Overall growth in the semiconductor industry is driven by the global demand for electronics products. The dual trends of cost reduction and innovation continue to drive the rapidly growing use of semiconductors in a broad set of products and applications. Demand for semiconductors ranges from traditional uses in computers and disk drives to newer applications including wireless networking equipment, cellular telephones, high definition televisions, automobiles and personal digital appliances.

As semiconductors become even more widely used, Gartner Dataquest estimates that worldwide sales will grow from approximately $177 billion in 2003 to $246 billion in 2005. Semiconductor industry growth, the transition to new technologies and the increasing complexity of manufacturing semiconductors drive semiconductor capital spending. According to Gartner Dataquest, this spending is projected to grow from approximately $30 billion in 2003 to $51 billion in 2005, reflecting a compound annual growth rate of 30%. In addition, VLSI Research estimates that the critical OEM subsystem market, which includes gas and chemical delivery modules, will grow at a 34% annual rate from $3.4 billion in 2003 to $6.1 billion in 2005.

The Company designs and manufactures process modules that precisely measure and control the delivery of high-purity process gases for semiconductor equipment. The Company combines its technologies and process knowledge to provide modules configured for specific gases and operating requirements. These modules typically come packaged in an enclosure with an integrated electronic control system and proprietary software.

The Company provides chemical delivery modules and equipment for both OEMs and semiconductor manufacturers. The Company’s OEM solutions are point-of-use modules, whereas its semiconductor manufacturer solutions are bulk-delivery, fab-wide solutions. Through its laboratory testing of slurries from leading manufacturers, the Company has developed expertise in slurry properties and characterization.

The Company’s MultiFlo MFCs can be easily configured for any one of a number of gases and flow rates through its proprietary software. MFCs are the critical instrument on the gas stick that measures and controls gas flow to the process chamber. The Company’s MFC products, which are marketed under the brand name UNIT Instruments, have been selected as a default standard by several of the leading OEMs because of their high degree of accuracy and repeatability, superior flow stability and configurability.

The Company’s Unit L Series liquid flow controllers, or LFCs, employing its proprietary InFlo technology are based on non-intrusive ultrasonic sensors and are immune to changes in pressure. These LFCs have been specifically designed to control and monitor slurry and chemical recipes at the point-of-use, allowing users to dynamically control constituent chemistries to optimize process results and chemical usage.

The Company’s specialty temperature sensors and heaters are incorporated in semiconductor manufacturing equipment. The Company’s products are used for testing, monitoring and controlling temperature levels during the semiconductor manufacturing process. The Company’s products are typically custom engineered for OEMs during the initial equipment research and development phase.

The Company’s precision thermal control equipment utilizes liquid and forced-air media and is used for OEM equipment cooling and freeze-drying applications. The Company’s products are applied in a wide range of research and industrial instrument applications for testing electronics components, pharmaceutical research and materials analysis.

The Company designs and manufactures process modules and instruments that precisely measure and control the delivery of high-purity process gases and chemicals used in the manufacturing of a variety of electronic and industrial products.

Gross margin as a percentage of revenue for the six months ended June 30, 2004 was 25.6% compared with 15.1% for the six months ended June 30, 2003.

Research and development expenses for the six months ended June 30, 2004 were $5.6 million compared with $3.4 million for the six months ended June 30, 2003.

Amortization expense for the six months ended June 30, 2004 was $0.3 million compared with $1.6 million for the six months ended June 30, 2003.

Interest expense for the six months ended June 30, 2004 was $62.1 million compared with $11.9 million for the six months ended June 30, 2003.