Tegal Corporation Reports Fourth Quarter and Fiscal Year 2005 Financial Results.PETALUMA Petaluma (pĕtəl  `mə), city (1990 pop. 43,184), Sonoma co., W Calif.; inc. 1858. , Calif. -- Tegal Tegal may refer to:
Tgal Thousand gallons ), a leading designer and manufacturer of plasma etch To create a design in a material by digging out the material. The circuit designs on printed circuit boards and chips are etched by acid. See chip and printed circuit board. and deposition Deposition Christ is taken from the cross and enshrouded. [N.T.: Matthew 27:57–60; Christian Art: Appleton, 55] See : Passion of Christ systems used in the production of integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. and nanotechnology nanotechnology: see micromechanics. nanotechnology Manipulation of atoms, molecules, and materials to form structures on the scale of nanometres (billionths of a metre). devices, today announced financial results for the Fourth Quarter and Fiscal Year 2005, which ended March 31, 2005. Senior management will conduct an investor conference call to discuss these results and the company's financial outlook in more detail at 2 p.m. Pacific Time, today, Thursday Thursday: see week. May 19, 2005. More information about the conference call is provided below. Fourth Quarter and Fiscal 2005 Highlights --Revenues for the fourth quarter were $3.6 million, a decrease of 42% from the same quarter one year ago, and an increase of 23% from $2.9 million reported in the fiscal third quarter of 2005. Revenues for the fiscal year were $14.9 million, a decrease of 10% from $16.5 million in the prior fiscal year. --Net losses for the fourth quarter were ($3.4) million or ($0.07) per share and for the full year were ($14.9) million or ($0.32) per share. These results compare to a loss of ($1.6) million ($0.06) per share in the fourth quarter last year and a loss of ($12.6) million ($0.56) per share for fiscal 2004. --Operating losses for the fourth quarter were ($3.4) million, including the effect of a charge of $0.8 million for excess inventory, compared to a positive $62 thousand in the same quarter last year. The company posted operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of the year of ($13.1) million, which included a $1.7 million non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for IPR&D related to its acquisition of First Derivative Noun 1. first derivative - the result of mathematical differentiation; the instantaneous change of one quantity relative to another; df(x)/dx derivative, derived function, differential, differential coefficient Systems, Inc. The operating loss in the prior fiscal year was ($7.2) million, which included a $2.2 million IPR&D charge and a $1.0 million excess inventory charge. --The company shipped a total of thirteen plasma etch and sputtering A popular method for adhering thin films onto a substrate. Sputtering is done by bombarding a target material with a charged gas (typically argon) which releases atoms in the target that coats the nearby substrate. It all takes place inside a magnetron vacuum chamber under low pressure. systems during the year, including four systems to four new customers. Customers are using these systems for the production of non-volatile memories Refers to memory chips that hold their content without power being applied. It may refer to chips that are not changeable, such as ROMs and PROMs, or to chips that can be rewritten many times such as flash memory. , photo-semiconductors and several types of MEMS (MicroElectroMechanical Systems) Tiny mechanical devices that are built onto semiconductor chips and are measured in micrometers. In the research labs since the 1980s, MEMS devices began to materialize as commercial products in the mid-1990s. devices, including Film Bulk Acoustic acoustic /acous·tic/ (ah-kldbomacs´tik) relating to sound or hearing. a·cous·tic or a·cous·ti·cal adj. Of or relating to sound, the sense of hearing, or the perception of sound. Resonators (FBARs). --The company completed the drawdown Drawdown The peak to trough decline during a specific record period of an investment or fund. It is usually quoted as the percentage between the peak to the trough. Notes: of its structured secondary offering facility with Kingsbridge
--The company elected Brad Mattson Mattson is a surname, and may refer to
as its Executive Chairman and Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs Mika Mika can refer to:
Financial Results Revenues for the fourth quarter were $3.6 million, a decrease of 42% from $6.2 million for the fourth quarter of 2004, and an increase of 23% from $2.9 million in the third quarter of 2005. Tegal reported a net loss of ($3.4) million, or ($0.07) per share, for the quarter, compared to a net loss of ($1.6) million, or ($0.06) per share in the comparable quarter one year ago. Sequentially, Tegal's reported loss increased from ($2.7) million or ($0.06) per share, in the third quarter of 2005. For the full fiscal 2005, revenues were $14.9 million, a decrease of 10% from $16.5 million for fiscal 2004. Tegal reported a net loss of ($14.9) million, or ($0.32) per share for the fiscal year, compared to a net loss of ($12.6) million, or ($0.56) per share in the prior fiscal year. Tegal's loss for the year included non-cash charges for: (i) a $2.0 million non-cash interest expense related to the amortization of the beneficial conversion feature connected to the debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. financing in FY2004 (ii) a $1.7 million one-time expensing of in-process research and development (IPR&D) related to its acquisition of First Derivative Systems, Inc. and (iii) a $0.8 million increase of excess inventory reserves. Excluding these non-cash charges, Tegal's pro-forma non-GAAP loss for the year was $10.5 million. Gross profits for the fourth quarter of fiscal 2005 were 1.1% compared to 43.4% in the same quarter one year ago. The decline in margins in the quarter resulted from a less efficient absorption of overhead costs overhead costs see fixed costs. on lower revenues and the effect of the increase in inventory reserves. For the year ended March 31, 2005, gross profits were 21.9% versus 28.1% in the prior fiscal year. Low overhead absorption and increased inventory reserves negatively affected gross profits for both years. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the fourth quarter were $3.4 million, an increase of $0.8 million from the fourth quarter of fiscal 2004. For the year ended March 31, 2005, total operating expenses were $16.3 million compared to operating expenses of $11.8 million in the prior fiscal year. The non-cash IPR&D charge for fiscal 2005 was $1.7 million, while the same charge for fiscal 2004 was $2.2 million. The operating loss for the fourth quarter was a ($3.4) million compared to an income of $62 thousand in the same quarter one year ago. The Company's operating loss for the full year was ($13.1) million, compared to an operating loss of ($7.2) million in the prior year. Cash at the end of the fourth quarter was $7.1 million, up $0.1 million from the same quarter one year ago, and up by $1.7 million from the third quarter. While the company's notes payable and bank lines of credit declined to $159 thousand from $2.4 million year-to-year, accounts payable increased by $2 million over the same period. The increase in inventories from one year earlier of approximately $1.4 million resulted primarily from the company's investment in its newly developed OnCore(TM) PVD PVD abbr. peripheral vascular disease PVD Peripheral vascular disease, see there system. Outlook "Fiscal 2005 proved to be a pivotal year for our company," said Thomas Mika, newly appointed President and CEO of Tegal Corporation. "We've strengthened our senior management team, and we continued the development of our new NLD NLD abbr. nonverbal learning disorder and OnCore products, both of which required substantial investment. Our base Etch and PVD business units performed well, but there were some customer delays in ramping advanced programs, especially in non-volatile memories. We have re-affirmed our commitment to achieve cash break-even in operations this fiscal year, and took the initial steps toward this goal." "In recent years Tegal has focused on emerging niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. , which represent significant growth opportunities for the company, but which are unpredictable in terms of timing," said Brad Mattson, newly appointed Executive Chairman of Tegal Corporation. "Tegal has begun the process of re-aligning its business strategy to also invest in opportunities in large, existing equipment markets. This is a strategy that I have implemented successfully in the past and one that I believe is possible for Tegal because of the strength of its technology." Investor Conference Call Company will host a conference call for investors today (Thursday, May 19) at 5:00 p.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) / 2:00 p.m. (PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT ). The dial-in phone numbers are (800) 299-7089 or (617) 801-9714 (for international callers). Investors should reference pass code: 68300902. 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, May 26, 2005. To access, investors should dial (888) 286-8010 or (617) 801-6888 (for international callers) and enter pass code: 49394839. The conference call also will be available live via the Investor Section of the Company's website at: www.tegal.com. A replay of the teleconference, along with a copy of the Company's earnings release, will be available on the Company's website, as well. 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 (Radio Frequency IDentification) A data collection technology that uses electronic tags for storing data. The tag, also known as an "electronic label," "transponder" or "code plate," is made up of an RFID chip attached to an antenna. applications; megapixel One million pixels. Refers to the resolution of a digital imaging device (monitor, scanner, video camera, still camera, etc.). For example, a five-megapixel digital still camera might take a picture composed of 5,038,848 red-green-blue color dots (pixels). imaging chips used in digital and cellphone (CELLular telePHONE) The first ubiquitous wireless telephone. Originally analog, all new cellular systems are digital, which has enabled the cellphone to turn into a smartphone that has access to the Internet. cameras; power amplifiers Power amplifier The final stage in multistage amplifiers, such as audio amplifiers and radio transmitters, designed to deliver appreciable power to the load. for portable handsets and wireless networking See wireless network. gear; and MEMS devices like accelerometers for automotive airbags, microfluidic control devices for ink jet printers See inkjet printer. ; and laboratory-on-a-chip medical test kits. More information is available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at: www.tegal.com.
TEGAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS
March 31, March 31,
2005 2004
----------- -----------
Current assets:
Cash and cash equivalents $7,093 $7,049
Trade receivables, net 2,347 4,729
Inventories 5,140 3,719
Prepaid expenses and other current assets 641 905
----------- -----------
Total current assets 15,221 16,402
Property and equipment, net 3,342 4,039
Intangible assets, net 1,796 1,190
Other assets 183 1,027
----------- -----------
Total assets $20,542 $22,658
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $159 $1,103
Bank line of credit - 1,347
2% convertible debentures, net - 74
Accounts payable 3,607 1,645
Product warranty 252 366
Accrued expenses and other current liabilities 2,575 2,604
Deferred revenue 122 440
----------- -----------
Total current liabilities 6,741 7,579
Other long-term obligations 64 98
Long-term portion of capital lease obligation 13 26
----------- -----------
Total liabilities 6,792 7,703
----------- -----------
Stockholders' equity:
Common stock 528 366
Additional paid-in capital 99,156 85,376
Accumulated other comprehensive income (110) 124
Accumulated deficit (85,824) (70,911)
----------- -----------
Total stockholders' equity 13,750 14,955
----------- -----------
$20,542 $22,658
=========== ===========
TEGAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Twelve Months
Ended March 31, Ended March 31,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenue $3,556 $6,157 $14,888 $16,528
Cost of revenue 3,516 3,484 11,621 11,881
--------- --------- --------- ---------
Gross profit (loss) 40 2,673 3,267 4,647
--------- --------- --------- ---------
Operating expenses:
Research and development 1,529 815 5,772 3,305
Sales and marketing 675 587 2,905 2,347
General and administrative 1,238 1,209 6,009 3,973
In-process research and
development - - 1,653 2,202
--------- --------- --------- ---------
Total operating expenses 3,442 2,611 16,339 11,827
--------- --------- --------- ---------
Operating income (loss) (3,402) 62 (13,072) (7,180)
Other income (expense), net
Interest expense, net 1 (1,653) (2,064) (5,521)
Other income (expense) 2 32 223 99
--------- --------- --------- ---------
Total other income (expense),
net 3 (1,621) (1,841) (5,422)
--------- --------- --------- ---------
Net loss $(3,399) $(1,559) $(14,913) $(12,602)
========= ========= ========= =========
Net loss per share, basic and
diluted $(0.07) $(0.06) $(0.32) $(0.56)
========= ========= ========= =========
Shares used in per share
computation:
Basic 52,206 27,375 46,879 22,442
Diluted 52,206 27,375 46,879 22,442
Reconciliation from GAAP to non-GAAP Measures of Performance
Three Months Twelve Months
Ended March 31, Ended March 31,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenue $3,556 $6,157 $14,888 $16,528
GAAP Cost of revenue 3,516 3,484 11,621 11,881
--------- --------- --------- ---------
Non-cash increase in inventory
reserve (778) - (778) (967)
--------- --------- --------- ---------
Non GAAP Cost of revenue 2,738 3,484 10,845 10,914
--------- --------- --------- ---------
Non GAAP Gross profit (loss) 818 2,673 4,045 5,614
--------- --------- --------- ---------
GAAP Total operating expenses 3,442 2,611 16,339 11,827
---------
Non-cash IPR&D expense - - (1,653) (2,202)
--------- --------- --------- ---------
Non GAAP total operating
expenses 3,442 2,611 14,686 9,625
--------- --------- --------- ---------
Non GAAP Operating income
(loss) (2,624) 62 (10,641) (4,011)
GAAP Total other income
(expense), net 3 (1,621) (1,841) (5,422)
Non-cash interest expense
associated with Debentures 0 1,653 2,019 5,519
--------- --------- --------- ---------
Non GAAP total other income
(expense), net 3 32 178 97
--------- --------- --------- ---------
Non GAAP Net income (loss) $(2,621) $94 $(10,463) $(3,914)
========= ========= ========= =========
Non GAAP Net loss per share,
basic $(0.05) $0.00 $(0.22) $(0.17)
========= ========= ========= =========
Non GAAP Net income (loss) per
share, diluted $(0.05) $0.00 $(0.22) $(0.17)
========= ========= ========= =========
Shares used in per share
computation:
Basic 52,206 27,375 46,629 22,442
Diluted 52,206 40,204 46,629 22,442
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