##### 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 September 30, 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
    
    (IRS Employer identification Number)of incorporation or organization)
 46897 Bayside Parkway, Fremont, California 94538
 (510) 661-5000
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



ASYST TECHNOLOGIES, INC.
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1.Financial Statements (unaudited):Condensed Consolidated Balance Sheets  September 30, 2008 and March 31, 2008
    
    
    3Condensed Consolidated Statements of Operations  Three and Six Months Ended September 30, 2008 and
September 30, 2007
    
    
    4Condensed Consolidated Statements of Cash Flows Six Months Ended September 30, 2008 and September 30, 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    32Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    
    52Item 4.Controls and Procedures
    
    
    53PART II. OTHER INFORMATIONItem 1.Legal Proceedings
    
    
    54Item 1A.Risk Factors
    
    
    54Item 4.Submission of Matters to a Vote of Security Holders
    
    
    65Item 5.Other Information
    
    
    66Item 6.Exhibits
    
    
    67Signatures
    
    
    68Exhibit Index
    
    
    69EX-10.52EX-10.53EX-10.54EX-10.55EX-10.56EX-10.58EX-31.1EX-31.2EX-32.1
  2




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Part I FINANCIAL INFORMATION
 
 ITEM 1 FINANCIAL STATEMENTS
 ASYST TECHNOLOGIES, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  September 30,
    
    
    March 31,2008
    
    
    2008 (1)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    79,122
    
    
    $
    95,669Accounts receivable, net
    
    
    110,473
    
    
    
    119,717Inventories
    
    
    25,399
    
    
    
    39,407Deferred income taxes
    
    
    1,315
    
    
    
    2,663Prepaid expenses and other current assets
    
    
    11,745
    
    
    
    16,320Total current assets
    
    
    228,054
    
    
    
    273,776Property and equipment, net
    
    
    27,873
    
    
    
    29,452Goodwill
    
    
    3,397
    
    
    
    98,777Intangible assets, net
    
    
    21,155
    
    
    
    29,271Other assets
    
    
    16,474
    
    
    
    14,377Total assets
    
    $
    296,953
    
    
    $
    445,653LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS (DEFICIT) EQUITYCURRENT LIABILITIES:Short-term loans and notes payable
    
    $
    71,781
    
    
    $
    36,167Current portion of long-term debt and capital leases
    
    
    78,624
    
    
    
    7,011Accounts payable
    
    
    78,155
    
    
    
    94,666Accrued and other liabilities
    
    
    66,606
    
    
    
    77,303Deferred margin
    
    
    5,212
    
    
    
    5,844Total current liabilities
    
    
    300,378
    
    
    
    220,991LONG-TERM LIABILITIES:Long-term
debt and capital leases, net of current portion (2)
    
    
    15
    
    
    
    112,667Deferred tax liability
    
    
    
    
    
    
    2,833Other long-term liabilities
    
    
    18,655
    
    
    
    21,428Total long-term liabilities
    
    
    18,670
    
    
    
    136,928COMMITMENTS AND CONTINGENCIES (see Note 15)MINORITY INTEREST
    
    
    159
    
    
    
    134SHAREHOLDERS (DEFICIT) EQUITY:Common stock, no par value:Authorized shares  300,000,000; Issued and Outstanding shares 
50,645,861 and 50,045,235 shares at September 30, 2008 and March 31,
2008, respectively
    
    
    493,100
    
    
    
    490,283Accumulated deficit
    
    
    (511,051
    )
    
    
    (400,496
    )Accumulated other comprehensive loss
    
    
    (4,303
    )
    
    
    (2,187
    )Total shareholders (deficit) equity
    
    
    (22,254
    )
    
    
    87,600Total liabilities, minority interest and shareholders (deficit) equity
    
    $
    296,953
    
    
    $
    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 12, Debt, for further
details. The accompanying notes are an integral part of these condensed consolidated inancial statements.
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ASYST TECHNOLOGIES, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    95,115
    
    
    $
    134,836
    
    
    $
    195,459
    
    
    $
    256,456Cost of sales
    
    
    71,363
    
    
    
    95,973
    
    
    
    145,774
    
    
    
    177,430Gross profit
    
    
    23,752
    
    
    
    38,863
    
    
    
    49,685
    
    
    
    79,026Operating expenses:Research and development
    
    
    9,875
    
    
    
    9,075
    
    
    
    20,768
    
    
    
    17,374Selling, general and administrative
    
    
    19,377
    
    
    
    23,485
    
    
    
    39,585
    
    
    
    45,153Amortization of acquired intangible assets
    
    
    2,994
    
    
    
    5,121
    
    
    
    6,251
    
    
    
    10,928Goodwill impairment charge
    
    
    89,431
    
    
    
    
    
    
    
    89,431
    
    
    
    Restructuring and other charges
    
    
    328
    
    
    
    436
    
    
    
    804
    
    
    
    981Total operating expenses
    
    
    122,005
    
    
    
    38,117
    
    
    
    156,839
    
    
    
    74,436(Loss) income from operations
    
    
    (98,253
    )
    
    
    746
    
    
    
    (107,154
    )
    
    
    4,590Interest and other income (expense), net:Interest income
    
    
    222
    
    
    
    477
    
    
    
    443
    
    
    
    1,061Interest expense
    
    
    (2,115
    )
    
    
    (2,408
    )
    
    
    (5,131
    )
    
    
    (4,895
    )Write-off of fees related to early extinguishment of
debt and early redemption of convertible securities
    
    
    
    
    
    
    (3,135
    )
    
    
    
    
    
    
    (3,135
    )Other expense, net
    
    
    (1,370
    )
    
    
    3,672
    
    
    
    (5,238
    )
    
    
    1,824Interest and other income (expense), net
    
    
    (3,263
    )
    
    
    (1,394
    )
    
    
    (9,926
    )
    
    
    (5,145
    )Loss before income taxes and minority interest
    
    
    (101,516
    )
    
    
    (648
    )
    
    
    (117,080
    )
    
    
    (555
    )Benefit from income taxes
    
    
    1,522
    
    
    
    1,115
    
    
    
    6,531
    
    
    
    641Minority interest
    
    
    (4
    )
    
    
    (8
    )
    
    
    (6
    )
    
    
    (13
    )Net (loss) income
    
    $
    (99,998
    )
    
    $
    459
    
    
    $
    (110,555
    )
    
    $
    73Basic net (loss) income per share
    
    
    ($1.98
    )
    
    $
    0.01
    
    
    
    ($2.19
    )
    
    $
    0.00Diluted net (loss) income per share
    
    
    ($1.98
    )
    
    $
    0.01
    
    
    
    ($2.19
    )
    
    $
    0.00Shares used in computing basic net (loss) income per share
    
    
    50,592
    
    
    
    49,663
    
    
    
    50,419
    
    
    
    49,555Shares used in computing diluted net (loss) income per share
    
    
    50,592
    
    
    
    50,170
    
    
    
    50,419
    
    
    
    50,230
 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
   Six Months EndedSeptember 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income
    
    $
    (110,555
    )
    
    $
    73Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities:Depreciation and amortization
    
    
    10,171
    
    
    
    14,453Amortization of deferred financing costs
    
    
    521
    
    
    
    715Goodwill impairment charge
    
    
    89,431
    
    
    
    Allowance for doubtful accounts
    
    
    (994
    )
    
    
    (312
    )Unrealized foreign exchange transaction losses
    
    
    2,454
    
    
    
    1,650Minority interest in net income in consolidated subsidiary
    
    
    6
    
    
    
    13Gain on disposal of fixed assets
    
    
    (31
    )
    
    
    (5
    )Write-off of fees related to early extinguishment of debt
    
    
    
    
    
    
    2,431Write-off of fees related to the amendment of a credit facility
    
    
    906
    
    
    
    Share-based compensation expense
    
    
    2,865
    
    
    
    3,624Non-cash restructuring charges
    
    
    101
    
    
    
    106Amortization of lease incentive payments
    
    
    (312
    )
    
    
    (312
    )Deferred taxes, net
    
    
    (7,717
    )
    
    
    (3,464
    )Changes in assets and liabilities:Accounts receivable
    
    
    1,314
    
    
    
    (32,437
    )Inventories
    
    
    11,951
    
    
    
    16,177Prepaid expenses and other assets
    
    
    3,779
    
    
    
    8,332Accounts payable, accrued and other liabilities and deferred margin
    
    
    (17,032
    )
    
    
    (21,771
    )Net cash used in operating activities
    
    
    (13,142
    )
    
    
    (10,727
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (4,488
    )
    
    
    (3,274
    )Net cash used in investing activities
    
    
    (4,488
    )
    
    
    (3,274
    )CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from lines of credit, net
    
    
    39,435
    
    
    
    25,793Principal payments on  debt and capital leases
    
    
    (34,821
    )
    
    
    (172,794
    )Proceeds from long-term debt
    
    
    
    
    
    
    127,581Payment of financing fees
    
    
    (562
    )
    
    
    (3,594
    )Proceeds from issuance of common stock
    
    
    528
    
    
    
    1,445Repurchase of common stock on net settlement of stock awards
    
    
    (458
    )
    
    
    (263
    )Net cash provided by (used in) financing activities
    
    
    4,122
    
    
    
    (21,832
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (3,039
    )
    
    
    775DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (16,547
    )
    
    
    (35,058
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    95,669
    
    
    
    99,701CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    79,122
    
    
    $
    64,643
 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 The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles.
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Accounting by Lessees for Nonrefundable
Maintenance Deposits
 Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active
 3. LIQUIDITY
 Classification of Obligations When a Violation
is Waived by a Creditor
    Debtors Accounting for Changes in Line-of-Credit or
Revolving-Debt Arrangements
  8




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4. COMPREHENSIVE INCOME (LOSS)
  9




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Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net (loss) income, as reported
    
    $
    (99,998
    )
    
    $
    459
    
    
    $
    (110,555
    )
    
    $
    73Net change in foreign currency translation adjustment
    
    
    (1,388
    )
    
    
    974
    
    
    
    (2,146
    )
    
    
    129Net change in unrealized losses on investments
    
    
    (17
    )
    
    
    (23
    )
    
    
    (20
    )
    
    
    (15
    )Net change in actuarial losses and prior service
cost of defined benefit plans
    
    
    25
    
    
    
    
    
    
    
    50Comprehensive (loss) income
    
    $
    (101,378
    )
    
    $
    1,410
    
    
    $
    (112,671
    )
    
    $
    187
 5. NET INCOME (LOSS) PER SHARE
  Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator:Net (loss) income
    
    $
    (99,998
    )
    
    $
    459
    
    
    $
    (110,555
    )
    
    $
    73Denominator:Weighted average common shares outstanding, excluding unvested
restricted stock units
    
    
    50,592
    
    
    
    49,663
    
    
    
    50,419
    
    
    
    49,555Denominator for basic net loss per share
    
    
    50,592
    
    
    
    49,663
    
    
    
    50,419
    
    
    
    49,555Effect of dilutive employee stock options and restricted stock units
    
    
    
    
    
    
    507
    
    
    
    
    
    
    
    675Denominator for diluted net loss per share
    
    
    50,592
    
    
    
    50,170
    
    
    
    50,419
    
    
    
    50,230Net (loss) income per share  basic
    
    $
    (1.98
    )
    
    $
    0.01
    
    
    $
    (2.19
    )
    
    $
    0.00Net (loss) income per share  diluted
    
    $
    (1.98
    )
    
    $
    0.01
    
    
    $
    (2.19
    )
    
    $
    0.00
  Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Restricted stock
awards and stock
units
    
    
    3,618
    
    
    
    1,706
    
    
    
    3,618
    
    
    
    1,167Stock options
    
    
    4,420
    
    
    
    3,230
    
    
    
    4,420
    
    
    
    3,200ESPP
    
    
    223
    
    
    
    99
    
    
    
    223
    
    
    
    99Total
    
    
    8,261
    
    
    
    5,035
    
    
    
    8,261
    
    
    
    4,466
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6. BALANCE SHEET COMPONENTS
 Cash and Cash Equivalents
  11




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Accounts Receivable, net of allowance for doubtful accounts
  September 30,
    
    
    March 31,2008
    
    
    2008Trade receivables
    
    $
    39,512
    
    
    $
    74,488Trade receivables-related party
    
    
    4
    
    
    
    26Unbilled receivables
    
    
    72,031
    
    
    
    47,403Less: Allowance for doubtful accounts
    
    
    (1,074
    )
    
    
    (2,200
    )Total
    
    $
    110,473
    
    
    $
    119,717
    Inventories
  September 30,
    
    
    March 31,2008
    
    
    2008Raw materials
    
    $
    10,425
    
    
    $
    12,938Work-in-process
    
    
    13,888
    
    
    
    23,765Finished goods
    
    
    1,086
    
    
    
    2,704Total
    
    $
    25,399
    
    
    $
    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 September 30, 2008
    
    $
    3,397
    
    
    $
    
    
    
    $
    3,397
 Goodwill and Other Intangible Assets
   13




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Intangible Assets
  September 30, 2008
    
    
    March 31, 2008Gross
    
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    
    
    
    
    Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Net
    
    
    Amount
    
    
    Amortization
    
    
    NetAmortizable intangible assets:Developed technology
    
    $
    89,045
    
    
    $
    74,521
    
    
    $
    14,524
    
    
    $
    94,188
    
    
    $
    75,963
    
    
    $
    18,225Customer base and other
intangible assets
    
    
    57,686
    
    
    
    52,019
    
    
    
    5,667
    
    
    
    60,708
    
    
    
    50,792
    
    
    
    9,916Licenses and patents
    
    
    5,297
    
    
    
    4,333
    
    
    
    964
    
    
    
    5,302
    
    
    
    4,172
    
    
    
    1,130Total
    
    $
    152,028
    
    
    $
    130,873
    
    
    $
    21,155
    
    
    $
    160,198
    
    
    $
    130,927
    
    
    $
    29,271
    Fiscal Year ending March 31,Remainder of 2009
    
    $
    6,1232010
    
    
    7,7112011
    
    
    5,4432012
    
    
    1,8362013
    
    
    42Total
    
    $
    21,155
 Accrued and other liabilities
 14




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September 30,
    
    
    March 31,2008
    
    
    2008Employee compensation
    
    $
    13,285
    
    
    $
    17,781Payable to Shinko for 4.9% share in ATJ
    
    
    12,345
    
    
    
    13,204Customer deposits
    
    
    11,604
    
    
    
    11,072Warranty
    
    
    10,936
    
    
    
    12,505Income taxes payable
    
    
    3,035
    
    
    
    2,986Other taxes payable
    
    
    1,382
    
    
    
    1,381Deferred tax liability
    
    
    532
    
    
    
    1,586Other accrued expenses
    
    
    13,487
    
    
    
    16,788Total
    
    $
    66,606
    
    
    $
    77,303
 Warranty Accrual
  Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Beginning balance
    
    $
    11,575
    
    
    $
    11,469
    
    
    $
    12,505
    
    
    $
    11,982Accruals
    
    
    2,968
    
    
    
    2,856
    
    
    
    6,186
    
    
    
    5,566Settlements
    
    
    (3,634
    )
    
    
    (3,925
    )
    
    
    (7,131
    )
    
    
    (5,298
    )Foreign currency
translation
    
    
    27
    
    
    
    572
    
    
    
    (624
    )
    
    
    (1,278
    )Ending balance
    
    $
    10,936
    
    
    $
    10,972
    
    
    $
    10,936
    
    
    $
    10,972
 7. SHARE-BASED COMPENSATION
 Stock Options Plans
    15




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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
    
    
    (262,880
    )
    
    
    9.50Options outstanding as of September 30, 2008
    
    
    4,419,739
    
    
    
    10.16
    
    
    
    3.42
    
    
    $
    Options vested and expected to vest at
September 30, 2008
    
    
    4,384,550
    
    
    
    10.20
    
    
    
    3.43
    
    
    $
    Exercisable as of September 30, 2008
    
    
    4,283,391
    
    
    $
    10.27
    
    
    
    3.44
    
    
    $
    
 
 (1)
    
    These amounts represent the difference between the exercise price and $2.40, the closing
price of Asyst stock on September 30, 2008, as reported on The NASDAQ Global Market, for all
in-the-money options outstanding.  16




---



##### Table of Contents



Restricted Stock Awards and Restricted Stock Units
  Weighted AverageNumber of
    
    
    Grant-DateShares
    
    
    Fair ValueOutstanding at March 31, 2008
    
    
    2,465,930
    
    
    $
    6.58Granted
    
    
    2,132,777
    
    
    
    3.63Vested
    
    
    (549,001
    )
    
    
    3.49Cancelled
    
    
    (431,448
    )
    
    
    5.75Outstanding at September 30, 2008
    
    
    3,618,258
    
    
    $
    5.41
  Stock Option Awards and Restricted Stock Units (RSUs) with Market and Performance Conditions
  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 September 30, 2008
    
    
    139,760
    
    
    $
    2.69
    
    
    
    0.64
 17




---



##### Table of Contents



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
    
    
    (110,880
    )
    
    
    5.11Outstanding at September 30,
2008
    
    
    1,249,348
    
    
    $
    4.68
    
    
    
    2.45
  Employee Stock Purchase Plan
  Share-Based Compensation Expense
  18




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Share-based compensation expense by
category:Cost of sales
    
    $
    144
    
    
    $
    182
    
    
    $
    337
    
    
    $
    335Research and development
    
    
    194
    
    
    
    228
    
    
    
    382
    
    
    
    413Selling, general and administrative
    
    
    1,073
    
    
    
    1,595
    
    
    
    2,146
    
    
    
    2,876Total share-based compensation expense
    
    $
    1,411
    
    
    $
    2,005
    
    
    $
    2,865
    
    
    $
    3,624
  8. PENSION BENEFIT PLANS
  Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    333
    
    
    $
    284
    
    
    $
    681
    
    
    $
    567Interest cost
    
    
    85
    
    
    
    98
    
    
    
    174
    
    
    
    195Expected return on plan assets
    
    
    (101
    )
    
    
    (102
    )
    
    
    (159
    )
    
    
    (203
    )Amortization of prior service
cost
    
    
    5
    
    
    
    (1
    )
    
    
    11
    
    
    
    (3
    )Amortization of actuarial losses
    
    
    (4
    )
    
    
    5
    
    
    
    (7
    )
    
    
    10Net periodic benefit cost
    
    $
    318
    
    
    $
    284
    
    
    $
    700
    
    
    $
    566
 Employer Contributions
  9. INCOME TAXES
 Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Benefit from income taxes
    
    $
    1,522
    
    
    $
    1,115
    
    
    $
    6,531
    
    
    $
    641
 19




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Accounting for Uncertainty in Income Taxes
    20




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##### Table of Contents



10. RESTRUCTURING CHARGES
  Severance and
    
    
    ExcessBenefits
    
    
    Facilities
    
    
    TotalBalance at March 31, 2008
    
    $
    387
    
    
    $
    154
    
    
    $
    541Reclassification from other
long-term liability
    
    
    
    
    
    
    65
    
    
    
    65Additional accruals
    
    
    571
    
    
    
    233
    
    
    
    804Non-cash related utilization
    
    
    
    
    
    
    (101
    )
    
    
    (101
    )Amounts paid in cash
    
    
    (811
    )
    
    
    (285
    )
    
    
    (1,096
    )Foreign currency translation
    
    
    (18
    )
    
    
    (8
    )
    
    
    (26
    )Balance at September 30, 2008
    
    $
    129
    
    
    $
    58
    
    
    $
    187
    Severance and
    
    
    ExcessBenefits
    
    
    Facilities
    
    
    TotalBalance at March 31, 2007
    
    $
    
    
    
    $
    788
    
    
    $
    788Reclassification from other
long-term liability
    
    
    
    
    
    
    41
    
    
    
    41Additional accruals
    
    
    588
    
    
    
    393
    
    
    
    981Non-cash related utilization
    
    
    
    
    
    
    (106
    )
    
    
    (106
    )Amounts paid in cash
    
    
    (580
    )
    
    
    (490
    )
    
    
    (1,070
    )Balance at September 30, 2007
    
    $
    8
    
    
    $
    626
    
    
    $
    634
  11. 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.
 21




---



##### Table of Contents




    
    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.
    Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007AMHS:Net sales
    
    $
    70,090
    
    
    $
    86,227
    
    
    $
    137,687
    
    
    $
    162,536Cost of Sales
    
    
    55,026
    
    
    
    69,081
    
    
    
    112,122
    
    
    
    124,863Gross Profit
    
    $
    15,064
    
    
    $
    17,146
    
    
    $
    25,565
    
    
    $
    37,673(Loss) income from
operations
    
    $
    (91,017
    )
    
    $
    (2,742
    )
    
    $
    (98,277
    )
    
    $
    150Fixed assets additions
    
    $
    966
    
    
    $
    1,299
    
    
    $
    2,236
    
    
    $
    2,094Amortization and
Depreciation
    
    $
    4,058
    
    
    $
    5,765
    
    
    $
    8,193
    
    
    $
    12,100Fab Automation Products:Net sales
    
    $
    25,025
    
    
    $
    48,609
    
    
    $
    57,772
    
    
    $
    93,920Cost of Sales
    
    
    16,337
    
    
    
    26,892
    
    
    
    33,652
    
    
    
    52,567Gross Profit
    
    $
    8,688
    
    
    $
    21,717
    
    
    $
    24,120
    
    
    $
    41,353(Loss) income from
operations
    
    $
    (7,236
    )
    
    $
    3,488
    
    
    $
    (8,877
    )
    
    $
    4,440Fixed assets additions
    
    $
    511
    
    
    $
    728
    
    
    $
    1,250
    
    
    $
    1,211Amortization and
Depreciation
    
    $
    1,140
    
    
    $
    1,435
    
    
    $
    2,499
    
    
    $
    3,068Consolidated:Net sales
    
    $
    95,115
    
    
    $
    134,836
    
    
    $
    195,459
    
    
    $
    256,456Cost of Sales
    
    
    71,363
    
    
    
    95,973
    
    
    
    145,774
    
    
    
    177,430Gross Profit
    
    $
    23,752
    
    
    $
    38,863
    
    
    $
    49,685
    
    
    $
    79,026(Loss) income from
operations
    
    $
    (98,253
    )
    
    $
    746
    
    
    $
    (107,154
    )
    
    $
    4,590Fixed assets additions
    
    $
    1,477
    
    
    $
    2,027
    
    
    $
    3,486
    
    
    $
    3,305Amortization and
Depreciation
    
    $
    5,198
    
    
    $
    7,200
    
    
    $
    10,692
    
    
    $
    15,168
  22




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##### Table of Contents



Net Revenue
    
    Accounts ReceivableThree Months Ended
    
    Six Months Ended
    
    As ofSeptember 30,
    
    September 30,
    
    September 30,
    
    March 31,2008
    
    2007
    
    2008
    
    2007
    
    2008
    
    2008Customer A
    
    
    30.2
    %
    
    
    23.2
    %
    
    
    27.0
    %
    
    
    21.1
    %
    
    
    
    *
    
    
    22.5
    %Customer B
    
    
    19.2
    %
    
    
    
    *
    
    
    17.9
    %
    
    
    
    *
    
    
    21.2
    %
    
    
    
    *Customer C
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    10.8
    %
    
    
    
    *
    
    
    
    *Customer D
    
    
    
    *
    
    
    12.2
    %
    
    
    
    *
    
    
    10.2
    %
    
    
    
    *
    
    
    14.3
    %
 
 *
    
    Less than 10% 23




---



##### Table of Contents



12. DEBT
  September 30,
    
    
    March 31,2008
    
    
    2008Short-term loans
    
    $
    69,780
    
    
    $
    35,250Long-term loans
    
    
    78,534
    
    
    
    119,475Capital leases
    
    
    105
    
    
    
    203Total debt and capital leases
    
    
    78,639
    
    
    
    119,678Less: Current portion of long-term debt and
capital
leases (1)
    
    
    (78,624
    )
    
    
    (7,011
    )Long-term debt and capital leases, net of
current portion
    
    $
    15
    
    
    $
    112,667
 
 (1)
    
    After giving effect to recent
amendments, we were in compliance with our debt covenants under our principal credit facility
as of September 30, 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
    
    $
    4,1782010
    
    
    12,3502011
    
    
    18,5982012
    
    
    26,9232013 and thereafter
    
    
    16,590Total
    
    $
    78,639
 Credit Facility
  Debtors Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements
 24




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Other Debt Financing Arrangements
  13. FAIR VALUE MEASUREMENTS
 Fair Value Measurements,
 25




---



##### Table of Contents



Fair Value Measurements at September 30, 2008Quoted Prices in ActiveMarkets for Identical
    
    
    Significant Other
    
    
    Significant UnobservableAssets
    
    
    Observable Inputs
    
    
    Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalAssetsCash and
cash
equivalentsMoney
market
funds
    
    $
    21,902
    
    
    $
    
    
    
    $
    
    
    
    $
    21,902Total
    
    $
    21,902
    
    
    $
    
    
    
    $
    
    
    
    $
    21,902
  The Fair Value Option for Financial Assets and Financial Liabilities
- Including an Amendment of FASB Statement No. 115
  14. RELATED-PARTY TRANSACTIONS
  26




---



##### Table of Contents



September 30,
    
    March 31,2008
    
    2008Accounts receivable from MECS Korea
    
    $
    4
    
    
    $
    26Accounts payable due to MECS Korea
    
    
    26
    
    
    
    67Accrued liabilities due to MECS Korea
    
    
    
    
    
    
    6
  Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Sales to MECS Korea
    
    $
    4
    
    
    $
    7
    
    
    
    12
    
    
    
    24Purchases from MECS Korea
    
    
    25
    
    
    
    220
    
    
    
    180
    
    
    
    267
 15. COMMITMENTS AND CONTINGENCIES
 Lease Commitments
  Fiscal Year Ending March 31,
    
    Capital Lease
    
    
    Operating Lease
    
    
    TotalRemainder of 2009
    
    $
    86
    
    
    $
    3,049
    
    
    $
    3,1352010
    
    
    9
    
    
    
    4,109
    
    
    
    4,1182011
    
    
    8
    
    
    
    2,200
    
    
    
    2,2082012
    
    
    3
    
    
    
    1,479
    
    
    
    1,4822013
    
    
    1
    
    
    
    1,352
    
    
    
    1,353Total
    
    
    107
    
    
    $
    12,189
    
    
    $
    12,296Less: interest
    
    
    (2
    )Present value of minimum lease payments
    
    
    105Less: current portion of capital leases
    
    
    (89
    )Capital leases, net of current portion
    
    $
    16
  Purchase Commitments
  27




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Legal Contingencies
 Our Patent Infringement Action against Jenoptik AG
       Daifukus Patent Infringement Action Against Us
  28




---



##### Table of Contents



29




---



##### Table of Contents



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




---



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31




---



##### 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 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
  
 
 
 
 32




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##### Table of Contents




  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.
    Status of Material Weakness
  33




---



##### Table of Contents



New Developments
  Goodwill Impairment Charge
    Outlook and Liquidity
  Classification of Obligations When a Violation is Waived by a Creditor
 34




---



##### Table of Contents



Critical Accounting Policies and Estimates
   Results of Operations for the Three and Six months Ended September 30, 2008 and 2007
  Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007AMHS:Net sales
    
    $
    70,090
    
    
    $
    86,227
    
    
    $
    137,687
    
    
    $
    162,536Cost of Sales
    
    
    55,026
    
    
    
    69,081
    
    
    
    112,122
    
    
    
    124,863Gross Profit
    
    $
    15,064
    
    
    $
    17,146
    
    
    $
    25,565
    
    
    $
    37,673(Loss) income from
operations
    
    $
    (91,017
    )
    
    $
    (2,742
    )
    
    $
    (98,277
    )
    
    $
    150Fab Automation Products:Net sales
    
    $
    25,025
    
    
    $
    48,609
    
    
    $
    57,772
    
    
    $
    93,920Cost of Sales
    
    
    16,337
    
    
    
    26,892
    
    
    
    33,652
    
    
    
    52,567Gross Profit
    
    $
    8,688
    
    
    $
    21,717
    
    
    $
    24,120
    
    
    $
    41,353(Loss) income from
operations
    
    $
    (7,236
    )
    
    $
    3,488
    
    
    $
    (8,877
    )
    
    $
    4,440Consolidated:Net sales
    
    $
    95,115
    
    
    $
    134,836
    
    
    $
    195,459
    
    
    $
    256,456Cost of Sales
    
    
    71,363
    
    
    
    95,973
    
    
    
    145,774
    
    
    
    177,430Gross Profit
    
    $
    23,752
    
    
    $
    38,863
    
    
    $
    49,685
    
    
    $
    79,026(Loss) income from
operations
    
    $
    (98,253
    )
    
    $
    746
    
    
    $
    (107,154
    )
    
    $
    4,590
 35




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007AMHS:Net sales
    
    
    73.7
    %
    
    
    63.9
    %
    
    
    70.4
    %
    
    
    63.4
    %Cost of Sales
    
    
    57.9
    %
    
    
    51.2
    %
    
    
    57.4
    %
    
    
    48.7
    %Gross Profit
    
    
    15.8
    %
    
    
    12.7
    %
    
    
    13.1
    %
    
    
    14.7
    %(Loss) income from
operations
    
    
    (95.7
    )%
    
    
    (2.0
    )%
    
    
    (50.3
    )%
    
    
    0.1
    %Fab Automation Products:Net sales
    
    
    26.3
    %
    
    
    36.1
    %
    
    
    29.6
    %
    
    
    36.6
    %Cost of Sales
    
    
    17.2
    %
    
    
    19.9
    %
    
    
    17.2
    %
    
    
    20.5
    %Gross Profit
    
    
    9.1
    %
    
    
    16.1
    %
    
    
    12.3
    %
    
    
    16.1
    %(Loss) income from
operations
    
    
    (7.6
    )%
    
    
    2.6
    %
    
    
    (4.5
    )%
    
    
    1.7
    %Consolidated:Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of Sales
    
    
    75.0
    %
    
    
    71.2
    %
    
    
    74.6
    %
    
    
    69.2
    %Gross Profit
    
    
    25.0
    %
    
    
    28.8
    %
    
    
    25.4
    %
    
    
    30.8
    %(Loss) income from
operations
    
    
    (103.3
    )%
    
    
    0.6
    %
    
    
    (54.8
    )%
    
    
    1.8
    %
 Second Quarter of 2009 Compared to Second Quarter of 2008
 Net Sales
 Consolidated
   AMHS
  36




---



##### Table of Contents



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




---



##### Table of Contents



Fab Automation
   Comparison of Expenses, Gross Margin, Interest & Other Income, and Income Taxes
  38




---



##### Table of Contents



Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    75.0
    %
    
    
    71.2
    %
    
    
    74.6
    %
    
    
    69.2
    %Gross profit
    
    
    25.0
    %
    
    
    28.8
    %
    
    
    25.4
    %
    
    
    30.8
    %Operating expenses:Research and development
    
    
    10.4
    %
    
    
    6.7
    %
    
    
    10.6
    %
    
    
    6.7
    %Selling, general and administrative
    
    
    20.4
    %
    
    
    17.4
    %
    
    
    20.3
    %
    
    
    17.6
    %Amortization of acquired intangible assets
    
    
    3.1
    %
    
    
    3.8
    %
    
    
    3.2
    %
    
    
    4.3
    %Goodwill impairment charge
    
    
    94.0
    %
    
    
    0.0
    %
    
    
    45.8
    %
    
    
    0.0
    %Restructuring and other charges
    
    
    0.3
    %
    
    
    0.3
    %
    
    
    0.4
    %
    
    
    0.4
    %Total operating expenses
    
    
    128.3
    %
    
    
    28.2
    %
    
    
    80.2
    %
    
    
    29.0
    %(Loss) income from operations
    
    
    (103.3
    )%
    
    
    0.6
    %
    
    
    (54.8
    )%
    
    
    1.8
    %Interest and other income (expense), net:Interest income
    
    
    0.2
    %
    
    
    0.4
    %
    
    
    0.2
    %
    
    
    0.4
    %Interest expense
    
    
    (2.2
    )%
    
    
    (1.8
    )%
    
    
    (2.6
    )%
    
    
    (1.9
    )%Write-off of fees related to early extinguishment
of debt and early redemption of convertible
securities
    
    
    0.0
    %
    
    
    (2.4
    )%
    
    
    0.0
    %
    
    
    (1.2
    )%Other expense, net
    
    
    (1.4
    )%
    
    
    2.7
    %
    
    
    (2.7
    )%
    
    
    0.7
    %Interest and other income (expense), net
    
    
    (3.4
    )%
    
    
    (1.1
    )%
    
    
    (5.1
    )%
    
    
    (2.0
    )%(Loss) income before income taxes and minority interest
    
    
    (106.7
    )%
    
    
    (0.5
    )%
    
    
    (59.9
    )%
    
    
    (0.2
    )%Benefit from (provision for) income taxes
    
    
    1.6
    %
    
    
    0.8
    %
    
    
    3.3
    %
    
    
    0.2
    %Minority interest
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Net loss
    
    
    (105.1
    )%
    
    
    0.3
    %
    
    
    (56.6
    )%
    
    
    0.0
    %
 Second Quarter of 2009 Compared to Second Quarter of 2008
 Gross Margin
 Consolidated
  AMHS
  39




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Fab Automation
  First Six Months of 2009 Compared to First Six Months of 2008
 Gross Margin
 Consolidated
  AMHS
  Fab Automation
  Research and Development
 Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,(in thousands, except percentages)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeResearch and development
    
    $
    9,875
    
    
    $
    9,075
    
    
    $
    800
    
    
    $
    20,768
    
    
    $
    17,374
    
    
    $
    3,394Percentage of total net
sales
    
    
    10.4
    %
    
    
    6.7
    %
    
    
    
    
    
    
    10.6
    %
    
    
    6.7
    %
  40




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Selling, General and Administrative
 Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,(in thousands, except percentage)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeSelling, general and
administrative
    
    $
    19,377
    
    
    $
    23,485
    
    
    $
    (4,108
    )
    
    $
    39,585
    
    
    $
    45,153
    
    
    $
    (5,568
    )Percentage of total net sales
    
    
    20.4
    %
    
    
    17.4
    %
    
    
    
    
    
    
    20.3
    %
    
    
    17.6
    %
   41




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Amortization of Acquired Intangibles Assets
 Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,(in thousands, except percentage)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeAmortization of acquired
intangible assets
    
    $
    2,994
    
    
    $
    5,121
    
    
    $
    (2,127
    )
    
    $
    6,251
    
    
    $
    10,928
    
    
    $
    (4,677
    )Percentage of total net sales
    
    
    3.1
    %
    
    
    3.8
    %
    
    
    
    
    
    
    3.2
    %
    
    
    4.3
    %
  Goodwill Impairment Charge
 Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,(in thousands, except percentage)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeGoodwill impairment
charge
    
    $
    89,431
    
    
    $
    
    
    
    $
    89,431
    
    
    $
    89,431
    
    
    $
    
    
    
    $
    89,431Percentage of total
net sales
    
    
    94.0
    %
    
    
    0.0
    %
    
    
    
    
    
    
    45.8
    %
    
    
    0.0
    %
    42




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Restructuring Charges
 Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,(in thousands, except percentage)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeRestructuring charges
    
    $
    328
    
    
    $
    436
    
    
    $
    (108
    )
    
    $
    804
    
    
    $
    981
    
    
    $
    (177
    )Percentage of total
net sales
    
    
    0.3
    %
    
    
    0.3
    %
    
    
    
    
    
    
    0.4
    %
    
    
    0.4
    %
    Severance and
    
    
    ExcessBenefits
    
    
    Facilities
    
    
    TotalBalance at March 31, 2008
    
    $
    387
    
    
    $
    154
    
    
    $
    541Reclassification from other
long-term liability
    
    
    
    
    
    
    65
    
    
    
    65Additional accruals
    
    
    571
    
    
    
    233
    
    
    
    804Non-cash related utilization
    
    
    
    
    
    
    (101
    )
    
    
    (101
    )Amounts paid in cash
    
    
    (811
    )
    
    
    (285
    )
    
    
    (1,096
    )Foreign currency translation
    
    
    (18
    )
    
    
    (8
    )
    
    
    (26
    )Balance at September 30, 2008
    
    $
    129
    
    
    $
    58
    
    
    $
    187
  43




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Interest and Other Income (Expense), Net
 Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,(in thousands)
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeInterest income
    
    $
    222
    
    
    $
    477
    
    
    $
    (255
    )
    
    $
    443
    
    
    $
    1,061
    
    
    $
    (618
    )Interest expense
    
    
    (2,115
    )
    
    
    (2,408
    )
    
    
    293
    
    
    
    (5,131
    )
    
    
    (4,895
    )
    
    
    (236
    )Write-off of fees related to early
extinguishment of debt and early
redemption of convertible securities
    
    
    
    
    
    
    (3,135
    )
    
    
    3,135
    
    
    
    
    
    
    
    (3,135
    )
    
    
    3,135Foreign currency exchange (loss) gain
    
    
    (1,729
    )
    
    
    2,549
    
    
    
    (4,278
    )
    
    
    (5,589
    )
    
    
    (347
    )
    
    
    (5,242
    )Other income, net
    
    
    359
    
    
    
    1,123
    
    
    
    (764
    )
    
    
    351
    
    
    
    2,171
    
    
    
    (1,820
    )Interest and other income (expense), net
    
    $
    (3,263
    )
    
    $
    (1,394
    )
    
    $
    (1,869
    )
    
    $
    (9,926
    )
    
    $
    (5,145
    )
    
    $
    (4,781
    )
   Debtors Accounting for Changes in
Line-of-Credit or Revolving-Debt Arrangements
     Income Taxes
 Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,(in thousands, except percentage)
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeBenefit from income taxes
    
    $
    1,522
    
    
    $
    1,115
    
    
    $
    407
    
    
    $
    6,531
    
    
    $
    641
    
    
    $
    5,890Percentage of total net
sales
    
    
    1.6
    %
    
    
    0.8
    %
    
    
    
    
    
    
    3.3
    %
    
    
    0.2
    %
 44




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Accounting for Uncertainty in Income Taxes
    Liquidity and Capital Resources
   Six Months EndedSeptember 30,(in thousands)
    
    2008
    
    2007Net cash used in operating activities
    
    $
    (13,142
    )
    
    $
    (10,727
    )Net cash used in investing activities
    
    
    (4,488
    )
    
    
    (3,274
    )Net cash provided by (used in) financing
activities
    
    
    4,122
    
    
    
    (21,832
    )
 46




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Cash Flows from Operating Activities
  Net loss
    
    $
    (110,555
    )Depreciation and amortization
    
    
    10,171Amortization of deferred financing costs
    
    
    521Goodwill impairment charge
    
    
    89,431Share-based compensation expense
    
    
    2,865Write-off of fees related to the amendment of a credit facility
    
    
    906Deferred taxes, net
    
    
    (7,717
    )Other non-cash charges
    
    
    1,224Decrease in accounts receivable
    
    
    1,314Decrease in inventories
    
    
    11,951Decrease in prepaid expenses and other assets
    
    
    3,779Decrease in accounts payable, accrued liabilities and deferred
margin
    
    
    (17,032
    )Net cash used in operating activities
    
    $
    (13,142
    )
     Cash Flows from Investing Activities
  Cash Flows from Financing Activities
   47




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Credit Facility
  Debtors Accounting for Changes
in Line-of-Credit or Revolving-Debt Arrangements
      48




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Other Debt Financing Arrangements
  Acquisition and Related Debt Financing Facility
    Other Liquidity Considerations
  49




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50




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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 The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles.
 51




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Accounting by Lessees for Nonrefundable
Maintenance Deposits
 Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk.
   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
six months ended
September 30, 2008
    
    $
    (120,720
    )
    
    $
    (115,370
    )
    
    $
    (110,555
    )
    
    $
    (106,200
    )
    
    $
    (102,240
    )
  52




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Accounting for Derivative Instruments and Hedging
Activities.
 
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
     Managements Remediation Initiatives
  53




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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.
  54




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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
    55




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Classification of Obligations When a Violation is Waived by a
Creditor
    Other Credit Lines
   56




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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
  57




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58




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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;
    
    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.
 59




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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.
   60




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##### 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.
  61




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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.
 Share-Based Payment
 62




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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.
  63




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The unsolicited attempts to acquire our company have created a distraction for our management
and uncertainty that may adversely affect our business.
   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.
    64




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We may not effectively compete in a highly competitive semiconductor manufacturing equipment
industry.
      
 ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   Nominees:
 FOR
    
    WITHHELDStephen S. Schwartz, Ph.D.
    
    
    32,581,140
    
    
    
    10,157,544Stanley Grubel
    
    
    31,824,721
    
    
    
    10,913,963Robert A. McNamara
    
    
    32,605,090
    
    
    
    10,133,594Anthony E. Santelli
    
    
    30,001,384
    
    
    
    12,737,300William Simon
    
    
    32,625,155
    
    
    
    10,113,529Walter W. Wilson
    
    
    31,825,085
    
    
    
    10,913,599
   FOR
    
    AGAINST
    
    ABSTAIN
    
    NO-VOTE16,231,647
    
    12,058,811
    
    121,077
    
    14,327,149
  FOR
    
    AGAINST
    
    ABSTAIN
    
    NO-VOTE20,166,404
    
    8,138,154
    
    106,977
    
    14,327,149
 65




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##### Table of Contents



3.
    
    To ratify the selection of PricewaterhouseCoopers LLP as our independent registered
public accounting firm for the fiscal year 2009:
 FOR
    
    AGAINST
    
    ABSTAIN39,241,124
    
    2,790,716
    
    526,844
 
 Item 5. Other Information.
      66




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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
    
    7/15/200810.50 *

    
    2003 Equity Incentive Plan as amended and
approved by the Companys shareholders
through September 16, 2008.
    
    14A
    
    App. B
    
    000-22430
    
    8/13/0810.51*

    
    1993 Employee Stock Purchase Plan as
amended and approved by the Companys
shareholders through September 16, 2008.
    
    14A
    
    App. C
    
    000-22430
    
    8/13/0810.52*

    
    Form of Change in Control Agreement
entered into between the Company and
certain executive officers (for agreements
executed after June 30, 2008).
    
    
    
    
    
    
    
    
    
    
    
    X10.53*

    
    Employment Agreement between the Company
and Aaron L. Tachibana, dated June 1,
2004.
    
    
    
    
    
    
    
    
    
    
    
    X10.54*

    
    Employment Agreement between the Company
and Paula C. LuPriore, dated October 4,
2002.
    
    
    
    
    
    
    
    
    
    
    
    X10.55*

    
    Employment Agreement between the Company
and Thomas R. Leitzke, dated June 22,
2004.
    
    
    
    
    
    
    
    
    
    
    
    X10.56*

    
    Form of Stock Award Notice and Stock Award
Agreement for employees (2003 Equity
Incentive Plan) (for agreements executed
on or after August 28, 2008)
    
    
    
    
    
    
    
    
    
    
    
    X10.57
    
    Second Amendment To
Credit Agreement
dated as of October
15, 2008 among
Asyst Technologies,
Inc., Asyst
Technologies Japan
Holdings Company,
Inc., and Asyst
Technologies Japan,
Inc. as Borrowers,
and Keybank
National
Association,
Administrative
Agent, Lender,
Swing Line Lender
and L/C Issuer and
the Lenders party
hereto, as Lenders.
    
    8-K
    
    
    99.1
    
    
    000-22430
    
    10/21/200810.58
    
    Third Amendment To
Credit Agreement
dated as of
November 10, 2008
among Asyst
Technologies, Inc.,
Asyst Technologies
Japan Holdings
Company, Inc., and
Asyst Technologies
Japan, Inc. as
Borrowers, and
Keybank National
Association,
Administrative
Agent, Lender,
Swing Line Lender
and L/C Issuer and
the Lenders party
hereto, as Lenders.
    
    
    
    
    
    
    
    
    
    
    
    X
 67




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Exhibit
    
    
    
    Incorporated by Reference
    
    
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    Ex. No.
    
    File No.
    
    Filing Date
    
    Herewith31.1
    
    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. 68




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##### Table of Contents



ASYST TECHNOLOGIES, INC.Date: November 12, 2008
    By:
    /S/ AARON L. TACHIBANAAaron L. TachibanaChief Financial Officer 69




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##### Table of Contents



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
    
    7/15/200810.50 *

    
    2003 Equity Incentive Plan as amended and
approved by the Companys shareholders
through September 16, 2008.
    
    14A
    
    App. B
    
    000-22430
    
    8/13/0810.51*

    
    1993 Employee Stock Purchase Plan as
amended and approved by the Companys
shareholders through September 16, 2008.
    
    14A
    
    App. C
    
    000-22430
    
    8/13/0810.52*

    
    Form of Change in Control Agreement
entered into between the Company and
certain executive officers (for agreements
executed after June 30, 2008).
    
    
    
    
    
    
    
    
    
    
    
    X10.53*

    
    Employment Agreement between the Company
and Aaron L. Tachibana, dated June 1,
2004.
    
    
    
    
    
    
    
    
    
    
    
    X10.54*

    
    Employment Agreement between the Company
and Paula C. LuPriore, dated October 4,
2002.
    
    
    
    
    
    
    
    
    
    
    
    X10.55*

    
    Employment Agreement between the Company
and Thomas R. Leitzke, dated June 22,
2004.
    
    
    
    
    
    
    
    
    
    
    
    X10.56*

    
    Form of Stock Award Notice and Stock Award
Agreement for employees (2003 Equity
Incentive Plan) (for agreements executed
on or after August 28, 2008)
    
    
    
    
    
    
    
    
    
    
    
    X10.57
    
    Second Amendment To
Credit Agreement
dated as of October
15, 2008 among
Asyst Technologies,
Inc., Asyst
Technologies Japan
Holdings Company,
Inc., and Asyst
Technologies Japan,
Inc. as Borrowers,
and Keybank
National
Association,
Administrative
Agent, Lender,
Swing Line Lender
and L/C Issuer and
the Lenders party
hereto, as Lenders.
    
    8-K
    
    
    99.1
    
    
    000-22430
    
    10/21/200810.58
    
    Third Amendment To
Credit Agreement
dated as of
November 10, 2008
among Asyst
Technologies, Inc.,
Asyst Technologies
Japan Holdings
Company, Inc., and
Asyst Technologies
Japan, Inc. as
Borrowers, and
Keybank National
Association,
Administrative
Agent, Lender,
Swing Line Lender
and L/C Issuer and
the Lenders party
hereto, as Lenders.
    
    
    
    
    
    
    
    
    
    
    
    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).
    
    
    
    
    
    
    
    
    
    
    
    X
 70




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##### Table of Contents



Exhibit
    
    
    
    Incorporated by Reference
    
    
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    Ex. No.
    
    File No.
    
    Filing Date
    
    Herewith32.1
    
    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. 71