ARCHIVE 2005

COMET achieves record sales

2004 fiscal year marked by strengthening of Industrial X-Ray business unit

FLAMATT, Switzerland – April 5, 2005 – The COMET Group, a leading manufacturer of components and systems for the growth markets of security, quality control and microelectronics, in 2004 generated sales of CHF 80.7 million (2003: CHF 56.2 million), the highest in the company’s history, with sales growth of 43.6%. Profitability was also boosted: Consolidated operating income (EBIT), at CHF 4.7 million, was far higher than one year earlier (CHF 2 million), and net income doubled to CHF 2.8 million (2003: CHF 1.4 million). The investment in the integration of FEINFOCUS as well as the provisions and write-downs in connection with the restructuring of the mass spectrometry activities prevented the Group from posting record earnings. Given these business results, the Board of Directors is proposing to the Annual Shareholder Meeting on April 28, 2005 to pay a dividend of CHF 2 per share (2003: CHF 1).

In 2004 COMET made great strides through both organic and external growth. With the acquisition of FEINFOCUS, the licensing agreement for the manufacture of mini X-ray tubes and the decision to exit the mass spectrometry development project, COMET further focused the corporate strategy and expanded the core business of X-ray technology for industrial applications.

Hence, the Security & Inspection division generated the strongest growth in the Group. Thanks to a slight upturn in the market segment of non-destructive testing and the further European expansion in personal dosimetry, the division’s two existing business units, Industrial X-Ray and Dosimetry, grew by 8.2%. Sales at the newly integrated FEINFOCUS rose by 18.1% to CHF 14.8 million. The Security & Inspection division as a whole registered sales of CHF 47.9 million (2003: CHF 30.6 million) and, despite its acquisition expenses, pushed up its EBIT to CHF 2.4 million (2003: CHF 1.6 million).

The results of Vacuum Capacitors and Analytics, the two business units in the Microelectronics & Life Science division, were very heterogeneous. Vacuum Capacitors benefited from a boom in the semiconductor industry that lifted the unit’s output and sales to unprecedented levels. By contrast, the Analytics unit was not able to gain a foothold in the market with its mass spectrometer. The strategic decision was reached to find a buyer for the start-up. On balance, sales in the Microelectronics & Life Science division attained a new record level of CHF 32.8 million (2003: CHF 25 million). Despite significant provisions and asset impairment, EBIT almost tripled to CHF 2.7 million (2003: CHF 1.0 million).

The increase in profitability at Group level is all the more remarkable in light of the eroding U.S. dollar. The higher profit margin reflects the dominant market positions of COMET’s two largest business units as well as sustained cost reductions.

The full implementation of the enterprise resource planning (ERP) software that has been in use since January 1, 2004 enabled COMET to perform enterprise-wide cost accounting in the fiscal year under review. In connection with the optimized production processes in the new building, all cost measurement methods and the valuations were reviewed. The opportunities for improvement led COMET to switch from the standard cost method to the moving weighted average approach. To ensure comparability, the data for 2003 was restated.

The capital increase carried out in June in the volatile stock market environment that characterized the year 2004 was one of the most successful in Switzerland. The offering, completed at the then-current quoted stock price, generated gross proceeds of CHF 18 million. Following the corporate action, COMET’s stock saw a rise in trading volume and continued its positive performance, gaining 25% in 2004 overall.

COMET’s prospects for 2005 are difficult to assess in view of the uncertain macroeconomic setting. However, thanks to COMET’s strong market positions and the reinforced potential in Industrial X-Ray, internal growth of the order of about 10% is expected to be achievable.