ASTeX comments of fourth quarter and year end fiscal 1996 results; Management comments on anticipated fiscal 1997 results.

WOBURN, Mass.--(BUSINESS WIRE)--May 14, 1996--Applied Science and Technology, Inc. ("ASTeX") (Nasdaq:ASTX) today commented that it is comfortable with the outlook for the fourth quarter and year end fiscal 1996 results for the Company.

In addition, the company stated that a slowdown in the semiconductor industry and a product transition at a major customer are expected to result in lower than anticipated revenue and profitability in the first half of fiscal 1997.

During the fourth quarter of fiscal 1996, the Company has experienced continued growth overall and has been able to gain additional inroads into new and existing customers for its ozone generators and subsystems. The strength of revenues from this area is offsetting modest declines in plasma products for semiconductor fabrication and systems for CVD diamond. The Company anticipates earnings to be in the range of $0.20 to $0.21 and $0.57 to $0.58 per share for the fourth quarter and fiscal year 1996, respectively.

Dr. Richard Post, President and Chief Executive Officer, said, "Although our results for the quarter are expected to be in line with analysts' estimates, we are beginning to see some signs of a slowdown in the industry and a recent product transition by a major customer. These factors will begin to impact revenues and earnings in the quarter, but are not anticipated to significantly affect the earnings for the quarter or fiscal year ending July 1, 1996."

ASTeX was recently informed by a major customer that due to a product transition there will be a significant reduction in orders for certain RF products manufactured by ETO, a division of ASTeX. As a result, revenues and earnings for the first half of fiscal 1997 will be lower than had been originally anticipated.

Dr. Post continued, "Although the unanticipated reduction in orders from a major ETO customer and the semiconductor industry slowdown will impact the first half of fiscal 1997, we believe we will be able to resume our growth in the second half of the year. As a consequence of the reduced revenues and our continued commitment to pursue new business opportunities, we expect earnings to be between 50%-75% below plan for the first and second quarter. We anticipate a resumption of our growth in the second half of the year, benefiting from our continued efforts to develop and ship new products to our existing and new customers. These factors are expected to result in relatively flat earnings per share on a year over year basis.

"We remain confident that the long term trends for the industry and our products will create continued opportunities for growth. Our development efforts to create and introduce products on new process chambers will allow us to advance even if the market growth continues at slower pace. Furthermore, we are getting strong pull-through from a number of our customers in Japan, and we expect to put our first direct salesperson in place in Japan in the coming fiscal year. The ability to establish a presence in the Japanese marketplace is a credit to the quality and innovative products that ASTeX has become recognized for worldwide.

"We are confident that ETO will be a strong contributor to our growth over the long term. We expect that the combination of our existing products, strong technology base and marketing infrastructure will enable us to significantly improve our growth in the coming years. We expect this delay in our growth to be temporary and not to impact our goal of $200 million in revenues in the year 2000."

ASTeX is a leading provider of innovative production technology through delivery of components and systems for semiconductor, medical, and CVD diamond applications. ASTeX markets its systems to producers of CVD diamond, while its microwave and RF power generators, plasma sources and ozone generators and subsystems are marketed to the world's leading semiconductor and medical capital equipment manufacturers. Typical semiconductor applications include stripping, etching, CVD and physical vapor deposition, while medical applications include diagnostic imaging and sterilization.

"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.

CONTACT: John Tarrh

Applied Science and Technology, Inc.

Senior Vice President and Chief

Financial Officer

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OR

Investor Relations Contact:

Donna N. Stein, APR/Evan Smith

Morgen-Walke Associates, Inc.

[phone]

OR

Press Contact:

Lee Foley 

Morgen-Walke Associates, Inc.

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