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<SEC-DOCUMENT>0001206774-08-001033.txt : 20080514
<SEC-HEADER>0001206774-08-001033.hdr.sgml : 20080514
<ACCEPTANCE-DATETIME>20080514160026
ACCESSION NUMBER:		0001206774-08-001033
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20080331
FILED AS OF DATE:		20080514
DATE AS OF CHANGE:		20080514

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:		08831847

	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: March 31, 2008</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=justify>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="90%">
      <P align=justify><FONT face=serif size=2>Large accelerated filer [
      ]</FONT></P></TD>
    <TD noWrap width="10%"><FONT size=2>Accelerated filer [ ]</FONT></TD></TR>
  <TR>
    <TD width="90%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD></TR>
  <TR>
    <TD width="90%"><FONT size=2>Non-accelerated filer [ X ] (Do not check if a
      smaller reporting company)</FONT>&nbsp;</TD>
    <TD noWrap width="10%">
      <P align=justify><FONT face=serif size=2>Smaller Reporting Company&nbsp;[ ]</FONT></P></TD></TR></TABLE>
<P></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
May 5, 2008: <U>9,080,048</U></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="97%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face=serif size=2>Page</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><B><FONT face=serif size=2>PART I. FINANCIAL INFORMATION</FONT></B></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD></TR>
  <TR>
    <TD noWrap align=left width="97%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2><B>Item 1.&nbsp;Condensed Consolidated Financial
      Statements</B></FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Condensed Consolidated Balance Sheets</FONT></TD>
    <TD noWrap align=right width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      March 31, 2008 (Unaudited) and September 30, 2007</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>3</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Condensed Consolidated Statements of Operations (Unaudited)</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Three and Six Months Ended March 31, 2008 and 2007</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>5</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Condensed Consolidated Statements of Cash Flows (Unaudited)</FONT></TD>
    <TD noWrap align=right width="2%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Six Months Ended March 31, 2008 and 2007</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>6</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Notes
      to Condensed Consolidated Financial Statements (Unaudited)</FONT>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>7</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="99%" bgColor=#cceeff colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      <STRONG>Item 2. Management&#146;s Discussion and Analysis of Financial
      Condition and Results</STRONG></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      <STRONG>of Operations</STRONG></FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Caution Regarding Forward-Looking Statements</FONT></TD>
    <TD noWrap align=right width="2%"><FONT size=2>17</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Overview</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT size=2>18</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Results of Operations</FONT></TD>
    <TD noWrap align=right width="2%"><FONT size=2>18</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Liquidity and Capital Resources</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>22</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Off-Balance Sheet Arrangements</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>23</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Contractual Obligations</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT size=2>23</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Critical Accounting Policies</FONT></TD>
    <TD noWrap align=right width="2%"><FONT size=2>23</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Impact of Recently Issued Accounting Pronouncements</FONT>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT size=2>25</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <B><FONT face=serif size=2>Item 3. Quantitative and Qualitative
      Disclosures About Market Risk</FONT></B></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>26</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="97%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <B><FONT face=serif size=2>Item 4. Controls and Procedures</FONT></B></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>26</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="97%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><B><FONT face=serif size=2>PART II. OTHER INFORMATION</FONT></B></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD></TR>
  <TR>
    <TD noWrap align=left width="97%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> <STRONG>Item 4.
      Submission of Matters to a Vote of Security Holders</STRONG></FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>27</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="97%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> <STRONG>Item 6.
      Exhibits</STRONG></FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>27</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="97%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><B><FONT face=serif size=2>SIGNATURES</FONT></B></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>28</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="97%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff><B><FONT face=serif size=2>EXHIBIT INDEX</FONT></B></TD>
    <TD noWrap align=right width="2%" 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>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="88%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>September 30,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>
    &nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" 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="4%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"><B><FONT face=serif size=1>Assets</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><B><FONT face=serif size=2>Current Assets</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="4%" 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="4%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>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;
$</FONT></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>37,848</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;
$</FONT></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>18,370</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Restricted cash</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="4%" bgColor=#cceeff><FONT size=2><FONT face=serif>-<FONT size=3>&nbsp;</FONT></FONT></FONT></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="4%" bgColor=#cceeff><FONT face=serif size=2>443</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accounts receivable</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Trade (less allowance for doubtful accounts of $195 and
      $126 at</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="4%" bgColor=#cceeff><FONT face=serif size=2>13,618</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="4%" bgColor=#cceeff><FONT face=serif size=2>9,952</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>March 31, 2008 and September 30, 2007,
      respectively)</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="4%" 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="4%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Unbilled and other</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>3,859</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>3,127</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Inventories</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="4%" bgColor=#cceeff><FONT face=serif size=2>16,570</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="4%" bgColor=#cceeff><FONT face=serif size=2>7,289</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Deferred 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="4%"><FONT face=serif size=2>2,768</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>1,690</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Other</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="4%" bgColor=#cceeff><FONT face=serif size=2>2,558</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="4%" bgColor=#cceeff><FONT face=serif size=2>1,339</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Total current assets</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>77,221</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>42,210</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><B><FONT face=serif size=2>Property, Plant and Equipment - Net</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="4%" bgColor=#cceeff><FONT face=serif size=2>8,559</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="4%" bgColor=#cceeff><FONT face=serif size=2>6,245</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><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="4%"><FONT size=2><FONT face=serif>-</FONT></FONT><FONT size=3>&nbsp;</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>30</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><B><FONT face=serif size=2>Intangible Assets - Net</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="4%" bgColor=#cceeff><FONT face=serif size=2>4,284</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="4%" bgColor=#cceeff><FONT face=serif size=2>1,364</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><B><FONT face=serif size=2>Goodwill</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>3,098</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>817</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><B><FONT face=serif size=2>Restricted cash - non-current</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="4%" bgColor=#cceeff><FONT face=serif size=2>1,631</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="4%" bgColor=#cceeff><FONT face=serif size=2>-<FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Total Assets</FONT></B>&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></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
    94,793</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></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%"><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>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="88%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; March
      31,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=1><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      <FONT face=serif><STRONG>September
      30,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG></FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT face=serif size=1><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>
      (Unaudited)<STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"><B><FONT face=serif size=1>Liabilities and Stockholders'
      Equity</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><B><FONT face=serif size=2>Current Liabilities</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="4%" 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="4%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accounts payable</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;
$</FONT></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>8,700</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="4%"><FONT face=serif size=2>4,150</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Bank
      loans and current maturities of long-term debt</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="4%" bgColor=#cceeff><FONT face=serif size=2>217</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="4%" bgColor=#cceeff><FONT face=serif size=2>224</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accrued compensation and related taxes</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>2,722</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>2,139</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accrued warranty expense</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="4%" bgColor=#cceeff><FONT face=serif size=2>591</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="4%" bgColor=#cceeff><FONT face=serif size=2>256</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Deferred profit</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>2,575</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>2,144</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Customer deposits</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="4%" bgColor=#cceeff><FONT face=serif size=2>2,732</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="4%" bgColor=#cceeff><FONT face=serif size=2>1,824</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Other accrued liabilities</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>1,200</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>562</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Income taxes payable</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="4%" bgColor=#cceeff><FONT face=serif size=2>517</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="4%" bgColor=#cceeff><FONT face=serif size=2>419</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Total current liabilities</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>19,254</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>11,718</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>436</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="4%" bgColor=#cceeff><FONT face=serif size=2>-<FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><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="4%"><FONT face=serif size=2>931</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>-<FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>355</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="4%" bgColor=#cceeff><FONT face=serif size=2>744</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Total liabilities</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>20,976</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>12,462</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" 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="4%" 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="4%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" 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="4%" 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="4%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Preferred stock; 100,000,000 shares authorized; none
      issued</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>-<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>-<FONT size=3>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Common stock; $0.01 par value; 100,000,000 shares
      authorized;</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="4%" 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="4%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>shares issued and outstanding: 9,074,298 and
      6,517,923</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="4%" 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="4%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>at March 31, 2008 and September 30, 2007</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="4%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>65</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Additional paid-in capital</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>69,762</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>35,610</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accumulated other comprehensive 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=right width="4%" bgColor=#cceeff><FONT face=serif size=2>2,311</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="4%" bgColor=#cceeff><FONT face=serif size=2>813</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Retained Earnings</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="4%"><FONT face=serif size=2>1,653</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="4%"><FONT face=serif size=2>1,716</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Total stockholders' equity</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="4%" bgColor=#cceeff><FONT face=serif size=2>73,817</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="4%" bgColor=#cceeff><FONT face=serif size=2>38,204</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Total Liabilities and Stockholders'
    Equity</FONT></B>&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="4%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
    94,793</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="4%"><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>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="75%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=6>&nbsp; <B><FONT face=serif size=1>Three Months Ended March
      31,</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=6><B><FONT face=serif size=1>Six Months Ended March
    31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><STRONG><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></FONT></STRONG></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><STRONG><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></STRONG>
      <B><FONT face=serif size=1>2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><FONT face=serif size=2>Revenues, net of returns and allowances</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>17,591</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>10,539</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>29,332</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>19,990</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#ffffff><FONT face=serif size=2>Cost of sales</FONT>&nbsp;</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="4%" bgColor=#ffffff><FONT face=serif size=2>13,464</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="4%" bgColor=#ffffff><FONT face=serif size=2>7,671</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="4%" bgColor=#ffffff><FONT face=serif size=2>21,645</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="4%" bgColor=#ffffff><FONT face=serif size=2>14,730</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Gross profit</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>4,127</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="4%" bgColor=#cceeff><FONT face=serif size=2>2,868</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="4%" bgColor=#cceeff><FONT face=serif size=2>7,687</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="4%" bgColor=#cceeff><FONT face=serif size=2>5,260</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="75%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" 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="4%" 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="4%" 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="4%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><FONT face=serif size=2>Selling, general and administrative</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>3,966</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="4%" bgColor=#cceeff><FONT face=serif size=2>2,417</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="4%" bgColor=#cceeff><FONT face=serif size=2>7,268</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="4%" bgColor=#cceeff><FONT face=serif size=2>4,636</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#ffffff><FONT face=serif size=2>Research and development</FONT>&nbsp;</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="4%" bgColor=#ffffff><FONT face=serif size=2>243</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="4%" bgColor=#ffffff><FONT face=serif size=2>141</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="4%" bgColor=#ffffff><FONT face=serif size=2>476</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="4%" bgColor=#ffffff><FONT face=serif size=2>259</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Operating income (loss)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>(82</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="4%" bgColor=#cceeff><FONT face=serif size=2>310</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="4%" bgColor=#cceeff><FONT face=serif size=2>(57</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT></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="4%" bgColor=#cceeff><FONT face=serif size=2>365</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="75%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" 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="4%" 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="4%" 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="4%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><FONT face=serif size=2>Interest and other income (expense), net</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="4%" bgColor=#cceeff><FONT face=serif size=2>348</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="4%" bgColor=#cceeff><FONT face=serif size=2>122</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="4%" bgColor=#cceeff><FONT face=serif size=2>501</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="4%" bgColor=#cceeff><FONT face=serif size=2>143</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="75%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" 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="4%" 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="4%" 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="4%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><FONT face=serif size=2>Income before income taxes</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>266</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="4%" bgColor=#cceeff><FONT face=serif size=2>432</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="4%" bgColor=#cceeff><FONT face=serif size=2>444</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="4%" bgColor=#cceeff><FONT face=serif size=2>508</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="75%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" 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="4%" 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="4%" 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="4%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><FONT face=serif size=2>Income tax expense</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="4%" bgColor=#cceeff><FONT face=serif size=2>105</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="4%" bgColor=#cceeff><FONT face=serif size=2>170</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="4%" bgColor=#cceeff><FONT face=serif size=2>175</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="4%" bgColor=#cceeff><FONT face=serif size=2>240</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="75%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" 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="4%" 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="4%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Net income</FONT></B>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>161</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&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>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>262</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></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>269</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></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>268</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="100%" bgColor=#ffffff colSpan=14>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><B><FONT face=serif size=2>Earnings Per Share:</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="4%" 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="4%" 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="4%" 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="4%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="75%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" 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="4%" 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="4%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><FONT face=serif size=2>Basic earnings per share</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>0.02</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>0.05</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>0.03</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>0.06</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#ffffff><FONT face=serif size=2>Weighted average shares outstanding</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#ffffff><FONT face=serif size=2>9,072</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="4%" bgColor=#ffffff><FONT face=serif size=2>5,193</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="4%" bgColor=#ffffff><FONT face=serif size=2>8,350</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="4%" bgColor=#ffffff><FONT face=serif size=2>4,325</FONT>&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="75%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" 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="4%" 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="4%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><FONT face=serif size=2>Diluted earnings per share</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>0.02</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>0.05</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>0.03</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>0.06</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#ffffff><FONT face=serif size=2>Weighted average shares outstanding</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#ffffff><FONT face=serif size=2>9,185</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="4%" bgColor=#ffffff><FONT face=serif size=2>5,255</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="4%" bgColor=#ffffff><FONT face=serif size=2>8,501</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="4%" bgColor=#ffffff><FONT face=serif size=2>4,371</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>5</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 Statements Of Cash
Flows<BR></FONT></B><FONT face=serif size=2>(Unaudited)<BR></FONT><B><FONT face=serif size=2>(in thousands)</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="13%" colSpan=7><B><FONT face=serif size=1>Six Months Ended March
    31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><B><FONT face=serif size=2>Operating Activities</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="4%" 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="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net income</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>269</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>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>268</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Adjustments to reconcile net income to net</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="4%" 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="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>cash
      used in operating activities:</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="4%" 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="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Depreciation and amortization</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>700</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="4%"><FONT face=serif size=2>329</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Deferred income taxes</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>(653</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="4%" bgColor=#cceeff><FONT face=serif size=2>(560</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="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Non-cash share based compensation
expense</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>229</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="4%"><FONT face=serif size=2>110</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Other</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>167</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="4%" bgColor=#cceeff><FONT face=serif size=2>103</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Changes in operating assets and
    liabilities:</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%"></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="4%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accounts receivable</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>(949</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="4%" bgColor=#cceeff><FONT face=serif size=2>(1,112</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="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Inventories</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(6,639</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="4%"><FONT face=serif size=2>(2,690</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="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accrued income taxes</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>107</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="4%" bgColor=#cceeff><FONT face=serif size=2>272</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Prepaid expenses and other assets</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(759</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="4%"><FONT face=serif size=2>(299</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="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accounts payable</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>2,821</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="4%" bgColor=#cceeff><FONT face=serif size=2>344</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accrued liabilities and customer
deposits</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>787</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="4%"><FONT face=serif size=2>1,883</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Deferred profit</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="4%" bgColor=#cceeff><FONT face=serif size=2>(185</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="4%" bgColor=#cceeff><FONT face=serif size=2>(46</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="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net cash used in operating activities</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="4%"><FONT face=serif size=2>(4,105</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="4%"><FONT face=serif size=2>(1,398</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="100%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><B><FONT face=serif size=2>Investing Activities</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="4%" 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="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Purchases of property, plant and
    equipment</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(1,873</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="4%"><FONT face=serif size=2>(3,240</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="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Increase in restricted cash</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>463</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="4%" bgColor=#cceeff><FONT face=serif size=2>-<FONT size=3></FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Investment in R2D</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="4%"><FONT face=serif size=2>(8,047</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="4%"><FONT face=serif size=2>-<FONT size=3></FONT></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="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net
      cash used in investing activities</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="4%" bgColor=#cceeff><FONT face=serif size=2>(9,457</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="4%" bgColor=#cceeff><FONT face=serif size=2>(3,240</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 width="100%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><B><FONT face=serif size=2>Financing Activities</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="4%" 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=right width="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Proceeds from issuance of common stock,
    net</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>33,869</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="4%"><FONT face=serif size=2>19,403</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Payments on long-term obligations</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>(635</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="4%" bgColor=#cceeff><FONT face=serif size=2>(103</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="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Borrowings on long-term obligations</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT size=2><FONT face=serif size=2>-</FONT></FONT><FONT size=3></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="4%"><FONT face=serif size=2>355</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net
      short term borrowings (payments)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT size=2><FONT face=serif size=2>-</FONT></FONT><FONT size=3></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="4%" bgColor=#cceeff><FONT face=serif size=2>(111</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="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Excess tax benefit of stock options</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="4%"><FONT face=serif size=2>80</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="4%"><FONT face=serif size=2>-<FONT size=3></FONT></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="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net
      cash provided by financing activities</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="4%" bgColor=#cceeff><FONT face=serif size=2>33,314</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="4%" bgColor=#cceeff><FONT face=serif size=2>19,544</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR>
    <TD width="100%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><B><FONT face=serif size=2>Effect of Exchange Rate Changes on Cash</FONT></B>&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="4%" bgColor=#cceeff><FONT face=serif size=2>(274</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="4%" bgColor=#cceeff><FONT face=serif size=2>(146</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 width="100%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><B><FONT face=serif size=2>Net Increase in Cash and Cash Equivalents</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>19,478</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="4%" bgColor=#cceeff><FONT face=serif size=2>14,760</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><B><FONT face=serif size=2>Cash and Cash
      Equivalents, Beginning of Period</FONT></B>&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="4%"><FONT face=serif size=2>18,370</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="4%"><FONT face=serif size=2>6,433</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="87%" bgColor=#cceeff><B><FONT face=serif size=2>Cash and Cash Equivalents, End of Period</FONT></B>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>37,848</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></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>21,193</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>&nbsp;</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR>
    <TD width="100%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" 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="4%" 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="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Interest paid</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>178</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></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>107</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Income tax payments</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="4%" bgColor=#cceeff><FONT face=serif size=2>747</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>529</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>6</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>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<BR>THREE
AND SIX MONTHS ENDED MARCH 31, 2008 AND 2007<BR>(UNAUDITED)</FONT></B></P>
<P align=justify><B><FONT face=serif size=2>1. Basis of
Presentation</FONT></B></P>
<P align=justify><FONT face=serif size=2><B>Nature of Operations and Basis of
Presentation</B> <B>&#150;</B> 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 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>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 and six month periods ended March 31, 2008, are not necessarily
indicative of the results to be expected for the full year.</FONT></P>
<P align=justify><FONT face=serif size=2><B>Use of Estimates</B> &#150; 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><FONT face=serif size=2><B>Revenue Recognition</B> &#150; 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. The full amount of revenue and costs of new
technology shipments is recognized upon the completion of installation at the
customers&#146; premises and acceptance of the product by the customer.</FONT></P>
<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=center><FONT face=serif><FONT size=2>7</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<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="89%">&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>September 30,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp;</TD>
    <TD noWrap align=center width="11%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" 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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>3,642</FONT>&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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>3,894</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><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="4%"><FONT face=serif size=2>1,067</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="4%"><FONT face=serif size=2>1,750</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT face=serif size=2>Deferred profit</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>2,575</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>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" 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 solar cells, semiconductors, semiconductor wafers, and MEMS
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 March 31, 2008, accounts
receivable from one customer accounted for 34% 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 $0.4 million as of September 30, 2007 consists
of bank guarantees of certain customer deposits in excess of our European line
of credit. As of March 31, 2008 bank guarantees did not exceed our line of
credit.</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 customer acceptance. 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 or net
realizable value. Cost for approximately 50% of inventory are determined on an
average cost basis with the remainder determined on a first-in, first-out (FIFO)
basis. The components of inventories 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="89%">&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>September 30,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><STRONG><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></FONT></STRONG></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp;</TD>
    <TD noWrap align=center width="11%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" 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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>9,701</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>5,291</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT face=serif size=2>Work-in-process</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>6,008</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>1,456</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>861</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="4%" bgColor=#cceeff><FONT face=serif size=2>542</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>16,570</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><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=justify><FONT face=serif size=2>The following is a summary of property, plant and
equipment:</FONT></P>
<P align=center><FONT face=serif size=2>8</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><BR>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>September 30,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD noWrap align=center width="13%" colSpan=7><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>7,104</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>&nbsp;</TD>
    <TD noWrap align=right width="4%" 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="87%"><FONT face=serif size=2>Equipment and
      machinery</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>3,658</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="4%"><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="87%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>3,069</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="4%" 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="87%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>13,831</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="4%"><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="87%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>(5,272</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="4%" bgColor=#cceeff><FONT face=serif size=2>(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="87%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%"><FONT face=serif size=2>8,559</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></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%"><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>On October 8, 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="9%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" 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="9%"><B><FONT face=serif size=1>Useful Life</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%">&nbsp;</TD>
    <TD noWrap align=center width="9%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%" 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="9%" bgColor=#cceeff><FONT face=serif size=2>Indefinite</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>592</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="4%" 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="9%"><FONT face=serif size=2>8-10
      years</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><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="4%"><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="9%" bgColor=#cceeff><FONT face=serif size=2>10-15 years</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="4%" 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="4%" 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="9%"><FONT face=serif size=2>4-10
      years</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><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%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><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="9%" bgColor=#cceeff><FONT face=serif size=2>10 years</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="4%" 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="4%" 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="9%"><FONT face=serif size=2>1-2
    years</FONT></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="4%"><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="4%"><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="77%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="9%" 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="4%" 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></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="4%" 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="9%">&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="4%"><FONT face=serif size=2>(526</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="4%"><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="9%" bgColor=#cceeff>&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>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>4,284</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>1,364</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>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=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>
<P align=center><FONT face=serif size=2>9</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="87%">&nbsp;</TD>
    <TD noWrap align=center width="13%" colSpan=7><B><FONT face=serif size=1>Six Months Ended March 31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD noWrap align=center width="13%" colSpan=7><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>256</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>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>289</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Warranty
      expenditures</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(262</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="4%"><FONT face=serif size=2>(51</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="87%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>350</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="4%" 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="87%"><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="4%"><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%"></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="4%"><FONT face=serif size=2>-<FONT size=3> </FONT></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="87%" bgColor=#cceeff><FONT face=serif size=2>Ending balance</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>591</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; $</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>281</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>Share-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 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="65%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%"><B><FONT face=serif size=1>Shares</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%"><B><FONT face=serif size=1>Shares</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="9%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%"><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="65%"><B><FONT face=serif size=1>Name of Plan</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%"><B><FONT face=serif size=1>Authorized</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%"><B><FONT face=serif size=1>Available</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%"><B><FONT face=serif size=1>Options Outstanding</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%"><B><FONT face=serif size=1>Expiration</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%" bgColor=#cceeff><FONT face=serif size=2>2007 Employee Stock Incentive Plan</FONT>&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>500,000</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>396,187</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="9%" bgColor=#cceeff><FONT face=serif size=2>72,313</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; Apr. 2017</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%"><FONT face=serif size=2>1998 Employee
      Stock Option Plan</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>500,000</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>-</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="9%"><FONT face=serif size=2>356,615</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>Jan.
    2008</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%" 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="7%" bgColor=#cceeff><FONT face=serif size=2>200,000</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#cceeff><FONT face=serif size=2>58,600</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%" bgColor=#cceeff><FONT face=serif size=2>69,000</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>Jul. 2015</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%"><FONT face=serif size=2>&nbsp;&nbsp; 454,787</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="9%"><FONT face=serif size=2>497,928</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%">&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Share-based compensation expense
recognized under SFAS 123 (R) reduced the Company&#146;s results of operations by the
following amounts:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="73%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="13%" colSpan=7><B><FONT face=serif size=1>Three Months Ended March
      31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="13%" colSpan=7><B><FONT face=serif size=1>Six Months Ended March
    31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%">&nbsp;</TD>
    <TD noWrap align=center width="27%" colSpan=15><FONT face=serif size=1>(dollars in thousands, except per share amounts)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%" bgColor=#cceeff><FONT face=serif size=2>Effect on income before income taxes (1)</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="4%" bgColor=#cceeff><FONT face=serif size=2>(128</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><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>(77</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><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>(229</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><FONT size=2>&nbsp;
      $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>(110</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="73%"><FONT face=serif size=2>Effect on net
      income</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(104</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%"><FONT face=serif size=2>&nbsp;
    $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(68</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%"><FONT face=serif size=2>&nbsp;
    $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(193</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%"><FONT size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(96</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="73%" bgColor=#cceeff><FONT face=serif size=2>Effect on basic income per share</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="4%" bgColor=#cceeff><FONT face=serif size=2>(0.01</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><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>(0.01</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><FONT face=serif size=2>&nbsp; $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>(0.02</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><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>(0.02</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="73%"><FONT face=serif size=2>Effect on
      diluted income per share</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(0.01</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%"><FONT face=serif size=2>&nbsp;
    $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(0.01</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%"><FONT face=serif size=2>&nbsp;
    $</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(0.02</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%"><FONT face=serif size=2>&nbsp;
$</FONT></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(0.02</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
option 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 2018. 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>Stock option transactions and the
options outstanding are summarized as follows:</FONT></P>
<P align=center><FONT face=serif size=2>10</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="75%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="25%" colSpan=13><B><FONT face=serif size=1>Six Months Ended March
    31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=6><B><FONT face=serif size=1>2008</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=6><B><FONT face=serif size=1>2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="4%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>Weighted</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="4%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>Weighted</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="4%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" 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="4%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>Average</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="4%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" 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="4%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>Exercise</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>Options</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>Price</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3>&nbsp; <B><FONT face=serif size=1>Options</FONT></B> &nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>Price</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>450,303</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;$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>6.44</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>308,384</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    5.95</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><FONT face=serif size=2>Granted</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>105,000</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="4%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.08</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>156,250</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="4%"><FONT face=serif size=2>7.01</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>(56,375</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="4%" bgColor=#cceeff><FONT face=serif size=2>5.22</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="4%" bgColor=#cceeff><FONT face=serif size=2>(2,550</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="4%" bgColor=#cceeff><FONT face=serif size=2>3.15</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><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="4%"><FONT face=serif size=2>(1,000</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="4%"><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="4%"><FONT face=serif size=2>(1,500</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="4%"><FONT face=serif size=2>7.00</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" 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="4%" bgColor=#cceeff><FONT face=serif size=2>497,928</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 noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>8.19</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>460,584</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>6.32</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="100%" colSpan=14>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><FONT face=serif size=2>Exercisable at end of period</FONT>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>265,726</FONT></TD>
    <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" 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;$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>6.48</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>251,007</FONT></TD>
    <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>5.97</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><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="4%"></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="4%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%"></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="4%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><FONT face=serif size=2>granted during
      the period</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>8.23</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>&nbsp;$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>4.57</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=left width="4%">&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The fair value of options was estimated
at the grant date 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="69%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="31%" colSpan=3><B><FONT face=serif size=1>Six Months Ended March
    31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="15%"><B><FONT face=serif size=1>2008</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="15%"><B><FONT face=serif size=1>2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%" bgColor=#cceeff><FONT face=serif size=2>Risk free interest rate</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%" bgColor=#cceeff><FONT face=serif size=2>3.27%</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="15%" bgColor=#cceeff><FONT face=serif size=2>4.69%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><FONT face=serif size=2>Expected
      life</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%"><FONT face=serif size=2>6
    years</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%"><FONT face=serif size=2>6
    years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%" bgColor=#cceeff><FONT face=serif size=2>Dividend rate</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%" bgColor=#cceeff><FONT face=serif size=2>0%</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=center width="15%" bgColor=#cceeff><FONT face=serif size=2>0%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><FONT face=serif size=2>Volatility</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%"><FONT face=serif size=2>61%</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%"><FONT face=serif size=2>68%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%" bgColor=#cceeff><FONT face=serif size=2>Forfeiture rate</FONT>&nbsp;</TD>
    <TD noWrap align=center width="15%" bgColor=#cceeff><FONT face=serif size=2>9%</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="15%" bgColor=#cceeff><FONT face=serif size=2>7%</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 20,000 and 105,000 options
granted during the three and six months ended March 31, 2008, respectively; and
86,250 and 156,250 options granted for the comparable periods of fiscal 2007.
Total fair value of options granted was approximately $124,000 and $864,000 for
the three and six months ended March 31 2008, respectively; and $391,000 and
$714,000 for the comparable periods of fiscal 2007.</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 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 six months ended March 31, 2008 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 six months ended March 31, 2008.</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 March 2008, the Financial Accounting
Standards Board (&#147;FASB&#148;) issued Statement of Financial Accounting Standards No.
161, &#147;Disclosures about Derivative Instruments and Hedging Activities&#151;an
amendment of FASB Statement No. 133&#148; (&#147;SFAS No. 161&#148;). SFAS No. 161 changes the
disclosure requirements for derivative instruments and hedging activities.
Entities are required to provide enhanced disclosures about (a) how and why an
entity uses derivative instruments, (b) how derivative instruments and related
hedged items are accounted for under SFAS No. 133 and its related
interpretations, and (c) how derivative instruments and related hedged items
affect an entity&#146;s financial position, financial performance and cash flows.
This Statement encourages, but does not require, comparative disclosures for
earlier periods at initial adoption. At this time, the Company does not expect
the adoptions of SFAS 161 to have an impact on its consolidated financial
statements. SFAS No. 161 is effective for the Company&#146;s quarter beginning
January 1, 2009.</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><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 recognition of a valuation allowance 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 until
evidence supports the conclusion that it is more likely than not that the
deferred tax asset will be realized. The amount of the valuation allowance at
March 31, 2008 and October 1, 2007 was $560,000 and $453,000, respectively. At
March 31, 2008, and October 1, 2007, the total amount of unrecognized tax
benefits was $436,000 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 March 31, 2008, $132,000 was 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=justify><B><FONT face=serif size=2>3. Earnings Per Share</FONT></B></P>
<P align=justify><FONT face=serif size=2>Basic earnings per share (EPS) is
computed by dividing net income 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.</FONT></P>
<P align=justify><FONT face=serif size=2>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 and six months ended March
31, 2008, options for 115,000 and 131,625 shares, respectively, are excluded
from the diluted EPS calculations because they are antidilutive. For the three
and six months ended March 31, 2008, restricted stock awards of 31,500 are
excluded from the diluted EPS calculations because they are antidilutive. For
the three and six months ended March 31, 2007, options for 20,000 and 39,100
shares, respectively, are excluded from the diluted EPS calculations because
they are antidilutive.</FONT></P>
<P align=center><FONT size=2>12</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="68%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>Six Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>March 31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>(in thousands, except per share amounts)</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>(in thousands, except per share amounts)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#cceeff><B><U><FONT face=serif size=2>Basic Earnings Per Share Computation</FONT></U></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Net income
      available to</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>common stockholders</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>161</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>262</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>269</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>268</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=2>Weighted Average Shares Outstanding:</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Common stock</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>9,072</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>5,193</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>8,350</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>4,325</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=2>Basic earnings per share</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0.02</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0.05</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0.03</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0.06</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#cceeff><B><U><FONT face=serif size=2>Diluted Earnings Per Share Computation</FONT></U></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Net
    income</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>161</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>262</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>269</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>268</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=2>Weighted Average Shares Outstanding:</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Common stock</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>9,072</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>5,193</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 8,350</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>4,325</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Common stock
      equivalents (1)</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>113</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>62</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>151</FONT></TD>
    <TD noWrap align=left width="2%" 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="5%" bgColor=#cceeff><FONT face=serif size=2>46</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Diluted shares</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%">&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
9,185</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
5,255</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%">&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>8,501</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>4,371</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=2>Diluted earnings per share</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0.02</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0.05</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0.03</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0.06</FONT></TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></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=justify><B><FONT face=serif size=2>4. Comprehensive
Income</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>Six Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>March 31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><STRONG><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></STRONG></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><STRONG><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></STRONG></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#cceeff><FONT face=serif size=2>Net income, as reported</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>161</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>262</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>269</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 268</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"><FONT face=serif size=2>Foreign currency
      translation adjustment</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>1,352</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>20</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>1,498</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>99</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#cceeff><FONT face=serif size=2>Comprehensive income</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      1,513</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
    282</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
      1,767</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>367</FONT></TD></TR></TABLE><BR>
<P align=justify><B><FONT face=serif size=2>5. Business Segment
Information</FONT></B></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 solar cells, integrated circuits,
and MEMS. Also included in the solar and semiconductor equipment segment are 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 size=2>13</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></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=center width="16%" colSpan=7><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="16%" colSpan=7><B><FONT face=serif size=1>Six Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="16%" colSpan=7><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="16%" colSpan=7><B><FONT face=serif size=1>March 31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</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="7%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</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="7%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</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="7%" colSpan=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Net
      Revenues:</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=center width="16%" colSpan=7><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="16%" colSpan=7><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Solar and semiconductor equipment</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>15,608</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>8,234</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>25,605</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>15,755</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Polishing supplies</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>1,983</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>2,305</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>3,727</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>4,235</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>17,591</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>10,539</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>29,332</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>19,990</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR>
    <TD width="100%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#cceeff><FONT face=serif size=2>Operating Income (loss):</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Solar and semiconductor
      equipment</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>(392</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=right width="2%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>(126</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>(510</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>(380</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Polishing
      supplies</FONT></TD>
    <TD noWrap align=left width="2%" 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="5%" bgColor=#cceeff><FONT face=serif size=2>310</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff>&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>436</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>453</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>745</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="64%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>(82</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>310</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>(57</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>365</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="100%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#cceeff><FONT face=serif size=2>Interest and other income (expense), net</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>348</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>122</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>501</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>143</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="2%"></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="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%">&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="64%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Income before income
      taxes</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>266</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>432</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>444</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>508</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>September 30,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"></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=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</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=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face=serif size=2>Identifiable
      Assets:</FONT></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Solar and semiconductor equipment</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>89,701</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>46,283</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Polishing supplies</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>5,092</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>4,383</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>94,793</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>50,666</FONT></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 months ended
March 31, 2008, two customers represented 20% and 18% of net revenues,
individually. During the six months ended
March 31, 2008, two customers represented 18% and 13% of net revenues,
individually. During the three and six months ended March 31, 2007, one customer
represented 15% and 14% of net revenues, respectively.</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 noWrap align=left width="85%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=1>Six Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=1>March 31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"></TD>
    <TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><STRONG><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></STRONG></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><STRONG><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></STRONG></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#cceeff><FONT face=serif size=2>North America (1)</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>17%</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>32%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><FONT face=serif size=2>Asia (2)
      (3)</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>59%</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>46%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#cceeff><FONT face=serif size=2>Europe</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>24%</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>22%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>100%</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>100%</FONT></TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD width="100%"><FONT face=serif size=2>Includes 17% and 31% to the
      United States in 2008 and 2007, respectively</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(2)</FONT></TD>
    <TD width="100%"><FONT face=serif size=2>Includes 34% and 13% to China in
      2008 and 2007, respectively.</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(3)</FONT></TD>
    <TD width="100%"><FONT face=serif size=2>Includes 12% and 19% to Taiwan in
      2008 and 2007, respectively.</FONT></TD></TR></TABLE>
<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 March 31, 2008, we had purchase obligations in
the amount of $14.0 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=center><FONT face=serif size=2>14</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>8. Issuance of Common
Stock</FONT></B></P>
<P align=justify><FONT 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. The
Company received $0.3 million from the exercise of stock options during the six months ended
March 31, 2008.</FONT></P>
<P align=justify><B><FONT size=2>9. Acquisition</FONT></B></P>
<P align=justify><FONT 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 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 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=justify><FONT 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="60%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT size=2><FONT size=3><FONT size=1><STRONG>Useful
      Life</STRONG></FONT>&nbsp;</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><FONT size=2>Assets
      Acquired:</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2>Current Assets</FONT></TD>
    <TD noWrap align=right width="1%"><FONT size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="4%"><FONT size=2>4,590</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><FONT size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Property, plant &amp;
      equipment</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT size=2>234</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Intangible assets:</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><FONT size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Non-compete agreements</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT size=2>176</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>8 years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Customer lists</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>1,216</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>10
    years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Technology</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>1,572</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>10 years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Backlog and other</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>226</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>1-10
    years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Goodwill</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>2,282</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
      Total assets acquired</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;
    10,296</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="5%"></TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><FONT face=serif size=2>Liabilities Assumed:</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Current Liabilities</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>2,413</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Long-term
      liabilities</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>1,218</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Total
      liabilities assumed</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>3,631</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Net
      assets acquired</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>6,665</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>15</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<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 six months ended March 31, 2007. 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="80%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Three Months</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Six Months</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"></TD>
    <TD align=center width="6%" colSpan=2><B><FONT face=serif size=1>Ended
      March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Ended March 31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"></TD>
    <TD noWrap align=left width="14%" colSpan=5><STRONG><FONT face=serif size=1>(dollars in thousands, except per share
  amounts)</FONT></STRONG></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#cceeff><FONT face=serif size=2>Revenues</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>11,077</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>&nbsp; $</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>22,060</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><FONT face=serif size=2>Net
    income</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>296</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>502</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#cceeff><FONT face=serif size=2>Net income per share:</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Basic</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>0.06</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>0.12</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Diluted</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0.06</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0.12</FONT></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 and six
months ended March 31, 2007 have been combined with the revenues and earnings of
Amtech for the three and six months ended March 31, 2007.</FONT></P>

<P align=justify><FONT face=serif size=2><b>10.  Subsequent Event</b></FONT></P>

<P align=justify><FONT face=serif size=2>In April 2008, Amtech adopted a plan to reduce costs at its Bruce Technologies division which has been affected by the slowdown in the semiconductor industry.  Certain personnel were notified of their termination of employment.  The restructuring charge is estimated to be approximately $360,000 and will be recorded in the results of the third quarter of fiscal 2008.</FONT></P>


<P align=center><FONT size=2>16</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=left><B><FONT face=serif size=2>ITEM 2. MANAGEMENT&#146;S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</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.</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 solar and semiconductor 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> <FONT face=serif></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 size=2>17</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>Overview</FONT></B><FONT face=serif></FONT></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><FONT face=serif></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 manufactures polishing templates, steel
carriers and double-sided polishing and lapping machines for fabricators of
optics, quartz, ceramics and metal parts, and for manufacturers of medical
equipment components.</FONT><FONT face=serif></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, our revenues, gross margins and operating
results have historically fluctuated on a quarterly basis. Our contracts
typically include holdbacks of 10-20% of revenue, which are recognized at the
time of customer acceptance.</FONT><FONT face=serif></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="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=5><B><FONT face=serif size=1>Six Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#cceeff><FONT face=serif size=2>Net revenue</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>100</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>100</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>100</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>100</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"><FONT face=serif size=2>Cost of goods
      sold</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>77</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>73</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>74</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>74</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#cceeff><FONT face=serif size=2>Gross margin</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>23</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>27</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>26</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>26</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"><FONT face=serif size=2>Operating
      expenses:</FONT></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Selling, general and administrative</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>22</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>23</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>24</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>23</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Research and Development</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>2</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#cceeff><FONT face=serif size=2>Total operating expenses</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>23</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>24</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>26</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>24</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"><FONT face=serif size=2>Income (loss)
      from operations</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>(0</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%)</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>3</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>(0</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%)</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>2</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#cceeff><FONT face=serif size=2>Interest and other income (expense), net</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>2</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"><FONT face=serif size=2>Income before
      income taxes</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>2</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>4</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>1</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>2</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#cceeff><FONT face=serif size=2>Income taxes</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>2</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>0</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"><FONT face=serif size=2>Net
    Income</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>2</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD></TR></TABLE><BR>
<P align=justify><B><I><FONT face=serif size=2>Net Revenue</FONT></I></B><FONT face=serif size=2></FONT></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 system sales. Timing of shipment, installation and customer acceptance 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 size=2>18</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="44%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="26%" colSpan=12><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="26%" colSpan=12><B><FONT face=serif size=1>Six Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="44%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="44%"><B><FONT face=serif size=1>Net Revenue</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <STRONG>2008</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <STRONG>2007</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <STRONG>(Dec)</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      %&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <STRONG>2008</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <STRONG>2007</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <STRONG>(Dec)</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      %&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="44%"></TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD noWrap align=center width="20%" colSpan=9><B><FONT face=serif size=1>(dollars in thousands)</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD noWrap align=center width="3%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="20%" colSpan=9><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD noWrap align=center width="3%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="44%" bgColor=#cceeff><FONT face=serif size=1>Solar and Semiconductor</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="4%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="44%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Equipment
      Segment</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT size=1>$</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>15,608</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>8,234</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>7,374</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>90</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>25,605</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>15,755</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>9,850</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>63</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="44%" bgColor=#ffffff><FONT face=serif size=1>Polishing Supplies Segment</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#ffffff><FONT face=serif size=1>1,983</FONT></TD>
    <TD noWrap align=left width="2%" 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="4%" bgColor=#ffffff><FONT face=serif size=1>2,305</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#ffffff><FONT face=serif size=1>(322</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>)</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>(14</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%)</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#ffffff>&nbsp;</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="4%" bgColor=#ffffff><FONT face=serif size=1>3,727</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#ffffff>&nbsp;</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="4%" bgColor=#ffffff><FONT face=serif size=1>4,235</FONT></TD>
    <TD noWrap align=left width="2%" 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="4%" bgColor=#ffffff><FONT face=serif size=1>(508</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>)</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>(12</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="44%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=1>Total</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>17,591</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>10,539</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>7,052</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>67</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>29,332</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>19,990</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>9,342</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>47</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR></TABLE>
<BR>
<P align=justify><FONT face=serif size=2>Net revenue for the quarter ended March
31, 2008 increased by $7.1 million, or 67%, compared to the quarter ended March
31, 2007. Revenue from the Solar and Semiconductor Equipment Segment increased
$7.4 million, or 90%, due to significantly higher shipments to the solar
industry, partially offset by decreased shipments to the semiconductor industry.
The growth in solar shipments was driven by the continuing increase in demand
for solar products from our customers and the success of our increased marketing
and sales efforts in penetrating the solar market. The decrease in net revenue
from the semiconductor industry was due primarily to the overall cyclical
downturn in the semiconductor industry. The decrease of $0.3 million, or 14%, in
net revenue from the Polishing Supplies Segment was due primarily to lower
insert carrier and polishing machines caused by higher competition in the insert
carrier market and the current downturn in the semiconductor
industry.</FONT></P>
<P align=justify><FONT face=serif size=2>Net revenue for the six months ended
March 31, 2008 increased by $9.3 million, or 47%, compared to the six months
ended March 31, 2007. Revenue from the Solar and Semiconductor Equipment Segment
increased $9.9 million, or 63%, due to higher solar product revenues, partially
offset by decreased revenues to the semiconductor industry. The decrease of $0.5
million, or 12%, in net revenue from the Polishing Supplies Segment is due to
the factors discussed above.</FONT></P>
<P align=justify><FONT face=serif size=2>The following table reflects new
orders</FONT> <SUP><FONT face=serif size=2>(1)</FONT></SUP><FONT face=serif size=2>, shipments and net revenues for the second quarter of the current and
prior fiscal year, and the backlog as of the end of those periods, on a
consolidated basis, as well as for each of our two business segments.</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="22%" colSpan=8><B><FONT face=serif size=1>Second Quarter</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="22%" colSpan=8><B><FONT face=serif size=1>Year-to-Date</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Solar and</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Solar and</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Semi-</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><STRONG><FONT size=1>Polishing</FONT></STRONG>&nbsp;</TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Semi-</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><STRONG><FONT size=1>Polishing</FONT></STRONG>&nbsp;</TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>conductor</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Supplies</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Total</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;</TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>conductor</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Supplies</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Total</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Equipment</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Segment</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Company</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Equipment</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Segment</FONT></B></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>Company</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=center width="22%" colSpan=8><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="22%" colSpan=8><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#cceeff><B><FONT face=serif size=2>2008:</FONT></B></TD>
    <TD noWrap align=left width="50%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="5%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"><FONT face=serif size=2>New orders
      (1)</FONT></TD>
    <TD noWrap align=right width="2%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 28,757</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,062</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 31,819</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 63,842</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,003</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>&nbsp;
    $</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 68,845</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="50%" bgColor=#cceeff><FONT face=serif size=2>Shipments</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>15,387</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>1,963</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>17,350</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>24,477</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>3,731</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>28,208</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"><FONT face=serif size=2>Net
      revenues</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>15,608</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>1,983</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>17,591</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>25,605</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>3,727</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>29,332</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="50%" bgColor=#cceeff><FONT face=serif size=2>R2D purchased</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>1,779</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>1,779</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"><FONT face=serif size=2>Backlog
      3/31/2008</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>61,999</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>2,159</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>64,158</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>61,999</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>2,159</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>64,158</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="50%" bgColor=#cceeff><B><FONT face=serif size=2>Book-to-bill ratio</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>1.9:1</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>1.6:1</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>1.8:1</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>2.6:1</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>1.3:1</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>2.4:1</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>2007</FONT></B></TD>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="50%" bgColor=#cceeff><FONT face=serif size=2>New orders (1)</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>6,880</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;<FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>1,647</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>8,527</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>18,457</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp; <FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>4,126</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>22,583</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"><FONT face=serif size=2>Shipments</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>7,837</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>2,303</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>10,140</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>15,872</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>4,235</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>20,107</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="50%" bgColor=#cceeff><FONT face=serif size=2>Net revenues</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>8,234</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>2,305</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>10,539</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>15,755</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>4,235</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>19,990</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="50%"><FONT face=serif size=2>Backlog
      3/31/2007 (2)</FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>15,316</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>876</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>16,192</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>15,316</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>876</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>16,192</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="50%" bgColor=#cceeff><B><FONT face=serif size=2>Book-to-bill ratio</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>0.9:1</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>0.7:1</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>0.8:1</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>1.2:1</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>1.0:1</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><B><FONT face=serif size=2>1.1:1</FONT></B></TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD 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 solar and semiconductor equipment segment.</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(2)</FONT></TD>
    <TD width="100%"><FONT face=serif size=2>The solar and semiconductor equipment segment backlog as of March 31, 2007
      includes $1.0 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=center><FONT size=2>19</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<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 March 31, 2008
and 2007 was $64.2 million and $16.2 million, respectively, a 296% increase. Our
backlog as of March 31, 2008 includes approximately $52.6 million of orders from
our solar industry customers compared to $7.3 million of orders from our solar
industry customers at March 31, 2007. The orders included in our backlog are
generally credit approved customer purchase orders expected to ship within the
next twelve months. 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.
We believe the orders included in backlog are probable of being filled and not
cancelled. 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.</FONT></P>
<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 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=center width="57%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="21%" colSpan=12><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>Three
      Months Ended</STRONG></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="20%" colSpan=12>&nbsp;<B><FONT face=serif size=1>Six Months
    Ended</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="57%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=3>&nbsp;<B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2>&nbsp;<B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>March 31,</STRONG></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3>&nbsp;<B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="57%"><B><FONT face=serif size=1>Gross profit</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>2008</STRONG><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT face=serif><STRONG>2007</STRONG></FONT></FONT><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>(Dec)</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>%</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>2008</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>2007</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>(Dec)</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>%</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="57%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=9><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=9><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%" bgColor=#cceeff><FONT face=serif size=1>Solar and Semiconductor</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&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="3%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Equipment
      Segment</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>3,455</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>2,040</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;</FONT>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>1,415</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>69</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;</FONT>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>6,514</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>3,775</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>2,739</FONT></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="3%" bgColor=#cceeff><FONT face=serif size=1>73</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%"><FONT face=serif size=1>Polishing
      Supplies Segment</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>672</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>828</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face=serif size=1>(156</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=1>)</FONT>&nbsp;</TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> (19</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=1>%)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>1,173</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>1,485</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>(312</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=1>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> (21</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=1>%)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=1>Total</FONT>&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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 4,127</FONT></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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 2,868</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;</FONT>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>1,259</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>44</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;</FONT>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 7,687</FONT></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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 5,260</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 2,427</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 noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>46</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=1>Gross margin</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1>23%</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1>27%</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="3%"></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="3%"><FONT face=serif size=1>26%</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1>26%</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR></TABLE><BR>

<P align=justify><FONT face=serif size=2>Gross profit for the quarter ended March 31, 2008 increased $1.3 million or 44% from $2.9 million in the
second quarter of fiscal 2007 to $4.1 million in the second quarter of fiscal
2008. Gross margin in the second quarter was 23% compared to 27% in the second
quarter of fiscal 2007, reflecting the net impact of deferred revenue and
deferred profit activity during the second quarter, which included the
recognition of $1.1 million of deferred revenue with no gross profit because
there was an equal amount of revenue and cost previously deferred. Lower
capacity utilization at Bruce Technologies also negatively impacted margins
during the second quarter along with a ramp up of production personnel at our
Tempress and R2D facilities. Excluding the net impact of deferred revenue and
profit activity, gross margin in the solar and semiconductor equipment segment
improved in the second quarter compared to the same quarter in the prior year,
primarily due to higher shipment volumes. Gross profit and margins in the
polishing supplies segment decreased due to lower revenues and increased
competition in the insert carrier market.</FONT></P>

<P align=justify><FONT face=serif size=2>Gross profit for the six months ended
March 31, 2008 increased $2.4 million or 46% from $5.3 million in the first half
of fiscal 2007 to $7.7 million in the first half of fiscal 2008. Gross margin
was 26% in both periods. As discussed above, in the second quarter of fiscal
2008 we recognized $1.1 million of previously deferred revenue with no gross
profit. Excluding this negative effect, gross margins improved in the first half
of fiscal 2008 when compared to the first half of fiscal 2007. This improvement
resulted mainly from the efficiencies realized in the second quarter of fiscal
2008 as discussed above.</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 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=center width="58%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="20%" colSpan=12><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>Three
      Months Ended</STRONG></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="20%" colSpan=12>&nbsp;<B><FONT face=serif size=1>Six Months
    Ended</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%"><B><FONT face=serif size=1>Selling,
      general</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>March 31,</STRONG></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>March 31,</STRONG></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3>&nbsp;<B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD align=center width="4%" colSpan=2>&nbsp;<B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>March 31,</STRONG></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3>&nbsp;<B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="58%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>and
      administrative</STRONG></FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>2008</STRONG></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>2007</STRONG></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>(Dec)</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>%</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>2008</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>2007</STRONG></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>(Dec)</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>%</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="58%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=9><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=9><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%" bgColor=#cceeff><FONT face=serif size=1>Solar and Semiconductor</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%" bgColor=#cceeff>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=1>Equipment Segment</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>3,604</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>2,026</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>1,578</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>78</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>6,547</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>3,896</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>2,651</FONT></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="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>68</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%"><FONT face=serif size=1>Polishing
      Supplies Segment</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="3%"><FONT face=serif size=1>362</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>391</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>(29</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=1>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1>(7</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=1>%)</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>721</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>740</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>(19</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=1>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1>(3</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=1>%)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=1>Total</FONT>&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=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>3,966</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>2,417</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>1,549</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 noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>64</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT>&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=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>7,268</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>4,636</FONT></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=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>2,632</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 noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>57</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=1>Percent of net revenue</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1>23%</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1>23%</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></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="3%"><FONT face=serif size=1>24%</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1>23%</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR></TABLE>
<P align=center><FONT face=serif><FONT size=2>20</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Selling, general and administrative
(SG&amp;A) expenses for the quarter ended March 31, 2008 increased $1.5 million,
or 64%, from $2.4 million to $4.0 million compared to the quarter ended March
31, 2007. The increase was due primarily to $0.6 million of increased selling
expense for higher revenues generated in regions where third party sales agents
are utilized. In addition, we incurred $0.3 million of expense at R2D for which
there were no comparable expenses in the prior year quarter. SG&amp;A expenses
include $0.1 million of stock-based compensation expense in the quarters ended
March 31, 2008 and 2007. The remainder of the increase in SG&amp;A resulted from
increased depreciation and operating costs for the new building in The
Netherlands and increased personnel and consulting costs. The increased
personnel and consulting costs include costs incurred to improve internal
financial and operational reporting, to comply with the Sarbanes-Oxley Act, and
to implement improvements in operational efficiencies.</FONT></P>
<P align=justify><FONT face=serif size=2>For the six months ended March 31,
2008, SG&amp;A increased $2.6 million or 57% compared to the six month period
ended March 31, 2007. The increase reflects $0.6 million of costs incurred by
R2D in fiscal 2008 for which there were no comparable expenses in the prior year
period. Selling expenses increased $1.0 million due to increased commissions and
increased sales and marketing activity. As previously discussed, personnel costs
and professional fees, including costs related to moving our Netherlands
operations into our new building, 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><FONT face=serif size=2></FONT></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 and processes; materials and supplies used in
those activities; and product prototyping. .</FONT></P>
<P align=left>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=center width="60%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="19%" colSpan=10><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>Three
      Months Ended</STRONG></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="18%" colSpan=10>&nbsp;<B><FONT face=serif size=1>Six Months
    Ended</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="60%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%" colSpan=2>&nbsp;<B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2>&nbsp;<B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>March 31,</STRONG></FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2>&nbsp;<B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="60%"><B><FONT face=serif size=1>Research and
    Development</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>2008</STRONG></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>2007</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>(Dec)</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>%</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>2008</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>2007</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>(Dec)</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>%</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="60%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%" colSpan=8><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=8><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="60%" bgColor=#cceeff><FONT face=serif size=1>Solar and Semiconductor</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&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="3%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="60%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> Equipment
      Segment</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>243</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>141</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;</FONT>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>102</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>72%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;</FONT>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>476</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>259</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>217</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>84%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="60%"><FONT face=serif size=1>Polishing
      Supplies Segment</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>-</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>-</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face=serif size=1>-</FONT></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>0%</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>-</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>-</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>0%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="60%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=1>Total</FONT>&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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 243</FONT></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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 141</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;</FONT>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 102</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>72%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;</FONT>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 476</FONT></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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 259</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 217</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>84%</FONT></TD></TR></TABLE>
<P align=justify><FONT face=serif size=2>Research and development costs for the
three and six months ended March 31, 2008 increased $0.1 million and $0.2
million, respectively compared to the three and six-month periods ended March
31, 2007. The increase results from increased focus on the solar industry and
reflects our partnering-based approach, in which our engineering and development
teams work closely with our customers to ensure our products are tailored to
meet our customers&#146; specific requirements while at the same time minimizing
research and development costs.</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 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="68%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=8><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>Three
      Months Ended</STRONG></FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="16%" colSpan=10>&nbsp;<B><FONT face=serif size=1>Six Months
    Ended</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><B><FONT face=serif size=1>Interest and
      other</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>March 31,</STRONG></FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>March 31,</STRONG></FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2>&nbsp;<B><FONT face=serif size=1>Inc.</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3>&nbsp;<B><FONT face=serif size=1>March 31,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>March 31,</STRONG></FONT>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><FONT face=serif size=1><FONT size=3>&nbsp;</FONT><STRONG>Inc.</STRONG></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="68%">&nbsp;&nbsp;&nbsp;&nbsp; <B><FONT face=serif size=1>income
      (expense), net</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>2008</STRONG></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>2007</STRONG></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>(Dec)</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>2008</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>2007</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=1>(Dec)</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=8><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="16%" colSpan=10><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=1>Interest and other income</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> (expense),
    net</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 298</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 107</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 191</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 504</FONT></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=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 130</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT> $</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> 374</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#ffffff><FONT face=serif size=1>Foreign currency gains (losses)</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>50</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>15</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>35</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>(3</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#ffffff>&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>13</FONT>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>(16</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>)</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp;
      <FONT face=serif size=1>Total</FONT>&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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>348</FONT>&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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>122</FONT>&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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>226</FONT>&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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>501</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=right width="1%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>143</FONT>&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=1><FONT size=3>&nbsp;</FONT>
    $</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>358</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap 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, revolving line of credit, equipment financing, and
amortization of debt issuance costs. Due to an increase in cash and cash
equivalents raised in the secondary public offerings of common stock during the
second quarter of fiscal 2007 and the first quarter of fiscal 2008, net interest
income increased by $0.2 million and $0.4 million, respectively during the three
and six months ended March 31, 2008, from the comparable periods in fiscal
2007.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>21</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<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 March 31,
2008 and 2007 we recorded income tax provisions of $0.1 million and $0.2
million, respectively for an effective tax rate of 39% in both periods. During
the six months ended March 31, 2008 and 2007, we recorded income tax provisions
of $0.2 million. The effective tax rates used for calculating the income tax
provisions for the six months ended March 31, 2008 and 2007 were approximately
39% and 47%, respectively, based upon estimates of annual income, annual
permanent differences, changes in the valuation allowance and statutory tax
rates for fiscal 2008 and 2007, respectively, in the various jurisdictions in
which we operate. . The effective tax rate for the six months ended March 31,
2007 was negatively impacted by permanent differences between financial income
and taxable income, which were higher in relation to pre-tax income.</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 $0.3 million 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 and foreign net operating losses until
evidence supports the conclusion that it is more likely than not that those
deferred tax assets may be realized. The amount of the valuation allowance at
March 31, 2008 and October 1, 2007 was $0.6 million and $0.5 million
respectively.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Liquidity and Capital
Resources</FONT></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>At March 31, 2008 and September 30,
2007, cash and cash equivalents and restricted cash were $37.8 million and $18.8
million, respectively. Our working capital increased $27.5 million to $58.0
million as of March 31, 2008, compared to $30.5 million at September 30, 2007.
Our ratio of current assets to current liabilities increased to 4.0:1 at March
31, 2008, from 3.6:1 at September 30, 2007. The increase in cash and cash
equivalents and working capital and the improvement in the current ratio
resulted primarily from the $33.6 million of net proceeds after deducting
expenses raised from the secondary public offering of common stock during
November 2007. The increase was partially offset by $8.0 million invested in the
acquisition of R2D and capital expenditures made primarily to improve the
manufacturing facility in The Netherlands, which increased the capacity of our
solar and semiconductor equipment segment.</FONT></P>
<P align=justify><FONT face=serif size=2>At March 31, 2008, our principal
sources of liquidity consisted of $37.8 million of cash and cash equivalents
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 March 31, 2008. The Silicon Valley
Bank line of credit expired in April, 2008 and was not immediately
renewed.</FONT></P>
<P align=justify><FONT face=serif size=2>We have a line of credit in the amount
of Euro 1.0 million (approximately $1.6 million) as of March 31, 2008. The line
of credit accrues interest at a rate of 1.75% over a Netherlands bank&#146;s basic
interest rate (5.5% as of March 31, 2008). The line of credit has no fixed
expiration date. The line of credit is secured by trade account receivable in
the Netherlands. As of March 31, 2008, bank guarantees in the amount of Euro 0.9
million were secured by this line of credit leaving Euro 0.1 million available.
Effective May 1, 2008 the line of credit was reduced to Euro 0.6
million.</FONT></P>
<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 2,500,000 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></P>
<P align=center><FONT face=serif><FONT size=2>22</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<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 $4.1 million for the six months ended March 31, 2008, compared to $1.4
million used in such activities for the six months ended March 31, 2007. During
the six months ended March 31, 2008 cash was primarily used to finance increases
in accounts receivable (0.9 million), inventory ($6.6 million), prepaid and
other assets ($0.8 million) and deferred
profit of ($0.2 million). This use of cash was partially offset by increases in
accounts payable of $2.8 million and accrued liabilities and customer deposits
of $0.8 million.</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 six
months ended March 31, 2008 and 2007 used $9.5 million and $3.2 million of cash,
respectively. Our investing activities for the six months ended March 31, 2008
used $8.0 million of cash in the acquisition of R2D. Capital expenditures of
$1.9 million resulted primarily from improvements to the new building in The
Netherlands. Restricted cash decreased $0.4 million. Restricted cash represents
bank guarantees in excess of our available credit facility in The Netherlands.
During fiscal 2007, the most significant investment was the purchase of a 48,000
sq. ft. manufacturing facility located in Vaassen, The Netherlands for
approximately $3.1 million.</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>Cash provided by financing activities
for the six months ended March 31, 2008 was $33.3 million. 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 $0.3
million was provided by the exercise of stock options. These sources of cash
were offset by the payment of long-term debt of $0.6 million. In the second
quarter of 2008, we paid the remaining balance of the mortgage on our building
in Heerde, The Netherlands in the amount of $0.5 million. This compares to $19.5
million of cash provided by financing activities during the six months ended
March 31, 2007 which primarily consists of the $19.4 million, net of expenses,
raised in the secondary public offering of the Company&#146;s common
stock.</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 March 31, 2008, 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><FONT face=serif></FONT></P>
<P 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 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 the Annual Report on Form 10-K for the year ended
September 30, 2007. We believe the following critical accounting policies affect
the more significant judgments and estimates used in the preparation of our
consolidated financial statements.</FONT><FONT face=serif></FONT></P>
<P align=center><FONT face=serif><FONT size=2>23</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P 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><FONT face=serif></FONT></P>
<P 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 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.</FONT><FONT face=serif size=2><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 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 state net operating loss carryforwards that will 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=center><FONT face=serif><FONT size=2>24</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<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 or net realizable value. Costs for approximately 50% of inventory
is determined on an average cost basis with the remainder determined on a
first-in, first-out (FIFO) basis. 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. 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 March 31, 2008, 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;Item 1: Financial Information&#148;
under &#147;Impact of Recently Issued Accounting Pronouncements&#148;.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>25</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<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
solar and semiconductor 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 operations 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 March 31, 2008, 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
and six month periods ended March 31, 2008 and 2007. As of March 31, 2008, our
foreign subsidiaries had $2.5 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 nonfunctional currency
would result in gains or losses of $0.3 million. As of March 31, 2008, we had
$3.9 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 functional currency relative to the non-functional currency
would result in net gains or losses of $0.4 million. Our net investment in and
long-term advances to our foreign operations totaled $28.3 million as of March
31, 2008. A 10% change in the value of the Euro relative to the U.S. dollar
would cause an approximately $2.8 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 the six months ended March 31,
2008, our European operations transacted U.S. dollar denominated sales and
purchases of $1.3 million and $1.1 million, respectively. As of March 31, 2008,
sales commitments denominated in a currency other than the function currency of
our transacting operation totaled $1.8 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 approximately $0.2
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 March 31, 2008, 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 six months 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 face=serif><FONT size=2>26</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>PART II. OTHER
INFORMATION</FONT></B></P>
<P align=justify><B><FONT face=serif size=2>Item 4. Submission of Matters to a
Vote of Security Holders</FONT></B></P>
<P align=justify><B><FONT face=serif size=2>Election of Directors</FONT></B>
<FONT face=serif></FONT></P>
<P align=justify><FONT face=serif size=2>At our annual shareholders&#146; meeting,
which was held on March 13, 2008, all nominees standing for election as directors
were elected to serve for one year terms or until their successors are elected
and qualified. The following chart indicates the number of votes cast for and
the number of votes withheld with respect to each nominee for
director:</FONT><FONT face=serif></FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="85%"><FONT face=serif size=2><FONT face=serif size=1>Nominee(1)</FONT></FONT>&nbsp;</TD>
    <TD align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="6%">&nbsp;<FONT face=serif size=2><FONT face=serif size=1>For</FONT></FONT>&nbsp;</TD>
    <TD align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="6%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><FONT face=serif size=1>Withheld</FONT></FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="85%" bgColor=#cceeff><FONT face=serif size=2>Jong S.
      Whang</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>6,511,039</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>127,334</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="85%"><FONT face=serif size=2>Michael
      Garnreiter</FONT>&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD align=right width="6%"><FONT face=serif size=2>6,042,535</FONT>&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD align=right width="6%"><FONT face=serif size=2>595,768</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="85%" bgColor=#cceeff><FONT face=serif size=2>Alfred
      W. Giese</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>6,534,014</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>104,289</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="85%"><FONT face=serif size=2>Brian L.
      Hoekstra</FONT>&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD align=right width="6%"><FONT face=serif size=2>6,504,059</FONT>&nbsp;</TD>
    <TD align=right width="1%"></TD>
    <TD align=right width="6%"><FONT face=serif size=2>134,244</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="85%" bgColor=#cceeff><FONT face=serif size=2>Robert
      F. King</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>6,510,970</FONT>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="6%" bgColor=#cceeff><FONT face=serif size=2>127,333</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>(1) Abstentions were not counted in the
election of the directors.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Item 6. Exhibits</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>31.1</FONT></TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><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 vAlign=bottom>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><FONT face=serif size=2></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%"><FONT face=serif size=2>31.2</FONT></TD>
    <TD vAlign=top align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top align=left width="98%"><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 vAlign=bottom>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><FONT face=serif size=2></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%"><FONT face=serif size=2>32.1</FONT></TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><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 2002*</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><FONT face=serif size=2></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%"><FONT face=serif size=2>32.2</FONT></TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><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></TR></TABLE>____________________ <BR>
<P align=justify><FONT face=serif size=2>* Filed herewith.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>27</FONT>&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>SIGNATURES</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>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 face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>AMTECH SYSTEMS, INC.</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>By<FONT size=3>&nbsp;</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="52%"><FONT size=2>/s/ Robert T. Hass</FONT>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=left width="1%"><FONT face=serif size=2>Dated:</FONT>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>May 14, 2008</FONT></TD>
    <TD align=left width="43%">&nbsp;</TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=6>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="52%"><FONT face=serif size=2>Robert T.
    Hass</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="44%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="52%"><FONT face=serif size=2>Chief Accounting
      Officer</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="44%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="52%"><FONT face=serif size=2>(Principal Accounting
      Officer)</FONT>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="44%" colSpan=2>&nbsp;</TD></TR></TABLE>
<BR>
<P align=center><FONT face=serif><FONT size=2>28</FONT>&nbsp;</FONT></P>
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<PAGE>
<P align=justify><B><FONT face=serif size=2>EXHIBIT INDEX</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left width="1%"><B><FONT face=serif size=2>Exhibit</FONT></B>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="85%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="11%"><B><FONT face=serif size=2>Page
    or</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><B><FONT face=serif size=2>Number</FONT></B>&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="85%"><B><FONT face=serif size=2>Description</FONT></B>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="11%"><B><FONT face=serif size=2>Method of
  Filing</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>31.1</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=left width="85%" bgColor=#cceeff><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>
    <TD align=center width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=center width="11%" bgColor=#cceeff><FONT face=serif size=2>*</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>31.2</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="85%" bgColor=#cceeff><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>
    <TD align=center width="1%" bgColor=#cceeff></TD>
    <TD align=center width="11%" bgColor=#cceeff><FONT face=serif size=2>*</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>32.1</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="85%" 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 2002</FONT></TD>
    <TD align=center width="1%" bgColor=#cceeff></TD>
    <TD align=center width="11%" bgColor=#cceeff><FONT face=serif size=2>*</FONT>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="85%"><FONT face=serif size=2></FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="11%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>32.2</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="85%" 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 align=center width="1%" bgColor=#cceeff></TD>
    <TD align=center width="11%" bgColor=#cceeff><FONT face=serif size=2>*</FONT>&nbsp;</TD></TR></TABLE>____________________ <BR>
<P align=justify><FONT face=serif size=2>* Filed herewith.</FONT></P>
<P align=center><FONT face=serif><FONT size=2>29</FONT>&nbsp;</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 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=justify><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><FONT face=serif size=2>By <U>/s/ Jong S. Whang</U><BR>Jong S. Whang <BR></FONT><FONT face=serif size=2>President and Chief Executive Officer
<BR>Amtech Systems, Inc. <BR></FONT><FONT face=serif size=2>Date: May 14, 2008
</FONT></P>
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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 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><FONT face=serif size=2>By <U>/s/ Bradley C. Anderson</U><BR>Bradley C. Anderson <BR>Chief Financial Officer <BR>Amtech Systems, Inc. <BR>Date: May 14,
2008 </FONT></P>
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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 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 March 31, 2008, 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>
<P align=justify><FONT face=serif size=2>By <U>/s/ Jong S. Whang</U><BR>Jong S. Whang
<BR></FONT><FONT face=serif size=2>President and Chief Executive Officer
<BR>Date: May 14, 2008 </FONT></P>
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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 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 March 31, 2008, 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><FONT face=serif size=2>By <U>/s/ Bradley C. Anderson</U><BR>Bradley C. Anderson <BR>Chief Financial Officer <BR>Date: May 14, 2008 </FONT></P>
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