Nanometrics Incorporated 1550 Buckeye Drive Milpitas, CA 95035 Tel: 408.545.6000 Fax: 408.232.5910 www.nanometrics.com

Investor Relations Contact:	Company Contact:
Claire McAdams	Ronald Kisling, CFO
Headgate Partners LLC	Nanometrics Incorporated
530.265.9899, 530.265.9699 fax	408.545.6143, 408.521.9490 fax
email: claire@headgatepartners.com	email: rkisling@nanometrics.com

Nanometrics Reports Third Quarter 2011 Financial Results

$58.3 Million in Revenues, 52.9% Gross Margin and $0.32 EPS; Cash Grows to $100 Million

MILPITAS, Calif., October 27, 2011 - Nanometrics Incorporated (NASDAQ: NANO), a leading provider of advanced process control metrology systems, today announced financial results for its third quarter ended October 1, 2011.

Highlights for the quarter include:

• Revenues of $58.3 million, at the midpoint of guidance and down 9% from a record second quarter;

• Gross margin of 52.9%;

• $11.7 million of income from operations and 20.2% operating margin;

• Increase in cash and investments of $8.5 million, ending the quarter at $100.1 million;

• Receipt of a multiple-unit order for our first 450mm systems, scheduled for mid-2012 delivery to multiple sites;

• Continuing significant competitive wins, including the announced OCD tool-of-record selection from an emerging foundry customer based in Asia and the integrated metrology selection from a leading Flash memory company, as well as multiple UniFire purchases from leading logic and memory customers.

Commenting on the third quarter results, president and chief executive officer Dr. Timothy J. Stultz said, “In a challenging industry environment and rapidly changing business dynamics, we delivered a strong third quarter, in line with the guidance we provided in late July. As we entered the third quarter, we began to see shifting priorities in the semiconductor industry, evidenced by order push-outs and delays in planned capacity expansions. Even with the increased level of volatility, until the second half of August, we continued to expect a return to revenue growth in the fourth quarter. Over the past two months, however, customer forecasts and capital spending have declined precipitously, and we now expect to see a significant sequential decline in revenues for the fourth quarter. That being said, we believe that order rates are either at - or nearing - trough levels.

“We achieved a number of meaningful new competitive wins in the third quarter that continue to demonstrate the strength of our products and ability to execute. We are gaining share in nearly every growth market within process control metrology. While we are not immune to the current slowdown in capital spending, conversations with our customers as well as industry analysis suggests to us that the pause is temporary. We are in the midst of a significant change in the way solid-state devices are designed and manufactured. While the transitions from 65, 45 and 32 nanometer devices followed traditional rules of shrinking geometries, the move to 22nm and below requires new tools, techniques and increased capital intensity. These leading-edge devices are expected to see meaningful growth as they address customer demand for higher-performance, smaller, and less expensive chip designs.

“In consideration of the significant opportunities created by the disruptive technology changes within the semiconductor industry impacting the next several technology nodes, our newly-established and growing partnerships with the leading device manufacturers, and our focus on long-term value creation and performance, we intend to continue to drive hard on winning new business and increasing our footprint in the worldwide semiconductor manufacturing industry. Our leadership in 3D device structures and advanced packaging technologies enable our customers to meet their technology roadmaps, and our served markets are expected to outpace the overall industry through the next several years. We believe our continued focus and investments contribute to a strong outlook for our business and continued growth and outperformance in 2012 and beyond.”

Third Quarter 2011 Summary

Revenues were $58.3 million, down 9% from a record $64.4 million in the second quarter of 2011 and up 8% from $53.9 million in the third quarter of 2010. Gross margin declined to 52.9%, compared to 56.1% in the prior quarter and 54.5% in the year-ago period, primarily as a result of product mix. Our operating margin was 20.2%, compared to 27.2% in the prior quarter and 25.6% in the year-ago period. Net income was $7.6 million or $0.32 per share, compared to $11.1 million or $0.47 per share in the prior quarter and $12.3 million or $0.53 per share in the third quarter of 2010.

Nanometrics Incorporated 1550 Buckeye Drive Milpitas, CA 95035 Tel: 408.545.6000 Fax: 408.232.5910 www.nanometrics.com

At October 1, 2011, Nanometrics had $100.1 million in cash and cash equivalents and $176.7 million in working capital. Stockholders' equity, excluding intangible assets, was $201.5 million, or $8.78 per share based on 23.0 million shares outstanding at quarter end.

Business Outlook

Due to the global economic slowdown and a significant pause in spending by the world's manufacturers of semiconductors, LEDs and other electronic devices, management expects revenues in the range of $40 to $44 million, gross margin in the range of 50% to 51% and operating income margin in the range of 1.5% to 6.5% for the fourth quarter of 2011. With an anticipated annual effective income tax rate of approximately 35%, management expects net earnings for the fourth quarter of 2011 in the range of $0.01 to $0.07 per diluted share.

Conference Call Details

A conference call to discuss third quarter results will be held today at 4:30 p.m. EDT (1:30 p.m. PDT). To participate in the conference call, the dial-in numbers are (877) 374-4041 for domestic callers and (253) 237-1156 for international callers. A live and recorded webcast will be made available on the investor page of the Nanometrics website at www.nanometrics.com.

Use of Non-GAAP Financial Information

Financial results such as non-GAAP operating income, which exclude certain expenses, charges and special items, are not in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Management uses non-GAAP operating income, which excludes non-cash expenses including stock-based compensation, depreciation and amortization, as well as asset impairments, restructuring charges and other special items, to evaluate the company's ongoing performance and cash flow from operations. The company believes the presentation of non-GAAP operating income is useful to investors for analyzing ongoing business trends, comparing performance to prior periods, and enhancing the investor's ability to view the company's results from management's perspective. A table presenting a reconciliation of GAAP results to non-GAAP operating income is included at the end of this press release.

About Nanometrics

Nanometrics is a leading provider of advanced, high-performance process control metrology systems used primarily in the fabrication of semiconductors, high-brightness LEDs, data storage devices and solar photovoltaics. Nanometrics' automated and integrated metrology systems measure critical dimensions, device structures, overlay registration, topography and various thin film properties, including film thickness as well as optical, electrical and material properties. 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, which remain subject to adjustment in connection with the preparation of Nanometrics' financial statements and periodic report on Form 10-Q for the quarter ended October 1, 2011, the continued adoption and competitiveness of its products, the expansion of the company's served markets and market share, changes in semiconductor capital spending, and our outlook for 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 a contraction in current 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 1550 Buckeye Drive Milpitas, CA 95035 Tel: 408.545.6000 Fax: 408.232.5910 www.nanometrics.com

NANOMETRICS INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

		As of October 1,			As of January 1,
		2011			2011
	ASSETS
Current assets:
	Cash and cash equivalents	$	100,149		$	66,460
	Accounts receivable, net of allowances of $156 and $63, respectively	45,183			44,523
	Inventories	51,353			43,168
	Inventories - delivered systems	1,943			1,466
	Prepaid expenses and other	3,514			2,986
	Deferred income tax assets	10,751			9,644
	Total current assets	212,893			168,247
	Property, plant and equipment, net	35,329			35,186
	Intangible assets, net	4,836			5,972
	Deferred income tax assets, non - current	5,960			9,256
	Other assets	1,091			1,235
	Total assets	$	260,109		$	219,896
	LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable	$	11,924		$	11,486
	Accrued payroll and related expenses	9,501			8,813
	Deferred revenue	5,102			4,063
	Other current liabilities	8,939			7,293
	Income taxes payable	—			250
	Current portion of debt obligations	748			572
	Total current liabilities	36,214			32,477
	Deferred revenue, non - current	5,468			3,191
	Other non - current liabilities	5,228			3,912
	Debt obligations, net of current portion	6,885			9,467
	Total liabilities	53,795			49,047
Stockholders’ equity:
	Common stock, $0.001 par value, 47,000 shares authorized;
	22,951 and 22,315, respectively, issued and outstanding	23			22
	Additional paid - in capital	231,413			225,755
	Accumulated deficit	(27,784		)	(57,000		)
	Accumulated other comprehensive income	2,662			2,072
	Total stockholders’ equity	206,314			170,849
	Total liabilities and stockholders’ equity	$	260,109		$	219,896

Nanometrics Incorporated 1550 Buckeye Drive Milpitas, CA 95035 Tel: 408.545.6000 Fax: 408.232.5910 www.nanometrics.com

NANOMETRICS INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

		Three Months Ended						Year to Date
		October 1,			October 2,			October 1,			October 2,
		2011			2010			2011			2010
Net revenues:
	Products	$	49,839		$	44,403		$	158,049		$	116,355
	Service	8,430			9,532			26,735			25,580
	Total net revenues	58,269			53,935			184,784			141,935
Costs of net revenues:
	Cost of products	22,881			19,159			68,862			50,043
	Cost of service	4,589			5,379			13,864			13,941
	Total costs of net revenues	27,470			24,538			82,726			63,984
	Gross profit	30,799			29,397			102,058			77,951
Operating expenses:
	Research and development	6,045			4,601			17,312			14,101
	Selling	6,862			5,734			20,558			15,822
	General and administrative	5,817			4,801			16,758			13,740
	Amortization of intangible assets	329			368			1,136			1,168
	Asset impairment	—			75			—			463
	Total operating expenses	19,053			15,579			55,764			45,294
	Income from operations	11,746			13,818			46,294			32,657
Other income (expense):
	Interest income	57			31			162			78
	Interest expense	(324		)	(355		)	(1,002		)	(1,192		)
	Other, net	834			(53		)	(149		)	705
	Total other income (expense), net	567			(377		)	(989		)	(409		)
Income before income taxes		12,313			13,441			45,305			32,248
Provision for income taxes		4,694			1,114			16,089			2,428
	Net income	$	7,619		$	12,327		$	29,216		$	29,820
Net income per share:
	Basic	$	0.33		$	0.56		$	1.29		$	1.37
	Diluted	$	0.32		$	0.53		$	1.24		$	1.30
Shares used in per share calculation:
	Basic	22,875			21,978			22,715			21,729
	Diluted	23,526			23,168			23,489			22,890

Nanometrics Incorporated 1550 Buckeye Drive Milpitas, CA 95035 Tel: 408.545.6000 Fax: 408.232.5910 www.nanometrics.com

NANOMETRICS INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands)

(Unaudited)

		Three Months Ended				Nine Months Ended
		October 1,		October 2,		October 1,		October 2,
		2011		2010		2011		2010
Income from operations		$	11,746	$	13,818	$	46,294	$	32,657
Non - GAAP adjustments:
	Amortization of intangible assets	329		368		1,136		1,168
	Depreciation	1,125		623		2,408		2,211
	Amortization of demonstration systems	357		464		1,178		1,083
	Asset impairment	—		75		—		463
	Stock-based compensation	970		610		2,747		2,741
Non-GAAP operating income		$	14,527	$	15,958	$	53,763	$	40,323