EXHIBIT 99
GENUS REPORTS SECOND QUARTER 2004 RESULTS
SUNNYVALE, CALIF. - JULY 26, 2004 - Genus, Inc. (Nasdaq: GGNS) today reported
financial results for its second quarter and six months ended June 30, 2004.
Senior management will conduct an investor conference call to discuss these
results and the company's financial outlook in more detail at 6 a.m. pacific
time tomorrow, Tuesday, July 27, 2004. Access information is provided below.
Net sales for the second quarter of 2004 were $8.8 million compared to net sales
of $14.7 million for the same quarter of 2003. Net sales for the six months
ended June 30, 2004 were $21.0 million down from $32.4 million for the six
months ended June 30, 2003. The net loss for the second quarter 2004 was $2.9
million or ($0.07) per diluted share compared to net loss of $1.4 million or
($0.05) per share in the same quarter of 2003. Net loss in the second quarter of
2004 included $821,000 of expenses related to our previously announced proposed
merger with Aixtron. The net loss for the six months ended June 30, 2004 was
$4.6 million or ($0.11) per diluted share compared to a net loss of $950,000 or
($0.03) per share for the six months ended June 30, 2003.
"Although the quarter was disappointing from a P&L point of view, customer
activity is strong in both our CVD and ALD segments and, as indicated in our
prior conference calls, we expect the second half to be better than the first
half for both bookings and revenues. Our balance sheet also remains strong,"
commented Bill Elder, Genus chairman and CEO.
Gross margin as a percentage of revenues was 38 percent for the second quarter
of 2004 compared to 27 percent for the same quarter of 2003, resulting mainly
from a favorable product mix caused by a higher proportion of spares and
services in the second quarter of 2004, which generally have higher margins as
compared with system sales. Gross margin as a percentage of revenues was 33
percent for the six months ended June 30, 2004 compared to 31 percent for the
six months ended June 30, 2003. The total of research and development, sales,
general and administrative expenses was $4.8 million in the second quarter of
2004, almost the same level as the second quarter of 2003. In addition, in the
second quarter of 2004, Genus incurred merger related expenses of $821,000.
Operating expenses, including research and development, sales, general and
administrative expenses and merger related expenses were $10.6 million for the
six months ended June 30, 2004, approximately $500,000 higher than the level
recorded for the six months ended June 30, 2003.
Genus ended the second quarter of 2004 with cash, cash equivalents and
short-term investments, net of short-term debt of $35.7 million, up from a
balance of $34.9 million at December 31, 2003.
CONFERENCE CALL INFORMATION
Genus plans to host an investor conference call on Tuesday, July 27, 2004, at 6
a.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 dialling 888-803-6692 or (706) 634-1030
and referencing call number 8959586. It will also be broadcast live over the
Internet at www.genus.com.
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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
www.genus.com. LYNX2(R) and LYNX3(TM) are trademarks of Genus, Inc.
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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.
COMPANY CONTACT:
Shum Mukherjee
Genus, Inc.
Tel: (408) 747-7120 Ext. 1311
Email: smukherjee@genus.com
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- - Tables to Follow -
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GENUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2004 2003 2004 2003
------------ ---------- ---------- ----------
Net sales . . . . . . . . . . . . . . . . . . $ 8,757 $ 14,739 $ 20,964 $ 32,434
Costs and expenses:
Cost of goods sold . . . . . . . . . . . . 5,406 10,813 13,956 22,390
Research and development . . . . . . . . . 1,678 1,981 3,672 4,094
Selling, general and administrative. . . . 3,133 2,868 6,151 6,042
Expenses related to proposed merger. . . . 821 0 821 0
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Loss from operations . . . . . . . . . . . . . (2,281) (923) (3,636) (92)
Other expenses, net. . . . . . . . . . . . . . (411) (435) (715) (858)
------------ ---------- ---------- ----------
Loss before income taxes . . . . . . . . . . . (2,692) (1,358) (4,351) (950)
Provision for income taxes . . . . . . . . . . 181 0 199 0
------------ ---------- ---------- ----------
Net loss . . . . . . . . . . . . . . . . . . . $ (2,873) $ (1,358) $ (4,550) $ (950)
============ ========== ========== ==========
Net loss per share:
Basic. . . . . . . . . . . . . . . . . . . $ (0.07) $ (0.05) $ (0.11) $ (0.03)
Diluted . . . . . . . . . . . . . . . . . $ (0.07) $ (0.05) $ (0.11) $ (0.03)
Shares used in per share calculation - basic . 39,664 29,313 39,628 29,114
============ ========== ========== ==========
Shares used in per share calculation - diluted 39,664 29,313 39,628 29,114
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GENUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
2004 2003
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ASSETS
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . $ 23,585 $ 41,608
Short term investment . . . . . . . . . . . . . . . . . . 12,249 -
Accounts receivable, net . . . . . . . . . . . . . . . . 6,672 9,606
Inventories . . . . . . . . . . . . . . . . . . . . . . . 12,469 9,783
Other current assets . . . . . . . . . . . . . . . . . . 808 854
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Total current assets . . . . . . . . . . . . . . . . 55,783 61,851
Equipment, furniture and fixtures, net . . . . . . . . . . . 10,693 8,748
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 1,041 1,169
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Total assets . . . . . . . . . . . . . . . . . . . . $ 67,517 $ 71,768
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LIABILITIES
Current Liabilities:
Short-term bank borrowings . . . . . . . . . . . . . . . $ - $ 6,500
Accounts payable . . . . . . . . . . . . . . . . . . . . 5,257 4,956
Accrued expenses . . . . . . . . . . . . . . . . . . . . 4,512 4,130
Deferred revenue . . . . . . . . . . . . . . . . . . . . 2,208 331
Customer advances . . . . . . . . . . . . . . . . . . . . 3,820 372
Long term liabilities, current portion . . . . . . . . . 116 249
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Total current liabilities . . . . . . . . . . . . . . 15,913 16,538
Convertible notes . . . . . . . . . . . . . . . . . . . . . . 6,139 5,806
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Total liabilities . . . . . . . . . . . . . . . . . . 22,052 22,344
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SHAREHOLDERS' EQUITY
Common stock, no par value:
Authorized 100,000 shares;
Issued and outstanding 39,759 shares at June 30, 2004
and 39,554 at December 31, 2003 . . . . . . . . . . . 163,408 163,061
Accumulated deficit . . . . . . . . . . . . . . . . . . . (115,878) (111,328)
Note receivable from shareholder . . . . . . . . . . . . - (187)
Accumulated other comprehensive loss . . . . . . . . . . (2,065) (2,122)
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Total shareholders' equity . . . . . . . . . . . . . 45,465 49,424
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Total liabilities and shareholders' equity . . . . . $ 67,517 $ 71,768
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