Tegal
Corporation 2201
S.
McDowell Blvd., Petaluma, CA 94954 [T] (707) 763-5600 [F] (707) 765-9311
www.tegal.com
TEGAL
CORPORATION REPORTS
FIRST
QUARTER FISCAL 2007 FINANCIAL RESULTS
Revenue
Increases 116% Year-over Year and 9% Sequentially
Substantial
Gross Margin Improvement to 38%
San
Jose, Calif., August 10, 2006 —
Tegal
Corporation (Nasdaq:TGALD), a leading designer and manufacturer of plasma
etch
and deposition systems used in the production of integrated circuits and
nanotechnology devices, today announced financial results for the First Quarter
Fiscal Year 2007, which ended June 30, 2006. Senior management will conduct
an
investor conference call to discuss these results and the company’s financial
outlook in more detail today at 2pm Pacific Time, Thursday, August 10, 2006.
More information about the conference call is provided below.
First
Quarter Highlights
· Revenues
during the first quarter of fiscal 2007 were $6.6 million, an increase of
116%
from $3.1 million reported in the same period last year, and an increase
of 9%
sequentially from the $6.1 million recorded for the fourth quarter of fiscal
2006.
· Tegal
recorded a net loss for the first quarter of $1.8 million or ($0.26) per
share
compared to a net loss of $2.5 million or ($0.57) per share in the same period
last year and a net loss of $2.3 million or ($0.33) per share for the fourth
quarter of fiscal 2006. All of the per share numbers reflect a one-for-twelve
reverse split in Tegal’s common stock which became effective on July 25, 2006.
· Gross
margins improved to 38% for the current quarter, compared to 22% in the same
period last year and 20% for the fourth quarter of fiscal 2006.
· Operating
losses for the first quarter were $1.8 million, including approximately $0.5
million of non-cash charges. This was an improvement over the $2.4 million
loss
in the same period last year and the $2.4 million loss for the fourth quarter
of
fiscal 2006, which included $0.4 million and $0.3 million of non-cash charges,
respectively. Litigation expenses amounted to approximately $0.7 million
for the
quarter.
· Tegal’s
wholly-owned subsidiary, Sputtered Films Inc. (SFI), has made damages claims
in
court against AMS, Agilent and Avago Technologies in excess of $100 million,
which claims may be subject to punitive multiples. The judge in the case
has
indicated that no further delays will be tolerated and that the case will
go to
trial on November 7, 2006 in the Superior Court of Santa Barbara,
California.
· Quarterly
shipments included an advanced etch system for high volume manufacturing
of
integrated passive devices to one of the largest semiconductor companies
in the
world, an advanced PVD system to the global leader in wafer level packaging
technology, and several 901ACS etch tools to a leading US-based wireless
component supplier undergoing a significant capacity expansion.
· Tegal’s
book-to-bill ratio was 0.9 to 1 for the quarter, and the current backlog
is $6.1
million.
Tegal
Q1
2007 Earnings Release
2-2-2
· Subsequent
to the end of the quarter, NASDAQ notified the Company that it had regained
compliance with the minimum bid price requirement, as a result of the Company’s
one-for-twelve reverse split and recent trading history.
“We
are
very pleased with our continued progress on building a sustainable revenue
base,
improving margins and lowering our cash losses,” said Thomas Mika, President
& Chief Executive Officer of Tegal Corporation. “Our first quarter Gross
Margin resulted principally from product mix, and we are clearly making progress
towards our goal of achieving sustainable 40% plus margins for our business.
Operating expenses were again affected by the costs associated with SFI’s
litigation against AMS, Agilent and Avago Technologies. We are now in the
final
pre-trial stages for this litigation with a firm trial date set for November
7,
2006. Clarity on the trial date allows us to calculate our likely costs through
trial, and we anticipate these substantial expenses will be reduced at the
end
of the calendar year which should improve our overall operating
model.”
Financial
Results
Revenues
for the first quarter of fiscal 2007 were $6.6 million, an increase of 116%
from
$3.1 million reported in the same period last year, and an increase of 9%
sequentially from the $6.1 million recorded for the fourth quarter of fiscal
2006. Tegal recorded a net loss for the first quarter of $1.8 million or
($0.26)
per share compared to a net loss of $2.5 million or ($0.57) per share in
the
same period last year. Sequentially, the Company’s net loss decreased from the
prior quarter loss of $2.3 million or ($0.33) per share. All of the per share
numbers reflect a one-for-twelve reverse split in Tegal’s common stock which
became effective on July 25, 2006.
Gross
profits for the first quarter of fiscal 2007 were 38% - an increase from
22% in
the same period last year and an increase from 20% for the fourth quarter
of
fiscal 2006.
Operating
expenses for the first quarter of fiscal 2007 were $4.3 million, an increase
of
$1.3 million reported for the same period last year and an increase of $0.8
million reported for the fourth quarter of fiscal 2006. This resulted in
operating losses of $1.8 million during the current quarter, which was an
improvement over the $2.4 million loss recorded in both the same period last
year and the fourth quarter of fiscal 2006.
As
a
result of the adoption by Tegal on April 1, 2006 of the options expensing
requirements of FAS 123R, operating expenses included approximately $230,000
of
non-cash options expense distributed among several categories. Other non-cash
expenses for the quarter included depreciation, amortization and warrant
expense
of approximately $270,000.
Cash
and
equivalents at the end of the first quarter of fiscal 2007 were $12.6 million
compared to $13.8 million in the fourth quarter of last fiscal year.
Total
shares outstanding as of June 30, 2006 were 7,039,173, adjusted for the
one-for-twelve reverse split in Tegal’s common stock which became effective on
July 25, 2006.
Investor
Conference Call
Tegal
Corporation will discuss these results and further details of its first quarter
of fiscal 2007 during a conference call today, August 10, 2006, at 5:00 p.m.
EST
/ 2:00 p.m. PST. The call is open to all interested investors. The call-in
numbers are (866) 356-4441 or (617) 597-5396. For either dial-in number,
investors should reference should reference passcode: 58576156. A digital
recording will be made available one hour after the completion of the conference
call, and it will be accessible through midnight on Thursday, August 16,
2006.
To access, investors should dial (888) 286-8010 or (617) 801-6888 and enter
passcode: 28154120. The conference call also will be available online via
the
Investor Section of the Company’s website at: www.tegal.com. An online
replay of the teleconference, along with a copy of the Company’s earnings
release, will also be available on the Company’s website.
Tegal
Q1
2007 Earnings Release
3-3-3
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
provides process and equipment solutions to leading edge suppliers of advanced
semiconductor and nanotechnology devices. Incorporating unique, patented
etch
and deposition technologies, Tegal’s system solutions are backed by over 35
years of advanced development and over 100 patents. Some examples of devices
enabled by Tegal technology are energy efficient memories found in portable
computers, cellphones, PDAs and RFID applications; megapixel imaging chips
used
in digital and cellphone cameras; power amplifiers for portable handsets
and
wireless networking gear; and MEMS devices like accelerometers for automotive
airbags, microfluidic control devices for ink jet printers; and
laboratory-on-a-chip medical test kits.
More
information is available on the Internet at: www.tegal.com.
Contact:
Tegal
Corporation
Christine
Hergenrother (VP and CFO), 707/763- 5600
or
The
Blue
Shirt Group
Rakesh
Mehta or
Chris
Danne, 415/217-7722
Tegal
Q1
2007 Earnings Release
4-4-4
TEGAL
CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In
thousands, except share data)
| |
|
2006
|
|
2006
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
12,640
|
|
$
|
13,787
|
|
Accounts
receivable, net of allowances for sales returns and doubtful
accounts of
$356 and $205 at June 30, 2006, and March 31, 2006
respectively
|
|
|
6,344
|
|
|
5,265
|
|
|
Inventories
|
|
|
6,974
|
|
|
7,700
|
|
|
Prepaid
expenses and other current assets
|
|
|
1,284
|
|
|
1,270
|
|
|
Total
current assets
|
|
|
27,242
|
|
|
28,022
|
|
|
Property
and equipment, net
|
|
|
1,692
|
|
|
1,849
|
|
|
Intangible
assets, net
|
|
|
1,396
|
|
|
1,474
|
|
|
Other
assets
|
|
|
148
|
|
|
146
|
|
|
Total
assets
|
|
$
|
30,478
|
|
$
|
31,491
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Notes
payable and bank lines of credit
|
|
$
|
107
|
|
$
|
27
|
|
|
Accounts
payable
|
|
|
2,708
|
|
|
2,458
|
|
|
Accrued
product warranty
|
|
|
668
|
|
|
506
|
|
|
Deferred
revenue
|
|
|
564
|
|
|
477
|
|
|
Accrued
expenses and other current liabilities
|
|
|
2,264
|
|
|
1,975
|
|
|
Total
current liabilities
|
|
|
6,311
|
|
|
5,443
|
|
|
Long-term
portion of capital lease obligations
|
|
|
—
|
|
|
2
|
|
|
Other
long term obligations
|
|
|
—
|
|
|
6
|
|
|
Total
long term liabilities
|
|
|
|
|
|
8
|
|
|
Total
liabilities
|
|
$
|
6,311
|
|
$
|
5,451
|
|
|
Stockholders’
equity:
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Preferred
stock; $ 0.01 par value; 5,000,000 shares authorized; none issued
and
outstanding
|
|
$
|
—
|
|
$
|
—
|
|
Common
stock; $ 0.01 par value; 200,000,000 shares authorized; 7,039,173
and
7,021,088 shares issued and outstanding at June 30, 2006 and
March 31,
2006
respectively
|
|
|
844
|
|
|
842
|
|
|
Restricted
Share Units
|
|
|
840
|
|
|
1,034
|
|
|
Deferred
Compensation
|
|
|
(224
|
)
|
|
(224
|
)
|
|
Additional
paid-in capital
|
|
|
119,471
|
|
|
119,010
|
|
|
Accumulated
other comprehensive income (loss)
|
|
|
192
|
|
|
532
|
|
|
Accumulated
deficit
|
|
|
(96,956
|
)
|
|
(95,154
|
)
|
|
Total
stockholders’ equity
|
|
|
24,167
|
|
|
26,040
|
|
|
Total
liabilities and stockholders’ equity
|
|
$
|
30,478
|
|
$
|
31,491
|
|
Tegal
Q1
2007 Earnings Release
5-5-5
TEGAL
CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In
thousands, except per share data)
| |
|
Three
Months Ended
|
|
| |
|
June
30,
|
|
| |
|
2006
|
|
2005
|
|
|
Revenue
|
|
$
|
6,576
|
|
$
|
3,052
|
|
|
Cost
of sales
|
|
|
4,078
|
|
|
2,377
|
|
|
Gross
profit (loss)
|
|
|
2,498
|
|
|
675
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research
and development
|
|
|
996
|
|
|
1,176
|
|
|
Sales
and marketing
|
|
|
1,044
|
|
|
644
|
|
|
General
and administrative
|
|
|
2,302
|
|
|
1,240
|
|
|
Total
operating expenses
|
|
|
4,342
|
|
|
3,060
|
|
|
Operating
loss
|
|
|
(1,844
|
)
|
|
(2,385
|
)
|
|
Other
income (expense), net
|
|
|
42
|
|
|
(122
|
)
|
|
Net
loss
|
|
$
|
(1,802
|
)
|
$
|
(2,507
|
)
|
|
Net
loss per share, basic and diluted
|
|
$
|
(0.26
|
)
|
$
|
(0.57
|
)
|
|
Shares
used in per share computation:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
7,023
|
|
|
4,409
|
|
|
Diluted
|
|
|
7,023
|
|
|
4,409
|
|
Note:
Shares used in per share computation for Basic and Diluted reflect a 12 to1
reverse stock split.
