Before providing our comments regarding forward-looking statements, I would like to inform each of you of our 2012 Investor and Analyst Meeting scheduled for March 15 in New York. For more information regarding the event, please contact me at the email address provided on our earnings release.Today’s 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 and year, which remains subject to adjustment in preparation of our periodic report on Form 10-K, future revenues, margins, earnings per share, financial performance and expansion of our served markets. 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 changes in industry spending, the continued adoption and competitiveness of our new and existing products, our ability to successfully integrate acquisitions, to realize operating efficiencies, and to achieve reduced tax rates, our ability to identify strategic acquisition targets and complete acquisition, changes in product mix, and the additional risk factors and cautionary statements set forth in the company’s Form 10-K on file for fiscal year 2010, 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 statements. I will now turn the call over to Tim Stultz. Tim? Tim Stultz Thank you, Claire and thank you everyone for joining us today. 2011 was another strong year for Nanometrics. In the first half of the year, we delivered our two highest revenue quarters on record and despite the industry slowdown in the second half, we finished the year with record revenues of $230 million, up 22% over 2010’s prior record. Importantly, our revenue growth was more than double the year-over-year increase in Wafer Fab Equipment or WFE spending, giving clear evidence of our success in outgrowing the industry in general. Solid operating income also helped drive positive cash flows throughout the year with free cash flow increasing more than 100% versus 2010.
2011 performance however was not only about financial results, but also about the continued strengthening of our business and business outlook resulting from our strong positions in growth markets, our progress in expanding our market share through critical competitive wins, and expansion of our served markets through strategic acquisitions.I would like to briefly expand on each of those areas, as they represent the foundation and basis for our ability to continue to outperform the overall industry. Let’s start with our primary served markets where capital investments are expected to outgrow spending in general. First and foremost, there is Optical Critical Dimension or OCD, our flagship technology and primary revenue driver. OCD has and is continuing to play an ever increasing role in the development and manufacturing of all types of solid state devices including logic, memory and thin film heads for disk drives. Last quarter, we announced the release of our 1000th OCD recipe into production. A significant milestone for us as well as OCD technology. OCD recipes are a key indicator of the proliferation of our OCD solutions within our customers’ fabs. Notably, whereas the overall deployment of OCD recipes into production increased by more than 60% in 2011, the use of technology nodes of 3X and below increased by more than 150%. This clearly points to the increased reliance upon OCD to develop, monitor and control the production of the most advanced devices such as 3D transistors or thin pads. Those devices, which are the most complex feature sets the smallest feature sizes and the tightest process exists. In terms of growth, we estimate that the OCD market grew more than 30% in 2011, triple that of overall WFE for the failure. Similarly, our technology leadership and established footprint in the emerging market of advanced 3D wafer level packaging has us well positioned to benefit from yet another exciting growth area, where form factor performance and power consumption. Our fundamental drivers behind the inevitability of this packaging evolution. We fully expect this market to become a meaningful contributor to our business in the not too distant future. Read the rest of this transcript for free on seekingalpha.com