TEGAL CORPORATION REPORTS Q3 FISCAL YEAR 2012 FINANCIAL RESULTS

February 9, 2012

Petaluma, Calif., February 9, 2012 — Tegal Corporation (NASDAQ: TGAL) today announced financial results for the Second Quarter of Fiscal Year 2012, which ended December 31, 2011.

Financial Statement Highlights

• The Company’s Net Income/(Loss) per share in the Third Quarter of Fiscal Year 2012 was $1.35, compared with ($0.05) in the Third Quarter of the prior fiscal year, and ($0.28) in the Second Quarter.
• Tegal recorded Net Income of approximately $2,269,000 in the Third Quarter of Fiscal Year 2012.  The Company recognized its proportionate share of Sequel Power’s operating loss of ($553,000) in the Third Quarter of Fiscal Year 2012.
• Tegal ended the Third Quarter of Fiscal Year 2012 with approximately $8.5 million in cash (including restricted cash).

Business Highlights

Tegal and its portfolio companies achieved numerous milestones in the Third Quarter of Fiscal Year 2012.  Tegal’s first two portfolio companies are Sequel Power, a private company dedicated to the development and operation of large scale photovoltaic (PV)-based solar utility projects, and NanoVibronix Inc., a private company that develops medical devices and products that implement its proprietary therapeutic ultrasound technology.

Among the highlights of the Third Quarter of Fiscal Year 2012:

• Tegal awarded patents to multiple bidders for three of the four bid lots of Tegal’s NLD Patent Portfolio recently offered for sale for an aggregate consideration of approximately $4 million.  Tegal received approximately $3.6 million in the Third Quarter from the sale of the first of four lots. Tegal sold over 30 patents from the NLD portfolio—which includes more than 35 U.S. and international patents in the areas of pulsed-chemical vapor deposition (CVD), plasma-enhanced atomic-layer deposition (ALD) and NLD.  NLD is a process technology that bridges the gap between high throughput, non-conformal chemical vapor deposition and lower throughput, highly conformal ALD.

• Tegal reported ongoing discussions regarding placement of Lot 4 of the NLD Patent portfolio, which applies to copper barrier and low-k dielectric technology.  Interest in Lot 4 is coming primarily from IC device manufacturers.

• Tegal made a $300,000 strategic investment in NanoVibronix Inc., a medical device company focused on creating products utilizing its proprietary low-intensity surface acoustic wave (SAW) technology.  The company's unique, patented approach enables the transmission of low-frequency, low-intensity ultrasound waves through a variety of soft, flexible materials, including skin and tissue, enabling low-cost, breakthrough devices targeted at large, high-growth markets.

• Sequel Power opened offices in Buenos Aires, Argentina, and Santiago, Chile, during the Third Quarter.   The offices serve Sequel Power’s customers and partners in South America and are overseen by Prince Alexander von Sachsen, Sequel Power’s Chairman of South America and Middle East/Africa.  Sequel Power is currently working on South American large-scale photovoltaic-based solar utilities projects in Argentina, Chile and Ecuador.
• Prince Alexander was a featured speaker at the Solar Arabia Summit at King Saud University in Riyadh, Saudi Arabia, during the Third Quarter of Fiscal Year 2012.  Sequel Power was a sponsor of the event, which is one of the global solar industry’s most important and exclusive gatherings of project developers, technology manufacturers and investors. The invitation-only event brought together leading policy-makers, government officials, investors and businesses involved in Saudi Arabia’s $100 billion program designed to produce 5 gigawatts of solar generated power by 2020.

“In the Third Quarter of Fiscal 2012, Tegal added significant strength to its balance sheet by successfully monetizing a substantial portion of its IP and establishing the groundwork for additional sales,” said Thomas Mika, President and Chief Executive Officer of Tegal.  “Our investment in NanoVibronix in the Third Quarter significantly expanded the scope of our portfolio of emerging growth companies.  The expanding Tegal portfolio is now poised to continue to leverage our historic technology leadership in semiconductors, MEMS and related sectors into market leadership in growth industries ranging from solar power to medical devices.”

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 Securities Exchange Act of 1934.  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, market acceptance of the Company's products and services, the Company’s exploration and execution of strategic alternatives.  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

Since its founding in 1972, Tegal Corporation has been dedicated to the development and application of emerging technologies.  In over 35 years of process development and equipment design, Tegal’s legacy is evident in the most advanced consumer and industrial products that incorporate microprocessors, magnetic memories, radio frequency ID chips, acoustic wave devices, sensors, LEDs, and an array of other semiconductor and MEMS devices fabricated by some of the world’s leading companies, including Tegal’s one-time parent, Motorola.  Drawing on its historic technology leadership in manufacturing process technology that incorporated electro-magnetics, plasma physics, radio frequency control, and materials science, Tegal is currently engaged in the sponsorship of other related emerging technology areas, including photovoltaic (PV)-based solar power and medical devices. Tegal‘s objective is to employ its know-how and resources to pursue these opportunities for growth and profitability in order to enhance its value for over 6,000 public shareholders. Tegal is headquartered in Petaluma, California.  Please visit us on the web at www.Tegal.com.

Consolidated Financial Statements

Contact:

Christine Hergenrother, Vice President & CFO

Tel: +1 707 763-5600

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