Applied Magnetics and DAS Devices Complete Merger.

GOLETA, Calif.--(BUSINESS WIRE)--Feb. 12, 1999--Applied Magnetics Corp. (NYSE:APM) Friday announced that it has completed its previously announced merger with DAS Devices Inc.

Concurrent with the closing, a private placement was also completed with certain institutional investors, which will net the company $20 million in new working capital.

The newly merged company will operate under the Applied Magnetics name with Wafer and Advanced Product Development centered in the Milpitas, Calif., facility. Manufacturing will continue to reside in the companies' facilities located in Goleta, and offshore in Malaysia, Korea and China. The combined company's headquarters will continue to be in Goleta.

The completion of the merger has resulted in the creation of a new company combining leading-edge GMR-based wafer technology with an extensive worldwide manufacturing infrastructure and customer support network to satisfy the demand for GMR recording heads, the fastest-growing segment of the recording head market.

The company currently has GMR product under evaluation at several U.S., Japanese and Korean hard disk drive manufacturers at aerial densities up to 8.2 gigabits per square inch.

"We are very excited to have completed the merger of Applied Magnetics Corporation and DAS Devices Inc. and are already experiencing near-term as well as long-term benefits by leveraging the strengths of the two companies," said Craig Crisman, chairman and CEO of Applied Magnetics.

Applied Magnetics is an independent manufacturer of magnetic recording heads, head-gimbal assemblies ("HGAs") and headstack assemblies ("HSAs") for computer hard disk drives. Founded in 1957, Applied Magnetics is the oldest independent U.S.-based supplier of disk heads to the merchant market.

With headquarters in Goleta, the company employs more than 4,700 people around the world, with facilities in Malaysia, Korea, Singapore and China. The company's World Wide Web site can be found at www.appmag.com.

Forward-looking statements included in this release are based on estimates and assumptions made by management of the company, which, although believed to be reasonable, are inherently uncertain and difficult to predict. Therefore, undue reliance should not be placed upon such estimates. Such statements are subject to certain risks and uncertainties inherent in the company's business that could cause actual results to differ materially from those projected. These factors include, but are not limited to: successful transition to volume production of MR and GMR disk head products with profitable yields; the limited number of customers and customer changes in short-range and long-range plans; competitive pricing pressures; changes in business conditions affecting the company's financial position or results of operations that significantly increase the company's working capital needs; the company's inability to generate or obtain sufficient capital to fund its working capital needs; the company's ability to control inventory levels; domestic and international competition in the company's product areas; risks related to international transactions; and general economic risks and uncertainties.