News

26 June 2009

 

Tegal’s quarterly revenue down 74% year-on-year

Plasma etch and deposition system maker Tegal Corp of Petaluma, CA, USA has reported revenue for fiscal 2009 (to end March) of $13.1m, down 60% on $32.9m in fiscal 2008. This included fourth-quarter revenue of just $1.9m, down 74% on $7.4m a year ago and 58% on the prior quarter (although only back to the $2m of the quarter before that). This follows Tegal on 16 September completing the acquisition from Alcatel Micro Machining Systems (AMMS) and Alcatel Lucent of their deep reactive ion etch (DRIE) and plasma-enhanced chemical vapor deposition (PECVD) products and related intellectual property. 

Gross margin has fallen from 42.6% to 39.8%, including just 26.3% in the fourth quarter (down on 50.6% a year ago). Compared to net income of $18.1m in fiscal 2008, net loss was $7.9m, including $3.2m for the fourth quarter (compared to net income of $15.2m a year ago). Cash balance fell from $19.3m a year ago to $12.7m at the end of fiscal Q3, but only fell to $12.5m at the end of fiscal Q4. The firm stresses that it has no debt and few liabilities.

During the quarter, systems order backlog fell from $2.8m to $1.5m, although it has since risen to $4.3m. Despite unprecedented market conditions, during the quarter Tegal secured system orders from two new customers (one in North America and one in Asia). 

After the fiscal year end, the firm established the subsidiary Tegal France, with offices in the Haute Savoie capital of Annecy, completing the  transition of the DRIE products and related intellectual property for 3D packaging and MEMS (micro-electro-mechanical system) devices from France-based AMMS and Alcatel Lucent.

Tegal says that the development of its new-generation DRIE tool has reached completion, offering a solution for complex 3D interconnects using thru-silicon vias (TSVs), which the firm believes will further expand the its stake in the MEMS market. 

Also, Tegal has just received orders for a 110 DE/SE DRIE tool and for an SMT AlN (aluminum nitride) PVD system from two research centers that are first-time customers: one in South East Asia for research in microsystems, microfluidics and MEMS sensor applications, and one in North American for research on RF MEMS and piezoelectric sensors and actuators, respectively.

However, the firm says that revenue levels remain below breakeven, even after rigorous cost-cutting initiatives (including a 10% cut in staffing announced last November). Furthermore, visibility is extremely poor industry-wide, making forecasting difficult, it adds. These challenges have prompted the board of directors and management to explore all available strategic alternatives to optimize future opportunities. Tegal has therefore retained the services of Cowen and Company LLC to assist in this.

“Doing what is right for our shareholders and employees means making pragmatic decisions based on prevailing market conditions,” says chairman, president & CEO Thomas Mika. “We cannot indefinitely withstand the impact of a protracted industry downturn and a deep global recession. It makes good business sense, therefore, to take early and decisive action to explore strategic alternatives, including the potential sale of the company as a going concern,” he adds. “Our considerable intellectual property assets and our healthy share of select high-growth markets strengthen our position, while our cash balance allows time for careful consideration of the best possible options.”

See related items:

Tegal given cure period to comply with NASDAQ listing requirements

Tegal doubles revenue and halves loss, boosted by AMMS acquisition

Tegal’s revenues fall 57% quarter-to-quarter

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