-----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, Rwb8YtiUBnaWtG9uC790+k+WrIxa9DU1IgWqEuuYzbKL+dQ4sBWlL9rohImVnNgc J2w7UEF1ntFBJfyABp0vSQ== 0001012870-97-001465.txt : 19970808 0001012870-97-001465.hdr.sgml : 19970808 ACCESSION NUMBER: 0001012870-97-001465 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970807 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: 97652888 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, DC 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, 1997 ______________ 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 14, 1997 there were 8,294,456 shares of common stock, no par value, issued and outstanding. 1 NANOMETRICS INCORPORATED INDEX Part I. Financial Information Page ---- Item 1. Financial Statements Consolidated Balance Sheets - June 30, 1997 and December 31, 1996........................ 3 Consolidated Statements of Income - Three months and six months ended June 30, 1997 and 1996..................................... 4 Consolidated Statements of Cash Flows - Six months ended June 30, 1997 and 1996................................................... 5 Notes to Consolidated Financial Statements................................................. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........... 7 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders..... 9 Item 6. Exhibits and Reports on Form 8-K........................ 9 Signatures........................................................ 10 2 PART I: FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS NANOMETRICS INCORPORATED CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS EXCEPT SHARE AMOUNTS)
June 30, December 31, ASSETS 1997 1996 (Unaudited) ----------- ------------ CURRENT ASSETS: Cash and equivalents $ 2,764 $ 1,725 Short-term investments 8,639 6,657 Accounts receivable, less allowance for doubtful accounts of $419 and $419 8,392 11,100 Inventories 6,316 5,078 Prepaid and deferred income taxes 2,413 1,648 Prepaid expenses and other 504 882 ------- ------- Total current assets 29,028 27,090 ------- ------- PROPERTY, PLANT AND EQUIPMENT, NET 2,546 2,600 OTHER ASSETS 284 274 ------- ------- TOTAL $31,858 $29,964 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 1,563 $ 1,563 Accrued payroll and related expenses 575 533 Other current liabilities 1,228 763 Income taxes payable -- 1,271 Current portion of long-term debt 349 347 ------- ------- Total current liabilities 3,715 4,477 ------- ------- LONG-TERM DEBT 3,143 3,296 DEFERRED INCOME TAXES 106 131 ------- ------- Total liabilities 6,964 7,904 ------- ------- SHAREHOLDERS' EQUITY: Common stock, no par value; 25,000,000 shares authorized; 8,294,456 and 8,258,061 outstanding 11,990 11,833 Retained earnings 13,033 10,387 Accumulated translation adjustment (129) (160) ------- ------- Total shareholders' equity 24,894 22,060 ------- ------- TOTAL $31,858 $29,964 ======= =======
See Notes to Consolidated Financial Statements 3 NANOMETRICS INCORPORATED CONSOLIDATED STATEMENTS OF INCOME (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 --------- ------- -------- ------- NET REVENUES: Product sales $7,741 $5,991 $15,042 $11,545 Service 958 1,566 1,916 3,080 ------ ------ ------- ------- Total net revenues 8,699 7,557 16,958 14,625 ------ ------ ------- ------- COSTS AND EXPENSES: Cost of product sales 2,902 2,533 5,639 4,902 Cost of service 874 1,045 1,737 2,048 Research and development 665 665 1,339 1,335 Selling 1,626 1,255 2,889 2,266 General and administrative 613 582 1,249 1,152 ------ ------ ------- ------- Total costs and expenses 6,680 6,080 12,853 11,703 ------ ------ ------- ------- OPERATING INCOME 2,019 1,477 4,105 2,922 OTHER INCOME, NET 107 117 186 189 ------ ------ ------- ------- INCOME BEFORE PROVISION FOR INCOME TAXES 2,126 1,594 4,291 3,111 PROVISION FOR INCOME TAXES 753 633 1,645 1,316 ------ ------ ------- ------- NET INCOME $1,373 $ 961 $ 2,646 $ 1,795 ====== ====== ======= ======= NET INCOME PER COMMON AND EQUIVALENT SHARE $.16 $.11 $.31 $.21 ====== ====== ======= ======= COMMON AND EQUIVALENT SHARES OUTSTANDING 8,665 8,583 8,669 8,567 ====== ====== ======= =======
See Notes to Consolidated Financial Statements 4 NANOMETRICS INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited)
Six Months Ended June 30, 1997 1996 ----------------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,646 $ 1,795 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 148 143 Deferred income taxes (58) 500 Changes in assets and liabilities: Accounts receivable 2,227 (3,249) Other receivables (135) 85 Inventories (1,208) (1,077) Prepaid expenses and other (354) (333) Accounts payable and other liabilities 506 1,291 Income taxes payable (1,272) (409) -------- ------- Net cash provided by operating activities 2,500 (1,254) -------- ------- INVESTING ACTIVITIES: Purchase of short-term investments 10,608 (7,603) Sales/maturities of short-term investments (12,590) 5,989 Capital expenditures (81) (32) -------- ------- Net cash used in investing activities (2,063) (1,646) -------- ------- FINANCING ACTIVITIES: Proceeds from long-term borrowings - 762 Repayments of long-term debt (167) (594) Issuance of common stock 157 786 -------- ------- Net cash in financing activities (10) 954 -------- ------- EFFECT OF EXCHANGE RATE CHANGES ON CASH 611 1 -------- ------- NET CHANGE IN CASH AND EQUIVALENTS 1,038 (1,945) CASH AND EQUIVALENTS, at beginning of period 1,725 3,625 -------- ------- CASH AND EQUIVALENTS, at end of period $ 2,763 $ 1,680 ======== ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $ 49 $ 61 ======== ======= Cash paid for income taxes $ 3,679 $ 87 ======== =======
See Notes to Consolidated Financial Statements 5 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 inter-company 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 Form 10-K for the year ended December 31, 1996 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 and shares issuable under the employee stock purchase plan). Note 3. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following (in thousands): June 30, December 31, 1997 1996 -------- ------------ Raw materials and subassemblies $3,483 $1,855 Work in process 2,039 1,414 Finished goods 794 1,809 ------ ------ $6,316 $5,078 ====== ====== Note 4. Recently Issued Accounting Standard In February 1997, the Financial Accounting Standards Board issued a Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128). The Company is required to adopt SFAS 128 in the fourth quarter of fiscal 1997 and will restate at that time earnings per share (EPS) data for prior periods to conform with SFAS 128. Earlier application is not permitted. SFAS 128 replaces current EPS reporting requirements and requires a dual presentation of basic and diluted EPS. Basic EPS excludes dilution and is computed by dividing net income by the weighted average of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. If SFAS 128 had been in effect during the current and prior year periods, basic EPS would have been $ 0.17 and $ 0.12 for the quarters ended June 30, 1997 and 1996, respectively, and $ 0.32 and $ 0.23 for the year to date periods, respectively. Diluted EPS under SFAS 128 would not have been significantly different than primary EPS currently reported for the periods. 6 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, 1997 were $8,699,000, an increase of $1,142,000 or 15% from the comparable period in 1996. For the six months ended June 30, 1997, total revenues of $16,958,000 increased by $2,333,000 or 16% from the comparable period in 1996. Product sales of $7,741,000 and $15,042,000 for the three months and six months ended June 30, 1997, respectively, increased $1,750,000 or 29% and $3,497,000 or 30%, respectively, as compared with the same periods during 1996. The increases in product sales resulted from stronger demand for, and increased shipments of, the Company's products, especially its automated products, particularly from customers in the Far East. Service revenue of $958,000 and $1,916,000 for the three months and six months ended June 30, 1997, respectively, decreased $608,000 or 39% and $1,164,000 or 38%, respectively, as compared to the same periods in 1996. These decreases in service revenue are primarily attributable to a lower sales of accessories and upgrades in the U.S. and the Far East in 1997. Cost of product sales as a percentage of product sales decreased from 42% in both the second quarter and in the first six months of 1996 to 37% in both the second quarter and in the first six months of 1997 primarily because of higher sales volume resulting in lower per unit manufacturing costs. Cost of service as a percentage of service revenue increased from 67% in the second quarter of 1996 to 91% in the second quarter of 1997. Cost of service as a percentage of service revenue for the six months ended June 30, 1997 increased to 91% from 66% a year ago. These increases were primarily attributable to the decline in the sales of accessories and upgrades while fixed service costs increased to support the Company's growing installed base of systems at customer locations in 1997. Research and development expenses for the three months ended June 30, 1997 were unchanged from the same period in 1996 and increased by $4,000 for the six months ended June 30, 1997 compared to the same period in 1996. Selling expenses for the three month and six month periods ended June 30, 1997 increased by $371,000 or 30% and $623,000 or 27%, respectively, compared to the same periods in 1996 primarily because of higher commission expenses resulting from higher sales and the addition of sales and marketing staff in the second half of 1996. General and administrative expenses for the three month and six month periods ended June 30, 1997 increased by $31,000 or 5% and $97,000 or 8%, respectively, compared to the same periods in 1996 as a result of spending associated with increased operating activity. Other income for the three month and six month periods ended June 30, 1997 decreased $10,000 and $3,000, respectively, from the comparable periods in 1996. The Company reported an operating income of $2,019,000 and net income of $1,373,000 for the second quarter of 1997 compared to an operating income of $1,477,000 and net income of $961,000 for the same period in 1996. For the first six months of 1997, the Company reported an operating income of $4,105,000 and net income of $2,646,000 which compared to an operating income of $2,922,000 and net income of $1,795,000 for the same period in 1996. 7 LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- At June 30, 1997, the Company had working capital of $25,313,000 compared to $22,613,000 at December 31, 1996. The current ratio at June 30, 1997 was 7.8 to 1. The Company believes working capital including cash and short-term investments of $11,403,000 will be sufficient to meet its needs at least through the next twelve months. Operating activities for the first six months of 1997 provided cash of $2,500,000 primarily from profits and decreased accounts receivable, which were offset to some extent by increased inventories and income tax payments, while the net purchases of short-term investments used $1,982,000, capital expenditures used $81,000, debt repayment used $167,000 and issuance of common stock provided $157,000. The foregoing Management's 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company's actual results could differ materially from the results anticipated in such forward-looking statements as a result of a number of factors. Such factors include, but are not limited to, the cyclicality of the semiconductor industry and the markets served by the Company's customers, the size and timing of orders, the proportion of direct sales and sales through distributors and representatives, changes in pricing by the Company, its competitors, customers or suppliers, market acceptance of new and enhanced products by the Company or its competitors and the other factors described in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. 8 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 15, 1997. 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 Against Abstain ------------ ------- ------- 1. To elect the following directors to serve for the ensuing year: Vincent J. Coates, Chairman 6,345,043 0 7,200 Nathaniel Brenner, Director 6,345,043 0 7,200 Norman V. Coates, Director 6,344,926 0 7,317 John D. Heaton, Director 6,345,043 0 7,200 Clifford F. Smedley, Director 6,345,043 0 7,200 Kanegi Nagai, Director 6,345,043 0 7,200 2. To approve amendments to the Company's 1991 Stock Option Plan. 6,028,434 246,793 14,960 3. To ratify the appointment of Deloitte & Touche LLP as independent auditors for the fiscal year ending December 31, 1997. 6,346,028 5,700 515
ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K A. Exhibits 27 Financial Data Schedule. B. Reports on Form 8-K. None. 9 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 7, 1997 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1997 APR-01-1997 JUN-30-1997 2,764 8,639 8,811 419 6,316 29,028 2,546 0 31,858 3,715 3,143 0 0 11,990 12,904 31,858 15,042 16,958 5,639 7,376 5,477 0 0 4,291 1,645 2,646 0 0 0 2,646 .31 .31
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