Mattson Technology, Inc. Reports Results for the Second Quarter 2008

FREMONT, Calif., July 23 /PRNewswire-FirstCall/ -- Mattson Technology,
Inc. (Nasdaq: MTSN), a leading supplier of advanced process equipment used to
manufacture semiconductors, today announced results for the second quarter
ended June 29, 2008 (hereafter referred to as "current quarter").
Technology Highlights of this report include:

-- Recognized revenue on the first Etch tool, Nexion(TM)
-- Shipped Millios(TM) to a key memory customer in Asia
-- Won two additional accounts with Suprema(TM)
-- Shipped initial Alpine(TM) system to a major semiconductor manufacturer
in Taiwan

Net sales for the current quarter were $41.8 million, down 14 percent from
$48.7 million for the previous quarter, and down 52 percent from $86.5 million
in the second quarter of 2007. Net sales for the second quarter of 2008 and
2007 included royalties of $6.4 million and $8.6 million, respectively,
related to the settlement of the patent infringement suit with Dainippon
Screen Manufacturing Co., Ltd. ("DNS").
Gross margin for the current quarter was 44.1 percent, up 1.3 percentage
points from 42.8 percent for the previous quarter, and down 4.0 percentage
points from 48.1 percent for the second quarter of 2007. Excluding royalty
income from DNS, gross margin for the current quarter was $12.1 million or
34.1 percent, compared to $33.0 million or 42.4 percent for the second quarter
of 2007. Operating expenses for the current quarter were $25.7 million,
compared to $24.7 million for the previous quarter and $26.1 million reported
for the second quarter of 2007. Interest and other income (expense) for the
quarter reflected an income of $0.9 million, compared to an expense of $0.2
million in the previous quarter and income of $2 million reported for the
second quarter of 2007.
Net loss for the current quarter was $6.8 million, or $0.14 loss per
diluted share, compared with $4.2 million, or $0.09 loss per share, for the
previous quarter, and net income of $11.5 million, or $0.22 earnings per
share, for the second quarter of 2007. Net loss for the current quarter
included non-recurring items for DNS royalty of $6.4 million, restructuring
expenses of $0.7 million, and severance expenses of $0.2 million. The net
favorable impact of these non-recurring items was $0.11 per share.
Cash, cash equivalents and short-term investments at the end of the second
quarter were $135.7 million, down $10.1 million from $145.8 million in the
previous quarter.
"While our financial results for the second quarter clearly reflect the
impact of the industry's protracted weakness in the memory markets," said
David L. Dutton, chief executive officer of Mattson Technology, "it is notable
that our revenue shortfall was not attributable to competitive losses. In
anticipation of improved market conditions, we continue to invest in new
products and growth initiatives; specifically, in the etch market with
innovative products targeting high volume dielectric etch applications, and
the millisecond annealing and thermal oxidation markets. We are proud of the
traction our new products have gained in the market place. Our new products
enable our customers to meet their next generation specification requirements,
and we are committed to ensuring that they are optimally positioned for the
next industry up-cycle."
Attached to this news release are preliminary unaudited condensed
consolidated statements of operations and balance sheets.
Guidance 2008 -- Third Quarter
The Company's guidance for the third quarter of 2008 is based on a
continued weakness in the memory market. For the third quarter, Mattson
expects the following:
-- Revenues in the range of $29 million to $37 million
-- Gross Margins between 33 percent and 37 percent
-- Earnings in a range of loss per share of $0.30 to loss per share of
$0.22

On Wednesday, July 23, 2008, at 2:30 PM Pacific Time (5:30 PM Eastern
Time), Mattson will hold a conference call to review the following topics:
second quarter 2008 financial results, current business conditions and the
near-term business outlook. The conference call will be simultaneously
webcast at http://www.mattson.com under the "Investors" section. In addition
to the live webcast, a replay will be available to the public on the Mattson
website for one week following the live broadcast.
Mattson will also webcast a slide presentation in conjunction with the
conference call, which can also be accessed at http://www.mattson.com under
the "Investors" section.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act
of 1995: This news release contains forward-looking statements regarding the
Company's future prospects, including, but not limited to: anticipated
bookings, revenue, margins, earnings per share, market share, tax rate and
fully diluted shares outstanding for future periods. Forward-looking
statements address matters that are subject to a number of risks and
uncertainties that can cause actual results to differ materially. Such risks
and uncertainties include, but are not limited to: end-user demand for
semiconductors; customer demand for semiconductor manufacturing equipment; the
timing of significant customer orders for the Company's products; customer
acceptance of delivered products and the Company's ability to collect amounts
due upon shipment and upon acceptance; the Company's ability to timely
manufacture, deliver and support ordered products; the Company's ability to
bring new products to market and to gain market share with such products;
customer rate of adoption of new technologies; risks inherent in the
development of complex technology; the timing and competitiveness of new
product releases by the Company's competitors; the Company's ability to align
its cost structure with market conditions; and other risks and uncertainties
described in the Company's Forms 10-K, 10-Q and other filings with the
Securities and Exchange Commission. Results for the current quarter are
preliminary and subject to adjustment. The Company assumes no obligation to
update the information provided in this news release.
About Mattson Technology, Inc.
Mattson Technology, Inc. designs, manufactures, and markets semiconductor
wafer processing equipment used in the fabrication of integrated circuits.
The Company is a leading supplier of dry strip and rapid thermal processing
equipment to the global semiconductor industry. Its strip and RTP equipment
utilize innovative technology to deliver advanced processing performance and
productivity gains to semiconductor manufacturers worldwide for the
fabrication of current- and next-generation devices. Mattson is expanding
into the etch market with innovative products targeting high volume dielectric
etch applications, and is also expanding into the millisecond annealing and
thermal oxidation markets. The Company expects that entry into these new
markets will enhance its technical leadership and deliver revenue and
profitability gains. Mattson was founded in 1988 and is headquartered in
Fremont, California. For more information, please contact Mattson Technology,
Inc., 47131 Bayside Parkway, Fremont, Calif. 94538. Telephone: (800)
MATTSON/(510) 657-5900. Fax: (510) 492-5911. Internet:
http://www.mattson.com
Mattson Technology Contact Investor & Media Contact
Andy Moring Laura Guerrant-Oiye
Mattson Technology, Inc. Guerrant Associates
tel 510-492-6530 tel 808-882-1467
fax 510-492-5963 fax 808-882-1267
andy.moring@mattson.com lguerrant@guerrantir.com

MATTSON TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)

Three Months Ended Six Months Ended
June 29, July 1, June 29, July 1,
2008 2007 2008 2007

Net sales $41,790 $86,544 $90,445 $156,485
Cost of sales 23,345 44,909 51,166 83,622
Gross margin 18,445 41,635 39,279 72,863
Operating expenses:
Research, development and
engineering 9,215 8,893 17,061 18,004
Selling, general and
administrative 15,592 17,090 32,367 33,069
Amortization of intangibles 128 128 256 255
Restructuring charges 748 - 748 -
Total operating expenses 25,683 26,111 50,432 51,328
Income (loss) from operations (7,238) 15,524 (11,153) 21,535
Interest and other income
(expense), net 906 2,023 739 4,625
Income (loss) before income taxes (6,332) 17,547 (10,414) 26,160
Provision for income taxes 422 6,000 556 6,962
Net income (loss) $(6,754) $11,547 $(10,970) $19,198
Net income (loss) per share:
Basic $(0.14) $0.22 $(0.22) $0.37
Diluted $(0.14) $0.22 $(0.22) $0.36
Shares used in computing net
income (loss) per share:
Basic 49,419 52,531 49,391 52,546
Diluted 49,419 53,627 49,391 53,573

MATTSON TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

June 29, December 31,
2008 2007
(unaudited) (1)

ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $135,739 $152,567
Accounts receivable, net 28,304 36,011
Advance billings 9,175 2,576
Inventories 57,546 51,073
Inventories -- delivered systems 4,178 -
Prepaid expenses and other assets 8,181 10,996
Total current assets 243,123 253,223
Property and equipment, net 32,500 28,600
Goodwill 18,076 18,076
Intangibles, net 6,824 7,080
Other assets 10,774 10,791
Total assets $311,297 $317,770

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $16,240 $18,097
Accrued liabilities 22,845 26,900
Deferred revenue 12,198 7,207
Total current liabilities 51,283 52,204
Income taxes payable, noncurrent 15,153 14,147
Other liabilities 5,827 6,136
Total liabilities 72,263 72,487

Stockholders' equity:
Common stock 54 54
Additional paid-in capital 626,273 623,527
Accumulated other comprehensive
income 23,620 19,032
Treasury stock (37,987) (35,374)
Accumulated deficit (372,926) (361,956)
Total stockholders' equity 239,034 245,283
Total liabilities and
stockholders' equity $311,297 $317,770

(1)Derived from audited financial statements

SOURCE Mattson Technology, Inc.

Andy Moring of Mattson Technology, Inc., +1-510-492-6530, fax,
+1-510-492-5963, andy.moring@mattson.com; or Investor & Media Contact, Laura
Guerrant-Oiye of Guerrant Associates, +1-808-882-1467, fax, +1-808-882-1267,
lguerrant@guerrantir.com, for Mattson Technology, Inc.