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<SEC-DOCUMENT>0001206774-08-000299.txt : 20080213
<SEC-HEADER>0001206774-08-000299.hdr.sgml : 20080213
<ACCEPTANCE-DATETIME>20080213160257
ACCESSION NUMBER:		0001206774-08-000299
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20071231
FILED AS OF DATE:		20080213
DATE AS OF CHANGE:		20080213

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMTECH SYSTEMS INC
		CENTRAL INDEX KEY:			0000720500
		STANDARD INDUSTRIAL CLASSIFICATION:	SPECIAL INDUSTRY MACHINERY, NEC [3559]
		IRS NUMBER:				860411215
		STATE OF INCORPORATION:			AZ
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-11412
		FILM NUMBER:		08604727

	BUSINESS ADDRESS:	
		STREET 1:		131 S CLARK DR
		CITY:			TEMPE
		STATE:			AZ
		ZIP:			85281
		BUSINESS PHONE:		6029675146

	MAIL ADDRESS:	
		STREET 1:		131 SOUTH CLARK DRIVE
		CITY:			TEMPE
		STATE:			AZ
		ZIP:			85281

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	QUARTZ ENGINEERING & MATERIALS INC
		DATE OF NAME CHANGE:	19870715
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>amtech_10q.htm
<DESCRIPTION>QUARTERLY REPORT
<TEXT>

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   <TITLE></TITLE>
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<P align=center><B><FONT face=serif size=4>UNITED STATES <BR></FONT></B><B><FONT face=serif size=4>SECURITIES AND EXCHANGE COMMISSION</FONT></B> <B><FONT face=serif><BR>Washington, D.C. 20549</FONT></B></P>
<P align=center><B><FONT face=serif size=5>__________<BR>FORM
10-Q</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="99%"><B><FONT face=serif size=2>(Mark
      One)</FONT></B>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
  &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="99%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>[X] QUARTERLY REPORT PURSUANT</FONT>&nbsp; <FONT face=serif size=2>TO SECTION</FONT>&nbsp; <FONT face=serif size=2>13</FONT>&nbsp;
      <FONT face=serif size=2>OR</FONT>&nbsp; <FONT face=serif size=2>15</FONT><FONT face=serif size=2>(d)</FONT>&nbsp; <FONT face=serif size=2>OF</FONT>&nbsp; <FONT face=serif size=2>THE</FONT>&nbsp; <FONT face=serif size=2>SECURITIES</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="99%">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>EXCHANGE ACT OF
      1934</FONT>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</TD></TR>
  <TR>
    <TD width="99%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="99%"><FONT face=serif size=2>For the
      quarterly period ended: December 31, 2007</FONT>&nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</TD></TR>
  <TR>
    <TD width="99%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=center width="99%"><FONT face=serif size=2>OR</FONT></TD></TR>
  <TR>
    <TD width="99%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="99%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>[ ] TRANSITION REPORT PURSUANT</FONT>&nbsp; <FONT face=serif size=2>TO SECTION</FONT>&nbsp; <FONT face=serif size=2>13</FONT>&nbsp;
      <FONT face=serif size=2>OR</FONT>&nbsp; <FONT face=serif size=2>15</FONT><FONT face=serif size=2>(d)</FONT>&nbsp; <FONT face=serif size=2>OF</FONT>&nbsp; <FONT face=serif size=2>THE</FONT>&nbsp; <FONT face=serif size=2>SECURITIES</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="99%">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>EXCHANGE ACT OF
      1934</FONT>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
  &nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>For the transition period from
________________ to ________________<BR></FONT></P>
<P align=center><FONT face=serif size=2>Commission File Number:</FONT> <U><FONT face=serif size=2>0-11412</FONT></U><FONT face=serif size=2></FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=center width="99%" colSpan=3><B><FONT face=serif size=5>AMTECH SYSTEMS,
      INC.</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="99%" colSpan=3><FONT face=serif size=2>(Exact name of registrant as specified in its
    charter)</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=center width="33%">&nbsp;</TD>
    <TD noWrap align=center width="33%"></TD>
    <TD noWrap align=center width="33%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=center width="33%"><FONT face=serif size=2>Arizona</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=center width="33%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=center width="33%"><FONT face=serif size=2>86-0411215</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="33%"><FONT face=serif size=2>(State or
      other jurisdiction of</FONT>&nbsp;</TD>
    <TD noWrap align=center width="33%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="33%"><FONT face=serif size=2>(I.R.S.
      Employer</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="33%"><FONT face=serif size=2>incorporation
      or organization)</FONT>&nbsp;</TD>
    <TD noWrap align=center width="33%"></TD>
    <TD noWrap align=center width="33%"><FONT face=serif size=2>Identification
      No.)</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=center width="33%">&nbsp;</TD>
    <TD noWrap align=center width="33%"></TD>
    <TD noWrap align=center width="33%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=center width="33%"><FONT face=serif size=2>131 South Clark Drive, Tempe,
      Arizona</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=center width="33%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=center width="33%"><FONT face=serif size=2>85281</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="33%"><FONT face=serif size=2>(Address of
      principal executive offices)</FONT>&nbsp;</TD>
    <TD noWrap align=center width="33%"></TD>
    <TD noWrap align=center width="33%"><FONT face=serif size=2>(Zip
      Code)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=serif size=2>Registrant&#146;s telephone number, including
area code:</FONT> <U><FONT face=serif size=2>480-967-5146</FONT></U><FONT face=serif size=2></FONT></P>
<P align=left><FONT face=serif size=2>Indicate by a 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. [X] Yes [
] No</FONT></P>
<P align=left><FONT face=serif size=2>Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer. See definition of &#147;accelerated filer and large
accelerated filer&#148; in Rule 12b-2 of the Exchange Act. (Check one):</FONT></P>
<P align=left><FONT face=serif size=2>Large accelerated filer [ ] Accelerated
filer [ ] Non-accelerated filer [ X ]</FONT></P>
<P align=left><FONT face=serif size=2>Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [ X ]</FONT></P>
<P align=center><FONT face=serif size=2>Shares of Common Stock outstanding as of
February 5, 2008: 9,071,048</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=center><B><FONT face=serif size=2>AMTECH SYSTEMS, INC. AND SUBSIDIARIES
<BR>TABLE OF CONTENTS</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="98%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>Page</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="99%" bgColor=#cceeff colSpan=2><B><FONT face=serif size=2><A href="#p3">PART I. FINANCIAL INFORMATION</A></FONT></B>&nbsp;
  &nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><a href="#p3"><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp; </STRONG>
<STRONG>Item 1.</STRONG></FONT> <FONT face=serif size=2><STRONG>Condensed Consolidated Financial
      Statements</STRONG></FONT>&nbsp;</a></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%"><a href="#p3"><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      Condensed Consolidated Balance Sheets</FONT></a></TD>
    <TD noWrap align=right width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%"><a href="#p3"><FONT size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <FONT face=serif>December 31, 2007 (Unaudited) and
      September 30, 2007</FONT></FONT></a></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>3</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>&nbsp;
      <a href="#p5">Condensed Consolidated Statements of Operations
      (Unaudited)</a></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><a href="#p5"><FONT size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <FONT face=serif>Three Months Ended December 31, 2007
      and 2006</FONT></FONT></a></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>5</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%"><a href="#p6"><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      Condensed Consolidated Statements of Cash Flows
      (Unaudited)</FONT></a></TD>
    <TD noWrap align=right width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%"><a href="#p6"><FONT size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <FONT face=serif>Three Months Ended December 31, 2007
      and 2006</FONT></FONT></a></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>6</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><a href="#p7"><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      Notes to Condensed Consolidated Financial Statements
      (Unaudited)</FONT></a></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>7</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="98%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="99%" bgColor=#cceeff colSpan=2><a href="#p18"><FONT size=+0></FONT><FONT size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp; </STRONG><FONT face=serif><STRONG>Item 2.</STRONG></FONT></FONT> <FONT face=serif size=2><STRONG>Management&#146;s Discussion and Analysis of Financial Condition
      and Results</STRONG></FONT></a>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><a href="#p18"><FONT size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </STRONG><FONT face=serif><STRONG>of
      Operations</STRONG></FONT></FONT></a>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%"><a href="#p18"><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      Caution Regarding Forward-Looking
      Statements</FONT></a></TD>
    <TD noWrap align=right width="1%">&nbsp;<FONT size=2>18</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <a href="#p19">Overview</a></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;<FONT size=2>19</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%"><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <a href="#p19">Results of Operations</a></FONT></TD>
    <TD noWrap align=right width="1%">&nbsp;<FONT size=2>19</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <a href="#p22">Liquidity and Capital Resources</a></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>22</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%"><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <a href="#p23">Off-Balance Sheet Arrangements</a></FONT></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>23</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <a href="#p23">Contractual Obligations</a></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp; <FONT size=2>23</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%"><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <a href="#p23">Critical Accounting Policies</a></FONT></TD>
    <TD noWrap align=right width="1%">&nbsp; <FONT size=2>23</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><FONT face=serif size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <a href="#p25">Impact of Recently Issued Accounting
      Pronouncements</a></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>25</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%">&nbsp;</TD>
    <TD noWrap align=right width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><a href="#p26"><FONT size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp; </STRONG><FONT face=serif><STRONG>Item 3. Quantitative and Qualitative Disclosures About
      Market Risk</STRONG></FONT></FONT>&nbsp;<FONT size=2></FONT></a></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>26</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="98%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><a href="#p26"><FONT size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp; </STRONG><FONT face=serif><STRONG>Item 4. Controls and
      Procedures</STRONG></FONT></FONT>&nbsp;<FONT size=2></FONT></a></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>26</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="98%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><a href="#p27"><FONT face=serif size=2><STRONG>PART II. OTHER
      INFORMATION</STRONG></FONT>&nbsp;<FONT size=2></FONT></a></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="98%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><a href="#p27"><FONT size=2><STRONG>&nbsp;&nbsp;&nbsp;&nbsp; </STRONG><FONT face=serif><STRONG>Item 6.</STRONG></FONT></FONT> <B><FONT face=serif size=2>Exhibits</FONT></B>&nbsp;</a></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>27</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="98%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><a href="#p28"><FONT face=serif size=2><STRONG>SIGNATURES</STRONG></FONT>&nbsp;</a></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>28</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="98%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="98%" bgColor=#cceeff><a href="#p29"><FONT face=serif size=2><STRONG>EXHIBIT INDEX</STRONG></FONT>&nbsp;</a></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>29</FONT></TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>2</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2><A name=p3></A>PART I FINANCIAL
INFORMATION</FONT></B></P>
<P align=justify><B><FONT face=serif size=2>ITEM 1. Condensed Consolidated
Financial Statements</FONT></B></P>
<P align=justify><B><FONT face=serif size=2>AMTECH SYSTEMS, INC. AND
SUBSIDIARIES <BR>Condensed Consolidated Balance Sheets<BR></FONT></B><B><FONT face=serif size=2>(in thousands except share data)</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="94%">&nbsp; &nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>December 31,</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>September 30,</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%">&nbsp; &nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%">&nbsp; &nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><FONT face=serif size=1>(Unaudited)</FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp; &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="94%"><B><FONT face=serif size=2>Assets</FONT></B>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#cceeff><B><FONT face=serif size=2>Current Assets</FONT></B>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;&nbsp;$</FONT> &nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 40,746</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;&nbsp;$</FONT> &nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 18,370</FONT> &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Restricted
      cash</FONT></FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>1,248</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>443</FONT> &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Accounts receivable</FONT></FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Trade (less allowance for doubtful accounts of $190 and $126
      at</FONT></FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>8,741</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>9,952</FONT> &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="96%" bgColor=#cceeff colSpan=3><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      December 31, 2007 and September 30, 2007, respectively)</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Unbilled and other</FONT></FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>3,578</FONT>
    &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>3,127</FONT>
    &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Inventories</FONT></FONT>
      &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>12,018</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>7,289</FONT> &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Deferred income taxes</FONT></FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>2,194</FONT>
    &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>1,690</FONT>
    &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Other</FONT></FONT>
    &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>1,684</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp; &nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>1,339</FONT> &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Total current assets</FONT></FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>70,209</FONT>
    &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>42,210</FONT>
    &nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="100%" colSpan=7>&nbsp; &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#cceeff><B><FONT face=serif size=2>Property, Plant and Equipment - Net</FONT></B>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>7,648</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>6,245</FONT> &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#ffffff><B><FONT face=serif size=2>Deferred Income Taxes - Long Term</FONT></B>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff><FONT face=serif size=2>-</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff><FONT face=serif size=2>30</FONT> &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#cceeff><B><FONT face=serif size=2>Intangible Assets - Net</FONT></B>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>4,419</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>1,364</FONT> &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><B><FONT face=serif size=2>Goodwill</FONT></B>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>1,974</FONT>
    &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>817</FONT>
    &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#cceeff><B><FONT face=serif size=2>Restricted cash - non-current</FONT></B>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>1,631</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp; &nbsp; &nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>-</FONT> &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <B><FONT face=serif>Total Assets</FONT></B></FONT>&nbsp; &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $</FONT> &nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>85,881</FONT> &nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $</FONT> &nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>50,666</FONT>
&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The accompanying notes are an integral
part of these condensed consolidated financial statements.</FONT></P>
<P align=center><FONT face=serif size=2>3</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>AMTECH SYSTEMS, INC. AND
SUBSIDIARIES <BR>Condensed Consolidated Balance Sheets <BR></FONT></B><B><FONT face=serif size=2>(in thousands except share data)</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="93%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>December 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>September 30,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><FONT face=serif size=1>(Unaudited)</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="93%" bgColor=#cceeff><B><FONT face=serif size=2>Liabilities and Stockholders'
      Equity</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><B><FONT face=serif size=2>Current
      Liabilities</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>4,647</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>4,150</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Bank loans and current maturities of long-term
      debt</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>269</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>224</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Accrued compensation and
      related taxes</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>2,233</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>2,139</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Accrued warranty expense</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>474</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>256</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Deferred
      profit</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>1,760</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>2,144</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Customer deposits</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>1,817</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>1,824</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Other accrued
      liabilities</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>908</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>562</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Income taxes payable</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>274</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>419</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Total current liabilities</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>12,382</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>11,718</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="99%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><B><FONT face=serif size=2>Income Taxes Payable Long-term</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>428</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>-</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><B><FONT face=serif size=2>Deferred
      Income Taxes Long-term</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>76</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>-</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><B><FONT face=serif size=2>Long-Term Obligations</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>860</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>744</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Total liabilities</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>13,746</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>12,462</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="99%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><B><FONT face=serif size=2>Commitments and Contingencies</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="99%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><B><FONT face=serif size=2>Stockholders' Equity</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Preferred stock; 100,000,000 shares authorized; none
      issued</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>-</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>-</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Common stock; $0.01 par
      value; 100,000,000 shares authorized;</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>shares issued and outstanding: 9,068,798 and
      6,517,923</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>at December 31, 2007 and September 30,
    2007</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>91</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>65</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Additional paid-in capital</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>69,593</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>35,610</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Accumulated other
      comprehensive income</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>959</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>813</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Retained Earnings</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>1,492</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>1,716</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Total stockholders' equity</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>72,135</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>38,204</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <B><FONT face=serif>Total Liabilities and Stockholders'
      Equity</FONT></B></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
    85,881</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
    50,666</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The accompanying notes are an integral
part of these condensed consolidated financial statements.</FONT></P>
<P align=center><FONT face=serif size=2>4</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2><A name=p5></A>AMTECH SYSTEMS, INC. AND
SUBSIDIARIES <BR>Condensed Consolidated Statements of
Operations<BR></FONT></B><FONT face=serif size=2>(Unaudited)<BR></FONT><B><FONT face=serif size=2>(in thousands, except per share data)</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="93%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=5><B><FONT face=serif size=1>Three Months Ended December
      31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>2006</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>Revenues, net of returns and allowances</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 11,741</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 9,451</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT face=serif size=2>Cost of
      sales</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>8,181</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>7,059</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; Gross profit</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>3,560</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>2,392</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT face=serif size=2>Selling, general
      and administrative</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>3,302</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>2,219</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>Research and development</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>233</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>118</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Operating income</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>25</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>55</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>Interest and other income, net</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>153</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>21</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT face=serif size=2>Income before
      income taxes</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>178</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>76</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>Income tax provision</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>70</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>70</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <B><FONT face=serif>Net income</FONT></B></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>108</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>6</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="99%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><B><FONT face=serif size=2>Earnings Per Share:</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT face=serif size=2>Basic income per
      share</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>0.01</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>0.00</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>Weighted average shares outstanding</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>7,636</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>3,476</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%"><FONT face=serif size=2>Diluted income
      per share</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>0.01</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>0.00</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>Weighted average shares outstanding</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>7,818</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>3,511</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The accompanying notes are an integral
part of these condensed consolidated financial statements.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>5</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2><A name=p6></A>AMTECH SYSTEMS, INC. AND
SUBSIDIARIES <BR>Condensed Consolidated Statements Of Cash
Flows<BR></FONT></B><B><FONT face=serif size=2>(Unaudited) <BR>(in
thousands)</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=7><B><FONT face=serif size=1>Three Months Ended December
      31,</FONT></B><FONT size=+0></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=3><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=3><B><FONT face=serif size=1>2006</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><B><FONT face=serif size=2>Operating Activities</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; Net income</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>108</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>6</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Adjustments to reconcile
      net income to net</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>cash provided by (used in) operating
    activities:</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Depreciation and amortization</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>313</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>168</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Write-down of inventory</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>24</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>43</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Deferred income taxes</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(398</FONT></TD>
    <TD noWrap align=left width="1%"><FONT size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(360</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Non-cash share based compensation
    expense</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>102</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>33</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Other</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>53</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>17</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Changes in operating
      assets and liabilities:</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Accounts receivable</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>3,063</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(813</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Inventories</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(2,745</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(1,002</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Accrued income taxes</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>276</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>132</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Prepaid expenses and other assets</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(5</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(462</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Accounts payable</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(772</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(677</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Accrued liabilities and customer
    deposits</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(408</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>1,262</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Deferred profit</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face=serif size=2>(833</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face=serif size=2>351</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="89%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Net cash used in
      operating activities</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(1,222</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      (1,302</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="99%" bgColor=#ffffff colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><B><FONT face=serif size=2>Investing Activities</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#ffffff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Purchases of property,
      plant and equipment</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff><FONT face=serif size=2>(1,193</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff><FONT face=serif size=2>(76</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Increase in restricted
      cash</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(786</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#ffffff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Investment in
      R2D</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#ffffff><FONT face=serif size=2>(8,046</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#ffffff><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="89%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Net cash used in
      investing activities</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      (10,025</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(76</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="99%" bgColor=#ffffff colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><B><FONT face=serif size=2>Financing Activities</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#ffffff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Proceeds from issuance of
      common stock</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff><FONT face=serif size=2>33,827</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Payments on long-term
      obligations</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(59</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(114</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#ffffff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Borrowings on long-term
      obligations</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff><FONT face=serif size=2>355</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Excess tax benefit of
      stock options</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>80</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="99%" bgColor=#ffffff colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Net cash provided by
      financing activities</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>33,848</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>241</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="99%" bgColor=#ffffff colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><B><FONT face=serif size=2>Effect of Exchange Rate Changes on Cash</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(225</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(83</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="99%" bgColor=#ffffff colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><B><FONT face=serif size=2>Net Increase (Decrease) in Cash and Cash
    Equivalents</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>22,376</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(1,220</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#ffffff><B><FONT face=serif size=2>Cash and Cash Equivalents, Beginning of Period</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#ffffff><FONT face=serif size=2>18,370</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#ffffff><FONT face=serif size=2>6,433</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><B><FONT face=serif size=2>Cash and Cash Equivalents, End of Period</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>40,746</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>5,213</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="99%" bgColor=#ffffff colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><B><FONT face=serif size=2>Supplemental Cash Flow Information:</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Interest paid</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>118</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>46</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Income tax
      payments</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>104</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>299</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The accompanying notes are an integral
part of these condensed consolidated financial statements.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>6</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2><A name=p7></A>AMTECH SYSTEMS, INC. AND
SUBSIDIARIES <BR></FONT></B><B><FONT face=serif size=2>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS <BR>THREE MONTHS ENDED DECEMBER 31, 2007 AND
2006<BR>(UNAUDITED)</FONT></B></P>
<P align=justify><B><FONT face=serif size=2>1. Basis of
Presentation</FONT></B><FONT face=serif size=2></FONT></P>
<P align=justify><B><FONT face=serif size=2>Nature of Operations and Basis of
Presentation</FONT></B> <FONT face=serif size=2>&#150; Amtech Systems, Inc. (the
&#147;Company&#148;) designs, assembles, sells and installs capital equipment and related
consumables used in the manufacture of solar cells, semiconductors, and wafers
of various materials, primarily for the solar and semiconductor industries. The
Company sells these products worldwide, particularly in the United States, Asia
and Europe. In addition, the Company provides semiconductor manufacturing
support services.</FONT></P>
<P align=justify><FONT face=serif size=2>Effective October 1, 2007, the Company
acquired, through its wholly-owned subsidiary, Tempress Holding B.V., 100% of
the voting equity, in R2D Ingenierie, or R2D, a solar cell and semiconductor
automation equipment manufacturing company, located near Montpellier, France.
R2D provides solutions to the solar and semiconductor industries. The purpose of
the acquisition was to expand the Company&#146;s automation products which are used
in the semiconductor manufacturing and solar diffusion processes. The
acquisition of the technology and business of R2D enhances the growth strategy
by allowing the Company to increase sales by offering an integrated system under
the Tempress brand to the solar industry.</FONT></P>
<P align=justify><FONT face=serif size=2>The Company serves niche markets in
industries that are experiencing rapid technological advances, and which
historically have been very cyclical. Therefore, future profitability and growth
depend on the Company&#146;s ability to develop or acquire and market profitable new
products, and on its ability to adapt to cyclical trends.</FONT></P>
<P align=justify><FONT face=serif size=2>The accompanying unaudited condensed
consolidated financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission (the &#147;SEC&#148;), and
consequently do not include all disclosures normally required by U.S. generally
accepted accounting principles. In the opinion of management, the accompanying
unaudited interim condensed consolidated financial statements contain all
adjustments necessary, all of which are of a normal recurring nature, to present
fairly our financial position, results of operations and cash flows. Certain
information and note disclosures normally included in financial statements have
been condensed or omitted pursuant to the rules and regulations of the SEC.
These condensed consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and notes thereto included in
our Annual Report on Form 10-K for the fiscal year ended September 30,
2007.</FONT></P>
<P align=justify><FONT face=serif size=2>The consolidated results of operations
for the three months ended December 31, 2007, are not necessarily indicative of
the results to be expected for the full fiscal year.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Use of Estimates &#150;</FONT></B> <FONT face=serif size=2>The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Revenue Recognition</FONT></B>
<B><I><FONT face=serif size=2>&#150;</FONT></I></B> <FONT face=serif size=2>Revenue
is recognized upon shipment of the Company&#146;s proven technology equal to the
sales price less the greater of (i) the fair value of undelivered services and
(ii) the contingent portion of the sales price, which is generally 10-20% of the
total contract price. The entire cost of the equipment relating to proven
technology is recorded upon shipment. The remaining contractual revenue,
deferred costs and installation costs are recorded upon successful installation
of the product.</FONT></P>
<P align=justify><FONT face=serif size=2>For purposes of revenue recognition,
proven technology means the Company has a history of at least two successful
installations. New technology systems are those systems with respect to which
the Company cannot demonstrate that it can meet the provisions of customer
acceptance at the time of shipment.</FONT></P>
<P align=justify><FONT face=serif size=2>Revenue on new technology is deferred
until installation and acceptance at the customer&#146;s premises is completed, as
these sales do not meet the provisions of customer acceptance at the time of
shipment. Cost of the equipment relating to new technology is recorded against
deferred profit and then recorded in cost of sales upon customer
acceptance.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>7</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Revenue from services is recognized as
the services are performed. Revenue from prepaid service contracts is recognized
ratably over the life of the contract. Revenue from spare parts is recorded upon
shipment.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Deferred Profit</FONT></B> <FONT face=serif size=2>&#150; Revenue deferred pursuant to the Company&#146;s revenue
recognition policy, net of the related deferred costs, if any, is recorded as
deferred profit in current liabilities. The components of deferred profit are as
follows:</FONT></P>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="94%">&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>December 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>September 30,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%">&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#cceeff><FONT face=serif size=2>Deferred revenues</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 3,488</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 3,894</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>Deferred
      costs</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>1,728</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>1,750</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#cceeff><FONT face=serif size=2>Deferred profit</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>1,760</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>2,144</FONT>&nbsp;</TD></TR></TABLE></DIV><BR>
<P align=justify><B><FONT face=serif size=2>Concentrations of Credit Risk
&#150;</FONT></B> <FONT face=serif size=2>Financial instruments that potentially
subject the Company to significant concentrations of credit risk consist
principally of trade accounts receivable. The Company&#146;s customers consist of
manufacturers of semiconductors, semiconductor wafers, MEMS and solar cells
located throughout the world. Credit risk is managed by performing ongoing
credit evaluations of the customers&#146; financial condition, by requiring
significant deposits where appropriate, and by actively monitoring collections.
Letters of credit are required of certain customers depending on the size of the
order, type of customer or its creditworthiness, and its country of domicile.
Reserves for potentially uncollectible receivables are maintained based on an
assessment of collectibility.</FONT></P>
<P align=justify><FONT face=serif size=2>As of December 31, 2007, receivables
from one customer individually accounted for 17% of total accounts
receivable.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Restricted Cash</FONT></B> <FONT face=serif size=2>&#150;</FONT><FONT face=sans-serif></FONT> <FONT face=serif size=2>Current restricted cash of $1.2 million and $0.4 million as December 31,
2007 and September 30, 2007, respectively, consists of bank guarantees in excess
of our European overdraft facility. The bank guarantees are required by certain
customers from whom amounts have been received in advance of
shipment.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Accounts Receivable - Unbilled and
Other</FONT></B> <FONT face=serif size=2>&#150; Unbilled and other accounts
receivable consist mainly of the contingent portion of the sales price that is
not collectible until successful installation of the product. These amounts are
generally billed upon final acceptance by our customers. The majority of these
amounts are offset by balances included in deferred profit.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Inventories</FONT></B> <FONT face=serif size=2>&#150; Inventories are stated at the lower of cost (first-in,
first-out method) or net realizable value.</FONT></P>
<P align=justify><FONT face=serif size=2>The components of inventories are as
follows:</FONT></P>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="95%">&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>December 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>September 30,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%">&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#cceeff><FONT face=serif size=2>Purchased parts and raw materials</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>6,332</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 5,291</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%"><FONT face=serif size=2>Work-in-process</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>4,810</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>1,456</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#cceeff><FONT face=serif size=2>Finished goods</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>876</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>542</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
    12,018</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>7,289</FONT>&nbsp;</TD></TR></TABLE></DIV><BR>
<P align=justify><B><FONT face=serif size=2>Property, Plant and
Equipment</FONT></B> <FONT face=serif size=2>&#150; Property, plant and equipment are
recorded at cost. Maintenance and repairs are charged to expense as incurred.
The cost of property retired or sold and the related accumulated depreciation
are removed from the applicable accounts when disposition occurs and any gain or
loss is recognized. Depreciation is computed using the straight-line method.
Useful lives for equipment, machinery and leasehold improvements range from
three to seven years; for furniture and fixtures from five to 10 years; and for
buildings 20 years.</FONT></P>
<P align=center><FONT face=serif size=2>8</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The following is a summary of property,
plant and equipment:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="92%">&nbsp;</TD>
    <TD noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>December 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>September 30,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%">&nbsp;</TD>
    <TD noWrap align=center width="7%" colSpan=7><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%" bgColor=#cceeff><FONT face=serif size=2>Land, building and leasehold improvements</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>6,510</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>5,105</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%"><FONT face=serif size=2>Equipment and
      machinery</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>3,239</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>2,874</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%" bgColor=#cceeff><FONT face=serif size=2>Furniture and fixtures</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>2,886</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>2,570</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>12,635</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>10,549</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%" bgColor=#cceeff><FONT face=serif size=2>Accumulated depreciation and amortization</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      (4,987</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      (4,304</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>7,648</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>6,245</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD></TR></TABLE><BR>
<P align=justify><B><FONT face=serif size=2>Goodwill -</FONT></B> <FONT face=serif size=2>Goodwill and intangible assets with indefinite lives are not
subject to amortization, but are tested for impairment at least annually. The
Company accounts for goodwill under the provisions of Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No. 142. Accordingly, goodwill is reviewed for
impairment on an annual basis, typically at the end of the fiscal year, or more
frequently if circumstances dictate.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Intangibles</FONT></B> <FONT face=serif size=2>&#150; Intangible assets are capitalized and amortized over 2 to 15
years if the life is determinable. If the life is not determinable, amortization
is not recorded.</FONT></P>
<P align=justify><FONT face=serif size=2>Effective October 1, 2007, the Company
acquired, through its wholly-owned subsidiary, Tempress Holding B.V., 100% of
the voting equity, in R2D Ingenierie, or R2D, a solar cell and semiconductor
automation equipment manufacturing company, located near Montpellier,
France.</FONT></P>
<P align=justify><FONT face=serif size=2>The intangible assets of R2D
principally consist of intellectual property and technology, reseller
relationships, customer contracts, trademarks and non-compete agreements
totaling $3.2 million. The valuation of the intangible assets is preliminary and
dependent upon final valuation analysis which will be determined with the
assistance of an independent third-party consultant. The fair value of
intangible assets was determined by a valuation approach that estimates the
future economic benefit stream of the asset. This benefit stream was then
discounted to present value with an appropriate risk-adjusted discount rate. See
Note 9, &#147;Acquisition,&#148; for detail of the intangible assets acquired.</FONT></P>
<P align=justify><FONT face=serif size=2>The following is a summary of
intangibles:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="77%">&nbsp;</TD>
    <TD noWrap align=center width="15%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>December 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>September 30,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="15%"><B><FONT face=serif size=1>Useful Life</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%">&nbsp;</TD>
    <TD noWrap align=center width="15%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=7><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#cceeff><FONT face=serif size=2>Trademarks</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%" bgColor=#cceeff><FONT face=serif size=2>Indefinite</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>592</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>592</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Non-compete
      agreements</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%"><FONT face=serif size=2>8-10
      years</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>526</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>350</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#cceeff><FONT face=serif size=2>Customer lists</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%" bgColor=#cceeff><FONT face=serif size=2>10-15 years</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>1,492</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>276</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Technology</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%"><FONT face=serif size=2>4-10
      years</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>1,674</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>102</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#cceeff><FONT face=serif size=2>Licenses</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%" bgColor=#cceeff><FONT face=serif size=2>10 years</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>300</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>300</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Backlog and
      other</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%"><FONT face=serif size=2>1-2
      years</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>226</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;-</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="15%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>4,810</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>1,620</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Accumulated
      amortization</FONT>&nbsp;</TD>
    <TD noWrap align=left width="15%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>(391</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>(256</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="15%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>4,419</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>1,364</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><B><FONT face=serif size=2>Restricted Cash &#150;
Non-current</FONT></B> <FONT face=serif size=2>&#150; Restricted cash &#150; non-current
consists of cash in an escrow account related to contingent payments to be paid
to the sellers of R2D upon fulfillment of certain requirements. The amount of
future contingent payments earned will be allocated to goodwill.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>9</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>Warranty &#150;</FONT></B> <FONT face=serif size=2>A limited warranty is provided free of charge, generally for
periods of 12 to 24 months to all purchasers of the Company&#146;s new products and
systems. Accruals are recorded for estimated warranty costs at the time revenue
is recognized.</FONT><FONT face=serif></FONT></P>
<P align=justify><FONT face=serif size=2>The following is a summary of activity
in accrued warranty expense:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="92%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=7><B><FONT face=serif size=1>Three Months Ended December
      31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>2006</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%">&nbsp;</TD>
    <TD noWrap align=center width="7%" colSpan=7><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%" bgColor=#cceeff><FONT face=serif size=2>Beginning balance</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>256</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
289</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%"><FONT face=serif size=2>Warranty
      expenditures</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (110</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>(16</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%" bgColor=#cceeff><FONT face=serif size=2>Provision</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>81</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>22</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%"><FONT face=serif size=2>Acquired through
      business acquisitions</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>247</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%" bgColor=#cceeff><FONT face=serif size=2>Ending balance</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>474</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>295</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><B><FONT face=serif size=2>Stock-Based Compensation
- -</FONT></B> <FONT face=serif size=2>On October 1, 2005, the Company adopted
SFAS No. 123 (R), &#147;Share-Based Payment&#148; (&#147;SFAS 123 (R)&#148;) and Staff Accounting
Bulletin 107, &#147;Share-Based Payment.&#148; SFAS 123 (R) requires the Company to
measure compensation costs relating to share-based payment transactions based
upon the grant-date fair value of the award. Those costs are recognized as
expense over the requisite service period, which is generally the vesting
period. The Company has elected the modified prospective application method of
reporting; therefore, prior periods were not restated. Under the modified
prospective method, this statement was applied to new awards granted after the
time of adoption, as well as to the unvested portion of previously granted
awards for which the requisite service had not been rendered as of October 1,
2005. SFAS 123 (R) also requires the benefits of tax deductions in excess of
recognized compensation cost to be reported as cash flow from financing
activities rather than as cash flow from operating activities. Our stock-based
compensation plans are summarized in the table below:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=center width="91%"></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"><B><FONT face=serif size=1>Shares</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"><B><FONT face=serif size=1>Shares</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"><B><FONT face=serif size=1>Plan</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="91%"><B><FONT face=serif size=1>Name of Plan</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><B><FONT face=serif size=1>Authorized</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><B><FONT face=serif size=1>Available</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><B><FONT face=serif size=1>Options Outstanding</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><B><FONT face=serif size=1>Expiration</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#cceeff><FONT face=serif size=2>2007 Employee Stock Incentive Plan</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>500,000</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>396,187</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>72,313</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;Apr. 2017</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face=serif size=2>1998 Employee
      Stock Option Plan</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>500,000</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>-</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>362,615</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>Jan.
    2008</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#cceeff><FONT face=serif size=2>Non-Employee Directors Stock Option Plan</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>200,000</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>78,600</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>49,000</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>Jul. 2015</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 474,787</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 483,928</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Stock-based compensation expense
recognized under SFAS 123 (R) reduced the Company&#146;s results of operations as
follows:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=7><B><FONT face=serif size=1>Three Months Ended December
      31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><STRONG><FONT size=1>2006</FONT></STRONG></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;</TD>
    <TD noWrap align=center width="14%" colSpan=7><FONT face=serif size=2>(dollars in thousands, except per share amounts)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#cceeff><FONT face=serif size=2>Effect on income before income taxes (1)</FONT>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      $</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(102</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp; $</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(33</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><FONT face=serif size=2>Effect on net
      income</FONT>&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT size=2>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(89</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="2%"><FONT size=2>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(28</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#cceeff><FONT face=serif size=2>Effect on basic income per share</FONT>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(0.01</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(0.01</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><FONT face=serif size=2>Effect on
      diluted income per share</FONT>&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(0.01</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(0.01</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; (1) Stock
based compensation expense is included in selling, general and administrative
expenses.</FONT><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>Qualified stock options issued under
the terms of the plans have, or will have, an exercise price equal to or greater
than the fair market value of the common stock at the date of the option grant
and expire no later than 10 years from the date of grant, with the most recent
grant expiring in 2017. Under the terms of the 1998 Employee Stock Option Plan,
nonqualified stock options may also be issued. Options issued by the Company
vest over 1 to 5 years.</FONT></P>
<P align=justify><FONT face=serif size=2>The stock option transactions and the
options outstanding are summarized as follows:</FONT></P>
<P align=center><FONT face=serif><FONT size=2>10</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=12><B><FONT face=serif size=1>Three Months Ended December
      31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=6><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=5><B><FONT face=serif size=1>2006</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>Weighted</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>Weighted</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>Average</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>Average</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>Exercise</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>Exercise</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>Options</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>Price</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>Options</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=1>Price</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><FONT face=serif size=2>Outstanding at beginning of period</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 450,303</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>6.44</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 308,384</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 5.95</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Granted</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>85,000</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 14.79</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>70,000</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>6.09</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><FONT face=serif size=2>Exercised</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>(50,875</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>5.15</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT size=2>-</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>-</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Forfeited</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>(500</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>7.00</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT size=2>-</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>-</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><FONT face=serif size=2>Outstanding at end of period</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>483,928</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>8.04</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>378,384</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>6.13</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><FONT face=serif size=2>Exercisable at end of period</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>222,809</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>6.35</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>244,557</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>5.91</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Weighted average
      fair value of options</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><FONT face=serif size=2>granted during the period</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>8.70</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>4.62</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The fair value of options was estimated
at the date of grant using the Black-Scholes option pricing model with the
following assumptions:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="96%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=3><B><FONT face=serif size=1>Three Months Ended December
      31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="96%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><B><FONT face=serif size=1>2006</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="96%" bgColor=#cceeff><FONT face=serif size=2>Risk free interest rate</FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff><FONT size=2><FONT face=serif>3.45</FONT>%</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff><FONT face=serif size=2>4.55%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="96%"><FONT face=serif size=2>Expected
      life</FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 6
      years</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 6
      years</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="96%" bgColor=#cceeff><FONT face=serif size=2>Dividend rate</FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff><FONT size=2><FONT face=serif>0</FONT>%</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff><FONT size=2><FONT face=serif>0</FONT>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="96%"><FONT face=serif size=2>Volatility</FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%"><FONT size=2><FONT face=serif>61</FONT>%</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"><FONT size=2><FONT face=serif>69</FONT>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="96%" bgColor=#cceeff><FONT face=serif size=2>Forfeiture rate</FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff><FONT size=2><FONT face=serif>9</FONT>%</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff><FONT size=2><FONT face=serif>7</FONT>%</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>To estimate expected lives for this
valuation, it was assumed that options will be exercised at varying schedules
after becoming fully vested. In accordance with SFAS 123 (R), forfeitures have
been estimated at the time of grant and will be revised, if necessary, in
subsequent periods if actual forfeitures differ from those estimates.
Forfeitures were estimated based upon historical experience. Fair value
computations are highly sensitive to the volatility factor assumed; the greater
the volatility, the higher the computed fair value of the options
granted.</FONT></P>
<P align=justify><FONT face=serif size=2>There were 85,000 and 70,000 options
granted during the three months ended December 31, 2007 and 2006, respectively.
Total fair value of options granted was approximately $740,000 and $324,000 for
the three months ended December 31, 2007 and 2006, respectively.</FONT></P>
<P align=justify><FONT face=serif size=2>In December 2007, we began awarding
restricted shares under the existing share-based compensation plans. Our
restricted share-awards vest in equal annual installments over a four-year year
period. The total value of these awards is expensed on a ratable basis over the
service period of the employees receiving the grants. The &#147;service period&#148; is
the time during which the employees receiving grants must remain employees for
the shares granted to fully vest. There were 31,500 restricted share awards
granted during the three months ended December 31, 2007 with a fair value of
$14.79 per share and a total fair value of $466,000. There were no restricted
shares that vested or were cancelled in the three months ended December 31,
2007.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Impact of Recently Issued Accounting
Pronouncements</FONT></B><FONT face=serif></FONT></P>
<P align=justify><FONT face=serif size=2>In September 2006, the FASB issued SFAS
No. 157, &#147;Fair Value Measurements&#148;. SFAS No. 157 defines fair value, establishes
a formal framework for measuring fair value and expands disclosures about fair
value measurements. The Company has not yet determined the impact, if any, that
SFAS No. 157 will have on its consolidated financial statements. SFAS No. 157 is
effective for the Company&#146;s fiscal year beginning October 1, 2008.</FONT></P>
<P align=justify><FONT face=serif size=2>In February 2007, the FASB issued SFAS
No. 159, &#147;The Fair Value Option for Financial Assets and Financial Liabilities
(as amended)&#148;. SFAS No. 159 permits entities to choose to measure many financial
instruments and certain other items at fair value that are not currently
required to be measured at fair value. In addition, FAS No. 159 establishes
presentation and disclosure requirements designed to facilitate comparisons
between entities that choose different measurement attributes for similar types
of assets and liabilities. The Company has not yet determined the impact, if
any, that SFAS No. 159 will have on its consolidated financial statements. SFAS
No. 159 is effective for the Company&#146;s fiscal year beginning October 1,
2008.</FONT></P>
<P align=center><FONT face=serif size=2>11</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>In December 2007, the FASB issued SFAS
No. 141(R), &#147;Business Combinations&#148;. This Statement replaces SFAS No. 141,
Business Combinations. This Statement retains the fundamental requirements in
Statement 141 that the acquisition method of accounting (which Statement 141
called the purchase method) be used for all business combinations and for an
acquirer to be identified for each business combination. This Statement also
establishes principles and requirements for how the acquirer: a) recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree; b)
recognizes and measures the goodwill acquired in the business combination or a
gain from a bargain purchase and c) determines what information to disclose to
enable users of the financial statements to evaluate the nature and financial
effects of the business combination. The former rules followed a cost
accumulation model that allocated acquisition costs to the net assets acquired,
whereas SFAS No. 141(R) follows a fair value model in which acquisition costs
will be expensed. SFAS No. 141(R) will apply prospectively to business
combinations for which the acquisition date is on or after Company&#146;s fiscal year
beginning October 1, 2009. While the Company has not yet evaluated this
statement for the impact, if any, that SFAS No. 141(R) will have on its
consolidated financial statements, the Company will be required to expense costs
related to any acquisitions beginning October 1, 2009.</FONT></P>
<P align=justify><FONT face=serif size=2>In December 2007, the FASB issued SFAS
No. 160, &#147;Noncontrolling Interests in Consolidated Financial Statements&#148;. This
Statement amends ARB 51 to establish accounting and reporting standards for the
noncontrolling (minority) interest in a subsidiary and for the deconsolidation
of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is
an ownership interest in the consolidated entity that should be reported as
equity in the consolidated financial statements. The Company has not yet
determined the impact, if any, that SFAS No. 160 will have on its consolidated
financial statements. SFAS No. 160 is effective for the Company&#146;s fiscal year
beginning October 1, 2009.</FONT></P>
<P align=justify><B><FONT face=serif size=2>2. Income Taxes</FONT></B></P>
<P align=justify><FONT face=serif size=2>The quarterly income tax provision is
calculated using an estimated annual effective tax rate, based upon expected
annual income, permanent items, statutory tax rates and planned tax strategies
in the various jurisdictions in which the Company operates.</FONT></P>
<P align=justify><FONT face=serif size=2>Deferred tax assets reflect the tax
effects of temporary differences between the carrying value of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes. Statement of Financial Accounting Standards (&#147;SFAS&#148;) No. 109
&#147;Accounting for Income Taxes&#148; requires that a valuation allowance is recognized
if, based on the weight of available evidence, it is more likely than not that
some portion or all of the deferred tax asset will not be realized. Each quarter
the valuation allowance is re-evaluated. During the quarter ended December 31,
2007, the valuation allowance was increased by $107,000 for net operating losses
in certain state and foreign jurisdictions that may not be recovered.</FONT></P>
<P align=justify><FONT face=serif size=2>The cumulative effect of the
application of the provisions of FIN 48 as of October 1, 2007 resulted in the
recognition of an additional tax liability of $332,000 for uncertain tax
positions and a decrease in the October 1, 2007 balance of retained earnings of
an equal amount. Upon the adoption of FIN 48, the Company classified uncertain
tax positions as non-current income taxes payable unless expected to be paid
within one year. The Company intends to maintain a valuation allowance for state
net operating losses until evidence supports the conclusion that it is more
likely than not that this deferred tax asset may be realized. The amount of the
valuation allowance at December 31, 2007 and October 1, 2007 was $560,000 and
$453,000, respectively. At December 31, 2007, and October 1, 2007, the total
amount of unrecognized tax benefits was $428,000 and $409,000. If recognized
these amounts would favorably impact the effective tax rate.</FONT></P>
<P align=justify><FONT face=serif size=2>The Company recognizes interest accrued
related to unrecognized tax benefits and penalties in the provision for income
taxes. As of December 31, 2007 and&nbsp;October 1, 2007, $115,000 and $96,000,
respectively, were accrued for the payment of interest and penalties.</FONT></P>
<P align=justify><FONT face=serif size=2>The Company and one or more of its
subsidiaries file income tax returns in The Netherlands, Germany, the U.S.,
France and other foreign jurisdictions, as well as various states in the U.S.
The Company and its subsidiaries have open tax years primarily from fiscal year
2002 to fiscal 2007 with taxing foreign jurisdictions and the U.S. These open
years contain certain matters that could be subject to differing interpretations
of applicable tax laws and regulations as they relate to the amount, timing, or
inclusion of revenues and expenses, or the sustainability of income tax
positions of the Company and its subsidiaries.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>12</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>3. Earnings Per Share</FONT></B></P>
<P align=justify><FONT face=serif size=2>Earnings per share (EPS) is computed by
dividing net income available to common shareholders (net income less accrued
preferred stock dividends) by the weighted average number of common shares
outstanding for the period. Diluted EPS is computed similarly to basic EPS
except that the denominator is increased to include the number of additional
common shares that would have been outstanding if potentially dilutive common
shares had been issued, and the numerator is based on net income available to
common shareholders. Common shares relating to stock options where the exercise
prices exceeded the average market price of our common shares during the period
were excluded from the diluted earnings per share calculation as the related
impact was antidilutive. For the three months ended December 31, 2007, options
for 85,000 shares and 31,500 restricted stock award shares are excluded from the
diluted EPS calculations because they are antidilutive. For the three months
ended December 31, 2006, options for 38,261 shares are excluded from the diluted
EPS calculations because they are antidilutive.</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="70%" border=0>

  <TR vAlign=bottom>
    <TD align=left width="79%">&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD align=center width="18%" colSpan=5><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><FONT size=1><STRONG>Three Months
      Ended</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%"><FONT size=1>&nbsp;</FONT></TD>
    <TD align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="18%" colSpan=5><FONT size=1><FONT size=3>&nbsp;</FONT><B><FONT face=serif size=1>December 31,</FONT></B></FONT><FONT size=3>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%"><FONT size=1>&nbsp;</FONT></TD>
    <TD align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=3><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>2007</STRONG></FONT></FONT><FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=3><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>2006</STRONG></FONT></FONT><STRONG></STRONG></FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%">&nbsp;</TD>
    <TD align=right width="2%"></TD>
    <TD noWrap align=center width="18%" colSpan=5><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>(in thousands, except per share
      amounts)</STRONG></FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%" bgColor=#cceeff><B><U><FONT face=serif size=2>Basic Earnings Per Share Computation</FONT></U></B>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%" bgColor=#ffffff><FONT size=2>Net
    income</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#ffffff><FONT face=serif size=2>108</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#ffffff><FONT face=serif size=2>6</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%" bgColor=#cceeff><FONT face=serif size=2>Weighted Average Shares Outstanding:</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Common stock</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>7,636</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>3,476</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%" bgColor=#cceeff><FONT face=serif size=2>Basic
      earnings per share</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>0.01</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>0.00</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%" bgColor=#cceeff><B><U><FONT face=serif size=2>Diluted Earnings Per Share Computation</FONT></U></B>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%"><FONT face=serif size=2>Net
    income</FONT>&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%"><FONT face=serif size=2>108</FONT>&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%"><FONT face=serif size=2>6</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%" bgColor=#cceeff><FONT face=serif size=2>Weighted Average Shares Outstanding:</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Common stock</FONT>&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT face=serif size=2>7,636</FONT>&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT face=serif size=2>3,476</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Common stock equivalents (1)</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>182</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>35</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Diluted shares</FONT>&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%"><FONT face=serif size=2>7,818</FONT>&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%"><FONT face=serif size=2>3,511</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="79%" bgColor=#cceeff><FONT face=serif size=2>Diluted
      earnings per share</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>0.01</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>0.00</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(1)</FONT></TD>
    <TD noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face=serif size=2>The number of common stock
      equivalents is calculated using the treasury stock method and the average
      market price during the period.</FONT></TD></TR></TABLE>
<P align=center><FONT face=serif><FONT size=2>13</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2><STRONG>4. Comprehensive
Income</STRONG></FONT></P>
<P align=justify>
<TABLE cellSpacing=0 cellPadding=0 width="80%" border=0>

  <TR vAlign=bottom>
    <TD align=left width="81%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=center width="18%" colSpan=5><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>Three Months
      Ended</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="81%"><FONT size=1>&nbsp;</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="18%" colSpan=5><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>December 31,</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="81%"><FONT size=1>&nbsp;</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>2007</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=1><STRONG>2006</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="81%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=center width="18%" colSpan=5>&nbsp;<B><FONT face=serif size=1>(dollars in thousands)</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#cceeff><FONT face=serif size=2>Net income, as reported</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT size=2><FONT face=serif>108</FONT></FONT>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff>&nbsp; <FONT face=serif size=2>6</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><FONT face=serif size=2>Foreign currency
      translation adjustment</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>146</FONT>&nbsp;</TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%">&nbsp; <FONT face=serif size=2>78</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#cceeff><FONT face=serif size=2>Comprehensive income</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#cceeff>&nbsp;<FONT face=serif size=2>254</FONT>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#cceeff>&nbsp; <FONT face=serif size=2>84</FONT>&nbsp;</TD></TR></TABLE>
<P align=justify><FONT face=serif size=2><STRONG>5. Business Segment
Information</STRONG></FONT></P>
<P align=justify><FONT face=serif size=2>The Company&#146;s products are classified
into two core business segments; the solar and semiconductor equipment segment
and the polishing supplies segment. The solar and semiconductor equipment
segment designs, manufactures and markets semiconductor wafer processing and
handling equipment used in the fabrication of integrated circuits, solar cells
and MEMS. Also included in the solar and semiconductor equipment segment are the
R2D operations, the manufacturing support service operations and corporate
expenses, except for a small portion that is allocated to the polishing supplies
segment. The polishing supplies segment designs, manufactures and markets
carriers, templates and equipment used in the lapping and polishing of
wafer-thin materials, including silicon wafers used in the production of
semiconductors.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>14</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Information concerning our business
segments is as follows:</FONT><FONT face=serif></FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="70%" border=0>

  <TR vAlign=bottom>
    <TD align=left width="82%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=center width="17%" colSpan=7>&nbsp;<B><FONT face=serif size=2><FONT size=1>Three Months Ended</FONT></FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="82%"><FONT size=1>&nbsp;</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="17%" colSpan=7>&nbsp;<B><FONT face=serif size=2><FONT size=1>December
      31,</FONT></FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="82%"><FONT size=1>&nbsp;</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=3>&nbsp;<B><FONT face=serif size=2><FONT size=1>2007</FONT></FONT></B>&nbsp;</TD>
    <TD align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=3>&nbsp;<B><FONT face=serif size=2><FONT size=1>2006</FONT></FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="82%"><FONT face=serif size=2>Net
    Revenues:</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=center width="17%" colSpan=7>&nbsp;<B><FONT face=serif size=1>(dollars in thousands)</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Solar and semiconductor equipment</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>9,997</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>7,521</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Polishing supplies</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>1,744</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>1,930</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; 11,741</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>9,451</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="100%" colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#cceeff><FONT face=serif size=2>Operating Income:</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="6%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="6%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Solar and semiconductor equipment</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>(118</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>(253</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Polishing supplies</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>143</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>308</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>25</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>55</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="100%" colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#cceeff><FONT face=serif size=2>Interest and other income (expense), net</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>153</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>21</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Income before income taxes</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%"><FONT face=serif size=2>178</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%"><FONT face=serif size=2>76</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="100%" colSpan=9>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="100%" colSpan=9>&nbsp;</TD></TR>
  <TR>
    <TD noWrap width="100%" colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3>&nbsp;<FONT face=serif size=2><FONT size=1><STRONG>December 31,</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><FONT size=1><FONT size=3>&nbsp;</FONT><B><FONT face=serif size=1>September
      30,</FONT></B></FONT><FONT size=3>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3><FONT size=1><FONT size=3>&nbsp;</FONT><B><FONT face=serif size=1>2007</FONT></B></FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3><FONT size=1><FONT size=3>&nbsp;</FONT><B><FONT face=serif size=1>2007</FONT></B></FONT><B><FONT face=serif size=2></FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face=serif size=2>Identifiable
      Assets:</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="17%" colSpan=7>&nbsp;<B><FONT face=serif size=1>(dollars in thousands)</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Solar and semiconductor equipment</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>81,749</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>46,283</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Polishing supplies</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>4,263</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>4,383</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>86,013</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>50,666</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><B><FONT face=serif size=2>6. Major Customers and Foreign
Sales</FONT></B></P>
<P align=justify><FONT face=serif size=2>During the three month period ended
December 31, 2007, one customer represented 15% of net revenues. During the
three months ended December 31, 2006, two customers individually represented 15%
and 11% of net revenues.</FONT></P>
<P align=justify><FONT face=serif size=2>Our net revenues were to customers in
the following geographic regions:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD align=left width="82%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=center width="17%" colSpan=5><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>Three Months
      Ended</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="82%"><FONT size=1>&nbsp;</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="17%" colSpan=5><FONT size=1><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>December 31,</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="82%"><FONT size=1>&nbsp;</FONT></TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>2007</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>2006</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="82%" bgColor=#cceeff><FONT face=serif size=2>North
      America (1)</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>21</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>34</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="82%"><FONT face=serif size=2>Asia (2)
    (3)</FONT>&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD align=right width="7%"><FONT face=serif size=2>44</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="7%"><FONT face=serif size=2>49</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="82%" bgColor=#cceeff><FONT face=serif size=2>Europe
      (4)</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>35</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>17</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="82%">&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>100</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%"><FONT face=serif size=2>100</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(1)</FONT></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>Includes 21% and 33%
      to the United States in fiscal 2008 and 2007, respectively</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(2)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>Includes 25% and 21%
      to China in fiscal 2008 and 2007, respectively.</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(3)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>Includes 6% and 12% to
      Taiwan in fiscal 2008 and 2007, respectively.</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT size=2>(4)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT size=2>Includes 15% to&nbsp;Switzerland
      in fiscal 2008.</FONT></TD></TR></TABLE>
<P align=center><FONT face=serif><FONT size=2>15</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>7. Commitments and
Contingencies</FONT></B></P>
<P align=justify><B><FONT face=serif size=2>Purchase Obligations</FONT></B>
<FONT face=serif size=2>&#150; As of December 31, 2007, we had purchase obligations
in the amount of $10.5 million. These purchase obligations consist of
outstanding purchase orders for goods and services. While the amount represents
purchase agreements, the actual amounts to be paid may be less in the event that
any agreements are renegotiated, cancelled or terminated.</FONT></P>
<P align=justify><B><FONT face=serif size=2>8. Issuance of Common
Stock</FONT></B></P>
<P align=justify><FONT face=serif size=2>In November 2007, the Company filed
registration statements on Form S-1 with the Securities and Exchange Commission
for the sale of 2,500,000 shares of its common stock in an underwritten public
offering at a price to the public of $14.41 per share. Net proceeds to the
Company were approximately $33.6 million, net of approximately $0.3 million of
offering expenses and $2.2 million of underwriting commissions. We intend to use
the net proceeds from this offering for working capital and other general
corporate purposes. Pending application of these proceeds, we intend to invest
the net proceeds in short-term, interest bearing investment grade
securities.</FONT></P>
<P align=justify><B><FONT face=serif size=2>9. Acquisition</FONT></B></P>
<P align=justify><FONT face=serif size=2>Effective October 1, 2007, the Company
acquired, through its wholly-owned subsidiary, Tempress Holding B.V., 100% of
the voting equity, in R2D Ingenierie, or R2D, a solar cell and semiconductor
automation equipment manufacturing company, located near Montpellier, France.
R2D provides solutions to the solar and semiconductor industries. The purpose of
the acquisition was to expand the Company&#146;s automation products which are used
in the semiconductor manufacturing and solar diffusion processes. The
acquisition of the technology and business of R2D enhances the growth strategy
by allowing the Company to increase sales by offering an integrated system under
the Tempress brand to the solar industry.</FONT></P>
<P align=justify><FONT face=serif size=2>The aggregate purchase price is based
on the cash consideration paid at closing of $5.5 million plus acquisition costs
of $0.9 million, including cost of legal representation and due diligence. Cash
contingent payments of $1.6 million to be paid to sellers upon fulfillment of
certain requirements have been deposited in an escrow account. The amount of
future contingent payments earned will be allocated to goodwill. The assets of
R2D principally consist of intellectual property and technology, reseller
relationships, customer contracts, trademarks, non-compete agreements,
inventories and other tangible property used in connection with the acquired
business. Liabilities assumed include current liabilities, loans, obligations
under certain contracts, leases, purchase orders and warranty claims for certain
products and services under warranty as of the date of the
acquisition.</FONT></P>
<P align=justify><FONT face=serif size=2>The valuation of acquired assets is
preliminary and dependent upon final valuation of assets acquired, including
valuation of intangible assets which will be determined with the assistance of
an independent third-party consultant. The fair value of intangible assets will
be determined by a valuation approach that estimates the future economic benefit
stream of the asset. This benefit stream will be discounted to present value
with an appropriate risk-adjusted discount rate.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>16</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The allocation of the purchase price to
the fair value of the assets acquired and liabilities assumed at the date of
acquisition is as follows (dollars in thousands):</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="70%" border=0>

  <TR vAlign=bottom>
    <TD align=left width="80%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="8%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%"><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>Useful Life</STRONG></FONT></FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%" bgColor=#cceeff><FONT face=serif size=2>Assets
      Acquired:</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="8%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="8%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%">&nbsp; &nbsp;&nbsp; <FONT face=serif size=2>Current Assets</FONT>&nbsp;</TD>
    <TD align=left width="1%"><FONT face=serif size=2>$<FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></FONT></TD>
    <TD align=right width="8%"><FONT face=serif size=2>4,411</FONT>&nbsp;</TD>
    <TD align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=left width="8%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Property, plant &amp; equipment</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>234</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="8%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Intangible assets:</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="8%">&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="8%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Non-compete agreements</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>176</FONT>&nbsp;</TD>
    <TD align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>8</FONT>&nbsp; <FONT face=serif size=2>years</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Customer lists</FONT>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%"><FONT face=serif size=2>1,216</FONT>&nbsp;</TD>
    <TD align=right width="2%"></TD>
    <TD align=right width="8%"><FONT face=serif size=2>10</FONT>&nbsp; <FONT face=serif size=2>years</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Technology</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>1,572</FONT>&nbsp;</TD>
    <TD align=right width="2%" bgColor=#cceeff></TD>
    <TD align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>10<FONT face="Times New Roman" size=3>&nbsp;</FONT> years</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Backlog and other</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>226</FONT>&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>1-10<FONT face="Times New Roman" size=3>&nbsp;</FONT> years</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Goodwill</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>1,158</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="8%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Total assets acquired</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="8%"><FONT face=serif size=2>8,993</FONT>&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="8%">&nbsp;</TD></TR>
  <TR>
    <TD align=left width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%" bgColor=#cceeff><FONT face=serif size=2>Liabilities Assumed:</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="8%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="8%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Current Liabilities</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="8%"><FONT face=serif size=2>2,413</FONT>&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="8%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Long-term liabilities</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>165</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="8%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Total liabilities assumed</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="8%"><FONT face=serif size=2>2,578</FONT>&nbsp;</TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="8%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="80%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Net assets acquired</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>6,415</FONT>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="8%" bgColor=#cceeff>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The following consolidated pro forma
financial information was prepared assuming that the acquisition had occurred at
the beginning of the three months ended December 31, 2006. This pro forma
information does not necessarily reflect the results of operations that would
have occurred had the acquisition taken place at the beginning of the period and
is not necessarily indicative of results that may be obtained in the future
(unaudited):</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=bottom>
    <TD align=left width="91%">&nbsp;</TD>
    <TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>Three Months
      Ended</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="91%"><FONT size=1>&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>December 31, 2006</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="91%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>(in thousands
      except</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="91%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>per share
      amounts)</STRONG></FONT></FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="91%" bgColor=#cceeff><FONT face=serif size=2>Revenues</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>10,822<FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="91%"><FONT face=serif size=2>Net
    income</FONT>&nbsp;</TD>
    <TD align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT face=serif size=2>206</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="91%" bgColor=#cceeff><FONT face=serif size=2>Net
      income per share:</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="7%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="91%">&nbsp; &nbsp;&nbsp; <FONT face=serif size=2>Basic</FONT>&nbsp;</TD>
    <TD align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT face=serif size=2>0.06</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="91%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp; <FONT face=serif size=2>Diluted</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>0.06</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>For purposes of the above pro forma
presentation, the historical revenues and earnings of R2D for the three months
ended December 31, 2006 have been combined with the revenues and earnings of
Amtech for the three months ended December 31, 2006.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>17</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif><FONT size=2><A name=p18></A>ITEM 2. MANAGEMENT&#146;S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</FONT></FONT></B></P>
<P align=justify><FONT face=serif size=2>The following discussion and analysis
of our financial condition and results of operations should be read in
conjunction with our condensed consolidated financial statements and the related
notes included in Item 1, &#147;Condensed Financial Statement&#148; in this quarterly
report on Form 10-Q and our consolidated financial statements and related notes
included in Item 8, &#147;Financial Statements and Supplementary Data&#148; in our Annual
Report on Form 10-K for the fiscal year ended September 30, 2007, as
amended.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Cautionary Statement Regarding
Forward-Looking Statements</FONT></B></P>
<P align=justify><I><FONT face=serif size=2>The statements in this report
include forward-looking statements. These forward-looking statements are based
on our management&#146;s current expectations and beliefs and involve numerous risks
and uncertainties that could cause actual results to differ materially from
expectations. You should not rely upon these forward-looking statements as
predictions of future events because we cannot assure you that the events or
circumstances reflected in these statements will be achieved or will occur. You
can identify forward-looking statements by the use of forward-looking
terminology, including the words &#147;believes,&#148; &#147;expects,&#148; &#147;may,&#148; &#147;will,&#148; &#147;should,&#148;
&#147;seeks,&#148; &#147;intends,&#148; &#147;plans,&#148; &#147;estimates&#148; or &#147;anticipates&#148; or the negative of
these words and phrases or other variations of these words and phrases or
comparable terminology. These forward-looking statements relate to, among other
things: our sales, results of operations and anticipated cash flows; capital
expenditures; depreciation and amortization expenses; research and development
expenses; selling, general and administrative expenses; the development and
timing of the introduction of new products and technologies; our ability to
maintain and develop relationships with our existing and potential future
customers and our ability to maintain the level of investment in research and
development and capacity that is required to remain competitive. Many factors
could cause our actual results to differ materially from those projected in
these forward-looking statements, including, but not limited to: whether we will
be able to complete acquisitions and integrate such businesses successfully and
achieve anticipated synergies; variability of our revenues and financial
performance; risks associated with product development and technological
changes; the acceptance of our products in the marketplace by existing and
potential future customers; disruption of operations or increases in expenses
caused by civil or political unrest or other catastrophic events; general
economic conditions and conditions in the semiconductor and solar industries in
particular; the continued employment of our key personnel and risks associated
with competition.</FONT></I><FONT face=serif size=2></FONT></P>
<P align=justify><I><FONT face=serif size=2>For a discussion of the factors that
could cause actual results to differ materially from the forward-looking
statements, see the &#147;Risk Factors&#148; set forth in Item 1A of Part I of Amtech
Systems, Inc.&#146;s Annual Report on Form 10-K for the fiscal year ended September
30, 2007, the &#147;Liquidity and Capital Resources&#148; section under &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations&#148; in
this item of this report and the other risks and uncertainties that are set
forth elsewhere in this report or detailed in our other Securities and Exchange
Commission reports and filings. We assume no obligation to update these
forward-looking statements.</FONT></I></P>
<P align=justify><B><FONT face=serif size=2>Introduction</FONT></B><B><FONT face=serif></FONT></B></P>
<P align=justify><FONT face=serif size=2>Management&#146;s Discussion and Analysis
(&#147;MD&amp;A&#148;) is intended to facilitate an understanding of our business and
results of operations. MD&amp;A consists of the following sections:</FONT></P>
<UL>
  <LI><FONT face=serif size=2>Overview<BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>Results of Operations<BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>Liquidity and Capital Resources<BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>Off &#150; Balance Sheet Arrangements<BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>Contractual Obligations<BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>Critical Accounting Policies<BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>Impact of Recently Issued Accounting
  Pronouncements</FONT></LI></UL>
<P align=center><FONT face=serif><FONT size=2>18</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><A name=p19></A>
<P align=justify><B><FONT face=serif size=2>Overview</FONT></B></P>
<P align=justify><FONT face=serif size=2>We operate in two segments: the solar
and semiconductor equipment segment and the polishing supplies segment. Our
solar and semiconductor equipment segment is a leading supplier of thermal
processing systems, including related automation, parts and services, to the
solar/photovoltaic, semiconductor, silicon wafer and MEMS industries.</FONT></P>
<P align=justify><FONT face=serif size=2>Our polishing supplies and equipment
segment is a leading supplier of wafer carriers to manufacturers of silicon
wafers. The polishing segment also manufacturers polishing templates, steel
carriers and double-sided polishing and lapping machines to fabricators of
optics, quartz, ceramics and metal parts, and to manufacturers of medical
equipment components.</FONT></P>
<P align=justify><FONT face=serif size=2>Our customers are primarily
manufacturers of solar cells and integrated circuits. The solar cell and
semiconductor industries are cyclical and historically have experienced
significant fluctuations. Our revenue is impacted by these broad industry
trends.</FONT></P>
<P align=justify><FONT face=serif size=2>Due to the nature of the capital
equipment markets that we serve, revenues, gross margins, and operating results
have historically fluctuated on a quarterly basis. Our contracts include
holdbacks of 10-20% of revenue, which are recognized at the time of customer
acceptance.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Results of Operations</FONT></B></P>
<P align=justify><FONT face=serif size=2>The following table sets forth certain
operational data as a percentage of net revenue for the periods
indicated:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="70%" border=0>

  <TR vAlign=bottom>
    <TD align=left width="83%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="17%" colSpan=5><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>Three
      Months Ended</STRONG></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%">&nbsp;</TD>
    <TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>December 31,</STRONG></FONT></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>December 31,</STRONG></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>2007</STRONG></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>2006</STRONG></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%" bgColor=#cceeff><FONT face=serif size=2>Net
      revenue</FONT>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      100</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      100</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%"><FONT face=serif size=2>Cost of goods
      sold</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>70</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>75</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%" bgColor=#cceeff><FONT face=serif size=2>Gross
      margin</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>30</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>25</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%"><FONT face=serif size=2>Operating
      expenses:</FONT>&nbsp;</TD>
    <TD align=left width="7%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="7%"></TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp; <FONT face=serif size=2>Selling, general and administrative</FONT>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>28</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>23</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Research and Development</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>2</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%" bgColor=#cceeff><FONT face=serif size=2>Total
      operating expenses</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>30</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>24</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%"><FONT face=serif size=2>Income from
      operations</FONT>&nbsp;</TD>
    <TD align=right width="7%"><FONT face=serif size=2>0</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD align=right width="7%"><FONT face=serif size=2>1</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%" bgColor=#cceeff><FONT face=serif size=2>Interest income (expense), net</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>2</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>0</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%"><FONT face=serif size=2>Income before income
      taxes</FONT>&nbsp;</TD>
    <TD align=right width="7%"><FONT face=serif size=2>2</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD align=right width="7%"><FONT face=serif size=2>1</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%" bgColor=#cceeff><FONT face=serif size=2>Income
      taxes</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="83%"><FONT face=serif size=2>Net
    Income</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>0</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><B><I><FONT face=serif size=2>Net Revenue</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Net revenue consists of revenue
recognized upon shipment or installation of products using proven technology and
upon acceptance of products using new technology. In addition, spare parts sales
are recognized upon shipment. Service revenue is recognized upon completion of
the service activity or ratably over the term of the service contract. The
majority of our revenue is generated from large furnace systems sales which,
depending on the timing of shipment and installation, can have a significant
impact on our revenue and earnings in any given period.</FONT> <I><FONT face=serif size=2>See</FONT></I> <FONT face=serif size=2>Critical Accounting
Policies &#150; Revenue Recognition.</FONT></P>
<P align=center><FONT face=serif><FONT size=3><FONT size=2>19</FONT></FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="67%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="15%" colSpan=5>&nbsp;<B><FONT face=serif size=1>Three Months
Ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="6%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp;<B><FONT face=serif size=1>December 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=1>December 31,</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3>&nbsp;<B><FONT face=serif size=1>Increase</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2>&nbsp;<B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=1>2006</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3>&nbsp;<B><FONT face=serif size=1>(Decrease)</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="67%"><B><FONT face=serif size=2>Net Revenue</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=5>&nbsp;<B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="6%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#cceeff><FONT face=serif size=2>Solar and Semiconductor Equipment Segment</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>9,997</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>7,521</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;<FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>2,476</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2><FONT style="BACKGROUND-COLOR: #cceeff" size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      33</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="67%"><FONT face=serif size=2>Polishing Supplies
      Segment</FONT>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="6%"><FONT face=serif size=2>1,744</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="6%"><FONT face=serif size=2>1,930</FONT>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="6%"><FONT face=serif size=2>(186</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="6%"><FONT face=serif size=2>(10</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp;
      <FONT face=serif size=2>Total</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2><FONT style="BACKGROUND-COLOR: #cceeff" size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      11,741</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2><FONT style="BACKGROUND-COLOR: #cceeff" size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      9,451</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;<FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2><FONT style="BACKGROUND-COLOR: #cceeff" size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      2,290</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>24</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Net revenue for the quarter ended
December 31, 2007 increased by $2.3 million, or 24%, from the quarter ended
December 31, 2006. Revenue from our new subsidiary, R2D, contributed $0.7
million to this segment&#146;s revenue. Revenue increases in the solar and
semiconductor equipment segment resulted from higher shipments to the solar
industry and recognition of deferred revenue. Net revenue to the solar industry
was $5.2 million for the three months ended December 31, 2007, a $2.7 million or
108% increase from the three months ended December 31, 2006. These increases
were partially offset by lower shipments to the semiconductor industry. Net
revenue of the polishing supplies segment decreased 10% primarily as a result of
lower sales volumes of insert carriers caused by increased competition in this
market segment.</FONT></P>
<P align=justify><FONT face=serif size=2>The following table reflects new
orders</FONT> <B><SUP><FONT face=serif size=2>(1)</FONT></SUP></B><FONT face=serif size=2>, shipments and net revenues for the first quarter of the
current and prior fiscal years, and the backlog as of the end of those
periods.</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="9%" colSpan=2>&nbsp;<FONT face=serif size=2><FONT size=1><STRONG>Solar and</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=center width="7%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=center width="7%"><FONT size=1>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="9%" colSpan=2><FONT size=1><FONT size=3>&nbsp;</FONT><B><FONT face=serif size=1>Semi-</FONT></B></FONT><FONT size=3>&nbsp;</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=center width="7%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><FONT size=1>&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="9%" colSpan=2><FONT size=1><FONT size=3>&nbsp;</FONT><B><FONT face=serif size=1>conductor</FONT></B></FONT><FONT size=3>&nbsp;</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=1><FONT size=3>&nbsp;</FONT><STRONG>Polishing</STRONG></FONT><FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><FONT size=1><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>Total</STRONG></FONT></FONT><FONT size=3>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=2><FONT size=1>&nbsp; <B><FONT face=serif size=1>Equipment
      (2)</FONT></B>&nbsp;</FONT></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><FONT size=1><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>Supplies</STRONG></FONT></FONT><FONT size=3>&nbsp;</FONT></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><FONT size=1><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>Company</STRONG></FONT></FONT><FONT size=3>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%"><FONT size=1>&nbsp;</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="27%" colSpan=8><FONT size=1><FONT size=3>&nbsp;</FONT><FONT face=serif size=1>(dollars in
      thousands)</FONT></FONT><FONT face=serif size=2></FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=2>2008:</FONT></B></TD>
    <TD noWrap align=left width="68%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="8%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="7%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="7%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>New orders
      (1)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>35,085</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>1,941</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>37,026</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=2>Shipments</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>9,091</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>1,767</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>10,858</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Net
      revenues</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>9,997</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>1,744</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>11,741</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=2>Backlog 12/31/07</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>48,850</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>1,080</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>49,930</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%"><B><FONT face=serif size=2>Book-to-bill
      ratio</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="8%"><B><FONT face=serif size=2>3.9:1</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>1.1:1</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>3.4:1</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=2>2007:</FONT></B></TD>
    <TD noWrap align=left width="68%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="8%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="7%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="7%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>New orders
      (1)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>11,577</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>2,479</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>14,056</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=2>Shipments</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>8,035</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>1,932</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>9,967</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Net
      revenues</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>7,521</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>1,930</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>9,451</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=2>Backlog 12/31/06</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="8%" bgColor=#cceeff><FONT face=serif size=2>16,670</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>1,535</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>18,205</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="68%"><B><FONT face=serif size=2>Book-to-bill
      ratio</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="8%"><B><FONT face=serif size=2>1.4:1</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>1.3:1</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>1.4:1</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(1)</FONT></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>Orders are net of
      cancellations and include the change in the U.S. dollar value of orders
      recorded in euros by our semiconductor and solar equipment
    segment.</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(2)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>The backlog as of
      December 31, 2007 and 2006, respectively, includes $0.9 million of
      deferred revenue for which there is an equal amount of deferred costs,
      i.e. with no gross profit to be realized.</FONT></TD></TR></TABLE>
<P align=justify><B><I><FONT face=serif size=2>Backlog</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Our order backlog as of December 31,
2007 and 2006 was $49.9 million and $18.2 million, respectively. In the first
quarter of fiscal 2008, we acquired $1.8 million of backlog in the acquisition
of R2D. Our backlog as of December 31, 2007 includes approximately $42.2 million
of orders from our solar industry customers compared to $5.3 million at December
31, 2006. The orders included in our backlog are generally credit approved
customer purchase orders expected to ship within the next twelve months. Our
backlog also includes revenue deferred pursuant to our revenue recognition
policy, derived from orders that have already been shipped, but which have not
met the criteria for revenue recognition. Because our orders are typically
subject to cancellation or delay by the customer, our backlog at any particular
point in time is not necessarily representative of actual sales for succeeding
periods, nor is backlog any assurance that we will realize profit from
completing these orders</FONT></P>
<P align=center><FONT face=serif><FONT size=2>20</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Gross Profit and Gross
Margin</FONT></I></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>Cost of goods sold consists of
purchased material, labor and overhead to manufacture equipment and spare parts
and the cost of service and factory and field support to customers for warranty,
installation and paid service calls. In addition, the cost of outsourcing the
assembly or manufacturing of certain systems and subsystems to third parties and
supplemental contract field service is included in cost of goods
sold.</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="63%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="17%" colSpan=5>&nbsp;<B><FONT face=serif size=1>Three Months
Ended</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="6%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>December 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>December 31,</STRONG></FONT></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="8%" colSpan=3>&nbsp;<B><FONT face=serif size=1>Increase</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="63%"><STRONG><FONT size=1>Gross profit</FONT></STRONG>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>2006</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3>&nbsp;<B><FONT face=serif size=1>(Decrease)</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>%</FONT>
    &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="16%" colSpan=4><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>(dollars in
      thousands)</STRONG></FONT></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="6%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%" bgColor=#cceeff><FONT face=serif size=2>Solar and Semiconductor Equipment Segment</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>3,059</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>1,735</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>1,324</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT>76%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%"><FONT face=serif size=2>Polishing
      Supplies Segment</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>501</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>657</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>(156</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>(24%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp;
      <FONT face=serif size=2>Total</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>3,560</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>2,392</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>1,168</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>49%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Gross margin</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>30%</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>25%</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="6%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>For the three months ended December 31,
2007, gross profit in the solar and semiconductor equipment segment increased
76% versus the three months ended December 31, 2006. Gross profit increased $1.2
million during the three months ended December 31, 2007 due to an excess of
previously-deferred revenue recognition over current period deferrals.
Improvements in gross margins were partially offset by lower gross margins on
semiconductor equipment which were negatively impacted by lower sales volumes as
well as costs resulting from the integration and ramp-up of the R2D acquisition.
Gross margins in the polishing supplies segment were negatively impacted by
product mix as well as increased price competition for insert
carriers.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Selling, General and
Administrative</FONT></I></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>Selling, general and administrative
expenses consist of the cost of employees, consultants and contractors, facility
costs, sales commissions, promotional marketing expenses, legal and accounting
expenses.</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="63%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="17%" colSpan=5>&nbsp;<B><FONT face=serif size=1>Three Months
Ended</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="6%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>December 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>December 31,</STRONG></FONT></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="8%" colSpan=3>&nbsp;<B><FONT face=serif size=1>Increase</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="63%"><FONT size=1><STRONG>Selling, general and
      administrative</STRONG></FONT><FONT size=3>&nbsp;</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>2006</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3>&nbsp;<B><FONT face=serif size=1>(Decrease)</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="16%" colSpan=4><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>(dollars in
      thousands)</STRONG></FONT></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="6%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%" bgColor=#cceeff><FONT face=serif size=2>Solar and Semiconductor Equipment Segment<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>2,944<FONT size=3></FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>1,870</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>1,074</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT>57%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%"><FONT face=serif size=2>Polishing
      Supplies Segment<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>358<FONT size=3></FONT></FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>349</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>9</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>3%</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp;
      <FONT face=serif size=2>Total</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>3,302<FONT size=3></FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>2,219</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>1,083</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>49%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="63%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Percent of net revenue</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>28%</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>23%</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="6%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The increase in selling, general and
administrative expense of $1.1 million, or 49%, over the three months ended
December 31, 2006 was due, in part to $0.3 million of costs incurred by R2D,
including $0.1 million of amortization of intangible assets. Selling expenses
increased an additional $0.2 million due to increased commissionable sales and
increased sales and marketing activity. Stock-based compensation expense
increased $0.1 million. Personnel costs and professional fees, including costs
related to moving our Netherlands operations into our new building, also
increased as we continued to execute our growth strategies and manage the
increasing compliance obligations of a growing multi-national public
company.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Research and
Development</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Research and development expenses
consist of the cost of employees, consultants and contractors who design,
engineer and develop new products; materials and supplies used in product
prototyping, including wafers, chemicals and process gases; depreciation and
amortization expense; charges for repairs to research equipment; and costs of
outside services for facilities, process engineering support and wafer
analytical services. We also include in research and development expenses
amortization of costs associated with the preparation and filing of patents and
other intellectual property. Any reimbursements of these costs in the form of
governmental research and development grants are netted against these
expenses.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>21</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><BR><A name=p22></A>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD align=left width="63%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="17%" colSpan=5>&nbsp;<B><FONT face=serif size=1>Three Months
Ended</FONT></B></TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="6%"></TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%"></TD>
    <TD align=center width="7%"></TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="63%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>December 31,</FONT></B></TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>December 31,</STRONG></FONT></TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%" colSpan=3>&nbsp;<B><FONT face=serif size=1>Increase</FONT></B></TD>
    <TD align=center width="1%"></TD>
    <TD align=center width="7%"></TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="63%"><STRONG><FONT size=1>Research and
    Development</FONT></STRONG>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>2006</FONT></B></TD>
    <TD align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=3>&nbsp;<B><FONT face=serif size=1>(Decrease)</FONT></B></TD>
    <TD align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="63%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="16%" colSpan=4><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>(dollars in thousands)</STRONG></FONT></TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="6%"></TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%"></TD>
    <TD align=center width="7%"></TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="63%" bgColor=#cceeff><FONT face=serif size=2>Solar
      and Semiconductor Equipment Segment</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>233</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>118</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>115</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT>97%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="63%"><FONT face=serif size=2>Polishing Supplies
      Segment</FONT>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>-</FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>-</FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="6%"><FONT face=serif size=2>-</FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD align=right width="7%"><FONT face=serif size=2>0%</FONT></TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="63%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp; <FONT face=serif size=2>Total</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>233</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>118</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>115</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>97%</FONT></TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="63%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Percent of net revenue</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT face=serif size=2>2%</FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT face=serif size=2>1%</FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="6%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="7%"></TD>
    <TD align=left width="1%">&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Research and development costs
increased $0.1 million during the three months ended December 31, 2007 as
compared to the three months ended December 31, 2006 primarily due to increased
personnel costs for research and development activity on our solar equipment
products.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Interest and other income
(expense), net</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Interest and other income (expense),
net includes mainly interest income, interest expense and gains and losses on
foreign currency transactions.</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD align=left width="71%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="18%" colSpan=6>&nbsp;<B><FONT face=serif size=1>Three Months Ended</FONT></B>
    &nbsp;</TD>
    <TD align=center width="1%"></TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="7%"></TD>
    <TD align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="71%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>December 31,</FONT></B></TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="9%" colSpan=3><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>December 31,</STRONG></FONT>&nbsp;</TD>
    <TD align=center width="1%"></TD>
    <TD align=center width="9%" colSpan=3>&nbsp;<B><FONT face=serif size=1>Increase</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="71%"><STRONG><FONT size=1>Interest and other income (expense),
      net</FONT></STRONG>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="8%" colSpan=2>&nbsp;<B><FONT face=serif size=1>2007</FONT></B></TD>
    <TD align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="9%" colSpan=3>&nbsp;<FONT face=serif size=1><STRONG>2006</STRONG><FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="9%" colSpan=3>&nbsp;<B><FONT face=serif size=1>(Decrease)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="71%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=center width="18%" colSpan=6><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>(dollars in thousands)</STRONG></FONT></TD>
    <TD align=center width="1%"></TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="7%"></TD>
    <TD align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="71%" bgColor=#cceeff><FONT face=serif size=2>Interest and other income (expense), net</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>207</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>23</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>184</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="71%"><FONT face=serif size=2>Foreign currency gains
      (losses)</FONT>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>(54</FONT></TD>
    <TD align=left width="1%"><FONT size=2>)</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>(2</FONT></TD>
    <TD align=left width="1%"><FONT size=2>)</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="7%"><FONT face=serif size=2>(52</FONT></TD>
    <TD align=left width="1%"><FONT size=2>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="71%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp; <FONT face=serif size=2>Total</FONT>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>153</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>21</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>132</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Interest income represents earnings on
invested funds. Interest expense primarily consists of interest incurred on our
overdraft facility, capital equipment borrowings and mortgage on Amtech&#146;s land
and buildings in the Netherlands. Due to an increase in cash and cash
equivalents, interest expense was more than offset by interest earned on
invested cash during the three months ended December 31, 2007 and
2006.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Income Taxes</FONT></I></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>During the three months ended December
31, 2007 and 2006 we recorded income taxes of $0.1 million. The effective tax
rate used for calculating the income tax provision for the three months ended
December 31, 2007 was approximately 40%, an estimate based upon projected annual
income, estimated annual permanent differences and statutory tax rates in the
various jurisdictions in which we operate. The effective tax rate for the three
months ended December 31, 2006 was 92%, which was negatively impacted by the
permanent differences between financial income and taxable income, which were
high in relation to pre-tax income. During the quarter ended December 31, 2007
and 2006, the valuation allowance was increased by $107,000 and $14,000,
respectively, for net operating losses in certain state and foreign
jurisdictions that may not be recovered. (See Note 2 to the financial
statements).</FONT></P>
<P align=justify><FONT face=serif size=2>As a result of the application of the
provisions of FIN 48 as of October 1, 2007, we recognized an additional tax
liability of $332,000 for uncertain tax positions and a decrease in the October
1, 2007 balance of retained earnings of an equal amount. Upon the adoption of
FIN 48, the Company classified uncertain tax positions as non-current income
taxes payable unless expected to be paid within one year. The Company intends to
maintain a valuation allowance for state net operating losses until evidence
supports the conclusion that it is more likely than not that this deferred tax
asset may be realized. The amount of the valuation allowance at December 31,
2007 and October 1, 2007 was $560,000 and $453,000, respectively. At December
31, 2007, and October 1, 2007, the total amount of unrecognized tax benefits was
$428,000 and $409,000. If recognized these amounts would favorably impact the
effective tax rate.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Liquidity and Capital
Resources</FONT></B></P>
<P align=justify><FONT face=serif size=2>At December 31, 2007 and September 30,
2007, cash and cash equivalents and restricted cash were $42.0 million, and
$18.8 million, respectively. Our working capital increased to $57.8 million as
of December 31, 2007, compared to $30.5 million at September 30, 2006. Our ratio
of current assets to current liabilities increased to 5.7:1 at December 31,
2007, from 3.6:1 at September 30, 2007, primarily as a result of the cash
provided by the sale of common stock in an underwritten public offering during
the current period.</FONT></P>
<P align=justify><FONT face=serif size=2>At December 31, 2007, our principal
sources of liquidity consisted of cash and cash equivalents and restricted cash
and the $2.0 million in domestic credit facilities to provide additional
liquidity to support future growth. Amtech&#146;s revolving line of credit with
Silicon Valley Bank contains certain financial and other covenants. Amtech was
in compliance with these covenants as of December 31, 2007.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>22</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><A name=p23></A>
<P align=justify><FONT face=serif size=2>The success of our growth strategy is
dependent upon the availability of additional capital resources on terms
satisfactory to management. Our sources of capital in the past have included
capital leases, long-term debt and the sale of equity securities, which include
common and preferred stock sold in private transactions and public offerings. In
the first quarter of fiscal 2008, we utilized approximately $7.0 million of cash
to acquire R2D Ingenierie and made a working capital infusion to R2D of $1.0
million that was used to satisfy certain outstanding obligations. Cash of $5.5
million was paid at closing plus acquisition costs of $0.9 million, including
cost of legal representation and due diligence. Cash contingent payments of $1.6
million to be paid to sellers upon fulfillment of certain requirements have been
deposited in an escrow account. R2D is a solar cell and semiconductor automation
equipment manufacturing company located near Montpellier, France. Also, in the
first quarter of fiscal 2008, we completed the sale of 2.5 million shares of
common stock in a public offering for $14.41 per share. The net proceeds of the
sale of common stock after offering expenses and underwriting fees was
approximately $33.6 million. The availability of such capital resources in the
future depends on the condition of the relevant debt or equity markets and our
long-term and recent operating performance and financial condition. There can be
no assurance that we can raise such additional capital resources on satisfactory
terms. We intend to use the net proceeds from this offering for working capital
and other general corporate purposes. Pending application of these proceeds, we
intend to invest the net proceeds in short-term, interest bearing investment
grade securities.</FONT><FONT face=serif></FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Cash Flows from Operating
Activities</FONT></I></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>Cash used in our operating activities
was $1.2 million for the three months ended December 31, 2007, compared to $1.3
million used in such activities for the three months ended December 31, 2006.
During the quarter ended December 31, 2007 $3.1 million of cash generated by a
decrease in accounts receivable was offset by financing of increases in other
working capital, including increased inventory ($2.7 million), and lower
accounts payables and other current liabilities ($1.2 million), as well as lower
deferred profit.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Cash Flows from Investing
Activities</FONT></I></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>Our investing activities for the three
months ended December 31, 2007 used $8.0 million of cash in the acquisition of
R2D. Capital expenditures of $1.2 million resulted primarily from improvements
to the new building in The Netherlands. Restricted cash increased $0.8 million.
Restricted cash represents bank guarantees in excess of our available credit
facility in The Netherlands.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Cash Flows from Financing
Activities</FONT></I></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>For the three months ended December 31,
2007, $33.8 million of cash was provided by financing activities. Cash of $33.6
million was provided by the sale of 2,500,000 shares of common stock in an
underwritten public offering at a price to the public of $14.41 per share. An
additional $0.2 million was provided by the exercise of stock options. This
compares to $0.2 million of net long-term borrowings during the three months
ended December 31, 2006.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Off-Balance Sheet
Arrangements</FONT></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>As of December 31, 2007, Amtech had no
off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K
promulgated by the Securities and Exchange Commission.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Contractual
Obligations</FONT></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>The only significant changes in
contractual obligations since the end of fiscal 2007 have been changes in
purchase obligations and long-term debt (See Notes 1 and 7 of the Condensed
Consolidated Financial Statements). Refer to Amtech&#146;s annual report on Form 10-K
for the year ended September 30, 2007, for information on the Company&#146;s other
contractual obligations.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Critical Accounting
Policies</FONT></B><FONT face=serif></FONT></P>
<P align=justify><FONT face=serif size=2>Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations discusses our consolidated
financial statements that have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires us to make estimates and assumptions that
affect the reported amount of assets and liabilities at the date of the
financial statements, the disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period.</FONT></P>
<P align=center><FONT face=serif size=2>23</FONT><FONT face=serif>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<PAGE>
<P style="FONT-SIZE: 12pt" align=justify><FONT face=serif size=2>On an on-going
basis, we evaluate our estimates and judgments, including those related to
revenue recognition, inventory valuation, accounts receivable collectibility,
warranty and impairment of long-lived assets. We base our estimates and
judgments on historical experience and on various other factors that we believe
to be reasonable under the circumstances. The results of these estimates and
judgments form the basis for making conclusions about the carrying value of
assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions.</FONT></P>
<P style="FONT-SIZE: 12pt" align=justify><FONT face=serif size=2>A critical
accounting policy is one that is both important to the presentation of our
financial position and results of operations, and requires management&#146;s most
difficult, subjective or complex judgments, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain. These
uncertainties are discussed in &#147;Item 1A. Risk Factors&#148; of this Annual Report on
Form 10-K. We believe the following critical accounting policies affect the more
significant judgments and estimates used in the preparation of our consolidated
financial statements.</FONT></P>
<P style="FONT-SIZE: 12pt" align=justify><B><I><FONT face=serif size=2>Revenue
Recognition.</FONT></I></B> <FONT face=serif size=2>We review product and
service sales contracts with multiple deliverables to determine if separate
units of accounting are present in the arrangements. Where separate units of
accounting exist, revenue is allocated to delivered items equal to the total
sales price less the greater of the relative fair value of the undelivered
items, and all contingent portions of the sales arrangement.</FONT></P>
<P style="FONT-SIZE: 12pt" align=justify><FONT face=serif size=2>We recognize
revenue when persuasive evidence of an arrangement exists; the product has been
delivered and title has transferred, or services have been rendered; the
seller&#146;s price to the buyer is fixed or determinable; and collectibility is
reasonably assured. For us, this policy generally results in revenue recognition
at the following points:</FONT> <FONT face=serif></FONT></P>
<UL style="TEXT-ALIGN: justify">
  <LI><FONT face=serif size=2>For the solar and semiconductor equipment segment,
  transactions where legal title passes to the</FONT> <FONT face=serif size=2>customer upon shipment, we recognize revenue upon shipment for those
  products where the customer&#146;s defined specifications have been met with at
  least two similarly configured systems and processes for a comparably situated
  customer. However, a portion of the revenue associated with certain
  installation-related tasks, equal to the greater of the relative fair value of
  those tasks or the portion of the contract price contingent upon their
  completion, generally 10%-20% of the system&#146;s selling price (the &#147;holdback&#148;),
  and directly related costs, if any, are deferred and recognized into income
  when the tasks are completed. Since we defer only those costs directly related
  to installation or other unit of accounting not yet delivered and that portion
  of the contract price is often considerably greater than the fair market value
  of those items, our policy at times will result in deferral of profit that is
  disproportionately greater than the deferred revenue. When this is the case,
  the gross profit recognized in one period will be lower and the gross profit
  reported in a subsequent period will improve.<BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>For products where the customer&#146;s defined
  specifications have not been met with at least two similarly configured
  systems and processes, the revenue and directly related costs are deferred at
  the time of shipment and recognized into income at the time of customer
  acceptance or when this criterion has been met. We have, on occasion,
  experienced longer than expected delays in receiving cash from certain
  customers pending final installation or system acceptance. If some of our
  customers refuse to pay the final payment, or otherwise delay final acceptance
  or installation, the deferred revenue would not be recognized, adversely
  affecting our future operating results.</FONT><FONT face=serif size=2><BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>Equipment sold by the polishing supplies segment
  does not include process guarantees, acceptance criteria or holdbacks;
  therefore, the related revenue is recorded upon transfer of title which is
  generally at time of shipment. Our shipping terms for both segments are
  customarily FOB our shipping point or equivalent terms.</FONT><FONT face=serif size=2><BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>For all segments, sales of spare parts and
  consumables are recognized upon shipment, as there are no post shipment
  obligations other than standard warranties.</FONT><FONT face=serif size=2><BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>Service revenue is recognized upon performance of
  the services requested by the customer. Revenue related to service contracts
  is recognized ratably over the period of the contract or in accordance with
  the terms of the contract, which generally coincides with the performance of
  the services requested by the customer.</FONT><FONT face=serif size=2></FONT></LI></UL>
<P style="FONT-SIZE: 12pt" align=center><FONT size=2>24</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><A name=p25></A>
<P align=justify><B><I><FONT face=serif size=2>Deferred Tax Asset Valuation
Allowance.</FONT></I></B> <FONT face=serif size=2>We currently have significant
deferred tax assets resulting from expenses not currently deductible for tax
purposes, revenue recognized for tax purposes but deferred for financial
statement purposes and net operating loss carryforwards in certain state and
foreign jurisdictions available to reduce taxable income in future
periods.</FONT></P>
<P align=justify><FONT face=serif size=2>During fiscal 2004, we recorded a
valuation allowance for the total of our deferred tax assets. SFAS No. 109
requires a valuation allowance be established when it is &#147;more likely than not&#148;
that all or a portion of deferred tax assets will not be realized. It also
states that it is difficult to conclude that a valuation allowance is not needed
when there is negative evidence such as cumulative losses in recent years.
Therefore, the cumulative losses weigh heavily in the overall assessment. Each
quarter, Amtech analyzes each deferred tax asset to determine the amount that is
more likely than not to be realized, based upon the weight of available
evidence, and adjusts the valuation allowance to the amount of deferred taxes
that do not meet the criteria for recognition under SFAS No. 109.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Inventory
Valuation.</FONT></I></B> <FONT face=serif size=2>We value our inventory at the
lower of cost (first-in, first-out method) or net realizable value. We regularly
review inventory quantities and record a write-down for excess and obsolete
inventory. The write-down is primarily based on historical inventory usage
adjusted for expected changes in product demand and production requirements.
However, our industry is characterized by customers in highly cyclical
industries, rapid technological changes, frequent new product developments and
rapid product obsolescence. While the inventories acquired in the Bruce
Technologies transaction will require several years to consume in production and
through spare parts sales, management believes the write-downs taken were
sufficient to protect against future losses, as this product line is receiving
greater attention under its current ownership. Changes in demand for our
products and product mix could result in further write-downs.</FONT><FONT face=serif></FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Allowance for Doubtful
Accounts.</FONT></I></B> <FONT face=serif size=2>We maintain an allowance for
doubtful accounts for estimated losses resulting from the inability of our
customers to make required payments. This allowance is based on historical
experience, credit evaluations, specific customer collection history and any
customer-specific issues we have identified. Since a significant portion of our
revenue is derived from the sale of high-value systems, our accounts receivable
are often concentrated in a relatively few number of customers. A significant
change in the liquidity or financial position of any one of these customers
could have a material adverse impact on the collectibility of our accounts
receivable and our future operating results.</FONT><FONT face=serif></FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Warranty.</FONT></I></B> <FONT face=serif size=2>We provide a limited warranty, generally for 12 to 24 months,
to our customers. A provision for the estimated cost of providing warranty
coverage is recorded upon shipment of all systems. On occasion, we have been
required and may be required in the future to provide additional warranty
coverage to ensure that the systems are ultimately accepted or to maintain
customer goodwill. While our warranty costs have historically been within our
expectations and we believe that the amounts accrued for warranty expenditures
are sufficient for all systems sold through December 31, 2007, we cannot
guarantee that we will continue to experience a similar level of predictability
with regard to warranty costs. In addition, technological changes or previously
unknown defects in raw materials or components may result in more extensive and
frequent warranty service than anticipated, which could result in an increase in
our warranty expense.</FONT><FONT face=serif></FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Impairment of Long-lived
Assets.</FONT></I></B> <FONT face=serif size=2>We periodically evaluate whether
events and circumstances have occurred that indicate the estimated useful lives
of long-lived assets or intangible assets may warrant revision or that the
remaining balance may not be recoverable. Goodwill is also tested for impairment
at least annually. When factors indicate that an asset should be evaluated for
possible impairment, we use an estimate of the related undiscounted net cash
flows generated by the asset over the remaining estimated life of the asset in
measuring whether the asset is recoverable. We make judgments and estimates used
in establishing the carrying value of long-lived or intangible assets. Those
judgments and estimates could be modified if adverse changes occurred in the
future resulting in an inability to recover the carrying value of these assets.
We have not experienced any impairment to long-lived assets during fiscal 2008,
2007 or 2006. Future adverse changes could be caused by, among other factors, a
downturn in the semiconductor industry, a general economic slowdown, reduced
demand for our products in the marketplace, poor operating results, the
inability to protect intellectual property or changing technologies and product
obsolescence.</FONT><FONT face=serif></FONT></P>
<P align=justify><B><FONT face=serif size=2>Impact of Recently Issued Accounting
Pronouncements</FONT></B></P>
<P align=justify><FONT face=serif size=2>For discussion of the impact of
recently issued accounting pronouncements, see &#147;Part 1. Financial Information&#148;
in Note 1 to the financial statements under &#147;Impact of Recently Issued
Accounting Pronouncements&#148;.</FONT></P>
<P align=center><FONT size=2>25</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><A name=p26></A>
<P align=justify><B><FONT face=serif size=2>ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK</FONT></B></P>
<P align=justify><B><FONT face=serif size=2></FONT></B><FONT face=serif size=2>We are exposed to financial market risks, including changes in foreign
currency exchange rates and interest rates. Our operations in the United States
are conducted in U.S. dollars. Our operations in Europe, a component of the
semiconductor and solar equipment segment, conduct business primarily in the
Euro, but also sell products in Asia in the U.S. dollar. The functional currency
of our European operation is the Euro. Nearly all of the transactions, assets
and liabilities of all other operating units are denominated in the U.S. dollar,
their functional currency. The following disclosures about market risk should be
read in conjunction with the more in depth discussion in Item 7A, Quantitative
and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K
for the fiscal year ended September 30, 2007.</FONT><FONT face=serif></FONT></P>
<P align=justify><FONT face=serif size=2>As of December 31, 2007, we did not
hold any stand-alone or separate derivative instruments. We incurred net foreign
currency transaction gains or losses of less than $0.1 million during the three
months ended December 31, 2007 and 2006. As of December 31, 2007, our foreign
subsidiaries had $3.1 million of assets (cash and receivables) denominated in
currencies other than the functional currency. A 10% change in the value of the
functional currency relative to the non-functional currency would result in a
gain or loss of $0.3 million. As of December 31, 2007, we had $3.0 million of
accounts payable, consisting primarily of amounts owed by our foreign
subsidiaries to our U.S. companies, denominated in U.S. dollars. Although the
intercompany accounts are eliminated in consolidation, a 10% change in the value
of the euro relative to the U.S. dollar would result in a gain or loss of $0.3
million. Our net investment in and advances to our foreign operations totaled
$24.4 million as of December 31, 2007. A 10% change in the value of the Euro
relative to the U.S. dollar would cause an approximately $2.4 million foreign
currency translation adjustment, a type of other comprehensive income (loss),
which would be a direct adjustment to our stockholders&#146; equity.</FONT><FONT face=serif></FONT></P>
<P align=justify><FONT face=serif size=2>During three months ended December 31,
2007, our European operations transacted U.S. dollar denominated sales and
purchases of $0.8 million and $1.1 million, respectively. As of December 31,
2007, sales commitments denominated in a currency other than the function
currency of our transacting operation totaled $0.8 million. Our lead-times to
fulfill these commitments generally range between 13 and 26 weeks. A 10% change
in the relevant exchange rates between the time the order was taken and the time
of shipment would cause our gross profit on such orders to be less than $0.1
million greater than or less than expected on the date the order was
taken.</FONT><FONT face=serif></FONT></P>
<P align=justify><B><FONT face=serif size=2>ITEM 4. CONTROLS AND
PROCEDURES</FONT></B><FONT face=serif size=2></FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Disclosure Controls and
Procedures</FONT></I></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>Our management, including the Chief
Executive Officer (&#147;CEO&#148;) and the Chief Financial Officer (&#147;CFO&#148;), has carried
out an evaluation of the effectiveness of our disclosure controls and procedures
as of December 31, 2007, pursuant to Exchange Act Rules 13a-15(e) and
15(d)-15(e). Based upon that evaluation, our CEO and CFO have concluded that as
of such date, our disclosure controls and procedures in place are
effective.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Changes in Internal Control Over
Financial Reporting</FONT></I></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>There has been no change in Amtech&#146;s
internal control over financial reporting during the first quarter of fiscal
2008 that has materially affected, or is reasonably likely to materially affect,
its internal control over financial reporting.</FONT></P>
<P align=center><FONT size=2>26</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><A name=p27></A>
<P align=justify><B><FONT face=serif size=2>PART II. OTHER
INFORMATION</FONT></B></P>
<P align=justify>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD vAlign=top noWrap width="1%"><STRONG><FONT size=2>Item
      6.</FONT></STRONG></TD>
    <TD vAlign=top noWrap width="1%"></TD>
    <TD vAlign=top noWrap width="97%"><STRONG><FONT size=2>Exhibits</FONT></STRONG></TD></TR>
  <TR>
    <TD vAlign=top noWrap width="1%"></TD>
    <TD vAlign=top noWrap width="1%"></TD>
    <TD vAlign=top noWrap width="97%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="1%"><FONT size=2>31.1</FONT></TD>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="97%"><FONT size=2>Certification of Chief Executive
      Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
      Act of 1934, as Amended*</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top width="97%"></TD></TR>
  <TR>
    <TD vAlign=top width="1%">
      <P><FONT size=2>31.2</FONT></P></TD>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="97%"><FONT size=2>Certification of Chief Financial
      Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
      Act of 1934, as Amended*</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="97%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="1%"><FONT size=2>32.1</FONT></TD>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="97%"><FONT size=2>Certification of Chief Executive
      Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002*</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="1%">&nbsp;</TD>
    <TD vAlign=top width="97%"></TD></TR>
  <TR>
    <TD vAlign=top width="1%"><FONT size=2>32.2</FONT></TD>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="97%"><FONT size=2>Certification of Chief Financial
      Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
      906 of the Sarbanes-Oxley Act of&nbsp;2002*</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>____________________<BR></FONT><FONT face=serif size=2><BR></FONT><FONT face=serif size=2>*&nbsp;&nbsp;&nbsp;Filed
herewith.</FONT></P>
<P align=center><FONT size=2>27</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><A name=p28></A>
<P align=left><FONT face=serif size=2>SIGNATURES</FONT></P>
<P align=justify><FONT face=serif size=2>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.</FONT></P>
<P align=justify><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AMTECH
SYSTEMS, INC.</FONT></P>
<P align=justify>&nbsp;</P>
<P align=justify>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>By&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="38%"><FONT face=serif size=2>/s/ Robert T. Hass</FONT>&nbsp;</TD>
    <TD noWrap align=left width="10%"></TD>
    <TD noWrap align=left width="50%"><FONT face=serif size=2>Dated:&nbsp;<U>February 13, 2008</U><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="38%"><FONT face=serif size=2>Robert T.
      Hass</FONT>&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp;</TD>
    <TD noWrap align=left width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="38%"><FONT face=serif size=2>Chief Accounting
      Officer</FONT>&nbsp;</TD>
    <TD noWrap align=left width="10%"></TD>
    <TD noWrap align=left width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="38%"><FONT face=serif size=2>(Principal
      Accounting Officer)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="10%"></TD>
    <TD noWrap align=left width="50%">&nbsp;</TD></TR></TABLE><BR>
<P align=center><FONT size=2>28</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><A name=p29></A>
<P align=justify><B><FONT face=serif size=2>EXHIBIT INDEX</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD vAlign=middle noWrap align=left width="2%">
      <P align=justify><B><FONT face=serif size=2>Exhibit</FONT></B></P></TD>
    <TD vAlign=middle noWrap align=left width="2%"></TD>
    <TD vAlign=middle align=left width="93%"></TD>
    <TD vAlign=middle noWrap align=left width="1%"></TD>
    <TD vAlign=middle noWrap align=left width="2%">
      <P align=justify><FONT face=serif size=2></FONT><B><FONT face=serif size=2>Page or</FONT></B></P></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=middle noWrap align=left width="2%">
      <P align=justify><B><FONT face=serif size=2>Number</FONT></B><FONT face=serif size=2></FONT></P></TD>
    <TD vAlign=middle noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=middle align=left width="93%">
      <P align=justify><B><FONT face=serif size=2>Description</FONT></B><B><FONT face=serif size=2></FONT></B></P></TD>
    <TD vAlign=middle noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=middle noWrap align=left width="2%">
      <P align=justify><B><FONT face=serif size=2>Method of
      Filing</FONT></B><FONT face=serif size=2></FONT></P></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="2%" bgColor=#cceeff><FONT face=serif size=2>31.1</FONT></TD>
    <TD vAlign=top noWrap align=left width="2%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>Certification of Chief Executive Officer Pursuant to Rule
      13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as
      Amended</FONT></TD>
    <TD vAlign=middle noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=middle noWrap align=left width="2%" bgColor=#cceeff>
      <P align=center><FONT face=serif size=2>*</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="2%" bgColor=#cceeff><FONT size=2>31.2</FONT></TD>
    <TD vAlign=top noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="TEXT-ALIGN: justify" vAlign=top align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>Certification of Chief Financial
      Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
      Act of 1934, as Amended</FONT></TD>
    <TD vAlign=middle noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=middle noWrap align=left width="2%" bgColor=#cceeff>
      <P align=center><FONT size=2>* &nbsp;</FONT></P></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="2%" bgColor=#cceeff><FONT size=2>32.1</FONT></TD>
    <TD vAlign=top noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="TEXT-ALIGN: justify" vAlign=top align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>Certification of Chief Executive
      Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
      906 of the Sarbanes-Oxley Act of&nbsp;2002</FONT></TD>
    <TD vAlign=middle noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=middle noWrap align=left width="2%" bgColor=#cceeff>
      <P align=center><FONT size=2>* &nbsp;</FONT></P></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="100%" colSpan=5><FONT face=serif>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="2%" bgColor=#cceeff><FONT face=serif size=2>32.2</FONT></TD>
    <TD vAlign=top noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="TEXT-ALIGN: justify" vAlign=top align=left width="93%" bgColor=#cceeff><FONT face=serif size=2>Certification of Chief Financial
      Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002</FONT></TD>
    <TD vAlign=middle noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=middle noWrap align=left width="2%" bgColor=#cceeff>
      <P align=center><FONT face=serif size=2>*
&nbsp;</FONT></P></TD></TR></TABLE>
<P align=justify><FONT face=serif size=2>____________________</FONT></P>
<P align=justify><FONT face=serif size=2>* Filed herewith.</FONT></P>
<P align=center><FONT size=2>29</FONT></P>
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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>exhibit31-1.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A)/15D-14(A)
<TEXT>
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<P align=right><FONT face=serif size=2>Exhibit 31.1 </FONT></P>
<P align=center><FONT face=serif size=2>AMTECH SYSTEMS, INC. AND ITS
SUBSIDIARIES <BR>CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) <BR>OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED </FONT></P>
<P align=left><FONT face=serif size=2>I, Jong S. Whang, certify that:
</FONT></P>
<P align=justify><FONT face=serif size=2>1. I have reviewed this Quarterly
Report on Form 10-Q of Amtech Systems, Inc. (the &#147;registrant&#148;), </FONT></P>
<P align=justify><FONT face=serif size=2>2. Based on my knowledge, this report
does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report; </FONT></P>
<P align=justify><FONT face=serif size=2>3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly
present in all material respects the financial position, results of operations
and cash flows of the registrant as of, and for, the periods presented in this
report; </FONT></P>
<P align=justify><FONT face=serif size=2>4. The registrant&#146;s other certifying
officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and we have: </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(a) Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
report is being prepared; </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(b) Evaluated the effectiveness of
the registrant&#146;s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such
evaluation; and </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(c) Disclosed in this report any
change in the registrant&#146;s internal control over financial reporting that
occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s
fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant&#146;s
internal control over financial reporting; and </FONT></P>
<P align=justify><FONT face=serif size=2>5. The registrant&#146;s other certifying
officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons performing the
equivalent functions): </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(a) All significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
registrant&#146;s ability to record, process, summarize and report financial
information; and </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(b) Any fraud, whether or not
material, that involves management or other employees who have a significant
role in the registrant&#146;s internal control over financial reporting. </FONT></P>
<P align=justify>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap width="1%"><FONT size=2>By&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="28%"><FONT size=2>/s/
      Jong S. Whang </FONT></TD>
    <TD width="70%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Jong S. Whang&nbsp; </FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>President and Chief Executive
      Officer </FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Amtech Systems, Inc.
  </FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Date: February 13, 2008
  </FONT></TD></TR></TABLE><BR>
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<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>exhibit31-2.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A)/15D-14(A)
<TEXT>
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<P align=right><FONT face=serif size=2>Exhibit 31.2 </FONT></P>
<P align=center><FONT face=serif size=2>AMTECH SYSTEMS, INC. AND ITS
SUBSIDIARIES <BR>CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) <BR>OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED </FONT></P>
<P align=justify><FONT face=serif size=2>I, Bradley C. Anderson, certify that:
</FONT></P>
<P align=justify><FONT face=serif size=2>1. I have reviewed this Quarterly
Report on Form 10-Q of Amtech Systems, Inc. (the &#147;registrant&#148;), </FONT></P>
<P align=justify><FONT face=serif size=2>2. Based on my knowledge, this report
does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report; </FONT></P>
<P align=justify><FONT face=serif size=2>3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly
present in all material respects the financial position, results of operations
and cash flows of the registrant as of, and for, the periods presented in this
report; </FONT></P>
<P align=justify><FONT face=serif size=2>4. The registrant&#146;s other certifying
officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and we have: </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(a) Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
report is being prepared; </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(b) Evaluated the effectiveness of
the registrant&#146;s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such
evaluation; and </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(c) Disclosed in this report any
change in the registrant&#146;s internal control over financial reporting that
occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s
fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant&#146;s
internal control over financial reporting; and </FONT></P>
<P align=justify><FONT face=serif size=2>5. The registrant&#146;s other certifying
officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons performing the
equivalent functions): </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(a) All significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
registrant&#146;s ability to record, process, summarize and report financial
information; and </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(b) Any fraud, whether or not
material, that involves management or other employees who have a significant
role in the registrant&#146;s internal control over financial reporting. </FONT></P>
<P align=justify>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap width="1%"><FONT size=2>By&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="28%"><FONT size=2>/s/
      Bradley C. Anderson<FONT face=serif size=2> </FONT></FONT></TD>
    <TD width="70%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Bradley C. Anderson </FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Chief Financial Officer
  </FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Amtech Systems, Inc.
  </FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Date: February 13, 2008
  </FONT></TD></TR></TABLE><BR>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>exhibit32-1.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>
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<P align=right><FONT face=serif size=2>Exhibit 32.1 </FONT></P>
<P align=center><FONT face=serif size=2>AMTECH SYSTEMS, INC. AND ITS
SUBSIDIARIES </FONT></P>
<P align=center><FONT face=serif size=2>CERTIFICATION PURSUANT TO <BR>18 U.S.C.
SECTION 1350, <BR>AS ADOPTED PURSUANT TO <BR></FONT><FONT face=serif size=2>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>In
connection with the Quarterly Report of Amtech Systems, Inc. (the &#147;Company&#148;) on
Form 10-Q for the period ended December 31, 2007, as filed with the Securities
and Exchange Commission on the date hereof (the &#147;Report&#148;), I, Jong S. Whang,
President and Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that: </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(1) The
Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(2) The
information contained in the Report fairly presents, in all material respects,
the financial condition and result of operations of the Company. </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap width="1%"><FONT size=2>By&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="28%"><FONT size=2>/s/
      Jong S. Whang </FONT></TD>
    <TD width="70%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Jong S. Whang&nbsp; </FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>President and Chief Executive
      Officer </FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Date: February 13, 2008
  </FONT></TD></TR></TABLE>
<P></P>
<P align=justify>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>exhibit32-2.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>
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<P align=right><FONT face=serif size=2>Exhibit 32.2 </FONT></P>
<P align=center><FONT face=serif size=2>AMTECH SYSTEMS, INC. AND ITS
SUBSIDIARIES </FONT></P>
<P align=center><FONT face=serif size=2>CERTIFICATION PURSUANT TO <BR>18 U.S.C.
SECTION 1350, <BR>AS ADOPTED PURSUANT TO<BR></FONT><FONT face=serif size=2>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>In
connection with the Quarterly Report of Amtech Systems, Inc. (the &#147;Company&#148;) on
Form 10-Q for the period ended December 31, 2007, as filed with the Securities
and Exchange Commission on the date hereof (the &#147;Report&#148;), I, Bradley C.
Anderson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002,
that: </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(1) The
Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(2) The
information contained in the Report fairly presents, in all material respects,
the financial condition and result of operations of the Company. </FONT></P>
<P align=justify>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap width="1%"><FONT size=2>By&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="28%"><FONT size=2>/s/
      Bradley C. Anderson<FONT face=serif size=2> </FONT></FONT></TD>
    <TD width="70%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Bradley C. Anderson </FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Chief Financial Officer
  </FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=3><FONT size=2>Date: February 13, 2008
  </FONT></TD></TR></TABLE><BR>
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