Cash, Cash Equivalents and Investments

6 Months Ended

Jul. 01, 2023

Investments All Other Investments [Abstract]

Cash, Cash Equivalents and Investments

8. Cash, Cash Equivalents and Investments

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

	July 1, 2023
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses		Fair Value
	(In thousands)
Cash and cash equivalents:
Cash	$	22,389	$	—	$	—	$	22,389
Money market funds		16,188		—		—		16,188
Commercial paper		5,401		—		2		5,399
Total cash and cash equivalents	$	43,978	$	—	$	2	$	43,976
Short-term investments:
Asset-backed securities	$	1,015	$	—	$	1	$	1,014
Certificates of deposit		1,700		—		1		1,699
Commercial paper		5,212		—		3		5,209
Corporate bonds and medium-term notes		5,673		—		101		5,572
Municipal bonds		1,220		—		13		1,207
U.S. treasury securities		9,024		—		99		8,925
Total short-term investments	$	23,844	$	—	$	218	$	23,626
Long-term investments:
Asset-backed securities	$	3,162	$	—	$	29	$	3,133
Corporate bonds and medium-term notes		2,430		—		13		2,417
Total long-term investments	$	5,592	$	—	$	42	$	5,550
Total cash, cash equivalents, and investments	$	73,414	$	—	$	262	$	73,152

	December 31, 2022
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses		Fair Value
	(In thousands)
Cash and cash equivalents:
Cash	$	26,465	$	—	$	—	$	26,465
Money market funds		9,589		—		—		9,589
Commercial paper		32,856		—		6		32,850
Total cash and cash equivalents	$	68,910	$	—	$	6	$	68,904
Short-term investments:
Asset-backed securities	$	2,012	$	—	$	13	$	1,999
Certificates of deposit		3,850		—		10		3,840
Commercial paper		9,443		—		28		9,415
Corporate bonds and medium-term notes		4,210		—		32		4,178
Municipal bonds		1,486		—		25		1,461
U.S. treasury securities		4,771		—		123		4,648
Total short-term investments	$	25,772	$	—	$	231	$	25,541
Long-term investments:
Asset-backed securities	$	6,749	$	—	$	85	$	6,664
Corporate bonds and medium-term notes		5,366		—		102		5,264
Municipal bonds		224		—		6		218
U.S. treasury and agency securities		5,493		—		54		5,439
Total long-term investments	$	17,832	$	—	$	247	$	17,585
Total cash, cash equivalents, and investments	$	112,514	$	—	$	484	$	112,030

The contractual maturities of investment securities at July 1, 2023 are presented in the following table.

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	45,433	$	45,213
Due after one through five years		5,592		5,550
	$	51,025	$	50,763

We reassess our estimated credit losses on investments each reporting period. U.S. government securities and cash equivalents are under a “zero-loss exception” for credit losses, meaning no credit loss risk calculation is necessary on those instruments due to the exceptionally low rate of default, which continues to decrease as the securities approach maturity. We record changes in the allowance for credit losses for available-for-sale debt securities with a corresponding adjustment in credit loss expense on the consolidated statement of operations. No reversal of a previously recorded allowance for credit losses may be made to an amount below zero. The total allowance for credit losses was $0 at both July 1, 2023 and December 31, 2022.

Our investment portfolio includes both corporate and U.S. government securities that have a maximum maturity of three years. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As yields increase, those securities with a lower yield-at-cost show a mark-to-market unrealized loss. Most of our unrealized losses are due to changes in market interest rates and bond yields. We believe that we have the ability to realize the full value of all these investments upon maturity. As of July 1, 2023, we had 56 investments in a gross unrealized loss position. 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 July 1, 2023.

	July 1, 2023
	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	$	288	$	2	$	3,778	$	28
Certificates of deposit		499		1		—		—
Commercial paper		9,458		5		—		—
Corporate bonds and medium-term notes		3,171		30		4,103		84
Municipal bonds		—		—		1,207		13
U.S. treasury securities		4,025		4		4,900		95
	$	17,441	$	42	$	13,988	$	220

All prices for the fixed maturity securities including U.S. treasury and agency securities, certificates of deposit, commercial paper, corporate bonds, asset-backed securities and municipal bonds are received from independent pricing services utilized by Intevac’s outside investment manager. This investment manager performs a review of the pricing methodologies and inputs utilized by the independent pricing services for each asset type priced by the vendor. In addition, on at least an annual basis, the investment manager conducts due diligence visits and interviews with each pricing vendor to verify the inputs utilized for each asset class. The due diligence visits include a review of the procedures performed by each vendor to ensure that pricing evaluations are representative of the price that would be received if a security were sold 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 July 1, 2023.

	Fair Value Measurements at July 1, 2023
	Total		Level 1		Level 2
	(In thousands)
Recurring fair value measurements:
Investment securities
Money market funds	$	16,188	$	16,188	$	—
U.S. treasury and agency securities		8,925		5,429		3,496
Asset-backed securities		4,147		—		4,147
Certificates of deposit		1,699		—		1,699
Commercial paper		10,608		—		10,608
Corporate bonds and medium-term notes		7,989		—		7,989
Municipal bonds		1,207		—		1,207
Total recurring fair value measurements	$	50,763	$	21,617	$	29,146