Alpha Industries Announces Record Results for Second Fiscal Quarter; Performance Driven by 83% Growth in Wireless Semiconductors.

WOBURN, Mass.--(BUSINESS WIRE)--Oct. 12, 1999--

Alpha Industries, Inc. (NASDAQ: AHAA) today announced its results for the second fiscal quarter ended September 26, 1999.

The Company reported net income for the second quarter of $5.4 million or $0.26 per share, up 80% compared with adjusted net income for the same quarter last year. Adjusted net income for last year's quarter of $3.0 million or $0.19 per share assumes a tax rate of 36%, the same as for this year's quarter. Reported net income for last year's quarter was $4.2 million or $0.26 per share.

Net sales for the quarter were $41.8 million, up by 41% over $29.6 million for the same quarter last year. New orders received in the quarter totaled $44.2 million, up from $29.7 million for last year's quarter.

The Company's Wireless Semiconductors sector had sales of $26.2 million for the quarter and generated $3.8 million in operating profit at a 44.2% gross margin. Application Specific Products had sales of $7.2 million and generated $2.0 million in operating profit at a 53.9% gross margin. Ceramic Products had sales of $8.4 million and generated $1.0 million in operating profit at a 35.3% gross margin. Deliveries to one major customer were 33.0% of total sales for the year to date.

"I am extremely pleased with Alpha's performance during this quarter," stated Tom Leonard, CEO and Vice Chairman of Alpha. "Wireless Semiconductors sales grew 83% and Ceramics grew 55%. Our book-to-bill in Wireless Semiconductors was 1.11. Demand for our products is surging among top wireless handset OEMs. We have set our sights on the broadband cable market, and sales of our components for cable modems and digital set-top boxes are already growing strongly.

"We made significant strides this quarter. We have doubled our GaAs fab capacity. We are now in the process of doubling it again, more than a year earlier than we had originally planned. We will expand our capacity faster than the growth of our markets, so we can continue to take share.

"Our first GaAs HBT product - a low-voltage, high-efficiency linear power amplifier for use in PCS CDMA digital wireless handsets - is now being evaluated by our customers, and early reactions are most encouraging. This is the first of a family of GaAs HBT products that will allow us to expand our customer base into additional major wireless handset OEMs.

"As we announced last month, I am also pleased to note that Dave Aldrich has been elected President and Chief Operating Officer of Alpha. Dave has done a superb job in our semiconductor operations, and now he has a much broader role. Alpha has the people, the products and the will to succeed in our target markets as we enter the new millennium."

Company Summary - Alpha Industries designs, develops, manufactures and markets proprietary radio frequency, microwave frequency and millimeter wave frequency integrated circuits and discrete semiconductors for wireless voice and data communications. The primary applications for our products include wireless handsets for cellular and personal communications services, or PCS. We also produce integrated circuits, discrete components and ceramic resonators and ferrites used in wireless base station equipment, cable television, wireless local loop, wireless personal digital assistants and wireless local area networks. Additional information is available at Alpha's Website - www.alphaind.com.

Safe Harbor Statement - Except for the historical information contained herein, this news release contains forward-looking statements that constitute the Company's current intentions, hopes, beliefs, expectations or predictions of the future which are, therefore, inherently subject to risks and uncertainties. The Company's actual results could differ materially from those anticipated in the Company's forward-looking statements based on various factors, including without limitation: cancellation or deferral of customer orders, dependence on a small number of large customers, difficulties in the timely development and market acceptance of new products, market developments that vary from the current public expectations concerning the growth of wireless communications, difficulties in manufacturing new or existing products in sufficient quantity or quality, increased competitive pressures, decreasing selling prices for the Company's products, or changes in economic conditions. Further information on factors that could affect the Company's performance is included in the Company's periodic reports filed with the SEC, including but not limited to the Company's Form 10-K for the year ended March 28, 1999, and subsequent Forms 10-Q. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company expressly disclaims any obligations or undertakings to release publicly any updates or revisions to any such statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based. -0-

ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(unaudited)                   Second Quarter Ended  Six Months Ended
                               Sept. 26, Sept. 27, Sept. 26, Sept. 27,
(in thousands,                    1999      1998      1999      1998
except per share data)
Net sales                       $ 41,769  $ 29,626  $ 80,374  $ 59,581
 Cost of sales                    23,356    16,763    44,856    33,895
 Research and
  development expenses             4,698     2,891     9,084     5,913
 Selling and
  administrative expenses          6,854     5,422    13,288    10,919
Operating income                   6,861     4,550    13,146     8,854
Interest expense                    (17)      (81)      (74)     (170)
Interest income and other, net     1,569       215     2,199       416
Income before income taxes         8,413     4,684    15,271     9,100
Provision for income taxes         3,029       468     5,498       910
Net income(1)                   $  5,384  $  4,216  $  9,773  $  8,190
Net income per share basic(1)   $   0.28  $   0.27  $   0.54  $   0.52
Net income per share diluted(1) $   0.26  $   0.26  $   0.51  $   0.51
Weighted average
 common shares basic              19,423    15,772    18,178    15,741
Weighted average
 common shares diluted            20,594    16,131    19,230    16,116

COMPARATIVE BALANCE SHEET
(unaudited)                                  Sept. 26,        Mar. 28,
(in thousands)                                 1999             1999
Assets
 Current assets
  Cash, cash equivalents
   and short-term investments              $   128,513     $    23,760
  Accounts receivable, net                      27,996          22,972
  Inventories                                    9,192           8,773
  Prepaid expenses
   and other current assets                      4,920           7,318
 Property, plant and equipment,
  less accumulated depreciation
  and amortization                              52,337          42,497
 Other assets                                    1,498           1,361
  Total assets                             $   224,456     $   106,681
Liabilities and Equity
 Current liabilities
  Current portion of long-term debt        $       111     $       912
  Accounts payable                              11,091          10,700
  Accrued liabilities
   and other current liabilities                 6,179           8,524
 Long-term debt                                    433             713
 Other long-term liabilities                     5,138           4,818
 Stockholders' equity                          201,504          81,014
  Total liabilities and equity             $   224,456     $   106,681

(1) Note - Alpha began reporting earnings on a fully taxed basis at an effective rate of 36%, beginning with the first quarter of fiscal 2000. Reported earnings for the second quarter and first six months of fiscal 1999 reflect a 10% tax rate, due to the utilization of net operating loss carryforwards. At an assumed tax rate of 36%, net income for the second quarter of fiscal 1999 would have been $3.0 million or $0.19 per share. At an assumed tax rate of 36%, net income for the first six months of fiscal 1999 would have been $5.8 million or $0.36 per share.