Genus Reports Third Quarter 2004 Results SUNNYVALE, Calif., Nov. 3
/PRNewswire-FirstCall/ -- Genus, Inc. (NASDAQ:GGNS) today reported
financial results for its third quarter and nine months ended
September 30, 2004. Senior management will conduct an investor
conference call to discuss these results and the company's
financial outlook in more detail today at 2 pm pacific time,
Wednesday, November 3, 2004. Access information is provided below.
Net sales for the third quarter of 2004 were $10.0 million compared
to $9.1 million for the same quarter of 2003 and $8.8 million in
second quarter of 2004. Net sales for the nine months ended
September 30, 2004 were $30.9 million, down from $41.5 million for
the nine months ended September 30, 2003. The net loss for the
third quarter 2004 was $3.9 million or ($0.10) per diluted share
compared to net loss of $2.8 million or ($0.09) per share in the
same quarter of 2003. Net loss in the third quarter of 2004
included $473,000 of expenses related to the previously announced
proposed merger with Aixtron. The net loss for the nine months
ended September 30, 2004 was $8.5 million or ($0.21) per diluted
share compared to a net loss of $3.8 million or ($0.13) per share
for the nine months ended September 30, 2003. "Although year to
date results have been disappointing from a P&L standpoint,
customer activity gained momentum toward the end of the quarter for
both our chemical vapor deposition (CVD) and atomic layer
deposition (ALD) product offerings," commented Bill Elder, Genus
chairman and CEO. "We have already added two new customers this
year." Gross margin as a percentage of revenues was 21 percent for
the third quarter of 2004 compared to 23 percent for the same
quarter of 2003. Gross margin as a percentage of revenues was 29
percent, the same for both the nine months ended September 30, 2004
and 2003. Research and development expenses were $2.1 million in
the third quarter of 2004, $400,000 higher than expenses of $1.7
million in the third quarter of 2003, reflecting expenses related
to additional temporary headcount required to complete two
important development programs on ALD technology. Sales, general
and administrative expenses (SG&A) were $3.1 million in the
third quarter of 2004, $300,000 higher than SG&A expenses of
$2.8 million in the third quarter of 2003, primarily reflecting
increased expenses related to customer demo programs of $120,000 in
the third quarter of 2004 and the recovery of $110,000 in bad debts
in third quarter of 2003. In addition, in the third quarter of
2004, Genus incurred merger related expenses of $473,000. Operating
expenses, including research and development, sales, general and
administrative expenses and merger related expenses were $16.3
million for the nine months ended September 30, 2004, compared to
$14.6 million recorded for the nine months ended September 30,
2003. For the nine months ended September 30, 2004, Genus incurred
merger related expenses of $1.3 million. Genus ended the third
quarter of 2004 with cash, cash equivalents and short-term
investments of $33.9 million, compared with a balance of $41.6
million on December 31, 2003. CONFERENCE CALL INFORMATION Genus
plans to host an investor conference call on Wednesday, November 3,
2004, at 2 p.m. Pacific Time, featuring remarks by Bill Elder,
chairman and CEO, and Shum Mukherjee, executive vice president
finance and CFO, followed by a live question and answer session.
The conference call will be accessible by dialing 888-803-6692 or
706-634-1030 and referencing call number 8959586. It will also be
broadcast live over the Internet at http://www.genus.com/. 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 and electronic storage devices. Genus'
customers include semiconductor and data storage 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/. 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, 2003 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 NINE MONTHS ENDED ENDED September 30,
September 30, 2004 2003 2004 2003 Net sales $ 9,959 $ 9,107 $30,923
$41,541 Costs and expenses: Cost of goods sold 7,886 7,049 21,842
29,438 Research and development 2,060 1,663 5,732 5,758 Selling,
general and administrative 3,111 2,800 9,262 8,842 Expenses related
to proposed merger 473 -- 1,294 -- Loss from operations (3,571)
(2,405) (7,207) (2,497) Interest expense (437) (411) (1,285)
(1,318) Other income, net 79 35 212 84 Loss before income taxes
(3,929) (2,781) (8,280) (3,731) Provision for (benefit from) income
taxes (25) 56 174 56 Net loss $(3,904) $(2,837) $(8,454) $(3,787)
Net loss per share - basic and diluted $(0.10) $(0.09) $(0.21)
$(0.13) Shares used in per share calculation - basic and diluted
39,759 30,628 39,673 29,624 GENUS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS) SEPTEMBER
30, DECEMBER 31, 2004 2003 ASSETS Current Assets: Cash and cash
equivalents $20,904 $41,608 Short term investments 13,015 --
Accounts receivable, net 6,857 9,606 Inventories 12,897 9,783 Other
current assets 1,549 854 Total current assets 55,222 61,851
Equipment, furniture and fixtures, net 11,378 8,748 Other assets
681 1,169 Total assets $67,281 $71,768 LIABILITIES Current
Liabilities: Short-term bank borrowings $7,500 $6,500 Accounts
payable 5,774 4,956 Accrued expenses 3,521 4,130 Deferred revenue
433 331 Customer advances 2,080 372 Notes payable 47 249 7%
convertible notes 6,368 -- Total current liabilities 25,723 16,538
7% convertible notes -- 5,806 Total liabilities 25,723 22,344
SHAREHOLDERS' EQUITY Common stock, no par value: Authorized 100,000
shares; Issued and outstanding 39,759 shares at September 30, 2004
and 39,554 shares at December 31, 2003 163,408 163,061 Accumulated
deficit (119,782) (111,328) Note receivable from shareholder --
(187) Accumulated other comprehensive loss (2,068) (2,122) Total
shareholders' equity 41,558 49,424 Total liabilities and
shareholders' equity $67,281 $71,768 DATASOURCE: Genus, Inc.
CONTACT: Trine Pierik of Positio Public Relations, Inc.,
+1-408-453-2400, or , for Genus, Inc.; or Shum Mukherjee of Genus,
Inc., +1-408-747-7140, or Web site: http://www.genus.com/
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