News Release

KLA-Tencor Reports Operating Results for Third Quarter

April 14, 1999 at 12:00 AM EDT
KLA-Tencor Reports Operating Results for Third Quarter San Jose, CA, April 14, 1999 - KLA-Tencor Corporation today announced operating results for its third quarter ended March 31, 1999. Revenues were $211 million compared to $274 million for the March quarter of 1998. Net income was $21 million or $0.22 per share. This compares with $29 million or $0.33 per share in the same period one year ago.

New orders for the March quarter were sequentially almost 50% more than the December quarter and backlog was increased substantially. Wafer inspection products experienced the most significant order increase over the December quarter reflecting strong demand for the 2138 and continued positive acceptance of the AIT II, introduced in November of 1998. The Company also experienced a significant increase in electron beam product orders during this period. Geographically, order improvements were most pronounced in the United States and Asia Pacific including Taiwan and Korea.

Gross margins increased to 48% during the March quarter from 46% in the December quarter. The increase resulted primarily from reductions in manufacturing overhead and a revenue mix shift to higher margin products in the wafer inspection area. The Company continues to actively manage its spending, holding operating expenses to less than $88 million.

Other income, net was $16 million, an increase from $14 million in the prior quarter. Other income includes a one-time gain from the sale of the Company's interest in KLA Acrotec and settlement of certain related litigation. Prior quarter other income included a gain from sale of stock in a supplier Company.

The financial position of the Company remains strong; the quarter ended with approximately $748 million in cash and investments and the Company continues to have no long-term debt.

Actual results could differ materially from those anticipated in forward-looking statements in this release as a result of certain factors, including those set forth in the risk factors described in the Company's SEC filings.

Click here to view Consolidated Statement of Income and Consolidated Balance Sheets

About KLA-Tencor: KLA-Tencor is the world leader in yield management and process control solutions for semiconductor manufacturing and related industries. Headquartered in San Jose, Calif., the company has sales and service offices around the world. An S&P 500 company, KLA-Tencor is traded on the Nasdaq National Market under the symbol KLAC.

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