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Nanometrics Reports Fourth Quarter And Full Year 2011 Financial Results

About Nanometrics

Nanometrics is a leading provider of advanced, high-performance process control metrology and inspection systems used primarily in the fabrication of semiconductors, high-brightness LEDs, data storage devices and solar photovoltaics. Nanometrics’ automated and integrated systems address numerous process control applications, including critical dimension and film thickness measurement, device topography, defect inspection, overlay registration, and analysis of various other film properties such as optical, electrical and material characteristics. The company’s process control solutions are deployed throughout the fabrication process, from front-end-of-line substrate manufacturing, to high-volume production of semiconductors and other devices, to advanced wafer-scale packaging applications. Nanometrics’ systems enable device manufacturers to improve yields, increase productivity and lower their manufacturing costs. The company maintains its headquarters in Milpitas, California, with sales and service offices worldwide. Nanometrics is traded on NASDAQ Global Select Market under the symbol NANO. Nanometrics’ website is http://www.nanometrics.com.

Forward Looking Statements

This press release contains forward-looking statements including, but not limited to, statements regarding Nanometrics’ expected results for its most recently completed fiscal quarter and year, which remain subject to adjustment in connection with the preparation of Nanometrics’ financial statements and periodic report on Form 10-K for the year ended December 31, 2011, future revenue, profitability and cash flow. Although Nanometrics believes that the expectations reflected in the forward-looking statements are reasonable, actual results could differ materially from the expectations due to a variety of factors including economic conditions, levels of industry spending, shifts in the timing of customer orders and product shipments, slower-than-anticipated market adoption, changes in product mix and increased operating expenses. For additional information and considerations regarding the risks faced by Nanometrics, see its annual report on Form 10-K for the year ended January 1, 2011 as filed with the Securities and Exchange Commission, as well as other periodic reports filed with the SEC from time to time. Nanometrics disclaims any obligation to update information contained in any forward-looking statement.

 
NANOMETRICS INCORPORATED
CONSOLIDATED BALANCE SHEETS

($ in thousands, except per share amounts)

(Unaudited)
     
As of Dec 31, As of Jan 1,
  2011     2011  
 
ASSETS
Current assets:
Cash and cash equivalents $ 97,699 $ 66,460
Accounts receivable, net of allowances of $117 and $63, respectively 29,289 44,523
Inventories 52,260 43,168
Inventories - delivered systems 1,637 1,466
Prepaid expenses and other 8,119 2,986
Deferred income tax assets   12,406     9,644  
Total current assets 201,410 168,247
 
Property, plant and equipment, net 35,521 35,186
Goodwill 11,990 -
Intangible assets, net 14,394 5,972
Deferred income tax assets, non - current 2,864 9,256
Other assets   1,042     1,235  
Total assets $ 267,221   $ 219,896  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 7,975 $ 11,486
Accrued payroll and related expenses 8,837 8,813
Deferred revenue 5,788 4,063
Other current liabilities 16,709 7,293
Income taxes payable 707 250
Current portion of debt obligations   765     572  
Total current liabilities 40,781 32,477
 
Deferred revenue, non - current 4,547 3,191
Income taxes payable, non - current 2,401 -
Other non - current liabilities 2,813 3,912
Debt obligations, net of current portion   6,687     9,467  
Total liabilities 57,229 49,047
 
 
Stockholders’ equity:
Common stock, $0.001 par value, 47,000,000 shares
authorized; 23,182,771 and 22,314,783, respectively,
issued and outstanding 23 22
Additional paid-in capital 236,735 225,755
Accumulated deficit (28,315 ) (57,000 )
Accumulated other comprehensive income   1,549     2,072  
Total stockholders’ equity   209,992     170,849  
Total liabilities and stockholders’ equity $ 267,221   $ 219,896  
 
NANOMETRICS INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
     

Three Months Ended

   

Twelve Months Ended

Dec 31,   Jan 1, Dec 31,   Jan 1,
  2011     2011     2011     2011  
 
Net revenues:
Products $ 36,725 $ 38,193 $ 194,774 $ 154,548
Service   8,552     7,937     35,287     33,517  
Total net revenues 45,277 46,130 230,061 188,065
 
Costs of net revenues:
Cost of products 19,717 16,440 88,579 66,484
Cost of service   4,440     5,387     18,304     19,328  
Total costs of net revenues   24,157     21,827     106,883     85,812  
Gross profit 21,120 24,303 123,178 102,253
 
Operating expenses:
Research and development 5,978 4,872 23,290 18,973
Selling 6,461 5,498 27,019 21,320
General and administrative 6,143 4,876 22,901 18,617
Amortization of intangible assets 566 389 1,702 1,556
Legal settlement 2,500 - 2,500 -
Asset impairment   -     -     -     463  
Total operating expenses   21,648     15,635     77,412     60,929  
Income (loss) from operations (528 ) 8,668 45,766 41,324
 
Other income (expense):
Interest income 49 28 220 107
Interest expense (326 ) (364 ) (1,336 ) (1,556 )
Other, net   83     109     (66 )   814  
Total other income (expense), net   (194 )   (227 )   (1,182 )   (635 )
 
Income (loss) before income taxes (722 ) 8,441 44,584 40,689
Provision for income taxes   (190 )   (17,687 )   15,899     (15,259 )
Net income (loss) $ (532 ) $ 26,128   $ 28,685   $ 55,948  
 
Net income (loss) per share:
Basic $ (0.02 ) $ 1.18   $ 1.26   $ 2.56  
Diluted $ (0.02 ) $ 1.12   $ 1.22   $ 2.43  
 
Shares used in per share calculation:
Basic   23,074     22,235     22,743     21,855  
Diluted   23,074     23,323     23,480     22,998  
 
NANOMETRICS INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME

(In thousands, except per share amounts)
(Unaudited)
 
    Three Months Ended Twelve Months Ended
Dec 31, Oct 1,   Jan 1, Dec 31,   Jan 1,
  2011     2011     2011     2011     2011  
 
GAAP net income (loss) $ (532 ) $ 7,619 $ 26,128 $ 28,685 $ 55,948
 
Non-GAAP adjustments:
Acquisition-related charges 1,277 (a) 682 - 1,959 -
Amortization of intangible assets 566 (b) 329 389 1,702 1,556
Legal settlement charges 2,500 (c) - - 2,500 -
Asset impairment - - - - 463
Income tax effect of non-GAAP adjustments (1,496 ) (364 ) (140 ) (2,151 ) (727 )
Discrete tax items   -     -     (18,198 ) (d)  

-

    (18,198 )
 
Non-GAAP net income $ 2,315   $ 8,266   $ 8,179   $ 32,695   $ 39,042  
 
GAAP net income (loss) per diluted share $ (0.02 ) $ 0.32   $ 1.12   $ 1.22   $ 2.43  
 
Non-GAAP net income per diluted share $ 0.10   $ 0.35   $ 0.35   $ 1.39   $ 1.70  
 
Shares used in Non-GAAP diluted income per share calculation   23,687     23,526     23,323     23,480     22,998  
 

(a)

Includes legal, finance and investment banking fees paid in connection with the acquisition of Nanda Technologies, as well as $474,000 in stock grants made to Nanda employees upon sign-on post close.

 

(b)

Includes $247,000 of amortization of acquired intangible assets from Nanda Technologies.

 

(c)

Charges associated with the settlement of KLA-Tencor litigation, which was a subsequent event completed in January 2012.

 

(d)

Consists of the favorable impact of the release of $18.2 million in income tax valuation allowances.





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