Net sales for the quarter were $47.3 million, an increase of 2.3 percent from $46.2 million in the first quarter of 2002, and a decrease of 33.8 percent from the second quarter of 2001 net sales of $71.4 million. Shipments for the quarter were $42.5 million, an increase of 25.7 percent from $33.8 million in the first quarter of 2002, and a decrease of 50.7 percent from the second quarter of 2001 shipments of $86.3 million.

Net loss for the second quarter of 2002 was $24.5 million, or $(0.58) per share, compared to net loss of $25.8 million, or $(0.70) per share, for the first quarter of 2002, and net loss of $33.1 million, or $(0.90) per share, for the second quarter of 2001.

Gross margin for the second quarter of 2002 was 20.0 percent, an increase from gross margin of 16.1 percent for the first quarter of 2002, and a decrease from 21.3 percent gross margin for the second quarter of 2001. Gross margin is still adversely affected by high fixed production costs relative to low volumes.

Deferred revenue at the end of the second quarter of 2002 was $117.4 million, a decrease from $124.5 million at the end of the first quarter of 2002, and a decrease from $136.6 million at December 31, 2001. Net bookings for the second quarter of 2002 were $55.0 million, an increase of 111.5 percent from $26.0 million in the first quarter of 2002, resulting in a book-to-bill ratio of 1.3 to 1.0.

The company ended the second quarter of 2002 with cash and cash equivalents, restricted cash and investments of $131.0 million, an increase of $33.9 million from $97.1 million at December 31, 2001. Working capital at the end of the second quarter of 2002 was $87.2 million, an increase of $9.9 million from $77.3 million at December 31, 2001. Subsequent to the end of the second quarter, the company repaid the balance due to STEAG Electronic Systems AG under promissory notes due on July 2, 2002. With this action, the company is virtually debt free.

David Dutton, president and chief executive officer said, "Our bookings doubled over the previous quarter, and the order momentum for our advanced products continued in the second quarter--with over 35% of our bookings coming from the 300mm and other advanced technology product areas. Despite the cyclical environment of our industry, our strategy of continued investment in advanced products and technology is clearly benefiting our customers and increasing our sales."

"We believe that the cyclical recovery is underway, but with a less robust ramp in this cycle than originally anticipated. As we move into the third quarter, we need to aggressively adjust our cost structure to reflect a slower and more volatile business environment," concluded Dutton.

Attached to this news release are unaudited condensed consolidated statements of operations and balance sheets.

At 2:00 PM (Pacific Time) today, Monday, August 12th, Mattson will hold a conference call to review the following topics: second quarter and first half 2002 financial results, current business conditions, and the near-term business outlook. The conference call will be publicly available via the Internet (www.mattson.com, under "Investor Line"), beginning with a live webcast at 2:00 pm Pacific Time, August 12, 2002. In addition to the live webcast, replays will be available to the public on the Mattson website for one week following the live broadcast. Users can access the replay one hour after the call.

This press release contains forward looking statements regarding, among other matters, the Company's future prospects and near-term outlook and changes in customer demand and the effect of the economic downturn. Forward looking statements address matters that are subject to a number of risks and uncertainties that can cause actual results to differ materially. In addition to the general risks associated with the slowdown in the semiconductor industry and development of complex technology, our future results will depend on a variety of factors, including the timing of significant orders, our ability to timely manufacture and deliver ordered products, our ability to bring new systems to market, the timing of new product releases by our competitors, and other competitive factors. Reference is made to the Company's filings with the Securities and Exchange Commission for further discussion of risks and uncertainties regarding the Company's business. The Company assumes no obligation to update the information in this press release.