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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549


Form 10-K

|           |  |                                                                                                 
|---------- |  | ------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                 
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended March 31,
    2002                                                    
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File number 0-22114

Asyst Technologies, Inc.

(Exact name of registrant as specified in its
charter)


|                                                                   |  |                                          
|------------------------------------------------------------------ |  | -----------------------------------------
|California                                                         |  | 94-2942251                               
|(State or other jurisdiction of
    incorporation or organization) |  | (Federal employer
    identification No.)

48761 Kato Road, Fremont, California
94538

(Address of principal executive
offices)


(510) 661-5000

(Registrants telephone number, including
area code)


Securities registered pursuant to
Section 12(b) of the Act:

None


Securities registered pursuant to
Section 12(g) of the Act:

Common stock, no par value


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 report), and
(2) has been subject to such filing requirements for the
past
90 days.     Yes þ          No o

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to
this
Form 10-K.     o

There were 38,199,175 shares of common stock, no
par value, outstanding as of June 17, 2002. The aggregate
market value of voting stock held by non-affiliates of the
registrant based upon the closing sales quotation of the common
stock on June 17, 2002 was approximately $665,567,251.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are
incorporated by reference in this report:

Definitive Proxy Statement in connection with
2002 Annual Meeting of Shareholders

(Part III of this Report)


The 2002 Proxy Statement shall be deemed to have
been filed only to the extent portions thereof are
expressly incorporated by reference.



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TABLE OF CONTENTS



|              |                                                                                                 |  |  |  |  |  |  | 
|------------- | ----------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I       
|              | Item 1 -- Business                                                                             
|              | Item 2 -- Properties                                                                           
|              | Item 3 -- Legal Proceedings                                                                    
|              | Item 4 -- Submission of Matters to a Vote for Security Holders                                 
|PART II      
|              | Item 5 -- Market for the Registrants Common Equity and Related Shareholder Matters            
|              | Item 6 -- Selected Financial Data                                                              
|              | Item 7 -- Managements Discussion and Analysis of Financial Condition and Results of Operations
|              | Item 7A -- Quantitative and Qualitative Disclosures Regarding Market Risks                     
|              | Item 8 -- Financial Statements and Supplementary Data                                          
|              | Item 9 -- Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III     
|              | Item 10 -- Directors and Executive Officers of the Registrant                                  
|              | Item 11 -- Executive Compensation                                                              
|              | Item 12 -- Security Ownership of Certain Beneficial Owners and Management                      
|              | Item 13 -- Certain Relationships and Related Transactions                                      
|PART IV      
|              | Item 14 -- Exhibits, Financial Statement Schedules and Reports on Form 8-K                     
|SCHEDULE II  
|EXHIBIT 4.5  
|EXHIBIT 10.35
|EXHIBIT 10.36
|EXHIBIT 10.37
|EXHIBIT 21.1 
|EXHIBIT 23.1 



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PART I

Forward Looking Statements

Except for the historical information contained
herein, the following discussion includes forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, and Section 21E of the Securities
Exchange Act of 1934 that involve risks and uncertainties. We
intend such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in
the Private Securities Litigation Reform Act of 1995, and we are
including this statement for purposes of complying with these
safe harbor provisions. We have based these forward-looking
statements on our current expectations and projections about
future events. The Companys actual results could differ
materially. These forward-looking statements are not guarantees
of future performance and are subject to risks, uncertainties
and assumptions, including those set forth in this section as
well as those under the caption, Managements
Discussion and Analysis of Financial Condition and Results of
Operations.

Words such as expect,
anticipate, intend, plan,
believe, estimate and variations of such
words and similar expressions are intended to identify such
forward-looking statements. Our actual results could differ
materially from those anticipated in the forward-looking
statements as a result of certain factors, including but not
limited to those discussed in Risk Factors in our
Annual Report on Form 10-K, as amended. We undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this
document and in our Annual Report on Form 10-K, as amended,
might not occur. The following discussion of our financial
condition and results of operations should be read in
conjunction with our consolidated financial statements and the
related notes included elsewhere in this report.

ASYST is our registered trademark. AXYS,
Fastrack, Fastmove, Fastload, Fastore, Asyst-SMIF System,
SMIF-Pod, SMIF-FOUP, SMIF-Arms, SMIF-Indexer, SMIF-LPI,
SMIF-LPO, SMIF-LPT, SMIF-E, Versaport, Plus, Inx, Advan Tag,
Link-Manager, Smart-Fab, Smart-Tag, Smart-Station,
Smart-Storage, Smart-Traveler, Smart-Comm, Substrate Management
System, Retical Management System, Wafer Management System,
Global Lot Server and Flourotrac Auto Id System are our
trademarks. This report also contains registered trademarks of
other entities.




Item 1  Business

Overview

We are a leading provider of integrated
automation systems for the semiconductor manufacturing industry.
Our systems enable semiconductor manufacturers to increase their
manufacturing productivity and protect their investment in
silicon wafers during the manufacture of integrated circuits, or
ICs. We are the only supplier with product offerings and
know-how in what we believe are the five key elements of
integrated automation systems: isolation systems,
work-in-process materials management, wafer-handling robotics,
automated transport and loading systems, or AMHS, and equipment
connectivity software and services.

We believe that our systems are becoming
increasingly important because of several trends in the
manufacturing of ICs:



| |   |                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The transition to larger diameter wafers, which
    require automated handling as a result of ergonomic issues and
    increased yield risk.       
|
| |  | Continuing decreases in line widths, which
    require higher levels of cleanliness in the manufacturing
    process.                              
|
| |  | Advances in new materials, such as copper, which
    may introduce additional contamination into the semiconductor
    manufacturing plant, or fab.
|
| |  | Continuing customer requirements for enhanced
    manufacturing productivity and return on capital.                                                

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We sell our systems directly to semiconductor
manufacturers, as well as to original equipment manufacturers,
or OEMs, that integrate our systems with their equipment for
sale to semiconductor manufacturers.

Industry Background

In recent years, advances in semiconductor
production equipment and facilities have supported the
continuation of historical trends toward production of ICs with
ever smaller line widths on ever larger wafers. Currently, most
fabs process wafers with diameters of 200mm. However, several
fabs are currently operating production lines utilizing 300mm
wafers and a significant number of new fabs are expected to be
built for 300mm wafers. Concurrently, line widths in IC
manufacturing have pushed to 0.13 micron and are expected
to decrease further. In addition, the increasing cost of
semiconductor manufacturing equipment and facilities continues
to push IC manufacturers to maximize the productivity of these
investments. Keeping pace with these trends presents
semiconductor manufacturers with a number of technical and
economic challenges.

In response to these challenges, many IC
manufacturers use automation systems to maximize tool
utilization and to minimize wafer mishandling, misprocessing and
contamination. We believe that semiconductor manufacturers will
increase their commitments to these solutions in their 300mm
fabs, because of: (a) the approximate $2 billion cost
of a 300mm fab, (b) the value of work-in-process inventory,
which could exceed $450,000 per 25-wafer lot, and (c) the
ergonomic issues introduced by the significantly increased
weight and bulk of loaded 300mm carriers.

As device dimensions decrease, the harmful
effects of microscopic contamination during the manufacturing
process increase, heightening the need for isolation of wafers
throughout manufacturing. Isolation technology allows for
control of the environment in the immediate vicinity of the
in-process wafers and the tools. Wafers are enclosed in sealed
carriers, or pods, which provide additional environmental
control during storage, transport and loading and unloading of
the tools. Pods holding wafers up to 200mm are known as standard
mechanical interface, or SMIF, pods, and pods holding 300mm
wafers are known as front-opening unified pods, or FOUPs. In
both the SMIF and FOUP processes, the carrier is docked with an
automated system that typically includes a load port or other
door-opening device and a robotic transfer arm to move the wafer
from the carrier to the tool. An enclosure with engineered
airflows surrounds and encapsulates this system. Because wafer
carriers fully encapsulate the wafers during transport between
process steps and during tool loading and unloading, these
devices also help to protect the wafers from accidental damage
due to mishandling.

Semiconductor manufacturers also increasingly are
automating the tracking, sorting, stocking and transport of
wafers throughout the fab, as well as wafer carrier loading and
unloading at the tool. In 200mm manufacturing, these
technologies are employed to reduce the risk of misprocessing,
to efficiently track and manage work-in-process inventory, and
to speed the movement of wafers between manufacturing steps. In
300mm manufacturing, these technologies are increasingly
important because of the increased value of the work-in-process
inventory and the ergonomic issues associated with human
transport and loading heavy, bulky 300mm wafer carriers.

A growing portion of wafer fab equipment spending
is attributable to manufacturing automation systems. In May
2002, Dataquest, an independent research group, estimated that
semiconductor manufacturers spent approximately
$1.5 billion on automation systems in 2001, including OEM
sales, which amounted to 6.6% of total wafer fab equipment
spending. Additionally, Dataquest estimated that this spending
will grow to approximately $3.6 billion in 2005, or 8% of
total wafer fab equipment spending.

The Asyst Solution

We offer a comprehensive line of integrated
automation systems for the semiconductor manufacturing industry.
These solutions provide two distinct benefits to semiconductor
manufacturers:

Increased Manufacturing
Productivity.We believe that
semiconductor manufacturers are able to attain a higher level of
productivity and performance from their equipment by integrating
our products into their manufacturing processes. In addition,
our connectivity software provides semiconductor manufacturers
with

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fab-ready automation capabilities, resulting in
faster implementation times and more efficient operational
productivity. With our automated transportation and loading
solutions, tool idle time is reduced and timely wafer delivery
is improved, thereby increasing equipment utilization and
productivity. Our systems offer semiconductor manufacturers the
flexibility to add capacity while minimizing disruption of
ongoing production in the fab.


Higher Yields.Our
isolation technology, robotics solutions and automated transport
and loading systems provide semiconductor manufacturers with
efficient contamination control throughout the wafer
manufacturing process and greater protection from wafer
mishandling, resulting in more rapid achievement of higher
yields. Our work-in-process materials management and
connectivity software permits wafer level identification,
tracking and logistics management, and minimizes yield loss due
to misprocessing.

Strategy

We believe that our historical success has been
driven by our ability to develop, manufacture, market, install
and support products that provide significant value to
customers. Our continuing strategy is to focus on the
development or acquisition of products and capabilities that
deliver productivity and yield benefits to customers. We are
focused on maintaining and enhancing our relationships with IC
manufacturers and with OEM equipment manufacturers to inform
them of product development and maintain high customer
satisfaction. We also will continue to focus on operational
excellence to support product quality, on-time delivery, and
company-wide efficiency. The following are our six principal
growth strategies:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Focus on Portal
    Automation.With the transition to
    300mm, we believe that essentially all wafer fabrication
    equipment will require automation. As a result, we believe that
    chipmakers increasingly will require equipment manufacturers to
    integrate fully automated front-ends, or portals, with wafer
    fabrication equipment. We increasingly have seen OEMs focusing
    on their core competencies at the tool level, and choosing to
    outsource these portals to qualified suppliers. We believe that
    we are the only supplier with its own total portal automation
    solution that integrates atmospheric robots, environmental
    control systems, integrated input/output interfaces, auto
    identification and tracking systems, wafer carriers and
    connectivity software. By leveraging our existing relationships
    with OEMs and semiconductor manufacturers, we seek to capitalize
    on the increasing demand for a standardized interface between
    the tool and the factory environment and the trend toward
    outsourcing. We also intend to continue to develop innovations
    in the portal area that can facilitate integration between OEM
    tools and fabs, and that improve productivity and/or enhance
    yields.
|
| |  | Leverage 200mm Market
    Leadership.We have a very strong
    200mm market position. Because of the severity of the IC
    industrys cyclical downturn beginning in 2000 and
    continuing to the present, and the resulting harm to the balance
    sheets of many IC manufacturers, we believe that the transition
    to 300mm manufacturing will take time. As a result, we believe
    that 200mm fabs will continue to operate for several years and
    that our customers will seek to extend the useful lives of these
    fabs by adding more advanced technology equipment and/or
    implementing our isolation technology. In the case of technology
    upgrades, such as fabs moving to smaller line widths or adding
    copper lines, we believe that fabs will make concurrent
    purchases of isolation products as they seek to maximize the
    yields and productivity of this new equipment. We plan to
    continue to advance the benefits of our technology and to
    leverage our leadership position throughout the 200mm market.                                                                                                                                                                                                                         
|
| |  | Penetrate the Market for AMHS.AMHS is a large and increasingly
    important market. We have developed a unique system for AMHS. We
    believe that this system, called FasTrack, can move wafers
    through the fab significantly faster than competitive systems
    for some applications. We intend to continue the
    commercialization program for this product. In addition, in May
    2002, we signed a definitive agreement to form a joint venture
    with Shinko Electric Co. Ltd., which we believe will
    significantly accelerate the commercial acceptance of FasTrack
    and will allow us to offer the broadest range of AMHS solutions
    in the industry.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Capitalize on the Emerging Market in
    China.Because of 200mm market
    leadership and our strong customer relationships and long
    history of success with the foundries of Asia, we have enjoyed
    strong                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | initial success in the emerging wafer fabrication
    market in China. During fiscal 2002, we received large orders
    from the first two fabs in China. We plan to continue to
    leverage our competitive advantages in this market, which is
    expected to see the development of a significant number of new
    200mm fabs over the next several years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | Further Penetrate the Japanese
    Market.Although the Japanese economic
    environment in 2001 was challenging, we believe that Japanese
    semiconductor manufacturers will upgrade existing 200mm
    facilities in response to market pressures and longer-term
    increases in demand. In addition, through our acquisition of
    MECS Corporation, a Japanese engineering and robotics company,
    we have become an important supplier to Japanese equipment
    makers, which continue to have a strong presence in the world
    market. We intend to continue to augment our ability to directly
    supply our products to Japanese customers by further increasing
    our local engineering, manufacturing and customer support
    presence in Japan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Focus on Connectivity
    Solutions.Trends toward process
    integration, automation, and remote diagnostics within the fab
    increasingly require that manufacturing equipment be capable of
    communicating with other layers of fab software and hardware. As
    a result, a multi-million dollar market for tool communication
    software and integration services, or connectivity solutions,
    has emerged. In April 2002, we created a new business unit, our
    Connectivity Solutions Group, or CSG, to sharpen our
    organizational focus on this market opportunity. In May 2001, we
    acquired GW Associates, Inc., or GW, the largest merchant
    provider of the industry-standard software driver protocol for
    communications between tools and fab host systems, known as
    SECS/ GEM. In May 2002, Asyst Connectivity Technologies, Inc.,
    or ACTI, one of our subsidiaries, purchased the assets of
    domainLogix Corporation, or DLC, a provider of software services
    and a developer of next-generation tool communications software
    products adhering to the OBEM industry standard. In April 2002,
    we formed a software services subsidiary, Asyst Integration
    Services (India) Ltd., which provides cost-effective software
    development and integration services. We have formed an
    exclusive relationship with Satyam Computer Services Ltd, an
    India-based CMM Level 5 company, to provide cost-effective
    software development services in support of the CSG.

Products



| |                    
| | -------------------
| | Equipment Solutions

Our equipment solutions are designed to automate
the rapid transfer of wafers and other substrates between
manufacturing equipment and wafer and substrate carriers while
maintaining an ultraclean environment throughout the transfer.
These solutions are sold to OEMs for integration with their
tools or directly to fabs that are adding isolation technology
to existing equipment as a manufacturing process enhancement.
Our equipment solutions include interfaces, robotics, and fully
integrated front-ends.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Interfaces.Asyst is
    the worlds leading merchant supplier of automated systems
    that provide the interface between the fab and manufacturing
    equipment. In fiscal 2002, we introduced the IsoPort, our latest
    generation interface for the 300mm market. We offer a variety of
    other input/output systems designed to address a broad range of
    customer applications and equipment types. These include 300mm
    load ports, SMIF-LPTs, SMIF-Arms, SMIF-Indexers, SMIF-LPIs,
    SMIF-LPOs, Versaport 2200s, and related products.                                                                                                                                                                                                                                                      
|
| |  | Substrate-Handling
    Robotics.Asyst offers comprehensive
    robotic substrate handling solutions to the semiconductor and
    related industries. Our robotics products transfer semiconductor
    wafers and substrates of all diameters, liquid crystal display,
    or LCD, panels, and plasma display substrates, and other
    substrates like rigid disks used in disk drive handling between
    the substrate carrier, the tool interface system and the tool
    itself. These products include robots, prealigners and elevators
    specifically designed for atmospheric, harsh environment, and
    wet chemical process applications. We also use our robots and
    prealigners in our Plus-Portal Front End Solutions, LCD Front
    End Solutions, and the SMS line of wafer sorter products.

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Fully Integrated Tool Front-End
    Solutions.Our Plus Portal System
    combines our expertise in isolation systems, work-in-process
    materials management, substrate handling robotics and
    connectivity solutions to provide a complete, integrated,
    automated front-end for process and metrology equipment. An
    integrated Plus Portal includes atmospheric robots,
    environmental control systems, integrated input/output
    interfaces, automated ID and tracking systems, and connectivity
    software.



| |              
| | -------------
| | Fab Solutions

Asysts fab solutions typically are sold
directly to chipmakers. As opposed to equipment solutions, which
generally relate to automating and isolating the transfer of
wafers between the carrier and the tool, fab solutions focus on
the efficient transport, loading, storage, and management of
wafer carriers as they move between tools. Our fab solutions
include AMHS, sorters, auto-ID systems, and wafer and reticle
carriers.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Automated Transport and Loading Systems.Automated transport and loading
    systems move wafer containers to and from tools and between
    process locations in fabs. Our automated transport and loading
    systems employ a unique concept referred to as continuous flow
    technology, or CFT. Competing systems use monorail vehicles that
    can cause delays in the fab if a vehicle is not available at the
    correct location to move material. CFT, on the other hand,
    offers significant improvements in fab efficiency when compared
    with vehicle-based monorail systems. CFT allows wafer carriers
    to move asynchronously on our track-based transport system,
    eliminating the delays associated with monorail vehicles. The
    result is faster, more predictable wafer delivery times, making
    tool loading more efficient.

In May 2002, we entered into a definitive
agreement with Shinko Electric to form a joint venture company,
Asyst Shinko, Inc. Shinko Electric is the market leader in 300mm
AMHS. Shinko Electric has agreed to put its entire AMHS business
into the joint venture, and will retain 49% ownership. We intend
to purchase 51% of the joint venture. Shinko Electric has
successfully penetrated six of the estimated twelve 300mm fabs
that were running AMHS as of May 2002, and we believe that their
300mm installed base is roughly twice that of its nearest
competitor. As of May 2002, Shinko Electric had approximately
250 employees engaged in its AMHS business.

We believe that our planned joint venture
positions us to offer customers highly specialized AMHS
solutions that, depending on customer needs, can combine
Asysts CFT and Shinko Electrics vehicle-based
systems. We further believe that our combined organizations will
be positioned to provide high levels of sales outreach,
pre-sales technical support, installation and integration
expertise, and customer support.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Wafer and Reticle Carriers.We are the worlds leading
    supplier of wafer and reticle carriers to the semiconductor
    manufacturing industry. These products provide a continuous,
    ultraclean environment for semiconductor wafers and reticles as
    they move through the fab. This can significantly reduce
    exposure to contaminants caused by the human handling of
    cassettes and the migration of contaminants from elsewhere in
    the cleanroom. Our carriers also provide a level of protection
    from mishandling during transport, tool loading and unloading,
    and storage.                                                                                                                                                                                                                                                                   
|
| |  | Auto-ID Systems.The
    Asyst SMART-Traveler System allows semiconductor manufacturers
    to reduce manufacturing errors and to achieve cycle time and
    equipment utilization improvements by improving their ability to
    manage work-in-process inventory. The Asyst SMART-Traveler
    System includes both infra-red and radio-frequency based
    products for automated wafer and reticle identification. The
    SMART-Tag is an electronic memory device that combines display,
    logic and communication technologies to provide process
    information, such as wafer lot number and next processing steps,
    about the wafers inside the carrier. AdvanTag automated ID
    performs the same functions as the SMART-Tag, but uses a
    radio-frequency based identification tag that can be attached to
    or embedded into wafer and reticle carriers.

The Asyst SMART-Traveler System also includes the
SMART-Comm, a multiplexing and communication protocol converting
device that increases operator and tool efficiency in
semiconductor facilities by optimizing communications and
minimizing hardware and software layers. The Link-Manager EP

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and read/write probes enable semiconductor
equipment suppliers to support all fab auto ID information
requirements with a single configuration. The complete solution
includes SMART-WIP, an interactive system built around a network
of controllers and communication probes that provides
work-in-process control and management of wafers in storage
racks or automated stockers. The SMART-WIP server software and
database provides the enterprise with global visibility of wafer
and reticle location and status with the reliability and high
availability required in mission-critical applications.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Sorters.Our sorters
    are used to rearrange wafers and reticles between manufacturing
    processes without operator handling, which helps to increase fab
    yields. Sorters also avoid the mishandling of wafers by enabling
    the tracking and verification of each wafer throughout the
    production process. Sorters utilize our input/output systems,
    auto identification systems, robots, prealigners and
    minienvironment technology.



| |                       
| | ----------------------
| | Connectivity Solutions

In April 2002, we created CSG, a new business
unit, which is focused on providing the software products and
services that allow semiconductor manufacturing equipment to
communicate with other layers of fab software and hardware.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Connectivity Products.Through our acquisition of GW, we are
    the largest merchant provider of the industry-standard software
    driver protocol for communications between tools and fab host
    systems, known as SECS/ GEM. Through our acquisition of DLC, we
    now also offer next-generation tool communications software
    products adhering to the OBEM industry standard.                                                                  
|
| |  | Connectivity Services.In April 2002, we formed a software
    services subsidiary, Asyst Integration Services (India) Ltd.,
    which provides cost-effective software development and
    integration services. We have formed an exclusive relationship
    with Satyam Computer Services Ltd, an India-based CMM
    Level 5 company, to provide cost-effective software
    development services in support of our connectivity solutions
    customers.

Customers

Semiconductor manufacturers drive our sales by
building new fabs or, in existing fabs, expanding capacity,
adding isolation technology, or upgrading process technology.
Through our early years and well into the last industry upcycle
that ended in the fourth calendar quarter of 2000, the majority
or our sales were direct to semiconductor manufacturers.
However, as the industry migrates to 300mm wafer fabs, OEMs are
purchasing an increasing proportion of our equipment solutions
and are making automation systems part of the tool. We saw the
result of this trend in our fiscal year ended March 31,
2002, as 59% of net sales were to OEMs. This compares with 45%
in the prior fiscal year. If we are successful in further
penetrating the market for AMHS, which along with our other fab
solutions products is sold directly to fabs, we anticipate that
our sales will be split approximately equally between
semiconductor manufacturers and OEMs.

Our net sales to any particular semiconductor
manufacturer customer are dependent on the number of fabs a
semiconductor manufacturer is constructing and the number of fab
upgrades a semiconductor manufacturer undertakes. As major
projects are completed, the amount of sales to these customers
will decline unless they undertake new projects.

During fiscal 2002 and fiscal 2001, no customer
accounted for more than 10 percent of sales. In fiscal
2000, Taiwan Semiconductor Manufacturing Co., Ltd., or TSMC,
accounted for approximately 11.3 percent of our net sales
and United MicroElectronics Corporation, or UMC, accounted for
approximately 11.0 percent of our net sales.

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Our ten largest customers based on cumulative
sales during fiscal 2002, 2001, and 2000, arranged
alphabetically, were:

|                                           |  |                  
|------------------------------------------ |  | -----------------
|Applied Materials                          |  | Novellus         
|Chartered Semiconductor Manufacturing, Ltd |  | Texas Instruments
|DNS                                        |  | Therma-Wave      
|KLA-Tencor Corporation                     |  | TSMC             
|Lam Research Corporation                   |  | UMC              

Sales and Marketing

We sell our products principally through a direct
sales force in the United States, Japan, Europe and the Asia/
Pacific region. Our sales organization is based in Northern
California, and domestic field sales personnel are stationed in
Arizona, Colorado, Minnesota, Texas, Vermont and Washington.
Japan is supported by sales and service offices in Nagoya and
Yokohama, Japan. The European market is supported through
offices in Crawley and Newport in the United Kingdom, Paris,
France and Dresden, Germany, and is augmented by a distributor
based in Israel. The Asia/ Pacific region is supported through
sales and service offices in Kuching and Kulim, Malaysia;
Tianjin, Peoples Republic of China; Seoul, South Korea;
Singapore; and Hsin-Chu, Taiwan.

International sales, which consist mainly of
export sales from the United States, accounted for approximately
52.0 percent of total sales for fiscal 2002,
60.9 percent of total sales for fiscal 2001, and
60.0 percent of total sales for fiscal 2000. Prior to
fiscal 2001, international sales were generally invoiced in
U.S. dollars and, accordingly, were not subject to
fluctuating currency exchange rates. In fiscal 2002,
approximately 23.5 percent of total net sales originated
from Asyst Japan, Inc., or AJI, and were typically invoiced in
Japanese yen or other regional currencies, and thus were subject
to fluctuating currency exchange rates.

The sales cycle to new customers ranges from six
months to 12 months from initial inquiry to placement of an
order, depending on the complexity of the project and the time
required to communicate the nature and benefits of our systems.
For sales to existing customers, the sales cycle is relatively
short. The sales cycle for follow-on orders by OEM customers can
be as short as two to three weeks.

An important part of our marketing strategy has
been participation in key industry organizations such as
International SEMATECH and SEMI, as well as attendance at events
coordinated by the Semiconductor Industry Association. In
addition, we actively participate in industry trade shows and
conferences and have sponsored symposiums with technology and
business experts from the semiconductor industry.

Systems Integration and Customer
Support

Our systems integration and OEM applications
organizations focus on understanding our customers
manufacturing methodologies and anticipated production
applications to develop customer-specific solutions. For
retrofitting and upgrading existing facilities with Asyst
solutions, our systems integration organization works with our
customers facilities and manufacturing personnel to
develop programs, schedules and solutions to minimize disruption
during the installation of our products into our customers
fabs. In the case of a new fab or tool design, our OEM
applications and systems integration organizations work with our
customers facility planners and operations personnel, as
well as with cleanroom designers, architects and engineers.

In the case of OEM integration, our OEM
applications organization designs and integrates these solutions
directly into the tool. Our OEM applications organization works
very closely with the OEM to understand the process equipment
and the processing requirements to provide our customer with an
optimized solution.

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Research and Development

Research and development efforts are focused on
enhancing our existing products and developing and introducing
new products in order to maintain technological leadership and
meet a wider range of customer needs. Our research and
development expenses were approximately $40.1 million
during fiscal 2002, $44.3 million during fiscal 2001 and
$21.6 million during fiscal 2000.

Our research and development employees are
involved in mechanical and electrical engineering, software
development, micro-contamination control, product documentation
and support. Our central research and development facilities
include a prototyping lab and a cleanroom used for product
research, development and equipment demonstration purposes.
These research and development facilities are primarily located
in Northern California. In addition, we maintain a facility in
Taichung, Taiwan, which is focused on research and development
efforts related to AMHS. Asyst Japan also conducts research and
development activities related to atmospheric robotics at its
facility in Nagoya, Japan.

Manufacturing

Our manufacturing activities consist of
assembling and testing components and sub-assemblies, which are
then integrated into finished systems. While we use standard
components whenever possible, most mechanical parts, metal
fabrications and castings are made to our specifications. Once
our systems are completed, we perform final tests on all
electronic and electromechanical sub-assemblies and cycle
products before shipment.

We currently maintain manufacturing facilities
for our isolation products, Plus-Portal Systems, automated
transport systems, sorters, and software products and services
in Fremont, California. We fabricate our custom enclosures at
SemiFab. In the case of large system orders we sometimes lease
temporary space near our customer for the manufacture of
enclosures. Our robotic products are manufactured in our
Fremont, California and Nagoya, Japan facilities. Manufacturing
of Advanced Machine Programming, Inc., or AMP, products is
conducted in Morgan Hill, California and a secondary Austin,
Texas location. The products of SemiFab are manufactured in
Hollister, California. We currently outsource the manufacturing
of our SMART-Traveler System to Paramit Corporation of Morgan
Hill, California, and our wafer and reticle carriers to Moll
Corporation of Newberg, Oregon.

Competition

We currently face direct competition in all of
our product lines. Many of our competitors have extensive
engineering, manufacturing and marketing capabilities and
potentially greater financial resources than those available to
us. The markets for our products are highly competitive and
subject to rapid technological change.

Brooks-PRI Automation, Inc, is our primary
competitor in the area of isolation systems. Our SMART-Traveler
System products face competition from bar code technology as
well as a number of smaller competitors. We compete primarily
with Entegris, Inc. in the area of wafer carriers. We also
compete with several companies in the robotics area, including,
but not limited to, Brooks-PRI Automation, Kensington Labs, now
part of Newport Corp., Rorze Corporation and Yaskawa 
Super Mectronics Division. In the area of AMHS, our products
face competition from Daifuku Co., Ltd., Murata Co., Ltd, and
Brooks-PRI Automation. Shinko Electric Co. Ltd. historically has
been a competitor in the area of AMHS, but we expect to begin
working cooperatively with Shinko upon formation of our joint
venture company, Asyst Shinko. Our wafer and reticle sorters
compete primarily with products from Recif, Inc. and Brooks-PRI
Automation.

Although most of our competitors currently do not
compete with us across our entire line of integrated automation
systems, we expect that many will attempt to do so in the
future. In addition, the transition to 300mm wafers is likely to
draw new competitors to the factory automation market. In the
markets for various 300mm products, we expect to face intense
competition from Brooks-PRI Automation, as well as competition
from OEMs who maintain their own captive automation
manufacturing capabilities.

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We believe that the principal competitive factors
in our market are:



| |   |                                                                                   
| | - | ----------------------------------------------------------------------------------
| |  | technical capabilities and characteristics of
    systems and products offered;   
|
| |  | technological experience and know how;                                            
|
| |  | product breadth;                                                                  
|
| |  | proven product performance, quality, reliability,
    ease of use and flexibility;
|
| |  | a global, skilled field service support
    organization;                         
|
| |  | effectiveness of marketing and sales; and                                         
|
| |  | price.                                                                            

We believe that we compete favorably with respect
to the foregoing factors. We also believe our ability to provide
a more complete automation and wafer isolation solution provides
a significant competitive advantage with respect to most of our
competitors.

We expect that our competitors will continue to
improve the design and performance of their products and to
introduce new products with competitive performance
characteristics. We believe we will be required to maintain a
high level of investment in research and development and sales
and marketing in order to remain competitive.

Intellectual Property

We pursue patent, trademark and copyright
protection for most of our products. We currently hold
94 patents in the United States and 72 foreign
patents, have 32 pending patent applications in process in
the United States, 231 pending foreign patent applications
in process and intend to file additional patent applications as
appropriate. Our patents expire between 2005 and 2022. There can
be no assurance that patents will be issued from any of these
pending applications or that any claims in existing patents, or
allowed from pending patent applications, will be sufficiently
broad to protect our technology.

There has been substantial litigation regarding
patent and other intellectual property rights in
semiconductor-related industries. While we intend to protect our
intellectual property rights vigorously, there can be no
assurance that any of our patents will not be challenged,
invalidated or avoided, or that the rights granted thereunder
will provide us with competitive advantages. Litigation may be
necessary to enforce our patents, to protect our trade secrets
or know how, to defend us against claimed infringement of the
rights of others, or to determine the scope and validity of the
patents or other intellectual rights of others. Any such
litigation could result in substantial cost and divert the
attention of management, which by itself could have a material
adverse effect on our financial condition and operating results.
Further, adverse determinations in such litigation could result
in our loss of intellectual property rights, subject us to
significant liabilities to third parties, require us to seek
licenses from third parties or prevent us from manufacturing or
selling our products, any of which could have a negative impact
on our financial condition and results of operations. For more
information regarding litigation in which we are currently
engaged, please see Item 3  Legal
Proceedings below.

We also rely on trade secrets and proprietary
technology that we seek to protect, in part, through
confidentiality agreements with employees, consultants and other
parties. There can be no assurance that these agreements will
not be breached, that we will have adequate remedies for any
breach, or that our trade secrets will not otherwise become
known to or independently developed by others. Also, the laws of
some foreign countries do not protect our intellectual property
rights to the same extent as the laws of the United States.

Backlog

Largely as a result of the industry downturn, our
backlog was approximately $61.5 million at March 31,
2002, compared with $119.6 million at March 31, 2001,
and $143.8 million at March 31, 2000. We include in
our backlog only orders for which a customers purchase
order has been received and a delivery date within

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12 months has been specified. As purchase
orders may be cancelled or delayed by customers with limited or
no penalty, our backlog is not necessarily indicative of future
revenues or earnings.


Employees

As of May 1, 2002, we employed 1,209 persons
on a full-time basis, including 198 in research and development,
397 in manufacturing operations, 18 in system integration, 208
in sales and marketing, which includes customer service, 22 in
quality assurance, 107 in finance and administration, and 259 in
international operations. Additionally, we employed 41 persons
on a temporary basis, including 10 in manufacturing operations.
We have never had a work stoppage or strike and no employees are
represented by a labor union or covered by a collective
bargaining agreement. We consider our employee relations to be
good. During fiscal 2002, we restructured our domestic and
international operations in response to the drop in our net
sales. As a result of these restructuring activities, we
terminated the employment of approximately 360 full-time
employees from our operations in the United States and
approximately 75 employees from our international operations
during fiscal 2002.

Financial Information by Business Segment and
Geographic Data

We operate in one reportable segment. The
information included in Note 9 of Notes to Consolidated
Financial Statements, is incorporated herein by reference.

Risk Factors

This Annual Report on Form 10-K contains
forward looking statements that involve risks and uncertainties,
including statements about our future plans, objectives,
intentions and expectations. Many factors, including those
described below, could cause actual results to differ materially
from those discussed in any forward looking
statements.



|  |                                                                                                                                           
|- | ------------------------------------------------------------------------------------------------------------------------------------------
| | The semiconductor manufacturing industry is
    highly cyclical, and the current substantial downturn is harming
    our operating results

Our business is entirely dependent upon the
capital expenditures of semiconductor manufacturers, which at
any point in time are dependent on the then-current and
anticipated market demand for ICs, as well as products utilizing
ICs. The semiconductor industry is cyclical and has historically
experienced periodic downturns. These periodic downturns,
whether the result of general economic changes or capacity
growth temporarily exceeding growth in demand for ICs, are
difficult to predict and often have a severe adverse effect on
the semiconductor industrys demand for tools. Sales of
tools to semiconductor manufacturers may be significantly more
cyclical than sales of ICs, as the large capital
expenditures required for building new fabs or facilitizing
existing fabs is often delayed until IC manufacturers have a
good indication of future demand. If demand for ICs and our
systems remains depressed for an extended period, it will
seriously harm our business.

The industry is currently experiencing a
significant downturn due to decreased worldwide demand for
semiconductors. During this downturn, most of our customers have
reduced capital expenditures, which has adversely impacted our
business. Our net sales declined 70.8% from their peak in the
third quarter of fiscal 2001 to the third quarter of fiscal
2002. We cannot assure you that our sales will recover
sufficiently for us to return to profitability in the near
future. As a result of cost reductions in response to the
decrease in net sales and uncertainty over the timing and extent
of any industry recovery, we may be unable to continue to invest
in marketing, research and development and engineering at the
levels we believe are necessary to maintain our competitive
position. Our failure to make these investments could seriously
curtail our long-term business prospects.

We believe that our future performance will
continue to be affected by the cyclical nature of the
semiconductor industry and, as a result, be adversely affected
by such industry downturns.

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| |                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  Because the semiconductor
    manufacturing industry is subject to rapid demand shifts which
    are difficult to predict, our inability to efficiently manage
    our manufacturing capacity and inventory levels in response to
    these rapid shifts may cause a reduction in our gross margins,
    profitability and market share

The semiconductor manufacturing industry
experiences rapid demand shifts. Our ability to respond to these
demand shifts is limited because we incur manufacturing
overhead, inventory expense and other costs, many of which are
fixed in the short-term, based on projections of anticipated
customer demand.

During a downturn, our ability to quickly reduce
our production costs is impaired by our projections of
manufacturing costs and inventory incurred. If market demand
does not match our projections, we will have to carry or write
off excess and obsolete inventory and our gross margins will
decline which, in turn, prevents us from operating profitably.
For example, we incurred an inventory reserve in the quarter
ended December 31, 2001 of $12.8 million associated
with additional inventory reserves for obsolete and excess
inventory. This inventory accumulated largely due to the steep
decline in demand for our products. Furthermore, if we do not
accurately predict the appropriate demand for our 200mm and
300mm automation products, this will increase the burden of
excess and obsolete inventory.

During periods of increased demand, our ability
to satisfy increased customer demand may be constrained by our
projections. If our projections underestimate demand, we may
have inadequate inventory and may not be able to expand our
manufacturing capacity, which could result in delays in
shipments and loss of customers and reduced profitability. Even
if we are able to sufficiently expand our capacity, we may not
efficiently manage this expansion which would adversely affect
our gross margin and profitability.



| |                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------
| |  Our gross margins on 300mm
    products may be lower than on 200mm products, which could result
    in decreased profitability

The gross margins on our 300mm products currently
are not as favorable as on our 200mm products. This is primarily
because our 300mm products are early in their production life,
we face increased competition for our products and we sell a
greater percentage of our 300mm products directly to OEMs rather
than IC manufacturers.

The 300mm market is still relatively new.
Manufacturing costs are generally higher in the early stages of
new product introduction and decrease as demand increases, due
to better economies of scale and efficiencies developed in the
manufacturing processes. However, we cannot assure you that we
will see such economies of scale and efficiencies in our future
manufacturing of 300mm products. We face increased competition
for our 300mm products because of the larger revenue opportunity
for 300mm products and because of the establishment of a
front-opening unified pod interface standard. While IC
manufacturers purchased a majority of 200mm automation products,
OEM manufacturers are purchasing a higher percentage of tool
automation products for 300mm. OEMs can generally command lower
prices from us and from their other vendors because of the
larger market opportunity they provide.

These and other factors may prevent us from
achieving or maintaining the same relative pricing and gross
margin performance on 300mm products as we achieved on 200mm
products. Lower margins will result in decreased profitability
or require further cost reductions to achieve historical profit
levels.



| |                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  We depend on large purchases
    from a few significant customers, and any loss, cancellation,
    reduction or delay in purchases by, or failure to collect
    receivables from, these customers could harm our
    business

The markets in which we sell our products are
comprised of a relatively small number of OEMs and semiconductor
manufacturers. Large orders from a relatively small number of
customers account for a significant portion of our revenue and
makes our relationship with each customer critical to our
business. We may not be able to retain our largest customers or
attract additional customers, and our OEM customers may not be
successful in selling our systems. Our success will depend on
our continued ability to develop and manage relationships with
significant customers. In addition, our customers have in the
past sought price

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concessions from us and may continue to do so in
the future, particularly during downturns in the semiconductor
market. Further, some of our customers may in the future shift
their purchases of products from us to our competitors.
Additionally, the inability to successfully develop
relationships with additional customers or the need to provide
future price concessions would have a negative impact on our
business.


If we are unable to collect a receivable from a
large customer, our financial results will be negatively
impacted. In addition, since each customer represents a
significant percentage of net sales, the timing of the
completion of an order can lead to a fluctuation in our
quarterly results. As we complete projects for a customer,
business from that customer will decline substantially unless it
undertakes additional projects incorporating our products.



| |                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  If we are unsuccessful in fully
    commercializing our FasTrack Automated Materials Handling
    System, and/or we cannot leverage our planned joint venture with
    Shinko Electric Co., Ltd., our growth prospects could be
    negatively impacted

AMHS is an important component of our growth
strategy. We have completed only one successful commercial
installation of our FasTrack system in a 200mm fab. Our FasTrack
system currently is not a complete AMHS solution, and we may not
be successful in some or all of our current efforts to develop
or otherwise obtain the additional components that comprise a
complete solution. If we are able to offer a complete solution,
we still could find it difficult to compete against companies
with greater experience and resources in the AMHS market. In
addition, our planned joint venture partner, Shinko Electric,
may not continue to succeed in the 300mm AMHS market. We may not
successfully leverage the Asyst Shinko joint venture
organization, technology and customer base to accelerate the
market acceptance of FasTrack. Any failure to win market
acceptance of our products, either FasTrack or joint venture
products, would negatively impact our growth prospects.



| |                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  Because we do not have
    long-term contracts with our customers, our customers may cease
    purchasing our products at any time if we fail to meet their
    needs

We do not have long-term contracts with our
customers. As a result, our agreements with our customers do not
provide any assurance of future sales. Accordingly:



| |   |                                                                                 
| | - | --------------------------------------------------------------------------------
| |  | our customers can cease purchasing our products
    at any time without penalty;
|
| |  | our customers are free to purchase products from
    our competitors;           
|
| |  | we are exposed to competitive price pressure on
    each order; and             
|
| |  | our customers are not required to make minimum
    purchases.                   

Sales are typically made pursuant to individual
purchase orders and product delivery often occurs with extremely
short lead times. If we are unable to fulfill these orders in a
timely manner, we could lose sales and customers.



| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| |  The timing of the transition to
    300mm technology is uncertain and competition may be
    intense

We have invested, and are continuing to invest,
substantial resources to develop new systems and technologies to
automate the processing of 300mm wafers. However, the timing of
the industrys transition from the current, widely used
200mm manufacturing technology to 300mm manufacturing technology
is uncertain, partly as a result of the recent period of reduced
demand for semiconductors. Delay in the adoption of 300mm
manufacturing technology could adversely affect our potential
revenue.

Manufacturers implementing factory automation in
300mm pilot projects may initially seek to purchase systems from
multiple vendors. Competition, including price competition, for
these early 300mm orders could be vigorous. A vendor whose
system is selected for an early 300mm pilot project may have, or
be perceived to have, an advantage in competing for future
orders, and thus the award to a competitor of one or more early
300mm orders could cause our stock price to fall.

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| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| |  If our fully integrated tool
    front-end solutions are not widely accepted, our growth
    prospects could be negatively impacted

Our Plus-Portal System offers our OEM customers a
complete, automated interface between the OEMs tool and
the fab, an alternative to designing and manufacturing automated
equipment front-ends for their tools utilizing purchased
components and in-house engineering and manufacturing resources.
The decision by OEMs to adopt our system for a large product
line involves significant organizational, technological and
financial commitments by the OEMs. OEMs expect the Plus-Portal
System to meet stringent design, reliability and delivery
specifications. To date, we have penetrated only a small
percentage of OEM tools. We believe that our growth prospects in
the OEM market depend in large part upon our ability to gain
acceptance of the Plus-Portal System and follow-on products by a
broader group of OEM customers. If we fail to satisfy these
expectations, whether based on limited or expanded sales levels,
OEMs will not adopt the Plus-Portal System. We cannot assure you
that these tools will be widely accepted in the marketplace or
that additional OEMs will adopt the system. Notwithstanding our
solution, OEMs may purchase components to assemble interfaces or
invest in the development of their own complete interfaces. If
our products are not adopted by OEMs, our prospects will be
negatively impacted and our profits substantially harmed.



| |                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------
| |  If we are unable to develop and
    introduce new products and technologies in a timely manner, our
    business could be negatively impacted

Semiconductor equipment and processes are subject
to rapid technological changes. The development of more complex
ICs has driven the need for new facilities, equipment and
processes to produce these devices at an acceptable cost. We
believe that our future success will depend in part upon our
ability to continue to enhance our existing products to meet
customer needs and to develop and introduce new products in a
timely manner. We often require long lead times for development
of our products, which requires us to expend significant
management effort and incur material development costs and other
expenses. During development periods we may not realize
corresponding revenue in the same period, or at all. We may not
succeed with our product development efforts and we may not
respond effectively to technological change.



| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| |  We may not effectively compete
    in a highly competitive semiconductor equipment
    industry

The markets for our products are highly
competitive and subject to rapid technological change. We
currently face direct competition with respect to all of our
products. In addition, the facility automation market has
periods of rapid consolidation. Some of our competitors,
especially following consolidation, may have greater name
recognition, more extensive engineering, manufacturing and
marketing capabilities and substantially greater financial,
technical and personnel resources than those available to us.

Brooks-PRI Automation, Inc, is our primary
competitor in the area of isolation systems. Our SMART-Traveler
System products face competition from bar code technology as
well as a number of smaller competitors. We compete primarily
with Entegris, Inc. in the area of wafer carriers. We also
compete with several companies in the robotics area, including,
but not limited to, Brooks-PRI Automation, Kensington Labs, now
part of Newport Corp., Rorze Corporation and Yaskawa 
Super Mectronics Division. In the area of AMHS, our products
face competition from Daifuku Co., Ltd., Murata Co., Ltd., and
Brooks-PRI Automation. Shinko Electric historically has been a
competitor in the area of AMHS, but we expect to begin working
cooperatively in this area with Shinko Electric upon formation
of our joint venture company, Asyst Shinko. Our wafer and
reticle sorters compete primarily with products from Recif, Inc.
and Brooks-PRI Automation.

In addition, the transition to 300mm wafers is
likely to draw new competitors to the facility automation market
and may result in additional consolidation. In the 300mm wafer
market, we expect to face intense competition from a number of
companies such as Brooks-PRI Automation, as well as potential
competition from semiconductor equipment and cleanroom
construction companies.

We expect that our competitors will continue to
develop new products in direct competition with our systems,
improve the design and performance of their products and
introduce new products with enhanced performance
characteristics. In order to remain competitive, we need to
continue to improve and expand our

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product line, which will require us to maintain a
high level of investment in research and development.
Ultimately, we may not be able to make the technological
advances and investments necessary to remain competitive.


New products developed by our competitors or more
efficient production of their products could increase pricing
pressure on our products. In addition, companies in the
semiconductor capital equipment industry have been facing
pressure to reduce costs. Either of these factors may require us
to make significant price reductions to avoid losing orders.
Further, our current and prospective customers continuously
exert pressure on us to lower prices, shorten delivery times and
improve the capabilities of our products. Failure to respond
adequately to such pressures could result in a loss of customers
or orders.



| |                                                                                         
| | ----------------------------------------------------------------------------------------
| |  We may not be able to
    efficiently integrate the operations of our
    acquisitions

We have made and, most likely, will continue to
make additional acquisitions of, or significant investments in,
businesses that offer complementary products, services,
technologies or market access. Our recent acquisitions include
Progressive Systems Technologies, Inc., or PST, Palo Alto
Technologies, Inc., or PAT, AMP, SemiFab, GW and MECS. We
subsequently merged MECS into Asyst Japan, Inc., or AJI.

We are likely to make additional acquisitions of,
or significant investments in, businesses that offer
complementary products, services, technologies or market access.
For example, in May 2002, we completed the asset purchase from
DLC and signed a definitive agreement with Shinko Electric for
the establishment of a joint venture. If we are to realize the
anticipated benefits of past and future acquisitions, the
operations of such companies must be integrated and combined
efficiently with those of Asyst. The process of integrating
supply and distribution channels, computer and accounting
systems and other aspects of operations, while managing a larger
entity, has in the past and will continue to present a
significant challenge to our management. In addition, it is not
certain that we will be able to incorporate different
technologies into our integrated solution. We may not succeed
with the integration process nor may we fully realize the
anticipated benefits of the business combinations. We may be
required to record significant future impairment costs, such as
the $60.4 million charge recorded in fiscal 2002, in the
event that the carrying value exceeds the fair value of acquired
intangible assets. The dedication of management resources to
such integration may detract attention from the day-to-day
business, and we may need to hire additional management
personnel to successfully rationalize our acquisitions. The
difficulties of integration may increase because of the
necessity of combining personnel with disparate business
backgrounds and combining different corporate cultures. We may
incur substantial costs associated with these activities and we
may suffer other material adverse effects from these integration
efforts which could materially reduce our short-term earnings.
Consideration for future acquisitions could be in the form of
cash, common stock, rights to purchase stock or a combination
thereof. Dilution to existing shareholders and to earnings per
share may result to the extent that shares of common stock or
other rights to purchase common stock are issued in connection
with any future acquisitions.



| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  We may be unable to protect our
    intellectual property rights and we may become involved in
    litigation concerning the intellectual property rights of
    others

We rely on a combination of patent, trade secret
and copyright protection to establish and protect our
intellectual property. While we intend to take reasonable steps
to protect our patent rights, we cannot assure you that our
patents will not be challenged, invalidated or avoided, or that
the rights granted thereunder will provide us with competitive
advantages. We also rely on trade secrets that we seek to
protect, in part, through confidentiality agreements with
employees, consultants and other parties. These agreements may
be breached, we may not have adequate remedies for any breach,
or our trade secrets may otherwise become known to, or
independently developed by, others.

Intellectual property rights are uncertain and
involve complex legal and factual questions. We may unknowingly
infringe on the intellectual property rights of others and may
be liable for that infringement, which could result in
significant liability for us. If we do infringe the intellectual
property rights of others, we could be forced to either seek a
license to intellectual property rights of others or alter our
products so that they no longer infringe the intellectual
property rights of others. A license could be very expensive to
obtain or

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may not be available at all. Similarly, changing
our products or processes to avoid infringing the rights of
others may be costly or impractical or could detract from the
value of our product.


There has been substantial litigation regarding
patent and other intellectual property rights in
semiconductor-related industries. Litigation may be necessary to
enforce our patents, to protect our trade secrets or know how,
to defend Asyst against claimed infringement of the rights of
others or to determine the scope and validity of the patents or
intellectual property rights of others. Any litigation could
result in substantial cost to us and divert the attention of our
management, which by itself could have an adverse material
effect on our financial condition and operating results.
Further, adverse determinations in any litigation could result
in our loss of intellectual property rights, subject us to
significant liabilities to third parties, require us to seek
licenses from third parties or prevent us from manufacturing or
selling our products. Any of these effects could have a negative
impact on our financial condition and results of operations.



| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| |  Because of intense competition
    for highly skilled personnel, we may not be able to recruit and
    retain necessary personnel

Our future success will depend in large part upon
our ability to recruit and retain highly skilled technical,
manufacturing, managerial, financial and marketing personnel.
Our future performance depends substantially on the continued
service of our senior management team. We do not have long term
employment agreements with any of our senior management team,
except Mihir Parikh, our Chairman of the Board and Chief
Executive Officer, and we do not maintain any key-man life
insurance policies.

Due to the cyclical nature of the demand for our
products, we have had to reduce our workforce and then rebuild
our workforce as our business has gone through cyclical peaks
and troughs. The labor markets in which we operate are highly
competitive and as a result, this type of employment cycle
increases our risk of not being able to retain and recruit key
personnel.

If we are unable to recruit or retain key
personnel, we may not have enough personnel to promptly return
to peak production levels. If we are unable to expand our
existing manufacturing capacity to meet demand, a
customers placement of a large order for the development
and delivery of factory automation systems during a particular
period might deter other customers from placing similar orders
with us for the same period. It could be difficult for us to
rapidly recruit and train the substantial number of qualified
engineering and technical personnel who would be necessary to
fulfill one or more large, unanticipated orders. A failure to
retain, acquire or adequately train key personnel could have a
material adverse impact on our performance.



|  |                                                                                                                                     
|- | ------------------------------------------------------------------------------------------------------------------------------------
| | We may experience lost sales due to
    outsourcing of certain product manufacturing, which could
    negatively impact our business

In an effort to focus on core competencies and
reduce the impact of cyclical peaks and troughs on our operating
results, we have outsourced the manufacturing of some of our
products. We may rely more heavily on outsourced manufacturing
in the future. Outsourced manufacturing could create disruptions
in the availability of our products if the timeliness or quality
of products delivered does not meet our requirements. These
problems could be caused by a number of factors including, but
not limited to: manufacturing process flow issues, financial
viability of an outsourced vendor, availability of raw materials
to the outsourced vendor, improper product specifications, and
the learning curve to commence manufacturing at a new outsourced
site. If products are delayed because of problems in outsourcing
we may lose sales and profits.

We have outsourced manufacturing in the past and
we have experienced delays due to financial difficulties at an
outsourced manufacturer. This negatively impacted our ability to
increase production in response to market demand.

Any delays in meeting customer demand or quality
problems resulting from product manufactured at an outsourced
location could have a material negative impact on our net sales
and results of operations, and could result in reduced future
sales to key customers.

15



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##### Table of Contents





|  |                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------
| | Because our quarterly operating results are
    subject to variability, quarter to quarter comparisons may not
    be meaningful

Our revenues and operating results can fluctuate
substantially from quarter to quarter depending on factors such
as:



| |   |                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------
| |  | the timing of significant customer orders;                                                               
|
| |  | the timing of product shipment and acceptance;                                                           
|
| |  | variations in the mix of products sold;                                                                  
|
| |  | the introduction of new products;                                                                        
|
| |  | changes in customer buying patterns;                                                                     
|
| |  | fluctuations in the semiconductor equipment
    market;                                                  
|
| |  | the availability of key components;                                                                      
|
| |  | lost sales due to outsourcing of manufacturing                                                           
|
| |  | pressure from competitors; and                                                                           
|
| |  | general trends in the semiconductor manufacturing
    industry, electronics industry and overall economy.

The sales cycle to new customers ranges from six
months to 12 months from initial inquiry to placement of an
order, depending on the complexity of the project. This extended
sales cycle makes the timing of customer orders uneven and
difficult to predict. A significant portion of the net sales in
any quarter is typically derived from a small number of
long-term, multi-million dollar customer projects involving
upgrades of existing facilities or the construction of new
facilities. Generally, our customers may cancel or reschedule
shipments with limited or no penalty. These factors increase the
risk of unplanned fluctuations in net sales. Moreover, a
shortfall in net sales in a quarter as a result of these factors
could negatively impact our operating results for the quarter.
Given these factors, we expect quarter to quarter performance to
fluctuate for the foreseeable future. In one or more future
quarters, our operating results are likely to be below the
expectations of public market analysts and investors, which may
cause our stock price to decline.



|  |                                                                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Shortages of components necessary for our
    product assembly can delay our shipments and can lead to
    increased costs which may negatively impact our financial
    results

When demand for semiconductor manufacturing
equipment is strong, our suppliers, both domestic and
international, strain to provide components on a timely basis
and, in some cases, on an expedited basis at our request.
Disruption or termination of these sources could have a serious
adverse effect on our operations. Many of the components and
subassemblies used in our products are obtained from a single
supplier or a limited group of suppliers. A prolonged inability
to obtain some components could have an adverse effect on our
operating results and could result in damage to our customer
relationships. Shortages of components may also result in price
increases for components and as a result, could decrease our
margins and negatively impact our financial results.



|  |                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------
| | We face significant economic and regulatory
    risks because a majority of our net sales are from outside the
    United States

A significant portion of our net sales are
attributable to sales outside the United States, primarily in
Taiwan, Japan, China, Singapore and Europe. We expect that
international sales will continue to represent a significant
portion of our total revenue in the future. This concentration
increases our exposure to any risks in this area. Sales to
customers outside the United States are subject to various
risks, including:



| |   |                                         
| | - | ----------------------------------------
| |  | exposure to currency fluctuations;      
|
| |  | the imposition of governmental controls;

16



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##### Table of Contents





| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | the need to comply with a wide variety of foreign
    and U.S. export laws;
|
| |  | political and economic instability;                                        
|
| |  | trade restrictions;                                                        
|
| |  | changes in tariffs and taxes;                                              
|
| |  | longer payment cycles typically associated with
    foreign sales;         
|
| |  | the greater difficulty of administering business
    overseas; and         
|
| |  | general economic conditions.                                               

Recently, a majority of our accounts receivable,
net, were due from international customers located primarily in
Taiwan, Japan, China, Singapore and Europe. Receivable
collections and credit evaluation in new geographic regions
challenge our ability to avert international risks. In addition,
the laws of certain foreign countries may not protect our
intellectual property to the same extent as do the laws of the
United States. We invoice a majority of our international sales
in United States dollars. However, for sales in Japan, we
invoice our sales in Japanese yen. Currency fluctuations may
adversely affect our future results of operations.



|  |                                                                                                                                                                                                        
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Anti-takeover provisions in our articles of
    incorporation, bylaws and our shareholder rights plan may
    prevent or delay an acquisition of Asyst that might be
    beneficial to our shareholders

Our articles of incorporation and bylaws include
provisions that may have the effect of deterring hostile
takeovers or delaying changes in control or management of Asyst.
These provisions include certain advance notice procedures for
nominating candidates for election to our Board of Directors, a
provision eliminating shareholder actions by written consent and
a provision under which only our Board of Directors, our
Chairman of the Board, our President or shareholders holding at
least 10 percent of the outstanding common stock may call
special meetings of the shareholders. We have entered into
agreements with our officers and directors indemnifying them
against losses they may incur in legal proceedings arising from
their service to Asyst, including losses associated with actions
related to third-party attempts to acquire Asyst.

We have adopted a share purchase rights plan,
pursuant to which we have granted to our shareholders rights to
purchase shares of junior participating preferred stock. Upon
the earlier of (1) the date of a public announcement that a
person, entity, or group of associated persons has acquired
15 percent of our common stock or (2) 10 business days
following the commencement of, or announcement of, a tender
offer or exchange offer, the rights granted to our shareholders
will become exercisable to purchase our common stock at a price
substantially discounted from the then applicable market price
of our common stock. These rights could generally discourage a
merger or tender offer involving the securities of Asyst that is
not approved by our Board of Directors by increasing the cost of
effecting any such transaction and, accordingly, could have an
adverse impact on shareholders who might want to vote in favor
of such merger or participate in such tender offer.

In addition, our Board of Directors has authority
to issue up to 4,000,000 shares of preferred stock and to fix
the rights, preferences, privileges and restrictions, including
voting rights, of those shares without any future vote or action
by the shareholders. The issuance of preferred stock, while
providing desirable flexibility in connection with possible
acquisition and other corporate purposes, could have the effect
of making it more difficult for a third party to acquire a
majority of our outstanding voting stock, thereby delaying,
deferring or preventing a change in control of Asyst.
Furthermore, such preferred stock may have other rights,
including economic rights senior to the common stock, and as a
result, the issuance thereof could have a material adverse
effect on the market value of the common stock. We have no
present plans to issue shares of preferred stock.

17



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##### Table of Contents





|  |                                                                                               
|- | ----------------------------------------------------------------------------------------------
| | Our stock price may fluctuate significantly
    which could be detrimental to our shareholders

Our stock price has in the past fluctuated and
will fluctuate in the future in response to a variety of
factors, including the following:



| |   |                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------
| |  | quarterly fluctuations in results of operations;                                                        
|
| |  | announcements of new products by Asyst or our
    competitors;                                          
|
| |  | changes in either our earnings estimates or
    investment recommendations by stock market analysts;    
|
| |  | announcements of technological innovations;                                                             
|
| |  | conditions or trends in the semiconductor
    manufacturing industry;                                   
|
| |  | announcements by Asyst or our competitors of
    acquisitions, strategic partnerships or joint ventures;
|
| |  | additions or departures of senior management; and                                                       
|
| |  | other events or factors many of which are beyond
    our control.                                       

In addition, in recent years, the stock market in
general and shares of technology companies in particular have
experienced extreme price fluctuations, and such extreme price
fluctuations may continue. These broad market and industry
fluctuations may adversely affect the market price of our common
stock.



|  |                                                                                       
|- | --------------------------------------------------------------------------------------
| | We may not be able to secure additional
    financing to meet our future capital needs

We currently anticipate that our available cash
resources, which include existing cash and cash equivalents,
short-term investments, cash generated from operations and other
existing sources of working capital will be sufficient to meet
our anticipated needs for working capital and capital
expenditures through at least fiscal 2003. If we are unable to
generate sufficient cash flows from operations to meet our
anticipated needs for working capital and capital expenditures
we may need to raise additional funds to develop new or enhanced
products, respond to competitive pressures or make acquisitions.
We may be unable to obtain any required additional financing on
terms favorable to us, if at all. If adequate funds are not
available on acceptable terms, we may be unable to fund our
expansion, successfully develop or enhance products, respond to
competitive pressures or take advantage of acquisition
opportunities, any of which could have a material adverse effect
on our business. For example, in May 2002, we signed a
definitive agreement with Shinko Electric for the establishment
of a joint venture. We currently anticipate pursuing additional
funds to pay for our share of the joint venture, as well as to
support our working capital and operating expense requirements
or for other purposes. We anticipate pursuing these additional
funds through public or private debt or equity financings. If we
raise additional funds through the issuance of equity
securities, our shareholders may experience dilution of their
ownership interest, and the newly-issued securities may have
rights superior to those of the common stock. If we raise
additional funds by issuing debt, we may be subject to
limitations on our operations. We have guaranteed AJIs
unsecured loans from banks and secured bonds with interest rates
ranging between 1.4 percent to 1.9 percent per annum.
This strain on our capital resources could adversely affect our
business.

 Representatives
of Arthur Andersen LLP are not available to consent to the
inclusion of Arthur Andersen LLPs reports on our
financial statements and incorporated in this Form 10-K,
and you will not be able to recover against Arthur Andersen LLP
under Section 11 of the Securities Act of
1933.

Arthur Andersen LLP was previously our
independent accountant. Representatives for Arthur Andersen LLP
are not available to provide the consents required for the
inclusion of their reports on our financial statements and
incorporated in this Form 10-K, and we have dispensed with
the requirement to file their consent in reliance upon
Rule 437a of the Securities Act of 1933. Because Arthur
Andersen LLP has not consented to the inclusion of their reports
in this Form 10-K, you will not be able to recover against
Arthur Andersen LLP under Section 11 of the Securities Act
of 1933 for any untrue statements of a material fact contained
in the financial statements audited by Arthur Andersen LLP that
are incorporated by reference or any omissions to state a
material fact required to be stated therein.

18



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##### Table of Contents






Item 2  Properties

We are headquartered in Fremont, California. In
Northern California, we lease nine facilities consisting of
approximately 408,100 square feet to support
administrative, manufacturing and research and development
activities. These leases expire between October 2002 and June
2009. In Austin Texas, we lease two facilities to support
administrative, manufacturing and research and development
activities consisting of approximately 91,000 square feet.
These leases expire between September 2002 and November 2005. We
also own a 66,500 square foot facility in Nagoya, Japan to
support administrative, manufacturing and research and
development activities. Additionally, we lease approximately
eight offices in the United States, four in Japan, six in our
Asia/ Pacific region and three in Europe to house sales and
product support activities.

We own land in Fremont, California, which we are
currently marketing for sale. We had intended to construct
corporate headquarters facilities on the land and subsequently
decided not to build these facilities. Initially, we leased the
land from a syndicate of financial institutions pursuant to an
original lease agreement and an amended lease agreement. We
purchased the land on October 22, 2001 for
$41.1 million, and we paid the syndicate of financial
institutions approximately $2.9 million for engineering
costs incurred in preparation for making leasehold improvements
to the land. Based upon market data at June 30, 2001, we
estimated that the then market value of the land had been
impaired and as such recorded a $15.0 million write-down to
its estimated market value during the quarter ended
June 30, 2001. We identified excess capacity in several of
our leased facilities located in Northern California and Austin,
Texas and have subleased approximately 39,300 square feet
to third parties. We believe our remaining facilities are
suitable and adequate for our requirements.




Item 3  Legal
Proceedings

In October 1996, we filed a lawsuit in the United
States District Court for the Northern District of California
against Jenoptik A.G., or Jenoptik, Jenoptik-Infab, Inc.,
or Infab, and Emtrak, Inc. and Empak, Inc., collectively, Empak,
alleging infringement of two patents related to our SMART
Traveler System. We amended our Complaint in April 1997 to
allege causes of action for breach of fiduciary duty against
Jenoptik and Meissner & Wurst, GmbH, and misappropriation of
trade secrets and unfair business practices against all
defendants. The Complaint seeks damages and injunctive relief
against further infringement. All defendants filed
counterclaims, seeking a judgment declaring the patents invalid,
unenforceable and not infringed. Jenoptik, Infab, and Empak also
alleged that we violated federal antitrust laws and engaged in
unfair competition. We denied these allegations. In May 1998, we
along with Empak stipulated to a dismissal, without prejudice,
of the respective claims and counterclaims against each other.
In November 1998, the court granted defendants motion for
partial summary judgment as to most of the patent infringement
claims and invited further briefing as to the remainder. In
January 1999, the court granted our motion for leave to seek
reconsideration of the November summary judgment order and also,
pursuant to a stipulation of the parties, dismissed without
prejudice two of the three antitrust counterclaims brought by
the defendants. Thereafter, the parties stipulated to, and the
court ordered, the dismissal with prejudice of the
defendants unfair competition and remaining antitrust
counterclaim, and our breach of fiduciary duty, misappropriation
of trade secrets and unfair business practices claims, leaving
only the patent related claims and counterclaims. On
June 4, 1999, the court issued an order by which it granted
a motion for reconsideration in the sense that it considered the
merits of our arguments, but decided that it would not change
its prior ruling on summary judgment and that it would also
grant summary judgment for defendants on the remaining patent
infringement claim. We appealed. On October 10, 2001, the
appellate court reversed the district courts decision to
grant defendants motion for summary judgment and remanded
the case back to the district court. The matter is now
proceeding before the district court.

We do not believe that this case will have a
material adverse effect on our operations, financial condition
or business.




Item 4  Submission of Matters to
a Vote for Security Holders

Not applicable.

19



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##### Table of Contents






PART II




Item 5  Market for the
Registrants Common Equity and Related Shareholder
Matters

Since September 22, 1993, our common stock,
no par value, has been traded on the Nasdaq National Market
under the symbol ASYT. The price per share reflected
in the following table represents the range of high and low
closing prices for our common stock as reported on the Nasdaq
National Market for the periods indicated.

|                              |  |      |       |     |  |   |       | 
|----------------------------- |  | ---- | ----- | --- |  | - | ----- | 
|                              |  | High |       | Low
|                              |  |      |       |    
|April 1  June 30, 2000       |  | $    | 58.13 |     |  | $ | 28.00 | 
|July 1  September 30, 2000   |  | $    | 37.38 |     |  | $ | 17.31 | 
|October 1  December 31, 2000 |  | $    | 19.69 |     |  | $ | 10.73 | 
|January 1  March 31, 2001    |  | $    | 19.06 |     |  | $ | 11.19 | 
|April 1  June 30, 2001       |  | $    | 22.62 |     |  | $ | 10.69 | 
|July 1  September 30, 2001   |  | $    | 17.10 |     |  | $ | 9.05  | 
|October 1  December 31, 2001 |  | $    | 13.06 |     |  | $ | 8.02  | 
|January 1  March 31, 2002    |  | $    | 19.33 |     |  | $ | 12.90 | 

We had approximately 361 stockholders of
record as of March 31, 2002. We have not declared or paid any
cash dividends since our inception. We presently intend to
retain future earnings, if any, to fund the development and
growth of our business and therefore do not anticipate paying
any cash dividends in the foreseeable future.

20



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##### Table of Contents








|         |                        
|-------- | -----------------------
|Item 6  | Selected Financial Data

We acquired companies in fiscal 2002, 2001, 2000
and 1999, and our implementation of SAB 101 in addition to
non-recurring charges as a result of restructuring and
impairment of goodwill and other long-lived assets has impacted
the year over year comparability of the selected financial data.
The following table reflects selected summary financial data (in
thousands, except per share amounts):

|                                                                                                          |                                                                                                         |                             |          |        |   |      |         |        |  |      |         |        |  |   |         |        |   |   |         |        | 
|--------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | --------------------------- | -------- | ------ | - | ---- | ------- | ------ |  | ---- | ------- | ------ |  | - | ------- | ------ | - | - | ------- | ------ | 
|                                                                                                          |                                                                                                         |                            
|                                                                                                          |                                                                                                         | Fiscal Year Ended March 31,
|                                                                                                          |                                                                                                         |                            
|                                                                                                          |                                                                                                         | 2002                        |          | 2001   |   | 2000 |         | 1999   |  | 1998
|                                                                                                          |                                                                                                         |                             |          |        |   |      |         |        |  |     
|Consolidated Statements of Operations
    Data:                                                           |                                                                                                         |                             |          |        |   |      |         |        |  |      |         |        |  |   |         |        |   |   |         |       
|Net sales                                                                                                 |                                                                                                         | $                           | 193,953  |        |   | $    | 491,542 |        |  | $    | 225,554 |        |  | $ | 92,948  |        |   | $ | 182,290 |       
|Gross profit                                                                                              |                                                                                                         |                             | 33,820   |        |   |      | 185,746 |        |  |      | 103,055 |        |  |   | 33,053  |        |   |   | 79,898  |       
|In-process research and development of acquired
    businesses and product line                           |                                                                                                         |                             | 2,000    |        |   |      |        |        |  |      | 4,884   |        |  |   | 7,100   |        |   |   |        |       
|Operating income (loss)                                                                                   |                                                                                                         |                             | (189,635 | )      |   |      | 43,106  |        |  |      | 15,456  |        |  |   | (39,475 | )      |   |   | 25,673  |       
|Income (loss) from continuing operations
    before cumulative effect of a change in accounting principle |                                                                                                         |                             | (148,917 | )      |   |      | 29,532  |        |  |      | 10,019  |        |  |   | (26,931 | )      |   |   | 17,202  |       
|Cumulative effect of change in accounting
    principle                                                   |                                                                                                         |                             |         |        |   |      | (2,506  | )      |  |      |        |        |  |   |        |        |   |   |        |       
|                                                                                                          |                                                                                                         |                             |          |        |   |      |         |        |  |      |         |        |  |   |         |        |   |   |         |       
|Net income (loss)                                                                                         |                                                                                                         |                             | (148,917 | )      |   |      | 27,026  |        |  |      | 10,019  |        |  |   | (26,931 | )      |   |   | 15,362  |       
|Basic earnings (loss) per share:                                                                          |                                                                                                         |                             |          |        |   |      |         |        |  |      |         |        |  |   |         |        |   |   |         |       
|                                                                                                          | Income (loss) from continuing operations
    before cumulative effect of change in accounting principle |                             | $        | (4.21  | ) |      | $       | 0.90   |  |      | $       | 0.36   |  |   | $       | (1.15  | ) |   | $       | 0.75   | 
|                                                                                                          | Income (loss) from continuing operations
    after cumulative effect of change in accounting principle  |                             |          | (4.21  | ) |      |         | 0.82   |  |      |         | 0.36   |  |   |         | (1.15  | ) |   |         | 0.75   | 
|                                                                                                          | Basic net income (loss) per share                                                                       |                             |          | (4.21  | ) |      |         | 0.82   |  |      |         | 0.36   |  |   |         | (1.15  | ) |   |         | 0.67   | 
|                                                                                                          | Shares used in basic earnings per share
    calculation                                                 |                             |          | 35,373 |   |      |         | 32,697 |  |      |         | 27,639 |  |   |         | 23,460 |   |   |         | 22,858 | 
|Diluted earnings (loss) per share:                                                                        |                                                                                                         |                             |          |        |   |      |         |        |  |      |         |        |  |   |         |        |   |   |         |       
|                                                                                                          | Income (loss) from continuing operations
    before cumulative effect of change in accounting principle |                             | $        | (4.21  | ) |      | $       | 0.85   |  |      | $       | 0.32   |  |   | $       | (1.15  | ) |   | $       | 0.71   | 
|                                                                                                          | Income (loss) from continuing operations
    after cumulative effect of change in accounting principle  |                             |          | (4.21  | ) |      |         | 0.78   |  |      |         | 0.32   |  |   |         | (1.15  | ) |   |         | 0.71   | 
|                                                                                                          | Diluted net income (loss) per share                                                                     |                             |          | (4.21  | ) |      |         | 0.78   |  |      |         | 0.32   |  |   |         | (1.15  | ) |   |         | 0.63   | 
|                                                                                                          | Shares used in diluted earnings per share
    calculation                                               |                             |          | 35,373 |   |      |         | 34,928 |  |      |         | 30,986 |  |   |         | 23,460 |   |   |         | 24,456 | 

|                                 |                                                                  |           |   |         |  |      |   |         |  |      |   |         |  |  |   |         |  |  |   |         | 
|-------------------------------- | ---------------------------------------------------------------- | --------- | - | ------- |  | ---- | - | ------- |  | ---- | - | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                 |                                                                  |          
|                                 |                                                                  | March 31,
|                                 |                                                                  |          
|                                 |                                                                  | 2002      |   | 2001    |  | 2000 |   | 1999    |  | 1998
|                                 |                                                                  |           |   |         |  |      |   |         |  |     
|Consolidated Balance Sheet Data: |                                                                  |           |   |         |  |      |   |         |  |      |   |         |  |  |   |         |  |  |   |        
|                                 | Cash, cash equivalents and short-term investments                |           | $ | 79,738  |  |      | $ | 37,749  |  |      | $ | 106,088 |  |  | $ | 35,762  |  |  | $ | 85,493  | 
|                                 | Restricted cash, cash equivalents and short-term
    investments |           |   | 5,052   |  |      |   | 52,500  |  |      |   |        |  |  |   |        |  |  |   |        | 
|                                 | Working capital                                                  |           |   | 127,109 |  |      |   | 179,154 |  |      |   | 171,550 |  |  |   | 72,484  |  |  |   | 122,535 | 
|                                 | Total assets                                                     |           |   | 344,415 |  |      |   | 408,432 |  |      |   | 329,200 |  |  |   | 124,288 |  |  |   | 166,502 | 
|                                 | Long-term debt and finance leases                                |           |   | 91,265  |  |      |   | 3,683   |  |      |   | 910     |  |  |   | 2,876   |  |  |   |        | 
|                                 | Shareholders equity                                             |           |   | 164,937 |  |      |   | 302,463 |  |      |   | 233,106 |  |  |   | 96,634  |  |  |   | 129,250 | 

21



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|         |                                                                                          
|-------- | -----------------------------------------------------------------------------------------
|Item 7  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

The following discussion of our financial
condition and results of operations should be read in
conjunction with our consolidated financial statements and the
related notes included elsewhere in this Annual Report on
Form 10-K. This discussion contains forward-looking
statements, which involve risk and uncertainties. Our actual
results could differ materially from those anticipated in the
forward looking statements as a result of certain factors,
including but not limited to those discussed in Risk
Factors and elsewhere in this Annual Report.

Overview

We are a leading provider of integrated
automation systems for the semiconductor and related electronics
manufacturing industries. We design systems that enable
semiconductor manufacturers to increase their manufacturing
productivity and protect their investment in silicon wafers
during the manufacture of ICs. We sell our systems directly to
semiconductor manufacturers, as well as to OEMs that integrate
our systems with their equipment for sale to semiconductor
manufacturers. Our sales are tied to capital expenditures at
fabs and as such are cyclical in nature. During fiscal 2002, the
worldwide demand for semiconductors continued its rapid decline.
The downturn, which began in the second half of fiscal 2001, can
be attributed to reduced worldwide demand for semiconductors and
resulting decreases in capital spending for semiconductor
manufacturing. We have taken an aggressive approach to reducing
fixed and variable cost during this downturn. We have reduced
our manufacturing facilities from eight to four. We also reduced
our workforce by approximately 435 employees. Four reporting
entities have been consolidated onto one Enterprise Resource
Planning System. These actions have increased efficiency
throughout the operation and reduced general and administrative
costs. We have outsourced the manufacturing of several product
lines resulting in reduced fixed and variable cost while
improving product cost. Our gross margins increased from
negative 14.1% in the third quarter of fiscal 2002 to 24% in the
fourth quarter of fiscal 2002 on a three percent increase in
sales.

As a result of the continued downturn in the
semiconductor industry through the third quarter of fiscal 2002,
which resulted in a 71% sales decline from the peak achieved in
the third fiscal quarter of 2001, we recorded a one-time charge
of $12.8 million associated with additional inventory
reserves for obsolete and excess inventories. We do not believe
that our customers will continue to purchase older versions of
our 150mm products and 200mm products when capital spending
resumes. During the third quarter of fiscal 2002 we completed an
assessment of the carrying value of long-lived assets pursuant
to Statement of Financial Accounting Standard, or SFAS,
No. 121, Accounting for the Impairment or Disposal of
Long-lived Assets. As a result of the significant negative
industry and economic trends, we concluded that our carrying
values of goodwill and other intangible assets were impaired and
took an impairment charge of $60.4 million during the
quarter. During fiscal 2002, we recorded $8.2 million of
non-recurring charges associated with our shutdown of
facilities, write-down of assets and workforce reduction
associated charges. During the first quarter of fiscal 2002, we
wrote down the value of land we own in Fremont, California to
market value, resulting in a $15.0 million charge.

In addition to the changes in the business cycle
impacting demand for our products, we continue to see a shift
from 200mm to 300mm products. In fiscal 2002, 300mm products
represented 34% of revenues and 41% of revenues in the fourth
quarter of fiscal 2002, as compared to 10% of revenues for
fiscal 2001 and 18% of revenues in the fourth quarter of fiscal
2001. The bookings ratio between 300mm and 200mm in the fourth
quarter of fiscal 2002 is consistent with the sales ratio.

During the fourth quarter of fiscal 2002, sales
increased 3%, which represented the first increase in sales in
five quarters. Bookings increased 96% sequentially over the
third fiscal quarter, which marked the first sequential increase
in bookings for five quarters.

We use a dedicated direct sales force worldwide.
The use of distributors in Europe ceased on December 31,
2001. Our functional currency is the U.S. dollar, except in
Japan where our functional currency is the Japanese yen. To
date, the impact of currency translation gains or losses has not
been material to our sales or results of operations.

22



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| |             
| | ------------
| | Acquisitions

During the three fiscal years ended
March 31, 2002, and through the date of this report, we
acquired the following companies:

In May 2002, ACTI, one of our subsidiaries,
purchased the assets of DLC, a leading developer of software for
tool communication and provider of a variety of consulting,
development and integration services to its customers. The
transaction was accounted for using the purchase method of
accounting.

In May 2001, we acquired GW, a developer of
factory integration software used by electronics manufacturers.
The transaction was accounted for using the purchase method of
accounting.

In February 2001, we acquired AMP, a manufacturer
of precision parts. The transaction was accounted for using the
purchase method of accounting.

In February 2001, we acquired SemiFab, a
manufacturer of environmental control equipment and a contract
manufacturer. The transaction was accounted for using the
purchase method of accounting.

In 2000, we acquired a majority ownership
percentage of MECS, a Japanese engineering and robotics
manufacturing company, and in fiscal 2002 our ownership
percentage increased to 96.8 percent. MECS is now merged
into AJI. The transactions were accounted for using the purchase
method of accounting.

In August 1999, we acquired PAT, which develops
continuous flow transport systems for use in semiconductor
manufacturing facilities. The transaction was accounted for
using the purchase method of accounting.

In June 1999, we acquired all of the shares of
PST, which manufactures wafer-sorting equipment used by
semiconductor manufacturers. The acquisition was accounted for
using the pooling of interests method of accounting.
Accordingly, our consolidated financial statements for all
periods presented have been restated to include the financial
statements of PST.

Critical Accounting Policies and
Estimates

Our discussion and analysis of our financial
condition and results of operations are based upon our
consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements
requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses,
and related disclosure of contingent assets and liabilities. On
an ongoing basis, we evaluate our estimates, including those
related to revenue recognition, allowance for doubtful accounts,
inventories, long-lived assets, accrued liabilities, and
deferred tax assets. We base our estimates on historical
experience and on various other assumptions that we believe 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.

We believe the following critical accounting
policies affect our more significant judgments and estimates
used in the preparation of our consolidated financial statements.



| |                    
| | -------------------
| | Revenue Recognition

We changed our revenue recognition policy
effective April 1, 2000, based on guidance provided in
Securities and Exchange Commission Staff Accounting Bulletin
No. 101, Revenue Recognition in Financial
Statements, or SAB 101. We recognize revenue when
persuasive evidence of an arrangement exists, delivery has
occurred or services have been rendered, the sellers price
is fixed or determinable, and collectibility is reasonably
assured. Some of our products are large volume consumables that
are tested to industry and/or customer acceptance criteria prior
to shipment. We recognize revenue for these types of products at
shipment. Some of our product sales are accounted for as
multiple-element arrangements. If we have met defined customer
acceptance experience levels with both the customer and the
specific type of equipment, we recognize the product revenue at
the time of shipment and transfer of title, with the remainder
when the other

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elements, primarily installation, have been
completed. Other products are highly customized systems that
cannot be completed or adequately tested to customer
specifications prior to shipment from the factory. We do not
recognize revenue for these products until formal acceptance by
the customer. We recognize revenue for spare parts on shipment.
We recognize revenue related to maintenance and service
contracts ratably over the duration of the contracts. Unearned
maintenance and service contract revenue is not significant and
is included in accrued liabilities and other.


During the year ended March 31, 2001, we
recorded a non-cash charge of $2.5 million, net of an
income tax benefit of $1.3 million or a loss of $0.07 per
diluted share, to reflect the cumulative effect of the change in
accounting principle, as of the beginning of the fiscal year, in
accordance with the guidance provided in SAB 101.

Prior to the year ended March 31, 2001, we
recognized revenue at the time the customer took title to the
product, generally at the time of shipment. Revenue related to
maintenance and service contracts was recognized ratably over
the duration of the contracts.

We account for software revenue recognition in
accordance with the American Institute of Certified Public
Accountants Statement of Position 97-2,
Software Revenue Recognition. We recognize revenues
for integration software work on a percentage of completion. We
recognize software license revenue, which is not material to the
consolidated financial statements, when the software is shipped;
payment is due within one year; collection is probable and there
are no significant obligations remaining.



| |                                    
| | -----------------------------------
| | Allowance for Doubtful
    Accounts

We estimate our allowance for doubtful accounts
based on a combination of specifically identified amounts and a
general reserve calculated based on the aging of receivables. If
circumstances change, such as an unexpected material adverse
change in a major customers ability to meet its financial
obligations to us or its payment trends, we may adjust our
estimates of the recoverability of amounts due to us. Allowance
for doubtful accounts was $4.2 million at March 31,
2002 and $3.8 million at March 31, 2001.



| |                   
| | ------------------
| | Inventory Reserves

We evaluate the recoverability of all inventory,
including raw materials, work-in-process, finished goods, and
spare parts to determine whether adjustments for impairment are
required. Inventory which is obsolete or in excess of our demand
forecast is fully reserved. If actual demand is lower than our
forecast, additional inventory write-downs may be required.



| |                  
| | -----------------
| | Long-Lived Assets

Consideration paid in connection with
acquisitions is required to be allocated to the assets,
including identifiable intangible assets, and liabilities
acquired. Acquired assets and liabilities are initially recorded
based on an independent appraisal, which requires significant
judgment with respect to future cash flows and discount rates.

For some long-lived assets, primarily fixed
assets, goodwill and intangible assets, we are required to
estimate the useful life of the asset and recognize its cost as
an expense over the useful life. We use the straight-line method
to expense long-lived assets, which results in an equal amount
of expense in each period. Additionally, pursuant to applicable
accounting rules, we periodically assess whether long-lived
assets have been impaired. We test for impairment by preparing
an estimate of the future cash flows expected from the future
use of the asset and its eventual disposition. If the sum of the
expected future cash flows, undiscounted and without interest
charges, is less than the carrying amount of the asset, we deem
the asset to be impaired. Predicting future cash flows
attributable to a particular asset is difficult, and requires
the use of significant judgment. Additionally, our industry
experiences significant sales fluctuations, impacting our future
cash flow estimates. This could result in significant unexpected
impairment to certain long-lived assets. At March 31, 2002,
we had $35.0 million of goodwill and intangible assets, net
of accumulated amortization, recorded on our balance sheet.

24



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| |                    
| | -------------------
| | Accrued Liabilities

Some of our accrued liabilities are based largely
on estimates. For instance, we record a liability on our balance
sheet each period for the estimated cost of goods and services
rendered to us, for which we have not received an invoice.
Additionally, a component of our restructuring reserve related
to a loss we expect to incur for excess leased facility space is
based on numerous assumptions and estimates, such as the market
value of the space and the time it will take to sublease the
space. Our estimates are based on historical experience, input
from sources outside the company, and other relevant facts and
circumstances. If our estimates are inaccurate due to incorrect
assumptions or trends significantly different from historical
experience, we may need to increase or decrease some accrued
liabilities which could materially impact our financial results.

Our warranty policy generally states that we will
provide warranty coverage for 24 months for material and
labor to repair and service our equipment. We record the
estimated warranty cost when we recognize revenue for our
product. We determine the estimated warranty cost based on the
warranty term and historical warranty costs for a specific
product. If actual product failure rates or material usage
differs from our estimates, we may need to revise our estimated
warranty reserve.

We routinely evaluate our contractual commitments
with our customers and suppliers to determine if it is probable
that a loss exists that can be estimated in fulfillment of the
contractual commitment. If so, we record a loss reserve and
include it in accrued liabilities and other. If actual
fulfillment of a contractual commitment differs from our
estimate, our financial results will be impacted, either
favorably or unfavorably, upon fulfillment of the contract, or
unfavorably upon a revised estimate that is more unfavorable
than the previous estimate.



| |                    
| | -------------------
| | Deferred Tax Assets

We have recorded a valuation allowance to reduce
our deferred tax assets to the amount that is more likely than
not to be realized. We have considered our future taxable income
and tax planning strategies in assessing our valuation
allowance. Future taxable income is based upon our estimates,
and actual results may significantly differ from these estimates
due to the volatility of our industry. If, in the future, we can
realize our deferred tax in excess of the net recorded amount,
we would record an adjustment to the valuation allowance,
increasing income in the period this determination was made.
Likewise, if we determine that we can not realize all or part of
our net deferred tax asset in the future, we would record an
adjustment to the valuation allowance, charging income in the
period such determination was made.

25



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##### Table of Contents



Fiscal Years Ended March 31, 2002, 2001
and 2000

The following table sets forth the percentage of
net sales represented by certain consolidated statements of
operations data for the periods indicated:

|                                                                                                                          |  |                   |       |      |  |      |       |   |  |  |       |  
|------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                                                                                          |  |                  
|                                                                                                                          |  | Fiscal Year Ended
|                                                                                                                          |  | March 31,        
|                                                                                                                          |  |                  
|                                                                                                                          |  | 2002              |       | 2001 |  | 2000
|                                                                                                                          |  |                   |       |      |  |     
|Net sales                                                                                                                 |  |                   | 100.0 | %    |  |      | 100.0 | % |  |  | 100.0 | %
|Cost of sales                                                                                                             |  |                   | 82.6  |      |  |      | 62.2  |   |  |  | 54.3  |  
|                                                                                                                          |  |                   |       |      |  |      |       |   |  |  |       |  
|Gross profit                                                                                                              |  |                   | 17.4  |      |  |      | 37.8  |   |  |  | 45.7  |  
|                                                                                                                          |  |                   |       |      |  |      |       |   |  |  |       |  
|Operating expenses:                                                                                                       |  |                   |       |      |  |      |       |   |  |  |       |  
|Research and development                                                                                                  |  |                   | 20.7  |      |  |      | 9.0   |   |  |  | 9.6   |  
|Selling, general and administrative                                                                                       |  |                   | 41.5  |      |  |      | 18.4  |   |  |  | 24.9  |  
|Amortization of acquired intangible assets                                                                                |  |                   | 7.4   |      |  |      | 1.4   |   |  |  | 1.1   |  
|Impairment of goodwill and other long-lived assets                                                                        |  |                   | 31.1  |      |  |      |      |   |  |  |      |  
|Non-recurring charges                                                                                                     |  |                   | 13.5  |      |  |      | 0.2   |   |  |  | 1.0   |  
|In-process research and development costs of
    acquired business                                                        |  |                   | 1.0   |      |  |      |      |   |  |  | 2.2   |  
|                                                                                                                          |  |                   |       |      |  |      |       |   |  |  |       |  
|Total operating expenses                                                                                                  |  |                   | 115.2 |      |  |      | 29.0  |   |  |  | 38.8  |  
|                                                                                                                          |  |                   |       |      |  |      |       |   |  |  |       |  
|Operating income (loss)                                                                                                   |  |                   | (97.8 | )    |  |      | 8.8   |   |  |  | 6.9   |  
|Other income (expense), net                                                                                               |  |                   | (2.1  | )    |  |      | 0.7   |   |  |  | 0.9   |  
|                                                                                                                          |  |                   |       |      |  |      |       |   |  |  |       |  
|Income (loss) before provision
    (benefit) for income taxes and cumulative effect of change
    in accounting principle |  |                   | (99.9 | )    |  |      | 9.5   |   |  |  | 7.8   |  
|Provision (benefit) for income taxes                                                                                      |  |                   | (23.1 | )    |  |      | 3.5   |   |  |  | 3.3   |  
|                                                                                                                          |  |                   |       |      |  |      |       |   |  |  |       |  
|Income (loss) before effect of change in
    accounting principle                                                         |  |                   | (76.8 | )    |  |      | 6.0   |   |  |  | 4.5   |  
|Cumulative effect of change in accounting
    principle, net of tax benefit                                               |  |                   |      |      |  |      | (0.5  | ) |  |  |      |  
|                                                                                                                          |  |                   |       |      |  |      |       |   |  |  |       |  
|Net income (loss)                                                                                                         |  |                   | (76.8 | )%   |  |      | 5.5   | % |  |  | 4.5   | %
|                                                                                                                          |  |                   |       |      |  |      |       |   |  |  |       |  

Net sales.Our net
sales for the fiscal year ended March 31, 2002 were
$194.0 million, a decrease of $297.6 million or
61 percent from the prior year. We believe that the decline
in sales was in line with the semiconductor equipment sector.
The reduction in sales was directly attributable to the reduced
capital spending of semiconductor manufacturers due to the
general decline in demand for ICs. Sales in fiscal 2001
were $491.5 million or 118 percent greater than fiscal
2000. Our increase in net sales in fiscal 2001 over fiscal 2000
resulted from approximately $52.7 million of net sales
contributed by MECS, AMP and SemiFab, which were not part of our
consolidated results for fiscal 2000, and continued growth in
demand for our other products. For the first quarter of fiscal
2003 we expect sales of $50 million to $55 million.

Our net sales by geography were as follows
(dollars in thousands):

|                                        |  |                             |         |      |  |      |         |  |  |   |         | 
|--------------------------------------- |  | --------------------------- | ------- | ---- |  | ---- | ------- |  |  | - | ------- | 
|                                        |  |                            
|                                        |  | Fiscal Year Ended March 31,
|                                        |  |                            
|                                        |  | 2002                        |         | 2001 |  | 2000
|                                        |  |                             |         |      |  |     
|United States                           |  | $                           | 93,097  |      |  | $    | 192,362 |  |  | $ | 90,204  | 
|Taiwan                                  |  |                             | 20,334  |      |  |      | 98,305  |  |  |   | 78,913  | 
|Japan                                   |  |                             | 45,610  |      |  |      | 102,784 |  |  |   | 30,646  | 
|Europe                                  |  |                             | 18,321  |      |  |      | 39,766  |  |  |   | 7,854   | 
|Other Asia (excluding Japan and Taiwan) |  |                             | 16,591  |      |  |      | 58,325  |  |  |   | 17,937  | 
|                                        |  |                             |         |      |  |      |         |  |  |   |         | 
|Total                                   |  | $                           | 193,953 |      |  | $    | 491,542 |  |  | $ | 225,554 | 
|                                        |  |                             |         |      |  |      |         |  |  |   |         | 

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Direct sales to international customers declined
as a percent of total sales during fiscal 2002. This was due to
the fact that 300mm sales grew 30 percent year over year and
were largely shipped to U.S. OEMs. The increase in Japans
share of our international net sales in fiscal 2002 is due to
the fact that the Japanese market lagged behind the downturn
occurring in the rest of the world. During fiscal 2001, we
achieved our first sales in Malaysia to two new semiconductor
manufacturers. Net sales to our European customers in fiscal
2001 grew by approximately 406 percent compared to fiscal
2000 due to winning a SMIF technology 200mm project in Germany.
As 300mm products comprise a higher percent of our net sales,
over time we expect that U.S. sales will continue to grow as a
percent of total net sales. This is because most of our 300mm
products will be sold to OEMs, most of which are located in the
United States and Japan and, to a lesser extent, in Europe.

During fiscal 2002, we had one reportable
segment. The net sales by product or service categories
comprising our net sales for the three fiscal years ended
March 31, 2002, 2001 and 2000 were as follows (dollars in
thousands):

|                               |       |                             |         |         |  |      |         |         |  |   |         |         | 
|------------------------------ | ----- | --------------------------- | ------- | ------- |  | ---- | ------- | ------- |  | - | ------- | ------- | 
|                               |       |                            
|                               |       | Fiscal Year Ended March 31,
|                               |       |                            
|                               |       | 2002                        |         | 2001    |  | 2000
|                               |       |                             |         |         |  |     
|Tool Based Solutions           |       | $                           | 130,971 |         |  | $    | 386,438 |         |  | $ | 185,539 |        
|Factory Connectivity Solutions |       |                             | 19,756  |         |  |      | 39,256  |         |  |   | 15,655  |        
|Wafer and Reticle Carriers     |       |                             | 24,795  |         |  |      | 38,816  |         |  |   | 19,556  |        
|Services & other               |       |                             | 18,431  |         |  |      | 27,032  |         |  |   | 4,804   |        
|                               |       |                             |         |         |  |      |         |         |  |   |         |        
|                               | Total |                             | $       | 193,953 |  |      | $       | 491,542 |  |   | $       | 225,554 | 
|                               |       |                             |         |         |  |      |         |         |  |   |         |        

Gross profit.Our
gross profit was 17.4 percent of net sales for fiscal 2002,
37.8 percent of net sales for fiscal 2001 and
45.7 percent of net sales for fiscal 2000. Gross profit in
fiscal 2002 was negatively impacted by the 61 percent
decline in sales from fiscal 2001 to fiscal 2002. During the
year ended March 31, 2002, we recorded a one-time charge of
$12.8 million associated with additional inventory reserves
for obsolete and excess inventories. The charge was included in
cost of sales. During the year, management took aggressive
actions to eliminate fixed costs by consolidating manufacturing
facilities and adjusting variable cost to meet current
manufacturing volumes. The headcount reduction associated with
manufacturing operations in fiscal 2002 was approximately 240.
Our gross margin increased from negative 14.1 percent, including
the effect of the $12.8 million one-time charge for
additional inventory reserves for obsolete and excess
inventories, in the third fiscal quarter to 23.7 percent in
the fourth fiscal quarter. Gross margin in the third fiscal
quarter was 20.2 percent excluding the inventory reserve.
Gross margin in fiscal 2001 was 37.8 percent, down from
45.7 percent in fiscal 2000. The decline in margin was
primarily due to the acquisition of a majority ownership
interest in MECS in late March 2000, the increased sales of
300mm products and the need to take substantial inventory and
loss reserves in the fourth quarter of fiscal 2001. In fiscal
2000, the gross margin of 45.7 percent was due to the
combined effect of material cost reduction achieved through
product re-design efforts and the dramatically increased rate of
absorption of fixed costs resulting from the 142.8 percent
increase in net sales over fiscal 1999. In the first quarter of
fiscal 2003, we expect that gross profit will be in the range of
28.0 to 30.0 percent of net sales and will continue to
trend upward as sales volume increases.

Research and
development.Research and development,
or R&D, expenses were $40.1 million for the fiscal year
ended March 31, 2002, $44.3 million for the fiscal
year ended March 31, 2001 and $21.6 million for the
fiscal year ended March 31, 2000. This represents
20.7 percent of net sales for the fiscal year ended
March 31, 2002, 9.0 percent of net sales for the
fiscal year ended March 31, 2001 and 9.6 percent of
net sales for the fiscal year ended March 31, 2000. Our
dedication to developing new products is evident by the
relatively minor reduction of 9.5 percent in spending in
2002 compared to 2001 while sales declined 61 percent. Our
R&D spending has been allocated to support the SMIF-300
product series, the development of automated material handling
technology for the 300mm market and the Plus-Portal. Our R&D
expenses as a percent of net sales can vary significantly based
on the level of net sales and our need to continue investing in
R&D activities to remain competitive. We capitalize legal
costs related to our patents. Costs related to research, design
and development of software products and enhancements to
existing software products are expensed as incurred until
technological feasibility, generally in the form of a working
model, of the product

27



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##### Table of Contents



has been established, at which time these costs
are capitalized, subject to net realizable value. Costs eligible
for capitalization, incurred after achieving technological
feasibility and before general release of the product, were not
material for any periods presented. Accordingly, we have charged
all software development costs to research and development
expense in our consolidated statements of operations.


We expect our R&D activities and related
expenditures to increase in absolute dollars in future periods
unless additional negative economic conditions impact the
semiconductor industry.

Selling, general and
administrative.Selling, general and
administrative, or SG&A, expenses were $80.5 million
for the fiscal year ended March 31, 2002,
$90.4 million for the fiscal year ended March 31, 2001
and $56.2 million for the fiscal year ended March 31,
2000. This represents 41.5 percent of net sales for the
fiscal year ended March 31, 2002, 18.4 percent of net
sales for the fiscal year ended March 31, 2001 and
24.9 percent of net sales for the fiscal year ended
March 31, 2000. The decline in SG&A of
$9.9 million in fiscal 2002 is attributable to cost
reduction efforts and lower business volume. The 60 percent
increase in SG&A from fiscal 2000 to 2001 was due to the
sales increase of 118 percent as well as the acquisitions
made during the preceding year and a half.

Amortization of acquired intangible
assets.Amortization expenses relating
to acquired intangible assets were $14.4 million for the
fiscal year ended March 31, 2002, $7.0 million for the
fiscal year ended March 31, 2001 and $2.6 million for
the fiscal year ended March 31, 2000. This represents
7.4 percent of net sales for the fiscal year ended
March 31, 2002, 1.4 percent of net sales for the
fiscal year ended March 31, 2001 and 1.1 percent of
net sales for the fiscal year ended March 31, 2000. We
amortize the acquired intangible assets over periods ranging
from four to fourteen years.

Impairment of goodwill and other long-lived
assets.We recorded an impairment
charge of $60.4 million during the fiscal year ended
March 31, 2002, reducing the carrying value of goodwill and
intangible assets to its estimated fair value. Fair value was
determined based on a discounted cash flow analysis. No such
charge was incurred in prior periods. We tested for impairment
by preparing an estimate of the future cash flows expected from
the future use of the asset and its eventual disposition. If the
sum of the expected future cash flows (undiscounted and without
interest charges) is less than the carrying amount of the asset,
we deem the asset to be impaired. The testing was initiated in
the quarter ended December 31, 2001 due to ongoing
reductions in net sales and general weakness in the
semiconductor equipment market. Based on this testing, we
recorded the impairment charge of $60.4 million in the
quarter ended December 31, 2001. Predicting future cash
flows attributable to a particular asset is difficult, and
requires the use of significant judgment. We do not anticipate a
further impairment charge to our remaining intangible assets in
the foreseeable future, however a further deterioration in net
sales, extended slump in net sales or significant reduction or
cessation of net sales from one of our acquired businesses could
result in a further impairment charge in a future period.

Non-recurring
charges.Non-recurring charges
recorded were (in thousands):

|                                                         |  |           |        |      |  |      |     |  |  |   |       |  
|-------------------------------------------------------- |  | --------- | ------ | ---- |  | ---- | --- |  |  | - | ----- | -
|                                                         |  |          
|                                                         |  | March 31,
|                                                         |  |          
|                                                         |  | 2002      |        | 2001 |  | 2000
|                                                         |  |           |        |      |  |     
|Land impairment                                          |  | $         | 17,925 |      |  | $    |    |  |  | $ |      |  
|Severance and benefits                                   |  |           | 4,511  |      |  |      | 540 |  |  |   |      |  
|Excess facilities                                        |  |           | 3,685  |      |  |      | 439 |  |  |   |      |  
|Contract cancellation                                    |  |           |       |      |  |      |    |  |  |   | 2,500 |  
|Reduction in estimate of prior year required
    reserve |  |           |       |      |  |      |    |  |  |   | (200  | )
|                                                         |  |           |        |      |  |      |     |  |  |   |       |  
|Total                                                    |  | $         | 26,121 |      |  | $    | 979 |  |  | $ | 2,300 |  
|                                                         |  |           |        |      |  |      |     |  |  |   |       |  



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Land impairment. We own land in Fremont,
    California, which we are currently marketing for sale. We had
    intended to construct corporate headquarters facilities on the
    land and subsequently decided not to build these facilities.
    Initially, we leased the land from a syndicate of financial
    institutions pursuant to an original lease agreement and an
    amended lease agreement. We purchased the land on
    October 22, 2001 for $41.1 million, and we paid the
    syndicate of financial institutions approximately
    $2.9 million for engineering costs incurred in preparation
    for making leasehold improvements to the land. Based upon

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | market data at June 30, 2001, we estimated
    that the then market value of the land had been impaired and as
    such recorded a $15.0 million write-down to its estimated
    market value during the quarter ended June 30, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Restructuring. Non-recurring restructuring
    charges were recorded associated with our plan to shut down some
    of our manufacturing and service locations, outsource some of
    our manufacturing activities and consolidate the remainder of
    our domestic manufacturing in Fremont, California, as well as to
    reduce our workforce due to economic conditions. These charges
    included approximately $3.7 million in write-downs of
    assets and reserves for lease commitments, net of estimated
    sublease income that we expect to generate from the vacated
    facilities, and severance costs of approximately
    $4.5 million related to reductions in force of
    approximately 435 employees or approximately 29% of our
    workforce.

In the fourth quarter of fiscal 2001, in response
to a decrease in net sales and new orders, we incurred a
$0.5 million charge relating to the reduction in our
employed workforce by 149 regular full-time employees and
approximately 150 temporary employees, primarily in Fremont,
California. In addition, as of March 31, 2001, we accrued
$0.5 million relating to a plan to close a small
manufacturing facility in Japan. We communicated the plan to the
affected employees prior to March 31, 2001.

In fiscal 2000, in connection with the decision
to move to a purely direct sales channel in Japan, we paid
$2.5 million to cancel an agreement previously entered into
to sell products in the Japanese market. Additionally, during
fiscal 2000, a reduction of $0.2 million was made to the
restructuring reserve balance to adjust for revised estimates
related to restructuring activities.

The following table summarizes our non-recurring
charges including restructuring activities for the fiscal year
ended March 31, 2002, (dollars in thousands):

|                          |  |            |         |              |  |            |        |       |  |   |       |   |  |   |         |  
|------------------------- |  | ---------- | ------- | ------------ |  | ---------- | ------ | ----- |  | - | ----- | - |  | - | ------- | -
|                          |  | Land       |         | Severance    |  | Excess     |        |      
|                          |  | Impairment |         | and Benefits |  | Facilities |        | Total
|                          |  |            |         |              |  |            |        |      
|Balance at March 31, 2001 |  | $          |        |              |  | $          |       |       |  | $ |      |   |  | $ |        |  
|Non-recurring charges     |  |            | 17,925  |              |  |            | 4,511  |       |  |   | 3,685 |   |  |   | 26,121  |  
|Less non-cash charges     |  |            | (15,000 | )            |  |            |       |       |  |   | (781  | ) |  |   | (15,781 | )
|Amounts paid in cash      |  |            | (2,925  | )            |  |            | (3,770 | )     |  |   | (472  | ) |  |   | (7,167  | )
|                          |  |            |         |              |  |            |        |       |  |   |       |   |  |   |         |  
|Balance at March 31, 2002 |  | $          |        |              |  | $          | 741    |       |  | $ | 2,432 |   |  | $ | 3,173   |  
|                          |  |            |         |              |  |            |        |       |  |   |       |   |  |   |         |  

We expect to utilize the remaining balance of
approximately $3.2 million during the fiscal year ended
March 31, 2003, primarily with cash.

In-process research and development of
acquired business and product line.On
May 22, 2001, we acquired GW in a transaction accounted for
using the purchase method of accounting. In connection with the
purchase price allocation $2.0 million was assigned to
in-process research and development costs of acquired business,
or IPR&D. During the fiscal year ended March 31, 2000,
we completed the acquisition of PAT and a majority interest in
MECS. In connection with the purchase price allocation of PAT,
we recorded a write-off of approximately $4.0 million of
in-process research and development costs. In connection with
the purchase price allocation of MECS we recorded a write-off of
approximately $0.9 million of in-process research and
development costs. In each acquisition, the amount allocated to
IPR&D was determined through established valuation
techniques in the high-technology industry and was expensed upon
acquisition, as we determined that the projects had not reached
technological feasibility at the time of our acquisition and had
no perceived alternative future uses.

Other income (expense),
net.Other income (expense), net was
$(4.0) million for the fiscal year ended March 31,
2002, $3.7 million for the fiscal year ended March 31,
2001 and $2.1 million for the fiscal year ended
March 31, 2000. Interest expense increased
$4.8 million in fiscal 2002 compared to fiscal 2001,
primarily due to interest expense related to the sale of
$86.3 million of 5 3/4 percent convertible
subordinated notes on July 3, 2001. Interest income
declined in fiscal 2002 compared to fiscal 2001 due to lower
average

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cash balances and lower average interest rates.
Other income (expense), net increased in fiscal 2001 compared to
fiscal 2000, primarily due to a higher cash balance resulting in
more interest income.


Provision (benefit)for income
taxes.Provision (benefit) for income
taxes were $(44.7) million for the fiscal year ended
March 31, 2002, $17.2 million for the fiscal year
ended March 31, 2001 and $7.5 million for the fiscal
year ended March 31, 2000. This represents an effective tax
rate of 23.1 percent for the fiscal year ended
March 31, 2002, 36.8 percent for the fiscal year ended
March 31, 2001 and 42.8 percent for the fiscal year
ended March 31, 2000. In fiscal 2002, we experienced a
lower tax rate due to an impairment charge for goodwill and
other long-lived assets of $60.4 million and a
$2.0 million IPR&D charge, neither of which is
deductible. Excluding these charges, our effective tax rate was
a benefit of 34.1 percent. In fiscal 2001, we experienced a
lower effective tax rate compared to fiscal 2000 due to the
impact in fiscal 2000 of non-deductible in-process research and
development write-offs related to the acquisitions of PAT and
MECS.

As of March 31, 2002, we have recorded a net
deferred tax asset of approximately $57.7 million, of which
approximately $36.2 million relates to net operating loss
carryforwards and tax credits generated by us and our domestic
subsidiaries, which expire at various dates through
March 31, 2022. As of March 31, 2002,
$10.8 million of the deferred tax asset relates to
pre-merger foreign net operating loss carryforwards of MECS
which expire in 2005. The utilization of the foreign net
operating loss carryforwards is subject to the ability of MECS
to generate future foreign taxable income. As a result, a
valuation allowance has been recorded related to pre-merger net
operating loss carryforwards of approximately
$10.2 million. Realization of the net deferred tax asset is
dependent on generating sufficient future taxable income.
Although realization is not assured, we believe that it is more
likely than not that we will realize the net deferred tax asset.
Although we consider the net deferred tax asset realizable,
actual amounts could be reduced if we do not achieve sufficient
future taxable income.

Cumulative effect of change in accounting
principle, net of tax benefit.We
recorded a non-cash charge of $2.5 million, net of an
income tax benefit of $1.3 million, or a loss of $0.07 per
diluted share, to reflect the cumulative effect of the
accounting change to comply with SAB 101 as of the
beginning of fiscal 2001. The deferred revenue recorded as a
result of this accounting change was fully recognized in fiscal
2001.

Selected Quarterly Financial Data

The following table sets forth our unaudited
consolidated statement of operations for each of the eight
quarterly periods ended March 31, 2002. You should read
this information in conjunction with our consolidated financial
statements and related notes appearing elsewhere in this Annual
Report. We have prepared this unaudited consolidated information
on a basis consistent with our audited consolidated financial
statements, reflecting all normal, recurring adjustments that we
consider necessary for a fair presentation of our financial
position and operating results for the quarters presented. You
should not draw any conclusions about our future results from
the operating results for any quarter.

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The first three quarters of our fiscal year end
on a Saturday, and thus the actual date of the quarter-end is
usually different from the quarter-end dates used throughout
this Form 10-K (in thousands, except for per share amounts):

|                                                                             |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |        |  
|---------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | -------------------- | ------- | -------------------- | - | -------- | ------- | -------- |  | -------- | ------- | -------- |  | -------- | ------- | -------- | - | - | ------- | ------ | - | - | ------- | ------ | - | - | -------- | ------ | - | - | ------- | ------ | -
|                                                                             |                                                                                          |                      |         |                     
|                                                                             |                                                                                          | Fiscal Quarter Ended |         | Fiscal Quarter Ended
|                                                                             |                                                                                          |                      |         |                     
|                                                                             |                                                                                          | Jun. 30,             |         | Sep. 30,             |   | Dec. 31, |         | Mar. 31, |  | Jun. 30, |         | Sep. 30, |  | Dec. 31, |         | Mar. 31,
|                                                                             |                                                                                          | 2000                 |         | 2000                 |   | 2000     |         | 2001     |  | 2001     |         | 2001     |  | 2001     |         | 2002    
|                                                                             |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |         
|Net sales                                                                    |                                                                                          | $                    | 122,483 |                      |   | $        | 126,000 |          |  | $        | 127,980 |          |  | $        | 115,079 |          |   | $ | 67,259  |        |   | $ | 51,015  |        |   | $ | 37,329   |        |   | $ | 38,350  |       
|Cost of sales                                                                |                                                                                          |                      | 67,151  |                      |   |          | 67,157  |          |  |          | 69,985  |          |  |          | 101,503 |          |   |   | 49,765  |        |   |   | 38,521  |        |   |   | 42,590   |        |   |   | 29,257  |       
|                                                                             |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|                                                                             | Gross profit                                                                             |                      |         | 55,332               |   |          |         | 58,843   |  |          |         | 57,995   |  |          |         | 13,576   |   |   |         | 17,494 |   |   |         | 12,494 |   |   |          | (5,261 | ) |   |         | 9,093  |  
|Operating expenses:                                                          |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|                                                                             | Research and development                                                                 |                      |         | 9,721                |   |          |         | 10,851   |  |          |         | 12,042   |  |          |         | 11,649   |   |   |         | 11,319 |   |   |         | 10,316 |   |   |          | 9,469  |   |   |         | 8,967  |  
|                                                                             | Selling, general and administrative                                                      |                      |         | 21,451               |   |          |         | 22,984   |  |          |         | 24,237   |  |          |         | 21,763   |   |   |         | 23,075 |   |   |         | 21,382 |   |   |          | 19,017 |   |   |         | 17,062 |  
|                                                                             | Amortization of acquired intangible assets                                               |                      |         | 1,702                |   |          |         | 1,366    |  |          |         | 1,336    |  |          |         | 2,559    |   |   |         | 3,542  |   |   |         | 4,782  |   |   |          | 4,601  |   |   |         | 1,448  |  
|                                                                             | Impairment of goodwill and other long-lived assets                                       |                      |         |                     |   |          |         |         |  |          |         |         |  |          |         |         |   |   |         |       |   |   |         |       |   |   |          | 60,354 |   |   |         |       |  
|                                                                             | Non-recurring charges                                                                    |                      |         |                     |   |          |         |         |  |          |         |         |  |          |         | 979      |   |   |         | 18,652 |   |   |         | 1,549  |   |   |          | 5,920  |   |   |         |       |  
|                                                                             | In-process research and development of acquired
    business and product line            |                      |         |                     |   |          |         |         |  |          |         |         |  |          |         |         |   |   |         | 2,000  |   |   |         |       |   |   |          |       |   |   |         |       |  
|                                                                             |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|                                                                             | Total operating expenses                                                                 |                      |         | 32,874               |   |          |         | 35,201   |  |          |         | 37,615   |  |          |         | 36,950   |   |   |         | 58,588 |   |   |         | 38,029 |   |   |          | 99,361 |   |   |         | 27,477 |  
|                                                                             |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|Operating (loss) income                                                      |                                                                                          |                      | 22,458  |                      |   |          | 23,642  |          |  |          | 20,380  |          |  |          | (23,374 | )        |   |   | (41,094 | )      |   |   | (25,535 | )      |   |   | (104,622 | )      |   |   | (18,384 | )     
|Other income (expense), net                                                  |                                                                                          |                      | 1,311   |                      |   |          | 1,648   |          |  |          | 469     |          |  |          | 227     |          |   |   | (32     | )      |   |   | (719    | )      |   |   | (874     | )      |   |   | (2,377  | )     
|                                                                             |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|Income (loss) before provision for income
    taxes                          |                                                                                          |                      | 23,769  |                      |   |          | 25,290  |          |  |          | 20,849  |          |  |          | (23,147 | )        |   |   | (41,126 | )      |   |   | (26,254 | )      |   |   | (105,496 | )      |   |   | (20,761 | )     
|Provision (benefit) for income taxes                                         |                                                                                          |                      | 8,380   |                      |   |          | 8,709   |          |  |          | 7,046   |          |  |          | (6,906  | )        |   |   | (13,571 | )      |   |   | (7,913  | )      |   |   | (15,648  | )      |   |   | (7,588  | )     
|                                                                             |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|Income (loss) before cumulative effect of change
    in accounting principle |                                                                                          |                      | 15,389  |                      |   |          | 16,581  |          |  |          | 13,803  |          |  |          | (16,241 | )        |   |   | (27,555 | )      |   |   | 18,341  |        |   |   | 89,848   |        |   |   | 13,173  |       
|Cumulative effect of change in accounting
    principle                      |                                                                                          |                      | (2,506  | )                    |   |          |        |          |  |          |        |          |  |          |        |          |   |   |        |        |   |   |        |        |   |   |         |        |   |   |        |       
|                                                                             |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|Net income (loss)                                                            |                                                                                          | $                    | 12,883  |                      |   | $        | 16,581  |          |  | $        | 13,803  |          |  | $        | (16,241 | )        |   | $ | (27,555 | )      |   | $ | (18,341 | )      |   | $ | (89,848  | )      |   | $ | (13,173 | )     
|                                                                             |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|Basic earnings (loss) per share:                                             |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|                                                                             | Earnings (loss) per share before cumulative
    effect of change in accounting principle |                      |         | 0.48                 |   |          | $       | 0.51     |  |          | $       | 0.43     |  |          | $       | (0.48    | ) |   | $       | (0.79  | ) |   | $       | (0.52  | ) |   | $        | (2.54  | ) |   | $       | (0.37  | )
|                                                                             | Cumulative effect of change in accounting
    principle, net of tax                      |                      |         | (0.08                | ) |          | $       |         |  |          | $       |         |  |          | $       |         |   |   | $       |       |   |   | $       |       |   |   | $        |       |   |   | $       |       |  
|                                                                             | Earnings after cumulative effect of change in
    accounting principle                   |                      |         | 0.40                 |   |          | $       | 0.51     |  |          | $       | 0.43     |  |          | $       | (0.48    | ) |   | $       | (0.79  | ) |   | $       | (0.52  | ) |   | $        | (2.54  | ) |   | $       | (0.37  | )
|Diluted earnings (loss) per share:                                           |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|                                                                             | Earnings (loss) per share before cumulative
    effect of change in accounting principle |                      |         | 0.43                 |   |          | $       | 0.48     |  |          | $       | 0.41     |  |          | $       | (0.48    | ) |   | $       | (0.79  | ) |   | $       | (0.52  | ) |   | $        | (2.54  | ) |   | $       | (0.37  | )
|                                                                             | Cumulative effect of change in accounting
    principle                                  |                      |         | (0.07                | ) |          | $       |         |  |          | $       |         |  |          | $       |         |   |   | $       |        |   |   | $       |       |   |   | $        |       |   |   | $       |       |  
|                                                                             | Earnings (loss) after cumulative effect of
    change in accounting principle            |                      |         | 0.36                 |   |          | $       | 0.48     |  |          | $       | 0.41     |  |          | $       | (0.48    | ) |   | $       | (0.79  | ) |   | $       | (0.52  | ) |   | $        | (2.54  | ) |   | $       | (0.37  | )
|Shares used in per share calculation:                                        |                                                                                          |                      |         |                      |   |          |         |          |  |          |         |          |  |          |         |          |   |   |         |        |   |   |         |        |   |   |          |        |   |   |         |       
|                                                                             | Basic                                                                                    |                      |         | 32,162               |   |          |         | 32,308   |  |          |         | 32,416   |  |          |         | 33,901   |   |   |         | 35,007 |   |   |         | 35,286 |   |   |          | 35,419 |   |   |         | 35,779 |  
|                                                                             | Diluted                                                                                  |                      |         | 35,377               |   |          |         | 34,840   |  |          |         | 33,937   |  |          |         | 33,901   |   |   |         | 35,007 |   |   |         | 35,286 |   |   |          | 35,419 |   |   |         | 35,779 |  

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards
Board, or FASB, issued Statement of Financial Accounting
Standards No. 141 Business Combinations, or
SFAS 141. SFAS 141 requires all business combinations
initiated after June 30, 2001 to be accounted for using the
purchase method. SFAS 141 also includes guidance on the
initial recognition and measurement of goodwill and other
intangible assets arising from business combinations completed
after June 30, 2001. We do not expect the adoption of
SFAS 141 to have a material effect on our financial
condition or results of operations.

In June 2001, the FASB issued Statement of
Financial Accounting Standard No. 142, Goodwill and
Other Intangible Assets, or SFAS 142. SFAS 142
discontinues amortization of goodwill and intangible assets

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deemed to have indefinite lives and requires such
assets to be reviewed at least annually for impairment.
SFAS 142 also includes provisions on the identification of
intangible assets, reclassification of some intangibles from
previously reported goodwill, and reassessment of the useful
lives of existing intangibles. The provisions of SFAS 142
are effective for fiscal years beginning after December 15,
2001. However, early adoption of SFAS 142 is permitted for
companies with a fiscal year beginning after March 15,
2001, provided their first quarter financial statements have not
been previously issued. In all cases, SFAS 142 must be
adopted at the beginning of a fiscal year. We will apply
SFAS 142 beginning in the first quarter of fiscal 2003.
Application of the non-amortization provisions for goodwill and
other intangible assets of SFAS 142 is expected to result
in a reduction in operating expenses of approximately
$0.5 million in fiscal 2003. We will test goodwill for
impairment using the two-step process prescribed in
SFAS 142. The first step is to screen for potential
impairment, while the second step measures the amount of the
impairment, if any. We expect to perform the first of the
required impairment tests of goodwill and indefinite lived
intangible assets in the second quarter of fiscal 2003, and we
do not expect the effect of these tests to be material to our
financial condition or results of operations.


In July 2001, the FASB issued Statement of
Financial Accounting Standard No. 143, Accounting for
Asset Retirement Obligations, or SFAS 143, which
addresses accounting and reporting for obligations associated
with the retirement of tangible long-lived assets and the
associated asset retirement costs. SFAS 143 is effective
for fiscal years beginning after June 15, 2002. We are
currently assessing the impact of this new standard, and we do
not expect its adoption to be material to our financial
condition or results of operations.

In August 2001, the FASB issued Statement of
Financial Accounting Standard No. 144, Impairment or
Disposal of Long-Lived Assets, or SFAS 144, which is
effective for fiscal years beginning after December 15,
2001. SFAS 144 supersedes Statement of Financial Accounting
Standard No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed
Of, and provides a single accounting model for impairment
of long-lived assets. We do not expect the adoption of
SFAS 144 to have a material effect on our financial
condition or results of operations.

Liquidity and Capital Resources

Since inception, we have funded our operations
primarily through the private sale of equity securities and
public stock offerings, customer pre-payments, bank borrowings
and cash generated from operations. As of March 31, 2002, we had
approximately $74.7 million in cash and cash equivalents,
$5.1 million in restricted cash equivalents and short-term
investments, $5.0 million in short-term investments,
$127.1 million in working capital and $93.4 million in
long-term debt and finance leases.

Cash flows from operating
activities.Net cash used in operating
activities in fiscal 2002 was $26.1 million. The net cash
used in operating activities in fiscal 2002 was primarily
attributable to our net loss of $148.9 million, reductions
in payables and accrued liabilities totaling $21.6 million,
and a non-cash benefit for deferred taxes of $37.0 million.
These uses of cash were partially offset by non-cash charges to
net income including an impairment charge for goodwill and
intangibles of $60.4 million, depreciation and amortization
of $26.8 million, a valuation reserve for land held for
resale of $15.0 million and an inventory reserve adjustment
of $12.8 million. Additionally, accounts receivable
decreased by $47.3 million and inventory balances decreased
by $18.6 million. The reductions in payables and accrued
liabilities, receivables and inventory all reflect reduced
operations during fiscal 2002 resulting from substantially lower
sales. We expect these balances to increase during fiscal 2003
with increases in sales. Net cash provided by operating
activities in fiscal 2001 was $31.0 million. The net cash
provided by operating activities in fiscal 2001 was primarily
attributable to our net income of $27.0 million and
non-cash charges to net income including depreciation and
amortization of $16.4 million and inventory reserve
adjustments of $16.5 million, partially offset by an
increase in inventories of $34.6 million and a decrease in
accounts payable of $11.8 million. Net cash used in
operating activities in fiscal 2000 was $13.6 million,
primarily attributable to increases in accounts receivable,
inventory and prepaid expenses and other totaling
$82.9 million, partially offset by a decrease in other
assets, net of $4.5 million, increases in accounts payable
and accrued liabilities and other of $34.1 million, our net
income of $10.0 million, tax benefit realized from employee
stock option plan activity of $9.9 million and non-cash

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charges to net income including depreciation and
amortization and purchased in-process research and development
totaling $13.2 million.


Cash flows from investing
activities.Net cash provided by
investing activities in fiscal 2002 was $31.0 million. We
sold short-term investments of $45.4 million, net. This
source of cash was offset by purchases of property and equipment
of approximately $9.8 million and cash used in connection
with our acquisition of GW of $3.8 million. Net cash used
in investing activities in fiscal 2001 was $9.0 million. We
used a total of $29.0 million in connection with
acquisitions of AMP, SemiFab and additional ownership interest
in MECS, and $17.9 million to modify our facilities and
purchase new equipment and furniture. These uses were offset by
sales or maturities of short-term investments, net of purchases
of short-term investments and restricted cash equivalents, of
$38.0 million. Net cash used in investing activities in
fiscal 2000 was $88.2 million, primarily due to net
purchases of short-term investments of $62.8 million,
$14.4 million used in connection with the acquisitions of
PAT and MECS and $10.4 million of purchases of property and
equipment.

Cash flows from financing
activities.Net cash provided by
financing activities in fiscal 2002 was $35.7 million.
During fiscal 2002, we received net proceeds of
$85.1 million from the issuance of convertible debt
securities and $5.9 million from the issuance of common
stock under our employee stock programs. These sources of cash
were offset by net principal payments on short-term and
long-term debt and finance leases of $53.8 million. During
fiscal 2001 we issued stock in connection with our employee
stock programs for an aggregate of $4.6 million. We made
net principal payments on debt and finance leases of
$4.5 million. Net cash provided by financing activities in
fiscal 2000 was $108.1 million, primarily due to the
issuance of $108.2 million of common stock through a
secondary public offering, private placement and employee stock
plans.

We own land in Fremont, California, which we are
currently marketing for sale. We had intended to construct
corporate headquarters facilities on the land and subsequently
decided not to build these facilities. Initially, we leased the
land from a syndicate of financial institutions pursuant to an
original lease agreement and an amended lease agreement. We
purchased the land on October 22, 2001 for
$41.1 million, and we paid the syndicate of financial
institutions approximately $2.9 million for engineering
costs incurred in preparation for making leasehold improvements
to the land. Based upon market data at June 30, 2001, we
estimated that the then market value of the land had been
impaired and as such recorded a $15.0 million write-down to
its estimated market value during the quarter ended
June 30, 2001. We are currently attempting to sell this
property.

The following table summarizes our significant
commitments at March 31, 2002 (in thousands):

|                                   |  |                        |         |           |  |             |        |             |  |               |        |  |  |   |        |  |  |   |        | 
|---------------------------------- |  | ---------------------- | ------- | --------- |  | ----------- | ------ | ----------- |  | ------------- | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                   |  |                       
|                                   |  | Payments Due by Period
|                                   |  |                       
|                                   |  |                        |         | Less than |  |            
|                                   |  | Total                  |         | 1 Year    |  | 1 - 3 Years |        | 3 - 5 Years |  | After 5 Years
|                                   |  |                        |         |           |  |             |        |             |  |              
|Convertible subordinated notes     |  | $                      | 86,250  |           |  | $           |       |             |  | $             |       |  |  | $ |       |  |  | $ | 86,250 | 
|Secured straight bonds             |  |                        | 4,508   |           |  |             | 825    |             |  |               | 1,670  |  |  |   | 1,410  |  |  |   | 603    | 
|Finance and operating leases       |  |                        | 32,427  |           |  |             | 8,949  |             |  |               | 12,958 |  |  |   | 10,520 |  |  |   |       | 
|Purchase commitments               |  |                        | 26,053  |           |  |             | 16,455 |             |  |               | 6,811  |  |  |   | 2,787  |  |  |   |       | 
|                                   |  |                        |         |           |  |             |        |             |  |               |        |  |  |   |        |  |  |   |        | 
|Total contractual cash obligations |  | $                      | 149,238 |           |  | $           | 26,229 |             |  | $             | 21,439 |  |  | $ | 14,717 |  |  | $ | 86,853 | 
|                                   |  |                        |         |           |  |             |        |             |  |               |        |  |  |   |        |  |  |   |        | 

On July 3, 2001, we completed the sale of
$86.3 million of 5 3/4 percent convertible
subordinated notes which provided us with aggregate proceeds of
$83.0 million net of issuance costs. The notes are
convertible, at the option of the holder, at any time on or
prior to maturity into shares of our common stock at a
conversion price of $15.18 per share, which is equal to a
conversion rate of 65.8718 shares per $1,000 principal
amount of notes. The notes mature July 3, 2008, pay
interest on January 3 and July 3 of each year and are
redeemable at our option after July 3, 2004. The
convertible subordinated notes are unsecured obligations,
subject to certain non-financial covenants. At March 31,
2002, we were in compliance with all covenants under the
convertible subordinated notes.

We had secured straight bonds from a bank in
Japan of Japanese Yen 597.8 million, or $4.5 million,
at March 31, 2002. The bonds bore interest at rates ranging
from 1.5 percent to 2.3 percent as of March 31,
2002

33



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and mature in fiscal year 2008. Some of our
assets in Japan have been pledged as security for these secured
straight bonds as well as for short-term debt. As of
March 31, 2002, pledged assets consist of land and other
property and equipment, net of accumulated depreciation, time
deposits and accounts receivable totaling $13.7 million.


We lease facilities under non-cancelable finance
and operating leases, with expiration dates ranging from
September 2002 to June 2009.

In addition, we may utilize cash resources to
fund acquisitions or investments in other businesses,
technologies or product lines. For example, in May 2002 we
signed a definitive agreement with Shinko Electric for the
establishment of a joint venture. Under terms of the agreement,
we will acquire 51% of the joint venture for approximately
8.16 billion Japanese yen, or approximately
$65 million. We currently anticipate pursuing additional
funds to pay for our share of the joint venture, as well as to
support our working capital and operating expense requirements
or for other purposes.

We anticipate that operating activities will
continue to constitute a material use of our cash resources. The
cyclical nature of the semiconductor industry makes it very
difficult for us to predict future liquidity requirements with
certainty. The anticipated upturn in the semiconductor industry
in fiscal 2003 may result in short-term uses of cash in
operations as cash may be used to purchase inventory and expand
our capacity prior to increased cash receipts from sales growth.
However, we believe that our available cash and cash equivalents
will be sufficient to meet our working capital and operating
expense requirements until the end of fiscal 2003. We currently
anticipate pursuing additional funds in relation to pending
acquisitions, to support our working capital and operating
expense requirements, or for other purposes. We anticipate
raising these additional funds through public or private debt or
equity financings. Such financing may not be available to us on
a timely basis if at all or, if available, on terms acceptable
to us and not dilutive to our shareholders. If we fail to obtain
acceptable additional financing, we may be required to reduce
planned expenditures or forego acquisition opportunities which
could reduce our revenues, increase our losses, and harm our
business.

Related party
transactions.At March 31, 2002,
we held two notes receivable from a former executive officer
totaling $0.8 million, notes from two former employees
totaling $0.2 million and notes from four other employees
totaling $0.9 million. During fiscal 2002, we forgave
$0.1 million of notes receivable from former employees in
accordance with the provisions of their separation agreements.
At March 31, 2001, we held two notes receivable from an
executive officer totaling $0.8 million and five separate
notes receivable from other employees totaling
$1.1 million. In all but one case, loans were extended to
these individuals to assist them in their relocation to
California. The remaining loan was extended in connection with a
personal matter. Each of the notes receivable are secured by
second deeds of trust on certain real property and pledged
securities of Asyst owned by the employees.

On February 28, 2002, we entered into an
Employment Separation Agreement with Dennis Riccio, Senior Vice
President, Worldwide Sales and Service. Pursuant to this
agreement, Mr. Riccio agreed to continue as a part-time
employee until October 19, 2002. In exchange, he will
receive compensation for his work as a part-time employee, his
outstanding options continued to vest until May 31, 2002,
and he will be eligible to continue to participate in deferred
compensation and long-term incentive plans until
October 19, 2002. Mr. Riccio agreed not to compete
with us while a part-time employee.

We loaned Mr. Riccio $350,000 in November
1998 and $450,000 in February 1999 to assist in his relocation
from Texas to California. The first loan has an interest rate of
4.47 percent per annum and the second loan has an interest
rate of 4.64 percent per annum. Both loans are secured by
deeds of trust on his California residence. Pursuant to his
Employment Separation Agreement, the terms of the loans have
both been amended to become due on December 31, 2002, and
the interest due under the loans will be forgiven if
Mr. Riccio repays the entire principal balance of the loans.

In April 1999, we entered into an employment
agreement with Mihir Parikh, our Chairman and Chief Executive
Officer. The term of employment commenced on April 1, 1998,
and extends for three years, renewing daily, so that, absent
notice by either party of an intent not to continue the term,
the term shall always be three years. The employment agreement
set Dr. Parikhs initial base salary at a minimum of
$325,000 annually. Pursuant to the agreement, our Compensation
Committee is obligated to annually review

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his base salary for potential increase. In
addition, during the employment term, Dr. Parikh is
eligible to receive annual bonuses and to participate in our
stock incentive plans. Also, he is eligible to participate in
any of our benefit plans maintained for our employees. If we
terminate Dr. Parikhs employment without cause or if
he terminates his employment for good reason, either before or
within six months following a change in control, he will be
entitled to receive a lump-sum cash payment equal to the present
value of the sum of (A) three times his then current annual
base salary and (B) three times an annual average bonus
amount, determined under a formula set forth in the employment
agreement. Dr. Parikh will also be entitled to all benefits
that were payable to him at the time of termination and to
continued participation for 18 months thereafter, in our
health and life insurance plans in which he was then a
participant. In addition, during the term of employment and for
one year thereafter, unless his employment terminates without
cause or for good reason, he may not solicit away employees or
customers.







|          |                                                                    
|--------- | -------------------------------------------------------------------
|Item 7A  | Quantitative and Qualitative Disclosures
    Regarding Market Risks

Interest Rate Risk.Our exposure to market risk for changes in interest rates relate
primarily to the investment portfolio. We do not use derivative
financial instruments in our investment portfolio. Our
investment portfolio consists of short-term fixed income
securities and by policy is limited by the amount of credit
exposure to any one issuer. As stated in our investment policy,
we ensure the safety and preservation of our invested principal
funds by limiting default risk, market risk and reinvestment
risk. We mitigate default risk by investing in safe and
high-credit quality securities and by constantly positioning our
portfolio to respond appropriately to a significant reduction in
a credit rating of any investment issuer, guarantor or
depository. Our portfolio includes only marketable securities
with active secondary or resale markets to ensure portfolio
liquidity. These securities, like all fixed income instruments,
carry a degree of interest rate risk. Fixed rate securities have
their fair market value adversely affected due to an increase in
interest rates.

The table below presents principal amounts and
related weighted average interest rates for the investment
portfolio at March 31, 2002. Our intent is not to hold
investments longer than twelve months. Restricted cash, cash
equivalents and short-term investments represent amounts that
are restricted as to their use primarily in accordance with debt
agreements more fully described in Note 5 to our
consolidated financial statements (dollars in thousands):

|                                                                                                   |  |          |        |          |  |  |      |  
|-------------------------------------------------------------------------------------------------- |  | -------- | ------ | -------- |  |  | ---- | -
|                                                                                                   |  |          |        | Average 
|                                                                                                   |  | Carrying |        | Interest
|                                                                                                   |  | Amount   |        | Rate    
|                                                                                                   |  |          |        |         
|CASH EQUIVALENTS:                                                                                  |  |          |        |          |  |  |      |  
|Institutional money market funds                                                                   |  | $        | 5,129  |          |  |  | 1.95 | %
|U.S. corporate debt securities                                                                     |  |          | 30,500 |          |  |  | 2.00 | %
|Debt securities issued by States of the United
    States and political subdivisions of the States |  |          | 31,000 |          |  |  | 1.97 | %
|                                                                                                   |  |          |        |          |  |  |      |  
|Total cash equivalents                                                                             |  | $        | 66,629 |          |  |  | 1.99 | %
|                                                                                                   |  |          |        |          |  |  |      |  
|RESTRICTED CASH EQUIVALENTS:                                                                       |  |          |        |          |  |  |      |  
|U.S. corporate debt securities                                                                     |  | $        | 500    |          |  |  | 1.64 | %
|                                                                                                   |  |          |        |          |  |  |      |  
|SHORT-TERM INVESTMENTS:                                                                            |  |          |        |          |  |  |      |  
|U.S. corporate debt securities                                                                     |  | $        | 5,000  |          |  |  | 3.21 | %
|                                                                                                   |  |          |        |          |  |  |      |  

Foreign Currency Exchange
Risk.We engage in international
operations and transact business in various foreign countries.
The primary foreign currency cash flows are located in Japan,
Europe, Singapore and Taiwan. We have approximately
$21.9 million in short-term and long-term debt and finance
leases denominated in Japanese Yen. Although we and our
subsidiaries operate and sell products in various global
markets, substantially all sales are denominated in the
U.S. dollar, except in Japan, therefore reducing the
foreign currency risk factor. In March 2001, we began to employ
a foreign currency hedge program utilizing foreign currency
forward exchange contracts in Japan. To date, the foreign
currency transactions and exposure

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to exchange rate volatility have not been
significant. There can be no assurance that foreign currency
risk will not be a material impact on our financial position,
results of operations or cash flow in the future.







|         |                                                
|-------- | -----------------------------------------------
|Item 8  | Financial Statements and Supplementary
    Data

Our Financial Statements and notes thereto and
Financial Statement Schedules appear on
pages 38 - 67 of this Form 10-K.






|         |                                                                                         
|-------- | ----------------------------------------------------------------------------------------
|Item 9  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure

Arthur Andersen LLP was previously our
independent accountant. Representatives for Arthur Andersen LLP
are not available to provide the consents required for the
inclusion of their report on our consolidated financial
statements for the years ended March 31, 2001 and 2000
included in this Form 10-K, and we have dispensed with the
requirement to file their consent in reliance upon
Rule 437a of the Securities Act of 1933. Because Arthur
Andersen LLP has not consented to the inclusion of their report
in this Form 10-K, investors will not be able to recover
against Arthur Andersen LLP under Section 11 of the
Securities Act of 1933 for any untrue statements of material
fact contained in the consolidated financial statements audited
by Arthur Andersen LLP that are incorporated by reference or any
omissions to state a material fact required to be stated therein.

Information regarding changes in accountants is
incorporated by reference to the Current Report on Form 8-K
filed on April 4, 2002.

For the two years prior to our engagement of
PricewaterhouseCoopers LLP as our independent auditors, we did
not consult with PricewaterhouseCoopers LLP regarding the
application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that
might be rendered on Asysts consolidated financial
statements. Additionally, PricewaterhouseCoopers LLP did not
audit our consolidated financial statements for the two most
recent fiscal years ended March 31, 2001.




PART III




Item 10  Directors and Executive
Officers of the Registrant

The information required by this item concerning
our directors and executive officers is incorporated by
reference from our Definitive Proxy Statement filed not later
than 120 days following the close of the fiscal year.






Item 11  Executive
Compensation


The information required under this item is
hereby incorporated by reference from our Definitive Proxy
Statement.






Item 12  Security Ownership of
Certain Beneficial Owners and Management


The information required under this item is
hereby incorporated by reference from our Definitive Proxy
Statement.






Item 13  Certain Relationships
and Related Transactions


The information required under this item is
hereby incorporated by reference from our Definitive Proxy
Statement.

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##### Table of Contents






PART IV




Item 14  Exhibits, Financial
Statement Schedules and Reports on Form 8-K

1.Index to
Financial Statements

The Financial Statements required by this item
are submitted in a separate section beginning on page 38 of
this report.

|                                                    |  |      |    | 
|--------------------------------------------------- |  | ---- | -- | 
|                                                    |  | Page
|                                                    |  |     
|Report of Independent Accountants                   |  |      | 38 | 
|Report of Independent Public Accountants            |  |      | 39 | 
|Consolidated Balance Sheets                         |  |      | 40 | 
|Consolidated Statements of Operations               |  |      | 41 | 
|Consolidated Statements of Shareholders
    Equity |  |      | 42 | 
|Consolidated Statements of Cash Flows               |  |      | 43 | 
|Notes to Consolidated Financial Statements          |  |      | 44 | 

2.Financial
Statement Schedules

All other schedules are omitted because they are
not applicable or the required information is shown in the
Financial Statements or the notes thereto.

3.Exhibits

The exhibits listed in the accompanying index to
exhibits are filed or incorporated by reference as part of this
annual report.

(b)Reports on Form 8-K

No reports on Form 8-K were filed during the
fourth quarter ended March 31, 2002.

37



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##### Table of Contents



REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders

of Asyst Technologies, Inc.:


In our opinion, the consolidated financial
statements listed in the index appearing under
Item 14(a)(1) present fairly, in all material respects, the
financial position of Asyst Technologies, Inc. and its
subsidiaries at March 31, 2002, and the results of their
operations and their cash flows for the year ended
March 31, 2002 in conformity with accounting principles
generally accepted in the United States of America. In addition,
in our opinion, the financial statement schedule listed in the
index appearing under Item 14(a)(2) presents fairly, in all
material respects, the information set forth therein for the
year ended March 31, 2002 when read in conjunction with the
related consolidated financial statements. These financial
statements and financial statement schedule are the
responsibility of the Companys management; our
responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits.
We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.



| |                                
| | -------------------------------
| | /s/  PRICEWATERHOUSECOOPERS LLP

San Jose, California

May 15, 2002 except for Note 14,


which is as of May 29, 2002


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##### Table of Contents



ARTHUR ANDERSEN LLP HAS NOT CONSENTED TO THE
INCLUSION OF THIS REPORT IN THIS FORM 10-K. SEE ITEM 9
FOR A DISCUSSION ON THIS MATTER. THE DISCLOSURES IN
NOTES 15 AND 13 REFERRED TO IN THE ARTHUR ANDERSEN REPORT
BELOW ARE INCLUDED IN NOTE 11 IN THE FISCAL 2002
CONSOLIDATED FINANCIAL STATEMENTS.

REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS

To Asyst Technologies, Inc.:

We have audited the accompanying consolidated
balance sheets of Asyst Technologies, Inc. (a California
corporation) and subsidiaries (the Company) as of
March 31, 2001 and 2000, and the related consolidated
statements of operations, shareholders equity and cash
flows for each of the three years in the period ended
March 31, 2001. These financial statements are the
responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the
consolidated balance sheet of MECS Corporation (a Japanese
corporation) and subsidiaries (MECS), a company
acquired on March 23, 2000 in a transaction accounted for
using the purchase method of accounting, as discussed in
Note 15. Such balance sheet is included in the consolidated
balance sheet of the Company as of March 31, 2000 and
reflects total assets of 12 percent (before giving effect
to purchase accounting). We also did not audit the consolidated
statement of operations, shareholders equity and cash
flows of Progressive System Technologies, Inc. (a Texas
corporation) and subsidiary (PST) for the year ended
December 31, 1998. PST was acquired on June 2, 1999 in
a transaction accounted for as a pooling of interests, as
discussed in Note 13. Such statements are included in the
consolidated financial statements of the Company and reflect
total revenues of 10 percent of the consolidated statement
of operations for the year ended March 31, 1999. These
statements were audited by other auditors whose report has been
furnished to us, and our opinion, insofar as it relates to
amounts included for PST and MECS, is based solely upon the
report of the other auditors.

We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and
the reports of other auditors provide a reasonable basis for our
opinion.

In our opinion, based on our audits and the
reports of other auditors, the financial statements referred to
above present fairly, in all material respects, the financial
position of Asyst Technologies, Inc. as of March 31, 2001
and 2000, and the results of their operations and their cash
flows for each of the three years in the period ended
March 31, 2001, in conformity with the accounting
principles generally accepted in the United States.

As discussed in Note 2 to the consolidated
financial statements, effective April 1, 2000, the Company
changed its method of accounting for revenue recognition in
accordance with guidance provided in SEC Accounting
Bulletin No. 101 (SAB 101) Revenue Recognition
in Financial Statements.

Our audits were made for the purpose of forming
an opinion on the basic financial statements taken as a whole.
The schedule listed under Item 14(a) is presented for the
purposes of complying with the Securities and Exchange
Commissions rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing
procedures applied to our audits of the basic financial
statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.



| |                    
| | -------------------
| | ARTHUR ANDERSEN LLP

San Jose, California

April 27, 2001


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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |         |         | 
|-------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------ | -------- | ------- |  | ------ | ------- | ------- | 
|                                                   |                                                                                                                                    |                                           
|                                                   |                                                                                                                                    | March 31,                                 
|                                                   |                                                                                                                                    |                                           
|                                                   |                                                                                                                                    | 2002                                       |        | 2001    
|                                                   |                                                                                                                                    |                                            |        |         
|                                                   |                                                                                                                                    |                                           
|                                                   |                                                                                                                                    | (In thousands, except                     
|                                                   |                                                                                                                                    | share and per share data)                 
|ASSETS                                             |                                                                                                                                    |                                            |        |          |         |  |        |        
|CURRENT ASSETS:                                    |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                   | Cash and cash equivalents                                                                                                          |                                            | $      | 74,738   |         |  | $      | 34,749  |        
|                                                   | Restricted cash, cash equivalents and short-term
    investments                                                                   |                                            |        | 5,052    |         |  |        | 52,500  |        
|                                                   | Short-term investments                                                                                                             |                                            |        | 5,000    |         |  |        | 3,000   |        
|                                                   | Accounts receivable, net of allowances for
    doubtful accounts of $4,198 and $3,795 at March 31, 2002
    and 2001, respectively |                                            |        | 29,715   |         |  |        | 77,660  |        
|                                                   | Inventories                                                                                                                        |                                            |        | 45,110   |         |  |        | 76,972  |        
|                                                   | Deferred tax asset                                                                                                                 |                                            |        | 33,906   |         |  |        | 20,068  |        
|                                                   | Prepaid expenses and other                                                                                                         |                                            |        | 15,006   |         |  |        | 16,017  |        
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                   |                                                                                                                                    | Total current assets                       |        |          | 208,527 |  |        |         | 280,966 | 
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        
|Property and equipment, net                        |                                                                                                                                    |                                            | 38,366 |          |         |  | 40,160 |        
|Goodwill and other intangible assets, net          |                                                                                                                                    |                                            | 35,048 |          |         |  | 79,264 |        
|Deferred tax asset                                 |                                                                                                                                    |                                            | 30,294 |          |         |  |       |        
|Other assets                                       |                                                                                                                                    |                                            | 32,180 |          |         |  | 8,042  |        
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                   |                                                                                                                                    | Total assets                               |        | $        | 344,415 |  |        | $       | 408,432 | 
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                  
|LIABILITIES AND SHAREHOLDERS
    EQUITY           |                                                                                                                                    |                                            |        |          |         |  |        |        
|CURRENT LIABILITIES:                               |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                   | Short-term loans and notes payable                                                                                                 |                                            | $      | 16,707   |         |  | $      | 28,776  |        
|                                                   | Current portion of long-term debt and finance
    leases                                                                           |                                            |        | 2,130    |         |  |        | 1,791   |        
|                                                   | Accounts payable                                                                                                                   |                                            |        | 10,246   |         |  |        | 29,560  |        
|                                                   | Accrued liabilities and other                                                                                                      |                                            |        | 47,859   |         |  |        | 36,495  |        
|                                                   | Deferred revenue                                                                                                                   |                                            |        | 4,476    |         |  |        | 5,190   |        
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                   |                                                                                                                                    | Total current liabilities                  |        |          | 81,418  |  |        |         | 101,812 | 
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        
|LONG-TERM LIABILITIES:                             |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                   | Long-term debt and finance leases, net of current
    portion                                                                      |                                            |        | 91,265   |         |  |        | 3,683   |        
|                                                   | Other long-term liabilities                                                                                                        |                                            |        | 6,795    |         |  |        | 474     |        
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                   |                                                                                                                                    | Total long-term liabilities                |        |          | 98,060  |  |        |         | 4,157   | 
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        
|COMMITMENTS AND CONTINGENCIES (see Notes 8 and 12) |                                                                                                                                    |                                            |        |          |         |  |        |        
|SHAREHOLDERS EQUITY:                              |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                   | Common stock, no par value                                                                                                         |                                            |        |          |         |  |        |         |        
|                                                   | Authorized shares  300,000,000                                                                                                    |                                            |        |          |         |  |        |         |        
|                                                   | Outstanding shares  35,864,658 and
    34,602,343 shares at March 31, 2002 and 2001, respectively                                 |                                            |        | 297,162  |         |  |        | 282,925 |        
|                                                   | Deferred stock compensation                                                                                                        |                                            |        | (2,846   | )       |  |        |        |        
|                                                   | Retained earnings (accumulated deficit)                                                                                            |                                            |        | (129,379 | )       |  |        | 19,538  |        
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                   |                                                                                                                                    | Total shareholders equity                 |        |          | 164,937 |  |        |         | 302,463 | 
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                   |                                                                                                                                    | Total liabilities and shareholders equity |        | $        | 344,415 |  |        | $       | 408,432 | 
|                                                   |                                                                                                                                    |                                            |        |          |         |  |        |        

The accompanying notes are an integral part of
these consolidated financial statements.

40



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##### Table of Contents



ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |         |        | 
|------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | -------- | ------ | -------- | ---- | ------- | ------- | ------- | - | ------- | ------- | ------ | 
|                                                                                                                    |                                                                              |                                                                                                                          
|                                                                                                                    |                                                                              | Fiscal Year Ended March 31,                                                                                              
|                                                                                                                    |                                                                              |                                                                                                                          
|                                                                                                                    |                                                                              | 2002                                                                                                                      |          | 2001   |          | 2000
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |     
|                                                                                                                    |                                                                              |                                                                                                                          
|                                                                                                                    |                                                                              | (In thousands, except per share data)                                                                                    
|NET SALES                                                                                                           |                                                                              | $                                                                                                                         | 193,953  |        |          | $    | 491,542 |         |         | $ | 225,554 |        
|COST OF SALES                                                                                                       |                                                                              |                                                                                                                           | 160,133  |        |          |      | 305,796 |         |         |   | 122,499 |        
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    | Gross profit                                                                 |                                                                                                                           |          | 33,820 |          |      |         | 185,746 |         |   |         | 103,055 |       
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|OPERATING EXPENSES:                                                                                                 |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    | Research and development                                                     |                                                                                                                           |          | 40,071 |          |      |         | 44,263  |         |   |         | 21,584  |       
|                                                                                                                    | Selling, general and administrative                                          |                                                                                                                           |          | 80,536 |          |      |         | 90,435  |         |   |         | 56,246  |       
|                                                                                                                    | Amortization of acquired intangible assets                                   |                                                                                                                           |          | 14,373 |          |      |         | 6,963   |         |   |         | 2,585   |       
|                                                                                                                    | Impairment of goodwill and other long-lived assets                           |                                                                                                                           |          | 60,354 |          |      |         |        |         |   |         |        |       
|                                                                                                                    | Non-recurring charges                                                        |                                                                                                                           |          | 26,121 |          |      |         | 979     |         |   |         | 2,300   |       
|                                                                                                                    | In-process research & development of acquired
    business and product line  |                                                                                                                           |          | 2,000  |          |      |         |        |         |   |         | 4,884   |       
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    |                                                                              | Total operating expenses                                                                                                  |          |        | 223,455  |      |         |         | 142,640 |   |         |         | 87,599 | 
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    |                                                                              | Operating income (loss)                                                                                                   |          |        | (189,635 | )    |         |         | 43,106  |   |         |         | 15,456 | 
|OTHER INCOME (EXPENSE):                                                                                             |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    | Interest income                                                              |                                                                                                                           |          | 3,586  |          |      |         | 4,924   |         |   |         | 2,590   |       
|                                                                                                                    | Interest expense                                                             |                                                                                                                           |          | (5,304 | )        |      |         | (497    | )       |   |         | 145     |       
|                                                                                                                    | Other income (expense)                                                       |                                                                                                                           |          | (2,284 | )        |      |         | (772    | )       |   |         | (664    | )     
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    |                                                                              | Other income (expense), net                                                                                               |          |        | (4,002   | )    |         |         | 3,655   |   |         |         | 2,071  | 
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    |                                                                              | Income (loss) before provision (benefit) for
    income taxes and cumulative effect of change in accounting
    principle |          |        | (193,637 | )    |         |         | 46,761  |   |         |         | 17,527 | 
|PROVISION (BENEFIT) FOR INCOME TAXES                                                                                |                                                                              |                                                                                                                           | (44,720  | )      |          |      | 17,229  |         |         |   | 7,508   |        
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
    CHANGE IN ACCOUNTING PRINCIPLE                                        |                                                                              |                                                                                                                           | (148,917 | )      |          |      | 29,532  |         |         |   | 10,019  |        
|Cumulative effect of change in accounting
    principle, net of tax benefit of $1,326                               |                                                                              |                                                                                                                           |         |        |          |      | (2,506  | )       |         |   |        |        
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|NET INCOME (LOSS)                                                                                                   |                                                                              | $                                                                                                                         | (148,917 | )      |          | $    | 27,026  |         |         | $ | 10,019  |        
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|BASIC EARNINGS (LOSS) PER SHARE:                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    | Income (loss) before cumulative effect of
    change in accounting principle |                                                                                                                           | $        | (4.21  | )        |      | $       | 0.90    |         |   | $       | 0.36    |       
|                                                                                                                    | Cumulative effect of change in accounting
    principle, net of tax          |                                                                                                                           |          |       |          |      |         | (0.08   | )       |   |         |        |       
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    | Basic net income (loss) per share                                            |                                                                                                                           | $        | (4.21  | )        |      | $       | 0.82    |         |   | $       | 0.36    |       
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|DILUTED EARNINGS (LOSS) PER SHARE:                                                                                  |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    | Income (loss) before cumulative effect of
    change in accounting principle |                                                                                                                           | $        | (4.21  | )        |      | $       | 0.85    |         |   | $       | 0.32    |       
|                                                                                                                    | Cumulative effect of change in accounting
    principle, net of tax          |                                                                                                                           |          |       |          |      |         | (0.07   | )       |   |         |        |       
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    | Diluted net income (loss) per share                                          |                                                                                                                           | $        | (4.21  | )        |      | $       | 0.78    |         |   | $       | 0.32    |       
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|SHARES USED IN THE PER SHARE CALCULATION:                                                                           |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    | Basic                                                                        |                                                                                                                           |          | 35,373 |          |      |         | 32,697  |         |   |         | 27,639  |       
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|                                                                                                                    | Diluted                                                                      |                                                                                                                           |          | 35,373 |          |      |         | 34,928  |         |   |         | 30,986  |       
|                                                                                                                    |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|Pro forma amounts with the change in accounting
    principle related to revenue applied retroactively (unaudited): |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|Net sales                                                                                                           |                                                                              |                                                                                                                           | N/A      |        |          |      | N/A     |         |         | $ | 220,518 |        
|Net income                                                                                                          |                                                                              |                                                                                                                           | N/A      |        |          |      | N/A     |         |         | $ | 7,513   |        
|Net income per share:                                                                                               |                                                                              |                                                                                                                           |          |        |          |      |         |         |         |   |         |        
|Basic                                                                                                               |                                                                              |                                                                                                                           | N/A      |        |          |      | N/A     |         |         | $ | 0.27    |        
|Diluted                                                                                                             |                                                                              |                                                                                                                           | N/A      |        |          |      | N/A     |         |         | $ | 0.24    |        

The accompanying notes are an integral part of
these consolidated financial statements.

41



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##### Table of Contents



ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS
EQUITY

|                                                                                                       |  |                                   |            |                   |  |          |         |              |  |               |            |          |  |        |        |   |  |   |        |   |  |   |          |   |  |   |          |  
|------------------------------------------------------------------------------------------------------ |  | --------------------------------- | ---------- | ----------------- |  | -------- | ------- | ------------ |  | ------------- | ---------- | -------- |  | ------ | ------ | - |  | - | ------ | - |  | - | -------- | - |  | - | -------- | -
|                                                                                                       |  |                                   |            |                   |  |          |         | Retained     |  |              
|                                                                                                       |  | Common Stock                      |            | Repurchase Shares |  | Deferred |         | Earnings     |  | Total        
|                                                                                                       |  |                                   |            |                   |  | Stock    |         | (Accumulated |  | Shareholders
|                                                                                                       |  | Shares                            |            | Amount            |  | Shares   |         | Amount       |  | Compensation  |            | Deficit) |  | Equity
|                                                                                                       |  |                                   |            |                   |  |          |         |              |  |               |            |          |  |       
|                                                                                                       |  |                                  
|                                                                                                       |  | (In thousands, except share data)
|BALANCE, MARCH 31, 1999                                                                                |  |                                   | 24,455,620 |                   |  | $        | 120,186 |              |  |               | (1,258,222 | )        |  | $      | (8,335 | ) |  | $ |       |   |  | $ | (15,217  | ) |  | $ | 96,634   |  
|Issuance of common stock under employee stock
    option and employee stock purchase plans             |  |                                   | 2,167,494  |                   |  |          | 13,106  |              |  |               | 8,222      |          |  |        | 55     |   |  |   |       |   |  |   |         |   |  |   | 13,161   |  
|Stock issues in exchange of PST redeemable
    preferred stock and redeemable preferred stock warrants |  |                                   | 369,398    |                   |  |          | 5,000   |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 5,000    |  
|Common stock issued in exchange of PST long-term
    debt                                              |  |                                   | 450,260    |                   |  |          | 5,066   |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 5,066    |  
|Tax benefit realized from activity in employee
    stock option plans                                  |  |                                   |           |                   |  |          | 9,934   |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 9,934    |  
|Board of Directors compensation                                                                       |  |                                   | 26,314     |                   |  |          | 125     |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 125      |  
|Common stock issued in secondary offering                                                              |  |                                   | 4,458,000  |                   |  |          | 84,098  |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 84,098   |  
|Common stock issued in private placement                                                               |  |                                   |           |                   |  |          | 2,689   |              |  |               | 1,250,000  |          |  |        | 8,280  |   |  |   |       |   |  |   |         |   |  |   | 10,969   |  
|Stock issued in acquisition of PAT                                                                     |  |                                   | 30,004     |                   |  |          | 390     |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 390      |  
|Adjustment to conform year end of Pooled business                                                      |  |                                   |           |                   |  |          |        |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   | (2,290   | ) |  |   | (2,290   | )
|Net income                                                                                             |  |                                   |           |                   |  |          |        |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   | 10,019   |   |  |   | 10,019   |  
|                                                                                                       |  |                                   |            |                   |  |          |         |              |  |               |            |          |  |        |        |   |  |   |        |   |  |   |          |   |  |   |          |  
|BALANCE, MARCH 31, 2000                                                                                |  |                                   | 31,957,090 |                   |  |          | 240,594 |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   | (7,488   | ) |  |   | 233,106  |  
|Issuance of common stock under employee stock
    option and employee stock purchase plans             |  |                                   | 568,380    |                   |  |          | 4,631   |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 4,631    |  
|Tax benefit realized from activity in employee
    stock option plans                                  |  |                                   |           |                   |  |          | 4,970   |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 4,970    |  
|Shares awarded to Board of Directors and employees                                                     |  |                                   | 4,720      |                   |  |          | 326     |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 326      |  
|Stock issued in acquisition of AMP                                                                     |  |                                   | 1,081,261  |                   |  |          | 19,000  |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 19,000   |  
|Stock issued in acquisition of SemiFab                                                                 |  |                                   | 990,892    |                   |  |          | 13,404  |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 13,404   |  
|Net income                                                                                             |  |                                   |           |                   |  |          |        |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   | 27,026   |   |  |   | 27,026   |  
|                                                                                                       |  |                                   |            |                   |  |          |         |              |  |               |            |          |  |        |        |   |  |   |        |   |  |   |          |   |  |   |          |  
|BALANCE, MARCH 31, 2001                                                                                |  |                                   | 34,602,343 |                   |  |          | 282,925 |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   | 19,538   |   |  |   | 302,463  |  
|Issuance of common stock under employee stock
    option and employee stock purchase plans             |  |                                   | 800,656    |                   |  |          | 2,533   |              |  |               |            |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 2,533    |  
|Employee and non-employee stock compensation                                                           |  |                                   | 10,396     |                   |  |          | 553     |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 553      |  
|Stock issued in acquisition of GW                                                                      |  |                                   | 451,263    |                   |  |          | 8,000   |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   |         |   |  |   | 8,000    |  
|Deferred compensation related to the acquisition
    of GW                                             |  |                                   |           |                   |  |          | 3,151   |              |  |               |           |          |  |        |       |   |  |   | (3,151 | ) |  |   |         |   |  |   |         |  
|Amortization of deferred stock compensation
    related to the acquisition of GW                       |  |                                   |           |                   |  |          |        |              |  |               |           |          |  |        |       |   |  |   | 305    |   |  |   |         |   |  |   | 305      |  
|Net loss                                                                                               |  |                                   |           |                   |  |          |        |              |  |               |           |          |  |        |       |   |  |   |       |   |  |   | (148,917 | ) |  |   | (148,917 | )
|                                                                                                       |  |                                   |            |                   |  |          |         |              |  |               |            |          |  |        |        |   |  |   |        |   |  |   |          |   |  |   |          |  
|BALANCE, MARCH 31, 2002                                                                                |  |                                   | 35,864,658 |                   |  | $        | 297,162 |              |  |               |           |          |  | $      |       |   |  | $ | (2,846 | ) |  | $ | (129,379 | ) |  | $ | 164,937  |  
|                                                                                                       |  |                                   |            |                   |  |          |         |              |  |               |            |          |  |        |        |   |  |   |        |   |  |   |          |   |  |   |          |  

The accompanying notes are an integral part of
these consolidated financial statements.

42



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##### Table of Contents



ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                                       |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |          |         |  
|------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------- | ------------------------------------------------------- | -------- | ------- | ------- | ---- | ------ | ------- | ------ | - | ------ | -------- | ------- | -
|                                                                                                       |                                                                                           |                                                        
|                                                                                                       |                                                                                           | Fiscal Year Ended March 31,                            
|                                                                                                       |                                                                                           |                                                        
|                                                                                                       |                                                                                           | 2002                                                    |          | 2001    |         | 2000
|                                                                                                       |                                                                                           |                                                         |          |         |         |     
|                                                                                                       |                                                                                           |                                                        
|                                                                                                       |                                                                                           | (Dollars in thousands)                                 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                  |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|Net income (loss)                                                                                      |                                                                                           | $                                                       | (148,917 | )       |         | $    | 27,026 |         |        | $ | 10,019 |         
|Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities: |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|                                                                                                       | Cumulative effect of change in accounting
    principle, net of tax benefit               |                                                         |          |        |         |      |        | 2,506   |        |   |        |         |        
|                                                                                                       | Adjustments to conform year end of pooled business                                        |                                                         |          |        |         |      |        |        |        |   |        | (2,290   | )      
|                                                                                                       | Depreciation and amortization                                                             |                                                         |          | 26,831  |         |      |        | 16,424  |        |   |        | 8,331    |        
|                                                                                                       | Impairment of goodwill and other long-lived assets                                        |                                                         |          | 60,354  |         |      |        |         |        |   |        |          |        
|                                                                                                       | Employee and non-employee stock compensation                                              |                                                         |          | 553     |         |      |        | 326     |        |   |        | 125      |        
|                                                                                                       | Shares issued for accrued interest on PST
    long-term debt                              |                                                         |          |        |         |      |        |        |        |   |        | 166      |        
|                                                                                                       | Provision for doubtful accounts                                                           |                                                         |          | 1,155   |         |      |        | 2,279   |        |   |        | 744      |        
|                                                                                                       | Non-cash restructuring expense                                                            |                                                         |          | 1,541   |         |      |        |        |        |   |        |         |        
|                                                                                                       | Write-down of land held for sale                                                          |                                                         |          | 15,000  |         |      |        |         |        |   |        |          |        
|                                                                                                       | Write-down of inventories                                                                 |                                                         |          | 12,810  |         |      |        | 16,457  |        |   |        |         |        
|                                                                                                       | Deferred tax asset                                                                        |                                                         |          | (37,026 | )       |      |        | 433     |        |   |        | (1,092   | )      
|                                                                                                       | Tax benefit realized from activity in employee
    stock option plans                     |                                                         |          |        |         |      |        | 4,970   |        |   |        | 9,934    |        
|                                                                                                       | Change in provision for contract loss reserves                                            |                                                         |          | (3,551  | )       |      |        | 5,551   |        |   |        |         |        
|                                                                                                       | Purchased in-process research and development                                             |                                                         |          | 2,000   |         |      |        |        |        |   |        | 4,884    |        
|Changes in assets and liabilities, net of
    acquisitions:                                            |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|                                                                                                       | Accounts receivable                                                                       |                                                         |          | 47,325  |         |      |        | (1,975  | )      |   |        | (50,502  | )      
|                                                                                                       | Inventories                                                                               |                                                         |          | 18,608  |         |      |        | (34,635 | )      |   |        | (21,283  | )      
|                                                                                                       | Prepaid expenses and other                                                                |                                                         |          | 1,086   |         |      |        | 46      |        |   |        | (11,126  | )      
|                                                                                                       | Other assets, net                                                                         |                                                         |          | (635    | )       |      |        | (1,957  | )      |   |        | 4,452    |        
|                                                                                                       | Accounts payable                                                                          |                                                         |          | (19,293 | )       |      |        | (11,756 | )      |   |        | 22,411   |        
|                                                                                                       | Accrued liabilities and other                                                             |                                                         |          | (2,314  | )       |      |        | 2,571   |        |   |        | 11,653   |        
|                                                                                                       | Deferred revenue                                                                          |                                                         |          | (1,637  | )       |      |        | 2,684   |        |   |        |         |        
|                                                                                                       |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|                                                                                                       |                                                                                           | Net cash provided by (used in) operating
    activities |          |         | (26,110 | )    |        |         | 30,950 |   |        |          | (13,574 | )
|                                                                                                       |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                                  |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|                                                                                                       | Purchase of short-term investments                                                        |                                                         |          | (37,077 | )       |      |        | (49,350 | )      |   |        | (158,891 | )      
|                                                                                                       | Sale or maturity of short-term investments                                                |                                                         |          | 35,077  |         |      |        | 139,800 |        |   |        | 96,138   |        
|                                                                                                       | Purchase of restricted cash equivalents and
    short-term investments                    |                                                         |          | (57,652 | )       |      |        | (52,500 | )      |   |        |         |        
|                                                                                                       | Sale or maturity of restricted cash equivalents
    and short-term investments            |                                                         |          | 105,100 |         |      |        |        |        |   |        |         |        
|                                                                                                       | Purchase of property and equipment, net                                                   |                                                         |          | (10,706 | )       |      |        | (17,918 | )      |   |        | (10,440  | )      
|                                                                                                       | Purchase of other long-term investment                                                    |                                                         |          |        |         |      |        |        |        |   |        | (600     | )      
|                                                                                                       | Net cash used in the acquisitions                                                         |                                                         |          | (3,772  | )       |      |        | (28,995 | )      |   |        | (14,439  | )      
|                                                                                                       |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|                                                                                                       |                                                                                           | Net cash provided by (used in) investing
    activities |          |         | 30,970  |      |        |         | (8,963 | ) |        |          | (88,232 | )
|                                                                                                       |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                  |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|                                                                                                       | Net principal payments on short-term loans                                                |                                                         |          | (51,631 | )       |      |        |        |        |   |        |         |        
|                                                                                                       | Net proceeds (principal payments) on short-term
    and long-term debt and finance leases |                                                         |          | 1,874   |         |      |        | (4,507  | )      |   |        | (1,016   | )      
|                                                                                                       | Proceeds from the issuance of convertible
    subordinated notes                          |                                                         |          | 82,980  |         |      |        |        |        |   |        |         |        
|                                                                                                       | Issuance of common stock                                                                  |                                                         |          | 2,533   |         |      |        | 4,631   |        |   |        | 108,228  |        
|                                                                                                       | Proceeds from issuance of subordinated debt and
    note payable to bank                  |                                                         |          |        |         |      |        |        |        |   |        | 850      |        
|                                                                                                       |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|                                                                                                       |                                                                                           | Net cash provided by financing activities               |          |         | 35,756  |      |        |         | 124    |   |        |          | 108,062 |  
|                                                                                                       |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                                |                                                                                           |                                                         | (627     | )       |         |      |       |         |        |   |       |         
|                                                                                                       |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|INCREASE (DECREASE) IN CASH AND CASH
    EQUIVALENTS                                                   |                                                                                           |                                                         | 39,989   |         |         |      | 22,111 |         |        |   | 6,256  |         
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                           |                                                                                           |                                                         | 34,749   |         |         |      | 12,638 |         |        |   | 6,382  |         
|                                                                                                       |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         
|CASH AND CASH EQUIVALENTS, END OF YEAR                                                                 |                                                                                           | $                                                       | 74,738   |         |         | $    | 34,749 |         |        | $ | 12,638 |         
|                                                                                                       |                                                                                           |                                                         |          |         |         |      |        |         |        |   |        |         

The accompanying notes are an integral part of
these consolidated financial statements.

43



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

1.     Organization
of the Company

The accompanying consolidated financial
statements include the accounts of Asyst Technologies, Inc. (the
Company) which was incorporated in California on
May 31, 1984, and its subsidiaries. The Company designs,
develops, manufactures and markets isolation systems,
work-in-process materials management, substrate-handling
robotics, automated transport and loading systems, and
connectivity automation software utilized primarily in clean
rooms for semiconductor manufacturing.

In May 2001, the Company acquired
100 percent of the common stock of GW Associates, Inc.
(GW), a California corporation, in a transaction accounted for
using the purchase method of accounting. (See Note 11)

In February 2001, the Company acquired
100 percent of the equity of Advanced Machine Programming,
Inc. (AMP), a Delaware company, and SemiFab, Inc. (SemiFab), a
Delaware company. Both transactions, which were unrelated, were
accounted for using the purchase method of accounting. (See
Note 11)

In transactions occurring between October 1999
and March 2002 the Company acquired a total of 96.8 percent
of the common stock of MECS Corporation (MECS), a Japanese
company. The acquisition was accounted for using the purchase
method of accounting in March 2000 when a majority interest of
MECS was obtained. (See Note 11)

In August 1999, the Company acquired
100 percent of the common stock of Palo Alto Technologies,
Inc. (PAT), a California corporation, in a transaction accounted
for using the purchase method of accounting. (See Note 11)

In June 1999, the Company acquired Progressive
Systems Technologies, Inc. (PST), a Texas corporation, in a
transaction accounted for as a pooling-of-interests.
Accordingly, the accompanying consolidated financial statements
of the Company have been restated to give retroactive effect of
the merger with PST. (See Note 11)

2.     Significant
Accounting Policies



| |                     
| | --------------------
| | Basis of Preparation

The accompanying consolidated financial
statements include the accounts of the Company and its
subsidiaries. All significant intercompany accounts and
transactions have been eliminated. The preparation of financial
statements in conformity with generally accepted accounting
principles in the United States requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.



| |                          
| | -------------------------
| | Cash and Cash Equivalents

The Company considers all highly liquid
investments with an original maturity of three months or less
from the date of purchase to be cash equivalents. The carrying
value of the cash equivalents approximates their current fair
market value.



| |                                                                 
| | ----------------------------------------------------------------
| | Restricted Cash, Cash Equivalents and
    Short-term Investments

Restricted cash, cash equivalents and short-term
investments represent amounts that are restricted as to their
use in accordance with Japanese debt agreements and a former
lease agreement for land in Fremont California more fully
described below under Other Assets.

44



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Restricted cash, cash equivalents and short-term
investments by security type are as follows (dollars in
thousands):

|                        |                                                                                                    |           |       |      |  |   |        |        | 
|----------------------- | -------------------------------------------------------------------------------------------------- | --------- | ----- | ---- |  | - | ------ | ------ | 
|                        |                                                                                                    |          
|                        |                                                                                                    | March 31,
|                        |                                                                                                    |          
|                        |                                                                                                    | 2002      |       | 2001
|                        |                                                                                                    |           |       |     
|CASH                    |                                                                                                    | $         | 4,552 |      |  | $ |       |       
|CASH EQUIVALENTS:       |                                                                                                    |           |       |      |  |   |        |       
|                        | Institutional money market funds debt securities                                                   |           |       | 500  |  |   |        |       | 
|                        | U.S. corporate debt securities                                                                     |           |       |     |  |   |        | 9,750  | 
|                        | Debt securities issued by States of the United
    States and political subdivisions of the states |           |       |     |  |   |        | 6,400  | 
|SHORT-TERM INVESTMENTS: |                                                                                                    |           |       |      |  |   |        |       
|                        | U.S. corporate debt securities                                                                     |           |       |     |  |   |        | 21,100 | 
|                        | Debt securities issued by States of the United
    States and political subdivisions of the states |           |       |     |  |   |        | 15,250 | 
|                        |                                                                                                    |           |       |      |  |   |        |       
|Total                   |                                                                                                    | $         | 5,052 |      |  | $ | 52,500 |       
|                        |                                                                                                    |           |       |      |  |   |        |       



| |                       
| | ----------------------
| | Short-term Investments

As of March 31, 2002 and 2001, the
Companys short-term investments consist of liquid debt
investments with maturities, at the time of purchase, greater
than three months and less than one year. All such investments
have been classified as available-for-sale and are
carried at fair value. Unrealized holding gains and losses, net
of taxes reported, have not been material to date. The cost of
the debt security is adjusted for amortization of premiums and
accretion of discounts to maturity. Such amortization, interest
income, realized gains and losses and declines in value that are
considered to be other than temporary, are included in other
income (expense), net, on the accompanying consolidated
statements of operations. There have been no declines in value
that are considered to be other than temporary for any of the
three years in the period ended March 31, 2002. The cost of
investments sold is based on specific identification. The
Company does not intend to hold the individual securities for
greater than one year.

Short-term investments by security type are as
follows (dollars in thousands):

|                               |  |           |       |      |  |   |       | 
|------------------------------ |  | --------- | ----- | ---- |  | - | ----- | 
|                               |  |          
|                               |  | March 31,
|                               |  |          
|                               |  | 2002      |       | 2001
|                               |  |           |       |     
|U.S. corporate debt securities |  | $         | 5,000 |      |  | $ | 3,000 | 
|                               |  |           |       |      |  |   |       | 
|Total                          |  | $         | 5,000 |      |  | $ | 3,000 | 
|                               |  |           |       |      |  |   |       | 



| |            
| | -----------
| | Inventories

Inventories are stated at the lower of cost
(first-in, first-out) or market and include materials, labor and
manufacturing overhead costs. Provisions, when required, are
made to reduce excess and obsolete inventories to their
estimated net realizable values. During the year ended
March 31, 2002, we recorded a one-time

45



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


charge of $12.8 million associated with
additional inventory reserves for obsolete and excess
inventories. The charge was included in cost of sales.
Inventories consisted of the following (dollars in thousands):

|                                   |  |           |        |      |  |   |        | 
|---------------------------------- |  | --------- | ------ | ---- |  | - | ------ | 
|                                   |  |          
|                                   |  | March 31,
|                                   |  |          
|                                   |  | 2002      |        | 2001
|                                   |  |           |        |     
|Raw materials                      |  | $         | 23,161 |      |  | $ | 50,490 | 
|Work-in-process and finished goods |  |           | 21,949 |      |  |   | 26,482 | 
|                                   |  |           |        |      |  |   |        | 
|Total                              |  | $         | 45,110 |      |  | $ | 76,972 | 
|                                   |  |           |        |      |  |   |        | 



| |                       
| | ----------------------
| | Property and Equipment

Property and equipment are recorded at cost or,
in the case of property and equipment purchased through
corporate acquisitions, at fair value based upon the allocated
purchase price on the acquisition date. Depreciation and
amortization are computed using the straight-line method over
the estimated useful lives of the assets (or over the lease term
if it is shorter for leasehold improvements) which range from
two to five years. Depreciation and amortization expense was
$12.1 million, $9.0 million and $5.7 million for
the fiscal years ended March 31, 2002, 2001 and 2000,
respectively.

Property and equipment consist of the following
(dollars in thousands):

|                                               |           |           |         |        |  |   |         |        | 
|---------------------------------------------- | --------- | --------- | ------- | ------ |  | - | ------- | ------ | 
|                                               |           |          
|                                               |           | March 31,
|                                               |           |          
|                                               |           | 2002      |         | 2001  
|                                               |           |           |         |       
|Land                                           |           | $         | 1,875   |        |  | $ | 1,985   |       
|Buildings                                      |           |           | 6,701   |        |  |   | 4,708   |       
|Leasehold Improvements                         |           |           | 13,825  |        |  |   | 10,365  |       
|Machinery and equipment                        |           |           | 28,789  |        |  |   | 24,370  |       
|Office equipment, furniture and fixtures       |           |           | 31,349  |        |  |   | 29,799  |       
|                                               |           |           |         |        |  |   |         |       
|                                               | Sub-total |           |         | 82,539 |  |   |         | 71,227 | 
|Less accumulated depreciation and amortization |           |           | (44,173 | )      |  |   | (31,067 | )     
|                                               |           |           |         |        |  |   |         |       
|Total                                          |           | $         | 38,366  |        |  | $ | 40,160  |       
|                                               |           |           |         |        |  |   |         |       



| |                                         
| | ----------------------------------------
| | Goodwill and Other Intangible
    Assets

The realizability of goodwill and intangible
assets is evaluated periodically as events or circumstances
indicate a possible inability to recover the net carrying
amount. Such evaluation is based on various analyses, including
cash flow and profitability projections that consider, as
applicable, the impact on existing lines of business. These
analyses require significant judgments and estimates related to
the future demand for the Companys products. To the extent
actual market conditions differ significantly from
managements estimates, the estimated carrying value of the
Companys intangible assets could change which may result
in a future impairment charge and such charge, if any, may be
material.

46



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Goodwill and other intangible assets, net
consisted of the following (dollars in thousands):

|                              |           |           |         |        |  |   |         |        | 
|----------------------------- | --------- | --------- | ------- | ------ |  | - | ------- | ------ | 
|                              |           |          
|                              |           | March 31,
|                              |           |          
|                              |           | 2002      |         | 2001  
|                              |           |           |         |       
|Goodwill                      |           | $         |        |        |  | $ | 49,057  |       
|Other intangible assets       |           |           | 64,163  |        |  |   | 43,082  |       
|                              |           |           |         |        |  |   |         |       
|                              | Sub-total |           |         | 64,163 |  |   |         | 92,139 | 
|Less accumulated amortization |           |           | (29,115 | )      |  |   | (12,875 | )     
|                              |           |           |         |        |  |   |         |       
|Total                         |           | $         | 35,048  |        |  | $ | 79,264  |       
|                              |           |           |         |        |  |   |         |       



| |             
| | ------------
| | Other Assets

The Company owns land in Fremont, California,
which it is currently marketing for sale. The Company had
intended to construct corporate headquarters facilities on the
land and subsequently decided not to build these facilities.
Initially, the Company leased the land from a syndicate of
financial institutions pursuant to an original lease agreement
and an amended lease agreement. The Company purchased the land
on October 22, 2001 for $41.1 million, and paid the
syndicate of financial institutions approximately $2.9 million
for engineering costs incurred in preparation for making
leasehold improvements to the land. Based upon market data at
June 30, 2001, the Company estimated that the then market
value of the land had been impaired and as such recorded a
$15.0 million write-down to its estimated market value
during the quarter ended June 30, 2001.

Other assets consisted of the following (dollars
in thousands):

|                   |  |           |        |      |  |   |       | 
|------------------ |  | --------- | ------ | ---- |  | - | ----- | 
|                   |  |          
|                   |  | March 31,
|                   |  |          
|                   |  | 2002      |        | 2001
|                   |  |           |        |     
|Land held for sale |  | $         | 26,121 |      |  | $ |      | 
|Other assets       |  |           | 6,059  |      |  |   | 8,042 | 
|                   |  |           |        |      |  |   |       | 
|Total              |  | $         | 32,180 |      |  | $ | 8,042 | 
|                   |  |           |        |      |  |   |       | 



| |                              
| | -----------------------------
| | Accrued Liabilities and Other

Accrued liabilities and other consisted of the
following (dollars in thousands):

|                                                             |  |           |        |      |  |   |        | 
|------------------------------------------------------------ |  | --------- | ------ | ---- |  | - | ------ | 
|                                                             |  |          
|                                                             |  | March 31,
|                                                             |  |          
|                                                             |  | 2002      |        | 2001
|                                                             |  |           |        |     
|Accrued warranty costs                                       |  | $         | 5,028  |      |  | $ | 2,264  | 
|Accrued payroll and payroll related costs                    |  |           | 3,248  |      |  |   | 16,004 | 
|Customer deposits                                            |  |           | 3,475  |      |  |   | 3,646  | 
|Income taxes payable                                         |  |           | 5,772  |      |  |   | 2,368  | 
|Accrued restructuring                                        |  |           | 3,173  |      |  |   |       | 
|Deferred acquisition payments due May 2002 (see
    Note 11) |  |           | 16,035 |      |  |   |       | 
|Other accrued liabilities                                    |  |           | 11,128 |      |  |   | 12,213 | 
|                                                             |  |           |        |      |  |   |        | 
|Total                                                        |  | $         | 47,859 |      |  | $ | 36,495 | 
|                                                             |  |           |        |      |  |   |        | 

47



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                    
| | -------------------
| | Revenue Recognition

The Company changed its revenue recognition
policy effective April 1, 2000, based on guidance provided
in Securities and Exchange Commission Staff Accounting Bulletin
No. 101 (SAB 101), Revenue Recognition in
Financial Statements. The Company recognizes revenue when
persuasive evidence of an arrangement exists, delivery has
occurred or service has been rendered, the sellers price
is fixed or determinable and collectibility is reasonably
assured. Some of the Companys products are large volume
consumables that are tested to industry and/or customer
acceptance criteria prior to shipment. Revenue for these types
of products is recognized at shipment. Certain of the
Companys product sales are accounted for as
multiple-element arrangements. If the Company has met defined
customer acceptance experience levels with both the customer and
the specific type of equipment, the Company recognizes the
product revenue at the time of shipment and transfer of title,
with the remainder when the other elements, primarily
installation, have been completed. Other products of the Company
are highly customized systems that cannot be completed or
adequately tested to customer specifications prior to shipment
from the factory. The Company does not recognize revenue for
these products until formal acceptance by the customer. Revenue
for spare parts sales is recognized on shipment. Revenue related
to maintenance and service contracts is recognized ratably over
the duration of the contracts. Unearned maintenance and service
contract revenue is not significant and is included in accrued
liabilities and other.

During the year ended, March 31, 2001, the
Company recorded a non-cash charge of $2.5 million, net of
an income tax benefit of $1.3 million or a loss of $0.07
per diluted share, to reflect the cumulative effect of the
change in accounting principle, as of the beginning of the year,
in accordance with the guidance provided in SAB 101.
Revenue of $5.0 million resulting from this charge was
fully recognized during the year ended March 31, 2001.

Prior to the year ended March 31, 2001, the
Companys revenue policy was to recognize revenue at the
time the customer takes title to the product, generally at the
time of shipment. Revenue related to maintenance and service
contracts was recognized ratably over the duration of the
contracts.

The Company accounts for software revenue in
accordance with the American Instituted of Certified Public
Accountants Statement of Position 97-2,
Software Revenue Recognition. Revenues for
integration software work are recognized on a percentage of
completion basis. Software license revenue, which is not
material to the consolidated financial statements, is recognized
when the software is shipped, payment is due within one year,
collectibility is probable and there are no significant
obligations remaining.



| |                 
| | ----------------
| | Warranty Reserve

The Company generally provides warranty on its
products for 24 months from date of shipment for material
and labor to repair and service the system. A provision for the
estimated cost of warranty is recorded when the revenue is
recognized.



| |                      
| | ---------------------
| | Contract Loss Reserve

The Company routinely evaluates the contractual
commitments with its customers and suppliers to determine if it
is probable that a loss exists that can be estimated in
fulfillment of the contractual commitment. If so, a loss reserve
is recorded and included in accrued liabilities and other. At
March 31, 2002 and 2001, the Company had a loss reserve of
approximately $2.0 million and $5.6 million,
respectively, which is included in accrued liabilities and other
in the accompanying consolidated balance sheets.



| |                     
| | --------------------
| | Comprehensive Income

Comprehensive income is defined as the change in
equity of a company during a period from transactions and other
events and circumstances excluding transactions resulting from
investments by owners and

48



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


distributions to owners and is to include
unrealized gains and losses that have historically been excluded
from net income (loss) and reflected instead in equity. The
Company has not had any such transactions or events during the
periods, which are material to the consolidated financial
statements. Therefore comprehensive income (loss) is the same as
the net income (loss) reported in the consolidated financial
statements.



| |                             
| | ----------------------------
| | Concentration of Credit Risk

Financial instruments that potentially subject
the Company to a concentration of credit risk principally
consist of cash equivalents, short-term investments and accounts
receivable. The Company has a cash investment policy that limits
cash investments to short-term, low risk investments. As of
March 31, 2002 and 2001, approximately 53.5 percent
and 41.6 percent, respectively, of accounts receivable,
net, were concentrated with ten customers. In addition, as of
March 31, 2002 and 2001, approximately 61.2 percent
and 55.9 percent, respectively, of accounts receivable,
net, respectively were due from international customers
primarily located in Japan, Taiwan, Singapore, and the United
Kingdom. As of March 31, 2002, approximately
13.1 percent of the total accounts receivable, net, was due
from one customer located in the United States. The Company
performs ongoing credit evaluations of its customers
financial condition and, generally, does not require collateral
on accounts receivable as the majority of the Companys
customers are large, well established companies. The allowance
for doubtful accounts is based upon the expected collectibility
of all accounts receivable.



| |        
| | -------
| | Patents

The Company capitalizes the direct costs
associated with obtaining patents. The costs, which are included
in intangible assets, net, in the accompanying consolidated
balance sheets, are being amortized using the straight-line
method over the expected useful lives of the patents of
10 years. Accumulated amortization was approximately
$0.3 million and $0.3 million during the years ended
March 31, 2002 and 2001, respectively.



| |                             
| | ----------------------------
| | Foreign Currency Translation

In general, the functional currency of the
Companys foreign subsidiaries is the U.S. dollar.
Accordingly, foreign translation and foreign exchange gains and
losses, which have not been material, are reflected in other
income (expense) in the accompanying consolidated
statements of operations. For foreign subsidiaries, using their
local currency as their functional currency, assets and
liabilities of operations are translated into U.S. dollars
using the current exchange rate. At March 31, 2002 and
2001, the effects of foreign currency translation adjustments
were insignificant.



| |                   
| | ------------------
| | Earnings Per Share

Basic earnings per share has been computed using
the weighted average number of actual common shares outstanding,
while diluted earnings per share has been computed using the
weighted average number of common and common equivalent shares
outstanding. Common equivalent shares used in the computation of
diluted earnings per share result from the assumed exercise of
stock options and warrants, using the treasury stock method and
the conversion of the redeemable convertible preferred stock.
For periods for which there is a net loss, the number of shares
used in the computation of diluted earnings (loss) per share are
the same as those used for the computation of basic earnings
(loss) per share as the inclusion of dilutive securities would
be anti-dilutive.

49



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##### Table of Contents



ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


The reconciliation of the numerators and
denominators of the basic and diluted earnings per share
computations are as follows (dollars in thousands, except per
share amounts):

|                                                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|----------------------------------------------------------------------------------- |  | ----------- | -------- | ------------- |  | ------ | ------ |  |  | - | ----- | -
|                                                                                    |  | Income      |          |               |  | Per   
|                                                                                    |  | (Loss)      |          | Shares        |  | Share 
|                                                                                    |  | (Numerator) |          | (Denominator) |  | Amount
|                                                                                    |  |             |          |               |  |       
|FISCAL YEAR ENDED MARCH 31, 2002                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|Basic Earnings Per Share:                                                           |  |             |          |               |  |        |        |  |  |   |       |  
|Net Loss                                                                            |  | $           | (148,917 | )             |  |        | 35,373 |  |  | $ | (4.21 | )
|                                                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|Diluted Earnings Per Share:                                                         |  |             |          |               |  |        |        |  |  |   |       |  
|Net Loss                                                                            |  | $           | (148,917 | )             |  |        | 35,373 |  |  | $ | (4.21 | )
|                                                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|FISCAL YEAR ENDED MARCH 31, 2001                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|Basic Earnings Per Share:                                                           |  |             |          |               |  |        |        |  |  |   |       |  
|Net Income                                                                          |  | $           | 27,026   |               |  |        | 32,697 |  |  | $ | 0.82  |  
|                                                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|Common shares issuable upon exercise of stock
    options using the treasury method |  |             |         |               |  |        | 2,231  |  |  |   |      |  
|                                                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|Diluted Earnings Per Share:                                                         |  |             |          |               |  |        |        |  |  |   |       |  
|Net Income                                                                          |  | $           | 27,026   |               |  |        | 34,928 |  |  | $ | 0.78  |  
|                                                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|FISCAL YEAR ENDED MARCH 31, 2000                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|Basic Earnings Per Share:                                                           |  |             |          |               |  |        |        |  |  |   |       |  
|Net Income                                                                          |  | $           | 10,019   |               |  |        | 27,639 |  |  | $ | 0.36  |  
|                                                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|Common shares issuable upon exercise of stock
    options using the treasury method |  |             |         |               |  |        | 3,347  |  |  |   |      |  
|                                                                                    |  |             |          |               |  |        |        |  |  |   |       |  
|Diluted Earnings Per Share:                                                         |  |             |          |               |  |        |        |  |  |   |       |  
|Net Income                                                                          |  | $           | 10,019   |               |  |        | 30,986 |  |  | $ | 0.32  |  
|                                                                                    |  |             |          |               |  |        |        |  |  |   |       |  

Securities outstanding at March 31, 2002
which were not included in the calculation of diluted net loss
per share, as to do so would be anti-dilutive, consisted of
5,681,818 related to 5 3/4% convertible subordinated notes
and 1,816,090 related to options.



| |                           
| | --------------------------
| | Software Development Costs

Costs related to research, design and development
of software products and enhancements to existing software
products are expensed as incurred until technological
feasibility (generally in the form of a working model) of the
product has been established, at which time such costs are
capitalized, subject to net realizable value. Costs eligible for
capitalization, incurred after achieving technological
feasibility and before general release of the product, were not
material for any periods presented. Accordingly, all software
development costs have been charged to research and development
expense in the accompanying consolidated statements of
operations.



| |                         
| | ------------------------
| | New Accounting Standards

In June 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial
Accounting Standards No. 141 Business
Combinations (SFAS 141). SFAS 141
requires all business combinations initiated after June 30,
2001 to be accounted for using the purchase method.
SFAS 141 also includes guidance on the initial recognition
and measurement of goodwill and other intangible assets arising

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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


from business combinations completed after
June 30, 2001. The Company does not expect the adoption of
SFAS 141 to have a material effect on our financial
condition or results of operations.

In June 2001, the FASB issued Statement of
Financial Accounting Standard No. 142, Goodwill and
Other Intangible Assets (SFAS 142).
SFAS 142 discontinues amortization of goodwill and
intangible assets deemed to have indefinite lives and requires
such assets to be reviewed at least annually for impairment.
SFAS 142 also includes provisions on the identification of
intangible assets, reclassification of certain intangibles from
previously reported goodwill, and reassessment of the useful
lives of existing intangibles. The provisions of SFAS 142
are effective for fiscal years beginning after December 15,
2001. However, early adoption of SFAS 142 is permitted for
companies with a fiscal year beginning after March 15,
2001, provided their first quarter financial statements have not
been previously issued. In all cases, SFAS 142 must be
adopted at the beginning of a fiscal year. The Company will
apply SFAS 142 beginning in the first quarter of fiscal
2003. Application of the non-amortization provisions for
goodwill and other intangible assets of SFAS 142 is expected to
result in a reduction in operating expenses of approximately
$0.5 million in fiscal 2003. The Company will test goodwill
for impairment using the two-step process prescribed in
SFAS 142. The first step is to screen for potential
impairment, while the second step measures the amount of the
impairment, if any. The Company expects to perform the first of
the required impairment tests of goodwill and indefinite lived
intangible assets in the second quarter of fiscal 2003, and does
not expect the effect of these tests to be material to its
financial condition or results of operations.

In July 2001, the FASB issued Statement of
Financial Accounting Standard No. 143, Accounting for
Asset Retirement Obligations, or SFAS 143, which
addresses accounting and reporting for obligations associated
with the retirement of tangible long-lived assets and the
associated asset retirement costs. SFAS 143 is effective
for fiscal years beginning after June 15, 2002. The Company
is currently assessing the impact of this new standard, and does
not expect its adoption to be material to its financial
condition or results of operations.

In August 2001, the FASB issued Statement of
Financial Accounting Standard No. 144, Impairment or
Disposal of Long-Lived Assets, or SFAS 144, which is
effective for fiscal years beginning after December 15,
2001. SFAS 144 supersedes Statement of Financial Accounting
Standard No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed
Of, and provides a single accounting model for impairment
of long-lived assets. The Company does not expect the adoption
of SFAS 144 to have a material effect on its financial
condition or results of operations.

3.     Supplemental
Statements of Cash Flows Disclosures

|                                                                                                        |  |                             |        |      |  |      |        |  |  |   |       | 
|------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------ | ---- |  | ---- | ------ |  |  | - | ----- | 
|                                                                                                        |  |                            
|                                                                                                        |  | Fiscal Year Ended March 31,
|                                                                                                        |  |                            
|                                                                                                        |  | 2002                        |        | 2001 |  | 2000
|                                                                                                        |  |                             |        |      |  |     
|                                                                                                        |  |                            
|                                                                                                        |  | (Dollars in thousands)     
|Cash paid for interest                                                                                  |  | $                           | 4,125  |      |  | $    | 636    |  |  | $ | 167   | 
|Cash (received) paid for domestic and
    foreign income taxes, net                                     |  | $                           | (1,590 | )    |  | $    | 11,064 |  |  | $ | 39    | 
|Non-cash transactions:                                                                                  |  |                             |        |      |  |      |        |  |  |   |       | 
|Stock issued to retire long term debt                                                                   |  | $                           |       |      |  | $    |       |  |  | $ | 5,066 | 
|Stock issued in exchange for PST redeemable
    preferred stock and redeemable preferred stock warrants |  | $                           |       |      |  | $    |       |  |  | $ | 5,000 | 
|Stock issued to acquire PAT                                                                             |  | $                           |       |      |  | $    |       |  |  | $ | 390   | 
|Stock issued to acquire SemiFab                                                                         |  | $                           |       |      |  | $    | 13,404 |  |  | $ |      | 
|Stock issued to acquire AMP                                                                             |  | $                           |       |      |  | $    | 19,000 |  |  | $ |      | 
|Stock issued to acquire GW                                                                              |  | $                           | 8,000  |      |  | $    |       |  |  | $ |      | 

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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


4.     Non-Recurring
Charges

Non-recurring charges recorded were (in
thousands):

|                                                         |  |           |        |      |  |      |     |  |  |   |       |  
|-------------------------------------------------------- |  | --------- | ------ | ---- |  | ---- | --- |  |  | - | ----- | -
|                                                         |  |          
|                                                         |  | March 31,
|                                                         |  |          
|                                                         |  | 2002      |        | 2001 |  | 2000
|                                                         |  |           |        |      |  |     
|Land impairment                                          |  | $         | 17,925 |      |  | $    |    |  |  | $ |      |  
|Severance and benefits                                   |  |           | 4,511  |      |  |      | 540 |  |  |   |      |  
|Excess facilities                                        |  |           | 3,685  |      |  |      | 439 |  |  |   |      |  
|Contract cancellation                                    |  |           |       |      |  |      |    |  |  |   | 2,500 |  
|Reduction in estimate of prior year required
    reserve |  |           |       |      |  |      |    |  |  |   | (200  | )
|                                                         |  |           |        |      |  |      |     |  |  |   |       |  
|Total                                                    |  | $         | 26,121 |      |  | $    | 979 |  |  | $ | 2,300 |  
|                                                         |  |           |        |      |  |      |     |  |  |   |       |  



| |                
| | ---------------
| | Land Impairment

The Company owns land in Fremont, California,
which it is currently marketing for sale. The Company had
intended to construct corporate headquarters facilities on the
land and subsequently decided not to build these facilities.
Initially, the Company leased the land from a syndicate of
financial institutions pursuant to an original lease agreement
and an amended lease agreement. The Company purchased the land
on October 22, 2001 for $41.1 million, and paid the
syndicate of financial institutions approximately
$2.9 million for engineering costs incurred in preparation
for making leasehold improvements to the land. Based upon market
data at June 30, 2001, the Company estimated that the then
market value of the land had been impaired and as such recorded
a $15.0 million write-down to its estimated market value
during the quarter ended June 30, 2001.



| |              
| | -------------
| | Restructuring

Non-recurring restructuring charges were recorded
in fiscal 2002 associated with the Companys plan to shut
down some of its manufacturing and service locations, outsource
some of its manufacturing activities and consolidate the
remainder of its domestic manufacturing in Fremont California,
as well as to reduce its workforce due to economic conditions.
These charges included approximately $3.7 million in
write-downs of assets and reserves for lease commitments, net of
estimated sublease income that the Company expects to generate
from the vacated facilities, and severance costs of
approximately $4.5 million related to reductions in force
of approximately 435 employees or approximately 29% of its
workforce.

In the fourth quarter of fiscal 2001, in response
to a decrease in net sales and new orders, the Company incurred
a $0.5 million charge relating to the reduction in its
employed workforce by 149 regular full-time employees and
approximately 150 temporary employees primarily in Fremont,
California. In addition, as of March 31, 2001, the Company
had accrued $0.5 million relating to a plan to close a
small manufacturing facility in Japan. The Company had
communicated the plan to the affected employees prior to
March 31, 2001.

In fiscal 2000, in connection with the decision
to move to a purely direct sales channel in Japan, the Company
paid $2.5 million to cancel an agreement previously entered
into to sell products in the Japanese market. Additionally,
during fiscal 2000, a reduction of $0.2 million was made to
the restructuring reserve balance to adjust for revised
estimates related to restructuring activities.

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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


The following table summarizes the Companys
non-recurring charges including restructuring activities for the
fiscal year ended March 31, 2002 (dollars in thousands):

|                          |  |            |         |              |  |            |        |       |  |   |       |   |  |   |         |  
|------------------------- |  | ---------- | ------- | ------------ |  | ---------- | ------ | ----- |  | - | ----- | - |  | - | ------- | -
|                          |  | Land       |         | Severance    |  | Excess     |        |      
|                          |  | Impairment |         | and Benefits |  | Facilities |        | Total
|                          |  |            |         |              |  |            |        |      
|Balance at March 31, 2001 |  | $          |        |              |  | $          |       |       |  | $ |      |   |  | $ |        |  
|Non-recurring charges     |  |            | 17,925  |              |  |            | 4,511  |       |  |   | 3,685 |   |  |   | 26,121  |  
|Less non-cash charges     |  |            | (15,000 | )            |  |            |       |       |  |   | (781  | ) |  |   | (15,781 | )
|Amounts paid in cash      |  |            | (2,925  | )            |  |            | (3,770 | )     |  |   | (472  | ) |  |   | (7,167  | )
|                          |  |            |         |              |  |            |        |       |  |   |       |   |  |   |         |  
|Balance at March 31, 2002 |  | $          |        |              |  | $          | 741    |       |  | $ | 2,432 |   |  | $ | 3,173   |  
|                          |  |            |         |              |  |            |        |       |  |   |       |   |  |   |         |  

The Company expects to utilize the remaining
balance of approximately $3,173,000 during fiscal 2003,
primarily with cash.

5.     Debt

The Company had Japanese Yen 2,216 million
($16.7 million) and Japanese Yen 3,608 million
($28.8 million) at March 31, 2002 and 2001,
respectively of short-term debt from banks in Japan. As of
March 31, 2002, the interest rate ranged from
1.4 percent to 1.9 percent (interest rates ranged from
1.4 percent to 2.0 percent at March 31, 2001).

Long-term debt consisted of the following
(dollars in thousands):

|                                        |  |           |        |      |  |   |       |  
|--------------------------------------- |  | --------- | ------ | ---- |  | - | ----- | -
|                                        |  |          
|                                        |  | March 31,
|                                        |  |          
|                                        |  | 2002      |        | 2001
|                                        |  |           |        |     
|Convertible subordinated notes          |  | $         | 86,250 |      |  | $ |      |  
|Unsecured loans from banks              |  |           |       |      |  |   | 558   |  
|Secured straight bonds                  |  |           | 4,508  |      |  |   | 1,596 |  
|                                        |  |           |        |      |  |   |       |  
|Total long-term debt                    |  |           | 90,758 |      |  |   | 2,154 |  
|Less: Current portion of long-term debt |  |           | (825   | )    |  |   | (404  | )
|                                        |  |           |        |      |  |   |       |  
|Long-term debt, net of current portion  |  | $         | 89,933 |      |  | $ | 1,750 |  
|                                        |  |           |        |      |  |   |       |  

At March 31, 2002, maturities of all
long-term debt are as follows (dollars in thousands):

|                             |  |   |        | 
|---------------------------- |  | - | ------ | 
|Fiscal Year Ending March 31, |  |  
|                             |  |  
|2003                         |  | $ | 825    | 
|2004                         |  |   | 875    | 
|2005                         |  |   | 795    | 
|2006                         |  |   | 735    | 
|2007 and thereafter          |  |   | 87,528 | 
|                             |  |   |        | 
|                             |  | $ | 90,758 | 
|                             |  |   |        | 



| |                                   
| | ----------------------------------
| | Convertible Subordinated
    Notes

On July 3, 2001 the Company completed the
sale of $86.3 million of 5 3/4 percent
convertible subordinated notes which resulted in aggregate
proceeds of $83.0 million to the Company net of issuance
costs. The notes are convertible, at the option of the holder,
at any time on or prior to maturity into shares of the
Companys common stock at a conversion price of $15.18 per
share, which is equal to a conversion rate of
65.8718 shares per $1,000 principal amount of notes. The
notes mature July 3, 2008, pay interest on January 3
and July 3 of

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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


each year and are redeemable at the
Companys option after July 3, 2004. Debt issuance
costs of $2.9 million, net of amortization, are included in
other assets. Issuance costs are being amortized over
84 months and are being charged to other income (expense).
Debt amortization costs totaled $0.4 million during the
year ended March 31, 2002. At March 31, 2002, the
Company was in compliance with all covenants under the
convertible subordinated notes.



| |                           
| | --------------------------
| | Unsecured Loans from Banks

The Company had Japanese Yen 69.9 million
($0.6 million) of unsecured loans with a bank in Japan at
March 31, 2001, with interest ranging from 1.7 percent
to 2.0 percent at March 31, 2001. This loan was fully
repaid in fiscal 2002.



| |                       
| | ----------------------
| | Secured Straight Bonds

The Company had Japanese Yen 597.8 million
($4.5 million) and Japanese Yen 200.0 million
($1.6 million) of secured straight bonds from a bank in
Japan at March 31, 2002 and 2001, respectively. During the
year ended March 31, 2002, the Company borrowed an
additional Japanese Yen 400.0 million ($3.0 million)
and paid Japanese Yen 2.2 million ($0.1 million) on
this debt. The bonds bore interest at rates ranging from
1.5 percent to 2.3 percent as of March 31, 2002
and 1.4 percent as of March 31, 2001 and mature in
fiscal 2008. Certain of the Companys assets in Japan have
been pledged as security for short-term debt and secured
straight bonds. As of March 31, 2002, pledged assets
consist of land and other property and equipment, net of
accumulated depreciation, time deposits and accounts receivable
totaling $13.7 million. The pledged assets secure
$4.5 million in secured straight bonds and
$9.2 million in other short-term debts.

6.     Redeemable
Convertible Preferred Stock

Progressive Systems Technologies, Inc. (PST), a
company acquired by the Company through a pooling-of-interests
transaction in fiscal 2000, had authorized the issuance of up to
5,000,000 shares of preferred stock and designated 4,504,505 of
the preferred stock to be Series A preferred stock. In
January 1996, PST issued the Series A preferred stock to
outside investors for consideration of $5.0 million. The
Series A preferred stock was convertible at any time into
PST common stock on a one-for-one basis subject to certain
antidilution provisions. At March 31, 1999, such conversion
rate equaled one-for-one. In connection with the merger with
PST, all outstanding shares of redeemable preferred stock plus
842,632 common stock warrants, attached to subordinated
promissory notes issued by PST, were converted into 5,347,137
shares of PST common stock, which were then converted into
369,398 shares of the Companys common stock. In June
1999, $4.5 million of subordinated promissory notes, and
$0.4 million of additional funding and accrued interest
were converted into 450,260 shares of Company common stock.

7.     Common
Stock

As of March 31, 2002, the following shares
of Company common stock were available for issuance:

|                             |  |  |         | 
|---------------------------- |  |  | ------- | 
|Employee Stock Option Plans  |  |  | 286,793 | 
|Employee Stock Purchase Plan |  |  | 472,143 | 
|                             |  |  |         | 
|                             |  |  | 758,936 | 
|                             |  |  |         | 



| |                   
| | ------------------
| | Private Placements

In May 1999, the Company completed a private
placement of 1,250,000 shares of its common stock to eight
institutional investors. The private placement was priced at
$9.00 per share, generating net proceeds of approximately $11.0
million. The purpose of the private placement was to untaint
shares of common stock to

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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


obtain pooling of interests accounting treatment
for the acquisition of PST completed in June 1999 (see
note 11). The proceeds were used for general corporate
purposes.



| |                   
| | ------------------
| | Secondary Offering

In November 1999, the Company completed a
secondary public offering of 4,458,000 shares of common stock at
an offering price of $20.25 per share, less $1.22 per share
underwriting discount, or $19.03 per share. Of the 4,458,000
shares offered, 458,000 shares were issued and sold by the
Company pursuant to the underwriters over-allotment
provision. Proceeds from the offering, net of issuance costs of
$0.8 million, amounted to $84.1 million. The proceeds
were used for the acquisition of MECS, capital expenditures,
working capital and other general corporate purposes.



| |                   
| | ------------------
| | Common Stock Split

On December 30, 1999, the Board of Directors
declared a two-for-one stock split of the Companys common
stock in the form of a 100 percent stock dividend. The
stock dividend was paid on February 4, 2000 to the holders
of record on January 7, 2000. All share and per share data,
including common stock equivalents, have been adjusted to give
effect to the stock split.



| |                   
| | ------------------
| | Stock Option Plans

The Company has five stock option plans: the 1986
Employee Stock Option Plan (the 1986 plan), the 1993
Employee Stock Option Plan (the 93 Plan), the
1993 Non- Employee Directors Stock Plan, the 2001
Non-Officer Equity Plan (the 2001 Plan) and the
SemiFab Inc. 1993 Flexible Stock Incentive Plan (the
SemiFab Plan). Under all of the Companys stock
option plans, options are granted for ten year periods and
become exercisable ratably over a vesting period of four years
or as determined by the Board of Directors.

The 1986 Plan was terminated in 1994, and there
are no further options available for issuance.

Under the 93 Plan, as amended,
12,784,790 shares of common stock are reserved for
issuance. The 93 Plan provides for the grant of both
incentive stock options and non-qualified stock options to key
employees and consultants of the Company. In fiscal 2001, the
Company began granting non-employee directors stock options
pursuant to the 93 Plan. Under the 93 Plan, options
may be granted at prices not less than the fair market value of
the Companys common stock at grant date (85.0 percent
for non-qualified options).

The 1993 Non-Employee Directors Stock Plan
was terminated in 1999, and there are no further options
available for issuance.

Under the 2001 Plan, adopted in January 2001,
1,800,000 shares of common stock are reserved for issuance. The
2001 Plan provides for the grant of only non-qualified stock
options to employees (other than officers or directors) and
consultants (not including directors). Under the 2001 Plan,
options may be granted at prices not less than the fair market
value of the Companys common stock at grant date.

The SemiFab Plan was acquired with the
acquisition of SemiFab in February 2001. In connection with the
acquisition of SemiFab by the Company, options are no longer
granted from the SemiFab plan and any options outstanding that
were initially granted under the SemiFab plan are exercisable
into Company common stock.

55



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Activity in the Companys stock option plans
is summarized as follows (prices are weighted average prices):

|                                       |  |                             |            |       |  |        |       |       |  |        |            |       |  |   |       |  |  |  |            |   |  |   |       | 
|-------------------------------------- |  | --------------------------- | ---------- | ----- |  | ------ | ----- | ----- |  | ------ | ---------- | ----- |  | - | ----- |  |  |  | ---------- | - |  | - | ----- | 
|                                       |  |                            
|                                       |  | Fiscal Year Ended March 31,
|                                       |  |                            
|                                       |  |                             |            |       |  |       
|                                       |  | 2002                        |            | 2001  |  | 2000  
|                                       |  |                             |            |       |  |       
|                                       |  | Shares                      |            | Price |  | Shares |       | Price |  | Shares |            | Price
|                                       |  |                             |            |       |  |        |       |       |  |        |            |      
|Options outstanding, beginning of year |  |                             | 8,194,290  |       |  | $      | 13.47 |       |  |        | 6,193,219  |       |  | $ | 11.13 |  |  |  | 6,725,686  |   |  | $ | 6.05  | 
|Granted                                |  |                             | 3,716,432  |       |  |        | 11.83 |       |  |        | 3,536,097  |       |  |   | 22.30 |  |  |  | 2,683,315  |   |  |   | 17.99 | 
|Exercised                              |  |                             | (560,954   | )     |  |        | 6.63  |       |  |        | (435,576   | )     |  |   | 5.93  |  |  |  | (2,019,372 | ) |  |   | 5.70  | 
|Cancelled                              |  |                             | (1,377,851 | )     |  |        | 17.13 |       |  |        | (1,099,450 | )     |  |   | 32.75 |  |  |  | (1,196,410 | ) |  |   | 7.32  | 
|                                       |  |                             |            |       |  |        |       |       |  |        |            |       |  |   |       |  |  |  |            |   |  |   |       | 
|Options outstanding, end of year       |  |                             | 9,971,917  |       |  | $      | 12.76 |       |  |        | 8,194,290  |       |  | $ | 13.47 |  |  |  | 6,193,219  |   |  | $ | 11.13 | 
|                                       |  |                             |            |       |  |        |       |       |  |        |            |       |  |   |       |  |  |  |            |   |  |   |       | 
|Exercisable, end of year               |  |                             | 4,498,458  |       |  | $      | 10.77 |       |  |        | 3,373,002  |       |  | $ | 8.89  |  |  |  | 2,446,609  |   |  | $ | 6.89  | 
|                                       |  |                             |            |       |  |        |       |       |  |        |            |       |  |   |       |  |  |  |            |   |  |   |       | 

The following table summarizes the stock options
as of March 31, 2002 (prices and contractual life are
weighted averages):

|                                |  |                     |           |                     |  |       |      |             |  |          |       |  |  |  |           |  |  |   |       | 
|------------------------------- |  | ------------------- | --------- | ------------------- |  | ----- | ---- | ----------- |  | -------- | ----- |  |  |  | --------- |  |  | - | ----- | 
|                                |  |                     |           |                     |  |      
|                                |  | Options Outstanding |           |                    
|                                |  |                     |           | Exercisable Options
|                                |  |                     |           | Remaining           |  |       |      |            
|                                |  | Number              |           | Contractual         |  |       |      | Number      |  | Exercise
|Actual Range of Exercise Prices |  | Outstanding         |           | Life                |  | Price |      | Exercisable |  | Price   
|                                |  |                     |           |                     |  |       |      |             |  |         
|$0.00 - $5.50                   |  |                     | 1,131,534 |                     |  |       | 5.86 |             |  | $        | 3.83  |  |  |  | 831,948   |  |  | $ | 3.97  | 
|5.52 - 6.88                     |  |                     | 1,250,759 |                     |  |       | 6.03 |             |  |          | 6.74  |  |  |  | 1,247,646 |  |  |   | 6.74  | 
|7.08 - 9.75                     |  |                     | 1,093,910 |                     |  |       | 7.93 |             |  |          | 8.70  |  |  |  | 444,794   |  |  |   | 8.76  | 
|9.81 - 12.03                    |  |                     | 1,234,608 |                     |  |       | 7.32 |             |  |          | 10.67 |  |  |  | 717,605   |  |  |   | 10.87 | 
|12.10 - 12.90                   |  |                     | 1,342,829 |                     |  |       | 9.46 |             |  |          | 12.78 |  |  |  | 140,916   |  |  |   | 12.32 | 
|12.93 - 14.00                   |  |                     | 1,358,928 |                     |  |       | 9.10 |             |  |          | 13.38 |  |  |  | 272,051   |  |  |   | 13.29 | 
|14.13 - 19.94                   |  |                     | 1,254,517 |                     |  |       | 7.91 |             |  |          | 16.54 |  |  |  | 329,780   |  |  |   | 16.07 | 
|20.06 - 73.06                   |  |                     | 1,304,832 |                     |  |       | 7.91 |             |  |          | 27.18 |  |  |  | 513,718   |  |  |   | 27.97 | 
|                                |  |                     |           |                     |  |       |      |             |  |          |       |  |  |  |           |  |  |   |       | 
|$0.00 - $73.06                  |  |                     | 9,971,917 |                     |  |       | 7.74 |             |  | $        | 12.76 |  |  |  | 4,498,458 |  |  | $ | 10.77 | 
|                                |  |                     |           |                     |  |       |      |             |  |          |       |  |  |  |           |  |  |   |       | 

The Company accounts for its stock option plans
under APB Opinion No. 25. Had compensation cost for these
stock option plans and other plans been determined consistent
with SFAS No. 123, Accounting for Stock-Based
Compensation, the Companys net income (loss) and per
share information would have been adjusted to the following pro
forma amounts, for the years ended March 31, (dollars in
thousands, except per share amounts):

|                                    |             |      |   |          |   |      |   |        |  |  |   |        | 
|----------------------------------- | ----------- | ---- | - | -------- | - | ---- | - | ------ |  |  | - | ------ | 
|                                    |             | 2002 |   | 2001     |   | 2000
|                                    |             |      |   |          |   |     
|Net income (loss)                   |             |      |   |          |   |      |   |        |  |  |   |       
|                                    | As reported |      | $ | (148,917 | ) |      | $ | 27,026 |  |  | $ | 10,019 | 
|                                    | Pro forma   |      | $ | (161,920 | ) |      | $ | 13,843 |  |  | $ | 2,557  | 
|Basic net income (loss) per share   |             |      |   |          |   |      |   |        |  |  |   |       
|                                    | As reported |      | $ | (4.21    | ) |      | $ | 0.82   |  |  | $ | 0.36   | 
|                                    | Pro forma   |      | $ | (4.52    | ) |      | $ | 0.42   |  |  | $ | 0.09   | 
|Diluted net income (loss) per share |             |      |   |          |   |      |   |        |  |  |   |       
|                                    | As reported |      | $ | (4.21    | ) |      | $ | 0.78   |  |  | $ | 0.32   | 
|                                    | Pro forma   |      | $ | (4.52    | ) |      | $ | 0.40   |  |  | $ | 0.09   | 

56



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


The weighted-average grant date fair value of
options during fiscal 2002, 2001 and 2000 was $7.27, $13.47, and
$11.13, respectively. The fair value of each option grant is
estimated on the date of grant using the Black-Scholes option
pricing model with the following weighted average assumptions
used for grants in fiscal 2002, 2001, and 2000; risk-free
interest rate of 4.97 percent, 4.89 percent and
6.4 percent, respectively; expected dividend yields of
0.0 percent; expected lives of 4.73 years,
4.80 years and 4.81 years, respectively; expected
volatility of 76 percent, 81 percent, and
74 percent, respectively.



| |                             
| | ----------------------------
| | Employee Stock Purchase Plan

Under the 1993 Employee Stock Purchase Plan (the
Plan), as amended, 1,900,000 shares of common stock
are reserved for issuance to eligible employees. The Plan
permits employees to purchase common stock through payroll
deductions, which may not exceed 10 percent of an
employees compensation, at a price not less than
85 percent of the market value of the stock on specified
dates. During the years ended March 31, 2002, 2001 and
2000, 239,702, 132,804 and 156,344 shares, respectively, were
issued under the plan. As of March 31, 2002, 1,427,857
shares had been purchased by employees under the Plan.

8.     Commitments

The Company leases various equipment and
facilities under non-cancelable finance and operating leases. At
March 31, 2002, the future minimum commitments under these
leases were as follows (dollars in thousands):

|                                        |  |         |        |           |  |   |        | 
|--------------------------------------- |  | ------- | ------ | --------- |  | - | ------ | 
|                                        |  | Finance |        | Operating
|Fiscal Year Ending March 31,            |  | Lease   |        | Lease    
|                                        |  |         |        |          
|2003                                    |  | $       | 1,416  |           |  | $ | 7,533  | 
|2004                                    |  |         | 613    |           |  |   | 6,209  | 
|2005                                    |  |         | 479    |           |  |   | 5,657  | 
|2006                                    |  |         | 300    |           |  |   | 4,282  | 
|2007 and thereafter                     |  |         | 19     |           |  |   | 5,919  | 
|                                        |  |         |        |           |  |   |        | 
|                                        |  | $       | 2,827  |           |  | $ | 29,600 | 
|                                        |  |         |        |           |  |   |        | 
|Less interest                           |  |         | (190   | )         |  |   |        | 
|                                        |  |         |        |           |  |   |        | 
|Present value of minimum lease payments |  | $       | 2,637  |           |  |   |        | 
|Less: current portion of finance leases |  |         | (1,305 | )         |  |   |        | 
|                                        |  |         |        |           |  |   |        | 
|Finance leases, net of current portion  |  | $       | 1,332  |           |  |   |        | 
|                                        |  |         |        |           |  |   |        | 

Rent expense under the Companys operating
leases was approximately $8.5 million, $7.5 million
and $3.5 million for the years ended March 31, 2002,
2001 and 2000, respectively.

The Company believes that its available cash and
cash equivalents will be sufficient to meet its working capital
and operating expense requirements until at least the end of
fiscal 2003 (see Note 14 regarding Proposed Joint Venture).

9.     Reportable
Segments

The Company offers a family of products and
related services to provide a front-end automation and isolation
system for wafer handling in semiconductor manufacturing
facilities. All of the Companys activities are aggregated
into a single operating segment. As a result, no operating
segment information is required.

57



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Net sales by geography were as follows (dollars
in thousands):

|                                        |  |                             |         |      |  |      |         |  |  |   |         | 
|--------------------------------------- |  | --------------------------- | ------- | ---- |  | ---- | ------- |  |  | - | ------- | 
|                                        |  |                            
|                                        |  | Fiscal Year Ended March 31,
|                                        |  |                            
|                                        |  | 2002                        |         | 2001 |  | 2000
|                                        |  |                             |         |      |  |     
|United States                           |  | $                           | 93,097  |      |  | $    | 192,362 |  |  | $ | 90,204  | 
|Taiwan                                  |  |                             | 20,334  |      |  |      | 98,305  |  |  |   | 78,913  | 
|Japan                                   |  |                             | 45,610  |      |  |      | 102,784 |  |  |   | 30,646  | 
|Europe                                  |  |                             | 18,321  |      |  |      | 39,766  |  |  |   | 7,854   | 
|Other Asia (excluding Japan and Taiwan) |  |                             | 16,591  |      |  |      | 58,325  |  |  |   | 17,937  | 
|                                        |  |                             |         |      |  |      |         |  |  |   |         | 
|Total                                   |  | $                           | 193,953 |      |  | $    | 491,542 |  |  | $ | 225,554 | 
|                                        |  |                             |         |      |  |      |         |  |  |   |         | 

The net sales by product or service categories
comprising the Companys net sales were as follows (dollars
in thousands):

|                               |       |                             |         |         |  |      |         |         |  |   |         |         | 
|------------------------------ | ----- | --------------------------- | ------- | ------- |  | ---- | ------- | ------- |  | - | ------- | ------- | 
|                               |       |                            
|                               |       | Fiscal Year Ended March 31,
|                               |       |                            
|                               |       | 2002                        |         | 2001    |  | 2000
|                               |       |                             |         |         |  |     
|Tool Based Solutions           |       | $                           | 130,971 |         |  | $    | 386,438 |         |  | $ | 185,539 |        
|Factory Connectivity Solutions |       |                             | 19,756  |         |  |      | 39,256  |         |  |   | 15,655  |        
|Wafer and Reticle Carriers     |       |                             | 24,795  |         |  |      | 38,816  |         |  |   | 19,556  |        
|Services & other               |       |                             | 18,431  |         |  |      | 27,032  |         |  |   | 4,804   |        
|                               |       |                             |         |         |  |      |         |         |  |   |         |        
|                               | Total |                             | $       | 193,953 |  |      | $       | 491,542 |  |   | $       | 225,554 | 
|                               |       |                             |         |         |  |      |         |         |  |   |         |        

In the fiscal years ended March 31, 2002 and
2001, no one customer individually accounted for more than
10.0 percent of net sales. In the fiscal year ended
March 31, 2000, two customers in aggregate accounted for
approximately 22.3 percent of net sales and were the only
customers that individually accounted for more than
10.0 percent of net sales.

Property and equipment, net, by geographical
location were as follows (dollars in thousands):

|              |       |           |        |        |  |   |        |        | 
|------------- | ----- | --------- | ------ | ------ |  | - | ------ | ------ | 
|              |       |          
|              |       | March 31,
|              |       |          
|              |       | 2002      |        | 2001  
|              |       |           |        |       
|United States |       | $         | 29,521 |        |  | $ | 30,411 |       
|Japan         |       |           | 7,928  |        |  |   | 9,109  |       
|Other         |       |           | 917    |        |  |   | 640    |       
|              |       |           |        |        |  |   |        |       
|              | Total |           | $      | 38,366 |  |   | $      | 40,160 | 
|              |       |           |        |        |  |   |        |       

10.     Income
Taxes

The provision (benefit) for income taxes is based
upon income (loss) before income taxes as follows (dollars in
thousands):

|                     |          |                             |          |          |   |      |        |        |  |   |        |        | 
|-------------------- | -------- | --------------------------- | -------- | -------- | - | ---- | ------ | ------ |  | - | ------ | ------ | 
|                     |          |                            
|                     |          | Fiscal Year Ended March 31,
|                     |          |                            
|                     |          | 2002                        |          | 2001     |   | 2000
|                     |          |                             |          |          |   |     
|Pretax Income (Loss) |          |                             |          |          |   |      |        |        |  |   |        |       
|                     | Domestic |                             | $        | (196,456 | ) |      | $      | 39,679 |  |   | $      | 15,202 | 
|                     | Foreign  |                             |          | 2,819    |   |      |        | 7,082  |  |   |        | 2,325  | 
|                     |          |                             |          |          |   |      |        |        |  |   |        |       
|                     |          | $                           | (193,637 | )        |   | $    | 46,761 |        |  | $ | 17,527 |       
|                     |          |                             |          |          |   |      |        |        |  |   |        |       

58



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


The provision (benefit) for income taxes
consisted of (dollars in thousands):

|          |         |                             |         |         |         |      |        |        |        |   |       |       |       | 
|--------- | ------- | --------------------------- | ------- | ------- | ------- | ---- | ------ | ------ | ------ | - | ----- | ----- | ----- | 
|          |         |                            
|          |         | Fiscal Year Ended March 31,
|          |         |                            
|          |         | 2002                        |         | 2001    |         | 2000
|          |         |                             |         |         |         |     
|Current:  |         |                             |         |         |         |      |        |        |        |   |       |      
|          | Federal |                             | $       | (5,712  | )       |      | $      | 16,674 |        |   | $     | 5,079 |      
|          | State   |                             |         | 80      |         |      |        | 861    |        |   |       | 396   |      
|Foreign   |         |                             | 747     |         |         |      | 123    |        |        |   | 674   |      
|          |         |                             |         |         |         |      |        |        |        |   |       |      
|          |         | Total current               |         |         | (4,885  | )    |        |        | 17,658 |   |       |       | 6,149 | 
|          |         |                             |         |         |         |      |        |        |        |   |       |      
|Deferred: |         |                             |         |         |         |      |        |        |        |   |       |      
|          | Federal |                             |         | (35,755 | )       |      |        | (12    | )      |   |       | 96    |      
|          | State   |                             |         | (4,080  | )       |      |        | (417   | )      |   |       | 1,263 |      
|          |         |                             |         |         |         |      |        |        |        |   |       |      
|          |         | Total deferred              |         |         | (39,835 | )    |        |        | (429   | ) |       |       | 1,359 | 
|          |         |                             |         |         |         |      |        |        |        |   |       |      
|          |         | $                           | (44,720 | )       |         | $    | 17,229 |        |        | $ | 7,508 |      
|          |         |                             |         |         |         |      |        |        |        |   |       |      

The provision for income taxes is reconciled with
the Federal statutory rate as follows (dollars in thousands):

|                                                                     |  |                             |         |      |  |      |        |   |  |   |       |  
|-------------------------------------------------------------------- |  | --------------------------- | ------- | ---- |  | ---- | ------ | - |  | - | ----- | -
|                                                                     |  |                            
|                                                                     |  | Fiscal Year Ended March 31,
|                                                                     |  |                            
|                                                                     |  | 2002                        |         | 2001 |  | 2000
|                                                                     |  |                             |         |      |  |     
|Provision computed at Federal statutory rate                         |  | $                           | (67,773 | )    |  | $    | 16,366 |   |  | $ | 6,134 |  
|State taxes, net of Federal benefit                                  |  |                             | (3,342  | )    |  |      | 2,287  |   |  |   | 785   |  
|Foreign income and withholding taxes in excess of
    statutory rate |  |                             | (118    | )    |  |      | 569    |   |  |   | (233  | )
|In-process research and development                                  |  |                             | 185     |      |  |      |       |   |  |   | 1,928 |  
|Non-deductible expenses and other                                    |  |                             | 264     |      |  |      | 665    |   |  |   | 88    |  
|Foreign sales corporation benefit                                    |  |                             |        |      |  |      | (1,714 | ) |  |   | (636  | )
|Other                                                                |  |                             |        |      |  |      | (1,500 | ) |  |   |      |  
|Non-deductible goodwill amortization and
    write-down              |  |                             | 26,277  |      |  |      | 1,777  |   |  |   |      |  
|Tax exempt income                                                    |  |                             | (213    | )    |  |      | (1,221 | ) |  |   | (558  | )
|                                                                     |  |                             |         |      |  |      |        |   |  |   |       |  
|                                                                     |  | $                           | (44,720 | )    |  | $    | 17,229 |   |  | $ | 7,508 |  
|                                                                     |  |                             |         |      |  |      |        |   |  |   |       |  
|Effective income tax rate                                            |  |                             | 23      | %    |  |      | 37     | % |  |   | 43    | %
|                                                                     |  |                             |         |      |  |      |        |   |  |   |       |  

59



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


The components of the net deferred tax asset are
as follows (dollars in thousands):

|                                               |                        |                   |         |        |   |   |         |        | 
|---------------------------------------------- | ---------------------- | ----------------- | ------- | ------ | - | - | ------- | ------ | 
|                                               |                        |                  
|                                               |                        | Fiscal Year Ended
|                                               |                        | March 31,        
|                                               |                        |                  
|                                               |                        | 2002              |         | 2001  
|                                               |                        |                   |         |       
|Net operating loss and credit carryforwards    |                        | $                 | 36,151  |        |   | $ | 4,345   |       
|Reserves and accruals                          |                        |                   | 26,264  |        |   |   | 14,978  |       
|Foreign deferred tax asset (MECS)              |                        |                   | 10,791  |        |   |   | 10,791  |       
|Depreciation and amortization                  |                        |                   | 2,918   |        |   |   | 2,978   |       
|                                               |                        |                   |         |        |   |   |         |       
|                                               | Deferred tax asset     |                   |         | 76,124 |   |   |         | 33,092 | 
|                                               |                        |                   |         |        |   |   |         |       
|Intangibles                                    |                        |                   | (6,478  | )      |   |   |        |       
|                                               |                        |                   |         |        |   |   |         |       
|                                               | Deferred tax liability |                   |         | (6,478 | ) |   |         |       | 
|                                               |                        |                   |         |        |   |   |         |       
|Gross deferred tax asset                       |                        |                   | 69,646  |        |   |   | 33,092  |       
|Valuation allowance for net deferred tax asset |                        |                   | (11,924 | )      |   |   | (13,024 | )     
|                                               |                        |                   |         |        |   |   |         |       
|Net deferred tax asset                         |                        | $                 | 57,722  |        |   | $ | 20,068  |       
|                                               |                        |                   |         |        |   |   |         |       

The Company has recorded a net deferred tax asset
of approximately $57.7 million, of which approximately
$36.2 million relates to net operating loss carryforwards
and tax credits generated by the Company and its domestic
subsidiaries, which expire at various dates through March 2022.

As of March 31, 2002, $10.8 million of
the deferred tax asset relates to pre-merger foreign net
operating loss carryforwards of MECS which expire in 2005. The
utilization of the foreign net operating loss carryforwards is
subject to the ability of MECS to generate future foreign
taxable income. As a result, a valuation allowance has been
recorded related to pre-merger net operating loss carryforwards
of approximately $10.2 million.

Realization of the net deferred tax asset is
dependent on generating sufficient future taxable income.
Although realization is not assured, management believes that it
is more likely than not that the net deferred tax asset will be
realized. Although the net deferred tax asset is considered
realizable, actual amounts could be reduced if sufficient future
taxable income is not achieved or if future events cause a
change in managements expectation of realization of these
assets.

11.     Acquisitions



| |                         
| | ------------------------
| | GW Associates, Inc. (GW)

On May 22, 2001 the Company acquired GW, a
developer of factory integration software used by electronics
manufacturers, for $3.6 million of cash, 451,263 shares of
the Companys common stock valued at $8.0 million and
a note for $16.0 million which was paid in May 2002 in the
Companys common stock. The note payable is included in
accrued liabilities and other in the accompanying consolidated
balance sheet. The acquisition was accounted for using the
purchase method of accounting. Accordingly the results of GW
have been combined with those of the Company since the date of
acquisition. Approximately $26.5 million of the purchase
price, in excess of the net assets of $4.5 million
acquired, was allocated to intangible assets. These intangible
assets consist of in-process research and development, developed
technology, installed customer base, assembled workforce, trade
name, and the excess purchase price of the net assets acquired.
Because there can be no assurance that the Company will be able
to successfully complete the associated products or that the
technology has any alternative future use, $2.0 million of
such in-process research and development was charged as an
expense during fiscal 2002. The remaining intangible assets are
being amortized over three to six years.

60



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Comparative pro forma information reflecting the
acquisition of GW has not been presented because the operations
of GW are not material to the Companys consolidated
financial statements.



| |                        
| | -----------------------
| | SemiFab, Inc. (SemiFab)

On February 12, 2001, the Company acquired
100% of the outstanding capital stock of SemiFab and assumed all
options to purchase SemiFab shares, a manufacturer of
environmental control equipment and a contract manufacturer for
the semiconductor equipment industry, for $6.3 million of
cash and assumed debt, and 990,892 shares of the Companys
common stock and the option to purchase 55,500 shares of the
Companys common stock. Total initial consideration was
$19.7 million. In addition, the Company issued 445,891
shares of its common stock into escrow to be awarded if certain
operating results are achieved over the next twelve months.
Since the outcomes of the contingencies were not yet
determinable at March 31, 2002, these shares were not
included in the purchase price. The acquisition was accounted
for using the purchase method of accounting. Accordingly the
results of SemiFab have been combined with those of the
Companys since the date of acquisition. Approximately
$16.0 million of the purchase price in excess of the net
assets of $3.7 million acquired was allocated to various
intangible assets. These intangible assets consist of customer
base, developed technology and know how, assembled workforce and
excess purchase price of the net assets acquired that are being
amortized over lives ranging from three to six years.

Comparative pro forma information reflecting the
acquisition of SemiFab has not been presented because the
operations of SemiFab are not material to the Companys
consolidated financial statements.



| |                                             
| | --------------------------------------------
| | Advanced Machine Programming, Inc.
    (AMP)

On February 2, 2001, the Company acquired
100% of outstanding capital stock of AMP, a manufacturer of
precision machined parts for the semiconductor equipment
industry, for $20.9 million of cash and 1,081,261 shares of
the Companys common stock valued at $19.0 million.
The acquisition was accounted for using the purchase method of
accounting. Accordingly the results of AMP have been combined
with those of the Companys since the date of acquisition.
Approximately $35.9 million of the purchase price, in
excess of the net assets of $4.0 million acquired, was
allocated to various intangible assets. These intangible assets
consist of developed technology and know how, assembled
workforce and excess purchase price of the net assets acquired
that are being amortized over lives ranging from three to six
years.

Comparative pro forma information reflecting the
acquisition of AMP has not been presented because the operations
of AMP are not material to the Companys consolidated
financial statements.



| |                        
| | -----------------------
| | MECS Corporation (MECS)

During the year ended March 31, 2000, the
Company acquired a 78.6 percent ownership interest of MECS,
a Japan based manufacturer of robotic systems used to automate
sophisticated semiconductor and flat panel display manufacturing
equipment in exchange for $12.4 million of cash. The
Company acquired additional shares in MECS in subsequent
periods, bringing its ownership interest to 96.8 percent at
March 31, 2002. On October 1, 2000, the Company merged
Asyst Japan, Inc. into MECS. The acquisition was accounted for
using the purchase method of accounting. Accordingly, results of
MECS operations have been combined with those of the
Companys since the date a majority interest was acquired
on March 23, 2000.

In connection with the acquisition, a portion of
the purchase price was allocated to the net assets acquired
based on their estimated fair values. Approximately
$18.7 million of the purchase price (including a reduction
of approximately $3.8 million in December 2000 related to
recognition of a tax loss carryforward that had been reserved at
the date of acquisition) was assigned to intangible assets
related to existing product technology, the assembled workforce
and the excess of purchase price over the net assets acquired.
These intangible assets are being amortized over a seven year
period. In addition, approximately $0.9 million of the
purchase price was

61



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


assigned to in-process research and development.
Because there was no assurance that the Company would be able to
successfully complete the development of MECS products or that
the technology had any alternative future use, such in-process
research and development was charged as an expense in the year
ended March 31, 2000.

The following pro-forma consolidated results of
operations are presented as if the acquisition of MECS had been
made at April 1, 1999 (unaudited; dollars in thousands,
except per share amounts).

|                                  |  |             |         | 
|--------------------------------- |  | ----------- | ------- | 
|                                  |  | Fiscal Year
|                                  |  | Ended      
|                                  |  | March 31,  
|                                  |  | 2000       
|                                  |  |            
|Net sales                         |  | $           | 278,733 | 
|Net income                        |  |             | 4,685   | 
|Basic earnings (loss) per share   |  |             | 0.17    | 
|Diluted earnings (loss) per share |  |             | 0.15    | 



| |                                       
| | --------------------------------------
| | Palo Alto Technologies, Inc.
    (PAT)

On August 27, 1999, the Company acquired all
of the shares of PAT, a company formed in 1997 to develop and
market a new concept wafer transport system for use in
semiconductor manufacturing facilities, for $4.6 million
consisting primarily of cash and Company common stock.
Approximately $4.6 million of the purchase price in excess
of the value of the net liabilities assumed was allocated to
various intangible assets including $4.0 million allocated
to in-process research and development which was expensed in the
three-month period ended September 30, 1999. The remaining
$0.6 million was assigned to intangible and other assets
and was being amortized over a 5 year period. During fiscal
2002 the Company concluded that the unamortized intangible
assets related to this acquisition were impaired and wrote off
the remaining balance. Dr. Mihir Parikh, the Companys
Chairman and Chief Executive Officer, and Mr. Anthony
Bonora, the Companys Executive Vice President, Chief
Technology Officer and Asyst Fellow, were shareholders of PAT
and Dr. Mihir Parikh was the Chairman of the Board of
Directors of PAT.



| |                                                 
| | ------------------------------------------------
| | Progressive Systems Technologies, Inc.
    (PST)

On June 2, 1999, the Company completed its
acquisition of 100 percent of the common stock of PST, in
exchange for 549,620 shares of common stock of the Company. In
addition to the exchange of common stock in the merger, 450,380
shares of common stock of the Company were issued in exchange
for cancellation of $4.9 million of PST debt and accrued
interest. PST manufactures wafer-sorting equipment used by
semiconductor manufacturers. The acquisition was accounted for
using the pooling of interest method of accounting. Accordingly,
the accompanying consolidated financial statements were restated
for all periods prior to the business combination. All material
intercompany transactions between the Company and PST were
eliminated. Costs associated with the PST merger, which were not
material, consisted primarily of transaction costs and were
expensed in the period incurred. PSTs fiscal year end was
December 31. For purposes of the restatement, PSTs
restated year ended December 31, 1999, was combined with
the Companys year ended March 31, 2000, and
PSTs year ended December 31, 1998 was combined with
the Companys year ended March 31, 1999. As a result,
the net sales of $1.5 million and net loss of
$2.3 million to account for the excluded net loss of PST
for the three month period from January 1, 2000 to
March 31, 2000 were made to the accumulated deficit in the
year ended March 31, 2000. Conforming PSTs accounting
practices to the Companys resulted in no adjustments to
net income (loss) or shareholders equity.

62



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                             
| | ----------------------------
| | Assessment of Carrying Value

During fiscal 2002, the Company, as part of its
review of financial results, performed an assessment of the
carrying value of the Companys goodwill and intangible
assets to be held and used including significant amounts of
goodwill and other intangible assets recorded in connection with
various acquisitions. The assessment was performed pursuant to
Statement of Financial Accounting Standard (SFAS)
No. 121, Accounting for the Impairment or Disposal of
Long-Lived Assets. As a result of the significant negative
industry and economic trends affecting both the Companys
current operations and expected future sales as well as the
general decline of technology valuations, the Company concluded
that the carrying values of goodwill and other intangible assets
recorded in connection with various acquisitions were impaired
and as such took an impairment charge of $60.4 million
during the quarter ended December 31, 2001 to reduce the
carrying value of these assets to fair value. Management
believes that the remaining unamortized balance of intangible
assets is recoverable.

The following table summarizes the impairment
charges (in millions):

|                  |  |          |      |            |  |               |     |           |  |            |     |  |  |   |     |  |  |   |      | 
|----------------- |  | -------- | ---- | ---------- |  | ------------- | --- | --------- |  | ---------- | --- |  |  | - | --- |  |  | - | ---- | 
|                  |  |          |      |            |  |               |     |           |  | Total     
|                  |  |          |      | Developed  |  | Customer      |     | Assembled |  | Impairment
|                  |  | Goodwill |      | Technology |  | Base and List |     | Workforce |  | Charges   
|                  |  |          |      |            |  |               |     |           |  |           
|GW                |  | $        | 9.2  |            |  | $             | 1.8 |           |  | $          | 0.5 |  |  | $ | 0.1 |  |  | $ | 11.6 | 
|SemiFab           |  |          | 2.3  |            |  |               | 5.4 |           |  |            | 2.6 |  |  |   |    |  |  |   | 10.3 | 
|AMP               |  |          | 27.6 |            |  |               |    |           |  |            |    |  |  |   | 0.1 |  |  |   | 27.7 | 
|MECS              |  |          | 5.0  |            |  |               | 1.7 |           |  |            |    |  |  |   | 0.7 |  |  |   | 7.4  | 
|Hine Design, Inc. |  |          | 3.3  |            |  |               |    |           |  |            |    |  |  |   | 0.1 |  |  |   | 3.4  | 
|                  |  |          |      |            |  |               |     |           |  |            |     |  |  |   |     |  |  |   |      | 
|                  |  | $        | 47.4 |            |  | $             | 8.9 |           |  | $          | 3.1 |  |  | $ | 1.0 |  |  | $ | 60.4 | 
|                  |  |          |      |            |  |               |     |           |  |            |     |  |  |   |     |  |  |   |      | 

12.     Legal
Proceedings

In October 1996, the Company filed a lawsuit in
the United States District Court for the Northern District of
California against Jenoptik A.G. (Jenoptik),
Jenoptik-Infab, Inc. (Infab), and Emtrak, Inc. and
Empak, Inc. (collectively, Empak), alleging
infringement of two patents related to the Companys SMART
Traveler System. The Company amended its Complaint in April 1997
to allege causes of action for breach of fiduciary duty against
Jenoptik and Meissner & Wurst, GmbH, and misappropriation of
trade secrets and unfair business practices against all
defendants. The Complaint seeks damages and injunctive relief
against further infringement. All defendants filed
counterclaims, seeking a judgment declaring the patents invalid,
unenforceable and not infringed. Jenoptik, Infab, and Empak also
alleged that the Company violated federal antitrust laws and
engaged in unfair competition. The Company denied these
allegations. In May 1998, the Company along with Empak
stipulated to a dismissal, without prejudice, of the respective
claims and counterclaims against each other. In November 1998,
the court granted defendants motion for partial summary
judgment as to most of the patent infringement claims and
invited further briefing as to the remainder. In January 1999,
the court granted the Companys motion for leave to seek
reconsideration of the November summary judgment order and also,
pursuant to a stipulation of the parties, dismissed without
prejudice two of the three antitrust counterclaims brought by
the defendants. Thereafter, the parties stipulated to, and the
court ordered, the dismissal with prejudice of the
defendants unfair competition and remaining antitrust
counterclaim, and the Companys breach of fiduciary duty,
misappropriation of trade secrets and unfair business practices
claims, leaving only the patent related claims and
counterclaims. On June 4, 1999, the court issued an order
by which it granted a motion for reconsideration in the sense
that it considered the merits of the Companys arguments,
but decided that it would not change its prior ruling on summary
judgment and that it would also grant summary judgment for
defendants on the remaining patent infringement claim. The
Company appealed. On October 10, 2001, the appellate court
reversed the district courts decision

63



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


to grant defendants motion for summary
judgment and remanded the case back to the district court. The
matter is now proceeding before the district court.

13.     Related Party
Transactions

At March 31, 2002, the Company held two
notes receivable from a former executive officer totaling
$0.8 million, notes from two former employees totaling
$0.2 million and notes from four current employees totaling
$0.9 million. During fiscal 2002, the Company forgave
$0.1 million of notes receivable from former employees in
accordance with the provisions of their separation agreements.
At March 31, 2001, the Company held two notes receivable
from an executive officer totaling $0.8 million and five
separate notes receivable from other employees totaling
$1.1 million. In all but one case, loans were extended to
these individuals to assist them in their relocation to
California. The remaining loan was extended in connection with a
personal matter. Each of the notes receivable are secured by
second deeds of trust on certain real property and pledged
securities of the Company owned by the employees and are
included in other assets at March 31, 2002 and 2001.

On February 28, 2002, the Company entered
into an Employment Separation Agreement with Dennis Riccio,
Senior Vice President, Worldwide Sales and Service. Pursuant to
this agreement, Mr. Riccio agreed to continue as a
part-time employee until October 19, 2002. In exchange, he
will receive compensation for his work as a part-time employee,
his outstanding options continued to vest until May 31,
2002, and he will be eligible to continue to participate in
deferred compensation and long-term incentive plans until
October 19, 2002. Mr. Riccio agreed not to compete
with the Company while a part-time employee.

The Company loaned Mr. Riccio $350,000 in
November 1998 and $450,000 in February 1999 to assist in his
relocation from Texas to California. The first loan has an
interest rate of 4.47 percent per annum and the second loan has
an interest rate of 4.64 percent per annum. Both loans are
secured by deeds of trust on his California residence. Pursuant
to his Employment Separation Agreement, the terms of the loans
have both been amended to become due on December 31, 2002,
and the interest due under the loans will be forgiven if
Mr. Riccio repays the entire principal balance of the loans.

In April 1999, the Company entered into an
employment agreement with Mihir Parikh, its Chairman and Chief
Executive Officer. The term of employment commenced on
April 1, 1998, and extends for three years, renewing daily,
so that, absent notice by either party of an intent not to
continue the term, the term shall always be three years. The
employment agreement set Dr. Parikhs initial base
salary at a minimum of $325,000 annually. Pursuant to the
agreement, the Companys Compensation Committee is
obligated to annually review his base salary for potential
increase. In addition, during the employment term,
Dr. Parikh is eligible to receive annual bonuses and to
participate in the Companys stock incentive plans. Also,
he is eligible to participate in any of the Companys
benefit plans maintained for its employees. If the Company
terminates Dr. Parikhs employment without cause or if
he terminates his employment for good reason, either before or
within six months following a change in control he will be
entitled to receive a lump-sum cash payment equal to the present
value of the sum of (A) three times his then current annual
base salary and (B) three times an annual average bonus
amount, determined under a formula set forth in the employment
agreement. Dr. Parikh will also be entitled to all benefits
that were payable to him at the time of termination and to
continued participation for 18 months thereafter, in the
Companys health and life insurance plans in which he was
then a participant. In addition, during the term of employment
and for one year thereafter, unless his employment terminates
without cause or for good reason, he may not solicit away
employees or customers.

64



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


14.     Subsequent
Events



| |                                                
| | -----------------------------------------------
| | Asyst Connectivity Technologies, Inc.
    (ACT)

On May 29, 2002, ACT, a wholly-owned
subsidiary of Asyst purchased substantially all of the assets of
domainLogix Corporation (DLC), a leading developer of
next-generation software for tool communication and provider of
a variety of consulting, development and integration services to
customers. Prior to this acquisition, the Company owned
approximately seven percent of the outstanding shares of DLC.
The DLC assets were acquired for $2.7 million of cash,
$0.9 million of liabilities assumed, and 468,796 shares of
Asyst common stock valued at $7.9 million. In addition,
certain employees of ACT received 304,327 restricted stock
grants of Asyst common stock, to vest over four years based on
continued employment with ACT. The majority of the purchase
price will be recorded as goodwill and intangible assets,
including in-process research and development, based on an
independent appraisal.



| |                                               
| | ----------------------------------------------
| | Proposed Joint Venture, Asyst Shinko,
    Inc.

On May 24, 2002 the Company signed a
definitive agreement with Shinko Electric Co., Ltd. (Shinko),
under which the two companies will establish a new joint venture
company, to be called Asyst Shinko, Inc. The joint venture will
develop, manufacture and market Shinkos market-leading
Automated Materials Handling Systems (AMHS). The transaction is
expected to close in October 2002. Under terms of the agreement,
Asyst will acquire 51% of the joint venture for approximately
JPY 8.16 billion ($65.3 million) and Shinko will
contribute its entire AMHS business, including intellectual
property and other assets, installed base and 250 employees.

The Company currently anticipates pursuing
additional funds to pay for its share of the joint venture, as
well as to support its working capital and operating expense
requirements or for other purposes. However there can be no
assurance that such sources of funding will be available on
reasonable terms, if at all.

15.     Quarterly
Financial Data

Fiscal Year Ended March 31, 2002

|                                              |  |                                       |         |         |  |         |         |         |  |   |         |   |  |   |         |  
|--------------------------------------------- |  | ------------------------------------- | ------- | ------- |  | ------- | ------- | ------- |  | - | ------- | - |  | - | ------- | -
|                                              |  | First                                 |         | Second  |  | Third   |         | Fourth 
|                                              |  | Quarter                               |         | Quarter |  | Quarter |         | Quarter
|                                              |  |                                       |         |         |  |         |         |        
|                                              |  |                                      
|                                              |  | (Unaudited)                          
|                                              |  |                                      
|                                              |  | (In thousands, except per share data)
|Net sales                                     |  | $                                     | 67,259  |         |  | $       | 51,015  |         |  | $ | 37,329  |   |  | $ | 38,350  |  
|Gross profit                                  |  | $                                     | 17,494  |         |  | $       | 12,494  |         |  | $ | (5,261  | ) |  | $ | 9,093   |  
|Net income (loss)                             |  | $                                     | (27,555 | )       |  | $       | (18,341 | )       |  | $ | (89,848 | ) |  | $ | (13,173 | )
|Basic earnings (loss) per share               |  | $                                     | (0.79   | )       |  | $       | (0.52   | )       |  | $ | (2.54   | ) |  | $ | (0.37   | )
|Diluted earnings (loss) per share             |  | $                                     | (0.79   | )       |  | $       | (0.52   | )       |  | $ | (2.54   | ) |  | $ | (0.37   | )
|Shares used in basic per share calculations   |  |                                       | 35,007  |         |  |         | 35,286  |         |  |   | 35,419  |   |  |   | 35,779  |  
|Shares used in diluted per share calculations |  |                                       | 35,007  |         |  |         | 35,286  |         |  |   | 35,419  |   |  |   | 35,779  |  

65



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ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Fiscal Year Ended March 31, 2001

|                                                                                          |  |                                       |         |         |  |         |         |         |  |   |         |  |  |   |         |  
|----------------------------------------------------------------------------------------- |  | ------------------------------------- | ------- | ------- |  | ------- | ------- | ------- |  | - | ------- |  |  | - | ------- | -
|                                                                                          |  | First                                 |         | Second  |  | Third   |         | Fourth 
|                                                                                          |  | Quarter                               |         | Quarter |  | Quarter |         | Quarter
|                                                                                          |  |                                       |         |         |  |         |         |        
|                                                                                          |  |                                      
|                                                                                          |  | (Unaudited)                          
|                                                                                          |  |                                      
|                                                                                          |  | (In thousands, except per share data)
|Net sales                                                                                 |  | $                                     | 122,483 |         |  | $       | 126,000 |         |  | $ | 127,980 |  |  | $ | 115,079 |  
|Gross profit                                                                              |  | $                                     | 55,332  |         |  | $       | 58,843  |         |  | $ | 57,995  |  |  | $ | 13,576  |  
|Net income before cumulative effect of change in
    accounting principle                 |  | $                                     | 15,389  |         |  | $       | 16,581  |         |  | $ | 13,803  |  |  | $ | (16,241 | )
|Cumulative effect of a change in accounting
    principle, net of tax                     |  | $                                     | (2,506  | )       |  | $       |        |         |  | $ |        |  |  | $ |        |  
|Net income (loss)                                                                         |  | $                                     | 12,883  |         |  | $       | 16,581  |         |  | $ | 13,803  |  |  | $ | (16,241 | )
|Basic earnings per share before cumulative effect
    of change in accounting principle   |  | $                                     | 0.48    |         |  | $       | 0.51    |         |  | $ | 0.43    |  |  | $ | (0.48   | )
|Cumulative effect of a change in accounting
    principle                                 |  | $                                     | (0.08   | )       |  | $       |        |         |  | $ |        |  |  | $ |        |  
|Basic earnings (loss) per share                                                           |  | $                                     | 0.40    |         |  | $       | 0.51    |         |  | $ | 0.43    |  |  | $ | (0.48   | )
|Diluted earnings per share before cumulative
    effect of change in accounting principle |  | $                                     | 0.43    |         |  | $       | 0.48    |         |  | $ | 0.41    |  |  | $ | (0.48   | )
|Cumulative effect of a change in accounting
    principle                                 |  | $                                     | (0.07   | )       |  | $       |        |         |  | $ |        |  |  | $ |        |  
|Diluted earnings (loss) per share                                                         |  | $                                     | 0.36    |         |  | $       | 0.48    |         |  | $ | 0.41    |  |  | $ | (0.48   | )
|Shares used in basic per share calculations                                               |  |                                       | 32,162  |         |  |         | 32,308  |         |  |   | 32,416  |  |  |   | 33,901  |  
|Shares used in diluted per share calculations                                             |  |                                       | 35,377  |         |  |         | 34,840  |         |  |   | 33,937  |  |  |   | 33,901  |  

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SCHEDULE II

ASYST TECHNOLOGIES, INC. AND
SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

|                     |                |                               |  |             |       |            |  |          |       |         |  |   |        |   |  |   |     |  |  |   |       | 
|-------------------- | -------------- | ----------------------------- |  | ----------- | ----- | ---------- |  | -------- | ----- | ------- |  | - | ------ | - |  | - | --- |  |  | - | ----- | 
|                     |                |                               |  | Charged     |       |            |  |          |       |        
|                     |                | Balance                       |  | to/         |       |            |  |          |       | Balance
|                     |                | Beginning                     |  | Recovery    |       |            |  |          |       | End    
|                     |                | of Year                       |  | of Expenses |       | Deductions |  | Acquired |       | of Year
|                     |                |                               |  |             |       |            |  |          |       |        
|                     |                |                              
|                     |                | (In thousands)               
|Accounts Receivable: |                |                               |  |             |       |            |  |          |       |         |  |   |        |   |  |   |     |  |  |  
|                     | March 31, 2000 |                               |  |             |       |            |  |          |       |         |  |   |        |   |  |   |     |  |  |   |      
|                     |                | Reserve for doubtful accounts |  | $           | 1,947 |            |  | $        | 1,533 |         |  | $ | (671   | ) |  | $ |    |  |  | $ | 2,809 | 
|                     | March 31, 2001 |                               |  |             |       |            |  |          |       |         |  |   |        |   |  |   |     |  |  |   |      
|                     |                | Reserve for doubtful accounts |  | $           | 2,809 |            |  | $        | 2,279 |         |  | $ | (1,533 | ) |  | $ | 240 |  |  | $ | 3,795 | 
|                     | March 31, 2002 |                               |  |             |       |            |  |          |       |         |  |   |        |   |  |   |     |  |  |   |      
|                     |                | Reserve for doubtful accounts |  | $           | 3,795 |            |  | $        | 1,155 |         |  | $ | (787   | ) |  | $ | 35  |  |  | $ | 4,198 | 

67



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SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Company has
duly caused this report on Form 10-K to be signed on its
behalf by the undersigned, thereunto duly authorized on the
27th day of June 2002.



| |                         
| | ------------------------
| | ASYST TECHNOLOGIES, INC.



| |     |                 
| | --- | ----------------
| | By: | /s/ MIHIR PARIKH

| |                                     
| | ------------------------------------
| |                                     
| | Mihir Parikh                        
| | Chairman and Chief Executive Officer
| | (Principal Executive Officer)       

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below constitutes and appoints
Mihir Parikh and Geoffrey G. Ribar, and each of them, his
attorney-in-fact, and agents with the power of substitution, for
him in any and all capacities, to sign any amendments to this
Annual Report on Form 10-K or to the Annual Report on
Form 10-K for the year ended March 31, 2002 as filed
with the Securities and Exchange Commission on June 28,
2002, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
the said attorney-in-fact, or agents, or any of them, or his
substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|                                           |  |                                                                                                    |  |               |  | 
|------------------------------------------ |  | -------------------------------------------------------------------------------------------------- |  | ------------- |  | 
|                                           |  |                                                                                                    |  |              
|Signature                                  |  | Title                                                                                              |  | Date         
|                                           |  |                                                                                                    |  |              
|/s/ MIHIR PARIKHMihir Parikh               |  | Chairman of the Board, Chief Executive Officer
    and Director (Principal Executive Officer)      |  | June 27, 2002
|                                          
|/s/ GEOFFREY G. RIBARGeoffrey G. Ribar     |  | Senior Vice President and Chief Financial Officer
    (Principal Financial and Accounting Officer) |  | June 27, 2002
|                                          
|/s/ P. JACKSON BELLP. Jackson Bell         |  | Director                                                                                           |  | June 27, 2002
|                                          
|/s/ STANLEY GRUBELStanley Grubel           |  | Director                                                                                           |  | June 27, 2002
|                                          
|/s/ ROBERT A. MCNAMARARobert A. McNamara   |  | Director                                                                                           |  | June 27, 2002
|                                          
|/s/ ANTHONY E. SANTELLIAnthony E. Santelli |  | Director                                                                                           |  | June 27, 2002
|                                          
|/s/ WALTER W. WILSONWalter W. Wilson       |  | Director                                                                                           |  | June 27, 2002

68



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INDEX TO EXHIBITS

|        |       |      |  |                         |  |                                                                                                                                                                                                                                                                             
|------- | ----- | ---- |  | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |      |  |                        
|Number  |       |      |  | Description of Document
|        |       |      |  |                        
|        | 2.2(  | 1)   |  |                         |  | Agreement and Plan of Merger and Reorganization
    among the Company, PSTI Merger SubAcquisition Corp., Progressive
    System Technologies, Inc., Advent International Investor 11,
    Envirotech Fund I and Global Private Equity Fund 11, dated as of
    June 2, 1999.
|        | 2.3(  | 2)   |  |                         |  | Stock Purchase Agreement among the Company, Palo
    Alto Technologies, Inc., or PAT, the Shareholders of PAT and the
    option holders of PAT, dated August 27, 1999.                                                                                                     
|        | 2.4(  | 3)   |  |                         |  | Agreement for Sale and Purchase of Common Stock
    between the Company and MECS Corporation, dated
    September 27, 1999.                                                                                                                                                 
|        | 2.5(  | 4)   |  |                         |  | Amendment Agreement between the Company and MECS
    Corporation, dated March 23, 2000.                                                                                                                                                                                     
|        | 2.6(  | 5)   |  |                         |  | Agreement and Plan of Merger and Reorganization,
    dated as of December 7, 2000, among Asyst Technologies,
    Inc., Ramp Acquisition Corp., Advanced Machine Programming,
    Inc., New AMP LLC, Matlock Charles Rowe & Company and the
    Selling Shareholders.        
|        | 2.7(  | 6)   |  |                         |  | Agreement and Plan of Merger and Reorganization,
    dated as of December 7, 2000, among Asyst Technologies,
    Inc., Tin Man Acquisition Corp., SemiFab, Inc. and certain
    principal shareholders of SemiFab.                                                          
|        | 2.8(  | 7)   |  |                         |  | Agreement and Plan of Merger and Reorganization,
    dated as of May 22, 2001, among Asyst Technologies, Inc.,
    Gem Acquisition Corp., GW Associates, Inc. and John S. Ghiselli.                                                                                         
|        | 3.1(  | 8)   |  |                         |  | Amended and Restated Articles of Incorporation of
    the Company.                                                                                                                                                                                                          
|        | 3.2(  | 8)   |  |                         |  | Bylaws of the Company.                                                                                                                                                                                                                                                      
|        | 3.3(  | 2)   |  |                         |  | Certificate of Amendment of the Amended and
    Restated Articles of Incorporation, filed September 24,
    1999.                                                                                                                                                           
|        | 3.4(  | 9)   |  |                         |  | Second Certificate of Amendment of the Amended
    and Restated Articles of Incorporation, filed October 5,
    2000.                                                                                                                                                       
|        | 4.1(  | 10)  |  |                         |  | Rights Agreement among the Company and Bank of
    Boston, N. A., as Rights Agent, dated June 25, 1998.                                                                                                                                                                     
|        | 4.2(  | 1)   |  |                         |  | Common Stock Purchase Agreement, dated as of
    May 26, 1999.                                                                                                                                                                                                              
|        | 4.3(  | 11)  |  |                         |  | Indenture dated as of July 3, 2001 between
    the Company State Street Bank and Trust Company of California,
    N.A., as trustee, including therein the forms of the notes.                                                                                               
|        | 4.4(  | 11)  |  |                         |  | Registration Rights Agreement dated as of
    July 3, 2001 between the Company and State Street Bank and
    Trust Company of California, N.A.                                                                                                                              
|        | 4.5   |      |  |                         |  | Amendment to Rights Agreement among the Company
    and Bank of Boston, N.A. as rights agent, dated
    November 31, 2001.                                                                                                                                                  
|        | 10.1( | 8)   |  |                         |  | Form of Indemnity Agreement entered into between
    the Company and its directors and officers.                                                                                                                                                                            
|        | 10.2( | 12)  |  |                         |  | Companys 1993 Stock Option Plan and related
    form of stock option agreement.                                                                                                                                                                                            
|        | 10.3( | 8)   |  |                         |  | Companys 1993 Employee Stock Purchase Plan
    and related offering document.                                                                                                                                                                                              
|        | 10.4( | 8)   |  |                         |  | Companys 1993 Non-Employee Directors
    Stock Option Plan and related offering document.                                                                                                                                                                                 
|        | 10.5( | 8)   |  |                         |  | Hewlett-Packard SMIF License Agreement dated
    June 6, 1984.                                                                                                                                                                                                              
|        | 10.6( | 13)  |  |                         |  | Lease Agreement between the Company and the Kato
    Road Partners dated February 16, 1995.                                                                                                                                                                                 
|        | 10.10 | (14) |  |                         |  | Secured Promissory Note between the Company and
    Dennis Riccio, Dated November 16, 1998.                                                                                                                                                                                 
|        | 10.11 | (14) |  |                         |  | Secured Promissory Note between the Company and
    Dennis Riccio, Dated February 1, 1999.                                                                                                                                                                                  
|        | 10.12 | (13) |  |                         |  | Employment and Compensation Agreement between the
    Company and Mihir Parikh, dated April 1, 1999.                                                                                                                                                                        
|        | 10.13 | (2)  |  |                         |  | Lease Agreement between Aetna Life Insurance
    Company and Hine Design, Incorporated, dated August 4, 1995.                                                                                                                                                               
|        | 10.14 | (2)  |  |                         |  | Industrial Space Lease Agreement between the
    Company and PEN Associates, dated November 13, 1995.                                                                                                                                                                       

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##### Table of Contents



|        |       |      |  |                         |  |                                                                                                                                                                                                                    
|------- | ----- | ---- |  | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |      |  |                        
|Number  |       |      |  | Description of Document
|        |       |      |  |                        
|        | 10.15 | (2)  |  |                         |  | Lease Agreement between SL-6 Partners, Ltd. and
    Progressive System Technologies, Inc. dated November 20,
    1995.                                                                                             
|        | 10.16 | (2)  |  |                         |  | Sublease Agreement between Progressive System
    Technologies, Inc. and Group, Inc., dated December 3, 1996.                                                                                                      
|        | 10.17 | (2)  |  |                         |  | Industrial Space Lease Agreement between the
    Company and PEN Associates, dated December 14, 1997.                                                                                                              
|        | 10.19 | (2)  |  |                         |  | Amendment to Lease Agreement between the Company
    and the Kato Road Partners, dated July 30, 1999.                                                                                                              
|        | 10.20 | (2)  |  |                         |  | Cooperation Agreement between the Company and
    MECS Corporation, dated August 5, 1999.                                                                                                                          
|        | 10.21 | (15) |  |                         |  | Lease agreement between the Company and Exar
    Corporation, dated October 18, 1999.                                                                                                                              
|        | 10.22 | (16) |  |                         |  | Employment Agreement between the Company and
    James C. Mitchener, Ph.D., dated March 28, 2000.                                                                                                                  
|        | 10.23 | (17) |  |                         |  | Employment Agreement between the Company and Pat
    Boudreau, dated May 25, 2000.                                                                                                                                 
|        | 10.24 | (17) |  |                         |  | Master Lease between the Company and Lease Plan
    North America, Inc., dated June 30, 2000.                                                                                                                      
|        | 10.25 | (7)  |  |                         |  | Second Amended and Restated Participation
    Agreement among the Company, Lease Plan North America, Inc., ABN
    Amro Bank N.V., and Certain Other Banks and Financial
    Institutions, dated February 21, 2001.
|        | 10.26 | (7)  |  |                         |  | First Amendment to Second Amended and Restated
    Participation Agreement and Other Operative Documents and
    Termination of Certain Operative Documents, dated May 25,
    2001.                               
|        | 10.27 | (7)  |  |                         |  | Employment Agreement between the Company and
    Stephen S. Schwartz, Ph.D., dated January 11, 2001.                                                                                                               
|        | 10.28 | (11) |  | *                       |  | Agreement on Bank Transactions between Asyst
    Japan, Inc., or AJI, and Tokyo Mitsubishi Bank dated
    March 13, 2001.                                                                                          
|        | 10.29 | (11) |  | *                       |  | Cash Consumer Debtor and Creditor Agreements
    between AJI and The Tokai Bank, Ltd. dated December 6, 1999
    and March 23, 2001.                                                                               
|        | 10.30 | (11) |  | *                       |  | Banking Consent & Agreement between MECS,
    K.K. and Tokai Bank, K.K. dated November 30, 1998,
    December 6, 1999.                                                                                             
|        | 10.31 | (11) |  | *                       |  | Banking Consent & Agreement between MECS,
    K.K. and Ogaki Kyoritsu Bank dated November 14, 1994.                                                                                                                
|        | 10.32 | (11) |  | *                       |  | Agreement on Bank Transactions between AJI and
    The Sumitomo Bank dated November 13, 2001.                                                                                                                      
|        | 10.33 | (18) |  |                         |  | Palo Alto Technologies, Inc. 1997 Stock Plan and
    related stock option agreement.                                                                                                                               
|        | 10.34 | (18) |  |                         |  | Progressive System Technologies, Inc. 1995 Stock
    Option/ Stock Issuance Plan and related notice document.                                                                                                      
|        | 10.35 |      |  |                         |  | Employment Separation Agreement between the
    Company and Dennis Riccio dated February 28, 2002.                                                                                                                 
|        | 10.36 |      |  |                         |  | Second Amended and Restated Secured Promissory
    Note between the Company and Dennis Riccio dated April, 12, 2002.                                                                                               
|        | 10.37 |      |  |                         |  | Amended and Restated Secured Promissory Note
    between the Company and Dennis Riccio dated April, 12, 2002.                                                                                                      
|        | 21.1  |      |  |                         |  | Subsidiaries of the Company.                                                                                                                                                                                       
|        | 23.1  |      |  |                         |  | Consent of Independent Accountants,
    PricewaterhouseCoopers LLP                                                                                                                                                 



---



|    |                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | English translation of original document.                                                                                                                                          
|   
|(1) | Previously filed as an Exhibit to our Current
    Report on Form 8-K, filed with the Securities Exchange
    Commission on June 18, 1999, and incorporated herein by
    reference.

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##### Table of Contents





|    |                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Previously filed as an Exhibit to our Quarterly
    Report on Form 10-Q for the quarter ended
    September 30, 1999, filed with the Securities Exchange
    Commission on October 21, 1999, and incorporated herein by
    reference.
|   
|(3) | Previously filed as an Exhibit to our
    Registration Statement on Form S-3/ A, File
    No. 333-89489, filed with the Securities Exchange
    Commission on October 29, 1999, and incorporated herein by
    reference.             
|   
|(4) | Previously filed as an Exhibit to our Current
    Report on Form 8-K/ A, filed with the Securities Exchange
    Commission on June 6, 2000, and incorporated herein by
    reference.                                                 
|   
|(5) | Previously filed as an Exhibit to our
    Registration Statement on Form S-3, File
    No. 333-54924, filed with the Securities Exchange
    Commission on February 2, 2001, and incorporated herein by
    reference.                
|   
|(6) | Previously filed as an Exhibit to our
    Registration Statement on Form S-3, File
    No. 333-56068, filed with the Securities Exchange
    Commission on February 23, 2001, and incorporated herein by
    reference.               
|   
|(7) | Previously as an Exhibit to our Annual Report on
    Form 10-K for the fiscal year ended March 31, 2001,
    filed with the Securities Exchange Commission on June 19,
    2001, and incorporated herein by reference.                
|   
|(8) | Previously filed as an Exhibit to our
    Registration Statement on Form S-1, as amended, File
    No. 333-66184, filed with the Securities Exchange
    Commission on July 19,1993, and incorporated herein by
    reference.        
|   
|(9) | Previously filed with our Definitive Proxy
    Statement for the 2000 Annual Meeting of Shareholders, filed
    with the Securities Exchange Commission on July 31, 2000,
    and incorporated herein by reference.                   



|     |                                                                                                                                                                                                                                   
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Previously filed as an Exhibit to our Current
    Report on Form 8-K, filed with the Securities Exchange
    Commission on June 29, 1998, and incorporated herein by
    reference.                                               
|    
|(11) | Previously filed as an Exhibit to our Quarterly
    Report on Form 10-Q for the quarter ended June 30,
    2001, filed with the Securities Exchange Commission on
    August 14, 2001, and incorporated herein by reference.      
|    
|(12) | Previously filed as an Exhibit to our
    Registration Statement on Form S-1, File No. 333-88246,
    filed with the Securities Exchange Commission on
    February 13, 1995, and incorporated herein by reference.               
|    
|(13) | Previously filed as an Exhibit to our Annual
    Report on Form 10-K for the fiscal year ended
    March 31, 1995, filed with the Securities Exchange
    Commission on July 19, 1995, and incorporated herein by
    reference.  
|    
|(14) | Previously filed as an Exhibit to our Quarterly
    Report on Form 10-Q for the quarter ended June 30,
    1999, filed with the Securities Exchange Commission on
    August 16, 1999, and incorporated herein by reference.      
|    
|(15) | Previously filed as an Exhibit to our Quarterly
    Report on Form 10-Q for the quarter ended December 31,
    1999, filed with the Securities Exchange Commission on
    February 14, 2000, and incorporated herein by reference.
|    
|(16) | Previously filed as an Exhibit to our Annual
    Report on Form 10-K for the fiscal year ended
    March 31, 2000, filed with the Securities Exchange
    Commission on June 29, 2000, and incorporated herein by
    reference.  
|    
|(17) | Previously filed as an Exhibit to our Quarterly
    Report on Form 10-Q for the quarter ended June 30,
    2000, filed with the Securities Exchange Commission on
    August 14, 2000, and incorporated herein by reference.      
|    
|(18) | Previously filed as an Exhibit to our
    Registration Statement on Form S-8, File
    No. 333-94619, filed with the Securities Exchange
    Commission on January 13, 2000, and incorporated herein by
    reference.            

71