MKS Instruments (MKSI) 8-K MKS Instruments Reports Third Quarter 2007 Financial Results

(MKS LOGO)

EXHIBIT 99.1

Contact: Ronald C. Weigner
Vice President and Chief Financial Officer
Telephone: 978.284.4000

MKS Instruments Reports
Third Quarter 2007 Financial Results

Wilmington, Mass., October 25, 2007 — MKS Instruments, Inc. (NASDAQ: MKSI), a leading worldwide provider of process control technologies for improving productivity in semiconductor and other advanced manufacturing processes, today reported third quarter 2007 financial results.

Sales were $181.0 million, down 12 percent from $205.5 million in the third quarter of 2006 and down 11 percent from $204.0 million in the second quarter of 2007.

Net income totaled $21.4 million, or $0.37 per diluted share, compared to $27.9 million, or $0.50 per diluted share, in the third quarter of 2006, and $22.5 million, or $0.39 per diluted share, in the second quarter of 2007.

Non-GAAP net earnings, which exclude amortization of acquired intangible assets and special items, totaled $22.0 million, or $0.38 per diluted share, compared to $28.9 million, or $0.52 per diluted share, in the third quarter of 2006, and $25.1 million, or $0.43 per diluted share, in the second quarter of 2007.

The financial results that exclude certain charges and special items are not in accordance with Accounting Principles Generally Accepted in the United States of America (GAAP). MKS’ management believes the presentation of non-GAAP financial measures, which exclude costs associated with acquisitions and special items, is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results.

Leo Berlinghieri, Chief Executive Officer and President, said, “After we achieved double-digit sales growth year over year in the first half of 2007, our business declined in the third quarter, primarily as a result of the industry-wide slowdown in semiconductor capital equipment spending. Despite lower sales, we delivered stronger than expected financial results.

“While we are quite optimistic about our long-term growth opportunities, we remain cautious about the near term outlook. Looking ahead to the fourth quarter, we expect sales could range from $165 to $173 million. Net income could range from $0.19 to $0.24 per diluted share on 58 million shares outstanding, and non-GAAP net earnings could range from $0.23 to $0.28 per diluted share.”

Management will discuss third quarter financial results on a conference call today at 8:30 a.m. (Eastern Time). Dial-in numbers are 1-800-366-7640 for domestic callers and 303-262-2140 for international callers. The call will be broadcast live and available for replay atwww.mksinstruments.com. To hear a telephone replay through November 1, 2007, dial 303-590-3000, pass code 11099192#.

MKS Instruments, Inc. is a leading worldwide provider of process control solutions for improving productivity in advanced manufacturing processes such as semiconductor device manufacturing; thin-film manufacturing for flat panel displays, data storage media, architectural glass and electro-optical products; and technology for medical imaging equipment and other markets. Our instruments, components and subsystems incorporate sophisticated technologies to power, measure, control, and monitor increasingly complex gas-related semiconductor manufacturing processes, thereby enhancing our customers’ uptime, yield and throughput, and return on invested capital.

This release contains projections or other forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27 of the Securities Act, and Section 21E of the Securities Exchange Act regarding MKS’ future growth and the future financial performance of MKS. These projections or statements are only predictions. Actual events or results may differ materially from those in the projections or other forward-looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the projections or other forward-looking statements are the fluctuations in capital spending in the semiconductor industry, fluctuations in net sales to MKS’ major customers, potential fluctuations in quarterly results, the challenges, risks and costs involved with integrating the operations of MKS and any acquired companies, dependence on new product development, rapid technological and market change, acquisition strategy, manufacturing and sourcing risks, volatility of stock price, international operations, financial risk management, and future growth subject to risks. Readers are referred to MKS’ filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K, for a discussion of these and other important risk factors concerning MKS and its operations. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

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MKS Instruments, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)

	Three Months Ended
	September 30, 2007			September 30, 2006			June 30, 2007
Net sales	$	181,014		$	205,494		$	203,978
Cost of sales		104,416			114,875			117,948
Gross profit		76,598			90,619			86,030
Research and development		17,159			17,964			18,351
Selling, general and administrative		32,494			33,017			35,928
Amortization of acquired intangible assets		3,877			4,016			4,108
Income from operations		23,068			35,622			27,643
Interest income, net		4,010			2,239			3,581
Income before income taxes		27,078			37,861			31,224
Provision for income taxes		5,696			9,928			8,697
Net income	$	21,382		$	27,933		$	22,527
Net income per share:
Basic	$	0.38		$	0.50		$	0.40
Diluted	$	0.37		$	0.50		$	0.39
Weighted average shares outstanding:
Basic		56,809			55,668			56,820
Diluted		57,482			56,105			57,939
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:
GAAP net income	$	21,382		$	27,933		$	22,527
Adjustments (net of tax, if applicable):
Amortization of acquired intangible assets		3,877			4,016			4,108
Benefit for income taxes (Note 1)		(1,847	)		(1,565	)		—
Tax effect of adjustments		(1,427	)		(1,479	)		(1,513	)
Non-GAAP net earnings (Note 2)	$	21,985		$	28,905		$	25,122
Non-GAAP net earnings per share (Note 2)	$	0.38		$	0.52		$	0.43
Weighted average shares outstanding — diluted		57,482			56,105			57,939

Note 1: The three month period ended September 30, 2007 includes a benefit of $1,847 attributable to a discrete tax matter related to our research and development tax credits. The three month period ended September 30, 2006 includes a net benefit of $1,565 primarily attributable to certain discrete tax matters related to our international operations.

Note 2: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude amortization of acquired intangible assets, acquisition and disposition related charges and special items, net of applicable income taxes.

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MKS Instruments, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)

	Nine Months Ended September 30,
	2007			2006
Net sales	$	596,424		$	582,906
Cost of sales		340,934			332,041
Gross profit		255,490			250,865
Research and development		53,809			51,684
Selling, general and administrative		102,998			93,082
Amortization of acquired intangible assets		12,092			13,356
Purchase of in-process technology		—			800
Income from operations		86,591			91,943
Interest income, net		10,896			5,603
Income before income taxes		97,487			97,546
Provision for income taxes		26,288			29,804
Net income	$	71,199		$	67,742
Net income per share:
Basic	$	1.26		$	1.23
Diluted	$	1.24		$	1.21
Weighted average shares outstanding:
Basic		56,661			55,222
Diluted		57,582			55,760
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:
GAAP net income	$	71,199		$	67,742
Adjustments (net of tax, if applicable):
Amortization of acquired intangible assets		12,092			13,356
Purchase of in-process technology		—			800
Benefit for income taxes (Note 1)		(1,847	)		(1,565	)
Tax effect of adjustments		(4,454	)		(4,889	)
Non-GAAP net earnings (Note 2)	$	76,990		$	75,444
Non-GAAP net earnings per share (Note 2)	$	1.34		$	1.35
Weighted average shares outstanding — diluted		57,582			55,760

Note 1: The nine month period ended September 30, 2007 includes a benefit of $1,847 attributable to a discrete tax matter related to our research and development tax credits. The nine month period ended September 30, 2006 includes a net benefit of $1,565 primarily attributable to certain discrete tax matters related to our international operations.

Note 2: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude amortization of acquired intangible assets, acquisition and disposition related charges and special items, net of applicable income taxes.

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MKS Instruments, Inc.
Unaudited Consolidated Balance Sheet
(In thousands)

	September 30, 2007		December 31, 2006
ASSETS
Cash and short-term investments	$	359,844	$	289,957
Trade accounts receivable		115,668		123,658
Inventories		159,441		149,820
Other current assets		33,139		28,003
Total current assets		668,092		591,438
Property, plant and equipment, net		82,069		79,463
Long-term investments		3,541		2,816
Goodwill		322,396		323,973
Other acquired intangible assets		32,122		43,104
Other assets		5,780		2,926
Total assets	$	1,114,000	$	1,043,720
LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term debt	$	24,198	$	23,021
Accounts payable		29,772		38,541
Accrued expenses and other liabilities		52,216		68,335
Total current liabilities		106,186		129,897
Long-term debt		6,055		6,113
Other long-term liabilities		19,348		6,491
Stockholders’ equity:
Common stock		113		113
Additional paid-in capital		712,936		680,164
Retained earnings		256,868		210,877
Other stockholders’ equity		12,494		10,065
Total stockholders’ equity		982,411		901,219
Total liabilities and stockholders’ equity	$	1,114,000	$	1,043,720

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