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President and chief executive officer Dr. Timothy J. Stultz said, "We are very pleased to announce Nanometrics' return to profitability in the third quarter of 2009. Improvements in our served markets together with our well-positioned product offerings translated into significant revenue growth, further improvements to our gross margin and, most importantly, positive cash flow and profits.
"During the economic and industry downturn, we have continued to invest in developing advanced, highly-differentiated, cost-effective and extendable product solutions for our customers. We have expanded our served markets through both internal product development and strategic acquisitions that were non-dilutive to our shareholders. At the same time, we completed a turnaround and restructuring of our business that resulted in a leaner, more efficient and volume-adaptable manufacturing and operating infrastructure. Our third quarter results are evidence that we have grown into our business model at this very early stage of our industry's recovery.
"The growth we achieved in the third quarter was largely driven by multi-system orders and technology upgrades from leading worldwide semiconductor companies in both the memory and logic sectors. We continue to see strong sales of our thin-film and OCD systems, increasing traction with our Caliper overlay product and Lynx platform, and further penetration into high-growth segments such as high-brightness LEDs. We are also excited about the emerging market opportunity for metrology in wafer-scale packaging, which represents an expansion of our served markets through the second-quarter acquisition of the Unifire product line.
"Looking ahead, we see continued improvements in our served markets and further growth in revenues, albeit at a slower rate than what we have achieved in the last two quarters. Our business is on a positive trajectory, with momentum building for continued success in our served markets and improved operational and financial performance."
In a release dated October 29, the company stated:
- Revenues were $25.8 million, up 78 percent from $14.5 million in the second quarter of 2009 and up 12 percent from $23.1 million in the third quarter of 2008. Gross margin increased to 54.0 percent, compared to 41.4 percent in the prior quarter and 44.1 percent in the year-ago period, as a result of higher sales volume, improved factory absorption and an increased contribution of upgrades to service revenue.
- Operating expenses were $12.4 million, compared to $12.5 million in the second quarter of 2009 and $70.2 million in the year-ago period. Total operating expenses in the comparative periods included asset impairment and restructuring charges of $2.3 million and $56.0 million, respectively, for the second quarter of 2009 and the third quarter of 2008.
- Net income was $1.6 million, or $0.08 per diluted share, compared to a net loss of $7.0 million, or $0.38 per share in the second quarter of 2009 and a net loss of $60.4 million, or $3.25 per share, in the third quarter of 2008. Non-GAAP operating income was $4.0 million, compared to non-GAAP operating losses of $2.3 million and $1.1 million, respectively, in the second quarter of 2009 and the year-ago period.
Summary for the Nine Months Ended September 26:
- Revenues were $50.4 million, down 38 percent from $81.6 million in the year-ago period. Despite the decline in revenues over the comparable period, gross margin increased by 100 basis points, from 44.2 percent to 45.2 percent, reflecting improvements to our cost structure. Excluding restructuring and asset impairment charges, operating expenses of $33.8 million decreased 27 percent from $46.0 million for the first nine months of 2008, as a result of company-wide cost reductions. Net loss was $16.0 million, or $0.87 per share, compared to net loss of $80.1 million, or $4.31 per share, for the first nine months of 2008. Non-GAAP operating loss was $4.9 million, compared to non-GAAP operating income of $0.1 million in the year-ago period.
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