-----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, DBd+dvNZGguEX/7saV884U9gGvhrqJNpshgvFIvZQeAHI9YAelZUIEYAZWkaUod/ ZcEVg3tsoZZkjJrOX8IM/Q== 0000950005-96-000510.txt : 19960807 0000950005-96-000510.hdr.sgml : 19960807 ACCESSION NUMBER: 0000950005-96-000510 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960806 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NANOMETRICS INC CENTRAL INDEX KEY: 0000704532 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] 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: 96604441 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 June 30, 1996 --------------- 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 July 12, 1996 there were 8,068,672 shares of common stock, no par value, issued and outstanding. NANOMETRICS INCORPORATED INDEX Part I. Financial Information Page ---- Item 1. Financial Statements Consolidated Balance Sheets - June 30, 1996 and December 31, 1995 . . . . . . . . . . . . . . . 3 Consolidated Statements of Income - Three months and six months ended June 30, 1996 and 1995. . . . . . . . . . . . . . . . . . . . . . 5 Consolidated Statements of Cash Flows - Six months ended June 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . .7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . .8 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders . . . . 10 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 10 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2 PART I: FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS NANOMETRICS INCORPORATED CONSOLIDATED BALANCE SHEETS (Amounts in thousands except share amounts) (Unaudited) ASSETS June 30, December 31, 1996 1995 --------- ------------ Current assets: Cash and equivalents ............................ $ 1,680 $ 3,625 Short-term investments .......................... 6,072 4,458 Accounts receivable, less allowance for doubtful accounts of $378 and $380 ............ 10,598 7,567 Inventories ..................................... 4,976 3,955 Prepaid and deferred income taxes ............... 1,600 2,069 Prepaid expenses and other ..................... 550 428 ------- ------- Total current assets ............................... 25,476 22,102 Property, plant and equipment, net ................. 2,645 2,900 Other assets ....................................... 187 165 ------- ------- $28,308 $25,167 ======= ======= See Notes to Consolidated Financial Statements 3 NANOMETRICS INCORPORATED CONSOLIDATED BALANCE SHEETS (Continued) (Amounts in thousands except share amounts) (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY June 30, December 31, 1996 1995 ------- ------------ Current liabilities: Accounts payable ................................. $ 1,487 $1,111 Accrued payroll and related expenses ............. 711 486 Other current liabilities ........................ 1,871 1,216 Income taxes payable ............................. 677 398 Current portion of long-term debt ................ 365 553 ------- ------- Total current liablities ...................... 5,111 3,764 Long-term debt ..................................... 3,646 3,528 Deferred income taxes .............................. 196 301 ------- ------- Total liabilities ............................. 8,953 7,593 ------- ------- Shareholders' equity: Common stock, no par value; 25,000,000 shares authorized 8,065,339 and 7,883,910 outstanding ............ 11,156 10,983 Retained earnings ................................ 8,189 6,394 Accumulated translation adjustment ............... 10 197 ------- ------- Total shareholders' equity .................... 19,355 17,574 ------- ------- $28,308 $25,167 ======= ======= See Notes to Consolidated Financial Statements 4 NANOMETRICS INCORPORATED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 -------- ------- ------- ------- Revenues: Net sales .......................................... $ 5,991 $ 3,947 $11,545 $ 7,556 Service ............................................ 1,566 1,257 3,080 2,190 ------- ------- ------- ------- Total revenues ................................ 7,557 5,204 14,625 9,746 Costs and expenses: Cost of sales ...................................... 2,533 1,831 4,902 3,581 Cost of service .................................... 1,045 810 2,048 1,554 Research and development ........................... 665 684 1,335 1,189 Selling ............................................ 1,255 872 2,266 1,624 General and administrative ......................... 582 529 1,152 1,026 ------- ------- ------- ------- Total costs and expenses ......................... 6,080 4,726 11,703 8,974 ------- ------- ------- ------- Operating income ....................................... 1,477 478 2,922 772 Other income, net ..................................... 117 296 189 468 ------- ------- ------- ------- Income before provision for income taxes ..................................... 1,594 774 3,111 1,240 Provision for income taxes ............................. 633 194 1,316 354 ------- ------- ------- ------- Net income ............................................. $ 961 $ 580 $ 1,795 $ 886 ======= ======= ======= ======= Net income per common and equivalent share .................................. $ .11 $ .07 $ .21 $ .11 ======= ======= ======= ======= Weighted average common and equivalent shares outstanding ........................ 8,583 8,349 8,567 8,029 ======= ======= ======= ======= See Notes to Consolidated Financial Statements
5 NANOMETRICS INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) Six Months Ended June 30, 1996 1995 ------- -------- Operating activities: Net income ......................................... $ 1,795 $ 886 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization .................. 143 157 Deferred income taxes .......................... 500 (214) Changes in assets and liabilities: Accounts receivable ......................... (3,164) (990) Inventories ................................. (1,077) 489 Prepaid expenses and other .................. (333) (203) Accounts payable and other liabilities ...... 1,291 571 Income taxes payable ........................ (409) 320 ------- ------- Net cash provided by (used in) operating activities .... (1,254) 1,016 ------- ------- Investing activities: Purchase of short-term investments ................. (7,603) (6,714) Sales/maturities of short-term investments ......... 5,989 1,576 Capital expenditures ............................... (32) (6) ------- ------- Net cash used in investing activities .................. (1,646) (5,144) ------- ------- Financing activities: Proceeds from long-term borrowings ................. 762 4,700 Repayments of long-term debt ....................... (594) (160) Issuance of common stock ........................... 786 141 ------- ------- Net cash provided by financing activities .............. 954 4,681 ------- ------- Effect of exchange rate changes on cash ................ 1 (385) ------- ------- Net change in cash and equivalents ..................... (1,945) 168 Cash and equivalents at beginning of period ............ 3,625 2,135 ------- ------- Cash and equivalents at end of period .................. $ 1,680 $ 2,303 ======= ======= Supplemental Disclosure of Cash Flow Information: Cash paid for interest ............................. $ 61 $ 35 ======= ======= Cash paid for income taxes ......................... $ 87 $ 23 ======= ======= 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 that may 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 1995 Form 10-K filed with the Securities and Exchange Commission. Note 2. Per Share Information Net income 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). Note 3. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following: June 30, December 31, 1996 1995 -------- ------------ (Amounts in thousands) Raw materials and subassemblies .................. $1,817 $1,727 Work in process .................................. 2,093 830 Finished goods ................................... 1,066 1,398 ------ ------ $4,976 $3,955 ====== ====== Note 4. Borrowing Arrangements In April 1996, the Company borrowed approximately $762,000 (80,000,000 Yen) from the Japan Development Bank in Tokyo, 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 rate of 3.4% and is due in quarterly installments of principal and interest through 2006. 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 June 30, 1996 were $7,557,000, an increase of $2,353,000 or 45% from the comparable period in 1995. For the six months ended June 30, 1996, total revenues of $14,625,000 increased by $4,879,000 or 50% from the comparable period in 1995. Net sales of $5,991,000 and $11,545,000 for the three months and six months ended June 30, 1996, respectively, increased $2,044,000 or 52% and $3,989,000 or 53%, respectively, as compared with the same periods during 1995. The increases in net sales resulted from stronger demand for, and increased shipments of, the Company's products, especially its automated products, from customers in the U.S., Korea and Japan. Service revenue of $1,566,000 and $3,080,000 for the three months and six months ended June 30, 1996, respectively, increased $309,000 or 25% and $890,000 or 41%, respectively, as compared to the same periods in 1995. These increases in service revenue are primarily attributable to increased sales of accessories and upgrades in the U.S. and Japan in 1996. The Company believes that its revenue growth for the three and six month periods ended June 30, 1996 is not necessarily indicative of future results. Cost of sales as a percentage of net sales decreased from 46% in the second quarter of 1995 to 42% in the second quarter of 1996 primarily because of higher sales volume resulting in lower per unit manufacturing costs. Cost of service as a percentage of service revenue increased from 64% in the second quarter of 1995 to 67% in the second quarter of 1996. This increase was primarily attributable to the addition of service personnel needed to support the Company's growing sales and installed base of systems at customer locations. Cost of sales as a percentage of net sales for the six months ended June 30, 1996 decreased to 42% from 47% a year ago as a result of higher sales volume resulting in lower per unit manufacturing costs. Cost of service as a percentage of service revenue for the six months ended June 30, 1996 decreased to 66% from 71% a year ago. This decrease was primarily attributable to relatively higher margins on the additional sales of accessories in the first quarter of 1996. Research and development expenses for the three months ended June 30, 1996 decreased $19,000 or 3% compared to the same period in 1995 resulting from lower material costs associated with continuing product development at the Japanese subsidiary. Research and development expenses for the six months ended June 30, 1996 increased $146,000 or 12% compared to the same period in 1995 primarily due to the addition of software engineers in the U.S. Selling expenses for the three month and six month periods ended June 30, 1996 increased by $383,000 or 44% and $642,000 or 40%, respectively, compared to the same periods in 1995 primarily because of higher commission expenses resulting from higher sales and the addition of sales offices and sales staff during the past 12 months. General and administrative expenses for the three month and six month periods ended June 30, 1996 increased by $53,000 or 10% and $126,000 or 12%, respectively, compared to the same periods in 1995 as a result of spending associated with increased operating activity. Other income for the three month and six month periods ended June 30, 1996 decreased $179,000 and $279,000, respectively, from the comparable periods in 1995 due to lower exchange rate gains in 1996. The Company reported an operating income of $1,477,000 and net income of $961,000 for the second quarter of 1996 compared to an operating income of $478,000 and net income of $580,000 for the same 8 period in 1995. For the first six months of 1996, the Company reported an operating income of $2,922,000 and net income of $1,795,000 which compared to an operating income of $772,000 and net income of $886,000 for the same period in 1995. Liquidity and Capital Resources At June 30, 1996, the Company had working capital of $20,365,000 compared to $18,338,000 at December 31, 1995. The current ratio at June 30, 1996 was 5.0 to 1. The Company believes working capital including cash and short-term investments of $7,752,000 will be sufficient to meet its needs at least through the next twelve months. Operating activities for the first six months of 1996 used cash of $1,254,000 primarily from increased accounts receivable and inventory, which were offset to some extent by increased accounts payable, while the net purchases of short-term investments used $1,614,000, capital expenditures used $32,000, a long-term loan from a Japanese bank provided $762,000, debt repayment used $594,000 and issuance of common stock provided $786,000. The foregoing Management Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements involve risks and uncertainties as set forth under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Factors" in the 1995 Annual Report. The Company's actual results could differ materially from the results anticipated in such forward-looking statements. 9 NANOMETRICS INCORPORATED PART II OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS A. The annual meeting of shareholders was held on May 22, 1996. B. The following directors were elected to the board of directors: Vincent J. Coates Nathaniel Brenner Norman V. Coates John D. Heaton Clifford F. Smedley Kanegi Nagai C. The following matters were voted upon at the annual meeting: For Again Abstain --------- ----- ------- 1. To elect the following directors to serve for the ensuing year: Vincent J. Coates, Chairman 5,872,118 0 2,450 Nathaniel Brenner, Director 5,872,118 0 2,450 Norman V. Coates, Director 5,872,118 0 2,450 John D. Heaton, Director 5,872,118 0 2,450 Clifford F. Smedley, Director 5,872,118 0 2,450 Kanegi Nagai, Director 5,872,118 0 2,450 2. To ratify the appointment of Deloitte & Touche LLP as independ- ent auditors for the fiscal year ending December 31, 1996. 5,871,518 2,750 300 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: August 6, 1996 11 EX-27 2
5 1,000 6-MOS Dec-31-1996 Apr-01-1996 Jun-30-1996 1,680 6,072 10,976 378 4,976 25,476 2,645 0 28,308 5,111 3,646 11,156 0 0 8,199 28,308 11,545 14,625 4,902 6,950 4,753 0 0 3,111 1,316 1,795 0 0 0 1,795 .21 .21
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