PFEIFFER VACUUM TECHNOLOGY AG 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a–16 or 15d–16 of

the Securities Exchange Act of 1934

Commission file number 001-14264

For the month of March 2005

PFEIFFER VACUUM TECHNOLOGY AG

(Translation of registrant’s name into English)

Berliner Strasse 43
D–35614 Asslar
Federal Republic of Germany
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of form 20–F or Form 40–F.

Form 20–F þ Form 40–F o

Indicate by check mark if the registrant is submitting the Form 6–K in paper as permitted by Regulation S–T Rule 101(b) (1):

Yes o No þ

Indicate by check mark if the registrant is submitting the Form 6–K in paper as permitted by Regulation S–T Rule 101(b) (7):

Yes o No þ

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3–2(b) under the Securities Exchange Act of 1934.

Yes o No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3–2(b): 82–

PFEIFFER VACUUM TECHNOLOGY AG

Table of Contents


	Page
Consolidated Statements of Income for the periods ended March 31, 2005 and March 31, 2004		3
Consolidated Balance Sheets at March 31, 2005 and December 31, 2004		4
Consolidated Statements of Shareholders’ Equity for the periods ended March 31, 2005 and December 31, 2004		5
Consolidated Statements of Cash Flows for the periods ended March 31, 2005 and March 31, 2004		6
Notes to the Consolidated Financial Statements		7
1. The Company and Basis of Presentation		7
2. Summary of Significant Accounting Policies		7
3. New U.S. Legislation and Accounting Rules		8
4. Inventories		8
5. Investment Securities		8
6. Stock-Based Compensation — Convertible Bonds		9
Employee Participation Program, Term: 2000 through 2005		9
Employee Participation Program, Term: 2002 through 2007		9
Accounting for Stock Based Compensation		10
7. Earnings per Ordinary and Diluted Share and ADR		11
8. Share Ownership		11
9. Employees		12
10. Pension Benefits and Similar Obligations		12
11. Warranty		13
12. Segment Information		13
13. Income Tax Expense		14
Management’s Discussion and Analyses of Financial Condition and Results of Operations		15
Signatures		18

PFEIFFER VACUUM TECHNOLOGY AG

CONSOLIDATED STATEMENTS OF INCOME
(in thousands other than per share amounts)
(unaudited)


	Three months ended
	March 31,
	2005			2004
	€			€
Net sales		37,631			39,040
Cost of sales		(20,423	)		(21,729	)

Gross profit		17,208			17,311

Selling and marketing expenses		(4,647	)		(4,779	)
General and administrative expenses		(3,005	)		(3,806	)
Research and development expenses		(1,955	)		(2,269	)

Operating profit		7,601			6,457

Interest expense		(8	)		(14	)
Interest income		176			75
Foreign exchange gain		444			491

Income before taxes		8,213			7,009

Income taxes		(3,285	)		(2,846	)

Net income		4,928			4,163

Earnings per ordinary share/ADR (in €)

Basic		0.57			0.48

Diluted		0.57			0.48

See accompanying notes to the consolidated financial statements.

PFEIFFER VACUUM TECHNOLOGY AG

CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)


	March 31,			December 31,
	2005			2004
	€			€
Assets
Cash and cash equivalents		45,288			44,986
Trade accounts receivable - net		20,354			18,967
Other accounts receivable		2,698			4,062
Inventories - net		14,977			14,865
Investment securities		9,000			9,000
Prepaid expenses		644			541
Deferred tax assets - net		832			774
Other current assets		329			564

Total current assets		94,122			93,759

Intangible assets		546			495
Property, plant and equipment - net		23,512			23,823
Investment Securities		4,002			1,002
Deferred tax assets - net		2,368			2,328
Prepaid pension cost		2,817			2,817
Other assets		1,082			1,009

Total non-current assets		34,327			31,474

Total assets		128,449			125,233

Liabilities and shareholders’ equity
Trade accounts payable		3,205			2,988
Accrued liabilities		7,462			9,645
Income tax liabilities		4,810			5,720
Customer deposits		1,178			1,911
Other payables		4,136			3,365

Total current liabilities		20,791			23,629

Convertible bonds		768			794
Accrued pension		1,742			1,455

Total non-current liabilities		2,510			2,249

Shareholders’ equity
Share capital (13,459,350 no par value ordinary shares authorized, 8,790,600 issued and 8,690,524 outstanding at March 31, 2005 and at December 31, 2004)		22,504			22,504
Additional paid-in capital		2,821			2,821
Retained earnings		84,184			79,256
Accumulated other comprehensive loss		(1,923	)		(2,788	)
Treasury stock, at cost (100,076 ordinary shares)		(2,438	)		(2,438	)

Total shareholders’ equity		105,148			99,355

Total liabilities and shareholders’ equity		128,449			125,233

See accompanying notes to the consolidated financial statements.

PFEIFFER VACUUM TECHNOLOGY AG

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY


								Accumulated Other
								Comprehensive Income
			Additional					Minimum			Cumulative			Unrealized						Total
	Share		paid-in		Retained			pension			translation			gain/(loss)			Treasury			shareholders'
	capital		capital		earnings			liability			adjustment			on hedges			stock			equity
	(€ in thousands)
Balance at January 1, 2003		22,504		2,821		65,870			(656	)		1,560			409			—			92,508
Dividends paid						(4,903	)														(4,903	)
Treasury stock																		(2,438	)		(2,438	)
Net income						12,746															12,746
Components of other comprehensive income - net of tax of €(305) -									592			(3,609	)		141						(2,876	)
Total comprehensive income																					9,870

Balance at December 31, 2003		22,504		2,821		73,713			(64	)		(2,049	)		550			(2,438	)		95,037
Dividends paid						(6,083	)														(6,083	)
Net income						11,626															11,626
Components of other comprehensive income - net of tax of €(11) -									(100	)		(765	)		(360	)					(1,225	)
Total comprehensive income																					10,401

Balance at December 31, 2004		22,504		2,821		79,256			(164	)		(2,814	)		190			(2,438	)		99,355
Net income						4,928															4,928
Components of other comprehensive income - net of tax of €52 -												968			(103	)					865
Total comprehensive income																					5,793

Balance at March 31, 2005		22,504		2,821		84,184			(164	)		(1,846	)		87			(2,438	)		105,148

See accompanying notes to the consolidated financial statements.

PFEIFFER VACUUM TECHNOLOGY AG

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)


	Three months ended March 31,
	2005			2004
	€			€
Cash flow from operating activities:
Net income		4,928			4,163
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		849			871
Gain on disposal of fixed assets		(23	)		(30	)
Change in deferred taxes		5			22
Provision for doubtful accounts		90			382
Effects of changes in operating assets and liabilities:
Trade accounts receivable		(1,240	)		(2,074	)
Other accounts receivable		1,368			247
Inventories		(3	)		(2,360	)
Prepaid expenses		(97	)		(48	)
Other current assets		69			119
Other long-term assets		(68	)		3
Accrued pension liabilities		252			462
Accounts payable trade		213			377
Income tax liabilities		(921	)		964
Accrued other liabilities		(2,240	)		(222	)
Customer deposits		(733	)		164
Other payables		755			1,752

Net cash provided by operating activities		3,204			4,792

Cash flow used in investing activities:
Proceeds from disposal of fixed assets		46			41
Capital expenditures		(612	)		(285	)
Purchase of investment securities		(3,000	)		-

Net cash used in investing activities		(3,566	)		(244	)

Net cash used in financing activities		-			-

Effects of foreign exchange rate changes on cash and cash equivalents		664			403


Net increase in cash and cash equivalents		302			4,951

Cash and cash equivalents at beginning of period		44,986			29,432


Cash and cash equivalents at end of period		45,288			34,383


Non-cash transactions:
Repayments of convertible bonds and employee loans		(26	)		-

See accompanying notes to the consolidated financial statements.

PFEIFFER VACUUM TECHNOLOGY AG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

March 31, 2005

The Company and Basis of Presentation

Pfeiffer Vacuum is a full-line manufacturer in the vacuum technology business offering solutions for a variety of customer applications relating to the generation, control and measurement of vacuum. The products developed and manufactured at the production facility in Asslar, Germany, include turbomolecular pumps, a range of backing pumps, such as rotary vane, Roots and dry pumps, complete pumping stations as well as customized vacuum systems, vacuum components and instruments.

Pfeiffer Vacuum distributes its products through a network of its own sales offices and subsidiaries as well as independent marketing agents. Moreover, there are service support centers in most major industrial locations throughout the world. The Company’s primary markets are located in Europe, the United States and Asia.

The Consolidated Financial Statements of Pfeiffer Vacuum Technology AG and its subsidiaries (“the Company” or “Pfeiffer Vacuum”) have been prepared in accordance with United States Generally Accepted Accounting Principles (U.S. GAAP). The interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the financial position, results of operations and cash flows of the Company.

Pfeiffer Vacuum presents its Consolidated Financial Statements in euros (€).

Summary of Significant Accounting Policies

Consolidation Principles

All companies which Pfeiffer Vacuum Technology AG directly or indirectly controls are consolidated. The Company is considered to control an entity if it either directly or indirectly holds a majority of the voting rights and can therefore exercise a controlling influence.

All material intercompany gains and losses, receivables, liabilities, revenues and expenses are eliminated as part of the consolidation process.

Use of Estimates

The preparation of the Consolidated Financial Statements requires management to make estimates and assumptions that affect the amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period that are reported in the financial statements and accompanying notes. These estimates and assumptions could differ from the actual results.

Reclassifications

Certain prior-year amounts have been reclassified to provide comparability with the presentation of the current year financial statements.

PFEIFFER VACUUM TECHNOLOGY AG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Foreign Currency Translation

The financial statements of the Company’s foreign subsidiaries have been translated into euros (€) in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency Translation”. The functional currency of all of the Company’s foreign subsidiaries is the applicable local currency in which that entity conducts its business. When translating foreign functional currency financial statements, year-end exchange rates are applied to the assets and liabilities, while average annual exchange rates are applied to income statement accounts. The resulting translation adjustments are recorded as accumulated other comprehensive income (loss).

New U.S. Legislation and Accounting Rules

As a result of the Company’s listing at New York Stock Exchange, it is subject not only to the provisions of German law (corporation, codetermination and capital market legislation) and of its own Articles of Association but also to the licensing requirements of the New York Stock Exchange. American capital market legislation - specifically the Sarbanes-Oxley Act and the rules and regulations of the Securities and Exchange Commission (“SEC”) - also apply to Pfeiffer.

On December 16, 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised 2004), “Share-Based Payment,” which is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation.” SFAS No. 123® supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees” and amends SFAS No. 95, “Statement of Cash Flows.” Generally, the approach in SFAS No. 123® is similar to the approach described in SFAS No. 123. However, SFAS No. 123® requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. SFAS No. 123® must be adopted in the first interim or annual period beginning after January 1, 2006. Early adoption will be permitted in periods in which financial statements have not yet been issued. The Company plans to adopt SFAS No. 123® on January 1, 2006.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method.

Inventories consist of the following:


	March 31,			December 31,
	2005			2004
	(€ in thousands)

Raw materials		7,024			7,021
Work-in-process		9,590			9,992
Finished products		9,153			8,876
Reserves		(10,790	)		(11,024	)

Total inventories - net		14,977			14,865

Investment Securities

In the first quarter 2005, the Company purchased investment securities amounting to € 3.0 million, which will be held until final maturity and are consequently valued at carrying cost of acquisition.

PFEIFFER VACUUM TECHNOLOGY AG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Stock-Based Compensation - Convertible Bonds

As permitted under SFAS No. 123, “Accounting for Stock-Based Compensation,” as amended, the Company applies the intrinsic value-based method in accordance with APB Opinion No. 25 for its stock-based compensation plans. Under APB No. 25 “Accounting for Stock Issued to Employees,” compensation expense is recorded on the measurement date only if the current market price of the underlying stock exceeds the exercise price.

Employee Participation Program, Term: 2000 through 2005

Within the scope of an employee participation program, in July 2000, the Company issued 4,400 convertible bonds valued at € 0.6 million at an issue price of 100% to members of management and salaried employees of the Company and its subsidiaries in Germany and other countries. The conversion feature entitles the bearer to convert each bond with a par value of € 128 into 50 non-par value shares of the Company, upon payment of a conversion price.

The conversion price is based upon 110% of the average closing price on the Frankfurt Stock Exchange for the last ten trading days prior to the resolution by the Management Board to issue the convertible bonds. Accordingly, the conversion price for the July 2000 issue was set at € 48.03 per share and includes the bond par value per equivalent share of € 2.56. There were 120,000 option shares, related to convertible bonds for the 2000 issue, outstanding at March 31, 2005. Fair value at the date of grant was € 10.64 per common share option.

Beginning in July 2002, each holder of convertible bonds could convert up to 30% of such bonds to common stock, in July 2003 up to 60% and in July 2004 up to 100%. The final conversion date is December 9, 2005. Conversion is only possible during specific periods of time. The convertible bonds bear interest at 6% p.a. and are redeemable at par on December 10, 2005, unless previously converted. The bonds are to be returned at par upon termination of employment. Employees were given the opportunity to finance the purchase of the convertible bonds with interest-bearing employee loans.

These loans bear interest at the same fixed rate as the bonds, have identical terms, are classified as other long-term assets in the balance sheet and are repayable upon conversion or return. There is a right of setoff for both principal and interest between the loan and the bond. As of March 31, 2005, employees had returned 2,000 of these convertible bonds having an aggregate principal value of € 256,000 and repaid the corresponding employee loans.

Employee Participation Program, Term: 2002 through 2007

Within the scope of a further employee participation program, in July 2002, the Company issued 4,600 convertible bonds having an aggregate principal amount of € 0.6 million to members of management and salaried employees of the Company in Germany and other countries. The conversion feature entitles the bearer to convert each bond with a par value of € 128 into 50 non-par shares of Company stock, upon payment of a conversion price.

The conversion price is based upon 110% of the average closing price on the Frankfurt Stock Exchange for the last ten trading days prior to the resolution by the Management Board to issue the convertible bonds. The conversion price for the July 2002 issue was set at € 42.86 per share and includes the bond par value per equivalent share of € 2.56. There were 180,000 option shares, related to the convertible bonds for the 2002 issue, outstanding at March 31, 2005. Fair value at the date of grant was € 10.35 per common share option.

Each holder of convertible bonds could convert up to 30% of such bonds to ordinary shares for the first time following the Annual Shareholders’ Meeting in 2004, and can convert up to 60% following the Annual Shareholders’ Meeting in 2005 and up to 100% following the Annual Shareholders’ Meeting in 2006. The final conversion date is December 9, 2007. Conversion is only possible during specific periods of time.

PFEIFFER VACUUM TECHNOLOGY AG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The convertible bonds bear interest at 6% p.a. and are redeemable at their principal amount on December 10, 2007, unless previously converted or called. The bonds may be called by the Company at their principal amount upon termination of employment. Employees were given the opportunity to finance the purchase of the convertible bonds with interest-bearing employee loans. These loans bear interest at the same fixed rate as the bonds, have identical terms, are classified as other long-term assets in the balance sheet and are repayable upon conversion or return. There is a right of setoff for both principal and interest between the loan and the bond.

As of March 31, 2005, employees had returned 1,000 of these convertible bonds having an aggregate principal value of € 128,000 and repaid the corresponding employee loans.

Accounting for Stock Based Compensation

A summary of option shares related to the convertible bonds is as follows:


				Weighted
	Number of			Average
	Shares			Exercise Price
	Outstanding			per Share
				€
Convertible shares outstanding January 1, 2004		330,000			44.74
Granted		-			-
Exercised		-			-
Forfeited		(20,000	)		42.86

Convertible shares outstanding December 31, 2004		310,000			44.86
Granted		-			-
Exercised		-			-
Forfeited		(10,000	)		42.86

Convertible shares outstanding March 31, 2005		300,000			44.93

Shares exercisable at March 31, 2005 totaled 174,000.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants in 2002 and 2000: Risk-free interest rates ranging from 4% to 5%; expected lives ranging from 4.5 to 6 years; expected dividend yield of 1% to 2%; and expected volatility ranging from 30% to 40%.

SFAS 123 requires disclosure of pro forma information regarding net income and earnings per share as if the Company had accounted for its stock-based compensation to employees using the fair value method. For pro forma purposes, using the fair value method the Company’s net income would have been K€ 4,820 and earnings per share would have been € 0.55.

PFEIFFER VACUUM TECHNOLOGY AG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Earnings per Ordinary and Diluted Share and ADR

The following table sets forth the computation of basic and diluted earnings per share and ADR:


	Three months ended
	March 31,
	2005		2004
Numerator:
Net income (in thousands €)		4,928		4,163

Denominator:
Denominator for basic earnings per share - weighted-average shares		8,690,524		8,690,524

Effect of dilutive securities:
Convertible bonds		-		-


Denominator for diluted earnings per share - adjusted weighted average shares and assumed conversions		8,690,524		8,690,524


Basic earnings per share and ADR (€)		0.57		0.48

Diluted earnings per share and ADR (€)		0.57		0.48

Share Ownership

The following table shows (known to the Company) the number of Ordinary Shares, ADR and Convertible Bonds of the Company as of March 31, 2005 owned by all members of the Supervisory Board and the Management Board:


	Ordinary				Convertible
Members of the Supervisory Board	Shares		ADRs		Bonds

Dr. Michael Oltmanns		100		0		0
Michael J. Anderson		0		0		0
Prof. Dr. Klaus Jürgen Kügler		0		0		0
Götz Timmerbeil		0		0		0
Edgar Keller		0		0		0
Günter Schneider		80		0		0

PFEIFFER VACUUM TECHNOLOGY AG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Employees

As of March 31, 2005 the Company employed 710 people, of which 527 are in Germany and 183 in other countries.

Headcount


	March 31,
	2005		2004		2005		2004
	Germany				Other Countries

Production		282		300		58		57
Research and Development		84		97		-		-
Selling and Marketing		102		105		96		93
Administration		59		68		29		34

Total		527		570		183		184

The Company’s manpower dropped by 5.8% primarily due to its withdrawal from DVD business. The accrued restructuring costs due to the redundancy program amounted to € 0.9 million at December 31, 2004 and decreased to approximately € 0.4 million at March 31, 2005, in consequence of payments.

10.

Pension Benefits and Similar Obligations

Most employees of the Company are entitled to receive pension benefits from Pfeiffer Vacuum, which are covered by defined benefit plans. Plan assets for the German Pension Plans are held in the Pfeiffer Vacuum Trust e.V. (“the Trust”), a registered association. It is an independent, bankruptcy-protected, separate legal entity whose sole purpose is to act in a fiduciary capacity as trustee for the assets held. Contributions for the year 2004 totaled K€ 836 and reflected the amount of the net periodic pension cost. The trust has invested this cash in a mutual fund managed by an unrelated third party that pursues a target allocation of 30% in equities and 70% in fixed-income securities and cash.

Pension expense for all plans included the following components:


	Three months ended
	March 31,
	2005			2004
	(€ in thousands)

Service cost		251			220
Interest cost		550			516
Expected return on assets		(544	)		(501	)
Amortization of:
Unrecognized net actuarial (gains) losses		38			4
Unrecognized prior service cost		18			19
Other		6			-

Net pension cost		319			258

In March 2005, the Company contributed approximately € 0.8 million to the Pfeiffer Vacuum Trust e.V. as plan assets for its German based early retirement obligation. Analog to the pension plan presentation, Pfeiffer Vacuum offsets these designated assets against the early retirement obligation in the liabilities section of the consolidated financial statements.

PFEIFFER VACUUM TECHNOLOGY AG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

11.

Warranty

Warranty accruals are established in the period the related revenue is recognized. The estimate is based on managements’ estimate and historical experience by specific product type.

Warranty provisions consist of the following:


	March 31,
	2005			2004
	(€ in thousands)

Balance at beginning of period		2,993			3,625
Warranties issued during the period		244			413
Utilization of accruals		(109	)		(59	)

Balance at end of period		3,128			3,979

12.

Segment Information

The Company evaluates the success and performance of its subsidiaries on the basis of their income before income tax.

The Company’s business activities include the development, manufacture, sale and service of vacuum pumps, vacuum components and instruments, as well as vacuum systems. The subsidiaries in the individual countries are independent legal entities with their own management. Consequently, segment reporting is country-based.

Information concerning the Company’s geographic locations is summarized as follows:


	Three months ended
	March 31,
	2005			2004
	(€ in thousands)
*Net Sales*
Germany
Unaffiliated		15,925			18,031
Intercompany		13,538			12,704

		29,463			30,735
Europe excluding Germany.		13,299			11,344
United States		7,718			7,875
Rest of World		886			1,938

		51,366			51,892
Intercompany eliminations		(13,735	)		(12,852	)

Total		37,631			39,040


*Operating Profit*
Germany		6,134			4,721
Europe excluding Germany.		904			799
United States		316			573
Rest of World		148			267

		7,502			6,360
Intercompany eliminations		99			97

Total		7,601			6,457

PFEIFFER VACUUM TECHNOLOGY AG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

13.

Income Tax Expense

Under German corporate tax law, taxes on income are composed of corporate taxes, trade taxes and an additional surtax.

The Company’s effective tax rate was 40.0% for the first quarter of 2005 and is virtually the same as for the first quarter of 2004 (40.6%).

PFEIFFER VACUUM TECHNOLOGY AG

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Results of Operations

Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004
(Percentages calculated based on amounts in thousands €)

Net Sales

The following table summarizes the Company’s net sales by geographical area:


	Three months ended
	March 31, 2005				March 31, 2004
	(€ in thousands)		%		(€ in thousands)		%
*Net Sales*
Germany		9,578		25.4		12,141		31.1
Europe excluding Germany		13,881		36.9		11,790		30.2
United States		7,665		20.4		7,825		20.0
Asia		6,125		16.3		7,041		18.1
Rest of World		382		1.0		243		0.6

Total		37,631		100.0		39,040		100.0

Total net sales amounted to € 37.6 million in the first quarter of 2005 and decreased by € 1.4 million or 3.6% from € 39.0 million in the previous year’s period. The major part of the sales decrease amounting to approximately € 2.6 million (thereof € 1.6 million due to the withdrawal of the DVD business in 2005) was recorded in Germany, partly offset by an increase in Europe (excluding Germany) of € 2.1 million. The Company’s net sales revenue in the U.S. increased in U.S. dollar by 2.8%. Due to the weakness of the U.S. dollar against the euro, the sales in the U.S. were adversely impacted by the effect of exchange rate differences amounting to approximately € 0.4 million. Sales in Asia reached in the first quarter of 2004 a higher-than-average level and amounted to € 7.0 million. In the first three months of 2005 the Company in this region recorded only € 6.1 million revenue, a decrease by € 0.9 million.

Net sales revenue in the Company’s core product, the turbo pump, decreased by € 1.3 million or 8.0% from € 15.8 million in the first quarter of 2004 to € 14.5 million in 2005, offset by an increase in fore vacuum pumps by € 0.5 million or 10.8%. Sales in vacuum systems increased from € 1.8 million in the first quarter of 2004 (including € 1.6 million DVD business) to € 2.1 million in 2005 (DVD business revenue was € 0). Revenue in service decreased by € 0.6 million, sales in vacuum instruments and components decreased by € 0.4 million or 3.4%.

Pfeiffer Vacuum is one of the leading full-line suppliers of vacuum technology and operates in a highly competitive market. Significant factors that affect its revenue are product performance, application support, post-sales service and training, a global network of sales and service organizations, product availability and fair prices. In Europe and especially in Germany, industry spending and investing remain low and despite the Company’s sales promotion efforts, sales did not increase.

Order intake and Order backlog

Orders received amounted to € 41.4 million in the three months ended March 31, 2005 and remained at the prior year period’s level (€ 41.3 million). Order intake in turbo pumps increased by € 2.2 million, in fore vacuum pumps by € 1.4 million, offset by decreased orders received in service by € 0.5 million and vacuum components and instruments by € 0.9 million.

PFEIFFER VACUUM TECHNOLOGY AG

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Order backlog increased slightly by € 0.6 million from € 29.5 million in the three month period ended March 31, 2004 to € 30.1 million in 2005. The Company considers its order intake and order backlog positions as an indication for a business development against the general economic trend.

Contracts are included in backlog only if they represent firm orders and include firm shipping schedules. The backlog position at any particular time should generally not be construed to represent future levels of sales and orders.

Gross Profit

Despite the decrease in sales amounting to € 1.4 million, gross profit only decreased by € 0.1 million or 0.6% from € 17.3 million in the three months ended March 31, 2004 to € 17.2 million in the comparable period in 2005. The Company’s gross margin increased from 44.3% in 2004 to 45.7% in 2005 resulting primarily from decreased manpower in the DVD production plant.

Selling and Marketing Expenses

Selling and marketing expenses decreased slightly from € 4.8 million in the first quarter 2004 to € 4.6 million in the first quarter 2005. As a percentage of sales, selling and marketing expenses remained virtually constant at 12.3% (2004: 12.2%), due to lower net sales revenues.

General and Administrative Expenses

General and administrative expenses amounted to € 3.0 million in the three months ended March 31, 2005 and decreased significantly by € 0.8 million from € 3.8 million in the prior year’s period. The Company’s ongoing ability to manage all headquarter and subsidiary needs with a small staff led to decreased general and administrative expense. The first quarter 2004 reflected increased costs for indemnities, bonuses and pensions which returned back to a normal level in 2005. Additionally, the withdrawal from the DVD business had a small positive effect in 2005. As a percentage of sales, general and administrative expenses decreased from 9.8% in 2004 to 8.0% in 2005.

Research and Development

Research and development expenses decreased from € 2.3 million in the first quarter of 2004 to € 2.0 million in the first three months of 2005. The percentage of sales was 5.2% in 2005 and 5.8% in 2004. The Company continues to depend on continuing technological advances in vacuum pump design and manufacturing and has invested in the needs of future markets, improving its market position and entering new markets. Pfeiffer Vacuum will continue to maintain a high ratio of research and development expenditures relative to total sales. The Company expenses all research and development costs as they are incurred.

Operating Profit

Operating profit increased from € 6.5 million in the three months ended March 31, 2004 to € 7.6 million in the three months ended March 31, 2005. As a percentage of sales the operating profit increased significantly from an already high level of 16.5% to 20.2%.

The Company implemented in past a variety of cost reduction measures. The workforce was lowered from 754 to 710 primarily due to the withdrawal from the DVD business. Pfeiffer Vacuum intends to continue its worldwide cost management.

PFEIFFER VACUUM TECHNOLOGY AG

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Interest Income and Interest Expense

Interest income in the first quarter of 2005 amounted to € 0.2 million compared to € 0.1 million in the first quarter of 2004.

Foreign Exchange Gain

Foreign exchange gain in the first quarter of 2004 amounted to € 0.5 million and decreased slightly by € 0.1 million to € 0.4 million in the first quarter of 2005.

Income Tax Expense

The effective tax rate for the three month period ended March 31, 2005 was 40.0% compared to 40.6% in the respective period of 2004.

Net income

Net income increased by € 0.7 million or 18.4% from € 4.2 million in the first quarter 2004 to € 4.9 million in the first quarter 2005, due to the factors discussed above.

Net income per Ordinary Share and ADR was € 0.57 (basic) and € 0.57 (diluted) in the three months ended March 31, 2005 compared to € 0.48 (basic) as well as € 0.48 (diluted) in the three months ended March 31, 2004.

Liquidity and Capital Resources

The Company’s business continues to generate sufficient cash to fund its operations, including its working capital and capital expenditure requirements. In the three month period ended March 31, 2005, net cash provided by operating activities totaled € 3.2 million as compared to € 4.8 million for the same period in the prior year. The decrease in net cash provided by operating activities is primarily a result of income tax payments, paid staff bonuses, and an increase in trade accounts receivable conditional upon extension of terms of payment for some major customers, partly offset by an increase in net income.

The Company’s use of cash in investing activities was € 3.6 million in the first quarter of 2005, compared to € 0.2 million in the first quarter of 2004. This increase primarily arises from the purchase of investment securities amounting to € 3.0 million and higher capital expenditures (€ 0.3 million).

All investments have been financed by the Company’s cash reserves.

The Company had no long-term debt at March 31, 2005, except for convertible bonds related to employee participation programs.

PFEIFFER VACUUM TECHNOLOGY AG

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

May 2, 2005


PFEIFFER VACUUM TECHNOLOGY AG
By: /s/ Wolfgang Dondorf
Wolfgang Dondorf Chief Executive Officer
By: /s/ Manfred Bender
Manfred Bender Chief Financial Officer

Ordinary

Convertible

Members of the Management Board

Shares

Wolfgang Dondorf

Manfred Bender