Axcelis Technologies Announces Cost Reductions; Company Reiterates Guidance For The Third Quarter

BEVERLY, Mass., Sep 25, 2002 (BUSINESS WIRE) -- Axcelis Technologies, Inc. (NASDAQ: ACLS) today announced additional workforce reductions, as part of a continuing effort to ensure that the company's business is appropriately sized for current market conditions. The reduction in force will affect 155 positions worldwide, and represents approximately 7% of the employee base. Axcelis estimates that these actions will save the company approximately $12 million annually. The Company is also in the process of implementing integrated supply chain initiatives that will yield an additional $10M in annual savings.

The Company will incur a charge estimated at $1.6 million in the third quarter, primarily associated with severance and related expenses. Despite this charge, management reaffirmed its third quarter revenue and earnings guidance. Worldwide revenues (including SEN) are expected to be $130-140 million and net revenues (excluding SEN) are expected to be $90-100 million. Gross margins should be consistent with the second quarter and net earnings per share are expected to range from ($0.02) to $0.02. Cash utilization is expected to be in the $15 to $20 million range.

Since the fourth quarter of 2000, Axcelis has undertaken significant cost saving efforts, including reductions in force, plant consolidations, shutdowns, pay freezes, and temporary leaves of absence. With the addition of this recent action, Axcelis has eliminated 473 jobs bringing its worldwide total employment to 1825 people, down 21% since the peak of the last cycle.

Mike Luttati, Executive Vice President and Chief Operating Officer stated, "Continued weakness in the semiconductor industry made this decision necessary. Unfortunately, all indications point to a delayed recovery, and as a result we must take action to further reduce our cost structure."

Mary Puma, President and Chief Executive Officer, said "We continue to remain focused on our strategy of delivering the most advanced technology to our customers to enable their success. This action does not affect our commitment to critical product development programs and the alignment of our organization to better serve our customers worldwide. We continue to be strongly positioned to take full advantage of our technology leadership position when the market rebounds."

Safe Harbor Statement

This document contains forward-looking statements under the SEC safe harbor provisions. These statements are based on management's current expectations and should be viewed with caution. They are subject to various risks and uncertainties, many of which are outside the control of the Company, including our ability to implement successfully our profit plans, the continuing demand for semiconductor equipment, relative market growth, continuity of business relationships with and purchases by major customers, competitive pressure on sales and pricing, increases in material and other production costs that cannot be recouped in product pricing and global economic, political and financial conditions. These risks and other risk factors relating to Axcelis are described more fully in the most recent Form 10-K filed by Axcelis and in other documents filed from time to time with the Securities and Exchange Commission.

About Axcelis Technologies, Inc.

Axcelis Technologies, Inc., headquartered in Beverly, Massachusetts, provides innovative, high-productivity solutions for the semiconductor industry. Axcelis is dedicated to developing enabling process applications through the design, manufacture and complete life cycle support of ion implantation, rapid thermal processing, and cleaning and curing systems. Axcelis Technologies has key technology centers in Beverly, Massachusetts, and Rockville, Maryland as well as in Toyo, Japan through its joint venture, SEN. The company's Internet address is: www.axcelis.com.

CONTACT:

Axcelis Technologies, Inc. (Company Contact)
Maureen Hart, 978/787-4266
maureen.hart@axcelis.com
or
Axcelis Technologies, Inc. (Investor Contact)
Mark Namaroff, 978/787-4000
investor.relations@axcelis.com
or
Loomis Group Inc. (Agency Contact)
Stacy Grisinger, 617/638-0022
grisingers@loomisgroup.com