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Electroglas, Inc. (EGLS) Discusses First Quarter Results and Semi Equipment Market Downturn

Electroglas, Inc. (NASD: EGLS), a leading supplier of wafer-probing and software solutions for the semiconductor industry, recently reported its operating results for the first fiscal quarter ended August 30, 2008. The company’s total revenue for the first quarter of fiscal 2009 declined to $8.4 million, a 30-percent decrease over the fourth quarter of fiscal 2008, and 20 percent lower than the first quarter of fiscal 2008.

Due to the current economic conditions, the semiconductor equipment market has been experiencing a downturn, and this cycle has recently affected Electroglas’ largest customers. The company has continued to maintain close contact with its key customers and, although the severity of the bookings drop to quarter revenue was unexpected, it was not entirely surprising to senior management, as the company’s competitors also continue to experience market depression forces.

Chief financial officer of Electroglas, Thomas E. Brunton, commented in a conference call last week stating, “Many of our customers pushed out their capital buying decisions. We are normally back-end loaded, so this hit us hard on the first quarter revenue line. We expect revenue for the second fiscal quarter of 2009 to be in the range of $7.0 million to $8.5 million.” Mr. Brunton added, “We expect gross margins in second quarter to improve from first quarter levels with a more normal product mix.”

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