The Board of Management of Rood Testhouse International N.V. (‘Rood Technology’) announced today the 2003 first half year results. The period ended in a net profit of EUR 31,000 (first six months of 2002: loss of EUR 2,206,000), despite the ongoing downturn in the semiconductor market.

The half year figures are presented as being unaudited as the shareholders have approved a delay of the issue of the final 2002 annual report to December 1, 2003, because the going concern assumption is under discussion. The attached figures are based on going concern. The comparison figures for the whole year 2002 are therefore still preliminary. The result for the whole year 2002 is EUR 39,000 worse than the figures announced in the press release dated April 25, 2003.

This is due to the financial effect of closing down the Scottish operation, which has been retrospectively taken into account into the fiscal year 2002. The Scottish site has been de-consolidated as of December 31, 2002.

Net sales for the period were EUR 4.2 million, down 6.8% from EUR 4.5 million in the first half year of 2002. As the discontinued Scottish activities contributed EUR 0.9 million to the first half year 2002 sales level, net sales of the German operation increased from EUR 3.6 million to EUR 4.2 million.

Excluding the Scottish site, the gross margin amounted to EUR 3.5 million, up 12.9% from EUR 3.1 million in the first half year of 2002. Through extensive cost saving programs ongoing operating costs have been reduced by EUR 2.6 million. Furthermore book profits from selling some unproductive equipment amounting to EUR 0.3 million were presented under the other operating expenses.

Furthermore the Board announced that the discussions with the potential investors have resulted in letters of intent regarding issuing subordinated convertible loans up to a maximum of EUR 2,000,000. Commitments have been received for an amount of EUR 1,500,000, but are subject to a favourable agreement with the Company’s bankers as well as shareholders’ approval. Therefore a general meeting of shareholders will be held on October 22, 2003 at 10am at the A4-hotel, Hoofddorp, The Netherlands.

The agreed conditions of the convertible loans are as follows:

Management will propose to exclude the pre-emptive rights of shareholders related to the issue of the convertible loans and any conversion in connection with it. The reason is to allow the Board of Management to secure the continuity of the Company. The conversion rate is justified based on the fact that the Board of Management has been looking for additional funding from existing or new shareholders for already 19 months. The possible issue of the mentioned convertible loans is the first real opportunity to add the needed additional capital.

In order to allow the conversion into shares during the coming years, shareholders’ will be asked for approval to authorise the Board of Management to change the Articles of Association of the Company. An increase of the authorised capital will be needed as well as a reduction of the nominal value of each share.

The half year figures are based on the assumption that the German group company can be reintegrated in the group by agreeing with the German banks, under the ‘Treuhandvertrag’, the transfer of the shareholders’ rights in the German group company from the trustees back to Rood Testhouse International.

As earlier announced, in July 2002 the Company was forced to sign this ‘Treuhandvertrag’ relating to the shares in the German group company. Based on this contract the German banks have the right to enforce the sale of the German group company and put the proceeds towards the moneys owed to them.

The waiver of this ‘Treuhandvertrag’ has also been put forward by the potential investors as a condition for entering into the convertible loans agreements.

     Consolidated Income Statement

Prospects

For the whole year 2003 management expects to realise a breakeven result. Depreciation will amount to about EUR 1,500,000. Therefore the cash flow will be around EUR 1,500,000.

Industry analysts are still predicting the start of an upturn for the semiconductor market with full effect in 2004. Management is convinced that Rood Technology will benefit from this anticipated growth.

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