##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File number: 000-22430
 ASYST TECHNOLOGIES, INC.
 (Exact name of Registrant, as specified in its charter)
 California
(State or other jurisdiction 
of incorporation or organization)
    
    94-2942251
(IRS Employer identification Number)
 46897 Bayside Parkway, Fremont, California 94538
  (510) 661-5000
  þ o
  o þ o
 o þ




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##### 



ASYST TECHNOLOGIES, INC.
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1.Financial Statements:
    
    
    3Condensed Consolidated Balance Sheets  December 31, 2007 and March 31, 2007
    
    
    3Condensed Consolidated Statements of Operations  Three and Nine Months Ended December
31, 2007 and December 31, 2006
    
    
    4Condensed Consolidated Statements of Cash Flows  Nine Months Ended December 31, 2007
and December 31, 2006
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    29Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    
    44Item 4.Controls and Procedures
    
    
    45PART II. OTHER INFORMATIONItem 1.Legal Proceedings
    
    
    47Item 1A.Risk Factors
    
    
    47Item 5.Other Information
    
    
    56Item 6.Exhibits
    
    
    56Signatures
    
    
    58Exhibit IndexEXHIBIT 10.56EXHIBIT 10.57EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
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Part I  FINANCIAL INFORMATION
 
 ITEM 1  FINANCIAL STATEMENTS
 
 ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 December 31,
    
    
    March 31,2007
    
    
    2007 (1)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    78,044
    
    
    $
    99,701Accounts receivable, net
    
    
    133,692
    
    
    
    125,889Inventories
    
    
    32,983
    
    
    
    51,797Deferred income taxes
    
    
    11,418
    
    
    
    12,764Prepaid expenses and other current assets
    
    
    7,132
    
    
    
    15,124Total current assets
    
    
    263,269
    
    
    
    305,275Property and equipment, net
    
    
    25,857
    
    
    
    25,138Goodwill
    
    
    87,704
    
    
    
    83,723Intangible assets, net
    
    
    29,102
    
    
    
    41,994Other assets
    
    
    14,817
    
    
    
    9,556Total assets
    
    $
    420,749
    
    
    $
    465,686LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Short-term loans and notes payable
    
    $
    28,705
    
    
    $
    1,453Current portion of long-term debt and capital leases
    
    
    6,196
    
    
    
    58,949Accounts payable
    
    
    68,092
    
    
    
    76,365Accounts payable-related parties
    
    
    19,332
    
    
    
    24,922Accrued and other liabilities
    
    
    63,338
    
    
    
    83,211Deferred margin
    
    
    7,389
    
    
    
    10,880Total current liabilities
    
    
    193,052
    
    
    
    255,780LONG-TERM LIABILITIES:Long-term debt and capital leases, net of current portion
    
    
    99,586
    
    
    
    86,412Deferred tax liability
    
    
    10,374
    
    
    
    13,124Other long-term liabilities
    
    
    18,804
    
    
    
    15,559Total long-term liabilities
    
    
    128,764
    
    
    
    115,095COMMITMENTS AND CONTINGENCIES (see Note 15)MINORITY INTEREST
    
    
    137
    
    
    
    130SHAREHOLDERS EQUITY:Common stock, no par value:Authorized shares  300,000,000; Outstanding shares 
49,688,691 and 49,306,925 shares at December 31, 2007 and March
31, 2007, respectively
    
    
    488,124
    
    
    
    481,624Accumulated deficit
    
    
    (387,547
    )
    
    
    (385,216
    )Accumulated other comprehensive loss
    
    
    (1,781
    )
    
    
    (1,727
    )Total shareholders equity
    
    
    98,796
    
    
    
    94,681Total liabilities, minority interest and shareholders equity
    
    $
    420,749
    
    
    $
    465,686
 
 (1)
    
    The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
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ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    106,475
    
    
    $
    126,135
    
    
    $
    362,931
    
    
    $
    365,765Cost of sales
    
    
    73,914
    
    
    
    88,019
    
    
    
    251,344
    
    
    
    252,082Gross profit
    
    
    32,561
    
    
    
    38,116
    
    
    
    111,587
    
    
    
    113,683Operating expenses:Research and development
    
    
    10,526
    
    
    
    7,690
    
    
    
    27,900
    
    
    
    25,679Selling, general and administrative
    
    
    20,873
    
    
    
    21,831
    
    
    
    66,026
    
    
    
    63,669Amortization of acquired intangible assets
    
    
    2,970
    
    
    
    5,912
    
    
    
    13,898
    
    
    
    14,461Restructuring and other charges
    
    
    38
    
    
    
    
    
    
    
    1,019
    
    
    
    1,784Total operating expenses
    
    
    34,407
    
    
    
    35,433
    
    
    
    108,843
    
    
    
    105,593(Loss) income from operations
    
    
    (1,846
    )
    
    
    2,683
    
    
    
    2,744
    
    
    
    8,090Interest and other income (expense), net:Interest income
    
    
    708
    
    
    
    552
    
    
    
    1,769
    
    
    
    1,828Interest expense
    
    
    (2,134
    )
    
    
    (2,678
    )
    
    
    (7,029
    )
    
    
    (6,624
    )Write-off of fees related to early extinguishment of
debt and early redemption of convertible securities
    
    
    
    
    
    
    
    
    
    
    (3,135
    )
    
    
    Other income, net
    
    
    1,855
    
    
    
    800
    
    
    
    3,679
    
    
    
    2,596Interest and other income (expense), net
    
    
    429
    
    
    
    (1,326
    )
    
    
    (4,716
    )
    
    
    (2,200
    )(Loss) income before income taxes and minority interest
    
    
    (1,417
    )
    
    
    1,357
    
    
    
    (1,972
    )
    
    
    5,890Benefit from (provision for) income taxes
    
    
    562
    
    
    
    (1,569
    )
    
    
    1,203
    
    
    
    (7,661
    )Minority interest
    
    
    (12
    )
    
    
    (11
    )
    
    
    (25
    )
    
    
    (1,760
    )Net loss prior to cumulative effect of change in
accounting principle
    
    
    (867
    )
    
    
    (223
    )
    
    
    (794
    )
    
    
    (3,531
    )Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103Net loss
    
    $
    (867
    )
    
    $
    (223
    )
    
    $
    (794
    )
    
    $
    (3,428
    )Basic net loss per share prior to cumulative effect of
change in accounting principle
    
    
    ($0.02
    )
    
    
    ($0.00
    )
    
    
    ($0.02
    )
    
    
    ($0.07
    )Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.00Basic net loss per share
    
    
    ($0.02
    )
    
    
    ($0.00
    )
    
    
    ($0.02
    )
    
    
    ($0.07
    )Diluted net loss per share prior to cumulative effect
of change in accounting principle
    
    
    ($0.02
    )
    
    
    ($0.00
    )
    
    
    ($0.02
    )
    
    
    ($0.07
    )Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.00Diluted net loss per share
    
    
    ($0.02
    )
    
    
    ($0.00
    )
    
    
    ($0.02
    )
    
    
    ($0.07
    )Shares used in computing basic net loss per share
    
    
    49,750
    
    
    
    49,028
    
    
    
    49,622
    
    
    
    48,829Shares used in computing diluted net loss per share
    
    
    49,750
    
    
    
    49,028
    
    
    
    49,622
    
    
    
    48,829
 The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
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ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedDecember 31,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (794
    )
    
    $
    (3,428
    )Adjustments to reconcile net loss to net cash (used in) provided by operating activities:Depreciation and amortization
    
    
    19,335
    
    
    
    20,074Amortization of deferred financing costs
    
    
    990
    
    
    
    937Allowance for doubtful accounts
    
    
    (1,995
    )
    
    
    (7,638
    )Foreign exchange transaction losses
    
    
    739
    
    
    
    Minority interest in net income in consolidated subsidiary
    
    
    25
    
    
    
    1,760Loss on disposal of fixed assets
    
    
    81
    
    
    
    366Write-off of fees related to early extinguishment of debt
    
    
    2,431
    
    
    
    Stock-based compensation expense
    
    
    5,177
    
    
    
    4,688Non-cash restructuring charges
    
    
    106
    
    
    
    188In-process research and development
    
    
    
    
    
    
    1,519Cumulative effect of change in accounting principle
    
    
    
    
    
    
    (103
    )Amortization of lease incentive payments
    
    
    (468
    )
    
    
    (468
    )Deferred taxes, net
    
    
    (5,924
    )
    
    
    (6,718
    )Changes in assets and liabilities, net of acquisitions:Accounts receivable
    
    
    1,250
    
    
    
    19,163Inventories
    
    
    20,633
    
    
    
    (24,781
    )Prepaid expenses and other assets
    
    
    8,362
    
    
    
    (8,597
    )Accounts payable, accrued and other liabilities and deferred margin
    
    
    (41,239
    )
    
    
    47,576Net cash provided by operating activities
    
    
    8,709
    
    
    
    44,538CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of investments
    
    
    
    
    
    
    (10,000
    )Sales or maturity of investments
    
    
    
    
    
    
    25,290Purchase of additional investment in subsidiary
    
    
    
    
    
    
    (105,295
    )Purchases of property and equipment, net
    
    
    (6,214
    )
    
    
    (6,392
    )Net cash (used in) investing activities
    
    
    (6,214
    )
    
    
    (96,397
    )CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from lines of credit
    
    
    194,496
    
    
    
    212,192Payments on lines of credit
    
    
    (169,255
    )
    
    
    (212,780
    )Dividends paid to minority shareholders of ATJ
    
    
    
    
    
    
    (6,317
    )Proceeds from long-term debt, net of financing fees
    
    
    119,130
    
    
    
    82,340Principal payments on long-term debt and capital leases
    
    
    (170,336
    )
    
    
    (21,786
    )Proceeds from issuance of common stock
    
    
    1,323
    
    
    
    2,392Net cash (used in) provided by financing activities
    
    
    (24,642
    )
    
    
    56,041Effect of exchange rate changes on cash and cash equivalents
    
    
    490
    
    
    
    (520
    )(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (21,657
    )
    
    
    3,662CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    99,701
    
    
    
    94,622CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    78,044
    
    
    $
    98,284
 The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
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ASYST TECHNOLOGIES, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
   1. BASIS OF PRESENTATION
     2. RECENT ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements
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The Fair Value Option for Financial Assets
and Financial Liabilities
 Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research
and Development Activities
 Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51
 Business Combinations
 3. ACCOUNTING CHANGES
 Accounting for Sabbatical Leave and Other Similar Benefits
Pursuant to FASB Statement No. 43
 Accounting for Uncertainty in Income Taxesan
interpretation of FASB Statement No. 109
 4. LIQUIDITY
  7




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3 4
   5. SIGNIFICANT ACCOUNTING POLICIES
 Revenue Recognition
  8




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Accounting for Performance of Construction-Type and Certain Production-Type Contracts
 Software Revenue
Recognition.
 Comprehensive Income (Loss)
  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net loss, as reported
    
    $
    (867
    )
    
    $
    (223
    )
    
    $
    (794
    )
    
    $
    (3,428
    )Net change in foreign currency translation
adjustment
    
    
    (168
    )
    
    
    237
    
    
    
    (39
    )
    
    
    (1,070
    )Net change in unrealized losses on investments
    
    
    
    
    
    
    (7
    )
    
    
    (15
    )
    
    
    (18
    )Comprehensive (loss) income
    
    $
    (1,035
    )
    
    $
    7
    
    
    $
    (848
    )
    
    $
    (4,516
    )
 Net Loss Per Share
  9




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Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Numerator:Net loss
    
    $
    (867
    )
    
    $
    (223
    )
    
    $
    (794
    )
    
    $
    (3,428
    )Denominator:Weighted average common shares
outstanding, excluding unvested
restricted stock units
    
    
    49,750
    
    
    
    49,028
    
    
    
    49,622
    
    
    
    48,829Denominator for basic net loss per share
    
    
    49,750
    
    
    
    49,028
    
    
    
    49,622
    
    
    
    48,829Effect of dilutive employee stock options
and restricted stock units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Denominator for diluted net loss per share
    
    
    49,750
    
    
    
    49,028
    
    
    
    49,622
    
    
    
    48,829Net loss per share  basic
    
    $
    (0.02
    )
    
    $
    (0.00
    )
    
    $
    (0.02
    )
    
    $
    (0.07
    )Net loss per share  diluted
    
    $
    (0.02
    )
    
    $
    (0.00
    )
    
    $
    (0.02
    )
    
    $
    (0.07
    )
  As ofDecember 31,2007
    
    
    2006Restricted stock awards and stock units
    
    
    2,547
    
    
    
    843Stock options
    
    
    5,048
    
    
    
    5,801Convertible notes
    
    
    
    
    
    
    5,682Total
    
    
    7,595
    
    
    
    12,326
 6. BALANCE SHEET COMPONENTS
 Cash Equivalents
  Accounts Receivable, net of allowance for doubtful accounts
  December 31,
    
    
    March 31,2007
    
    
    2007Trade receivables
    
    $
    60,170
    
    
    $
    58,781Trade receivables-related party
    
    
    19
    
    
    
    6Unbilled receivables
    
    
    64,427
    
    
    
    62,201Other receivables
    
    
    11,393
    
    
    
    9,057Less: Allowance for doubtful accounts
    
    
    (2,317
    )
    
    
    (4,156
    )Total
    
    $
    133,692
    
    
    $
    125,889
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Inventories
  December 31,
    
    
    March 31,2007
    
    
    2007Raw materials
    
    $
    10,491
    
    
    $
    15,462Work-in-process
    
    
    20,391
    
    
    
    36,035Finished goods
    
    
    2,101
    
    
    
    300Total
    
    $
    32,983
    
    
    $
    51,797
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Goodwill and Intangible Assets
 Goodwill
  Fab Automation
    
    
    AMHS
    
    
    TotalBalances at March 31, 2007
    
    $
    3,397
    
    
    $
    80,326
    
    
    $
    83,723Foreign currency translation
    
    
    
    
    
    
    3,981
    
    
    
    3,981Balances at December 31, 2007
    
    $
    3,397
    
    
    $
    84,307
    
    
    $
    87,704
 Intangible assets, net
  December 31, 2007
    
    
    March 31, 2007Gross
    
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    
    
    
    
    Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Net
    
    
    Amount
    
    
    Amortization
    
    
    NetAmortizable intangible assets:Developed technology
    
    $
    84,615
    
    
    $
    67,301
    
    
    $
    17,314
    
    
    $
    81,174
    
    
    $
    56,818
    
    
    $
    24,356Customer base and other
intangible assets
    
    
    55,082
    
    
    
    44,504
    
    
    
    10,578
    
    
    
    53,060
    
    
    
    36,878
    
    
    
    16,182Licenses and patents
    
    
    5,303
    
    
    
    4,093
    
    
    
    1,210
    
    
    
    5,299
    
    
    
    3,843
    
    
    
    1,456Total
    
    $
    145,000
    
    
    $
    115,898
    
    
    $
    29,102
    
    
    $
    139,533
    
    
    $
    97,539
    
    
    $
    41,994
    Fiscal Year ending March 31,Remainder of 2008
    
    $
    3,0772009
    
    
    11,8192010
    
    
    7,3002011
    
    
    5,1612012 and thereafter
    
    
    1,745Total
    
    $
    29,102
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Accrued and other liabilities
  December 31,
    
    
    March 31,2007
    
    
    2007Income taxes payable
    
    $
    8,033
    
    
    $
    8,188Warranty
    
    
    11,165
    
    
    
    11,982Employee compensation
    
    
    14,673
    
    
    
    18,429Customer deposits
    
    
    1,873
    
    
    
    14,086Payable to Shinko for 4.9% share in ATJ
    
    
    11,606
    
    
    
    11,439Other accrued expenses
    
    
    15,988
    
    
    
    19,087Total
    
    $
    63,338
    
    
    $
    83,211
 Warranty Accrual
  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Beginning balance
    
    $
    10,972
    
    
    $
    7,761
    
    
    $
    11,982
    
    
    $
    7,967Accruals
    
    
    1,846
    
    
    
    4,732
    
    
    
    7,412
    
    
    
    10,636Settlements
    
    
    (1,837
    )
    
    
    (2,634
    )
    
    
    (7,135
    )
    
    
    (8,866
    )Foreign currency
translation
    
    
    184
    
    
    
    (43
    )
    
    
    (1,094
    )
    
    
    79Ending balance
    
    $
    11,165
    
    
    $
    9,816
    
    
    $
    11,165
    
    
    $
    9,816
 7. ACQUISITION
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Business Combinations
 Purchase Price:Total cash consideration
    
    $
    102,043Liability to purchase remaining 4.9 percent interest plus future fixed
dividends
    
    
    11,480Transaction costs
    
    
    5,666Total Purchase Price
    
    $
    119,189Allocation of purchase price to assets acquired and liabilities assumed:Net tangible assets
    
    $
    32,560In-process research & development (IPR&D)
    
    
    1,519Acquired identifiable intangible assets:Developed technology
    
    
    29,008Backlog
    
    
    2,940Customer relationships
    
    
    16,464Trademark
    
    
    2,499Deferred tax liabilities
    
    
    (19,414
    )Goodwill
    
    
    53,613Total Purchase Price
    
    $
    119,189
 Net Tangible Assets
  Cash
    
    $
    13,169Accounts receivable
    
    
    56,319Inventories
    
    
    21,462Property plant and equipment
    
    
    4,706Other assets
    
    
    1,935Deferred tax assets, net
    
    
    4,414Accounts payable and other current liabilities
    
    
    (59,587
    )Long-term debt
    
    
    (6,607
    )Pension and other long-term liabilities
    
    
    (3,251
    )Net tangible assets acquired
    
    $
    32,560
 Intangible Assets
  14




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In-Process Research and Development (IPR&D) and Developed Technology
   Minority Interest
  Pro Forma Financial Information
  15




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Three Months Ended
    
    
    Nine Months EndedDecember 31, 2006
    
    
    December 31, 2006Net sales
    
    $
    126,135
    
    
    $
    365,765Pro forma net loss prior to cumulative effect
of change in accounting principle
    
    
    (223
    )
    
    
    (5,302
    )Cumulative effect of change in accounting
principle
    
    
    
    
    
    
    103Pro forma net loss
    
    $
    (223
    )
    
    $
    (5,199
    )Pro forma basic and diluted net loss per
share prior to cumulative effect of change in
accounting principle
    
    $
    (0.00
    )
    
    $
    (0.11
    )Cumulative effect of change in accounting
principle
    
    
    
    
    
    
    0.00Pro forma basic and diluted net loss per share
    
    $
    (0.00
    )
    
    $
    (0.11
    )Shares used in the per share calculation- Basic
    
    
    49,028
    
    
    
    48,829- Diluted
    
    
    49,028
    
    
    
    48,829
 8. STOCK-BASED COMPENSATION
 Stock Options Plans
     Weighted-AverageTotal Number
    
    
    Weighted-Average
    
    
    Remaining
    
    
    Aggregateof Shares
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    Intrinsic ValueOptions outstanding as of March
31, 2007
    
    
    5,679,084
    
    
    $
    9.66Granted
    
    
    Exercised
    
    
    (182,335
    )
    
    
    4.34Cancelled
    
    
    (448,532
    )
    
    
    10.28Options outstanding as of December
31, 2007
    
    
    5,048,217
    
    
    
    9.80
    
    
    
    4.09
    
    
    $
    8Exercisable as of December 31, 2007
    
    
    4,503,639
    
    
    $
    10.23
    
    
    
    4.08
    
    
    $
    8
 16




---



##### Table of Contents



Restricted Stock Awards and Restricted Stock Units
  Weighted AverageNumber of
    
    
    Grant-DateShares
    
    
    Fair ValueOutstanding at March 31, 2007
    
    
    1,124,500
    
    
    $
    5.90Granted
    
    
    1,935,383
    
    
    
    6.95Vested
    
    
    (190,767
    )
    
    
    6.75Cancelled
    
    
    (322,441
    )
    
    
    6.48Outstanding at December 31, 2007
    
    
    2,546,675
    
    
    $
    6.56
  Stock Option Awards and Restricted Stock Units (RSUs) with Market and Performance Conditions
     17




---



##### Table of Contents



Market Condition Awards and Options
 WeightedNumber of
    
    
    AverageShares
    
    
    Grant Date Fair ValueOutstanding at March 31, 2007
    
    
    317,679
    
    
    $
    2.46Awards granted
    
    
    
    
    
    
    Awards cancelled
    
    
    (87,013
    )
    
    
    3.06Balance at December 31, 2007
    
    
    230,666
    
    
    $
    2.23
 Performance Condition Awards and Options
 WeightedNumber of
    
    
    AverageShares
    
    
    Grant Date Fair ValueOutstanding at March 31, 2007
    
    
    
    
    
    
    Awards granted
    
    
    484,358
    
    
    $
    7.18Awards cancelled
    
    
    (74,028
    )
    
    
    7.18Balance at December 31, 2007
    
    
    410,330
    
    
    $
    7.18
  Employee Stock Purchase Plan
  Share-Based Compensation Expense
  18




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Stock-based compensation expense by
category:Cost of sales
    
    $
    160
    
    
    $
    221
    
    
    $
    495
    
    
    $
    454Research and development
    
    
    204
    
    
    
    255
    
    
    
    617
    
    
    
    750Selling, general and administrative
    
    
    1,189
    
    
    
    1,059
    
    
    
    4,065
    
    
    
    3,484Total stock-based compensation expense
    
    $
    1,553
    
    
    $
    1,535
    
    
    $
    5,177
    
    
    $
    4,688
   Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,2007
    
    2006
    
    2007
    
    2006Employee Stock option plans:Risk-free interest rate
    
    
    
    
    
    
    4.7
    %
    
    
    
    
    
    
    4.7
    %Expected term of options (in years)
    
    
    
    
    
    
    3.3
    
    
    
    
    
    
    
    3.3Expected volatility
    
    
    
    
    
    
    67.0
    %
    
    
    
    
    
    
    67.0
    %Expected dividend yield
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %Weighted average grant date fair
value
    
    
    
    
    
    $
    2.07
    
    
    
    
    
    
    $
    2.40Employee Stock purchase plan:Risk-free interest rate
    
    
    5.0
    %
    
    
    4.7
    %
    
    
    5.1
    %
    
    
    4.7
    %Expected term of options (in years)
    
    
    0.5
    
    
    
    0.5
    
    
    
    0.5
    
    
    
    0.5Expected volatility
    
    
    36.4
    %
    
    
    67.0
    %
    
    
    41.1
    %
    
    
    67.0
    %Expected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Weighted average grant date fair
value
    
    $
    1.74
    
    
    $
    2.39
    
    
    $
    1.80
    
    
    $
    2.42
  19




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##### Table of Contents



9. PENSION BENEFIT PLANS
  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    299
    
    
    $
    258
    
    
    $
    863
    
    
    $
    785Interest cost
    
    
    103
    
    
    
    87
    
    
    
    297
    
    
    
    264Expected return on plan assets
    
    
    (107
    )
    
    
    (99
    )
    
    
    (308
    )
    
    
    (302
    )Amortization of prior service
cost
    
    
    (1
    )
    
    
    (1
    )
    
    
    (4
    )
    
    
    (3
    )Amortization of actuarial
losses
    
    
    5
    
    
    
    5
    
    
    
    15
    
    
    
    15Net periodic benefit cost
    
    $
    299
    
    
    $
    250
    
    
    $
    863
    
    
    $
    759
 Employer Contributions
  10. INCOME TAXES
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,2007
    
    2006
    
    2007
    
    2006Benefit from
(provision for)
income taxes
    
    $
    562
    
    
    $
    (1,569
    )
    
    $
    1,203
    
    
    $
    (7,661
    )
     20




---



##### Table of Contents



Accounting for Income Taxes
   11. RESTRUCTURING CHARGES
  Severance and
    
    
    ExcessBenefits
    
    
    Facilities
    
    
    TotalBalance, March 31, 2007
    
    $
    
    
    
    $
    788
    
    
    $
    788Reclassification from other
long-term liability
    
    
    
    
    
    
    41
    
    
    $
    41Additional accruals
    
    
    629
    
    
    
    391
    
    
    
    1,020Non-cash related utilization
    
    
    
    
    
    
    (106
    )
    
    
    (106
    )Amounts paid in cash
    
    
    (623
    )
    
    
    (841
    )
    
    
    (1,464
    )Foreign currency translation
    
    
    
    
    
    
    4
    
    
    
    4Balance, December 31, 2007
    
    $
    6
    
    
    $
    277
    
    
    $
    283
  21




---



##### Table of Contents



Severance andBenefits
    
    
    Excess Facilities
    
    
    TotalBalance, March 31, 2006
    
    $
    
    
    
    $
    105
    
    
    $
    105Additional accruals
    
    
    
    
    
    
    1,812
    
    
    
    1,812Reduction in accruals
    
    
    
    
    
    
    (26
    )
    
    
    (26
    )Non-cash related
utilization
    
    
    
    
    
    
    (188
    )
    
    
    (188
    )Amounts paid in cash
    
    
    
    
    
    
    (905
    )
    
    
    (905
    )Balance, December 31,
2006
    
    $
    
    
    
    $
    798
    
    
    $
    798
  12. REPORTABLE SEGMENTS
 Disclosures about
Segments of an Enterprise and Related Information
  
    
    Automated Material Handling Systems (AMHS).Products include automated transport and
loading systems for semiconductor fabs and flat panel display manufacturers.
    
    Fab Automation Product.Products include interface products, substrate-handling robotics,
wafer and reticle carriers, auto-ID systems, sorters, EFEMs and connectivity software.
   Explanatory Note
  22




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006(as restated)
    
    
    
    
    
    
    (as restated)AMHS:Net sales
    
    $
    68,441
    
    
    $
    77,847
    
    
    $
    230,977
    
    
    $
    216,595Cost of Sales
    
    
    52,308
    
    
    
    58,620
    
    
    
    177,171
    
    
    
    165,061Gross Profit
    
    $
    16,133
    
    
    $
    19,227
    
    
    $
    53,806
    
    
    $
    51,534(Loss) income from
operations
    
    $
    (856
    )
    
    $
    4,413
    
    
    $
    (706
    )
    
    $
    13,860Fixed assets additions
    
    $
    1,552
    
    
    $
    773
    
    
    $
    3,646
    
    
    $
    4,441Amortization and
Depreciation
    
    $
    3,831
    
    
    $
    6,400
    
    
    $
    15,931
    
    
    $
    15,523Fab Automation Products:Net sales
    
    $
    38,034
    
    
    $
    48,288
    
    
    $
    131,954
    
    
    $
    149,170Cost of Sales
    
    
    21,606
    
    
    
    29,399
    
    
    
    74,173
    
    
    
    87,021Gross Profit
    
    $
    16,428
    
    
    $
    18,889
    
    
    $
    57,781
    
    
    $
    62,149(Loss) income from
operations
    
    $
    (990
    )
    
    $
    (1,730
    )
    
    $
    3,450
    
    
    $
    (5,770
    )Fixed assets additions
    
    $
    567
    
    
    $
    142
    
    
    $
    1,778
    
    
    $
    2,046Amortization and
Depreciation
    
    $
    1,326
    
    
    $
    1,715
    
    
    $
    4,394
    
    
    $
    5,488Consolidated:Net sales
    
    $
    106,475
    
    
    $
    126,135
    
    
    $
    362,931
    
    
    $
    365,765Cost of Sales
    
    
    73,914
    
    
    
    88,019
    
    
    
    251,344
    
    
    
    252,082Gross Profit
    
    $
    32,561
    
    
    $
    38,116
    
    
    $
    111,587
    
    
    $
    113,683(Loss) income from
operations
    
    $
    (1,846
    )
    
    $
    2,683
    
    
    $
    2,744
    
    
    $
    8,090Fixed assets additions
    
    $
    2,119
    
    
    $
    915
    
    
    $
    5,424
    
    
    $
    6,487Amortization and
Depreciation
    
    $
    5,157
    
    
    $
    8,115
    
    
    $
    20,325
    
    
    $
    21,011
   Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Customer A
    
    
    23.7
    %
    
    
    22.0
    %
    
    
    21.9
    %
    
    
    19.8
    %Customer B
    
    
    8.5
    %
    
    
    14.6
    %
    
    
    10.1
    %
    
    
    10.7
    %Customer C
    
    
    6.0
    %
    
    
    9.2
    %
    
    
    8.5
    %
    
    
    11.9
    %
  23




---



##### Table of Contents



13. DEBT
  December 31,
    
    
    March 31,2007
    
    
    2007Convertible subordinated notes
    
    $
    
    
    
    $
    86,250Short-term loans
    
    
    26,702
    
    
    
    Long-term loans
    
    
    105,560
    
    
    
    58,782Capital leases
    
    
    222
    
    
    
    329Total debt and capital leases
    
    
    105,782
    
    
    
    145,361Less: Current portion of long-term debt and
capital leases
    
    
    (6,196
    )
    
    
    (58,949
    )Long-term debt and capital leases, net of
current portion
    
    $
    99,586
    
    
    $
    86,412
  Fiscal Year Ending March 31,
    
    AmountRemainder of 2008
    
    $
    1302009
    
    
    6,0812010
    
    
    12,1992011
    
    
    18,3652012 and thereafter
    
    
    69,007Total
    
    $
    105,782
 Credit Facility
   24




---



##### Table of Contents



Convertible Subordinated Notes
 3 4
 Other Debt Financing Arrangements
  14. RELATED-PARTY TRANSACTIONS
  December 31,
    
    March 31,2007
    
    2007Accounts payable and notes payable due to Shinko
    
    $
    19,319
    
    
    $
    24,694Accrued liabilities due to Shinko
    
    
    313
    
    
    
    304Accrued liabilities due to Shinko relating to
ATJ acquisition
    
    
    11,606
    
    
    
    11,439Accounts receivable from MECS Korea
    
    
    19
    
    
    
    6Accounts payable due to MECS Korea
    
    
    13
    
    
    
    228Accrued liabilities due to MECS Korea
    
    
    17
    
    
    
    13
  Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,2007
    
    2006
    
    2007
    
    2006Material and service
purchases from Shinko
    
    $
    12,174
    
    
    $
    19,958
    
    
    $
    41,333
    
    
    $
    38,620Sales to MECS Korea
    
    
    33
    
    
    
    35
    
    
    
    57
    
    
    
    39Purchases from MECS Korea
    
    
    192
    
    
    
    250
    
    
    
    459
    
    
    
    274
 25




---



##### Table of Contents



15. COMMITMENTS AND CONTINGENCIES
 Lease Commitments
  Fiscal Year Ending March 31,
    
    Capital Lease
    
    
    Operating LeaseRemainder of 2008
    
    $
    50
    
    
    $
    1,8682009
    
    
    156
    
    
    
    4,1012010
    
    
    8
    
    
    
    3,2352011
    
    
    7
    
    
    
    1,8412012 and thereafter
    
    
    4
    
    
    
    2,762Total
    
    
    225
    
    
    $
    13,807Less: interest
    
    
    (3
    )Present value of minimum lease payments
    
    
    222Less: current portion of capital leases
    
    
    (163
    )Capital leases, net of current portion
    
    $
    59
  Purchase Commitments
  Legal Contingencies
 Our Patent Infringement Action against Jenoptik AG
   26




---



##### Table of Contents



Daifukus Patent Infringement Action Against Us
  Derivative Action filed Against Current and Former Directors & Officers Relating to Past Stock
Option Grants & Practices
 In re Asyst Technologies, Inc. Derivative Litigation Forlenzo v. Schwartz, et a et. seq.
 27




---



##### Table of Contents



Other Matters
  Indemnifications
   16. SUBSEQUENT EVENT
  28




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 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. Our
actual results could differ materially, as a result of certain factors including but not limited to
those discussed in Risk Factors in this report and our other Securities and Exchange Commission
(SEC) filings. 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, Item 1A Risk Factors.
 Words such as expect, anticipate, intend, plan, believe, and estimate, and
variations of such words and similar expressions are intended to identify such forward-looking
statements. Except as may be required by law, we do not intend 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
report might not occur.
 The following discussion should be read in conjunction with the unaudited condensed
consolidated financial statements and related notes included in this report and our audited
consolidated financial statements and related notes as filed in our Annual Report Form 10-K for the
fiscal year ended March 31, 2007. Certain prior period amounts have been reclassified to conform to
current period presentation.
   Overview
     29




---



##### Table of Contents




    
    The Fab Automation product segment, which consists principally of our interface products,
auto-ID systems, substrate-handling robotics, sorters, EFEMs, connectivity software and
continuous flow technology (CFT).
    
    The AMHS segment, which consists principally of our automated transport and loading
systems, semiconductor and flat panel display products.
   Status of Material Weaknesses
  Critical Accounting Policies and Estimates
   30




---



##### Table of Contents



Income Taxes. Accounting for Uncertainty in Income Taxesan interpretation of
FASB Statement No. 109
    Results of Operations for the Three and Nine Months Ended December 31, 2007 and 2006
   31




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006 (1)
    
    
    2007
    
    
    2006 (1)(as restated)
    
    
    
    
    
    
    (as restated)AMHS:Net sales
    
    $
    68,441
    
    
    $
    77,847
    
    
    $
    230,977
    
    
    $
    216,595Cost of Sales
    
    
    52,308
    
    
    
    58,620
    
    
    
    177,171
    
    
    
    165,061Gross Profit
    
    $
    16,133
    
    
    $
    19,227
    
    
    $
    53,806
    
    
    $
    51,534(Loss) income from operations
    
    $
    (856
    )
    
    $
    4,413
    
    
    $
    (706
    )
    
    $
    13,860Fab Automation Products:Net sales
    
    $
    38,034
    
    
    $
    48,288
    
    
    $
    131,954
    
    
    $
    149,170Cost of Sales
    
    
    21,606
    
    
    
    29,399
    
    
    
    74,173
    
    
    
    87,021Gross Profit
    
    $
    16,428
    
    
    $
    18,889
    
    
    $
    57,781
    
    
    $
    62,149(Loss) income from operations
    
    $
    (990
    )
    
    $
    (1,730
    )
    
    $
    3,450
    
    
    $
    (5,770
    )Consolidated:Net sales
    
    $
    106,475
    
    
    $
    126,135
    
    
    $
    362,931
    
    
    $
    365,765Cost of Sales
    
    
    73,914
    
    
    
    88,019
    
    
    
    251,344
    
    
    
    252,082Gross Profit
    
    $
    32,561
    
    
    $
    38,116
    
    
    $
    111,587
    
    
    $
    113,683(Loss) income from operations
    
    $
    (1,846
    )
    
    $
    2,683
    
    
    $
    2,744
    
    
    $
    8,090
 
 1
    
     See Note 12, Reportable Segments, in Notes to Condensed Consolidated Financial Statements.  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006(as restated)
    
    
    
    
    
    
    (as restated)AMHS:Net sales
    
    
    64.3
    %
    
    
    61.7
    %
    
    
    63.6
    %
    
    
    59.2
    %Cost of Sales
    
    
    49.1
    %
    
    
    46.5
    %
    
    
    48.8
    %
    
    
    45.1
    %Gross Profit
    
    
    15.2
    %
    
    
    15.2
    %
    
    
    14.8
    %
    
    
    14.1
    %(Loss) income from operations
    
    
    -0.8
    %
    
    
    3.5
    %
    
    
    -0.2
    %
    
    
    3.8
    %Fab Automation Products:Net sales
    
    
    35.7
    %
    
    
    38.3
    %
    
    
    36.4
    %
    
    
    40.8
    %Cost of Sales
    
    
    20.3
    %
    
    
    23.3
    %
    
    
    20.4
    %
    
    
    23.8
    %Gross Profit
    
    
    15.4
    %
    
    
    15.0
    %
    
    
    16.0
    %
    
    
    17.0
    %(Loss) income from operations
    
    
    -0.9
    %
    
    
    -1.4
    %
    
    
    1.0
    %
    
    
    -1.6
    %Consolidated:Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of Sales
    
    
    69.4
    %
    
    
    69.8
    %
    
    
    69.3
    %
    
    
    68.9
    %Gross Profit
    
    
    30.6
    %
    
    
    30.2
    %
    
    
    30.7
    %
    
    
    31.1
    %(Loss) income from operations
    
    
    -1.7
    %
    
    
    2.1
    %
    
    
    0.8
    %
    
    
    2.2
    %
 32




---



##### Table of Contents



Third Quarter of 2008 Compared to Third Quarter of 2007
 Net Sales
 Consolidated
  AMHS
  Fab Automation
  First Nine Months of 2008 Compared to First Nine Months of 2007
 Net Sales
 Consolidated
  33




---



##### Table of Contents



AMHS
  Fab Automation
  Comparison of Expenses, Gross Margin, Interest & Other Income, and Income Taxes
  34




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    69.4
    %
    
    
    69.8
    %
    
    
    69.3
    %
    
    
    68.9
    %Gross profit
    
    
    30.6
    %
    
    
    30.2
    %
    
    
    30.7
    %
    
    
    31.1
    %Operating expenses:Research and development
    
    
    9.9
    %
    
    
    6.1
    %
    
    
    7.7
    %
    
    
    7.0
    %Selling, general and administrative
    
    
    19.6
    %
    
    
    17.3
    %
    
    
    18.2
    %
    
    
    17.4
    %Amortization of acquired intangible
assets
    
    
    2.8
    %
    
    
    4.7
    %
    
    
    3.8
    %
    
    
    4.0
    %Restructuring and other charges
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.3
    %
    
    
    0.5
    %Total operating expenses
    
    
    32.3
    %
    
    
    28.1
    %
    
    
    30.0
    %
    
    
    28.9
    %(Loss) income from operations
    
    
    -1.7
    %
    
    
    2.1
    %
    
    
    0.8
    %
    
    
    2.2
    %Interest and other income (expense), net:Interest income
    
    
    0.7
    %
    
    
    0.4
    %
    
    
    0.5
    %
    
    
    0.5
    %Interest expense
    
    
    -2.0
    %
    
    
    -2.1
    %
    
    
    -1.9
    %
    
    
    -1.8
    %Write-off of fees related to early
extinguishment of debt and early
redemption of convertible securities
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    -0.9
    %
    
    
    0.0
    %Other income, net
    
    
    1.7
    %
    
    
    0.6
    %
    
    
    1.0
    %
    
    
    0.7
    %Interest and other income
(expense), net
    
    
    0.4
    %
    
    
    -1.1
    %
    
    
    -1.3
    %
    
    
    -0.6
    %(Loss) income before income taxes and
minority interest
    
    
    -1.3
    %
    
    
    1.0
    %
    
    
    -0.5
    %
    
    
    1.6
    %Benefit from (provision for) income taxes
    
    
    0.5
    %
    
    
    -1.2
    %
    
    
    0.3
    %
    
    
    -2.1
    %Minority interest
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    -0.5
    %Net loss prior to cumulative effect of
change in accounting principle
    
    
    -0.8
    %
    
    
    -0.2
    %
    
    
    -0.2
    %
    
    
    -1.0
    %Cumulative effect of change in
accounting principle
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Net loss
    
    
    -0.8
    %
    
    
    -0.2
    %
    
    
    -0.2
    %
    
    
    -1.0
    %
 Gross Margin
 Consolidated
   35




---



##### Table of Contents



AMHS
   Fab Automation
   Research and Development
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentages)
    
    2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeResearch and development
    
    $
    10,526
    
    
    $
    7,690
    
    
    $
    2,836
    
    
    $
    27,900
    
    
    $
    25,679
    
    
    $
    2,221Percentage of total net sales
    
    
    9.9
    %
    
    
    6.1
    %
    
    
    
    
    
    
    7.7
    %
    
    
    7.0
    %
    36




---



##### Table of Contents



Selling, General and Administrative
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentage)
    
    2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeSelling, general
and administrative
    
    $
    20,873
    
    
    $
    21,831
    
    
    $
    (958
    )
    
    $
    66,026
    
    
    $
    63,669
    
    
    $
    2,357Percentage of total
net sales
    
    
    19.6
    %
    
    
    17.3
    %
    
    
    
    
    
    
    18.2
    %
    
    
    17.4
    %
   Amortization of Acquired Intangibles Assets
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentage)
    
    2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeAmortization of
acquired intangible
assets
    
    $
    2,970
    
    
    $
    5,912
    
    
    $
    (2,942
    )
    
    $
    13,898
    
    
    $
    14,461
    
    
    $
    (563
    )Percentage of total
net sales
    
    
    2.8
    %
    
    
    4.7
    %
    
    
    
    
    
    
    3.8
    %
    
    
    4.0
    %
  Restructuring Charges
  Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentage)
    
    2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeRestructuring charges
    
    $
    38
    
    
    $
    
    
    
    $
    38
    
    
    $
    1,019
    
    
    $
    1,784
    
    
    $
    (765
    )Percentage of total net sales
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    
    
    
    
    0.3
    %
    
    
    0.5
    %
 37




---



##### Table of Contents



Severance and
    
    
    ExcessBenefits
    
    
    Facilities
    
    
    TotalBalance, March 31, 2007
    
    $
    
    
    
    $
    788
    
    
    $
    788Reclassification
from other
long-term liability
    
    
    
    
    
    
    41
    
    
    $
    41Additional accruals
    
    
    629
    
    
    
    391
    
    
    
    1,020Non-cash related
utilization
    
    
    
    
    
    
    (106
    )
    
    
    (106
    )Amounts paid in cash
    
    
    (623
    )
    
    
    (841
    )
    
    
    (1,464
    )Foreign currency
translation
    
    
    
    
    
    
    4
    
    
    
    4Balance, December 31,
2007
    
    $
    6
    
    
    $
    277
    
    
    $
    283
 Interest and Other Income (Expense), Net
 Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,(in thousands)
    
    2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    ChangeInterest income
    
    $
    708
    
    
    $
    552
    
    
    $
    156
    
    
    $
    1,769
    
    
    $
    1,828
    
    
    $
    (59
    )Interest expense
    
    
    (2,134
    )
    
    
    (2,678
    )
    
    
    544
    
    
    
    (7,029
    )
    
    
    (6,624
    )
    
    
    (405
    )Write-off of fees
related to early
extinguishment of
debt and early
redemption of
convertible
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,135
    )
    
    
    
    
    
    
    (3,135
    )Other income, net
    
    
    1,855
    
    
    
    800
    
    
    
    1,055
    
    
    
    3,679
    
    
    
    2,596
    
    
    
    1,083Interest and other
income (expense),
net
    
    $
    429
    
    
    $
    (1,326
    )
    
    $
    1,755
    
    
    $
    (4,716
    )
    
    $
    (2,200
    )
    
    $
    (2,516
    )
   3 4
 38




---



##### Table of Contents



Income Taxes
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentage)
    
    2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeBenefit from (provision for)
income taxes
    
    $
    562
    
    
    $
    (1,569
    )
    
    $
    2,131
    
    
    $
    1,203
    
    
    $
    (7,661
    )
    
    $
    8,864Percentage of total net sales
    
    
    0.5
    %
    
    
    -1.2
    %
    
    
    
    
    
    
    0.3
    %
    
    
    -2.1
    %
       39




---



##### Table of Contents



Liquidity and Capital Resources
   Nine Months EndedDecember 31,(in thousands)
    
    2007
    
    2006Net cash provided by operating activities
    
    $
    8,709
    
    
    $
    44,538Net cash used in investing activities
    
    
    (6,214
    )
    
    
    (96,397
    )Net cash (used in) provided by financing
activities
    
    
    (24,642
    )
    
    
    56,041
 Cash Flows from Operating Activities
  Net loss
    
    $
    (794
    )Depreciation and amortization
    
    
    19,335Amortization of deferred financing costs
    
    
    990Stock-based compensation expense
    
    
    5,177Write-off of fees related to early extinguishment of debt
    
    
    2,431Deferred taxes, net
    
    
    (5,924
    )Other non-cash charges
    
    
    (1,512
    )Decrease in accounts receivable
    
    
    1,250Decrease in inventories
    
    
    20,633Decrease in prepaid expenses and other assets
    
    
    8,362Decrease in accounts payable, accrued liabilities and
deferred margin
    
    
    (41,239
    )Net cash provided by operating activities
    
    $
    8,709
  40




---



##### Table of Contents



Cash Flows from Investing Activities
   Cash Flows from Financing Activities
   Credit Facility
  41




---



##### Table of Contents



Convertible Subordinated Notes
 3 4
 Other Debt Financing Arrangements
   42




---



##### Table of Contents



Acquisition and Related Debt Financing Facility
    Other Liquidity Considerations
    43




---



##### Table of Contents



Recent Accounting Pronouncements
 Fair Value Measurements
 The Fair Value Option for Financial Assets
and Financial Liabilities
 Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research
and Development Activities
 Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51
 Business Combinations
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk.
 44




---



##### Table of Contents



Foreign Currency Exchange Risk
  Strengthening in
    
    No change in
    
    Weakening inJapanese Yen of
    
    Japanese Yen
    
    Japanese Yen ofX percent
    
    exchange rate
    
    X percent10%
    
    5%
    
    
    
    
    
    5%
    
    10%Net loss for the
nine months ended
December 31, 2007
    
    $
    878
    
    
    $
    (2
    )
    
    $
    (794
    )
    
    $
    (1,510
    )
    
    $
    (2,162
    )
  Accounting for Derivative Instruments and Hedging
Activities .
 
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  45




---



##### Table of Contents



Managements Remediation Initiatives
     46




---



##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
 We have a history of significant losses.
  We continue to need to reduce costs in core areas; significant cost reductions could affect our
existing customer base, profitability and ability to benefit from future upturn in demand for our
products.
  47




---



##### Table of Contents



We face potential risks in connection with our outstanding indebtedness; if we are not able to
comply with the requirements of this debt on a timely basis, our ability to discharge our
obligations under this indebtedness, liquidity and business may be harmed.
  Indebtedness under Credit Agreement with KeyBank
   3 4
   Other Credit Lines
  48




---



##### Table of Contents



49




---



##### Table of Contents



If we need additional financing to meet our working capital needs, to finance capital expenditures
or to fund operations, we may not be able to obtain such financing on terms favorable to us, if at
all.
  We have risk of material losses including attorney fees and expenses in conjunction with ongoing
lawsuits.
 In re Asyst Technologies, Inc. Derivative Litigation Forlenzo v. Schwartz, et al.
    If we continue to fail to achieve and maintain effective disclosure controls and procedures and
internal control over financial reporting on a consolidated basis, our stock price and investor
confidence in our Company could be materially and adversely affected.
  50




---



##### Table of Contents



Our global operations subject us to risks that may negatively affect our results of operations and
financial condition.
  
    
    security concerns, such as armed conflict and civil or military unrest, crime, political
instability, and terrorist activity;
    
    trade restrictions; compliance with extensive foreign and U.S. export laws;
    
    natural disasters;
    
    inability to enforce payment obligations or legal protections accorded creditors to the
same extent within the U.S.;
    
    differing employment practices and labor issues;
    
    local business and cultural factors that differ from our normal standards and practices;
    
    regulatory requirements and prohibitions that differ between jurisdictions;
    
    restrictions on our operations by governments seeking to support local industries,
nationalization of our operations, and restrictions on our ability to repatriate earnings;
and/or
    
    the laws of certain foreign countries may not protect our intellectual property to the
same extent as do the laws of the United States.
   51




---



##### Table of Contents



Fluctuations in the demand for and mix of products sold may adversely affect our financial
results.
  
    
    competitive pressures from companies that have competing products;
    
    changes in customer product needs;
    
    changes in business and economic conditions, including a downturn in the semiconductor
industry;
    
    strategic actions taken by our competitors; and/or
    
    market acceptance of our products.
  Most of our Fab Automation Product manufacturing is outsourced to a single contract manufacturer,
which could disrupt the availability of our Fab Automation Products and adversely affect our gross
margins.
     52




---



##### Table of Contents



Shortages of components necessary for product assembly by Flextronics or us can delay shipments to
our customers and can lead to increased costs, which may negatively impact our financial results.
  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.
  We operate in an intensely competitive industry, and our failure to respond quickly to
technological developments and introduce new products and features could have an adverse effect on
our ability to compete.
  We may be unable to protect our intellectual property rights and we may become involved in
litigation concerning the intellectual property rights of others.
   53




---



##### Table of Contents



Our results of operations could vary as a result of the methods, estimates, and judgments we use
in applying our accounting policies.
  Changes in our effective tax rate may have an adverse effect on our results of operations.
  
    
    the jurisdictions in which profits are determined to be earned and taxed;
    
    the resolution of issues arising from tax audits with various tax authorities;
    
    changes in the valuation of our deferred tax assets and liabilities;
    
    adjustments to estimated taxes upon finalization of various tax returns;
    
    changes in share-based compensation expense;
    
    changes in tax laws or the interpretation of such tax laws and changes in generally
accepted accounting principles; and/or
    
    the repatriation of non-U.S. earnings for which we have not previously provided for U.S.
taxes.
 54




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##### Table of Contents



We may not be able to integrate efficiently the operations of our acquisitions, and may incur
substantial losses in the divestiture of assets or operations.
  We could experience unexpected turnover in our finance department, and this could have an adverse
impact on our business; In order to compete, we must attract, retain, and motivate key employees
Company wide, and our failure to do so could have an adverse effect on our results of operations.
    Risks Related to Our Industry
 The semiconductor manufacturing equipment industry is highly cyclical and is affected by recurring
downturns in the semiconductor industry, and these cycles can harm our operating results.
  55




---



##### Table of Contents



We may not effectively compete in a highly competitive semiconductor manufacturing equipment
industry.
     
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Exhibit Description
    
    Incorporated by Reference
    
    
    
    FiledForm
    
    Ex. No.
    
    File No.
    
    Filing Date
    
    Herewith3.1
    
    Amended and Restated Articles of
Incorporation of the Company.
    
    S-1
    
    
    3.1
    
    
    333-66184
    
    7/19/19933.2
    
    Bylaws of the Company.
    
    8-K
    
    
    3.2
    
    
    000-22470
    
    10/16/20073.3
    
    Certificate of Amendment of the
Amended and Restated Articles of
Incorporation, filed September 24,
1999.
    
    10-Q
    
    
    3.2
    
    
    000-22430
    
    10/21/19993.4
    
    Certificate of Amendment of the
Amended and Restated Articles of
Incorporation, filed October 5, 2000.
    
    DEF 14A
    
    App.
    
    000-22430
    
    7/31/20004.1
    
    Rights Agreement among the Company and
Bank of Boston, N.A., as Rights Agent,
dated June 25, 1998.
    
    8-K
    
    
    
    
    
    000-22430
    
    6/29/1998
 56




---



##### Table of Contents



ExhibitNumber
    
    Exhibit Description
    
    Incorporated by Reference
    
    
    
    FiledForm
    
    Ex. No.
    
    File No.
    
    Filing Date
    
    Herewith4.3
    
    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.
    
    10-Q
    
    
    4.3
    
    
    000-22430
    
    8/14/200110.56 *
    
    Form of Change in Control Agreement
entered into between the Company and
certain executive officers (for
agreements executed after January 1,
2008).
    
    
    
    
    
    
    
    
    
    
    
    X10.57*
    
    Employment Agreement between the
Company and Stephen S. Schwartz dated
as of December 21, 2007.
    
    
    
    
    
    
    
    
    
    
    
    X31.1
    
    Certification of the Chief Executive
Officer required by Rule 13a-14(a).
(pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002).
    
    
    
    
    
    
    
    
    
    
    
    X31.2
    
    Certification of the Chief Financial
Officer required by Rule 13a-14(a).
(pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002).
    
    
    
    
    
    
    
    
    
    
    
    X32.1
    
    Combined Certifications of the Chief
Executive Officer and Chief Financial
Officer required by Rule 13a-14(b).
(pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002).
    
    
    
    
    
    
    
    
    
    
    
    X
 
 *
    
    Indicates a management contract or compensatory plan or arrangement 57




---



##### Table of Contents



ASYST TECHNOLOGIES, INC.Date: February 1, 2008
    By:

/S/ MICHAEL A. SICUROMichael A. SicuroChief Financial OfficerBy:

/S/ AARON L. TACHIBANAAaron L. TachibanaPrincipal Accounting Officer 58




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber
    
    Exhibit Description
    
    Incorporated by Reference
    
    
    
    FiledForm
    
    Ex. No.
    
    File No.
    
    Filing Date
    
    Herewith3.1
    
    Amended and Restated Articles of
Incorporation of the Company.
    
    S-1
    
    
    3.1
    
    
    333-66184
    
    7/19/19933.2
    
    Bylaws of the Company.
    
    8-K
    
    
    3.2
    
    
    000-22470
    
    10/16/20073.3
    
    Certificate of Amendment of the
Amended and Restated Articles of
Incorporation, filed September 24,
1999.
    
    10-Q
    
    
    3.2
    
    
    000-22430
    
    10/21/19993.4
    
    Certificate of Amendment of the
Amended and Restated Articles of
Incorporation, filed October 5, 2000.
    
    DEF 14A
    
    App.
    
    000-22430
    
    7/31/20004.1
    
    Rights Agreement among the Company and
Bank of Boston, N.A., as Rights Agent,
dated June 25, 1998.
    
    8-K
    
    
    99.2
    
    
    000-22430
    
    6/29/19984.3
    
    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.
    
    10-Q
    
    
    4.3
    
    
    000-22430
    
    8/14/200110.56 *
    
    Form of Change in Control Agreement
entered into between the Company and
certain executive officers (for
agreements executed after January 1,
2008).
    
    
    
    
    
    
    
    
    
    
    
    X10.57*
    
    Employment Agreement between the
Company and Stephen S. Schwartz dated
as of December 21, 2007.
    
    
    
    
    
    
    
    
    
    
    
    X31.1
    
    Certification of the Chief Executive
Officer required by Rule 13a-14(a).
(pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002).
    
    
    
    
    
    
    
    
    
    
    
    X31.2
    
    Certification of the Chief Financial
Officer required by Rule 13a-14(a).
(pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002).
    
    
    
    
    
    
    
    
    
    
    
    X32.1
    
    Combined Certifications of the Chief
Executive Officer and Chief Financial
Officer required by Rule 13a-14(b).
(pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002).
    
    
    
    
    
    
    
    
    
    
    
    X
 
 *
    
    Indicates a management contract or compensatory plan or arrangement