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| [June 25, 2004] |
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Tegal Corporation Announces Final Fourth Quarter and Fiscal Year 2004 Financial Results
PETALUMA, Calif. --(Business Wire)-- June 25, 2004 -- Tegal Corporation (Nasdaq:TGAL), a leading designer and manufacturer of plasma etch and deposition systems used in the production of integrated circuits and nanotechnology devices, today announced final financial results for the Fourth Quarter and Fiscal Year 2004, which ended March 31, 2004. The final financial results followed a previously announced review of the accounting related to non-cash interest expense with respect to the Company's convertible debentures. As reported in the Company's preliminary earnings announcement on May 6, this review did not have an impact on Tegal's revenue, operating income and pro forma net income for fiscal 2004.
The results of the review are as follows:
As reported on May 6, in connection with its fiscal year-end 2004 closing, the Company determined that the amount of a non-cash, non-operating interest expense item previously reported in Tegal's unaudited condensed consolidated quarterly financial statements for the third fiscal 2004 quarter ended December 31, 2003, was understated by approximately $1.5 million. The non-cash interest expense originally reported for the third fiscal quarter of 2004 did not accurately reflect the impact of the acceleration of the amortization of the beneficial conversion feature and the related accounting for certain debt issuance costs related to the portion of our convertible debentures converted into common stock during that quarter. The correction affects reported interest expense for the quarter, and the nine month period ended December 31, 2003 and other current assets, additional paid in capital, and accumulated deficit as of December 31, 2003 which in turn affects the reported net loss and net loss per common share. The correction has no effect on previously reported revenue, operating expenses, operating loss, pro-forma results or cash flows. The Company has filed an amendment to its Form 10-Q for the third fiscal 2004 quarter to restate its unaudited condensed consolidated financial statements to correct this error. The tables appended to this press release set out the corrected line items based on our calculation of the Company's consolidated statements of operations for the three and nine-month periods ending December 31, 2003.
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. -0- *T TEGAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) ASSETS March 31, March 31, 2004 2003 --------- --------- Current assets: Cash and cash equivalents $ 7,049 $ 912 Trade receivables, net 4,729 2,681 Inventories 3,719 7,032 Prepaid expenses and other current assets 905 465 --------- --------- Total current assets 16,402 11,090 Property and equipment, net 4,039 4,916 Intangible assets, net 1,190 959 Other assets 1,027 244 --------- --------- Total assets $ 22,658 $ 17,209 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $ 124 $ 389 Bank lines of credit 2,326 -- 2% convertible debentures, net 74 -- Accounts payable 1,645 1,923 Product warranty 366 734 Accrued expenses and other current liabilities 2,604 2,679 Deferred revenue 440 324 --------- --------- Total current liabilities 7,579 6,049 Other long-term obligations 98 - Long-term portion of capital lease obligation 26 37 --------- --------- Total liabilities 7,703 6,086 --------- --------- Stockholders' equity: Common stock 366 161 Additional paid-in capital 85,376 68,806 Accumulated other comprehensive income 124 465 Accumulated deficit (70,911) (58,309) --------- --------- Total stockholders' equity 14,955 11,123 --------- --------- $ 22,658 $ 17,209 ========= ========= TEGAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Twelve Months Ended Ended March 31, March 31, ----------------- ------------------- 2004 2003 2004 2003 -------- -------- --------- --------- Revenue $ 6,157 $ 4,002 $ 16,528 $ 14,100 Cost of revenue 3,484 2,727 11,881 14,166 -------- -------- --------- --------- Gross profit (loss) 2,673 1,275 4,647 (66) -------- -------- --------- --------- Operating expenses: Research and development 815 1,418 3,305 4,815 Sales and marketing 587 662 2,347 2,922 General and administrative 1,209 1,038 3,973 4,814 In-process research and development - - 2,202 - -------- -------- --------- --------- Total operating expenses 2,611 3,118 11,827 12,551 -------- -------- --------- --------- Operating income (loss) 62 (1,843) (7,180) (12,617) Other income (expense), net Interest expense, net (1,653) 31 (5,521) (329) Other income, net 32 117 99 321 -------- -------- --------- --------- Total other income (expense), net (1,621) 148 (5,422) (8) -------- -------- --------- --------- Net loss $(1,559) $(1,695) $(12,602) $(12,625) ======== ======== ========= ========= Net loss per share, basic and diluted $ (0.06) $ (0.11) $ (0.56) $ (0.82) ======== ======== ========= ========= Shares used in per share computation: Basic 27,375 16,064 22,442 15,311 Diluted 27,375 16,064 22,442 15,311 Reconciliation from GAAP to non-GAAP Measures of Performance Three Months Twelve Months Ended Ended March 31, March 31, ----------------- ------------------ 2004 2003 2004 2003 -------- -------- -------- --------- Revenue $ 6,157 $ 4,002 $16,528 $ 14,100 GAAP Cost of revenue 3,484 2,727 11,881 14,166 -------- -------- -------- --------- Non-cash inventory provision - - (967) (1,922) -------- -------- -------- --------- Non GAAP Cost of revenue 3,484 2,727 10,914 12,244 -------- -------- -------- --------- Non GAAP Gross profit 2,673 1,275 5,614 1,856 -------- -------- -------- --------- GAAP Total operating expenses 2,611 3,118 11,827 12,551 Non-cash IPR&D expense - - (2,202) - -------- -------- -------- --------- Non GAAP total operating expenses 2,611 3,118 9,625 12,551 -------- -------- -------- --------- Non GAAP Operating loss 62 (1,843) (4,011) (10,695) GAAP Total other income (expense), net (1,621) 148 (5,422) (8) Non-cash interest expense associated with debentures 1,653 - 5,519 - -------- -------- -------- --------- Non GAAP total other income (expense), net 32 148 97 (8) -------- -------- -------- --------- Non GAAP Net income (loss) $ 94 $(1,695) $(3,914) $(10,703) ======== ======== ======== ========= Non GAAP Net income (loss) per share, basic $ 0.00 $ (0.11) $ (0.17) $ (0.70) ======== ======== ======== ========= Non GAAP Net income (loss) per share, diluted $ 0.00 $ (0.11) $ (0.17) $ (0.70) ======== ======== ======== ========= Shares used in per share computation: Basic 27,375 16,064 22,442 15,311 Diluted 40,204 16,064 22,442 15,311 The above pro-forma financial information is presented for informational purposes only. Our presentation excludes a non-cash inventory provision, a non-cash, non-recurring IPR&D charge, and non-cash interest expense resulting from our debentures financing. Because of these exclusions, our presentation is not in accordance with Generally Accepted Accounting Principles (GAAP). Additionally, our presentation of pro-forma financial information may not be consistent with that of other companies. We believe that the exclusion of these non-cash charges may help the investor better understand our liquidity position and the use of tangible resources in our operations and the exclusion of unusual or infrequent items provides an alternative measure which may help the investor evaluate our underlying operating performance. Pro-forma information is not, and should not be considered, a substitute for financial information prepared in accordance with GAAP. TEGAL CORPORATION AND SUBSIDIARIES Detail of Third Quarter Restatement (Unaudited) (In thousands, except per share data) Three months ended December 31, 2003 As Originally As Reported Adjustments Restated ----------- ----------- --------- Interest expense, net (2,055) (1,458) (3,513) Other income (expense) 6 - 6 ----------- ----------- --------- Total other income (expense), net (2,049) (1,458) (3,507) Net loss $ (6,661) $ (1,458) $ (8,119) =========== =========== ========= Net loss per share basic and diluted $ (0.29) $ (0.06) $ (0.35) =========== =========== ========= Nine months ended December 31, 2003 As Originally As Reported Adjustments Restated ----------- ----------- --------- Interest expense, net (2,408) (1,458) (3,866) Other income (expense) 66 - 66 ----------- ----------- --------- Total other income (expense), net (2,342) (1,458) (3,800) Net loss $ (9,584) $ (1,458) $(11,042) =========== =========== ========= Net loss per share basic and diluted $ (0.52) $ (0.07) $ (0.59) =========== =========== ========= As of December 31, 2003 As Originally As Reported Adjustments Restated ----------- ----------- --------- Other current assets $ 2,983 $ (1,280) $ 1,703 Additional paid-in capital 82,268 184 82,452 Accumulated deficit $ (67,893) $ (1,458) $(69,351) *T
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