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MKS Announces Record First Quarter Revenue and Profits

Waterloo, ON - September 8, 2005: MKS Inc. (MKS) (TSX: MKX) today announced its financial results for the first quarter of fiscal 2006 which ended on July 31, 2005. All amounts are reported in US dollars under United States Generally Accepted Accounting Principles.

Waterloo, ON - September 8, 2005: MKS Inc. (MKS) (TSX: MKX) today announced its financial results for the first quarter of fiscal 2006 which ended on July 31, 2005. All amounts are reported in US dollars under United States Generally Accepted Accounting Principles.

Total revenue for the first quarter of fiscal 2006 was $10.8 million, a 22 percent or $2.0 million increase from $8.8 million in the first quarter of fiscal 2005. Net income for the first quarter of fiscal 2006 was $0.5 million, or $0.01 per share, an improvement of 206 per cent or $0.3 million compared to net income of $0.2 million or $0.00 per share in the first quarter of fiscal 2005.

First quarter application lifecycle management (ALM) revenues were $8.8 million, representing 32 percent growth over ALM revenues of $6.7 million in the first quarter of fiscal 2005. The Company’s cash position increased from $7.8 million to $8.9 million during the quarter.

“We were pleased to show continued strong results in our first quarter, once again driven by excellent licensing and field services performance,” said Philip C. Deck, CEO of MKS. “Our strong profitability and cash flow in the quarter was particularly gratifying given significant new hiring in both R&D and field operations as we build for future quarters.”

“In addition to steady license progress, we have begun to see the results of our strategic initiative to build out services partnerships and channels,” said Michael Harris, MKS COO. “We generated more than 50 percent growth in our service revenue due in part to contributions from MKS Solutions Partners in customer implementations.”

MKS expects that the trend of revenue growth will continue throughout fiscal 2006 developing ALM licensing opportunities through expansion of existing customer relationships and through targeting of Global 1000 companies in its primary markets worldwide. MKS believes that the positive results in Q1 ’06 and the anticipated growth in ALM revenue in the balance of fiscal 2006 will lead to annual fiscal 2006 revenue in the range of $46 to $51 million and income from operations before tax in the range of $3 to $4 million. Factors to be considered in arriving at these ranges, identified in the April 30, 2005 MD&A, yet still relevant as of July 31, 2005, include: the expectation that MKS's Interoperability business will decline 5 to 10 percent over the course of the year; the intention of MKS to expand its sales and services staff, increased marketing expenditures and increased ALM research and development expenditures to ensure MKS maintains its technical leadership in the ALM market.

Highlights for the Quarter

  • Significant customer wins at Axalto N.V.; BearingPoint Inc.; Cincinnati Financial Corporation ; Continental Teves Inc; Deutsche Lufthansa AG; European Aeronautic Defense and Space Company EADS N.V.; Exel PLC; HSBC Holdings PLC; LexisNexis Group; NCR Corporation; Northrop Grumman Corporation; Tele Atlas N.V.; T-Mobil International; Verizon Wireless and Wincor Nixdorf International GmbH.
  • 37 contracts worth greater than $50,000, vs. 41 in the same period last year.
  • 63 percent growth in ALM service revenue delivery over the first quarter of fiscal 2005.
  • Partnership with Aspen Software Consultants extending MKS’s consulting and professional services reach with deep consulting, implementation and process expertise.
  • Delivery of the MKS Integrity Solution for ITIL with processes for change, configuration, incident and problem management and the announcement of certification of the solution and MKS software by Pink Elephant.
  • Release of MKS Toolkit 9.0 improving developer productivity on 32 and 64-bit Windows operating systems.

Conference Call Details
The Company will hold a conference call today, September 8, 2005 at 5:00 p.m. EDT to discuss its first quarter performance. Interested parties may access the call by dialing 1-877-871-9526 or 1-416-620-2400. A digital recording of the call will be available for one (1) week from September 8, 2005 to September 15, 2005 and may be accessed by dialing 1-800-558-5253 reservation #21256395 or 1-416-626-4100 reservation #21256395.

For summarized financial information, please click here.

About MKS
MKS is the preeminent provider of enterprise technology management solutions for the global 1000. MKS’s solution spans the application lifecycle from requirements management, through application development, to server deployment providing customers with greater visibility over software development activities, enhanced development productivity and improved IT controls for regulatory compliance. MKS solutions are distinguished by their ease of implementation and low total cost of ownership. Founded in 1984, MKS serves more than 10,000 customers in countries across the world. Whether through deployment of MKS’s enterprise solutions strategically on an enterprise scale, or by leveraging individual components to solve project-level challenges, our customers can use MKS’s technology to better enable higher levels of process maturity, better manage global development activity and safeguard their most critical business applications and software assets. Under its widely known MKS Toolkit brand, MKS also provides UNIX-Windows co-existence and system administration that significantly cut development and administrative costs and reduce time to market, while enabling enhanced performance. More information about MKS can be found at http://www.mks.com, or by calling 1-800-265-2797 (US & Canada), +49-711-351775-0 (Germany), +44-1483-733900 (United Kingdom) and 1-519-884-2251 (Rest of World).

Copyright © 2005 MKS Inc. MKS, and MKS Toolkit are registered 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. 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.

Investor Contact:
Douglas Sawatzky, CFO
519-883-3252
E-mail dsawatzky@mks.com


 

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