Nanometrics CEO Discusses Q3 2010 Results - Earnings Call Transcript
Nanometrics, Inc. (
)
Q3 2010 Earnings Call
November 3, 2010 05:00 pm ET
Executives
Claire McAdams - IR
Dr. Timothy Stultz - President & CEO
Jim Moniz - CFO
Analysts
Gus Richard - Piper Jaffray
Weston Twigg - Pacific Crest Securities
Mahesh Sanganeria - RBC Capital Markets
Edwin Mok - Needham & Company
Jacob Strumwasser - AYM Capital
Presentation
Operator
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Nanometrics Q3 2009 Earnings Call Transcript
Good afternoon and welcome to Nanometrics Third Quarter 2010 Financial Results Conference Call. A Q&A session will be held at the end of the call. Until that time, all participants will be in a listen-only mode. Please note that this conference call is being recorded today, November 2, 2010.
At this time, I would like to turn the call over to Claire McAdams, Investor Relations Counsel for Nanometrics. Please go ahead.
Claire McAdams
Thank you and good afternoon, everyone. Welcome to the Nanometrics Third Quarter 2010 Financial Results Conference Call. On today’s call are Dr. Timothy Stultz, President and Chief Executive Officer, and Jim Moniz, Chief Financial Officer.
Before we get started, I would like to call your attention to the following Safe Harbor statement. This conference call contains certain forward-looking statements, including, but not limited to, statements regarding financial results for the company’s most recently completed fiscal quarter, which remains subject to adjustment in connection with the preparation of our financial statements and periodic report on Form 10-Q for the quarter ended October 2, 2010; the continued adoption and competitiveness of our products; the expansion of the company’s served markets; and future revenue growth, 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 risks, including slower-than-anticipated market adoption, a contraction in current levels of industry spending, and the additional risk factors and cautionary statements set forth in the company’s Form 10-K for fiscal year 2009 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.
I will now turn the call to Tim Stultz.
Dr. Timothy Stultz
Thank you, Claire, and good afternoon, everyone, and thank you for joining us today. In my remarks today, I will discuss the business and financial highlights for the third quarter, our view of the current- and near-term industry environment, and give some perspective on our business outlook for the next few quarters. Jim Moniz, our Chief Financial Officer, will provide a closer review of our financial performance, following my prepared remarks.
Last quarter, we announced the best quarterly results in Nanometrics’ history. Today, I’m pleased to report that we have raised the bar again by delivering record revenues and profits in the September quarter.
Financial highlights for the quarter include revenues of $54 million; operating margin of 26%; earnings of $0.53 per share; and $14 million in cash generation from the P&L, which increased our cash balance by $9 million after investments in working capital, completion of our stock repurchase program, and partial pay-down of our building mortgage.
In the first nine months of 2010, we have achieved revenues of $142 million, an increase of 182% over the previous comparable period in 2009 and notably 25% above the same period in 2007, which was the last cyclical peak in the semiconductor capital spending. Clearly, we are well on our way to achieving record revenues for 2010, and revenue growth that is significantly higher than growth in overall wafer fab equipment spending.
Our continuously stated goal has been to outperform the overall sector through market share gains and expansion of our served markets, accompanied by strong financial performance. I believe these results combined with those of the last several quarters demonstrate that we are delivering against those objectives.
The primary driving force behind our business improvement is the continued adoption of our leading-edge products and technologies that serve the critical growth markets of optical critical dimension, or OCD, overlay, wafer-level packaging and high-brightness LEDs.
The demand for these products is based on the increasing importance of process control metrology and the continued transition to high-speed, non-destructive, optically-based tools which enable our customers to meet their aggressive technology roadmaps, increase their yields, and meet the price and performance demands of their served markets.
Taking a closer look at our business in the third quarter, while we achieved near record contributions from our flagship automated OCD product line, we also experienced nice upticks in revenue contributions from our overlay products, which serve the lithography and patterning sector; our UniFire product, which is used for wafer-level packaging applications; and our integrated metrology products, which are driven primarily by capacity expansions.
Revenues and revenue growth, however, are only part of the Nanometrics business story. Over the last few years, we have increased our focus on working closely with our key customers to align our product and technology roadmaps with theirs. We have invested heavily in bringing new products and applications to the market, and in doing so, strived to achieve technology and market leadership.
At the same time, we focused on clarity in our strategic vision and priorities, operational excellence and strong management of our cost structure. The result of those efforts in addition to top line growth is industry-leading gross margins and operating profitability combined with positive cash flow.
We believe these results are indicative of our overall competitiveness, the demonstrated value of our products, an efficient business architecture and solid execution by the Nanometrics team.
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