FINAL TRANSCRIPT

Thank you, Brian. Good morning and thank you all for joining us today. On February 23, 2006, we announced that ADE had reached a definitive agreement to be acquired by KLA Tencor, the leading provider of yield management solutions for the semiconductor industry. ADE, as the leading provider of metrology and inspection systems to the bare wafer industry, has distinguished itself in the marketplace as a well managed Company that has excellent technology and market presence. As the industry demand for 300mm wafer continues, forecasted to triple in the next four years, ADE, along with KLA Tencor, is well positioned to benefit from this growth with an expanded product portfolio which addresses the ever demanding needs of the customer. ADE has a long history in the semiconductor industry from its early days in establishing the standards by which critical wafer parameters are evaluated and developing metrology and defect inspection tools to monitor and certify the silicon wafer substrate.

Yield begins with the bare wafer and ADE is instrumental in supporting the semiconductor device industry's drive to higher yields. Through the years ADE has developed a broad range of advanced metrology and defect inspection tools for the unpatterned silicon wafer, using a number of technologies to provide good cost of ownership over multiple generation nodes. This world class technology has allowed ADE to achieve respectable gross margins, while continuing to invest in R&D to support customers' future requirements. ADE is the industry's main supplier of production tools to monitor and certify wafer substrate flatness, shape and nanotopography, which is the nano scale variation fingerprint of the wafer surface. These various systems support 200mm and 300mm production, out beyond the 65 nanometer node, using low noise capacitive sensors and high resolution optical interferometry. With its market knowledge and intellectual property, ADE has been able to maintain its significant market share in this segment through the years. To expand its available markets, ADE seeks to extend its capable technology into the semiconductor device fab.

NanoXAM is ADE's first pattern wafer metrology tool using noncontact optical interferometry to measure surface topography of pre and post CMP product wafers, monitoring dishing and erosion of device structures. Using dark field high speed laser scanning methods, ADE has championed the use of angular resolve scatter to detect, identify and classify particle and defects on bare and unpatterned blanket wafers. Our latest generation wafer exam inspection tool has unique abilities to better classify scratches and defects due to its multiple collector architecture. And early customer evaluations are under way. With its strong technology and interferometric surface metrology, capacitive sensing, magnetics and angular resolve scatterometry, combined with operational excellence, ADE has been able to consistently produce stellar financial results, on par to larger capitalization companies. ADE performed well during the most recent industry downturn. During this cyclical slow down, gross margins and operating net income remained consistently high, yielding 56 to 57% gross margins and operating income ranging from 15% to nearly 20%.

Efficient operations, cycle time improvements and advanced new product introductions and solid financial results all helped ADE to distinguish itself among its peers. For this quarter, Q3 of fiscal 2006, ADE continued to operate within its model even exceeding the model with strong gross margins of 57% and operating income near the 20% mark at 19.3%. Add to these results a strong balance sheet and the result is that ADE operates among the top tier companies in our industry. The breakdown of revenue for the third quarter was 66% from bare wafer, 15% from semiconductor device and OEM, and 19% in data storage. Of our system revenue, 200mm tools represented 18% with 300mm tools being 82% of system revenues, indicating the ongoing transition of new capacity toward 300mm wafers. The latest major new products from ADE are gaining traction with customers. NanoXAM, our multi-functional metrology tool for CMP base, revenued this quarter and there are ongoing evaluations with a number of major device customers. FabVision is also quickly demonstrating the value and productivity and yield management to our customers in the bare wafer industry.

Our team is supporting multiple installations under evaluation at various customers throughout the world. And we expect to continue to drive the adoption of FabVision, which interconnects the large install base of ADE tools within the wafer fab to a central data management system. WaferXAM, our dark field defect inspection laser scanning system, is now being evaluated at customer fabs. The tool offers high sensitivity at high throughputs seeing more real world defects. Multiple collectors are used to resolve in angle the light scattered from nanometer type defects, 33 nanometers or larger, on prime wafer substrates. We expect to begin to revenue this product in Q4. WaferSight continues its adoption as the tool of record for the 65 nanometer node and less for wafer geometry measurements as all major wafer suppliers further expand their production lines. Recent orders have extended backlog, pushing our new orders to late in the calendar year. We are actively increasing production rates to improve our ability to respond to current and future customer demand.

Forecasts indicate the growth of 300mm wafer unit demand to nearly triple over the next four years, further driving demand for ADE equipment, which certifies the quality of these silicon substrates so critical to semiconductor yields going forward. We look for additional growth in new markets with our new products in the semiconductor device fabs, expanding the total market size of our products that we address. In addition, the hard drive industry is also transitioning to perpendicular recording methods to increase data storage densities, which in turn is driving our data storage segment to near record levels for ADE. ADE and KLA Tencor have very complimentary technologies and products that should enable us to grow at a faster rate than we could on our own. Once the conditions to the merger have been completed and it closes, we plan to leverage KLA