Applied Films Corporation Announces Agreement to Sell Its Share In Its China Joint Venture

LONGMONT, Colo., Nov. 28 /PRNewswire-FirstCall/ -- Applied Films Corporation (NASDAQ: AFCO) announced today that it has entered into a definitive agreement to sell its 50% stake in its China Joint Venture, Suzhou NSG AFC Thin Films Electronics Co., Ltd., ("STEC"), located in Suzhou China.

The Company entered into a contract with its joint venture partner Nippon Sheet Glass ("NSG"), whereby NSG will purchase Applied Films' share of STEC for $14.6 million (U.S.). The transaction is subject to the approval of the Chinese government, and it is estimated that this approval will be received within the next 30 days. Because the price is below the current book value of the joint venture (our original investment plus our share of STEC's undistributed profit), the Company will incur an impairment charge on the net assets associated with this investment. This pretax charge is estimated to be in the range of $1.7 - $1.9 million in the current quarter. Going forward, the Company will no longer record equity earnings from the Joint Venture.

"This has been an excellent partnership and investment for Applied Films throughout the last six years. Although we have achieved a positive return on investment from this joint venture and place great value on our relationship with our partners, Nippon Sheet Glass Company, Ltd., we believe a Joint Venture for the coating of Glass is no longer core to our business and strategy. Our Joint Venture partner, NSG, has an excellent management team and we are confident that STEC will provide real strategic value for them," said Thomas T. Edman, President and Chief Executive Officer of Applied Films Corporation.

Conference Call

Applied Films Corporation will conduct a conference call and webcast at 7:00 a.m. MT (9:00 a.m. ET) on November 28, 2005 to discuss the transaction in more detail. During the conference call and webcast, Thomas T. Edman, President and Chief Executive Officer, and Lawrence D. Firestone, Chief Financial Officer, will present the transaction and strategy going forward.

The public is invited to participate in the conference call by dialing 1- 800-374-1496 or 1-706-634-1435 (International) at least 5-10 minutes prior to the start time, or via webcast at http://www.appliedfilms.com/, in the "Investor Relations" section under "Meetings and Presentations". A replay of the recorded conference call will be available two hours after the live call, until December 5, 2005. To listen to the replay, dial 1-800-642-1687, or 1- 706-645-9291 (International) and use Conference ID: 2903876.