Photon Dynamics(PHTN) - 500 Beiträge pro Seite

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Profile:Photon Dynamics, Inc. is a provider of yield management solutions to the flat panel display (FPD) industry. The Company also offers yield management solutions for the printed circuit board (PCB) assembly and advanced semiconductor packaging industries and the cathode ray tube (CRT) display and CRT glass and auto glass industries. The Company`s test, repair and inspection systems are used by manufacturers to collect data, analyze product quality and identify and repair product defects at critical steps in the manufacturing process.
http://www.photondynamics.com

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World`s First Fifth-Generation Production Facility Uses Photon Dynamics` Equipment
SAN JOSE, Calif.--(BUSINESS WIRE)--June 19, 2002--Photon Dynamics, Inc. (Nasdaq:PHTN - News), a leading supplier of integrated yield management solutions for the display, electronics and glass markets, announced its continued relationship with LG.Philips LCD to produce the world`s largest and first fifth-generation, thin-film transistor (TFT)-LCD fabrication facility.

Photon Dynamics congratulates LG.Philips LCD on its new P4, fifth-generation facility in Kumi, South Korea. The new state of the art facility includes multiple ArrayChecker 3000s, Photon Dynamics` functional LCD array test solution, as well as multiple ArraySaver 520s, Photon Dynamics` LCD array repair solution, for an unrivaled integrated yield management solution. Manufacturers such as LG.Philips LCD will be able to expedite the transition into a new, display-centric era of consumer electronic applications due in part to technology provided by Photon Dynamics, and by the long-term relationship and cooperation between the companies.

"Our new P4 fabrication facility in Kumi will be the first in the world to utilize Photon Dynamics` latest test and repair systems for the industry`s largest glass substrates. The enhanced throughput, defect detection and integrated repair capabilities of these systems will help support our yield management requirements. In turn, we will be able to provide high quality and more affordable LCD desktop monitors and LCD TV applications to our customers," explained Bruce Berkoff, executive vice president of Marketing at LG.Philips LCD.

Vincent Sollitto, president and CEO of Photon Dynamics, added, "We are extremely pleased to continue our long-term relationship with the leading TFT-LCD manufacturer, LG.Philips LCD."

About Photon Dynamics, Inc.

Photon Dynamics, Inc. is a leading global supplier of integrated yield management solutions for the display, electronics and glass markets. Photon Dynamics` patented image acquisition and image processing technology, electro-optical design, and systems engineering expertise are currently used for: test and repair of flat panel displays; inspection of cathode ray tube displays and automotive glass; and inspection of advanced semiconductor and printed wiring assembly packaging solutions.

Photon Dynamics develops systems that enable manufacturers to collect and analyze data from the production line, and quickly diagnose and repair process-related defects, thereby allowing manufacturers to decrease material costs and improve throughput to gain an incremental yield edge critical to success. Founded in 1986, Photon Dynamics has approximately 320 employees with sales offices and customer support services in San Jose and Aliso Viejo, Calif.; Austin, Texas; Beijing, China; Eindhoven, The Netherlands; Hsinchu and Taipei, Taiwan; Markham, Ontario, Canada; Redhill, Surrey, U.K.; Seoul, Republic of Korea; and Tokyo, Japan. For additional information about Photon Dynamics, visit its Web site at www.photondynamics.com.



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Contact:

Photon Dynamics
Beth Popham, 408/360-3556
[e-mail]

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Photon Dynamics Signs Definitive Agreement to Acquire Infared Screening and Inspection Solutions
Acquisition Expected to Expand Yield Management Applications for Electronics Division
SAN JOSE, Calif.--(BUSINESS WIRE)--July 3, 2002-- Photon Dynamics, Inc. (Nasdaq:PHTN - News), a leading provider of integrated yield management solutions for the display, electronics and glass markets, today announced it has signed a definitive agreement to acquire the Infrared Screening and Inspection Solutions (ISIS) Division of ART Advanced Research Technologies Inc. (ART) (Toronto Stock Exchange:ARA - News) for $5.5 million in cash.

Based in Montreal, Quebec, Canada, ART is a leading developer of optical and infrared imaging technologies for the detection of anomalies in the medical sector and the electronics industry. The patented ISIS® infrared verification system provides an innovative, fast, and cost effective end-of-line screening, and off-line inspection and failure analysis tool to help manufacturers achieve a higher level of process and yield improvement in the electronics printed wiring assembly (PWA) industry.

Photon Dynamics believes the acquisition will extend its product portfolio and intellectual property with the additional product offerings for broad fault coverage of PWAs, thereby expanding its yield management capabilities for original equipment manufacturers (OEMs) and electronic manufacturing services (EMS) companies in the electronics industry.

The transaction is expected to close in July 2002 and is contingent upon the usual closing conditions. For accounting purposes, the acquisition will be treated as a purchase transaction.

About Photon Dynamics, Inc.

Photon Dynamics, Inc. is a leading global supplier of integrated yield management solutions for the display, electronics and glass markets. Photon Dynamics` patented image acquisition and image processing technology, electro-optical design, and systems engineering expertise are currently used for test, repair and inspection of flat panel displays; inspection of cathode ray tube displays and automotive glass; and inspection of printed wiring assemblies and advanced semiconductor packaging. Photon Dynamics develops systems that enable manufacturers to collect and analyze data from the production line, and quickly diagnose and repair process-related defects, thereby allowing manufacturers to decrease material costs and improve throughput to gain an incremental yield edge critical to success. Founded in 1986, Photon Dynamics has approximately 320 employees with sales offices and customer support services in San Jose and Aliso Viejo, California; Austin, Texas; Beijing, China; Eindhoven, The Netherlands; Hsinchu and Taipei, Taiwan; Markham, Ontario, Canada; Redhill, Surrey, U.K.; Seoul, Republic of Korea; and Tokyo, Japan. For more information about Photon Dynamics, visit its Web site at www.photondynamics.com.

About Advanced Research Technologies, Inc.

Advanced Research Technologies Inc. is a North-American company that is involved in research, design, development, and marketing of optical and infrared technologies used in the detection of anomalies in the medical and electronics industries. ART is in the process of bringing to market an optical imaging device to detect and diagnose breast cancer. The device, known as SoftScan®, represents an innovative imaging solution for the detection of breast cancer without the adverse consequences associated with traditional technology. SoftScan® uses the time domain technique in optical imaging, which generates the most information possible about tissue. ART is also working on the development of a novel and proprietary molecular imaging technology, designed to characterize and measure cellular and molecular processes and pathways. ART has been listed on the Toronto Stock Exchange since June 29, 2000 (TSX:ARA).

Safe Harbor Statement

The statements in this press release regarding the benefits Photon Dynamics expects to obtain from the acquisition, and the expected timing of the closing of the acquisition, are forward-looking statements that involve a number of uncertainties and risks. The timing and success of the acquisition and benefits Photon Dynamics ultimately obtains may differ from Photon Dynamics` expectations. Such uncertainties and risks include, without limitation: the potential failure of Photon Dynamics or ART to satisfy the closing conditions for the acquisition (in which case the acquisition may not close); potential difficulties and uncertainties in the assimilation of operations, strategies, technologies, methodologies and products of ISIS into Photon Dynamics; the risk of loss of key personnel of ISIS; diversion of management attention from other business concerns; the risk that the market will not accept the new Photon Dynamics product resulting from the acquisition of ISIS; and the risk that Photon Dynamics will not be able to develop new products using the acquired technology for technological or other reasons. As a result actual results may differ substantially from expectations. For further information on risks affecting Photon Dynamics, refer to the section entitled "Risk Factors" in Photon Dynamics` Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 24, 2002.



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Contact:

Photon Dynamics
Beth Popham, 408/360-3103
[e-mail]
or
Advanced Research Technologies
Sebastien Gignac, 514/832-0777
[e-mail]

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(PHTN) 26.63 -1.39: -- Update -- Co reports on their website Q3 EPS of $0.01, $0.04 worse than the Multex consensus; revs were $19.3 mln, vs consensus of $21.2 mln; co expects Q4 EPS of $0.01-$0.05 and revs up 10-15% from Q3 (about $21.2-$22.2 mln), vs consensus of $0.16 and $24.4 mln. (Co was originally scheduled to report today after the close.)

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12:00PM Photon Dynamics retracts press release issued on website (PHTN) 25.51 -2.51: -- Update -- Company tells Briefing.com that the earnings press release made available on its website this morning (see 10:04 comment) was posted inadvertently due to a technical error; the company says a new press release will be issued at the originally scheduled time after the close, and that some numbers may be revised from the report issued on their website this morning, though they will not discuss the specific nature of any revisions.

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Tuesday July 16, 1:10 pm Eastern Time
Reuters Internet Report
Photon Earnings Draft Posted on Web Site in Error

NEW YORK (Reuters) - A draft copy of the Photon Dynamics Inc. (NasdaqNM:PHTN - News) earnings statement was errantly posted to the company`s Web site for more than 7 hours on Tuesday, sending the stock sinking before Nasdaq halted trading in the shares.
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The Web posting was "an absolute inadvertent error," said Photon Dynamics spokeswoman Beth Popham said. She said the release would be revised before its scheduled release later on Tuesday, but declined to specify the changes.

Shares of San Jose, California-based Photon Dynamics, a maker of electronics testing equipment, tumbled $2.50, or 8.9 percent, to $25.52 in morning trade. Nasdaq halted the stock at 11:30 a.m., but by that time more than 4 million shares had changed hands, an all-time daily high for the company.

The report on the company`s third fiscal quarter appeared on the Web site at 3:57 ET and was taken down at 11:23, Popham said. But at 10:04, the investor information site Briefing.com posted details of the release.

In the draft, Popham said, Photon Dynamics showed a quarterly profit of 1 cent a share, missing the average analyst estimate of 5 cents a share, as measured by Thomson Financial First Call.

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Photon Dynamics Reports Third Quarter Financial Results
Bookings Increase for the Fifth Consecutive Quarter-Company returns to profitability
SAN JOSE, Calif.--(BUSINESS WIRE)--July 16, 2002--Photon Dynamics, Inc. (Nasdaq NM: PHTN - News) a leading global supplier of integrated yield management solutions for the display, electronics and glass markets, today reported financial results for the third quarter of fiscal 2002. The results for fiscal 2001 have been restated to reflect the adoption of Staff Accounting Bulletin No. 101 (SAB 101).

Revenue for the third quarter of fiscal 2002 increased 12 percent to $19.3 million compared to $17.3 million for the second quarter of fiscal 2002 and increased 44 percent compared to $13.4 million for the third quarter of fiscal 2001, as restated. The net income for the current quarter was $117,000, or $0.01 per diluted share, compared to a net loss of $1.6 million, or ($0.10) per diluted share, for the second quarter of fiscal 2002 and a net loss of $1.0 million, or ($0.08) per diluted share, for the third quarter of fiscal 2001, as restated.

Amortization of intangibles in the third and second quarter of fiscal 2002 do not have comparable charges in the third quarter of fiscal 2001. Excluding these amortization of intangibles charges, the net income for the current quarter was $404,000, or $0.02 per diluted share, compared to a net loss of $1.3 million, or ($0.08) per diluted share, for the second quarter of fiscal 2002 and a net loss of $1.0 million, or ($0.08) per diluted share, for the third quarter of fiscal 2001, as restated.

For the first nine months of fiscal 2002, revenue decreased 16 percent to $50.8 million compared to $60.7 million, as restated, for the comparable period of fiscal 2001. The net loss for the first nine months of fiscal 2002 was $4.9 million, or ($0.31) per diluted share, compared to net loss of $5.7 million, or ($0.44) per diluted share, as restated, for the same period a year ago.

Amortization of intangibles in the first nine months of fiscal 2002 do not have comparable charges in fiscal 2001. Non-recurring acquisition charges and the cumulative effect of a change in accounting principle to adopt SAB 101 in fiscal 2001 do not have comparable charges in fiscal 2002. Excluding these charges, the net loss for the first nine months of fiscal 2002 was $4.0 million, or ($0.26) per diluted share, compared to net income of $3.2 million, or $0.23 per diluted share for the first nine months of fiscal 2001, as restated.

"Bookings for the third quarter of fiscal 2002 increased to $30 million, the fifth consecutive quarterly increase, and as a result, the company posted a backlog of $48 million as of June 30, 2002. Our book to bill, driven mostly by the Flat Panel Display (FPD) business, exceeded $1.5," said Vincent Sollitto, president and CEO of Photon Dynamics, Inc. "While we are disappointed with the delayed recovery of the electronics industry, thin-film transistor-liquid crystal displays (TFT-LCDs) are enjoying strong demand. Still driven by the displacement of cathode ray tube (CRT) displays, rising prices and tight supply are encouraging manufacturers to investment in new capacity. As for our electronics business, we are modeling its recovery to now be delayed until fiscal 2003," added Mr. Sollitto.

The company`s current revenue projections for the fourth quarter of fiscal 2002 is to be 10 percent to 15 percent higher than the third quarter of fiscal 2002, with a profit of $0.01 to $0.05 per share.

Photon Dynamics will be presenting at the United States Display Consortium (USDC) Conference on August 5 in Boston, MA; Adams, Harkness & Hill Conference on August 6 also in Boston, MA; and the Soundview SEMI Conference on August 27-29, in Santa Clara, CA. The company will also present at the SEMICON West, FPD Forum, on July 19, in San Jose, CA; and at the Assembly Technology Expo on September 23 with an exhibition booth on September 24-26 in Chicago, IL.

Earnings Conference Call

The company will host a quarterly conference call on July 16, 2002 at 1:30 pm PST. To access the conference call in the US/Canada, dial [phone], and [phone] for international calls. Both numbers will use conference identification name, "Photon Dynamics" and identification number PD716493.

A digital replay will be available on our website at www.photondynamics.com or by phone, two hours after the conclusion of the conference call, July 16, 2002 to July 30, 2002. For US/Canada, [phone], and [phone] for international calls. Enter the conference identification number, 38202, and then the confirmation number, 1628. Both numbers will use conference identification number, 38202, and confirmation number, 1628.

About Photon Dynamics, Inc.

Photon Dynamics, Inc. is a leading global supplier of integrated yield management solutions for the display, electronics and glass markets. The company`s products enable manufacturers to collect production line data, analyze it and quickly diagnose and repair process-related defects. This decreases material costs and improves throughput, giving manufacturers an incremental yield edge critical to their success. Photon Dynamics` solutions, based on patented technologies and systems engineering expertise, are used for flat panel display test, inspection and repair; CRT display and automotive glass inspection; and advanced semiconductor packaging and printed wiring assembly inspection. Founded in 1986, Photon Dynamics has approximately 330 employees with sales offices and/or customer support services in San Jose and Aliso Viejo, California; Austin, Texas; Beijing, China; Eindhoven, The Netherlands; Hsinchu and Taipei, Taiwan; Kumi City and Seoul, Republic of Korea; Markham, Ontario, Canada; Montreal, Quebec, Canada; Redhill, Surrey, U.K.; and Tokyo, Japan. For more information about Photon Dynamics, visit its Web site: www.photondynamics.com.

Safe Harbor Statement

The statements in this press release relating to Photon Dynamics` optimism about the flat panel display market, electronics industry recovery and projected future financial results are forward-looking statements. Such forward-looking statements are based on current expectations on the date of this press release and involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to: the recent economic downturn has created substantial economic uncertainty, which may cause consumers to reduce purchases of products containing flat panel displays and electronic products, and Photon Dynamics` customers to reduce investments in Photon Dynamics` products below that which Photon Dynamics projects until the markets become more certain; recent economic conditions may cause an increase in competitive pricing pressures; and the risk of the introduction of competing products having technological and/or pricing advantages. As a result, Photon Dynamics` actual results may differ substantially from expectations. For further information on risks affecting Photon Dynamics, refer to the section entitled "Risk Factors" in Photon Dynamics` Registration Statement on Form S-1 as filed on May 24, 2002 and other filings with the Securities and Exchange Commission. Photon Dynamics undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise.


Photon Dynamics, Inc.
Condensed Consolidated Balance Sheets
(In thousands)

June 30, September 30,
2002 2001
--------- ---------
(unaudited)
Assets

Current assets:
Cash, cash equivalents and
investments $ 183,499 $ 84,091
Accounts receivable, net 19,454 11,171
Inventories 12,905 16,007
Other current assets 5,425 3,406
--------- ---------
Total current assets 221,283 114,675

Land, property and equipment, net 13,265 14,046

Other assets 2,287 2,688
Intangible assets 3,641 4,502
Goodwill 22,724 22,724
--------- ---------
Total assets $ 263,200 $ 158,635
========= =========

Liabilities and Shareholders` Equity

Current liabilities:
Accounts payable $ 4,702 $ 4,295
Other current liabilities 7,302 8,361
Deferred revenue and customer
deposits 614 2,312
--------- ---------
Total current liabilities 12,618 14,968

Other liabilities 338 359

Shareholders` equity:
Common stock 296,498 184,500
Accumulated deficit (46,557) (41,698)
Accumulated other
comprehensive income 303 506
--------- ---------
Total shareholders` equity 250,244 143,308
--------- ---------
Total liabilities and
shareholders` equity $ 263,200 $ 158,635
========= =========

Photon Dynamics, Inc.
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)


Three Months Ended Nine Months Ended
June 30, June 30,
2002 2001 2002 2001
-------- -------- -------- --------
Revenue $ 19,320 $ 13,436 $ 50,822 $ 60,690

Cost of revenue 10,952 8,103 30,231 35,224
-------- -------- -------- --------
Gross margin 8,368 5,333 20,591 25,466

Operating expenses:
Research and
development 4,803 3,753 12,929 12,888
Selling, general
and administrative 4,064 3,918 13,725 13,266
Non-recurring
acquisition charges -- -- -- 2,325
Amortization of
intangible assets 287 -- 860 --
-------- -------- -------- --------
Total operating expenses 9,154 7,671 27,514 28,479
-------- -------- -------- --------
Loss from operations (786) (2,338) (6,923) (3,013)

Interest income
and other, net 903 1,066 2,064 4,323
-------- -------- -------- --------
Income (loss) before
income taxes and
cumulative effect of
a change in
accounting principle 117 (1,272) (4,859) 1,310

Provision for
income taxes -- (241) -- 468
-------- -------- -------- --------
Income (loss) before
cumulative effect of
change in accounting
principle 117 (1,031) (4,859) 842

Cumulative effect of
change in accounting
principle, net of
tax benefit -- -- -- (6,560)
-------- -------- -------- --------
Net income (loss) $ 117 $ (1,031) $ (4,859) $ (5,718)
======== ======== ======== ========

Net income (loss) per
share before cumulative
effect of change in
accounting principle:
Basic $ 0.01 $ (0.08) $ (0.31) $ 0.06
-------- -------- -------- --------
Diluted $ 0.01 $ (0.08) $ (0.31) $ 0.06
-------- -------- -------- --------
Loss per share from the
cumulative effect of
change in accounting
principle, net of
tax benefit:
Basic -- -- -- $ (0.50)
-------- -------- -------- --------
Diluted -- -- -- $ (0.50)
-------- -------- -------- --------
Net income (loss)
per share:
Basic $ 0.01 $ (0.08) $ (0.31) $ (0.44)
======== ======== ======== ========
Diluted $ 0.01 $ (0.08) $ (0.31) $ (0.44)
======== ======== ======== ========
Weighted average
number of shares:
Basic 17,031 13,014 15,564 12,983
Diluted 17,999 13,014 15,564 13,727




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Contact:
Photon Dynamics
So-Yeon Jeong, 408/360-3561
[e-mail]
or
Weber Shandwick, Silicon Valley
Carol Felton, 650/532-4071
[e-mail]

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2:58PM Photon Dynamics issues same press release (PHTN) 25.52 -2.50 (halted): -- Update -- Company finally makes earnings report official; though company had told Briefing.com that some numbers would be revised from the release that was mistakenly posted to their site earlier today, all of the numbers look the same, and certainly the most important numbers - Jun qtr results and Sep qtr guidance - matched the earlier release. The Jun qtr numbers fell shy of estimates, and Sep qtr guidance was below current consensus (see 10:04 comment for more).

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Photon Dynamics Announces Stock Repurchase Program
SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 14, 2002--Photon Dynamics, Inc. (Nasdaq:PHTN - News) today announced that its Board of Directors has approved the repurchase of up to an aggregate of $25 million of its Common Stock. "Based on current market prices, we believe that our stock is undervalued and that the repurchase program is a good investment of available funds," said Vincent Sollitto, the president and chief executive officer of the Company. The repurchases will be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. The repurchase program is expected to continue over the next twelve (12) months unless extended or shortened by the Board of Directors. ADVERTISEMENT




About Photon Dynamics, Inc.

Photon Dynamics, Inc. is a leading global supplier of integrated yield management solutions for the display, electronics and glass markets. The company`s products enable manufacturers to collect production line data, analyze it and quickly diagnose and repair process-related defects. This decreases material costs and improves throughput, giving manufacturers an incremental yield edge critical to their success. Photon Dynamics` solutions, based on patented technologies and systems engineering expertise, are used for flat panel display test, inspection and repair; CRT display and automotive glass inspection; and advanced semiconductor packaging and printed wiring assembly inspection. Founded in 1986, Photon Dynamics has approximately 330 employees with sales offices and/or customer support services in San Jose and Aliso Viejo, Calif.; Austin, Texas; Beijing, China; Eindhoven, The Netherlands; Hsinchu and Taipei, Taiwan; Kumi City and Seoul, Republic of Korea; Markham, Ontario, Canada; Montreal, Quebec, Canada; Redhill, Surrey, U.K.; and Tokyo, Japan. For more information about Photon Dynamics, visit its Web site: www.photondynamics.com.

Safe Harbor Statement

The statements in this press release regarding the repurchase of Photon Dynamics Common Stock and the expected duration of the repurchase program are forward looking statements that are subject to risks and uncertainties. Photon Dynamics may repurchase all $25 million of its stock, or no shares of its stock, or any amount in between, and lengthen or shorten the repurchase period, depending on the trading price of its Common Stock, market conditions, determinations following the date of this announcement to use such funds for other purposes, or for other reasons. Other risks relating to Photon Dynamics can be found in Photon Dynamics` latest Annual Report on Form 10-K and subsequent Form 10-Qs filed with the Securities and Exchange Commission.



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Contact:

Photon Dynamics
So-Yeon Jeong, 408/360-3561
[e-mail]
or
Weber Shandwick, Silicon Valley
Carol Felton, 650/532-4071
[e-mail]

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Photon Dynamics Completes Acquisition of Akcron Corporation in Korea
Acquisition Expected to Expand Flat Panel Display Cell Inspection Solution and Presence in Asia Pacific
Friday September 27, 9:46 am ET


SAN JOSE, Calif.--(BUSINESS WIRE)--Sept. 27, 2002-- Photon Dynamics, Inc. (Nasdaq:PHTN - News), a leading provider of integrated yield management solutions for the display, electronics and glass markets, today announced it has completed its acquisition of Akcron Corporation LTD., which provides automated optical inspection equipment and backlight inverter manufacturing for flat panel displays, in Korea for approximately $4 million in cash.
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Based in Daeduk Valley, Daejeon, South Korea, Akcron Corporation LTD. was a privately held manufacturer of automated optical inspection equipment, image processing hardware and software algorithms and high-performance liquid crystal display (LCD) backlight inverters for flat panel displays.

Photon Dynamics believes the acquisition will expand its product and technology portfolio to address LCD cell and module inspection capabilities, increase regional service to provide development applications, and further enhance its established Asian Pacific infrastructure.

"Combined with our current FPD array and automated optical inspection (AOI) solutions, this additional technology will enable Photon Dynamics to provide customers with a broader suite of integrated yield management solutions," stated Jeff Hawthorne, president of Photon Dynamics` Image Processing Systems Division. "This acquisition further demonstrates our commitment to a global strategy and expanded investment in the Asia Pacific region," added Hawthorne.

"We are delighted to join Photon Dynamics," stated Ki Hyun Hong, chief executive officer, Akcron Corporation LTD. "Given Photon Dynamics` established presence among Korean equipment manufacturers and Akcron`s local proximity and direct access, customers will benefit by additional comprehensive services and broader technology," added Hong.

Terms of the Agreement

Photon Dynamics purchased from shareholders of Akcron Corporation all of Akcron Corporation`s outstanding stock in exchange for approximately $4 million in cash. Akcron Corporation, which has 19 employees, 13 of which are engineers, will continue its operations as a wholly owned subsidiary of Photon Dynamics.

About Photon Dynamics, Inc.

Photon Dynamics, Inc. is a leading global supplier of integrated yield management solutions for the display, electronics and glass markets. Photon Dynamics` patented image acquisition and image processing technology, electro-optical design, and systems engineering expertise are currently used for test, repair and inspection of flat panel displays; inspection of cathode ray tube displays and automotive glass; and inspection of printed wiring assemblies and advanced semiconductor packaging. Photon Dynamics develops systems that enable manufacturers to collect and analyze data from the production line, and quickly diagnose and repair process-related defects, thereby allowing manufacturers to decrease material costs and improve throughput to gain an incremental yield edge critical to success. Founded in 1986, Photon Dynamics has sales offices and customer support services in San Jose and Aliso Viejo, California; Austin, Texas; Beijing, China; Eindhoven, The Netherlands; Hsinchu and Taipei, Taiwan; Kumi City and Seoul, Republic of Korea; Markham, Ontario, and Quebec, Montreal, Canada; and Tokyo, Japan. For more information about Photon Dynamics, visit its Web site: www.photondynamics.com.

About Akcron Corporation LTD.

Akcron is a South Korean company that develops and manufactures optical inspection equipment and inverter modules for FPDs. Akcron has succeeded in entering the LCD automated optical inspection equipment and inverter modules market in Taiwan and South Korea. The inspection equipment, known as DSJ2000, represents a unique inspection technology for the detection of a wide variety of defects in the LCD manufacturing process. Akcron has also been in the process of broadening its inverter market share for TFT-LCD backlight units such as LCD TVs, monitors, notebook computers and PDAs. Akcron is located in Daeduk Valley, Daejeon, South Korea.

Safe Harbor Statement

The statements in this press release regarding the benefits Photon Dynamics expects to obtain from the acquisition are forward-looking statements that involve a number of uncertainties and risks. The success of the acquisition and benefits Photon Dynamics ultimately obtains may differ substantially from Photon Dynamics` expectations. Such uncertainties and risks include, without limitation: the potential difficulties in the assimilation of operations, strategies, technologies, methodologies and products of Akcron; the risk of loss of key personnel of Akcron; diversion of management attention from other business concerns; the risk that the market will not accept the new Photon Dynamics products resulting from the acquisition of Akcron; and the risk that Photon Dynamics will not be able to develop new products using the acquired technology for technological or other reasons. For further information on risks affecting Photon Dynamics, refer to the section entitled "Factors Affecting Operating Results" in Photon Dynamics` Quarterly Report, filed on August 12, 2002 with the Securities and Exchange Commission. Photon Dynamics undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or other filings with the Securities and Exchange Commission.



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Contact:
Photon Dynamics
Beth Popham, 408/360-3566
[e-mail]
or
Weber Shandwick
Craig Librett, 617/520-7038
[e-mail]



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Source: Photon Dynamics

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Intevac Signs Agreement to Sell Its Rapid Thermal Processing Business to Photon Dynamics
Tuesday October 22, 4:02 pm ET


SANTA CLARA, Calif., Oct. 22 /PRNewswire-FirstCall/ -- Intevac, Inc. (Nasdaq: IVAC - News), today announced it had signed an asset purchase agreement to sell its rapid thermal processing capital equipment ("RTP") business to Photon Dynamics, Inc. of San Jose, CA. (Nasdaq: PHTN - News).
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The agreement provides for the sale of Intevac`s RTP business to Photon Dynamics for $20 million cash and the assumption of certain liabilities. $2 million of the cash payment will be held in escrow for one year. Release of the escrow at the end of this period is subject to a number of conditions. The transaction is structured as an asset purchase and contemplates the relocation of the RTP business to Photon Dynamics` facility in San Jose, CA. Closing is expected in early November and is contingent on certain customary closing conditions.

Mr. Kevin Fairbairn, Intevac`s Chief Executive Officer, said, "The sale of the RTP business to Photon Dynamics will significantly improve our balance sheet and allow us to focus more effectively on the development of our Intensified Imaging business which has significant growth potential."

About Photon Dynamics

Photon Dynamics, Inc. is a leading global supplier of integrated yield management solutions for the display, electronics and glass markets. Photon Dynamics` patented image acquisition and image processing technology, electro-optical design, and systems engineering expertise are currently used for: test, repair and inspection of flat panel displays; inspection of cathode ray tube displays and automotive glass; and inspection of printed wiring assemblies and advanced semiconductor packaging. Photon Dynamics develops systems that enable manufacturers to collect and analyze data from the production line, and quickly diagnose and repair process-related defects, thereby allowing manufacturers to decrease material costs and improve throughput to gain an incremental yield edge critical to success. Founded in 1986, Photon Dynamics has sales offices and customer support services in San Jose and Aliso Viejo, California; Beijing, China; Eindhoven, The Netherlands; Hsinchu and Taipei, Taiwan; Markham, Ontario, Canada; Redhill, Surrey, UK; Daejeaon, Kumi, and Seoul, Korea; and Tokyo, Japan. For more information about Photon Dynamics, visit its web site at www.photodynamics.com.

About Intevac

Intevac is developing revolutionary intensified imaging products that address potentially large commercial and military markets. The Company also produces sophisticated manufacturing equipment used in the manufacture of high technology products and is leveraging its equipment expertise to enable cost-effective production of new intensified imaging products. Intevac`s intensified imaging products are high-speed electro-optical devices that detect light with extraordinary sensitivity. The Company`s proprietary technology makes possible products such as LIVAR®, a long-range target identification system, and video cameras with night vision capability. Intevac`s equipment products are designed to deposit or modify highly engineered thin-films of material on a variety of substrates. These systems are designed for continuous high volume manufacturing of precision thin-film products such as flat panel displays, magnetic media for hard drives and extreme-low-light-level cameras. For more information call 408-986-9888 or visit the Company`s website at www.intevac.com.

Safe Harbor Statement

The statements in this press released regarding the sale of Intevac`s RTP business to Photon Dynamics, are forward looking statements. These forward-looking statements include, without limitation, statements related to purchase price, closing schedule, closing conditions, impact of the transaction on Intevac`s balance sheet and the potential of the Intensified Imaging business. These forward-looking statements involve a number of uncertainties and risks, which include, without limitation, the potential failure of the transaction to close on the anticipated schedule, or to close at all; the failure of either Intevac or Photon Dynamics to satisfy all of the closing conditions; any failures in Intevac`s representations and warranties or anticipated performance of the RTP business that could lead to forfeiture of a portion, or all, of the $2 million escrow account to Photon Dynamics; or the failure of the Intensified Imaging business to achieve significant growth. As a result of the above, the actual results may differ substantially from expectations. For further information on the risks affecting Intevac please see Intevac`s report on form 10-Q for the period ended June 29, 2002, filed with the Securities and Exchange Commission.

NOTE: LIVAR(R) is a registered trademark of Intevac.

Make Your Opinion Count - Click Here




--------------------------------------------------------------------------------
Source: Intevac, Inc.

[panik]

Photon Dynamics Reports Fourth Quarter and Fiscal Year End Financial Results
Tuesday October 22, 4:11 pm ET
Book to Bill exceeds 1 for Fourth Consecutive Quarter


SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 22, 2002--Photon Dynamics, Inc. (Nasdaq:PHTN - News), a leading global supplier of integrated yield management solutions for the display, electronics and glass markets, today reported financial results for the fourth quarter and full year of fiscal 2002. The results for fiscal 2001 have been restated to reflect the adoption of Staff Accounting Bulletin No. 101 (SAB 101).
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Revenue for the fourth quarter of fiscal 2002 increased by 77% percent to $18.4 million compared to $10.4 million for the fourth quarter of fiscal 2001. The net loss for the current quarter was $16.9 million, or ($1.00) per diluted share, compared to net loss of $7.4 million, or ($0.54) per diluted share, for the fourth quarter of fiscal 2001.

The company`s results of operations for the fourth quarter of 2002 included: a charge for goodwill and intangible impairment of $12.2 million as the value of the electronics business has dropped significantly due to the prolonged economic down cycle; a restructuring charge of $2.6 million for employee-related costs and consolidation of facilities in connection with the restructuring of the electronics division; $0.7 million of acquired in-process research and development resulting from the acquisitions of Akcron Corporation and the Infrared Systems Inspection Solutions (ISIS) Division of Advanced Research Technologies Inc.; and $0.2 million of amortization of intangible assets. Excluding charges from each of these line items in the comparable quarters, the net loss for the current quarter was $1.3 million, or ($0.08) per diluted share, compared to a net income of $404,000, or $0.02 per diluted share for the third quarter of fiscal 2002 and a net loss of $4.6 million, or ($0.34) per diluted share, for the fourth quarter of fiscal 2001.

Richard L. Dissly, chief financial officer, stated "A customer requested that we delay shipment because their facility was not ready for installation of two test systems scheduled for September delivery. These systems were shipped in October which will result in approximately $2.8 million in revenue for the first quarter of fiscal 2003."

Cash and short-term investments at September 30, 2002 was $170 million compared to $183 million at June 30, 2002. The decrease in cash was due to the acquisitions of ISIS and Akcron and the repurchase of 351,000 shares of the Company`s Common Stock under the repurchase program announced in August 2002. Net of the above items, the Company was cash flow positive for the fourth quarter.

For the fiscal year 2002, revenue decreased 3 percent to $69.2 million compared to $71.1 million, as restated, for the fiscal year 2001. The net loss for fiscal 2002 was $21.8 million, or ($1.37) per diluted share, compared to a net loss of $13.1 million, or ($1.00) per diluted share, as restated, for the same period a year ago.

The goodwill and intangible impairment charge in fiscal 2002 and the non-recurring acquisition charges and the cumulative effect of a change in accounting principle to adopt SAB 101 in fiscal 2001 do not have similar charges in the comparative period. Excluding these charges, as well as acquired in-process research and development, restructure and amortization of intangible asset charges in each of fiscal 2002 and 2001, the net loss for fiscal 2002 was $5.3 million, or ($0.34) per diluted share, compared to net loss of $1.5 million, or ($0.11) per diluted share for fiscal 2001, as restated.

Bookings for the fourth quarter of fiscal 2002 were approximately $24 million and as a result, the company posted a backlog of $54 million as of September 30, 2002. The company`s book to bill, driven mostly by the Flat Panel Display (FPD) business, exceeded 1 for the fourth consecutive quarter.

Vincent F. Sollitto, president and chief executive officer, stated "To align our Electronics operations with the current level of business we took another round of cost-cutting measures in the fourth quarter, including the consolidation of facilities, which will lower our expenses by approximately $600,000 per quarter."

While we continue to devote special attention to controlling expenses, with the support from our strong cash position, which increased in the fourth quarter when excluding acquisitions and stock repurchases, we remain committed to investment in advanced technology and product development," concluded Sollitto.

The company`s current revenue projection for the first quarter of fiscal 2003 is to be 30 percent to 40 percent higher than the fourth quarter of fiscal 2002, with a profit of $0.03 to $0.09 per share.

Photon Dynamics will be exhibiting and presenting at LCD/PDP International, October 31 - November 2 in Yokohama, Japan and at the AEA Classic on November 4 - 5 in San Diego, CA.

Earnings Conference Call

The company will host a quarterly conference call on October 22, 2002 at 1:30 pm PST. To access the conference call in the US/Canada, dial 800/289-0494, and 913/981-5220 for international calls. Both numbers will use confirmation code 195917.

A digital replay will be available on our website at www.photondynamics.com or by phone, two hours after the conclusion of the conference call, October 22, 2002 to November 5, 2002. For US/Canada, 888/203-1112, and 719/457-0820 for international calls. Enter the confirmation code 195917.

About Photon Dynamics, Inc.

Photon Dynamics is a leading global supplier of integrated yield management solutions for the display, electronics and glass markets. Photon Dynamics` patented image acquisition and image processing technology, electro-optical design, and system engineering expertise are currently used for: test, repair and inspection of flat panel displays; inspection of cathode ray tube displays and automotive glass; and inspection of printed wiring assemblies and advanced semiconductor packaging. Photon Dynamics develops systems that enable manufacturers to collect and analyze data from a production line, and quickly diagnose material costs and improve throughput to gain an incremental yield edge critical to success. Founded in 1986, Photon Dynamics has sales offices and customer support services in: San Jose and Aliso Viejo, California; Beijing, China; Eindhoven, The Netherlands; Hsinchu and Taipei, Taiwan; Markham, Canada; Redhill, Surrey, UK; Bundang, Daejeon and Kumi, Korea; and Tokyo, Japan. For more information about Photon Dynamics, visit its corporate Web site at www.photondynamics.com.

Safe Harbor Statement

The statements in this press release relating to Photon Dynamics` projected future financial results for the first quarter of fiscal 2003 are forward-looking statements. Such forward-looking statements are based on current expectations on the date of this press release and involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to: the current economic downturn has created substantial economic uncertainty, which may cause consumers to purchase products containing flat panel displays and electronic products at a rate lower than Photon Dynamics expects, and therefore Photon Dynamics` customers to reduce investments in Photon Dynamics` products below that which Photon Dynamics projects until the markets become more certain; current economic conditions may cause an increase in competitive pricing pressures; future acquisitions may occur, which would affect future operating results; and the risk of the introduction of competing products having technological and/or pricing advantages. As a result, Photon Dynamics` actual results may differ substantially from expectations. For further information on risks affecting Photon Dynamics, refer to the section entitled "Management`s Discussion and Analysis of Financial Condition and Results of Operations" under the caption " Factors Affecting Operating Results" in Photon Dynamics` Quarterly Report on Form 10-Q as filed on August 12, 2002 with the Securities and Exchange Commission. Photon Dynamics undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise.

-0-


Photon Dynamics, Inc.
Condensed Consolidated Balance Sheets
(In thousands)



September 30, September 30,
2002 2001
------------- -------------

Assets
Current assets:
Cash, cash equivalents and
investments $ 170,143 $ 84,091
Accounts receivable, net 16,579 11,171
Inventories I 18,650 16,007
Other current assets 6,367 3,156
------------- -------------
Total current assets 211,739 114,425

Land, property and equipment, net 12,404 14,046

Other assets 2,925 2,938
Intangible assets 3,554 4,502
Goodwill 18,537 22,724
------------- -------------
Total assets $ 249,159 $ 158,635
============= =============

Liabilities and Shareholders` Equity
Current liabilities:
Accounts payable $ 10,610 $ 4,295
Other current liabilities 10,637 8,361
Deferred revenue and customer deposits 304 2,312
------------- -------------
Total current liabilities 21,551 14,968

Other liabilities 1,465 359

Shareholders` equity:
Common stock 288,833 184,500
Accumulated deficit (63,500) (41,698)
Accumulated other comprehensive income 810 506
------------- -------------
Total shareholders` equity 226,143 143,308
------------- -------------
Total liabilities and shareholders`
equity $ 249,159 $ 158,635
============= =============



Photon Dynamics, Inc.
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)


Three Months Ended Fiscal Year Ended
September 30, September 30,
------------------ -----------------
2002 2001 2002 2001
-------- -------- ------- --------

Revenue $ 18,404 $10,393 $69,226 $71,083

Cost of revenue 9,799 6,829 40,030 42,053

-------- -------- ------- --------
Gross margin 8,605 3,564 29,196 29,030

Operating expenses:
Research and development 5,890 4,234 18,819 17,122

Selling, general and
administrative 4,818 5,048 18,543 18,314
Goodwill and intangible
impairment charge 12,217 -- 12,217 --
Non-recurring acquisition
charges -- -- -- 2,325
Acquired in-process
research & development 654 1,323 654 1,323
Restructure charges 2,551 1,229 2,551 1,229
Amortization of
intangible assets 182 239 1,042 239
-------- -------- ------- --------
Total operating expenses 26,312 12,073 53,826 40,552
-------- -------- ------- --------
Loss from operations (17,707) (8,509) (24,630) (11,522)


Interest income and other,
net 849 685 2,913 5,008
-------- -------- ------- --------

Loss before income taxes and
cumulative effect of a change
in accounting principle (16,858) (7,824) (21,717) (6,514)



Provision for income taxes 85 (415) 85 53
-------- -------- ------- --------

Loss before cumulative effect
of change in accounting
principle (16,943) (7,409) (21,802) (6,567)


Cumulative effect of change
in accounting principle, net
of tax benefit -- -- -- (6,560)

-------- -------- -------- --------

Net loss
$(16,943) $(7,409) $(21,802)$(13,127)
======== ======== ======== =========

Net loss per share before
cumulative effect of change
in accounting principle:
Basic $ (1.00) $ (0.54) $ (1.37)($ 0.50)
-------- -------- -------- --------

Diluted $ (1.00) $ (0.54) $ (1.37)($ 0.50)
-------- -------- -------- --------

Loss per share from the
cumulative effect of change
in accounting principle, net
of tax benefit:
Basic -- -- -- $ (0.50)
-------- -------- -------- --------
Diluted -- -- -- $ 0.50)
-------- -------- -------- --------
Net loss per share:
Basic $ (1.00) $ (0.54) $ (1.37) $ (1.00)
======== ======== ======== ========

Diluted $ (1.00) $ (0.54) $ (1.37) $ (1.00)
======== ======== ======== ========

Weighted average number of
shares:
Basic 16,991 13,705 15,923 13,165
Diluted 16,991 13,705 15,923 13,165




--------------------------------------------------------------------------------
Contact:
Photon Dynamics, Inc.
So-Yeon Jeong, 408/360-3561 (Investor Relations Manager)
[e-mail]
or
Weber Shandwick, Cambridge, MA
Denis Roy, 617/520-7285
[e-mail]



--------------------------------------------------------------------------------
Source: Photon Dynamics, Inc.

[panik]

Photon Dynamics Opens Wholly Foreign-Owned Enterprise in China
Friday October 25, 11:05 am ET
Shanghai Subsidiary to Support Domestic Electronics and Flat Panel Display Manufacturers


SAN JOSE, Calif. & HONG KONG--(BUSINESS WIRE)--Oct. 25, 2002-- Photon Dynamics, Inc. (Nasdaq:PHTN - News), a leading supplier of integrated yield management solutions for the display, electronics, and glass markets, today announced that it would open a wholly foreign-owned enterprise (WFOE) in Shanghai, and a demonstration facility in Suzhou, China.
China`s ascent comes at a time when an increasing number of electronics-manufacturing services (EMS) companies and liquid crystal display (LCD) manufacturers are shifting production and final assembly to China to leverage several manufacturing advantages. Primary advantages include: the highly competitive wage rate in China as compared to other Asian countries; an enhanced export hub for technology production; and the concentration of original design manufacturers (ODMs) and electronics parts manufacturers to provide a sustainable domestic supplier base.

According to a Chinese market research firm, 394,000 notebook computers were sold in China in the first half of 2002, a sharp increase of 42.8 percent compared with a year earlier. By 2003, China is expected to be manufacturing 15 to 18 million notebook computers a year and is expected to provide as much as 80 percent of global notebook production.



--------------------------------------------------------------------------------
Contact:
Photon Dynamics
So-Yeon Jeong, 408/360-3561
Investor Relations Manager
[e-mail]
or
Weber Shandwick, Hong Kong, China
Tim Smart, (852)-2533-9900
[e-mail]



--------------------------------------------------------------------------------
Source: Photon Dynamics

[panik]

Photon Dynamics Introduces ArraySaver 550 HFS LCD Array Repair System
Tuesday October 29, 9:57 am ET
Next Generation Technology to Address Fifth Generation Process with High Functionality at Competitive Price


SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 29, 2002--Photon Dynamics, Inc. (Nasdaq NM: PHTN - News) today introduced its ArraySaver 550 HFS repair system (AS-550) HFS (High Functionality System), the next generation technology to address fifth generation processes -- the largest LCD substrates up to 1,200 x 1,300 mm -- with high functionality at a competitive price. The new system enables precision repair work for active matrix liquid crystal display (AMLCD) manufacturers, allowing them to further increase yield and reduce material costs over previous generation repair systems.
"We believe that this repair solution, combined with the new AC-3500 test solution, will further enable manufactures to optimize their factory production with a lower cost of ownership, stated Bernard T. Clark, president of the Flat Panel Display Division. "The AS-550 HFS new multi-wavelength laser feature improves the overall repair process to provide more consistent and reliable laser cutting and welding operations. Additionally, the new laser design allows for a simple, cost effective laser replacement method than previously provided," concluded Clark.

The AS-550 HFS also incorporates a faster auto focus capability to improve image focus more than two times, resulting in faster review and alignment - improving overall repair throughput by up to 30 percent compared to its predecessor.

Integrated Functionality

Photon Dynamics` complete integrated yield management solutions can be quickly configured for different panel layouts. Photon Dynamic`s intuitive user interface, graphical tools, and utilities allow manufacturers the flexibility to enter customer-specific defect codes, update server files, access stored repair recipes, to automatically update defect files for repair reports to provide efficient, highly-functional, LCD array repair.

AS-550 HFS Features

Repairs with precise cuts or welds and induces proper laser-material interaction on amorphous and poly-silicon circuits.
Supports repair of Generation 5 glass sizes, up to 1,200 x 1,300 mm.
Bankless glass alignment -- improved algorithms drive a non-banking glass alignment operation that improves overall alignment and reduces handling errors.
New high reliability, multi-wavelength laser and feedback control system to provide consistent laser output for uniform laser cutting.
Improved Autofocus -- reduces the time required to focus on a defect from three seconds to less than 1.5 seconds, reducing alignment time by five seconds per plate and improving standard cycle time by 60 seconds or more depending on number of defects reviewed.
New modular design enables key components, such as the laser source, to be replaced in the field -- driving down total cost of ownership and boosting functionality.
Defect repair queue option -- An offline test (AC-3500) and repair strategy to provide integrated functionality and flexibility, thereby reducing equipment operator time in the cleanroom, and improving capacity by maximizing equipment utilization to enable repairs at machine speeds.
Transparent chuck option -- offers improved review performance, enabling operators to more accurately verify repairs and features a motorized illuminator, which is positioned directly beneath the objective for maximum brightness at 100X magnification.
About Photon Dynamics

Photon Dynamics is a leading global supplier of integrated yield management solutions for the display, electronics and glass markets. Photon Dynamics` patented image acquisition and image processing technology, electro-optical design, and system engineering expertise are currently used for: test, repair and inspection of flat panel displays; inspection of cathode ray tube displays and automotive glass; and inspection of printed wiring assemblies and advanced semiconductor packaging. Photon Dynamics develops systems that enable manufacturers to collect and analyze data from a production line, and quickly diagnose material costs and improve throughput to gain an incremental yield edge critical to success. Founded in 1986, Photon Dynamics has sales offices and customer support services in San Jose and Aliso Viejo, California; Beijing, Shanghai and Suzhou, China; Eindhoven, The Netherlands; Hsinchu and Taipei, Taiwan; Markham, Canada; Redhill, Surrey, UK; Bundang, Daejeon and Kumi, Korea; and Tokyo, Japan. For more information about Photon Dynamics, visit its Web site at www.photondynamics.com.

Safe Harbor Statement

This press release contains forward-looking statements relating to the benefits to be obtained from the ArraySaver 550 (AS-550), which are subject to risks and uncertainties. These risks include, without limitation that the results of the AS-550 may vary due to; difficulties in the integration of the software and hardware components; or other technical difficulties resulting from operator errors. For further information regarding risks relating to Photon Dynamics, refer to the section entitled "Factors Affecting Operating Results" in Photon Dynamics` Quarterly Report, filed August 12, 2002, filed with the Securities and Exchange Commission. Photon Dynamics undertakes no obligation to update the information in this press release.



--------------------------------------------------------------------------------
Contact:
Photon Dynamics
Beth Popham, 408/360-3566
[e-mail]
or
Weber Shandwick, Cambridge, MA
Vicki Greene, 617/520-7271
[e-mail]
or
Weber Shandwick, Hong Kong, China
Tim Smart, 852/2533-9900
[e-mail]



--------------------------------------------------------------------------------
Source: Photon Dynamics

[panik]

Photon Dynamics Introduces ArrayChecker 3500 Production Proven Fifth Generation LCD Array Test System
Tuesday October 29, 10:49 am ET
Industry`s Largest Digital Camera Provides Multiple Functions with Single Capture


SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 29, 2002-- Photon Dynamics, Inc. (Nasdaq:PHTN - News) today introduced the ArrayChecker 3500 test system (AC-3500), a production proven array tester for Generation 5 glass substrates -- capable of testing LCD glass plate sizes up to 1,200 x 1,300 mm -- using a patented Voltage Imaging Optical Sensor (VIOS(TM)) that is more than three times larger than prior generation systems with the largest industrial-use digital camera to date. The AC-3500 reduces Array test time up to 40 percent, and provides resolution and productivity improvements for much higher tool utilization rates.
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With the AC-3500, manufacturers can test Generation 5 glass substrates with a VIOS, which includes a 16.7 mega-pixel camera -- the first industrial use of such an advanced digital camera. The AC-3500 provides the highest pixel sensitivity resolution available at 34 to 60 microns per pixel for active matrix liquid crystal display-thin film transistors (AMLCD-TFTs).

"We believe that this test solution will help enable manufacturers to meet their customer demands for a full line-up of displays; sizes ranging from 15-inch to over 30-inch wide screens for premium monitor and TV usage," stated Bernard T. Clark, president of the Flat Panel Display Division, Photon Dynamics.

The AC-3500 Test System

The AC-3500 performs multiple functional tests for both amorphous and low-temperature poly-silicon (LTPS) array substrates. Further, it detects, locates, quantifies and characterizes electrical, contamination and other defects after array fabrication, but before the costly materials and process steps of cell assembly are added. The AC-3500 tests arrays up to 40 percent faster than the first Generation 5 array tester, the AC-3000, and supports testing of 1,200 x 1,300 mm substrates with a spatial resolution of 34 to 60 microns (um). This makes the AC-3500 the first array test system to support the larger Generation 5 plate sizes and the only platform to have already been proven in Generation 5 production facilities.

The AC-3500 features a number of enhancements designed to improve both total average cycle time (TACT), or throughput, and system sensitivity.

AC-3500 Features

Industry leading, non-contact, functional test of TFT-LCD arrays.
Supports test of Generation 5, up to 1,200 x 1,300 mm substrates and smaller.
Tests arrays up to 40 percent faster than the AC-3000.
Non-contact, 131 mm electro-optical voltage sensor; four times larger than previous 73 mm sensor.
Highest pixel sensitivity resolution available at 34 to 60 microns (73 mm sensor and 131 mm sensor respectively).
The new sensor features a polymer dispersed liquid crystal (PDLC) material to greatly enhance the sensor reliability and lifetime, which significantly reduces the cost of consumables.
16 mega-pixel camera; largest industrial-use digital camera to date.
Automatic bright/dark pixel defect classification for repair and correlation to Cell test.
"eADC" - Automatic Defect Classification for Yield Enhancement (point defect classification by defect type).
"ArrayVision" option - A high-resolution camera for defect review and image capture.
Defect repair queue option - An offline test and repair (AS-550) strategy to provide integrated functionality and flexibility, thereby reducing equipment operator time in the cleanroom, and improving capacity by maximizing equipment utilization and enabling repairs at machine speeds.
"We believe that the ability to provide an integrated array test and repair (ArraySaver 550 was also introduced today) solution that addresses Generation 5 substrate challenges is essential to produce higher-quality, lower cost flat panel displays," said Vincent F. Sollitto, president and CEO of Photon Dynamics, Inc. "These next-generation FPDs are driving a new era of display-centric applications," concluded Sollitto.

About Photon Dynamics

Photon Dynamics is a leading global supplier of integrated yield management solutions for the display, electronics and glass markets. Photon Dynamics` patented image acquisition and image processing technology, electro-optical design, and system engineering expertise are currently used for: test, repair and inspection of flat panel displays; inspection of cathode ray tube displays and automotive glass; and inspection of printed wiring assemblies and advanced semiconductor packaging. Photon Dynamics develops systems that enable manufacturers to collect and analyze data from a production line, and quickly diagnose material costs and improve throughput to gain an incremental yield edge critical to success. Founded in 1986, Photon Dynamics has sales offices and customer support services in San Jose and Aliso Viejo, California; Beijing, Shanghai and Suzhou, China; Eindhoven, The Netherlands; Hsinchu and Taipei, Taiwan; Markham, Canada; Redhill, Surrey, UK; Bundang, Daejeon and Kumi, Korea; and Tokyo, Japan. For more information about Photon Dynamics, visit its Web site at www.photondynamics.com.

Safe Harbor Statement

This press release contains forward-looking statements relating to the benefits to be obtained from the ArrayChecker 3500 (AC-3500), which are subject to risks and uncertainties. These risks include, without limitation that the results of the AC-3500 may vary due to; difficulties in the integration of the Voltage Optical Imaging System (VIOS); or other technical difficulties resulting from operator errors. For further information regarding risks relating to Photon Dynamics, refer to the section entitled "Factors Affecting Operating Results" in Photon Dynamics` Quarterly Report, filed August 12, 2002, filed with the Securities and Exchange Commission. Photon Dynamics undertakes no obligation to update the information in this press release.



--------------------------------------------------------------------------------
Contact:
Photon Dynamics
Beth Popham, 408/360-3566
[e-mail]
or
Weber Shandwick, Cambridge, MA
Vicki Greene, 617/520-7271
[e-mail]
or
Weber Shandwick, Hong Kong, China
Tim Smart, 852-2533-9900
[e-mail]



--------------------------------------------------------------------------------
Source: Photon Dynamics

[panik]

CIBC World upgrades flat panel display sector to overweight from market-weight. The firm says Applied Films (AFCO ) is its top pick in the group; it also likes Photon Dynamics (PHTN ) and Planar Systems (PLNR ).

[panik]

Reuters
UPDATE - Photon says Q1 sales to miss projections by 20 pct
Thursday December 19, 4:50 pm ET


(Updates throughout with more details, background)
SAN JOSE, Calif., Dec 19 (Reuters) - Photon Dynamics Inc. (NasdaqNM:PHTN - News) said on Thursday it lowered first-quarter sales projections by 20 percent from previous expectations and now expects a loss instead of a profit, citing weak capital equipment spending.

ADVERTISEMENT


The company, which makes electronics testing equipment, said in a statement that revenue for the first quarter of 2003 would be 20 percent below prior expectations and would total between $19 million and $21 million, compared to $18.4 million in the fourth quarter of 2002.

It expects a per share loss of 15 cents to 23 cents. In October, the company expected a profit of 3 cents to 9 cents.

Wall Street analysts, on average, had expected first-quarter earnings of 5 cents a share and $24.6 million in revenue, according to research firm Thomson First Call.

The company said it had expected to introduce and ship several units of its ArrayChecker system. However, its shipments have been rescheduled because of technical delays. Photon Dynamics will detail the impact of that delay on the fiscal year in mid-January.

The San Jose, California-based company said current economic conditions for circuit boards used in electronics and computers and high quality glass industries remain weak and capital equipment spending in these industries remains cautious.

As a result, Photon said revenue in these areas will be below prior expectations. The company said it sees no market activity to demonstrate that bookings or revenue will return to prior levels at this time.

The company also said it is looking at cost-cutting options to address the prolonged weakness in the electronics sector, but didn`t provide specifics.

Shares of Photon Dynamics closed down 6 percent, or $1.81, to $27.05 on the Nasdaq.

[panik]

Photon Dynamics Reports First Quarter Results for Fiscal 2003
Tuesday January 28, 4:40 pm ET
Company Announces its Exit From the Printed Circuit Board Assembly Inspection Market


SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 28, 2003--Photon Dynamics, Inc. (Nasdaq:PHTN - News), a leading global supplier of integrated yield management solutions for the flat panel display market, today reported financial results for the first quarter of fiscal 2003, ending December 31, 2002.
ADVERTISEMENT


Revenue for the first quarter of fiscal 2003 was $21.7 million, an increase of 53 percent compared with $14.2 million for the first quarter of fiscal 2002. The net loss for the current quarter was $25.0 million, or $1.55 per share, compared to a net loss of $3.4 million, or $0.24 per share, for the same quarter a year ago.

The above results included an impairment charge for goodwill and long-lived assets of $20.8 million associated with the company`s printed circuit board assembly inspection business, as the company has decided to exit this market. Also included is a charge for acquired in-process research and development of $1.8 million as the result of the acquisition of the rapid thermal processing equipment business of Intevac, Inc. The impairment charges and acquired in-process research and development charges do not have comparable expenses in the first quarter of fiscal 2002.

Cash, cash equivalents and short-term investments at December 31, 2002 were $126 million compared to $170 million at September 30, 2002. The decrease in cash, cash equivalents and short-term investment was due primarily to the acquisition of the rapid thermal processing equipment business of Intevac, Inc. for approximately $20 million, the repurchase of 698,400 shares of the Company`s Common Stock at a cost of approximately $13 million under an ongoing stock repurchase program, an increase of approximately $8 million in accounts receivable and decrease of approximately $3 million in accounts payable during the quarter.

Bookings for the first quarter of fiscal 2003 were $12 million, and the company posted a backlog of approximately $44 million at the end of the first quarter of fiscal 2003. Bookings and backlog are not necessarily indicative of future revenue.

"While bookings were below expectations, we are optimistic about the growth of the flat panel display industry and expect bookings to improve throughout the year. As we have mentioned previously, the bookings are not expected to be smooth throughout fiscal year 2003 given the forecasted buying patterns of our customers," stated Woody H. Spedden, president and chief executive officer.

"After a comprehensive analysis, Photon Dynamics has decided to exit the printed circuit board assembly (PCBA) inspection market. The business segment will be treated as a discontinued operation beginning in Q2, and a write-down of goodwill, intangible and fixed assets has been taken in Q1 of fiscal 2003. With the forecasted growth in the flat panel display industry over the next several years, and the extended downturn projected in the PCBA and overall electronics market, we have concluded that the optimal investment opportunities and returns on investment are in our core flat panel display business," stated Spedden.

Due to the previously announced technical delay in the introduction of the company`s next-generation LCD array test system, the ArrayChecker 3500, several shipments of the systems have been rescheduled from the first quarter to the second quarter of fiscal 2003. However, in accordance with our revenue recognition policy, revenue is not recognized for a new product until final customer acceptance is obtained. Given the duration of the acceptance process in the customers` factories, this most likely will not occur by the end of the second quarter. This will have a significant impact on the timing of both revenue and net income for the second quarter. Without the acceptance of any of the ArrayChecker 3500 test systems during the quarter, the company estimates that the revenue for the second quarter of fiscal 2003 will be between $8 and $10 million, with a loss of between $1.25 to $1.05 per share. This loss includes a loss from discontinued operations of between $10 to $12 million.

Photon Dynamics will be hosting its Annual Shareholders Meeting on February 4 at the Company headquarters in San Jose, CA, and presenting at D.A. Davidson Technology Conference, February 20 in Deer Valley, UT, and the USDC Display Industry Investment Conference, March 18 in New York, NY.

Earnings Conference Call

The company will host a quarterly conference call on January 28, 2003 at 2:00 pm PST. To access the conference call in the US/Canada, dial [phone], and [phone] for international calls. Both numbers will use confirmation code 734792.

A digital replay will be available on our website at www.photondynamics.com or by phone, two hours after the conclusion of the conference call, January 28, 2003 to February 11, 2003. For US/Canada, [phone], and [phone] for international calls. Enter the confirmation code 734792.

About Photon Dynamics

Photon Dynamics, Inc. is a leading global supplier of integrated yield management solutions for the flat panel display market. Photon Dynamics develops systems that enable manufacturers to collect and analyze data from the production line, and quickly diagnose and repair process-related defects, thereby allowing manufacturers to decrease material costs and improve throughput to gain an incremental yield edge critical to success. For more information about Photon Dynamics, visit its Web site at www.photondynamics.com.

Safe Harbor Statement

The statements in this press release relating to Photon Dynamics` expected bookings, projected shipments and estimated financial results for the second quarter of fiscal 2003 are forward-looking statements. These forward-looking statements are based on current expectations on the date of this press release and involve a number of uncertainties and risks. These uncertainties and risks include, but are not limited to: the current economic downturn has created substantial economic uncertainty, which may cause consumers to purchase products containing flat panel displays at a rate lower than Photon Dynamics expects, and therefore Photon Dynamics` customers to reduce investments in Photon Dynamics` products below that which Photon Dynamics projects until the markets become more certain; current economic conditions may cause an increase in competitive pricing pressures; the risk of the introduction of competing products having technological and/or pricing advantages; and the risk that the technical problems causing the delay in introduction of the ArrayChecker 3500 test system may not be resolved as soon as Photon Dynamics expects. As a result, Photon Dynamics` actual results may differ substantially from expectations. For further information on risks affecting Photon Dynamics, refer to the section entitled "Management`s Discussion and Analysis of Financial Condition and Results of Operations" under the caption "Factors Affecting Operating Results" in Photon Dynamics` Annual Report on Form 10-K as filed on December 11, 2002 with the Securities and Exchange Commission. Photon Dynamics undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise.

-0-

Photon Dynamics, Inc.
Condensed Consolidated Balance Sheets
(In thousands)

Dec. 31, Sept. 30,
2002 2002
--------- ---------
Assets
Current assets:
Cash, cash equivalents and investments $126,112 $170,143
Accounts receivable, net 24,285 16,579
Inventories 19,150 18,650
Other current assets 7,088 6,367
--------- ---------
Total current assets 176,635 211,739

Property and equipment, net 11,957 12,404

Other assets 2,566 2,925
Intangible assets 7,051 3,554
Goodwill 10,865 18,537
--------- ---------
Total assets $209,074 $249,159
========= =========

Liabilities and Shareholders` Equity

Current liabilities:
Accounts payable $7,429 $10,610
Other current liabilities 10,850 10,637
Deferred revenue and customer deposits 723 304
--------- ---------
Total current liabilities 19,002 21,551

Other liabilities 1,319 1,465

Shareholders` equity:
Common stock 276,326 288,833
Accumulated deficit (88,518) (63,500)
Accumulated other comprehensive income 945 810
--------- ---------
Total shareholders` equity 188,753 226,143
--------- ---------
Total liabilities and shareholders` equity $209,074 $249,159
========= =========


Photon Dynamics, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)

Three Months Ended
December 31,
2002 2001
--------- --------

Revenue $21,727 $14,205

Cost of revenue 13,940 9,211
--------- --------
Gross margin 7,787 4,994

Operating expenses:
Research and development 5,722 3,925
Selling, general and administrative 4,801 4,667
Goodwill and other long-lived asset impairment
charge 20,791 --
Acquired in-process research and development 1,849 --
Amortization of intangible assets 455 287
--------- --------
Total operating expenses 33,618 8,879
--------- --------
Loss from operations (25,831) (3,885)

Interest income and other, net 813 522
--------- --------
Net loss $(25,018) $(3,363)
========= ========

Net loss per share:
Basic and diluted $(1.55) $(0.24)
========= ========

Weighted average number of shares:
Basic and diluted 16,156 13,929




--------------------------------------------------------------------------------
Contact:
Photon Dynamics
So-Yeon Jeong, 408/360-3033 (IR)
[e-mail]
or
Weber Shandwick
Debby Martin, 408/559-6090
[e-mail]



--------------------------------------------------------------------------------
Source: Photon Dynamics

[panik]

Photon Dynamics Reports Second Quarter of 2006 Earnings per Share of $0.15 ($0.21 Excluding Equity Based Compensation of $0.06) on Revenue of $50.3 Million
Wednesday April 26, 4:00 pm ET


SAN JOSE, CA--(MARKET WIRE)--Apr 26, 2006 -- Photon Dynamics, Inc. (NasdaqNM:PHTN - News), a leading global supplier of integrated yield management solutions for the flat panel display market, today reported financial results for the second quarter of fiscal 2006, ended March 31, 2006.
ADVERTISEMENT


Revenue for the second quarter of fiscal 2006 was $50.3 million, a sequential increase of 21 percent from the $41.6 million reported in the first quarter of fiscal 2006 and a year-over-year increase of 99 percent compared to the $25.3 million reported for the same quarter a year ago.

Net income for the second quarter was $2.5 million, or $0.15 per diluted share, compared to net income for the prior quarter of $3.4 million, or $0.20 per share, and compared to net loss of ($10.3) million, or ($0.61) loss per share, for the same quarter in the year ago period.

For the six months ended March 31, 2006, net income was $5.9 million and earnings per diluted share was $0.34, compared to a loss of ($9.8) million and ($0.58) loss per share for the six months ended March 31, 2005.

The results include the impact from SFAS 123 (R) which the company adopted in the first quarter of fiscal 2006. The company included equity based compensation expenses of $1.0 million or $0.06 per diluted share after tax in its costs and operating expenses during the second quarter of fiscal 2006. Excluding equity based employee compensation expenses, net income would have been $3.5 million, and earnings per diluted share would have been $0.21 for the second quarter of fiscal 2006.

Income from continuing operations for the second quarter of fiscal 2006 was $2.2 million or $0.13 per diluted share, compared to $4.0 million or $0.24 per diluted share in the December 31, 2005 quarter and a loss from continuing operations of ($10.3) million or ($0.61) loss per share for the second quarter of fiscal 2005.

Second quarter non-GAAP net income was $3.7 million, or $0.22 per diluted share, excluding the impact of equity based compensation expenses, restructuring benefit, amortization of intangible assets, and income from discontinued operations, net of related tax. These results compare to non-GAAP net loss of ($9.9) million, or ($0.59) per diluted share, for the same quarter a year ago and non-GAAP net income of $5.5 million or $0.32 per diluted share for the fiscal first quarter. A reconciliation of these non-GAAP measures is provided after the GAAP financial statements below.

Photon Dynamics' financial position remained strong with cash, cash equivalents and marketable securities of $88 million. Cash declined slightly during the quarter due to an increase in accounts receivable during the quarter related to increased shipment levels.

Gross margin of 34.3% resulted from two major factors: product mix and the level of revenue from final acceptances received from customers. Lower margin repair business revenue accounted for 31% of total revenue for the quarter versus historical norms of 15-20% of revenue. In addition, the amount of revenue deferred during the quarter until final acceptance for shipments during the quarter greatly exceeded the amount recognized for systems shipped in previous quarters. This is significant because the revenue associated with final acceptance has a significantly higher than average gross margin.

Bookings for the second quarter of fiscal 2006 were $31.9 million and the company posted a backlog at the end of the quarter of $96.6 million. The company noted that bookings and backlog are not necessarily indicative of future revenue and that historically, bookings have fluctuated on a quarter-to-quarter basis. This trend may continue in the future.

"We had many significant accomplishments during the quarter," commented Jeffrey Hawthorne, CEO and President. "We shipped our first Generation 8 tester which is being installed and should be testing glass early in the current quarter. In addition, we made good progress in our cost reduction activities, especially in second source activities for key components."

Mr. Hawthorne continued, "The demand for capital equipment is particularly sensitive to LCD TV adoption and to customer investment timing. We now see all the major LCD manufacturers firming up their plans for Generation 8 factories. Based on our visibility at this point, we see strong activity in the second half of calendar 2006. We are uniquely positioned to benefit from the positive investment outlook given that we offer the customer the broadest line of yield management tools to assist in ramping to entitled yield."

Company Projections for Fiscal Year 2006 Third Quarter

The company estimates revenue for the third quarter of fiscal 2006 to be between $48 and $50 million, and net income per share to be between $0.22 and $0.25 including the impact of SFAS 123 (R).

Information Regarding Non-GAAP Financial Measures

Photon Dynamics provides non-GAAP net income and non-GAAP earnings per share data as additional information for its operating results. These measures are not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. Photon Dynamics' non-GAAP net income and non-GAAP earnings per share exclude the effect of SFAS 123 (R), restructuring charge, amortization of intangible assets, and loss from discontinued operations. Because SFAS 123 (R) is a material, non-cash item, Photon Dynamics has also provided non-GAAP information excluding the impact of SFAS 123 (R) to provide more comparability with prior periods. Management excludes the effect of SFAS 123 (R) and other charges as indicated, because management does not believe that these charges are directly applicable to the core operating performance of Photon Dynamics. As a result, management excludes the effect of these charges for budgeting purposes, as well as for analyzing the underlying performance of Photon Dynamics. Management believes that although GAAP measures are important for investors to understand, providing investors with this non-GAAP measure provides investors additional important information to enable them to assess, in the way that management assesses, both the current and future operations of Photon Dynamics.

Earnings Conference Call

The company will host a quarterly conference call today at 4:30 pm EDT. To access the conference call in the U.S. or Canada, dial [phone]. For all international calls, dial [phone].

A digital replay will be available on Photon Dynamics' website at www.photondynamics.com under 'presentation/conference call' in the 'investors' section of the website two hours after the conclusion of the conference until such time as Photon Dynamics issues a press release announcing its third quarter fiscal 2006 financial results.

A replay will also be available by phone call two hours after the conclusion of the conference from April 26 to May 10, 2006. You may access the telephone replay by dialing [phone] or [phone] and entering access code 882496.

About Photon Dynamics, Inc.

Photon Dynamics, Inc. is a leading global supplier of integrated yield management solutions for the flat panel display market. Photon Dynamics develops systems that enable manufacturers to collect and analyze data from the production line, and quickly diagnose and repair process-related defects, thereby allowing manufacturers to decrease material costs and improve throughput. Founded in 1986, Photon Dynamics is headquartered in San Jose, California with sales and customer support offices in Beijing, China; Seoul, Daejeon, Gumi, and Cheonan, Korea; Hsinchu, Tainan, and Taichung, Taiwan; and Tokyo and Tsu, Japan. For more information about Photon Dynamics, visit its website at www.photondynamics.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

The statements in this press release relating to Photon Dynamics' estimated financial results for the third quarter of fiscal 2006 and Photon Dynamics' expectations for strong activity in the second half of calendar of 2006 and Generation 8 factory construction are forward-looking statements. These forward-looking statements are based on current expectations on the date of this press release and involve a number of uncertainties and risks. These uncertainties and risks include, but are not limited to: the current economic uncertainty, which may cause consumers to purchase products containing flat panel displays at a rate lower than Photon Dynamics and its customers expect, and therefore that could lead Photon Dynamics' customers to reduce investments in Photon Dynamics' products below that which Photon Dynamics projects until the markets become more certain; current economic conditions may cause an increase in competitive pricing pressures; and the risk of the introduction of competing products having technological and/or pricing advantages, which would reduce the demand for Photon Dynamics' products. As a result, Photon Dynamics' actual results may differ substantially from expectations. For further information on risks affecting Photon Dynamics, refer to the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the caption " Factors Affecting Operating Results" in Photon Dynamics' Quarterly Report on Form 10-Q as filed on February 9, 2006 with the Securities and Exchange Commission. Photon Dynamics undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise.

PHOTON DYNAMICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)


March September
31, 30,
2006 2005
--------- ---------

ASSETS
Current assets:
Cash and cash equivalents $ 19,600 $ 20,288
Short-term investments 68,713 72,738
Accounts receivable, net 38,523 27,067
Inventories 31,183 32,545
Other current assets 4,390 3,932
--------- ---------
Total current assets 162,409 156,570
Land, property and equipment, net 17,805 19,366
Other assets 3,632 4,390
Intangible assets, net 2,460 3,205
Goodwill 153 153
--------- ---------
Total assets $ 186,459 $ 183,684
========= =========

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 13,169 $ 13,005
Warranty 4,784 5,346
Other current liabilities 11,194 8,618
Deferred gross margin 5,393 13,113
--------- ---------
Total current liabilities 34,540 40,082
Other liabilities 982 1,008
Commitments and contingencies - -
Shareholders’ equity:
Common stock, no par value 290,300 287,765
Accumulated deficit (139,604) (145,489)
Accumulated other comprehensive income 241 318
--------- ---------
Total shareholders’ equity 150,937 142,594
--------- ---------
Total liabilities and shareholders’ equity $ 186,459 $ 183,684
========= =========


PHOTON DYNAMICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

Three Months Ended Six Months Ended
March 31, March 31,
-------------------- --------------------
2006 2005 2006 2005
--------- --------- --------- ---------

Revenue $ 50,322 $ 25,326 $ 91,955 $ 61,965
Cost of revenue 33,069 18,768 55,451 41,549
--------- --------- --------- ---------
Gross margin 17,253 6,558 36,504 20,416
Operating expenses:
Research and development 8,560 9,818 16,631 19,288
Selling, general and
administrative 6,984 6,107 13,835 10,791
Restructuring charge
(benefit) (32) - 30 -
Goodwill impairment charge - - - -
Impairment of purchased
intangibles - - - -
Impairment of fixed assets - 382 - 382
Loss on sale of fixed assets - - - -
Acquired in-process research
and development - - - -
Amortization of intangible
assets 373 398 745 795
--------- --------- --------- ---------
Total operating expenses 15,885 16,705 31,241 31,256
--------- --------- --------- ---------
Income (loss) from operations 1,368 (10,147) 5,263 (10,840)
Interest income and other, net 1,019 164 1,519 1,419
--------- --------- --------- ---------
Income (loss) from continuing
operations before income
taxes and
discontinued operations 2,387 (9,983) 6,782 (9,421)
Provision for income taxes 199 359 551 398
--------- --------- --------- ---------
Income (loss) from continuing
operations before discontinued
operations 2,188 (10,342) 6,231 (9,819)
Income (loss) from
discontinued operations 334 (4) (346) (10)
--------- --------- --------- ---------
Net income (loss) $ 2,522 $ (10,346) $ 5,885 $ (9,829)
========= ========= ========= =========
Income (loss) per share from
continuing operations:
Basic $ 0.13 $ (0.61) $ 0.37 $ (0.58)
========= ========= ========= =========
Diluted $ 0.13 $ (0.61) $ 0.37 $ (0.58)
========= ========= ========= =========
Income (loss) per share from
discontinued operations:
Basic $ 0.02 $ (0.00) $ (0.02) $ (0.00)
========= ========= ========= =========
Diluted $ 0.02 $ (0.00) $ (0.02) $ (0.00)
========= ========= ========= =========
Net income (loss) per share:
Basic $ 0.15 $ (0.61) $ 0.35 $ (0.58)
========= ========= ========= =========
Diluted $ 0.15 $ (0.61) $ 0.34 $ (0.58)
========= ========= ========= =========
Weighted average number of
shares:
Basic 17,018 16,948 17,011 16,890
========= ========= ========= =========
Diluted 17,077 16,948 17,062 16,890
========= ========= ========= =========


PHOTON DYNAMICS, INC.
Reconciliation of GAAP to Non-GAAP Results
(In thousands, except per share data)
(Unaudited)

Three Months Ended Six Months Ended
March 31, March 31,
-------------------- --------------------
2006 2005 2006 2005
--------- --------- --------- ---------

Non-GAAP Net Income (Loss)

GAAP net income (loss) $ 2,522 $ (10,346) $ 5,885 $ (9,829)
Stock-based employee
compensation expense 1,141 - 2,002 -
Restructuring charge (benefit) (32) - 30 -
Amortization of intangible
assets 373 398 745 795
Loss (income) from
discontinued operations (334) 4 353 10
Income tax effect of non-GAAP
adjustments 6 - (4) -
--------- --------- --------- ---------
Non-GAAP net income (loss) $ 3,676 $ (9,944) $ 9,011 $ (9,024)
========= ========= ========= =========

Non-GAAP Diluted Net Income
(Loss) Per Share

GAAP net income (loss) per
share - diluted $ 0.15 $ (0.61) $ 0.34 $ (0.58)
Stock-based employee
compensation expense 0.07 - 0.12 -
Restructuring charge (benefit) (0.00) - 0.00 -
Amortization of intangible
assets 0.02 0.02 0.04 0.05
Loss (income) from
discontinued operations (0.02) 0.00 0.02 0.00
Income tax effect of non-GAAP
adjustments 0.00 - (0.00) -
--------- --------- --------- ---------
Non-GAAP net income (loss) -
diluted $ 0.22 $ (0.59) $ 0.53 $ (0.53)
========= ========= ========= =========

Shares used in basic shares
calculation 17,018 16,948 17,011 16,890
========= ========= ========= =========
Shares used in diluted shares
calculation 17,077 16,948 17,062 16,890
========= ========= ========= =========



Contact:
Contacts:

Corporation:
Photon Dynamics
Maureen Lamb
[phone]
Email Contact

Investors and Media:
Guerrant Associates
Laura Guerrant
[phone]
Email Contact



--------------------------------------------------------------------------------
Source: Photon Dynamics, Inc.

[panik]

[panik]

[scopus]

[scopus]

Photon Dynamics Issues Revised Fourth Quarter Guidance and Announces Earnings Call for Reporting of Fourth Quarter and Annual Results
Tuesday October 17, 7:00 am ET


SAN JOSE, CA--(MARKET WIRE)--Oct 17, 2006 -- Photon Dynamics, Inc. (NASDAQ:PHTN - News), a leading global supplier of integrated yield management solutions for the flat panel display market, today announced that it has lowered the revenue and earnings per share guidance for the fourth quarter ended September 30, 2006.


The Company now estimates revenue for the fourth quarter of fiscal year 2006 to be between $29 and $32 million, with a loss per share of ($0.34) to ($0.38). Previously the Company had issued guidance of revenue for the quarter to be between $30 and $35 million, with a loss per share of ($0.15) to ($0.25). This revised lower guidance is the result of two events. First, the Company missed obtaining final acceptance on two generation 8 test systems. Final acceptance of the systems, along with the corresponding revenue, is expected to occur in the first quarter of fiscal 2007. In addition, in an unrelated transaction, the Company incurred additional warranty expense in the fourth quarter of fiscal 2006, resulting from a resolution of the product warranty situation with a customer.

Commenting on the lower than anticipated results for the fourth quarter, Jeffrey Hawthorne, President and CEO, stated, "While it is a disappointment that we came up short on the final acceptance for the industry's first generation 8 test systems in the fourth quarter, we are nonetheless confident that we will obtain the final acceptance and be able to recognize the revenue in the first quarter of fiscal 2007. With respect to the other transaction, we resolved a product warranty situation with a customer in order to demonstrate our commitment to customer satisfaction."

Fourth Quarter Earnings Conference Call

The Company will report its fourth quarter and 2006 fiscal year financial results and financial outlook on Thursday, November 2, 2006, at approximately 1:00 p.m. PST, followed by a conference call at 1:30 p.m. PST. To access the conference call in the U.S. or Canada, dial [phone]. For all international calls, dial [phone]. A digital replay will be available on Photon Dynamics' website at www.photondynamics.com under 'presentation/conference call' in the 'investors' section of the website two hours after the conclusion of the conference until such time as Photon Dynamics issues a press release announcing its first quarter fiscal 2007 financial results. You may access the telephone replay by dialing [phone] or [phone] and entering confirmation code 11073236.

About Photon Dynamics, Inc.

Photon Dynamics, Inc. is a leading global supplier of integrated yield management solutions for the flat panel display market. Photon Dynamics develops systems that enable manufacturers to collect and analyze data from the production line, and quickly diagnose and repair process-related defects, thereby allowing manufacturers to decrease material costs and improve throughput. Founded in 1986, Photon Dynamics is headquartered in San Jose, California with sales and customer support offices in Beijing, China; Seoul, Daejeon, Gumi, and Cheonan, Korea; Hsinchu, Tainan, and Taichung, Taiwan; and Tokyo and Tsu, Japan. For more information about Photon Dynamics, visit its website at www.photondynamics.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

The statements in this press release relating to Photon Dynamics' estimated results for the fourth quarter of fiscal 2006 and the first quarter of fiscal 2007 are forward-looking statements. These forward-looking statements are based on current expectations on the date of this press release and involve a number of uncertainties and risks. In particular, the estimated results for the fourth quarter of fiscal 2006 are preliminary and are subject to revision and adjustment, as a result of which the actual results could vary materially. These uncertainties and risks include, but are not limited to: the current economic uncertainty, which may cause consumers to purchase products containing flat panel displays at a rate lower than Photon Dynamics and its customers expect, and therefore that could lead Photon Dynamics' customers to reduce investments in Photon Dynamics' products below that which Photon Dynamics projects until the markets become more certain; current economic conditions may cause an increase in competitive pricing pressures; and the risk of the introduction of competing products having technological and/or pricing advantages, which would reduce the demand for Photon Dynamics' products. As a result, Photon Dynamics' actual results and end user demand may differ substantially from expectations. For further information on risks affecting Photon Dynamics, refer to the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the caption "Factors Affecting Operating Results" in Photon Dynamics' Quarterly Report on Form 10-Q as filed on August 9, 2006 with the Securities and Exchange Commission. Photon Dynamics undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise.



Contact:
Contacts:
Corporation:
Photon Dynamics, Inc.
Jeffrey Hawthorne
[phone]
Email Contact

Investors and Media:
Guerrant Associates
Laura Guerrant
[phone]
Email Contact



--------------------------------------------------------------------------------
Source: Photon Dynamics