PROPRIETARY May 2016 Investor Presentation_1 PROPRIETARY

Intevac Investor Presentation

B Riley 17th Annual Investor Conference

May 2016

POWERING INNOVATION. DELIVERING VALUE.

Wendell T. Blonigan Chief Executive Officer

James P. Moniz Chief Financial Officer

PROPRIETARY May 2016 Investor Presentation_2

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 May 2016 Investor Presentation_3

Providing Enabling Technology to Important Markets

Thin-Film Equipment Photonics

Mobility and the

Internet of Things

Clean Energy / Solar Power

Cloud Computing and Storage

Addressing Multiple Large Growth Industries

Night Vision and Target ID

Cameras Systems

Integrated Night Vision Systems for Gen 5 Heads Up Displays

Night Vision and Head Mounted

Displays for Soldiers

Critical Supplier of Digital Vision Systems

PROPRIETARY May 2016 Investor Presentation_4

Thin-Film Equipment:

Core Technologies and Production-Proven Platforms

Op

200 Lean Platform

MATRIX Platform VERTEX Platform

Core Technology

• Small-Substrate

Processing

• Precision Thin-Film

Deposition

• High-Throughput

• Today: Display Cover Panel

• Optical Diamond-Like Carbon

Protective Coatings (oDLC)

• Future: ARC, TFB

• Technology and Market Share

Leader for HDD Media

• Process Tool of Record for HAMR

• Solid Upgrade and Service

Business

ARC – anti-reflective coatings

TFB – thin-film batteries

PVD – physical vapor deposition

HDD – hard disk drive

HAMR – heat-assisted magnetic recording

• PVD and Implant for Solar

• Process Tool of Record for

Advanced Solar Cell

Architectures

• Multi-Layer Optical Coatings

PROPRIETARY May 2016 Investor Presentation_5

Optical-Grade DLC

Mobile Device Scratch Protection

VERTEX Advantages

• Lowest Cost Anti-Scratch Solution

20x Scratch Resistance

20% Increased Breakage Resistance

10x Haze Reduction

VERTEX oDLC Applications: Display Cover Panel

oDLC

Applications High Volume – High

Growth Markets

Mobile Phones Tablet PCs

Wearables POS Stations

Auto -

Infotainment

oDLC Competitive Advantage

oDLC Alternative

A

Alternative

B 7.5N @ 10cyc/min SS Ball

# p

asse

s to

scr

atch

0

10

20

30

40

50

60

70

80

90

AS Glass AS Glass + AFS AS Glass + oDLC

Scratch Protection

Rel

ativ

e p

rice

PROPRIETARY May 2016 Investor Presentation_6

Display Cover Panel: Market Opportunity

Progress

2nd System Signed Off and in

Production

Under Evaluation with Multiple

Top-Tier Phone Manufacturers

• Broad Engagement with Tier 1

Cover Glass Manufacturers

• Established In-House Coating

Service to Accelerate Product

Adoption

Opportunity

• 510 VERTEX Tools Required to

Coat All Glass in 2020

• 25% Adoption Rate = $500M

Revenue Opportunity Through

2020

Thousands m

2

Total material (in m2) for Cover Glass

Source – IHS Technology + Company Estimates

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2015 2016 2017 2018 2019 2020

Cover Glass m2 Per Market Segment

Mobile Phone Tablet PC Wearable Other

PROPRIETARY May 2016 Investor Presentation_7

MATRIX PVD and Implant Application: N-Type Solar

PERT,

Bifacial

IBC

n-type Mono

HJT

Mono PERT, PERL,

Bifacial

Mono PERC

p-type Mono

Multi PERC

Al BSF

p-type Multi

2014 2013 2015 2016

Ce

ll E

ffic

ien

cy %

15%

25%

20%

2017

Advanced Metallization and Doping

of High-Efficiency N-type Solar

Cells

MATRIX PVD Advantage

Best-in-Class Target Utilization

Lowest CoO

Copper Interconnects

Backside Reflectors

MATRIX Implant Advantage

Boron Doping Simplification

Selective and Patterned Doping

Process Step Reduction

Reduction in Capex

PROPRIETARY May 2016 Investor Presentation_8

N- Type Solar Market Opportunity

Progress – MATRIX PVD

• Process Tool of Record for N-type Cells

• Two Tier 1 Customers

Progress – MATRIX Implant

• Order in Backlog with Tier 1 Customer

• Investigating Adjacent Applications

Opportunity

• N-type Cell Installations up 2.5x

- 5GW of New Capacity by 2020

• 65 MATRIX PVD & Implant Tools Required

to Support Incremental IBC & PERT

Capacity

• Intevac’s Estimated Revenue Opportunity

is $175M Through 2020

Source: LONGJi Silicon Materials ’15-’18; Growth Rate

Projections ‘19, ‘20

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2015 2016 2017 2018 2019 2020

MW

N-type Cell Capacity

N-IBC (MW) N-PERT (MW) N-HIT (MW)

PROPRIETARY May 2016 Investor Presentation_9

-

200

400

600

800

1,000

1,200

1,400

2014 2015 2016 2017 2018 2019 2020

Exabyte

s

Exabytes Shipped on HDDs

1.0

1.2

1.4

1.6

1.8

2.0

2.2

Actual Actual Actual Actual Actual Actual Forecast Forecast

Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16

Tie Ratio (Average # of Disks per Drive)

200 Lean PVD Application: HDD Media

HDDs Dominate Storage in Exabytes Tie Ratio Increasing

Storage Needs by 2020 will be Approx. 2x 2015

• 60% in the Cloud

• 90% on HDDs

- SSDs Growing but Still <10% of Stored Data

Excess Media Capacity Remains Today

Positive Fundamentals for Return to

Capacity Additions

Source – TrendFocus Feb. 2016

PROPRIETARY May 2016 Investor Presentation_10

0

100

200

300

400

500

600

1.75 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 4.25 4.50

Media

Units (

M)

Tie Ratio (Average Disks per Drive)

Media Unit Demand per Quarter Based on Flat HDD Market and Increasing Tie Ratio

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Actual Forecast Forecast Forecast Forecast Forecast

2015 2016 2017 2018 2019 2020

Tie Ratio for Nearline (Cloud) Drives

Nearline HDDs for the Cloud Driving Tie Ratio Upward

High-Capacity Drives Growing Disks/Drive Key for Capacity Adds

Source – TrendFocus Feb 2016

Growth in Media Driven by Nearline HDDs

• Nearline HDD Unit Volumes Growing in Otherwise

Stagnant HDD Unit Environment

• Nearline Tie Ratio Also Increasing – from <4 to >7

Increasing Tie Ratio Positive for Media Units

• Media Demand Would Exceed Capacity, Even in

a Flat HDD Market

• Crossover when Tie Ratio Increases to 2.5 – 3.0

Based on 110M Unit / Qtr HDD Market

Current

225

Capacity

300

PROPRIETARY May 2016 Investor Presentation_11

Photonics: The Supplier of Digital Night Vision to Military

Op

Soldier Night Vision + Head Mounted Displays

Integrated Night Vision Systems

Night Vision + Target ID Cameras

Core Technology

• Patented Digital Night

Vision Technology

• Image Processing

• Enables Augmented

Reality

• Apache Helicopter Volume

Production

• LIVAR Long-Range Viewing

• Airborne/UAV Camera

in Development

• $25M Funding Vehicle for Next-Gen

Sensor – Future Ground Force Goggle

• 15-Year Tech Roadmap Established

• HMDs for F35 and Striker II

• Digital Aviation Goggle in

Development

Apache Camera

LIVAR SWIR

Camera

HMDs – helmet-mounted displays

LIVAR – laser illuminated viewing and ranging

SWIR – short wave infra red

UAV – unmanned aerial vehicle

PROPRIETARY May 2016 Investor Presentation_12

Photonics Application: Night Vision Cameras

LIVAR – Airborne

Target ID Camera

Apache Helicopter

Night Vision Camera

• Rotary Pilotage Programs • US Army’s Apache Program

• Transitioning to Foreign Military Sales

• Target ID and Ranging • LIVAR

- Longest Range Targeting and Ranging

Capability – up to 20KM

• Northrup Grumman LITENING Pod

Intevac’s Digital Night Vision

Technology Enables:

- High-Definition Imagery

- Information Overlay Capability

- Fused Infrared and Low Light Imagery

- Low-Halo Operation

- Image Enhancement and Transmission

- Elimination of Bulky Analog NV Goggles

PROPRIETARY May 2016 Investor Presentation_13

Photonics Opportunity: Night Vision Cameras

• Progress

• 500+ Apache Cameras Sold

• 780+ LIVAR Cameras Sold

• “Digital Night Vision Gold Standard”

- ISIE-11

• High Resolution Camera in Evaluation

- ISIE-4000

• Opportunity

• Contracted Deliveries of Apache and LIVAR

• New:

- Apache Co-Pilot / Gunner

- Next-Gen (ISIE-12) for Apache Upgrade

- Next-Gen SWIR for LIVAR Upgrade

- Drone / UAV Opportunities

Program Opportunity Pipeline $250M+

Current Production,

$126 Upgrades, $84

Pursuits, $40

F-16 Falcon

Apache Helicopter

PROPRIETARY May 2016 Investor Presentation_14

Photonics Opportunity: Integrated Night Vision

Progress • Sole-Source for F-35 JSF

• 500 Gen 1s (ISIE-10) Fielded

• >2000 Gen 2s (ISIE-11) Contracted

• In Qualification for BAE’s Typhoon

• High-Resolution Goggle Prototypes Ship Q1

Opportunity

• F-35 to Full Rate Production - ~2700 baseline aircraft

• New

- Next-Gen Camera (ISIE-12) for F-35 Upgrade

- BAE Opening Opportunities in Europe ‣ Also Marketing to Aircraft beyond Typhoon

- US Navy Program for Enhanced Visual Acuity

- High-Resolution Digital Goggle ‣ ISIE-4000

Program Opportunity Pipeline $325M+

Current Production,

$156 Upgrades,

$140

Pursuits, $30

F-35 Joint

Strike Fighter

Euro Fighter

Typhoon

JSF HMDS

BAE STRIKER II

High-Resolution

Digital Night

Vision Goggle

PROPRIETARY May 2016 Investor Presentation_15

Photonics Application: Ground Forces

• Fused Vision Mobility Device (Monocular) for

US Army Ground Forces

• Program of Record to Replace Analog Night Vision

• Family of Weapons Sights

• Rifle Sight Eyepiece (Individual)

• Wireless Helmet Mounted Display (Crew)

Fused Goggles Augmented Reality

Family of Weapons Sights Wireless

Helmet Mounted Display

Intevac’s Digital NV Technology Enables:

Fused Vision Mobility Devices:

- Low-Halo Operation

- Augmented Reality

- Proven IR and Low-Light Fusion

Family of Weapons Sights:

- Proprietary Optical Design

- Proven Low-Cost Solution

Strongly Supported by US Government

PROPRIETARY May 2016 Investor Presentation_16

Photonics Opportunity: Ground Forces

• Progress • $25 Million Funding Vehicle in Place for Next-

Gen Sensor Development

• Ground Forces • Fused Vision Mobility Device Demonstrator

Delivery Scheduled for Q2’16

• Family of Weapons Sights • Prototypes Qualified

• Selected by Majority of Primes

• USG Requirements for Wireless HMD Built

Around Intevac Demonstrator

• Opportunity • Over 100K Digital Night Vision Monoculars

to be Fielded for US Army Soldiers

• Family of Weapons Sights

• Individual - 36.5K units program total

• Crew - 25K units program total

Program Opportunity Pipeline $400M+

Current Production,

$17

Pursuits, $388

Image Enhancement Data

Overlay

Analog Point Source

“Halo”

Intevac Digital

“Low Halo”

PROPRIETARY May 2016 Investor Presentation_17

Expanded Program Opportunity Pipeline for Photonics

• Next-Gen Sensor Upgrades Expand Program Opportunity Pipeline to >$500M

• For programs that are already designed-in and in production

• An increase from total engagement pipeline of ~$350M previously

• Programs Currently in Pursuit Grow Program Opportunity Pipeline to Nearly $1B

• Largest US Military opportunity is for Ground Forces

$350M

>$500M

~$1B

$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Previous Program OpportunityPipeline

Revised Program OpportunityPipeline: Current Production +

Upgrades

Total Program OpportunityPipeline, Including Pursuits

$M

Ground Forces

Integrated Night Vision

Night Vision Cameras +Target ID

PROPRIETARY May 2016 Investor Presentation_18

In Summary:

Two Businesses with Billion-$ Revenue Opportunities

$1B Revenue Opportunity for Equipment $1B Revenue Opportunity for Photonics

Display Cover Panel

$500M+

Solar PVD and Implant

$175M+

HDD

$300M+

5-Year Available Revenue Opportunity

Night Vision Cameras

$250M+

Integrated Night Vision

$325M+

Ground Force Night Vision

$400M+

Revenue Opportunity Pipeline for Current Programs & Pursuits

PROPRIETARY May 2016 Investor Presentation_19

Improving Financial Performance

2015 Exceeded Expectations

Entering the Year

• Revenues Up 15% Over 2014

• Increased Full-Year Guidance

Each Quarter in 2015

• Improved GM and Reduced Opex

2016 Guidance

• Revenue Growth of Up to 10%

from 2015

• 34-36% Gross Margin

• $37-38M Operating Expenses

Positioned for Cash Flow

Positive Operations in 2016 -15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

$(30)

$(20)

$(10)

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

2014 2015G

ross M

arg

in %

$M

Revenues Non-GAAP OpEx Operating Loss GM%

PROPRIETARY May 2016 Investor Presentation_20

Strong Foundation and Capital Deployment Strategy

Structuring and Managing the

Company for Profitability Across

Business Cycles

Pursuing Organic Growth Initiatives

Strong Foundation with No Debt

Maintaining Strong Balance Sheet Strategically Deploying Capital

Returning Capital to Shareholders through

$30M Stock Repurchase Program

• $28.5M Purchased as of Year-End 2015

Only $6M Use of Cash and Investments

2014-2015, Net of Stock Repurchases

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

2013 2014 2015

$ in

Millio

ns

Cumulative Cash Utilized for Stock Repurchases

Balance of Cash and Investments at Qtr/Year End

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$-

$10

$20

$30

$40

$50

$60

$70

At Apr 2, 2016$ p

er

Sh

are

$ in

Millio

ns

Tangible Book Value Cash and Investments

TBV/Share Cash/Share

PROPRIETARY May 2016 Investor Presentation_21

Intevac: Solid Foundation, Strong Growth Trajectory

Op

Solid Financial Foundation

Photonics: Key Enabler for Military Night Vision

Thin-Film Equipment:

Leadership and Strategy for Growth

Intevac Value

Proposition

• Tier 1 Customer in Production

for VERTEX Display Cover Panel

• MATRIX PVD Process Tool of

Record for Advanced Solar Cells

• Technology and Market Share

Leader in HDD

• Strong Balance Sheet

• Improving Financial Performance

• Positioned for Revenue Growth and Cash Flow

Positive Operations in 2016

• Major Programs with Apache and JSF

• Funding Vehicle Awarded for Next-

Generation Sensor Development

• Current Programs ~$500M;

Ground Force Applications

Grow Revenue Opportunity

to ~$1B

PROPRIETARY May 2016 Investor Presentation_22

PROPRIETARY © 2016 INTEVAC, INC.