##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended December 31, 2008
 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
    
    94-2942251(State or other jurisdiction 
of incorporation or organization)
    
    (IRS Employer identification Number)
 46897 Bayside Parkway, Fremont, California 94538
 (510) 661-5000
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o (Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



ASYST TECHNOLOGIES, INC.
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1.Financial Statements (unaudited):
    
    
    3Condensed Consolidated Balance Sheets  December 31, 2008 and March 31, 2008
    
    
    3Condensed Consolidated Statements of Operations  Three and Nine Months Ended December 31, 2008 and
December 31, 2007
    
    
    4Condensed Consolidated Statements of Cash Flows Nine Months Ended December 31, 2008 and December 31, 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    31Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    
    50Item 4.Controls and Procedures
    
    
    51PART II. OTHER INFORMATIONItem 1.Legal Proceedings
    
    
    52Item 1A.Risk Factors
    
    
    52Item 5. Other Information
    
    
    63Item 6.Exhibits
    
    
    64Signatures
    
    
    65Exhibit Index
    
    
    66EXHIBIT 10.59EXHIBIT 10.60EXHIBIT 10.61EXHIBIT 10.62EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  2




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##### Table of Contents



Part I FINANCIAL INFORMATION
 
 ITEM 1 FINANCIAL STATEMENTS
 ASYST TECHNOLOGIES, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  December 31,
    
    
    March 31,2008
    
    
    2008(1)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    76,551
    
    
    $
    95,669Accounts receivable, net
    
    
    92,056
    
    
    
    119,717Inventories
    
    
    33,654
    
    
    
    39,407Deferred income taxes
    
    
    3,171
    
    
    
    2,663Prepaid expenses and other current assets
    
    
    13,933
    
    
    
    16,320Total current assets
    
    
    219,365
    
    
    
    273,776Property and equipment, net
    
    
    30,648
    
    
    
    29,452Goodwill
    
    
    3,397
    
    
    
    98,777Intangible assets, net
    
    
    23,118
    
    
    
    29,271Other assets
    
    
    19,254
    
    
    
    14,377Total assets
    
    $
    295,782
    
    
    $
    445,653LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS (DEFICIT) EQUITYCURRENT LIABILITIES:Short-term loans and notes payable
    
    $
    75,277
    
    
    $
    36,167Current portion of long-term debt and capital leases (2)
    
    
    81,820
    
    
    
    7,011Accounts payable
    
    
    82,132
    
    
    
    94,666Accrued and other liabilities
    
    
    70,712
    
    
    
    77,303Deferred margin
    
    
    5,423
    
    
    
    5,844Total current liabilities
    
    
    315,364
    
    
    
    220,991LONG-TERM LIABILITIES:Long-term debt and capital leases, net of current portion (2)
    
    
    1,897
    
    
    
    112,667Deferred tax liability
    
    
    826
    
    
    
    2,833Other long-term liabilities
    
    
    19,799
    
    
    
    21,428Total long-term liabilities
    
    
    22,522
    
    
    
    136,928COMMITMENTS AND CONTINGENCIES (see Note 17)MINORITY INTEREST
    
    
    117
    
    
    
    134SHAREHOLDERS (DEFICIT) EQUITY:Common stock, no par value:Authorized shares  300,000,000; Issued and Outstanding shares  50,667,669 and
50,045,235 shares at
December 31, 2008 and March 31, 2008, respectively
    
    
    494,672
    
    
    
    490,283Accumulated deficit
    
    
    (518,358
    )
    
    
    (400,496
    )Accumulated other comprehensive loss
    
    
    (18,535
    )
    
    
    (2,187
    )Total shareholders (deficit) equity
    
    
    (42,221
    )
    
    
    87,600Total liabilities, minority interest and shareholders (deficit) equity
    
    $
    295,782
    
    
    $
    445,653
 
 (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.(2)
    
    In accordance with EITF No. 86-30, Classification of Obligations When a Violation is Waived
by a Creditor, we reclassified the long-term portion of our KeyBank National Association
credit facility as current. However, this reclassification did not change or
accelerate the repayment schedule or maturity of the credit facility (which currently matures
July 2012). See Note 14, Debt, for further details. 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 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    82,983
    
    
    $
    106,475
    
    
    $
    278,442
    
    
    $
    362,931Cost of sales
    
    
    56,867
    
    
    
    73,914
    
    
    
    202,641
    
    
    
    251,344Gross profit
    
    
    26,116
    
    
    
    32,561
    
    
    
    75,801
    
    
    
    111,587Operating expenses:Research and development
    
    
    8,615
    
    
    
    10,526
    
    
    
    29,383
    
    
    
    27,900Selling, general and administrative
    
    
    18,321
    
    
    
    20,873
    
    
    
    57,906
    
    
    
    66,026Amortization of acquired intangible assets
    
    
    1,299
    
    
    
    2,970
    
    
    
    7,550
    
    
    
    13,898Goodwill impairment charge
    
    
    
    
    
    
    
    
    
    
    89,431
    
    
    
    Restructuring and other charges
    
    
    2,165
    
    
    
    38
    
    
    
    2,969
    
    
    
    1,019Total operating expenses
    
    
    30,400
    
    
    
    34,407
    
    
    
    187,239
    
    
    
    108,843(Loss) income from operations
    
    
    (4,284
    )
    
    
    (1,846
    )
    
    
    (111,438
    )
    
    
    2,744Interest and other income (expense), net:Interest income
    
    
    105
    
    
    
    708
    
    
    
    548
    
    
    
    1,769Interest expense
    
    
    (2,653
    )
    
    
    (2,134
    )
    
    
    (7,784
    )
    
    
    (7,029
    )Write-off of fees related to early extinguishment
of debt and earlyredemption of convertible securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,135
    )Other income (expense), net
    
    
    (2,783
    )
    
    
    1,855
    
    
    
    (8,021
    )
    
    
    3,679Interest and other income (expense), net
    
    
    (5,331
    )
    
    
    429
    
    
    
    (15,257
    )
    
    
    (4,716
    )Loss before income taxes and minority interest
    
    
    (9,615
    )
    
    
    (1,417
    )
    
    
    (126,695
    )
    
    
    (1,972
    )Benefit from income taxes
    
    
    2,314
    
    
    
    562
    
    
    
    8,845
    
    
    
    1,203Minority interest
    
    
    (6
    )
    
    
    (12
    )
    
    
    (12
    )
    
    
    (25
    )Net loss
    
    $
    (7,307
    )
    
    $
    (867
    )
    
    $
    (117,862
    )
    
    $
    (794
    )Basic net loss per share
    
    $
    (0.14
    )
    
    $
    (0.02
    )
    
    $
    (2.33
    )
    
    $
    (0.02
    )Diluted net loss per share
    
    $
    (0.14
    )
    
    $
    (0.02
    )
    
    $
    (2.33
    )
    
    $
    (0.02
    )Shares used in computing basic net loss per share
    
    
    50,669
    
    
    
    49,750
    
    
    
    50,516
    
    
    
    49,622Shares used in computing diluted net loss per share
    
    
    50,669
    
    
    
    49,750
    
    
    
    50,516
    
    
    
    49,622
 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 31,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (117,862
    )
    
    $
    (794
    )Adjustments to reconcile net loss to net cash (used in) provided by operating activities:Depreciation and amortization
    
    
    13,598
    
    
    
    19,335Amortization of deferred financing costs
    
    
    836
    
    
    
    990Goodwill impairment charge
    
    
    89,431
    
    
    
    Allowance for doubtful accounts
    
    
    (880
    )
    
    
    (1,995
    )Unrealized foreign exchange transaction losses
    
    
    4,363
    
    
    
    739Minority interest in net income in consolidated subsidiary
    
    
    12
    
    
    
    25(Gain) loss on disposal of fixed assets
    
    
    (26
    )
    
    
    81Write-off of fees related to early extinguishment of debt
    
    
    
    
    
    
    2,431Write-off of fees related to the amendment of a credit facility
    
    
    954
    
    
    
    Share-based compensation expense
    
    
    4,438
    
    
    
    5,177Non-cash restructuring charges
    
    
    101
    
    
    
    106Amortization of lease incentive payments
    
    
    (468
    )
    
    
    (468
    )Deferred taxes, net
    
    
    (7,936
    )
    
    
    (5,924
    )Changes in assets and liabilities:Accounts receivable
    
    
    28,702
    
    
    
    1,250Inventories
    
    
    7,458
    
    
    
    20,633Prepaid expenses and other assets
    
    
    2,990
    
    
    
    8,362Accounts payable, accrued and other liabilities and deferred margin
    
    
    (28,308
    )
    
    
    (41,239
    )Net cash (used in) provided by operating activities
    
    
    (2,597
    )
    
    
    8,709CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment, net of sales
    
    
    (6,489
    )
    
    
    (6,214
    )Net cash used in investing activities
    
    
    (6,489
    )
    
    
    (6,214
    )CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from lines of credit, net
    
    
    30,917
    
    
    
    25,241Principal payments on debt and capital leases
    
    
    (45,607
    )
    
    
    (170,336
    )Proceeds from long-term debt
    
    
    2,833
    
    
    
    122,954Payment of financing fees
    
    
    (1,189
    )
    
    
    (3,824
    )Proceeds from issuance of common stock
    
    
    528
    
    
    
    1,508Repurchase of common stock on net settlement of stock awards
    
    
    (458
    )
    
    
    (185
    )Net cash used in financing activities
    
    
    (12,976
    )
    
    
    (24,642
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    2,944
    
    
    
    490DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (19,118
    )
    
    
    (21,657
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    95,669
    
    
    
    99,701CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    76,551
    
    
    $
    78,044
 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
   Majority Owners Accounting for a Transaction in the Shares of a Consolidated Subsidiary and
a Derivative Indexed to the Minority Interest in That Subsidiary
   6




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2. RECENT ACCOUNTING PRONOUNCEMENTS
 Noncontrolling Interests in Consolidated
Financial Statements-an amendment of ARB No. 51
 Business Combinations
 Effective Date of FASB Statement
No. 157
 Disclosures about Derivative Instruments and
Hedging Activities Accounting for Derivative Instruments and Hedging Activities,
 Determination of the Useful Life of
Intangible Assets
 The Hierarchy of Generally Accepted Accounting
Principles
 7




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The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles.
 Accounting by Lessees for Nonrefundable
Maintenance Deposits
 Accounting for Equity Method Investment
Considerations
 Accounting for Defensive Intangible
Assets
 Employers Disclosures about
Postretirement Benefit Plan Assets
 3. LIQUIDITY
    Classification
of Obligations When a Violation is Waived by a Creditor
  8




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4. SIGNIFICANT ACCOUNTING POLICIES
 Intangible Assets, net
   9




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Accounting Changes and Error Corrections
 Accounting for the Impairment of Long-Lived Assets to be Disposed of
 5. COMPREHENSIVE INCOME (LOSS)
  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net loss, as reported
    
    $
    (7,307
    )
    
    $
    (867
    )
    
    $
    (117,862
    )
    
    $
    (794
    )Net change in foreign currency translation adjustment
    
    
    (14,247
    )
    
    
    (168
    )
    
    
    (16,393
    )
    
    
    (39
    )Net change in unrealized losses on investments
    
    
    (11
    )
    
    
    
    
    
    
    (30
    )
    
    
    (15
    )Net change in actuarial losses and prior service cost of defined benefit plans
    
    
    26
    
    
    
    
    
    
    
    75
    
    
    
    Comprehensive loss
    
    $
    (21,539
    )
    
    $
    (1,035
    )
    
    $
    (134,210
    )
    
    $
    (848
    )
 6. NET INCOME (LOSS) PER SHARE
  10




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Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator:Net loss
    
    $
    (7,307
    )
    
    $
    (867
    )
    
    $
    (117,862
    )
    
    $
    (794
    )Denominator:Weighted average common shares
outstanding, excluding unvested
restricted stock units
    
    
    50,669
    
    
    
    49,750
    
    
    
    50,516
    
    
    
    49,622Denominator for basic net loss per share
    
    
    50,669
    
    
    
    49,750
    
    
    
    50,516
    
    
    
    49,622Effect of dilutive employee stock options
and restricted stock units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Denominator for diluted net loss per share
    
    
    50,669
    
    
    
    49,750
    
    
    
    50,516
    
    
    
    49,622Net loss per share  basic
    
    $
    (0.14
    )
    
    $
    (0.02
    )
    
    $
    (2.33
    )
    
    $
    (0.02
    )Net loss per share  diluted
    
    $
    (0.14
    )
    
    $
    (0.02
    )
    
    $
    (2.33
    )
    
    $
    (0.02
    )
  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Restricted stock awards and stock units
    
    
    3,428
    
    
    
    2,547
    
    
    
    3,428
    
    
    
    2,547Stock options
    
    
    4,233
    
    
    
    5,048
    
    
    
    4,233
    
    
    
    5,048ESPP
    
    
    
    
    
    
    105
    
    
    
    
    
    
    
    105Total
    
    
    7,661
    
    
    
    7,700
    
    
    
    7,661
    
    
    
    7,700
 7. DERIVATIVE FINANCIAL INSTRUMENTS
  Accounting for
Derivative Instruments and Hedging Activities
  8. BALANCE SHEET COMPONENTS
 Cash and Cash Equivalents
  11




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Accounts Receivable, net of allowance for doubtful accounts
  December 31,
    
    
    March 31,2008
    
    
    2008Trade receivables
    
    $
    29,986
    
    
    $
    74,488Trade receivables-related party
    
    
    18
    
    
    
    26Unbilled receivables
    
    
    63,252
    
    
    
    47,403Less: Allowance for doubtful accounts
    
    
    (1,200
    )
    
    
    (2,200
    )Total
    
    $
    92,056
    
    
    $
    119,717
    Inventories
  December 31,
    
    
    March 31,2008
    
    
    2008Raw materials
    
    $
    12,328
    
    
    $
    12,938Work-in-process
    
    
    20,478
    
    
    
    23,765Finished goods
    
    
    848
    
    
    
    2,704Total
    
    $
    33,654
    
    
    $
    39,407
   12




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Goodwill
  Fab Automation
    
    
    AMHS
    
    
    TotalBalances at March 31, 2008
    
    $
    3,397
    
    
    $
    95,380
    
    
    $
    98,777Foreign currency translation
    
    
    
    
    
    
    (5,949
    )
    
    
    (5,949
    )Goodwill impairment charge
    
    
    
    
    
    
    (89,431
    )
    
    
    (89,431
    )Balances at December 31, 2008
    
    $
    3,397
    
    
    $
    
    
    
    $
    3,397
 Goodwill and Other Intangible Assets
   13




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Intangible Assets
  December 31, 2008
    
    
    March 31, 2008Gross
    
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    
    
    
    
    Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Net
    
    
    Amount
    
    
    Amortization
    
    
    NetAmortizable intangible assets:Developed technology
    
    $
    102,304
    
    
    $
    86,166
    
    
    $
    16,138
    
    
    $
    94,188
    
    
    $
    75,963
    
    
    $
    18,225Customer base and other
intangible assets
    
    
    65,477
    
    
    
    59,389
    
    
    
    6,088
    
    
    
    60,708
    
    
    
    50,792
    
    
    
    9,916Licenses and patents
    
    
    5,304
    
    
    
    4,412
    
    
    
    892
    
    
    
    5,302
    
    
    
    4,172
    
    
    
    1,130Total
    
    $
    173,085
    
    
    $
    149,967
    
    
    $
    23,118
    
    
    $
    160,198
    
    
    $
    130,927
    
    
    $
    29,271
    14




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Fiscal Year ending March 31,Remainder of 2009
    
    $
    1,5122010
    
    
    5,3752011
    
    
    5,0382012
    
    
    4,8452013 and thereafter
    
    
    6,348Total
    
    $
    23,118
 Accrued and other liabilities
  December 31,
    
    
    March 31,2008
    
    
    2008Customer deposits
    
    $
    14,211
    
    
    $
    11,072Payable to Shinko for 4.9% share in ATJ
    
    
    14,383
    
    
    
    13,093Warranty
    
    
    11,957
    
    
    
    12,505Employee compensation
    
    
    10,797
    
    
    
    17,781Deferred tax liability
    
    
    1,611
    
    
    
    1,586Income taxes payable
    
    
    1,361
    
    
    
    2,986Other taxes payable
    
    
    765
    
    
    
    1,381Other accrued expenses
    
    
    15,627
    
    
    
    16,899Total
    
    $
    70,712
    
    
    $
    77,303
 Warranty Accrual
  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Beginning balance
    
    $
    10,935
    
    
    $
    10,972
    
    
    $
    12,505
    
    
    $
    11,982Accruals
    
    
    3,289
    
    
    
    1,846
    
    
    
    9,474
    
    
    
    7,412Settlements
    
    
    (3,737
    )
    
    
    (1,837
    )
    
    
    (10,868
    )
    
    
    (7,135
    )Foreign currency
translation
    
    
    1,470
    
    
    
    184
    
    
    
    846
    
    
    
    (1,094
    )Ending balance
    
    $
    11,957
    
    
    $
    11,165
    
    
    $
    11,957
    
    
    $
    11,165
 9. SHARE-BASED COMPENSATION
 Stock Options Plans
  15




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16




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Weighted-Average
    
    
    AggregateTotal Number
    
    
    Weighted-Average
    
    
    Remaining
    
    
    Intrinsic Value (1)of Shares
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    (in thousands)Options outstanding as of March 31, 2008
    
    
    4,783,836
    
    
    $
    9.98Granted
    
    
    
    
    
    
    Exercised
    
    
    (101,217
    )
    
    
    3.42Cancelled
    
    
    (450,069
    )
    
    
    8.97Options outstanding as of December 31, 2008
    
    
    4,232,550
    
    
    
    10.24
    
    
    
    3.19
    
    
    $
    Options vested and expected to vest at
December 31, 2008
    
    
    4,204,382
    
    
    
    10.28
    
    
    
    3.20
    
    
    $
    Exercisable as of December 31, 2008
    
    
    4,114,437
    
    
    $
    10.34
    
    
    
    3.20
    
    
    $
    
 
 (1)
    
    These amounts represent the difference between the exercise price and $0.25, the closing
price of Asyst stock on December 31, 2008, as reported on The NASDAQ Global Market, for all
in-the-money options outstanding.  Restricted Stock Awards and Restricted Stock Units
  Weighted AverageNumber of
    
    
    Grant-DateShares
    
    
    Fair ValueOutstanding at March 31, 2008
    
    
    2,465,930
    
    
    $
    6.58Granted
    
    
    2,244,277
    
    
    
    3.47Vested
    
    
    (571,754
    )
    
    
    3.36Cancelled
    
    
    (710,515
    )
    
    
    5.48Outstanding at December 31, 2008
    
    
    3,427,938
    
    
    $
    5.31
  Stock Option Awards and Restricted Stock Units (RSUs) with Market and Performance Conditions
  17




---



##### Table of Contents



Market Condition Awards and Options
  WeightedAverageWeighted
    
    
    ContractualNumber of
    
    
    Average
    
    
    TermShares
    
    
    Grant Date Fair Value
    
    
    (Years)Outstanding at March 31, 2008
    
    
    230,666
    
    
    $
    2.23Awards granted
    
    
    
    
    
    
    Awards vested
    
    
    (27,500
    )
    
    
    0.64Awards cancelled
    
    
    (63,406
    )
    
    
    1.91Outstanding at December 31, 2008
    
    
    139,760
    
    
    $
    2.69
    
    
    
    0.39
 Performance Condition Awards and Options
  WeightedAverageWeighted
    
    
    ContractualNumber of
    
    
    Average
    
    
    TermShares
    
    
    Grant Date Fair Value
    
    
    (Years)Outstanding at March 31, 2008
    
    
    410,330
    
    
    $
    7.18Awards granted
    
    
    949,898
    
    
    
    3.65Awards cancelled
    
    
    (211,830
    )
    
    
    5.04Outstanding at December 31,
2008
    
    
    1,148,398
    
    
    $
    4.65
    
    
    
    2.71
  Employee Stock Purchase Plan
  18




---



##### Table of Contents



Share-Based Compensation Expense
   Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Share-based compensation expense
by category:Cost of sales
    
    $
    144
    
    
    $
    160
    
    
    $
    481
    
    
    $
    495Research and development
    
    
    172
    
    
    
    204
    
    
    
    554
    
    
    
    617Selling, general and administrative
    
    
    1,257
    
    
    
    1,189
    
    
    
    3,403
    
    
    
    4,065Total share-based compensation
expense
    
    $
    1,573
    
    
    $
    1,553
    
    
    $
    4,438
    
    
    $
    5,177
  10. PENSION BENEFIT PLANS
  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    357
    
    
    $
    299
    
    
    $
    1,038
    
    
    $
    863Interest cost
    
    
    92
    
    
    
    103
    
    
    
    266
    
    
    
    297Expected return on plan assets
    
    
    (84
    )
    
    
    (107
    )
    
    
    (243
    )
    
    
    (308
    )Amortization of prior service
cost
    
    
    6
    
    
    
    (1
    )
    
    
    17
    
    
    
    (4
    )Amortization of actuarial
losses
    
    
    (4
    )
    
    
    5
    
    
    
    (11
    )
    
    
    15Net periodic benefit cost
    
    $
    367
    
    
    $
    299
    
    
    $
    1,067
    
    
    $
    863
 Employer Contributions
  19




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##### Table of Contents



11. INCOME TAXES
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,2008
    
    2007
    
    2008
    
    2007Benefit from income taxes
    
    $
    2,314
    
    
    $
    562
    
    
    $
    8,845
    
    
    $
    1,203
        20




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##### Table of Contents



12. RESTRUCTURING CHARGES
  Severance and
    
    
    ExcessBenefits
    
    
    Facilities
    
    
    TotalBalance at March 31, 2008
    
    $
    387
    
    
    $
    154
    
    
    $
    541Reclassification from other
long-term liability
    
    
    
    
    
    
    65
    
    
    
    65Additional accruals
    
    
    2,736
    
    
    
    233
    
    
    
    2,969Non-cash related utilization
    
    
    
    
    
    
    (101
    )
    
    
    (101
    )Amounts paid in cash
    
    
    (2,484
    )
    
    
    (285
    )
    
    
    (2,769
    )Foreign currency translation
    
    
    (14
    )
    
    
    (7
    )
    
    
    (21
    )Balance at December 31, 2008
    
    $
    625
    
    
    $
    59
    
    
    $
    684
    Severance and
    
    
    ExcessBenefits
    
    
    Facilities
    
    
    TotalBalance at March 31, 2007
    
    $
    
    
    
    $
    788
    
    
    $
    788Reclassification from other
long-term liability
    
    
    
    
    
    
    41
    
    
    
    41Additional accruals
    
    
    629
    
    
    
    390
    
    
    
    1,019Non-cash related utilization
    
    
    
    
    
    
    (106
    )
    
    
    (106
    )Amounts paid in cash
    
    
    (623
    )
    
    
    (841
    )
    
    
    (1,464
    )Foreign Currency Translation
    
    
    
    
    
    
    4
    
    
    
    4Balance at December 31, 2007
    
    $
    6
    
    
    $
    276
    
    
    $
    282
  21




---



##### Table of Contents



13. REPORTABLE SEGMENTS
 Disclosures about
Segments of an Enterprise and Related Information
  
    
    Automated Material Handling Systems (AMHS).This segment derives revenues from the sale
of products and services for automated transport and loading systems for semiconductor fabs
and flat panel display manufacturers.
    
    Fab Automation Products.This segment derives revenues from the sale of products and
services for interface products, substrate-handling robotics, Auto-ID systems, sorters,
EFEMs and connectivity software.
   22




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007AMHS:Net sales
    
    $
    67,615
    
    
    $
    68,441
    
    
    $
    205,302
    
    
    $
    230,977Cost of Sales
    
    
    46,690
    
    
    
    52,308
    
    
    
    158,812
    
    
    
    177,171Gross Profit
    
    $
    20,925
    
    
    $
    16,133
    
    
    $
    46,490
    
    
    $
    53,806(Loss) income from operations
    
    $
    4,983
    
    
    $
    (856
    )
    
    $
    (93,294
    )
    
    $
    (706
    )Fixed assets additions
    
    $
    1,548
    
    
    $
    1,552
    
    
    $
    3,784
    
    
    $
    3,646Amortization and Depreciation
    
    $
    2,543
    
    
    $
    3,831
    
    
    $
    10,736
    
    
    $
    15,931Fab Automation Products:Net sales
    
    $
    15,368
    
    
    $
    38,034
    
    
    $
    73,140
    
    
    $
    131,954Cost of Sales
    
    
    10,177
    
    
    
    21,606
    
    
    
    43,829
    
    
    
    74,173Gross Profit
    
    $
    5,191
    
    
    $
    16,428
    
    
    $
    29,311
    
    
    $
    57,781(Loss) income from operations
    
    $
    (9,267
    )
    
    $
    (990
    )
    
    $
    (18,144
    )
    
    $
    3,450Fixed assets additions
    
    $
    209
    
    
    $
    567
    
    
    $
    1,459
    
    
    $
    1,778Amortization and Depreciation
    
    $
    1,199
    
    
    $
    1,326
    
    
    $
    3,698
    
    
    $
    4,394Consolidated:Net sales
    
    $
    82,983
    
    
    $
    106,475
    
    
    $
    278,442
    
    
    $
    362,931Cost of Sales
    
    
    56,867
    
    
    
    73,914
    
    
    
    202,641
    
    
    
    251,344Gross Profit
    
    $
    26,116
    
    
    $
    32,561
    
    
    $
    75,801
    
    
    $
    111,587(Loss) income from operations
    
    $
    (4,284
    )
    
    $
    (1,846
    )
    
    $
    (111,438
    )
    
    $
    2,744Fixed assets additions
    
    $
    1,757
    
    
    $
    2,119
    
    
    $
    5,243
    
    
    $
    5,424Amortization and Depreciation
    
    $
    3,742
    
    
    $
    5,157
    
    
    $
    14,434
    
    
    $
    20,325
   Net Revenue
    
    
    
    
    
    Accounts ReceivableThree Months Ended
    
    Nine Months Ended
    
    As ofDecember 31,
    
    December 31,
    
    December 31,
    
    March 31,2008
    
    2007
    
    2008
    
    2007
    
    2008
    
    2008Customer A
    
    
    
    *
    
    
    23.7
    %
    
    
    21.5
    %
    
    
    21.9
    %
    
    
    23.2
    %
    
    
    22.5
    %Customer B
    
    
    
    *
    
    
    
    *
    
    
    15.2
    %
    
    
    
    *
    
    
    12.6
    %
    
    
    
    *Customer C
    
    
    28.9
    %
    
    
    
    *
    
    
    15.5
    %
    
    
    10.1
    %
    
    
    
    *
    
    
    
    *
 
 *
    
    Less than 10% 23




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##### Table of Contents



14. DEBT
  December 31,
    
    
    March 31,2008
    
    
    2008Short-term loans
    
    $
    73,354
    
    
    $
    35,250Long-term loans
    
    
    83,644
    
    
    
    119,475Capital leases
    
    
    73
    
    
    
    203Total debt and capital leases
    
    
    83,717
    
    
    
    119,678Less: Current portion of long-term debt and capital
leases (1)
    
    
    (81,820
    )
    
    
    (7,011
    )Long-term debt and capital leases, net of current portion
    
    $
    1,897
    
    
    $
    112,667
 
 (1)
    
    After giving effect to recent amendments, we were in compliance with our debt covenants under
our principal credit facility as of December 31, 2008. Nonetheless, we believe it is probable
that we will need a further amendment or waiver of certain covenants as of March 31, 2009. As
a result, we reclassified the long-term portion of our KeyBank credit facility as current in
accordance with EITF No. 86-30. However, this reclassification did not change or accelerate
the repayment schedule or maturity of the credit facility (which currently matures July 2012).
We intend to initiate discussions with our banks for further amendment or waiver of our
covenants, however there can be no assurance that we will receive amendment or waiver.  Fiscal Year Ending March 31,
    
    AmountRemainder of 2009
    
    $
    2,9472010
    
    
    22,5192011
    
    
    21,4172012
    
    
    29,4172013 and thereafter
    
    
    7,417Total
    
    $
    83,717
 Credit Facility
  Debtors Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements
 24




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##### Table of Contents



25




---



##### Table of Contents



Other Debt Financing Arrangements
   26




---



##### Table of Contents



15. FAIR VALUE MEASUREMENTS
 Fair Value Measurements,
 Fair Value Measurements at December 31, 2008Quoted Prices inActive Markets for
    
    
    Significant Other
    
    
    SignificantIdentical Assets
    
    
    Observable Inputs
    
    
    Unobservable Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalAssetsCash and cash equivalents
money market funds
    
    $
    1,689
    
    
    $
    
    
    
    $
    
    
    
    $
    1,689Total
    
    $
    1,689
    
    
    $
    
    
    
    $
    
    
    
    $
    1,689
  The Fair Value Option for Financial Assets and Financial Liabilities
- Including an Amendment of FASB Statement No. 115
  16. RELATED-PARTY TRANSACTIONS
  27




---



##### Table of Contents



December 31,
    
    March 31,2008
    
    2008Accounts receivable from MECS Korea
    
    $
    18
    
    
    $
    26Accounts payable due to MECS Korea
    
    
    19
    
    
    
    67Accrued liabilities due to MECS Korea
    
    
    
    
    
    
    6
  Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,2008
    
    2007
    
    2008
    
    2007Sales to MECS Korea
    
    $
    16
    
    
    $
    33
    
    
    
    28
    
    
    $
    57Purchases from MECS Korea
    
    
    20
    
    
    
    192
    
    
    
    200
    
    
    
    459
 17. COMMITMENTS AND CONTINGENCIES
 Lease Commitments
  Fiscal Year Ending March 31,
    
    Capital Lease
    
    
    Operating Lease
    
    
    TotalRemainder of 2009
    
    $
    50
    
    
    $
    1,726
    
    
    $
    1,7762010
    
    
    10
    
    
    
    4,746
    
    
    
    4,7562011
    
    
    10
    
    
    
    2,403
    
    
    
    2,4132012
    
    
    4
    
    
    
    1,489
    
    
    
    1,4932013 and thereafter
    
    
    1
    
    
    
    1,354
    
    
    
    1,355Total
    
    
    75
    
    
    $
    11,718
    
    
    $
    11,793Less: interest
    
    
    (2
    )Present value of minimum lease payments
    
    
    73Less: current portion of capital leases
    
    
    (57
    )Capital leases, net of current portion
    
    $
    16
  Purchase Commitments
  28




---



##### Table of Contents



Legal Contingencies
 Our Patent Infringement Action against Jenoptik AG
       Daifukus Patent Infringement Action Against Us
  29




---



##### Table of Contents



Derivative Action filed Against Current and Former Directors & Officers Relating to Past Stock
Option Grants & Practices
  Other Matters
  Indemnifications
   30




---



##### Table of Contents



18. SUBSEQUENT EVENTS
   
 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 publicly to 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, 2008
   Overview
  31




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##### Table of Contents




    
    The use of larger diameter silicon wafers, which require automated handling because of
ergonomic issues and increased yield risk.
    
    The use of larger size glass panels for the manufacturing of FPDs, which require
automated handling because of the extreme bulk and weight of the panels.
    
    Continuing decreases in semiconductor device line widths, which require higher levels of
cleanliness in the manufacturing process.
    
    Increasingly complex semiconductor devices, which require more process steps and thus
greater transportation and tool loading capabilities and higher throughput.
    
    Continuing customer requirements for enhanced manufacturing control, productivity and
return on capital.
  Our Operating Segments
  
    
    AMHS.This segment derives revenues from the sale of products and services for automated
transport and loading systems for semiconductor fabs and flat panel display manufacturers.
    
    Fab Automation Products.This segment derives revenues from the sale of products and
services for interface products, substrate-handling robotics, Auto-ID systems, sorters,
EFEMs and connectivity software.
    32




---



##### Table of Contents



Status of Material Weakness
  Goodwill Impairment Charge
     Outlook and Liquidity
  Classification of Obligations When a Violation is
Waived by a Creditor
 33




---



##### Table of Contents



Critical Accounting Policies and Estimates
   34




---



##### Table of Contents



Results of Operations for the Three and Nine Months Ended December 31, 2008 and 2007
  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007AMHS:Net sales
    
    $
    67,615
    
    
    $
    68,441
    
    
    $
    205,302
    
    
    $
    230,977Cost of Sales
    
    
    46,690
    
    
    
    52,308
    
    
    
    158,812
    
    
    
    177,171Gross Profit
    
    $
    20,925
    
    
    $
    16,133
    
    
    $
    46,490
    
    
    $
    53,806(Loss) income from operations
    
    $
    4,983
    
    
    $
    (856
    )
    
    $
    (93,294
    )
    
    $
    (706
    )Fab Automation Products:Net sales
    
    $
    15,368
    
    
    $
    38,034
    
    
    $
    73,140
    
    
    $
    131,954Cost of Sales
    
    
    10,177
    
    
    
    21,606
    
    
    
    43,829
    
    
    
    74,173Gross Profit
    
    $
    5,191
    
    
    $
    16,428
    
    
    $
    29,311
    
    
    $
    57,781(Loss) income from operations
    
    $
    (9,267
    )
    
    $
    (990
    )
    
    $
    (18,144
    )
    
    $
    3,450Consolidated:Net sales
    
    $
    82,983
    
    
    $
    106,475
    
    
    $
    278,442
    
    
    $
    362,931Cost of Sales
    
    
    56,867
    
    
    
    73,914
    
    
    
    202,641
    
    
    
    251,344Gross Profit
    
    $
    26,116
    
    
    $
    32,561
    
    
    $
    75,801
    
    
    $
    111,587(Loss) income from operations
    
    $
    (4,284
    )
    
    $
    (1,846
    )
    
    $
    (111,438
    )
    
    $
    2,744
  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007AMHS:Net sales
    
    
    81.5
    %
    
    
    64.3
    %
    
    
    73.7
    %
    
    
    63.6
    %Cost of Sales
    
    
    56.3
    %
    
    
    49.1
    %
    
    
    57.0
    %
    
    
    48.8
    %Gross Profit
    
    
    25.2
    %
    
    
    15.2
    %
    
    
    16.7
    %
    
    
    14.8
    %(Loss) income from operations
    
    
    6.0
    %
    
    
    (0.8
    )%
    
    
    (33.5
    )%
    
    
    (0.2
    )%Fab Automation Products:Net sales
    
    
    18.5
    %
    
    
    35.7
    %
    
    
    26.3
    %
    
    
    36.4
    %Cost of Sales
    
    
    12.3
    %
    
    
    20.3
    %
    
    
    15.7
    %
    
    
    20.4
    %Gross Profit
    
    
    6.3
    %
    
    
    15.4
    %
    
    
    10.5
    %
    
    
    16.0
    %(Loss) income from operations
    
    
    (11.2
    )%
    
    
    (0.9
    )%
    
    
    (6.5
    )%
    
    
    1.0
    %Consolidated:Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of Sales
    
    
    68.5
    %
    
    
    69.4
    %
    
    
    72.8
    %
    
    
    69.3
    %Gross Profit
    
    
    31.5
    %
    
    
    30.6
    %
    
    
    27.2
    %
    
    
    30.7
    %(Loss) income from operations
    
    
    (5.2
    )%
    
    
    (1.7
    )%
    
    
    (40.0
    )%
    
    
    0.8
    %
 35




---



##### Table of Contents



Third Quarter of 2009 Compared to Third Quarter of 2008
 Net Sales
 Consolidated
   AMHS
   Fab Automation
   36




---



##### Table of Contents



First Nine Months of 2009 Compared to First Nine Months of 2008
 Net Sales
 Consolidated
   AMHS
   Fab Automation
   37




---



##### Table of Contents



Comparison of Expenses, Gross Margin, Interest & Other Income, and Income Taxes
  Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    68.5
    %
    
    
    69.4
    %
    
    
    72.8
    %
    
    
    69.3
    %Gross profit
    
    
    31.5
    %
    
    
    30.6
    %
    
    
    27.2
    %
    
    
    30.7
    %Operating expenses:Research and development
    
    
    10.4
    %
    
    
    9.9
    %
    
    
    10.6
    %
    
    
    7.7
    %Selling, general and administrative
    
    
    22.1
    %
    
    
    19.6
    %
    
    
    20.8
    %
    
    
    18.2
    %Amortization of acquired intangible assets
    
    
    1.6
    %
    
    
    2.8
    %
    
    
    2.7
    %
    
    
    3.8
    %Goodwill impairment charge
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    32.1
    %
    
    
    0.0
    %Restructuring and other charges
    
    
    2.6
    %
    
    
    0.0
    %
    
    
    1.1
    %
    
    
    0.3
    %Total operating expenses
    
    
    36.6
    %
    
    
    32.3
    %
    
    
    67.2
    %
    
    
    30.0
    %(Loss) income from operations
    
    
    (5.2
    )%
    
    
    (1.7
    )%
    
    
    (40.0
    )%
    
    
    0.8
    %Interest and other income (expense), net:Interest income
    
    
    0.1
    %
    
    
    0.7
    %
    
    
    0.2
    %
    
    
    0.5
    %Interest expense
    
    
    (3.2
    )%
    
    
    (2.0
    )%
    
    
    (2.8
    )%
    
    
    (1.8
    )%Write-off of fees related to early
extinguishment of debt and early
redemption of convertible securities
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    (0.9
    )%Other expense, net
    
    
    (3.4
    )%
    
    
    1.7
    %
    
    
    (2.9
    )%
    
    
    1.0
    %Interest and other income (expense), net
    
    
    (6.4
    )%
    
    
    0.4
    %
    
    
    (5.5
    )%
    
    
    (1.3
    )%Loss before income taxes and minority
interest
    
    
    (11.6
    )%
    
    
    (1.3
    )%
    
    
    (45.5
    )%
    
    
    (0.5
    )%Benefit from income taxes
    
    
    2.8
    %
    
    
    0.5
    %
    
    
    3.2
    %
    
    
    0.3
    %Minority interest
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Net loss
    
    
    (8.8
    )%
    
    
    (0.8
    )%
    
    
    (42.3
    )%
    
    
    (0.2
    )%
 Third Quarter of 2009 Compared to Third Quarter of 2008
 Gross Margin
 Consolidated
  38




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##### Table of Contents



AMHS
  Fab Automation
  First Nine Months of 2009 Compared to First Nine Months of 2008
 Gross Margin
 Consolidated
  AMHS
  Fab Automation
  Research and Development
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentages)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeResearch and development
    
    $
    8,615
    
    
    $
    10,526
    
    
    $
    (1,911
    )
    
    $
    29,383
    
    
    $
    27,900
    
    
    $
    1,483Percentage of total net sales
    
    
    10.4
    %
    
    
    9.9
    %
    
    
    
    
    
    
    10.6
    %
    
    
    7.7
    %
 39




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##### Table of Contents



Selling, General and Administrative
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentage)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeSelling, general and
administrative
    
    $
    18,321
    
    
    $
    20,873
    
    
    $
    (2,552
    )
    
    $
    57,906
    
    
    $
    66,026
    
    
    $
    (8,120
    )Percentage of total net sales
    
    
    22.1
    %
    
    
    19.6
    %
    
    
    
    
    
    
    20.8
    %
    
    
    18.2
    %
   Amortization of Acquired Intangibles Assets
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentage)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeAmortization of acquired
intangible assets
    
    $
    1,299
    
    
    $
    2,970
    
    
    $
    (1,671
    )
    
    $
    7,550
    
    
    $
    13,898
    
    
    $
    (6,348
    )Percentage of total net sales
    
    
    1.6
    %
    
    
    2.8
    %
    
    
    
    
    
    
    2.7
    %
    
    
    3.8
    %
  40




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##### Table of Contents



Accounting Changes and Error Corrections
  Goodwill Impairment Charge
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentage)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeGoodwill impairment charge
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    89,431
    
    
    $
    
    
    
    $
    89,431Percentage of total net sales
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    
    
    
    
    32.1
    %
    
    
    0.0
    %
   41




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##### Table of Contents



Restructuring Charges
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentage)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeRestructuring charges
    
    $
    2,165
    
    
    $
    38
    
    
    $
    2,127
    
    
    $
    2,969
    
    
    $
    1,019
    
    
    $
    1,950Percentage of total net sales
    
    
    2.6
    %
    
    
    0.0
    %
    
    
    
    
    
    
    1.1
    %
    
    
    0.3
    %
    42




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##### Table of Contents



Severance and
    
    
    ExcessBenefits
    
    
    Facilities
    
    
    TotalBalance at March 31, 2008
    
    $
    387
    
    
    $
    154
    
    
    $
    541Reclassification from other
long-term liability
    
    
    
    
    
    
    65
    
    
    
    65Additional accruals
    
    
    2,736
    
    
    
    233
    
    
    
    2,969Non-cash related utilization
    
    
    
    
    
    
    (101
    )
    
    
    (101
    )Amounts paid in cash
    
    
    (2,484
    )
    
    
    (285
    )
    
    
    (2,769
    )Foreign currency translation
    
    
    (14
    )
    
    
    (7
    )
    
    
    (21
    )Balance at December 31, 2008
    
    $
    625
    
    
    $
    59
    
    
    $
    684
 Interest and Other Income (Expense), Net
 Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,(in thousands)
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeInterest income
    
    $
    105
    
    
    $
    708
    
    
    $
    (603
    )
    
    $
    548
    
    
    $
    1,769
    
    
    $
    (1,221
    )Interest expense
    
    
    (2,653
    )
    
    
    (2,134
    )
    
    
    (519
    )
    
    
    (7,784
    )
    
    
    (7,029
    )
    
    
    (755
    )Write-off of fees related
to early extinguishment of
debt and early redemption
of convertible securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,135
    )
    
    
    3,135Foreign currency exchange
(loss) gain
    
    
    (2,772
    )
    
    
    591
    
    
    
    (3,363
    )
    
    
    (8,360
    )
    
    
    244
    
    
    
    (8,604
    )Other income (expense), net
    
    
    (11
    )
    
    
    1,264
    
    
    
    (1,275
    )
    
    
    339
    
    
    
    3,435
    
    
    
    (3,096
    )Interest and other income
(expense), net
    
    $
    (5,331
    )
    
    $
    429
    
    
    $
    (5,760
    )
    
    $
    (15,257
    )
    
    $
    (4,716
    )
    
    $
    (10,541
    )
      43




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##### Table of Contents



Income Taxes
 Three Months Ended
    
    Nine Months EndedDecember 31,
    
    December 31,(in thousands, except percentage)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeBenefit from income taxes
    
    $
    2,314
    
    
    $
    562
    
    
    $
    1,752
    
    
    $
    8,845
    
    
    $
    1,203
    
    
    $
    7,642Percentage of total net sales
    
    
    2.8
    %
    
    
    0.5
    %
    
    
    
    
    
    
    3.2
    %
    
    
    0.3
    %
        Liquidity and Capital Resources
  44




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##### Table of Contents



Nine Months EndedDecember 31,(in thousands)
    
    2008
    
    2007Net cash
(used in) provided by operating activities
    
    $
    (2,597
    )
    
    $
    8,709Net cash used in investing activities
    
    
    (6,489
    )
    
    
    (6,214
    )Net cash used in financing activities
    
    
    (12,976
    )
    
    
    (24,642
    )
 Cash Flows from Operating Activities
  Net loss
    
    $
    (117,862
    )Depreciation and amortization
    
    
    13,598Amortization of deferred financing costs
    
    
    836Goodwill impairment charge
    
    
    89,431Share-based compensation expense
    
    
    4,438Write-off of fees related to the amendment of a credit facility
    
    
    954Deferred taxes, net
    
    
    (7,936
    )Other non-cash charges
    
    
    3,102Decrease in accounts receivable
    
    
    28,702Decrease in inventories
    
    
    7,458Decrease in prepaid expenses and other assets
    
    
    2,990Decrease in accounts payable, accrued liabilities and deferred
margin
    
    
    (28,308
    )Net cash used in operating activities
    
    $
    (2,597
    )
    45




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##### Table of Contents



Cash Flows from Investing Activities
  Cash Flows from Financing Activities
   Credit Facility
  Debtors Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements
   46




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Other Debt Financing Arrangements
   47




---



##### Table of Contents



Acquisition and Related Debt Financing Facility
    Other Liquidity Considerations
    48




---



##### Table of Contents



Recent Accounting Pronouncements
 Noncontrolling Interests in Consolidated
Financial Statements-an amendment of ARB No. 51
 Business Combinations
 Effective Date of FASB Statement
No. 157
 Disclosures about Derivative Instruments and
Hedging Activities Accounting for Derivative Instruments and Hedging Activities,
 Determination of the Useful Life of
Intangible Assets
 49




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##### Table of Contents



The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles.
 Accounting by Lessees for Nonrefundable
Maintenance Deposits
 Accounting for Equity Method Investment
Considerations
 Accounting for Defensive Intangible
Assets
 Employers Disclosures about
Postretirement Benefit Plan Assets
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk.
   Foreign Currency Exchange Risk
 50




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##### Table of Contents



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, 2008
    
    $
    (118,219
    )
    
    $
    (118,031
    )
    
    $
    (117,862
    )
    
    $
    (117,709
    )
    
    $
    (117,570
    )
  Accounting for Derivative Instruments and Hedging
Activities.
 
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   51




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##### Table of Contents



Managements Remediation Initiatives
       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.
  52




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##### Table of Contents



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.
  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
  Debtors Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements
 53




---



##### Table of Contents



Classification of
Obligations When a Violation is Waived by a Creditor
    54




---



##### Table of Contents



Other Credit Lines
      55




---



##### 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
   56




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##### Table of Contents



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.
    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;
 57




---



##### Table of Contents




    
    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.
   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.
   58




---



##### 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.
  59




---



##### Table of Contents



We may be unable to protect our intellectual property rights and we may become involved in
litigation concerning the intellectual property rights of others.
     Our results of operations could vary as a result of the methods, estimates, and judgments we use
in applying our accounting policies.
  60




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##### Table of Contents



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.
  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 have experienced unexpected turnover in our finance department recently and in past years, 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.
  61




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##### Table of Contents



The unsolicited attempts to acquire our company have created a distraction for our management
and uncertainty that may adversely affect our business.
   Our stock price declined precipitously in the latter part of 2008, has closed under $1 per
share since October 22, 2008, and could be delisted by NASDAQ if future closing prices and value of
publicly held shares failure to meet applicable requirements
    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.
  62




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##### Table of Contents



We may not effectively compete in a highly competitive semiconductor manufacturing equipment
industry.
      
 ITEM 5. OTHER INFORMATION
   63




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##### Table of Contents



ITEM 6. EXHIBITS
 Exhibit
    
    
    
    Incorporated by Reference
    
    
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    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
    
    Amended and Restated Bylaws of the Company.
    
    8-K
    
    
    3.2
    
    
    000-22430
    
    5/20/20083.3
    
    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.
    
    14A
    
    App.
    
    000-22430
    
    7/31/20003.5
    
    Amended and Restated Certificate of
Determination of Series A Junior
Participating Preferred Stock, dated July
9, 2008.
    
    8-K
    
    
    3.5
    
    
    000-22430
    
    7/15/20084.1
    
    Amended and Restated Rights Agreement
between the Company and Computershare Trust
Company, N.A., as Rights Agent, dated July
9, 2008.
    
    8-K
    
    
    4.3
    
    
    000-22430
    
    7/15/200810.59*
    
    Amendment No. 7 to Manufacturing Services
and Supply Agreement among the Company and
Flextronics Industrial, Ltd. (as successor
to Solectron Corporation) and its
subsidiaries and affiliates effective
August 13, 2008.
    
    
    
    
    
    
    
    
    
    
    
    X10.60
    
    Companys Executive Deferred Compensation
Plan as amended and restated November 6,
2008.
    
    
    
    
    
    
    
    
    
    
    
    X10.61
    
    Form of Indemnity Agreement entered into
between the Company and directors and
certain executive officers (for agreements
executed on or after December 31, 2008).
    
    
    
    
    
    
    
    
    
    
    
    X10.62
    
    Form of Change-in-Control Agreement entered
into between the Company and certain
executive officers (for agreements executed
on or after December 31, 2008).
    
    
    
    
    
    
    
    
    
    
    
    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 confidential treatment has been requested for portions of this document. 64




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##### Table of Contents



ASYST TECHNOLOGIES, INC.Date: February 6, 2009
    By:
    /S/ AARON L. TACHIBANAAaron L. Tachibana(Principal Financial Officer and Authorized Officer) 65




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EXHIBIT INDEX
 Exhibit
    
    
    
    Incorporated by Reference
    
    
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    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
    
    Amended and Restated Bylaws of the Company.
    
    8-K
    
    
    3.2
    
    
    000-22430
    
    5/20/20083.3
    
    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.
    
    14A
    
    App.
    
    000-22430
    
    7/31/20003.5
    
    Amended and Restated Certificate of
Determination of Series A Junior
Participating Preferred Stock, dated July
9, 2008.
    
    8-K
    
    
    3.5
    
    
    000-22430
    
    7/15/20084.1
    
    Amended and Restated Rights Agreement
between the Company and Computershare Trust
Company, N.A., as Rights Agent, dated July
9, 2008.
    
    8-K
    
    
    4.3
    
    
    000-22430
    
    7/15/200810.59*
    
    Amendment No. 7 to Manufacturing Services
and Supply Agreement among the Company and
Flextronics Industrial, Ltd. (as successor
to Solectron Corporation) and its
subsidiaries and affiliates effective
August 13, 2008.
    
    
    
    
    
    
    
    
    
    
    
    X10.60
    
    Companys Executive Deferred Compensation
Plan as amended and restated November 6,
2008.
    
    
    
    
    
    
    
    
    
    
    
    X10.61
    
    Form of Indemnity Agreement entered into
between the Company and directors and
certain executive officers (for agreements
executed on or after December 31, 2008).
    
    
    
    
    
    
    
    
    
    
    
    X10.62
    
    Form of Change-in-Control Agreement entered
into between the Company and certain
executive officers (for agreements executed
on or after December 31, 2008).
    
    
    
    
    
    
    
    
    
    
    
    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
 
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    Indicates confidential treatment has been requested for portions of this document. 66