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MKS Announces First Quarter Fiscal 2010 Results

Waterloo, ON - September 9, 2009: MKS Inc., (MKS) (TSX: MKX) the global application lifecycle management (ALM) technology leader, today announced its financial results for the first quarter of fiscal year 2010 and declared a quarterly cash dividend of US$0.125 per share. All amounts are reported in US dollars under United States Generally Accepted Accounting Principles.

Waterloo, ON - September 9, 2009: MKS Inc., (MKS) (TSX: MKX) the global application lifecycle management (ALM) technology leader, today announced its financial results for the first quarter of fiscal year 2010 and declared a quarterly cash dividend of US$0.125 per share. All amounts are reported in US dollars under United States Generally Accepted Accounting Principles.

Financial & Operational Highlights:

Q1 2010 (compared with Q1 2009)

  • Total revenue increased 2% to $15.7 million from $15.4 million
  • Net income of $1.4 million or $0.14 per share compared to $0.6 million, or $0.06 per share, a 127% increase
  • ALM revenue increased 7% to $14.4 million from $13.4 million
  • ALM operating income increased to $2.2 million compared to $0.6 million, a 250% increase
  • ALM license revenue was unchanged at $5.0 million
  • ALM maintenance revenue increased 6% to $6.7 million from $6.3 million
  • ALM Service revenue increased 24% to $2.7 million from $2.2 million
  • Average headcount increased to 312 from 303.

Closing cash balance at July 31, 2009 was $19.7 million, a $2.6 million increase from the $17.1 million balance at April 30, 2009. During the quarter, MKS paid $1.3 million in dividends.

MKS also announced today that its Board of Directors has declared a quarterly cash dividend of US $0.125 per share on the Company's outstanding common shares, in accordance with its dividend policy.

"We are pleased to report rebounding ALM licensing results from two sluggish quarters late last year" said Philip Deck, CEO of MKS. "Combined with steady performance in maintenance and services, our improved licensing results led to our second best quarterly operating profit ever and record cash balances".

"The improvement in license revenue was a direct result of software deployments within major customers" said Michael Harris, MKS President and COO, "We have been awarded significant new mandates from major software engineering companies worldwide and are now starting to see license revenues that they can generate".

The cash dividend on MKS common shares will be payable on October 15, 2009 to shareholders of record at the close of business on September 30, 2009. The dividend is designated as an eligible dividend for the purposes of section 89 of the Income Tax Act (Canada).

Financial Review

Total revenue for the first quarter of fiscal 2010 was $15.7 million, up 2 percent from $15.4 million for the first quarter of fiscal 2009. Net income for the first quarter of fiscal 2010 increased to $1.4 million, or $0.14 per share, compared to $0.6 million or $0.06 per share in the first quarter of fiscal 2009.

First quarter fiscal 2010 ALM revenues were $5.0 million, unchanged from the ALM revenues reported in the first quarter of fiscal 2009.

Outlook

MKS is committed to profitable organic growth in its primary operating segment, ALM. The Company strives to maintain a balance between increasing current shareholder returns and funding research and sales force investments for long-term growth.

The Company expects a continued decline in the Interoperability business of approximately 10 percent annually.

Investor Presentation Details

The Company will hold its Annual Investor Presentation and Update on September 9th, 2009 at 4:00 p.m. EDT to provide an update to investors and to discuss its first quarter performance. The presentation will be held at the Toronto Board of Trade, 1 First Canadian Place, Meeting Room A/B. The presentation will be available on the Company's Web site following the meeting.

For summarized financial information, please click here.

About MKS

MKS Inc., the global application lifecycle management (ALM) technology leader, enables software engineering and IT organizations to seamlessly manage their worldwide software development activities. With its flagship product, MKS Integrity, MKS offers support for all software development activities through a single enterprise application, resulting in better global collaboration and higher productivity. MKS supports customers worldwide with offices across North America, Europe and Asia. For more information about MKS, visit our Web site at http://www.mks.com.

Copyright © 2009 MKS Inc. MKS and MKS Integrity are trademarks of MKS Inc. All other trademarks mentioned in this release are the property of their respective owners.

This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions are intended to identify forward-looking statements. Such statements reflect the Company's current views with respect to future events and are subject to such risks and uncertainties. Although the Company believes the expectations represented by such forward looking statements are reasonable, there can be no assurance that those expectations will prove to be correct. Many factors could cause our actual results to differ materially from the statements made including those factors detailed from time to time in filings made by the Company with Canadian securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. The Company does not intend and does not assume any obligation to update these forward-looking statements.

For further information, contact:
Douglas Sawatzky, Chief Financial Officer
MKS Inc.
Phone: 519-883-3252
Email: dsawatzky@mks.com

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