Silicon Valley Group Reports First Quarter Results - Company Financial Information

Edge: Work-Group Computing Report, Jan 31, 2000

Silicon Valley Group, Inc. (Nasdaq: SVGI) Tuesday reported sales of $179,801,000 for the first quarter of fiscal 2000 ended December 31, 1999, representing an increase of 110% over first quarter fiscal 1999 sales of $85,487,000 and a 5% decrease from fourth quarter fiscal 1999 sales of $189,813,000. The Company recorded net income of $6,242,000 or $.18 per diluted share for the first quarter of fiscal 2000 compared to a net loss of $7,032,000 or $.21 per diluted share in the first quarter of fiscal 1999 and net income of $1,635,000 or $.05 per diluted share in the fourth quarter of fiscal 1999. The first quarter of fiscal 2000 and the fourth quarter of fiscal 1999 include the results of the acquired business of the Semiconductor Equipment Group of Watkins-Johnson Company.

The Company recorded bookings of $205,028,000 for the first quarter of fiscal 2000, an increase of 135% over first quarter fiscal 1999 bookings of $87,286,000, and an increase of 13% over fourth quarter fiscal 1999 bookings of $181,335,000. During the first quarter, orders for sixteen Micrascan systems were entered into the Company's backlog. However, due to the Company's policy of including orders with shipment dates within one year of receipt of the order in backlog, orders received for an additional eleven Micrascan systems were excluded from the quarter end backlog of $382,682,000.

The Company attributes the improvement in earnings during the first quarter of fiscal 2000 compared to the first quarter of fiscal 1999 primarily to overall higher sales. The improvement in earnings during the first quarter of fiscal 2000 when compared to the fourth quarter of fiscal 1999 is primarily the result of lower operating expenses.

"The Company is pleased with the improvement in our results," said Papken S. Der Torossian, Chairman and CEO. "Orders for both expansion and new technology products recorded for the quarter were strong, reinforcing the current recovery of the industry. On the strength of improved operational efficiencies, SVG showed significant improvement in profitability."

SVG is a leading manufacturer of automated wafer processing equipment for the worldwide semiconductor industry. The Company designs, manufactures, and markets technically sophisticated equipment used in the primary states of semiconductor manufacturing. Its products include photoresist processing equipment; oxidation, diffusion and low-pressure chemical vapor deposition processing systems; atmospheric pressure chemical vapor deposition systems; photolithography exposure tools that use step-and-scan technology; and precision optical components and systems. Silicon Valley Group is listed on the Nasdaq Stock Market under the symbol SVGI. The Company's World Wide Web address is: http://www.svg.com.

                  SILICON VALLEY GROUP, INC.
              CONDENSED STATEMENTS OF OPERATIONS
           (In thousands, except per share amounts)
                         (Unaudited)

                                               Quarters Ended
                                                 December 31,
                                              1999         1998
                                              ----         ----
Net Sales                                  $ 179,801    $  85,487
Cost of Sales                                104,780       61,457
Gross Profit                                  75,021       24,030
Operating Expenses:
  Research, development and related
   engineering                                30,139       16,001
  Marketing, general and administrative       36,392       19,473
Operating Income (Loss)                        8,490      (11,444)
Interest Income & Other, Net                   2,290        1,465
Interest Expense                                (713)        (374)
Income (Loss) Before Income Taxes             10,067      (10,353)
Provision (Benefit) for Income Taxes           3,825       (3,321)
Net Income (Loss)                          $   6,242    $  (7,032)
Net Income (Loss) per Share - Basic        $    0.19    $   (0.21)
Shares Used in Per Share
Computations - Basic                          33,337       32,759
Net Income (Loss) per Share - Diluted      $    0.18    $   (0.21)
Shares Used in Per Share
Computations - Diluted                        34,637       32,759

                   CONDENSED BALANCE SHEETS
                        (In thousands)

                                       December 31,  September 30,
                                            1999          1999
                                            ----          ----
                                        (Unaudited)

Assets
   Cash and temporary investments         $173,346       $142,246
   Accounts receivable                     132,563        153,981
   Inventories                             209,501        200,769
   Other current / other assets            253,982        257,777
Total                                     $769,392       $754,773
Liabilities and Stockholders' Equity
   Current liabilities                    $170,141       $162,656
   Noncurrent liabilities                   35,131         34,580
   Stockholders' equity                    564,120        557,537
Total                                     $769,392       $754,773