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, 2002

                                       or

[ ]  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                               (I.R.S. Employer
incorporation or organization)                               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.              YES        NO X (1)
                                                   ------    ------

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.                            YES        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.

        17,445,359 shares of Common Stock, $.10 Par Value, at May 9, 2002


(1)     The Company erroneously omitted to file by EDGAR, with the Securities
        and Exchange Commission, a copy of the Company's proxy statement dated
        October 6, 2001, in connection with the Annual Meeting of Stockholders
        held on November 14, 2001. The proxy and the consequent amendment to the
        Company's Annual Report on Form 10-K 405 dated June 30, 2001 were filed
        by the Company on February 13, 2002.

<PAGE>


                           FORWARD LOOKING STATEMENTS

All statements other than statements of historical fact included in this Form
10-Q Quarterly Report, regarding the Company's financial position, business
strategy, plans and objectives of management of the Company for future
operations, are forward-looking statements. These forward looking statements
include without limitation statements under "Management's Discussion and
Analysis of Financial Condition and Results of Operations." 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 such as those disclosed under "Risk Factors" which references
the Form 10-K405. Such statements reflect the current views of the Company with
respect to future events and are subject to these and other risks, uncertainties
and assumptions relating to the operations, results of operations, and growth
strategy of the Company.



<PAGE>


                         PART I - Financial Information

ITEM 1. FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                                                                      Three Months Ended               Nine Months Ended
                                                                           March 31,                       March 31,
                                                                  -------------------------         -------------------------
                                                                    2002             2001             2002             2001
                                                                  --------         --------         --------         --------
<S>                                                               <C>              <C>              <C>              <C>
Net sales ................................................        $ 21,298         $ 38,717         $ 61,260         $ 95,380
Cost of goods sold .......................................          15,016           19,228           43,275           52,311
                                                                  --------         --------         --------         --------
     Gross profit ........................................           6,282           19,489           17,985           43,069

Selling, general and administrative expenses .............           6,494            9,720           18,931           21,365
Research, development and engineering expenses ...........           5,442            4,528           17,195           11,999
Amortization of goodwill and other intangibles ...........             253              199              687              598
Automation Systems Group exit costs ......................            --               --              1,920             --
                                                                  --------         --------         --------         --------
     Operating (loss) profit .............................          (5,907)           5,042          (20,748)           9,107

Gain on sale of Automation Systems Group .................            --               --              6,117             --

Other income (expense):
     Interest income .....................................             291              406            1,196              996
     Interest expense ....................................            (216)             (91)            (722)            (130)
     Miscellaneous (expense), net ........................             (19)            (302)            (142)            (476)
                                                                  --------         --------         --------         --------
          Total other income .............................              56               13              332              390
                                                                  --------         --------         --------         --------
          (Loss) earnings before income taxes and minority
           interest ......................................          (5,851)           5,055          (14,299)           9,497

Income tax benefit (expense) .............................           2,223           (1,719)           5,433           (3,229)
                                                                  --------         --------         --------         --------
          (Loss) earnings before minority interest .......          (3,628)           3,336           (8,866)           6,268

Minority interest ........................................              94              129              246              339
                                                                  --------         --------         --------         --------
          Net (loss) earnings ............................        $ (3,722)        $  3,207         $ (9,112)        $  5,929
                                                                  ========         ========         ========         ========

(Loss) earnings per common and common equivalent share:
     Basic (1) ...........................................        $   (.21)        $    .21         $   (.52)        $    .40
                                                                  ========         ========         ========         ========
     Diluted (1) .........................................        $   (.21)        $    .20         $   (.52)        $    .38
                                                                  ========         ========         ========         ========

Weighted average common shares and common
   dilutive equivalents outstanding:
     Basic (2) ...........................................          17,434           15,535           17,404           14,731
                                                                  ========         ========         ========         ========
     Diluted (2) .........................................          17,434           15,975           17,404           15,436
                                                                  ========         ========         ========         ========
</TABLE>

(1)  The difference between basic shares outstanding and diluted shares
     outstanding is the assumed conversion of common stock equivalents (stock
     options) in the amount of 440 and 705 shares for the three and nine months
     ended March 31, 2001, respectively.

(2)  Accounting principles generally accepted in the United States of America
     require the computation of the net loss per share to be based on the
     weighted average basic shares outstanding.


<PAGE>


CONSOLIDATED BALANCE SHEETS
(Thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                              MARCH 31,
                                                                                2002            June 30,
                                                                            (UNAUDITED)           2001
                                                                             ---------         ---------
<S>                                                                          <C>               <C>
ASSETS
Current assets:
     Cash and cash equivalents ......................................        $  32,084         $  52,630
     Restricted cash ................................................            1,221              --
     Marketable securities ..........................................            8,437             7,121
     Receivables ....................................................           18,005            27,278
     Income taxes receivable ........................................            1,157              --
     Inventories ....................................................           23,026            24,261
     Costs in excess of billings ....................................            1,082             1,802
     Prepaid expenses ...............................................            1,355             1,393
     Deferred income taxes ..........................................            4,324             4,076
                                                                             ---------         ---------
          Total current assets ......................................           90,691           118,561
                                                                             ---------         ---------

Property, plant and equipment, net ..................................           56,733            47,475
Deferred income taxes ...............................................           17,401            15,819
Goodwill and other intangibles, net .................................            4,593             4,867
Other assets ........................................................             --                 110
                                                                             ---------         ---------
TOTAL ASSETS ........................................................        $ 169,418         $ 186,832
                                                                             =========         =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Current portion of long-term debt ..............................        $     837         $     279
     Accounts payable ...............................................            5,292             8,648
     Accrued progress payments ......................................              594               549
     Accrued salary and wages .......................................            3,327             7,153
     Other accrued liabilities ......................................            4,882             4,688
     Income taxes payable ...........................................             --               3,132
                                                                             ---------         ---------
          Total current liabilities .................................           14,932            24,449
                                                                             ---------         ---------

Long-term debt, excluding current portion ...........................           11,583            12,281
Other long-term liabilities .........................................            1,172              --
Minority interest ...................................................            1,078               963

Stockholders' equity:
     Common stock, $.10 par value per share:
          40,000,000 shares authorized;
          17,882,564 shares issued (17,803,812 at June 30, 2001);
          17,435,359 shares outstanding (17,356,607 at June 30, 2001)            1,788             1,780
     Additional paid-in capital .....................................          135,557           134,380
     Retained earnings ..............................................           10,602            19,714
     Accumulated other comprehensive income:
          Currency translation effects ..............................           (1,641)           (1,786)
          Net unrealized (loss) gain on swap agreement ..............             (281)               31
          Net unrealized (loss) gain on marketable securities .......              (85)               37
                                                                             ---------         ---------
                                                                               145,940           154,156
     Less treasury stock, at cost;
        447,205 common shares (447,205 shares at June 30, 2001) .....            5,287             5,017
                                                                             ---------         ---------
           Total stockholders' equity ...............................          140,653           149,139
                                                                             ---------         ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..........................        $ 169,418         $ 186,832
                                                                             =========         =========
</TABLE>

<PAGE>


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
(Thousands of dollars)

<TABLE>
<CAPTION>
                                                                                                                   Accum.
                                                                                                                    Other
                                                                   Comp.     Common      Paid-In     Retained       Comp.   Treasury
                                                     Total        Income      Stock      Capital     Earnings      Income    Stock
                                                   ---------------------------------------------------------------------------------
<S>                                                <C>                       <C>        <C>         <C>          <C>        <C>
Balance at June 30, 2001 ......................... $149,139                  $1,780     $134,380    $19,714      $(1,718)   $(5,017)
Comprehensive loss
  Net loss .......................................   (2,371)    (2,371)                              (2,371)
                                                                ------
  Other comprehensive loss, net of tax
    Unrealized gain on marketable securities .....       51         51
    Unrealized loss on swap agreement ............     (899)      (899)
    Foreign currency translation effect ..........      913        913
                                                                ------
  Other comprehensive loss .......................                  65                                                65
                                                                ------
Comprehensive loss ...............................              (2,306)
                                                                ======
Repurchased common stock adjustment ..............     (270)                                                                   (270)
Employee Stock Purchase ..........................      499                       4          495
Exercise of employee stock options,
  net of related tax effect ......................       12                                   12
                                                   ---------------------------------------------------------------------------------
Balance at September 30, 2001 .................... $147,074                  $1,784     $134,887    $17,343      $(1,653)   $(5,287)
Comprehensive loss
  Net loss .......................................   (3,019)    (3,019)                              (3,019)
                                                                ------
  Other comprehensive loss, net of tax
    Unrealized loss on marketable securities .....      (22)       (22)
    Unrealized gain on swap agreement ............      306        306
    Foreign currency translation effect ..........     (521)      (521)
                                                                ------
  Other comprehensive loss .......................                (237)                                             (237)
                                                                ------
Comprehensive loss ...............................              (3,256)
                                                                ======
Non-cash compensation charges related
  to stock options ...............................       45                                   45
Exercise of employee stock options,
  net of related tax effect ......................        3                                    3
                                                   ---------------------------------------------------------------------------------
Balance at December 30, 2001 ..................... $143,866                  $1,784     $134,935    $14,324      $(1,890)   $(5,287)
Comprehensive income
  Net loss .......................................   (3,722)    (3,722)                              (3,722)
                                                                ------
  Other comprehensive loss, net of tax
       Unrealized loss on marketable securities ..     (151)      (151)
       Unrealized gain on Swap Agreement .........      282        282
       Foreign currency translation effect .......     (248)      (248)
                                                                ------
  Other comprehensive income .....................                (117)                                             (117)
                                                                ------
Comprehensive income .............................              (3,839)
                                                                ======
Non-cash compensation charges related
  to stock options ...............................       19                                   19
Employee Stock Purchase ..........................      599                       4          595
Exercise of employee stock options,
  net of related tax effect ......................        8                                    8
                                                   ---------------------------------------------------------------------------------
Balance at March 31, 2002 ........................ $140,653                  $1,788     $135,557    $10,602      $(2,007)   $(5,287)
</TABLE>


<PAGE>



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

<TABLE>
<CAPTION>
                                                                              Nine Months Ended
                                                                                  March 31,
                                                                          -------------------------
                                                                            2002             2001
                                                                          --------         --------
<S>                                                                       <C>              <C>
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
     Net (loss) earnings ............................................     $ (9,112)        $  5,929
     Adjustments to reconcile net (loss) earnings to cash
          provided by (used for) operating activities:
          Depreciation and amortization .............................        5,412            3,667
          Gain on sale of Automation Systems Group ..................       (6,117)            --
          Loss on disposal of assets ................................          435              860
          Deferred income taxes .....................................       (1,582)            (319)
          Non-cash compensation charges related to stock options ....           64             --
          Changes in operating accounts:
               Receivables ..........................................        7,211           (6,483)
               Income taxes receivable ..............................       (4,289)            --
               Inventories ..........................................         (141)         (12,182)
               Costs in excess of billings ..........................       (1,772)           4,049
               Prepaid expenses .....................................           17              976
               Accounts payable and accrued expenses ................       (5,330)             438
               Minority interest ....................................          246              391
                                                                          --------         --------
          Net cash provided by (used for) operating activities ......      (14,958)          (2,674)
                                                                          --------         --------

CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES:
     Additions to property, plant and equipment .....................      (15,207)         (18,505)
     Investment in marketable securities ............................       (7,512)            (627)
     Investments in other assets ....................................         (303)          (2,147)
     Proceeds from sale of Automation Systems Group,
          net of cash sold ($88) ....................................       12,077             --
     Restricted cash from sale of Automation Systems Group ..........       (1,221)            --
     Proceeds from maturity of marketable securities ................        1,750            1,180
     Proceeds from the sale of marketable securities ................        4,248             --
                                                                          --------         --------
     Net cash provided by (used for) investing activities ...........       (6,168)         (20,099)
                                                                          --------         --------

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
     (Payments) proceeds of debt ....................................         (140)           4,975
     Dividend payments to minority interest .........................         (131)            --
     Employee stock purchase ........................................        1,098             --
     Exercise of employee stock options and secondary offering ......           23           60,410
     Repurchased common stock adjustment ............................         (270)            --
                                                                          --------         --------
     Net cash provided by (used for) financing activities ...........          580           65,385
                                                                          --------         --------

Net increase (decrease) in cash and cash equivalents ................      (20,546)          42,612
Cash and cash equivalents, beginning of year ........................       52,630           15,598
                                                                          --------         --------
Cash and cash equivalents, end of period ............................     $ 32,084         $ 58,210
                                                                          ========         ========
</TABLE>

These interim financial statements should be read in conjunction with the
financial statements and notes included in the Company's June 30, 2001 Annual
Report on Form 10-K405 including items incorporated by reference therein.

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Thousands, except for per share amounts

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The Consolidated Balance Sheet at March 31, 2002, the Consolidated Statements of
Earnings for the three and nine months ended March 31, 2002 and 2001, the
Consolidated Statements of Stockholders' Equity for the three and nine months
ended March 31, 2002, and the Consolidated Statements of Cash Flows for the nine
months ended March 31, 2002 and 2001 are unaudited but, in the opinion of the
Company, include all adjustments, consisting only of normal recurring accruals,
necessary for a fair statement of the results of the interim periods.

The accompanying consolidated financial statements include the accounts of Zygo
Corporation and its subsidiaries ("ZYGO" or the "Company"). All material
transactions and accounts with the subsidiaries have been eliminated from the
consolidated financial statements. The results of operations for the period
ended March 31, 2002 are not necessarily indicative of the results to be
expected for the full fiscal year.

EARNINGS PER SHARE

Basic and diluted earnings per share are calculated in accordance with Statement
of Financial Accounting Standards No. 128, "Earnings Per Share."

The following table sets forth the reconciliation of weighted average shares
outstanding and diluted weighted average shares outstanding:

<TABLE>
<CAPTION>
                                                    Three Months Ended          Nine Months Ended
                                                        March 31,                  March 31,
                                                   --------------------        --------------------
                                                    2002          2001          2002          2001
                                                   ------        ------        ------        ------
<S>                                                <C>           <C>           <C>           <C>
Basic weighted average shares outstanding ......   17,434        15,535        17,404        14,731
Dilutive effect of stock options ...............     --             440          --             705
                                                   ------        ------        ------        ------
Diluted weighted average shares outstanding ....   17,434        15,975        17,404        15,436
                                                   ======        ======        ======        ======
</TABLE>

For three and nine months ended March 31, 2002, the Company recorded net losses.
Due to these net losses, stock options of 325 and 327 for the three and nine
month periods, respectively, were excluded from the computation because of the
anti-dilutive effect on loss per share.

INVENTORIES

Inventories are stated at the lower of cost (determined on a first-in, first-out
basis) or market. At March 31, 2002 and June 30, 2001, inventories were as
follows:

                                                 MARCH 31,       June 30,
                                                   2002           2001
                                                 -------         -------
Raw materials and manufactured parts .......     $18,310         $20,359
Work in process ............................       7,101           5,674
Finished goods .............................         649           1,308
                                                 -------         -------
                                                  26,060          27,341
Reserves ...................................      (3,034)         (3,080)
                                                 -------         -------
                                                 $23,026         $24,261
                                                 =======         =======

<PAGE>


PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment are stated at cost. Costs of additions,
replacements and improvements are capitalized. Maintenance and repairs are
charged to expense as incurred. At March 31, 2002 and June 30, 2001, property,
plant, and equipment, at cost, were as follows:

                                                      MARCH 31,         June 30,
                                                        2002             2001
                                                      --------         --------
Land and land improvements ...................        $  3,822         $  3,778
Buildings and building improvements ..........          25,299            9,199
Machinery, equipment, and office furniture ...          45,609           31,101
Leasehold improvements .......................             241              625
Construction in progress .....................           5,925           23,849
                                                      --------         --------
                                                        80,896           68,552
Accumulated depreciation .....................         (24,163)         (21,077)
                                                      --------         --------
                                                      $ 56,733         $ 47,475
                                                      ========         ========

Depreciation is based on the estimated useful lives ranging from 3-40 years for
the various classes of assets and is computed using the straight-line method.

LONG-TERM DEBT

On May 14, 2001, the Company entered into a mortgage on its Westborough,
Massachusetts facility. The mortgage amount is $12,560 at an interest rate of
LIBOR plus 150 basis points (approximately 3.4% in total at March 31, 2002) and
is payable in full on May 14, 2007. Interest only payments were made through
February 14, 2002. The mortgage principal is amortizing on a 15-year level
amortization schedule requiring monthly principal and interest payments. As of
March 31, 2002, long-term debt was $11,583 and the current portion of long-term
debt was $837. The agreement contains financial covenants, which among others
relate to debt service and consolidated debt ratios. As of March 31, 2002, the
Company is in compliance with the financial covenants.

In conjunction with the mortgage, the Company entered into an interest rate swap
agreement that provides for a fixed interest rate of approximately 7% for the
duration of the mortgage. As of March 31, 2002, the market value of the
agreement is ($453) and is recorded as a liability with a corresponding charge
to stockholders' equity, net of taxes.


NOTE 2: RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 141, "Business Combinations" which
addresses the financial accounting and reporting for business combinations and
modifies Accounting Principles Board (APB) Opinion No. 16, "Business
Combinations," and SFAS No. 38, "Accounting for Preacquisition Contingencies of
Purchased Enterprises." SFAS No. 141 requires that all business combinations be
accounted for by a single method, the purchase method, modifies the criteria for
recognizing intangible assets, and expands disclosure requirements. The
provisions of SFAS No. 141 apply to all business combinations initiated after
June 30, 2001. We do not expect the adoption of SFAS No. 141 to have a material
effect on our results of operations or statements of financial position.


<PAGE>


In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets" which addresses financial accounting and reporting for acquired goodwill
and other intangible assets and supersedes APB No. 17, "Intangible Assets." SFAS
No. 142 addresses how intangible assets that are acquired individually or with a
group of other assets should be accounted for in financial statements upon their
acquisition and after they have been initially recognized in the financial
statements. SFAS No. 142 requires that goodwill and intangible assets that have
indefinite useful lives not be amortized but rather tested at least annually for
impairment, and intangible assets that have finite useful lives be amortized
over their useful lives. SFAS No. 142 provides specific guidance for testing
goodwill and intangible assets that will not be amortized for impairment. In
addition, SFAS No. 142 expands the disclosure requirements for goodwill and
other intangible assets in the years subsequent to their acquisition. SFAS No.
142 is effective for our fiscal year 2003, with early adoption permitted at the
beginning of our fiscal year 2002. Impairment losses for goodwill and
indefinite-life intangible assets that arise due to the initial application of
SFAS No. 142 are to be reported as resulting from a change in accounting
principles. However, goodwill and intangible assets acquired after June 30, 2001
will be subject immediately to provisions of SFAS No. 142. We do not expect the
adoption of SFAS No. 142 to have a material effect on our results of operations
or statements of financial position and will adopt SFAS No. 142 effective for
our fiscal year 2003.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" which addresses financial accounting and reporting for retirement
obligations associated with the retirement of tangible long-lived assets and for
the associated asset retirement costs. SFAS No. 143 requires a company to record
the fair value of an asset retirement obligation in the period in which it is
incurred. When the retirement obligation is initially recorded, the company also
records a corresponding increase to the carrying amount of the related tangible
long-lived asset and depreciates that cost over the useful life of the tangible
long-lived asset. The retirement obligation is increased at the end of each
period to reflect the passage of time and changes in the estimated future cash
flows underlying the initial fair value measurement. Upon settlement of the
retirement obligation, the company either settles the retirement obligation for
its recorded amount or incurs a gain or loss upon settlement. SFAS No. 143 is
effective for fiscal years beginning after June 15, 2002 with earlier
application encouraged. Management is currently assessing the impact that SFAS
No. 143 will have on the Company's financial position and results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets and also affects
certain aspects of accounting for discontinued operations. SFAS No. 144
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of," and APB No. 30, "Reporting the Results
of Operations--Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions." SFAS
No. 144 is effective for fiscal years beginning after December 15, 2001.
Management is currently assessing the impact that SFAS No. 144 will have on the
Company's financial position and results of operations.


<PAGE>


NOTE 3: SALE OF THE AUTOMATION SYSTEMS GROUP

On December 12, 2001, the Company sold its Automation Systems Group in Longmont,
Colorado, to Brooks Automation, Inc. of Chelmsford, Massachusetts, in a cash
transaction, for $12,165. Substantially all of the assets were sold to Brooks
and substantially all of the liabilities were assumed by Brooks. The gain on the
sale was $6,117 before related exit costs of $1,920 to be paid from the
proceeds, inventory write-downs of $808, and tax expense of $1,288. As of March
31, 2002, the restricted cash balance of $1,221 related to the Automation sale
is being held in escrow for a period of one year from the date of sale.


NOTE 4: SEGMENT INFORMATION

FASB Statement No. 131, "Disclosures about Segments of an Enterprise and Related
Information" establishes standards, using a management approach, for reporting
information regarding operating segments in annual financial statements. The
management approach designates the internal reporting that is used by the chief
operating decision-maker when making operating decisions and assessing
performance as the source of the Company's reportable segments. The Company's
president has been determined to be its chief operating decision-maker, as
defined under Statement 131.

The Company operates in three principal business segments globally:
Semiconductor; Industrial; and Telecommunications. The segment data is presented
below in a manner consistent with management's internal measurement of the
business.

<TABLE>
<CAPTION>
                                                      Three Months Ended                 Nine Months Ended
                                                          March 31,                         March 31,
                                                  --------------------------         -------------------------
                                                    2002              2001             2002              2001
                                                  --------          --------         --------          --------
<S>                                               <C>               <C>              <C>               <C>
SEMICONDUCTOR
       Sales .................................    $  8,599          $ 25,014         $ 27,102          $ 60,817
       Gross profit ..........................       2,808            12,302            8,468            27,396
       Gross profit as a % of sales ..........          33%               49%              31%               45%

INDUSTRIAL
       Sales .................................    $ 10,925          $  8,807         $ 28,355          $ 24,974
       Gross profit ..........................       4,049             4,321            9,960            10,792
       Gross profit as a % of sales ..........          37%               49%              35%               43%

TELECOMMUNICATIONS
       Sales .................................    $  1,774          $  4,896         $  5,803          $  9,589
       Gross (loss) profit ...................        (575)            2,866             (443)            4,881
       Gross (loss) profit as a % of sales ...         (32%)              59%              (8%)              51%

TOTAL
       Sales .................................    $ 21,298          $ 38,717         $ 61,260          $ 95,380
       Gross profit ..........................    $  6,282          $ 19,489         $ 17,985          $ 43,069
       Gross profit as a % of sales ..........          30%               50%              29%               45%
</TABLE>

The total sales and the semiconductor sales for the three and nine months ended
March 31, 2002 included a settlement for $3,000 associated with the cancellation
of outstanding purchase orders from a semiconductor customer. Approximately 60%
of this amount relates to payments for finished goods at contracted selling
prices with the remainder representing cancellation charges for work in process
and raw materials inventories.


<PAGE>


The total gross profit and the semiconductor segment gross profit for the nine
months ended March 31, 2002 included $808 of inventory write-downs related to
the sale of the Automation Systems Group.

Separate financial information by segment for total assets, capital
expenditures, and depreciation and amortization is not available and is not
evaluated by the chief operating decision-maker of the Company.

Substantially all of the Company's operating results, assets, depreciation, and
amortization are U.S. based. The Company's sales by geographic area were as
follows:

<TABLE>
<CAPTION>
                                             Three Months Ended            Nine Months Ended
                                                 March 31,                     March 31,
                                           ----------------------        ----------------------
                                            2002           2001           2002           2001
                                           -------        -------        -------        -------
<S>                                        <C>            <C>            <C>            <C>
Americas (primarily United States) ...     $12,117        $19,264        $32,997        $49,507
Far East:
   Japan .............................       4,257         15,032         13,763         31,819
   Pacific Rim .......................       1,550          1,392          4,316          5,721
                                           -------        -------        -------        -------
Total Far East .......................     $ 5,807        $16,424        $18,079        $37,540
Europe and Other (primarily Europe) ..       3,374          3,029         10,184          8,333
                                           -------        -------        -------        -------
Total ................................     $21,298        $38,717        $61,260        $95,380
                                           =======        =======        =======        =======
</TABLE>

<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

                              RESULTS OF OPERATIONS

Net sales of $21,298,000 for the third quarter and $61,260,000 for the nine
months ended March 31, 2002 decreased by $17,419,000, or 45%, and $34,120,000,
or 36%, from the comparable prior year periods. Included in third quarter of
fiscal 2002 sales was a settlement for $3,000,000 associated with the
cancellation of outstanding purchase orders from a semiconductor customer.
Approximately 60% of this amount relates to payments for finished goods at
contracted selling prices with the remainder representing cancellation charges
for work in process and raw materials inventories.

For the third quarter of fiscal 2002, net sales in the semiconductor segment
were $8,599,000, or 41% of total net sales, as compared to $25,014,000, or 64%,
in the prior year period; net sales in the industrial segment were $10,925,000,
or 51% of total net sales, as compared to $8,807,000, or 23%, in the prior year
period; and net sales in the telecommunications segment were $1,774,000, or 8%
of total net sales, as compared to $4,896,000, or 13%, in the prior year period.

For the first nine months of fiscal 2002, net sales in the semiconductor segment
were $27,102,000, or 44% of total net sales, as compared to $60,817,000, or 64%,
in the prior year period; net sales in the industrial segment were $28,355,000,
or 46% of total net sales, as compared to $24,974,000, or 26%, in the prior year
period; and net sales in the telecommunications segment were $5,803,000, or 10%
of total net sales, as compared to $9,589,000, or 10%, in the prior year period.
The Company continues to be impacted significantly by the downturn in the
semiconductor and telecommunications industries, however, progress continues to
be made in the penetration of the industrial segment.

Company sales to the Americas, the vast majority of which are in the United
States, amounted to $12,117,000 in the third quarter of fiscal 2002, a decrease
of $7,147,000, or 37%, from the third quarter of fiscal 2001 levels of
$19,264,000. The Company's sales outside the Americas amounted to $9,181,000 in
the third quarter of fiscal 2002, a decrease of $10,272,000, or 53%, from the
third quarter of fiscal 2001 levels of $19,453,000. This decrease (as well as
the decrease discussed below for the comparative nine-month periods) can be
attributed to weakness in both the semiconductor and telecommunications
industries, which were only partially offset by increased sales to industrial
sectors. Sales to Japan during the third quarter of fiscal 2002 amounted to
$4,257,000, a decrease of $10,775,000, or 72%, from the third quarter of fiscal
2001 sales levels. Japan sales were affected by the continued weakness in the
semiconductor market, especially the Company's product lines, which serve
original equipment manufacturers. Sales to Europe/Other, primarily Europe,
amounted to $3,374,000, an increase of $345,000, or 11%, from the third quarter
of fiscal 2001. Sales to the Pacific Rim, excluding Japan, amounted to
$1,550,000, an increase of $158,000, or 11%, from the third quarter of fiscal
2001 sales levels.

Company sales to the Americas, the vast majority of which are in the United
States, amounted to $32,997,000 in the first nine months of fiscal 2002, a
decrease of $16,510,000, or 33%, from the first nine months of fiscal 2001
levels of $49,507,000. The Company's sales outside the Americas amounted to
$28,263,000 in the first nine months of fiscal 2002, a decrease of $17,610,000,
or 38%, from the first nine months of fiscal 2001 levels of $45,873,000. Sales
to Japan during the first nine months of fiscal 2002 amounted to $13,763,000, a
decrease of


<PAGE>


$18,056,000, or 57%, from the first nine months of fiscal 2001 sales levels.
Sales to Europe/Other, primarily Europe, amounted to $10,184,000, an increase of
$1,851,000, or 22%, from the first nine months of fiscal 2001. This increase was
due to continued growth in the Company's industrial sector, especially the
automotive industry. Sales to the Pacific Rim, excluding Japan, amounted to
$4,316,000, a decrease of $1,405,000, or 25%, from the first nine months of
fiscal 2001 sales levels due to weakness in sales to the semiconductor market.

Sales in U.S. dollars, for the quarter and nine months ended March 31, 2002,
were $18,008,000 and $51,653,000, respectively, or 84% of all Company sales for
both periods. Significant changes in the values of foreign currencies relative
to the value of the U.S. dollar can impact the sales of the Company's products
in its export markets, as would changes in the general economic conditions in
those markets. The impact of such changes in foreign currency values on the
Company's sales cannot be measured.

Gross profit for the third quarter of fiscal 2002 totaled $6,282,000, a decrease
of $13,207,000, or 68%, from $19,489,000 in the third quarter of fiscal 2001.
Gross profit as a percentage of sales for the third quarter of fiscal 2002 was
30%, as compared to 50% for the comparable prior year period. Gross profit for
the first nine months of fiscal 2002 totaled $17,985,000 (including $808,000 of
inventory write-downs related to the sale of the Automation Systems Group in
Longmont, Colorado to Brooks Automation, Inc. in December, 2001), a decrease of
$25,084,000, or 58%, from $43,069,000 for the first nine months of fiscal 2001.
Gross profit as a percentage of sales for the first nine months of fiscal 2002
was 29%, as compared to 45% for the comparable prior year period. The decrease
in gross profit and in gross profit as a percentage of sales is primarily due to
lower production volumes.

Selling, general and administrative expenses ("SG&A") in the third quarter of
fiscal 2002 amounted to $6,494,000, a decrease of $3,226,000, or 33%, from the
third quarter of fiscal 2001. As a percentage of net sales, SG&A for the third
quarter of fiscal 2002 was 30%, as compared to 25% in the third quarter of
fiscal 2001. SG&A in the first nine months of fiscal 2002 amounted to
$18,931,000, a decrease of $2,434,000, or 11%, from the first nine months of
fiscal 2001. As a percentage of net sales, SG&A for the first nine months of
fiscal 2002 was 31%, as compared to 22% in the first nine months of fiscal 2001.
The decrease in SG&A resulted from lower incentive compensation costs due to
lower sales volume and net losses for each of the third quarter and first nine
months of fiscal 2002.

Research, development, and engineering expenses ("R&D") for the third quarter of
fiscal 2002 totaled $5,442,000, an increase of $914,000, or 20%, from $4,528,000
in the third quarter of fiscal 2001. R&D as a percentage of net sales for the
third quarter of fiscal 2002 was 26%, as compared to 12% in the third quarter of
fiscal 2001. R&D for the first nine months of fiscal 2002 totaled $17,195,000,
an increase of $5,196,000, or 43%, from $11,999,000 in the comparable prior year
period. R&D as a percentage of net sales for the first nine months of fiscal
2002 was 28%, as compared to 13% in the first nine months of fiscal 2001. The
increase in R&D primarily was due to continued investment in the semiconductor
and telecommunications segments, including telecommunication automation. These
investments are due to increased customer interest in new technology products.

The Company recorded an operating loss of $5,907,000 in the third quarter of
fiscal 2002, as compared to an operating profit of $5,042,000 in the third
quarter of fiscal 2001. The operating loss as a percentage of sales in the third
quarter of fiscal 2002 was (28%), as compared to an operating profit as a
percentage of sales of 13% in the third quarter of fiscal 2001. The


<PAGE>


Company recorded an operating loss of $20,748,000 (including $1,920,000 of exit
costs and $808,000 of inventory write-downs related to the sale of the
Automation Systems Group) in the first nine months of fiscal 2002, as compared
to operating profit of $9,107,000 in the first nine months of fiscal 2001. The
operating loss as a percentage of sales in the first nine months of fiscal 2002
was (34%), as compared to an operating profit as a percentage of sales of 10% in
the first nine months of fiscal 2001.

Income tax benefit in the third quarter of fiscal 2002 totaled $2,223,000, or
38% of pretax losses, which compares with an income tax expense of $1,719,000,
or 34% of pretax profits, in the third quarter of fiscal 2001. Income tax
benefit in the first nine months of fiscal 2002 totaled $5,433,000, or 38% of
pretax losses, which compares with an income tax expense of $3,229,000, or 34%
of pretax profits, in the first nine months of fiscal 2001. The effective tax
rate of 38% for first nine months of fiscal 2002 has increased from the 34% tax
rate used for fiscal 2001. The lower effective tax rate in fiscal 2001 primarily
was due to the impact of transactions involving the early sale of stock
resulting from the exercise of incentive stock options by former employees of
Firefly Technologies, Inc. (now known as Zygo TeraOptix).

The Company recorded a net loss of $3,722,000 for the third quarter ended March
31, 2002 as compared to net earnings of $3,207,000 for the comparable quarter
ended March 31, 2001. On a diluted per share basis, the net loss was $.21 per
share for the quarter ended March 31, 2002, compared with net earnings of $.20
per share in the comparable prior year period. For the first nine months of
fiscal 2002, the Company recorded a net loss of $9,112,000, or $.52 per share,
as compared to net earnings of $5,929,000, or $.38 per share, for the comparable
prior year period. Excluding the gain on sale of the Automation Systems Group of
$6,117,000 and related exit costs ($1,920,000), inventory write-downs
($808,000), and tax expense ($1,288,000), for the first nine months of fiscal
2002, the net loss would have been $11,213,000, or $.64 on a diluted per share
basis. The net loss per share is based on the weighted average basic shares
outstanding which equals the diluted weighted average shares.

The basic and fully diluted weighted average number of shares outstanding for
the quarter ended March 31, 2002 were 17,434,000 as compared to 15,535,000 basic
shares and 15,975,000 fully diluted shares for the quarter ended March 31, 2001.
The basic and fully diluted weighted average number of shares outstanding for
the first nine months of fiscal 2002 were 17,404,000 as compared to 14,731,000
basic shares and 15,436,000 fully diluted shares for the comparable prior year
period ended March 31, 2001. The increases in the number of shares outstanding
were due to the 2,924,500 shares issued in March 2001 in the secondary offering
of the Company's common stock, employee stock purchases, and the exercise of
stock options.

Backlog at March 31, 2002 totaled $49,886,000, a decrease of $3,524,000, or 7%,
from $53,410,000 at December 30, 2001. Backlog at March 31, 2002, decreased
$20,467,000, or 29%, from $70,353,000 at March 31, 2001. Orders for the third
quarter of fiscal 2002 of $20,596,000, net of debookings of $2,822,000, totaled
$17,774,000. Net orders by segment for the third quarter of fiscal 2002
consisted of $8,603,000 (net of $1,300,000 of debookings), or 48%, in the
semiconductor segment; $9,649,000, or 54%, in the industrial segment; and a net
debooking of $478,000, or (2%), in the telecommunications segment. The net
debooking in the telecommunications segment, represented by orders of $1,044,000
offset by debookings of $1,522,000, was primarily due to cancellations by one
customer due to market conditions.


<PAGE>


Orders, net of debookings, for the first nine months of fiscal 2002 totaled
$58,697,000 (including $1,448,000 related to the Automation Systems Group) and
consisted of $19,806,000, or 33%, in the semiconductor segment; $31,438,000, or
54%, in the industrial segment; and $7,453,000, or 13%, in the
telecommunications segment.


                           RELATED PARTY TRANSACTIONS

Sales to Canon Inc., a stockholder, and Canon Sales Co., Inc., a distributor of
certain of the Company's products in Japan and a subsidiary of Canon Inc.,
amounted to $3,764,000 (18% of net sales), and $10,942,000 (18% of net sales),
for the three and nine months ended March 31, 2002, respectively, as compared to
$14,352,000 (37% of net sales) and $30,582,000 (32% of net sales) for the
comparable prior year periods. Selling prices of products sold to Canon Inc. and
Canon Sales Co., Inc. are based, generally, on the normal terms given to
distributors. At March 31, 2002 and June 30, 2001, there was approximately, in
the aggregate, $1,183,000 and $3,827,000 respectively, of trade accounts
receivable from Canon Inc. and Canon Sales Co., Inc.


                         LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2002, working capital was $75,759,000, a decrease of $18,353,000
from $94,112,000 at June 30, 2001. Excluding the cash proceeds from the sale of
the Automation Systems Group ($12,165,000) and excluding the working capital
sold ($4,614,000) included in the June 30, 2001 balance sheet, there would have
been a decrease of $25,904,000 for the first nine months of fiscal 2002. The
Company maintained cash, cash equivalents, and marketable securities (excluding
restricted cash of $1,221,000) at March 31, 2002 totaling $40,521,000. This
represents a decrease of $19,230,000 from June 30, 2001. Excluding the cash
received from the sale of the Automation Systems Group of $10,948,000 (which is
net of restricted cash of $1,217,000), there would have been a decrease of
$30,178,000 for the first nine months of fiscal 2002. The decrease was due to
the operating loss, decreases in accounts payable and accrued expenses, and
investments in property, plant, and equipment, partially offset by a decrease in
receivables (in all cases, after excluding the Automation System Group assets
and liabilities from the June 30, 2001 balance sheet which were transferred to
Brooks). The decrease in accrued expenses was due to payments of profit sharing
and other incentive compensation that were in accrued liabilities at June 30,
2001. The investments in property, plant, and equipment are primarily due to
investments in optical equipment ($4,003,000) and the completion of the
TeraOptix facility in Westborough, Massachusetts ($7,561,000).

As of March 31, 2002 the mortgage balance on the Company's Westborough,
Massachusetts facility was $12,420,000 comprised of long-term debt of
$11,583,000 and a current portion of long-term debt of $837,000. The mortgage
has an interest rate of LIBOR plus 150 basis points (approximately 3.4% in total
at March 31, 2002) which is payable in full on May 14, 2007. Interest only
payments were made through February 14, 2002. The mortgage principal is
amortizing on a 15-year level amortization schedule requiring monthly principal
and interest payments. Future mortgage principal payments by fiscal years ended
June 30 will total $209,000 for 2002; $837,000 for each year 2003-2006; and
$698,000 for the first 10 months of 2007 with a final payment of $8,165,000 in
May 2007. In conjunction with the mortgage, the Company entered into an interest
rate swap agreement (with a highly rated financial institution) that provides
for a fixed interest rate of approximately 7% for the duration of the mortgage.


<PAGE>


There were no borrowings outstanding under the Company's $3,000,000 bank line of
credit at March 31, 2002.

Stockholders equity at March 31, 2002 decreased by $8,486,000 from June 30, 2001
to $140,653,000, primarily due to the net losses in the first nine months of
fiscal 2002.

Although cash requirements will fluctuate based on the timing and extent of
various factors, Management believes that cash generated from operations,
together with the liquidity provided by existing cash balances and borrowing
capability, will be sufficient to satisfy the Company's liquidity requirements
for the next 12 months.


                   RISK FACTORS THAT MAY IMPACT FUTURE RESULTS

Risk factors that may impact future results include those disclosed in our Form
10-K405 for the year ended June 30, 2001.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discussion about our market risk involves forward-looking
statements. Actual results could differ materially from those projected in the
forward-looking statements. We are exposed to market risk related to changes in
interest rates and foreign currency exchange rates. We do not use derivative
financial instruments for speculative or trading purposes.

INTEREST RATE SENSITIVITY

We maintain a portfolio of cash equivalents and marketable securities including
institutional money market funds (which may include commercial paper,
certificates of deposit, and U.S. treasury securities), government agency
securities, and corporate bonds. Our interest income on our variable rate
investments is sensitive to changes in the general level of U.S. interest rates,
particularly since the majority of our investments are short-term instruments.
The impact of interest rate changes on the Company's results cannot be measured.

During fiscal 2001, the Company entered into a mortgage on its Westborough
facility of $12,560,000 at an interest rate of LIBOR plus 150 basis points (3.4%
in total at March 31, 2002) which is payable in full on May 14, 2007. As of
March 31, 2002, long-term debt was $11,583,000 and the current portion of
long-term debt was $837,000. In conjunction with the mortgage, the Company
entered into an interest rate swap agreement (with a highly rated financial
institution) that provides for a fixed interest rate of approximately 7% for the
duration of the mortgage. Due to the existence of the swap agreement, we do not
believe that a material risk exposure exists.

EXCHANGE RATE SENSITIVITY

Approximately 84% of the Company's sales for the quarter and the nine months
ended March 31, 2002 were in U.S. dollars. At March 31, 2002, the Company's
backlog included orders in U.S. dollars of $40,887,000, or 82% of the total
backlog. Substantially all of the Company's costs are negotiated and paid in
U.S. dollars. Significant changes in the values of foreign currencies relative
to the value of the U.S. dollar can impact the sales of the Company's products
in its export markets as would changes in the general economic conditions in
those markets. The impact of such changes in foreign currency values on the
Company's sales and backlog cannot be measured.


<PAGE>


                           PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)     None.

(b)     None.


<PAGE>



                                    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
                                       President, Chairman, and Chief Executive
                                       Officer




                                       /s/ RICHARD M. DRESSLER
                                       -------------------------------------
                                       Richard M. Dressler
                                       Vice President, Finance, Chief
                                       Financial Officer, and Treasurer


Date: May 10, 2002