INFICON Reports Third Quarter 2006 Results

Top-line Growth and Improved Operating Leverage Drive Significant Profitability Increase

SYRACUSE, N.Y. & ZURICH, Switzerland--(BUSINESS WIRE)--Oct. 18, 2006--INFICON (SWX Swiss Exchange: IFCN), a leading manufacturer of instrumentation and process control software for the semiconductor and vacuum-coating industries and other industrial applications, today announced financial results for the third quarter ended September 30, 2006.

Revenues for the third quarter of 2006 totaled $54.4 million compared to $45.5 million for the third quarter of 2005, representing a 19.6% increase. On a constant dollar basis, revenues for the quarter increased 18.0%. Net income increased 84.5% to $5.9 million, or $2.49 per diluted share, compared to $3.2 million, or $1.36 per diluted share, in the third quarter of 2005. Cash provided by operating activities was $13.1 million compared to cash provided of $7.9 million in the same quarter last year.

Revenues for the nine months ended September 30, 2006 were $155.9 million compared to $143.6 million for the same period in 2005, representing an 8.6% increase. On a constant dollar basis, revenues increased 10.3%. Net income increased 46.6% for the period to $15.2 million, or $6.41 per diluted share, compared to net income of $10.3 million, or $4.43 per diluted share, in the previous period. Cash provided by operating activities was $22.6 million compared to cash provided of $11.4 million in the period last year.

Lukas Winkler, president and chief executive officer, commented, "Momentum in our business environment was strong, propelling us to an all-time revenue record in the third quarter of 2006. Our year to date results also demonstrate steady progress in the implementation of our many initiatives for generating higher levels of profitability. The effect of tightly controlled overhead expenses is illustrated by the improved operating leverage we have achieved over the past year."

"Strong sales in the semiconductor and vacuum coating markets were the biggest factor for our improved performance, with significantly higher activity from both end-users and original equipment makers who appreciate the process improvements and cost advantages of INFICON in situ metrology sensors combined with FabGuard Sensor Integration and Analysis software, vacuum control products including our unique lines of ceramic diaphragm vacuum gauges and combination gauges, and market-leading leak detectors.

"In the refrigeration and air conditioning market, we turned in a solid sales performance. The Protec P3000 helium leak detector continues to grow in market acceptance, as its technical superiority and positive impact on productivity are recognized. This high-performance instrument has been especially successful in the U.S. and has also been well-accepted in Asia.

"Accelerating growth in Europe drove another excellent quarter in the general vacuum processes market, where we sell vacuum gauges, leak detectors and gas analyzers to our private label partners.

"Decreased activity with the U.S. military resulted in significantly reduced sales to the emergency response and security market, although international sales and revenue from training, service contracts and consumables continued to expand. Our recent announcement of a substantial, new two-year program with the U.S. Department of Defense for the Air Force illustrates the continuing importance of the HAPSITE Chemical Identification System to the military and the opportunities that our market-leading technology can create for INFICON longer term."

Mr. Winkler continued, "With the increased visibility we have now of fiscal 2006, we are adjusting the financial targets we provided last year. Based on the concentration of revenue in the third quarter and our existing pipeline of opportunities, we expect full-year sales growth of 7 - 9%. We now expect an operating margin between 12 - 13%, compared to our earlier 2006 operating margin estimate of approximately 12%.

"For 2007, we are continuing to target sales growth of 10 - 15%, including potential strategic acquisitions. To continue to strengthen our technology leadership, we plan to undertake an increased number of R&D initiatives designed to further accelerate the company's organic growth. With significant investments in this area, we expect to achieve an operating margin of 13 - 14%."

Conference Call and Visual Presentation: INFICON will hold an earnings teleconference, including presentation slides, that will be webcast on October 18 at 4:00 p.m. Central European Time/10:00 a.m. Eastern Time. To access the teleconference, please dial +1.706.634.1033. The audio and visual webcast will be available in the Investor Relations section of the INFICON website. Please visit www.inficon.com where our presentation will be available 20 minutes prior to the teleconference and webcast.

A replay of the teleconference will be available from 7:00 p.m. CET/1:00 p.m. ET on October 18 through 5:59 a.m. October 26 CET/11:59 p.m. ET on October 25. To access the replay, please dial +1.706.645.9291, conference ID #7210440. The webcast will also be archived on the INFICON website.

Email Alerts: The latest financial information from INFICON can automatically be sent via Email Alert; sign up is available in the Investor Relations section of the INFICON website.

ABOUT INFICON
INFICON is a leading developer, manufacturer and supplier of innovative instrumentation, critical sensor technologies, and advanced process control software for the semiconductor and vacuum-coating industries and other industrial applications. These analysis, measurement and control products are vital to original equipment manufacturers (OEMs) and end-users in the complex manufacturing of semiconductors, flat panel displays, magnetic and optical storage media and precision optics. INFICON also provides essential instrumentation for gas leak detection to the air conditioning/refrigeration industries and toxic chemical analysis for the emergency response and security markets. With executive offices in Syracuse, New York, INFICON has world-class manufacturing facilities in the United States and Europe and subsidiaries in the U.S., China, France, Germany, Japan, Korea, Liechtenstein, Singapore, Switzerland, Taiwan, and the United Kingdom. INFICON registered shares (IFCN) are listed on the SWX Swiss Stock Exchange. For more information about INFICON and its products, please visit www.inficon.com.

This press release and oral statements or other written statements made, or to be made, by us contain forward-looking statements that do not relate solely to historical or current facts. These forward-looking statements address, among other things, our strategic objectives, trends in vacuum technology and in the industries that employ vacuum instrumentation, such as the semiconductor and related industries and the anticipated effects of these trends on our business. These forward-looking statements are based on the current plans and expectations of our management and are subject to a number of uncertainties and risks that could significantly affect our current plans and expectations, as well as future results of operations and financial condition. Some of these risks and uncertainties are discussed in the company's Annual Report for fiscal 2005. As a consequence, our current and anticipated plans and our future prospects, results of operations and financial condition may differ from those expressed in any forward-looking statements made by or on behalf of our company. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.