Financial: Genus Posts 1998 Financial Results - Company Business and Marketing

Edge: Work-Group Computing Report, Feb 22, 1999

Genus, Inc. (Nasdaq: GGNS), announced Tuesday results for the fourth quarter and year end 1998. The Company reported net sales of $5.1 million, compared to $20.9 million for the fourth quarter of 1997. Net income for the fourth quarter of 1998 was $1.3 million or $0.07 per share, compared to a net loss of $20.3 million or $1.20 per share for the same quarter of 1997.

The Company's net sales for 1998 were $32.4 million and net loss was $29.5 million, resulting in a loss of $1.71 per share available to common shareholders. In comparison, Genus' net sales for the previous year were $84.3 million and net loss was $19.3 million or $1.15 per share. Kenneth Schwanda, Genus' vice president of finance, commented, "Genus posted a $1.3 million profit for the quarter although operationally the company incurred a loss of $830,000. This profit is attributed to non-recurring cost reversals of $2.1 million related to inventory, warranty, and restructuring charges. We exited the quarter maintaining our strong balance sheet and with Tuesday's announcement of a multiple system order from a major DRAM manufacturer, Genus is well positioned going into 1999." "We are encouraged by the improving signs we are seeing in the semiconductor marketplace," said William W.R. Elder, Genus' chairman and CEO. "The multiple system order announced Tuesday confirms this trend. In addition, Genus' new product announcements in the fourth quarter of 1998 position us extremely well for the upturn projected by the industry analysts for the second half of this year." Founded in 1982, Genus, Inc. designs, manufactures and markets capital equipment and deposition processes for advanced semiconductor manufacturing. The Company's thin film deposition products are used worldwide to produce integrated circuits for the data processing, communications, medical, military, transportation and consumer electronics industries. Genus' customers include semiconductor manufacturers located throughout the United States, Europe and the Pacific Rim including Korea, Japan and Taiwan. Genus' headquarters are located in Sunnyvale, CA. FMI: http://www.genus.com.

                          Genus, Inc.
  Condensed Consolidated Statement of Operations (Unaudited)
         (Amounts in thousands, except per share data)

                       Three Months Ended     Twelve Months Ended
                          December 31,            December 31,
                         1998      1997         1998       1997

Net sales              $ 5,119   $20,879      $32,431    $84,286

Costs and expenses:

 Cost of goods sold      3,271    14,885       26,029     54,762
 Inventory and warranty
  reserve reversals     (1,623)       --       (1,828)        --
 Research and development1,134     3,012        8,921     12,327
 Selling, general and
  administrative         1,862     7,912       14,115     20,326
 Restructuring charge     (509)       --       12,707         --
                       --------  --------     --------   --------
  Income (loss) from
   operations              984    (4,930)     (27,513)    (3,129)

Other, net                 318    (1,172)         (86)    (1,363)
                       --------  --------     --------   --------
 Income (loss) before
  income taxes           1,302    (6,102)     (27,599)    (4,492)

 Provision for income taxes --    14,223            1     14,844
                       --------  --------     --------   --------
  Net income (loss)   $  1,302  $(20,325)    $(27,600)  $(19,336)

  Deemed dividends on
   preferred stock    $     --  $     --     $ (1,903)  $     --

  Net income (loss)
   available to
   common shareholders$  1,302  $(20,325)    $(29,503)  $(19,336)

  Net income (loss) per
   common share available
   to common shareholders
   and per common share
   assuming dilution  $   0.07  $  (1.20)    $  (1.71)  $  (1.15)

 Shares used in per
  share calculations
   -- basic             17,362    16,965       17,248     16,860
 Shares used in per
  share calculations
   -- diluted           18,106    16,965       17,248     16,860


                          Genus, Inc.
       Condensed Consolidated Balance Sheets (Unaudited)
                    (Amounts in thousands)

                               December 31,       December 31,
                                  1998                1997

Assets

Cash and cash equivalents       $ 8,125             $ 8,700
Accounts receivable, net         13,008              19,469
Inventories                       5,338              28,986
Other current assets                379               1,029
                                -------             -------
Total current assets             26,850              58,184

Property and equipment, net       4,659              15,276
Other assets, net                   318               3,278
                                =======             =======
Total assets                    $31,827             $76,738

Liabilities, redeemable
 preferred stock,
 and shareholders' equity

Short-term borrowings           $ 4,000             $ 7,345
Other current liabilities         6,989              20,065
Long-term debt                      114                 971
Redeemable preferred stock          897                  --
Shareholders' equity             19,827              48,357
                                -------             -------
Total liabilities, redeemable
 preferred stock,
 and shareholders' equity       $31,827             $76,738