SANTA CLARA, Calif. - Intevac , Inc. (NASDAQ:IVAC), a provider of thin-film processing systems, has announced its financial outlook and strategic initiatives, projecting a year-end cash balance of $70-$72 million for 2024 and revenue expectations of $52-$55 million for 2025. The company also plans to initiate a quarterly dividend of $0.05 per share starting in the first quarter of 2025, pending Board approval. According to InvestingPro data, Intevac maintains a strong financial position with a current ratio of 6.41, indicating robust liquidity, while its stock has declined nearly 29% over the past six months.
The company's focus has shifted to the Hard Disk Drive (HDD) sector following the underperformance of its TRIO technology. A one-time charge of up to $35 million was recorded due to the closure of the TRIO business, with anticipated annualized savings contributing to profitability in 2025. This strategic pivot comes as the company seeks to improve its financial performance, with InvestingPro data showing revenue growth of 28.52% in the last twelve months despite current profitability challenges.
Intevac's HDD business is anticipated to generate approximately $200 million in revenue over the next three years, driven by industry-wide adoption of Heat-Assisted Magnetic Recording (HAMR) technology, which is expected to meet the growing demands of data centers and artificial intelligence.
The company has secured a second significant customer for HAMR, with initial upgrades completed. Intevac's restructuring aims to increase efficiency and streamline operations, focusing on its core HDD business. The company's CEO Nigel Hunton expressed confidence in the leadership team and the company's strategy to enable the HDD industry's transition to HAMR.
Furthermore, Intevac has retained Houlihan Lokey (NYSE:HLI) Capital, Inc. to advise on strategic alternatives to increase shareholder value. The company's Board of Directors has also updated its Strategic Committee, now comprising independent directors Kevin Barber, David Dury, and Ryan Vardeman.
While exploring strategic alternatives, Intevac has not set a definitive timetable and does not plan to disclose further developments unless a specific transaction is approved or the review concludes. With a market capitalization of $76.33 million, InvestingPro analysis suggests the stock is currently undervalued. Investors seeking deeper insights can access comprehensive analysis and additional ProTips through InvestingPro's detailed research reports, available for over 1,400 US stocks including Intevac.
This news is based on a press release statement from Intevac, a company with over three decades of experience in the HDD industry, known for its 200 Lean® platform and partnership with HDD customers. The company's forward-looking statements involve risks and uncertainties that could impact financial results and market capitalization.
In other recent news, Intevac Inc. reported a noteworthy surge in its third-quarter financial results for 2024, with revenues reaching $28.5 million, significantly exceeding the anticipated $10.5 million to $12 million. This increase included a substantial $15 million from the settlement of a customer's inventory obligation. The company's Q3 gross margin was reported at 24.8%, with the underlying business gross margin around 45%.
In light of recent developments, Intevac is forecasting Q4 revenues to fall between $9 million and $10.5 million, with gross margins expected at 30% to 32%. Looking ahead, the company targets a fiscal 2025 revenue baseline of $50 million, primarily driven by the HDD upgrade market. A 19% reduction in global headcount is also planned to enhance profitability.
However, the company reported a Q3 net loss of $0.08 per share and anticipates a Q4 loss of $0.19 to $0.21 per share. Despite this, Intevac ended Q3 with cash and investments totaling $72.1 million. The company's forward-looking statements reveal a focus on the HDD upgrade market and a strategic reduction in global headcount to bolster profitability.
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