Intevac Investor Presentation Jefferies Semiconductor, IT Hardware & Comm Infrastructure Summit September 1, 2020 Wendell T. Blonigan James P. Moniz Chief Executive Officer Chief Financial Officer POWERING INNOVATION. DELIVERING VALUE. PROPRIETARY PROPRIETARY Jefferies Sep. 1, 2020 Investor Presentation_ 1
Cautionary Disclaimer During the course of this presentation, we will comment upon future events and may make projections about our future financial performance, including statements related to strategies, our expected sales, product shipments and acceptance, gross margin, operating expense, profit, cash flow, income tax expense, and capital allocation. We will discuss our business strategy, our products, the markets our products address, our position in those markets, expected market acceptance of those products and production capacity. We wish to caution you that these are forward looking statements that are based upon our current expectations, and that actual results could differ materially as a result of various risks and uncertainties, including, without limitation, the following: inability to develop and deliver new products as planned; inability to accurately forecast the demand for our products and services; the possibility that orders in backlog may be cancelled, delayed or rescheduled; inability to achieve gross margin and expense goals; and other risk factors discussed in documents filed by us with the Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to update the forward-looking statements made during this presentation. PROPRIETARY Jefferies Sep. 1, 2020 Investor Presentation_ 2
Providing Enabling Technology to Important Markets Intevac is an Essential Business with a Solid Financial Foundation Photonics Thin-Film Equipment Integrated Digital Night Digital Night Mobility Night Vision Vision for Clean Energy Cloud Vision and the for Gen 5 Individual & Advanced Computing Cameras for Internet of Heads Up Ground Semi. Pkg. and Storage Aviation Things Displays Soldier Critical Supplier of Digital Vision Systems Addressing Multiple Large Growth Industries Both Photonics and TFE are Essential Businesses Serving the Critical Defense and IT Industries PROPRIETARY Jefferies Sep. 1, 2020 Investor Presentation_ 3
Photonics: Intevac’s Proprietary Digital Night Vision Intevac’s Digital Night Vision High-Definition Night Technology Enables: Vision - High-Definition Night Imagery - Complete Augmented Reality Capability - Information Overlay - Image Enhancement and Transmission - Fused Infrared and Low Light Imagery Analog Point Source - Low-Halo Operation “Halo” Augmented Reality Overlay Warfighter View, Image Enhancement, and Fused Night Vision and IR Transmission PROPRIETARY Jefferies Sep. 1, 2020 Investor Presentation_ 4
Beneficiary of Major Contract Award for IVAS Program US Army’s IVAS: Integrated Visual Augmentation System • First Dismounted Soldier System that Requires Digital Night Vision • Body-Worn Sensors Support Soldier Performance in All-Digital Day/Night System Awards for 2 Night Vision Camera Development Programs • CMOS Development Award is a Low-Cost/Small Form Factor Low Light Level Camera System • CMOS with Gain Development Award Provides State of the Art Intensified Night Vison Capability • Both Development Programs Leverage Intevac’s ISIE-19 Sensor Currently Under Development Significant Program to be Delivered Through 2021 • $31.5 Million Award Includes Development and Camera Module Units • Over 200,000 Camera Unit Potential Once Fielded to the Dismounted Soldier (100,000 IVAS Systems) PROPRIETARY Jefferies Sep. 1, 2020 Investor Presentation_ 5
Photonics: Solid Core Business, Significant Growth Opportunities, No Impact from COVID-19 Integrated Night Vision Aviation Night Vision Cameras Ground Soldier Night Vision Apache Helicopter F-35 HMD Dismounted Ground Soldier Joint Strike Fighter “IVAS” Digital Night Vision LIVAR F-16 Falcon BAE STRIKER II HMD Eurofighter Aviation Night Vision >$350M Ground Soldier NV >$500M Integrated Night Vision >$500M $2 $37 $90 $69 $173 $39 $224 $372 $428 Prior 5 Yrs. Revenue (2014-2018) Current 5-Yr. Period Revenue (2019-2023E) Revenue Opportunity Beyond 2023 PROPRIETARY Jefferies Sep. 1, 2020 Investor Presentation_ 6
IVAS Program Potential Can Double 5-Year Revenues Photonics Revenue Drivers ~60% of Revenue Over Last 5 Years $350 Driven by Apache and Funded R&D $300 Continued Revenue Pipeline Contribution from Avionics Programs over Next 5 $250 Years PHOTONICS REVENUE ($M) • Apache Upgrades and FMS • LIVAR Program Sustainment and Upgrades $200 • Growing Joint Strike Fighter Program • Increased Contribution from BAE/EVA/NAVAIR $150 Significant Incremental Revenue $100 Opportunity with IVAS • Provides Potential to Double Photonics $50 Revenues over Next 5 Year Time Window $- $1B of Long-Range Revenue Opportunity 2014-2018 2019-2023E Identified Beyond 2023 Prior 5 Years Current 5-Yr Period • Together Comprising ~$1.4 Billion of Revenue Opportunity Contract R&D & Other Apache LIVAR JSF BAE/EVA/NAVAIR Ground Forces PROPRIETARY Jefferies Sep. 1, 2020 Investor Presentation_ 7
Thin Film Equipment: Solid Core Business, Significant Growth Opportunities Common Core Technologies: • High-Productivity Systems Adjacent Adjacent • Small Substrate Processing Markets Markets • High Precision Films with Low CoO MATRIX Advanced Semi Packaging, Advanced Semi Packaging, Solar PVD and Implant, and Emerging Solar PVD and Implant, and Emerging Markets Currently Serving: Markets Offer Additional Growth Potential Markets Offer Additional Growth Potential • HDD Media • Display Cover Panel Display Cover Panel Market Display Cover Panel Market • Solar Cell VERTEX Future Markets Include: • Advanced Packaging Protective and Decorative Coatings Protective and Decorative Coatings • Protective Coatings • EMI Shielding • MRAM Large Incremental Revenue Opportunity Addressing Large Incremental Revenue Opportunity Addressing Demand for More Robust, More Durable, and More Demand for More Robust, More Durable, and More Visually Differentiated Mobile Handsets and Other Visually Differentiated Mobile Handsets and Other Devices Devices 200 Lean Hard Disk Drive Media Market Hard Disk Drive Media Market Stable, Profitable Business Serving Ongoing Technology and Stable, Profitable Business Serving Ongoing Technology and Future Capacity Needs Supporting the Growth of Cloud-Based Future Capacity Needs Supporting the Growth of Cloud-Based Data Storage Data Storage PROPRIETARY Jefferies Sep. 1, 2020 Investor Presentation_ 8
HDD Media: Growth is Driven by Nearline Storage Storage Shipped on HDDs in 2024 will Triple from 2019 Levels Total Industry Exabyte Shipments: HDDs+SSDs 3,000 2,500 2,000 34% 1,500 CAGR 1,000 500 - 2019 2020E 2021E 2022E 2023E 2024E Desktop HDD Mobile HDD CE HDD Traditional Enterprise HDD Nearline HDD Client SSD Enterprise SSD Source –TrendFocus August 2020 estimates PROPRIETARY Jefferies Sep. 1, 2020 Investor Presentation_ 9
Strong Data Center Demand Drove Record Tie Ratio in Q1 COVID-19 Driving Increased Nearline Spend and >10% Increase in Media Units 1H YoY Average # of Disks per Drive Total Industry Exabyte Shipments vs. Forecasted Media Units 3,000 1,300 5.0 1,200 18% QoQ Increase in Additional Additional 1,100 2,500 Q1 Capacity Capacity ~80% ~80% 4.0 Required Required 1,000 Capacity Capacity 26% YoY Exabytes Shipped on HDDs and SSDs by Q4 by Q4 Increase in 900 2020 2,000 800 HDD Media Units 3.0 700 1,500 600 2.0 500 1,000 400 300 1.0 500 200 100 - - - 2019 2020E 2021E 2022E 2023E 2024E 2016 2017 2018 2019 2020 2021 2022 2023 2024 Est. Est. Est. Est. Est. Total HDD Exabytes Total SSD Exabytes Media Forecast Current Media Capacity Source –TrendFocus August 2020 estimates PROPRIETARY Jefferies Sep. 1, 2020 Investor Presentation_ 10
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