FOR IMMEDIATE RELEASE

Keithley Instruments Reports Sequential Increases in Sales and Orders for Fiscal 2002 Third Quarter

Cleveland, Ohio -- July 18, 2002 -- Keithley Instruments, Inc. (NYSE:KEI), a leader in solutions for emerging measurement needs, today announced sequential double-digit increases in both sales and orders, including the first year-over-year order increase in 18 months for its fiscal 2002 third quarter that ended June 30, 2002.

Net sales of $26.0 million for the third quarter of fiscal 2002 increased 18 percent from the second quarter. Compared to the prior year's third quarter, net sales decreased 28 percent from $36.3 million last year. The net loss for the third quarter of fiscal 2002 of $0.9 million, or $0.06 per share, includes $0.06 per share for severance charges, which affected approximately 7 percent of the workforce. Excluding the severance charges, the company was profitable with pretax earnings of $0.1 million. The company reported net income of $4.1 million, or $0.25 per share, in last year's third quarter.

Orders of $30.9 million for the third quarter increased 36 percent from the second quarter, and 11 percent from the prior year's third quarter; the first year-over-year increase since December 2000. The increase is due primarily to higher orders for the company's products serving the semiconductor industry, and includes a $5 million order from a single semiconductor industry customer. When compared to the second quarter, orders from the semiconductor industry increased 149 percent, wireless industry orders increased 24 percent, optoelectronics industry orders were up 8 percent, while research and education customer orders decreased 5 percent. When compared to the prior year's third quarter, geographic orders were up 18 percent in the United States, flat in Europe, and down 4 percent in the Pacific Basin. For the first nine months of fiscal 2002, semiconductor orders comprised approximately 30 percent of the total, wireless orders accounted for about 15 percent, optoelectronics orders made up 5 percent, while research and education comprised approximately 20 percent of total orders. Order backlog increased 39 percent during the quarter to $17.0 million at June 30, 2002.

"Reporting our second consecutive quarter of sequential growth in sales and orders is encouraging, particularly when viewed in combination with our improving financial results," stated Joseph P. Keithley, the company's Chairman, President and Chief Executive Officer. "Sequentially, orders increased 36 percent, and orders from our semiconductor customers were particularly strong. The workforce reduction, which was primarily in manufacturing, will allow us to maintain our investments in areas that will generate future growth, and will partially offset cost increases that will occur over the next 12 months. We will continue to allocate resources to areas that we believe provide the most long-term benefit to our customers and shareholders."

"Additionally, we are beginning to implement a lean manufacturing initiative," added Mr. Keithley. "We are excited about the benefits we expect to receive from lean manufacturing, and anticipate shorter lead times, lower inventory levels, and higher inventory turns as we progress with the implementation. We have adjusted our manufacturing staffing consistent with this initiative."

"Although conditions are difficult in most segments of the electronics industry we serve, we remain cautiously optimistic. We expect continued improvement in some segments of the electronics industry over the next year, while other segments may not improve in the near-term. Based on our current order activity and orders in backlog, we would expect net sales for the fourth quarter to range between $26 and $28 million. Given this level of sales, we would expect break-even results at the lower end of the sales range, and pretax earnings as a percentage of sales in the low single digits at the higher end of the range," added Mr. Keithley.

The company's financial position remains strong with cash generated from operations of $7 million for the quarter. Cash and short-term investments total $52 million, an increase of $7 million during the quarter, with debt of $3 million at June 30, 2002.

For the nine months ending June 30, 2002, net sales were $68.5 million, down 45 percent from $124.0 million last year. The net loss for the 2002 nine-month period was $3.8 million, or $0.24 per share. Excluding severance charges recorded in the third quarter of this year, the net loss was $0.18 per share. Net income for the 2001 nine-month period was $16.1 million, or $0.97 per share.

The company has an open market stock repurchase program in place, the primary purpose of which is to offset the dilutive effect of employee stock incentive plans. During the first nine months of fiscal 2002, the company did not repurchase shares under the program.

Statements made in the fourth, fifth, and sixth paragraphs of this release relating to the company's expectations with regard to future growth and expense levels; the implementation of lean manufacturing; and the company's expectation for sales and earnings for the fourth quarter of fiscal 2002 are forward-looking statements that involve a number of risks and uncertainties. Actual results may differ materially from the expected results stated or implied in the forward-looking statements as a result of a number of factors that include but are not limited to: worldwide economic conditions and business conditions in the semiconductor, wireless, optoelectronics, and other industries which the company serves and the severity and duration of the current downturn of these as well as the overall broadband industry, the company's ability to develop an effective sales and support organization in Japan, the company's ability to develop new products and gain market acceptance of those products to remain competitive and gain market share, the company's ability to implement an effective lean manufacturing system, the company's ability to control costs, and foreign currency fluctuations which could affect worldwide operations. Further information on factors that could cause actual results to differ from those anticipated is included in the company's annual report on Form 10-K and quarterly reports on Form 10-Q which are filed with the Securities and Exchange Commission. In light of these uncertainties, the inclusion of forward-looking information should not be regarded as a representation by the company that its plans or objectives will be achieved. Further, the company is not obligating itself to revise forward-looking statements contained herein to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

On Thursday, July 18, 2002 at 10:00 a.m. Eastern Time, interested parties may listen to the Keithley Instruments quarterly conference call live on the Web by registering on the investor relations portion of the company's web site at www.keithley.com. Interested parties may also listen to a replay of the quarterly conference call by visiting the web site. The replay will be available for approximately 30 days.

KEITHLEY INSTRUMENTS, INC.
CONSOLIDATED STATEMENT OF INCOME
(In Thousands of Dollars Except for Per Share Data)
(Unaudited)