Press Releases

NOVELLUS SYSTEMS REPORTS RECORD RESULTS FOR THIRD QUARTER 2000

San Jose, Calif. -- Oct. 16, 2000 -- Novellus Systems, Inc. (Nasdaq NM: NVLS) today reported record net sales and results of operations for its third quarter ended September 30, 2000. Record net sales for the quarter were $359.1 million, up 10 percent from $326.0 million in the second quarter of 2000 and up 132 percent from the third quarter 1999 net sales of $154.9 million. Record net income assisted by record net margins, for the third quarter of 2000 was $85.3 million or $0.62 per share, up 13 percent from $75.7 million or $0.56 per share, for the second quarter of 2000 and up 291 percent as compared to net income of $21.8 million and $0.18 per share in the third quarter of 1999. The per share amounts are stated on a fully diluted basis.

Record bookings for the quarter again generated a book to bill ratio that was significantly greater than 1:1 for the quarter. Cash and short-term investments at September 30, 2000 were also at record levels of $1,103.5 million, up 3 percent over second quarter balances of $1,071.4 million.

Richard Hill, chairman and chief executive officer said: "Record results for the quarter were driven both by market share gains with advanced technology and customer expansion with our ever increasing portfolio of new products.

Hill continued, "During the quarter Novellus received summary judgement from U.S. District Judge Ronald M. Whyte stating that Novellus' INOVA™ physical vapor deposition (PVD) system does not infringe on Applied Materials' U.S. Patent No. 5,186,718. We are very pleased that to date, the court has not found valid any of Applied's claims that the INOVA system infringes on its patents."

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements regarding (i) customer expansion and (ii) the ability of the Company's product portfolio to meet this demand, as well as other matters discussed in the news release that are not purely historical data, are forward-looking statements. The forward-looking statements involve risks and uncertainties including, but not limited to, a possible slowdown in customer capital spending which would result in a slowdown in new orders, and competitors introducing advanced products that would adversely affect orders for the Company's products as well as other risks indicated in filings with the Securities and Exchange Commission (SEC). Actual results could differ materially. Novellus assumes no obligation to update this information. For more details, please refer to Novellus' SEC filings, including its most recent Annual Report on Form 10-K for the year ended December 31, 1999 and quarterly reports on Form 10-Q for the quarters ended April 1, and July 1, 2000.

Novellus Systems, Inc. manufactures, markets, and services advanced automated wafer fabrication systems for the deposition of thin films. Novellus deposition systems are designed for high-volume production of advanced, leading-edge semiconductors at the lowest overall cost. The Company's stock trades on the Nasdaq Stock Market's National Market under the symbol "NVLS". Additional information about the company is available on the Novellus Systems home page on the World Wide Web, located at http://www.novellus.com.