ADE Corporation Announces Second-Quarter Fiscal 2000 Financial Results; Posts Third Consecutive Quarter of Increased Backlog.

WESTWOOD, Mass.--(BUSINESS WIRE)--Dec. 7, 1999--

ADE Corporation (NASDAQ:ADEX) today announced revenue of $13.6 million for the second quarter of fiscal 2000 ended October 31, 1999, compared with $12.2 million reported for the year-earlier quarter. Net loss for the second quarter of fiscal 2000 was $5.9 million, or $0.44 per share, compared with a net loss of $7.9 million, or $0.61 per share, for the second quarter of fiscal 1999, with weighted average shares outstanding during the comparable periods of 13.4 million and 13.0 million, respectively. Weighted average shares for the three months ended October 31, 1999 and 1998 exclude stock options outstanding during the period as the effect would be antidilutive. Gross margins for the three months ended October 31, 1999 increased to 35% from (5%) in the prior year, primarily due to the non-reoccurrence of inventory related charges that resulted in the negative margin for the second quarter of last year.

Stated ADE President and Chief Executive Officer Robert Abbe, "We continue to be encouraged by the upward trends in ADE's core industries. The Company is also looking forward to capitalizing on the technological progress it has made once wafer manufacturers begin new wafer fab construction projects and volume purchases of capital equipment. During the second quarter, we continued to recover from the severe downturn that began in 1998 - improving our bottom line and increasing backlog to $27.0 million, our third consecutive sequential gain."

For the first six months of fiscal 2000, ADE reported revenue of $26.0 million, compared with revenue of $36.3 million in the first six months of fiscal 1999. For the first six months of fiscal 2000, the Company reported a net loss of $13.1 million, or $0.98 per share, with 13.3 million weighted average shares outstanding. This compares with a net loss of $8.7 million, or $0.67 per share, with 12.9 million weighted average shares outstanding, in the corresponding period of the previous year. Weighted average shares for the six months ended October 31, 1999 and 1998 exclude stock options outstanding during those periods as the effect would be antidilutive.

"Over the past few months, we have gained better visibility into wafer and disk manufacturers' plans for fab construction," Abbe continued. "According to industry experts, manufacturers are presently running at approximately 85 percent capacity. This level has historically resulted in a large ramp-up of facility construction in order to meet market demand. Due to current pricing pressures in that market, however, it is expected that the resurgence of such projects will not be triggered until manufacturers near full capacity. Once those projects are underway, we expect to benefit greatly as companies begin to fill their new facilities with the equipment necessary to bring next-generation wafers to market."

"In preparation for this eventuality, ADE has aggressively pursued the research and development of advanced yield- and throughput-enhancing products for its customers. Earlier this month, ADE displayed some of its latest advances at Semicon Japan, an international tradeshow that is used by Japanese engineers in determining future budgetary expenditures," stated Abbe. "Among the products showcased were the E2 advanced flatness tool, the Nanomapper, the Ultragage 9530, and the EpiScan 3000. These products have been received positively by wafer and hard disk manufacturers since their recent introductions."

"Although our financial results continue to be affected by the delay in renewed wafer fab construction projects, we expect that wafer makers will eventually exceed present production capacity," Abbe continued. "ADE's objective to augment its existing technology through continued research and development as well as strategic acquisitions and partnerships should allow the Company to succeed in its mission to provide unparalleled metrology and inspection technology."

This news release contains certain forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to our visibility and long-term trends in the industry, demand for the Company's products, further increases in backlog and the ability of the Company to develop and manufacture products that meet customer needs within the timeframes required by customers.

ADE Corporation is a leading supplier of metrology and inspection systems for the silicon wafer and data storage industries. The Company's systems analyze and report product quality at critical manufacturing process steps and provide quality certification data that is relied upon by semiconductor and data storage manufacturers. The Company's systems also are used in the fabrication of integrated circuits.

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                            ADE CORPORATION
            UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                 (In thousands, except per share data)



                                Three months ended  Six months ended
                                    October 31,        October 31,
                                  1999      1998     1999      1998

Revenue                        $ 13,625  $ 12,239  $ 25,987  $ 36,267
Cost of revenue                   8,904    12,799    16,153    26,256
          Gross profit (loss)     4,721      (560)    9,834    10,011

Operating expenses:
    Research and development      4,571     6,463    10,127    13,115
    Marketing and sales           3,367     3,240     6,084     6,361
    General and administrative    2,877     2,213     6,437     5,092
          Total operating
           expenses              10,815    11,916    22,648    24,568
Loss from operations             (6,094)  (12,476)  (12,814)  (14,557)

Interest income, net                374       701       522     1,461
Loss before benefit from income
 taxes and equity in net loss
 of affiliated companies         (5,720)  (11,775)  (12,292)  (13,096)
Benefit from income taxes          --      (4,201)     --      (4,715)

Loss before equity in net loss
 of affiliated companies         (5,720)   (7,574)  (12,292)   (8,381)

Equity in net loss of
 affiliated companies              (149)     (324)     (763)     (331)

Net loss                       $ (5,869) $ (7,898) $(13,055) $ (8,712)

Basic loss per share           $  (0.44) $  (0.61) $  (0.98) $  (0.67)
Diluted loss per share         $  (0.44) $  (0.61) $  (0.98) $  (0.67)

Weighted average shares
 outstanding - basic             13,360    12,965    13,277    12,944
Weighted average shares
 outstanding - diluted           13,360    12,965    13,277    12,944



                            ADE CORPORATION
            UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                 (In thousands, except per share data)


                                                 October 31, April 30,
                                                    1999        1999
                                                 (unaudited)
Assets
Cash and cash equivalents                          $ 39,476   $ 61,278
Accounts receivable, net                             11,521     11,843
Inventories                                          26,855     22,178
Other current assets                                 13,228     15,425
     Total current assets                            91,080    110,724

Fixed assets, net                                    29,755     28,268
Investments                                           3,457      3,869
Restricted cash                                       3,805      3,533
Other assets                                         10,222      7,036
     Total assets                                  $138,319   $153,430

Liabilities and Stockholders' Equity
Total current liabilities                          $ 17,740   $ 20,071
Long-term debt                                       12,237     12,537
Total stockholders' equity                          108,342    120,822
     Total liabilities and stockholders' equity    $138,319   $153,430