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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mark Oliver who wrote (5932)	3/26/1999 7:34:00 PM
From: La Traguhs	Read Replies (2) \| Respond to of 9256

Mark and Thread, The "foodchain" continues to work for free! 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.

To: Mark Oliver who wrote (5932)	3/27/1999 1:08:00 AM
From: Stitch	Respond to of 9256

Mark, Egad! Reading yours and Yogi's response made me go back and read my post and I realized it could have been read as petulant. But it was not intended so. <<Maybe you are right that WD is using TSA, but in October it was said they were a year away from a TSA program. Things change quickly.>> I have made a note to find this out. I just sorta assumed it. <<I did find the Inacom warning to be very interesting. They are perhaps experiencing the same problem as HTCH, a little higher up the food chain? The channel is still in trouble as the "direct" model experiences problems?>> I think BTO is a whole lot harder to do then anyone has realized. There has been enormous pressure put on the supply line just when they were the weakest IMO. It is still shaking out. This isn't (and cannot be) just a case of fist pounding negotiations. There is going to have be some real partnering going on which is one of the reasons, IMO, we are seeing some deals announced. When the family jewels go with the deal it puts a little cement in the marriage. But paradigms do not change easy. Even IBM, with an apparent corporate mandate to most of its units that they have to sink or swim on their own, has stumbled a bit if I what I hear is accurate. For example: heads have to match the channel and/or vice versa. You can't drop a GMR head that is used in an IBM drive, directly into a WDC design for example. That involves a lot of give and take. Something these guys may not be used to. It isn't just about price when heads or media are selected. There is a lot to be understood and negotiated including technical parameters which ultimately impact supplier yields which has a direct effect on the bottom line, and so on. Its a complex deal and the complexity tends to add to the time factor. And that is a commodity no one in the DD industry feels they have amply enough. One DD guy told me that they had received a corporate edict to decrease head qualification programs from about 18 weeks to 12 weeks. His continuing headache is "how?". I think that the fact that HTCH felt good about the quarter going in, only to have to warn and do a layoff later is very telling. I would not be surprised if we see more disconnects like that. And I do not necessarily mean to the downside only but the upside as well. We are all at the mercy of the buyer. The user. In other words, we are all at the mercy of ourselves. As Yogi quoted recently: "Cry Havoc!" <G> P.S. Will try to remember to use an emoticon more liberally. best, Stitch