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Company Press Release
SOURCE: Intevac, Inc.
Intevac, Inc. Announces Reduction in Force and Updates Outlook for Q1-99 Financial Results
SANTA CLARA, Calif., March 26 /PRNewswire/ -- Intevac, Inc. (Nasdaq: IVAC - news), a leading supplier of sputtering systems and related equipment used to manufacture thin-film disks for computer hard disk drives, today announced a reduction in force of approximately 10% of its staff and updated its outlook for financial results for the three months ended March 27, 1999.
On January 21, 1999 the Company released its 1998 financial results and the press release explained that the Company was encouraged by improving demand reported by disk drive and media manufacturers, that orders received by the Company during the fourth quarter of 1998 reflected the desire of some of the Company's customers to resume adding capacity, and that the Company was seeing a heightened level of customer interest in its new product offerings, particularly the new MDP-250K disk sputtering system. The Company indicated that the interest in new products, combined with improving industry fundamentals gave the potential to significantly increase revenues in the second half.
On March 26, 1999, Intevac's Chief Executive Officer, Mr. Norman H. Pond, said, ''In January 1999, based on improving financial results reported by much of the disk drive industry, we became cautiously optimistic and forecast a pick up in orders for our disk manufacturing equipment early in 1999, and a resulting increase in revenues in the second half of 1999. This pick up in orders has not occurred during the first quarter of 1999 and, based on customer inputs, this low order rate may continue into the second quarter of 1999. Accordingly, we have decided to make further reductions in our expense level.''
''Today we are completing a reduction in force of approximately 10% of the Company's staff of contract and regular employees. The reductions affect all functional areas that support our disk equipment products. After the reduction in force, Intevac's worldwide staff will total approximately 255 personnel. Severance costs will total approximately $110,000 and will be expensed during the first fiscal quarter of 1999.
''For the three months ending March 27, 1999 we expect to report a net loss per share, including the above charges, that will fall in the range of ($0.20) to ($0.30) diluted. This is consistent with the current range of analyst estimates for loss per share.
''Although I am disappointed with the current low demand for disk manufacturing equipment and the resulting poor financial results, I continue to be optimistic about Intevac's long term prospects. It is clear that the long-term demand for thin film disks will grow and that the performance and quality requirements of those disks will continue to increase at a rapid pace. This creates tremendous challenges and opportunities for producers of disk manufacturing equipment like Intevac. We are also continuing with our diversification efforts in photonics, flat panel display manufacturing equipment, and electron beam processing equipment and expect growth from each of these new product lines this year.''
Intevac will report earnings for the three months ended March 27, 1999 on April 12, 1999.
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