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MKS Announces Third Quarter Fiscal 2010 Results and Quarterly Dividend

Waterloo, ON - February 23, 2010: MKS Inc. (MKS) (TSX: MKX), the global application lifecycle management (ALM) technology leader, today announced its financial results for the third quarter of fiscal year 2010 and a quarterly cash dividend of US$0.15 per share. All amounts are reported in US dollars under United States Generally Accepted Accounting Principles.

Waterloo, ON - February 23, 2010: MKS Inc. (MKS) (TSX: MKX), the global application lifecycle management (ALM) technology leader, today announced its financial results for the third quarter of fiscal year 2010 and a quarterly cash dividend of US$0.15 per share. All amounts are reported in US dollars under United States Generally Accepted Accounting Principles.

Financial & Operational Highlights:

Q3 2010 (compared with Q3 2009)

  • Total revenue of $15.3 million compared to $13.2 million, an increase of 16%
  • License revenue increased 34% to $5.0 million from $3.7 million
  • Maintenance revenue increased 11% to $7.8 million from $7.0 million
  • Service revenue increased 3% to $2.6 million from $2.5 million
  • Operating income increased to $1.7 million compared to $0.4 million, a 310% increase
  • Net income increased 240% to $1.1 million or $0.11 per share compared to $0.3 million, or $0.03 per share.

Closing cash balance at January 31, 2010 was $22.1 million, a $5.0 million increase from the $17.1 million balance at April 30, 2009. During the quarter, MKS paid $1.5 million in dividends.

"We were pleased to see strong growth in our ALM licensing this quarter" said Michael Harris, President and CEO. "As the need for comprehensive management of software engineering and quality processes for advanced manufacturing customers becomes more and more evident, and as capital budgets are restored from the depths of the recession, we continue to increase our investment in field operations as the driver to license revenue growth"

"We continue to see steady improvement in financial measures across the board" said Philip C. Deck, Executive Chairman. "Along with rebounding licensing, we saw steady improvements in services and maintenance contributing to strong year to date profitability."

MKS also announced today that its Board of Directors has declared a quarterly cash dividend of US$0.15 per share on the Company's outstanding common shares in accordance with its dividend policy.

The cash dividend on MKS common shares will be payable on April 15, 2010 to shareholders of record at the close of business on March 31, 2010. 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 third quarter of fiscal 2010 was $15.3 million, up 16 percent from $13.2 million for the third quarter of fiscal 2009. Net income for the third quarter of fiscal 2010 increased 240 percent to $1.1 million, or $0.11 per share, compared to $0.3 million or $0.03 per share in the third quarter of fiscal 2009.

Nine month revenues for fiscal 2010 increased 2 percent to $45.7 million compared with revenue of $44.8 million for the same period in fiscal 2009. Nine month net income was $4.1 million, or $0.41 per share, an increase of 80 percent from the net income of $2.3 million, or $0.23 per share, for the same period in fiscal 2009.

Third quarter fiscal 2010 ALM revenues were $13.3 million, up 15 percent from ALM revenues reported in the third quarter of fiscal 2009. Nine month ALM revenues for fiscal 2010 increased 4 percent to $40.7 million from $39.2 million for the first nine months 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 field force investments for long-term growth. The Company is making investments in its field force to meet anticipated increases in demand as the mandates received from major customers mature and the availability of capital to fund those mandates improves.

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

Conference Call Details

The Company will hold a conference call February 23, 2010 at 4:00 p.m. EST to discuss its third quarter performance. Interested parties may access the call by dialing 800-215-1640 or 1-416-620-2418. A digital recording of the call will be available for seven (7) days following the call and may be accessed by dialing 800-558-5253 or 416-626-4100 and by entering reservation #21442609.

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 © 2010 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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