Segment Reporting

3 Months Ended

Mar. 28, 2020

13.	Segment Reporting

Intevac’s

two

reportable segments are: TFE and Photonics. Intevac’s chief operating decision-maker has been identified as the President and CEO, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Segment information is presented based upon Intevac’s management organization structure as of March 28, 2020 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to the reportable segments disclosed.

Each reportable segment is separately managed and has separate financial results that are reviewed by Intevac’s chief operating decision-maker. Each reportable segment contains closely related products that are unique to the particular segment. Segment operating profit is determined based upon internal performance measures used by the chief operating decision-maker.

Intevac derives the segment results from its internal management reporting system. The accounting policies Intevac uses to derive reportable segment results are substantially the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics, including orders, net revenues and operating income. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. Intevac manages certain operating expenses separately at the corporate level. Intevac allocates certain of these corporate expenses to the segments in an amount equal to

% of net revenues. Segment operating income excludes interest income/expense and other financial charges and income taxes according to how a particular reportable segment’s management is measured. Management does not consider impairment charges, gains and losses on divestitures and sales of intellectual property, and unallocated costs in measuring the performance of the reportable segments.

The TFE segment designs, develops and markets vacuum process equipment solutions for high-volume manufacturing of small substrates with precise thin-film properties, such as for the hard drive, solar cell and DCP industries, as well as other adjacent thin-film markets.

The Photonics segment develops compact, cost-effective, high-sensitivity digital-optical products for the capture and display of

low-light

images. Intevac provides sensors, cameras and systems for government applications such as night vision.

Information for each reportable segment for the three months ended March 28, 2020 and March 30, 2019 is as follows:

Net Revenues


	Three Months Ended
	March 28, 2020		March 30, 2019
	(In thousands)
TFE	$	7,962	$	18,945
Photonics		10,878		5,882

Total segment net revenues	$	18,840	$	24,827

Operating Income (Loss)


	Three Months Ended
	March 28, 2020			March 30, 2019
	(In thousands)
TFE	$	(2,531	)	$	(603	)
Photonics		2,912			(640	)

Total segment operating income (loss)		381			(1,243	)
Unallocated costs		(1,481	)		(756	)

Loss from operations		(1,100	)		(1,999	)
Interest income and other income (expense), net		142			160

Loss before provision for income taxes	$	(958	)	$	(1,839	)

Total assets for each reportable segment as of March 28, 2020 and December 28, 2019 are as follows:

Assets


	March 28, 2020		December 28, 2019
	(In thousands)
TFE	$	46,007	$	51,153
Photonics		23,487		22,071

Total segment assets		69,494		73,244

Cash, cash equivalents and investments		42,440		42,024
Restricted cash		787		787
Deferred income taxes		6,138		6,252
Other current assets		1,195		752
Common property, plant and equipment		1,531		1,307
Common operating lease right-of-use assets		1,794		1,898
Other assets		—		78

Consolidated total assets	$	123,379	$	126,322