##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number 0-26946
 INTEVAC, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

94-3125814(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer Identification
    No.)   3560 Bassett Street
 Santa Clara, California 95054
 (Address of principal executive
    office, including Zip Code)
  Registrants telephone number, including area code:
    (408) 986-9888
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock ($0.001 par value)

The Nasdaq Stock Market LLC (NASDAQ Global Select)   Securities registered pursuant to Section 12(g) of the
    Act:
 None.
    o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o

Smaller reporting
    company o(Do not check if a smaller
    reporting company)   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE.
  Form 10-K.




---





TABLE OF CONTENTS  PART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataPrinciples of Consolidation and Basis of PresentationItem 9. Changes In and Disagreements With Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresChanges in Internal Control over Financial ReportingItem 9B. Other InformationPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEX-21.1EX-23.1EX-23.2EX-31.1EX-31.2EX-32.1    Table of Contents   CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K Form 10-K)
   
  PART I
 
  Item 1.
    Business  Overview
    Equipment:
  Intevac Photonics:
    Equipment
    Segment
  Hard
    Disk Drive Equipment Market
   2




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®
    Hard
    Disk Drive Equipment Products
  Disk
    Sputtering Systems
            Disk
    Lubrication Systems
     3




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tm
  Deposition
    System
  tm
  Non-Systems
    Business
    Semiconductor
    Equipment Market
          Semiconductor
    Manufacturing Products
  tm
      Solar
    Market
   4




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state-of-the-art,
  Solar
    Manufacturing Product
  tm
  Intevac
    Photonics Segment
  Intevac
    Photonics Market
    Military
    Products
  Night
    Vision Systems
  ®
 5




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Digital
    Enhanced Night Vision Goggle
    Night
    Port
  tm
  LIVAR
  ®
  Intensified
    Photodiodes
    Near-Eye
    Display Systems
  field-of-view tm
  Commercial
    Products
  ®
 6




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Handheld
    Raman Materials Identification Instruments
  tm tm tm
  Laboratory
    Instruments
  tm
  Low-Light
    Cameras
  ® ® signal-to-noise
  Backlog
    Customer
    Concentration
      Competition
   7




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Marketing
    and Sales
      and/or and/or
   8




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start-up
      state-of-the-art.
      Research
    and Development and Intellectual Property
       9




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and/or
  Manufacturing
      Employees
    Compliance
    with Environmental Regulations
   10




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Executive
    Officers of the Registrant
    Name

Age

PositionExecutive Officers:Norman H. Pond


71


Chairman of the BoardKevin Fairbairn


56


President and Chief Executive OfficerJeffrey Andreson


48


Executive Vice President, Finance and Administration, Chief
    Financial Officer, Treasurer and SecretaryMichael Russak


63


Executive Vice President and General Manager, Hard Disk
    Equipment ProductsLuke Marusiak


47


Executive Vice President and General Manager, Emerging Equipment
    ProductsKimberly Burk


44


Vice President, Human ResourcesJoseph Pietras


55


Executive Vice President and General Manager, Intevac PhotonicsOther Key Officers:Verle Aebi


55


Chief Technology Officer, Intevac PhotonicsJames Birt


45


Vice President, Manufacturing and Customer Support, Equipment
    ProductsTerry Bluck


50


Vice President, Technology, Equipment ProductsJerry Carollo


56


Vice President and General Manager, Intevac Vision SystemsTimothy Justyn


47


Vice President of Operations, Intevac PhotonicsMichael Kayat


57


Vice President and General Manager, DeltaNuDave Kelly


47


Vice President, Engineering, Intevac Vision Systems   Mr. Pond
  Mr. Fairbairn
  Mr. Andreson
  Dr. Russak
 11




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Mr. Marusiak
  Ms. Burk
  Dr. Pietras
  Mr. Aebi
  Mr. Birt
  Mr. Bluck
  Mr. Carollo
  Mr. Justyn
  Dr. Kayat
 12




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start-ups
  Mr. Kelly
  Available
    Information
  http://www.intevac.com.
  Trade
    Marks
  ® tm ® ® tm tm tm tm tm ® ® ® ® tm tm
 
  Item 1A.
    Risk
    Factors    The
    industries we serve are cyclical, volatile and
    unpredictable.
       13




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Sales
    of our equipment are primarily dependent on our customers
    upgrade and capacity expansion plans and whether our customers
    select our equipment.
    state-of-the-art
      We are
    exposed to risks associated with a highly concentrated customer
    base.
      Our
    growth depends on development of technically advanced new
    products and processes.
   14




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Our
    operating results fluctuate significantly from quarter to
    quarter, which can lead to volatility in the price of our common
    stock.
      and/or
  The
    liquidity of our auction rate securities is impaired, which
    could impact our ability to meet cash requirements and require
    additional debt financing.
   15




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and/or other-than-temporary
    Adverse
    economic conditions and volatility and disruption of the capital
    and credit markets may negatively impact our revenues and our
    ability to access financing.
      We may
    be subject to additional impairment charges due to potential
    declines in the fair value of our assets.
   16




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We
    operate in an intensely competitive marketplace, and our
    competitors have greater resources than we do.
    We may
    not be able to obtain export licenses from the U.S. government
    permitting delivery of our products to international
    customers.
    The
    Intevac Photonics business is dependent on U.S. government
    contracts, which are subject to fixed pricing, immediate
    termination and a number of procurement rules and
    regulations.
     17




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Changes
    to our effective tax rate affect our results of
    operations.
      Our
    success depends on international sales and the management of
    global operations.
    and/or
 18




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Our
    success is dependent on recruiting and retaining a highly
    talented work force.
      We are
    dependent on certain suppliers for parts used in our
    products.
  sub-assemblies
  Our
    business depends on the integrity of our intellectual property
    rights.
      We
    could be involved in litigation.
   19




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Difficulties
    in integrating past or future acquisitions could adversely
    affect our business.
    We use
    hazardous materials and are subject to risks of non-compliance
    with environmental and safety regulations.
    Business
    interruptions could adversely affect our
    operations.
    We are
    required to evaluate our internal control over financial
    reporting under Section 404 of the Sarbanes-Oxley Act of
    2002, and any adverse results from such evaluation could result
    in a loss of investor confidence in our financial reports and
    have an adverse effect on our stock price.
  Form 10-K
 20




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Item 1B.
    Unresolved
    Staff Comments   
  Item 2.
    Properties    Location

Square Footage


Principal UseSanta Clara, CA


169,583


Corporate Headquarters; Equipment and Intevac Photonics
    Marketing, Manufacturing, Engineering and Customer SupportFremont, CA


9,505


Intevac Photonics Sensor FabricationLaramie, WY


12,000


Intevac Photonics Raman Spectrometer ManufacturingCarlsbad, CA


10,360


Intevac Photonics Micro Display Product ManufacturingSingapore


31,947


Equipment Manufacturing and Customer SupportMalaysia


1,291


Equipment Customer SupportShenzhen, China


2,568


Equipment Customer Support    
  Item 3.
    Legal
    Proceedings     21




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Item 4.
    Submission
    of Matters to a Vote of Security Holders   22




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PART II
 
  Item 5.Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities
  Price
    Range of Common Stock
      High

LowFiscal 2009:First Quarter

$
5.73


$
3.43Second Quarter


8.65



5.02Third Quarter


13.14



7.45Fourth Quarter


13.45



10.00Fiscal 2008:First Quarter

$
14.28


$
10.14Second Quarter


17.46



11.16Third Quarter


13.32



9.50Fourth Quarter


10.64



3.93   Recent
    Sales of Unregistered Securities
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
    Performance
    Graph
   23




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COMPARISON
    OF CUMULATIVE TOTAL RETURN SINCE DECEMBER 31, 2004
    AMONG INTEVAC, NASDAQ STOCK MARKET TOTAL RETURN INDEX AND
    NASDAQ COMPUTER MANUFACTURERS TOTAL RETURN INDEX
  
  12/31/04


12/31/05


12/30/06


12/29/07


12/31/08


12/31/09Intevac, Inc.


$
100



$
175



$
343



$
192



$
67



$
152Nasdaq Stock Market Total Return Index



100




102




112




122




59




84Nasdaq Computer Manufacturers Total Return Index



100




102




105




153




64




141  
  Item 6.
    Selected
    Financial Data    Year Ended December 31,2009

2008

2007

2006

2005(In thousands, except per share data)Net revenues

$
77,981


$
110,307


$
215,834


$
259,875


$
137,229Gross profit

$
32,720


$
43,339


$
96,043


$
100,959


$
43,578Operating income (loss)

$
(17,347
)

$
(30,471
)

$
27,436


$
47,999


$
14,717Net income (loss)

$
(10,077
)

$
(15,345
)

$
27,345


$
46,698


$
16,151Earnings (loss) per share:Basic

$
(0.46
)

$
(0.71
)

$
1.28


$
2.22


$
0.79Diluted

$
(0.46
)

$
(0.71
)

$
1.23


$
2.13


$
0.76At year end:Total assets

$
203,378


$
189,169


$
215,413


$
206,003


$
130,444Long-term debt

$



$



$
1,898


$



$
  23




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K. Form 10-K.
  
    Overview: a summary of Intevacs business,
    measurements and opportunities.
    Results of Operations: a discussion of operating results.
    Liquidity and Capital Resources: an analysis of cash
    flows, sources and uses of cash, contractual obligations and
    financial position.
    Critical Accounting Policies: a discussion of critical
    accounting policies that require the exercise of judgments and
    estimates.  Overview
  tm
  tm
    % Change

% ChangeFiscal Year

2009

2008

2007

2009 vs. 2008

2008 vs. 2007(In thousands, except percentages and per share amounts)Net revenues

$
77,981


$
110,307


$
215,834



(29.3
)%


(48.9
)%Gross profit


32,720



43,339



96,043



(24.5
)%


(54.9
)%Gross margin percent


42.0
%


39.3
%


44.5
%


2.7
%


(5.2
)%Net income (loss)


(10,077
)


(15,345
)


27,345



34.3
%


(156.1
)%Earnings (loss) per diluted share

$
(0.46
)

$
(0.71
)

$
1.23



35.2
%


(157.7
)%    24




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##### Table of Contents



Results
    of Operations
  Net
    revenues
  Years Ended December 31,


% Change


% Change2009


2008


2007


2009 vs. 2008


2008 vs. 2007(In thousands, except percentages)Equipment

$
51,389


$
87,469


$
196,686



(41.2
)%


(55.5
)%Intevac Photonics


26,592



22,838



19,148



16.4
%


19.3
%Total net revenues

$
77,981


$
110,307


$
215,834



(29.3
)%


(48.9
)%      25




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®
         26




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Gross
    margin
  Years Ended December 31,

% Change

% Change2009

2008

2007

2009 vs. 2008

2008 vs. 2007(In thousands, except percentages)Equipment gross profit

$
23,266


$
35,797


$
87,885



(35.0
)%


(59.3
)%% of Equipment net revenues


45.3
%


40.9
%


44.7
%Intevac Photonics gross profit

$
9,454


$
7,542


$
8,158



25.4
%


(7.6
)%% of Intevac Photonics net revenues


35.6
%


33.0
%


42.6
%Total gross profit

$
32,720


$
43,339


$
96,043



(24.5
)%


(54.9
)%% of net revenues


42.0
%


39.3
%


44.5
%         Research
    and development
  Years Ended December 31,

% Change

% Change2009

2008

2007

2009 vs. 2008

2008 vs. 2007(In thousands, except percentages)Research and development expense

$
28,064


$
35,083


$
40,137



(20.0
)%


(12.6
)%% of net revenues


36.0
%


31.8
%


18.6
%      27




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Selling,
    general and administrative
  Years Ended December 31,

% Change

% Change2009

2008

2007

2009 vs. 2008

2008 vs. 2007(In thousands, except percentages)Selling, general and administrative expense

$
22,003


$
28,229


$
28,470



(22.1
)%


(0.9
)%% of net revenues


28.2
%


25.6
%


13.2
%       Global
    cost reduction plan
    Impairment
    of goodwill and intangibles
     28




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##### Table of Contents



Interest
    income and other, net
  Years Ended December 31,

% Change

% Change2009

2008

2007

2009 vs. 2008

2008 vs. 2007(In thousands, except percentages)Interest income and other, net

$
1,254


$
3,932


$
8,142



(68.1
)%


(51.7
)%     Provision
    for (benefit from) income taxes
  Years Ended December 31,

% Change

% Change2009

2008

2007

2009 vs. 2008

2008 vs. 2007(In thousands, except percentages)Provision for (benefit from) income taxes

$
(6,016
)

$
(11,194
)

$
8,233



46.3
%


(236.0
)%  29




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Business
    Combinations
          Recent
    Accounting Pronouncements
  No. 33-9002, Form 10-Q.
   30




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Liquidity
    and Capital Resources
      December 31,


December 31,2009


2008(In thousands)Cash and cash equivalents

$
17,592


$
39,201Short-term investments


6,000



Long-term investments


66,249



66,328Total cash, cash-equivalents and investments

$
89,841


$
105,529      31




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32




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##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodTotal


< 1 Year


1-3 Years


3-5 Years


> 5 Years(In thousands)Operating lease obligations

$
5,422


$
2,340


$
3,082


$



$
Purchase obligations and commitments(1)


13,071



13,071











Other long-term liabilities(2)


252



252











Total(3)

$
18,745


$
15,663


$
3,082


$



$
    (1)
    
    Purchase obligations include agreements to purchase goods or
    services that are enforceable and legally binding on Intevac and
    that specify all significant terms, including fixed or minimum
    quantities to be purchased; fixed, minimum or variable price
    provisions; and the approximate timing of the transaction.
    Purchase obligations exclude agreements that are cancelable
    without penalty. These purchase obligations are related
    principally to inventory and other items.(2)
    
    Intevac is unable to reliably estimate the timing of future
    payments related to uncertain tax positions; therefore, $782,000
    of unrecognized tax benefits has been excluded from the table
    above.(3)
    
    Total excludes contractual obligations already recorded on the
    consolidated balance sheet as current liabilities (except other
    long-term liabilities) and certain purchase obligations.  Off-Balance
    Sheet Arrangements
  Regulation S-K).
  Critical
    Accounting Policies
       33




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Revenue
    Recognition
      Inventories
    Warranty
   34




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Income
    Taxes
        Goodwill
    and Purchased Intangible Assets
     35




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##### Table of Contents



Equity-Based
    Compensation
    
 Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest rate risk.
    Fair2010

2011

2012

Beyond

Total

Value(In thousands, except percentages)Cash equivalentsFixed rate amounts

$
9,255














$
9,255


$
9,255Weighted-average rate


0.02
%










Short-term investmentsFixed rate amounts

$
6,000














$
6,000


$
6,000Weighted-average rate


0.06
%










Long-term investmentsFixed rate amounts













$
69,950


$
69,950


$
66,249Weighted-average rate














1.9
%Total investment portfolio

$
15,255










$
69,950


$
85,205


$
81,504         Foreign exchange risk.
 36




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  INTEVAC,
    INC.
  CONSOLIDATED
    FINANCIAL STATEMENTS
  Contents
  PageReport of Independent Registered Public Accounting Firm


38Consolidated Balance Sheets


39Consolidated Statements of Operations


40Consolidated Statement of Stockholders Equity and
    Comprehensive Income (Loss)


41Consolidated Statements of Cash Flows


42Notes to Consolidated Financial Statements


43  37




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REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
           Internal Control 
    Integrated Framework
      38




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INTEVAC,
    INC.
    CONSOLIDATED BALANCE
    SHEETS
 December 31,2009


2008(In thousands, except par value)ASSETSCurrent assets:Cash and cash equivalents

$
17,592


$
39,201Short-term investments


6,000



Trade and other accounts receivable, net of allowances of $133
    and $145 at December 31, 2009 and 2008, respectively


44,756



15,014Inventories


19,100



17,674Prepaid expenses and other current assets


6,687



4,806Deferred income tax assets


1,515



3,204Total current assets


95,650



79,899Property, plant and equipment, net


12,351



14,886Long-term investments


66,249



66,328Goodwill


7,905



7,905Other intangible assets, net of amortization of $1,248 and $693
    at December 31, 2009 and 2008, respectively


3,537



4,054Deferred income taxes and other long-term assets


17,686



16,097Total assets

$
203,378


$
189,169LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Note payable

$



$
2,000Accounts payable


4,701



4,214Accrued payroll and related liabilities


2,784



3,395Other accrued liabilities


11,104



3,175Customer advances


13,180



2,807Total current liabilities


31,769



15,591Other long-term liabilities


252



509Commitments and contingenciesStockholders equity:Undesignated preferred stock, $0.001 par value,
    10,000 shares authorized, no shares issued and outstanding






Common stock, $0.001 par value :Authorized shares  50,000 issued and outstanding
    shares  22,079 and 21,805 at December 31, 2009
    and 2008, respectively


22



22Additional
    paid-in-capital


134,071



128,686Accumulated other comprehensive loss


(1,828
)


(4,808
)Retained earnings


39,092



49,169Total stockholders equity


171,357



173,069Total liabilities and stockholders equity

$
203,378


$
189,169    39




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##### Table of Contents



INTEVAC,
    INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS
  Years Ended December 31,2009


2008


2007(In thousands, except per share amounts)Net revenues:Systems and components

$
61,893


$
95,962


$
202,292Technology development


16,088



14,345



13,542Total net revenues


77,981



110,307



215,834Cost of net revenues:Systems and components


36,172



58,503



112,376Technology development


9,089



8,465



7,415Total cost of net revenues


45,261



66,968



119,791Gross profit


32,720



43,339



96,043Operating expenses:Research and development


28,064



35,083



40,137Selling, general and administrative


22,003



28,229



28,470Impairment of goodwill and intangible assets






10,498



Total operating expenses


50,067



73,810



68,607Operating income (loss)


(17,347
)


(30,471
)


27,436Interest income


1,362



3,968



6,544Other income (expense), net


(108
)


(36
)


1,598Income (loss) before income taxes


(16,093
)


(26,539
)


35,578Provision (benefit) for income taxes


(6,016
)


(11,194
)


8,233Net income (loss)

$
(10,077
)

$
(15,345
)

$
27,345Net income (loss) per share:Basic

$
(0.46
)

$
(0.71
)

$
1.28Diluted

$
(0.46
)

$
(0.71
)

$
1.23Weighted average shares outstanding:Basic


21,975



21,724



21,447Diluted


21,975



21,724



22,150    40




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##### Table of Contents



INTEVAC,
    INC.
    CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY AND
    COMPREHENSIVE INCOME (LOSS)
  Accumulated


RetainedAdditional


Other


Earnings


TotalCommon Stock


Paid-In


Comprehensive


(Accumulated


StockholdersShares


Amount


Capital


Income (Loss)


Deficit)


Equity(In thousands)Balance at December 31, 2006


21,188


$
99,468


$
7,319


$
354


$
37,169


$
144,310Shares issued in connection with:Exercise of stock options


313



2,141



353











2,494Employee stock purchase plan


90



671



704











1,375Reclassification of par value for Delaware






(102,258
)


102,258











Income tax benefits realized from activity in employee stock
    plans










3,009











3,009Equity-based compensation expense










6,379











6,379Net income


















27,345



27,345Foreign currency translation adjustment














251







251Comprehensive income






















27,596Balance at December 31, 2007


21,591


$
22


$
120,022


$
605


$
64,514


$
185,163Shares issued in connection with:Exercise of stock options


48







322











322Employee stock purchase plan


166







1,516











1,516Income tax benefits realized from activity in employee stock
    plans










327











327Equity-based compensation expense










6,499











6,499Net loss


















(15,345
)


(15,345
)Unrealized loss on securities held as
    available-for-sale














(8,072
)






(8,072
)Deferred taxes on unrealized loss on
    available-for-sale
    securities














2,825







2,825Foreign currency translation adjustment














(166
)






(166
)Comprehensive loss






















(20,758
)Balance at December 31, 2008


21,805


$
22


$
128,686


$
(4,808
)

$
49,169


$
173,069Shares issued in connection with:Exercise of stock options


34







223











223Employee stock purchase plan


240







899











899Income tax benefits realized from activity in employee stock
    plans










69











69Equity-based compensation expense










4,194











4,194Net loss


















(10,077
)


(10,077
)Unrealized gain on securities held as
    available-for-sale














4,371







4,371Deferred taxes on unrealized gain on
    available-for-sale
    securities














(1,529
)






(1,529
)Foreign currency translation adjustment














138







138Comprehensive loss






















(7,097
)Balance at December 31, 2009


22,079


$
22


$
134,071


$
(1,828
)

$
39,092


$
171,357    41




---



##### Table of Contents



INTEVAC,
    INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
  Years Ended December 31,2009


2008


2007(In thousands)Operating activitiesNet income (loss)

$
(10,077
)

$
(15,345
)

$
27,345Adjustments to reconcile net income (loss) to net cash and cash
    equivalents provided by (used in) operating activities:Depreciation & amortization


5,031



4,709



4,203Net accretion of investment premiums and discounts


(20
)


(256
)


(175
)Impairment of goodwill and intangible assets






10,498



Amortization of intangible assets


554



700



218Equity-based compensation


4,255



6,577



6,270Deferred income taxes


(87
)


(8,002
)


(1,654
)Excess tax benefits from equity-based compensation


(69
)


(327
)


(3,009
)Loss on disposal of equipment


57



7



Changes in assets and liabilities:Accounts receivable


(28,935
)


765



26,687Inventories


(1,411
)


4,434



16,657Prepaid expenses and other assets


(3,177
)


(100
)


(2,537
)Accounts payable


441



(3,468
)


(8,671
)Accrued payroll and other accrued liabilities


6,902



(5,475
)


(3,964
)Customer advances


9,967



(2,911
)


(20,736
)Total adjustments


(6,492
)


7,151



13,289Net cash and cash equivalents provided by (used in) operating
    activities


(16,569
)


(8,194
)


40,634Investing activitiesPurchase of investments


(26,979
)


(7,000
)


(175,624
)Proceeds from sales and maturities of investments


25,450



45,850



126,400Sale of investment in 601 California Avenue LLC










2,431Acquisition of Oerlikon assets, net of cash acquired






(15,093
)


Acquisition of DeltaNu, LLC, net of cash acquired










(2,083
)Acquisition of Creative Display Systems, LLC, net of cash
    acquired










(4,782
)Purchase of equipment


(2,615
)


(4,185
)


(5,735
)Net cash and cash equivalents provided by (used in) investing
    activities


(4,144
)


19,572



(59,393
)Financing activitiesProceeds from issuance of common stock


1,122



1,838



3,869Repayment of note payable


(2,000
)


(2,000
)


Excess tax benefits from equity-based compensation


69



327



3,009Net cash and cash equivalents provided by (used in) financing
    activities


(809
)


165



6,878Effect of exchange rate changes on cash


(87
)


(15
)


114Net increase (decrease) in cash and cash equivalents


(21,609
)


11,528



(11,767
)Cash and cash equivalents at beginning of period


39,201



27,673



39,440Cash and cash equivalents at end of period

$
17,592


$
39,201


$
27,673Cash paid (received) for:Income taxes

$
713


$
410


$
11,644Income tax refund

$
(2,821
)

$
(3,717
)

$
(259
)Other non-cash changes:Notes payable issued for the acquisition of DeltaNu, LLC

$



$



$
3,720    42




---



##### Table of Contents



INTEVAC,
    INC.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Summary
    of Significant Accounting Policies 
  Principles
    of Consolidation and Basis of Presentation
      Cash,
    Cash Equivalents and Investments
  Available-for-sale available-for-sale Held-to-maturity
  Fair
    Value Measurement  Definition and
    Hierarchy
  820-10,
    Level 1
  Level 2
  Level 3
    Trade
    Receivables and Doubtful Accounts
   43




---



##### Table of Contents



Inventories
    Property,
    Plant and Equipment
    Goodwill
    and Purchased Intangible Assets
       44




---



##### Table of Contents



Impairment
    of Long-Lived Assets
    Income
    Taxes
          Sales
    and Value Added Taxes
    Revenue
    Recognition
   45




---



##### Table of Contents



percentage-of-completion
  Advertising
    Costs
    Foreign
    Currency Translation
    Comprehensive
    Income
    December 31,2009


2008(In thousands)Accumulated net unrealized holding loss on
    available-for-sale
    investments, net of tax

$
(2,405
)

$
(5,247
)Foreign currency translation gains and losses


577



439Total accumulated other comprehensive income (loss)

$
(1,828
)

$
(4,808
)   Employee
    Stock Plans
    Recent
    Accounting Pronouncements
  No. 33-9002,
 46




---



##### Table of Contents



Form 10-Q.
        2.
    Equity-Based
    Compensation    Descriptions
    of Plans
  2004
    Equity Incentive Plan
     47




---



##### Table of Contents



2003
    Employee Stock Purchase Plan
      2009


2008


2007Equity-based compensation by type of award:Stock options

$
3,418


$
5,252


$
5,517Employee stock purchase plan


776



1,247



864Amounts released to cost of sales (capitalized as inventory)


61



78



(111
)Total equity-based compensation


4,255



6,577



6,270Tax effect on equity-based compensation


(1,224
)


(1,785
)


(1,882
)Net effect on net income

$
3,031


$
4,792


$
4,388    48




---



##### Table of Contents



Stock
    Options
    2009


2008


2007Stock Options:Expected volatility


67.17
%


65.60
%


66.67
%Risk free interest rate


2.01
%


2.87
%


4.05
%Expected term of options (in years)


4.47



4.47



4.49Dividend yield


None



None



None       ESPP
    2009


2008


2007Stock Purchase Rights:Expected volatility


82.56
%


62.65
%


63.15
%Risk free interest rate


0.85
%


1.68
%


3.94
%Expected term of purchase rights (in years)


1.85



1.87



1.97Dividend yield


None



None



None    49




---



##### Table of Contents



Stock
    Plan Activity
  2004
    Equity Incentive Plan
    WeightedAverage RemainingWeighted Average

Contractual Term

Aggregate IntrinsicShares

Exercise Price

(years)

ValueOptions outstanding at December 31, 2008


2,926,411


$
12.83



7.13


$
683,649Options granted


536,025


$
4.76Options forfeited


(317,064
)

$
12.89Options exercised


(34,158
)

$
6.54Options outstanding at December 31, 2009


3,111,214


$
11.50



6.43


$
7,744,629Vested and expected to vest at December 31, 2009


2,932,870


$
11.60



6.30


$
7,202,315Options exercisable at December 31, 2009


1,827,023


$
11.94



5.03


$
4,299,791       Options OutstandingWeighted Average





Options ExercisableRemaining





NumberNumber of Shares


Contractual Term


Weighted Average


Vested and


Weighted AverageRange of Exercise Prices

Outstanding


(In Years)


Exercise Price


Exercisable


Exercise Price$2.63 - $4.06






679,924



6.20


$
3.48







303,449


$
2.95$4.07 - $7.72






379,650



5.26


$
7.06







295,775


$
7.20$7.73 - $10.69






210,290



5.66


$
9.09







175,603


$
9.18$10.70 - $15.40






792,025



7.82


$
12.34







321,320


$
12.39$15.41 - $15.81






103,875



0.81


$
15.80







100,500


$
15.80$15.82 - $16.13






573,700



6.67


$
16.12







369,376


$
16.13$16.14 - $22.01






221,750



6.84


$
19.77







162,500


$
19.76$22.12 - $29.45






150,000



6.59


$
25.15







98,500


$
24.76$2.63 - $29.45






3,111,214



6.43


$
11.50







1,827,023


$
11.94   2003
    Employee Stock Purchase Plan
   50




---



##### Table of Contents



3.
    Earnings
    Per Share      2009


2008


2007(In thousands)Numerator:Numerator for diluted earnings per share  income
    (loss) available to common stockholders

$
(10,077
)

$
(15,345
)

$
27,345Denominator:Denominator for basic earnings per share 
    weighted-average shares


21,975



21,724



21,447Effect of dilutive securities:Employee stock options(1)










703Dilutive potential common shares










703Denominator for diluted earnings per share  adjusted


21,975



21,724



22,150     (1)
    
    Potentially dilutive securities, consisting of shares issuable
    upon exercise of employee stock options, are excluded from the
    calculation of diluted EPS if their effect would be
    anti-dilutive. The weighted average number of employee stock
    options excluded from the twelve-month periods ended
    December 31, 2009, 2008, and 2007 was 3,150,397, 2,760,874,
    and 784,684 respectively.  4.
    Concentrations  Credit
    Risk and Significant Customers
        Products
   51




---



##### Table of Contents



5.
    Balance
    Sheet Details    Inventory
    December 31,2009


2008(In thousands)Raw materials

$
10,147


$
10,470Work-in-progress


4,421



4,932Finished goods


4,532



2,272$
19,100


$
17,674       Property,
    Plant and Equipment
  December 31,2009


2008(In thousands)Leasehold improvements

$
13,964


$
13,834Machinery and equipment


30,577



28,26344,541



42,097Less accumulated depreciation and amortization


32,190



27,211Total property, plant and equipment, net

$
12,351


$
14,886   Customer
    Advances
   52




---



##### Table of Contents



Other
    Accrued Liabilities
  December 31,2009


2008(In thousands)Deferred revenue

$
7,283


$
588Other taxes payable


1,776



517Accrued product warranties


1,550



1,286Accrued income taxes


53



421Other


442



363Total other accrued liabilities

$
11,104


$
3,175   6.
    Goodwill
    and Purchased Intangible Assets, Net    IntevacEquipment


Photonics


Total(In thousands)Balance as of December 31, 2007

$



$
7,905


$
7,905Goodwill acquired during the period


9,768







9,768Impairment charges


(9,689
)






(9,689
)Foreign exchange


(79
)






(79
)Balance as of December 31, 2008

$



$
7,905


$
7,905Goodwill acquired during the period










Impairment charges










Balance as of December 31, 2009

$



$
7,905


$
7,905         December 31, 2009


December 31, 2008Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


Amount(In thousands)Customer relationships

$
3,181


$
677


$
2,504


$
3,152


$
282


$
2,870Purchased technology


1,145



243



902



1,136



101



1,035Covenants not to compete


140



129



11



140



111



29Backlog


199



199







199



199



Total amortizable intangible assets


4,665



1,248



3,417



4,627



693



3,934Indefinite life tradename


120







120



120







120Total intangible assets

$
4,785


$
1,248


$
3,537


$
4,747


$
693


$
4,054  53




---



##### Table of Contents



7.
    Business
    Combinations           54




---



##### Table of Contents



8.
    Financial
    Instruments      December 31,


December 31,2009


2008(In thousands)Carrying value:Short-term investments-U.S. treasury bills

$
6,000


$
Long-term investments-ARS


66,249



66,328Total investments in debt securities

$
72,249


$
66,328Approximate fair value of investments in debt securities

$
72,249


$
66,328     97-98%
    other-than-temporary. other-than-temporary
 55




---



##### Table of Contents



available-for-sale
    Investment securities at January 1, 2008





$
81,450Net unrealized gains and losses included in earnings






Net unrealized gains and losses included in other comprehensive
    income






(8,072
)Purchases






7,000Settlements






(14,050
)Investment securities at December 31, 2008






66,328Net unrealized gains and losses included in earnings






Net unrealized gains and losses included in other comprehensive
    income






4,371Settlements






(4,450
)Investment securities at December 31, 2009





$
66,249   9.
    Equity
    Investment  601
    California Avenue LLC
     56




---



##### Table of Contents



10.
    Borrowing
    Facility    11.
    Income
    Taxes    Years Ended December 31,2009


2008


2007Federal:Current

$
(3,927
)

$
(3,498
)

$
9,534Deferred


(3,860
)


(7,442
)


(1,507
)(7,787
)


(10,940
)


8,027State:Current


3



3



3Deferred


1,567



(560
)


(147
)1,570



(557
)


(144
)Foreign:Current


201



303



350Total

$
(6,016
)

$
(11,194
)

$
8,233     Years Ended December 31,2009


2008


2007U.S.

$
(22,513
)

$
(28,886
)

$
32,066Foreign


6,420



2,347



3,512$
(16,093
)

$
(26,539
)

$
35,578Effective tax rate


37.4
%


42.2
%


23.1
%    57




---



##### Table of Contents



December 31,2009


2008Deferred tax assets:Vacation, rent, warranty and other accruals

$
932


$
742Depreciation and amortization


3,280



3,806Inventory valuation


2,044



3,254Deferred income


(713
)


(264
)Equity-based compensation


6,221



4,935Research and other tax credit carryforwards


15,866



9,320Impairment losses on
    available-for-sale
    securities


1,295



2,825Other


(293
)


(552
)28,632



24,066Valuation allowance for deferred tax assets


(10,576
)


(6,097
)Net deferred tax assets

$
18,056


$
17,969As reported on the balance sheet:Current assetsDeferred tax assets

$
2,465


$
3,696Valuation allowance for deferred tax assets


(950
)


(492
)Net current deferred tax assets


1,515



3,204Other long-term assetsDeferred tax assets


26,167



20,370Valuation allowance for deferred tax assets


(9,626
)


(5,605
)Net non-current deferred tax assets


16,541



14,765Net deferred tax assets

$
18,056


$
17,969       Years Ended December 31,2009


2008


2007Income tax (benefit) at the federal statutory rate

$
(5,632
)

$
(9,289
)

$
12,452State income taxes, net of federal benefit


1,020



(312
)


27Effect of foreign operations taxes at various rates


(2,046
)


(518
)


(879
)Research tax credits


(565
)


(1,100
)


(1,800
)Effect of tax rate changes, permanent differences and
    adjustments of prior deferrals


965



(36
)


(1,699
)Unrecognized tax benefits


242



140



400Change in valuation allowance










(121
)Other






(79
)


(147
)Total

$
(6,016
)

$
(11,194
)

$
8,233    58




---



##### Table of Contents



non-U.S. operations non-U.S. subsidiaries
        (In thousands):Beginning balance as of December 31, 2007

$
400Increases in balances related to tax positions taken during
    current period


140Balance as of December 31, 2008


540Increases in balances related to tax positions taken during
    current period


242Balance as of at December 31, 2009

$
782      59




---



##### Table of Contents



12.
    Employee
    Benefit Plans  Employee
    Savings and Retirement Plan
    Employee
    Bonus Plans
    13.
    Commitments
    and Contingencies  Leases
    Guarantees
  Officer
    and Director Indemnifications
    Other
    Indemnifications
   60




---



##### Table of Contents



Warranty
        2009


2008(In thousands)Beginning balance

$
1,695


$
3,092Expenditures incurred under warranties


(1,645
)


(2,997
)Accruals for product warranties


1,740



1,450Adjustments to previously existing warranty accruals


(188
)


150Ending balance

$
1,602


$
1,695     December 31,2009


2008(In thousands)Other accrued liabilities

$
1,550


$
1,286Other long-term liabilities


52



409Total warranty provision

$
1,602


$
1,695   Legal
    Matters
     61




---



##### Table of Contents



14.
    Segment
    and Geographic Information              Net
    Revenues
  2009


2008


2007(In thousands)Equipment

$
51,389


$
87,469


$
196,686Intevac Photonics


26,592



22,838



19,148Total segment net revenues

$
77,981


$
110,307


$
215,834  62




---



##### Table of Contents



Operating
    Profit (Loss)
  2009


2008


2007(In thousands)Equipment

$
(8,826
)

$
(9,924
)

$
32,903Intevac Photonics


(4,133
)


(6,674
)


(2,919
)Total segment operating profit (loss)


(12,959
)


(16,598
)


29,984Unallocated costs


(4,388
)


(3,375
)


(2,548
)Impairment of goodwill and intangible assets






(10,498
)


Operating income (loss)


(17,347
)


(30,471
)


27,436Interest income


1,362



3,968



6,544Other income and expense, net


(108
)


(36
)


1,598Income (loss) before income taxes

$
(16,093
)

$
(26,539
)

$
35,578   Depreciation
    and amortization
  2009


2008


2007(In thousands)Equipment

$
2,916


$
2,851


$
2,228Intevac Photonics


1,326



1,384



1,492Total segment depreciation and amortization


4,242



4,235



3,720Unallocated costs


1,343



1,174



701Total consolidated depreciation and amortization

$
5,585


$
5,409


$
4,421   Capital
    Additions
  2009


2008


2007(In thousands)Equipment

$
1,176


$
1,588


$
2,816Intevac Photonics


938



1,743



858Total segment capital additions


2,114



3,331



3,674Unallocated


501



854



2,061Total consolidated capital additions

$
2,615


$
4,185


$
5,735   Segment
    Assets
  2009


2008(In thousands)Equipment

$
61,136


$
33,132Intevac Photonics


25,529



23,839Total segment assets


86,665



56,971Cash and investments


89,841



105,529Deferred income taxes


18,056



17,969Other current assets


5,171



3,753Common property, plant and equipment


2,802



3,643Other assets


843



1,304Consolidated total assets

$
203,378


$
189,169  63




---



##### Table of Contents



2009


2008


2007(In thousands)United States

$
38,768


$
33,806


$
38,801Asia(*)


38,144



75,102



175,907Europe


1,069



1,321



1,083Rest of world






78



43Total net revenues

$
77,981


$
110,307


$
215,834     (*)
    
    Revenues are attributable to the geographic area in which
    Intevacs customers are located. Net trade revenues in Asia
    includes shipments to Singapore, China, Japan and Malaysia.    2009


2008(In thousands)United States

$
11,431


$
14,016Asia


920



870Net property, plant & equipment

$
12,351


$
14,886   15.
    Selected
    Quarterly Consolidated Financial Data (Unaudited)  Three Months EndedMarch 28,

June 27,

Sept. 26,

Dec. 31,2009

2009

2009

2009(In thousands, except per share data)Net sales

$
12,308


$
12,318


$
19,155


$
34,200Gross profit


4,265



4,513



8,678



15,264Net income (loss)


(5,773
)


(4,487
)


(1,792
)


1,975Basic income (loss) per share

$
(0.26
)

$
(0.20
)

$
(0.08
)

$
0.09Diluted income (loss) per share


(0.26
)


(0.20
)


(0.08
)


0.09   Three Months EndedMarch 29,

June 28,

Sept. 27,

Dec. 31,2008

2008

2008

2008(In thousands, except per share data)Net sales

$
33,175


$
32,132


$
28,560


$
16,440Gross profit


15,311



13,133



9,085



5,810Net income (loss)


1,563



(937
)


(3,353
)


(12,618
)Basic income (loss) per share

$
0.07


$
(0.04
)

$
(0.15
)

$
(0.58
)Diluted income (loss) per share


0.07



(0.04
)


(0.15
)


(0.58
)  64




---



##### Table of Contents



Item 9.
    Changes
    In and Disagreements With Accountants on Accounting and
    Financial Disclosure   
  Item 9A.
    Controls
    and Procedures  Managements
    Report on Assessment of Internal Controls Over Financial
    Reporting
  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control over Financial
    Reporting
      Internal
    Control  Integrated Framework
 
  Changes
    in Internal Control over Financial Reporting
   65




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control  Integrated Fram
        Internal Control  Integrated
    Framework
        66




---



##### Table of Contents



Item 9B.
    Other
    Information   
  PART III
 
  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K.
 
  Item 11.
    Executive
    Compensation   
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    (a)





(c)Number of Securities


(b)


Number of Securitiesto be Issued upon


Weighted-Average


Remaining AvailableExercise of


Exercise Price of


for Future IssuanceOutstanding Options,


Outstanding Options,


under EquityPlan Category

warrants and Rights


Warrants and Rights


Compensation Plans(1)Equity compensation plans approved by security holders(2)


3,111,214


$
11.56



1,025,941Equity compensation plans not approved by security holders










Total


3,111,214


$
11.56



1,025,941     (1)
    
    Excludes securities reflected in column (a).(2)
    
    Included in the column (c) amount are 491,010 shares
    available for future issuance under Intevacs 2003 Employee
    Stock Purchase Plan.   
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence   67




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##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services   
  PART IV
 
  Item 15.
    Exhibits
    and Financial Statement Schedules  Form 10-K:
    Form 10-K.
          ExhibitNumber

Description3
.1(1)

Certificate of Incorporation of the Registrant3
.2(2)

Bylaws of the Registrant, as amended10
.1+(3)

The Registrants 1995 Stock Option/Stock Issuance Plan, as
    amended10
.2+(4)

The Registrants 2003 Employee Stock Purchase Plan, as
    amended10
.3+(5)

The Registrants 2004 Equity Incentive Plan, as amended10
.4(6)

Lease, dated February 5, 2001 regarding the space located
    at 3510, 3544, 3560, 3570 and 3580 Bassett Street,
    Santa Clara, California, including the First through Sixth
    Amendments10
.6+(3)

The Registrants 401(k) Profit Sharing Plan10
.8(7)

Loan Facility with Citigroup Global Markets, Inc.10
.9(8)

Director and Officer Indemnification Agreement10
.11+(9)

The Registrants Executive Incentive Plan10
.12+(9)

Employment Agreement of Kevin Fairbairn dated January 24,
    2002, as amended21
.1

Subsidiaries of the Registrant23
.1

Consent of Independent Registered Public Accounting Firm23
.2

Consent of Independent Valuation Firm24
.1

Power of Attorney (see page 70)31
.1

Certification of President and Chief Executive Officer Pursuant
    to Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification of Vice-President, Finance and Administration,
    Chief Financial Officer, Treasurer and Secretary Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certifications Pursuant to U.S.C. 1350, adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     (1)
    
    Previously filed as an exhibit to the Companys Report on
    Form 8-K
    filed July 23, 2007(2)
    
    Previously filed as an exhibit to the Companys Report on
    Form 8-K
    filed November 19, 2008(3)
    
    Previously filed as an exhibit to the Registration Statement on
    Form S-1
    (No.
    33-97806) 68




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##### Table of Contents



(4)
    
    Previously filed as an exhibit to the Companys Definitive
    Proxy Statements filed March 25, 2003(5)
    
    Previously filed as an exhibit to the Companys Report on
    Form 8-K
    filed May 20, 2008(6)
    
    Previously filed as an exhibit to the Companys
    Form 10-K
    filed March 16, 2007(7)
    
    Previously filed as an exhibit to the Companys Report on
    Form 8-K
    filed March 6, 2008(8)
    
    Previously filed as an exhibit to the Companys
    Form 10-K
    filed March 14, 2008(9)
    
    Previously filed as an exhibit to the Companys
    Form 10-K
    filed March 4, 2009+
    
    Management compensatory plan or arrangement required to be filed
    as an exhibit pursuant to Item 15(c) of
    Form 10-K 69




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##### Table of Contents



SIGNATURES
    INTEVAC, INC.
  JEFFREY
    ANDRESON
      POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title

Date/s/  KEVIN
    FAIRBAIRN(Kevin
    Fairbairn)

President, Chief Executive Officer and Director (Principal
    Executive Officer)

February 26, 2010/s/  NORMAN
    H. POND(Norman
    H. Pond)

Chairman of the Board

February 26, 2010/s/  JEFFREY
    ANDRESON(Jeffrey
    Andreson)

Executive Vice President, Finance and Administration, Chief
    Financial Officer Treasurer and Secretary (Principal Financial
    and Accounting Officer)

February 26, 2010/s/  DAVID
    S. DURY(David
    S. Dury)

Director

February 26, 2010/s/  STANLEY
    J. HILL(Stanley
    J. Hill)

Director

February 26, 2010/s/  ROBERT
    LEMOS(Robert
    Lemos)

Director

February 26, 2010/s/  PING
    YANG(Ping
    Yang)

Director

February 26, 2010  70




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##### Table of Contents



SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
  INTEVAC,
    INC.
  Additions (Reductions)Charged


ChargedBalance at


(Credited)


(Credited)





Balance atBeginning


to Costs and


to Other





EndDescription

of Period


Expenses


Accounts


Deductions - Describe


of Period(In thousands)Year ended December 31, 2007:Deducted from asset accounts:Allowance for doubtful accounts

$
143


$
(84
)

$



$
2
(1)

$
57Year ended December 31, 2008:Deducted from asset accounts:Allowance for doubtful accounts

$
57


$
93


$



$
5
(1)

$
145Year ended December 31, 2009:Deducted from asset accounts:Allowance for doubtful accounts

$
145


$
133


$



$
145
(1)

$
133     (1)
    
    Write-offs of amounts deemed uncollectible. 71