Press Release

SINGULUS TECHNOLOGIES (SINGULUS) reports sales of € 48.8 million for the 1st quarter, which is close to the level achieved in the same quarter one year ago (€ 50.4 million). For the first time and from the 1st quarter 2006 the reporting of the consolidated financial statements of SINGULUS includes the STEAG HamaTech Group (HamaTech). Overall the SINGULUS Group currently holds 87.65 % of the ordinary shares of the STEAG HamaTech AG.

The earnings before interest and taxes (EBIT) increased from € 0.9 million in the 1st quarter of the previous year to € 7.0 million in the 1st quarter of the current business year. The earnings before interest and taxes include extraordinary effects such as one-off restructuring charges in the SINGULUS Group in the amount of € 20.1 million. This mainly stems from the discontinuation of the Recordable business at SINGULUS as well as the Prerecorded activities at HamaTech and personnel redundancies. On the other hand, extraordinary income in the amount of € 34.1 million was also recognized due to the HamaTech acquisition. The net profit of € 9.6 million for the quarter was significantly above the level achieved in the same quarter one year ago (€ 0.8 million).

The gross profit margin stood at 21.8 % (previous year: 27.3 %). The EBIT margin increased to 15 % (previous year 1.9 %). In the 1st quarter the operating cash flow of the Group of € 3.1 million was significantly higher than in the previous year (-€ 4.1 million)

The order intake amounted to € 107.5 million and includes the acquired order backlog of HamaTech in the amount of € 42.6 million. Accordingly, the net order intake came to € 64.9 million in the 1st quarter (previous year: € 34.3 million). Compared with the 1st quarter 2005 the order intake was thus better overall; however, a real pick-up in the market could not be recorded yet. The order activities in China in the segment for machines for the production of pre-recorded DVD showed a favorable trend. In contrast, activities in the Recordable division, i.e. machines for the production of one-time recordable discs, were subdued. As of March 31, 2006, the order backlog was at € 119.5 million (previous year: € 40.6 million), which is significantly higher than at the same time one year ago.

While initial staff adjustments were already initiated at SINGULUS in the 1st quarter 2005, the number of employees continued to decline. Compared with March 31, 2005, the headcount (excluding HamaTech) declined from 692 to 629 employees as of March 31, 2006. HamaTech has also adjusted its headcount continuously to the economic situation since the beginning of 2005. However, due to the acquisition of Nove Mesto, Slovakia, as of July 31, 2005 with 315 employees the headcount increased substantially on balance. The SINGULUS Group (including HamaTech) employed 1,240 people as of March 31, 2006. During the course of the year the headcount will continue to decline due to the disposal of several business activities, a job cut of about 75 people at SINGULUS’ location in Kahl as well as by around 40 employees at HamaTech's location in Sternenfels.

Outlook
The global market for machines for the production of optical storage media has been in a cyclical downtrend for more than one year. The existing excess capacities as well as the expected new format generation resulted in buying restraint on part of the replicators. Even SINGULUS as the global market leader experienced a substantial decline in sales in 2005. At the same time SINGULUS contributed actively to the market consolidation in the course of the downturn and acquired STEAG HamaTech at the beginning of the current year. This step has brought SINGULUS new customers, removed capacity from the market and significantly improved the order intake and order backlog as well as the net result in the 1st quarter 2006 compared with the same period one year ago. From today’s point of view it remains unclear whether 2006 will bring the hoped for global upturn in the optical disc industry. On part of the replicators a considerable market shakeout already took place in the previous twelve months. There are first signs that a further market consolidation will also happen for the manufacturers of optical disc machines. SINGULUS expects that with the transition to the formats of the third generation of optical disc, only few large replicators will compete in the market on a global scale. This will result in an additional squeezing-out of manufacturers of machines for optical discs. However, SINGULUS sees itself well positioned for the upcoming competition.

SINGULUS will report the guidance for the full-year 2006 with the announcement of the results for the 2nd quarter.