MKS Instruments reduces headcount by 7%

Sept. 18, 2002 – Andover, MA – MKS Instruments Inc., a provider of products that measure, control, power, and monitor critical parameters of semiconductor and other advanced thin-film manufacturing processes, has consolidated recent acquisitions to accelerate product development, rationalize manufacturing operations, and reduce operating costs. MKS will also reduce its work force by some 7%, or 173 employees.

John Bertucci, Chairman, CEO and president of MKS, said, “In conjunction with this consolidation and given recent downward revisions in semiconductor capital equipment spending for 4Q02, today we reduced our workforce by 173 employees, and announced we will take time off in the fourth quarter in addition to our regularly scheduled holidays. This reduction in personnel and additional time off could lower our quarterly breakeven revenue run rate (on a cash basis, which excludes amortization of charges related to acquisitions) from approximately $89 to $91 million to between $80 and $83 million in 4Q. By the end of 2Q03, after the consolidation is fully implemented, we anticipate that our quarterly breakeven revenue run rate could be reduced by an additional $1.0 to $1.5 million going forward.”

Bertucci continued, “The integration of our 2002 acquisitions is proceeding smoothly, with opportunities to better serve our customers and lower our cost structure. We are combining complementary product groups to accelerate the development of high-value integrated products and shorten time to market. We also expect to improve operating efficiency and leverage our lean manufacturing expertise by consolidating certain manufacturing operations, while maintaining dedicated design centers that continue to concentrate on product development. These actions will help MKS respond rapidly and cost effectively with solutions tailored to our customers’ requirements.”

The company’s ENI and ASTeX product groups, which provide power and plasma generation products, will become the power and reactive gas product group, with design and manufacturing continuing in New York, Massachusetts, and China. Robert Klimm will be the VP and GM of the group, reporting to John Bertucci.

Three acquisitions that enable e- diagnostics and advanced process control (TeNTA, DIP and IPC) will become the control and information technology product group, with design centers in California, Germany, and Israel. Ron Hadar will be the GM of this group, reporting to John Smith, VP and GM of the materials delivery and APC products group.

MKS will consolidate all RF power product manufacturing for semiconductor, medical, and other markets in the ENI manufacturing plants. The Colorado Springs, Colorado, RF facility will become the design center for high-power RF products.

MKS’ spectra products will maintain a design center for RGA-based process monitoring products in California, while consolidating manufacturing for those products in the UK.

The company’s on-line products infrared-based process monitoring product manufacturing will shift to existing Massachusetts facilities, and the design center will remain in Connecticut.

A charge of up to $3.0 million will be recorded in the third quarter of 2002 as a result of these actions.

3Q02 revenues are expected to be within the $85 to $90 million range of guidance given on July 30, 2002.


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