Ultratech, Inc.
Jan 31, 2002

Ultratech Stepper Announces Fourth Quarter and Year End 2001 Results

For the fourth quarter of fiscal 2001 Ultratech reported net sales of $21.5 million compared to $41.0 million during the fourth quarter of 2000. Ultratech's net loss for the fourth quarter of 2001, before approximately $367,000 in special charges, was $2.1 million or $0.09 per share (diluted) compared to net income of $5.5 million or $0.25 per share for the same quarter last year. Including the charges, the net loss for the fourth quarter of 2001 was $2.4 million or $0.11 per share (diluted).

Ultratech's net sales for the year ended December 31, 2001 were $130.7 million compared to net sales of $146.7 million for fiscal 2000. Excluding the special charges Ultratech incurred in 2001, Ultratech posted net income of $5.5 million or $0.24 per share (diluted) for the full year 2001. This compares to net income of $5.9 million or $0.27 per share (diluted) for the full year 2000, excluding special charges for the shutdown of operations, the cumulative effect of the implementation of SAB 101, and the gain on a sale of land (net of tax).

Including the charges, for the full year 2001 Ultratech posted a net loss of $17.8 million or $0.81 per share (diluted) compared to a net loss of $9.2 million or $0.43 per share (diluted) for the full year 2000.

Arthur W. Zafiropoulo, Chairman and Chief Executive Officer, stated, "Ultratech remains focused on prudent financial and operational management in this continued industry downturn, while also providing our customers with market leading solutions that offer the best in both technology and cost-efficiency in our served markets. Our Model 1600DSA stepper was awarded the Semiconductor International (SI) Magazine's Editors' Choice Best Product Award in early November, reaffirming our commitment to supplying our customers with advanced, yet cost-effective, technology solutions for next-generation nanotechnology applications."

"In line with our continued commitment to our investment program for long term growth, Ultratech announced in the fourth quarter of 2001 that it is a founding member of the Advanced Packaging and Interconnect Alliance (APiA)," Zafiropoulo continued. "Immediate plans include the establishment of 300 mm pilot lines in the United States and Asia to facilitate process development and customer demos."

"Ultratech has invested heavily in its advanced product program, recognizing the need to create a product portfolio that offers a balance between capacity driven and technology driven demands. We believe the industry turnaround forecasted for the second half of 2002 will be technology driven, and that Ultratech is well positioned to capitalize on this opportunity once the industry recovers," Zafiropoulo concluded.

At December 31, 2001, Ultratech Stepper had $169.2 million in cash, cash equivalents and short-term investments and a current ratio of 4.4:1. Working capital was $162.8 million and stockholders' equity was $8.70 per share based on 22,451,137 total shares outstanding on December 31, 2001.

    Conference Call Information
The conference call will be broadcast live over the Internet beginning at 11:00 a.m. Eastern Time/8:00 a.m. Pacific Time, today Thursday, January 31, 2002. To listen to the call over the Internet or to obtain telephone dial-in information for the call, please go to Ultratech's web site at www.ultratech.com.

If you are unable to attend the live conference call, a replay will be available on Ultratech's web site. If you do not have Internet access a replay of the call will be available by dialing 1-800-633-8284 and entering access code 20200473.

    Profile
Founded in 1979, Ultratech Stepper, Inc. designs, manufactures and markets photolithography equipment used worldwide in the fabrication of semiconductor and nanotechnology devices. The company produces products that substantially reduce the cost of ownership for manufacturers in the electronics industry. The company's home page on the World Wide Web is located at www.ultratech.com.

Certain of the statements contained herein may be considered forward-looking statements such as those related to the Company's future financial results, the condition of the semiconductor industry, the worldwide economy and the benefits of the Company's products. These statements involve risks and uncertainties, such as the cyclicality in the semiconductor and nanotechnology markets, delays, deferrals and cancellations of orders by customers, pricing pressures, competition, lengthy sales cycles for the Company's systems, ability to volume produce systems and meet customer requirements, the mix of products sold, dependence on new product introductions and commercial success of any new products, integration and development of the Verdant operation, manufacturing inefficiencies and absorption levels, risks associated with introducing new technologies, inventory obsolescence, economic and political conditions in Asia, delays in collecting accounts receivable, extended payment terms, changes in technologies, the effects of the California power shortage, and any adverse affects of the recent terrorist attacks in the United States on the economy in general or our business in particular. Such risk and uncertainties are described in the Company's SEC reports including the Company's Annual Report on Form 10-K, filed as of December 31, 2000 and Form 10-Q, filed as of September 30, 2001.

                        ULTRATECH STEPPER, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                                             Dec. 31,     Dec. 31,
(In thousands)                                 2001        2000/a
                                             --------     --------
ASSETS                                     (Unaudited)
Current assets:
  Cash, cash equivalents, and
   short-term investments                    $169,154     $163,681
  Accounts receivable                          13,802       23,942
  Inventories                                  26,047       30,262
  Prepaid expenses and other
   current assets                               1,786        3,129
                                             --------     --------
Total current assets                          210,789      221,014
Equipment and leasehold
 improvements, net                             24,619       28,833
Intangible assets, net                          1,239        6,880
Demonstration inventories, net                  3,684        6,542
Other assets                                    3,088          800
                                             --------     --------
Total assets                                 $243,419     $264,069
                                             ========     ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Notes payable                                 $ --        $1,152
  Accounts payable                              9,093       12,228
  Deferred product and services income          3,568        6,728
  Deferred license income                      13,707       22,369
  Other current liabilities                    21,595       27,103
                                             --------     --------
Total current liabilities                      47,963       69,580
Other liabilities                                 175          232
Stockholders' equity                          195,281      194,257
                                             --------     --------
Total liabilities and stockholders' equity   $243,419     $264,069
                                             ========     ========
Notes:
/a  The Balance Sheet as of Dec. 31, 2000 has been derived from the
    audited financial statements at that date.
                        ULTRATECH STEPPER, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                              (UNAUDITED)
                          Three Months Ended          Year Ended
(In thousands, except   Dec. 31,     Dec. 31,    Dec. 31,     Dec. 31,
 per share amounts)       2001         2000        2001         2000
                       --------     --------    --------     --------
Net sales               $21,507      $41,011    $130,680     $146,655
Cost of sales            12,909       22,060      74,829       88,988
Cost of discontinued
 products                    77         --        11,070         --
                       --------     --------    --------     --------
Gross profit              8,521       18,951      44,781       57,667
Operating expenses:
  Research, development,
   and engineering        6,013        7,011      25,759       26,833
  Amortization of
   goodwill                  96          497       1,508        2,061
  Selling, general,
   and administrative     6,208        8,000      29,701       30,274
  Restructure of
   operations               290         --        12,278         --
  Shut-down of
   operations              --           --          --          9,670
                       --------     --------    --------     --------
Operating income (loss)  (4,086)       3,443     (24,465)     (11,171)
Gain on sale of land       --           --          --         15,983
Interest and other
 income, net              1,788        2,057       7,659        7,347
                       --------     --------    --------     --------
Income (loss) before
 tax and cumulative
 effect of a change in
 accounting principle    (2,298)       5,500     (16,806)      12,159
Income taxes                120         --         1,038        2,433
                       --------     --------    --------     --------
Income (loss) before
 cumulative effect of a
 change in accounting
 principle               (2,418)       5,500     (17,844)       9,726
Cumulative effect on
 prior years of the
 application of SAB 101
 "Revenue Recognition in
 Financial Statements"     --           --          --        (18,883)
                       --------     --------    --------     --------
Net income (loss)       ($2,418)      $5,500    ($17,844)     ($9,157)
                       ========     ========    ========     ========
Earnings per share
 -- basic:
  Income (loss) before
   cumulative effect of a
   change in accounting
   principle             ($0.11)       $0.26      ($0.81)       $0.46
  Cumulative effect on
   prior years of the
   application of SAB 101
   "Revenue Recognition
   in Financial
   Statements"             --           --          --         ($0.89)
  Net income (loss)      ($0.11)       $0.26      ($0.81)      ($0.43)
  Number of shares used
   in per share
   calculations
   -- basic              22,443       21,233      22,143       21,236
Earnings per share -- diluted:
  Income (loss) before
   cumulative effect of a
   change in accounting
   principle             ($0.11)       $0.25      ($0.81)       $0.46
  Cumulative effect on
   prior years of the
   application of SAB 101
   "Revenue Recognition
   in Financial
   Statements"             --           --          --         ($0.89)
Net income (loss)        ($0.11)       $0.25      ($0.81)      ($0.43)
Number of shares used in
 per share calculations
 -- diluted              22,443       22,056      22,143       21,236
                       ========     ========    ========     ========
Supplemental disclosure results excluding
 the gain on sale of land (net of tax)
 and special charges for the restructure of
 operations, shut-down of operations, cost of
 discontinued products and the cumulative
 effect of the application of SAB 101:
Net income (loss)       ($2,051)      $5,500      $5,504       $5,846
Net income (loss)
 -- basic                ($0.09)       $0.26       $0.25        $0.28
Number of shares used in
 per share calculations
 -- basic                22,443       21,233      22,143       21,236
Net income (loss)
 -- diluted              ($0.09)       $0.25       $0.24        $0.27
Number of shares used in
 per share calculations
 -- diluted              22,443       22,056      22,826       21,741
                       ========     ========    ========     ========
CONTACT:          Ultratech Stepper
                  Bruce Wright, 408/321-8835
                  Sr. Vice President, Finance/CFO         
                  Laura Rebouche, 408/321-8835                        
                  Vice President of Investor Relations 
                  and Corporate Communications
                  OR 
                  Lippert/Heilshorn & Assoc. (for Ultratech Stepper) 
                  Lillian Armstrong, 415/433-3777 (analysts)   
                  Managing Director              


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