-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bt6u+xppRMHl/MezWn2WALPkdTa5JG7DU96AxuVYLdzfuo7FFXDzMsZs7/UYsTkI ksQtgxn1Puf9S43nt+UoiQ== 0000898430-95-002271.txt : 19951119 0000898430-95-002271.hdr.sgml : 19951119 ACCESSION NUMBER: 0000898430-95-002271 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NANOMETRICS INC CENTRAL INDEX KEY: 0000704532 STANDARD INDUSTRIAL CLASSIFICATION: OPTICAL INSTRUMENTS & LENSES [3827] IRS NUMBER: 942276314 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13470 FILM NUMBER: 95589925 BUSINESS ADDRESS: STREET 1: 310 DEGUIGNE DR CITY: SUNNYVALE STATE: CA ZIP: 94086 BUSINESS PHONE: 4087461600 MAIL ADDRESS: STREET 1: 310 DEGUIGNE DRIVE CITY: SUNNYVALE STATE: CA ZIP: 94086 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q X Quarterly report pursuant to Section 13 or 15(d) of the Securities - --- Exchange Act of 1934 For the quarterly period ended September 30, 1995 --------- --- ---- Transition report pursuant to Section 13 or 15(d) of the Securities - --- Exchange Act of 1934 For the transition period from _______________ to _______________ Commission file number 0-13470 ---------------------------------------------------- NANOMETRICS INCORPORATED - ---------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-2276314 - ---------------------------------------------- ---------------------- (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 310 DeGuigne Drive, Sunnyvale, CA 94086 - ---------------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (408) 746-1600 -------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ------- ------ At October 6, 1995 there were 7,847,578 shares of common stock, no par value, issued and outstanding. NANOMETRICS INCORPORATED INDEX
Page ---- Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets - September 30, 1995 and December 31, 1994.................... 3 Consolidated Statements of Operations - Three months and nine months ended September 30, 1995 and 1994................................. 5 Consolidated Statements of Cash Flows - Nine months ended September 30, 1995 and 1994.................................................... 6 Notes to Consolidated Financial Statement................................................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............... 8 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K......................... 10 Signatures......................................................... 11
2 PART I: FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS NANOMETRICS INCORPORATION CONSOLIDATED BALANCE SHEETS (Amounts in thousands except share amounts) (Unaudited)
September 30, December 31, 1995 1994 ------------ ------------ ASSETS Current assets: Cash and equivalents $1,238 $ 2,135 Short-term investments 5,635 493 Accounts receivable, less allowance for doubtful accounts of $305 and $270 7,268 4,881 Other receivables 116 115 Inventories 4,103 4,752 Deferred income taxes and prepaid expenses 610 112 ------- ------- Total current assets 18,970 12,488 Property, plant and equipment, net 3,045 3,179 Other assets 167 119 ------- ------- $22,182 $15,786 ======= =======
See Notes to Consolidated Financial Statements 3 NANOMETRICS INCORPORATED CONSOLIDATED BALANCE SHEETS (CONTINUED) (Amounts in thousands except share amounts) (Unaudited)
September 30, December 31, 1995 1994 ------------- ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,055 $ 696 Accrued payroll and related expenses 502 236 Other current liabilities 833 1,117 Income taxes payable 532 7 Current portion of long-term debt 574 227 ------- ------- Total current liabilities 3,496 2,283 Long-term debt 3,771 421 Deferred income taxes 87 87 Shareholders' equity: Common stock, no par value; 25,000,000 shares authorized; 7,804,891 and 7,370,978 shares outstanding 10,308 10,018 Retained earnings 3,843 2,117 Cumulative translation adjustment 677 860 ------- ------- Total shareholders' equity 14,828 12,995 ------- ------- $22,182 $15,786 ======= =======
See Notes to Consolidated Financial Statements 4 NANOMETRICS INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
Three Month Ended Nine Months Ended September 30, September 30, 1995 1994 1995 1994 -------- --------- --------- -------- Revenues: Net sales $4,945 $2,288 $12,501 $ 6,415 Service 1,161 1,075 3,351 3,001 ------- ------- ------- ------- Total revenues 6,106 3,363 15,852 9,416 Costs and expenses: Cost of sales 2,124 1,241 5,705 3,419 Cost of service 928 788 2,482 2,139 Research and development 654 611 1,843 1,851 Selling 978 743 2,602 2,060 General and administrative 557 1,004 1,583 1,947 ------- ------- ------- ------- Total costs and expenses 5,241 4,387 14,215 11,416 ------- ------- ------- ------- Operating income (loss) 865 (1,024) 1,637 (2,000) Other income, net 222 50 690 142 ------- ------- ------- ------- Income (loss) before provision for income taxes 1,087 (974) 2,327 (1,858) Provision for income taxes 245 4 599 17 ------- ------- ------- ------- Net income (loss) $ 842 $ (978) $ 1,728 $(1,875) ======= ======= ======= ======= Per share amounts: Net income (loss) per share $ .10 $ (.13) $ .21 $ (.26) ======= ======= ======= ======= Weighted average shares outstanding 8,444 7,363 8,167 7,281 ======= ======= ======= =======
See Notes to Consolidated Financial Statements 5 NANOMETRICS INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited)
Nine Months Ended September 30, 1995 1994 -------- -------- Operating activities: Net income (loss) $ 1,728 $ (1,875) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 241 251 Deferred income taxes (218) 155 Changes in assets and liabilities: Accounts receivable (2,543) 1,074 Other receivables 2 (11) Inventories 634 (1,079) Prepaid expense (284) (19) Other assets (58) 10 Accounts payable and other liabilities 363 (561) Income taxes payable 579 (291) ------- -------- Net cash provided by (used in) operating activities 444 (2,346) ------- -------- Investing activities: Short term investments, net (5,142) 2,956 Capital expenditures (93) (30) -------- -------- Net cash provided by (used in) investing activities (5,235) 2,926 -------- -------- Financing activities: Proceeds from long-term borrowings 4,700 - Repayments of long-term debt (588) (433) Issuance of common stock 290 155 -------- -------- Net cash provided by (used in) financing activities 4,402 (278) -------- -------- Effect of exchange rate changes on cash (508) (49) -------- -------- Net change in cash and equivalents (897) 253 Cash and equivalents at beginning of period 2,135 1,210 -------- -------- Cash and equivalents at end of period $ 1,238 $ 1,463 ======== ======== Supplemental Disclosure of Cash Flow Information: Cash paid for interest $ 76 $ 41 ======== ======== Cash paid for income taxes $ 23 $ 136 ======== ========
See Notes to Consolidated Financial Statements 6 NANOMETRICS INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Consolidated Financial Statements The consolidated financial statements include the accounts of Nanometrics Incorporated and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. While the quarterly financial information is unaudited, the financial statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) which the Company considers necessary for a fair presentation of the results of operations for the interim periods covered and of the financial condition of the Company at the date of the interim balance sheet. The operating results for interim periods are not necessarily indicative of the operating results to be expected for the entire year. The information included in this report should be read in conjunction with the information included in the Company's 1994 Form 10-K. Note 2. Per Share Information Net income (loss) per share is based on the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares include dilutive common stock options (using the treasury stock method) and are excluded in loss periods as they are anti-dilutive. Note 3. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following:
September 30, December 31, 1995 1994 ------------- ------------ (Amounts in thousands) Raw materials and subassemblies $1,604 $1,225 Work in process 1,474 735 Finished goods 1,025 2,792 ------ ------ $4,103 $4,752 ====== ======
Note 4. Borrowing Arrangements The Company, in June 1995, borrowed $4.7 million (400,000,000 Yen) from the Mitsubishi Bank, Ltd in Chiba, Japan to provide supplemental working capital for the Company's operations. The loan was secured using the Company's factory and adjacent land in Japan as collateral. This obligation bears interest at the bank's prime rate (2.375% at June 30, 1995) plus 1.3% and is due in quarterly installments of principal and interest through 2005. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - ------- -- ---------- Total revenues for the three months ended September 30, 1995 were $6,106,000, an increase of $2,743,000 or 82% from the comparable period in 1994. For the nine months ended September 30, 1995, total revenues of $15,852,000 increased by $6,436,000 or 68% from the comparable period in 1994. Net sales of $4,945,000 and $12,501,000 for the three months and nine months ended September 30, 1995, respectively, increased $2,657,000 or 116% and $6,086,000 or 95%, respectively, as compared with the same periods during 1994. The increases in net sales resulted from stronger worldwide demand for all of the Company's products especially from semiconductor manufacturers in the U.S., Europe, Korea and Japan. Service revenue of $1,161,000 and $3,351,000 for the three months and nine months ended September 30, 1995, respectively, increased $86,000 or 8% and $350,000 or 12%, respectively, as compared to the same periods in 1994. These increases in service revenue are primarily attributable to increased sales of accessories and upgrades in the U.S. and Japan in 1995. The Company believes that its revenue growth for the three and nine month periods ended September 30, 1995 is not necessarily indicative of future results. Cost of sales as a percentage of net sales decreased to 43% in the third quarter of 1995 from 54% in the third quarter of 1994. In addition, cost of sales as a percentage of net sales for the nine months ended September 30, 1995 decreased to 46% from 53% a year ago. These improved cost of sales ratios resulted primarily from higher sales volumes resulting in lower per unit manufacturing costs. Cost of service as a percentage of service revenue increased to 80% in the third quarter of 1995 from 73% in the third quarter of 1994, while cost of service as a percentage of service revenue for the nine months ended September 30, 1995 increased to 74% from 71% a year ago. These cost of service ratios increased primarily from the addition of service personnel in Korea and the U.S. Research and development expenses for the three months ended September 30, 1995 increased $44,000 or 7% compared to the same period in 1995 resulting from higher development costs at the Japanese subsidiary. Research and development expenses for the nine months ended September 30, 1995 decreased $8,000 compared to the same period in 1994. Selling expenses for the three month and nine month periods ended September 30, 1995 increased by $235,000 or 32% and $542,000 or 26%, respectively, compared to the same periods in 1994 primarily because of higher commission expenses resulting from higher sales and the cost of opening sales offices in Korea and in Austin, Texas. General and administrative expenses for the three month and nine month periods ended September 30, 1995 decreased by $447,000 or 45% and $364,000 or 19%, respectively, compared to the same periods in 1994. The higher general and administrative expenses in 1994 included a $517,000 writeoff of a doubtful receivable. Other income for the three month and nine month periods ended September 30, 1995 increased $173,000 and $548,000, respectively, from the comparable periods in 1994 due primarily to more favorable exchange rate results. For the quarter and the nine months ended September 30, 1995, the effective income tax rates were 23% and 26%, respectively. The income tax provision for interim periods reflects the Company's 8 estimated annual income tax rate. The difference between income taxes computed at the federal statutory rate and the effective tax rate in the third quarter and the first nine months of 1995 is due to the effect of foreign income taxed at a lower overall effective rate due to the utilization of previously reserved net operating loss carryforwards and the utilization of previously reserved federal net operating losses and foreign tax credits. The Company reported an operating income of $864,000 and net income of $842,000 for the third quarter of 1995 compared to an operating loss of $1,024,000 and a net loss of $978,000 for the same period in 1994. For the first nine months of 1995, the Company reported an operating income of $1,637,000 and net income of $1,728,000 which compared to an operating loss of $2,000,000 and a net loss of $1,875,000 for the same period in 1994. With sufficient capital and increased demand for new products and established products, the Company is optimistic about its prospects for the fourth quarter. Liquidity and Capital Resources - --------- --- ------- --------- At September 30, 1995, the Company had working capital of $15,474,000 compared to $10,205,000 at December 31, 1994. The current ratio at September 30, 1995 was 5.4 to 1. The Company believes working capital, including cash and short- term investments of $6,873,000, will be sufficient to meet its needs at least through the next twelve months. Operating activities for the first nine months of 1995 provided cash of $444,000 primarily from net income, while the purchase of short-term investments used $5,142,000, capital expenditures used $93,000, a long-term loan from a Japanese bank provided $4,700,000, debt repayment used $588,000 and issuance of common stock provided $290,000. 9 NANOMETRICS INCORPORATE PART II OTHER INFORMATION ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K A. Exhibits None B. Reports on Form 8-K. None. 10 NANOMETRICS INCORPORATED 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 thereunto duly authorized. NANOMETRICS INCORPORATED (Registrant) /s/ Vincent J. Coates - ------------------------------------ Vincent J. Coates Chairman and Chief Executive Officer /s/ Paul B. Nolan - ------------------------------------ Paul B. Nolan Chief Financial Officer Dated: November 13, 1995 11 NANOMETRICS INCORPORATED 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 thereunto duly authorized. NANOMETRICS INCORPORATED (Registrant) - ------------------------------------ Vincent J. Coates Chairman and Chief Executive Officer - ------------------------------------ Paul B. Nolan Chief Financial Officer Dated: November 13, 1995 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1995 JUL-01-1995 SEP-30-1995 1,238 5,635 7,573 305 4,103 18,970 3,045 0 22,182 3,496 3,771 10,308 0 0 4,520 22,182 12,501 15,852 5,705 8,187 6,028 0 0 2,327 599 1,728 0 0 0 1,728 .21 .21
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