EX-99.1 2 exhibit991q42011.htm PRESS RELEASE Exhibit 99.1 Q4 2011
        
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 Fourth Quarter and Full Year 2011 Financial Results
Q4 Revenues Exceed Guidance; Annual Sales Increase 22% to New Record of $230 Million

MILPITAS, Calif., February 8, 2012 - Nanometrics Incorporated (NASDAQ: NANO), a leading provider of advanced process control metrology systems, today announced financial results for its fourth quarter and fiscal year ended December 31, 2011.

Fourth Quarter Highlights
•
Revenues of $45.3 million, exceeding guidance;
•
Introduction of the Atlas II flagship metrology system for optical critical dimension (OCD) process control;
•
Milestone achievement of over 1,000 OCD recipes in production at customer sites; and
•
Expansion of the company's product offering into the large and growing process control inspection market with the acquisition of Nanda Technologies.

Fiscal 2011 Highlights
•
Record revenues of $230 million, up 22% year-over-year;
•
Net cash and investments increased 47% for the year, up $31.2 million to $97.7 million at year-end; and
•
Continuing significant competitive wins, including several tool-of-record selections for Nanometrics automated and integrated OCD solutions for next-generation semiconductor devices, as well as multiple customer orders for UniFire systems for advanced 3-D wafer-scale packaging applications and the company's first 450mm systems, scheduled for delivery in 2012.
GAAP Results
 
 
 
 
 
 
 
 
 
Q4 2011
 
Q3 2011
 
Q4 2010
 
 
 
 
 
 
 
Revenues
 
$45.3 million
 
$58.3 million
 
$46.1 million
 
 
 
 
 
 
 
Net Income (Loss)
 
($0.5 million)
 
$7.6 million
 
$26.1 million
 
 
 
 
 
 
 
Earnings per Diluted Share
 
$(0.02)
 
$0.32
 
$1.12
 
 
 
 
 
 
 
Non-GAAP Results
 
 
 
 
 
 
 
 
 
Q4 2011
 
Q3 2011
 
Q4 2010
 
 
 
 
 
 
 
Net Income
 
$2.3 million
 
$8.3 million
 
$8.2 million
 
 
 
 
 
 
 
Earnings per Diluted Share
 
$0.10
 
$0.35
 
$0.35

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this release. Non-GAAP results exclude the impact of acquisitions, legal settlement, asset impairments, restructuring-related items, and certain discrete tax items.

Commenting on the company's results, president and chief executive officer Dr. Timothy J. Stultz said, “2011 was another strong year for Nanometrics, in which we again outpaced overall industry spending with record revenues of $230 million, up 22% over 2010. We are encouraged by the recent improvements in capital spending expectations for 2012, particularly among Nanometrics' largest customers. We believe that our strong customer positions, high-growth served markets and strategic deployment of capital contribute to a strong outlook for our business and continued growth and outperformance in 2012 and beyond.”

Fourth Quarter 2011 Summary
Revenues were $45.3 million, down 22% from $58.3 million in the third quarter of 2011 and down 2% from $46.1 million in the fourth quarter of 2010. Gross margin was 46.6%, a decline compared to 52.9% in the prior quarter and 52.7% in the year-ago period, primarily as a result of lower factory absorption due to the reduced volume of system sales and changes in product mix. GAAP net income (loss) was ($0.5) million or ($0.02) per share, compared to $7.6 million or $0.32 per diluted share in the prior quarter and $26.1 million or $1.12 per diluted share in the fourth quarter of 2010. The GAAP net loss in the fourth quarter of 2011 included the negative impact of approximately $1.3 million in acquisition-related costs and $2.5 million for settlement of litigation with KLA-Tencor, while the prior year period reflected the favorable impact of the release of $18.2 million in income tax asset valuation allowances.


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


Non-GAAP net income was $2.3 million or $0.10 per share, compared to $8.3 million or $0.35 per share in the prior quarter and $8.2 million or $0.35 per share in the fourth quarter of 2010.
 
Fiscal 2011 Summary
Revenues were a record $230.1 million, up 22% from $188.1 million in fiscal 2010. Gross margin was 53.5%, a decline compared to 54.4% in 2010, primarily due to product mix and the impact of lower factory absorption in the fourth quarter of 2011. GAAP net income was $28.7 million or $1.22 per share, compared to $55.9 million or $2.43 per share in the 2010. GAAP net income in 2011 included the negative impact of approximately $2.0 million in acquisition-related costs and $2.5 million for settlement of litigation with KLA-Tencor, while 2010 results reflected the favorable impact of the release of $18.2 million in income tax asset valuation allowances. Non-GAAP net income was $32.7 million or $1.39 per share, compared to $39.0 million or $1.70 per share in 2010.

At December 31, 2011, Nanometrics had $97.7 million in cash and cash equivalents and $160.6 million in working capital. Stockholders' equity, excluding intangible assets, was $183.6 million, or $7.92 per share based on 23.2 million shares outstanding at year end.
Business Outlook
Due to the improvement in business conditions since last quarter, management expects revenues in the range of $52 to $55 million, gross margin in the range of 47% to 50%, and operating income margin in the range of 5% to 10% for the first quarter of 2012. The anticipated effective income tax rate for the first quarter is approximately 40%, which assumes the elimination of the research and development tax credit. Given this outlook, management expects first quarter GAAP net earnings in the range of $0.06 to $0.13 per share and non-GAAP net earnings in the range of $0.09 to $0.16 per share.

Conference Call Details
A conference call to discuss fourth quarter and fiscal year 2011 results will be held today at 4:30 p.m. EST (1:30 p.m. PST). 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 net income and net income per share, which exclude certain expenses, charges and special items, are not in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Management uses non-GAAP net income, which excludes acquisition-related expenses such as professional fees and amortization of acquired intangibles, asset impairments, restructuring charges, legal settlements and other unusual and infrequent items to evaluate the company's ongoing performance and to enable comparison to other periods which did not have these unusual and infrequent items. The company believes the presentation of non-GAAP results 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 results is included at the end of this press release.

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
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 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
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
 
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 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 before income taxes
 
(722
)
 
8,441

 
44,584

 
40,689

Provision for income taxes
 
(190
)
 
(17,687
)
 
15,899

 
(15,259
)
 
Net income
 
$
(532
)
 
$
26,128

 
$
28,685

 
$
55,948

 
 
 
 
 
 
 
 
 
 
Net income 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
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, 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 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.