<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
------------------------
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE THREE MONTH PERIOD ENDED JUNE 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-26824
TEGAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 68-0370244
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
2201 SOUTH MCDOWELL BLVD.
PETALUMA, CALIFORNIA 94954
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
TELEPHONE NUMBER (707) 763-5600
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of July 15, 1999, there were 10,761,588 shares of the registrant's
Common Stock outstanding.
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TEGAL CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Statements of Operations -- for the
three months ended June 30, 1999 and 1998................... 3
Condensed Consolidated Balance Sheets, as of June 30, 1999
and March 31, 1999.......................................... 4
Condensed Consolidated Statements of Cash Flows -- for the
three months ended June 30, 1999 and 1998................... 5
Notes to Condensed Consolidated Financial Statements........ 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................... 8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK........................................................ 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS........................................... 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................ 12
SIGNATURES.................................................. 13
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TEGAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
------------------
1999 1998
------- -------
<S> <C> <C>
Revenue..................................................... $ 6,659 $ 6,484
Cost of sales............................................... 4,502 4,101
------- -------
Gross profit...................................... 2,157 2,383
------- -------
Operating expenses:
Research and development.................................. 2,628 2,640
Sales and marketing....................................... 1,198 1,425
General and administrative................................ 2,301 1,915
------- -------
Total operating expenses.......................... 6,127 5,980
------- -------
Operating loss.................................... (3,970) (3,597)
Other income, net........................................... 205 207
------- -------
Net loss.......................................... $(3,765) $(3,390)
======= =======
Net loss per common share:
Basic............................................. $ (0.35) $ (0.32)
Diluted........................................... $ (0.35) $ (0.32)
Shares used in per share computation:
Basic............................................. 10,726 10,568
Diluted........................................... 10,726 10,568
</TABLE>
See accompanying notes.
3
<PAGE> 4
TEGAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1999 1999
-------- ---------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 10,785 $ 17,569
Receivables, net.......................................... 8,112 4,831
Inventories............................................... 13,240 12,226
Prepaid expenses and other current assets................. 1,547 1,478
-------- --------
Total current assets.............................. 33,684 36,104
Property and equipment, net................................. 2,791 3,185
Other assets, net........................................... 360 363
-------- --------
$ 36,835 $ 39,652
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable............................................. $ 876 $ 223
Accounts payable.......................................... 1,941 2,254
Accrued expenses and other current liabilities............ 6,971 6,329
-------- --------
Total current liabilities......................... 9,788 8,806
Long-term portion of capital lease obligation............... 5 30
-------- --------
Total liabilities................................. 9,793 8,836
-------- --------
Stockholders' Equity:
Common stock.............................................. 108 107
Additional paid-in capital................................ 55,722 55,635
Cumulative translation adjustment......................... 59 156
Accumulated deficit....................................... (28,847) (25,082)
-------- --------
Total stockholders' equity........................ 27,042 30,816
-------- --------
$ 36,835 $ 39,652
======== ========
</TABLE>
See accompanying notes.
4
<PAGE> 5
TEGAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
------------------
1999 1998
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $(3,765) $(3,390)
Adjustments to reconcile net loss to cash used in
operating activities:
Depreciation and amortization.......................... 441 526
Changes in operating assets and liabilities............ (3,962) 190
------- -------
Net cash used in operating activities................ (7,286) (2,674)
------- -------
Cash flows used in investing activities -- purchases of
property and equipment.................................... (47) (53)
------- -------
Cash flows from financing activities:
Proceeds from issuance of common stock.................... 88 --
Borrowings under lines of credit.......................... 585 340
Repayment of capital lease financing...................... (27) (78)
------- -------
Net cash provided by financing activities............ 646 262
------- -------
Effect of exchange rates on cash and cash equivalents....... (97) (48)
------- -------
Net decrease in cash and cash equivalents................... (6,784) (2,513)
Cash and cash equivalents at beginning of period............ 17,569 25,660
------- -------
Cash and cash equivalents at end of period.................. $10,785 $23,147
======= =======
</TABLE>
See accompanying notes.
5
<PAGE> 6
TEGAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(ALL AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
1. BASIS OF PRESENTATION:
In the opinion of management, the unaudited condensed consolidated interim
financial statements have been prepared on the same basis as the March 31, 1999
audited consolidated financial statements and include all adjustments consisting
only of normal recurring adjustments, necessary to fairly state the information
set forth herein. The statements have been prepared in accordance with the
regulations of the Securities and Exchange Commission, but omit certain
information and footnote disclosures necessary to present the statements in
accordance with generally accepted accounting principles. These interim
financial statements should be read in conjunction with the financial statements
and footnotes thereto included in the annual report on Form 10-K of Tegal
Corporation (the "Company") for the year ended March 31, 1999. The results of
operations for the three months ended June 30, 1999 are not necessarily
indicative of results to be expected for the entire year.
2. INVENTORIES:
Inventories consisted of:
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1999 1999
-------- ---------
<S> <C> <C>
Raw materials........................................... $ 2,543 $ 2,554
Work in progress........................................ 2,847 1,590
Finished goods and spares............................... 7,850 8,082
------- -------
$13,240 $12,226
======= =======
</TABLE>
3. NET LOSS PER COMMON SHARE:
Options to purchase 2,545,538 and 2,013,649 shares of common stock were
outstanding during the three months ended June 30, 1999 and June 30, 1998,
respectively, but were not reflected in the computations of diluted earnings per
share because the Company recorded a net loss in those periods and to do so
would have been anti-dilutive. Accordingly the number of shares used to compute
basic and diluted loss per share was the same.
4. INCOME TAX EXPENSE:
No provision for federal or state income tax has been recorded for the
three month periods ended June 30, 1999 and 1998, respectively, as the Company
has recorded a net loss before taxes for both periods. The Company did not
recognize a benefit for these net losses before taxes because any benefit
derived would require offsetting current losses against future profitability
where such profitability's timing and magnitude are uncertain.
5. NEW ACCOUNTING PRONOUNCEMENTS:
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). SFAS 133 establishes a new model for
accounting for derivatives and hedging activities and supersedes and amends a
number of existing accounting standards. SFAS 133 requires that all derivatives
be recognized in the balance sheet at their fair market value, and the
corresponding derivative gains or losses be either reported in the statement of
operations or as a deferred item depending on the type of hedge relationship
that exists with respect to such derivative. Adopting the provisions of SFAS 133
are not expected to have a material effect on the Company's consolidated
financial statements, which will be effective for the Company's fiscal year
ending March 31, 2002.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Information herein contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, which can be identified
by the use of forward-looking terminology such as "may," "will," "expect,"
"anticipate," "estimate," or "continue" or the negative thereof or other
variations thereon or comparable terminology or which constitute projected
financial information. The forward-looking statements relate to the near-term
semiconductor capital equipment industry outlook, demand for the Company's
products, the Company's quarterly revenue and earnings prospects for the
near-term future and other matters contained herein. Such statements are based
on current expectations and beliefs and involve a number of uncertainties and
risks that could cause the actual results to differ materially from those
projected. Such uncertainties and risks include, but are not limited to, the
impact of the Asian financial crisis on semiconductor capital equipment demand,
current soft demand for semiconductor manufacturing equipment, particularly for
equipment procured for capacity additions such as the Company's non-critical
etch systems, the cyclicality of the semiconductor industry, dependence on
recently introduced systems for the critical etch markets, impediments to
customer acceptance, fluctuations in quarterly operating results, competitive
pricing pressures, the introduction of competitor products having technological
and/or pricing advantages, product volume and mix and other risks detailed from
time to time in the Company's Securities and Exchange Commission ("SEC")
reports. For further information, refer to the business description and
additional risk factors sections included in the Company's Form 10-K for the
year ended March 31, 1999, as filed with the SEC.
RESULTS OF OPERATIONS
The Company designs, manufactures, markets and services plasma etch systems
used in the fabrication of integrated circuits, read-write heads for the disk
drive industry, printer heads and small flat panel displays.
The following table sets forth certain financial items as a percentage of
revenue for the three month periods ended June 30, 1999 and 1998:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
------------------
1999 1998
------ ------
<S> <C> <C>
Revenue..................................................... 100.0% 100.0%
Cost of sales............................................... 67.6 63.2
----- -----
Gross profit.............................................. 32.4 36.8
----- -----
Operating expenses:
Research and development.................................. 39.5 40.7
Sales and marketing....................................... 18.0 22.0
General and administrative................................ 34.5 29.6
----- -----
Total operating expenses.......................... 92.0 92.3
----- -----
Operating loss.............................................. (59.6) (55.5)
Other income, net........................................... 3.1 3.2
----- -----
Income before income taxes.................................. (56.5) (52.3)
Provision for income taxes.................................. 0.0 0.0
----- -----
Net loss.................................................... (56.5)% (52.3)%
===== =====
</TABLE>
Revenue. Revenue for the three months ended June 30, 1999 was $6.7 million,
up 2.7% over the comparable period in 1998. The increase from the comparable
period in the prior year was primarily attributable to the sale of one 6500
series system in the current period, offset in part, by four fewer non-critical
etch systems sales and reduced spare parts and service sales in the three months
ended June 30, 1999.
Revenue from spare parts and service sales was $3.4 million for the three
month period ended June 30, 1999, down from $4.1 million for the three month
period ended June 30, 1998. The Company believes the revenue decline is a result
of customers curtailing spare parts purchases during the current industry
slowdown and to a lesser extent, to increased competition from third party spare
parts suppliers.
7
<PAGE> 8
International sales as a percentage of the Company's revenue was
approximately 71.8% and 66.1% for the three months ended June 30, 1999 and 1998,
respectively. The Company believes that international sales will continue to
represent a significant portion of its revenue.
The Company believes that the slowdown in the semiconductor equipment
industry is likely to persist, for one or two additional quarters and believes
that those industry conditions are likely to adversely affect its revenues
during that time. Specifically, the Company anticipates that its revenue for the
next quarter is likely to be less than the revenue for the three month period
ended June 30, 1999.
Gross profit. Gross profit as a percentage of revenue (gross margin) was
32.4% and 36.8% for the three months ended June 30, 1999 and 1998, respectively.
The decline in gross margin for the three months ended June 30, 1999, compared
to the comparable period in the prior year was principally attributable to
changes in the product mix of systems sales and increased net service spending
in support of systems under warranty.
The Company's gross profit as a percentage of revenue has been, and will
continue to be, affected by a variety of factors, including the mix and average
selling prices of systems sold and the costs to manufacture, service and support
new product introductions and enhancements. Gross margins for the Company's new
systems are typically lower than those of its more mature products due to the
inefficiencies associated with the start-up of manufacturing operations, smaller
vendor discounts due to lower order volumes and increased service installation
and warranty support. As a result of such factors and an anticipation that the
semiconductor equipment industry slowdown will continue for several more
quarters, the Company expects that its gross margin is likely to be below 35
percent for fiscal 2000.
Research and development. Research and development expenses consist
primarily of salaries, prototype material and other costs associated with the
Company's ongoing systems and process technology development, applications and
field process support efforts. Research and development expenses were $2.6
million for each of the three months ended June 30, 1999 and 1998, representing
39.5% and 40.7% of revenue, respectively.
Sales and marketing. Sales and marketing expenses consist primarily of
salaries, commissions, trade show promotion and travel and living expenses
associated with those functions. Sales and marketing expenses were $1.2 million
and $1.4 million for the three months ended June 30, 1999 and 1998,
respectively, representing 18.0% and 22.0% of revenue, respectively. The
decrease in sales and marketing spending for the three months ended June 30,
1999, compared to the comparable period in the prior year is primarily
attributable to reduced trade show and other promotional spending and improved
staffing efficiencies.
General and administrative. General and administrative expenses consist
primarily of compensation for general management, accounting and finance, human
resources, information systems and investor relations functions and for legal,
consulting and accounting fees of the Company. General and administrative
expenses were $2.3 million and $1.9 million for the three months ended June 30,
1999 and 1998, representing 34.5% and 29.6% of revenue, respectively. The
increase in general and administrative spending for the period ended June 30,
1999, compared to the comparable period in the prior year was primarily
attributable to the Company incurring additional legal expenses in connection
with its patent disputes with Austria Mikro Systeme International AG and AMS
Austria MikroSysteme International, Inc. ("AMS") and Tokyo Electron Limited
("TEL"). See "Part II, Item 1. Legal Proceedings."
Other income, net. Other income, net consists primarily of interest income
on outstanding cash balances, and gains and losses on foreign exchange.
Income tax expense. No provision for federal or state income tax has been
recorded for the three months ended June 30, 1999 and 1998, as the Company has
recorded a net loss before taxes in both periods. The Company did not recognize
a benefit for this net loss before taxes in those periods because any benefit
derived would require offsetting current losses against future profitability
where such profitability's timing and magnitude is uncertain.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
For the three month periods ended June 30, 1999 and 1998, the Company
financed its operations through the use of outstanding cash balances.
Net cash used in operations was $7.3 million during the three months ended
June 30, 1999, due principally to a net loss of $3.3 million after adjusting for
depreciation, an increase in accounts receivable and inventory and a decline in
accounts payable, offset in part, by an increase in accrued expenses. Net cash
used in operations was $2.7 million for the three months ended June 30, 1998,
due principally to a net loss of $2.9 million after adjusting for depreciation,
an increase in inventory and a decline in accrued expenses and accounts payable,
offset in part, by a decline in accounts receivable.
Net capital expenditures totaled approximately $50,000 for each of the
three months ended June 30, 1999 and 1998. Capital expenditures in both periods
were incurred principally for leasehold improvements and to acquire design
tools, analytical equipment and computers.
Net cash provided by financing activities totaled $0.6 million and $0.3
million for the three months ended June 30, 1999 and 1998, respectively. In both
periods, the increase was due principally to increased borrowings under the
Company's two Japanese borrowing facilities, offset in part, by repayment of
capital lease obligations.
As of June 30, 1999, the Company had approximately $10.8 million of cash
and cash equivalents. In addition to cash and cash equivalents, the Company's
other principal sources of liquidity consisted of the unused portions of several
bank borrowing facilities. At June 30, 1999, the Company had an aggregate
borrowing capacity of $12.5 million available under a domestic line of credit
secured by substantially all of the Company's assets. The facility is available
until August 15, 1999 and is in the process of being renewed. In addition to the
foregoing facility, as of June 30, 1999, the Company's Japanese subsidiary had
available two lines of credit for a total of 352 million Yen (approximately $2.9
million at exchange rates prevailing on June 30, 1999), unused portion of two
Japanese bank lines of credit totaling 450 million Yen (approximately $3.7
million at exchange rates prevailing on June 30, 1999) secured by Japanese
customer promissory notes held by such subsidiary in advance of payment on
customers' accounts receivable..
The Company believes that anticipated cash flow from operations, funds
available under its lines of credit and existing cash and cash equivalent
balances will be sufficient to meet the Company's cash requirements for the next
nine to twelve months.
YEAR 2000 COMPLIANCE
In the past, many information technology products were designed with two
digit year codes that did not recognize century and millennium fields. As a
result these hardware and software products may not function or may give
incorrect results when Year 2000 dates are used. The "Year 2000 Issue" is faced
by substantially every company which relies on computer systems. In order to
address this issue, such hardware and software products may need to be upgraded
or replaced in order to correctly process dates beginning in the Year 2000.
The Company has formed a team and named an executive sponsor to identify
remedies and test and develop contingency plans for the Year 2000 Issue. The
Company estimates that the tasks identified by this team will be completed by
October 1999. To date, the Company has evaluated its internal systems, its
products and the readiness of its key suppliers and other third parties to
determine their Year 2000 status.
The Company's Enterprise Resource Planning (ERP) system is provided by a
software vendor and contains some custom modifications to meet the Company's
business requirements. The vendor-provided software is Information Technology
Association of America certified Year 2000 compliant. The custom modifications
have been evaluated to identify the changes necessary to make them compliant and
is in the process of coding and testing those changes. The Company estimates
that the required modifications will be completed by October 1999. The Company's
current product offerings have been tested and determined to either be Year 2000
compliant or, where they are not compliant, an upgrade program is available to
address the problem.
9
<PAGE> 10
The Company completed its Year 2000 risk assessment and its corrective
action and contingency plans in April 1999. The corrective action plan has
identified required modifications and upgrades to its business software and
hardware. The risk assessment has evaluated the readiness of its key suppliers
and other third parties and the effect their compliance readiness might have on
the Company. For key suppliers where the risk of non-compliance has been
assessed as high, backup or contingency plans have been developed and documented
and audits of those vendors for Year 2000 compliance are being scheduled to be
performed prior to October 1999. The Company is not currently planning on
assessing the compliance readiness of its customers. The Company's customers are
generally considerably larger than the Company and are unlikely to complete any
questionnaire which the Company might furnish to its customers to assess Year
2000 compliance. The Company does not anticipate that its ability to conduct its
business operations with its suppliers or customers is likely to be materially
adversely impacted by Year 2000 issues since purchase and sales order
transactions are generally transmitted by mail, phone or facsimile between
parties as opposed to through some form of electronic data interchange.
The total expense of preparing the Company for Year 2000 compliance is
estimated at approximately $0.4 million, which is not material to the Company's
business operations or financial condition. Less than $0.2 million of expense
has been incurred through the date of this report. Nevertheless, satisfactorily
addressing the Year 2000 Issue is dependent on many factors, some of which are
not within the Company's control. Should the Company's internal systems, or the
internal systems of one or more of its significant vendors, customers, or other
third parties fail to achieve Year 2000 compliance, the Company's business,
financial condition and results of operations could be materially adversely
affected.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has an investment portfolio of securities principally comprised
of money market funds. These funds are subject to interest rate risk and may
fall in value if market interest rates increase. The Company attempts to limit
this exposure by investing primarily in short-term securities having a maturity
of three months or less.
The Company has foreign subsidiaries which operate and sell the Company's
products in various global markets. As a result, the Company's cash flow and
earnings are exposed to fluctuations in interest and foreign currency exchange
rates. The Company attempts to limit these exposures through the use of various
hedge instruments, primarily forward exchange contracts and currency option
contracts (with maturities of less than three months) to manage its exposure
associated with firm obligations and net asset and liability positions
denominated in non-functional currencies. There have been no significant changes
in the market risk disclosures during the first three months of fiscal 2000, as
compared to the discussion in our 1999 Annual Report on Form 10-K for the year
ended March 31, 1999.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material legal proceedings pending against the Company.
However, on June 10, 1996, Lucent Technologies Inc. ("Lucent") led a claim with
the United States District Court for the Northern District of California
alleging patent infringement by Austria Mikro Systeme International AG and AMS
Austria Mikro Systeme International, Inc. ("AMS") for the sale of integrated
circuits manufactured with the Company's dry plasma etch systems. In March 1995,
the Company executed an agreement with AMS, containing an indemnification
provision covering certain uses of select equipment sold to AMS. Lucent and AMS
have settled the U.S. claim and AMS is now seeking indemnification from the
Company through an arbitration proceeding with respect to the U.S. claim. The
Company has been informed that Lucent filed a claim for patent infringement in
Germany against AMS for the worldwide sale of integrated circuits manufactured
with the Company's dry plasma etch systems. Lucent and AMS have settled that
matter with respect to worldwide sales and AMS has also requested
indemnification for that matter. The Company believes that the claims made by
AMS are without merit and that the ultimate outcome of any defense of such
indemnification claims is unlikely to have a material adverse effect on the
Company's results of operations or financial condition. With respect to the
above matters, proposals have been made by the parties to an ICC arbitration
panel. The proposals must now be examined and finalized by the International
Court of Arbitration. A resolution is expected in August of this year. No
assurance can be given, however, as to the outcome of such legal proceedings or
as to the effect of any such outcome on the Company's results of operations or
financial condition.
On March 17, 1998, the Company filed a suit in the United States District
Court in the Eastern District of Virginia against Tokyo Electron Limited and
several of its U.S. subsidiaries (collectively, "TEL") alleging that TEL's
current generation of etch equipment infringes certain of the Company's patents.
On January 21, 1999 the Court issued an order interpreting the patents-in-suit
in the manner urged by the Company and rejecting the interpretation arguments
made by TEL. The Company is seeking, among other things, injunctive relief
barring TEL from importing or selling such products. The case was tried to the
Court on May 26 - 29, 1999 and is now under submission. The Court has indicated
that it expects to issue a decision by September 1, 1999. No assurance can be
given as to the outcome of such legal proceedings or as to the effect of any
such outcome on the Company's results of operation or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the three
month period ended June 30, 1999.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
None.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 4, 1999
TEGAL CORPORATION
(Registrant)
/s/ DAVID CURTIS
--------------------------------------
David Curtis
Chief Financial Officer, Treasurer and
Secretary (Principal Financial
Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 10,785
<SECURITIES> 0
<RECEIVABLES> 8,427
<ALLOWANCES> 315
<INVENTORY> 13,240
<CURRENT-ASSETS> 33,684
<PP&E> 14,109
<DEPRECIATION> 11,318
<TOTAL-ASSETS> 36,835
<CURRENT-LIABILITIES> 9,788
<BONDS> 0
0
0
<COMMON> 108
<OTHER-SE> 26,934
<TOTAL-LIABILITY-AND-EQUITY> 36,835
<SALES> 6,659
<TOTAL-REVENUES> 6,659
<CGS> 4,502
<TOTAL-COSTS> 4,502
<OTHER-EXPENSES> 2,628
<LOSS-PROVISION> 6
<INTEREST-EXPENSE> 8
<INCOME-PRETAX> (3,765)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,765)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,765)
<EPS-BASIC> (0.35)
<EPS-DILUTED> (0.35)
</TABLE>
