Tegal Corporation Reports Third Quarter Fiscal 2011 Financial Results

PETALUMA, Calif.--([ BUSINESS WIRE ])--Tegal Corporation (NASDAQ: TGAL), today announced financial results for the third quarter and year-to-date fiscal year 2011, which ended December 31, 2010.

Financial Results

Revenues for the third quarter of fiscal 2011 were $1.3 million, a decrease from $5.1 million in the same period last year and from $3.2 million in the prior fiscal quarter. Tegal reported net loss of ($0.1) million, or ($0.01) per share, for the quarter, compared to net loss of ($8.8) million, or ($1.04) per share in the same period last year, and a net income of $0.1 million, or $0.02 per share in the prior quarter. Net loss for the nine months ended for the fiscal year 2011 was ($2.4) million, or ($0.29) per share compared to ($13.1) million, or ($1.55) per share in the prior year to date. At the end of the quarter Tegala�s cash balance was $7.9 million.

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 Corporation

Tegal is focused on the development and application of both proven and emerging technologies in the field of green energy. Through its formation of sequel Power, Tegal is engaged in the promotion of large scale solar power plant development projects worldwide. Sequel Power provides the development of self-sustaining businesses from such projects, including supporting, developing, building and operating solar photovoltaic fabrication facilities and solar farms and other non-PV based renewable energy projects. Headquartered in Petaluma, California, the company has more than 35 years of high tech expertise and innovation in specialized technologies. Please visit us on the web at [ www.Tegal.com ].

TEGAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share data)

	December 31,			March 31,
		2010			2010

ASSETS
Current assets:
Cash and cash equivalents	$	7,890		$	7,298
Accounts receivable, net of allowances for sales returns and doubtful accounts of $181 and $324 at December 31, 2010 and March 31, 2010, respectively		1,571			3,116
Notes Receivable		1,026			1,347
Inventories, net		1,196			1,221
Prepaid expenses and other current assets		134			1,243
Total current assets		11,817			14,225
Property and equipment, net		145			308
Intangible assets, net		1,062			1,230
Other assets		6			540
Total assets	$	13,030		$	16,303
LIABILITIES AND STOCKHOLDERSa� EQUITY
Current liabilities:
Accounts payable		493			1,520
Accrued product warranty		336			374
Common stock warrant liability		24			363
Deferred revenue		86			242
Accrued expenses and other current liabilities		2,293			1,867
Total current liabilities		3,232			4,366
Commitments and contingencies (Item 2)
Stockholdersa� equity:
Preferred stock; $0.01 par value; 5,000,000 shares authorized; none issued and outstanding		a"			a"
Common stock; $0.01 par value; 50,000,000 shares authorized; 8,443,714 and 8,438,115 shares issued and outstanding at December 31, 2010 and March 31, 2010, respectively		84			84
Additional paid-in capital		128,605			128,290
Accumulated other comprehensive income (loss)		(178	)		(149	)
Accumulated deficit		(118,713	)		(116,288	))
Total stockholdersa� equity		9,703			11,937
Total liabilities and stockholdersa� equity	$	13,030		$	16,303

TEGAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data)

	Three Months Ended December 31,						Nine Months Ended December 31,
		2010			2009			2010			2009

Revenue	$	1,345		$	5,072		$	4,847		$	9,272
Inventory Provision					7,828						7,828
Cost of sales		323			2,780			2,825			6,039
Gross profit		1,022			(5,536	)		2,022			(4,595	)
Operating expenses:
Research and development expenses		829			1,503			2,394			3,913
Sales and marketing expenses		211			539			519			1,914
General and administrative expenses		554			957			2,631			2,930
Total operating expenses		1,594			2,999			5,544			8,757
Operating income (loss)		(572	)		(8,535	)		(3,522	)		(13,352	)
Other income (expense), net		480			(244	)		1,103			227
Income (loss) before tax expense (benefit)		(92	)		(8,779	)		(2,419	)		(13,125	)
Income tax expense (benefit)								7			(50	)
Net income (loss)	$	(92	)	$	(8,779	)	$	(2,426	)	$	(13,075	)
Net income (loss) per share:
Basic	$	( 0.01	)	$	(1.04	)	$	(0.29	)	$	(1.55	)
Diluted	$	(0.01	)	$	(1.04	)	$	(0.29	)	$	(1.55	)
Shares used in per share computation:
Basic		8,442			8,425			8,439			8,418
Diluted		8,442			8,425			8,439			8,418

N@N

Tegal Corporation Reports Third Quarter Fiscal 2011 Financial Results