Tegal to acquire Sputtered Films
The acquisition, for 1.5 million shares of Tegal’s common stock plus a performance-based future cash earnout, is expected to be completed during August 2002. As Wall Street closed for business on August 13, Tegal’s shares were $0.78 each, valuing the stock element of the deal at $1,170,000
Sputtered Films, with headquarters in Santa Barbara, CA, designs and manufactures sputtering equipment for semiconductor, photomask, advanced packaging (including flip chip) and compound semiconductor applications. The late Peter Clarke, the inventor of the world s first magnetron sputtering device, founded Sputtered Films more than 35 years ago.
The company recorded revenues of approximately $5 million over the past 12 months, and has approximately 18 employees, who will continue to be based in Santa Barbara. The acquisition will include Sputtered Films patented Endeavor product lines, which are used to deposit some of the industry s most critical thin films.
Carole Anne Clarke Demachkie, daughter of the founder, will be named a Tegal vice president and general manager of the subsidiary, reporting to Michael Parodi, president and CEO of Tegal. Demachkie has been actively involved with Sputtered Films since 1995 and is currently part of its senior management team.
On completion of the acquisition, Tegal estimates its worldwide employee count will remain at approximately 140, its level prior to the acquisition. Independently, Tegal recently reduced its operating expenses by an amount roughly equal to that of the Sputtered Films operation (see First quarter results below)
"With Sputtered Films, Tegal gains important, complementary product lines to better serve an expanded customer base," said Parodi. "The acquisition builds revenues and will have a positive impact on gross margins. Tegal s industry leading capabilities in new materials etch will be complemented by Sputtered Films advanced deposition solutions. Additionally, we look to accelerate sales and service for the Endeavor product lines through our award-winning support team and international sales force.
First quarter results
Tegal has also announced operating results for its fiscal 2003 first quarter ended June 30, 2002. The results reflected continuing slow or delayed capital equipment orders from semiconductor industry customers. The company reported a net loss of $2.8 million on revenues of $3.7 million for the period ended June 30, 2002. This compares with a net loss of $2.5 million on sales of $7.9 million a year ago.
Revenue for the first quarter was negatively impacted by one less 900 series system and two fewer 6500 series systems sales than during the same period in fiscal 2002. International sales, meanwhile, continue to play an important role with approximately 74% of sales from overseas business, versus 48% last year in the first quarter of fiscal 2002.
In a move to further reduce its costs, Tegal said its expects to generate an additional $1.5 million in annual savings through a 15% work force reduction.
