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MKS Improves Profit on Record Second Quarter SCM Revenue

Waterloo, ON – November 24, 2004: MKS Inc. (MKS) (TSX: MKX) today announced its financial results for the second quarter of fiscal 2005 which ended on October 31, 2004. All amounts are reported in US dollars under United States Generally Accepted Accounting Principles.

Waterloo, ON – November 24, 2004: MKS Inc. (MKS) (TSX: MKX) today announced its financial results for the second quarter of fiscal 2005 which ended on October 31, 2004. All amounts are reported in US dollars under United States Generally Accepted Accounting Principles.

Total revenue for the second quarter of fiscal 2005 was $9.4 million, a 24 percent or $1.8 million increase from $7.6 million in the second quarter of fiscal 2004 and a 6 percent or $0.6 million increase from $8.8 million in the first quarter of fiscal 2005. Net income for the second quarter of fiscal 2005 was $0.2 million, or $0.01 per share, an improvement of $0.8 million compared to a net loss of $(0.6) million or $(0.01) per share in the second quarter of fiscal 2004 and consistent with earnings of $0.2 million the first quarter of fiscal 2005.

Six month revenue for fiscal 2005 was $18.2 million, a 17 percent or $2.6 million increase from $15.6 million for the same period in fiscal 2004. Six month net income was $0.4 million, up $1.1 million, or $0.03 per share, from the net loss of $0.7 million, or ($0.02) per share, reported in the same period of fiscal 2004.

For the second quarter of fiscal 2005, software configuration management (SCM) revenues were a record $7.3 million, representing a 34 percent increase over SCM revenues of $5.5 million in the second quarter of fiscal 2004 and a 9 percent increase over SCM revenues of $6.7 million in the first quarter of fiscal 2005. The Company’s cash position increased from $4.5 million to $4.8 million during the quarter.

"We were pleased to see continued strong growth in SCM revenues and improving liquidity," said Philip Deck, MKS chairman and CEO. "Our steadily improving results keep us very much on track with our plans for fiscal 2005."

"Our sales and services teams continued to make outstanding progress, with 44 percent SCM license growth over the same period last year, record services bookings and service revenue," said Michael Harris, MKS chief operating officer. "As in the first quarter of this year, outstanding North American performance dominated the overall SCM revenue results."

The Company reaffirmed its expectation that continued growth in its SCM revenue will result in profitability for the Company as a whole in fiscal 2005.

Highlights of the Quarter

  • 34 contracts worth greater than $50,000, vs. 22 in the same period last year
  • Customer wins at ADP, Autoliv, BAE, CitiGroup, Continental Temic, Electrolux, Honeywell Technology Solutions, Northrop Grumman, SAIC, T-Systems International and Verizon Wireless
  • Expanded market presence in India through a partnership with IonIdea
  • Entry into requirements management marketplace with announcement of MKS Requirements 2005 due to ship January 2005
  • Expanded integrations into .NET, IBM WebSphere/Eclipse development environments, Mercury Quality Center for test management, and Telelogic DOORS for requirements management

Conference Call Details
The Company will hold a conference call at 5:00 p.m. EST after close of markets today to discuss its second quarter performance and results. Interested parties may access the call by dialing 1-888-280-8771 or 416-695-9702. A digital recording of the call will be available from November 25, 2004 to December 11, 2004 and may be accessed by dialing 1-888-509-0082 or 416-695-5275.

For summarized financial information, please click here.

About MKS
MKS is the preeminent provider of enterprise technology management solutions for the Global 1000. Our solutions let companies manage the technology governing the enterprise by enabling all of the key steps in the technology lifecycle, from requirements capture and business process design to global development team collaboration, while providing metrics management and reporting enabling auditing of software and system change in support of IT governance initiatives. MKS solutions are distinguished for their speed of implementation and low total cost of ownership. Founded in 1984, MKS serves more than 10,000 customers in countries across the world. 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), and +44-1483-733900 (United Kingdom).

Copyright © 2004 MKS Inc. MKS and design, 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
Email dsawatzky@mks.com


 

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