Tegal eyes acquisitions in tough market
Plasma etch and deposition tool specialist Tegal Corporation has posted a strong finish to its fiscal year, thanks partly to the settlement of a $15 million legal dispute with its own attorneys.
For the year that ended on March 31, 2008, Tegal made an after-tax net profit of $18.1 million on sales of $32.9 million.
And although that huge profit margin resulted largely from the $15 million legal settlement recorded in the final quarter of the fiscal year, the company s operations have improved beyond recognition compared with the previous year, when it posted a net loss of $13.2 million.
Unsurprisingly, CEO Tom Mika declared himself "very pleased" with the financial turnaround, which is the culmination of initiatives put into place over the past three years.
"We were fortunate this year to be able to overcome a strong headwind in the semiconductor capital equipment market," said Mika.
He is now hoping to improve further by getting more beta versions of its advanced nanolayer deposition (Compact 360 NLD) tool into semiconductor fabs, and also by exploiting the company's relatively strong balance sheet.
Tegal s only new product over the past ten years, the Compact 360 NLD has already been chosen by a top manufacturer of high-brightness LEDs (see related story).
Mika wants to build on that initial success, and he is also looking at a number of possible acquisitions to add to the company's range of products. "It pays to be healthy at a time when others are not," he said, indicating the tough predicament that competitors both large and small are finding themselves in.
On top of that, the CEO believes that Tegal can increase its market share in more traditional PVD and etch applications, at a time when he sees rivals either weakened by the economic climate, or distracted by the lure of the photovoltaic equipment business.
"Our competitors are behaving in a way that makes me more confident about Tegal s ability to improve its relative market share position in some key markets," he concluded.
Any acquisitions that are under consideration will be approached very carefully, however, with Mika describing the financial environment for small companies as "horrible".
