GGNS Genus (MM)

Genus Reports Fourth Quarter and Fiscal Year 2003 Results SUNNYVALE, Calif., Feb. 10 /PRNewswire-FirstCall/ -- Genus, Inc. today reported financial results for its fourth quarter and twelve months ended December 31, 2003. Senior management will conduct an investor conference call to discuss these results and the company's financial outlook in more detail at 2 p.m. pacific time, Tuesday, February 10, 2004. Access information is provided below. Net sales for the fourth quarter of 2003 were $15.3 million compared to net sales of $11.3 million for the same quarter of 2002, and up from $39.8 million for twelve months ended December 31, 2002 to $56.9 million for the twelve months ended December 31, 2003. The net income for the fourth quarter 2003 was $268,000 or $0.01 per basic and diluted share compared to net loss of $2.7 million or ($0.09) per share in the same quarter of 2002. The net loss for the twelve months ended December 31, 2003 was $3.5 million or ($0.11) per diluted share compared toa net loss of $11.6 million or ($0.43) per share for the twelve months ended December 31, 2002. "We are beginning to see signs that the prolonged recession in the semiconductor equipment industry is over, with 2004 expected to be a growth year for the industry," commented Bill Elder, Genus chairman and CEO. "Genus' revenues grew over 40 percent in 2003 and ALD technology continued to gain traction in the semiconductor and data storage markets." "With recent announcements of leading semiconductor and data storage companies increasing their capital expenditures, Genus' ALD technology is set to gain further acceptance with a renewed market confidence," Elder continued. Gross margin as a percentage of revenues was 36 percent for the fourth quarter of 2003 compared to 23 percent for the same quarter of 2002. Gross margin as a percentage of revenues was 31 percent for the twelve months ended December 31, 2003 compared to 27 percent for the twelve months ended December 31, 2002. Operating expenses, including research and development, sales, and general and administrative expenses were $4.7 million or 31 percent of revenues in the fourth quarter of 2003, as compared to $4.3 million or 38 percent of revenues in the fourth quarter of 2002. Operating expenses, including research and development, sales, and general and administrative expenses were $19.3 million or 34 percent of revenues for the twelve months ended December 31, 2003, as compared to $20.6 million or 52 percent of revenues for the twelve months ended December 31, 2002. Genus ended the fiscal year 2003 with cash and cash equivalents of $41.6 million, up from cash balance of $11.5 million at December 31, 2002. Cash net of short-term debt on December 31, 2003 was $34.9 million, up from$3.5 million on December 31, 2002. Conference Call Information Genus plans to host an investor conference call on Tuesday, February 10, 2003, at 2 p.m. pacific time, featuring remarks by Bill Elder, chairman and chief executive officer, and Shum Mukherjee, executive vice president finance and chief financial officer, followed by a live question and answer session. The call will be accessible live by dialing 888-803-6692 and referencing call number 5356666. The conference call will also be broadcast live over the Internet at http://www.genus.com/. A replay of the call will be available for 48 hours, beginning two hours after the call, by dialing 800-642-1687 or 706-645-9291 and entering access code 5356666. A webcast replay will be available at http://www.genus.com/ for 31 days after the conference call. About Genus Genus, Inc. manufactures critical deposition processing products for the global semiconductor industry and the data storage industry. To enable the production of intricate micro computer chips and electronic storage devices, Genus offers its STRATAGEM and LYNX series production-proven equipment for 200mm and 300mm semiconductor production, and offers thin film deposition products for chemical vapor deposition (CVD), atomic layer deposition (ALD), and pre-clean capabilities. Genus is at the forefront of market and technology developments in the ALD marketplace, which is gaining acceptance worldwide as a critical technology for sub 0.13-micron production of computer chips andelectronic storage devices. Genus' customers include semiconductor manufacturers located throughout the United States, Europe and the Pacific Rim including Korea, Japan and Taiwan. Founded in 1981, the company is headquartered in Sunnyvale, California.For additional information visit Genus' web site at http://www.genus.com/. STRATAGEM, LYNX2(R) and LYNX3(TM) are trademarks of Genus, Inc. Forward-Looking Statements This press release contains forward-looking statements regarding the company's future financial and business performance. These forward-looking statements are subject to a number of risks and uncertainties. These contingencies include but are not limited to: actual customer orders received by the company, the extent to which ALD technology is demanded by the marketplace, the actual number of customer orders received by the company, the timing of final acceptance of products by customers, the financial climate and accessibility to financing, general conditions in the thin film equipment market and in the macro-economy, and the influence of global political events. Genus assumes no obligation to update this information. Additional risks and uncertainties are discussed in the Management's Discussion and Analysis of Results of Operations contained in Genus' Annual Report on Form 10-K for the fiscal year ended December 31, 2002 filed with the Securities and Exchange Commission. GENUS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) Three Months Ended Year ended December 31, December 31, 2003 20022003 2002 Net sales $15,320 $11,280 $56,861 $39,767 Costs and expenses: Cost of goods sold 9,811 8,680 39,249 29,143 Research and development 1,839 1,932 7,597 8,011 Selling, general and administrative 2,899 2,392 11,741 12,621 Income (loss) from operations 771 (1,724) (1,726) (10,008) Other expenses, net (331) (581) (1,565) (1,074) Income (loss) before income taxes 440 (2,305) (3,291) (11,082) Provision for income taxes 172 379 228 538 Net Income (loss) $268 $(2,684) $(3,519) $(11,620) Net Income (loss) per share: Basic $0.01 $(0.09) $(0.11) $(0.43) Diluted $0.01 $(0.09) $(0.11) $(0.43) Shares used in per share calculation - basic 36,288 28,008 31,303 26,934 Shares used in per share calculation - diluted 37,047 28,008 31,303 26,934 GENUS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands) December 31, December 31, 2003 2002 ASSETS Current Assets: Cash and cash equivalents $41,608 $11,546 Accounts receivable (net of allowance for doubtful accounts of $0 in 2003 and $69 in 2002) 9,606 7,505 Inventories 9,783 11,405 Other current assets 854 1,336 Total current assets 61,851 31,792 Equipment, furniture and fixtures, net 8,748 8,661 Other assets, net 1,169 1,057 Total assets $71,768 $41,510 LIABILITIES Current Liabilities: Short-term bank borrowings$6,500 $7,813 Accounts payable 4,956 6,498 Accrued expenses 4,130 3,064 Deferred revenue 331 2,713 Customer advances 372 1,809 Long-term liabilities, current portion 249 245 Total current liabilities 16,538 22,142 Convertible notes 5,806 5,301 Long-term liabilities -- 270 Total liabilities 22,344 27,713 SHAREHOLDERS' EQUITY Common stock, no par value: Authorized 100,000 shares on December 31, 2003; and 50,000 shares on December 31, 2002; Issued and outstanding 39,554 shares in 2003 and 28,621 in 2002 163,061 123,890 Accumulated deficit (111,328) (107,809) Note receivable from shareholder (187) (151) Accumulated other comprehensive loss (2,122) (2,133) Total shareholders' equity 49,42413,797 Total liabilities and shareholders' equity $71,768 $41,510 DATASOURCE: Genus, Inc. CONTACT: Shum Mukherjee of Genus, Inc., +1-408-747-7120 ext. 1311, or Web site: http://www.genus.com/

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