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AUGUST 2001 INDUSTRY NEWS

Fluke Corporation Achieves International Standards Accreditation for Calibration Laboratories

Fluke Corporation, a world leader in precision measurement hardware, software, and calibration services, recently announced accreditation of two Fluke calibration laboratories, one in the United States and one in the United Kingdom.

The Fluke Precision Measurement service facility and calibration laboratory in San Diego, California, USA has received accreditation to the stringent ISO/IEC 17025-1999 and ANSI/NCSL Z540-1-1994 standards set by the American Association for Laboratory Accreditation (A2LA). The standards and calibration laboratories of Fluke Precision Measurement's Norwich, Norfolk factory in the United Kingdom have recently been accredited to ISO/IEC 17025 by the United Kingdom Accreditation Service (UKAS).

San Diego is one of few accredited labs in the USA
The accreditation of the San Diego lab ensures that Fluke and Wavetek-Datron customers will receive fully accredited calibration services to the QS 9000 standard (a variation of ISO 9000 and CQI). This new A2LA accreditation makes the San Diego facility one of few out of thousands of calibration laboratories operating in the United States accredited to the new 17025 standards.

ISO/IEC 17025 is the new international standard for laboratory accreditation. First released in December 1999, the standard replaced the previous ISO Guide 25 and its various local interpretations such as the UKAS M10 standard used in the UK. The Norwich laboratory was initially accredited to the M10 standard in 1986 by the UK's National Measurement Accreditation Service (NAMAS). Since then, the laboratory has expanded and its capabilities improved to enable new product development and to meet the need for higher accuracy.

In April 2000, the UKAS accreditation was extended to include the capabilities of the former Fluke Watford laboratory. Accreditation to ISO/IEC 17025 is another important milestone in the history and development of the Norwich laboratory.

For more information about accredited calibration in the San Diego Laboratory, contact the lab directly by calling (858) 576-4806. For more information about accredited calibration in the United Kingdom, contact Peter Crisp at +44 (0) 1603 256630.

Agilent Technologies Reports Smaller-than-expected Third-quarter Loss

Agilent Technologies Inc. reported orders of $1.3 billion and revenue of $1.8 billion for the quarter ended July 31. On an earnings before goodwill basis, the company lost 24 cents per share versus the consensus estimate of a 35-cent-per-share loss. These results represent continuing operations, excluding Agilent's recently sold healthcare business. The company said that third-quarter orders for its communications and semiconductor products continued to be very weak, reflecting the severe slowdown that has plagued these industries in recent months.

In addition to expense reduction actions that Agilent has already taken, the company announced that it will reduce its workforce by approximately 4,000 people, or about 9 percent, by the middle of next year in order to restore the company to profitability as soon as possible.

"Based on our outlook earlier in the year, we implemented a variety of aggressive cost-control measures -- including a temporary 10-percent pay cut -- to try to avoid layoffs," said Ned Barnholt, Agilent president and CEO. "The measures to date have had a positive impact, but the business environment in our key industries continued to deteriorate this quarter. And the outlook going forward is for a slow and gradual recovery. We are now taking additional actions to bring the size of our workforce more in line with anticipated business levels."

Weak customer demand coupled with excess capacity and inventory in key industries Agilent serves drove net orders down 54 percent -- to $1.3 billion -- from a very strong third quarter a year ago. Net orders declined 5 percent from last quarter. Cancellations were about $240 million, down from Q2 but higher than expected. Third-quarter revenue was $1.8 billion, a 23-percent decrease year over year. Revenue declined 24 percent from last quarter. upon new orders. Revenue is expected to be between $1.3 and $1.5 billion, which would lead to an expected loss of between 50 and 70 cents per share on an earnings before goodwill basis, excluding restructuring charges.

"We're balancing the need for aggressive, immediate action to meet extraordinary market conditions with our goal of building a company for the long term," Barnholt said. "We're very optimistic about the potential of the businesses we're in, but we clearly need to return Agilent to profitability as soon as possible. Reducing our workforce in areas where we have excess capacity will help us become a stronger company while enabling us to preserve our investments in core R&D and new product programs."

Arden Bement, Jr to be Nominated as the Director of the National Institute of Standards and Technology (NIST)

President George W. Bush announced his intention to nominate Arden Bement, Jr. to be Director of the National Institute of Standards and Technology at the Department of Commerce. He has served at Purdue University since 1993, first as a Professor of Engineering and Director of the Midwest Superconductivity Consortium and then as a Professor of Nuclear Engineering and head of Purdue's School of Nuclear Engineering. From 1980 to 1993, he was with TRW, Inc. as Vice President for Technical Resources from 1980 to 1988, and then as Vice President for Science and Technology from 1988 to 1993. A former member of the U.S. Army and Army Reserves, he is a graduate of the Colorado School of Mines, received a Master's degree from the University of Idaho and a Ph.D. from the University of Michigan.

New Reference Material Simplifies SEM Performance Checks

The use of a new "sharpness" reference material from NIST combined with data from state-of-the-art inspection software could help make routine the currently difficult but critical task of running performance checks on scanning electron microscopes, known as SEMs.

All SEMs, whether they are in the laboratory or on the production line, slowly lose performance ability with use. Loss in image quality also means loss in measurement sensitivity. Contributing to SEM performance loss are a variety of factors including misalignment, contamination and increase in size of the primary electron beam. Measuring the loss in image sharpness is one way to identify this performance. An improved ability to assess SEM performance loss would be an important quality control advance for the more than $200 billion semiconductor industry because fully automated SEMs are used to inspect silicon wafers.

NIST Reference Material 8091 is a small (approximately 2-square-millimeter) diced semiconductor chip with tiny tower-shaped structures of silicon generated by a plasma-etching artifact commonly referred to as "grass." The fine-grained "towers" can be used to determine image sharpness at magnifications in excess of 100,000 times at both high- and low-accelerating voltages.

RM 8091 can be mounted onto a wafer, wafer piece or specimen stub for insertion into a laboratory SEM or wafer inspection SEM. The chip also can be mounted onto a "drop-in" wafer. It is designed for use with Fourier analysis software such as the NIST/SPECTEL SEM Monitor Program, the NIST Kurtosis program, the University of Tennessee SMART program, or similar analytical techniques.

The SEM Monitor is a collaborative effort by NIST, Hewlett-Packard, and SPECTEL Co. of Mountain View, Calif. The SEM Monitor was honored in 1998 with an R&D 100 award from Research and Development Magazine. The system can make sharpness measurements on static, collected images or in real-time live mode, thus enabling users to easily adjust and align a CD-SEM or laboratory microscope to optimize performance.

RM 8091 is available from the NIST Standard Reference Materials Program. Purchases of RM 8091 can be made by calling (301) 975-6776. RM 8091 also can be ordered online at www.nist.gov/srm. For technical information, contact Michael Postek, (301) 975-2299.

GenRad Agrees to be Acquired by Teradyne

Teradyne, Inc., announced the signing of a definitive agreement to acquire GenRad, Inc. of Westford, MA, a leading manufacturer of electronic automatic test equipment and related software.

Under the terms of the proposed acquisition, each outstanding share of GenRad common stock would be converted into 0.1733 shares of Teradyne common stock. At Teradyne's closing price of $35.10 on August 1, 2001, the transaction would be valued at approximately $260 million in the aggregate. This includes the assumption of debt of approximately $85 million, before considering any proceeds from the anticipated sale of GenRad's Diagnostic Solutions business unit, which is expected to occur before the closing with Teradyne. Revenue for the GenRad business to be retained by Teradyne following the closing of these transactions was approximately $255 million in 2000.

Robert M. Dutkowsky, chairman, president and CEO of GenRad, Inc. will manage the combined Teradyne circuit board test and inspection division.

The acquisition of GenRad by Teradyne is expected to close in the fourth quarter of 2001 and is subject to approval by both the shareholders of GenRad, Inc. and regulators.

George W. Chamillard, Teradyne Inc., chairman, president and CEO stated, "The combination of Teradyne and GenRad broadens our scope in the global electronics manufacturing test market, creating a 'total test solution' that will significantly benefit customers."

"Today's electronic products are packing higher speeds and greater functionality into denser spaces, creating a packaging revolution in electronics manufacturing," Chamillard said. "This means the electronics product assembly process has become increasingly complex, placing new demands on test and inspection equipment--and creating new market growth opportunities. This complexity also requires sophisticated software tools to optimize and improve that process. The addition of GenRad products to our existing product line will give us the industry's broadest range of circuit board test and inspection products: in-circuit and functional test systems and automated inspection systems--both optical and X-ray. Tying it together will be the factory automation software tools needed to deploy the equipment strategically and manage the process efficiently."

GenRad's Dutkowsky stated that, "Adding our strengths in electronics testing and production hardware, software and service solutions to Teradyne's breadth across the semiconductor, telecommunications, computer and Internet industries is a superb strategic fit. Our customers will benefit from the expanded capabilities this new organization will bring to manufacturing test environments worldwide."

GenRad Reports Second Quarter 2001 Results

GenRad, Inc., a global leader in electronics testing and manufacturing solutions, reported results for its second fiscal quarter in 2001.

GenRad reported that revenues for the second quarter ended June 30, 2001, were $54.5 million, compared with revenues of $87.3 million for the same period in 2000. The company reported a net loss, before special items, of $13.8 million, or $0.48 per share, compared with net income, before special items, of $1.6 million, or $0.06 per share in 2000.

Separately, GenRad announced that it had signed an agreement to be acquired by Teradyne, Inc. (NYSE: TER). It also announced that it was seeking a buyer for its Diagnostic Solutions line of business. The company recorded two special items during the quarter, both largely the result of the company's decision to discontinue the development of the GTE3200 automotive diagnostics aftermarket product within the Diagnostics Solutions line of business. As a result of this decision and the current and projected softness in the electronics manufacturing market sector, the company recorded additional provisions for anticipated excess and obsolete inventories. This charge, which totaled $11.9 million, adversely impacted the cost of revenue of the automotive diagnostics aftermarket product line and various manufacturing test product lines.

Sypris Solutions Reports Second Quarter Earnings; Revenue Increases 21%

Sypris Solutions, Inc. reported second quarter earnings of $0.12 per diluted share compared to $0.14 per diluted share for the same quarter in 2000. Net income for the second quarter totaled $1.2 million compared to $1.4 million for the same quarter in 2000, which included special charges of $0.5 million after tax for expenses incurred to consolidate certain operations within the Company's Electronics Group. Revenue increased 21% to $63.2 million from $52.1 million for the prior year period.

For the six months ended July 1, 2001, the Company reported earnings of $2.2 million, or $0.23 per diluted share, compared to $1.5 million, or $0.15 per diluted share for the prior year period, which included special charges of $1.7 million after tax. Revenue for the first six months increased 18% to $121.2 million, up from $102.8 million for the year-earlier period.

"Revenue growth is now beginning to reflect the increase in orders and backlog the Company has generated over the past year," said Jeffrey T. Gill, president and chief executive officer. "While margins will continue to be impacted by costs associated with the start up of new programs and the depressed state of the heavy-duty truck market, we believe that our continued investment in people, technology and systems during this period of softness will be of material benefit to the Company over the longer-term."

MKS Instruments Reports Revenues For Second Quarter 2001

MKS Instruments, Inc., a leading supplier of gas measurement, control and analysis products, reactive gas generator and power delivery products used in semiconductor and other advanced manufacturing processes, reported financial results for the quarter ended June 30, 2001. The Company's 2000 results reported in this release have been restated to reflect the January 26, 2001 acquisition of Applied Science and Technology using the pooling of interests method of accounting for combining the results of operations for the same reported calendar quarters.

Second quarter 2001 sales were $72,656,000, compared to first quarter 2001 sales of $110,888,000, and second quarter 2000 sales of $121,797,000. In the second quarter 2001, the Company wrote off $2,645,000 of obsolete and excess inventory. This write-off was significantly higher than normal and was primarily caused by a significant reduction in demand, including reduced demand for older technology products.

John Bertucci, Chairman and CEO, commented, "We continue to feel the impact as our industry reacts to the world-wide slowdown in demand for technology products. We have taken the steps necessary to manage costs, including a 16 percent reduction in headcount from our peak during the fourth quarter of 2000, and we have implemented further cost reductions through reduced work weeks, reduction in management salaries, mandated vacation days and reduced spending."

NIST Offers Online Metrology Resource for Electronics Manufacturers

Semiconductor, electronics and data storage device manufacturers can use a new NIST web page to easily find the NIST research, products and services of greatest relevance to their industry. The NIST semiconductor/electronics industry-sector web page www.nist.gov/semiconductors is designed to help industrial R&D departments and manufacturing operations find the most accurate measurements, standards, calibrations and data available from NIST. Links to NIST cooperative research and funding opportunities also are offered.

The semiconductor/electronics web page gives very short descriptions of what NIST does to help build better microchips, from more accurately measuring step heights, dielectric films and interconnects to ways to improve manufacturing processes. Along with the brief project descriptions, the page offers links to more detailed descriptions of each project or program, as well as contact names, e-mail addresses and phone numbers.

The page is one of several new industry-sector web pages intended to improve industry awareness of NIST products, services and programs. Go to "Information for Industry" on the NIST home page www.nist.gov to access the index for all of the NIST industry-sector web pages.

Mettler-Toledo International Inc. Reports Record Second Quarter

Mettler-Toledo International Inc. announced another record quarter, with net earnings before non-recurring items of $21.3 million, or $0.50 per share on a diluted basis, for the quarter ended June 30, 2001. This represents a 16% increase over the second quarter 2000 net earnings of $0.43 per share before non-recurring items. For the six months ending June 30, 2001, earnings per share before non-recurring items on a diluted basis amounted to $0.84 per share, an 18% increase over the prior year period.

Sales for the quarter were $279.0 million, compared with $268.6 million for the quarter ended June 30, 2000. This represents an increase of 8% in local currency sales, partially offset by unfavorable exchange rates. The Company's adjusted operating income increased 15% to $40.4 million, or 14.5% of sales, compared with $35.2 million, or 13.1% of sales, in the same period of 2000.

Robert F. Spoerry, Chairman, President and Chief Executive Officer, stated, "We are very pleased to deliver strong financial results in the face of a difficult economic environment. The hallmarks of our franchise are market-leading positions, global presence and diversification in end-markets and product lines. These factors have continued to insulate us from much of the current economic downturn."

PerkinElmer to buy Packard BioScience for $650 million

PerkinElmer Inc., the world's third-biggest maker of drug discovery equipment, said it agreed to buy laboratory instrument maker Packard BioScience Co. for $650 million in stock and debt. The move is the latest in a series of efforts PerkinElmer has made over the past three years to transform itself into a risk-taking, high-growth company by moving into the genetics industry -- principally by providing the technology needed by drug companies to test and analyze potential drug candidates.

The transaction will allow PerkinElmer to provide customers with a tool that complements its existing products. It hopes to attract new customers at an earlier stage of the discovery process and to offer existing customers a broader range of services. Packard's strength is in liquid handling, which keeps chemical samples pure.

"Packard BioScience represents an excellent strategic fit as a leading supplier of automated liquid handling, sample preparation tools and advanced Boche technologies," said Gregory Summae, PerkinElmer's chief executive, in a statement. The acquisition, which is subject to regulatory and shareholder approval, is expected to close during the fourth quarter, the companies said.

Gage Lab, Inc. Merges with LTI Metrology

Laboratory Testing, Inc. announces the merger of Gage Lab, Inc. with LTI Metrology. Gage Lab is a full service lab servicing inspection and test equipment since 1965. The company was purchased by Laboratory Testing, Inc. in April 2000, and has been operating as an independent subsidiary. LTI Metrology is the calibration division of Laboratory Testing, Inc. The two calibration operations are merging to improve the services and convenience offered to all calibration customers.

Gage Lab's technicians and equipment will move to the Laboratory Testing, Inc. facility in Hatfield, Pennsylvania. Tom McVaugh, president of Gage Lab and LTI Metrology, expects the move and merger to be completed by August 31, 2001. The consolidated calibration operation will be known as LTI Metrology.

Laboratory Testing, Inc. is an independent materials testing laboratory founded in 1984. The company specializes in the inspection and analysis of metals and alloys found in fasteners, tubular products, plates, bars and castings. In addition to materials testing and calibration, the company also performs specimen machining and materials-engineering services.

AMETEK Achieves Record Earnings

AMETEK achieved 2001 second quarter net income of $18.7 million on sales of $261.4 million. For the same period of a year ago, net income was $17.2 million on sales of $255.5 million. For the 2001 quarter, AMETEK benefited from stronger demand for aerospace and power instrumentation, the contribution of recent acquisitions, and continued focused cost reductions. Operating income for the second quarter of 2001 reached $35.6 million, a 5% increase over the same period of 2000. Diluted earnings per share rose 6% to $.56 per share from the second quarter 2000 level of $.53 per share.

"Our ability to grow sales and earnings in difficult economic conditions is a direct result of our Corporate Growth Strategies. Our acquisition strategy continues to generate profitable top-line growth, while our Operational Excellence strategy has enhanced our profitability and competitive position. The cost reductions implemented in the fourth quarter of last year and throughout the first half of this year are yielding the anticipated results," commented Frank S. Hermance, AMETEK chairman and chief executive officer.

Q3 Revenues and Earnings Up for Varian, Inc.

Driven by strength in its Scientific Instruments segment, Varian, Inc. reported increased revenues and earnings for the third quarter of fiscal year 2001, ended June 29, 2001, compared to the third quarter of fiscal year 2000. Sales for the third quarter grew 8 % in local currency revenues. The term "local currency revenues" means sales adjusted for the effects of foreign currency fluctuations. Including currency effects, reported sales grew 5% over the prior year to $191.5 million.

Operating earnings for the third quarter of 2001 grew 8% to $21.1 million, up from $19.4 million in the prior-year quarter. Third quarter net earnings were $12.7 million, or $0.37 diluted earnings per share, compared to $11.6 million, or $0.34 diluted earnings per share, in the fiscal 2000 quarter. Third quarter cash earnings per share were $0.39 compared to $0.35 in the prior-year quarter. Cash earnings per share is based on net earnings excluding the amortization of goodwill and certain intangibles from acquisitions.

"For the first time, products sold into life sciences and health care applications accounted for approximately 40% of Scientific Instruments revenues during the quarter," said Allen J. Lauer, president and chief executive officer. "The company is continuing to execute on its strategy of growing revenues from those applications to 50% of the segment's total to support continued increases in operating profits."

Cesar D. Bautista, Jr Appointed as Senior Vice-President of Operations for Micro Metrology, Inc.

Micro Metrology, Inc. recently announced the appointment of Cesar (Jun) D. Bautista, Jr. as Senior Vice-President, Operations. Jun Bautista will be responsible for the profitability and growth of the company. He will also be tasked with leading Micro Metrology, Inc. to the top amongst the third party calibration services providers.

Jun Bautista is one of the country's well known metrologists. He brings twenty-four years of metrology experience with him. He held the position of Director of Operations for Transcat Calibration Laboratories and most recently, prior to joining Micro Metrology, Inc., was the Corporate Metrologist and Metrology Engineering Consultant for SIMCO Electronics.

Mr. Bautista's first objective is to establish the first commercial ISO 17025 accredited fiber optic instrumentation calibration laboratory on the West Coast. Micro Metrology, Inc. is slated to seek ISO 17025 accreditation from the American Association for Laboratory Accreditation (A2LA) within the next couple of months. For more information about Micro Metrology, Inc. please visit www.mmicallabs.com.

 
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