8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

October 29, 2015

Date of Report (date of earliest event reported)

Nanometrics Incorporated

(Exact name of Registrant as specified in charter)

Delaware	000-13470	94-2276314
(State or other jurisdiction of incorporation)	(Commission File Number)	(I. R. S. Employer Identification No.)

1550 Buckeye Drive, Milpitas, California 95035

(Address of principal executive offices)

Registrant's telephone number, including area code: (408) 545-6000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

q Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

q Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

q Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

q Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 - Results of Operations and Financial Condition.

On October 29, 2015, Nanometrics Incorporated issued a press release announcing financial results for its fiscal third quarter ended September 26, 2015. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference.

The information in this current report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) nor otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01 - Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press release issued by Nanometrics Incorporated dated October 29, 2015, reporting financial results for its third quarter of fiscal 2015.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: October 29, 2015	NANOMETRICS INCORPORATED
	/S/    Jeffrey Andreson
	Jeffrey Andreson Chief Financial Officer
	Duly Authorized Officer

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press release issued by Nanometrics Incorporated dated October 29, 2015, reporting financial results for its third quarter of fiscal 2015.

EX-99.1

Nanometrics Incorporated    Tel: 408.545.6000

1550 Buckeye Drive    Fax: 408.232.5910

Milpitas, CA 95035    www.nanometrics.com

Investor Relations Contact:Company Contact:

Claire McAdamsJeffrey Andreson, CFO

Headgate Partners LLCNanometrics Incorporated

530.265.9899408.545.6143

claire@headgatepartners.comjandreson@nanometrics.com

Nanometrics Reports Third Quarter 2015 Financial Results

MILPITAS, Calif., October 29, 2015 - Nanometrics Incorporated (NASDAQ: NANO), a leading provider of advanced process control systems, today announced financial results for its third quarter ended September 26, 2015.

Q3 2015 Highlights Include:

• Share Gains Resulted in Significant Sales Growth in Integrated Metrology. Integrated metrology sales grew an additional 80% quarter-on-quarter, after over 30% growth in Q2, reflecting market share gains with multiple key customers.

• Continued Strength in 3D-NAND and Foundry. Significant recent customer account wins drove continued strong sales in both 3D-NAND and Foundry during the quarter, as well as record-high revenues from a leading Flash memory customer.

• Continued Gross Margin Improvement. Gross margin improved sequentially for the fourth consecutive quarter.

GAAP Results
	Q3 2015		Q2 2015		Q3 2014
					Q2 2014
Revenues	$	45,678	$	48,629	$	27,133
Gross Profit	$	22,219	$	23,264	$	11,416
Income (Loss) from Operations	$	1,264	$	2,509	$	(10,609	)
Net Income (Loss)	$	818	$	1,344	$	(28,662	)
Earnings per Diluted Share	$	0.03	$	0.06	$	(1.19	)
Non-GAAP Results
	Q3 2015		Q2 2015		Q3 2014
Gross Profit	$	22,687	$	23,721	$	12,104
Income (Loss) from Operations	$	1,758	$	2,991	$	(8,103	)
Net Income (Loss)	$	1,312	$	1,826	$	(5,892	)
Earnings per Diluted Share	$	0.05	$	0.08	$	(0.24	)
Non-GAAP results exclude the impact of the following in the indicated period:
Amortization of acquired intangibles	●		●		●
Restructuring charges					●
Non-cash tax items					●

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this release and on the investor page of Nanometrics' website.

Commenting on the company’s results, president and chief executive officer Dr. Timothy J. Stultz said, "Third-quarter results came in largely as expected, with 3D-NAND and foundry spending continuing to drive over half of our revenues for the third consecutive quarter. Service revenues included some upside in high-margin software upgrades, which helped to drive gross margins above the high end of our guidance range, and led us to a fourth straight quarter of gross margin improvement. While recent reports include capex reductions and muted expectations for near term semiconductor capital spending, our solutions continue to be in high demand for process control of advanced 3D device architectures, which we expect will result in 2015 being another year of outperformance versus the industry for Nanometrics.”

Third Quarter 2015 Summary

Revenues for the third quarter of 2015 were $45.7 million, down 6% from $48.6 million in the second quarter of 2015 due to lower product and upgrade sales, and up 68% from $27.1 million in the third quarter of 2014. On a GAAP basis, gross margin was 48.6%, compared to 47.8% in the prior quarter and 42.1% in the year-ago period. Operating income was $1.3 million, compared to $2.5 million in the prior quarter and an operating loss of $10.6 million in the year-ago period. Net income was $0.8 million or $0.03 per diluted share, compared to $1.3 million or $0.06 per diluted share in the prior quarter, and a net loss of $28.7 million or $1.19 per share in the third quarter of 2014.

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Nanometrics Incorporated    Tel: 408.545.6000

1550 Buckeye Drive    Fax: 408.232.5910

Milpitas, CA 95035    www.nanometrics.com

On a non-GAAP basis, which excludes amortization of acquired intangible assets, gross margin was 49.7% compared to 48.8% in the prior quarter and 44.6% in the year-ago period. Non-GAAP operating income was $1.8 million compared to $3.0 million in the prior quarter and an operating loss of $8.1 million in the third quarter of 2014. Non-GAAP net income, which adjusts for amortization of intangible assets, restructuring charges, a valuation allowance related to certain deferred tax assets and the income tax effect of non-GAAP adjustments, was $1.3 million or $0.05 per diluted share, compared to $1.8 million or $0.08 per diluted share in the prior quarter and a net loss of $5.9 million or $0.24 per share in the third quarter of 2014.

Business Outlook

Management expects fourth-quarter 2015 revenues in the range of $39 to $43 million, with GAAP gross margin in the range of 45.7% to 48.3% and non-GAAP gross margin in the range of 47% to 49.5%. Management expects fourth-quarter operating expenses to range between $21.3 million and $21.9 million on a GAAP basis, and between $20.0 million and $20.6 million on a non-GAAP basis. Management expects a fourth-quarter loss in the range of ($0.17) to ($0.08) per share on a GAAP basis, and ($0.10) to breakeven per share on a non-GAAP basis.

Conference Call Details

A conference call to discuss third quarter 2015 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 and supplemental financial information 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 gross profit, gross margin, operating income, net income, and net income per share, which exclude certain expenses, charges and special items, were not prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Management uses non-GAAP financial results, which exclude acquisition-related expenses such as amortization of acquired intangibles and transaction costs, restructuring charges, and other unusual and infrequent items, to evaluate the company’s ongoing performance and to enable comparison to other periods that did not include 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; however, investors are cautioned that other companies may calculate these measures differently than Nanometrics does, which would limit the usefulness of these financial measures. A table presenting a reconciliation of GAAP results to non-GAAP results is included at the end of this press release and is available on the investor page of the Nanometrics website at www.nanometrics.com.

About Nanometrics

Nanometrics is a leading provider of advanced, high-performance process control metrology and inspection systems used primarily in the fabrication of semiconductors and other solid-state devices, including sensors, optoelectronic devices, high-brightness LEDs, discretes and data storage components. Nanometrics’ automated and integrated metrology systems measure critical dimensions, device structures, topography and various thin film properties, including three-dimensional features and 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 three-dimensional wafer-level packaging applications. Nanometrics’ systems enable advanced process control for device manufacturers, providing improved device yield at reduced manufacturing cycle time, supporting the accelerated product life cycles in the semiconductor and other advanced device markets. 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

Certain statements in this press release, including statements under the caption “Business Outlook,” and in Dr. Stultz’s quote regarding the company’s expectations regarding the continued high demand for its products and solutions and, the expectation to outperform the industry are forward-looking statements. Although Nanometrics believes that the expectations reflected in the forward-looking statements are reasonable, actual results could differ materially from these expectations due to a variety of factors outside of Nanometrics’ control, including levels of industry spending, demand for our products, shifts in the timing of customer orders and product shipments, technology adoption rates, changes in customer and product mix, changes in market share, changes in operating expenses, and general economic conditions. For additional information and considerations regarding the risks faced by Nanometrics that could cause actual results to differ materially, see its annual report on Form 10-K for the year ended December 27, 2014, as filed with the Securities and Exchange Commission on February 25, 2015, including under the caption “Risk Factors,” 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, except as required by law.

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Nanometrics Incorporated    Tel: 408.545.6000

1550 Buckeye Drive    Fax: 408.232.5910

Milpitas, CA 95035    www.nanometrics.com

NANOMETRICS INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	September 26, 2015			December 27, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	41,561		$	34,676
Marketable securities	43,065			49,286
Accounts receivable, net	37,573			26,121
Inventories	48,398			35,105
Inventories-delivered systems	1,543			1,912
Prepaid expenses and other	6,651			9,289
Deferred income tax assets	1,438			1,457
Total current assets	180,229			157,846
Property, plant and equipment, net	45,944			49,633
Goodwill	9,678			10,494
Intangible assets, net	2,403			4,294
Deferred income tax assets	385			410
Other assets	497			559
Total assets	$	239,136		$	223,236
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	15,882		$	10,199
Accrued payroll and related expenses	10,025			8,700
Deferred revenue	10,985			10,021
Other current liabilities	9,422			8,265
Income taxes payable	1,236			1,017
Total current liabilities	47,550			38,202
Deferred revenue	939			2,591
Income taxes payable	776			701
Deferred tax liabilities	1,054			926
Other long-term liabilities	1,018			1,279
Total liabilities	51,337			43,699
Stockholders’ equity:
Common stock	24			24
Additional paid-in capital	256,878			251,396
Accumulated deficit	(64,396		)	(69,114		)
Accumulated other comprehensive income (loss)	(4,707		)	(2,769		)
Total stockholders’ equity	187,799			179,537
Total liabilities and stockholders’ equity	$	239,136		$	223,236

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Nanometrics Incorporated    Tel: 408.545.6000

1550 Buckeye Drive    Fax: 408.232.5910

Milpitas, CA 95035    www.nanometrics.com

NANOMETRICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 26, 2015			September 27, 2014			September 26, 2015			September 27, 2014
Net revenues:
Products	$	36,414		$	19,487		$	113,689		$	101,991
Service	9,264			7,646			30,993			24,747
Total net revenues	45,678			27,133			144,682			126,738
Costs of net revenues:
Cost of products	19,242			10,737			59,106			52,165
Cost of service	3,749			4,292			15,158			14,061
Amortization of intangible assets	468			688			1,557			2,039
Total costs of net revenues	23,459			15,717			75,821			68,265
Gross profit	22,219			11,416			68,861			58,473
Operating expenses:
Research and development	8,579			8,037			24,896			25,724
Selling	6,760			6,389			20,905			20,443
General and administrative	5,590			5,781			16,901			18,120
Amortization of intangible assets	26			103			89			318
Restructuring	—			1,715			56			1,715
Total operating expenses	20,955			22,025			62,847			66,320
Income (loss) from operations	1,264			(10,609		)	6,014			(7,847		)
Other income (expense):
Interest income	7			13			63			37
Interest expense	(86		)	(90		)	(252		)	(286		)
Other income, net	346			(57		)	740			111
Total other income (expense), net	267			(134		)	551			(138		)
Income (loss) before income taxes	1,531			(10,743		)	6,565			(7,985		)
Provision for income taxes	713			17,919			1,847			18,494
Net income (loss)	$	818		$	(28,662	)	$	4,718		$	(26,479	)
Net income (loss) per share:
Basic	$	0.03		$	(1.19	)	$	0.20		$	(1.11	)
Diluted	$	0.03		$	(1.19	)	$	0.19		$	(1.11	)
Shares used in per share calculation:
Basic	24,145			24,132			24,010			23,928
Diluted	24,352			24,132			24,347			23,928

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Nanometrics Incorporated    Tel: 408.545.6000

1550 Buckeye Drive    Fax: 408.232.5910

Milpitas, CA 95035    www.nanometrics.com

NANOMETRICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended
	September 26, 2015			September 27, 2014
Cash flows from operating activities:
Net income (loss)	$	4,718		$	(26,479	)
Reconciliation of net income (loss) to net cash from operating activities:
Depreciation and amortization	6,826			8,660
Stock-based compensation	4,664			5,115
Loss on disposal of fixed assets	578			80
Inventory write-down	1,971			1,109
Deferred income taxes	173			20,776
Changes in fair value of contingent consideration	137			118
Changes in assets and liabilities:
Accounts receivable	(14,873		)	4,882
Inventories	(15,893		)	(7,998		)
Inventories-delivered systems	370			6,400
Prepaid expenses and other	4,436			1,751
Accounts payable, accrued and other liabilities	9,634			(4,535		)
Deferred revenue	(688		)	(16,270		)
Income taxes payable	295			(3,158		)
Net cash provided by (used in) operating activities	2,348			(9,549		)
Cash flows from investing activities:
Sales of marketable securities	2,884			—
Maturities of marketable securities	30,279			25,570
Purchases of marketable securities	(27,298		)	(26,810		)
Purchases of property, plant and equipment	(1,365		)	(2,800		)
Net cash provided by (used in) investing activities	4,500			(4,040		)
Cash flows from financing activities:
Payments to Zygo Corporation related to acquisition	(614		)	(470		)
Proceeds from sale of shares under employee stock option and purchase plans	3,642			5,852
Taxes paid on net issuance of stock awards	(1,104		)	(664		)
Repurchases of common stock	(1,721		)	—
Net cash provided by financing activities	203			4,718
Effect of exchange rate changes on cash and cash equivalents	(166		)	(269		)
Net increase (decrease) in cash and cash equivalents	6,885			(9,140		)
Cash and cash equivalents, beginning of period	34,676			44,765
Cash and cash equivalents, end of period	$	41,561		$	35,625

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Nanometrics Incorporated    Tel: 408.545.6000

1550 Buckeye Drive    Fax: 408.232.5910

Milpitas, CA 95035    www.nanometrics.com

NANOMETRICS INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share amounts)

(Unaudited)

		Three Months Ended
		September 26, 2015				June 27, 2015				September 27, 2014
Reconciliation of GAAP gross profit and gross margin to non-GAAP gross profit and gross margin
GAAP gross profit and gross margin, respectively		$	22,219	48.6	%	$	23,264	47.8	%	$	11,416		42.1	%
	Non-GAAP adjustments:
	Amortization of intangible assets	468		1.1	%	457		1.0	%	688			2.5	%
	Non-GAAP gross profit and gross margin, respectively	$	22,687	49.7	%	$	23,721	48.8	%	$	12,104		44.6	%
Reconciliation of GAAP operating income to non-GAAP operating income
GAAP operating income (loss)		$	1,264			$	2,509			$	(10,609	)
	Non-GAAP adjustments:
	Amortization of intangible assets included in cost of revenues	468				457				688
	Amortization of intangible assets included in operating expenses	26				25				103
	Restructuring included in operating expenses	—				—				1,715
	Total non-GAAP adjustments to operating income (loss)	494				482				2,506
	Non-GAAP operating income (loss)	$	1,758			$	2,991			$	(8,103	)
Reconciliation of GAAP net income to non-GAAP net income
GAAP net income (loss)		$	818			$	1,344			$	(28,662	)
	Non-GAAP adjustments:
	Total non-GAAP adjustments to non-GAAP operating income (loss)	494				482				2,506
	Valuation allowance on deferred tax assets and other non-cash adjustments to tax assets	—				—				21,141
	Income tax effect of non-GAAP adjustments	—				—				(877		)
	Non-GAAP net income (loss)	$	1,312			$	1,826			$	(5,892	)
GAAP net income (loss) per diluted share		$	0.03			$	0.06			$	(1.19	)
Non-GAAP net income (loss) per diluted share		$	0.05			$	0.08			$	(0.24	)
Shares used in diluted net income per share calculation		24,352				24,285				24,132

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