Intevac (NASDAQ:IVAC) Announces Restructuring Plans and Strategic Focus

On December 10, 2024, Intevac Inc. filed an 8-K report with the SEC outlining significant changes in its operational strategy. The Board of Directors approved a decision to halt the development and production of the Company’s TRIO product as part of cost-cutting initiatives aimed at reducing ongoing operating expenses while exploring strategic alternatives.

As a result of this action, Intevac is set to eliminate 7 positions, constituting approximately 6% of its workforce, with an estimated cost of about $300,000 for severance and related expenses. The majority of cash outlays associated with this decision are anticipated to occur in the fourth quarter of fiscal 2024.

Moreover, due to the discontinuation of TRIO, the Company foresees recognizing a non-cash charge of around $20 million for inventory write-downs and an additional cash charge of up to $1 million, of which $600,000 relates to purchase order cancellation fees. Intevac also expects to incur non-cash impairment charges between $11 million and $12 million concerning facility lease right of use assets, other intangible assets, and certain equipment. These charges, estimated at $28 million to $35 million, are scheduled for the fourth quarter of fiscal 2024.

Additionally, the Board sanctioned an amendment to the CEO’s employment agreement, outlining severance terms in the event of termination. The amendment extends severance benefits and equity vesting terms, aiming to align the Company’s interests with those of its executives.

Moreover, the Company disclosed plans to initiate a quarterly dividend of $0.05 per share starting in the first quarter of 2025, a move signaling Intevac’s sustained financial strength and commitment to shareholder value. Furthermore, Intevac provided guidance on its cash position and revenue expectations for the end of 2024 and fiscal year 2025, aiming to fortify its balance sheet and pursue sustainable growth opportunities.

Intevac’s long-term strategic transition from TRIO technology to focus on Hard Disk Drive (HDD) activities, particularly Heat-Assisted Magnetic Recording (HAMR) technology, underpins its goal of enhancing profitability and capitalizing on industry advancements. The Company’s updated outlook anticipates significant revenue growth in the HDD segment over the next three years, emphasizing its confidence in the sector’s potential expansion and value.

Lastly, Intevac disclosed that it had engaged Houlihan Lokey Capital to explore strategic alternatives, reflecting its commitment to enhancing shareholder value. The Company formed a Strategic Committee to collaborate with management and advisors in evaluating potential options to optimize shareholder returns.

The complete 8-K filing provides detailed information on Intevac’s structural changes, financial expectations, strategic realignment, and commitment to long-term growth strategies.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Intevac’s 8K filing here.

Intevac Company Profile

Intevac, Inc, together with its subsidiaries, engages in the designing, developing, and manufacturing thin-film processing systems in the United States, Europe, and Asia. It designs, develops, and markets vacuum process equipment solutions for manufacturing small substrates with precise thin-film properties, such as hard disk drive, advanced coatings, and other adjacent thin-film markets.