ASTeX Announces Record Fiscal 1998 Second Quarter Earnings.

WOBURN, Mass.--(BUSINESS WIRE)--Feb. 3, 1998--

-Reports All-Time Record Quarterly Revenues and Earnings -

Applied Science and Technology, Inc. ("ASTeX") (Nasdaq:ASTX) today reported record financial results for the fiscal 1998 second quarter and six months ended December 27, 1997.

Total revenues for the second quarter of fiscal 1998 increased 141% to an all-time record $22.4 million, versus $9.3 million reported in the second quarter of fiscal 1997. Net earnings for the quarter grew to an all-time record $1.3 million, or $0.15 per share, diluted, compared to net earnings of $280,000, or $0.04 per share, in last year's comparable quarter. As previously announced, results for the second quarter of fiscal 1998 include $212,000 of in-process research and development expense associated with the October 1, 1997, acquisition of Sorbios GmbH, renamed ASTeX Sorbios GmbH. Without the acquisition-related expense, net earnings would have been $1.5 million, or $0.17 per share, diluted. Revenues for the second quarter of fiscal 1998, excluding those for ASTeX Sorbios and ASTeX CPI, which are not included in the comparable quarter of 1997, increased by 91% to $17.8 million. Weighted average shares outstanding used to calculate diluted earnings per share increased to 8.8 million, versus 6.7 million for the comparable period last year, primarily due to the exercise of warrants called for redemption in the first half of fiscal 1998 and, secondarily, due to the dilutive effects of incentive stock options.

Revenues for the six months ended December 27, 1997, rose 108% to $39.9 million, versus $19.2 million reported in the comparable six months of fiscal 1997. Net earnings for the six months rose to $2.4 million, or $0.30 per share diluted, compared to $592,000, or $0.09 per share diluted, in the comparable period last year.

During the quarter, the Company received net proceeds of $10.7 million from the exercise of warrants called for redemption, which was used to repay all bank debt, and completed the acquisition of ASTeX Sorbios. In addition, the Company announced on November 26, 1997, a 3-for-2 split of its Common Stock, which was distributed to shareholders in the form of a stock dividend on December 12, 1997. All prior period share amounts have been adjusted to reflect the stock split.

Dr. Richard Post, President and Chief Executive Officer, stated, "The Company's strongest quarter in its history was the result of impressive demand for all product lines which, in addition to record revenues, resulted in record bookings of $24.4 million and a record backlog of $21.8 million. Our business is being driven by our successes in establishing our products on newly introduced products of our customers. In addition, one third of our revenues was outside the semiconductor industry for medical, elctro-optic and synthetic diamond applications. This sector grew by 18% in the second quarter of fiscal 1998 in comparison to the first quarter of fiscal 1998. International sales were also strong, increasing by a third over the prior quarter, not including ASTeX Sorbios. Including ASTeX Sorbios, international sales increased sequentially by 57% to $5.7 million or 25% of total revenue."

"The solid quarterly results were particularly attributable to strong demand for ozone and microwave plasma generators and subsystems, and the new RF products introduced last year by ASTeX ETO for high-density plasma CVD and oxide etch applications. We began a strong production ramp to meet customer demand through the addition of a second shift and rapid expansion of our Colorado space by a third. We also made excellent progress with the rollout of ASTRON(TM), our new product for chamber clean applications, as well as with the new SmartPower(TM) microwave generator product line. Additionally, we are encouraged by the contributions to our revenue growth we are seeing from our recent acquisitions of ASTeX Sorbios and ASTeX CPI, and by their contributions to our technology base, our global presence, and the diversification and expansion of our markets, product portfolio and customer base."

Dr. Post stated, "As we continue to focus on providing global support to meet the needs of our customers, we are extremely pleased to announce the addition of Bob Shaghafi to our senior management team as Vice President of Global Customer Service reporting to Brian Chisholm, Senior Vice President-Operations. He joins ASTeX with 14 years of experience in the semiconductor capital equipment industry, most recently as Director of International Service for the Asia Pacific Rim with KLA-Tencor. Previously, he was Manager of Worldwide Product Support at Watkins-Johnson and ETEC Systems. I look forward to working with Bob to accelerate our success in building a strong global company."

"With our continued goal of integrating all the Company's sites and systems, during the quarter we selected a new Enterprise Resource Planning computer system which we plan to implement at two sites by the end of fiscal 1998 and company-wide in fiscal 1999. Furthermore, we are undergoing the ISO 9001 registration process at our Woburn and Beverly, Massachusetts, facilities and at our Modesto, California facility, with the goal of being registered at all of our major U.S. sites during 1998."

Dr. Post concluded, "This year continues to be an important one for ASTeX as we further pursue the integration and standardization of our systems in order to offer the best possible solutions and service to our customers. Our research and development investments continue to yield the benefits of new product introductions and design wins, and we look to increase our investments to achieve further penetration into our existing and new customers. The recent acquisitions have contributed strongly to the growth of our product offerings and our market presence worldwide. Through our investments in R&D, key additions to management and our expansion into the European market, we are well positioned to take advantage of our growing opportunities in the coming quarters."

ASTeX is a leading provider of innovative production technology for the manufacture of advanced semiconductor devices. ASTeX markets its plasma sources and subsystems, ozone generators and subsystems, and specialty power sources to the world's leading semiconductor capital equipment manufacturers. ASTeX markets the same underlying core technology for medical, electro-optic and synthetic diamond applications. For more information, visit the new ASTeX web site at www.astex.com.

"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 competitive products and pricing, product demand and market acceptance, new product development, reliance on key strategic alliances, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. -0-

         Applied Science and Technology, Inc. and Subsidiaries
                 Consolidated Statements of Operations

                       Three Months Ended        Six Months Ended
                   December 27, December 28, December 27, December 28,
                     1997        1996        1997      1996
                  (unaudited)   (unaudited)  (unaudited)  (unaudited)

Product sales, net $21,245,162  $8,174,529  $37,310,447  $16,996,986
Research contract
 revenue               200,380     284,314      400,420      544,230
Other revenue          994,252     833,934    2,150,230    1,611,901
    Total revenue   22,439,794   9,292,777   39,861,097   19,153,117

Cost of sales and revenue:
  Product sales and
   other revenue    14,155,232   5,758,982   25,034,648   11,686,365
  Research contracts    54,744     138,400      122,614      257,943
    Total cost of sales
     and revenue    14,209,976   5,897,382   25,157,262   11,944,308

    Gross profit     8,229,818   3,395,395   14,703,835    7,208,809

Operating expenses:
  Selling expenses   1,181,740     632,885    2,016,799    1,398,848
  General and administrative
   expenses          1,886,416     891,602    3,287,321    1,733,927
  Research and development
   expenses          2,850,252   1,409,836    5,411,257    3,079,266
  Acquisition-related
   expenses            212,423           0      212,423            0
    Total operating
     expenses        6,130,831   2,934,323   10,927,800    6,212,041

    Earnings from
     operations      2,098,987     461,072    3,776,035      996,768

Other expense (income):
  Interest expense      35,321     141,222      196,032      293,422
  Interest income     (143,369)    (99,265)    (223,425)    (214,482)
  Other expense
   (income)             21,200     (24,473)    (215,357)     (20,676)
    Total other
     (income) expense  (86,848)     17,484     (242,750)      58,264

    Earnings before
     income taxes    2,185,835     443,588    4,018,785      938,504

Income tax expense     911,000     164,000    1,589,000      347,000

    Net earnings    $1,274,835 $   279,588   $2,429,785   $  591,504

Basic net earnings
 per share          $     0.15 $      0.04   $     0.32   $     0.09
Diluted net earnings
 per share          $     0.15 $      0.04   $     0.30   $     0.09

Weighted average common shares
 outstanding used to calculate
  basic earnings
   per share         8,310,436   6,665,522    7,570,134    6,669,145

Weighted average common shares
 outstanding used to calculate
  diluted earnings
   per share         8,779,355   6,720,527    8,002,489    6,715,897

Note to table: The Company has adopted the provisions of Statement
of Financial Accounting Standards Statement (SFAS) No.  128, Earnings
Per Share.  In accordance with the adoption of SFAS 128, the Company
has excluded the effect of dilutive common stock equivalents from its
basic earnings per share, formally primary earnings per share,
calculation and restated all prior periods on that basis.
-0-
         Applied Science and Technology, Inc. and Subsidiaries
                      Consolidated Balance Sheets

Assets                                   December 27,    June 28,
                                             1997          1997
                                         (unaudited)
Current assets:
     Cash and cash equivalents            $ 9,783,977 $ 3,246,337
     Short-term marketable investments      1,299,771           0
     Accounts receivable, trade, net       12,369,921  11,915,919
     Inventories                           13,335,570  10,013,422
     Prepaid expenses and other assets        245,743     276,682
     Deferred income taxes                  1,458,951     895,237
              Total current assets         38,493,933  26,347,597

Property, plant and equipment:
     Land                                     473,000     473,000
     Building and improvements              1,624,577   1,621,469
     Equipment                              9,299,244   7,871,718
     Furniture and fixtures                   864,006     741,143
     Leasehold improvements                 2,074,913   1,946,800
                                           14,335,740  12,654,130
     Less accumulated depreciation
      and amortization                     (6,860,666) (5,150,881)
              Net property, plant
               and equipment                7,475,074   7,503,249

Other assets:
     Patents, net                           1,172,533     148,794
     Goodwill, net of
      accumulated amortization              4,234,062   3,261,652
     Long-term investments                          0   1,299,545
     Notes receivable, less
      current maturities                      374,978     383,080
     Deferred income taxes                  1,027,384           0
     Other, net                                     0     383,304
               Total other assets           6,808,957   5,476,375
                                          $52,777,964 $39,327,221
Liabilities and Stockholders' Equity

Current Liabilities:
     Current maturities of long-term debt $         0 $ 1,824,397
     Accounts payable                       5,035,820   3,869,521
     Accrued expenses                       2,266,740   1,374,635
     Accrued compensation expense
      and related costs                     2,255,814   1,448,928
     Accrued income tax expense             1,623,302     647,142
     Commissions payable and
      customer advances                       375,142     226,672
               Total current liabilities   11,556,818   9,391,295

Long-term debt, less current maturities             0   6,368,913
Deferred income taxes                               0      78,003
               Total liabilities           11,556,818  15,838,211

Stockholders' equity:
     Common stock                              84,586      67,785
     Additional paid-in capital            43,171,516  27,837,250
     Accumulated deficit                   (1,837,914) (4,267,699)
     Cumulated translation adjustment         (48,716)          0
 Less: Notes receivable for
  common stock purchases                     (148,326)   (148,326)
               Total stockholders' equity  41,221,146  23,489,010
                                          $52,777,964 $39,327,221

CONTACT: John Tarrh

Applied Science and Technology, Inc.

Senior Vice President and Chief

Financial Officer

[phone]

or

Investor Relations Contact:

Donna N. Stein, APR/Dan Durkin/Keil Decker

Morgen-Walke Associates, Inc.

[phone]

Press Contact: Lee Foley/Elizabeth Pieroni

Morgen-Walke Associates, Inc.

[phone]