15 November 2010

Tegal returns to profit and revenue growth after shedding thin-film etch & PVD

For fiscal second-quarter 2011 (to end-September 2010), plasma etch and deposition system maker Tegal Corp of Petaluma, CA, USA has reported revenue of $3.2m, up from $3.1m a year ago and just $0.3m last quarter.

This follows March’s sale of its legacy thin-film etch and physical vapor deposition (PVD) product lines to OEM Group Inc of Gilbert, AZ, USA for up to $3m. Tegal continues to sell and support its full range of deep reactive ion etch (DRIE) systems acquired from Alcatel Micro Machining Systems (AMMS) in September 2008, which are used for etching silicon and dielectric films in the micro-electro-mechanical systems (MEMS), bio-tech, power IC, optoelectronic, and 3D-IC (interconnect) sectors.

“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,” says president & CEO Thomas Mika.

Operating expenses have been cut from $2.7m a year ago to $1.6m, largely due to R&D expenses being more than halved from $1.17m to $0.54m and sales & marketing expenses being slashed from $0.67m to $0.15m. This has contributed to the firm recording a net income of $0.1m, compared to a net loss of $1.7m a year ago and $2.5m last quarter.

Nevertheless, during the quarter, cash balance fell further, from $6.2m to $4.4m. At the end of Q2, systems backlog was about $1m.

In July, Mika said that results of the restructuring will not be fully realized until the December quarter, following closure of its manufacturing facility in Petaluma.

“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,” says Mika. “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,” he adds.

See related items:

Tegal sells thin-film etch and PVD assets to OEM Group

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Visit: www.Tegal.com