPM LLP |
We have served as the Company’s auditor since 2015. |
|
February 17, 2022 |
January 1, 2022 |
January 2, 2021 |
|||||||
(In thousands, except par value) |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Short-term investments |
||||||||
Trade and other accounts receivable, net of allowances of $ |
||||||||
Inventories |
||||||||
Prepaid expenses and other current assets |
||||||||
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|
|
|
|||||
Total current assets |
||||||||
Property, plant and equipment, net |
||||||||
Operating lease right-of-use |
||||||||
Long-term investments |
||||||||
Restricted cash |
||||||||
Deferred income taxes and other long-term assets |
||||||||
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|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Current operating lease liabilities |
$ | $ | ||||||
Accounts payable |
||||||||
Accrued payroll and related liabilities |
||||||||
Other accrued liabilities |
||||||||
Customer advances |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Noncurrent liabilities: |
||||||||
Noncurrent operating lease liabilities |
||||||||
Other long-term liabilities |
||||||||
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|
|
|
|||||
Total noncurrent liabilities |
||||||||
Commitments and contingencies |
||||||||
Stockholders’ equity: |
||||||||
Undesignated preferred stock, $ |
||||||||
Common stock, $ |
||||||||
Authorized shares — |
||||||||
Additional paid-in capital |
||||||||
Treasury stock, |
( |
) | ( |
) | ||||
Accumulated other comprehensive income |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
|
|
|
|
Year Ended, |
||||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(In thousands, except per share amounts) |
||||||||
Net revenues |
$ | $ | ||||||
Cost of net revenues |
||||||||
|
|
|
|
|||||
Gross profit |
||||||||
Operating expenses: |
||||||||
Research and development |
||||||||
Selling, general and administrative |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
|
|
|
|
|||||
Operating loss |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Interest income |
||||||||
Other income (expense), net |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Loss from continuing operations before provision for income taxes |
( |
) | ( |
) | ||||
Provision for income taxes |
||||||||
|
|
|
|
|||||
Net loss from continuing operations |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Income from discontinued operations: |
||||||||
Income (loss) from Photonics division, net of tax |
( |
) | ||||||
Gain on sale of Photonics division, net of tax |
||||||||
|
|
|
|
|||||
Total income from discontinued operations, net of tax |
||||||||
|
|
|
|
|||||
Net income |
$ | $ | ||||||
|
|
|
|
|||||
Net income (loss) per share: |
||||||||
Basic and diluted—continuing operations |
$ | ( |
) | $ | ( |
) | ||
Basic and diluted—discontinued operations |
$ | $ | ||||||
Basic and diluted—net income |
$ | $ | ||||||
Weighted average shares outstanding: |
||||||||
Basic and diluted |
Year Ended, |
||||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(In thousands) |
||||||||
Net income |
$ | $ | ||||||
Other comprehensive income (loss), before tax |
||||||||
Change in unrealized net gain on available-for-sale |
( |
) | ( |
) | ||||
Foreign currency translation gains |
||||||||
|
|
|
|
|||||
Other comprehensive income (loss), before tax |
( |
) | ||||||
Income tax expense related to items in other comprehensive income (loss) |
||||||||
|
|
|
|
|||||
Other comprehensive income (loss), net of tax |
( |
) | ||||||
|
|
|
|
|||||
Comprehensive income |
$ | $ | ||||||
|
|
|
|
Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Total Stockholders’ Equity |
|||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||
Balance at December 28, 2019 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||||||
Shares issued in connection with: |
||||||||||||||||||||||||||||||||
Exercise of stock options |
— | — | — | — | — | |||||||||||||||||||||||||||
Settlement of RSUs |
— | — | — | — | — | — | — | |||||||||||||||||||||||||
Employee stock purchase plan |
— | — | — | — | ||||||||||||||||||||||||||||
Shares withheld in connection with net share settlement of RSUs |
( |
) | — | ( |
) | — | — | — | — | ( |
) | |||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Common stock repurchases |
( |
) | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at January 2, 2021 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||||||
Shares issued in connection with: |
||||||||||||||||||||||||||||||||
Exercise of stock options |
— | — | — | — | — | |||||||||||||||||||||||||||
Settlement of RSUs |
— | — | — | — | — | — | — | |||||||||||||||||||||||||
Employee stock purchase plan |
— | — | — | — | ||||||||||||||||||||||||||||
Shares withheld in connection with net share settlement of RSUs |
( |
) | — | ( |
) | — | — | — | — | ( |
) | |||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at January 1 2022 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
||||||||
January 1 2022 |
January 2, 2021 |
|||||||
(In thousands) |
||||||||
Operating activities |
||||||||
Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: |
||||||||
Depreciation and amortization |
||||||||
Net amortization (accretion) of investment premiums and discounts |
||||||||
Amortization of intangible assets |
||||||||
Gain on sale of Photonics division |
( |
) | ||||||
Asset impairment charges |
||||||||
Equity-based compensation |
||||||||
Straight-line rent adjustment and amortization of lease incentives |
( |
) | ( |
) | ||||
Deferred income taxes |
||||||||
Changes in assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ||||||
Inventories |
||||||||
Prepaid expenses and other assets |
( |
) | ||||||
Accounts payable |
( |
) | ||||||
Accrued payroll and other accrued liabilities |
( |
) | ||||||
Customer advances |
( |
) | ||||||
|
|
|
|
|||||
Total adjustments |
( |
) | ||||||
|
|
|
|
|||||
Net cash and cash equivalents provided by operating activities |
||||||||
Investing activities |
||||||||
Purchase of investments |
( |
) | ( |
) | ||||
Proceeds from sales and maturities of investments |
||||||||
Proceeds from sale of Photonics division |
— | |||||||
Purchase of leasehold improvements and equipment |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash and cash equivalents provided by (used in) investing activities |
( |
) | ||||||
Financing activities |
||||||||
Proceeds from issuance of common stock |
||||||||
Common stock repurchases |
( |
) | ||||||
Taxes paid related to net share settlement |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash and cash equivalents provided by financing activities |
||||||||
Effect of exchange rate changes on cash |
||||||||
|
|
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|
|||||
Net increase in cash, cash equivalents and restricted cash |
||||||||
Cash, cash equivalents and restricted cash at beginning of period |
||||||||
|
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|
|||||
Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
|
|
|
|
|||||
Cash paid (received) for: |
||||||||
Income taxes |
$ | $ | ||||||
Income tax refund |
$ | ( |
) | $ | ( |
) |
Foreign currency |
Unrealized holding gains (losses) on available-for-sale investments |
Total |
||||||||||
(in thousands) |
||||||||||||
Balance at December 28, 2019 |
$ | |
$ | |
$ | |
||||||
|
|
|
|
|
|
|||||||
Other comprehensive income (loss) before reclassification |
( |
) | ||||||||||
Amounts reclassified from other comprehensive income (loss) |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Net current-period other comprehensive income (loss) |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Balance at January 2, 2021 |
||||||||||||
|
|
|
|
|
|
|||||||
Other comprehensive income (loss) before reclassification |
( |
) | ( |
) | ||||||||
Amounts reclassified from other comprehensive income (loss) |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Net current-period other comprehensive income (loss) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Balance at January 1, 2022 |
$ | $ | ( |
) | $ | |||||||
|
|
|
|
|
|
Cash proceeds |
$ | |||
Working capital adjustment |
( |
) | ||
|
|
|||
Assets sold: |
||||
Accounts receivable |
||||
Inventories |
||||
Other current assets |
||||
Property, plant and equipment |
||||
|
|
|||
Total assets sold |
||||
Liabilities divested: |
||||
Accounts payable |
||||
Other accrued expenses |
||||
|
|
|||
Total liabilities divested |
||||
Transaction and other costs |
( |
) | ||
|
|
|||
Gain on sale |
$ | |||
|
|
Year Ended, |
||||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(In thousands, except per share amounts) |
||||||||
Net revenues: |
||||||||
Systems and components |
$ | $ | ||||||
Technology development |
||||||||
|
|
|
|
|||||
Total net revenues |
||||||||
Cost of net revenues: |
||||||||
Systems and components |
||||||||
Technology development |
||||||||
|
|
|
|
|||||
Total cost of net revenues |
||||||||
Gross profit |
Year Ended, |
||||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(In thousands, except per share amounts) |
||||||||
Operating expenses: |
||||||||
Research and development |
||||||||
Selling, general and administrative |
||||||||
Asset impairment and restructuring charges |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
|
|
|
|
|||||
Operating income (loss)—discontinued operations |
( |
) | ||||||
Other income (expense)—discontinued operations |
||||||||
|
|
|
|
|||||
Income (loss) discontinued operations before provision for (benefit from) income taxes |
( |
) | ||||||
Gain on disposal of discontinued operations before income taxes |
||||||||
|
|
|
|
|||||
Total income from discontinued operations, before tax |
||||||||
Provision for (benefit from) income taxes |
||||||||
|
|
|
|
|||||
Net income from discontinued operations net of tax |
$ | $ | ||||||
|
|
|
|
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Depreciation and amortization |
$ | $ | ||||||
Amortization of intangible assets |
$ | $ | ||||||
Asset impairment charges |
$ | $ | ||||||
Equity-based compensation |
$ | $ | ||||||
Purchase of leasehold improvements and equipment |
$ | $ |
2021 |
2020 |
|||||||||||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||||||
HDD |
DCP |
PV |
ASP |
Total |
HDD |
PV |
Total |
|||||||||||||||||||||||||
Systems, upgrades and spare parts | $ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Field service | ||||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||||||
Total TFE net revenues |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
2020 |
|||||||
(in thousands) |
||||||||
United States |
$ | $ | ||||||
Asia |
||||||||
Europe |
||||||||
|
|
|
|
|||||
Total net revenues |
$ | $ | ||||||
|
|
|
|
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Products transferred at a point in time | $ |
$ |
||||||
Products and services transferred over time | ||||||||
Total net revenues |
$ | $ | ||||||
January 1, 2022 |
January 2, 2021 |
Change |
||||||||||
(In thousands) |
||||||||||||
TFE: |
||||||||||||
Contract assets: |
||||||||||||
Accounts receivable, unbilled |
$ | $ | $ | ( |
) | |||||||
Contract liabilities: |
||||||||||||
Deferred revenue |
$ | $ | $ | ( |
) | |||||||
Customer advances |
||||||||||||
$ | $ | $ | ||||||||||
Photonics (included in discontinued operations): |
||||||||||||
Contract assets: |
||||||||||||
Accounts receivable, unbilled |
$ | $ | $ | ( |
) | |||||||
Retainage |
( |
) | ||||||||||
$ | $ | $ | ( |
) | ||||||||
Contract liabilities: |
||||||||||||
Deferred revenue |
$ | $ | $ | ( |
) | |||||||
2021 |
2020 |
|||||||
Equity-based compensation by type of award: |
||||||||
Stock options | $ |
$ |
||||||
RSUs |
||||||||
Employee stock purchase plan |
||||||||
|
|
|
|
|||||
Total equity-based compensation * |
$ | $ | ||||||
|
|
|
|
2021 |
2020 |
|||||||
Stock Options: |
||||||||
Weighted-average fair value of grants per share |
$ | |||||||
Expected volatility |
% | |||||||
Risk free interest rate | ||||||||
Expected term of options (in years) |
— | |||||||
Dividend yield |
None |
Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term (years) |
Aggregate Intrinsic Value |
|||||||||||||
Options outstanding at January 2, 2021 |
$ | $ | ||||||||||||||
Options cancelled and forfeited |
( |
) | $ | |||||||||||||
Options exercised |
( |
) | $ | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Options outstanding at January 1, 2022 |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Options exercisable at January 1, 2022 |
$ | $ |
Shares |
Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term (years) |
Aggregate Intrinsic Value |
|||||||||||||
Non-vested RSUs at January 2, 2021 |
$ | $ | ||||||||||||||
Granted |
$ | |||||||||||||||
Vested |
( |
) | $ | |||||||||||||
Cancelled |
( |
) | $ | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-vested RSUs at January 1, 2022 |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
2021 |
||||
Weighted-average fair value of grants per share |
$ | |||
Expected volatility |
% | |||
Risk-free interest rate |
% | |||
Dividend yield |
2020 |
||||
Weighted-average fair value of grants per share |
$ | |||
Expected volatility |
% | |||
Risk-free interest rate |
% | |||
Dividend yield |
2021 |
2020 |
|||||||
Stock Purchase Rights: |
||||||||
Weighted-average fair value of grants per share |
$ | $ | ||||||
Expected volatility |
% | % | ||||||
Risk free interest rate |
% | % | ||||||
Expected term of purchase rights (in years) |
||||||||
Dividend yield |
2021 |
2020 |
|||||||
(in thousands, except per share amounts) |
||||||||
Shares purchased |
||||||||
Weighted-average purchase price per share |
$ | $ | ||||||
Aggregate intrinsic value of purchase rights exercised |
$ | $ |
2021 |
2020 |
|||||||
(in thousands, except per share amounts) |
||||||||
Net loss from continuing operations |
$ | ( |
) | $ | ( |
) | ||
Net income from discontinued operations, net of tax |
||||||||
|
|
|
|
|||||
Net income |
$ | $ | ||||||
|
|
|
|
|||||
Weighted-average shares – basic |
||||||||
Effect of dilutive potential common shares |
||||||||
|
|
|
|
|||||
Weighted-average shares – diluted |
||||||||
|
|
|
|
|||||
Basic and diluted net income (loss) per share: |
||||||||
Continuing operations |
$ | ( |
) | $ | ( |
) | ||
Discontinued operations |
$ | $ | ||||||
Net income per share |
$ | $ |
2021 |
2020 |
|||||||
Seagate Technology |
% | % | ||||||
Western Digital Corporation |
% | % | ||||||
Amkor Technology, Inc. |
% | * | ||||||
U.S. Government (included in discontinued operations). |
— | % |
* | Less than 10% |
2021 |
2020 |
|||||||
Seagate Technology |
% | % | ||||||
Western Digital Corporation |
% | % | ||||||
Amkor Technology, Inc. |
% | * |
* | Less than 10% |
January 1, 2022 |
January 2, 2021 |
|||||||
(in thousands) |
||||||||
Trade receivables and other |
$ | $ | ||||||
Unbilled costs and accrued profits |
||||||||
Less: allowance for doubtful accounts |
||||||||
$ | $ | |||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(in thousands) |
||||||||
Raw materials |
$ | $ | ||||||
Work-in-progress |
||||||||
Finished goods |
— | |||||||
$ | $ | |||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(in thousands) |
||||||||
Leasehold improvements |
$ | $ | ||||||
Machinery and equipment |
||||||||
Less accumulated depreciation and amortization |
||||||||
Total property, plant and equipment, net |
$ | $ | ||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(in thousands) |
||||||||
United States |
$ | $ | ||||||
Asia |
||||||||
Net property, plant & equipment |
$ | $ | ||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(in thousands) |
||||||||
Deferred income taxes |
$ | $ | ||||||
Prepaid expenses |
||||||||
$ | $ | |||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(in thousands) |
||||||||
Other taxes payable |
$ | $ | ||||||
Litigation settlement |
— | |||||||
Income taxes payable |
||||||||
Restructuring |
— | |||||||
Accrued product warranties |
||||||||
Other |
||||||||
Deferred revenue |
||||||||
Total other accrued liabilities |
$ | $ | ||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(in thousands) |
||||||||
Restructuring |
$ | $ | — | |||||
Accrued product warranties |
||||||||
Employer payroll taxes |
— | |||||||
Total other long-term liabilities |
$ | $ | ||||||
January 1, 2022 |
||||||||||||||||
Amortized Cost |
Unrealized Holding Gains |
Unrealized Holding Losses |
Fair Value |
|||||||||||||
(in thousands) |
||||||||||||||||
Cash and cash equivalents: |
||||||||||||||||
Cash |
$ | $ | — | $ | — | $ | ||||||||||
Money market funds |
— | — | ||||||||||||||
Total cash and cash equivalents |
$ | $ | — | $ | — | $ | ||||||||||
Short-term investments: |
||||||||||||||||
Certificates of deposit |
$ | $ | — | $ | — | $ | ||||||||||
Commercial paper |
— | — | ||||||||||||||
Corporate bonds and medium-term notes |
— | |||||||||||||||
Municipal bonds |
— | — | ||||||||||||||
U.S. treasury securities |
— | |||||||||||||||
Total short-term investments |
$ | $ | — | $ | $ | |||||||||||
Long-term investments: |
||||||||||||||||
Asset backed securities |
$ | $ | — | $ | $ | |||||||||||
Certificates of deposit |
— | |||||||||||||||
Corporate bonds and medium-term notes |
— | |||||||||||||||
Municipal bonds |
— | |||||||||||||||
U.S. treasury securities |
— | |||||||||||||||
Total long-term investments |
$ | $ | — | $ | $ | |||||||||||
Total cash, cash equivalents, and investments |
$ | $ | — | $ | $ | |||||||||||
January 2, 2021 |
||||||||||||||||
Amortized Cost |
Unrealized Holding Gains |
Unrealized Holding Losses |
Fair Value |
|||||||||||||
(in thousands) |
||||||||||||||||
Cash and cash equivalents: |
||||||||||||||||
Cash |
$ | $ | — | $ | — | $ | ||||||||||
Money market funds |
— | — | ||||||||||||||
Certificates of deposit |
— | — | ||||||||||||||
Total cash and cash equivalents |
$ | $ | — | $ | — | $ | ||||||||||
Short-term investments: |
||||||||||||||||
Certificates of deposit |
$ | $ | $ | — | $ | |||||||||||
Commercial paper |
— | — | ||||||||||||||
Corporate bonds and medium-term notes |
— | |||||||||||||||
Municipal bonds |
— | — | ||||||||||||||
U.S. treasury securities |
— | |||||||||||||||
Total short-term investments |
$ | $ | $ | — | $ | |||||||||||
Long-term investments: |
||||||||||||||||
Certificates of deposit |
$ | $ | — | $ | — | $ | ||||||||||
Corporate bonds and medium-term notes |
— | |||||||||||||||
U.S. treasury securities |
— | |||||||||||||||
Total long-term investments |
$ | $ | $ | — | $ | |||||||||||
Total cash, cash equivalents, and investments |
$ | $ | $ | — | $ | |||||||||||
Amortized Cost |
Fair Value |
|||||||
(in thousands) |
||||||||
Due in one year or less |
$ | $ | ||||||
Due after one through five years |
||||||||
$ | $ | |||||||
January 1, 2022 |
||||||||||||||||
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) |
||||||||||||||||
Asset backed securities |
$ | $ | $ | — | $ | — | ||||||||||
Certificates of deposit |
— | — | ||||||||||||||
Corporate bonds and medium-term notes |
— | — | ||||||||||||||
Municipal bond |
— | — | ||||||||||||||
U.S. treasury securities |
— | — | ||||||||||||||
$ | $ | $ | — | $ | — | |||||||||||
Fair Value Measurements at January 1, 2022 |
||||||||||||
Total |
Level 1 |
Level 2 |
||||||||||
(in thousands) |
||||||||||||
Recurring fair value measurements: |
||||||||||||
Money market funds |
$ | $ | $ | — | ||||||||
U.S. treasury securities |
— | |||||||||||
Asset backed securities |
— | |||||||||||
Certificates of deposit |
— | |||||||||||
Commercial paper |
— | |||||||||||
Corporate bonds and medium-term notes |
— | |||||||||||
Municipal bonds |
— | |||||||||||
Total recurring fair value measurements |
$ | $ | $ | |||||||||
Notional Amounts |
Derivative Assets |
Derivative Liabilities |
||||||||||||||||||||||
Derivative Instrument |
January 1, 2022 |
January 2, 2021 |
January 1, 2022 |
January 2, 2021 |
||||||||||||||||||||
Balance Sheet Line |
Fair Value |
Balance Sheet Line |
Fair Value |
|||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Undesignated Hedges: |
||||||||||||||||||||||||
Forward Foreign Currency Contracts |
$ | a |
$ | b |
$ | |||||||||||||||||||
Total Hedges |
$ | $ | $ | |||||||||||||||||||||
a | Other current assets |
b | Other accrued liabilities |
2021 |
2020 |
|||||||
(in thousands, except per share amounts) |
||||||||
Shares of common stock repurchased |
||||||||
Cost of stock repurchased |
$ | $ | ||||||
Average price paid per share |
$ | $ |
2021 |
2020 |
|||||||
Federal: |
||||||||
Current |
$ | $ | ( |
) | ||||
Deferred |
||||||||
( |
) | |||||||
State: |
||||||||
Current |
||||||||
Deferred |
||||||||
Foreign: |
||||||||
Current |
||||||||
Deferred |
||||||||
Total |
$ | $ | ||||||
Income taxes on discontinued operations |
$ | $ | ||||||
Income taxes on continuing operations |
$ | $ |
2021 |
2020 |
|||||||
U.S |
$ | ( |
) | $ | ( |
) | ||
Foreign |
||||||||
$ | ( |
) | $ | ( |
) | |||
Effective tax rate |
( |
%) | ( |
%) | ||||
January 1, 2022 |
January 2, 2021 |
|||||||
Deferred tax assets: |
||||||||
Vacation, warranty and other accruals |
$ | $ | ||||||
Intangible amortization |
||||||||
Purchased technology |
||||||||
Inventory valuation |
||||||||
Equity-based compensation |
||||||||
Lease liability |
||||||||
Net operating loss, research and other tax credit carryforwards |
||||||||
Other |
||||||||
Valuation allowance for deferred tax assets |
( |
) | ( |
) | ||||
Total deferred tax assets |
||||||||
January 1, 2022 |
January 2, 2021 |
|||||||
Deferred tax liabilities: |
||||||||
Depreciation and amortization |
( |
) | ( |
) | ||||
ROU asset |
( |
) | ||||||
Unbilled revenue |
( |
) | ||||||
Total deferred tax liabilities |
( |
) | ( |
) | ||||
Net deferred tax assets |
$ | $ | ||||||
As reported on the consolidated balance sheets: |
||||||||
Non-current deferred tax assets |
$ | $ | ||||||
2021 |
2020 |
|||||||
Income tax at the federal statutory rate |
$ | ( |
) | $ | ( |
) | ||
State income taxes, net of federal benefit |
||||||||
Change in valuation allowance: |
||||||||
U.S |
||||||||
Foreign |
— | |||||||
Effect of foreign operations taxed at various rates |
( |
) | ||||||
Research tax credits |
( |
) | ( |
) | ||||
Effect of tax rate changes, permanent differences and adjustments of prior deferrals |
||||||||
Unrecognized tax benefits |
||||||||
Total income tax expense on continuing operations |
$ | $ | ||||||
2021 |
2020 |
|||||||
Beginning balance |
$ | $ | ||||||
Additions based on tax positions related to the current year |
||||||||
Decreases for tax positions of prior years |
( |
) | ||||||
Lapse of statute of limitations |
( |
) | ( |
) | ||||
Ending balance |
$ | $ | ||||||
January 1, 2022 |
January 2, 2021 |
|||||||
(in thousands) |
||||||||
Assets: |
||||||||
Operating lease ROU assets |
$ | $ | ||||||
Liabilities: |
||||||||
Current operating lease liabilities |
$ | $ | ||||||
Noncurrent operating lease liabilities |
||||||||
$ | $ | |||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Operating lease cost |
$ | $ | ||||||
Short-term lease cost |
||||||||
Total lease cost |
$ | $ | ||||||
Continuing Operations |
Discontinued Operations |
Total |
||||||||||
(in thousands) |
||||||||||||
2022 |
$ | $ | $ | |||||||||
2023 |
||||||||||||
2024 |
||||||||||||
Total lease payments |
$ | $ | ||||||||||
Less: Interest |
( |
) | ( |
) | ( |
) | ||||||
Present value of lease liabilities |
$ | $ | ||||||||||
January 1, 2022 |
January 2, 2021 |
|||||||
Weighted-average remaining lease term (in years) |
||||||||
Weighted-average discount rate |
% | % |
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Operating cash outflows from operating leases |
$ | $ | ||||||
|
|
|
|
|||||
ROU asset impairment expense (reported in discontinued operations) |
$ | $ | — | |||||
|
|
|
|
|||||
ROU assets obtained in exchange for new operating lease liabilities |
$ | — | $ | |||||
|
|
|
|
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Beginning balance |
$ | $ | ||||||
Expenditures incurred under warranties |
( |
) | ( |
) | ||||
Expenditures incurred under warranties included in discontinued operations |
( |
) | ( |
) | ||||
Accruals for product warranties |
||||||||
Accruals for product warranties included in discontinued operations |
||||||||
Adjustments to previously existing warranty accruals |
( |
) | ||||||
Adjustments to previously existing warranty accruals included in discontinued operations |
( |
) | ( |
) | ||||
Sale of Photonics division |
( |
) | — | |||||
|
|
|
|
|||||
Ending balance |
$ | $ | ||||||
|
|
|
|
Employee Termination Costs |
Other Exit Costs |
Total |
||||||||||
(in thousands) |
||||||||||||
Balance at December 28, 2019 |
$ | $ | $ | |||||||||
Provision for restructuring charges under the 2020 Cost Reduction Plan |
||||||||||||
Cash payments made |
( |
) | — | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Balance at January 2, 2021 |
$ | $ | $ | |||||||||
Provision for restructuring charges under the 2021 Cost Reduction Plan |
— | |||||||||||
Cash payments made |
( |
) | ( |
) | ||||||||
Provision for restructuring charges associated with Photonics sale (a) |
||||||||||||
Cash payments made |
( |
) | — | ( |
) | |||||||
Non-cash utilization |
( |
)(b) | ( |
)(c) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Balance at January 1, 2022 |
$ | (d) | $ | $ | ||||||||
|
|
|
|
|
|
Item 9. |
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure |
Item 9A. |
Controls and Procedures |
Item 9B. |
Other Information |
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
Item 10. |
Directors, Executive Officers and Corporate Governance |
Item 11. |
Executive Compensation |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
Item 14. |
Principal Accountant Fees and Services |
Item 15. |
Exhibits and Financial Statement Schedules |
(1) | Previously filed as an exhibit to the Company’s Report on Form 8-K filed July 23, 2007 |
(2) | Previously filed as an exhibit to the Company’s Report on Form 8-K filed March 15, 2012 |
(3) | Previously filed as an exhibit to the Registration Statement on Form S-1 (No. 33-97806) |
(4) | Previously filed as an exhibit to the Company’s Form 10-K filed February 12, 2020 |
(5) | Previously filed as an exhibit to the Company’s Form 10-Q filed May 3, 2011 |
(6) | Previously filed as an exhibit to the Company’s Definitive Proxy Statement filed April 7, 2020. |
(7) | Previously filed as an exhibit to the Company’s Definitive Proxy Statement filed April 11, 2018 |
(8) | Previously filed as an exhibit to the Company’s Form 10-Q filed May 1, 2012 |
(9) | Previously filed as an exhibit to the Company’s Form 10-Q filed July 30, 2019 |
(10) | Previously filed as an exhibit to the Company’s Form 10-Q filed April 29, 2014 |
(11) | Previously filed as an exhibit to the Registration Statement on Form S-8 filed May 14, 2020 (No. 33-238262) |
(12) | Previously filed as an exhibit to the Company’s Form 10-Q filed August 3, 2021 |
(13) | Previously filed as an exhibit to the Company’s Report on Form 8-K filed January 20, 2022 |
(14) | Previously filed as an exhibit to the Company’s Form 10-K filed March 14, 2008 |
(15) | Previously filed as an exhibit to the Company’s Report on Form 8-K filed February 1, 2022 |
(16) | Previously filed as an exhibit to the Company’s Form 10-Q filed October 28, 2014 |
(17) | Previously filed as an exhibit to the Company’s Report on Form 8-K filed October 31, 2014 |
(18) | Previously filed as an exhibit to the Company’s Form 10-Q filed May 1, 2018 |
(19) | Previously filed as an exhibit to the Company’s Report on Form 8-K filed January 3, 2022 |
(20) | Previously filed as an exhibit to the Company’s Definitive Proxy Statement filed April 14, 2021 |
(P) | Paper exhibit. |
+ | Management compensatory plan or arrangement |
INTEVAC, INC. |
/s/ JAMES MONIZ |
James Moniz |
Executive Vice President, Finance and Administration |
Chief Financial Officer, Secretary and Treasurer |
Signature |
Title |
Date | ||
/s/ NIGEL D. HUNTON |
President, |
February 17, 2022 | ||
(Nigel D. Hunton) |
Chief Executive Officer and Director (Principal Executive Officer) |
|||
/s/ JAMES MONIZ |
Executive Vice President, Finance and |
February 17, 2022 | ||
(James Moniz) |
Administration, Chief Financial Officer, Secretary and Treasurer (Principal Financial and Accounting Officer) |
|||
/s/ DAVID S. DURY |
Chairman of Board |
February 17, 2022 | ||
(David S. Dury) |
||||
/s/ KEVIN D. BARBER |
Director |
February 17, 2022 | ||
(Kevin D. Barber) |
||||
/s/ DOROTHY D. HAYES |
Director |
February 17, 2022 | ||
(Dorothy D. Hayes) |
||||
/s/ STEPHEN A. JAMISON |
Director |
February 17, 2022 | ||
(Stephen A. Jamison) |
||||
/s/ MICHELE F. KLEIN |
Director |
February 17, 2022 | ||
(Michele F. Klein) |
||||
/s/ MARK P. POPOVICH |
Director |
February 17, 2022 | ||
(Mark P. Popovich) |
||||
/s/ THOMAS M. ROHRS |
Director |
February 17, 2022 | ||
(Thomas M. Rohrs) |
Exhibit 10.10
LEASE ASSIGNMENT AGREEMENT
THIS LEASE ASSIGNMENT AGREEMENT (this Agreement) is dated as of December 30, 2021 (the Effective Date), by and between INTEVAC, INC., a Delaware corporation (Assignor) and EOTECH, LLC, a Michigan limited liability company (Assignee), with reference to the following facts and circumstances:
A. Assignor entered into that certain Lease dated March 20, 2014 (the Building 3 Lease) between HGIT Bassett Campus LP (Landlord), successor-in-interest to M West Propco X, LLC, as landlord, and Assignor, as tenant, regarding certain Premises described therein commonly known as 3548 Bassett Street, Santa Clara, California (the Building 3 Premises).
B. Assignor entered into that certain Lease dated March 20, 2014 (the Building 1 & 2 Lease) between Landlord and Assignor regarding certain Premises described therein consisting primarily of two (2) buildings commonly known as 3560 Bassett Street, Santa Clara, California (the Building 2 Premises) and 3580 Bassett Street, Santa Clara, California (the Building 1 Premises).
C. Intevac Photonics, Inc., a Delaware corporation (Seller), Assignor and Assignee have entered into (i) that certain Asset Purchase Agreement dated on or about the date hereof (the APA) pursuant to which Seller and Assignor have agreed to sell and transfer to Assignee a portion of the assets of Seller and Assignor and (ii) that certain Transition Services Agreement dated on or about the date hereof (the TSA) to facilitate the provision of certain ongoing services on a transitional basis in accordance with transactions contemplated by the APA. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the APA.
D. Pursuant to the APA, Assignor has agreed to assign to Assignee all of Assignors right, title and interest in and to (i) the Building 3 Lease and the Building 3 Premises and (ii) the Building 1 & 2 Lease as to the Building 1 Premises only (collectively, the Transferred Premises) in accordance with an subject to the terms, provisions and conditions in this Agreement. As used herein, the term Transferred Leases shall mean, collectively, the Building 3 Lease and the Building 1 & 2 Lease as to the Building 1 Premises only.
E. In connection with the assignment of the Transferred Leases as to the Transferred Premises, Assignor may provide certain transition services to Assignee pursuant to the TSA which may require continued access to the Transferred Premises by Assignor from and after the Effective Date.
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:
1. Assignment and Assumption. Effective as of the Effective Date, Assignor hereby assigns to Assignee, and Assignee hereby accepts from Assignor, all of Assignors right, title and interest in, under and to the Transferred Leases as to the Transferred Premises, excluding the Outside Area (as defined in the Building 1 & 2 Lease) and the Building 2 Premises (for which Assignor shall remain solely liable), but including the non-exclusive right to use the Common Area (as defined in
the Transferred Leases), subject to the limitations and reservations contained herein. Also effective as of the Effective Date, Assignee accepts this Agreement and assumes and agrees to keep, perform and fulfill, as a direct obligation to Landlord and for the benefit of Assignor, all of the terms, covenants, conditions and obligations required to be kept, performed and fulfilled by the Tenant under the Transferred Leases as to the Transferred Premises (excluding the Outside Area (except as provided in Section 2 below) and Building 2 Premises) from and after the Effective Date, including, without limitation, all obligations with respect to the surrender of the Transferred Premises under the Transferred Leases and the removal of any personal property, alterations, cabling and equipment from the Transferred Premises, including, without, limitation removal of any Purchased Assets from the Transferred Premises and the Building 1 & 2 Outside Areas (as defined below), in all cases, only to the extent required by the Transferred Leases.
2. Building 1 & 2 Outside Areas. In connection with the assignment of the Transferred Leases as to the Transferred Premises, Assignor hereby grants to Assignee the non-exclusive right, together with Assignor and its agents, employees, contractors, subtenants, successors and assigns, to use and access the Outside Area, as defined in the Building 1 & 2 Lease (the Building 1 & 2 Outside Areas) for the purpose of operating, maintaining, repairing, replacing and removing any equipment and personal property that constitutes Purchased Assets pursuant to the APA (the Transferred Equipment). Such use of the Building 1 & 2 Outside Areas shall be subject to Assignees compliance with the applicable terms and conditions of the Building 1 & 2 Lease, including, without limitation, Section 15.17 thereof and the obligation to decommission, remove and surrender such Transferred Equipment at the expiration or earlier termination of the Building 1 & 2 Lease, to the extent required by Landlord under the Building 1 & 2 Lease (if at all). Assignor and Assignee shall reasonably cooperate with each other to facilitate the operation, maintenance and repair of their respective equipment and personal property in the Building 1 & 2 Outside Areas through the remaining term of the Building 1 & 2 Lease and shall use commercially reasonable efforts to avoid unreasonable interference with the other partys use of the Building 1 & 2 Outside Areas.
3. Retained Rights. Notwithstanding anything to the contrary contained herein, Assignor and its agents, contractors, engineers and employees (Assignors Representatives) shall have the right to access and use the Transferred Premises to the extent necessary to accommodate the activities and transition services contemplated under the APA and the TSA, which access may be restricted or limited by Assignee in Assignees sole discretion to the extent required to comply with privacy and security requirements related to Assignees governmental contracts. All such access and use of the Transferred Premises by Assignor and Assignors Representatives and work performed in connection therewith shall be subject to the terms and conditions of the APA and the TSA and Assignor shall use commercially reasonable efforts to avoid unreasonably interference with Assignees use of the Transferred Premises in connection therewith. For purposes of the foregoing and the continued shared use of the Building 1 & 2 Outside Areas as set forth above, Assignor and Assignee agree that the release and waivers of subrogation set forth Section 9.3 of each of the Transferred Leases shall apply as between Assignor and Assignee.
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4. Responsibilities Under Leases.
A. Assignor shall be responsible for the payment of all rents and other amounts and the performance of all obligations required under the Transferred Leases to be paid or performed by Assignor for any period prior to the Effective Date, including, without limitation, any and all indemnity obligations of Assignor accrued with respect to facts or circumstances first occurring prior to the Effective Date.
B. Assignee shall be responsible for the payment of all rents and other amounts and the performance of all obligations required under the Transferred Leases as to the Transferred Premises (excluding the Outside Area (except as provided in Section 2 above) and the Building 2 Premises) to be paid or performed for any period on or after the Effective Date, including, without limitation, any and all indemnity obligations of the Tenant under the Transferred Leases as to the Transferred Premises (excluding the Outside Area (except as provided in Section 2 above) and Building 2 Premises) accruing with respect to facts or circumstances first occurring on or after the Effective Date.
C. Subject to the other terms and conditions of this Agreement, to the extent that Assignor has made payments or performed obligations pursuant to the Transferred Leases as to the Transferred Premises (excluding the Outside Area (except as provided in Section 2 above) and the Building 2 Premises) that relate to periods on or after the Effective Date and to the extent that Assignee has made payments or performed obligations pursuant to the Transferred Leases as to the Transferred Premises (excluding the Outside Area (except as provided in Section 2 above) and Building 2 Premises) that relate to periods prior to the Effective Date, such amounts and obligations shall be prorated as of the Effective Date and the party with a net obligation to the other shall promptly pay such amount on or after the Effective Date.
5. Covenants of Assignee.
A. From and after the Effective Date, Assignee shall (i) pay all rent and perform all other payment obligations pursuant to this Agreement that are due pursuant to the Transferred Leases as to the Transferred Premises (excluding the Outside Area (except as provided in Section 2 above) and Building 2 Premises) directly to Landlord, and (ii) render performance of all other obligations which have been assumed pursuant to this Agreement that are due pursuant to the Transferred Leases as to the Transferred Premises (excluding the Outside Area (except as provided in Section 2 above) and Building 2 Premises) directly to Landlord.
B. Assignee shall provide to Landlord such insurance and insurance certificates required of the Tenant under the Transferred Leases as to the Transferred Premises (excluding the Outside Area and Building 2 Premises) from and after the Effective Date and shall cause Assignor to be named as an additional insured on any policy of insurance carried by Assignee pursuant to the Transferred Leases (or which is carried by Assignee and relates to the Transferred Premises) upon which Assignee is a named insured. Assignee shall deliver to Assignor certificates of insurance, copies of policies and evidence of renewal at the same times and in the same manner that such items are required to be provided to Landlord under the Transferred Leases.
C. Unless Assignee obtains Landlords agreement to release Assignor from any further liability under the Transferred Leases, Assignee shall not (i) waive or amend any term or
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condition of the Transferred Leases, (ii) exercise any election, option, right or remedy under the Transferred Leases (including, without limitation, any right to extend or renew a Transferred Lease under Exhibit D attached thereto), (iii) grant any consent or approval under the Transferred Leases, (iv) improve or otherwise alter any of the Transferred Premises, or (v) assign, sublease, mortgage, pledge or encumber any interest in or under this Agreement, the Transferred Leases or the Transferred Premises, in each case to the extent the same increases the obligations of the Tenant under the Transferred Leases, without in each such case having obtained the prior written consent of Assignor, which consent shall not be unreasonably withheld (but which consent may be conditioned upon Assignees provision of adequate security for the performance of Assignees obligations under this Agreement and the Transferred Leases). Unless Assignee obtains Landlords agreement to release Assignor from any further liability under the Transferred Leases, Assignee may not in any event amend the Transferred Leases to increase the rent or other sums payable thereunder, to extend the term thereof or to expand the premises subject thereto. Assignee may not terminate the Building 1 & 2 Lease without Assignors prior written consent, which may be withheld in Assignors sole and absolute discretion unless Landlord agrees in writing that such termination does not affect Assignors rights and obligations with respect to the Building 1 Premises.
D. Assignee shall promptly deliver to Assignor copies of all notices of default given or received by Assignee to or from the Landlord under the Transferred Leases.
6. Default. In the event that Assignee fails to pay any sum or perform any obligation to be paid or performed by Assignee under this Agreement or the Transferred Leases, then, in addition to all other rights and remedies provided at law and in equity, Assignor shall have the following remedies to which Assignor may resort cumulatively or alternatively:
A. Right to Cure. If Assignee fails to pay any sum or perform any obligation on its part to be performed under the terms of the Transferred Leases or this Agreement, Assignor may make such payment or perform such obligation without waiving or releasing Assignee from its obligations. Assignor shall be entitled (but not required) to take such action at such time as is necessary to avoid the occurrence of an event of tenants default under the Transferred Leases.
B. Additional Remedies at Law. If and to the extent this Agreement is characterized as a sublease for purposes of determining Assignors rights and remedies against Assignee, (i) Assignor shall have the remedy described in California Civil Code Section 1951.4 (which provides that a lessor may continue a lease in effect after the lessees breach and abandonment and recover rent as it becomes due, if the lessee has the right to sublet or assign, subject only to reasonable limitations), and (ii) Assignor shall have the right to recover damages in accordance with the provisions of California Civil Code Section 1951.2, including the right to recover the worth at the time of the award of the amount by which the unpaid rent which would have been earned after termination until the time of the award exceeds the amount of rental loss that Assignee proves could have been reasonably avoided.
7. Miscellaneous. Should any provision of this Agreement prove to be invalid or illegal, such invalidity or illegality shall in no way affect, impair or invalidate any other provision hereof, and such remaining provisions shall remain in full force and effect. Time is of the essence of this Agreement. The captions used in this Agreement are for convenience only and shall not be
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considered in the construction or interpretation of any provision hereof. The language in all parts of this Agreement shall in all cases be construed as a whole according to its fair meaning and not strictly for or against either Assignor or Assignee, both of whom were represented by counsel in connection with the negotiation and preparation of this Agreement. The terms shall, will, and agree are mandatory. The term may is permissive. When a party is required to do something by this Agreement, it shall do so at its sole cost and expense without right of reimbursement from the other party unless a provision of this Agreement expressly requires reimbursement.
8. Brokerage Commissions. Each party hereto (i) represents to the others that it has not had any dealings with any real estate brokers, leasing agents or salesmen, or incurred any obligations for the payment of real estate brokerage commissions or finders fees which would be earned or due and payable by reason of the execution of this Agreement, and (ii) agrees to indemnify, defend and hold harmless the other parties from any claim for any such commission or fees which result from the actions of the indemnifying party.
9. Notices. Except for legal process which may also be served as provided by law or as provided herein, all notices, demands, requests, consents and other communications (Notices) which may be given or are required to be given by any party under this Agreement to the others shall be in writing and shall be deemed given to and received by the party intended to receive such Notice (i) when hand delivered, (ii) on the date on which the United States Post Office certifies delivery or refusal to accept delivery of such Notice which shall have been deposited, postage prepaid, to the United States mail, certified return receipt requested, properly addressed to the address specified herein, or (iii) on the date of delivery sent to the address specified herein by reputable overnight courier (e.g., Federal Express or other comparable service), as evidenced by such couriers records. All such Notices to Assignor and Assignee at the following addresses, provided, that, any party may change its address by notifying the other of such change in writing:
If to Assignor:
Intevac, Inc.
3560 Bassett Street
Santa Clara, CA 95054
Attn: James Moniz
Email: jmoniz@intevac.com
with a mandatory copy to:
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, CA 94304
Attn: Melissa Hollatz
Email: mhollatz@wsgr.com
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If to Assignee:
EOTECH, LLC
2145 Crooks Rd., Ste. 210
Troy, MI 48084
Attn: Joseph Caradonna
Email: joe@crscompanies.com
with a mandatory copy to:
Bodman PLC
201 West Big Beaver Rd, Suite 500
Troy, Michigan 48084
Attn: Stephen P. Dunn
Email: sdunn@bodmanlaw.com
10. Entire Agreement. This Agreement, together with the APA and the TSA, constitute the entire Agreement among Assignor and Assignee regarding the Transferred Leases and the Transferred Premises, and there are no binding agreements or representations between the parties except as expressed herein. Assignee acknowledges that neither Assignor nor any party acting on behalf of Assignor has made any legally binding representation as to any matter except those expressly set forth herein, and Assignee agrees that it may not reasonably rely on any representation made by, or purportedly made by, Assignor or any party acting on behalf of Assignor unless such representation is expressly set forth in this Agreement. There are no oral agreements among Assignor and Assignee affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements and understandings, if any, between Assignor and Assignee with respect to the subject matter of this Agreement. This Agreement shall not be legally binding until it is executed by Assignor and Assignee. No subsequent change or addition to this Agreement shall be binding unless in writing and signed by the party sought to be bound thereby.
11. Counterparts. For the convenience of the parties, this Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same document.
12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
13. Authority. Each party hereto represents and warrants to the other parties that (i) the person or persons executing this Agreement on behalf of such party is duly authorized to execute this Agreement on behalf of such party, and (ii) such party has the right, power and authority to execute and deliver this document to the other parties and to perform its obligations as set forth herein.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement through their duly authorized representatives as of the date first above written.
ASSIGNOR: | ||
INTEVAC, INC., a Delaware corporation | ||
By: |
/s/ Wendell Blonigan | |
Name: |
Wendell Blonigan | |
Title: |
Chief Executive Officer |
ASSIGNEE: | ||
EOTECH, LLC, a Michigan limited liability company | ||
By: |
/s/ Joseph L. Caradonna | |
Name: |
Joseph L. Caradonna | |
Title: |
Manager |
Exhibit 10.29
PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement (hereinafter referred to as Agreement), dated January 04, 2022 (the Effective Date), is made by and between lntevac, Inc., with its principal a place of business at 3560 Bassett Street, Santa Clara, California 95054-2704 (lntevac), and Tim Justyn, (including its employees, agents or subcontractors) with its principal place of business at 18173 Knuth Road, Los Gatos, CA 95033 (Consultant). lntevac desires the services of Consultant as an independent consultant, and Consultant desires to perform such services. lntevac and Consultant each a Party and collectively the Parties.
In consideration of the mutual covenants contained herein, the Parties agree as follows:
1. | Statement of Work |
Commencing on the Effective Date, Consultant shall perform the services, as defined below, for lntevac or as specifically directed by the authorized representative(s) of lntevac.
The Consultant will provide the following services (Services): Support transitioning of Photonics to EOTech.
2. | Payment |
In consideration for such Services, and subject to the terms and conditions of this Agreement, lntevac will (i) pay Consultant $153.85 per hour for consulting Services furnished by the Consultant under this Agreement, and (ii) reimburse Consultant for all reasonable and authorized expenses not to exceed $0.00 as described herein ((i) and (ii) collectively Fees). Regarding 2(ii) above, lntevac will only reimburse expenses incurred, and approved, for services rendered under this Agreement that are accompanied by itemized statements and include copies of actual bills, receipts, invoices or other evidence of expenses. Consultant shall not incur any expense on behalf of lntevac except upon the prior written approval of lntevac.
The maximum total amount of Fees payable under this Agreement is $32,000.00, and Consultant shall invoice lntevac on a monthly basis for all work performed and expenses incurred herein. Consultants monthly invoice shall contain a written summary of all authorized expenses, work performed and the associated time expended in that month. All invoices should be addressed to the attention of Accounts Payable.
All Invoices submitted by Consultant for Services and expenses shall be in the form prescribed by lntevac and shall be subject to approval by responsible technical and accounting personnel of lntevac prior to payment. lntevac will review each monthly invoice submitted and reserves the right to reject any invoice that does not adequately describe the service provided by Consultant. lntevac will issue payments within thirty (30) days from actual receipt of Consultants invoice by lntevac.
Consultant shall not be reimbursed for time spent during travel for Services rendered under this Agreement, except to the extent that work is actually performed during travel periods. Consultant shall comply with lntevacs travel policies except as otherwise agreed by lntevac in writing. Consultant shall permit audit of Consultants compliance with the terms of this Agreement by lntevacs internal audit staff or such other representative(s) as lntevac shall designate. Any consulting work and related expenses that are not in accord with applicable laws, regulations, lntevac Standards of Conduct pursuant to Section 10, and other terms of this Agreement, will not be reimbursed.
lntevacs sole liability to Consultant shall be the Fees as expressly set forth in this Agreement. lntevac makes no representations as to the scope or cost of Consultants services, other than as set forth in this Agreement, and shall have no liability whatsoever for any costs in excess of the amounts as authorized by this Agreement.
3. | Inventions and Data Developed under This Agreement |
The term Invention as used in this Agreement means any invention, discovery, improvement, design, idea or suggestion, whether or not patentable, conceived and/or first actually reduced to practice by Consultant, its employees, agents or subcontractors, alone or jointly with others, in the course of or as a result of any work performed for lntevac under this Agreement.
The term Data as used in this Agreement means any writings, sound recordings, pictorial reproductions, drawings, or other graphic representations, and works of any similar nature, whether or not copyrightable, which are prepared by Consultant, its employees, agents or subcontractors, alone or jointly with others, in the course of or as a result of any work performed for lntevac under this Agreement. Without further consideration, all Inventions and Data developed by Consultant under this Agreement are and shall remain the property of lntevac, its successors or assigns, or its nominees, whether or not lntevac obtains patent or copyright protection thereon, and regardless of whether such Invention or Data was developed solely by Consultant.
Consultant shall, without further consideration, promptly disclose all Inventions and Data to lntevac or its nominees. Consultant shall assist lntevac and its nominees to procure and/or maintain patents, copyrights and trade secrets throughout the world on said Inventions and Data, and to record the existence of the right, title and interest to said Inventions and Data in lntevac, its successors or assigns, or its nominees at lntevacs expense, in every proper way, including signing papers.
lntevac shall have the sole right to any Consultant Inventions or Data developed under this Agreement, including the right to own or use any such developments, inclusions or recommendations in lntevac products without restriction and without further compensation to Consultant for such use or ownership. These rights to use and own shall extend to any Inventions or Data developed under this Agreement by Consultants employees, agents and subcontractors.
4. | Confidential Treatment Information |
Consultant, its employees, agents and subcontractors shall not, either during or after the term of this Agreement, directly or indirectly publish or disclose to any third party any information (including but not limited to subject inventions or subject data) pertaining in any way to the business of lntevac, its customers or suppliers which is developed, acquired, derived or learned from association with lntevac, unless lntevac gives written authorization to do so. Such information shall not be used apart from lntevac business without the written approval of lntevac. The prohibition against disclosure to others shall not apply to information after it is clearly disclosed to the public by lntevac in writing.
Drawings, sketches and any other tangible material made or obtained by Consultant, its employees, agents or subcontractors at or for lntevac shall be promptly turned over to lntevac, and shall not be removed from lntevacs premises without written permission of lntevac. If written permission is given to remove any such material, the material shall be promptly returned to lntevac upon completion of the work for lntevac or at any earlier time requested by lntevac.
5. | Term and Termination |
This Agreement shall expire on June 30, 2022. Notwithstanding the foregoing, lntevac may terminate this Agreement without cause at any time for any reason by providing written notice thereof to Consultant.
lntevac may immediately suspend or terminate performance under this Agreement if, in its sole judgment, it believes that Consultant may have, i) engaged in any illegal or unethical conduct, ii) engaged in any activity, employment or business arrangement which conflicts with the Consultants obligations hereunder, or with the interests of lntevac, or iii) materially breached any other of its obligations under this Agreement.
Consultant may terminate this Agreement without cause upon providing ten (10) day written notice to lntevac.
The obligations contained in this Agreement shall continue after termination or expiration. lntevacs sole obligation after termination, however, shall be to pay earned and unpaid Fees, as shall be due and owing for lawful consulting Services requested by lntevac and rendered prior to such termination.
6. | Conflicts of Interest |
During the term of this Agreement, Consultant shall not perform any work which might constitute a conflict of interest. Consultant represents and warrants that Consultant has disclosed in writing to lntevac all other clients and any work which may represent a conflict of interest with respect to the work to be performed for lntevac under this Agreement. Consultant shall during the term hereof advise lntevac prior to entering into any agreement with any other entity or performing any other work which may result in such a conflict of interest, and further shall during the term hereof not enter into any such agreement or perform any other such work without the prior written approval of lntevacs Contracts Department Head, or its assigned delegate.
7. | Information Provided |
With reference to any information provided by Consultant to lntevac, Consultant warrants the following:
i) Consultant has the lawful right to transfer such information to lntevac, without breach of any law, regulation, contract obligation, or duty of employment, and that lntevac may use such information without incurring any liability or obligation to any other person or entity, and ii) that any information provided to lntevac which may have been obtained directly by Consultant or from any other person or entity was, to the best of Consultants knowledge, properly obtained and not in violation of any law, regulation, contract obligation, or duty of employment. Consultant shall indemnify, defend, and hold harmless lntevac and its employees, officers and directors from any damages and claims arising out of or related to any gross negligent breach by Consultant of any of the above, (a) Consultant provides information under this Agreement on a best efforts basis with no guarantee of accuracy, and Consultant shall have no liability whatsoever to lntevac for any errors and omissions in performance hereunder, and (b) Consultant shall have no liability for any aforesaid information disclosed to lntevac as to which Consultant has made a full and complete written disclosure to, and obtained prior written approval for such disclosure from, lntevacs Contracts Department Head and/or Chief Financial Officer of the circumstances regarding Consultants acquisition of such information.
8. | Conformance with Applicable Laws |
Consultant represents and warrants that (i) Consultant is familiar with and will continue to be familiar with all current laws and regulations relating to gratuities, bribery, kickbacks, conflicts of interest, classified information and lobbying activity (as that term is generally defined in the Federal Regulation of Lobbying Act, 2 USC 261, et seq.); (ii) no principal or relative of any principal of Consultant is a U.S. Government official other than as expressly disclosed in writing by Consultant prior to the effective date of this Agreement; and (iii) no U.S. Government official has or owns any beneficial interest in Consultant, nor in any of compensation that will be paid to Consultant by lntevac, under this Agreement; and (iv) if Consultants Services extend outside the United States for any reason, (A) it understands the
Organization for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Convention), has read and understood the Guidance Note and agrees to comply with the Convention; and (B) it will not, directly, or indirectly, in connection with this Agreement and the business resulting therefrom, offer, pay, promise to pay, or authorize the giving of money or anything of value to any government official (as defined in the U.S. Foreign Corrupt Practices Act, as amended (FCPA)), to any political party or official thereof or to any candidate for political office, or to any person, while knowing or being aware of a high probability that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any government official, to any political party or official thereof, or to any candidate to political office, for the purpose of (a) influencing any act or decision of such official, political party, party official, or candidate in his or its official capacity, including a decision to fail to perform his or its official functions; or (b) inducing such official, political party, party official, or candidate to use his or its influence with the government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist lntevac in obtaining or retaining business for or with, or directing business to lntevac.
Consultant shall strictly comply with all applicable statutes and regulations in the conduct of Consultants work for lntevac,.
PROHIBITED DISCRIMINATION. This contractor and subcontractor shall abide by the requirements of 29 CFR Part 471, Appendix A to Subpart A (Appendix A is available at www.dol.gov/olms/regs/compliance/E013496.htm}, 41 CFR 60-1.4(a), 60-300.S(a) and 60-741.S(a). These regulations prohibit discrimination against qualified individuals based on their status as protected veterans or individuals with disabilities, and prohibit discrimination against all individuals based on their race, color, religion, sex, sexual orientation, gender identity, national origin, or for inquiring about, discussing, or disclosing information about compensation. Moreover, these regulations require that covered prime contractors and subcontractors take affirmative action to employ and advance in employment individuals without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or veteran status.
9. | Export Law Compliance |
Consultant represents and warrants that, except as allowed under applicable U.S. Government export laws and regulations, no technical data, hardware, software, technology, or other information furnished to it hereunder shall be disclosed or exported to any foreign person, firm, or country, including foreign persons employed by or associated with Consultant. Furthermore, Consultant shall not allow any re-export of any technical data, hardware, software, technology, or other information furnished, without first complying with all applicable U.S. Government export laws and regulations. Prior to exporting any technical data, hardware, software, technology, or other information furnished hereunder, Consultant shall obtain the advance written approval of lntevac.
10. | Standards of Conduct |
Consultant has read, understands, and shall comply, with lntevacs Standards of Conduct, which can be accessed on lntevacs website at https://www.intevac.com. Consultant shall report to lntevac all contacts with U.S. Government employees and officials during which lntevac matters are discussed.
11. | Reporting of Violations |
Consultant shall report to lntevac any request made by an lntevac employee to obtain any information or perform any other act under this Agreement in a manner which would violate any i) applicable law or regulation, ii) contract obligation or duty of employment, or iii) lntevac Standards of Conduct. Consultant is requested similarly to report to lntevacs Human Resources Manager or Contracts Department Head any observed violation of law or regulation by lntevac personnel. All such reports will be handled on a confidential basis and may be made anonymously, if desired.
12. | Limitation of Liability |
INTEVAC SHALL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES IN ANY WAY ARISING OUT OF THIS AGREEMENT INCLUDING BUT NOT LIMITED TO ANY LOSS OF PROFITS, REVENUES OR GOODWILL, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY EVEN IF SUCH DAMAGES ARE FORSEEABLE AND WHETHER OR NOT BUYER HAS BEEN ADVISED OF THE POSSIBILITY THEREOF. EXCEPT FOR INTEVACS OBLIGATION TO PAY CONSULTANT FOR FEES APPROVED UNDER THIS AGREEMENT, INTEVACS MAXIMUM AGGREGATE LIABILITY FOR ALL CLAIMS OF ANY KIND UNDER THIS AGREEMENT WILL NOT EXCEED THE TOTAL PAYMENTS MADE TO CONSULTANT UNDER THIS AGREEMENT IN THE TWELVE (12) MONTHS IMMEDIATELY PRECEDING THE DATE THE CLAIM AROSE.
13. | Indemnification |
Where Consultant will perform work or services on lntevacs premises, Consultant shall indemnify and hold harmless lntevac and its affiliates from any claims brought by Consultant and its employees, third party subcontractors, agents, or consultants (collectively referred to as Consultants Personnel), for property damage, injury to person or wrongful death that occurs while Consultants Personnel are working on lntevacs premises, regardless of the actual cause or proximate cause of the injury. Consultant shall flow down this indemnification requirement to all subcontractors it retains to work on lntevacs premises.
14. | Miscellaneous |
Independent Contractor: Consultant shall be deemed as, and at all times act as, an independent contractor and not as an employee, agent or partner of lntevac.
No employee, agent or subcontractor of Consultant, who is not made a party to this Agreement or Non-Disclosure Agreement with lntevac, shall be permitted to have access to the premises, data, documents, property, or personnel of lntevac.
If, in connection with this Agreement, Consultant performs services for any subsidiary or affiliate of lntevac or has access to the premises, data, property, or personnel of any subsidiary or affiliate of lntevac, the term lntevac as used herein shall include each such subsidiary or affiliate of lntevac.
This Agreement contains the entire understanding of the Parties hereto with respect to the subject matter hereof, and supersedes all prior representations, warranties, understandings, and agreements, written and oral. It may not be modified except by written agreement executed by the Parties hereto. Consultant waives any and all provisions of law construing agreements against the drafting Party.
No waiver of any term or provision of this Agreement shall imply a subsequent waiver of the same or any other provision hereof, nor shall it constitute a continuing waiver.
This Agreement will be governed by and construed in accordance with the laws of the State of California, USA Any suit or action under this Agreement must be brought in the United States Federal District Court located in San Jose or in the Superior Court for the State of California, located in Santa Clara County, California, USA Each Party agrees and submits to the personal jurisdiction and venue of such courts.
In the event any term or provision hereof is held to be invalid or unenforceable by final judgment of any court of competent jurisdiction, such term or provision shall there upon be severed from this Agreement and the remainder of the terms and provisions hereof shall remain in full force and effect.
Sections 3, 4, 7, 9, 12, 13 & 14 shall survive the expiration or termination of this Agreement.
BY EXECUTION HEREOF CONSULTANT ACKNOWLEDGES THAT CONSULTANT HAS FULLY READ AND UNDERSTOOD THIS AGREEMENT INCLUDING THE INTEVACS STANDARDS OF CONDUCT
AND AGREES TO ADHERE STRICTLY TO THE TERMS AND CONDITIONS CONTAINED THEREIN. CONSULTANT FURTHER ACKNOWLEDGES THAT THIS AGREEMENT REQUIRES STRICT COMPLIANCE WITH ALL APPLICABLE LAWS AND REGULATIONS AS WELL AS THE AVOIDANCE OF CONFLICTS OF INTEREST RELATING TO THE WORK TO BE PERFORMED.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement.
CONSULTANT
Date: January 4, 2022 |
/s/ TIMOTHY JUSTYN | |||
Timothy Justyn | ||||
Consultant |
INTEVAC, INC.
Date: January 4, 2022 |
/s/ SCOTT SEELY | |||
Scott Seely | ||||
Senior Director Contracts |
Exhibit 21.1
SUBSIDIARIES OF THE REGISTRANT
1. |
Intevac Photonics, Inc. Delaware |
2. |
Intevac Pacific Group Holdings Ltd. Pte Singapore |
3. |
Lotus Technologies, Inc. Santa Clara, California |
4. |
IRPC, Inc. Santa Clara, California |
5. |
Solar Implant Technologies, Inc. California |
6. |
Intevac Foreign Sales Corporation Barbados |
7. |
Intevac Asia Private Limited Singapore |
8. |
Intevac Malaysia Sdn Bhd Malaysia |
9. |
Intevac Limited Hong Kong |
10. |
Intevac (Shenzhen) Co. Ltd. China |
11. |
IVAC Co. Ltd. Korea |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-258132, 333-238262, 333-232730, 333-226262, 333-219405, 333-212647, 333-205368, 333-197700, 333-190250, 333-181929, 333-175979, 333-160596, 333-134422, 333-109260, and 333-106960) of Intevac, Inc. of our reports dated February 17, 2022 relating to the consolidated financial statements and internal control over financial reporting, which appear in this Annual Report on Form 10-K.
/s/ BPM LLP
San Jose, California
February 17, 2022
Exhibit 31.1
Certifications
I, Nigel D. Hunton, certify that:
1. | I have reviewed this Annual Report on Form 10-K 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 registrants 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 controls 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 registrants 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;
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrants 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 registrants internal control over financial reporting.
Date: February 17, 2022
/s/ Nigel D. Hunton |
Nigel D. Hunton |
President, Chief Executive Officer and Director |
Exhibit 31.2
Certifications
I, James Moniz, certify that:
1. | I have reviewed this Annual Report on Form 10-K 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 registrants 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 controls 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 registrants 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;
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrants 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 registrants internal control over financial reporting.
Date: February 17, 2022
/s/ James Moniz |
James Moniz |
Executive Vice President, Finance and Administration Chief Financial Officer, Secretary and Treasurer |
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, Nigel D. Hunton, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of Intevac, Inc. on Form 10-K for the period ended January 1, 2022 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-K fairly presents in all material respects the financial condition and results of operations of Intevac, Inc.
Date: February 17, 2022
/s/ Nigel D. Hunton |
Nigel D. Hunton |
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 Annual Report of Intevac, Inc. on Form 10-K for the period ended January 1, 2022 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-K fairly presents in all material respects the financial condition and results of operations of Intevac, Inc.
Date: February 17, 2022
/s/ James Moniz |
James Moniz |
Executive Vice President, Finance and Administration Chief Financial Officer, Secretary 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.
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Net of allowances of trade, note and other accounts receivable | $ 0 | $ 0 |
Undesignated preferred stock, par value | $ 0.001 | $ 0.001 |
Undesignated preferred stock, shares authorized | 10,000 | 10,000 |
Undesignated preferred stock, shares issued | 0 | 0 |
Undesignated preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000 | 50,000 |
Common stock, shares issued | 24,636 | 23,874 |
Common stock, shares outstanding | 24,636 | 23,874 |
Treasury stock, shares | 5,087 | 5,087 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 26,620 | $ 1,056 |
Other comprehensive income (loss), before tax | ||
Change in unrealized net gain on available-for-sale investments | (68) | (5) |
Foreign currency translation gains | 6 | 221 |
Other comprehensive income (loss), before tax | (62) | 216 |
Income tax expense related to items in other comprehensive income (loss) | 0 | 0 |
Other comprehensive income (loss), net of tax | (62) | 216 |
Comprehensive income | $ 26,558 | $ 1,272 |
Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 01, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Intevac, Inc. and its subsidiaries (Intevac, the Company or we) after elimination of inter-company balances and transactions. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Fiscal Year End Date Intevac operates under a 52-53 week fiscal year ending on the Saturday nearest to December 31 of each year in order to improve the alignment of financial and business processes and to streamline financial reporting. Each fiscal quarter consists of 13 weeks, with an occasional fourth quarter extending to 14 weeks, if necessary, for the fiscal year to end on the Saturday nearest to December 31. The Company’s fiscal 2021 and fiscal 2020 years ended on January 1, 2022 and January 2, 2021, respectively. Reportable Segment During fiscal 2021, we sold the business of one of our reporting segments, Photonics. Therefore, we have one reportable segment remaining. See Note 2 for additional disclosure related to discontinued operations. The remaining segment, Thin Film Equipment (“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, display cover panel (“DCP”) and advanced semiconductor packaging (“ASP”) industries, as well as other adjacent thin-film markets. Reclassification of Prior Periods On December 30, 2021, the Company completed the sale of its Photonics business to EOTECH, LLC, a Michigan limited liability company (“EOTECH”), in exchange for (i) $70.0 million in cash consideration (as may be increased or decreased by certain closing net working capital adjustments), (ii) up to $30.0 million in earnout payments and (iii) the assumption by EOTECH of certain liabilities of the Photonics business. Due to the sale of the Photonics business during the fourth quarter of 2021, we have classified the results of the Photonics business as discontinued operations in our consolidated statements of income for all periods presented. All amounts included in the Notes to Consolidated Financial Statements relate to continuing operations unless otherwise noted. Cash, Cash Equivalents and Investments Intevac considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Available-for-sale available-for-sale Restricted Cash Restricted cash of $600,000 as of January 1, 2022 secures a standby letter of credit obligation associated with a lease obligation and the restriction on the cash will be removed when the letter of credit expires. In addition, Intevac pledged $186,000 as collateral for various guarantees with its bank. Derivative Instruments and Hedging Arrangements Foreign Exchange Exposure Management re-measurement of certain recorded assets and liabilities in a non-functional currency and to offset certain operational exposures from the impact of changes in foreign currency exchange rates. Such exposures result from the portion of the Company’s operations, assets and liabilities that are denominated in currencies other than the U.S. dollar, primarily the Singapore dollar. These foreign currency exchange contracts are entered into to support transactions made in the normal course of business, and accordingly, are not speculative in nature. The contracts are for periods consistent with the terms of the underlying transactions, generally one year or less. Changes in the fair value of these undesignated hedges are recognized in other income (expense), net immediately as an offset to the changes in the fair value of the asset or liability being hedged. Fair Value Measurement—Definition and Hierarchy Intevac reports certain financial assets and liabilities at fair value. Intevac defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following three categories: Level 1 Level 2 Level 3 Trade Accounts Receivables and Doubtful Accounts Intevac evaluates the collectibility of trade accounts receivable on an ongoing basis and provides reserves against potential losses when appropriate. Management analyzes historical bad debts, customer concentrations, customer creditworthiness, changes in customer payment tendencies and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. Customer accounts are written off against the allowance when the amount is deemed uncollectible. Inventories Inventories are generally stated at the lower of cost or net realizable value, with cost determined on an average cost basis. Property, Plant and Equipment Equipment and leasehold improvements are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: computers and software, 3 years; machinery and equipment, 5 years; furniture, 7 years; vehicles, 4 years; and leasehold improvements, remaining lease term. Impairment of Long-Lived Assets Long-lived assets and certain identifiable finite-lived intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability of long-lived assets is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value. Income Taxes Intevac accounts for income taxes by recognizing deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. Deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between book and tax bases of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized. In determining whether to establish or maintain a valuation allowance against a deferred tax asset, the Company reviews available evidence to determine whether it is more likely than not that all or a portion of the Company’s net deferred tax assets will be realized in future periods. Consideration is given to various positive and negative factors that could affect the realization of the net deferred tax assets. In making such a determination, the Company considers, among other things, future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, historical financial performance, the length of statutory carry forward periods, experience with operating loss and tax credit carry forwards not expiring unused. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The effective tax rate is highly dependent upon the level of Intevac’s projected earnings, the geographic composition of worldwide earnings, tax regulations governing each region, net operating loss carryforwards, availability of tax credits and the effectiveness of Intevac’s tax planning strategies. Intevac carefully monitors the changes in many factors and adjust its effective income tax rate on a timely basis. If actual results differ from the estimates, this could have a material effect on Intevac’s business, financial condition and results of operations. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with Intevac’s expectations could have a material effect on Intevac’s business, financial condition and results of operations. Intevac recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. Sales and Value Added Taxes Taxes collected from customers and remitted to governmental authorities are presented on a net basis in the accompanying consolidated statements of income. Revenue Recognition A majority of our equipment sales revenue, which includes systems, technology upgrades, service and spare parts is recognized when products are shipped from our manufacturing facilities. We recognize revenue for equipment sales at a point in time following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. Intevac recognizes revenue in certain circumstances before delivery has occurred (commonly referred to as bill and hold transactions). In such circumstances, among other things, risk of ownership has passed to the customer, the customer has made a written fixed commitment to purchase the finished goods, the customer has requested the finished goods be held for future delivery as scheduled and designated by them, and no additional performance obligations exist by Intevac. For these transactions, the finished goods are segregated from inventory and normal billing and credit terms granted. Our contracts with customers may include multiple performance obligations. For such arrangements, under the revenue standard we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or by using expected cost plus margin. Under the revenue standard, the expected costs associated with our base warranties are recognized as expense when the equipment is sold. Government Grants and Credits The Company generally records grants from governmental agencies related to income as a reduction in operating expense. Grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to the grant arrangement and the grant will be received. Reimbursements of eligible expenditures pursuant to government assistance programs are recorded as reductions of operating costs when the related costs have been incurred and there is reasonable assurance regarding collection of the claim. Grant claims not settled by the balance sheet date are recorded as receivables, provided their receipt is reasonably assured. The determination of the amount of the claim, and accordingly the receivable amount, requires management to make calculations based on its interpretation of eligible expenditures in accordance with the terms of the programs. The reimbursement claims submitted by the Company are subject to review by the relevant government agencies. In Singapore, Intevac receives government assistance under the Job Support Scheme (“JSS”). During fiscal 2021, the Company received $83,000 in JSS grants, of which $56,000 is reported as a reduction of cost of net revenues, $10,000 is reported as a reduction of research and development (“R&D”) expenses and $17,000 is reported as a reduction of selling, general and administrative expenses on the consolidated statements of income. During fiscal 2020, the Company received $567,000 in JSS grants of which $328,000 is reported as a reduction of cost of net revenues, $90,000 is reported as a reduction of R&D expenses and $149,000 is reported as a reduction of selling, general and administrative expenses on the consolidated statements of income. Advertising Costs Advertising costs are expensed as incurred. Advertising costs were not material for all periods presented. Foreign Currency Translation The functional currency of Intevac’s foreign subsidiaries in Singapore and Hong Kong and the Taiwan branch is the U.S. dollar. The functional currency of Intevac’s foreign subsidiaries in China, Malaysia and Korea is the local currency of the country in which the respective subsidiary operates. Assets and liabilities recorded in foreign currencies are translated at year-end exchange rates; revenues and expenses are translated at average exchange rates during the year. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets. The effects of foreign currency transactions are included in other income (expense), net in the determination of net income. Losses from foreign currency transactions were $65,000 and $139,000 in 2021 and 2020, respectively. Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) by component, were as follows for the years ended January 1, 2022 and January 2, 2021:
Employee Stock Plans Intevac has equity-based compensation plans that provide for the grant to employees of equity-based awards, including incentive or non-statutory stock options, performance-based stock options (“PSOs”), restricted stock, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and performance shares. In addition, these plans provide for the grant of non-statutory stock options and RSUs to non-employee directors and consultants. Intevac also has an employee stock purchase plan, which provides Intevac’s employees with the opportunity to purchase Intevac common stock at a discount through payroll deductions. See Note 4 for a complete description of these plans and their accounting treatment. Recent Accounting Pronouncements Not Yet Adopted In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10, Disclosures by Business Entities about Government Assistance In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) 2021-01, Reference Rate Reform (Topic 848): Scope 2020-04 and are effective in the same timeframe as ASU 2020-04. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU
2016-13, Financial Instruments—Credit Losses (Topic 326). |
Divestiture and Discontinued Operations |
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Divestiture and Discontinued Operations | 2. Divestiture and Discontinued Operations Sale of Photonics On December 30, 2021, the Company entered into an asset purchase agreement (the “Purchase Agreement”) with EOTECH, governing the sale of the Company’s Photonics business to EOTECH in exchange for (i) $70.0 million in cash consideration (as may be increased or decreased by certain closing net working capital adjustments), (ii) up to $30.0 million in earnout payments and (iii) the assumption by EOTECH of certain liabilities of the Photonics business as specified in the Purchase Agreement. The transaction closed on December 30, 2021. Under the Purchase Agreement, EOTECH has also agreed to pay to the Company, if earned, earnout payments of up to an aggregate of $30.0 million based on achievement of fiscal year 2023, 2024 and 2025 Photonics segment revenue targets for the Integrated Visual Augmentation System (“IVAS”) program as specified in the Purchase Agreement. At any time prior to December 31, 2024, EOTECH may elect to pay to the Company $14.0 million, which would terminate EOTECH’s obligations with respect to any remaining earnout payments. The cash proceeds do not include any estimated future payments from the revenue earnout as the Company has elected to record the proceeds when the consideration is deemed realizable. The Company believes this disposition will allow it to benefit from a streamlined business model, simplified operating structure, and enhanced management focus. In connection with the Photonics sale, the Company and EOTECH have entered into a Transition Service Agreement (“TSA”) and a Lease Assignment Agreement. The TSA outlines the information technology, people, and facility support the parties will provide to each other for a period anticipated to be up to six months after the closing of the sale. The Lease Assignment Agreement assigns the lease obligation for two buildings in the company’s California campus to EOTECH. As part of the assignment, the Company has agreed to subsidize a portion of the EOTECH’s lease payments through the remainder of the lease term which expires in March 2024. The following table summarizes the components of the gain on sale of the Photonics segment (in thousands):
Discontinued operations Based on its magnitude and because the Company exited certain markets, the sale of the Photonics segment represents a significant strategic shift that has a material effect on the Company’s operations and financial results, and the Company has separately reported the results of its Photonics segment as discontinued operations in the consolidated statements of income for the years ended January 1, 2022 and January 2, 2021. The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the Photonics segment that have been eliminated from continuing operations. Previously reported expenses for the Photonics segment have been recast to exclude certain allocated expenses that are not directly attributable to the Photonics segment. The key components from discontinued operations related to the Photonics segment are as follows (in thousands):
The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. The following table presents cash flow and non-cash information related to discontinued operations for the years ended January 1, 2022 and January 2, 2021, respectively (in thousands):
Revenue recognition The Photonics segment recognized revenues for cost plus fixed fee (“CPFF”) and firm fixed price (“FFP”) government contracts over time under the cost-to-cost non-U.S. government contracts, the customer typically controls the work in process as evidenced either by contractual termination clauses or by the rights to payment for work performed to date to deliver products or services that do not have an alternative use to the Company. The cost-to-cost The majority of the contracts in the Photonics segment had a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Some of the contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the product lifecycle (development and production). For contracts with multiple performance obligations, the contract’s transaction price was allocated to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which the expected costs of satisfying a performance obligation is forecasted and then an appropriate margin is added for that distinct good or service. In the Photonics segment, revenue for homogenous manufactured military products sold to the U.S. government and its contractors was recognized over time under the units-of-delivery units-of-delivery The nature of the contracts in the Photonics segment gave rise to several types of variable consideration including tiered pricing. Allocation of contract revenues among Photonics military products, and the timing of the recognition of those revenues, was impacted by agreements with tiered pricing or variable rate structures. Variable consideration was included in the estimated transaction price when there was a basis to reasonably estimate the amount of the consideration. These estimates were based on historical experience, anticipated performance and our best judgment at the time. Because of the certainty in estimating these amounts, they were included in the transaction price of our contracts and the associated remaining performance obligations. Accounting for CPFF and FFP contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For these contracts, the profit on a contract was estimated as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. Contract estimates were based on various assumptions to project the outcome of future events. These assumptions included the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. As a significant change in one or more of these estimates could affect the profitability of the contracts, the contract-related estimates were reviewed and updated regularly. Adjustments in estimated profit on contracts were recognized under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract was recognized in the period the adjustment was identified. Revenue and profit in future periods of contract performance was recognized using the adjusted estimate. If at any time the estimate of contract profitability indicated an anticipated loss on the contract, the total loss was recognized in the quarter it was identified. Impairment of Long-Lived Assets In the fourth fiscal quarter of 2021, as a result of and in consideration of the Photonics sale, the assignment of leased space to EOTECH and the agreement to subsidize EOTECH for spaces that will no longer be utilized, the Company evaluated its lease
right-of-use asset (“ROU”) related to the unused space for impairment. As a result of the analysis, the Company recognized an impairment loss during the fourth quarter of fiscal 2021 of $1.2 million. |
Revenue |
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Revenue | 3. Revenue The following tables represent a disaggregation of revenue from contracts with customers for fiscal 2021 and 2020. Major Products and Service Lines
Primary Geography Markets
Timing of Revenue Recognition
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 fiscal 2020:
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 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 fiscal 2021, contract assets in our TFE segment decreased by $270,000 primarily due to the final billing on one system that was pending acceptance as of January 2, 2021 that completed installation and was accepted by the customer. Customer advances in our TFE segment generally represent amounts billed to the customer prior to transferring goods which represents a contract liability. 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 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 and represents a contract liability. During fiscal 2021, we recognized revenue in our TFE segment of $33,000 and $427,000 that was included in customer advances and deferred revenue, respectively, at the beginning of the period. On January 1, 2022, we had $24.7 million of remaining performance obligations, which we also refer to as backlog and expect to recognize as revenue in 2022. On December 30, 2021, we sold assets comprising our Photonics business and we have separately reported the results of our Photonics segment as discontinued operations in our consolidated statements of income for the years ended January 1, 2022 and January 2, 2021, respectively. Accounts receivable, unbilled in our Photonics segment represented a contract asset for revenue that had been recognized in advance of billing the customer, which is common for contracts in the defense industry. In the Photonics segment, amounts were billed as work progressed in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly) or upon achievement of contractual milestones. Generally, billing occurred subsequent to revenue recognition, resulting in contract assets. These contracts with the U.S. government also contained retainage provisions. Retainage represents a contract asset for the portion of the contract price earned 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 was billable upon completion of the contract performance and approval of final indirect expense rates by the government. During fiscal 2021, contract assets in the Photonics segment decreased by $5.6 million primarily due to invoicing upon the achievement of contractual milestones, offset in part to the revenue recognized reported in discontinued operations on FFP contracts in advance of billing and the accrual of revenue reported in discontinued operations incurred costs under CPFF contracts. Deferred revenue in the Photonics segment generally represented a contract liability for amounts billed to the customer upon achievement of contractual milestones. These amounts are liquidated when revenue was recognized. During fiscal 2021, the Photonics segment recognized revenue of $779,000 reported in discontinued operations that was included in deferred revenue at the beginning of the period. |
Equity-Based Compensation |
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Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-Based Compensation | 4. Equity-Based Compensation Intevac accounts for share-based awards in accordance with the provisions of the accounting guidance which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, consultants and directors based upon the grant-date fair value of those awards. The estimated fair value of Intevac’s equity-based awards is amortized over the awards’ service periods using the graded vesting attribution method. Descriptions of Plans Equity Incentive Plans At January 1, 2022, Intevac had equity-based awards outstanding under the 2020 Equity Incentive Plan and the 2012 Equity Incentive Plan (the “Plans”) and the 2003 Employee Stock Purchase Plan (the “ESPP”). Intevac’s stockholders approved all of these plans. The Plans are a broad-based, long-term retention program intended to attract and retain qualified management and employees, and align stockholder and employee interests. The Plans permit the grant of incentive or non-statutory stock options, performance-based stock options (“PSOs”), restricted stock, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and performance shares. Option price, vesting period, and other terms are determined by the administrator of the Plans, but the option price shall generally not be less than 100% of the fair market value per share on the date of grant. As of January 1, 2022, 2.9 million shares of common stock were authorized for future issuance under the Plans. The 2020 Equity Incentive Plan expires no later than May 13, 2030. On January 19, 2022, the Board of Directors adopted the 2022 Inducement Equity Incentive Plan (the “Inducement Plan”) and, subject to the adjustment provisions of the Inducement Plan, reserved 1,200,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan. The Inducement Plan provides for the grant of equity-based awards, including nonstatutory stock options, restricted stock units, restricted stock, stock appreciation rights, performance shares and performance units, and its terms are substantially similar to the Company’s 2020 Equity Incentive Plan. The Inducement Plan was adopted without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. In accordance with that rule, awards under the Inducement Plan may only be made to individuals not previously employees or non-employee directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company. 2003 Employee Stock Purchase Plan 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. Beginning August 1, 2020, under the terms of the ESPP, employees can choose to have up to 50% of their base earnings withheld to purchase Intevac common stock (not to exceed $25,000 per year). As of January 1, 2022, 729,000 shares remained available for issuance under the ESPP. The effect of recording equity-based compensation for fiscal 2021 and 2020 was as follows (in thousands):
*Included in the table above, equity based compensation reported in discontinued operations of $1.2 million and $1.0 million for fiscal years 2021 and 2020, respectively. Equity-based compensation expense is based on awards which vest. Intevac accounts for forfeitures as they occur, rather than estimating expected forfeitures. Stock Options The exercise price of each stock option equals the market price of Intevac’s stock on the date of grant. Most options are scheduled to vest over and/or four years and expire no later than ten years after the grant date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and are fully transferable. Intevac’s employee stock options have characteristics significantly different from those of publicly traded options. The weighted-average assumptions used in the model are outlined in the following table:
The computation of the expected volatility assumption used in the Black-Scholes calculations for new grants is based on historical volatility of Intevac’s stock price. The risk-free interest rate is based on the yield available on U.S. Treasury Strips with an equivalent remaining term. The expected life 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 stock-based awards and vesting schedules. The dividend yield assumption is based on Intevac’s history of not paying dividends and the assumption of not paying dividends in the future. A summary of the stock option activity is as follows:
The total intrinsic value of options exercised during fiscal years 2021 and 2020 was $101,000 and $110,000, respectively. At January 1, 2022, Intevac had $78,000 of total unrecognized compensation expense related to stock option plans that will be recognized over the weighted-average period of 0.72 years. RSUs A summary of the RSU activity is as follows:
Time-based RSUs are converted into shares of Intevac common stock upon vesting on a one-for-one In May 2021, we granted 126,320 performance-based restricted stock units (“PRSUs”) to members of our senior management. The number of PRSUs that will vest is determined by our common stock achieving a certain Total Shareholder Return (“TSR”) for the Company, relative to the TSR of a specified peer group over a measurement period of two years from the time of grant. The fair value of each PRSU award was estimated on the date of grant using a Monte Carlo simulation. PRSU activity is included in the above RSU table. At the end of the performance measurement period, the Compensation Committee of the Board of Directors (the “Compensation Committee”) will determine the achievement against the performance objectives. Depending on the Company’s TSR relative to the peer group TSR, the actual number of shares that will be vested for each PRSU grant can range from zero to 200% of the initial grant. Intevac estimated the weighted-average fair value of PRSUs using the following weighted-average assumptions:
In May 2020, we granted 109,465 PRSUs to members of our senior management. The PRSUs were issued collectively in four separate tranches with individual one-year performance periods beginning in May 2020, 2021, 2022 and 2023, respectively. Vesting of the PRSUs is based on the performance of our common stock relative to the performance of a specified peer group. The fair value of each PRSU award was estimated on the date of grant using a Monte Carlo simulation. PRSU activity is included in the above RSU tables. At the end of each performance measurement period, the Compensation Committee will determine the achievement against the performance objectives. Any earned PRSU awards will vest 100% after the end of the applicable performance measurement period. The first performance measurement period ended in May 2021 and the metric was not achieved. Intevac estimated the weighted-average fair value of PRSUs using the following weighted-average assumptions:
ESPP The fair value of the employee stock purchase right is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
The expected life of purchase rights is the period of time remaining in the current offering period. The ESPP activity during fiscal 2021 and 2020 is as follows:
As of January 1, 2022, Intevac had $215,000 of total unrecognized compensation expense related to purchase rights that will be recognized over the weighted-average period of 0.5 years. |
Earnings Per Share |
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Earnings Per Share [Text Block] | 5. Earnings Per Share Intevac calculates basic earnings per share (“EPS”) using net income (loss) and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuance of common stock pursuant to the exercise of employee stock options and vesting of RSUs. The following table sets forth the computation of basic and diluted net income (loss) per share:
As the Company is in a net loss position from continuing operations, all of the Company’s equity instruments are considered antidilutive. |
Concentrations |
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Concentrations | 6. Concentrations Credit Risk and Significant Customers Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash equivalents, short- and long-term investments, restricted cash, and accounts receivable. Intevac generally invests its excess cash in money market funds, certificates of deposit, commercial paper, obligations of the U.S. government and its agencies, corporate debt securities, asset backed securities and municipal bonds. The Company has adopted an investment policy and established guidelines relating to credit quality, diversification and maturities of its investments in order to preserve principal and maintain liquidity. All investment securities in Intevac’s portfolio have an investment grade credit rating. Intevac’s accounts receivable tend to be concentrated in a limited number of customers. The following customers accounted for at least 10 percent of Intevac’s accounts receivable at January 1, 2022 and January 2, 2021.
Intevac’s largest customers tend to change from period to period. Historically, a significant portion of Intevac’s revenues in any particular period have been attributable to sales to a limited number of customers. Intevac performs credit evaluations of its customers’ financial condition and generally requires deposits on system orders but does not generally require collateral or other security to support customer receivables. The following customers accounted for at least 10 percent of Intevac’s consolidated net revenues in fiscal 2021 and/or 2020.
Products Disk manufacturing products contributed a significant portion of Intevac’s revenues in fiscal 2021 and 2020. Intevac expects that the ability to maintain or expand its current levels of revenues in the future will depend upon continuing market demand for its products; its success in enhancing its existing systems and developing and manufacturing competitive disk manufacturing equipment, such as the 200 Lean; its success in utilizing Intevac’s expertise in complex manufacturing equipment to develop and sell new manufacturing equipment products for PV, DCP and ASP. |
Balance Sheet Details |
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Balance Sheet Details | 7. Balance Sheet Details Balance sheet details were as follows as of January 1, 2022 and January 2, 2021: Trade and Other Accounts Receivable, Net
Inventories Inventories are stated at the lower of average cost or net realizable value and consist of the following:
Property, Plant and Equipment, Net
Net property, plant and equipment by geographic region at January 1, 2022 and January 2, 2021 was as follows:
Deferred Income Taxes and Other Long-Term Assets
Accounts Payable Included in accounts payable is $109,000 and $84,000 of book overdraft at January 1, 2022 and January 2, 2021, respectively. Other Accrued Liabilities
Other Long-Term Liabilities
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Financial Instruments |
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Cash Flow Hedges Derivative Instruments at Fair Value, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | 8. Financial Instruments Cash, Cash Equivalents and Investments Cash and cash equivalents, short-term investments and long-term investments consist of:
The contractual maturities of investment securities at January 1, 2022 are presented in the following table.
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 January 1, 2022.
All prices for the fixed maturity securities including U.S. treasury and agency securities, asset backed securities, certificates of deposit, commercial paper, corporate bonds, 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 investment securities measured at fair value on a recurring basis as of January 1, 2022.
Derivatives 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 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 consolidated balance sheets as of January 1, 2022 and January 2, 2021:
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Equity | 9. Equity 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 authorizing up to $40.0 million. Under this authorization, Intevac purchases shares of its common stock under a systematic stock repurchase program and may also make supplemental stock repurchases from time to time, depending on market conditions, stock price and other factors. At January 1, 2022, $10.4 million remains available for future stock repurchases under the repurchase program. The following table summarizes Intevac’s stock repurchases for fiscal 2021 and 2020:
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 the accumulated deficit. |
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Income Taxes | 10. Income Taxes The provision for income taxes on income from operations for fiscal 2021 and 2020 consists of the following (in thousands):
Income (loss) before income taxes for fiscal 2021 and 2020 consisted of the following (in thousands):
As a result of the adoption of ASU 2019-12 and the full net valuation allowance position, the Company will not recognize any U.S. Federal income tax expense or tax benefit on any components of continuing or discontinued operations. We did not recognize income tax expense on the gain from the sale of Photonics. The gain for federal purposes was offset by net operating losses. In California we used tax credits to offset the tax due on the gain. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of deferred tax assets are as follows (in thousands):
Intevac accounts for income taxes in accordance with ASC 740, Income Taxes Accounting standards also require that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion of or all of the deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. In fiscal 2014, a valuation allowance of $9.4 million was established to record the portion of the Singapore deferred tax assets that more likely than not will not be realized. The Company concluded that, as of December 29, 2018, it is more likely than not that the Company will generate sufficient taxable income in Singapore to realize its deferred tax assets and reversed the valuation allowance during the fourth quarter of 2018. This reversal resulted in the recognition of a non-cash income tax benefit of $7.9 million for fiscal 2018. The Company has considered all positive and negative evidence regarding the ability to fully realize the deferred tax assets, including past operating results and the forecast of future taxable income. This conclusion, and the resulting reversal of the deferred tax asset valuation allowance, was based upon consideration of a number of factors, including the Company’s completion of 7 consecutive quarters of profitability and its forecast of future profitability under multiple scenarios that support the utilization of net operating loss carryforwards. After recognizing the reversal, the Company does not have a remaining valuation allowance against the deferred tax assets in Singapore at January 1, 2022. In fiscal 2012, a valuation allowance of $23.4 million was established to record the portion of the U.S. federal deferred tax asset that more likely than not will not be realized. For fiscal 2021 a valuation allowance increase of $1.1 million and for fiscal 2020 a valuation allowance decrease of $416,000 were recorded for the U.S. federal deferred tax assets. A valuation allowance is recorded against the entire state deferred tax assets, which consists of state income tax temporary differences and deferred research and other tax credits that are not realizable in the foreseeable future. As of January 1, 2022, our federal, foreign and state net operating loss carryforwards for income tax purposes were approximately $29.4 million, $30.2 million and $70.2 million, respectively. The federal and state net operating loss carryforwards are subject to various limitations under Section 382 of the Internal Revenue Code and applicable state tax laws. If not utilized, the federal net operating loss carryforwards and the state net operating loss carryforwards will begin to expire in 2030 and 2028, respectively. The foreign net operating loss carryforwards do not expire. As of January 1, 2022, our federal and state tax credit carryforwards for income tax purposes were approximately $20.5 million and $16.0 million, respectively. If not utilized, the federal tax credit carryforwards will begin to expire in 2022 and the state tax credits carry forward indefinitely. We account for Global Intangible Low-Taxed Income (“GILTI”) earned by certain foreign subsidiaries in the year the tax is incurred. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States. The CARES Act includes several significant provisions for corporations, including the usage of net operating losses and payroll benefits. Several foreign (non-U.S.) jurisdictions in which we operate have taken similar economic stimulus measures. The Company evaluated the provisions of the CARES Act and other non-U.S. economic measures and determined the impact on our financial position at January 1, 2022 and on the results of operations and cash flows for fiscal 2021 and fiscal 2020 to be as follows. Under the CARES Act, we elected to defer payment, on an interest-free basis, of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020. One-half of such deferral amount was paid in December 31, 2021 and the other half will become due on December 31, 2022. We elected to utilize this deferral program to delay payment of approximately $764,000 of the employer portion of payroll taxes which were incurred between March 27, 2020 and December 31, 2020. On the consolidated balance sheets, the short-term portion of the deferred payroll tax liability is included in accrued payroll and related liabilities, while the long-term portion is included in other long-term liabilities. The Company also utilized the employee retention tax credit under the CARES Act for certain qualifying employee salary and wage expenditures. Tax benefits under the employee retention tax credit are not significant. Additionally, the CARES Act accelerated the timing of the refund for alternative minimum tax (“AMT”) credits. The entire balance of the income tax refund receivable of $157,000 was received in fiscal 2020. In Singapore, Intevac receives government assistance under the Job Support Scheme (“JSS”). The purpose of the JSS is to provide wage support to employers to help them retain their local employees. During fiscal 2021, the Company received $83,000 in JSS grants, of which $56,000 is reported as a reduction of cost of net revenues, $10,000 is reported as a reduction of R&D expenses and $17,000 is reported as a reduction of selling, general and administrative expenses on the consolidated statements of income. During fiscal 2020, the Company received $567,000 in JSS grants, of which $328,000 is reported as a reduction of cost of net revenues, $90,000 is reported as a reduction of R&D expenses and $149,000 is reported as a reduction of selling, general and administrative expenses on the consolidated statement of income. The difference between the tax provision at the statutory federal income tax rate and the tax provision for fiscal 2021 and 2020 on continuing operations was as follows (in thousands):
Intevac has not provided for foreign withholding taxes on approximately $1.6 million of undistributed earnings from non-U.S. operations as of January 1, 2022 because Intevac intends to reinvest such earnings indefinitely outside of the United States. If Intevac were to distribute these earnings, foreign withholding tax would be payable. For all other undistributed foreign earnings, Intevac also intends to reinvest such earnings indefinitely outside of the United States. The total amount of gross unrecognized tax benefits was $718,000 as of January 1, 2022, none of which would affect Intevac’s effective tax rate if realized. The aggregate changes in the balance of gross unrecognized tax benefits were as follows for fiscal 2021 and 2020 :
The Company does not anticipate any changes in the amount of unrecognized tax benefits in the next twelve months. It is Intevac’s policy to include interest and penalties related to unrecognized tax benefits in the provision for income taxes on the consolidated statements of operations. During fiscal 2021 and 2020, Intevac recognized a net tax expense (benefit) of $0 and ($2,000), respectively. As of January 1, 2022 Intevac did not have any accrued interest related to unrecognized tax benefits. Intevac did not accrue any penalties related to these unrecognized tax benefits because Intevac has other tax attributes which would offset any potential taxes due. Intevac is subject to income taxes in the U.S. federal jurisdiction, and various state and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. As of January 1, 2022, all of the tax years remained open to examination by the federal and state taxing authorities, for or four years from the tax year in which net operating losses or tax credits are utilized completely. Singapore is open to examination from 2017 forward. The Inland Revenue Authority of Singapore (“IRAS”) conducted a review of the fiscal 2009 through 2010 tax returns of the Company’s wholly-owned subsidiary, Intevac Asia Pte. Ltd. IRAS challenged the Company’s tax position with respect to certain deductions. The Company paid all contested taxes and the related interest to have the right to defend its position under Singapore tax law. During 2019, the Company received an unfavorable decision on its appeal to the Singapore Income Tax Board of Review. The Company appealed the decision to the Singapore High Court. In October 2020, the Company received an unfavorable decision on its appeal to the Singapore High Court. Management decided not to pursue additional appeals and the matter is fully settled. Presently, there are no other active income tax examinations in the jurisdictions where Intevac operates. |
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Employee Benefit Plans | 11. Employee Benefit Plans Employee Savings and Retirement Plan In 1991, Intevac established a defined contribution retirement plan with 401(k) plan features. The plan covers all United States employees eighteen years and older. Employees may make contributions by a percentage reduction in their salaries, not to exceed the statutorily prescribed annual limit. Intevac made cash contributions of $188,000 for fiscal 2021 and $201,000 for fiscal 2020. Employees may choose among several investment options for their contributions and their share of Intevac’s contributions, and they are able to move funds between investment options at any time. Intevac’s common stock is not one of the investment options. Administrative expenses relating to the plan are insignificant. Employee Bonus Plans Intevac has various employee bonus plans. A profit-sharing plan provides for the distribution of a percentage of
pre-tax profits to substantially all of Intevac’s employees not eligible for other performance-based incentive plans, up to a maximum percentage of compensation. Other plans award annual cash bonuses to Intevac’s executives and key contributors based on the achievement of profitability and other specific performance criteria. Charges to expense under these plans were $901,000, and $2.3 million, respectively, for fiscal 2021 and 2020. |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | 12. Commitments and Contingencies 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 consolidated balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The Company and EOTECH have entered into a Lease Assignment Agreement that assigns a portion of the Company’s lease obligation regarding its Santa Clara, California campus to EOTECH. The Company is contingently liable should EOTECH default on future lease obligations through the lease termination date of March 2024. The aggregate amount of the future lease obligations under this arrangement is $3.4 million as of January 1, 2022. As the Company is not being released as the primary obligor under the original lease, the lease assignment has been accounted for as a sublease. In consideration of EOTECH’s assumption of the above-mentioned lease obligations, which assumed lease obligations pertain in part to excess space beyond that required for EOTECH’s currently anticipated operation of the Photonics business, the Company agreed to pay to EOTECH the amount of $2.1 million (the “Unused Space Amount”), which Unused Space Amount is payable in (i) one initial installment of $308,000 on January 10, 2022 and (ii) seven (7) equal quarterly installments of $259,000. The following table reflects our lease assets and our lease liabilities at January 1, 2022 and January 2, 2021.
Lease Costs: The components of lease costs were as follows:
As of January 1, 2022 the maturity of operating lease liabilities was as follows:
The operating lease liabilities in discontinued operations represent the lease obligations that were assigned to EOTECH but which will be accounted for as a sublease as the Company has not been relieved of its primary obligations with the landlord. Lease Term and Discount Rate:
Other information: Supplemental cash flow information related to leases was as follows (in thousands):
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 January 1, 2022, we had letters of credit and bank guarantees outstanding totaling $786,000, including the standby letter of credit outstanding under the Santa Clara, California facility lease and various other guarantees with its bank. These letters of credit and bank guarantees are collateralized by $786,000 of restricted cash. Warranty Intevac provides for the estimated cost of warranty when revenue is recognized. Intevac’s warranty is subject to contract terms and, for its HDD manufacturing, DCP manufacturing, solar cell manufacturing and ASP 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 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 consolidated statements of income. The following table displays the activity in the warranty provision account for fiscal 2021 and 2020:
Legal Matters From time to time, Intevac receives notification from third parties, including customers and suppliers, seeking indemnification, litigation support, payment of money or other actions in connection with claims made against them. In addition, from time to time, Intevac receives notification from third parties claiming that Intevac may be or is infringing their intellectual property or other rights. Intevac also is subject to various other legal proceedings and claims, both asserted and unasserted, that arise in the ordinary course of business. Although the outcome of these claims and proceedings cannot be predicted with certainty, Intevac does not believe that any of these other existing proceedings or claims will have a material adverse effect on its consolidated financial condition or results of operations. In July 2020, Robin Quiusky, a former contract employee who worked for us via a staffing agency, filed an action against us under the Private Attorneys General Act (“PAGA”) in California state court (Quiusky v. Intevac, Inc., et al) alleging that the Company failed to provide rest and meal breaks, pay overtime and reimburse business expenses for
non-exempt California employees. The former employee subsequently added class action claims to his original complaint. The parties participated in a confidential mediation on February 1, 2022, and reached a settlement resolving the case. We are awaiting approval of the settlement by the court. Payment on the claims is expected to be made in the second half of 2022. The settlement effectively extinguishes the Quiusky v. Intevac, Inc., et al lawsuit. The settlement includes the dismissal of all claims against the Company and related parties in the Quiusky lawsuit and claim under the PAGA, without any admission of liability or wrongdoing attributed to the Company. Because of the uncertainty surrounding this litigation, no litigation reserve had been previously established by the Company resulting in the full $1.0 million settlement expense being recognized in the fourth quarter of fiscal 2021. |
Restructuring Charges |
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Restructuring Charges | 13. Restructuring Charges During the fourth quarter of fiscal 2021, the Company recorded asset impairment and restructuring charges associated with the sale of the Photonics division including (i) $693,000 in severance and other employee-related costs related to the termination of the Photonics general manager; (ii) $1.2 million in asset impairment charges on the Company’s ROU asset and (iii) $665,000 in accruals for common area charges associated with an unused space commitment to EOTECH. In consideration of EOTECH’s assumption of certain lease obligations related to the Company’s Santa Clara, California campus, which assumed lease obligations pertain in part to excess space beyond that required EOTECH’s currently anticipated operation of the Photonics division, the Company agreed to pay EOTECH the amount of $2.1 million, which is payable in (i) one initial installment of $308,000 on January 10, 2022 and (ii) seven equal quarterly installments of $259,000. The Company recorded an asset impairment charge against its ROU asset in the amount of $1.2 million associated with the excess space noted above. The Company recorded a liability to EOTECH in the amount of $665,000, the amount related to common area charges which are not included in the base rental payments or the lease liability on the Company’s consolidated balance sheet. During the third quarter of fiscal 2021, Intevac substantially completed implementation of the 2021 cost reduction plan (the “2021 Cost Reduction Plan”), which was intended to reduce expenses and reduce its workforce by 5.2 percent. The cost of implementing the 2021 Cost Reduction Plan was reported under cost of net revenues and operating expenses in the consolidated statements of income. Substantially all cash outlays in connection with the Cost Reduction Plan occurred in the first nine months of fiscal 2021. Implementation of the 2021 Cost Reduction Plan is expected to reduce salary, wages and other employee-related expenses by approximately $2.0 million on an annual basis. During the third quarter of fiscal 2020, Intevac substantially completed implementation of the 2020 cost reduction plan (the “2020 Cost Reduction Plan”), which was intended to reduce expenses and reduce its workforce by 1.0 percent. The cost of implementing the 2020 Cost Reduction Plan was reported under cost of net revenues and operating expenses in the consolidated statements of income. Substantially all cash outlays in connection with the 2020 Cost Reduction Plan occurred in the third quarter of fiscal 2020. Implementation of the 2020 Cost Reduction reduced salary, wages and other employee-related expenses by approximately $864,000 on an annual basis. As of January 1, 2022, activities related to the 2021 Plan and the 2020 Plan were complete. The following table summarizes the significant activities within, and components of, the restructuring liabilities.
(a) Included in income from discontinued operations (See note 2). (b) Acceleration of equity awards. (c) Impairment of ROU asset. (d) Liability for employee termination costs is included in accrued payroll and related liabilities. |
Summary of Significant Accounting Policies (Policies) |
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Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Intevac, Inc. and its subsidiaries (Intevac, the Company or we) after elimination of inter-company balances and transactions. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. |
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Fiscal Year End Date | Fiscal Year End Date Intevac operates under a
52-53 week fiscal year ending on the Saturday nearest to December 31 of each year in order to improve the alignment of financial and business processes and to streamline financial reporting. Each fiscal quarter consists of 13 weeks, with an occasional fourth quarter extending to 14 weeks, if necessary, for the fiscal year to end on the Saturday nearest to December 31. The Company’s fiscal 2021 and fiscal 2020 years ended on January 1, 2022 and January 2, 2021, respectively. |
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Reportable Segment | Reportable Segment During fiscal 2021, we sold the business of one of our reporting segments, Photonics. Therefore, we have one reportable segment remaining. See Note 2 for additional disclosure related to discontinued operations. The remaining segment, Thin Film Equipment (“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, display cover panel (“DCP”) and advanced semiconductor packaging (“ASP”) industries, as well as other adjacent thin-film markets. |
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Reclassification of Prior Periods | Reclassification of Prior Periods On December 30, 2021, the Company completed the sale of its Photonics business to EOTECH, LLC, a Michigan limited liability company (“EOTECH”), in exchange for (i) $70.0 million in cash consideration (as may be increased or decreased by certain closing net working capital adjustments), (ii) up to $30.0 million in earnout payments and (iii) the assumption by EOTECH of certain liabilities of the Photonics business. Due to the sale of the Photonics business during the fourth quarter of 2021, we have classified the results of the Photonics business as discontinued operations in our consolidated statements of income for all periods presented. All amounts included in the Notes to Consolidated Financial Statements relate to continuing operations unless otherwise noted. |
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Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments Intevac considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.
Available-for-sale available-for-sale |
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Restricted Cash | Restricted Cash Restricted cash of $600,000 as of January 1, 2022 secures a standby letter of credit obligation associated with a lease obligation and the restriction on the cash will be removed when the letter of credit expires. In addition, Intevac pledged $186,000 as collateral for various guarantees with its bank. |
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Derivative Instruments and Hedging Arrangements | Derivative Instruments and Hedging Arrangements Foreign Exchange Exposure Management re-measurement of certain recorded assets and liabilities in a non-functional currency and to offset certain operational exposures from the impact of changes in foreign currency exchange rates. Such exposures result from the portion of the Company’s operations, assets and liabilities that are denominated in currencies other than the U.S. dollar, primarily the Singapore dollar. These foreign currency exchange contracts are entered into to support transactions made in the normal course of business, and accordingly, are not speculative in nature. The contracts are for periods consistent with the terms of the underlying transactions, generally one year or less. Changes in the fair value of these undesignated hedges are recognized in other income (expense), net immediately as an offset to the changes in the fair value of the asset or liability being hedged. |
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Fair Value Measurement-Definition and Hierarchy | Fair Value Measurement—Definition and Hierarchy Intevac reports certain financial assets and liabilities at fair value. Intevac defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following three categories: Level 1 Level 2 Level 3 |
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Trade Accounts Receivables and Doubtful Accounts | Trade Accounts Receivables and Doubtful Accounts Intevac evaluates the collectibility of trade accounts receivable on an ongoing basis and provides reserves against potential losses when appropriate. Management analyzes historical bad debts, customer concentrations, customer creditworthiness, changes in customer payment tendencies and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. Customer accounts are written off against the allowance when the amount is deemed uncollectible. |
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Inventories | Inventories Inventories are generally stated at the lower of cost or net realizable value, with cost determined on an average cost basis. |
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Property, Plant and Equipment | Property, Plant and Equipment Equipment and leasehold improvements are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: computers and software, 3 years; machinery and equipment, 5 years; furniture, 7 years; vehicles, 4 years; and leasehold improvements, remaining lease term. |
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets and certain identifiable finite-lived intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability of long-lived assets is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value. |
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Income Taxes | Income Taxes Intevac accounts for income taxes by recognizing deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. Deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between book and tax bases of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized. In determining whether to establish or maintain a valuation allowance against a deferred tax asset, the Company reviews available evidence to determine whether it is more likely than not that all or a portion of the Company’s net deferred tax assets will be realized in future periods. Consideration is given to various positive and negative factors that could affect the realization of the net deferred tax assets. In making such a determination, the Company considers, among other things, future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, historical financial performance, the length of statutory carry forward periods, experience with operating loss and tax credit carry forwards not expiring unused. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The effective tax rate is highly dependent upon the level of Intevac’s projected earnings, the geographic composition of worldwide earnings, tax regulations governing each region, net operating loss carryforwards, availability of tax credits and the effectiveness of Intevac’s tax planning strategies. Intevac carefully monitors the changes in many factors and adjust its effective income tax rate on a timely basis. If actual results differ from the estimates, this could have a material effect on Intevac’s business, financial condition and results of operations. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with Intevac’s expectations could have a material effect on Intevac’s business, financial condition and results of operations. Intevac recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. |
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Sales and Value Added Taxes | Sales and Value Added Taxes Taxes collected from customers and remitted to governmental authorities are presented on a net basis in the accompanying consolidated statements of income. |
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Revenue Recognition | Revenue Recognition A majority of our equipment sales revenue, which includes systems, technology upgrades, service and spare parts is recognized when products are shipped from our manufacturing facilities. We recognize revenue for equipment sales at a point in time following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. Intevac recognizes revenue in certain circumstances before delivery has occurred (commonly referred to as bill and hold transactions). In such circumstances, among other things, risk of ownership has passed to the customer, the customer has made a written fixed commitment to purchase the finished goods, the customer has requested the finished goods be held for future delivery as scheduled and designated by them, and no additional performance obligations exist by Intevac. For these transactions, the finished goods are segregated from inventory and normal billing and credit terms granted. Our contracts with customers may include multiple performance obligations. For such arrangements, under the revenue standard we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or by using expected cost plus margin. Under the revenue standard, the expected costs associated with our base warranties are recognized as expense when the equipment is sold. |
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Government Grants And Credits | Government Grants and Credits The Company generally records grants from governmental agencies related to income as a reduction in operating expense. Grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to the grant arrangement and the grant will be received. Reimbursements of eligible expenditures pursuant to government assistance programs are recorded as reductions of operating costs when the related costs have been incurred and there is reasonable assurance regarding collection of the claim. Grant claims not settled by the balance sheet date are recorded as receivables, provided their receipt is reasonably assured. The determination of the amount of the claim, and accordingly the receivable amount, requires management to make calculations based on its interpretation of eligible expenditures in accordance with the terms of the programs. The reimbursement claims submitted by the Company are subject to review by the relevant government agencies. In Singapore, Intevac receives government assistance under the Job Support Scheme (“JSS”). During fiscal 2021, the Company received $83,000 in JSS grants, of which $56,000 is reported as a reduction of cost of net revenues, $10,000 is reported as a reduction of research and development (“R&D”) expenses and $17,000 is reported as a reduction of selling, general and administrative expenses on the consolidated statements of income. During fiscal 2020, the Company received $567,000 in JSS grants of which $328,000 is reported as a reduction of cost of net revenues, $90,000 is reported as a reduction of R&D expenses and $149,000 is reported as a reduction of selling, general and administrative expenses on the consolidated statements of income. |
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Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising costs were not material for all periods presented. |
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Foreign Currency Translation | Foreign Currency Translation The functional currency of Intevac’s foreign subsidiaries in Singapore and Hong Kong and the Taiwan branch is the U.S. dollar. The functional currency of Intevac’s foreign subsidiaries in China, Malaysia and Korea is the local currency of the country in which the respective subsidiary operates. Assets and liabilities recorded in foreign currencies are translated at
year-end exchange rates; revenues and expenses are translated at average exchange rates during the year. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets. The effects of foreign currency transactions are included in other income (expense), net in the determination of net income. Losses from foreign currency transactions were $65,000 and $139,000 in 2021 and 2020, respectively. |
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Comprehensive Income | Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) by component, were as follows for the years ended January 1, 2022 and January 2, 2021:
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Employee Stock Plans | Employee Stock Plans Intevac has equity-based compensation plans that provide for the grant to employees of equity-based awards, including incentive or
non-statutory stock options, performance-based stock options (“PSOs”), restricted stock, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and performance shares. In addition, these plans provide for the grant of non-statutory stock options and RSUs to non-employee directors and consultants. Intevac also has an employee stock purchase plan, which provides Intevac’s employees with the opportunity to purchase Intevac common stock at a discount through payroll deductions. See Note 4 for a complete description of these plans and their accounting treatment. |
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Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10, Disclosures by Business Entities about Government Assistance In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) 2021-01, Reference Rate Reform (Topic 848): Scope 2020-04 and are effective in the same timeframe as ASU 2020-04. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU
2016-13, Financial Instruments—Credit Losses (Topic 326). |
Summary of Significant Accounting Policies (Tables) |
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Changes in Accumulated Other Comprehensive Income by Component | The changes in accumulated other comprehensive income (loss) by component, were as follows for the years ended January 1, 2022 and January 2, 2021:
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Divestiture and Discontinued Operations (Tables) |
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Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of gain on sale of photonics segment | The following table summarizes the components of the gain on sale of the Photonics segment (in thousands):
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Summary of components discontinued operations related photonics segment | The key components from discontinued operations related to the Photonics segment are as follows (in thousands):
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Summary of cash flow and noncash information related to discontinued operations | The following table presents cash flow and non-cash information related to discontinued operations for the years ended January 1, 2022 and January 2, 2021, respectively (in thousands):
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue from Contracts with Customers | The following tables represent a disaggregation of revenue from contracts with customers for fiscal 2021 and 2020. Major Products and Service Lines
Primary Geography Markets
Timing of Revenue Recognition
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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 fiscal 2020:
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Equity-Based Compensation (Tables) |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of Recording Equity-Based Compensation | The effect of recording equity-based compensation for fiscal 2021 and 2020 was as follows (in thousands):
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Summary of Stock Option Activity | A summary of the stock option activity is as follows:
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Employee Stock Options Weighted-Average Assumptions | The weighted-average assumptions used in the model are outlined in the following table:
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Summary of Restricted Stock Units Activity | A summary of the RSU activity is as follows:
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Employee Stock Purchase Rights Weighted-Average Assumptions | The fair value of the employee stock purchase right is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
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Employee Stock Purchase Plan Activity | The ESPP activity during fiscal 2021 and 2020 is as follows:
As of January 1, 2022, Intevac had $215,000 of total unrecognized compensation expense related to purchase rights that will be recognized over the weighted-average period of 0.5 years. |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Stock Options Weighted-Average Assumptions | Intevac estimated the weighted-average fair value of PRSUs using the following weighted-average assumptions:
Intevac estimated the weighted-average fair value of PRSUs using the following weighted-average assumptions:
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Earnings Per Share (Tables) |
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Computation of Basic and Diluted Net Income Per Share | The following table sets forth the computation of basic and diluted net income (loss) per share:
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Concentrations (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customers that Accounted for at Least Ten percent of Accounts Receivable/Consolidated Net Revenues | Intevac’s accounts receivable tend to be concentrated in a limited number of customers. The following customers accounted for at least 10 percent of Intevac’s accounts receivable at January 1, 2022 and January 2, 2021.
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Sales Revenue Net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customers that Accounted for at Least Ten percent of Accounts Receivable/Consolidated Net Revenues | The following customers accounted for at least 10 percent of Intevac’s consolidated net revenues in fiscal 2021 and/or 2020.
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Balance Sheet Details (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 01, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trade and Other Accounts Receivable, Net | Trade and Other Accounts Receivable, Net
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Summary of Inventories | Inventories are stated at the lower of average cost or net realizable value and consist of the following:
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Property, Plant and Equipment | Property, Plant and Equipment, Net
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Net Property, Plant And Equipment By Geographic Region | Net property, plant and equipment by geographic region at January 1, 2022 and January 2, 2021 was as follows:
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Deferred Income Taxes and Other Long-Term Assets | Deferred Income Taxes and Other Long-Term Assets
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Other Accrued Liabilities | Other Accrued Liabilities
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Other Long-Term Liabilities | Other Long-Term Liabilities
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Financial Instruments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 01, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Flow Hedges Derivative Instruments at Fair Value, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Short-Term Investments and Long-Term Investments | Cash and cash equivalents, short-term investments and long-term investments consist of:
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Contractual Maturities of Available-for-Sale Securities | The contractual maturities of investment securities at January 1, 2022 are presented in the following table.
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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 January 1, 2022.
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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 investment securities measured at fair value on a recurring basis as of January 1, 2022.
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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 consolidated balance sheets as of January 1, 2022 and January 2, 2021:
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Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Repurchases | The following table summarizes Intevac’s stock repurchases for fiscal 2021 and 2020:
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 01, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for Income Taxes | The provision for income taxes on income from operations for fiscal 2021 and 2020 consists of the following (in thousands):
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Income (Loss) Before Income Taxes | Income (loss) before income taxes for fiscal 2021 and 2020 consisted of the following (in thousands):
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Significant Components of Deferred Tax Assets | Significant components of deferred tax assets are as follows (in thousands):
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Difference Between Tax Provision at Statutory Federal Income Tax Rate and Tax Provision | The difference between the tax provision at the statutory federal income tax rate and the tax provision for fiscal 2021 and 2020 on continuing operations was as follows (in thousands):
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Aggregate Changes in Balance of Gross Unrecognized Tax Benefits | The aggregate changes in the balance of gross unrecognized tax benefits were as follows for fiscal 2021 and 2020 :
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Assets and Lease Liabilities | The following table reflects our lease assets and our lease liabilities at January 1, 2022 and January 2, 2021.
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Lease Costs | The components of lease costs were as follows:
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Schedule of Maturity of Operating Lease Liabilities | As of January 1, 2022 the maturity of operating lease liabilities was as follows:
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Schedule of Lease Term and Discount Rate |
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Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows (in thousands):
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Schedule of Product Warranty Liability | The following table displays the activity in the warranty provision account for fiscal 2021 and 2020:
|
Restructuring Charges (Tables) |
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Jan. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Restructuring Reserves | The following table summarizes the significant activities within, and components of, the restructuring liabilities.
(a) Included in income from discontinued operations (See note 2). (b) Acceleration of equity awards. (c) Impairment of ROU asset. (d) Liability for employee termination costs is included in accrued payroll and related liabilities. |
Divestiture and Discontinued Operations - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
Dec. 31, 2024 |
Dec. 30, 2021 |
|
Impairment loss | $ 1,200 | $ 128 | ||
EOTECH LLC [Member] | Photonics | ||||
Cash | $ 70,000 | |||
Earnout payment | $ 30,000 | $ 14,000 | $ 30,000 |
Divestiture and Discontinued Operations - Summary of Photonics Segment (Detail) - Photonics $ in Thousands |
Jan. 01, 2022
USD ($)
|
---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash proceeds | $ 70,000 |
Working capital adjustment | (74) |
Disposal Group Including Discontinued Operations Net Cash Proceeds | 69,926 |
Assets sold: | |
Accounts receivable | 3,535 |
Inventories | 6,301 |
Other current assets | 72 |
Property, plant and equipment | 3,987 |
Total assets sold | 13,895 |
Liabilities divested: | |
Accounts payable | 888 |
Other accrued expenses | 594 |
Total liabilities divested | 1,482 |
Transaction and other costs | (3,172) |
Gain on sale | $ 54,341 |
Divestiture and Discontinued Operations - Summary of Cash Flow and Non-cash Information Related to Discontinued Operations (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation and amortization | $ 1,366 | $ 1,123 |
Amortization of intangible assets | 0 | 36 |
Asset impairment charges | 1,246 | 0 |
Equity-based compensation | 1,167 | 959 |
Purchase of leasehold improvements and equipment | $ 429 | $ 636 |
Revenue - Primary Geography Markets (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Disaggregation of Revenue [Line Items] | |||
Total net revenues | $ 52,128 | $ 38,524 | $ 52,128 |
Products Transferred at a Point in Time | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenues | $ 52,128 | 38,524 | |
Products and Services Transferred Over Time | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenues | 0 | 0 | |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenues | 3,670 | 6,450 | |
Asia | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenues | 31,004 | 45,611 | |
Europe | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenues | $ 3,850 | $ 67 |
Revenue - Additional Information (Detail) |
12 Months Ended |
---|---|
Jan. 01, 2022
USD ($)
Day
| |
Revenue From Contract With Customers [Line Items] | |
Number of installments | Day | 3 |
Revenue remaining performance obligation | $ 24,700,000 |
Revenue recognized | 779,000 |
TFE | Accounts Receivable, Unbilled | |
Revenue From Contract With Customers [Line Items] | |
Change in contract assets | (270,000) |
TFE | Customer Advances | |
Revenue From Contract With Customers [Line Items] | |
Contract with customer liability revenue recognized | 33,000 |
TFE | Deferred Revenue | |
Revenue From Contract With Customers [Line Items] | |
Contract with customer liability revenue recognized | 427,000 |
Photonics | |
Revenue From Contract With Customers [Line Items] | |
Change in contract assets | (5,565,000) |
Photonics | Accounts Receivable, Unbilled | |
Revenue From Contract With Customers [Line Items] | |
Change in contract assets | $ (5,439,000) |
Equity-Based Compensation - Effect of Recording Equity-Based Compensation (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation | $ 4,003 | $ 3,389 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation | $ 504 | 198 | |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation | 2,819 | 1,936 | |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation | $ 986 | $ 949 |
Equity-Based Compensation - Effect of Recording Equity-Based Compensation (Detail) (Parenthetical) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation | $ 4,003,000 | $ 3,389,000 | |
Discontinued Operations [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation | $ 1,000.0 | $ 1,200 |
Equity-Based Compensation - Weighted-Average Fair Value of Stock Options and Employee Stock Purchase Rights using Weighted-Average Assumptions (Detail) - $ / shares |
12 Months Ended | |
---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average fair value of grants per share | $ 0 | $ 1.82 |
Expected volatility | 0.00% | 46.06% |
Risk free interest rate | 0.00% | 0.44% |
Expected term of options (in years) | 4 years 4 months 20 days | |
Dividend yield | 0.00% | |
Stock Purchase Rights | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average fair value of grants per share | $ 2.59 | $ 2.20 |
Expected volatility | 60.88% | 51.49% |
Risk free interest rate | 0.08% | 0.14% |
Expected term of options (in years) | 10 months 28 days | 1 year 2 months 26 days |
Dividend yield | 0.00% | 0.00% |
Equity-Based Compensation - Weighted-Average Fair Value of Performance Stock Options Using Weighted-Average Assumptions (Detail) - Performance Based Restricted Stock Units [Member] - $ / shares |
12 Months Ended | |
---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average fair value of grants per share | $ 7.65 | $ 3.16 |
Expected volatility | 56.26% | 46.70% |
Risk free interest rate | 0.15% | 0.25% |
Dividend yield | 0.00% | 0.00% |
Equity-Based Compensation - Summary of Restricted Stock Units Activity (Detail) - Restricted Stock Units (RSUs) - USD ($) |
1 Months Ended | 12 Months Ended | |
---|---|---|---|
May 31, 2021 |
May 31, 2020 |
Jan. 01, 2022 |
|
Shares | |||
Non-vested RSUs at December 28, 2019 | 901,634 | ||
Granted | 126,320 | 109,465 | 606,705 |
Vested | (382,747) | ||
Cancelled | (92,156) | ||
Non-vested RSUs at January 2, 2021 | 1,033,436 | ||
Weighted Average Grant Date Fair Value | |||
Non-vested RSUs at December 28, 2019 | $ 5.30 | ||
Granted | 6.03 | ||
Vested | 5.71 | ||
Cancelled | 4.79 | ||
Non-vested RSUs at January 2, 2021 | $ 5.59 | ||
Weighted Average Remaining Contractual Term | |||
Non-vested RSUs at December 28, 2019 | 1 year 6 months | ||
Non-vested RSUs at January 2, 2021 | 1 year 4 months 20 days | ||
Aggregate Intrinsic Value | |||
Non-vested RSUs at December 28, 2019 | $ 6,500,781 | ||
Non-vested RSUs at January 2, 2021 | $ 4,867,484 |
Equity-Based Compensation - Employee Stock Purchase Plan Activities (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Employee Stock Purchase Plan [Line Items] | ||
Shares purchased | 435 | 392 |
Weighted-average purchase price per share | $ 5.05 | $ 4.01 |
Aggregate intrinsic value of purchase rights exercised | $ 671 | $ 765 |
Earnings Per Share - Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Net loss from continuing operations | $ (10,435) | $ (23,057) | $ (10,435) |
Net income from discontinued operations, net of tax | 11,491 | 49,677 | 11,491 |
Net income | $ 1,056 | $ 26,620 | $ 1,056 |
Weighted-average shares - basic | 24,348 | 23,669 | |
Effect of dilutive potential common shares | 0 | 0 | |
Weighted-average shares – diluted | 24,348 | 23,669 | |
Basic and diluted net income (loss) per share: | |||
Basic and diluted—continuing operations | $ (0.44) | $ (0.95) | $ (0.44) |
Discontinued operations | 0.49 | 2.04 | 0.49 |
Net income per share | $ 0.04 | $ 1.09 | $ 0.04 |
Concentrations - Customers That Accounted for at Least ten percent of Consolidated Net Revenue (Detail) - Sales Revenue Net - Customer Concentration Risk |
12 Months Ended | |
---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Seagate Technology | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 60.00% | 79.00% |
Amkor Technology Inc. [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | |
Western Digital Corporation [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 25.00% | 18.00% |
Concentrations - Customers That Accounted for at Least Ten percent of Accounts Receivable (Detail) - Accounts Receivable - Credit Concentration Risk |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Seagate Technology | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 47.00% | 45.00% | |
USGovernment [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 26.00% | ||
Western Digital Corporation [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 16.00% | 30.00% | |
Amkor Technology Inc. [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 22.00% |
Balance Sheet Details - Trade and Other Accounts Receivable, Net (Detail) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade receivables and other | $ 14,162 | $ 22,712 |
Unbilled costs and accrued profits | 99 | 5,934 |
Less: allowance for doubtful accounts | 0 | 0 |
Trade and other accounts receivable, net of allowances of $0 at both January 2, 2021 and December 28, 2019 | $ 14,261 | $ 28,646 |
Balance Sheet Details - Inventories Stated at Lower of Average Cost or Net Realizable Value (Detail) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 5,323 | $ 9,999 |
Work-in-progress | 468 | 4,832 |
Finished goods | 6,858 | |
Inventories | $ 5,791 | $ 21,689 |
Balance Sheet Details - Property, Plant and Equipment (Detail) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $ 33,665 | $ 63,169 |
Less accumulated depreciation and amortization | 28,906 | 52,165 |
Total property, plant and equipment, net | 4,759 | 11,004 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | 9,847 | 16,323 |
Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $ 23,818 | $ 46,846 |
Balance Sheet Details - Summary Of the Net Property, Plant And Equipment By Geographic Region (Detail) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Net property, plant & equipment | $ 4,759 | $ 11,004 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Net property, plant & equipment | 4,385 | 10,678 |
Asia | ||
Property, Plant and Equipment [Line Items] | ||
Net property, plant & equipment | $ 374 | $ 326 |
Balance Sheet Details - Deferred Income Taxes and Other Long-Term Assets (Detail) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Deferred income taxes | $ 5,310 | $ 5,335 |
Prepaid expenses | 139 | 151 |
Deferred income taxes and other long-term assets | $ 5,449 | $ 5,486 |
Balance Sheet Details - Additional Information (Detail) - USD ($) |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Balance Sheet Details [Line Items] | ||
Accounts payable, book overdraft | $ 109,000 | $ 84,000 |
Balance Sheet Details - Other Accrued Liabilities (Detail) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Accrued Liabilities [Line Items] | ||
Other taxes payable | $ 1,318 | $ 935 |
Litigation settlement | 1,000 | |
Income taxes payable | 370 | 263 |
Restructuring | 347 | |
Accrued product warranties | 301 | 405 |
Other | 264 | 734 |
Deferred revenue | 65 | 1,261 |
Total other accrued liabilities | $ 3,665 | $ 3,598 |
Balance Sheet Details - Other Long-Term Liabilities (Detail) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Other Long Term Liabilities [Line Items] | ||
Restructuring | $ 318 | |
Accrued product warranties | 45 | $ 75 |
Employer payroll taxes | 382 | |
Total other long-term liabilities | $ 363 | $ 457 |
Financial Instruments - Contractual Maturities of Available-For-Sale Securities (Detail) $ in Thousands |
Jan. 01, 2022
USD ($)
|
---|---|
Investments Debt And Equity Securities [Abstract] | |
Amortized Cost, Due in one year or less | $ 10,460 |
Amortized Cost, Due after one through five years | 7,452 |
Amortized Cost | 17,912 |
Fair Value, Due in one year or less | 10,455 |
Fair Value, Due after one through five years | 7,427 |
Fair Value | $ 17,882 |
Financial Instruments - Additional Information (Detail) |
12 Months Ended |
---|---|
Jan. 01, 2022 | |
Derivative Instrument Detail [Abstract] | |
Maturity of foreign currency derivative | 30 days |
Financial Instruments - Summary of Outstanding Derivative Instruments on Gross Basis as Recorded in Consolidated Balance Sheets (Detail) - Undesignated Hedges - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | $ 815 | $ 983 |
Derivative Asset | 1 | |
Derivative Liabilities | 3 | |
Forward Foreign Currency Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | 815 | 983 |
Derivative Asset | $ 1 | |
Derivative Liabilities | $ 3 |
Equity - Additional Information (Detail) - USD ($) $ in Millions |
Aug. 15, 2018 |
Jan. 01, 2022 |
Nov. 21, 2013 |
---|---|---|---|
Equity [Abstract] | |||
Stock repurchase authorized amount | $ 40.0 | $ 30.0 | |
Increase in stock repurchase program | $ 10.0 | ||
Stock repurchase remained available for future stock repurchase | $ 10.4 |
Equity - Schedule of Stock Repurchases (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Equity [Abstract] | ||
Shares of common stock repurchased | 0 | 98 |
Cost of stock repurchased | $ 0 | $ 393 |
Average price paid per share | $ 0 | $ 3.97 |
Income Taxes - Provision for Income Taxes (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Federal: | |||
Current | $ 0 | $ (915) | |
Deferred | 0 | 0 | |
Federal Income Tax Expense (Benefit), Operations, Total | 0 | (915) | |
State: | |||
Current | 4 | 4 | |
Deferred | 0 | 0 | |
State and Local Income Tax Expense (Benefit), Operations, Total | 4 | 4 | |
Foreign: | |||
Current | 546 | 1,705 | |
Deferred | 25 | 917 | |
Foreign Income Tax Expense (Benefit), Operations, Total | 571 | 2,622 | |
Total | $ 1,711 | 575 | 1,711 |
Income taxes on discontinued operations | 0 | 0 | |
Income taxes on continuing operations | $ 575 | $ 1,711 |
Income Taxes - Income (Loss) Before Income Taxes (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items] | |||
U.S | $ (22,694) | $ (14,784) | |
Foreign | 212 | 6,060 | |
Loss from continuing operations before provision for income taxes | $ (8,724) | $ (22,482) | $ (8,724) |
Effective tax rate | (2.60%) | (19.60%) |
Income Taxes - Significant Components of Deferred Tax Assets (Detail) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Deferred tax assets: | ||
Vacation, warranty and other accruals | $ 627 | $ 651 |
Intangible amortization | 282 | 551 |
Purchased technology | 17 | 14 |
Inventory valuation | 1,653 | 1,101 |
Equity-based compensation | 1,343 | 1,494 |
Lease liability | 1,659 | 0 |
Net operating loss, research and other tax credit carryforwards | 53,684 | 55,322 |
Other | 22 | 30 |
Deferred tax assets, gross, total | 59,287 | 59,163 |
Valuation allowance for deferred tax assets | (52,703) | (52,088) |
Total deferred tax assets | 6,584 | 7,075 |
Deferred tax liabilities: | ||
Depreciation and amortization | (201) | (341) |
ROU asset | (1,073) | 0 |
Unbilled revenue | 0 | (1,399) |
Total deferred tax liabilities | (1,274) | (1,740) |
Net deferred tax assets | 5,310 | 5,335 |
As reported on the balance sheet: | ||
Non-current deferred tax assets | $ 5,310 | $ 5,335 |
Income Taxes - Difference Between Tax Provision at Statutory Federal Income Tax Rate and Tax Provision (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Reconciliation Of Income Taxes [Line Items] | |||
Income tax at the federal statutory rate | $ (4,721) | $ (1,832) | |
State income taxes, net of federal benefit | 4 | 4 | |
Effect of foreign operations taxed at various rates | 48 | (235) | |
Research tax credits | (1,135) | (1,306) | |
Effect of tax rate changes, permanent differences and adjustments of prior deferrals | 6,285 | 4,461 | |
Unrecognized tax benefits | 0 | 579 | |
Total | $ 1,711 | 575 | 1,711 |
United States | |||
Reconciliation Of Income Taxes [Line Items] | |||
Change in valuation allowance | 94 | $ 40 | |
Foreign Tax Authority | |||
Reconciliation Of Income Taxes [Line Items] | |||
Change in valuation allowance |
Income Taxes - Aggregate Changes in Balance of Gross Unrecognized Tax benefits (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Income Tax Contingency [Line Items] | ||
Beginning balance | $ 7,327,000 | $ 7,683,000 |
Additions based on tax positions related to the current year | 24,000 | 589,000 |
Decreases for tax positions of prior years | 6,622,000 | 0 |
Lapse of statute of limitations | (11,000) | (945,000) |
Ending balance | $ 718,000 | $ 7,327,000 |
Employee Benefit Plans - Additional Information (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Jan. 01, 2022 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Defined contribution retirement plan, employee eligibility age | 18 years | |
Cash contributions | $ 201,000 | $ 188,000 |
Defined bonus plan, charges to expenses | $ 2,300,000 | $ 901,000 |
Commitments and Contingencies - Additional Information (Detail) |
12 Months Ended | ||
---|---|---|---|
Jan. 10, 2022
USD ($)
Installment
|
Jan. 01, 2022
USD ($)
|
Jan. 02, 2021
USD ($)
|
|
Commitments and Contingencies [Line Items] | |||
Letters of credit and bank guarantees outstanding, amount | $ 786,000 | ||
Letters of credit and bank guarantees collateralized by restricted cash | $ 786,000 | ||
Minimum product warranty range | 12 months | ||
Maximum product warranty range | 24 months | ||
Product warranty offer on sale | 1 day | ||
Future lease obligations | $ 3,400,000 | ||
Operating Lease, Payments | $ 2,100,000 | $ 3,382,000 | $ 3,332,000 |
Operating lease, quarterly instalment payments | $ 259,000 | ||
Number of operating lease payments | Installment | 7 | ||
Operating lease, first instalment payments | $ 308,000 | ||
Maximum | |||
Commitments and Contingencies [Line Items] | |||
Operating lease expiration date | 2024-03 | ||
EOTECH [Member] | |||
Commitments and Contingencies [Line Items] | |||
Operating Lease, Payments | $ 2,100,000 |
Commitments and Contingencies - Schedule of Lease Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Assets: | ||
Operating lease ROU assets | $ 4,520 | $ 8,165 |
Liabilities: | ||
Current operating lease liabilities | 3,119 | 2,853 |
Noncurrent operating lease liabilities | 3,675 | 6,803 |
Operating Lease, Liability | $ 6,794 | $ 9,656 |
Commitments and Contingencies - Lease Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 2,944 | $ 2,942 |
Short-term lease cost | 98 | 93 |
Total lease cost | $ 3,042 | $ 3,035 |
Commitments and Contingencies - Schedule of Maturity of Operating Lease Liabilities (Detail) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Loss Contingencies [Line Items] | ||
2022 | $ 3,466 | |
2023 | 3,287 | |
2024 | 542 | |
Total lease payments | 7,295 | |
Less: Interest | (501) | |
Present value of lease liabilities | 6,794 | $ 9,656 |
Discontinued Operations [Member] | ||
Loss Contingencies [Line Items] | ||
2022 | 1,661 | |
2023 | 1,710 | |
2024 | 286 | |
Total lease payments | 3,657 | |
Less: Interest | (259) | |
Present value of lease liabilities | 3,398 | |
Continuing Operations [Member] | ||
Loss Contingencies [Line Items] | ||
2022 | 1,805 | |
2023 | 1,577 | |
2024 | 256 | |
Total lease payments | 3,638 | |
Less: Interest | (242) | |
Present value of lease liabilities | $ 3,396 |
Commitments and Contingencies - Schedule of Lease Term and Discount Rate (Detail) |
Jan. 01, 2022 |
Jan. 02, 2021 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Weighted-average remaining lease term (in years) | 2 years 1 month 9 days | 3 years 1 month 2 days |
Weighted-average discount rate | 6.40% | 6.39% |
Commitments and Contingencies - Schedule of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 10, 2022 |
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Operating cash outflows from operating leases | $ 2,100 | $ 3,382 | $ 3,332 |
ROU asset impairment expense (reported in discontinued operations) | 1,246 | ||
ROU assets obtained in exchange for new operating lease liabilities | $ 1,200 | $ 128 |
Commitments and Contingencies - Activity in Warranty Provisions Account (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 01, 2022 |
Jan. 02, 2021 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Beginning balance | $ 480 | $ 1,022 |
Expenditures incurred under warranties | (622) | (493) |
Expenditures incurred under warranties included in discontinued operations | (89) | (19) |
Accruals for product warranties | 502 | 237 |
Accruals for product warranties included in discontinued operations | 122 | 43 |
Adjustments to previously existing warranty accruals | 31 | (306) |
Adjustments to previously existing warranty accruals included in discontinued operations | (31) | (4) |
Sale of Photonics division | (47) | |
Ending balance | $ 346 | $ 480 |
Restructuring Charges - Additional Information (Detail) |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jan. 10, 2022
USD ($)
Installment
|
Jan. 02, 2021
USD ($)
|
Sep. 26, 2020
USD ($)
|
Jan. 01, 2022
USD ($)
|
Jan. 02, 2021
USD ($)
|
Jan. 01, 2021
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | ||||||
Percentage of reduction of global workforce | 1.00% | 5.20% | ||||
Reduction in salary, wages and other employee-related expenses due to implementation of plan | $ 864,000,000 | $ 2,000.0 | ||||
Other Employee benefits expense | $ 693,000 | |||||
Asset impairment charges | 1,200,000 | $ 0 | 1,246,000 | $ 1,200,000 | ||
Other Commitment | 665,000 | $ 665,000 | $ 665,000 | |||
Operating cash outflows from operating leases | 2,100,000 | $ 3,382,000 | $ 3,332,000 | |||
Operating lease, first instalment payments | 308,000 | |||||
Operating lease, quarterly instalment payments | $ 259,000 | |||||
Number of operating lease payments | Installment | 7 |
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