Nanometrics Incorporated, a leading supplier of advanced process control metrology systems used primarily in the manufacturing of semiconductors, solar photovoltaics and high-brightness LEDs, today announced financial results for its first quarter ended March 28, 2009.
Commenting on the first quarter results, president and chief executive officer Dr. Timothy J. Stultz said, “Severe reductions in semiconductor capital equipment spending resulted in a sharp decline in our quarterly revenues. However, our service and upgrade business, as well as our product sales into the high-brightness LEDs and solar photovoltaics markets, have showed continued strength and resilience during this unprecedented decline in memory and logic fab spending.”
“While we are beginning to see signs that business is improving in the semiconductor industry, and that the first quarter may indeed be the trough quarter for capital spending, we will continue to take steps to further reduce our expenses and cost structure until such time as visibility, certainty and lead times improve,” commented Dr. Stultz. “For five straight quarters we have reduced our ongoing operating expenses and driven down our cash break-even revenue level. Continued cost reduction actions taken in the first quarter of the year and those planned for the current quarter will further drive down operating expenses and our cash break-even level.”
“While we are steadfast in our commitment to reduce and manage expenses, we are equally committed to our investments in new products, technologies and applications which will be the fuel for growth when spending in our industry resumes,” added Dr. Stultz. “We are very encouraged by the performance of, and customer reception to, our latest product offerings, and expect to emerge from this downturn with a stronger and increased position within our served markets.”
First Quarter 2009 Summary
Revenues were $10.1 million, down 51% from $20.5 million in the fourth quarter of 2008 and down 71% from $34.7 million in the first quarter of 2008. Gross margin was 28.3%, down from 42.1% for the prior quarter and 45.6% in the year-ago period, reflecting decreased factory absorption as a result of decreased sales volume. Operating expenses totaled $11.9 million, including a $0.7 million restructuring charge relating to workforce reductions in the quarter, representing a decrease of 2% from the prior quarter and 29% from the year-ago period.
The net loss was $10.6 million, or $0.58 per share. This compares to a net loss of $2.6 million, or $0.14 per share, in the fourth quarter of 2008 and a net loss of $0.7 million, or $0.04 per share, in the first quarter of 2008. The net loss for the first quarter included $0.3 million of stock-based compensation expenses and $0.7 million of restructuring charges, compared $0.9 million and $0.9 million, respectively, in the first quarter of 2008. The net loss also included a foreign currency charge of $1.3 million associated with a reclassification of our intercompany loans with Japan at the end of fiscal 2008 as well as the weakening of the Japanese yen during the quarter.
Earnings (loss) before interest, income taxes, depreciation and amortization excluding certain items such as asset impairment, restructuring and acquisition-related charges (“EBITDA”) for the first quarter was ($6.9) million, compared to ($2.0) million for the fourth quarter of 2008 and $2.5 million for the first quarter of 2008.
Conference Call Details
A conference call to discuss the first quarter 2009 results will be held today at 4:45 p.m. EDT (1:45 p.m. PDT). To participate in the conference call, the dial-in numbers are 800-435-1398 for domestic callers and 617-614-4078 for international callers. The passcode is 18283705. A live and recorded webcast will be made available on the investor page of the Nanometrics website at http://www.nanometrics.com.
Use of Non-GAAP Financial Information
Financial results such as EBITDA that exclude certain charges and special items are not in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Management uses EBITDA, which excludes costs associated with acquisitions, asset impairments, restructuring and other special items, to evaluate the company’s operating and financial results. The company believes the presentation of EBITDA 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. A table presenting a reconciliation of GAAP results to EBITDA is included at the end of this press release.
Nanometrics is a leader in the design, manufacture and marketing of high-performance process control metrology systems used primarily in the manufacturing of semiconductors, solar photovoltaics and high-brightness LEDs, as well as by customers in the silicon wafer and data storage industries. Nanometrics standalone and integrated metrology systems measure various thin film properties, critical dimensions, overlay control and optical, electrical and material properties, including the structural composition of silicon, compound semiconductor and photovoltaic devices, during various steps of the manufacturing process. These systems enable device manufacturers to improve yields, increase productivity and lower their manufacturing costs. The company maintains its headquarters in Milpitas, California, with sales and service offices worldwide. Nanometrics is traded on NASDAQ Global Market under the symbol NANO. Nanometrics’ website is http://www.nanometrics.com.