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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Form 10-Q

|           |  |                                                                                                                                              | 
|---------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- | 
|(Mark One)
|          
|[X]        |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002        
|          
|OR        
|          
|[   ]      |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________

Commission File number 000-22430

ASYST TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

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

48761 Kato Road, Fremont, California 94538
(Address of principal executive offices)

(510) 661-5000
(Registrants telephone number, including area code)



| |  | Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Yes [X]    No [   ]

The number of shares of the registrants Common Stock, no par value,
outstanding as of July 15, 2002 was 38,013,901.



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TABLE OF CONTENTS



|                               |                                                                                                             |                                                      |  |  |  |  |  | 
|------------------------------ | ----------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|Part I  FINANCIAL INFORMATION
|                               | Item 1  Financial Statements                                                                              
|                               |                                                                                                             | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                               |                                                                                                             | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                               |                                                                                                             | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                               |                                                                                                             | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                               | Item 2    Managements Discussion and Analysis of Results of Financial Condition and Results of Operations
|                               | Item 3  Quantitative and Qualitative Disclosures About Market Risk                                        
|PART II  OTHER INFORMATION   
|                               | Item 6  Exhibits and Reports on Form 8-K                                                                  
|SIGNATURES                    
|EXHIBIT INDEX                 
|EXHIBIT 99.1                  
|EXHIBIT 99.2                  



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ASYST TECHNOLOGIES, INC.

INDEX

|           |  |                       |  |         |  |                                                                                               |  |                                                                                                      |  |  |  |  |    |          |   | 
|---------- |  | --------------------- |  | ------- |  | --------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- |  |  |  |  | -- | -------- | - | 
|           |  |                       |  |         |  |                                                                                               |  |                                                                                                      |  |  |  |  |    | Page No.
|           |  |                       |  |         |  |                                                                                               |  |                                                                                                      |  |  |  |  |    |         
|Part I.    |  | Financial Information
|          
|           |  |                       |  | Item 1. |  | Financial Statements
Condensed Consolidated Balance Sheets 
June 30, 2002 and March 31, 2002 |  |                                                                                                      |  |  |  |  | 3  |         
|          
|           |  |                       |  |         |  |                                                                                               |  | Condensed Consolidated Statements of Operations 
Three Months Ended June 30, 2002 and
June 30, 2001 |  |  |  |  |    |          | 4 | 
|          
|           |  |                       |  |         |  |                                                                                               |  | Condensed Consolidated Statements of Cash Flows 
Three Months Ended June 30, 2002 and
June 30, 2001 |  |  |  |  |    |          | 5
|          
|           |  |                       |  |         |  |                                                                                               |  | Notes to Condensed Consolidated Financial
Statements                                                 |  |  |  |  |    |          | 6 | 
|          
|           |  |                       |  | Item 2. |  | Managements Discussion and Analysis of Financial
Condition and Results of Operations         |  |                                                                                                      |  |  |  |  | 14 |         
|          
|           |  |                       |  | Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                    |  |                                                                                                      |  |  |  |  | 29 |         
|          
|Part II.   |  | Other Information    
|          
|           |  |                       |  | Item 1. |  | Legal Proceedings                                                                             |  |                                                                                                      |  |  |  |  | 30 |         
|          
|           |  |                       |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                              |  |                                                                                                      |  |  |  |  | 31 |         
|          
|Signatures |  |                       |  |         |  |                                                                                               |  |                                                                                                      |  |  |  |  | 31 |         

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Part I  FINANCIAL INFORMATION




Item 1  Financial Statements




ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in thousands)

|                                     |                                                           |                                            |   |          |         |           |   |          |         | 
|------------------------------------ | --------------------------------------------------------- | ------------------------------------------ | - | -------- | ------- | --------- | - | -------- | ------- | 
|                                     |                                                           |                                            |   | June 30, |         | March 31,
|                                     |                                                           |                                            |   | 2002     |         | 2002     
|                                     |                                                           |                                            |   |          |         |          
|ASSETS                               |                                                           |                                            |   |          |         |           |   |         
|Current assets:                      |                                                           |                                            |   |          |         |           |   |         
|                                     | Cash and cash
equivalents                                 |                                            | $ | 64,658   |         |           | $ | 74,738   |        
|                                     | Restricted cash and cash equivalents                      |                                            |   | 4,158    |         |           |   | 5,052    |        
|                                     | Short-term investments                                    |                                            |   | 14,000   |         |           |   | 5,000    |        
|                                     | Accounts receivable, net                                  |                                            |   | 40,545   |         |           |   | 29,715   |        
|                                     | Inventories                                               |                                            |   | 40,420   |         |           |   | 45,110   |        
|                                     | Deferred tax asset                                        |                                            |   | 33,937   |         |           |   | 33,906   |        
|                                     | Prepaid expenses and other                                |                                            |   | 15,272   |         |           |   | 15,006   |        
|                                     |                                                           |                                            |   |          |         |           |   |         
|                                     |                                                           | Total current assets                       |   |          | 212,990 |           |   |          | 208,527 | 
|                                     |                                                           |                                            |   |          |         |           |   |         
|                                     | Property and equipment, net                               |                                            |   | 39,162   |         |           |   | 38,366   |        
|                                     | Deferred tax asset                                        |                                            |   | 33,265   |         |           |   | 30,294   |        
|                                     | Intangible assets and other assets,
net                   |                                            |   | 72,571   |         |           |   | 67,228   |        
|                                     |                                                           |                                            |   |          |         |           |   |         
|                                     |                                                           | Total
assets                               |   | $        | 357,988 |           |   | $        | 344,415 | 
|                                     |                                                           |                                            |   |          |         |           |   |         
|LIABILITIES
AND SHAREHOLDERS EQUITY |                                                           |                                            |   |          |         |           |   |         
|Current liabilities:                 |                                                           |                                            |   |          |         |           |   |         
|                                     | Short-term
loans and
notes payable                        |                                            | $ | 19,964   |         |           | $ | 16,707   |        
|                                     | Current portion of long-term debt and
finance leases      |                                            |   | 1,880    |         |           |   | 2,130    |        
|                                     | Accounts payable                                          |                                            |   | 16,919   |         |           |   | 10,246   |        
|                                     | Accrued liabilities and other                             |                                            |   | 34,063   |         |           |   | 47,859   |        
|                                     | Deferred revenue                                          |                                            |   | 7,555    |         |           |   | 4,476    |        
|                                     |                                                           |                                            |   |          |         |           |   |         
|                                     |                                                           | Total current
liabilities                  |   |          | 80,381  |           |   |          | 81,418  | 
|                                     |                                                           |                                            |   |          |         |           |   |         
|Long-term liabilities:               |                                                           |                                            |   |          |         |           |   |         
|                                     | Long-term debt and finance leases, net of current
portion |                                            |   | 91,238   |         |           |   | 91,265   |        
|                                     | Other long-term liabilities                               |                                            |   | 6,520    |         |           |   | 6,795    |        
|                                     |                                                           |                                            |   |          |         |           |   |         
|                                     |                                                           | Total long-term liabilities                |   |          | 97,758  |           |   |          | 98,060  | 
|                                     |                                                           |                                            |   |          |         |           |   |         
|Shareholders
equity:                |                                                           |                                            |   |          |         |           |   |         
|                                     | Common stock                                              |                                            |   | 322,686  |         |           |   | 294,316  |        
|                                     | Accumulated deficit                                       |                                            |   | (142,837 | )       |           |   | (129,379 | )      
|                                     |                                                           |                                            |   |          |         |           |   |         
|                                     |                                                           | Total shareholders equity                 |   |          | 179,849 |           |   |          | 164,937 | 
|                                     |                                                           |                                            |   |          |         |           |   |         
|                                     |                                                           | Total liabilities and shareholders
equity |   | $        | 357,988 |           |   | $        | 344,415 | 
|                                     |                                                           |                                            |   |          |         |           |   |         

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
(Unaudited; in thousands, except per share data)

|                                                           |                                                                |                          |         |                    |        |      |         |        |        | 
|---------------------------------------------------------- | -------------------------------------------------------------- | ------------------------ | ------- | ------------------ | ------ | ---- | ------- | ------ | ------ | 
|                                                           |                                                                |                          |         | Three Months Ended
|                                                           |                                                                |                          |         | June 30,          
|                                                           |                                                                |                          |         |                   
|                                                           |                                                                |                          |         | 2002               |        | 2001
|                                                           |                                                                |                          |         |                    |        |     
|Net sales                                                  |                                                                | $                        | 55,902  |                    |        | $    | 67,259  |       
|Cost of sales                                              |                                                                |                          | 39,589  |                    |        |      | 49,765  |       
|                                                           |                                                                |                          |         |                    |        |      |         |       
|Gross profit                                               |                                                                |                          | 16,313  |                    |        |      | 17,494  |       
|                                                           |                                                                |                          |         |                    |        |      |         |       
|Operating expenses:                                        |                                                                |                          |         |                    |        |      |         |       
|                                                           | Research and development                                       |                          |         | 10,511             |        |      |         | 11,319 |       
|                                                           | Selling, general and administrative                            |                          |         | 17,490             |        |      |         | 23,075 |       
|                                                           | Amortization of acquired intangible assets                     |                          |         | 2,000              |        |      |         | 3,542  |       
|                                                           | Non-recurring charges                                          |                          |         |                   |        |      |         | 18,652 |       
|                                                           | In-process research and development costs of acquired business |                          |         | 2,500              |        |      |         | 2,000  |       
|                                                           |                                                                |                          |         |                    |        |      |         |       
|                                                           |                                                                | Total
operating expenses |         |                    | 32,501 |      |         |        | 58,588 | 
|Operating loss                                             |                                                                |                          | (16,188 | )                  |        |      | (41,094 | )     
|Other income (expense), net                                |                                                                |                          | (1,756  | )                  |        |      | (32     | )     
|                                                           |                                                                |                          |         |                    |        |      |         |       
|Loss before benefit for income taxes                       |                                                                |                          | (17,944 | )                  |        |      | (41,126 | )     
|Benefit for income taxes                                   |                                                                |                          | (4,486  | )                  |        |      | (13,571 | )     
|                                                           |                                                                |                          |         |                    |        |      |         |       
|Net loss                                                   |                                                                | $                        | (13,458 | )                  |        | $    | (27,555 | )     
|                                                           |                                                                |                          |         |                    |        |      |         |       
|Basic and diluted net loss per share                       |                                                                | $                        | (0.37   | )                  |        | $    | (0.79   | )     
|                                                           |                                                                |                          |         |                    |        |      |         |       
|Shares used in the basic and diluted per share calculation |                                                                |                          | 36,565  |                    |        |      | 35,007  |       
|                                                           |                                                                |                          |         |                    |        |      |         |       

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
(Unaudited; in thousands)

|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |        |         |         |       | 
|------------------------------------------------ | ----------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | --------------------------------------------------- | ------- | ------------------ | ------ | ------ | ------- | ------- | ----- | 
|                                                 |                                                                                           |                                                                   |                                                     |         | Three Months Ended
|                                                 |                                                                                           |                                                                   |                                                     |         | June 30,          
|                                                 |                                                                                           |                                                                   |                                                     |         |                   
|                                                 |                                                                                           |                                                                   |                                                     |         | 2002               |        | 2001  
|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |       
|Cash flows from operating activities:            |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|                                                 | Net loss                                                                                  |                                                                   | $                                                   | (13,458 | )                  |        | $      | (27,555 | )      
|                                                 | Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |                                                                   |                                                     |         |                    |        |        |         |        
|                                                 |                                                                                           | Depreciation
and amortization                                     |                                                     |         | 5,866              |        |        |         | 6,477   |      
|                                                 |                                                                                           | Employee
and
non-employee
stock compensation                      |                                                     |         | 383                |        |        |         | 28      |      
|                                                 |                                                                                           | Provision
for doubtful accounts                                   |                                                     |         | (276               | )      |        |         | 63      |      
|                                                 |                                                                                           | Write-down
of
land
held
for sale                                  |                                                     |         |                   |        |        |         | 15,000  |      
|                                                 |                                                                                           | Tax
benefit realized from activity in employee stock option plans |                                                     |         |                   |        |        |         | 244     |      
|                                                 |                                                                                           | In-process
research
and
development costs                         |                                                     |         | 2,500              |        |        |         | 2,000   |      
|                                                 | Changes in assets and liabilities, net of acquisitions:                                   |                                                                   |                                                     |         |                    |        |        |         |        
|                                                 |                                                                                           | Accounts receivable                                               |                                                     |         | (9,748             | )      |        |         | 21,098  |      
|                                                 |                                                                                           | Inventories                                                       |                                                     |         | 5,127              |        |        |         | 7,427   |      
|                                                 |                                                                                           | Deferred
tax asset                                                |                                                     |         | (3,002             | )      |        |         | (13,723 | )    
|                                                 |                                                                                           | Prepaid
expenses
and other                                        |                                                     |         | (3,832             | )      |        |         | 1,707   |      
|                                                 |                                                                                           | Other
assets, net                                                 |                                                     |         | 1,833              |        |        |         | 3,420   |      
|                                                 |                                                                                           | Accounts payable                                                  |                                                     |         | 6,564              |        |        |         | (10,627 | )    
|                                                 |                                                                                           | Accrued
liabilities and other                                     |                                                     |         | 1,254              |        |        |         | (3,684  | )    
|                                                 |                                                                                           | Deferred revenue                                                  |                                                     |         | 3,079              |        |        |         | 2,871   |      
|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|                                                 |                                                                                           |                                                                   | Net
cash provided by (used in) operating activities |         |                    | (3,710 | )      |         |         | 4,746 | 
|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|Cash flows from investing activities:            |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|                                                 | Purchase of short-term investments                                                        |                                                                   |                                                     | (9,000  | )                  |        |        |        |        
|                                                 | Sale or maturity of short-term investments                                                |                                                                   |                                                     |        |                    |        |        | 3,000   |        
|                                                 | Purchase of restricted cash equivalents and short-term investments                        |                                                                   |                                                     | (12,500 | )                  |        |        | (28,082 | )      
|                                                 | Sale or maturity of restricted cash equivalents and short-term investments                |                                                                   |                                                     | 13,394  |                    |        |        | 37,550  |        
|                                                 | Purchase of property and equipment, net                                                   |                                                                   |                                                     | (3,627  | )                  |        |        | (3,383  | )      
|                                                 | Net cash used in acquisitions                                                             |                                                                   |                                                     |        |                    |        |        | (3,759  | )      
|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|                                                 |                                                                                           | Net
cash
provided
by
(used
in)
investing activities               |                                                     |         | (11,733            | )      |        |         | 5,326   |      
|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|Cash flows from financing activities:            |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|                                                 | Net proceeds (payments) on short-term loans                                               |                                                                   |                                                     | 1,890   |                    |        |        | (6,851  | )      
|                                                 | Net proceeds (payments) from long-term debt and finance leases                            |                                                                   |                                                     | (246    | )                  |        |        | 1,791   |        
|                                                 | Issuance of common stock                                                                  |                                                                   |                                                     | 3,303   |                    |        |        | 1,852   |        
|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|                                                 |                                                                                           | Net
cash
provided
by
(used
in)
financing activities               |                                                     |         | 4,947              |        |        |         | (3,208  | )    
|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|Effect of exchange rate changes on cash          |                                                                                           |                                                                   | 416                                                 |         |                    |        |       |        
|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|Increase (decrease) in cash and cash equivalents |                                                                                           |                                                                   | (10,080                                             | )       |                    |        | 6,864  |        
|Cash and cash equivalents, beginning of period   |                                                                                           |                                                                   | 74,738                                              |         |                    |        | 34,749 |        
|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |        |        
|Cash and cash equivalents, end of period         |                                                                                           | $                                                                 | 64,658                                              |         |                    | $      | 41,613 |        
|                                                 |                                                                                           |                                                                   |                                                     |         |                    |        |        |        

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
(Unaudited)

1. ORGANIZATION OF THE COMPANY:

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

In May 2002, Asyst Connectivity Technologies, Inc., a subsidiary of the
Company (ACT), purchased substantially all of the assets of domainLogix
Corporation, (DLC), a Texas corporation.

In May 2001, the Company acquired 100 percent of the common stock of GW
Associates, Inc. (GW), a California corporation.

In February 2001, the Company acquired 100 percent of the equity of
Advanced Machine Programming, Inc., a Delaware company, and SemiFab Inc., a
Delaware company.

All of the above transactions, which were unrelated, were accounted for
using the purchase method of accounting.

2. SIGNIFICANT ACCOUNTING POLICIES:

Basis of Preparation

While the financial information furnished is unaudited, the condensed
consolidated financial statements included in this report reflect all
adjustments (consisting only of normal recurring adjustments) which the Company
considers necessary for the fair presentation of the results of operations for
the interim periods covered and of the financial condition of the Company at
the date of the interim balance sheet. All significant intercompany accounts
and transactions have been eliminated. Certain prior year amounts in the
condensed consolidated financial statements and the notes thereto have been
reclassified where necessary to conform to the quarter ended June 30, 2002. The
Company closes its books on the last Saturday of each quarter and thus the
actual date of the quarter-end is usually different from the month-end dates
used throughout this Form 10-Q report. The results for interim periods are not
necessarily indicative of the results for the entire year. The condensed
consolidated financial statements should be read in connection with the Asyst
Technologies, Inc. consolidated financial statements for the year ended March
31, 2002 included in its Annual Report on Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates.

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Cash and Cash Equivalents

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

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents represent amounts that are restricted
as to their use in accordance with Japanese debt agreements.

Restricted cash and cash equivalents by security type are as follows
(dollars in thousands):



|                  |                                                  |       |       |             |       |           |       |     |       | 
|----------------- | ------------------------------------------------ | ----- | ----- | ----------- | ----- | --------- | ----- | --- | ----- | 
|                  |                                                  |       |       | June 30,    |       | March 31,
|                  |                                                  |       |       | 2002        |       | 2002     
|                  |                                                  |       |       |             |       |          
|                  |                                                  |       |       | (Unaudited) |       |           |       |    
|Cash              |                                                  |       | 3,658 |             |       | $         | 4,552 |    
|Cash equivalents: |                                                  |       |       |             |       |           |       |    
|                  | Institutional money market funds debt securities |       | $     | 500         |       |           | $     | 500 |      
|                  |                                                  |       |       |             |       |           |       |    
|                  |                                                  | Total |       | $           | 4,158 |           |       | $   | 5,052 | 
|                  |                                                  |       |       |             |       |           |       |    

Short-term Investments

As of June 30, 2002 and March 31, 2002, short-term investments consisted
of liquid debt investments with maturities, at the time of purchase, greater
than three months and less than one year. All such investments have been
classified as available-for-sale and are carried at fair value. Unrealized
holding gains and losses, net of taxes reported, have not been material to
date. The cost of the debt security is adjusted for amortization of premiums
and accretion of discounts to maturity. Such amortization, interest income,
realized gains and losses and declines in value that are considered to be other
than temporary, are included in other income (expense), net, on the
accompanying condensed consolidated statements of operations. There have been
no declines in value that are considered to be other than temporary for either
of the three month periods ended June 30, 2002 or 2001. The cost of
investments sold is based on specific identification. The Company does not
intend to hold the individual securities for greater than one year.

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

|                               |  |             |        |           |  |   |       | 
|------------------------------ |  | ----------- | ------ | --------- |  | - | ----- | 
|                               |  | June 30,    |        | March 31,
|                               |  | 2002        |        | 2002     
|                               |  |             |        |          
|                               |  | (Unaudited) |        |           |  |  
|U.S. corporate debt securities |  | $           | 14,000 |           |  | $ | 5,000 | 
|                               |  |             |        |           |  |   |       | 

Supplemental Statements of Cash Flows Disclosure

Cash paid (received) for interest and domestic and foreign income taxes
are as follows (unaudited; dollars in thousands):

|             |  |                    |     |      |  |   |     | 
|------------ |  | ------------------ | --- | ---- |  | - | --- | 
|             |  | Three Months Ended
|             |  | June 30,          
|             |  |                   
|             |  | 2002               |     | 2001
|             |  |                    |     |     
|Interest     |  | $                  | 84  |      |  | $ | 356 | 
|Income taxes |  | $                  | 183 |      |  | $ | 47  | 

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The Companys significant non-cash investing and financing activities were
as follows (unaudited; dollars in thousands):

|                                               |  |                    |        |      |  |   |        | 
|---------------------------------------------- |  | ------------------ | ------ | ---- |  | - | ------ | 
|                                               |  | Three months Ended
|                                               |  | June 30,          
|                                               |  |                   
|                                               |  | 2002               |        | 2001
|                                               |  |                    |        |     
|Commitment to purchase land                    |  | $                  |       |      |  | $ | 41,121 | 
|Stock issued to acquire DLC                    |  | $                  | 13,510 |      |  | $ |       | 
|Stock issued in connection with GW acquisition |  | $                  | 16,000 |      |  | $ |       | 

Inventories

Inventories are stated at the lower of cost (first in, first out) or
market and include materials, labor and manufacturing overhead costs.
Provisions, when required, are made to reduce excess and obsolete inventories
to their estimated net realizable values.

Inventories consist of the following (dollars in thousands):

|                                   |       |   |             |        |           |   |        |        | 
|---------------------------------- | ----- | - | ----------- | ------ | --------- | - | ------ | ------ | 
|                                   |       |   | June 30,    |        | March 31,
|                                   |       |   | 2002        |        | 2002     
|                                   |       |   |             |        |          
|                                   |       |   | (Unaudited) |        |           |   |       
|Raw materials                      |       | $ | 20,505      |        |           | $ | 23,161 |       
|Work-in-process and finished goods |       |   | 19,915      |        |           |   | 21,949 |       
|                                   |       |   |             |        |           |   |        |       
|                                   | Total |   | $           | 40,420 |           |   | $      | 45,110 | 
|                                   |       |   |             |        |           |   |        |       

Intangible Assets and Other Assets, net

| |                                                                              
| | -----------------------------------------------------------------------------
| | Intangible assets and other assets, net include the following (in
thousands):

|                                           |       |   |             |        |           |   |        |        | 
|------------------------------------------ | ----- | - | ----------- | ------ | --------- | - | ------ | ------ | 
|                                           |       |   | June 30,    |        | March 31,
|                                           |       |   | 2002        |        | 2002     
|                                           |       |   |             |        |          
|                                           |       |   | (Unaudited) |        |           |   |       
|Purchased technology                       |       | $ | 19,986      |        |           | $ | 14,848 |       
|Customer lists and other intangible assets |       |   | 10,611      |        |           |   | 13,297 |       
|Licenses and patents                       |       |   | 6,957       |        |           |   | 6,903  |       
|Goodwill                                   |       |   | 4,428       |        |           |   |       |       
|Land held for sale                         |       |   | 26,121      |        |           |   | 26,121 |       
|Other                                      |       |   | 4,468       |        |           |   | 6,059  |       
|                                           |       |   |             |        |           |   |        |       
|                                           | Total |   | $           | 72,571 |           |   | $      | 67,228 | 
|                                           |       |   |             |        |           |   |        |       

The Company adopted Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets, or SFAS 142, in the first quarter of
fiscal 2003. SFAS 142 supersedes Accounting Principles Board Opinion No. 17,
Intangible Assets, and discontinues the amortization of goodwill. In
addition, SFAS 142 includes provisions regarding: 1) the reclassification
between goodwill and identifiable intangible assets in accordance with the new
definition of intangible assets set forth in Statement of Financial Accounting
Standards No. 141, Business Combinations; 2) the reassessment of the useful
lives of existing recognized intangibles; and 3) the testing for impairment of
goodwill and other intangibles.

In accordance with SFAS 142, beginning April 1, 2002, goodwill is no
longer amortized, but is reviewed periodically for impairment. The Company
expects to complete the first step of the transitional goodwill impairment test
in the second quarter of fiscal 2003.

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Based on criteria set out in SFAS 142, the Company reclassified $2.2
million of assets previously classified as intangible assets to goodwill.
Intangible assets subject to amortization are being amortized over the
following estimated useful lives using the straight-line method: purchased
technology, four to eight years; customer lists and
other intangible assets, five to ten years; and licenses and patents, ten
years. No changes were made to the useful lives of amortizable intangible
assets in connection with the adoption of SFAS 142. In connection with the DLC
acquisition in May 2002, the Company recorded goodwill of $2.2 million in the
quarter ended June 30, 2002.

Intangible assets were as follows (in thousands):

|                               |                                            |       |   |               |        |                |   |          |        |              |   |        |        |  |   |        |        | 
|------------------------------ | ------------------------------------------ | ----- | - | ------------- | ------ | -------------- | - | -------- | ------ | ------------ | - | ------ | ------ |  | - | ------ | ------ | 
|                               |                                            |       |   | June 30, 2002 |        | March 31, 2002
|                               |                                            |       |   |               |        |               
|                               |                                            |       |   | Gross         |        |                |   |          |        | Gross        |   |        |        | 
|                               |                                            |       |   | Carrying      |        | Accumulated    |   | Carrying |        | Accumulated 
|                               |                                            |       |   | Amount        |        | Amortization   |   | Amount   |        | Amortization
|                               |                                            |       |   |               |        |                |   |          |        |             
|Amortizable intangible assets: |                                            |       |   |               |        |                |   |          |        |              |   |        |        |  |   |       
|                               | Purchased technology                       |       | $ | 31,358        |        |                | $ | 11,372   |        |              | $ | 24,787 |        |  | $ | 9,939  |       
|                               | Customer lists and other
intangible assets |       |   | 15,899        |        |                |   | 5,288    |        |              |   | 19,504 |        |  |   | 6,207  |       
|                               | Licenses and patents                       |       |   | 8,696         |        |                |   | 1,739    |        |              |   | 8,496  |        |  |   | 1,593  |       
|                               |                                            |       |   |               |        |                |   |          |        |              |   |        |        |  |   |       
|                               |                                            | Total |   | $             | 55,953 |                |   | $        | 18,399 |              |   | $      | 52,787 |  |   | $      | 17,739 | 
|Unamortized intangible assets: |                                            |       |   |               |        |                |   |          |        |              |   |        |        |  |   |       
|                               | Goodwill                                   |       | $ | 4,428         |        |                | $ |         |        |              | $ | 11,376 |        |  | $ | 11,376 |       

Amortization expense was $2.1 million for the quarter ended June 30, 2002
and $3.6 million for the quarter ended June 30, 2001.

Expected future
intangible amortization expense, based on current balances, for the remainder of
fiscal 2003 and for the following fiscal years is as follows (in thousands):

|              |  |   |       | 
|------------- |  | - | ----- | 
|Fiscal Years:
|2003          |  | $ | 6,595 | 
|2004          |  |   | 8,669 | 
|2005          |  |   | 8,668 | 
|2006          |  |   | 6,509 | 
|2007          |  |   | 2,867 | 
|Thereafter    |  |   | 4,246 | 

To facilitate comparison with prior periods, the following table shows our
results for the quarter ended June 30, 2001 and the three fiscal years ended
March 31, 2002, if goodwill was not amortized for those periods (unaudited;
dollars in thousands):

|                            |  |              |       |              |  |                   |          |              |  |             |       |   |  |   |       |  
|--------------------------- |  | ------------ | ----- | ------------ |  | ----------------- | -------- | ------------ |  | ----------- | ----- | - |  | - | ----- | -
|                            |  |              |       |              |  | Net Income (Loss) |          | Basic EPS    |  | Diluted EPS
|                            |  |              |       |              |  | Excluding         |          | Excluding    |  | Excluding  
|                            |  | Goodwill     |       | Goodwill     |  | Goodwill          |          | Goodwill    
|Fiscal Period               |  | Amortization |       | Amortization |  | Amortization      |          | Amortization
|                            |  |              |       |              |  |                   |          |             
|Quarter ended June
30, 2001 |  | $            | 1,686 |              |  | $                 | (25,869  | )            |  | $           | (0.74 | ) |  | $ | (0.74 | )
|Fiscal 2002                 |  |              | 7,625 |              |  |                   | (141,292 | )            |  |             | (3.99 | ) |  |   | (3.99 | )
|Fiscal 2001                 |  |              | 3,457 |              |  |                   | 30,483   |              |  |             | 0.93  |   |  |   | 0.87  |  
|Fiscal 2000                 |  |              | 345   |              |  |                   | 10,364   |              |  |             | 0.37  |   |  |   | 0.33  |  

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

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement
exists, delivery has occurred or service has been rendered, the sellers price
is fixed or determinable and collectibility is reasonably assured. Some of the
Companys products are large volume consumables that are tested to industry
and/or customer acceptance criteria prior to shipment. Revenue for these types
of products is recognized at shipment. Certain of the Companys product sales
are accounted for as multiple-element arrangements. If the Company has met
defined customer acceptance experience levels with both the customer and the
specific type of equipment, the Company recognizes the product revenue at the
time of shipment and transfer of title, with the remainder when the other
elements, primarily installation, have been completed. Other products of the
Company are highly customized systems that cannot be completed or adequately
tested to customer specifications prior to shipment from the factory. The
Company does not recognize revenue for these products until formal acceptance
by the customer. Revenue for spare parts sales is recognized on shipment.
Revenue related to maintenance and service contracts is recognized ratably over
the duration of the contracts. Unearned maintenance and service contract
revenue is not significant and is included in accrued liabilities and other.

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

Provision for Income Taxes

For the three month period ended June 30, 2002 the Company recorded a
benefit for income taxes of $4.5 million, representing an annual effective
income tax rate of 25 percent. For the quarter ended June 30, 2001 the Company
recorded a benefit for income taxes of $13.6 million, representing an annual
effective income tax rate of 33 percent. The annual effective income tax rate
for the quarter ended June 30, 2002 reflects the impact of non-deductible
amortization and deferred stock compensation and research and development tax
credits.

Loss Per Share

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

The following table sets forth the calculation of basic and diluted loss
per share (unaudited; in thousands, except per share amounts):
10Table of Contents

|                                  |                                |                      |   |                    |       |      |   |         |       |  
|--------------------------------- | ------------------------------ | -------------------- | - | ------------------ | ----- | ---- | - | ------- | ----- | -
|                                  |                                |                      |   | Three Months Ended
|                                  |                                |                      |   | June 30,          
|                                  |                                |                      |   |                   
|                                  |                                |                      |   | 2002               |       | 2001
|                                  |                                |                      |   |                    |       |     
|Basic and diluted loss per share: |                                |                      |   |                    |       |      |   |        
|                                  | Net loss                       |                      | $ | (13,458            | )     |      | $ | (27,555 | )    
|                                  | Weighted average common shares |                      |   | 36,565             |       |      |   | 35,007  |      
|                                  |                                |                      |   |                    |       |      |   |        
|                                  |                                | Basic loss per share |   | $                  | (0.37 | )    |   | $       | (0.79 | )
|                                  |                                |                      |   |                    |       |      |   |        

Securities outstanding at June 30, 2002 which were not included in the
calculation of diluted net loss per share, as to do so would be anti-dilutive,
consisted of 5,681,818 related to the 5 3/4 percent convertible subordinated
notes, 1,881,396 related to options and 304,327 related to restricted stock
awards granted in connection with the acquisition of DLC.

Comprehensive Income

Comprehensive income is defined as the change in equity of a company
during a period from transactions and other events and circumstances excluding
transactions resulting from investments by owners and distributions to owners
and is to include unrealized gains and losses that have historically been
excluded from net income (loss) and reflected instead in equity. The Company
has not had any such transactions or events during the periods, which are
material to the condensed consolidated financial statements. Therefore
comprehensive income (loss) is the same as the net income (loss) reported in
the condensed consolidated financial statements.

New Accounting Standard

In June 2002, the Financial Accounting Standards Board issued SFAS No.
146, Accounting for Exit or Disposal Activities, or SFAS 146. SFAS 146
addresses significant issues regarding the recognition, measurement, and
reporting of costs that are associated with exit and disposal activities,
including restructuring activities that are currently accounted for under EITF
No. 94-3, Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). The scope of SFAS 146 also includes costs related to
terminating a contract that is not a capital lease and termination benefits
that employees who are involuntarily terminated receive under the terms of a
one-time benefit arrangement that is not an ongoing benefit arrangement or an
individual deferred-compensation contract. SFAS 146 will be effective for exit
or disposal activities that are initiated after December 31, 2002 and early
application is encouraged. The Company will adopt SFAS 146 during the quarter
ending March 31, 2003. The provisions of EITF No. 94-3 shall continue to apply
for an exit activity initiated under an exit plan that met the criteria of EITF
No. 94-3 prior to the adoption of SFAS 146. The effect on adoption of SFAS 146
will change on a prospective basis the timing of when restructuring charges are
recorded from a commitment date approach to when the liability is incurred.

3. REPORTABLE SEGMENTS:

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

Net sales by geography were as follows (unaudited; dollars in millions):

|                   |       |   |                    |      |      |   |      |      | 
|------------------ | ----- | - | ------------------ | ---- | ---- | - | ---- | ---- | 
|                   |       |   | Three Months Ended
|                   |       |   | June 30,          
|                   |       |   |                   
|                   |       |   | 2002               |      | 2001
|                   |       |   |                    |      |     
|United States      |       | $ | 26.2               |      |      | $ | 32.3 |     
|Taiwan             |       |   | 11.0               |      |      |   | 9.6  |     
|Japan              |       |   | 7.7                |      |      |   | 16.8 |     
|Other Asia/Pacific |       |   | 6.2                |      |      |   | 3.0  |     
|Europe             |       |   | 4.8                |      |      |   | 5.6  |     
|                   |       |   |                    |      |      |   |      |     
|                   | Total |   | $                  | 55.9 |      |   | $    | 67.3 | 
|                   |       |   |                    |      |      |   |      |     

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| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | The net sales by product or service categories comprising the Companys
net sales were as follows (unaudited; dollars in millions):

|                       |       |   |                    |      |      |   |      |      | 
|---------------------- | ----- | - | ------------------ | ---- | ---- | - | ---- | ---- | 
|                       |       |   | Three Months Ended
|                       |       |   | June 30,          
|                       |       |   |                   
|                       |       |   | 2002               |      | 2001
|                       |       |   |                    |      |     
|Equipment Solutions    |       | $ | 24.5               |      |      | $ | 31.9 |     
|Fab Solutions          |       |   | 26.0               |      |      |   | 30.9 |     
|Connectivity Solutions |       |   | 2.3                |      |      |   | 1.2  |     
|Other                  |       |   | 3.1                |      |      |   | 3.3  |     
|                       |       |   |                    |      |      |   |      |     
|                       | Total |   | $                  | 55.9 |      |   | $    | 67.3 | 
|                       |       |   |                    |      |      |   |      |     

4. NON-RECURRING CHARGES:

The Company incurred non-recurring charges of $18.7 million during the
quarter ended June 30, 2001 consisting of a $15.0 million impairment of the
market value of land held for sale, the impairment of approximately $2.9
million of engineering costs related to that land and severance costs of
approximately $0.8 million. The Company owns land in Fremont, California,
which it is currently marketing for sale. The Company had intended to
construct corporate headquarters facilities on the land and subsequently
decided not to build these facilities. Initially, the Company leased the land
from a syndicate of financial institutions pursuant to an original lease
agreement and an amended lease agreement. The Company purchased the land on
October 22, 2001 for $41.1 million, and paid the syndicate of financial
institutions approximately $2.9 million for engineering costs incurred in
preparation for making leasehold improvements to the land. Based upon market
data at June 30, 2001, the Company estimated that the then market value of the
land had been impaired and recorded a $15.0 million write-down to its
estimated market value during the quarter ended June 30, 2001.

The following table summarizes the Companys utilization of accrued
restructuring expense during the quarter ended June 30, 2002 (unaudited; dollars in
thousands):

|                             |  |           |      |            |  |       |       |   |  |   |       |  
|---------------------------- |  | --------- | ---- | ---------- |  | ----- | ----- | - |  | - | ----- | -
|                             |  | Severance |      |            |  |       |       |   |  |  
|                             |  | and       |      | Excess     |  |       |       |  
|                             |  | Benefits  |      | Facilities |  | Total
|                             |  |           |      |            |  |      
|Balance at March 31, 2002    |  | $         | 741  |            |  | $     | 2,432 |   |  | $ | 3,173 |  
|Non-cash related utilization |  |           | (-   | )          |  |       | (496  | ) |  |   | (496  | )
|Amounts paid in cash         |  |           | (260 | )          |  |       | (173  | ) |  |   | (433  | )
|                             |  |           |      |            |  |       |       |   |  |   |       |  
|Balance, June 30, 2002       |  | $         | 481  |            |  | $     | 1,763 |   |  | $ | 2,244 |  
|                             |  |           |      |            |  |       |       |   |  |   |       |  

The Company expects to utilize the remaining balance of approximately $2.2
million during the fiscal year ended March 31, 2003, primarily with cash.

5. SHORT-TERM LOANS:

The Company had short-term debt from banks in Japan of Japanese Yen 2,496
million ($20.0 million) and Japanese Yen 2,216 million ($16.7 million) at June
30, 2002 and March 31, 2002, respectively. As of June 30, 2002, the interest
rate ranged from 1.4 percent to 1.9 percent

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6. LONG-TERM DEBT:

On July 3, 2001
the Company completed the sale of $86.3 million 5 3/4
percent convertible subordinated notes which resulted in aggregate proceeds of
$82.9 million to the Company net of issuance costs. The notes are convertible,
at the option of the holder, at any time on or prior to maturity into shares of
the Companys common stock at a conversion price of $15.18 per share, which is
equal to a conversion rate of 65.8718 shares per $1,000 principal amount of
notes. The notes mature July 3, 2008, pay interest on January 3 and July 3 of
each year and are redeemable at the Companys option after July 3, 2004. The
Company has additional long-term debt and finance leases totaling $6.9 million
at June 30, 2002 and $7.1 million at March 31, 2002.

7. ASYST CONNECTIVITY TECHNOLOGIES, INC. (ACT):

On May 29, 2002, ACT, a subsidiary of Asyst, purchased substantially all
of the assets of domainLogix Corporation (DLC), a leading developer of
next-generation software for tool communication and a provider of a variety of
consulting, development and integration services to customers. Prior to this
acquisition, the Company owned approximately seven percent of the outstanding
shares of DLC. The acquisition is intended to solidify the Companys position
in connectivity solutions. The results of ACT reflect the acquisition of DLCs
assets from the purchase date. The DLC assets were acquired for $2.7 million
of cash, $0.9 million of liabilities assumed, and 468,796 shares of Asyst
common stock valued at $7.9 million. In addition, certain employees of DLC
received a grant of 304,327 shares of Asyst common stock, to vest over four
years based on continued employment with ACT. The stock grants are valued at
approximately $5.7 million, based on their intrinsic value at the date of
grant. Assets acquired include $460,000 of receivables and $40,000 of fixed
assets. The majority of the purchase price will be recorded as goodwill and
intangible assets, including in-process research and development, based on an
independent appraisal. The appraisal is expected to be completed during the
second quarter of fiscal 2003. The Company estimates the value of intangible
assets as follows (unaudited; in thousands):

|                                    |  |  |        | 
|----------------------------------- |  |  | ------ | 
|Amortizable intangible assets       |  |  | $7,095 | 
|Goodwill                            |  |  | 2,184  | 
|In-process research and development |  |  | 2,500  | 

Comparative pro forma information reflecting the acquisition of DLCs
assets has not been presented because the operations of DLC were not material
to the Companys financial statements.

8. GW ASSOCIATES, INC. (GW)

On May 22, 2001 the Company acquired GW, a developer of factory
integration software used by electronics manufacturers, for $3.6 million of
cash, 451,263 shares of the Companys common stock valued at $8.0 million and a
note for $16.0 million. The note was paid in May 2002 using
841,308 shares of the Companys common stock. The note payable was included in accrued liabilities and other in the
condensed consolidated balance sheet at March 31, 2002. The results of GW have
been combined with those of the Company since the date of acquisition.

9. PROPOSED JOINT VENTURE, ASYST SHINKO, INC.

On May 24, 2002 the Company signed a definitive agreement with Shinko
Electric Co., Ltd. (Shinko), under which the two companies will establish a new
joint venture company, to be called Asyst Shinko, Inc. The joint venture will
develop, manufacture and market Shinkos market-leading Automated Materials
Handling Systems (AMHS). The transaction is expected to close in October 2002.
Under terms of the agreement, Asyst will acquire 51% of the joint venture for
approximately JPY 8.16 billion, or approximately $68 million at current
exchange rates, and Shinko will contribute its entire AMHS business, including
intellectual property and other assets, installed base and 250 employees.

10. RELATED PARTY TRANSACTIONS:

At June 30, 2002 and March 31, 2002, the Company held two notes receivable
from a former executive officer totaling $0.8 million, notes from two former
employees totaling $0.2 million and notes from four current employees totaling
$0.9 million. In all but one case, loans were extended to these individuals to
assist them in their

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relocation to California. The remaining loan was extended in connection
with a personal matter. Each of the notes receivable are secured by second
deeds of trust on certain real property and pledged securities of the Company
owned by the employees and are included in other assets at June 30, 2002 and
March 31, 2002, respectively.

11. LEGAL PROCEEDINGS:

In October 1996, the Company filed a lawsuit in the United States District
Court for the Northern District of California against Jenoptik A.G., or
Jenoptik, Jenoptik-Infab, Inc., or Infab, Emtrak, Inc., or Emtrak and Empak,
Inc., or Empak alleging infringement of two patents related to the Companys
SMART Traveler System. The Company amended its Complaint in April 1997 to
allege causes of action for breach of fiduciary duty against Jenoptik and
Meissner & Wurst, GmbH, and misappropriation of trade secrets and unfair
business practices against all defendants. The Complaint seeks damages and
injunctive relief against further infringement. All defendants filed counter
claims, seeking a judgment declaring the patents invalid, unenforceable and not
infringed. Jenoptik, Infab, and Emtrak also alleged that the Company violated
federal antitrust laws and engaged in unfair competition. The Company denied
these allegations. In May 1998, the Company along with Empak stipulated to a
dismissal, without prejudice, of the respective claims and counter claims
against each other. In November 1998, the court granted defendants motion for
partial summary judgment as to most of the patent infringement claims and
invited further briefing as to the remainder. In January 1999, the court
granted the Companys motion for leave to seek reconsideration of the November
summary judgment order and also, pursuant to a stipulation of the parties,
dismissed without prejudice two of the three antitrust counter claims brought
by the defendants. Since then, the parties stipulated to, and the court has
ordered, the dismissal with prejudice of the defendants unfair competition and
remaining antitrust counterclaim, and the Companys breach of fiduciary duty,
misappropriation of trade secrets and unfair business practices claims. On June
4, 1999, the court issued an order by which it granted a motion for
reconsideration in the sense that it considered the merits of the Companys
arguments, but decided that it would not change its prior ruling on summary
judgment and would also grant summary judgment for defendants on the remaining
patent infringement claim. The Company appealed and the trial date has since
been vacated. On October 10, 2001, the appellate court reversed the district
courts decision to grant defendants motion for summary judgement and remanded
the case back to the district court. On July 22, 2002, the Company along with
the remaining defendants stipulated to a dismissal of the respective claims and
counterclaims relating to one of the two patents in suit. The matter is now
proceeding before the district court.

In July 2002, three former shareholders of SemiFab, Inc., a
corporation that merged with a subsidiary of the Company in February 2001, filed a complaint in San Benito
County Superior Court against the Company claiming breach of contract,
declaratory relief, conversion, constructive trust, and injunctive relief. The
plaintiffs allege that the Company failed to provide sufficient funding to
SemiFab to make specified capital expenditures, as required by the merger
agreement under which SemiFab was acquired. They further allege that they were
entitled to receive approximately 466,000 shares of Company stock on specified
dates. The plaintiffs seek the shares of common stock, plus interest, attorney fees and
other relief. The Company denies that it failed to fulfill
its obligations under the merger agreement. The Company responded to the
complaint in August 2002. The first hearing on this matter is scheduled for September 2002.

12. SUBSEQUENT EVENT:

On August 1,
2002 the Board of Directors appointed Stephen S. Schwartz to the
position of President and Chief Executive Officer. Mihir Parikh, formerly Chief
Executive Officer and Chairman of the Board, will remain as Chairman
of the Board.




Item 2    Managements Discussion and Analysis of Results 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

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future events. The Companys actual results could differ materially. These forward-looking
statements are not guarantees of future performance and are subject to risks,
uncertainties and assumptions, including those set forth in this section as
well as those under the caption, Managements Discussion and Analysis of
Financial Condition and Results of Operations.

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

Overview

We are a leading provider of integrated automation systems for the
semiconductor and related electronics manufacturing industries. We design
systems that enable semiconductor manufacturers to increase their manufacturing
productivity and protect their investment in silicon wafers during the
manufacture of ICs. We sell our systems directly to semiconductor
manufacturers, as well as to OEMs that integrate our systems with their
equipment for sale to semiconductor manufacturers. Our sales are tied to
capital expenditures at fabs and are cyclical in nature. During fiscal 2002,
the worldwide demand for semiconductors continued its rapid decline. We
believe that reduced worldwide demand for semiconductors and resulting
decreases in capital spending for semiconductor manufacturing contributed to
this downturn, which began in the second half of fiscal 2001. We experienced
substantial increases in orders and revenue during the first quarter of fiscal
2003, however we do not believe this reflects a sustained recovery. We have
taken an aggressive approach to reducing fixed and variable cost during this
downturn and delayed increasing costs in spite of recent sales growth. We have
reduced our manufacturing facilities from eight to four. We also reduced our
workforce by approximately 435 employees. Four reporting entities have been
consolidated onto one Enterprise Resource Planning System. These actions have
increased efficiency throughout the operation and reduced general and
administrative costs. We have outsourced the manufacturing of several product
lines resulting in reduced fixed and variable cost while improving product
cost. Our gross margins increased to 29 percent in the first quarter of fiscal
2003 from 24 percent in the fourth quarter of fiscal 2002 on a 46 percent
increase in sales.

In addition to the changes in the business cycle impacting demand for our
products, we have seen an overall shift from 200mm to 300mm products. In fiscal
2002, 300mm products represented 34% of revenues, 36% of revenues in the first
quarter of fiscal 2003, as compared to 10% of revenues for fiscal 2001.

During the first quarter of fiscal 2003, sales increased 46 percent and
bookings increased 58 percent sequentially over the fourth quarter of fiscal
2002. We anticipate sales growth of approximately 25 percent in the second
quarter of fiscal 2003 over the first quarter. However, we have not seen
sufficient recovery in the end markets for semiconductors to suggest that this
recent upturn marks the beginning of a sustained recovery in capital spending.
As evidence of this, in July 2002 several chipmakers announced plans to reduce
capital spending for the remainder of the year.

We sell our products
principally through a direct sales force worldwide. The use of distributors
in Europe ceased on December 31, 2001. In Japan, we use a direct
sales force as well as two distributors, one to sell sorters and the
other to sell software. Our functional currency is the U.S.
dollar, except in Japan where our functional currency is the Japanese yen. To
date, the impact of currency translation gains or losses has not been material
to our sales or results of operations.

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Acquisitions

During the fiscal year ended March 31, 2002 and the first quarter of
fiscal 2003, we acquired the following companies:

In May 2002, Asyst Connectivity Technologies, Inc., or ACT, one of our
subsidiaries, purchased the assets of domainLogix Corporation, or DLC, a Texas
corporation. DLC is a leading developer of software for tool communication and
a provider of a variety of consulting, development and integration services to
its customers.

In May 2001, we acquired GW Associates, Inc., or GW, a California
corporation, a developer of factory integration software used by electronics
manufacturers.

Both of the above transactions were accounted for using the purchase
method of accounting.

The results of operations for the first quarter of fiscal 2003 include the
revenues and expenses of ACT from the date of acquisition. The results of
operations for the first quarter of fiscal 2001 include the revenues and
expenses of GW from the date of acquisition.

Three Months Ended June 30, 2002 and 2001

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

|                                     |                                                                |                          |       |                    |      |      |       |      |      | 
|------------------------------------ | -------------------------------------------------------------- | ------------------------ | ----- | ------------------ | ---- | ---- | ----- | ---- | ---- | 
|                                     |                                                                |                          |       | Three Months Ended
|                                     |                                                                |                          |       | June 30,          
|                                     |                                                                |                          |       |                   
|                                     |                                                                |                          |       | 2002               |      | 2001
|                                     |                                                                |                          |       |                    |      |     
|Net sales                            |                                                                |                          | 100.0 | %                  |      |      | 100.0 | %   
|Cost of sales                        |                                                                |                          | 70.8  |                    |      |      | 74.0  |     
|                                     |                                                                |                          |       |                    |      |      |       |     
|Gross profit (loss)                  |                                                                |                          | 29.2  |                    |      |      | 26.0  |     
|Operating expenses:                  |                                                                |                          |       |                    |      |      |       |     
|                                     | Research and development                                       |                          |       | 18.8               |      |      |       | 16.8 |     
|                                     | Selling, general and administration                            |                          |       | 31.3               |      |      |       | 34.3 |     
|                                     | Amortization of acquired intangible assets                     |                          |       | 3.6                |      |      |       | 5.3  |     
|                                     | Nonrecurring charges                                           |                          |       |                   |      |      |       | 27.7 |     
|                                     | In-process research and development costs of acquired business |                          |       | 4.5                |      |      |       | 3.0  |     
|                                     |                                                                |                          |       |                    |      |      |       |     
|                                     |                                                                | Total operating expenses |       |                    | 58.2 |      |       |      | 87.1 | 
|                                     |                                                                |                          |       |                    |      |      |       |     
|Operating loss                       |                                                                |                          | (29.0 | )                  |      |      | (61.1 | )   
|Other income (expense), net          |                                                                |                          | (3.1  | )                  |      |      |      |     
|                                     |                                                                |                          |       |                    |      |      |       |     
|Loss before benefit for income taxes |                                                                |                          | (32.1 | )                  |      |      | (61.1 | )   
|Benefit for income taxes             |                                                                |                          | (8.0  | )                  |      |      | (20.1 | )   
|                                     |                                                                |                          |       |                    |      |      |       |     
|Net loss                             |                                                                |                          | (24.1 | )%                 |      |      | (41.0 | )%  
|                                     |                                                                |                          |       |                    |      |      |       |     

Results of Operations

Net Sales.Net sales decreased 17 percent to $55.9 million for the first
quarter of fiscal 2003, from $67.3 million in the first quarter of fiscal
2002. Net sales increased 46 percent in the first quarter of fiscal 2003
compared with net sales of $38.4 in the fourth quarter of fiscal 2002.

Capital spending by the semiconductor manufacturers, as measured by our
new bookings and net sales, began to decline from its peak levels during the
quarter ended December 31, 2000 and continued to decline each quarter until the
fourth quarter of fiscal 2002 when bookings increased substantially and sales
increased slightly from the third fiscal quarter. These declines resulted from
reductions in capital spending by semiconductor manufacturers worldwide, as
discussed in the overview.

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Our net sales by geography, including local revenues recorded at our
foreign locations, were as follows (unaudited; dollars in millions):

|                   |       |           |                    |           |                    |           |            |           |   |   |      |      |            |  |    |     |  
|------------------ | ----- | --------- | ------------------ | --------- | ------------------ | --------- | ---------- | --------- | - | - | ---- | ---- | ---------- |  | -- | --- | -
|                   |       |           | Three Months Ended |           | Three Months Ended
|                   |       |           | June 30, 2002      |           | June 30, 2001     
|                   |       |           |                    |           |                   
|                   |       |           |                    |           |                    |           | Percentage |           |   |   |      |      | Percentage
|                   |       |           |                    |           |                    |           | of         |           |   |   |      |      | Of        
|Geographic Region  |       | Net Sales |                    | Net Sales |                    | Net Sales |            | Net Sales
|                   |       |           |                    |           |                    |           |            |          
|United States      |       | $         | 26.2               |           |                    |           | 47         | %         |   | $ | 32.3 |      |            |  | 48 | %  
|Taiwan             |       |           | 11.0               |           |                    |           | 20         |           |   |   | 9.6  |      |            |  | 14 |    
|Japan              |       |           | 7.7                |           |                    |           | 14         |           |   |   | 16.8 |      |            |  | 25 |    
|Other Asia/Pacific |       |           | 6.2                |           |                    |           | 11         |           |   |   | 3.0  |      |            |  | 5  |    
|Europe             |       |           | 4.8                |           |                    |           | 8          |           |   |   | 5.6  |      |            |  | 8  |    
|                   |       |           |                    |           |                    |           |            |           |   |   |      |      |            |  |    |    
|                   | Total |           | $                  | 55.9      |                    |           |            | 100       | % |   | $    | 67.3 |            |  |    | 100 | %
|                   |       |           |                    |           |                    |           |            |           |   |   |      |      |            |  |    |    

We currently have a single reportable segment. The net sales by our
product groups were as follows (unaudited; dollars in millions):

|                       |       |   |                    |      |                    |  |            |     |           |   |      |      |            |  |    |     |  
|---------------------- | ----- | - | ------------------ | ---- | ------------------ |  | ---------- | --- | --------- | - | ---- | ---- | ---------- |  | -- | --- | -
|                       |       |   | Three Months Ended |      | Three Months Ended
|                       |       |   | June 30, 2002      |      | June 30, 2001     
|                       |       |   |                    |      |                   
|                       |       |   |                    |      |                    |  | Percentage |     |           |   |      |      | Percentage
|                       |       |   |                    |      |                    |  | of         |     |           |   |      |      | Of        
|                       |       |   | Net Sales          |      | Net Sales          |  | Net Sales  |     | Net Sales
|                       |       |   |                    |      |                    |  |            |     |          
|Equipment Solutions    |       | $ | 24.5               |      |                    |  | 44         | %   |           | $ | 31.9 |      |            |  | 47 | %  
|Fab Solutions          |       |   | 26.0               |      |                    |  | 46         |     |           |   | 30.9 |      |            |  | 46 |    
|Connectivity Solutions |       |   | 2.3                |      |                    |  | 4          |     |           |   | 1.2  |      |            |  | 2  |    
|Other                  |       |   | 3.1                |      |                    |  | 6          |     |           |   | 3.3  |      |            |  | 5  |    
|                       |       |   |                    |      |                    |  |            |     |           |   |      |      |            |  |    |    
|                       | Total |   | $                  | 55.9 |                    |  |            | 100 | %         |   | $    | 67.3 |            |  |    | 100 | %
|                       |       |   |                    |      |                    |  |            |     |           |   |      |      |            |  |    |    

The mix of sales between product groups remained relatively consistent in
the quarter ended June 30, 2002 as compared to the quarter ended June 30, 2001.
The overall decrease in net sales reflects substantial declines in the
semiconductor equipment sector as a whole. Net sales in the quarter ended June
30, 2002 increased 46 percent from the quarter ended March 31, 2002, the first
significant quarter-over-quarter sales increase since the quarter ended
December 31, 2000. We expect sales to increase further in the second quarter
of fiscal 2003.

Gross Margin. Gross margin increased to 29.2 percent of net sales for the
quarter ended June 30, 2002, compared to 26.0 percent of net sales for the
quarter ended June 30, 2001. During fiscal 2002, we took aggressive actions to
eliminate fixed costs by consolidating manufacturing facilities and adjusting
variable costs to meet current manufacturing volumes. We substantially reduced
manufacturing headcount from the prior year. These efforts resulted in
improved gross margins in spite of lower sales. While we have taken actions to
reduce manufacturing overhead, we continue to be impacted by unabsorbed
manufacturing overhead costs due to lower sales. We expect this to continue
until sales increase significantly from current levels.

In the quarter ended June 30, 2002, 300mm products contributed 35.6
percent of our net sales compared to 40.6 percent of net sales for the quarter
ended June 30, 2001. Net sales of 300mm products increased by $4.3 million.
The decline as a percentage of net sales is due to the significant increase in sales of 200mm
products to fabs in the quarter ended June 30, 2002. We expect 300mm product
sales to continue to trend upward, although quarterly fluctuations are possible
as the 300mm market matures. 300mm products are very early in their product
life cycle and currently have low margins in comparison to our 200mm products.
Swings in product mix may impact our gross margins on

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a quarter over quarter basis. We have enacted cost reduction initiatives
related to our 300mm products and expect gross margin for these
products to
improve. However, because of the anticipated size of the emerging 300mm
product market, we face strong competition on price and features for these
products from existing and new competitors.

We believe that gross
margin will increase as a percent of sales in
the quarter ended September 30, 2002 from the gross margin in the quarter ended
June 30, 2002. This anticipated gross margin increase is due to further
absorption of manufacturing overhead costs and ongoing efforts to reduce our
fixed manufacturing costs. We also continue to monitor on-hand raw material
inventory levels against demand and are taking steps to reduce inventory
levels. Our gross margin will continue to be impacted by future changes in
product mix, net sales volumes and market competition.

Research and Development.Research and development expenses decreased
seven percent to $10.5 million for the quarter ended June 30, 2002, compared
with $11.3 million for the quarter ended June 30, 2001. As a percentage of
sales, research and development increased to 18.8 percent of sales in the
quarter ended June 30, 2002, compared to 16.8 percent in the quarter ended June
30, 2001. The decrease in spending is due to headcount reductions and other
spending cuts during the past year to reduce research and development expenses
in response to declines in our net sales. Our research and development
expenses vary as a percentage of net sales because we do not manage these
expenditures strictly to variations in our level of net sales. We expect our
research and development expenses will increase in the next quarter as we
accelerate efforts on key new products.

Selling, General and Administrative.Selling, general and administrative,
or SG&A, expenses decreased 24 percent to $17.5 million for the quarter ended
June 30, 2002, compared to $23.1 million for the quarter ended June 30, 2001.
As a percent of net sales, SG&A expenses declined to 31 percent for the quarter
ended June 30, 2002 compared to 34 percent for the quarter ended June 30, 2001.
We reduced SG&A headcount throughout fiscal 2002 in response to lower net
sales, and continue to assess our expenses in light of anticipated future net
sales. We implemented several targeted cost reduction initiatives to lower our
SG&A expenses through process improvements and supplier cost reductions. We
expect that our SG&A expenses will decrease further in the second quarter of
fiscal 2003 as we continue to adjust spending.

Non-recurring Charges. We incurred non-recurring charges of $18.7 million
during the quarter ended June 30, 2001, consisting of a $15.0 million
impairment of the market value of land held for sale, the impairment of
approximately $2.9 million of engineering costs related to that land and
severance costs of approximately $0.8 million. We own land in Fremont,
California, which we are currently marketing for sale. We had intended to
construct corporate headquarters facilities on the land and subsequently
decided not to build these facilities. Initially, we leased the land from a
syndicate of financial institutions pursuant to an original lease agreement and
an amended lease agreement. We purchased the land on October 22, 2001 for
$41.1 million, and we paid the syndicate of financial institutions
approximately $2.9 million for engineering costs incurred in preparation for
making leasehold improvements to the land. Based upon market data at June 30,
2001, we estimated that the then market value of the land had been impaired and
recorded a $15.0 million write-down to its estimated market value
during the quarter ended June 30, 2001. Due to a continuing decline in
revenues, in April 2001 we reduced our workforce to lower operating costs and
incurred approximately $0.8 million of severance costs in connection with the
workforce reduction.

The following table summarizes our utilization of accrued restructuring
expense during the quarter ended June 30, 2002 (unaudited; dollars in thousands):

|                             |  |           |      |            |  |       |       |   |  |   |       |  
|---------------------------- |  | --------- | ---- | ---------- |  | ----- | ----- | - |  | - | ----- | -
|                             |  | Severance |      |            |  |       |       |   |  |  
|                             |  | and       |      | Excess     |  |       |       |  
|                             |  | Benefits  |      | Facilities |  | Total
|                             |  |           |      |            |  |      
|Balance at March 31, 2002    |  | $         | 741  |            |  | $     | 2,432 |   |  | $ | 3,173 |  
|Non-cash related utilization |  |           | (329 | )          |  |       | (167  | ) |  |   | (496  | )
|Amounts paid in cash         |  |           | (260 | )          |  |       | (173  | ) |  |   | (433  | )
|                             |  |           |      |            |  |       |       |   |  |   |       |  
|Balance, June 30, 2002       |  | $         | 152  |            |  | $     | 2,092 |   |  | $ | 2,244 |  
|                             |  |           |      |            |  |       |       |   |  |   |       |  

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We expect to utilize the remaining balance of approximately $2.2 million
during fiscal year 2003, primarily with cash.

In-process Research and Development Costs of Acquired Business.On May 29,
2002, ACT, a subsidiary of Asyst, purchased substantially all of
the assets of DLC. In connection with the estimated purchase price allocation,
$2.5 million was assigned to in-process research and development costs of
acquired business, or IPR&D. The amount allocated to IPR&D was estimated
through established valuation techniques in the high-technology industry and
was expensed upon acquisition as it was determined that the projects had not
reached technological feasibility at the time of our acquisition. We will
adjust the estimated IPR&D expense, if necessary, when we complete the
valuation calculation, currently expected to occur during the second quarter of
fiscal 2003.

Amortization of Acquired Intangible Assets.Amortization expenses relating
to acquired intangible assets were $2.0 million or 4 percent of net sales for
the quarter ended June 30, 2002 and $3.5 million or 5 percent of net sales
for the quarter ended June 30, 2001. We amortize the acquired intangible
assets over periods ranging from four to ten years. The decrease in the
amortization expense is due to a $60.4 million impairment charge during the
fiscal year ended March 31, 2002 that substantially reduced the carrying value
of acquired intangible assets. Additionally, we reclassified intangible assets
relating to acquired workforce to goodwill and stopped amortizing goodwill as a
result of implementation of SFAS 142 during the quarter ended June 30, 2002.

Other Income (Expense), Net.Other income (expense), net, was $(1.8)
million for the quarter ended June 30, 2002, compared to less than $0.1 million
for the quarter ended June 30, 2001, primarily due to interest expense related
to the sale of $86.3 million of 5 3/4 percent convertible subordinated notes
on July 3, 2001.

Benefit for Income Taxes. We recorded a benefit for income taxes of $4.5
million for the quarter ended June 30, 2002, representing an annual effective
income tax rate of 25 percent. We recorded a benefit for income taxes of $13.6
million for the quarter ended June 30, 2001, representing an annual effective
income tax rate of 33 percent. The annual effective income tax rate for the
quarter ended June 30, 2002 reflects the impact of non-deductible amortization
and deferred stock compensation and research and development tax credits.

Liquidity and Capital Resources

Since inception, we have funded our operations primarily through the
private sale of equity securities and public stock offerings, customer
pre-payments, bank borrowings, long-term debt and cash generated from
operations. As of June 30, 2002, we had approximately $64.7 million in cash
and cash equivalents, $4.2 million in restricted cash equivalents, $14.0
million in short-term investments, $132.6 million in working capital and $91.2
million in long-term debt and finance leases.

Operating activities.Net cash used in operating activities was $3.7
million in the quarter ended June 30, 2002, primarily consisting of a $13.5
million loss, a $9.7 million increase in accounts receivable, a $3.8 million
increase in prepaid expenses and other assets and a $3.0 million increase in
deferred tax asset. These uses of cash were largely offset by an increase in
accounts payable and accrued liabilities and other of $7.8 million, a decrease
in inventory of $5.1 million, an increase in deferred revenue of $3.1 million,
a decrease in other assets of $1.8 million and non-cash charges of $8.7 million
including depreciation and amortization, in-process research and development
costs and stock compensation charges. The increases in receivables, accounts
payable, accrued liabilities and deferred revenue reflect substantial sales
growth during the quarter. The decrease in inventory resulted from ongoing
efforts to improve inventory turns as well as increased sales.

Net cash provided by operating activities was $4.7 million in the quarter
ended June 30, 2001, primarily attributable to reductions in accounts
receivable of $21.1 million and to reductions in inventories of $7.4 million,
combined with our non-cash charges to net income including: depreciation and
amortization of $6.5 million, write-down of land held for sale of $15.0 million
and write-off of purchased in-process research and development of $2.0 million.
Net cash provided by operating activities was largely offset by our net loss
of $27.6 million, an increase in our deferred tax asset of $13.7 million and a
reduction in accounts payable of $10.6 million.

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Investing activities.Net cash used in investing activities was $11.7
million in the quarter ended June 30, 2002, due to net purchases of short-term
investments of $8.1 million and purchases of property and equipment of $3.6
million.

Net cash provided by investing activities was $5.3 million in the quarter
ended June 30, 2001. Net sales of short-term investments and restricted cash
equivalents and short-term investments provided $12.5 million during the
quarter, offset by $3.8 million used in connection with the acquisitions of
AMP, SemiFab and GW and $3.4 million used to modify our facilities and purchase
new equipment and furniture used in our operations.

Financing activities. Net cash provided by financing activities was $4.9
million for the quarter ended June 30, 2002, due to net proceeds from short-
and long-term borrowing of $1.6 million and $3.3 million from stock issuances
under our employee stock programs.

Net cash used by financing activities was $3.2 million during the quarter
ended June 30, 2001, consisting of payments of $6.3 million and $0.6 million on
short-term loans and short-term and long-term debt and finance leases,
respectively. These uses were partially offset by proceeds of $1.8 million
from the issuance of new long-term debt with a Japanese bank and $1.9 million
from issuances under our employee stock programs.

Our contractual obligations at June 30, 2002, and the effect such
obligations are expected to have on our liquidity and cash flow in future
periods, have not changed materially since March 31, 2002 as described in our
Form 10-K.

On July 3, 2001,
we completed the sale of $86.3 million of 5 3/4 percent
convertible subordinated notes which provided us with aggregate proceeds of
$82.9 million net of issuance costs. The notes are convertible, at the option
of the holder, at any time on or prior to maturity into shares of our common
stock at a conversion price of $15.18 per share, which is equal to a conversion
rate of 65.8718 shares per $1,000 principal amount of notes. The notes mature
July 3, 2008, pay interest on January 3 and July 3 of each year and are
redeemable at our option after July 3, 2004.

We may utilize cash resources to fund acquisitions or investments in other
businesses, technologies or product lines. For example, in May 2002 we signed
a definitive agreement with Shinko Electric for the establishment of a joint
venture. Under terms of the agreement, we will acquire 51% of the joint
venture for approximately 8.16 billion Japanese yen, or approximately $68
million at current exchange rates. We currently anticipate pursuing additional
funds to pay for all or a portion of our share of the joint venture, as well as
to support our working capital and operating expense requirements or for other
purposes.

We anticipate that operating expenses will constitute a material use of
our cash resources. The cyclical nature of the semiconductor industry makes it
very difficult for us to predict future liquidity requirements with certainty.
Any upturn in the semiconductor industry may result in short-term uses of cash
in operations as cash may be used to purchase inventory and expand our capacity
prior to increased cash receipts from sales growth. However, we believe that
our available cash and cash equivalents will be sufficient to meet our working
capital and operating expense requirements through at least the first quarter
of fiscal 2004. We currently anticipate pursuing additional funds in relation
to the pending Asyst Shinko joint venture acquisition, to support our working
capital and operating expense requirements, or for other purposes. We
anticipate raising these additional funds through public or private debt or
equity financings. Such financing may not be available to us on a timely basis
if at all or, if available, on terms acceptable to us and not dilutive to our
shareholders. If we fail to obtain acceptable additional financing, we may be
required to reduce planned expenditures or forego acquisition opportunities
which could reduce our revenues, increase our losses, and harm our business.

New Accounting Pronouncement

In June 2002, the Financial Accounting Standards Board issued SFAS No.
146, Accounting for Exit or Disposal Activities, or SFAS 146. SFAS 146
addresses significant issues regarding the recognition, measurement, and
reporting of costs that are associated with exit and disposal activities,
including restructuring activities that are currently accounted for under EITF
No. 94-3, Liability Recognition for Certain Employee Termination Benefits

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and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). The scope of SFAS 146 also includes costs related to
terminating a contract that is not a capital lease and termination benefits
that employees who are involuntarily terminated receive under the terms of a
one-time benefit arrangement that is not an ongoing benefit arrangement or an
individual deferred-compensation contract. SFAS 146 will be effective for exit
or disposal activities that are initiated after December 31, 2002 and early
application is encouraged. We will adopt SFAS 146 during the quarter ending
March 31, 2003. The provisions of EITF No. 94-3 shall continue to apply for an
exit activity initiated under an exit plan that met the criteria of EITF No.
94-3 prior to the adoption of SFAS 146. The effect on adoption of SFAS 146
will change on a prospective basis the timing of when restructuring charges are
recorded from a commitment date approach to when the liability is incurred.

Risk Factors

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



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

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

The industry is currently experiencing a significant downturn due to
decreased worldwide demand for semiconductors. During this downturn, most of
our customers have reduced capital expenditures, which has adversely impacted
our business. Our net sales declined 71% from their peak in the third quarter
of fiscal 2001 to the third quarter of fiscal 2002. We cannot assure you that
our sales will recover sufficiently for us to return to profitability in the
near future. In addition, if our future revenue projections decline, we may be
required to write down the value of our intangible and net deferred tax assets,
which would adversely impact our operating results. As a result of cost
reductions in response to the decrease in net sales and uncertainty over the
timing and extent of any industry recovery, we may not continue to
invest in marketing, research and development and engineering at the levels we
believe are necessary to maintain our competitive position. Our failure to
make these investments could seriously curtail our long-term business
prospects.

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



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

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

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During a downturn, our ability to quickly reduce our production costs is
impaired by our projections of manufacturing costs and inventory incurred. If
market demand does not match our projections, we will have to carry or write
off excess and obsolete inventory and our gross margins will decline which, in
turn, prevents us from operating profitably. Furthermore, if we do not
accurately predict the appropriate demand for our 200mm and 300mm automation
products, this will increase the burden of excess and obsolete inventory.

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



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

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

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

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



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

The markets in which we sell our products are comprised of a relatively
small number of OEMs and semiconductor manufacturers. Large orders from a
relatively small number of customers account for a significant portion of our
revenue and makes our relationship with each customer critical to our business.
We may not be able to retain our largest customers or attract additional
customers, and our OEM customers may not be successful in selling our systems.
Our success will depend on our continued ability to develop and manage
relationships with significant customers. In addition, our customers have in
the past sought price concessions from us and may continue to do so in the
future, particularly during downturns in the semiconductor market. Further,
some of our customers may in the future shift their purchases of products from
us to our competitors. Additionally, the inability to successfully develop
relationships with additional customers or the need to provide future price
concessions would have a negative impact on our business.

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



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

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prospects could be negatively impacted

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



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

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



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

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



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

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

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



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

Our Plus-Portal System offers our OEM customers a complete, automated
interface between the OEMs tool and the fab, an alternative to designing and
manufacturing automated equipment front-ends for their tools utilizing
purchased components and in-house engineering and manufacturing resources. The
decision by OEMs to adopt our system for a large product line involves
significant organizational, technological and financial commitments by the
OEMs. OEMs expect the Plus-Portal System to meet stringent design, reliability
and delivery specifications. To date, we have penetrated only a small
percentage of OEM tools. We believe that our growth prospects in the OEM
market depend in large part upon our ability to gain acceptance of the
Plus-Portal system and follow-on products by a broader group of OEM customers.
If we fail to satisfy these expectations, whether based

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on limited or expanded sales levels, OEMs will not adopt the Plus-Portal
System. We cannot assure you that these tools will be widely accepted in the
marketplace or that additional OEMs will adopt the system. Notwithstanding our
solution, OEMs may purchase components to assemble interfaces or invest in the
development of their own complete interfaces. If our products are not adopted
by OEMs, our prospects will be negatively impacted and our profits
substantially harmed.



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

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



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

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

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

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

We expect that our competitors will continue to develop new products in
direct competition with our systems, improve the design and performance of
their products and introduce new products with enhanced performance
characteristics. In order to remain competitive, we need to continue to improve
and expand our product line, which will require us to maintain a high level of
investment in research and development. Ultimately, we may not be able to make
the technological advances and investments necessary to remain competitive.

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

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

We have made and, most likely, will continue to make additional
acquisitions of, or significant investments in, businesses that offer
complementary products, services, technologies or market access. Our recent
acquisitions include GW and DLC.

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



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

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

Intellectual property rights are uncertain and involve complex legal and
factual questions. We may unknowingly infringe on the intellectual property
rights of others and may be liable for that infringement, which could result in
significant liability for us. If we do infringe the intellectual property
rights of others, we could be forced to either seek a license to intellectual
property rights of others or alter our products so that they no longer infringe
the intellectual property rights of others. A license could be very expensive
to obtain or may not be available at all. Similarly, changing our products or
processes to avoid infringing the rights of others may be costly or impractical
or could detract from the value of our product.

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

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| |  |  |  Our performance may suffer if we are unable to recruit and retain
necessary personnel or if members of the management team are unable
to effectively transition into their new
positions
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

A number of our
executive officers, including our Chief Executive Officer, Mr. Schwartz, are required to transition into new positions during a prolonged economic downturn. Their performance in their new positions will have an effect on our results. If they are unable to effectively transition into their positions, our performance may suffer.

Due to the cyclical nature of the demand for our products, we have had to reduce our workforce and then rebuild our workforce as our business has gone through cyclical peaks and troughs. The labor markets in which we operate are highly competitive and as a result, this type of employment cycle increases our risk of not being able to retain and recruit key personnel. If we are unable to recruit or retain key personnel, we may not have enough
personnel to promptly return to peak production levels. If we are
unable to expand our existing manufacturing capacity to meet demand,
a customers placement of a large order for the development and
delivery of factory automation systems during a particular period
might deter other customers from placing similar orders with us for
the same period. It could be difficult for us to rapidly recruit and
train the substantial number of qualified engineering and technical personnel who would be necessary
to fulfill one or more large, unanticipated orders. A failure to
retain, acquire or adequately train key personnel could have a material adverse impact on our performance.



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

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

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

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



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

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



| |  |  | the timing of significant customer orders;
| | - |  | ------------------------------------------

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

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



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

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



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

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



| |  |  | exposure to currency fluctuations;                                     
| | - |  | -----------------------------------------------------------------------
|
| |  |  | the imposition of governmental controls;                               
|
| |  |  | the need to comply with a wide variety of foreign and U.S. export laws;
|
| |  |  | political and economic instability;                                    
|
| |  |  | trade restrictions;                                                    
|
| |  |  | changes in tariffs and taxes;                                          

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| |  |  | longer payment cycles typically associated with foreign sales;
| | - |  | --------------------------------------------------------------
|
| |  |  | the greater difficulty of administering business overseas; and
|
| |  |  | general economic conditions.                                  

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



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

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

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

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



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

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



| |  |  | quarterly fluctuations in results of operations;                                                
| | - |  | ------------------------------------------------------------------------------------------------
|
| |  |  | announcements of new products by Asyst or our competitors;                                      
|
| |  |  | changes in either our earnings estimates or investment recommendations by stock market analysts;
|
| |  |  | announcements of technological innovations;                                                     
|
| |  |  | conditions or trends in the semiconductor manufacturing industry;                               

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| |  |  | announcements by Asyst or our competitors of acquisitions, strategic partnerships or joint ventures;
| | - |  | ----------------------------------------------------------------------------------------------------
|
| |  |  | additions or departures of senior management; and                                                   
|
| |  |  | other events or factors many of which are beyond our control.                                       

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



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

We currently anticipate that our available cash resources, which include
existing cash and cash equivalents, short-term investments, cash generated from
operations and other existing sources of working capital will be sufficient to
meet our anticipated needs for working capital and capital expenditures through
at least the first quarter of fiscal 2004. If we are unable to generate
sufficient cash flows from operations to meet our anticipated needs for working
capital and capital expenditures we may need to raise additional funds to
develop new or enhanced products, respond to competitive pressures or make
acquisitions. We may be unable to obtain any required additional financing on
terms favorable to us, if at all. If adequate funds are not available on
acceptable terms, we may be unable to fund our expansion, successfully develop
or enhance products, respond to competitive pressures or take advantage of
acquisition opportunities, any of which could have a material adverse effect on
our business. For example, in May 2002 we signed a definitive agreement with
Shinko Electric for the establishment of a joint venture. We currently
anticipate pursuing additional funds to pay for our share of the joint venture,
as well as to support our working capital and operating expense requirements or
for other purposes. We anticipate pursuing these additional funds through
public or private debt or equity financings. If we raise additional funds
through the issuance of equity securities, our shareholders may experience
dilution of their ownership interest, and the newly-issued securities may have
rights superior to those of the common stock. If we raise additional funds by
issuing debt, we may be subject to limitations on our operations. We have
guaranteed AJIs unsecured loans from banks and secured bonds. This strain on
our capital resources could adversely affect our business.



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

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




Item 3  Quantitative and Qualitative Disclosures About Market Risk

There has not been a material change in our exposure to interest rate and
foreign currency risks since the date of our 2001 Form 10-K, as amended.

Interest Rate Risk.Our exposure to market risk for changes in interest
rates relate primarily to the investment portfolio. We do not use derivative
financial instruments in our investment portfolio. Our investment portfolio
consists of short-term fixed income securities and by policy is limited by the
amount of credit exposure to any one issuer. As stated in our investment
policy, we ensure the safety and preservation of our invested principal funds
by limiting default risk, market risk and reinvestment risk. We mitigate
default risk by investing in safe and high-credit quality securities and by
constantly positioning our portfolio to respond appropriately to a significant
reduction in a credit rating of any investment issuer, guarantor or depository.
Our portfolio includes only marketable securities with active secondary or
resale markets to ensure portfolio liquidity. These securities, like all
29Table of Contentsfixed income instruments, carry a degree of interest rate risk. Fixed rate securities
have their fair market value adversely affected due to rises in interest rates.Foreign Currency Exchange Risk.We engage in international operations and
transact business in various foreign countries. The primary foreign currency
cash flows are located in Japan, Europe, Singapore and Taiwan. We have
approximately $25.2 million in short-term and long-term debt and finance leases
denominated in Japanese Yen. Although we and our subsidiaries operate and sell
products in various global markets, substantially all sales are denominated in
the U.S. dollar, except in Japan, therefore reducing the foreign currency risk
factor. In March 2001, we began to employ a foreign currency hedge program
utilizing foreign currency forward exchange contracts in Japan. To date, the
foreign currency transactions and exposure to exchange rate volatility have not
been significant. There can be no assurance that foreign currency risk will not
have a material impact on our financial position, results of operations or cash
flow in the future.
PART II  OTHER INFORMATIONIn October 1996, the Company filed a lawsuit in the United States District
Court for the Northern District of California against Jenoptik A.G., or
Jenoptik, Jenoptik-Infab, Inc., or Infab, Emtrak, Inc., or Emtrak and Empak,
Inc., or Empak alleging infringement of two patents related to the Companys
SMART Traveler System. The Company amended its Complaint in April 1997 to
allege causes of action for breach of fiduciary duty against Jenoptik and
Meissner & Wurst, GmbH, and misappropriation of trade secrets and unfair
business practices against all defendants. The Complaint seeks damages and
injunctive relief against further infringement. All defendants filed counter
claims, seeking a judgment declaring the patents invalid, unenforceable and not
infringed. Jenoptik, Infab, and Emtrak also alleged that the Company violated
federal antitrust laws and engaged in unfair competition. The Company denied
these allegations. In May 1998, the Company along with Empak stipulated to a
dismissal, without prejudice, of the respective claims and counter claims
against each other. In November 1998, the court granted defendants motion for
partial summary judgment as to most of the patent infringement claims and
invited further briefing as to the remainder. In January 1999, the court
granted the Companys motion for leave to seek reconsideration of the November
summary judgment order and also, pursuant to a stipulation of the parties,
dismissed without prejudice two of the three antitrust counter claims brought
by the defendants. Since then, the parties stipulated to, and the court has
ordered, the dismissal with prejudice of the defendants unfair competition and
remaining antitrust counterclaim, and the Companys breach of fiduciary duty,
misappropriation of trade secrets and unfair business practices claims. On June
4, 1999, the court issued an order by which it granted a motion for
reconsideration in the sense that it considered the merits of the Companys
arguments, but decided that it would not change its prior ruling on summary
judgment and would also grant summary judgment for defendants on the remaining
patent infringement claim. The Company appealed and the trial date has since
been vacated. On October 10, 2001, the appellate court reversed the district
courts decision to grant defendants motion for summary judgement and remanded
the case back to the district court. On July 22, 2002, the Company along with
the remaining defendants stipulated to a dismissal of the respective claims and
counterclaims relating to one of the two patents in suit. The matter is now
proceeding before the district court.In July 2002, three former shareholders of SemiFab, Inc., a
corporation that merged with a subsidiary of the Company in February 2001, filed a complaint in San Benito
County Superior Court against the Company claiming breach of contract,
declaratory relief, conversion, constructive trust, and injunctive relief. The
plaintiffs allege that the Company failed to provide sufficient funding to
SemiFab to make specified capital expenditures, as required by the merger
agreement under which SemiFab was acquired. They further allege that they were
entitled to receive approximately 466,000 shares of Company stock on specified
dates. The plaintiffs seek the shares of common stock, plus interest, attorney fees and
other relief. The Company denies that it failed to fulfill
its obligations under the merger agreement. The Company responded to the
complaint in August 2002. The first hearing on this matter is scheduled for September 2002.30Table of Contents
Item 6  Exhibits and Reports on Form 8-K(a) Exhibits

|     |  |                                          
|---- |  | -----------------------------------------
|99.1 |  | Certification of Chief Executive Officer.
|99.2 |  | Certification of Chief Financial Officer.

(b) Reports on Form 8-K.

| |                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | On April 4, 2002, we filed a Current
Report on Form 8-K dated April 2, 2002. On June 12, 2002 we filed a Current Report on Form 8-K
dated May 24, 2002.




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                         |  |                 |  |     |                       |                                                                                          
|------------------------ |  | --------------- |  | --- | --------------------- | -----------------------------------------------------------------------------------------
|ASYST TECHNOLOGIES, INC.
|                        
|Date:                    |  | August 14, 2002 |  | By: |                      
|                         |  |                 |  |     | /s/ Geoffrey G.
Ribar
|                         |  |                 |  |     |                       | Geoffrey G. Ribar
Senior Vice President
Chief Financial Officer                          
|                        
|                         |  |                 |  |     |                       | Signing on
behalf of the registrant and as the principal accounting and
financial officer

31



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##### Table of Contents






EXHIBIT INDEX



|        |  |                                           |  |  |  | 
|------- |  | ----------------------------------------- |  |  |  | 
|Exhibit |  |                                           |  |  |  | 
|Number  |  | Description                               |  |  |  | 
|        |  |                                           |  |  |  | 
|99.1    |  | Certification of Chief Executive Officer.
|99.2    |  | Certification of Chief Financial Officer.