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<SEC-DOCUMENT>0001206774-08-001435.txt : 20080813
<SEC-HEADER>0001206774-08-001435.hdr.sgml : 20080813
<ACCEPTANCE-DATETIME>20080813163432
ACCESSION NUMBER:		0001206774-08-001435
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20080630
FILED AS OF DATE:		20080813
DATE AS OF CHANGE:		20080813

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:		081013441

	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>

<HTML>
<HEAD>
   <TITLE>secpub_scratch.pdf -- Converted by SECPublisher 4.0, created by BCL Technologies Inc., for SEC Filing</TITLE>
</HEAD>

<BODY bgcolor="#ffffff">

<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>
<P align=justify>
<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: June 30,
      2008</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>
<P align=justify>
<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>
<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
August 8, 2008: 9,095,798</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 align=center width="99%" colSpan=2><B><FONT face=serif size=2>AMTECH
      SYSTEMS, INC. AND SUBSIDIARIES</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD align=center width="99%" colSpan=2><B><FONT face=serif size=2>TABLE OF
      CONTENTS</FONT></B> </TD></TR>
  <TR>
    <TD align=center width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center 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>&nbsp; </TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff>&nbsp; </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 1.
      Condensed Consolidated Financial Statements</STRONG></FONT>&nbsp; </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&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;
      </FONT>Condensed Consolidated Balance Sheets</FONT>&nbsp; </TD>
    <TD noWrap align=right width="2%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>June 30, 2008 (Unaudited) and September 30,
      2007</FONT>&nbsp; </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>&nbsp; </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Three and Nine Months Ended June 30, 2008 and
      2007</FONT>&nbsp; </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>&nbsp; </TD>
    <TD noWrap align=right width="2%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="97%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Nine Months Ended June 30, 2008 and
      2007</FONT>&nbsp; </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&nbsp;<BR></STRONG><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT><STRONG>of Operations</STRONG></FONT>&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;
      </FONT>Caution Regarding Forward-Looking Statements</FONT>&nbsp; </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>&nbsp; </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>&nbsp; </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>&nbsp; </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>&nbsp; </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>&nbsp; </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>&nbsp; </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></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;&nbsp; </TD>
    <TD noWrap align=right width="2%">&nbsp; </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>&nbsp; </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>&nbsp; </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>&nbsp; </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff>&nbsp; </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>&nbsp; </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>&nbsp; </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>&nbsp; </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>
<PAGE>
<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="72%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>June 30,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>September 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=center width="13%" colSpan=2><FONT face=serif size=2>(Unaudited)</FONT> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="72%" bgColor=#ffffff><B><FONT face=serif size=2>Assets</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="12%" 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=left width="12%" bgColor=#ffffff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff><B><FONT face=serif size=2>Current Assets</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Cash
      and cash equivalents</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%" bgColor=#ffffff><FONT face=serif size=2>36,788</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%" bgColor=#ffffff><FONT face=serif size=2>18,370</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Restricted cash</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="12%" bgColor=#cceeff><FONT face=serif size=2>108</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="12%" bgColor=#cceeff><FONT face=serif size=2>443</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accounts receivable</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="12%" 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=left width="12%" bgColor=#ffffff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Trade (less allowance for doubtful accounts of $192 and
      $126 at</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="12%" bgColor=#cceeff><FONT face=serif size=2>16,273</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="12%" bgColor=#cceeff><FONT face=serif size=2>9,952</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>June 30, 2008 and September 30, 2007,
      respectively)</FONT> </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="12%" 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="12%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Unbilled and other</FONT> </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="12%" bgColor=#ffffff><FONT face=serif size=2>5,624</FONT> </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="12%" bgColor=#ffffff><FONT face=serif size=2>3,127</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Inventories</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="12%" bgColor=#cceeff><FONT face=serif size=2>20,664</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="12%" bgColor=#cceeff><FONT face=serif size=2>7,289</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Deferred income taxes</FONT> </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="12%" bgColor=#ffffff><FONT face=serif size=2>3,786</FONT> </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="12%" bgColor=#ffffff><FONT face=serif size=2>1,690</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Other</FONT> </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="12%" bgColor=#cceeff><FONT face=serif size=2>2,452</FONT> </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="12%" bgColor=#cceeff><FONT face=serif size=2>1,339</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Total current assets</FONT> </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="12%" bgColor=#ffffff><FONT face=serif size=2>85,695</FONT> </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="12%" bgColor=#ffffff><FONT face=serif size=2>42,210</FONT> </TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff><B><FONT face=serif size=2>Property, Plant and Equipment - Net</FONT></B> </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="12%" bgColor=#cceeff><FONT face=serif size=2>8,828</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="12%" bgColor=#cceeff><FONT face=serif size=2>6,245</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"><B><FONT face=serif size=2>Deferred
      Income Taxes - Long Term</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>-</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>30</FONT>
</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff><B><FONT face=serif size=2>Intangible Assets - Net</FONT></B> </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="12%" bgColor=#cceeff><FONT face=serif size=2>4,549</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="12%" bgColor=#cceeff><FONT face=serif size=2>1,364</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"><B><FONT face=serif size=2>Goodwill</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>3,077</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>817</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff><B><FONT face=serif size=2>Restricted cash - non-current</FONT></B> </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="12%" bgColor=#cceeff><FONT face=serif size=2>1,383</FONT> </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="12%" bgColor=#cceeff><FONT face=serif size=2>-</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&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>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><FONT face=serif size=2>103,532</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><FONT face=serif size=2>50,666</FONT> </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="72%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>June 30,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>September 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>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="13%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%" colSpan=2><FONT face=serif size=2>(Unaudited)</FONT> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="72%"><B><FONT face=serif size=2>Liabilities and Stockholders'
      Equity</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="12%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="12%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff><B><FONT face=serif size=2>Current Liabilities</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accounts payable</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>9,976</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>4,150</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Bank
      loans and current maturities of long-term debt</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="12%" bgColor=#cceeff><FONT face=serif size=2>184</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="12%" bgColor=#cceeff><FONT face=serif size=2>224</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accrued compensation and related taxes</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>3,581</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>2,139</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accrued warranty expense</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="12%" bgColor=#cceeff><FONT face=serif size=2>1,022</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="12%" bgColor=#cceeff><FONT face=serif size=2>256</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Deferred profit</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>4,440</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>2,144</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Customer deposits</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="12%" bgColor=#cceeff><FONT face=serif size=2>5,591</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="12%" bgColor=#cceeff><FONT face=serif size=2>1,824</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Other accrued liabilities</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>998</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>562</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Income taxes payable</FONT> </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="12%" bgColor=#cceeff><FONT face=serif size=2>1,209</FONT> </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="12%" bgColor=#cceeff><FONT face=serif size=2>419</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Total current liabilities</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>27,001</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>11,718</FONT>
    </TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff><B><FONT face=serif size=2>Income Taxes Payable Long-term</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="12%" bgColor=#cceeff><FONT face=serif size=2>227</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="12%" bgColor=#cceeff><FONT face=serif size=2>-</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"><B><FONT face=serif size=2>Deferred
      Income Taxes Long-term</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>791</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>-</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff><B><FONT face=serif size=2>Long-Term Obligations</FONT></B> </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="12%" bgColor=#cceeff><FONT face=serif size=2>326</FONT> </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="12%" bgColor=#cceeff><FONT face=serif size=2>744</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Total liabilities</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>28,345</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>12,462</FONT>
    </TD></TR>
  <TR>
    <TD align=center width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff><B><FONT face=serif size=2>Commitments and Contingencies</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff><B><FONT face=serif size=2>Stockholders' Equity</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Preferred stock; 100,000,000 shares authorized; none
      issued</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>-</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>-</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Common stock; $0.01 par value; 100,000,000 shares
      authorized;</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>shares issued and outstanding: 9,085,298 and
      6,517,923</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="12%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>at June 30, 2008 and September 30, 2007</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="12%" bgColor=#cceeff><FONT face=serif size=2>91</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="12%" bgColor=#cceeff><FONT face=serif size=2>65</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Additional paid-in capital</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>69,941</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>35,610</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accumulated other comprehensive income</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="12%" bgColor=#cceeff><FONT face=serif size=2>2,344</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="12%" bgColor=#cceeff><FONT face=serif size=2>813</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Retained Earnings</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="12%"><FONT face=serif size=2>2,811</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="12%"><FONT face=serif size=2>1,716</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Total stockholders' equity</FONT> </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="12%" bgColor=#cceeff><FONT face=serif size=2>75,187</FONT> </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="12%" bgColor=#cceeff><FONT face=serif size=2>38,204</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Total Liabilities and Stockholders' Equity</FONT></B>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><FONT face=serif size=2>103,532</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><FONT face=serif size=2>50,666</FONT> </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="52%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="24%" colSpan=6><B><FONT face=serif size=2>Three Months Ended June
      30,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="23%" colSpan=5><B><FONT face=serif size=2>Nine Months Ended June 30,</FONT></B>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="11%" colSpan=2><B><FONT face=serif size=2>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="12%" colSpan=3><B><FONT face=serif size=2>2007</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="11%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp; &nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="11%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff><FONT face=serif size=2>Revenues, net of returns and allowances</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>24,147</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>12,874</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>53,479</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>32,864</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%"><FONT face=serif size=2>Cost of
      sales</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=right width="10%"><FONT face=serif size=2>17,069</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="10%"><FONT face=serif size=2>9,450</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="10%"><FONT face=serif size=2>38,714</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="10%"><FONT face=serif size=2>24,180</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Gross profit</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>7,078</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="10%" bgColor=#cceeff><FONT face=serif size=2>3,424</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>14,765</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="10%" bgColor=#cceeff><FONT face=serif size=2>8,684</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="52%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff><FONT face=serif size=2>Selling, general and administrative</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>4,847</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="10%" bgColor=#cceeff><FONT face=serif size=2>2,700</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>12,115</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="10%" bgColor=#cceeff><FONT face=serif size=2>7,336</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%"><FONT face=serif size=2>Restructuring
      Charge</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>344</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>-</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>344</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>-</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff><FONT face=serif size=2>Research and development</FONT> </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="10%" bgColor=#cceeff><FONT face=serif size=2>210</FONT> </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="10%" bgColor=#cceeff><FONT face=serif size=2>117</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="10%" bgColor=#cceeff><FONT face=serif size=2>686</FONT> </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="10%" bgColor=#cceeff><FONT face=serif size=2>376</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Operating income</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>1,677</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>607</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>1,620</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>972</FONT>
  </TD></TR>
  <TR>
    <TD noWrap align=left width="52%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff><FONT face=serif size=2>Interest and other income, 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="10%" bgColor=#cceeff><FONT face=serif size=2>248</FONT> </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="10%" bgColor=#cceeff><FONT face=serif size=2>170</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="10%" bgColor=#cceeff><FONT face=serif size=2>749</FONT> </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="10%" bgColor=#cceeff><FONT face=serif size=2>313</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="52%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff><FONT face=serif size=2>Income before income taxes</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>1,925</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="10%" bgColor=#cceeff><FONT face=serif size=2>777</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>2,369</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="10%" bgColor=#cceeff><FONT face=serif size=2>1,285</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="52%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff><FONT face=serif size=2>Income tax expense (benefit)</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="10%" bgColor=#cceeff><FONT face=serif size=2>765</FONT> </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="10%" bgColor=#cceeff><FONT face=serif size=2>(233</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=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="10%" bgColor=#cceeff><FONT face=serif size=2>940</FONT> </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="10%" bgColor=#cceeff><FONT face=serif size=2>7</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="52%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Net
      income</STRONG></FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>1,160</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>1,010</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>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>1,429</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>1,278</FONT> </TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff><B><FONT face=serif size=2>Earnings Per Share:</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD></TR>
  <TR>
    <TD noWrap align=left width="52%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff><FONT face=serif size=2>Basic earnings per share</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>0.13</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>0.16</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>0.17</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>0.25</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%"><FONT face=serif size=2>Weighted average
      shares outstanding</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>9,081</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>6,498</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>8,593</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>5,050</FONT>
  </TD></TR>
  <TR>
    <TD noWrap align=left width="52%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%" bgColor=#cceeff><FONT face=serif size=2>Diluted earnings per share</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>0.13</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>0.15</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>0.16</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>0.25</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="52%"><FONT face=serif size=2>Weighted average
      shares outstanding</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>9,197</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>6,575</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>8,732</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>5,104</FONT>
  </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><STRONG>(in
thousands)</STRONG></FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="25%" colSpan=7><B><FONT face=serif size=2>Nine Months Ended June 30,</FONT></B>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp; &nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><B><FONT face=serif size=2>Operating Activities</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net income</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>1,429</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>1,278</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Adjustments to reconcile net income to net</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" 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> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Depreciation and amortization</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>1,095</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>524</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" 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> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>(1,790</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></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>(1,029</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="75%">&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> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>355</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>228</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Other</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>240</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>160</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Changes in operating assets and liabilities:</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="10%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" 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> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>(5,222</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></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>(4,734</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="75%">&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%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>(10,776</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>(1,855</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" 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> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>577</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>258</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&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> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>(685</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>(602</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" 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> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>4,110</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>(199</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="75%">&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> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>4,872</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>1,225</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" 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> </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="10%" bgColor=#cceeff><FONT face=serif size=2>1,615</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="10%" bgColor=#cceeff><FONT face=serif size=2>659</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="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net
      cash used in operating activities</FONT> </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="10%" bgColor=#cceeff><FONT face=serif size=2>(4,180</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=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="10%" bgColor=#cceeff><FONT face=serif size=2>(4,087</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>
    <TD width="100%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><B><FONT face=serif size=2>Investing Activities</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Purchases of property, plant and equipment</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>(2,434</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>(3,505</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Decrease in restricted cash</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>362</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>-</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Payment for licensing agreement</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>(400</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>(300</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Investment in R2D</FONT> </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="10%" bgColor=#cceeff><FONT face=serif size=2>(8,071</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=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="10%" bgColor=#cceeff><FONT face=serif size=2>-</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net cash used in investing activities</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=right width="10%"><FONT face=serif size=2>(10,543</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</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="10%"><FONT face=serif size=2>(3,805</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR>
    <TD width="100%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><B><FONT face=serif size=2>Financing Activities</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Proceeds from issuance of common stock, net</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>33,934</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>19,440</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Payments on long-term obligations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>(702</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></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>(155</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="75%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Borrowings on long-term obligations</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>-</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>355</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net
      short term borrowings (payments)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" 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></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>(111</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="75%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Excess tax benefit of stock options</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=right width="10%"><FONT face=serif size=2>69</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="10%"><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="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net
      cash provided by financing activities</FONT> </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="10%" bgColor=#cceeff><FONT face=serif size=2>33,301</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="10%" bgColor=#cceeff><FONT face=serif size=2>19,529</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="75%" bgColor=#cceeff><B><FONT face=serif size=2>Effect of Exchange Rate Changes on Cash</FONT></B> </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="10%" bgColor=#cceeff><FONT face=serif size=2>(160</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=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="10%" bgColor=#cceeff><FONT face=serif size=2>(198</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>
    <TD width="100%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff><B><FONT face=serif size=2>Net Increase in Cash and Cash Equivalents</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>18,418</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>11,439</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><B><FONT face=serif size=2>Cash and Cash
      Equivalents, Beginning of Period</FONT></B> </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="10%"><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="10%"><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="75%" bgColor=#cceeff><B><FONT face=serif size=2>Cash and Cash Equivalents, End of Period</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>36,788</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>17,872</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" 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="75%" bgColor=#cceeff><B><FONT face=serif size=2>Supplemental Cash Flow Information:</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="10%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Interest paid</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>189</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>228</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Income tax payments</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>2,188</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#cceeff><FONT face=serif size=2>778</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;
</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The accompanying notes are an integral
part of these condensed consolidated financial statements.</FONT></P>
<P align=center><FONT face=serif 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 NINE MONTHS ENDED June 30, 2008 AND 2007<BR>(UNAUDITED)</FONT></B></P>
<P align=justify><B><FONT face=serif size=2>1. Basis of
Presentation</FONT></B><FONT face=serif size=2> </FONT></P>
<P align=justify><B><FONT face=serif size=2>Nature of Operations and Basis of
Presentation</FONT></B><FONT face=serif size=2> &#150; Amtech Systems, Inc. (the
&#147;Company&#148;) designs, assembles, sells and installs capital equipment and related
consumables used in the manufacture of solar cells, semiconductors and wafers of
various materials, primarily for the semiconductor industry. 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 nine month periods ended June 30, 2008, are not necessarily
indicative of the results to be expected for the full year. </FONT></P>
<P align=justify><B><FONT face=serif size=2>Use of Estimates &#150; </FONT></B><FONT face=serif size=2>The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. </FONT></P>
<P align=justify><B><FONT face=serif size=2>Revenue
Recognition</FONT></B><B><I><FONT face=serif size=2> &#150; </FONT></I></B><FONT face=serif size=2>Revenue is recognized upon shipment of the Company&#146;s proven
technology equal to the sales price less the greater of (i) the fair value of
undelivered services and (ii) the contingent portion of the sales price, which
is generally 10-20% of the total contract price. The entire cost of the
equipment relating to proven technology is recorded upon shipment. The remaining
contractual revenue, deferred costs and installation costs are recorded upon
successful installation of the product. </FONT></P>
<P align=justify><FONT face=serif size=2>For purposes of revenue recognition,
proven technology means the Company has a history of at least two successful
installations. New technology systems are those systems with respect to which
the Company cannot demonstrate that it can meet the provisions of customer
acceptance at the time of shipment</FONT><FONT face=sans-serif size=2>.
</FONT><FONT face=serif size=2>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 size=2>7</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="73%">&nbsp; </TD>
    <TD noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>June 30,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>September 30,</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="13%" colSpan=2><B><FONT face=serif size=2>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="13%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%">&nbsp; </TD>
    <TD noWrap align=center width="27%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%" 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>$</FONT> </TD>
    <TD noWrap align=right width="12%" bgColor=#cceeff><FONT face=serif size=2>6,042</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%" bgColor=#cceeff><FONT face=serif size=2>3,894</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%"><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="12%"><FONT face=serif size=2>1,602</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="12%"><FONT face=serif size=2>1,750</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%" bgColor=#cceeff><FONT face=serif size=2>Deferred profit</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%" bgColor=#cceeff><FONT face=serif size=2>4,440</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%" bgColor=#cceeff><FONT face=serif size=2>2,144</FONT>
</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 June 30, 2008, accounts
receivable from one customer accounted for 38% 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 June 30, 2008 current restricted cash is $0.1 million due to a
certificate of deposit collateralizing a letter of credit issued on our behalf
as required by a customer deposit.</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. Costs 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="73%">&nbsp; </TD>
    <TD noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>June 30,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>September 30,</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="13%" colSpan=2><B><FONT face=serif size=2>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="13%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%">&nbsp; </TD>
    <TD noWrap align=center width="27%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%" 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>$</FONT> </TD>
    <TD noWrap align=right width="12%" bgColor=#cceeff><FONT face=serif size=2>13,849</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%" bgColor=#cceeff><FONT face=serif size=2>5,291</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%"><FONT face=serif size=2>Work-in-process</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>5,492</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>1,456</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%" 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="12%" bgColor=#cceeff><FONT face=serif size=2>1,323</FONT> </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="12%" bgColor=#cceeff><FONT face=serif size=2>542</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="73%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><FONT face=serif size=2>20,664</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><FONT face=serif size=2>7,289</FONT>
</TD></TR></TABLE></DIV><BR>
<P align=justify><B><FONT face=serif size=2>Property, Plant and
Equipment</FONT></B><FONT face=serif size=2> &#150; Property, plant and equipment are
recorded at cost. Maintenance and repairs are charged to expense as incurred.
The cost of property retired or sold and the related accumulated depreciation
are removed from the applicable accounts when disposition occurs and any gain or
loss is recognized. Depreciation is computed using the straight-line method.
Useful lives for equipment, machinery and leasehold improvements range from
three to seven years; for furniture and fixtures from five to 10 years; and for
buildings 20 years.</FONT></P>
<P align=center><FONT face=serif size=2>8</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The following is a summary of property,
plant and equipment:</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>June 30,</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>September 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"></TD>
    <TD noWrap align=left width="1%">&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="86%" bgColor=#cceeff><FONT face=serif size=2>Land, building and leasehold improvements</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>7,279</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="5%" 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="86%" bgColor=#ffffff><FONT face=serif size=2>Equipment and machinery</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>3,770</FONT> </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="5%" bgColor=#ffffff><FONT face=serif size=2>2,874</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#cceeff><FONT face=serif size=2>Furniture and fixtures</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>3,312</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>&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>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="86%" 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="3%" bgColor=#ffffff><FONT face=serif size=2>14,361</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="5%" bgColor=#ffffff><FONT face=serif size=2>10,549</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#cceeff><FONT face=serif size=2>Accumulated depreciation and amortization</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (5,533</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=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (4,304</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>8,828</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#ffffff><FONT face=serif size=2>6,245</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff></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, customer lists,
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 style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="6%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>June 30,</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>September 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%"><B><FONT face=serif size=2>Useful Life</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="6%"></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="13%" colSpan=7><STRONG><FONT size=1>(dollars in thousands)</FONT></STRONG> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff><FONT face=serif size=2>Trademarks</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="6%" bgColor=#cceeff><FONT face=serif size=2>Indefinite</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>592</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>592</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"><FONT face=serif size=2>Non-compete
      agreements</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="6%"><FONT face=serif size=2>8-10
      years</FONT> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>526</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>350</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff><FONT face=serif size=2>Customer lists</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="6%" bgColor=#cceeff><FONT face=serif size=2>10-15 years</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>1,492</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" 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>276</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"><FONT face=serif size=2>Technology</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=center width="6%"><FONT face=serif size=2>4-10
      years</FONT> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      1,674</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>102</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff><FONT face=serif size=2>Licenses</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="6%" bgColor=#cceeff><FONT face=serif size=2>10 years</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>700</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" 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>300</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"><FONT face=serif size=2>Backlog and
      other</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="6%"><FONT face=serif size=2>1-2
      years</FONT> </TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>226</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>-</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="6%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>5,210</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      1,620</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"><FONT face=serif size=2>Accumulated
      amortization</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="6%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>(661</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><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> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="6%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>4,549</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" 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=center><FONT face=serif size=2>9 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The following is a summary of activity
in accrued warranty expense: </FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="9%" colSpan=7><B><FONT face=serif size=2>Nine Months Ended June 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=center width="9%" colSpan=7><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>Beginning balance</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>256</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      289</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT face=serif size=2>Warranty
      expenditures</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(441</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(61</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT face=serif size=2>Provision</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="2%" bgColor=#cceeff><FONT face=serif size=2>960</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>55</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT face=serif size=2>Acquired through
      business acquisitions</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="2%"><FONT face=serif size=2>247</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face=serif size=2>-</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT face=serif size=2>Ending balance</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      1,022</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>283</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>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 style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="3%"><B><FONT face=serif size=1>Shares</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"><B><FONT face=serif size=1>Shares</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%"><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="81%"><B><FONT face=serif size=1>Name of Plan</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%"><B><FONT face=serif size=1>Authorized</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%"><B><FONT face=serif size=1>Available</FONT></B> </TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=1>Options Outstanding</FONT></B> </TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=1>Expiration</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#cceeff><FONT face=serif size=1>2007 Employee Stock Incentive Plan</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>500,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>382,187</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>87,313</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>Apr. 2017</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><FONT face=serif size=1>1998 Employee
      Stock Option Plan</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1>500,000</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=1>-</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=1>346,740</FONT>
    </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=1>Jan. 2008</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#cceeff><FONT face=serif size=1>Non-Employee Directors Stock Option Plan</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>200,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>58,600</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>64,000</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>Jul. 2015</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=1>440,787</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=1>498,053</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="4%">&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 style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="80%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=7><B><FONT face=serif size=2>Three Months Ended June
      30,</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=7><B><FONT face=serif size=2>Nine Months Ended June 30,</FONT></B>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="19%" colSpan=15><FONT face=serif size=2>(dollars in thousands, except per share amounts)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#cceeff><FONT face=serif size=2>Effect on income before income taxes (1)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(125</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(118</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><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(355</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(228</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="80%"><FONT face=serif size=2>Effect on net
      income</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(98</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(99</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(291</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>(195</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#cceeff><FONT face=serif size=2>Effect on basic income per share</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(0.01</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" 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> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(0.03</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>(0.05</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="80%"><FONT face=serif size=2>Effect on
      diluted income per share</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (0.01</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (0.02</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (0.03</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (0.04</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=1>(1)&nbsp;&nbsp;&nbsp;&nbsp; Stock
option expense is included in selling, general and administrative
expenses.</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 2007 Employee Stock Incentive
Plan, nonqualified stock options and restricted stock may also be granted.
Options issued by the Company vest over 1 to 5 years.</FONT></P>
<P align=center><FONT face=serif size=2>10 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Stock option transactions and the
options outstanding are summarized as follows: </FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="22%" colSpan=13><B><FONT face=serif size=2>Nine Months Ended June
      30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="10%" colSpan=6><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="11%" colSpan=6><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Weighted</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Weighted</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"></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%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Average</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Average</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Exercise</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Exercise</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>Options</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Price</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>Options</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Price</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#cceeff><FONT face=serif size=2>Outstanding at beginning of period</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="3%" bgColor=#cceeff><FONT face=serif size=2>450,303</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>6.44</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>308,384</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>5.95</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Granted</FONT>
    </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=2>120,000</FONT>
    </TD>
    <TD noWrap align=left width="1%"></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=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>13.65</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>167,250</FONT>
    </TD>
    <TD noWrap align=left width="1%"></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>7.09</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#cceeff><FONT face=serif size=2>Exercised</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="3%" bgColor=#cceeff><FONT face=serif size=2>(67,375</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></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>5.34</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>(8,050</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></TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>3.63</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Forfeited</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>(4,875</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>6.35</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>(1,950</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #ffffff 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #ffffff 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>7.01</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="77%" bgColor=#cceeff><FONT face=serif size=2>Outstanding at end of
      period</FONT> </TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>498,053</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>8.33</FONT> </TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>465,634</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>6.40</FONT> </TD></TR>
  <TR>
    <TD width="77%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="3%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="77%" bgColor=#cceeff><FONT face=serif size=2>Exercisable at end of
      period</FONT> </TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>263,171</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>6.51</FONT> </TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>258,418</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>6.04</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Weighted average
      fair value of options</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#ffffff><FONT face=serif size=2>granted during the period</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>8.01</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>4.59</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></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 style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="17%" colSpan=3><B><FONT face=serif size=2>Nine Months Ended June 30,</FONT></B>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%"><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%"><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#cceeff><FONT face=serif size=2>Risk free interest rate</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="8%" bgColor=#cceeff><FONT face=serif size=2>3.27%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=center width="8%" bgColor=#cceeff><FONT face=serif size=2>4.40%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face=serif size=2>Expected
      life</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%"><FONT face=serif size=2>6 years</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=center width="8%"><FONT face=serif size=2>6 years</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#cceeff><FONT face=serif size=2>Dividend rate</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="8%" bgColor=#cceeff><FONT face=serif size=2>0%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=center width="8%" bgColor=#cceeff><FONT face=serif size=2>0%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face=serif size=2>Volatility</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%"><FONT face=serif size=2>62%</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=center width="8%"><FONT face=serif size=2>63%</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#cceeff><FONT face=serif size=2>Forfeiture rate</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=center width="8%" bgColor=#cceeff><FONT face=serif size=2>9%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=center width="8%" bgColor=#cceeff><FONT face=serif size=2>5%</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. The change
in the forfeiture rate is 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 15,000 and 120,000 options
granted during the three and nine months ended June 30, 2008, respectively; and
11,000 and 167,250 options granted for the comparable periods of fiscal 2007.
Total fair value of options granted was approximately $98,000 and $961,000 for
the three and nine months ended June 30 2008, respectively; and $53,000 and
$767,000 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 nine months ended June 30, 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 and 1,000 shares were forfeited in the nine months ended June 30,
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 April 2008, the FASB issued Staff
Position (&#147;FSP&#148;) No. 142-3 &#147;Determination of the Useful Life of Intangible
Assets (&#147;FSP No. 142-3&#148;). FSP No. 142-3 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under SFAS No. 142 &#147;Goodwill and
Other Intangible Assets&#148;. FSP No. 142-3 is effective for the Company&#146;s quarter
beginning October 1, 2009. The Company is currently evaluating the impact that
FSP No. 142-3 will have on its consolidated financial statements. </FONT></P>
<P align=center><FONT face=serif size=2>11 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>In September 2006, the FASB issued SFAS
No. 157, &#147;Fair Value Measurements&#148;. SFAS No. 157 defines fair value, establishes
a formal framework for measuring fair value and expands disclosures about fair
value measurements. The Company has not yet determined the impact, if any, that
SFAS No. 157 will have on its consolidated financial statements. SFAS No. 157 is
effective for the Company&#146;s fiscal year beginning October 1, 2009.</FONT></P>
<P align=justify><FONT face=serif size=2>In December 2007, the FASB issued SFAS
No. 141(R), &#147;Business Combinations&#148;. This Statement replaces SFAS No. 141,
Business Combinations. This Statement retains the fundamental requirements in
Statement 141 that the acquisition method of accounting (which Statement 141
called the purchase method) be used for all business combinations and for an
acquirer to be identified for each business combination. This Statement also
establishes principles and requirements for how the acquirer: a) recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree; b)
recognizes and measures the goodwill acquired in the business combination or a
gain from a bargain purchase and c) determines what information to disclose to
enable users of the financial statements to evaluate the nature and financial
effects of the business combination. SFAS No. 141(R) will apply prospectively to
business combinations for which the acquisition date is on or after Company&#146;s
fiscal year beginning October 1, 2009. While the Company has not yet evaluated
this statement for the impact, if any, that SFAS No. 141(R) will have on its
consolidated financial statements, the Company will be required to expense costs
related to any acquisitions after September 30, 2009.</FONT></P>
<P align=justify><B><FONT face=serif size=2>2. Income Taxes </FONT></B></P>
<P align=justify><FONT face=serif size=2>The quarterly income tax provision is
calculated using an estimated annual effective tax rate, based upon expected
annual income, permanent items, statutory tax rates and planned tax strategies
in the various jurisdictions in which the Company operates.</FONT></P>
<P align=justify><FONT face=serif size=2>Deferred tax assets reflect the tax
effects of temporary differences between the carrying value of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes. Statement of Financial Accounting Standards (&#147;SFAS&#148;) No. 109
&#147;Accounting for Income Taxes&#148; and Interpretation Number 48 (&#147;FIN 48&#148;) requires
recognition of a valuation allowance if, based on the weight of available
evidence, it is more likely than not that the company will have sufficient
future taxable income to realize its deferred tax asset. Each quarter the
valuation allowance is re-evaluated. The Company intends to maintain a valuation
allowance until evidence supports the conclusion that it is more likely than not
that the company will have sufficient future taxable income to realize its
deferred tax asset. The amount of the valuation allowance at June 30, 2008 and
September 30, 2007 was $350,000 and $450,000, respectively.</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. At June 30, 2008, and October 1, 2007, the total amount of
unrecognized tax benefits was $446,000 and $409,000, respectively, and 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 June 30, 2008, $133,000 was accrued for the payment of interest and
penalties relative to these uncertain positions.</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 US, The Netherlands, Germany, 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 <FONT face=serif size=2>increased to include the
number of additional common shares that would have been outstanding if
potentially dilutive common shares had been
issued.&nbsp;</FONT>&nbsp;</FONT></P>
<P align=center><FONT face=serif size=2>12 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<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 nine months ended June
30, 2008, options for 130,000 shares, respectively, are excluded from the
diluted EPS calculations based on the exercise price and the treasury stock
method. For the three and nine months ended June 30, 2007, options for 190,750
and 196,272 shares, respectively, are excluded from the diluted EPS calculations
because they are antidilutive. </FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=5>&nbsp; &nbsp; &nbsp;
      &nbsp;<B><FONT face=serif size=1>Three Months Ended</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=5><B><FONT face=serif size=1>Nine Months Ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=5><B><FONT face=serif size=1>June 30,</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=5><B><FONT face=serif size=1>June 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=2><B><FONT face=serif size=1>2008</FONT></B> </TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=2><B><FONT face=serif size=1>2008</FONT></B> </TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=5><B><FONT face=serif size=1>(in thousands, except per share amounts)</FONT></B> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="7%" 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="84%" bgColor=#cceeff><B><U><FONT face=serif size=1>Basic Earnings Per Share Computation</FONT></U></B> </TD>
    <TD noWrap align=left width="1%" 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="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face=serif size=1>Net income
      available to</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%">&nbsp; &nbsp;&nbsp; <FONT face=serif size=1>common stockholders</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>1,160</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>1,010</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>1,429</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>1,278</FONT> </TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#cceeff><FONT face=serif size=1>Weighted Average Shares Outstanding:</FONT> </TD>
    <TD noWrap align=left width="1%" 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="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="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="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=1>Common stock</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>9,081</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>6,498</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>8,593</FONT> </TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>5,050</FONT> </TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#cceeff><FONT face=serif size=1>Basic earnings per share</FONT> </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=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>0.13</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>0.16</FONT> </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=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>0.17</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>0.25</FONT> </TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#cceeff><B><U><FONT face=serif size=1>Diluted Earnings Per Share Computation</FONT></U></B> </TD>
    <TD noWrap align=left width="1%" 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>&nbsp;</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="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="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face=serif size=1>Net
      income</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=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>1,160</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>1,010</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>1,429</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>1,278</FONT> </TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#cceeff><FONT face=serif size=1>Weighted Average Shares Outstanding:</FONT> </TD>
    <TD noWrap align=left width="1%" 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="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="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="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="2%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%">&nbsp; &nbsp;&nbsp; <FONT face=serif size=1>Common stock</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      9,081</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      6,498</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      8,593</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      5,050</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#cceeff>&nbsp; &nbsp;&nbsp;
      <FONT face=serif size=1>Common stock equivalents (1)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>116</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>77</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>139</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>54</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%">&nbsp; &nbsp;&nbsp; <FONT face=serif size=1>Diluted shares</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>9,197</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>6,575</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>8,732</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%"><FONT face=serif size=1>5,104</FONT> </TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#cceeff><FONT face=serif size=1>Diluted earnings per share</FONT> </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=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>0.13</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>0.15</FONT> </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=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>0.16</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>0.25</FONT>
</TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD noWrap><FONT face=serif size=1>(1)</FONT></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD width="100%"><FONT face=serif size=1>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 style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=5><B><FONT face=serif size=2>Three Months Ended</FONT></B> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=5><B><FONT face=serif size=2>Nine Months Ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=5><B><FONT face=serif size=2>June 30,</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=5><B><FONT face=serif size=2>June 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#cceeff><FONT face=serif size=2>Net income, as reported</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,160</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,010</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif>1,429</FONT></FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,278</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face=serif size=2>Foreign currency
      translation adjustment</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face=serif size=2>32</FONT> </TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face=serif size=2>26</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face=serif size=2>1,531</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face=serif size=2>125</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#cceeff><FONT face=serif size=2>Comprehensive income</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>1,192</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>1,036</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>2,960</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#cceeff><FONT face=serif size=2>1,403</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 face=serif 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><FONT face=serif> </FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="9%" colSpan=5><B><FONT face=serif size=2>Three Months Ended</FONT></B> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="10%" colSpan=6><B><FONT face=serif size=2>Nine Months Ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=5><B><FONT face=serif size=2>June 30,</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="10%" colSpan=6><B><FONT face=serif size=2>June 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"><FONT face=serif size=2>Net
      Revenues:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="9%" colSpan=5><B><FONT face=serif size=1>(dollars in thousands)</FONT></B> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="10%" colSpan=6><B><FONT face=serif size=1>(dollars in thousands)</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Solar and semiconductor equipment</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>22,138</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>10,886</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>47,743</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>26,641</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Polishing supplies</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>2,009</FONT> </TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>1,988</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>5,736</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>6,223</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      24,147</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      12,874</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      53,479</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      32,864</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR>
    <TD width="99%" colSpan=14>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff><FONT face=serif size=2>Operating income (loss):</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></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></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></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></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></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Solar and semiconductor equipment</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>1,421</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>306</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>911</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>(75</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Polishing supplies</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>256</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>301</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>709</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>1,047</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"></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=2>1,677</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>607</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>1,620</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>972</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="99%" colSpan=14>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff><FONT face=serif size=2>Interest and other income (expense), net</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="3%" bgColor=#cceeff><FONT face=serif size=2>248</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>170</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>749</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>313</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR>
    <TD width="78%"></TD>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="3%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Income before income taxes</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>1,925</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>777</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>2,369</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>1,285</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR>
    <TD width="99%" colSpan=14>&nbsp;&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=14>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>June 30,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>September 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"><FONT face=serif size=2>Identifiable
      Assets:</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="10%" colSpan=6><B><FONT face=serif size=1>(dollars in thousands)</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Solar and semiconductor equipment</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></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></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></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>98,604</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff colSpan=2><FONT face=serif size=2>46,283</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Polishing supplies</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>4,928</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=serif size=2>4,383</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></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></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></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      103,532</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#cceeff colSpan=2><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      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 June 30,
2008, two customers represented 34% and 11% of net revenues, individually.
During the nine months ended June 30, 2008, two customers represented 25% and
10% of net revenues, individually. During the three and nine months ended June
30, 2007, two customers represented 14% and 11%, individually, and 12% and 10%,
individually, of net revenue, 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 style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="80%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="11%" colSpan=5><B><FONT face=serif size=2>Nine Months Ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="11%" colSpan=5><B><FONT face=serif size=2>June 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><FONT face=serif size=2>North America (1)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>17</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=right width="4%" bgColor=#cceeff><FONT face=serif size=2>29</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="88%"><FONT face=serif size=2>Asia (2)
      (3)</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>63</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>48</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#cceeff><FONT face=serif size=2>Europe</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#cceeff><FONT face=serif size=2>20</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=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>23</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="88%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 100</FONT>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 100</FONT>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT> </TD></TR></TABLE><BR>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=1>(1)</FONT> </TD>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><FONT face=serif size=1>Includes 16% and 29% to the
      United States in 2008 and 2007, respectively</FONT> </TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=1>(2)</FONT> </TD>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><FONT face=serif size=1>Includes 39% and 17% to China in
      2008 and 2007, respectively.</FONT> </TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=1>(3)</FONT> </TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD width="100%"><FONT face=serif size=1>Includes 15% 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 June 30, 2008, we had purchase obligations in the
amount of $10.2 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.&nbsp;Issuance of Common
Stock&nbsp;</FONT></B></P>
<P align=justify><FONT face=serif size=2>In November 2007, the Company filed
registration statements on Form S-1 with the Securities and Exchange Commission
for the sale of 2,500,000 shares of its common stock in an underwritten public
offering at a price to the public of $14.41 per share. Net proceeds to the
Company were approximately $33.6 million, net of approximately $0.3 million of
offering expenses and $2.2 million of underwriting commissions. We intend to use
the net proceeds from this offering for working capital and other general
corporate purposes. Pending application of these proceeds, we intend to invest
the net proceeds in short-term, interest bearing investment grade securities.
The Company received $0.3 million from the exercise of stock options during the
nine months ended June 30, 2008. </FONT></P>
<P align=justify><B><FONT face=serif size=2>9. Acquisition </FONT></B></P>
<P align=justify><FONT face=serif size=2>Effective October 1, 2007, the Company
acquired, through its wholly-owned subsidiary, Tempress Holding B.V., 100% of
the voting equity, in R2D Ingenierie, or R2D, a solar cell and semiconductor
automation equipment manufacturing company, located near Montpellier, France.
R2D provides solutions to the solar and semiconductor industries. The purpose of
the acquisition was to expand the Company&#146;s automation products which are used
in the semiconductor manufacturing and solar diffusion processes. The
acquisition of the technology and business of R2D enhances the growth strategy
by allowing the Company to increase sales by offering to the solar industry an
integrated system under the Tempress brand.</FONT></P>
<P align=justify><FONT face=serif size=2>The aggregate purchase price is based
on the cash consideration paid at closing of $5.5 million plus acquisition costs
of $1.0 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. As of June 30,
2008, approximately $0.3 million of the $1.6 million was paid to sellers in
recognition of fulfilling certain requirements. The amount of contingent
payments earned is allocated to goodwill. The assets of R2D principally consist
of intellectual property and technology, customer lists, customer contracts,
trademarks, non-compete agreements, inventories and other tangible property used
in connection with the acquired business. Liabilities assumed include current
liabilities, loans, obligations under certain contracts, leases, purchase orders
and warranty claims for certain products and services under warranty as of the
date of the acquisition.</FONT></P>
<P align=justify><FONT face=serif size=2>The valuation of acquired assets is
preliminary and dependent upon final valuation of assets acquired, including
valuation of intangible assets which will be determined with the assistance of
an independent third-party consultant. The fair value of intangible assets will
be determined by a valuation approach that estimates the future economic benefit
stream of the asset. This benefit stream will be discounted to present value
with an appropriate risk-adjusted discount rate. </FONT></P>
<P align=justify><FONT face=serif size=2>The allocation of the purchase price to
the fair value of the assets acquired and liabilities assumed at the date of
acquisition is as follows (dollars in thousands): </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="91%">&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%"><B><FONT face=serif size=2>Useful Life</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#cceeff><FONT face=serif size=2>Assets Acquired:</FONT> </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></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%">&nbsp; &nbsp;&nbsp; <FONT face=serif size=2>Current Assets</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;&nbsp; &nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>4,907</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Property, plant &amp; equipment</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>234</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Intangible assets:</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Non-compete agreements</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>176</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>8 years</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Customer lists</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>1,216</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>10 years</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Technology</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>1,572</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>10 years</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Backlog and other</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>226</FONT> </TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>1-10
      years</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Goodwill</FONT> </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="3%" bgColor=#cceeff><FONT face=serif size=2>2,260</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><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>&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="3%"><FONT face=serif size=2>10,591</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp; </TD></TR>
  <TR>
    <TD align=left width="99%" colSpan=5>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#cceeff><FONT face=serif size=2>Liabilities Assumed:</FONT> </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></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Current Liabilities</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>2,647</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Long-term liabilities</FONT> </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="3%" bgColor=#cceeff><FONT face=serif size=2>1,257</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Total liabilities assumed</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=right width="3%"><FONT face=serif size=2>3,904</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #cceeff 2pt solid" noWrap align=left width="91%" 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>Net assets acquired</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>6,687</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp;
</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 nine months ended June 30, 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="89%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Three Months</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Nine Months</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD align=center width="4%" colSpan=2><B><FONT face=serif size=2>Ended
      June 30,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Ended June 30,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="9%" colSpan=5><FONT face=serif size=2>(dollars in thousands, except per share amounts)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT face=serif size=2>Revenues</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>14,087</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>36,147</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT face=serif size=2>Net
      income</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>1,147</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>1,649</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT face=serif size=2>Net income per share:</FONT> </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="3%" bgColor=#cceeff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#cceeff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp; &nbsp;&nbsp; <FONT face=serif size=2>Basic</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0.18</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0.33</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#cceeff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Diluted</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>0.17</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff></TD>
    <TD noWrap align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#cceeff><FONT face=serif size=2>0.32</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 nine
months ended June 30, 2007 have been combined with the revenues and earnings of
Amtech for the three and nine months ended June 30, 2007. </FONT></P>
<P align=justify><B><FONT face=serif size=2>10. Restructuring
Charge</FONT></B><FONT face=serif size=2> </FONT></P>
<P align=justify><FONT face=serif size=2>In the third quarter of fiscal 2008,
Bruce Technologies operations were reorganized to better position the company
for profitability in light of lower plant utilization resulting from a slowdown
in the semiconductor industry. As a result of this reorganization, the company
notified certain personnel of their termination date and severance and recorded
a restructuring charge of $0.3 million, of which $0.1 million had been paid as
of June 30, 2008. These charges are presented as a separate line item on the
Condensed Consolidated Statements of Operations.</FONT></P>
<P align=center><FONT face=serif size=2>16 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><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 size=2> </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 size=2></FONT></P>
<UL style="FONT-SIZE: 10pt; TEXT-ALIGN: justify">
  <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></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></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></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 style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=center width="72%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="13%" colSpan=5><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="13%" colSpan=5><B><FONT face=serif size=1>Nine Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="72%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; June
      30,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; June
      30,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; June
      30,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; June
      30,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="72%"></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=2><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="6%" colSpan=2><B><FONT face=serif size=1>2007</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=2><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="6%" colSpan=2><B><FONT face=serif size=1>2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%" bgColor=#cceeff><FONT face=serif size=1>Net
      revenue</FONT>&nbsp; </TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>100</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>100</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>100</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>100</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%"><FONT face=serif size=1>Cost of goods
      sold</FONT></TD>
    <TD align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>71</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>73</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>72</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>74</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%" bgColor=#cceeff><FONT face=serif size=1>Gross
      margin</FONT>&nbsp; </TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>29</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>27</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>28</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>26</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%"><FONT face=serif size=1>Operating
      expenses:</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="5%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="5%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="5%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="5%"></TD>
    <TD align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%" bgColor=#cceeff>&nbsp; &nbsp; &nbsp;<FONT face=serif size=1>Selling, general and administrative</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>20</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>21</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>23</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>22</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=1>Restructuring Charge</FONT></TD>
    <TD align=right width="1%"></TD>
    <TD align=right width="5%"><FONT face=serif size=1>1</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="5%"><FONT face=serif size=1>0</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="5%"><FONT face=serif size=1>1</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="5%"><FONT face=serif size=1>0</FONT></TD>
    <TD align=left width="1%"><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=1>Research and Development</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%"><FONT face=serif size=1>Total operating
      expenses</FONT></TD>
    <TD align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>22</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>22</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>25</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>23</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%" bgColor=#cceeff><FONT face=serif size=1>Income
      from operations</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>7</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>5</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>3</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>3</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%"><FONT face=serif size=1>Interest and other
      income (expense), net</FONT></TD>
    <TD align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>2</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>1</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%" bgColor=#cceeff><FONT face=serif size=1>Income
      before income taxes</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>8</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>6</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>5</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>4</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%"><FONT face=serif size=1>Income taxes</FONT></TD>
    <TD align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>3</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>-2</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>3</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="5%"><FONT face=serif size=1>0</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%"><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="72%" bgColor=#cceeff><FONT face=serif size=1>Net
      Income</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>5</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>8</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>2</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="5%" bgColor=#cceeff><FONT face=serif size=1>4</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</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 face=serif size=2>18</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="60%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="19%" colSpan=11><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="19%" colSpan=12><B><FONT face=serif size=1>Nine Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="60%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><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%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="60%"><B><FONT face=serif size=1>Net Revenue</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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;
      2008&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;
      2007&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;
      (Dec)&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="4%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp; &nbsp;% &nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;
      2008&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;
      2007&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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;
      (Dec)&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="3%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp; %&nbsp;&nbsp;&nbsp;
      </FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="60%"></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>
    <TD noWrap align=center width="1%"></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="2%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="60%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3><FONT size=1>Solar and
      Semiconductor</FONT><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Equipment
      Segment</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>22,138</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>10,886</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>11,252</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>103</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>47,743</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>26,641</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>21,102</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>79</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="60%" bgColor=#ffffff><FONT face=serif size=1>Polishing Supplies Segment</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>2,009</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>1,988</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>21</FONT></TD>
    <TD align=right width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>1</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>5,736</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>6,223</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>(487</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>)</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="2%" bgColor=#ffffff><FONT face=serif size=1>(8</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="60%" bgColor=#cceeff>&nbsp;&nbsp; &nbsp;&nbsp;<FONT face=serif size=1>Total</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>24,147</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>12,874</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>11,273</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>88</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>53,479</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>32,864</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>20,615</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>63</FONT></TD>
    <TD 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 June
30, 2008 increased $11.3 million, or 88%, compared to the quarter ended June 30,
2007. Revenue from the solar and semiconductor equipment segment increased $11.3
million, or 103%, 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. </FONT><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>Net revenue for the nine months ended
June 30, 2008 increased by $20.6 million, or 63%, compared to the nine months
ended June 30, 2007. Revenue from the solar and semiconductor equipment segment
increased $21.1 million, or 79%, due to higher solar product revenues, partially
offset by decreased revenues from the semiconductor industry. The decrease of
$0.5 million, or 8%, in net revenue from the Polishing Supplies Segment is due
primarily to lower shipments of insert carriers 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>The following table reflects new orders
<B><SUP>(1)</SUP></B>, shipments and net revenues for the third 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 style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=right width="70%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=8><B><FONT face=serif size=1>Third Quarter</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=8><B><FONT face=serif size=1>Year-to-Date</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="70%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Solar and</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Solar and</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="70%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Semi-</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Polishing</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Semi-</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Polishing</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="70%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>conductor</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Supplies</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Total</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>conductor</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Supplies</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Total</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="70%"></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Equipment</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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;
      Segment&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp; Company&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="4%" colSpan=2><B><FONT face=serif size=1>Equipment</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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;
      Segment&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp; Company&nbsp;
</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="70%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=8><FONT face=serif size=1>(dollars in thousands)</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=8><FONT face=serif size=1>(dollars in thousands)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%" bgColor=#cceeff><STRONG><FONT size=1>2008:</FONT></STRONG></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>New orders
      <SUP>(1)</SUP></FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%"><FONT face=serif size=1>17,215</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%"><FONT face=serif size=1>2,920</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%"><FONT face=serif size=1>20,135</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%"><FONT face=serif size=1>81,057</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%"><FONT face=serif size=1>7,923</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%"><FONT face=serif size=1>88,980</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Shipments</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>24,449</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>1,997</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>26,446</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>48,927</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>5,728</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>54,655</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Net revenues</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>22,138</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>2,009</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>24,147</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>47,743</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>5,736</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>53,479</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>R2D purchased</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>-</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>-</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>-</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>1,779</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>-</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>1,779</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Backlog 6/30/2008</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>57,076</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>3,070</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>60,146</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>57,076</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>3,070</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>60,146</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><STRONG>Book-to-bill
      ratio</STRONG></FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>0.7:1</FONT></B></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>1.5:1</FONT></B></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>0.8:1</FONT></B></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>1.7:1</FONT></B></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>1.4:1</FONT></B></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>1.6:1</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%"><STRONG><FONT size=1>2007</FONT></STRONG></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>New orders
      <SUP>(1)</SUP></FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>15,020</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>2,314</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>17,334</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>33,477</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>6,440</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>39,917</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Shipments</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>11,638</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>1,988</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>13,626</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>27,510</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>6,223</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>33,733</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Net revenues</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>10,886</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>1,988</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>12,874</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>26,641</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>6,223</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>32,864</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Backlog 6/30/2007
      <SUP>(2)</SUP></FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>19,450</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>1,203</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>20,653</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>19,450</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>1,203</FONT></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="3%"><FONT face=serif size=1>20,653</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="70%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><STRONG>Book-to-bill
      ratio</STRONG></FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>1.3:1</FONT></B></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>1.2:1</FONT></B></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>1.3:1</FONT></B></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>1.2:1</FONT></B></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>1.0:1</FONT></B></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><B><FONT face=serif size=1>1.2:1</FONT></B></TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=1>(1)</FONT></TD>
    <TD noWrap></TD>
    <TD align=left width="100%">
      <P align=justify><FONT face=serif size=1>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></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD noWrap><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=1>(2)</FONT></TD>
    <TD noWrap></TD>
    <TD align=left width="100%">
      <P align=justify><FONT face=serif size=1>The solar and semiconductor
      equipment segment backlog as of June 30, 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></P></TD></TR></TABLE>
<P align=justify><B><I><FONT face=serif size=2>Backlog </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Our order backlog as of June 30, 2008
and 2007 was $60.1 million and $20.7 million, respectively, a 191% increase. Our
backlog as of June 30, 2008 includes approximately $44.2 million of orders from
our solar industry customers compared to $11.5 million of orders from our solar
industry customers at June 30, 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=center><FONT face=serif size=2>19</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Gross Profit and Gross
Margin</FONT></I></B><FONT face=serif size=2> </FONT></P>
<P align=justify><FONT face=serif size=2>Cost of goods sold consists of
purchased material, labor and overhead to manufacture equipment and spare parts,
the cost of customer support and field service 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 style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="22%" colSpan=14><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="21%" colSpan=14><B><FONT face=serif size=1>Nine Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><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%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="55%"><B><FONT face=serif size=1>Gross profit</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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (Dec)&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="4%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      %&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (Dec)&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="3%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      %&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="17%" colSpan=11><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%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="17%" colSpan=11><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="55%" bgColor=#cceeff><FONT size=1>Solar and
      Semiconductor</FONT><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=1>Equipment Segment</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>6,457</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>2,758</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>3,699</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>134</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>12,971</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>6,533</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>6,438</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>99</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="55%" bgColor=#ffffff><FONT face=serif size=1>Polishing Supplies Segment</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>621</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>666</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>(45</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>)</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>(7</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%)</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>1,794</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>2,151</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>(357</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>)</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="2%" bgColor=#ffffff><FONT face=serif size=1>(17</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="55%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=1>Total</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>7,078</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>3,424</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>3,654</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>107</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>14,765</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>8,684</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>6,081</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>70</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="55%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=1>Gross margin</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>29</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>27</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="3%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="3%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>28</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>26</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="3%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="2%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Gross profit for the quarter ended June
30, 2008 increased $3.7 million or 107% from $3.4 million in the third quarter
of fiscal 2007 to $7.1 million in the third quarter of fiscal 2008. Gross margin
in the third quarter was 29% compared to 27% in the third quarter of fiscal
2007. Gross margin in the solar and semiconductor equipment segment improved to
29% in the third quarter compared to 25% in the same quarter of the prior year,
due primarily to higher shipment volumes and the related efficiencies and
economies of scale, offset by higher warranty costs and higher deferred profit.
Gross profit and margins in the polishing supplies segment decreased due to
increased competition in the insert carrier market. We deferred $1.8 million
profit for the quarter ended June 30, 2008, net of acceptances, compared to a
net deferral of $0.7 million for the quarter ended June 30, 2007. </FONT></P>
<P align=justify><FONT face=serif size=2>Gross profit for the nine months ended
June 30, 2008 increased $6.1 million or 70% from $8.7 million in the first nine
months of fiscal 2007 to $14.8 million in the first nine months of fiscal 2008.
Gross margin increased from 26% in the first nine months of fiscal 2007 to 28%
in the first nine months of fiscal 2008. This improvement resulted mainly from
the efficiencies realized in fiscal 2008, offset by higher warranty costs and
higher deferred profit as discussed above. We deferred $1.6 million profit for
the nine months ended June 30, 2008, net of acceptances, compared to a net
deferral of $0.7 million for the nine months ended June 30, 2007. </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 style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="21%" colSpan=13><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="21%" colSpan=14><B><FONT face=serif size=1>Nine Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"><STRONG><FONT size=1>Selling,
      general</FONT></STRONG></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><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%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="55%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>and
      administrative</STRONG></FONT></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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (Dec)&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="4%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      %&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (Dec)&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="3%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      %&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></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>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="17%" colSpan=11><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="55%" bgColor=#cceeff><FONT face=serif size=1>Solar
      and Semiconductor</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="55%" bgColor=#cceeff>&nbsp; &nbsp; &nbsp;<FONT face=serif size=1>Equipment Segment</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>4,482</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>2,335</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>2,147</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>92</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>11,030</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>6,231</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>4,799</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>77</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="55%" bgColor=#ffffff><FONT face=serif size=1>Polishing Supplies Segment</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>365</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>365</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>-</FONT></TD>
    <TD align=right width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>0</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>1,085</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>1,105</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>(20</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>)</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="2%" bgColor=#ffffff><FONT face=serif size=1>(2</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="55%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=1>Total</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>4,847</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>2,700</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>2,147</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>80</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>12,115</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>7,336</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>4,779</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>65</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="55%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=1>Percent of net revenue</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>20</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>21</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="3%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="3%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>23</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>22</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="3%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD>
    <TD align=left width="2%" bgColor=#ffffff></TD>
    <TD align=left width="1%" bgColor=#ffffff></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Selling, general and administrative
(SG&amp;A) expenses for the quarter ended June 30, 2008 increased $2.1 million,
or 80%, from $2.7 million to $4.8 million compared to the quarter ended June 30,
2007. SG&amp;A expenses include $0.1 million of stock-based compensation expense
in the quarters ended June 30, 2008 and 2007. SG&amp;A expenses for the quarter
ended June 30, 2008, include $0.1 million of costs related to compliance with
the Sarbanes-Oxley Act. The increase in SG&amp;A expenses was due primarily to
$1.1 million of increased selling expense related to 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. 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 increased incentive compensation costs
and costs incurred to comply with the Sarbanes-Oxley Act, improve internal
financial and operational reporting and implement improvements in operational
efficiencies.</FONT></P>
<P align=center><FONT face=serif size=2>20</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>For the nine months ended June 30,
2008, SG&amp;A increased $4.8 million or 65% compared to the nine month period
ended June 30, 2007. SG&amp;A expenses include $0.4 million and $0.2 million of
stock-based compensation expense for the nine months ended June 30, 2008 and
2007, respectively. SG&amp;A expenses for the nine months ended June 30, 2008
includes $0.3 million of costs related to compliance with the Sarbanes-Oxley
Act. The increase reflects $0.9 million of costs incurred by R2D in fiscal 2008
for which there were no comparable expenses in the prior year period. Selling
expenses increased $2.1 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>Restructuring
Charge</FONT></I></B><FONT face=serif size=2> </FONT></P>
<P align=justify><FONT face=serif size=2>In the third quarter of fiscal 2008,
our Bruce Technologies operations were reorganized to better position the
company for profitability in light of lower plant utilization resulting from a
slowdown in the semiconductor industry. The reorganization resulted in a
restructuring charge of $0.3 million, consisting mainly of severance and
placement costs for personnel affected by the reduction in force. </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>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="60%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="19%" colSpan=11><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="18%" colSpan=11><B><FONT face=serif size=1>Nine Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="60%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><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%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></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></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (Dec)&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="4%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      %&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (Dec)&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="3%" colSpan=2><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      %&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="60%"></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>
    <TD noWrap align=center width="1%"></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="2%"></TD>
    <TD noWrap align=center width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="60%" bgColor=#cceeff><FONT face=serif size=1>Solar
      and Semiconductor</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="3%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="2%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="60%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Equipment Segment</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>210</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>117</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>93</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>80</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>686</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>376</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>310</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>82</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="60%" bgColor=#ffffff><FONT face=serif size=1>Polishing Supplies Segment</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>-</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>-</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>-</FONT></TD>
    <TD align=right width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>0</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT size=1>-</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>-</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>-</FONT></TD>
    <TD align=right width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=right width="2%" bgColor=#ffffff><FONT face=serif size=1>0</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="60%" bgColor=#cceeff>&nbsp;&nbsp; &nbsp;&nbsp;<FONT face=serif size=1>Total</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>210</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>117</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>93</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>80</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>686</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>376</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>310</FONT></TD>
    <TD align=right width="1%" bgColor=#cceeff></TD>
    <TD align=right width="2%" bgColor=#cceeff><FONT face=serif size=1>82</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>%</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Research and development costs for the
three and nine months ended June 30, 2008 increased $0.1 million and $0.3
million, respectively compared to the three and nine-month periods ended June
30, 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 leading solar research centers and 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 style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="16%" colSpan=8><B><FONT face=serif size=1>Three Months Ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="15%" colSpan=9><B><FONT face=serif size=1>Nine Months Ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"><STRONG><FONT size=1>Interest and
      other</FONT></STRONG></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Inc.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=1>June 30,</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=1>Inc.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="67%"><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>income (expense),
      net</STRONG></FONT></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;
      2008&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;
      2007&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (Dec)&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2008&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=3><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2007&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="4%" colSpan=2><B><FONT face=serif size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (Dec)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="16%" 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="15%" colSpan=9><B><FONT face=serif size=1>(dollars in thousands)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="67%" bgColor=#cceeff><FONT face=serif size=1>Interest and other income</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="4%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="4%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="3%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="3%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="3%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="3%" bgColor=#cceeff>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="67%" bgColor=#cceeff><FONT face=serif size=1><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(expense), net</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>169</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>155</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>14</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>673</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>324</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>349</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="67%" bgColor=#ffffff><FONT face=serif size=1>Foreign
      currency gains (losses)</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="4%" bgColor=#ffffff><FONT face=serif size=1>79</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="4%" bgColor=#ffffff><FONT face=serif size=1>15</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>64</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>76</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>(11</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff><FONT face=serif size=1>)</FONT></TD>
    <TD align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" bgColor=#ffffff><FONT face=serif size=1>87</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="67%" bgColor=#cceeff>&nbsp;&nbsp; &nbsp;&nbsp;<FONT face=serif size=1>Total</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>248</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="4%" bgColor=#cceeff><FONT face=serif size=1>170</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>78</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>749</FONT></TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>313</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#cceeff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=left width="1%" bgColor=#cceeff><FONT face=serif size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" align=right width="3%" bgColor=#cceeff><FONT face=serif size=1>436</FONT></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 and equipment financing. Interest income on invested funds
increased due to funds raised in the secondary public offerings of common stock
during the second quarter of fiscal 2007 and the first quarter of fiscal 2008.
Increases were offset by significantly lower interest rates in fiscal 2008 as
compared to fiscal 2007. Foreign currency gains or losses were less than $0.1
million in each reporting period.</FONT></P>
<P align=center><FONT face=serif size=2>21</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></P>
<P align=justify><FONT face=serif size=2>During the three months ended June 30,
2008 we recorded an income tax provision of $0.8 million, reflecting an
effective tax rate of 40%. For the same period in fiscal 2007, we recorded a tax
benefit of $0.2 million, including a $0.5 million reduction in the valuation
allowance on deferred tax assets. During the nine months ended June 30, 2008 and
2007, we recorded income tax provisions of $0.9 million and effectively zero,
respectively. The effective tax rates used for calculating the income tax
provisions for the nine months ended June 30, 2008 and 2007 were approximately
42% and 39%, respectively, excluding the favorable impact of reductions in the
valuation allowance on deferred tax assets. These rates are based upon estimates
of annual income, annual permanent differences, and statutory tax rates in the
jurisdictions in which we operate. The effective tax rate including the change
in the valuation allowance was 40% and less than 1% for the nine months ended
June 30, 2008 and 2007, respectively. </FONT></P>
<P align=justify><FONT face=serif size=2>The Company intends to maintain a
valuation allowance on deferred tax assets related to 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 June 30, 2008 and September 30, 2007 was $0.4 million and
$0.5 million, respectively. </FONT></P>
<P align=justify><FONT face=serif size=2>As a result of the application of the
provisions of FIN 48, we recognized as of October 1, 2007 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. The impact
related to the provisions of Fin 48 was less than $0.1 million for the nine
months ended June 30, 2008. 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.</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 June 30, 2008 and September 30,
2007, cash and cash equivalents and restricted cash were $36.9 million and $18.8
million, respectively. Our working capital increased $28.2 million to $58.7
million as of June 30, 2008, compared to $30.5 million at September 30, 2007.
The increase in cash and cash equivalents and working capital resulted primarily
from the $33.6 million of net proceeds from the secondary public offering of
common stock during November 2007. The increase was partially offset by $8.1
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>We have a line of credit in the amount
of Euro 1.0 million (approximately $1.6 million) as of June 30, 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 June 30, 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 June 30, 2008, bank guarantees in the amount of Euro 0.8
million were secured by this line of credit leaving Euro 0.2 million
available.</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 $7.1 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 $1.1 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 were
deposited in an escrow account. As of June 30, 2008, approximately $0.3 million
of the $1.6 million was paid to sellers in recognition of fulfilling certain
requirements. 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.</FONT></P>
<P align=center><FONT face=serif size=2>22</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 $4.2 million for the nine months ended June 30, 2008, compared to $4.1
million used in such activities for the nine months ended June 30, 2007. During
the nine months ended June 30, 2008 cash was primarily used to finance increases
in inventory ($10.8 million), accounts receivable ($5.2 million), prepaid and
other assets ($0.7 million) and deferred income taxes of ($1.8 million). This
use of cash was partially offset by increases in accounts payable of $4.1
million, accrued liabilities, customer deposits of $4.9 million, deferred profit
of $1.6 million and $1.1 million of depreciation and amortization, which are
noncash expenses. </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 nine
months ended June 30, 2008 and 2007 used $10.5 million and $3.8 million of cash,
respectively. Our investing activities for the nine months ended June 30, 2008
used $8.1 million of cash in the acquisition of R2D. Capital expenditures of
$2.4 million resulted primarily from improvements to the new building in The
Netherlands. Restricted cash decreased $0.4 million. Restricted cash represents
funds securing customer deposits as well as bank guarantees in excess of our
available credit facility in The Netherlands. During fiscal 2007, the most
significant investing activity 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 nine months ended June 30, 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 $0.7 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 nine months ended
June 30, 2007 which primarily consists of the $19.4 million, net of expenses,
raised in a 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 June 30, 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 September 30, 2007 have been changes in purchase
obligations and long-term debt (See Note 7 of the Condensed Consolidated
Financial Statements). Refer to Amtech&#146;s annual report on Form 10-K for the year
ended September 30, 2007, for information on the Company&#146;s other contractual
obligations. </FONT></P>
<P align=justify><B><FONT face=serif size=2>Critical Accounting
Policies</FONT></B><FONT face=serif> </FONT></P>
<P align=justify><FONT face=serif size=2>Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations discusses our consolidated
financial statements that have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires us to make estimates and assumptions that
affect the reported amount of assets and liabilities at the date of the
financial statements, the disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period.</FONT></P>
<P align=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=center><FONT face=serif size=2>23</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<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></P>
<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></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="FONT-SIZE: 10pt; TEXT-ALIGN: justify">
  <LI><FONT face=serif size=2>For the solar and semiconductor equipment segment,
  transactions where legal title passes to the</FONT> <FONT face=serif size=2>customer upon shipment, we recognize revenue upon shipment for those
  products where the customer&#146;s</FONT> <FONT face=serif size=2>defined
  specifications have been met with at least two similarly configured systems
  and processes for a</FONT> <FONT face=serif size=2>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</FONT> <FONT face=serif size=2>price contingent upon their completion, generally 10%-20% of the
  system&#146;s selling price (the</FONT> <FONT face=serif size=2>&#147;holdback&#148;), and
  directly related costs, if any, are deferred and recognized into income when
  the tasks</FONT> <FONT face=serif size=2>are completed. Since we defer only
  those costs directly related to installation or other unit of
  accounting</FONT> <FONT face=serif size=2>not yet delivered and that portion
  of the contract price is often considerably greater than the fair
  market</FONT> <FONT face=serif size=2>value of those items, our policy at
  times will result in deferral of profit that is disproportionately
  greater</FONT> <FONT face=serif size=2>than the deferred revenue. When this is
  the case, the gross profit recognized in one period will be lower</FONT> <FONT face=serif size=2>and the gross profit reported in a subsequent period will
  improve.<BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>For products where the customer&#146;s defined
  specifications have not been met with at least two similarly</FONT> <FONT face=serif size=2>configured systems and processes, the revenue and directly
  related costs are deferred at the time of</FONT> <FONT face=serif size=2>shipment and recognized into income at the time of customer acceptance
  or when this criterion has been</FONT> <FONT face=serif size=2>met. We have,
  on occasion, experienced longer than expected delays in receiving cash from
  certain</FONT> <FONT face=serif size=2>customers pending final installation or
  system acceptance. If some of our customers refuse to pay the</FONT> <FONT face=serif size=2>final payment, or otherwise delay final acceptance or
  installation, the deferred revenue would not be</FONT> <FONT face=serif size=2>recognized, adversely affecting our future operating
  results.<BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>Equipment sold by the polishing supplies segment
  does not include process guarantees, acceptance</FONT> <FONT face=serif size=2>criteria or holdbacks; therefore, the related revenue is recorded upon
  transfer of title which is generally</FONT> <FONT face=serif size=2>at time of
  shipment. Our shipping terms for both segments are customarily FOB our
  shipping point or</FONT> <FONT face=serif size=2>equivalent
  terms.<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</FONT> <FONT face=serif size=2>post shipment obligations other than standard
  warranties.<BR>&nbsp;</FONT>
  <LI><FONT face=serif size=2>Service revenue is recognized upon performance of
  the services requested by the customer. Revenue</FONT> <FONT face=serif size=2>related to service contracts is recognized ratably over the period of
  the contract or in accordance with the</FONT> <FONT face=serif size=2>terms of
  the contract, which generally coincides with the performance of the services
  requested by the</FONT> <FONT face=serif size=2>customer.</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 size=2>24</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></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></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 June 30, 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></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></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 size=2>25</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></P>
<P align=justify><FONT face=serif size=2>As of June 30, 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 nine month periods ended June 30, 2008 and 2007. As of June 30, 2008, our
foreign subsidiaries had $1.7 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 $0.2 million. As of June 30, 2008, we had
$2.8 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 $0.3 million. Our net investment in and
long-term advances to our foreign operations totaled $33.6 million as of June
30, 2008. A 10% change in the value of the Euro relative to the U.S. dollar
would cause an approximately $3.4 million foreign currency translation
adjustment, a type of other comprehensive income (loss), which would be a direct
adjustment to our stockholders&#146; equity.</FONT></P>
<P align=justify><FONT face=serif size=2>During the nine months ended June 30,
2008, our European operations transacted U.S. dollar denominated sales and
purchases of $1.8 million and $4.9 million, respectively. As of June 30, 2008,
sales commitments denominated in a currency other than the function currency of
our transacting operation totaled $3.7 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 $0.4
million greater than or less than expected on the date the order was
taken.</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 June 30, 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></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 nine 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 size=2>26</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>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><B><FONT face=serif size=2>Item 6.</FONT></B></TD>
    <TD vAlign=top align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top align=left width="62%"><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; Exhibits</FONT></B></TD>
    <TD vAlign=top align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top align=left width="34%" colSpan=2>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>31.1</FONT></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="62%" bgColor=#cceeff>
      <P align=justify><FONT face=serif size=2>Certification of Chief Executive
      Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
      Act of 1934, as Amended</FONT></P></TD>
    <TD vAlign=top align=left width="2%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>*</FONT></TD>
    <TD vAlign=top align=left width="33%">&nbsp;</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="62%"><FONT face=serif size=2></FONT></TD>
    <TD vAlign=top align=left width="2%"></TD>
    <TD vAlign=top align=left width="34%" colSpan=2>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>31.2</FONT></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="62%" bgColor=#cceeff>
      <P align=justify><FONT face=serif size=2>Certification of Chief Financial
      Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
      Act of 1934, as Amended</FONT></P></TD>
    <TD vAlign=top align=left width="2%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>*</FONT></TD>
    <TD vAlign=top align=left width="33%">&nbsp;</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="62%"><FONT face=serif size=2></FONT></TD>
    <TD vAlign=top align=left width="2%"></TD>
    <TD vAlign=top align=left width="34%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>32.1</FONT></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="62%" bgColor=#cceeff>
      <P align=justify><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></P></TD>
    <TD vAlign=top align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>*</FONT></TD>
    <TD vAlign=top align=left width="33%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%">&nbsp; </TD>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="62%"><FONT face=serif size=2></FONT></TD>
    <TD vAlign=top align=left width="2%"></TD>
    <TD vAlign=top align=left width="34%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>32.2</FONT></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="62%" bgColor=#cceeff>
      <P align=justify><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></P></TD>
    <TD vAlign=top align=left width="2%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>*</FONT></TD>
    <TD vAlign=top align=left width="33%">&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>____________________<BR><BR>*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Filed
herewith. </FONT></P>
<P align=center><FONT face=serif size=2>27</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>SIGNATURES
<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> AMTECH SYSTEMS, INC.</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> By&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="61%">/s/ <FONT size=2>Robert T. Hass</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="2%"><FONT face=serif size=2>Dated:</FONT>&nbsp;</TD>
    <TD noWrap align=left width="34%"><FONT face=serif size=2><U>August 13,
      2008</U></FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="61%"><FONT face=serif size=2>Robert T.
      Hass</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="34%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="61%"><FONT face=serif size=2>Chief Accounting
      Officer</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="34%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="61%"><FONT face=serif size=2>(Principal
      Accounting Officer)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="34%">&nbsp;</TD></TR></TABLE><BR>
<P align=center><FONT face=serif><FONT face=serif size=2>28</FONT></FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>EXHIBIT INDEX</FONT></B></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><B><FONT face=serif size=2>Exhibit</FONT></B></TD>
    <TD vAlign=top align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top align=left width="57%"></TD>
    <TD vAlign=top align=left width="41%" colSpan=4><STRONG><FONT face=serif size=2>Page or</FONT></STRONG></TD></TR>
  <TR>
    <TD vAlign=top noWrap align=left width="1%"><STRONG><U><FONT face=serif size=2>Number</FONT></U></STRONG></TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="57%"><STRONG><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; <U>Description</U></FONT></STRONG></TD>
    <TD vAlign=top align=left width="41%" colSpan=4><STRONG><U><FONT face=serif size=2>Method of Filing</FONT></U></STRONG></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>31.1</FONT></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="62%" bgColor=#cceeff colSpan=2>
      <P align=justify><FONT face=serif size=2>Certification of Chief Executive
      Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
      Act of 1934, as Amended</FONT></P></TD>
    <TD vAlign=top align=left width="2%" bgColor=#cceeff>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>*</FONT></TD>
    <TD vAlign=top align=left width="33%">&nbsp;</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="62%" colSpan=2><FONT face=serif size=2></FONT></TD>
    <TD vAlign=top align=left width="2%"></TD>
    <TD vAlign=top align=left width="34%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>31.2</FONT></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="62%" bgColor=#cceeff colSpan=2>
      <P align=justify><FONT face=serif size=2>Certification of Chief Financial
      Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
      Act of 1934, as Amended</FONT></P></TD>
    <TD vAlign=top align=left width="2%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>*</FONT></TD>
    <TD vAlign=top align=left width="33%">&nbsp;</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="62%" colSpan=2><FONT face=serif size=2></FONT></TD>
    <TD vAlign=top align=left width="2%"></TD>
    <TD vAlign=top align=left width="34%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>32.1</FONT></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="62%" bgColor=#cceeff colSpan=2>
      <P align=justify><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></P></TD>
    <TD vAlign=top align=left width="2%" bgColor=#cceeff>&nbsp;</TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>*</FONT></TD>
    <TD vAlign=top align=left width="33%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="62%" colSpan=2><FONT face=serif size=2></FONT></TD>
    <TD vAlign=top align=left width="2%"></TD>
    <TD vAlign=top align=left width="34%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>32.2</FONT></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="62%" bgColor=#cceeff colSpan=2>
      <P align=justify><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></P></TD>
    <TD vAlign=top align=left width="2%" bgColor=#cceeff></TD>
    <TD vAlign=top align=left width="1%" bgColor=#cceeff><FONT face=serif size=2>*</FONT></TD>
    <TD vAlign=top align=left width="33%">&nbsp;</TD></TR></TABLE>
<P align=justify><FONT face=serif size=2>____________________<BR><BR>*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Filed
herewith.</FONT></P>
<P align=center><FONT face=serif><FONT face=serif size=2>29</FONT></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=center><FONT face=serif size=2>AMTECH SYSTEMS, INC. AND ITS
SUBSIDIARIES <BR></FONT><FONT face=serif size=2>CERTIFICATION PURSUANT TO RULE
13a-14(a)/15d-14(a) <BR></FONT><FONT face=serif size=2>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=left>&nbsp;&nbsp;&nbsp;&nbsp; <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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&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&nbsp;<U>&nbsp;&nbsp; /s/ Jong S.
Whang&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <BR></U>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: August
13, 2008 </FONT></P>


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</DOCUMENT>
<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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</HEAD>

<BODY bgcolor="#ffffff">

<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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>1. I have reviewed this Quarterly Report on Form 10-Q of Amtech Systems,
Inc. (the &#147;registrant&#148;), </FONT></P>
<P align=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&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=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&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&nbsp;<U>&nbsp;&nbsp; /s/ Bradley C.
Anderson&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </U><BR>Bradley
C. Anderson <BR>Chief Financial Officer <BR>Amtech Systems, Inc. <BR>Date:
August 13, 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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</HEAD>

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<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=left>&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 June 30, 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=left>&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=left>&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&nbsp;<U>&nbsp;&nbsp; /s/ Jong S.
Whang&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <BR></U>Jong
S. Whang <BR></FONT><FONT face=serif size=2>President and Chief Executive
Officer <BR>Date: August 13, 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=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=left>&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 June 30, 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=left>&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=left>&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&nbsp;<U>&nbsp;&nbsp; /s/ Bradley C.
Anderson&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<BR></U>Bradley C. Anderson <BR>Chief Financial Officer <BR>Date: August 13,
2008 </FONT></P>


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