Mattson Technology struggles with big merger, sharp downturn

FREMONT, Calif. -- Mattson Technology Inc. has been hint hard by the downturn in semiconductor equipment while attempting to digest a three-way merger that was supposed to significantly increase its size. Instead, the company today posted a 21% sequential decline in revenues to $96.9 million in the second quarter, compared to $122.6 million in Q1.

Mattson Technology's net loss totaled $33.1 million vs. a net loss of $49.6 million in Q1. The company also said its deferred revenue at the end of Q2 was $107.8 million.

The sharp slowdown "hit us especially hard since we recently acquired substantial production facilities as part of our merger with CFM and Steag," said Brad Mattson, chief executive officer of Mattson Technology.

At the start of 2001, the Fremont company took over Steag Electronic Systems AG of Essen, Germany, and CFM Technologies Inc. of Exton, Pa., to become the world's 14th largest supplier of fab tools (see Jan. 3 story). But almost as soon as the deal was completed, the industry fell into its worst recession in history.

"Our restructuring efforts initiated in Q2 will require a couple of quarters to complete," Mattson said. "We have already taken several actions so far in Q2 and into Q3 to reduce expenses and improve efficiency, including consolidating facilities, reducing materials costs, reducing executive pay, implementing shortened workweeks and reducing headcount. We implemented a reduction in force in May, releasing approximately 180 employees. This was in addition to previous reductions in contract and temporary employees," he added.

Looking ahead, Mattson said his company expects revenues to be sequentially down by 10-to-20% from Q2. Bookings are expected to be flat with Q2 in the current third quarter at around $45-to-$50 million, he said.

"As part of our consolidation plan, we are in the process of selling two buildings -- one in Austin, Tex., and the other in West Chester, Pa.," said the chief executive officer. "We also have plans to reduce our space in the Fremont/San Jose area by more than 60,000 sq. ft. in the near future. We continue to review our headcount and plan to make further adjustments to align headcount with current revenue levels."

He said the supplier of thermal, plasma and wet semiconductor processing equipment was reviewing its product lines and looking to outsource some low-volume systems. "The company expects to record restructuring charges in the third quarter as a result of these actions," Mattson said.