Genus Reports Second Quarter 2002 Results

Company Remains On Track for Strong Second Half 2002

SUNNYVALE, Calif. - August 5, 2002 - Genus, Inc. (Nasdaq: GGNS) today reported financial results for its second quarter and six months ended June 30, 2002. Senior management will conduct an investor conference call to discuss these results and the company's financial outlook in more detail at 8:00 a.m. pacific time tomorrow, Tuesday, August 6, 2002. Access information is provided below.

Net sales for the second quarter 2002 were $6.7 million compared to net sales of $13.7 million for the same quarter of 2001, and $9.6 million in the first quarter 2002. The net loss for the second quarter 2002 was $3.6 million or $(0.13) per diluted share compared to net loss of $853,000, or $(0.04) per share in the same quarter of 2001, and down sequentially from a loss of $3.8 million or $(0.15) in the first quarter 2002.

Net sales for the six months ended June 30, 2002 were $16.3 million compared to net sales of $28.0 million for the same period of 2001. The net loss for the six months ended June 30, 2002 was $7.4 million or $(0.28) per diluted share compared to net loss of $722,000, or $(0.04) per share in the same period of 2001.

"As we announced on July 2, 2002, financial results for the second quarter were impacted by a delay in customer acceptance of one order, and by delays in anticipated orders that led us to lower our revenue outlook for 2002," said Bill Elder, Genus' chairman and CEO. "Despite the difficult industry environment, we believe that orders in the second half 2002 will be significantly stronger than orders in the first half 2002, as we believe that order push-outs and growing demand will begin to be fulfilled in the second half."

"We are moving forward in the procurement process with new and existing customers, who continue to be very excited about the prospect of implementing Genus' ALD technology. The reception we enjoyed at Semicon West last month is a testament to the growing need for ALD tools, and the introduction of Genus' new StrataGem™, production-ready 300 mm ALD tool further solidified our leading position in the marketplace," added Elder.

"We realized the benefit of increased production efficiencies and reduced costs in the second quarter," said Shum Mukherjee, executive vice president finance and CFO. "Despite a 30 percent sequential decrease in revenues, both gross margin and earnings improved slightly in the second quarter compared to the first quarter. We also expect continued improvements in gross margin with higher volumes and changes in sales mix in the second half 2002. Total operating expenses of about $5.1 million were lower by $559,000 compared to the first quarter 2002, as we carefully managed costs to lower levels during the quarter."

"Entering the second half of 2002, Genus implemented actions to further lower our operating cost structure. Accordingly, we expect to realize additional improvements in operating costs in the third and fourth quarters, and to reduce our cash operating breakeven point to approximately $10 million in net revenues per quarter," added Mukherjee.

Genus ended the second quarter 2002 with cash and marketable securities of $5.3 million. On July 31, 2002, the company announced that it has received binding commitments for $7.5 million of financing through a private placement, which is expected to close in August 2002.

Financial Guidance
As previously announced on July 2, 2002, Genus expects full year 2002 bookings to be in the range of $55 million to $65 million, approximately twice the level booked in 2001. The company's goal for full-year 2002 revenues is to be in the range of $40 million to $50 million. "While we expect there will be continued pressure on customer capital spending in 2002, we remain well-positioned to benefit as conditions improve," said Elder. "In the near term, we expect a stronger second half, with the majority of growth in total revenues in the fourth quarter. We are focused on achieving profitability, and have recently taken cost cutting actions to lower our breakeven point with that goal in mind. We also expect increased production efficiencies and changes in product mix to benefit gross margins as we exit the year."

Conference Call Information
Genus plans to host an investor conference call on Tuesday, August 6, 2002, at 8:00 a.m. pacific time, featuring remarks by Bill Elder, chairman and chief executive officer, and Shum Mukherjee, executive vice president finance and CFO, followed by a live question and answer session. The call will be accessible live by dialing 800-305-1078.

The conference call will also be broadcast live over the Internet at www.genus.com. A replay of the call will be available for 48 hours, beginning two hours after the call, by dialing 888-266-2081 and entering access code 6089688. A webcast replay will be available at www.genus.com.

About Genus
Genus, Inc. manufactures critical deposition processing products for the global semiconductor industry and the data storage industry. To enable the production of intricate micro computer chips and electronic storage devices, Genus offers its LYNX series production-proven equipment for 200mm and 300mm semiconductor production, and offers thin film deposition products for chemical vapor deposition (CVD), atomic layer deposition (ALD), and pre-clean capabilities. Genus is at the forefront of market and technology developments in the ALD marketplace, which is gaining acceptance worldwide as a critical technology for sub 0.13-micron production of computer chips and electronic storage devices. Genus' customers include semiconductor manufacturers located throughout the United States, Europe and the Pacific Rim including Korea, Japan and Taiwan. Founded in 1981, the company is headquartered in Sunnyvale, California. For additional information visit Genus' web site at www.genus.com. LYNX2® and LYNX3™ are trademarks of Genus, Inc.

Forward-Looking Statements
This press release contains forward-looking statements regarding the company's future financial and business performance. These forward-looking statements are subject to a number of risks and uncertainties. These contingencies include but are not limited to: actual customer orders received by the company, the extent to which ALD technology is demanded by the marketplace, the actual number of customer orders received by the company, availability of components from suppliers, the timing of final acceptance of products by customers, the financial climate, accessibility to financing and fulfillment of closing conditions, general conditions in the thin film equipment market and in the macro-economy, and the influence of global political events. Genus assumes no obligation to update this information. Additional risks and uncertainties are discussed in the Management's Discussion and Analysis of Results of Operations contained in Genus' Annual Report on Form 10-K for the fiscal year ended December 31, 2001 and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission.

Exhibit 1
Genus, Inc. Condensed Consolidated Statement of Operations (unaudited)

Exhibit 2
Genus, Inc. Condensed Consolidated Balance Sheets (unaudited)