Sonics & Materials Reports Second Quarter Fiscal 2001 Results

    NEWTOWN, Conn.--Feb. 20, 2001--Sonics & Materials, Inc. (OTCBB:SIMA) today reported a net loss for the second quarter of Fiscal Year 2001 of $255,184 or ($.07) per share, as opposed to net income of $45,622 or $.01 per share, for the second quarter of Fiscal Year 2000. The company also reported sales for the quarter of $2,926,626, compared to sales of $3,224,589 for the same period in Fiscal Year 2000.
    Mr. Robert Soloff, President and CEO of Sonics & Materials, commented, "The net loss was the result of a decline in sales of its plastics assembly equipment. "Clearly," he stated, "Sonics has been affected by the slowdown in the economy. However, despite the slowdown, we are encouraged by the fact that Sonics has recently booked its largest order in the Company's history, and we continue to see strong sales in our liquid processor product line."
    Mr. Soloff added, "During the quarter, and continuing into the third quarter of Fiscal Year 2001, the Company has implemented extensive cost reduction measures. We have been aggressive in our restructuring of the organization and will continue to closely monitor our needs going forward." He added, "The net loss for the quarter also reflects the impact of the restructuring in that a charge for severance was booked in the second quarter of Fiscal Year 2001."
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                       Sonics & Materials, Inc.
                 CONSOLIDATED CONDENSED BALANCE SHEETS
                                 As of

                                      December 31,          June 30,
                                         2000                 2000
                                      (unaudited)              (a)
ASSETS
CURRENT ASSETS
Cash and cash equivalents        $     529,843        $      719,183
Accounts receivable, net of 
 allowance for doubtful accounts
 of $88,470 at June 30, 2000 and 
 December 31, 2000                   2,189,660             2,692,786 
Inventories                          5,074,820             4,489,967
Other current assets                   150,841               150,913

Total current assets                 7,945,164             8,052,849

PROPERTY PLANT & EQUIPMENT - NET     3,977,466             4,050,052

GOODWILL - NET                         901,339               929,091

OTHER ASSETS                           593,810               672,215

                                  $ 13,417,779        $   13,704,207

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable                    $   1,290,000        $    1,290,000
Current maturities of 
 long-term debt                        331,097               331,097
Accounts payable                     1,020,631               701,929
Customer Advances                      327,135               133,816
Commissions payable                    141,526               193,356
Other accrued expenses and 
 sundry liabilities                    395,477               599,436

Total current liabilities            3,505,866             3,249,634

LONG-TERM DEBT, net of 
 current portion                     3,410,965             3,584,390

COMMITMENTS

STOCKHOLDERS' EQUITY
Common stock - par value $.03 
 per share; authorized, 10,000,000
 shares; issued and outstanding, 
 3,520,100 shares at December 
 31, 2000 and June 30, 2000            105,603               105,603
Additional paid in capital           6,570,116             6,575,010
Retained earnings 
 (accumulated deficit)                (175,364)              189,570
Total stockholders' equity           6,500,355             6,870,183

                                 $  13,417,779        $   13,704,207

(a) Taken from the audited financial statements at June 30, 2000.


                       Sonics & Materials, Inc.
            CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                              (unaudited)

               For the Three Months Ended     For the Six Months Ended
                      December 31,                  December 31,
                                                          
                       2000       1999         2000        1999

Net sales         $ 2,926,626 $ 3,210,804 $ 5,729,942 $ 6,717,914
Cost of sales
                    1,903,870   1,963,342   3,628,015   4,281,215

Gross profit        1,022,756   1,247,462   2,101,927   2,436,699

Operating expenses
 Selling expense      758,448     680,618   1,443,188   1,326,321
 General and 
 administrative       332,379     316,490     614,651     556,725
 Research and 
 development           89,430      97,375     191,085     188,379

 Total operating 
  expenses          1,180,257   1,092,483   2,248,924   2,071,425

Other income 
 (expense)

 Interest expense    (103,612)   (97,755)    (217,658)  (194,002)
 Interest and Other
 Income                 5,929      17,815      17,760      29,412
                      (97,683)    (79,940)   (199,898)   (164,590)

Income before 
 provision for 
 income taxes        (255,184)     75,039    (346,895)    200,684


Provision for income 
 taxes                             29,000                  59,000

Income (loss) from
 continuing 
 operations          (255,184)     46,039    (346,895)    141,684
                                   
Loss from discontinued 
 operations                          (417)                 (2,257)
 Net Income (Loss) $ (255,184)  $  45,622  $ (346,895)  $ 139,427

Income per share - 
 Basic
Net income per share    $(.07)      $ .01       $(.10)       $.03
Weighted average 
number of shares
outstanding         3,520,100   3,520,100   3,520,100   3,520,100

Income per share - 
 Diluted
Net income per share    $(.07)      $ .01       $(.10)       $.03
Weighted average number 
 of shares 
 outstanding        3,520,100   3,532,916   3,520,100   3,532,916