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MKS Announces Second Quarter Results for Fiscal 2003

Waterloo, ON - December 4, 2002: MKS Inc. (MKS) (TSE:MKX) today announced its financial results for the second quarter of fiscal 2003

Waterloo, ON - December 4, 2002: MKS Inc. (MKS) (TSE:MKX) today announced its financial results for the second quarter of fiscal 20031.

Total revenue for the quarter ended October 31, 2002 was $7.5 million, an increase of 10.9 percent from $6.8 million in the quarter ended October 31, 2001 and a 16.4 percent increase from $6.5 million in the previous quarter. The Company's earnings before interest, taxes, depreciation and amortization (EBITDA) were ($0.2) million, or $(0.01) per share for the second quarter of fiscal 2003, compared to EBITDA of $(0.8) million, or $(0.03) per share, in the second quarter of fiscal 2002 and (EBITDA) of ($1.6) million, or $(0.04) per share, for the first quarter of fiscal 2003. The net loss for the second quarter of fiscal 2003 was $(0.6) million, or $(0.02) per share, compared to a year-earlier loss of $(1.2) million, or $(0.04) per share, in the second quarter of fiscal 2002 and a $(1.5) million, or $(0.04) per share loss in the first quarter of fiscal 2003. Included in operating costs for the period were $0.3 million in one-time severance costs arising from terminations during the period.

The Company continued in the second quarter to show strong growth in the Company's enterprise software configuration management business. During the second quarter of fiscal 2003, SCM revenues increased to $5.1 million, representing 22.5 percent growth over SCM revenues of $4.2 million in the second quarter of fiscal 2002 and a 15.5 percent increase over SCM revenues of $4.4 million in the previous quarter.

After deducting the one time cost of severance during the second quarter of $0.3 million, the Company showed a normalized EBITDA of $0.1 million.

"This quarter represents a major milestone in MKS's continued return to profitability with positive normalized EBITDA," said Philip C. Deck, chairman and chief executive officer of MKS. "Strong license growth combined with much improved operating margins has allowed us to close the profitability gap and reduce our breakeven point."

During the first quarter of fiscal 2003 MKS successfully launched MKS Source Integrity® Enterprise Edition 8.3 and MKS Integrity Manager™ 4.4, bringing to market significantly enhanced enterprise capabilities including its new MKS Federated Server™ architecture and graphical process modeling. Shortly after launch, MKS Source Integrity Enterprise Edition was awarded Editor's Choice for Source Code Control by Windows & .NET Magazine. During the quarter MKS also announced new SCM integrations with complementary technologies from IBM, TogetherSoft, Microsoft and Sybase.

MKS also signed significant SCM agreements with enterprise customers including Schlumberger, Johnson & Johnson, M&G Investments, Continental Teves AG, sentitO Networks, Big Lots Inc., Hypo Vereinsbank, and expanded deployments of MKS Toolkit® with customers E.I. DuPont and Philips Medical Systems.

Finally, the Company reaffirmed its expectation for positive net income in the third fiscal quarter ending January 31, 2003 and now expects its SCM business to achieve positive EBITDA in the same quarter. The Company also expects revenue for its 2003 fiscal year to be in the range of $31 to $33 million.

Conference Call Details
The company will hold a conference call at 5:00 p.m. EST on December 4, 2002 to discuss second quarter performance and results. Interested parties may access the call by dialing (877) 888-7019 or (416) 695-5259. An operator assisted playback of the call will be available for one (1) week from December 4, 2002 to December 11, 2002 during the hours of 7am-11pm and may be accessed by dialing (888) 509-0081 or (416) 695-9728.

For details and numbers, click here.

About MKS
MKS Inc. ("MKS") (TSE:MKX) provides award-winning enterprise software configuration management (SCM) and interoperability software solutions enabling development teams at Fortune 1000 companies such as Park Place Entertainment, Continental Teves, Federated Insurance Companies and Northrop Grumman to analyze, build and deploy software systems quickly and reliably. The company's family of SCM products offer advanced technology with robust workflow, code management, and impact analysis capabilities. Under its widely known MKS Toolkit brand, MKS provides UNIX-Windows co-existence, and system administration that significantly cut development and administrative costs and reduce time to market while enabling enhanced performance. Founded in 1984 with over 10,000 customers worldwide, MKS has built its brand on the foundation of advanced technology, superior quality and extraordinary customer service. 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), and +44-1483-733900 (United Kingdom).

1 Reported in US dollars under US Generally Accepted Accounting Principles (US GAAP), except for EBITDA amounts.

MKS, MKS Source Integrity, MKS Integrity Manager, MKS Integrity Solution, MKS Federated Server, MKS AlertCentre and MKS Toolkit are trademarks or 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. Earnings before interest, taxes, depreciation and amortization or EBITDA is used by the Corporation to measure its operating results. EBITDA is not a measure recognized under US GAAP and may not be consistent with the calculation of similar measures for other companies and should not be viewed as an alternative to net income or other measures of performance calculated in accordance with generally accepted accounting principles. Similarly, EBITDA margins may not be comparable to similar measures reported by other companies.

 

Investor Contact:
Douglas Sawatzky
519-883-4316
Email dsawatzky@mks.com

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