|                                  
|----------------------------------
|UNITED STATES                     
|SECURITIES AND EXCHANGE COMMISSION
|Washington,
 D.C. 20549           
|                                  
|FORM 10-Q                         
|                                  

|           |                                                                                        
|---------- | ---------------------------------------------------------------------------------------
|(Mark One)
|           |                                                                                        
|x          | QUARTERLY
 REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

|                                |               
|------------------------------- | --------------
|For the
 quarterly period ended | March 31, 2009
|                                |               
|                                |               
|or                             

|  |                                                                                         
|- | ----------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

|                                                                                                                    |        
|------------------------------------------------------------------------------------------------------------------- | -------
|For the
 transition period from ________________________________________ to
 ______________________________________
|                                                                                                                    |        
|Commission
 File Number                                                                                             | 0-12944
|                                                                                                                    |        

|                                                      
|------------------------------------------------------
|ZYGO CORPORATION                                      
|                                                      
|(Exact name of registrant as specified in its charter)

|                                                                                    |                                      | 
|----------------------------------------------------------------------------------- | ------------------------------------ | 
|Delaware                                                                            | 06-0864500                           | 
|                                                                                    |                                      | 
|(State or
 other jurisdiction of incorporation or organization)                     | (I.R.S. Employer Identification No.) | 
|                                                                                    |                                      | 
|Laurel Brook
 Road, Middlefield, Connecticut                                        | 06455                                | 
|                                                                                    |                                      | 
|(Address of
 principal executive offices)                                           | (Zip Code)                           | 
|                                                                                    |                                      | 
|(860) 347-8506                                                                     
|                                                                                   
|Registrants telephone number, including area code                                 
|                                                                                   
|N/A                                                                                
|                                                                                   
|(Former name, former address, and former fiscal year, if changed from
 last report)

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Indicate by
 check mark whether the registrant (1) has filed all reports required to be
 filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
 the preceding 12 months (or for such shorter period that the registrant was
 required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (1)
               
               
               
               
               
                         
               
               
               
     o YES xNO
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|Indicate by
 check mark whether the registrant has submitted electronically and posted on
 its corporate Web site, if any, every Interactive Data File required to be
 submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
 12 months (or for such
 shorter period that the registrant was required to submit and post such
 files).                
               
               
               
               
                         
               
               
               
o YES xNO    

Indicate by
check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act.

|                                                                       |                             
|---------------------------------------------------------------------- | ----------------------------
|Large
 accelerated filer o                                             | Accelerated
 filer x        
|Non-accelerated
 filer o (Do not check if a smaller reporting company) | Smaller
 reporting company o

Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).


o YES x NO


APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of
each of the issuers classes of common stock, as of the latest practicable
date.

16,892,569 shares of Common Stock, $.10 Par
Value, at May 1, 2009

1

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(1) In
connection with its previously disclosed acquisition of the assets of
Solvision, Inc., the registrant was required to file stand-alone audited
financial statements for Solvision, Inc. for each of its last two fiscal years,
within 75 days of such acquisition (or by May 13, 2008). The registrant has
filed such audited financial statements in an 8-K/A with the SEC on December 5,
2008.

FORWARD LOOKING STATEMENTS

All statements
other than statements of historical fact included in this Form 10-Q Quarterly
Report regarding our financial performance, condition and operations, and the
business strategy, plans, anticipated sales, orders, market acceptance, growth
rates, market opportunities, and objectives of management of the Company for
future operations are forward-looking statements. Forward-looking statements
are intended to provide managements current expectations or plans for the
future operating and financial performance of the Company based upon
information currently available and assumptions currently believed to be valid.
Forward-looking statements can be identified by the use of words such as anticipate,
believe, estimate, expect, intend, plans, strategy,
project, and
other words of similar meaning in connection with a discussion of future
operating or financial performance. Actual results could differ materially from
those contemplated by the forward-looking statements as a result of certain
factors. Among the important factors that could cause actual events to differ
materially from those in the forward-looking statements are fluctuations in
capital spending of our customers; fluctuations in net sales to our major
customer; manufacturing and supplier risks; risks of order cancellations,
push-outs and de-bookings; dependence on timing and market acceptance of new
product development; rapid technological and market change; risks in
international operations; dependence on proprietary technology and key
personnel; length of the sales cycle; environmental regulations; investment
portfolio returns; fluctuations in our stock price; and the risk that
anticipated growth opportunities may be smaller than anticipated or may not be
realized.

Any
forward-looking statements included in this Quarterly Report speak only as of
the date of this document. We undertake no obligation to publicly update or
revise forward-looking statements to reflect events or circumstances occurring
after the date of this Form 10-Q. Further information on potential factors that
could affect our business is described in our reports on file with the
Securities and Exchange Commission, including our Form 10-K, as amended by Form
10-K/A, for the fiscal year ended June 30, 2008.

2

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PART I - Financial Information

Item 1. Financial Statements

CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)(Thousands, except per share amounts)

|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|--------------------------------------------------------- |  | ---------------------------- | ------- | --------------------------- | - | ------ | - | ---- | ------- | - | - | ------- | -
|                                                          |  | Three
Months Ended March 31, |         | Nine
Months Ended March 31, |  
|                                                          |  |                              |         |                             |  
|                                                          |  | 2009                         |         | 2008                        |   | 2009   |   | 2008 |        
|                                                          |  |                              |         |                             |   |        |   |      |        
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Net sales                                                 |  | $                            | 20,031  |                             | $ | 38,456 |   | $    | 91,873  |   | $ | 110,539 |  
|Cost of goods sold                                        |  |                              | 16,875  |                             |   | 22,907 |   |      | 59,650  |   |   | 67,292  |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Gross profit                                              |  |                              | 3,156   |                             |   | 15,549 |   |      | 32,223  |   |   | 43,247  |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Selling, general, and administrative expenses             |  |                              | 15,959  |                             |   | 9,328  |   |      | 37,927  |   |   | 24,577  |  
|Research, development, and engineering expenses           |  |                              | 7,008   |                             |   | 6,248  |   |      | 18,419  |   |   | 17,353  |  
|Provision for doubtful accounts and notes                 |  |                              | 15      |                             |   | (37    | ) |      | 1,014   |   |   | 1,523   |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Operating profit (loss)                                   |  |                              | (19,826 | )                           |   | 10     |   |      | (25,137 | ) |   | (206    | )
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Other income (expense)                                    |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Interest income                                           |  |                              | 140     |                             |   | 517    |   |      | 800     |   |   | 1,998   |  
|Miscellaneous income (expense)                            |  |                              | (220    | )                           |   | (394   | ) |      | 104     |   |   | 82      |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Total other income (expense)                              |  |                              | (80     | )                           |   | 123    |   |      | 904     |   |   | 2,080   |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Earnings (loss) before income taxes and minority interest |  |                              | (19,906 | )                           |   | 133    |   |      | (24,233 | ) |   | 1,874   |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Income tax (expense) benefit                              |  |                              | 4,908   |                             |   | (15    | ) |      | 6,345   |   |   | (642    | )
|Minority interest                                         |  |                              | (103    | )                           |   | (167   | ) |      | (751    | ) |   | (1,046  | )
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Net earnings (loss)                                       |  | $                            | (15,101 | )                           | $ | (49    | ) | $    | (18,639 | ) | $ | 186     |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Basic - Earnings (loss) per share                         |  | $                            | (0.90   | )                           | $ | (0.00  | ) | $    | (1.11   | ) | $ | 0.01    |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Diluted - Earnings (loss) per share                       |  | $                            | (0.90   | )                           | $ | (0.00  | ) | $    | (1.11   | ) | $ | 0.01    |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Weighted average shares outstanding                       |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Basic shares                                              |  |                              | 16,872  |                             |   | 16,751 |   |      | 16,826  |   |   | 17,482  |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  
|Diluted shares                                            |  |                              | 16,872  |                             |   | 16,751 |   |      | 16,826  |   |   | 17,819  |  
|                                                          |  |                              |         |                             |   |        |   |      |         |   |   |         |  

See accompanying notes to condensed
consolidated financial statements.

3

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CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Thousands, except share amounts)

|                                                                                                                                                  |  |                |         |               |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | ------------- | - | ------- | 
|                                                                                                                                                  |  | March 31, 2009 |         | June
30, 2008 |  
|                                                                                                                                                  |  |                |         |               |  
|Assets                                                                                                                                            |  |                |         |               |   |         | 
|Current assets:                                                                                                                                   |  |                |         |               |   |         | 
|Cash and cash equivalents                                                                                                                         |  | $              | 35,726  |               | $ | 26,421  | 
|Marketable securities                                                                                                                             |  |                | 6,975   |               |   | 17,639  | 
|Receivables, net of allowance for doubtful accounts
of $454 and $349,
 respectively                                                               |  |                | 20,278  |               |   | 31,036  | 
|Inventories                                                                                                                                       |  |                | 38,490  |               |   | 37,542  | 
|Prepaid expenses and other                                                                                                                        |  |                | 1,760   |               |   | 2,230   | 
|Income tax receivable                                                                                                                             |  |                | 836     |               |   | 241     | 
|Deferred income taxes                                                                                                                             |  |                | 5,273   |               |   | 12,143  | 
|                                                                                                                                                  |  |                |         |               |   |         | 
|Total current assets                                                                                                                              |  |                | 109,338 |               |   | 127,252 | 
|                                                                                                                                                  |  |                |         |               |   |         | 
|Marketable securities                                                                                                                             |  |                | 365     |               |   | 6,963   | 
|Property, plant, and equipment, net                                                                                                               |  |                | 34,724  |               |   | 36,371  | 
|Deferred income taxes                                                                                                                             |  |                | 23,547  |               |   | 8,904   | 
|Intangible assets, net                                                                                                                            |  |                | 7,326   |               |   | 9,522   | 
|Other assets                                                                                                                                      |  |                | 1,013   |               |   | 996     | 
|                                                                                                                                                  |  |                |         |               |   |         | 
|Total assets                                                                                                                                      |  | $              | 176,313 |               | $ | 190,008 | 
|                                                                                                                                                  |  |                |         |               |   |         | 
|                                                                                                                                                  |  |                |         |               |   |         | 
|Liabilities and Stockholders Equity                                                                                                              |  |                |         |               |   |         | 
|Current liabilities:                                                                                                                              |  |                |         |               |   |         | 
|Accounts payable                                                                                                                                  |  | $              | 6,119   |               | $ | 7,955   | 
|Accrued progress payments                                                                                                                         |  |                | 7,616   |               |   | 5,226   | 
|Accrued salaries and wages                                                                                                                        |  |                | 3,228   |               |   | 4,156   | 
|Other accrued liabilities                                                                                                                         |  |                | 10,553  |               |   | 5,032   | 
|Deferred income taxes                                                                                                                             |  |                | 226     |               |   | 32      | 
|                                                                                                                                                  |  |                |         |               |   |         | 
|Total current liabilities                                                                                                                         |  |                | 27,742  |               |   | 22,401  | 
|                                                                                                                                                  |  |                |         |               |   |         | 
|Long-term income tax payable                                                                                                                      |  |                | 1,826   |               |   | 1,973   | 
|Other long-term liabilities                                                                                                                       |  |                | 920     |               |   | 844     | 
|Minority interest                                                                                                                                 |  |                | 1,294   |               |   | 1,844   | 
|Commitments and contingencies                                                                                                                     |  |                |         |               |   |         | 
|                                                                                                                                                 
|Stockholders equity:                                                                                                                             |  |                |         |               |   |         | 
|Common stock, $0.10 par value per share:                                                                                                          |  |                |         |               |   |         | 
|40,000,000
shares authorized;18,991,713 shares issued (18,824,670 at June 30, 2008); 16,879,630 shares
 outstanding (16,732,399 at June 30, 2008) |  |                | 1,899   |               |   | 1,882   | 
|Additional paid-in capital                                                                                                                        |  |                | 155,362 |               |   | 152,663 | 
|Retained earnings                                                                                                                                 |  |                | 13,875  |               |   | 32,514  | 
|Accumulated other comprehensive income (loss):                                                                                                    |  |                |         |               |   |         | 
|Currency translation effects                                                                                                                      |  |                | (1,053  | )             |   | 1,277   | 
|                                                                                                                                                  |  |                |         |               |   |         | 
|                                                                                                                                                  |  |                | 170,083 |               |   | 188,336 | 
|Less treasury stock, at cost, 2,112,083 shares
(2,092,271 at June 30,
 2008                                                                       |  |                | 25,552  |               |   | 25,390  | 
|                                                                                                                                                  |  |                |         |               |   |         | 
|Total stockholders equity                                                                                                                        |  |                | 144,531 |               |   | 162,946 | 
|                                                                                                                                                  |  |                |         |               |   |         | 
|Total liabilities and stockholders equity                                                                                                        |  | $              | 176,313 |               | $ | 190,008 | 
|                                                                                                                                                  |  |                |         |               |   |         | 

See accompanying notes to condensed consolidated
financial statements.

4

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CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Thousands of dollars)

|                                                                                                   |  |                             |         |      |   |         |  
|-------------------------------------------------------------------------------------------------- |  | --------------------------- | ------- | ---- | - | ------- | -
|                                                                                                   |  | Nine
Months Ended March 31, |        
|                                                                                                   |  |                             |        
|                                                                                                   |  | 2009                        |         | 2008 |  
|                                                                                                   |  |                             |         |      |  
|Cash provided by operating activities:                                                             |  |                             |         |      |   |         |  
|Net earnings (loss)                                                                                |  | $                           | (18,639 | )    | $ | 186     |  
|                                                                                                   |  |                             |         |      |   |         |  
|Adjustments to reconcile net earnings (loss) to cash
provided by (used
 for) operating activities: |  |                             |         |      |   |         |  
|Depreciation and amortization                                                                      |  |                             | 6,157   |      |   | 5,378   |  
|Deferred income taxes                                                                              |  |                             | (7,807  | )    |   | (669    | )
|Impairment of marketable securities                                                                |  |                             | 309     |      |   | 291     |  
|Loss on disposal and impairment of intangible
assets                                               |  |                             | 2,361   |      |   |        |  
|Compensation cost related to share-based payments
arrangements                                     |  |                             | 2,324   |      |   | 1,989   |  
|Excess tax benefits from share-based payment
arrangements                                          |  |                             | (9      | )    |   | (40     | )
|Minority interest                                                                                  |  |                             | 751     |      |   | 1,267   |  
|Provision for doubtful accounts and notes
receivable                                               |  |                             | 1,016   |      |   | 1,519   |  
|Other, net                                                                                         |  |                             | (390    | )    |   | (916    | )
|Changes in operating accounts:                                                                     |  |                             |         |      |   |         |  
|Receivables                                                                                        |  |                             | 10,351  |      |   | 5,907   |  
|Inventories                                                                                        |  |                             | (1,717  | )    |   | 4,582   |  
|Prepaid expenses and other current assets                                                          |  |                             | (129    | )    |   | (117    | )
|Accounts payable, accrued expenses, and taxes
payable                                              |  |                             | 5,212   |      |   | (9,436  | )
|                                                                                                   |  |                             |         |      |   |         |  
|Net cash provided (used for) by operating
activities                                               |  |                             | (210    | )    |   | 9,941   |  
|                                                                                                   |  |                             |         |      |   |         |  
|Cash provided by investing activities:                                                             |  |                             |         |      |   |         |  
|Additions to property, plant, and
equipment                                                        |  |                             | (4,251  | )    |   | (5,683  | )
|Issuance of note receivable                                                                        |  |                             |        |      |   | (1,500  | )
|Investments and acqusitions, excluding cash
acquired                                               |  |                             |        |      |   | (4,138  | )
|Purchase of marketable securities                                                                  |  |                             | (8,174  | )    |   | (4,963  | )
|Additions to intangibles and other assets                                                          |  |                             | (840    | )    |   | (622    | )
|Proceeds from the maturity and sale of marketable
securities                                       |  |                             | 24,862  |      |   | 30,938  |  
|                                                                                                   |  |                             |         |      |   |         |  
|Net cash provided by investing activities                                                          |  |                             | 11,597  |      |   | 14,032  |  
|                                                                                                   |  |                             |         |      |   |         |  
|Cash used for financing activities:                                                                |  |                             |         |      |   |         |  
|Employee stock purchase                                                                            |  |                             | 207     |      |   | 267     |  
|Repurchase of common stock                                                                         |  |                             |        |      |   | (20,049 | )
|Dividend payment to minority interest                                                              |  |                             | (1,301  | )    |   | (751    | )
|Exercise of employee stock options                                                                 |  |                             | 185     |      |   | 487     |  
|Vesting of restricted stock and related tax
benefits                                               |  |                             | (162    | )    |   | (88     | )
|Excess tax benefits from share-based payment
arangements                                           |  |                             | 9       |      |   | 40      |  
|                                                                                                   |  |                             |         |      |   |         |  
|Net cash used for financing activities                                                             |  |                             | (1,062  | )    |   | (20,094 | )
|                                                                                                   |  |                             |         |      |   |         |  
|Effect of exchange rate changes on cash and cash
equivalents                                       |  |                             | (1,020  | )    |   | 754     |  
|                                                                                                   |  |                             |         |      |   |         |  
|Net increase in cash and cash equivalents                                                          |  |                             | 9,305   |      |   | 4,633   |  
|Cash and cash equivalents, beginning of period                                                     |  |                             | 26,421  |      |   | 17,826  |  
|                                                                                                   |  |                             |         |      |   |         |  
|Cash and cash equivalents, end of period                                                           |  | $                           | 35,726  |      | $ | 22,459  |  
|                                                                                                   |  |                             |         |      |   |         |  

Supplemental Cash Flow Information

Net income tax
payments amounted to $1,150 and $2,101 for the nine months ended March 31, 2009
and 2008, respectively.

See accompanying notes to condensed consolidated
financial statements.

5

---



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Dollars in thousands, except for per share
amounts)

Note 1: Principles of Consolidation and
Presentation

Zygo
Corporation is a worldwide supplier of optical metrology instruments, precision
optics, and electro-optical design and manufacturing services, serving
customers in the semiconductor capital equipment and industrial markets. The
accompanying condensed consolidated financial statements include the accounts
of Zygo Corporation and its subsidiaries (ZYGO, we, us, our or the
Company). The Company follows accounting principles generally accepted in the
United States of America. ZYGOs reporting currency is the U.S. dollar. The
functional currency of the majority of our foreign subsidiaries is their local
currency and, as such, amounts included in the consolidated statements of
operations are translated at the weighted-average exchange rates for the
period. Assets and liabilities are translated at period-end exchange rates and
resulting foreign exchange translation adjustments are recorded in the
consolidated balance sheets as a component of accumulated other comprehensive
income (loss). All transactions and accounts with the subsidiaries have been
eliminated from the condensed consolidated financial statements. The results of
operations for the three and nine months ended March 31, 2009 are not
necessarily indicative of the results to be expected for the full fiscal year.

The Condensed
Consolidated Balance Sheet at March 31, 2009, the Condensed Consolidated
Statements of Operations for the three and nine months ended March 31, 2009 and
2008, and the Condensed Consolidated Statements of Cash Flows for the nine
months ended March 31, 2009 and 2008 are unaudited but, in managements
opinion, include all adjustments, consisting only of normal recurring accruals,
necessary for a fair presentation of the results of the interim periods. The
accompanying condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes included in
our Annual Report on Form 10-K, as amended by Form 10-K/A, for the year ended
June 30, 2008, including items incorporated by reference therein.

Revenue Recognition

ZYGO
recognizes revenue based on guidance provided in SEC Staff Accounting Bulletin
(SAB) No. 104, Revenue Recognition, and in accordance with Emerging Issues
Task Force (EITF) Issue No. 00-21, Revenue Arrangements with Multiple
Deliverables. ZYGO recognizes revenue when persuasive evidence of an
arrangement exists, delivery has occurred or services have been rendered,
ZYGOs price is fixed or determinable, and collectability is reasonably
assured. ZYGO recognizes revenue on its standard products when title passes to
the customer upon shipment. While ZYGOs standard products generally require
installation, the installation is considered a perfunctory performance
obligation. The standard products do not have customer acceptance criteria.
Generally, software is a component of ZYGOs standard product and, as such, is
not separately recognized as revenue. Standalone software products are
recognized as revenue when they are shipped. ZYGO has standard rights of return
which relate to defective products under warranty that ZYGO accounts for as a
warranty provision under SFAS No. 5, Accounting for Contingencies.

ZYGO does not
have any price protection agreements or other post shipment obligations. For
custom equipment where customer acceptance is part of the sales agreement,
revenue is recognized when the customer has accepted the product. In cases
where custom equipment does not have customer acceptance as part of the sales
agreement, ZYGO recognizes revenue upon shipment, as long as the system meets
the specifications as agreed upon with the customer. Certain transactions have
multiple deliverables, with the deliverables clearly defined. To the extent
that the secondary deliverables are other than perfunctory, ZYGO recognizes the
revenue on each deliverable, if separable, or on the completion of all
deliverables, if not separable. Revenue generated from development contracts are
recorded on a cost-plus basis in the period services are rendered.

Certain
customer transactions include payment terms whereby ZYGO receives a partial
payment of the total order amount prior to the related sale being recognized in
its financial statements. These advance payments are included in accrued
progress payments in the consolidated balance sheet. Generally, these progress
payments relate to orders for custom equipment that require a lengthy build
cycle and, in some cases, acceptance by the customer. ZYGO may negotiate
payment terms with these customers on these particular orders and secure
certain payments prior to or on shipment of the equipment. These payments
remain in accrued progress payments until ZYGOs applicable revenue recognition
criteria have been met.

6

---



Note 2: Earnings Per Share

Basic and
diluted earnings per share are calculated in accordance with Statement of
Financial Accounting Standards (SFAS) No. 128, Earnings Per Share. For the
three and nine months ended March 31, 2009, 2,486,612 and 2,403,324,
respectively, (for the three and nine months ended March 31, 2008, 2,713,509
and 1,153,480, respectively) of the Companys outstanding stock options and
restricted stock awards (Stock Grants) were excluded from the calculation of
diluted earnings per share because they were antidilutive.

The following
table sets forth the reconciliation of basic weighted average shares
outstanding and diluted weighted average shares outstanding for the periods
presented:

|                                                        |  |                              |            |                             |  |            |  |      |            |  |  |            | 
|------------------------------------------------------- |  | ---------------------------- | ---------- | --------------------------- |  | ---------- |  | ---- | ---------- |  |  | ---------- | 
|                                                        |  | Three Months Ended March 31, |            | Nine Months Ended March 31, | 
|                                                        |  |                              |            |                             | 
|                                                        |  | 2009                         |            | 2008                        |  | 2009       |  | 2008 |           
|                                                        |  |                              |            |                             |  |            |  |      |           
|Basic weighted average shares outstanding               |  |                              | 16,872,396 |                             |  | 16,751,243 |  |      | 16,826,303 |  |  | 17,481,825 | 
|Dilutive effect of stock options and
 restricted shares |  |                              |           |                             |  |           |  |      |           |  |  | 337,385    | 
|                                                        |  |                              |            |                             |  |            |  |      |            |  |  |            | 
|Diluted weighted average shares outstanding             |  |                              | 16,872,396 |                             |  | 16,751,243 |  |      | 16,826,303 |  |  | 17,819,210 | 
|                                                        |  |                              |            |                             |  |            |  |      |            |  |  |            | 

Note 3: Recent Accounting Pronouncements

In April 2009,
the FASB issued FSP FAS 157-4, Determining Fair Value When Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly (FSP 157-4). FSP 157-4 provides
guidance on how to determine the fair value of assets and liabilities when the volume
and level of activity for the asset/liability has significantly decreased. FSP
157-4 also provides guidance on identifying circumstances that indicate a
transaction is not orderly. In addition, FSP 157-4 requires disclosure in
interim and annual periods of the inputs and valuation techniques used to
measure fair value and a discussion of changes in valuation techniques. FSP
157-4 is effective for us beginning in the fourth quarter of fiscal year 2009.
The adoption of FSP 157-4 is not expected to have a significant impact on our
consolidated financial statements.

In April 2009,
the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of
Other-Than-Temporary Impairment (FSP 115-2/124-2). FSP 115-2/124-2 amends the
requirements for the recognition and measurement of other-than-temporary
impairments for debt securities by modifying the pre-existing intent and
ability indicator. Under FSP 115-2/124-2, an other-than-temporary impairment
is triggered when there is an intent to sell the security, it is more likely
than not that the security will be required to be sold before recovery, or the
security is not expected to recover the entire amortized cost basis of the
security. Additionally, FSP 115-2/124-2 changes the presentation of an other-than-temporary
impairment in the income statement for those impairments involving credit
losses. The credit loss component will be recognized in earnings and the
remainder of the impairment will be recorded in other comprehensive income. FSP
115-2/124-2 is effective for us beginning in the fourth quarter of fiscal year
2009. Upon implementation at the beginning of the fourth quarter of 2009, FSP
115-2/124-2 is not expected to have a significant impact on our consolidated
financial statements.

In April 2009,
the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosure about Fair
Value of Financial Instruments (FSP 107-1/APB 28-1). FSP 107-1/APB 28-1
requires interim disclosures regarding the fair values of financial instruments
that are within the scope of FAS 107, Disclosures about the Fair Value of
Financial Instruments. Additionally, FSP 107-1/APB 28-1 requires disclosure of
the methods and significant assumptions used to estimate the fair value of
financial instruments on an interim basis as well as changes of the methods and
significant assumptions from prior periods. FSP 107-1/APB 28-1 does not change
the accounting treatment for these financial instruments and is effective for
us beginning in the fourth quarter of fiscal year 2009.

7

---



On July 1,
2008 we adopted the provisions of Statement of Financial Accounting Standards
No. 157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value,
establishes a framework for measuring fair value in accordance with generally
accepted accounting principles, and expands disclosures about fair value
measurements. The adoption of the provisions of SFAS 157 is not expected to
have a material effect on us. In February 2008, the Financial Accounting
Standards Board (FASB) issued FASB Staff Position FAS 157-1, Application of
SFAS No. 157 to SFAS No. 13 and Its Related Interpretative Accounting
Pronouncements that Address Leasing Transactions (FSP No. 157-1) and FASB
Staff Position FAS 157-2, Effective Date of SFAS No. 157 (FSP No. 157-2). FSP
No. 157-1 excludes SFAS No. 13, Accounting for Leases, and its related
interpretive accounting pronouncements that address leasing transactions, with
the exception of fair value measurements of assets and liabilities recorded as
a result of a lease transaction but measured pursuant to other pronouncements
within the scope of SFAS No. 157. FSP No. 157-2 delays the effective date of
SFAS No. 157 for all non-financial assets and non-financial liabilities, except
those that are recognized or disclosed at fair value in the financial
statements on a recurring basis (at least annually). FSP No. 157-1 and FSP No.
157-2 became effective for us upon adoption of SFAS No. 157. In October 2008,
the FASB issued FASB Staff Position No. 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset is Not Active (FSP No. 157-3).
FSP No. 157-3 clarifies the application of SFAS No. 157 in cases where a market
is not active. The Company has considered FSP No. 157-3 in its determination of
estimated fair values as of March 31, 2009, and the impact was not material.

On July 1,
2008 we adopted the provisions of SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value, with unrealized gains
and losses related to these financial instruments reported in earnings at each
subsequent reporting date. We have chosen not to measure any other financial
instrument or other items at fair value that are not currently required to be
measured at fair value.

In April 2008,
the FASB issued Staff Position (FSP) No. FAS 142-3, Determination of the
Useful Life of Intangible Assets.The
FSP amends the factors that should be considered in developing renewal or
extension assumptions used to determine the useful life of a recognized
intangible asset under SFAS 142, Goodwill and Other Intangible Assets. The
FSP is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal years. We are
in the process of evaluating the impact FSP 142-3 may have on our consolidated
financial statements.

In March 2008,
the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133 (SFAS 161). SFAS
161 requires disclosures of how and why an entity uses derivative instruments,
how derivative instruments and related hedged items are accounted for and how
derivative instruments and related hedged items affect an entitys financial
position, financial performance, and cash flows. SFAS 161 is effective for us
in the third quarter of fiscal 2009. The adoption of SFAS 161 did not have a
material effect on our consolidated financial statements.

In December
2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated
Financial Statements, an amendment of ARB No. 51 (SFAS 160). SFAS 160 requires that the ownership
interests in subsidiaries held by parties other than the parent be clearly
identified, labeled, and presented in the consolidated balance sheets within
equity, but separate from the parents equity. Furthermore, the amount of consolidated
net income attributable to the parent and to the non-controlling interest must
be clearly identified and presented on the face of the consolidated statement
of operations. The provisions of SFAS 160 are effective for our fiscal year
beginning July 1, 2009. We are in the process of evaluating the impact SFAS 160
may have on our consolidated financial statements.

In December
2007, the FASB issued SFAS No. 141R, Business Combinations (SFAS 141R). SFAS 141R offers specific guidance on
how
the acquirer recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, any non-controlling
interest in the acquirer, and goodwill acquired or any bargain purchase gains.
The provisions of SFAS 141R are effective for our fiscal year beginning July 1,
2009. We are in the process of evaluating the impact SFAS 141R may have on our
consolidated financial statements.

8

---



Note 4. Fair Value Measurements

The Company
adopted SFAS No. 157 and SFAS No. 159 effective July 1, 2008 and did not elect
the fair value option for its financial instruments with the exception of the
application of the statement to non-recurring non-financial assets and
non-financial liabilities. Non-recurring non-financial assets and non-financial
liabilities for which the Company has not applied the provisions of SFAS No.
157 include those initially measured at fair value in a business combination.
SFAS No. 157 defines fair value, establishes a framework for measuring fair
value and expands the related disclosure requirements. The statement indicates,
among other things, that a fair value measurement assumes that the transaction
to sell an asset or transfer a liability occurs in the principal market for the
asset or liability or, in the absence of a principal market, the most
advantageous market for the asset or liability. SFAS No. 157 defines fair value
based upon an exit price model.

SFAS No. 157
establishes a valuation hierarchy for disclosure of the inputs to valuation
used to measure fair value. This hierarchy prioritizes the inputs into three
broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets
for identical assets or liabilities. Level 2 inputs are quoted prices for
similar assets and liabilities in active markets or inputs that are observable
for the asset or liability, either directly or indirectly through market
corroboration, for substantially the full term of the financial instrument.
Level 3 inputs are unobservable inputs based on the managements assumptions
used to measure assets and liabilities at fair value. A financial asset or
liabilitys classification within the hierarchy is determined based on the
lowest level input that is significant to the fair value measurement.

The following
table provides the assets and liabilities carried at fair value measured on a
recurring basis as of March 31, 2009:

|                              |  |                                     |     |                                              |                                           |                                                   |  |                                              |    |  |   |   | 
|----------------------------- |  | ----------------------------------- | --- | -------------------------------------------- | ----------------------------------------- | ------------------------------------------------- |  | -------------------------------------------- | -- |  | - | - | 
|                              |  |                                     |     |                                              | Fair value measurements at March 31, 2009 |                                                  
|                              |  |                                     |     |                                              |                                           |                                                  
|                              |  | Total carrying
 value at
 31-Mar-09 |     | Quoted prices
 in active
 markets
 (Level 1) |                                           | Significant
 other
 observable
 inputs
 (Level 2) |  | Significant
 unobservable
 inputs
 (Level 3) |   
|                              |  |                                     |     |                                              |                                           |                                                   |  |                                              |   
|Trading securities            |  | $                                   | 365 |                                              | $                                         | 365                                               |  | $                                            |   |  | $ |  | 
|Available-for-sale securities |  |                                     |    |                                              |                                           |                                                  |  |                                              |   |  |   |  | 
|Foreign currency hedge        |  |                                     | 43  |                                              |                                           |                                                  |  |                                              | 43 |  |   |  | 
|                              |  |                                     |     |                                              |                                           |                                                   |  |                                              |    |  |   |   | 
|Total                         |  | $                                   | 408 |                                              | $                                         | 365                                               |  | $                                            | 43 |  | $ |  | 
|                              |  |                                     |     |                                              |                                           |                                                   |  |                                              |    |  |   |   | 

When
available, the Company uses quoted market prices to determine the fair value of
its marketable securities included in Level 1. When quoted market prices are
unobservable, the Company uses quotes from independent pricing vendors based on
recent trading activity and other relevant information. For the period from
July 1, 2008 to March 31, 2009, the Level 3 asset, an auction rate security,
was reduced from $270 to $0 as the result of an other than temporary
impairment. There were no other activities in Level 3 fair value measurements
during the period.

The carrying
value of other financial instruments, including cash, accounts receivable,
accounts payable, and accrued liabilities approximate fair value due to their
short maturities. The remainder of our marketable securities at March 31, 2009
are accounted for as held-to-maturity investments and are recorded at amortized
cost of $6,975.

Note 5: Acquisition

On February
28, 2008, we acquired certain assets of Solvision Inc. (Solvision), a
Canadian-based company, including the shares of its Singapore subsidiary, for
$4,138 in cash (net of cash received). With this acquisition, we entered the
market for in-line inspection of Flip Chip Substrates and Packaged Integrated
Circuits. The Consolidated Financial Statements included the results of
operations of Solvision from the date of acquisition. Solvision is included in
the Metrology Solutions segment.

Previously, in
October 2007, we loaned $1,500 to Solvision. In December 2007, based on
Solvisions financial difficulty at the time, we recorded a reserve against the
full value of the note receivable of $1,500. Based on the preliminary
valuation, $941 of the note receivable was recovered as of June 30, 2008 as part of additional purchase
consideration. In the first quarter of fiscal 2009, the valuation was adjusted
and resulted in a loss of $266 on the portion of the note receivable previously
recovered. In the second quarter of fiscal 2009, the purchase price allocation
was completed and based on the final valuation a further loss of $658 was taken
against the portion of the note receivable previously recovered. In the third
quarter of fiscal 2009, net intangible assets of $2,149 related to the
Solvision acquisition were written off as they were determined to be impaired.

9

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Note 6: Share-Based Payments

We recorded
share-based compensation expense for the three months ended March 31, 2009 and
2008 of $672 and $687, respectively, with a related tax benefit of $242 and
$247, respectively. Share-based compensation expense for the nine months ended
March 31, 2009 and 2008 was $2,324 and $1,989, respectively, with a related tax
benefit of $836 and $716, respectively.

Stock Options

We utilized
the Black-Scholes valuation method to determine the weighted average fair value
of the stock option grants for both fiscal 2009 and 2008 stock option
valuations. The key assumptions for this valuation method include the expected
term of the option, stock price volatility, risk-free interest rate, dividend
yield, exercise price, and forfeiture rate. Many of these assumptions are
judgmental and highly sensitive in the determination of compensation expense.
Under the assumptions indicated below, the weighted-average fair value of stock
option grants for the three months ended March 31, 2008 were $4.64. During the
three months ended March 31, 2009, there were no stock option grants. The
weighted-average fair value of stock option grants for the nine months ended
March 31, 2009 and 2008 was $4.43 and $4.99, respectively. The table below
indicates the key assumptions used in the option valuation calculations for
options granted in the periods presented and a discussion of our methodology
for developing each of the assumptions used in the valuation model:

|                        |  |                              |   |                             |  |           |   |      |           |   |  |           |  
|----------------------- |  | ---------------------------- | - | --------------------------- |  | --------- | - | ---- | --------- | - |  | --------- | -
|                        |  | Three Months Ended March 31, |   | Nine Months Ended March 31, | 
|                        |  |                              |   |                             | 
|                        |  | 2009                         |   | 2008                        |  | 2009      |   | 2008 |          
|                        |  |                              |   |                             |  |           |   |      |          
|Term                    |  |                              |  |                             |  | 4.0 Years |   |      | 4.6 Years |   |  | 4.0 Years |  
|Volatility              |  |                              |  |                             |  | 45.7      | % |      | 45.5      | % |  | 45.7      | %
|Dividend yield          |  |                              |  |                             |  | 0.0       | % |      | 0.0       | % |  | 0.0       | %
|Risk-free interest rate |  |                              |  |                             |  | 2.5       | % |      | 2.9       | % |  | 2.5%-4.2  | %
|Forfeiture rate         |  |                              |  |                             |  | 11.0      | % |      | 9.5       | % |  | 11.0      | %

Term  This is generally the period of time
over which the options granted are expected to remain outstanding. Options
granted have a maximum term of ten years. An increase in the expected term will
increase compensation expense.

Volatility  This is a measure of the amount
by which a price has fluctuated or is expected to fluctuate. Volatilities are
based on implied volatilities from traded options of ZYGOs shares, historical
volatility of ZYGOs shares, and other factors, such as expected changes in
volatility arising from planned changes in ZYGOs business operations. An
increase in the expected volatility will increase compensation expense.

Dividend Yield  We did not make any dividend
payments during the last five fiscal years and we have no plans to pay
dividends in the foreseeable future. An increase in the dividend yield will
decrease compensation expense.

Risk-Free Interest Rate  This is the U.S.
Treasury rate for the week of the grant having a term equal to the expected
term of the option. An increase in the risk-free interest rate will increase
compensation expense.

Forfeiture Rate  This is the estimated
percentage of options granted that are expected to be forfeited or canceled
before becoming fully vested. An increase in the forfeiture rate will decrease
compensation expense.

Restricted Stock

Our
share-based compensation expense also includes the effects of the issuance of
restricted stock and restricted stock units. The compensation expense related
to restricted stock awards is determined based on the market price of our stock
at the date of grant applied to the total number of shares that are anticipated
to fully vest, which is then amortized over the expected term. During the three
months ended March 31, 2009, there were no grants of restricted stock. During
the three months ended March 31, 2008, an aggregate of 116,000 shares of
restricted stock units were issued at a weighted average grant price of $11.10.
During the nine months ended March 31, 2009 and 2008, there were an aggregate
of 156,700 and 317,550 shares of restricted stock units issued at a weighted
average grant price $10.68 and $11.74, respectively. Generally, the restrictions
on the restricted stock and restricted stock units granted to employees lapse
at a rate of 50% after three years and the remaining 50% after the fourth year.

10

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Note 7: Comprehensive Loss

Total
comprehensive income (loss) was as follows:

|                                                     |  |                              |         |                             |   |      |   |      |         |   |   |       | 
|---------------------------------------------------- |  | ---------------------------- | ------- | --------------------------- | - | ---- | - | ---- | ------- | - | - | ----- | 
|                                                     |  | Three Months Ended March 31, |         | Nine Months Ended March 31, |  
|                                                     |  |                              |         |                             |  
|                                                     |  | 2009                         |         | 2008                        |   | 2009 |   | 2008 |        
|                                                     |  |                              |         |                             |   |      |   |      |        
|Net earnings (loss)                                  |  | $                            | (15,101 | )                           | $ | (49  | ) | $    | (18,639 | ) | $ | 186   | 
|Unrealized gain on marketable securities, net of
tax |  |                              |        |                             |   |     |   |      | 39      |   |   |      | 
|Foreign currency translation effect                  |  |                              | (850    | )                           |   | 722  |   |      | (2,369  | ) |   | 1,243 | 
|                                                     |  |                              |         |                             |   |      |   |      |         |   |   |       | 
|Comprehensive income (loss)                          |  | $                            | (15,951 | )                           | $ | 673  |   | $    | (20,969 | ) | $ | 1,429 | 
|                                                     |  |                              |         |                             |   |      |   |      |         |   |   |       | 

Note 8: Inventories

Inventories
are stated at the lower of cost (determined on a first-in, first-out basis) or
market. At March 31, 2009 and June 30, 2008, inventories were as follows:

|                                      |  |                 |        |                |   |        | 
|------------------------------------- |  | --------------- | ------ | -------------- | - | ------ | 
|                                      |  | March 31,
 2009 |        | June 30,
 2008 |  
|                                      |  |                 |        |                |  
|Raw materials and
 manufactured parts |  | $               | 19,071 |                | $ | 17,049 | 
|Work in process                       |  |                 | 15,357 |                |   | 14,763 | 
|Finished goods                        |  |                 | 4,062  |                |   | 5,730  | 
|                                      |  |                 |        |                |   |        | 
|                                      |  | $               | 38,490 |                | $ | 37,542 | 
|                                      |  |                 |        |                |   |        | 

Note 9: Property, Plant, and Equipment

Property,
plant, and equipment are stated at cost. Maintenance and repairs are charged to
expense as incurred. Management evaluates, on an ongoing basis, the carrying
value of our property, plant, and equipment and makes adjustments when
impairments are identified. Depreciation is based on the estimated useful lives
of the various classes of assets and is computed using the straight-line
method. At March 31, 2009 and June 30, 2008, property, plant, and equipment
were as follows:

|                                            |  |                 |         |                |   |                                 |   |       |  | 
|------------------------------------------- |  | --------------- | ------- | -------------- | - | ------------------------------- | - | ----- |  | 
|                                            |  | March 31,
 2009 |         | June 30,
 2008 |   | Estimated
 Useful Life
 (Years) |  
|                                            |  |                 |         |                |   |                                 |  
|Land                                        |  | $               | 615     |                | $ | 615                             |   |      | 
|Building and improvements                   |  |                 | 17,381  |                |   | 17,270                          |   | 15-40 | 
|Machinery, equipment, and
 office furniture |  |                 | 62,652  |                |   | 62,940                          |   | 3-8   | 
|Leasehold improvements                      |  |                 | 910     |                |   | 903                             |   | 1-5   | 
|Construction in progress                    |  |                 | 1,945   |                |   | 2,050                           |   |      | 
|                                            |  |                 |         |                |   |                                 |   |       |  | 
|                                            |  |                 | 83,503  |                |   | 83,778                          |   |       |  | 
|Accumulated depreciation                    |  |                 | (48,779 | )              |   | (47,407                         | ) |       |  | 
|                                            |  |                 |         |                |   |                                 |   |       |  | 
|                                            |  | $               | 34,724  |                | $ | 36,371                          |   |       |  | 
|                                            |  |                 |         |                |   |                                 |   |       |  | 

Depreciation
expense was $1,835 and $1,668 for the three months ended March 31, 2009 and 2008,
respectively, and $5,566 and $5,154 for the nine months ended March 31, 2009
and 2008, respectively.

11

---



Note 10: Intangible Assets

Intangible
assets include patents, trademarks, customer relationships and technology, and
a covenant not-to-compete. The cost of patents, trademarks, customer
relationships and technology is amortized on a straight-line basis over
estimated useful lives ranging from 5-17 years. We entered into a non-compete
agreement with a former officer and current director of the company effective
February 28, 2009. The agreement calls for payments over a four year period of
declining amounts totaling $878, which includes $27 of imputed interest. As of
March 31, 2009, current liabilities include $205 and long-term liabilities
include $313 related to the payments under this agreement. We are amortizing
the value of the non-compete over four years on a declining balance method.

Intangible
assets, at cost, at March 31, 2009 and June 30, 2008 were as follows:

|                                       |  |                 |        |                |   |        |  
|-------------------------------------- |  | --------------- | ------ | -------------- | - | ------ | -
|                                       |  | March 31,
 2009 |        | June 30,
 2008 |  
|                                       |  |                 |        |                |  
|Patents and
 trademarks                |  | $               | 8,481  |                | $ | 8,106  |  
|Customer
 relationships and technology |  |                 |       |                |   | 3,311  |  
|Covenant
 not-to-compete               |  |                 | 851    |                |   |       |  
|                                       |  |                 |        |                |   |        |  
|                                       |  |                 | 9,332  |                |   | 11,417 |  
|Accumulated
 amortization              |  |                 | (2,006 | )              |   | (1,895 | )
|                                       |  |                 |        |                |   |        |  
|Total                                  |  | $               | 7,326  |                | $ | 9,522  |  
|                                       |  |                 |        |                |   |        |  

Intangible
amortization expense was $199 and $166 for the three months ended March 31,
2009 and 2008, respectively, and $574 and $335 for the nine months ended March
31, 2009 and 2008, respectively. This amortization expense related to certain
intangible assets is included in Cost of goods sold in the Condensed
Consolidated Statements of Operations. During the quarter ended March 31, 2009,
$2,149 of customer relationships and technology intangible assets related to
the Solvision asset acquisition were written off. The write-off of customer and
technology related intangible assets is due to the downturn in orders to such
an extent that the inherent value of the intangible asset is no longer
realizable.

Intangible
amortization is expected to be approximately $738, $659, $577, $492, and $420
annually in fiscal 2010-2014, respectively.

Note 11: Warranty

A limited
warranty is provided on our products for periods ranging from 3 to 24 months
and allowances for estimated warranty costs are recorded during the period of
sale. The determination of such allowances requires management to make
estimates of product return rates and expected costs to repair or replace
products under warranty. If actual return rates or repair and replacement
costs, or both, differ significantly from managements estimates, adjustments
to the expense will be required.

The following
is a reconciliation of the accrued warranty liability, which is included in the
Other accrued liabilities in the Condensed Consolidated Balance Sheets:

|                                                                      |  |                              |       |      |   |        |  
|--------------------------------------------------------------------- |  | ---------------------------- | ----- | ---- | - | ------ | -
|                                                                      |  | Nine
 Months Ended March 31, |      
|                                                                      |  |                              |      
|                                                                      |  | 2009                         |       | 2008 |  
|                                                                      |  |                              |       |      |  
|Beginning
 balance                                                    |  | $                            | 1,263 |      | $ | 1,552  |  
|Reductions for payments made                                          |  |                              | (749  | )    |   | (1,268 | )
|Changes in accruals related to pre-existing
 warranties               |  |                              | (122  | )    |   | (158   | )
|Changes in accruals related to warranties
 made in the current period |  |                              | 892   |      |   | 1,091  |  
|                                                                      |  |                              |       |      |   |        |  
|Ending
 balance                                                       |  | $                            | 1,284 |      | $ | 1,217  |  
|                                                                      |  |                              |       |      |   |        |  

12

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Note 12: Segment Information

ZYGOs
Metrology Solutions division (segment) consists of OEM and in-line products
primarily for the semiconductor and industrial markets. The Optical Systems
division (segment) consists of components and opto-mechanical assemblies
primarily for the medical, defense, and aerospace industries, which are
included in the industrial market. For the three and nine months ended March
31, 2009 and 2008, segment sales and gross profit are as follows:

|                             |  |                               |        |                              |   |        |   |      |        |   |   |         |  
|---------------------------- |  | ----------------------------- | ------ | ---------------------------- | - | ------ | - | ---- | ------ | - | - | ------- | -
|                             |  | Three
 Months Ended March 31, |        | Nine
 Months Ended March 31, |  
|                             |  |                               |        |                              |  
|                             |  | 2009                          |        | 2008                         |   | 2009   |   | 2008 |       
|                             |  |                               |        |                              |   |        |   |      |       
|Metrology Solutions          |  |                               |        |                              |   |        |   |      |        |   |   |         |  
|Sales                        |  | $                             | 13,933 |                              | $ | 24,337 |   | $    | 66,086 |   | $ | 73,491  |  
|Gross profit                 |  | $                             | 2,493  |                              | $ | 11,285 |   | $    | 27,034 |   | $ | 33,508  |  
|Gross profit as a % of sales |  |                               | 18     | %                            |   | 46     | % |      | 41     | % |   | 46      | %
|Optical Systems              |  |                               |        |                              |   |        |   |      |        |   |   |         |  
|Sales                        |  | $                             | 6,098  |                              | $ | 14,119 |   | $    | 25,787 |   | $ | 37,048  |  
|Gross profit                 |  | $                             | 663    |                              | $ | 4,264  |   | $    | 5,189  |   | $ | 9,739   |  
|Gross profit as a % of sales |  |                               | 11     | %                            |   | 30     | % |      | 20     | % |   | 26      | %
|                             |  |                               |        |                              |   |        |   |      |        |   |   |         |  
|Total                        |  |                               |        |                              |   |        |   |      |        |   |   |         |  
|Sales                        |  | $                             | 20,031 |                              | $ | 38,456 |   | $    | 91,873 |   | $ | 110,539 |  
|Gross profit                 |  | $                             | 3,156  |                              | $ | 15,549 |   | $    | 32,223 |   | $ | 43,247  |  
|Gross profit as a % of sales |  |                               | 16     | %                            |   | 40     | % |      | 35     | % |   | 39      | %

Separate
financial information by segment for total assets, capital expenditures, and
depreciation and amortization is not evaluated by our chief operating
decision-maker. Substantially all of our operating expenses, assets, and
depreciation and amortization are U.S. based.

Sales by
geographic area were as follows:

|            |  |                               |        |                              |   |        |  |      |        |  |   |         | 
|----------- |  | ----------------------------- | ------ | ---------------------------- | - | ------ |  | ---- | ------ |  | - | ------- | 
|            |  | Three
 Months Ended March 31, |        | Nine
 Months Ended March 31, |  
|            |  |                               |        |                              |  
|            |  | 2009                          |        | 2008                         |   | 2009   |  | 2008 |       
|            |  |                               |        |                              |   |        |  |      |       
|Americas    |  | $                             | 10,276 |                              | $ | 20,083 |  | $    | 44,030 |  | $ | 53,345  | 
|Europe      |  |                               | 2,526  |                              |   | 4,129  |  |      | 11,209 |  |   | 15,331  | 
|Japan       |  |                               | 4,164  |                              |   | 10,529 |  |      | 21,853 |  |   | 31,090  | 
|Pacific Rim |  |                               | 3,065  |                              |   | 3,715  |  |      | 14,781 |  |   | 10,773  | 
|            |  |                               |        |                              |   |        |  |      |        |  |   |         | 
|Total       |  | $                             | 20,031 |                              | $ | 38,456 |  | $    | 91,873 |  | $ | 110,539 | 
|            |  |                               |        |                              |   |        |  |      |        |  |   |         | 

Note 13: Transactions with Stockholder

Sales to Canon
Inc., a stockholder, and Canon Sales Co., Inc., a distributor of certain of our
products in Japan and a subsidiary of Canon Inc.
(collectively referred to as Canon), amounted to $2,991 and $15,112 (15% and
16% of net sales, respectively) for the three
and nine months ended March 31, 2009, respectively, as compared with $8,302 and
$20,605 (22% and 19% of net sales,
respectively) for the three and nine months ended March 31, 2008. Selling
prices of products sold to Canon are based, generally, on
the terms customarily given to distributors. At March 31, 2009 and June 30,
2008, there were, in the aggregate, $166 and $3,032, respectively, of trade accounts receivable from Canon.

13

---



Note 14: Derivatives and Hedging Activities

In March 2008,
the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133 (SFAS 161). SFAS
161 requires entities to provide enhanced disclosure about how and why the
entity uses derivative instruments, how the instruments and related hedged
items are accounted for under SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities (SFAS 133), and how the instruments and
related hedged items affect the financial position, results of operations, and
cash flows of the entity. We adopted SFAS 161 during the quarter ended March
31, 2009.

We enter into
foreign currency forward contracts to reduce the impact of adverse fluctuations
on earnings associated with foreign currency exchange rate changes. We do not
enter into any derivative transactions for speculative purposes. These
contracts are not designated as cash flow, fair value, or net investment hedges
under SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended, and, therefore, are marked-to-market with changes in
fair value recorded in the Condensed Consolidated Statement of Operations.
These contracts are entered into for periods consistent with the expected currency
transaction exposures, generally three to six months. Any gains and losses on
the fair value of these contracts are expected to substantially offset
corresponding losses and gains on the underlying transactions.

As of March
31, 2009, we had five currency contracts outstanding involving our Japanese
operations with notional amounts aggregating $2,100. These foreign currency
hedges are not considered designated hedging instruments. For the three months
ended March 31, 2009 and 2008, we recognized net unrealized gains of $365 and
net unrealized losses of $381, respectively, from foreign currency forward
contracts. For the nine months ended March 31, 2009 and 2008, we recognized net
unrealized gains of $8 and net unrealized losses of $855, respectively, from
foreign currency forward contracts. These unrealized losses and unrealized
gains are substantially offset by foreign exchange gains and losses on
intercompany balances recorded by our subsidiary and are recorded in
Miscellaneous income (expense) on our Condensed Consolidated Statements of
Operations.

The following
table summarizes the fair value of derivative instruments as of March 31, 2009:

|                                                  |  |                            |    
|------------------------------------------------- |  | -------------------------- | ---
|Derivitives not designated
as hedging instruments |  | Balance
Sheet Location    
|                                                  |  |                           
|                                                  |  |                            |    
|Foreign
 exchange contracts                       |  | Prepaid expenses and other | $43

14

---



Note
15: Income Taxes

|                              |  |                              |       |                             |  |        |   |             |     |        |  |             |   |        |       |             |  |    |   |   |      |   |  |    |  
|----------------------------- |  | ---------------------------- | ----- | --------------------------- |  | ------ | - | ----------- | --- | ------ |  | ----------- | - | ------ | ----- | ----------- |  | -- | - | - | ---- | - |  | -- | -
|                              |  | Three Months ended March 31, |       | Nine Months ended March 31, | 
|                              |  |                              |       |                             | 
|                              |  | 2009                         |       | 2008                        |  | 2009   |   | 2008        |    
|                              |  |                              |       |                             |  |        |   |             |    
|                              |  | Amount                       |       | Tax
 Rate %                 |  | Amount |   | Tax
 Rate % |     | Amount |  | Tax
 Rate % |   | Amount |       | Tax
 Rate % | 
|                              |  |                              |       |                             |  |        |   |             |     |        |  |             |   |        |       |             | 
|                              |  |                              |       |                             |  |        |   |             |     |        |  |             |   |        |       |             |  |    |   |   |      |   |  |    |  
|Income tax
 (expense) benefit |  | $                            | 4,908 |                             |  | 25     | % | $           | (15 | )      |  | 11          | % | $      | 6,345 |             |  | 26 | % | $ | (642 | ) |  | 34 | %

We recorded a
valuation allowance of $1,634 for the three and nine months ended March 31,
2009 for net operating loss carryforwards and research and development credits
in Canada and Singapore based on our assessment of the likelihood that we would
not be able to realize the tax benefits in the foreseeable future.

We adopted the
provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, on July 1, 2007. As a result of this adoption, we recognized a
liability for unrecognized income tax benefits of $1,535, an increase in income
tax receivables of $616, and a charge of approximately $919 to the July 1, 2007
retained earnings balance. As of the adoption date, we had gross tax-affected
unrecognized tax benefits of $1,784, of which $1,168, if recognized, would
affect the effective tax rate. Due to our net operating loss carryforwards, we
have accrued no interest and penalties for the unrecognized tax benefits;
however, our accounting policy is to recognize interest related to unrecognized
tax benefits in interest expense. Penalties, if incurred, would be recognized
as a component of income tax expense. In the normal course of business, we
provide for uncertain tax positions and adjust our unrecognized tax benefits
accordingly. For the quarter ended March 31, 2009, we did not recognize an
additional liability for uncertain tax positions. The total liability for
uncertain tax liabilities was $1,872 at March 31, 2009 and June 30, 2008. We
are not aware of any tax positions that would create a significant adjustment
to the unrecognized tax benefits during the next twelve months.

We are subject
to U.S. federal income tax as well as income tax in multiple state and foreign
jurisdictions. We are no longer subject to U.S. federal income tax audit or tax
adjustments for years prior to June 30, 1997. We are no longer subject to state
and foreign income tax audit or tax adjustments for years prior to June 30,
2000 and June 30, 2003, respectively. We are currently under a federal income
tax audit.

Note 16: Commitments and Contingencies

From time to
time, we are subject to certain legal proceedings and claims that arise in the
normal course of our business. During the nine months ended March 31, 2009, we
recorded a reserve of $1.4 million for potential royalty claims. In the opinion
of management, any excess settlement of the royalty claims above the amount
recorded is not expected to have an adverse effect on our financial condition,
results of operation, or liquidity.

We are aware
of certain levels of contamination on our property which are below reportable
levels. In addition, we are aware of certain contamination on an adjacent
property that we formerly owned. The future effect of environmental matters,
including potential liabilities, is often difficult to estimate. Presently, we
are unable to determine or reasonably estimate the amount of costs, if any,
that we might incur or for which we may potentially be responsible. We will
record an environmental reserve when it is both probable that a liability has
been incurred and the amount of any liability can be reasonably estimated,
whether a claim has been asserted or unasserted.

15

---



Item 2. Managements Discussion and Analysis
of Financial Condition and Results of Operations

OVERVIEW

Zygo
Corporation is a worldwide supplier of optical metrology instruments, precision
optics, and electro-optical design and manufacturing services, serving
customers in the semiconductor capital equipment and industrial markets. We
conduct the majority of our manufacturing in our 153,500 square foot facility
in Middlefield, Connecticut and our 39,780 square foot facility in Tucson, Arizona.

On April 2,
2009, Electro Scientific Industries, Inc. (ESI) and ZYGO agreed to terminate
their previously executed merger agreement. Pursuant to the terms of the
settlement agreement, ZYGO agreed to pay ESI a break up fee of $5.4 million,
and an additional $1.2 million in the event that on or before November 2, 2009,
ZYGOs Board of directors approves an alternate transaction proposal for the
merger or sale of the company. A reevaluation of the proposed merger with ESI
by ZYGOs Board was necessitated by changes in conditions since the merger
agreement was executed on October 15, 2008, and led to the withdrawal by the
ZYGO Board of its recommendation in favor of the merger agreement.

Orders for the
three months ended in March 31, 2009 were $15.6 million, as compared with $39.1
million for the comparable prior year period. Orders for our companys
Metrology Solutions segment accounted for 44% of the orders received, with the
Optical Systems segment accounting for 56% of orders. The $25.8 million decline
in orders from the same period of the prior year occurred primarily in the
Metrology Solutions segment, which experienced reduced orders for instruments
of $9.9 million, display solutions of $8.3 million, lithography products of
$7.7 million, and vision systems of $1.0 million, slightly offset by an
increase in orders of $1.1 million in the semiconductor solutions business.
Within the Optics segment, orders increased by $2.3 million, primarily due to
an increase in orders of laser fusion optics of $2.7 million and contract
manufacturing of $1.0 million, partially offset by a decline in orders in
precision optics of $1.4 million. We also experienced a decrease of 48% in
sales for the three months ended March 31, 2009 as compared with the prior year
period, primarily as a result of the global economic downturn.

Demand for
certain of our products is impacted by various conditions affecting all our
markets. The downturn in the semiconductor market, in particular, affects all
of our Metrology Solutions segment product lines in varying degrees. The length
and severity of the current downturn in the semiconductor industry is difficult
to predict. Based on recent communications with our semiconductor customers and
revised external market forecasts, we believe that there will be continued
pressure on demand for several of our products at least through the end of
fiscal 2009.

In response to
the decline in sales and orders, we have taken and continue to take various
actions to mitigate the effects on our company of the downturn in the global
economy, including reductions in work force, salary adjustments, unpaid
furloughs, suspension of our matching 401-K program, and a reduction in
director fees. These actions are expected to save us approximately $9.6 million
on an annualized basis. We are also discussing partnership opportunities with
established semiconductor equipment manufacturers to combine the strength of
our core semiconductor technology with a partners strength in the system
automation, sales, and service of high volume manufacturing equipment. Pending
a successful conclusion of ongoing discussions with semiconductor equipment
manufacturers, we could achieve another $4.0 - $5.0 million of annualized cost
savings. There may be further restructuring actions and related charges.

16

---



CRITICAL ACCOUNTING POLICIES, SIGNIFICANT
JUDGMENTS, AND ESTIMATES

The discussion
and analysis of our financial condition and results of operations are based
upon our condensed consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United
States of America. The preparation of these condensed consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues, and expenses, and related disclosures
at the date of our condensed consolidated financial statements. On an on-going
basis, management evaluates its estimates and judgments, including those
related to bad debts, inventories, marketable securities, warranty obligations,
income taxes, long-lived assets, and share-based payments. Management bases its
estimates and judgments on historical experience and current market conditions
and on various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions or conditions. As discussed in Item 7, Managements
Discussion and Analysis of Financial Condition and Results of Operations of
the Companys Annual Report on Form 10-K for the fiscal year ended June 30,
2008, as amended by Form 10-K/A, management considers the Companys policies on
revenue recognition and allowance for doubtful accounts; inventory valuation;
other than temporary impairment of marketable securities; share-based
compensation; warranty costs; accounting for income taxes; valuation of long-lived
assets; and accruals for health insurance to be critical accounting policies
due to the estimates, assumptions, and application of judgment involved in
each.

As discussed
below and in Note 4 to the Condensed Consolidated Financial Statements, we
adopted the provisions of Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157)
(with the exception of the application of the statement to non-recurring
non-financial assets and non-financial liabilities). SFAS 157 defines fair
value, establishes a framework for measuring fair value in accordance with
generally accepted accounting principles, and expands disclosures about fair
value measurements. The provisions of SFAS 157 were effective for our fiscal
year beginning July 1, 2008. The adoption of the provisions of SFAS 157 did not
have a material effect on us.

As discussed
below and in Note 14 to the Condensed Consolidated Financial Statements, we
adopted the provisions of Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 161, Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133
(SFAS 161) during the third quarter of fiscal 2009. SFAS 161 requires
entities to provide enhanced disclosure about how and why the entity uses
derivative instruments, how the instruments and related hedged items are
accounted for under SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, and how the instruments and related hedged items affect
the financial position, results of operations, and cash flows of the entity.
The adoption of the provisions of SFAS 161 did not have a material effect on
us.

17

---



RESULTS OF OPERATIONS

Net Sales

|                           |                     |  |             |      |             |  |        |   |              |       |  |  |     |  
|-------------------------- | ------------------- |  | ----------- | ---- | ----------- |  | ------ | - | ------------ | ----- |  |  | --- | -
|                           |                     |  | Fiscal 2009 |      | Fiscal 2008 | 
|                           |                     |  |             |      |             | 
|(Dollars
 in millions)     |                     |  | Amount      |      | Net Sales % |  | Amount |   | Net Sales
 % |      
|                           |                     |  |             |      |             |  |        |   |              |      
|Quarter ended March 31     |                     |  |             |      |             |  |        |   |              |       |  |  |    
|                           | Metrology Solutions |  | $           | 13.9 |             |  | 70     | % | $            | 24.4  |  |  | 63  | %
|                           | Optical Systems     |  |             | 6.1  |             |  | 30     | % |              | 14.1  |  |  | 37  | %
|                           |                     |  |             |      |             |  |        |   |              |       |  |  |     |  
|                           | Total               |  | $           | 20.0 |             |  | 100    | % | $            | 38.5  |  |  | 100 | %
|                           |                     |  |             |      |             |  |        |   |              |       |  |  |     |  
|                           |                     |  |             |      |             |  |        |   |              |       |  |  |     |  
|Nine months ended March 31 |                     |  |             |      |             |  |        |   |              |       |  |  |    
|                           | Metrology Solutions |  | $           | 66.1 |             |  | 72     | % | $            | 73.5  |  |  | 67  | %
|                           | Optical Systems     |  |             | 25.8 |             |  | 28     | % |              | 37.0  |  |  | 33  | %
|                           |                     |  |             |      |             |  |        |   |              |       |  |  |     |  
|                           | Total               |  | $           | 91.9 |             |  | 100    | % | $            | 110.5 |  |  | 100 | %
|                           |                     |  |             |      |             |  |        |   |              |       |  |  |     |  

Overall, net
sales for the three months ended March 31, 2009 decreased 48% as compared with
the prior year period, reflecting decreases in the Metrology Solutions segment
sales of 43% and in Optical Systems segment sales of 57%. The decrease in
Metrology Solutions segment net sales was primarily due to volume decreases in
lithography of $6.5 million, instruments of $1.6 million, display solutions of
$1.6 million, and semiconductor solutions of $0.6 million. These volume
decreases, in large measure, are due to a reduction in orders that appears to
be tied directly to the general global economic downturn, most notably in the
semiconductor industry. A decrease in orders from Canon accounted for the
majority of the decrease in lithography sales. The decrease in the Optical
Systems segment sales occurred across all operations but was the most
pronounced in contract manufacturing and laser fusion, which had decreases of
$4.6 million and $2.3 million, respectively. The decrease in contract
manufacturing sales is primarily related to reductions in shipments for certain
medical device equipment and a reduction in engineering projects.

Net sales for
the nine months ended March 31, 2009 decreased 17% as compared with the prior
year period, reflecting a decrease in the Metrology Solutions segment sales of
10% and a decrease in Optical Systems segment sales of 30%. The Metrology
Solutions segment net sales decrease was primarily due to decreased volume in
lithography of $7.5 million and in instruments of $4.3 million, partially
offset by sales increases in display solutions of $2.9 million and vision
systems of $2.0 million. Vision systems was acquired in February of 2008
resulting in only one month of vision systems sales being included in the third
quarter of fiscal 2008.The decrease in the Optical Systems segment net sales
was due primarily to decreases in contract manufacturing of $6.8 million and
volume decreases of $4.4 million in the laser fusion and precision optics
areas. The decrease in contract manufacturing sales was primarily due to a
reduction in engineering projects and the volume loss on product manufacturing.

Sales in U.S.
dollars for the three and nine months ended March 31, 2009 were approximately
80% and 77% of total net sales, respectively, with the remaining 20% and 23%,
respectively, being in Euro or Yen. For our sales which are based in foreign
currency, we are exposed to foreign exchange fluctuations from the time
customers are invoiced in foreign currency until collection occurs. Significant
changes in the values of foreign currencies relative to the value of the U.S.
dollar, or in the general economic conditions in our export markets, could
materially impact the sales of our products in these markets and our Condensed
Consolidated Financial Position and Results of Operations.

18

---



Gross Profit by Segment

|                            |                      |             |   |                 |  |        |    |                 |   |      |  |  |    |  
|--------------------------- | -------------------- | ----------- | - | --------------- |  | ------ | -- | --------------- | - | ---- |  |  | -- | -
|                            |                      | Fiscal 2009 |   | Fiscal 2008     | 
|                            |                      |             |   |                 | 
|(Dollars
 in millions)      |                      | Amount      |   | Gross
 Profit % |  | Amount |    | Gross
 Profit % |  
|                            |                      |             |   |                 |  |        |    |                 |  
|Quarter
 ended March 31     |                      |             |   |                 |  |        |    |                 |   |      |  |  |    |  
|                            | Metrology
 Solutions |             | $ | 2.5             |  |        | 18 | %               | $ | 11.3 |  |  | 46 | %
|                            | Optical
 Systems     |             |   | 0.7             |  |        | 11 | %               |   | 4.2  |  |  | 30 | %
|                            |                      |             |   |                 |  |        |    |                 |   |      |  |  |    |  
|                            | Total                |             | $ | 3.2             |  |        | 16 | %               | $ | 15.5 |  |  | 40 | %
|                            |                      |             |   |                 |  |        |    |                 |   |      |  |  |    |  
|                            |                      |             |   |                 |  |        |    |                 |   |      |  |  |    |  
|Nine months
 ended March 31 |                      |             |   |                 |  |        |    |                 |   |      |  |  |    |  
|                            | Metrology
 Solutions |             | $ | 27.0            |  |        | 41 | %               | $ | 33.5 |  |  | 46 | %
|                            | Optical
 Systems     |             |   | 5.2             |  |        | 20 | %               |   | 9.7  |  |  | 26 | %
|                            |                      |             |   |                 |  |        |    |                 |   |      |  |  |    |  
|                            | Total                |             | $ | 32.2            |  |        | 35 | %               | $ | 43.2 |  |  | 39 | %
|                            |                      |             |   |                 |  |        |    |                 |   |      |  |  |    |  

Gross profit
as a percentage of net sales for the three months ended March 31, 2009 was 16%,
which represents a decrease of twenty-four percentage points from the
comparable prior year period. Within the Metrology Solutions segment, the
decrease in gross profit as a percentage of net sales for the three months
ended March 31, 2009 as compared with the prior year period is primarily due to
inventory write-downs and unabsorbed costs due to lower net sales. Significant
inventory write-downs totaled $3.3 million, or 17% of net sales, in the three
months ended March 31, 2009, related primarily to inventory for semiconductor,
display, and vision systems product lines. These inventory write-downs are due
to inventory at levels above current forecasted demand for the foreseeable
future. Within the Optical Systems segment, the decrease in gross profit as a
percentage of net sales for the three months ended March 31, 2009 as compared
with the prior year period is primarily due to unabsorbed costs due to lower
net sales. We have taken actions to reduce costs in both segments in light of
the decline in orders, including workforce reductions and unpaid furloughs.

Gross profit
as a percentage of net sales for the nine months ended March 31, 2009 was 35%,
which represents a decrease of four percentage points from the comparable prior
year period. Within the Metrology Solutions segment, the decrease in gross
profit as a percentage of net sales for the nine months ended March 31, 2009 as
compared with the prior year period is primarily due to a change in product
mix, inventory write-downs, and unabsorbed costs due to lower net sales. Within
the Optical Systems segment, the decrease in gross profit as a percentage of
net sales for the nine months ended March 31, 2009 as compared with fiscal 2008
is primarily due to unabsorbed costs due to lower net sales.

Selling, General, and Administrative Expenses (SG&A)

|                           |  |             |      |             |  |        |   |            |      |  |  |    |  
|-------------------------- |  | ----------- | ---- | ----------- |  | ------ | - | ---------- | ---- |  |  | -- | -
|                           |  | Fiscal 2009 |      | Fiscal 2008 | 
|                           |  |             |      |             | 
|(Dollars in
 millions)     |  | Amount      |      | % of Sales  |  | Amount |   | % of Sales |     
|                           |  |             |      |             |  |        |   |            |     
|                          
|Quarter ended March 31     |  | $           | 16.0 |             |  | 80     | % | $          | 9.3  |  |  | 24 | %
|Nine months ended March 31 |  | $           | 37.9 |             |  | 41     | % | $          | 24.6 |  |  | 22 | %

SG&A
expenses increased in the three months ended March 31, 2009 by $6.7 million
from the comparable prior year period, primarily due to the accrual of a $5.4
million merger termination fee and of $0.7 million in other related merger
costs, $1.2 million in incremental vision systems expenses which only had one
month of expenses in the third quarter of fiscal 2008, and $0.9 in intangible
assets write-offs related to vision systems. SG&A expenses increased in the
nine months ended March 31, 2009 by $13.3 million from the comparable prior
year period, primarily due to the accrual of a $5.4 million merger termination
fee and of $2.9 million in other merger related costs, the inclusion of $2.2
million of incremental vision systems expenses, $1.4 million in reserves for
potential royalty claims, and $0.9 million in intangible asset write-offs
related to vision systems. The write-off of customer related intangible assets
is due to the downturn in orders to such an extent that the inherent value of
the intangible asset is no longer realizable.

19

---



Research,
Development, and Engineering Expenses (RD&E)

|                           |  |             |      |             |  |        |   |            |      |  |  |    |  
|-------------------------- |  | ----------- | ---- | ----------- |  | ------ | - | ---------- | ---- |  |  | -- | -
|                           |  | Fiscal 2009 |      | Fiscal 2008 | 
|                           |  |             |      |             | 
|(Dollars in
 millions)     |  | Amount      |      | % of Sales  |  | Amount |   | % of Sales |     
|                           |  |             |      |             |  |        |   |            |     
|                          
|Quarter ended March 31     |  | $           | 7.0  |             |  | 35     | % | $          | 6.2  |  |  | 16 | %
|Nine months ended March 31 |  | $           | 18.4 |             |  | 20     | % | $          | 17.4 |  |  | 16 | %

RD&E for
the three and nine months ended March 31, 2009 increased 13% and 6%,
respectively, as compared with the prior year periods. The increase in the
RD&E expense for the three months ended March 31, 2009, as compared with
the prior year period was primarily due to the write-down of technology-related
intangible assets of $1.3 million and the inclusion of vision systems for the
entire quarter of $0.4 million, partially offset by reductions in RD&E in
other product lines totaling $0.9 million. The inclusion of incremental vision
systems expenses increased our RD&E costs by $3.2 million, including an intangible
write-down of $1.3 million, for the nine months ended March 31, 2009. This increase
was partially offset by a reduction in RD&E
spending in our lithography group. The reduction in lithography RD&E is related
to the slowdown in capital spending in the semiconductor market. RD&E spending
in the three and nine months ended March 31, 2009 was concentrated on our
semiconductor initiative and core instruments products. The write-off of
technology related intangible assets is due to the downturn in orders to such
an extent that the inherent value of the intangible asset is no longer
realizable.

Provision
for Doubtful Accounts and Notes

|                           |  |             |     |             |  |        |   |            |     |  |  |   |  
|-------------------------- |  | ----------- | --- | ----------- |  | ------ | - | ---------- | --- |  |  | - | -
|                           |  | Fiscal 2009 |     | Fiscal 2008 | 
|                           |  |             |     |             | 
|(Dollars in
 millions)     |  | Amount      |     | % of Sales  |  | Amount |   | % of Sales |    
|                           |  |             |     |             |  |        |   |            |    
|                          
|Quarter ended March 31     |  | $           |    |             |  | 0      | % | $          |    |  |  | 0 | %
|Nine months ended March 31 |  | $           | 1.0 |             |  | 1      | % | $          | 1.5 |  |  | 1 | %

Provision for
doubtful accounts and notes for the nine months ended March 31, 2009 decreased
by $0.5 million, as compared with the prior year period, primarily due to
changes in the purchase allocation relating to the Solvision asset acquisition
in February 2008 which affected the value of the $1.5 million note receivable
from Solvision. We originally had loaned $1.5 million to Solvision in October
2007.

Other Income (Expense)

|                           |  |             |      |             |  |        |   |            |     |  |  |   |  
|-------------------------- |  | ----------- | ---- | ----------- |  | ------ | - | ---------- | --- |  |  | - | -
|                           |  | Fiscal 2009 |      | Fiscal 2008 | 
|                           |  |             |      |             | 
|(Dollars in
 millions)     |  | Amount      |      | % of Sales  |  | Amount |   | % of Sales |    
|                           |  |             |      |             |  |        |   |            |    
|                          
|Quarter ended March 31     |  | $           | (0.1 | )           |  | -1     | % | $          | 0.1 |  |  | 0 | %
|Nine months ended March 31 |  | $           | 0.9  |             |  | 1      | % | $          | 2.1 |  |  | 2 | %

Other income
(expense) for the three months ended March 31, 2009 decreased by $0.2 million
as compared with the prior year period primarily due to a decrease in
investment income. Investment income has declined due to the maturities of our
investment portfolio. Other income for the nine months ended March 31, 2009
decreased by $1.2 million from the comparable prior year period, primarily due
to decreased investment income of $1.2 million, and mark to market write-downs
of $0.5 million on our investment in an auction rate security and a mutual fund
related to our deferred compensation program, partially offset by the benefit
from a guaranteed dividend payment of $0.3 million related to our German joint
venture partner and $0.2 million related to the settlement of a vendor account.

20

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Income Tax
Benefit (Expense)

|                           |  |             |     |             |  |        |   |             |      |   |  |    |  
|-------------------------- |  | ----------- | --- | ----------- |  | ------ | - | ----------- | ---- | - |  | -- | -
|                           |  | Fiscal 2009 |     | Fiscal 2008 | 
|                           |  |             |     |             | 
|(Dollars in
 millions)     |  | Amount      |     | Tax Rate
 % |  | Amount |   | Tax Rate
 % |     
|                           |  |             |     |             |  |        |   |             |     
|                          
|Quarter ended March 31     |  | $           | 4.9 |             |  | 25     | % | $           |     |   |  | 11 | %
|Nine months ended March 31 |  | $           | 6.3 |             |  | 26     | % | $           | (0.6 | ) |  | 34 | %

The effective income tax rate for the three months ended March
    31, 2009 was 25% as compared with 11% in the comparable prior year period.
    The 25% effective tax rate in fiscal 2009 was a tax benefit and resulted
    from taxable losses in comparatively higher tax jurisdictions, reduced by
    valuation allowances of $1.6 million against various foreign deferred taxes.
    The 11% effective tax rate in fiscal 2008 was primarily due to higher earnings
    in comparatively lower tax jurisdictions and the recognition of research
    and development tax credits with the filing of tax returns, partially offset
    by the loss of the deduction attributable to the extraterritorial
    income exclusion, which was repealed effective January 1, 2007. The effective
    income tax rate for the nine months ended March 31, 2009 was 26% as compared
    with 34% in the comparable prior year period. The reduction in the effective
    income tax rate was primarily due to valuation allowance of $1.6 million
    against various foreign deferred tax assets.

TRANSACTIONS WITH STOCKHOLDER

Sales to Canon
Inc., a stockholder, and Canon Sales Co., Inc., a distributor of certain of our
products in Japan and a subsidiary of Canon Inc. (collectively referred to as
Canon), amounted to $3.0 million and $15.1 million (15% and 16% of net sales,
respectively) for the three and nine months ended March 31, 2009, respectively,
as compared with $8.3 million and $20.6 million (22% and 19% of net sales,
respectively) for the three and nine months ended March 31, 2008. Selling
prices of products sold to Canon are based, generally, on the terms customarily
given to distributors. At March 31, 2009 and June 30, 2008, there were, in the
aggregate, $0.2 million and $4.1 million, respectively, of trade accounts
receivable from Canon.

LIQUIDITY AND
CAPITAL RESOURCES

We assess our liquidity in terms of our ability to generate cash to
fund our operating, investing, and financing activities. Our principal source
of liquidity is operating cash flows. In addition to operating cash flows,
other significant factors that affect our overall management of liquidity
include: capital expenditures, customer credit requirements, investments in
businesses, expenses related to our initially contemplated merger with ESI,
common stock repurchases, and the adequacy of available bank lines of credit.

Recent distress in the financial markets, including extreme volatility
in security prices, severely diminished liquidity and credit availability,
rating downgrades of certain investments, and declining valuations of others,
has had an adverse impact on financial market activities. We have assessed the
implications of these factors on our current business and determined that there
has not been a significant impact to our financial position, results of
operations, or liquidity during the first nine months of fiscal 2009, other
than the indirect effect that the current uncertainty in global economic
conditions resulting from the recent disruption in credit markets has had on
customer demand for our products.

We currently have no debt or lines of credit. In the future, if the
need for debt or credit lines arose there is no assurance that we would be able
to secure such financing due to the lack of credit availability in the
financial markets or our own financial position.

At March 31, 2009, cash and marketable securities were $43.1 million, a
decrease of $7.9 million from $51.0 million at June 30, 2008. Our marketable
securities consist of corporate bonds ($7.0 million) and a mutual fund ($0.4
million). The credit losses taken by major financial institutions and the reduction
in the Federal Reserve rate may have an effect on the valuation of the
portfolio and our future interest income.

The composition of our marketable securities by industry sector is as
follows: 54% Finance; 14% Utilities; 13% Real Estate, and 19% Other. We hold a
total of eight corporate bonds. The largest individual bond has a value at
maturity of $1.0 million. We have the ability and intent to hold all the
securities to maturity, the last maturity of which is on December 1, 2009. We
believe there are no impairments in our investments other than an impairment of
$0.6 million on an auction rate security for the nine months ended March 31,
2009. Such auction rate security is valued at $0 at March 31, 2009.

The cash equivalents balance in our money market account, which is
invested primarily in U.S. government securities, is $19.0 million as of March
31, 2009. We do not believe there is any risk to liquidity in the money market
account, nor are there currently any limits on redemptions.

21

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In our third
quarter of fiscal 2009, a reduction in workforce resulted in severance payments
totaling $0.9 million. It is expected that reductions in workforce, salary
adjustments, unpaid furloughs, suspension of our matching 401-K program, and a
reduction in director fees will save us approximately $9.6 million on an
annualized basis. We are considering implementing further restructuring actions
during the fiscal year. In addition, in our fourth quarter of fiscal 2009, we
paid a merger termination fee of $5.4 million.

We have nearly
$4.0 million of accounts receivable related to our display customers which are
overdue. We have agreed to payment terms with several display customers and are
in negotiations with other customers. Although we believe such amounts are
collectible, our liquidity will be affected by the timing of the receipt of
such payments. We have not experienced significant delays in payments from
non-display customers, but given economic conditions, it is possible we will
experience delays or non-payment issues which would affect our cash flow.

We believe we
have sufficient operating flexibility and cash reserves to maintain adequate
amounts of liquidity and to meet our future liquidity requirements for at least
the next twelve months, although the impact of continued market volatility
cannot be predicted.

Cash Flow from Operating Activities

|                                                            |  |                             |      |      |   |     | 
|----------------------------------------------------------- |  | --------------------------- | ---- | ---- | - | --- | 
|                                                            |  | Nine Months Ended March 31, |     
|                                                            |  |                             |     
|                                                            |  | 2009                        |      | 2008 |  
|                                                            |  |                             |      |      |  
|Net cash flows provided by
 (used for) operating activities |  | $                           | (0.2 | )    | $ | 9.9 | 

Cash flow from
operating activities for the first nine months of fiscal 2009 decreased by
$10.1 million as compared with the prior year period. This was primarily due to
a negative change in net income of $18.5 million, which included merger related
costs of $8.3 million, the negative change in inventory related cash flows of
$6.3 million, and an increase in receivables of $4.5 million. The change in
inventory related cash flows is primarily a result of increasing inventory
levels in the nine months ended March 31, 2009 in display systems and
semiconductor inventory related to systems in the customer acceptance phase.
These decreases in cash flow from operating activities were offset in part by
an increase in accounts payable, accrued expenses, and taxes payable of $14.6
million.

Cash Flow from Investing Activities

|                                                 |  |                             |      |      |   |      | 
|------------------------------------------------ |  | --------------------------- | ---- | ---- | - | ---- | 
|                                                 |  | Nine Months Ended March 31, |     
|                                                 |  |                             |     
|                                                 |  | 2009                        |      | 2008 |  
|                                                 |  |                             |      |      |  
|Net cash flows provided by
 investing activities |  | $                           | 11.6 |      | $ | 14.0 | 

Cash flows
provided by investing activities for the first nine months of fiscal 2009
decreased by $2.4 million as compared with the prior year period. This change
was primarily related to a net $6.1 million decrease in proceeds from the
maturity of marketable securities, partially offset by $5.6 in
acquisition-related uses of cash flow (Solvision) during the same period in the
prior year.

Cash Flow from Financing Activities

|                                              |  |                             |      |      |   |       |  
|--------------------------------------------- |  | --------------------------- | ---- | ---- | - | ----- | -
|                                              |  | Nine Months Ended March 31, |     
|                                              |  |                             |     
|                                              |  | 2009                        |      | 2008 |  
|                                              |  |                             |      |      |  
|Net cash flows used for
 financing activities |  | $                           | (1.1 | )    | $ | (20.1 | )

Cash flows used
for financing activities in the nine months ended March 31, 2009 decreased by
$19.0 million as compared with the prior year period. For the nine months ended
March 31, 2008, we utilized $20.1 million to repurchase shares of our common
stock.

22

---



OFF-BALANCE SHEET ARRANGEMENTS

We have not
created, and are not party to, any special-purpose or off-balance sheet
entities for the purpose of raising capital, incurring debt, or operating parts
of our business that are not consolidated into our financial statements. We
have not guaranteed any obligations of a third party.

Item 3. Quantitative and Qualitative
Disclosures about Market Risk

There have
been no material changes that have occurred in our quantitative and qualitative
market risk disclosures during the nine months ended March 31, 2009 except for
the ongoing economic crisis which is impacting us through decreased orders and
order push-outs by some of our customers. Our exposure to market risk is
presented in Item 7a., Quantitative and Qualitative Disclosures about Market
Risk, of our Annual Report on Form 10-K, as amended by Form 10-K/A, for the
year ended June 30, 2008, filed with the Securities and Exchange Commission
(the 2008 Annual Report).

Current
uncertainty in global economic conditions resulting from the recent disruption
in credit markets poses a risk to the overall economy that could impact
customer demand for our products, impact our ability to manage relationships
with our customers, suppliers and creditors, or cause supplier or customer
disruptions resulting from tighter credit markets, among other risks.

Item 4. Controls and Procedures

The
effectiveness of our or any system of disclosure controls and procedures is
subject to certain limitations, including the exercise of judgment in
designing, implementing, and evaluating the controls and procedures, the
assumptions used in identifying the likelihood of future events, and the
inability to eliminate misconduct completely. In designing, implementing, and
evaluating the disclosure controls and procedures, our management recognized
that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives
and our management necessarily was required to apply its judgment in evaluating
the cost-benefit relationship of possible controls and procedures.

Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, carried out an evaluation, as of the end of the period covered
by this report of the effectiveness of our disclosure controls and procedures
(as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the Exchange Act)). Based upon their
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that, as of the end of such period, our disclosure controls and procedures were
effective in recording, processing, summarizing and reporting on a timely basis
information required to be disclosed by us in the reports that we file or
submit under the Exchange Act and were effective in ensuring that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is accumulated and communicated to our management, including the
Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.

There were no
changes in our internal control over financial reporting that occurred in our
most recent fiscal quarter that materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.

23

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PART II - Other Information

Item 1A. Risk Factors

In addition to
the information set forth below and elsewhere in this report, the reader should
carefully consider the factors discussed in Part I, Item 1A. Risk Factors in
our 2008 Annual Report, which could materially affect our business, financial
condition, or future results. The risks described in our 2008 Annual Report are
not the only risks facing our Company. Additional risks and uncertainties not
currently known to us or that we currently deem to be immaterial also may
materially adversely affect our business, financial condition, and/or operating
results.

There is no
assurance that we would be able to secure financing if the need arose due to
the lack of credit availability in the financial markets or our own financial
position.

General economic conditions and the related
deterioration in the global business environment could have a material adverse
effect on our business, operating results and financial condition.

Global
consumer confidence has eroded amidst concerns over declining asset values,
inflation, volatility in energy costs, geopolitical issues, the availability
and cost of credit, rising unemployment, and the stability and solvency of
financial institutions, financial markets, businesses and sovereign nations.
These concerns have slowed global economic growth and have resulted in
recessions in numerous countries, including many of those in North America,
Europe and Asia. Recent economic conditions had a negative impact on our
results of operations during the third quarter of fiscal 2009 due to reduced
customer demand and we expect this trend to continue for the next several
fiscal quarters. As these economic conditions continue to persist, or if they
worsen, a number of negative effects on our business could result, including
customers or potential customers reducing or delaying orders, the insolvency of
key suppliers which could result in production delays, the inability of
customers to obtain credit, and the insolvency of one or more customers. Any of
these effects could impact our ability to effectively manage inventory levels,
create unabsorbed costs due to lower net sales, and collect receivables and
ultimately decrease our net revenues and profitability.

We are subject to environmental laws and
regulations and may have liabilities arising from environmental matters.

We are subject
to a variety of environmental regulations relating to the use, storage,
discharge, and disposal of hazardous chemicals used during our manufacturing
processes. Any failure by us to comply with applicable regulations could
subject us to future liabilities or the suspension of production. We are aware
of certain levels of contamination on our property which are below reportable
levels. In addition, we are aware of certain contamination on an adjacent
property that we formerly owned. We are unable to determine or reasonably
estimate the amount of costs, if any, that we might incur or for which we may
potentially be responsible. In addition, environmental regulations could
restrict our ability to expand our facilities or could require us to acquire
costly equipment or to incur other significant expenses to comply with such
regulations.

24

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Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds

The following
table provides information about our purchases during the quarter ended March
31, 2009 of equity securities that are registered by us pursuant to Section 12
of the Exchange Act.

|                                      |  |                                       |       |                               |  |                                                                                          |  |                                                                                                            |   |  |   |     | 
|------------------------------------- |  | ------------------------------------- | ----- | ----------------------------- |  | ---------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------- | - |  | - | --- | 
|Period                                |  | Total number of
 shares purchased (2) |       | Average price
 paid per share |  | Total number of
 shares purchased as
 part of publicly
 announced
 plans or programs (1) |  | Approximate dollar
 value of shares that
 may yet be purchased
 under the plans or
 programs (in millions) |  
|                                      |  |                                       |       |                               |  |                                                                                          |  |                                                                                                            |  
|                                     
|January 1, 2009 - January
 31, 2009   |  |                                       | 1,629 |                               |  | 5.72                                                                                     |  |                                                                                                            |  |  | $ | 5.0 | 
|February 1, 2009 -
 February 28, 2009 |  |                                       | 3,771 |                               |  | 4.09                                                                                     |  |                                                                                                            |  |  | $ | 5.0 | 
|March 1, 2009 - March 31,
 2009       |  |                                       | 453   |                               |  | 4.59                                                                                     |  |                                                                                                            |  |  | $ | 5.0 | 

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | In August
 2007, our Board of Directors authorized the repurchase of up to $25.0 million
 of our outstanding common stock. During the nine months ended March 31, 2009,
 there were no repurchases of common stock in the open market. The share
 repurchases have been effected pursuant to plans in conformity with Rule
 10b5-1 under the Securities Exchange Act of 1934. This rule allows public
 companies to adopt written, pre-arranged stock trading plans when they do not
 have material, non-public information in their possession. The adoption of
 this stock trading plan allows us to repurchase our shares during periods
 when we otherwise might be prevented from doing so under insider trading laws
 or because of self-imposed trading blackout periods.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (2) | Shares were
 repurchased from certain of our employees in satisfaction of withholding tax
 obligations arising from the vesting of their restricted stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Item 6. Exhibits

|    |           |                                                                                                                                                                     
|--- | --------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Exhibits:
|    |           |                                                                                                                                                                     
|    | 31.1      | Certification
 Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of
 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|    |           |                                                                                                                                                                     
|    | 31.2      | Certification
 Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of
 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|    |           |                                                                                                                                                                     
|    | 32.1      | Certification
 Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the
 Sarbanes-Oxley Act of 2002                                            
|    |           |                                                                                                                                                                     
|    | 32.2      | Certification
 Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the
 Sarbanes-Oxley Act of 2002                                            

25

---



SIGNATURE

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.

| |                                                                  | 
| | ---------------------------------------------------------------- | 
| | Zygo
 Corporation                                                | 
| |                                                                  | 
| | (Registrant)                                                     | 
| |                                                                  | 
| | /s/ J. Bruce
 Robinson                                           | 
| |                                                                  | 
| | J. Bruce
 Robinson                                               | 
| | Chairman and
 Chief Executive Officer                            | 
| |                                                                  | 
| | /s/ Walter
 A. Shephard                                          | 
| |                                                                  | 
| | Walter A.
 Shephard                                              | 
| | Vice
 President, Finance, Chief Financial Officer, and Treasurer | 

Date: May 11, 2009

26

---



EXHIBIT INDEX

|     |                                                                                                                                                                      
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 | Certification
 Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of
 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
 2002
|     |                                                                                                                                                                      
|31.2 | Certification
 Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of
 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
 2002
|     |                                                                                                                                                                      
|32.1 | Certification
 Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the
 Sarbanes-Oxley Act of 2002                                             
|     |                                                                                                                                                                      
|32.2 | Certification
 Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the
 Sarbanes-Oxley Act of 2002                                             

---