Genus Reports Third Quarter 2003 Results

Genus Reports Third Quarter 2003 Results 


SUNNYVALE, Calif., Oct. 27  /PRNewswire-FirstCall/ -- Genus, Inc.  today
reported financial results for its third quarter and nine months ended September
30, 2003.  Senior management will conduct an investor conference call to discuss
these results and the company's financial outlook in more detail at 8 a.m.
pacific time tomorrow, Tuesday, October 28, 2003. Access information is provided
below.

Net sales for the third quarter of 2003 were $9.1 million compared to net sales
of $12.2 million for the same quarter of 2002, and up from $28.5 million for
nine months ended September 30, 2002 to $41.5 million for the nine months ended
September 30, 2003.  The net loss for the third quarter 2003 was $2.8 million or
($0.09) per diluted share compared to net loss of $1.6 million or ($0.06) per
share in the same quarter of 2002. The net loss for the nine months ended
September 30, 2003 was $3.8 million or ($0.13) per diluted share compared to a
net loss of $8.9 million or ($0.34) per share for the nine months ended
September 30, 2002.

"Though the market growth has been slowed by the continuing recession in the
semiconductor industry, Genus' recent order activity has emerged as a positive
industry indicator that ALD is the enabling technology it was predicted to be,"
said company chairman and CEO Bill Elder. "With recent announcements of leading
semiconductor and data storage companies increasing their capital expenditures,
our ALD technology is set to gain further acceptance with a renewed market
confidence. The company continues to be well positioned globally with ALD
customers in the semiconductor and data storage markets in the U.S., Asia and
Europe, and we maintain our expectation that the worldwide demand for ALD
products will continue to grow."

Gross margin as a percentage of revenues was 23 percent for the third quarter of
2003 compared to 36 percent for the same quarter of 2002. Gross margin as a
percentage of revenues was 29 percent for the nine months ended September 30,
2003 compared to 28 percent for the nine months ended September 30, 2002.
Operating expenses, including research and development, sales and general and
administrative expenses were $4.5 million in the third quarter of 2003,
approximately $1.1 million below the level recorded in the third quarter of
2002. Operating expenses, including research and development, sales and general
and administrative expenses was $14.6 million for the nine months ended
September 30, 2003, approximately $1.7 million below the level recorded for the
nine months ended September 30, 2002.

Genus ended the third quarter 2003 with cash and cash equivalents of $10.5
million, slightly lower than the cash balance of $10.9 million at June 30, 2003.
 Cash net of short-term debt was $8.2 million, up from $2.9 million on June 30,
2003.

Financial Guidance

Genus maintains its financial guidance for full year 2003 for both bookings ($45
million to $60 million range) and revenues ($50 million to $60 million range).

Conference Call Information

Genus plans to host an investor conference call on Tuesday, October 28, 2003, at
11:00 a.m. eastern 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 call will be accessible live by dialing 888
803-6692.

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 and entering access
code 3473923. A webcast replay will be available 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/.

  NOTE:  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          Nine Months Ended
                              September 30,               September 30,
                           2003          2002         2003          2002

  Net sales               $9,107       $12,153      $41,541       $28,487
  Costs and expenses:
   Cost of goods sold      7,049         7,826       29,438        20,463
   Research and
    development            1,663         2,127        5,758         6,079
   Selling, general
    and administrative     2,800         3,498        8,842        10,229
  Loss from operations   (2,405)       (1,298)      (2,497)       (8,284)

  Other income
   (expenses), net         (376)         (206)      (1,234)         (493)
  Loss before income
    taxes                (2,781)       (1,504)      (3,731)       (8,777)

  Provision for
   income taxes               56            71           56           159
  Net loss              $(2,837)      $(1,575)     $(3,787)      $(8,936)

  Net loss per share:
   Basic                 $(0.09)       $(0.06)      $(0.13)       $(0.34)
   Diluted               $(0.09)       $(0.06)      $(0.13)       $(0.34)

  Shares used in per
   share calculation
   - basic                30,628        27,693       29,624        26,572
  Shares used in per
   share calculation
   - diluted              30,628        27,693       29,624        26,572



                       GENUS, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                              (in thousands)

                                                September 30,  December 31,
                                                    2003           2002

  ASSETS
  Current Assets:
   Cash and cash equivalents                       $10,470        $11,546

   Accounts receivable (net
    of allowance for doubtful
    accounts of $0 in 2003
    and $69 in 2002)                                 3,275          7,505
   Inventories                                       9,005         11,405
   Other current assets                              1,064          1,336
    Total current assets                            23,814         31,792
  Equipment, furniture and fixtures, net             9,325          8,661
  Other assets, net                                  1,270          1,057
    Total assets                                   $34,409        $41,510

  LIABILITIES
  Current Liabilities:
   Short-term bank borrowings                       $1,969         $7,813
   Accounts payable                                  3,186          6,498

   Accrued expenses                                  3,857          3,064
   Deferred revenue                                  2,576          2,713
   Customer advances                                 1,728          1,809
   Long-term liabilities, current portion              266            245
    Total current liabilities                       13,582         22,142

  Convertible notes                                  5,647          5,301
  Long-term liabilities                                 47            270
    Total liabilities                               19,276         27,713

  SHAREHOLDERS' EQUITY
  Common stock, no par value:
   Authorized 100,000 shares on September
    30, 2003; and 50,000 shares on
    December 31, 2002;
    Issued and outstanding 32,201 shares in
     2003 and 28,621 in 2002                       128,862        123,890
   Accumulated deficit                           (111,596)      (107,809)
   Note receivable from shareholder                  (151)          (151)
   Accumulated other comprehensive loss            (1,982)        (2,133)
    Total shareholders' equity                      15,133         13,797

    Total liabilities and
     shareholders' equity                          $34,409        $41,510


DATASOURCE: Genus, Inc.



CONTACT:  Shum Mukherjee of Genus, Inc., [phone], ext. 1311, or





Web site:  http://www.genus.com/ 

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