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Filed by: Applied Science and Technology, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: Applied Science and Technology, Inc.
Exchange Act File No. 0-22646
AT THE COMPANY THE FINANCIAL RELATIONS BOARD
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John M. Tarrh Michael Lawson Beth Lewis Martin Gitlin
Vice President and Treasurer (general info) (analyst info) (media info)
978-284-4135 617-369-9240 617-369-9240 212-661-8030
William S. Hurley
Senior Vice President and Chief Financial Officer
978-284-4402
FOR IMMEDIATE RELEASE
October 24, 2000
ASTeX ANNOUNCES FIRST QUARTER EARNINGS FOR FISCAL 2001
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REVENUES UP 35%, NET INCOME UP 26%
Wilmington, Mass. - October 24, 2000 - Applied Science and Technology, Inc.
("ASTeX") (Nasdaq: ASTX), a leading provider of precision reactive gas
processing solutions to the OEM semiconductor, medical, and industrial markets,
today reported financial results for the fiscal 2001 first quarter ended
September 30, 2000.
Total revenue for the first quarter of fiscal 2001 was $41.3 million, an
increase of 35% from $30.6 million reported in the first quarter of fiscal 2000.
Net earnings for the quarter grew 26% to $3.3 million, or $0.22 per diluted
share, based on 14.8 million common shares outstanding. This compares to net
earnings for the same period in fiscal 2000 of $2.6 million, or $0.22 per
diluted share, based on 12.2 million common shares outstanding.
ASTeX seeks to answer the call of semiconductor equipment OEMs, looking for
integrated, value-added solutions," said Dr. Richard Post, Chairman and CEO of
ASTeX. "The depth of ASTeX's product portfolio underscores our value as a
partner, and our strengths at systems integration positions us to take advantage
of the growing trend toward lean manufacturing and the reliance on broad-based
critical suppliers.
"Our reactive gas modules and power systems for semiconductor production had a
strong first quarter. ASTRON -- ASTeX's leading product that integrates a
reactive gas source, power source and controls into a compact subsystem for
chamber clean -- continued to dominate its market, achieving record sales during
the first quarter. Liquozon -- our new product which delivers high
concentrations of ozone dissolved in de-ionized water for wafer cleaning --
continued to gain market acceptance.
"We are pleased to report the status of our major modular products on customer's
process chambers. ASTeX currently has wet and dry ozone on 29 process chambers
with 6 new opportunities in evaluation; ASTRON on 23 process chambers with 13
new opportunities in evaluation; and microwave products on 13 process chambers
with 8 new opportunities in
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evaluation. Our RF business continues to be strong, with new investment in
advanced RF products targeted for new 300 mm opportunities."
ASTeX continued to make progress with its evolving systems business during the
first quarter, shipping two Nimbus 300 PVD systems for flip-chip advanced
packaging to new customers in Taiwan and Korea. Customers are continuing to
respond to the Nimbus 300's unique in-line design and flexibility which easily
accommodates a wide variety of wafer sizes up to 300 mm, yielding high wafer
throughput with a small footprint and the industry's lowest cost per wafer.
Two days subsequent to the close of the first quarter, ASTeX announced a
definitive agreement to merge with MKS Instruments. Based in Andover, MA, MKS
offers a broad portfolio of gas measurement, control and analysis products based
on its core technologies. The planned merger combines ASTeX, a leading supplier
of reactive gas solutions, with MKS, a leading supplier of gas process control
instruments, and will allow ASTeX to fully leverage the worldwide sales,
marketing and support infrastructure of MKS. Under terms of the agreement MKS
will issue approximately 11.2 million common shares in exchange for the 14.6
million outstanding ASTeX shares, so that after closing, the ASTeX shareholders
will own approximately 30% and the MKS shareholders approximately 70% of the
combined company.
Commenting on the merger, Dr. Post said, "Together, ASTeX and MKS will be the
only provider of products and solutions in all five product areas surrounding
the process chamber: pressure measurement and control, materials delivery and
analysis, vacuum components, reactive gas generators, and power delivery
subsystems. We expect that the critical mass we achieve with this combination
will provide an enhanced growth platform and enable us to strengthen our
customer relationships around the globe."
During the first fiscal quarter of 2001, ASTeX also completed its headquarters
move to Wilmington, MA and, as previously announced, promoted John Ross to
President and Chief Operating Officer. "We're extremely pleased to have John in
this key leadership role," concluded Dr. Post, "as the size and complexity of
our operations continue to expand to meet our customers' needs globally and our
own growth objectives."
ASTeX provides precision reactive gas processing solutions and specialty power
sources to the OEM semiconductor, medical and industrial markets, and complete
process systems for advanced packaging, telecommunications and magnetic sensor
applications. ASTeX's broad product line is based on one or more of our core
technologies including precision reactive gas processing, power sources and
system integration. Depending on customer needs, ASTeX provides varying levels
of integration-from components to integrated subsystems to complete process
solutions. For more information, visit the ASTeX web site at www.astex.com.
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MKS plans to file a Registration Statement on SEC Form S-4 in connection with
the merger and MKS and ASTeX expect to mail a Joint Proxy Statement/Prospectus
to their stockholders containing information about the merger. Investors and
security holders are urged to read the Registration Statement and the Joint
Proxy Statement/Prospectus carefully when they are available. The Registration
Statement and the Joint Proxy Statement/Prospectus will contain important
information about MKS, ASTeX, the merger and related matters. These documents
will be filed with the United States Securities and Exchange Commission. When
these and other documents are filed with the SEC, they may be obtained free at
the SEC's web site at www.sec.gov. You may also obtain for free each of these
documents (when available) from MKS by directing your request to Ronald C.
Weigner, Vice President and Chief Financial Officer of MKS at (978) 975-2350, or
from John Tarrh, Vice President and Treasurer of ASTeX at (978) 284-4135.
MKS and ASTeX, and their respective directors, executive officers and certain
members of management and employees may be soliciting proxies from MKS and ASTeX
stockholders in favor of the adoption of the merger agreement and the
transactions associated with the merger. A description of any interests that
MKS' and ASTeX's directors and executive officers have in the merger will be
available in the Joint Proxy Statement/Prospectus.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: This release contains forward-looking statements that are subject to risks
and uncertainties, including, but not limited to, the impact of industry
business cycles, competitive products and pricing, product demand and market
acceptance, new product development, reliance on key strategic alliances,
general economic conditions, availability of raw materials, fluctuations in
operating results, and other risks detailed from time to time in our filings
with the Securities and Exchange Commission.
- Tables Follow -
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APPLIED SCIENCE AND TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
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September 30, September 25,
2000 1999
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<S> <C> <C>
Product sales, net $ 38,236 $ 28,516
Other revenue 3,070 2,086
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Total revenue 41,306 30,602
Cost of sales and revenue:
Product sales and other revenue 26,132 19,420
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Gross profit 15,174 11,182
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Operating expenses:
Research and development expenses 5,277 2,696
Selling expenses 2,558 2,026
General and administrative expenses 3,333 2,571
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Total operating expenses 11,168 7,293
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Earnings from operations 4,006 3,889
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Other income (expense):
Interest expense (197) 0
Interest income 1,381 407
Other income (expense) 174 (8)
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Total other income 1,358 399
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Earnings before income taxes 5,364 4,288
Income tax expense 2,052 1,658
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Net earnings $ 3,312 $ 2,630
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Earnings per share:
Basic $ 0.23 $ 0.23
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Diluted $ 0.22 $ 0.22
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Weighted average common shares:
Basic 14,407 11,427
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Diluted 14,839 12,207
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</TABLE>
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APPLIED SCIENCE AND TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
ASSETS September 30, July 1,
2000 2000
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(unaudited) (audited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 63,587 $ 78,407
Investments, short term 14,524 12,803
Trade and notes receivables, net 32,890 32,963
Other receivables 434 240
Inventories 26,240 19,947
Prepaid expenses and other assets 331 563
Deferred income taxes 2,409 2,409
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Total current assets 140,415 147,332
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Property and equipment:
Land 2,259 2,259
Building and improvements 17,046 10,889
Equipment 15,613 13,615
Construction in Progress 3,449 5,956
Furniture and fixtures 1,670 1,235
Leasehold improvements 365 1,633
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40,402 35,587
Less accumulated depreciation and amortization (8,973) (8,744)
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Net property, plant and equipment 31,429 26,843
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Other assets:
Long-term investments 9,790 4,000
Goodwill, net of accumulated amortization 7,607 7,852
Deferred income taxes 732 732
Notes receivable, less current maturities 167 177
Patents and other assets, net 3,097 1,640
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Total other assets 21,393 14,401
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$ 193,237 $ 188,576
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 8,045 6,802
Accrued expenses 7,316 5,985
Accrued compensation expense and related costs 2,501 4,101
Accrued income taxes 1,791 1,911
Commissions payable and customer advances 1,614 995
Current portion of mortgage note payable 1,429 1,429
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Total current liabilities 22,696 21,223
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Mortgage note payable, net of current portion 7,858 8,210
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Total liabilities: 30,554 29,433
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Stockholders' equity:
Common stock 145 144
Additional paid-in capital 148,197 147,554
Retained earnings 15,215 11,902
Accumulated other comprehensive loss (874) (457)
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Total stockholders' equity 162,683 159,143
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$ 193,237 $ 188,576
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</TABLE>
