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Tegal Corporation Reports Second Quarter Fiscal 2011 Financial Results

PETALUMA, Calif., Nov 12, 2010 (BUSINESS WIRE) -- Tegal Corporation (NASDAQ:TGAL), an innovator of specialized production solutions for the fabrication of advanced MEMS, power ICs and optoelectronic devices, today announced financial results for the second quarter and year-to-date fiscal year 2011, which ended September 30, 2010.

Financial Results Revenues for the second quarter of fiscal 2011 were $3.2 million, an increase of $0.1 million from $3.1 million in the same period last year. Tegal reported net income of $0.1 million, or $0.02 per share, for the quarter, compared to net loss of ($1.7) million, or ($0.20) per share in the same period last year, and a net loss of ($2.5) million, or ($0.29) per share in the prior quarter. Net loss for the six months ended for the fiscal year 2011 was ($2.3) million, or ($0.28) per share compared to ($4.3) million, or ($0.51) per share in the prior year to date.

"We expected our results this quarter to improve as we shipped two new systems to two new customers and a process module to an existing customer," said Thomas Mika, President and CEO, Tegal Corporation. "We are in the process of restructuring the company to its present mission, which is focused on deep silicon etch for MEMS and TSV applications." Mr. Mika continued: "At the end of Q2, our systems backlog stood at approximately $1M and our cash balance was $4.4M. We are actively seeking business partners that can take full advantage of our leading technical position in these markets, and we are evaluating several strategic alternatives for the Company, including possible business combinations in these markets and in related, higher growth markets." Safe Harbor Statement Except for historical information, matters discussed in this news release contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements, which are based on assumptions and describe our future plans, strategies and expectations, are generally identifiable by the use of the words "anticipate," "believe," "estimate," "expect," "intend," "project" or similar expressions.

These forward-looking statements are subject to risks, uncertainties and assumptions about the Company including, but not limited to industry conditions, economic conditions, acceptance of new technologies and market acceptance of the Company's products and services. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this paragraph. For a further discussion of these risks and uncertainties, please refer to the Company's periodic filings with the Securities and Exchange Commission.

About Tegal Tegal is an innovator of specialized production solutions for the fabrication of advanced MEMS, power ICs and optoelectronic devices found in products like smart phones, networking gear, solid-state lighting, and digital imaging. The Company's plasma etch and deposition tools enable sophisticated manufacturing techniques, such as 3D interconnect structures formed by intricate silicon etch, also known as Deep Reactive Ion Etching (DRIE). Tegal combines proven expertise with practical system strategies to deliver application-specific solutions that are robust and reliable, and deliver exceptional process quality and high yields at a lower overall cost of ownership. Headquartered in Petaluma, California, the company has more than 35 years of expertise and innovation in specialized technologies, over 100 patents, and an installed base of more than 1900 systems worldwide. Please visit us on the web at www.Tegal.com.

TEGAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)

September 30, March 31,

2010 2010

--------------- --------------

ASSETS

Current assets:

Cash and cash equivalents $

4,373 $ 7,298

Accounts receivable, net of allowances for sales returns and

2,829 3,116

doubtful accounts of $196 and $324 at September 30, 2010 and March

31, 2010, respectively

Notes Receivable

1,527 1,347

Inventories, net

1,407 1,221

Prepaid expenses and other current assets

202 1,243

--------- ---------

Total current assets 10,338 14,225 Property and equipment, net

241 308 Intangible assets, net

1,118 1,230 Other assets

6 540

--------- ---------

Total assets $ 11,703 $ 16,303

====== ========= ===== =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

568 1,520

Accrued product warranty

474 374

Common stock warrant liability

21 363

Deferred revenue

223 242

Accrued expenses and other current liabilities

535 1,867

--------- ---------

Total current liabilities

1,821 4,366

--------- --------- Commitments and contingencies (Item 2)

Stockholders' equity:

Preferred stock; $0.01 par value; 5,000,000 shares authorized; none

-- --

issued and outstanding

Common stock; $0.01 par value; 50,000,000 shares authorized;

84 84

8,439,095 and 8,438,115 shares issued and outstanding at September

30, 2010 and March 31, 2010, respectively

Additional paid-in capital 128,549 128,290

Accumulated other comprehensive income (loss)

(129) (149)

Accumulated deficit (118,622) (116,288)

--------- ---------

Total stockholders' equity

9,882 11,937

--------- ---------

Total liabilities and stockholders' equity $ 11,703 $ 16,303

====== ========= ===== =========

TEGAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

Three Months Ended Six Months Ended

September 30, September 30,

2010 2009 2010

2009

----- ------- ------- -------

Revenue $ 3,183 $ 3,117 $ 3,502 $ 4,200 Cost of sales 1,952 2,269 2,502 3,259

----- ------- ------- -------

Gross profit 1,231 848 1,000 941

----- ------- ------- ------- Operating expenses:

Research and development expenses 542 1,170 1,565 2,411

Sales and marketing expenses 150 670 308 1,374

General and administrative expenses 927 810 2,077 1,973

----- ------- ------- -------

Total operating expenses 1,619 2,650 3,950 5,758

----- ------- ------- -------

Operating income (loss) (388) (1,802) (2,950) (4,817)

Other income (expense), net 527 114 623 471

----- ------- ------- ------- Income (loss) before tax expense (benefit) 139 (1,688) (2,327) (4,346)

Income tax expense (benefit) (5) 1 7 (50)

----- ------- ------- ------- Net income (loss) $ 134 $ (1,689) $ (2,334) $ (4,296)

=== ===== === ======= == ======= == =======

Net income (loss) per share:

Basic $ 0.02 $ (0.20) $ (0.28) $ (0.51)

Diluted $ 0.02 $ (0.20) $ (0.28) $ (0.51) Shares used in per share computation:

Basic 8,439 8,415 8,438 8,415

Diluted 8,460 8,415 8,438 8,415 SOURCE: Tegal Corporation CONTACT: Tegal Corporation Christine Hergenrother (VP and CFO), 707-763-5600 Copyright Business Wire 2010 -0- KEYWORD: United States

North America

California INDUSTRY KEYWORD: Technology

Electronic Design Automation

Hardware

Semiconductor SUBJECT CODE: Earnings