<PAGE>
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 March 31, 1995 or
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____ 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
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NANOMETRICS INCORPORATED
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(Exact name of registrant as specified in its charter)
CALIFORNIA 94-2276314
- --------------------------------- -------------------
(State of 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 April 7, 1995 there were 7,408,495 shares of common stock, no par value,
issued and outstanding.
<PAGE>
NANOMETRICS INCORPORATED
INDEX
Part I. Financial Information Page
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Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1995 (unaudited) and December 31, 1994 . . . . . . . . . . . 3
Consolidated Statements of Operations -
Three months ended March 31, 1995
and 1994 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows -
Three months ended March 31, 1995
and 1994 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial
Statements (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . .8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . .9
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
NANOMETRICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except share amounts)
<TABLE>
<CAPTION>
ASSETS
March 31, December 31,
1995 1994
(Unaudited)
---------- ----------
<S> <C> <C>
Current assets:
Cash and equivalents $ 2,006 $ 2,135
Short-term investments 1,374 493
Accounts receivable, less allowance for
doubtful accounts of $275 and $270 5,602 4,881
Other receivables 28 115
Inventories 4,394 4,752
Prepaid and deferred income taxes 98 -
Other prepaid expenses 407 112
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Total current assets 13,909 12,488
Property, plant and equipment, net 3,524 3,179
Other assets 127 119
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$ 17,560 $ 15,786
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-------- ------
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
NANOMETRICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(CONTINUED)
(Amounts in thousands except share amounts)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
(Unaudited)
----------- -----------
<S> <C> <C>
Current liabilities:
Accounts payable $ 1,019 $ 696
Accrued payroll and related expenses 337 236
Other current liabilities 1,189 1,117
Income taxes payable 164 7
Current portion of long-term debt 199 227
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Total current liabilities 2,908 2,283
Long-term debt 401 421
Deferred income taxes 90 87
Shareholders' equity:
Common stock, no par value;
25,000,000 shares authorized;
7,394,678 and 7,370,978 outstanding 10,033 10,018
Retained earnings 2,421 2,117
Cumulative translation adjustment 1,707 860
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Total shareholders' equity 14,161 12,995
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Total liabilities and shareholders' equity $ 17,560 $ 15,786
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</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
NANOMETRICS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
------ -------
<S> <C> <C>
Revenues:
Net sales $ 3,609 $ 1,681
Service 933 958
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Total revenues 4,542 2,639
Costs and expenses:
Cost of sales 1,750 943
Cost of service 744 672
Research and development 505 631
Selling 752 636
General and administrative 497 468
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Total costs and expenses 4,248 3,350
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Operating income (loss) 294 (711)
Other income, net 172 74
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Income (loss) before provision for income taxes 466 (637)
Provision for income taxes 160 7
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Net income (loss) $ 306 $ (644)
------ -------
------ -------
Per share amounts:
Net income (loss) per common share $ 0.04 $ (0.09)
------ -------
------ -------
Weighted average common shares outstanding 7,709 7,154
------ -------
------ -------
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
NANOMETRICS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
------ -------
<S> <C> <C>
Operating activities:
Net income (loss) $ 306 $ (644)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 77 85
Changes in assets and liabilities:
Accounts receivable (210) 518
Other receivables 90 (25)
Inventories 507 (511)
Prepaid expenses (296) (30)
Other assets (98) 11
Accounts payable and other liabilities 370 (395)
Deferred revenue 50 5
Income taxes payable 144 (136)
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Net cash provided by (used in) operating activities 940 (1,122)
Investing activities:
Short term investments, net (790) 1,007
Capital expenditures - -
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Net cash provided by (used in) investing activities (790) 1,007
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Financing activities:
Repayments of long-term debt (137) (158)
Issuance of common stock 15 60
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Net cash used in financing activities (122) (98)
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Effect of exchange rate changes on cash (66) (19)
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Net change in cash and equivalents (38) (232)
Cash and equivalents at beginning of period 2,135 1,210
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Cash and equivalents at end of period $ 2,097 $ 978
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Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 9 $ 14
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------- -------
Cash paid for income taxes $ 1 $ 110
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------- -------
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE>
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 subsidiary. 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 for the entire year. The information included in this
report should be read in conjunction with the information included in the
Company's 1994 Form 10-K.
Note 2. Inventories
Inventories are stated at the lower of standard cost (which approximates
first-in, first-out actual cost) or market.
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
-------- ---------
(Amounts in thousands)
<S> <C> <C>
Raw materials and subassemblies $ 1,826 $ 1,225
Work in process 894 735
Finished goods 1,674 2,792
-------- ---------
$ 4,394 $ 4,752
-------- ---------
-------- ---------
</TABLE>
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total revenues for the first quarter of 1995 were $4,542,000, an increase
of $1,903,000 or 72% from the same quarter in 1994. Net sales revenue of
$3,609,000 increased $1,928,000 or 115% for the first quarter of 1995 compared
to the same period in 1994 resulting from increased demand for the Company's
products in the U. S. and Japan, especially its higher priced, automated
systems. Service revenue decreased $25,000 or 3% for the first quarter of 1995
compared to the same period in 1994.
Cost of sales as a percentage of net sales decreased from 56% in the first
quarter of 1994 to 48% in the first quarter of 1995 primarily because of higher
sales volume resulting in lower per unit manufacturing costs. Cost of service
as a percentage of service revenue increased from 70% in the first quarter of
1994 to 80% in the first quarter of 1995. This increase was primarily
attributable to additional personnel for improved customer response and to
higher costs in Japan.
Research and development expenses for the first quarter of 1995 decreased
by $126,000 or 20% compared to the same period in 1994. This decrease was
mainly due to lower materials expenses as the Company directs more of its
efforts on software development.
Selling expenses for the first quarter of 1995 increased by $116,000 or 18%
compared to the same period in 1994 primarily because of higher commission
expenses resulting from higher sales.
General and administrative expenses for the first quarter of 1995 increased
$29,000 or 6% compared to the same period in 1994 as a result of higher overhead
expenses.
Other income increased $98,000 during the first quarter of 1995 compared to
the same period in 1994 due to more favorable exchange rate results.
The Company reported an operating income of $294,000 and net income of
$306,000 for the first quarter of 1995 compared to an operating loss of $711,000
and a net loss of $644,000 for the same period in 1994.
The Company is optimistic about its prospects for the second quarter with
new products ready to ship and increased demand for established products.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1995, the Company had working capital of $11,001,000 compared
to $10,205,000 at December 31, 1994. The current ratio at March 31, 1995 was
4.8 to 1. The Company believes working capital including cash and short-term
investments of $3,380,000 will be sufficient to meet its needs at least through
the next twelve months. The Company can seek bank or other financing to provide
additional capital if needed. Operating activities for the first quarter of
1995 provided cash of $940,000 primarily from lower inventory levels and net
income while the purchase of short-term investments used $790,000, debt
repayment used $137,000 and issuance of common stock provided $15,000.
8
<PAGE>
NANOMETRICS INCORPORATED
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
None
B. Reports on Form 8-K
None.
9
<PAGE>
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: May 11, 1995
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 2,006
<SECURITIES> 1,374
<RECEIVABLES> 5,877
<ALLOWANCES> 275
<INVENTORY> 4,394
<CURRENT-ASSETS> 13,909
<PP&E> 3,524
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,560
<CURRENT-LIABILITIES> 2,908
<BONDS> 401
<COMMON> 10,033
0
0
<OTHER-SE> 4,128
<TOTAL-LIABILITY-AND-EQUITY> 17,560
<SALES> 3,609
<TOTAL-REVENUES> 4,542
<CGS> 1,750
<TOTAL-COSTS> 2,494
<OTHER-EXPENSES> 1,754
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 466
<INCOME-TAX> 160
<INCOME-CONTINUING> 306
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 306
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
