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 26, 2005

Date of Report (date of earliest event reported)

Nanometrics Incorporated

(Exact name of Registrant as specified in charter)

California	0-13470	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) 435-9600

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:

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

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

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

¨ 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 27, 2005, Nanometrics Incorporated (the “Company”) issued a press release announcing preliminary financial results for the third quarter ended October 1, 2005. The press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference.

The information in this current report on Form 8-K disclosed pursuant to Item 2.02 and the Exhibit attached hereto shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (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, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 4.02 – Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

(a) On October 26, 2005, the Company’s Audit Committee, acting on a recommendation from the Company’s management, determined that the Company’s audited financial statements for the fiscal year ended January 1, 2005, and its unaudited quarterly financial statements for the periods ended April 2, 2005 and July 2, 2005, should no longer be relied upon and should be restated to revise the accounting for certain post-sale warranty services. The primary purpose of the restatement is to defer revenue associated with extended warranty service contracts purchased by certain customers at the time of equipment sale. Such revenue had erroneously been recognized at the time of equipment sale when, in fact, it should have been recognized ratably over the term of the service contracts in question. The Company issued a press release relating to these determinations on October 27, 2005, a copy of which is attached hereto as Exhibit 99.1 to this report and is incorporated herein by reference.

The Company will file amended reports on Forms 10-K/A and 10-Q/A for the periods being restated. The Company’s management and its Audit Committee reached their conclusions in consultation with the Company’s independent registered public accounting firm BDO Seidman, LLP.

Item 9.01 – Financial Statements and Exhibits.

(c) Exhibits.

99.1 Press Release issued by Nanometrics Incorporated dated October 27, 2005.

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 27, 2005	NANOMETRICS INCORPORATED
	/s/    Douglas J. McCutcheon
	Douglas J. McCutcheon Chief Financial Officer

Exhibit Index

Exhibit Number	Exhibit Title
99.1	Press release dated October 27, 2005.

EX-99.1

Exhibit 99.1

News Release

Agency Contact:	Company Contact:
Vincent Mayeda	Douglas McCutcheon
Loomis Group	Nanometrics Incorporated
909.590.9324, 909.517.1787 fax	408.435.9600 , 408.232.5910 fax
email: mayedav@loomisgroup.com	email: dmccutcheon@nanometrics.com

Nanometrics Announces Intention to Restate Financial Statements for

Fiscal 2004 and Interim Periods of 2005

and

Preliminary Results for Third Quarter Fiscal 2005

Restatements related to Accounting for Post-Sale Services

MILPITAS, Calif., Oct. 27, 2005 — Nanometrics Incorporated (Nasdaq: NANO), a leading supplier of advanced integrated and standalone metrology equipment for the semiconductor industry, today announced that it will restate its financial statements for fiscal year 2004 and the first six months of fiscal 2005 to revise the accounting for certain post-sale warranty services. Because changes in prior period accounting will affect results of the recently completed third fiscal quarter, the results being reported today are preliminary.

The accounting issues that led to the restatement are the subject of an ongoing review of the Company’s financial statements and accounting records currently being performed by management, the audit committee and the Company’s independent registered public accounting firm. The Company’s preliminary estimate of the impact to net revenues and cost of product sales of the combined adjustments are reflected below. These revenue adjustments reflect the deferral of revenue associated with extended warranty service contracts purchased by customers at the time of equipment sale. Such deferred revenue will now be recognized ratably over the term of the service contracts in question. Adjustments to cost of product sales reflect alignment of the warranty accrual with the actual warranty periods for certain customers.

	Increase (decrease)
Net Revenues
Fiscal Year 2004	($0.6-0.9 million)
First Six Months FY 2005	($0.2-0.4 million)
Cost of Product Sales	$0.0-1.0 million
(effect on prior periods to be determined)

Preliminary results for the fiscal 2005 third quarter ended October 1, 2005 reflect revenues of $14.0-$14.5 million, in line with the Company’s revenue pre-announcement of October 5, 2005; gross margin of approximately 38%; and operating expenses of $9.2 million. The cash and short term investments balance at October 1, 2005 was $46.5.

“While financial restatements are never pleasant, we believe this event is evidence of the Company’s enhanced level of financial rigor and process. After bringing this matter to the attention of our outside auditors, we have worked diligently with them to restate results for the relevant historical periods,” said Douglas McCutcheon, executive vice president and chief financial officer. The Company expects to file both restated financial reports and the fiscal 2005 third quarter report with the Securities and Exchange Commission in November 2005.

About Nanometrics: Nanometrics is a leader in the design, manufacture and marketing of high-performance process control metrology systems used in the manufacture of semiconductors, integrated circuits and flat panel displays. Nanometrics metrology systems measure various thin film properties, critical circuit dimensions and layer-to-layer circuit alignment (overlay) during various steps of the manufacturing process, enabling semiconductor and integrated circuit manufacturers to improve yields, increase productivity and lower their manufacturing costs. The Company maintains its headquarters in Milpitas, and sales and service offices worldwide. Nanometrics is traded on NASDAQ under the symbol NANO. Nanometrics’ website is: http://www.nanometrics.com. A conference call to discuss preliminary results for the third quarter of 2005 will be held on October 27, 2005 at 2:00 p.m. PT (5:00 p.m. ET). To participate in the earnings conference call, the dial-in numbers are 800-706-7741 in the United States or 617-614-3471 for international calls. The passcode is 93276456. If you are unable to participate during the live conference call, a webcast recording will be made available on the Nanometrics website.

Forward-Looking Statements: This release contains forward-looking statements including those regarding the anticipated nature, scope and timing of the Company’s restatement of its financial statements. These forward-looking statements involve risks and uncertainties which may cause actual results or timing to differ from those set forth in such forward-looking statements, including, but not limited to: additional issues may arise in connection with the ongoing review of the Company’s financial statements and accounting records by management, the audit committee and the Company’s independent registered public accounting firm that may cause additional deferral of revenue or other additional changes to the Company’s financial statements potentially including changes to financial statements for periods other than those referenced herein; if the Company’s ongoing review or the restatement causes the Company to delay the filing of its Form 10-Q for

the third quarter ended October 1, 2005, the Company will not be in compliance with the rules of the Securities and Exchange Commission and Nasdaq and may be subject to potential delisting of the Company’s securities from the Nasdaq National Market and other adverse effects. Please also refer to our Form 10-K, Forms 10-Q, Forms 8-K and other filings with the U.S. Securities and Exchange Commission for additional information on these factors and other factors that could cause actual results to differ materially from the forward-looking statements. Nanometrics does not assume any obligation to update the forward-looking information contained in this press release.