Press Releases

Nov 07,2019

Onto Innovation Reports Third Quarter 2019 Results, Combined Company Guidance and Additional Merger Details

WILMINGTON, Mass.--(BUSINESS WIRE)--Nov. 7, 2019-- Onto Innovation Inc. (NYSE: ONTO) today reported financial results for the third quarter of 2019 for Rudolph Technologies and Nanometrics Incorporated on a standalone basis, the last quarter prior to their merger completed on October 25, 2019. Rudolph Technologies will continue as the surviving corporation for accounting purposes and a wholly owned subsidiary of Nanometrics. The combined company is now named Onto Innovation Inc.

Rudolph Technologies Third Quarter 2019 Highlights

  • Revenue of $62.9 million, incrementally higher than the 2019 second quarter.
  • Inspection revenue increased 20% from the second quarter.
  • Shipment of a JetStep® lithography panel system to a new customer bringing the number of panel customers to six.
  • Cash flow from operations was $15.1 million, and cash and marketable securities increased to $193.1 million at quarter end.

Nanometrics Third Quarter 2019 Highlights

  • Revenue of $73.1 million, increased 8% from the 2019 second quarter.
  • The Atlas® III+ platform has grown to comprise the majority of total Atlas system sales year-to-date, with adoption by leading manufacturers of logic and memory devices.
  • New customer win for the IMPULSE® integrated metrology system after qualification at a major memory manufacturer.

Onto Innovation Merger Completion and Results Commentary

Michael Plisinski, chief executive officer of Onto Innovation commented, “We have an incredibly talented, new team that now forms the ingenuity of Onto Innovation. After the successful launch last week, the various teams have not only embraced the tasks of bringing the two companies together, but we are also now focused on building plans that increase value to customers, employees, and shareholders. With similar enthusiasm, the merger of Nanometrics and Rudolph Technologies was ratified by an overwhelming response from shareholders, with 99% of the actual voted shares voting for the merger.”

He continued, “Though the semiconductor market is still recovering, the growing confidence in the market across a number of segments is a great backdrop for the launch of Onto Innovation. Onto Innovation will play an important role in many of these anticipated inflections. Our expanded base of technologies, products and end markets along with greater scale enables us to be a more comprehensive partner for our customers. Our new name embodies our continuous focus on the future and the crucial role that innovation plays in that future for our customers as well as the Onto Innovation team.”

Rudolph Technologies, Inc.

Key Financial Data for the Quarters Ended September 30, 2019,

June 30, 2019, and September 30, 2018

(in thousands, except per share amounts)

   

U.S. GAAP

 

 

 

September 2019

 

 

June 2019

 

 

September 2018

 

Revenue

 

$

62,935

 

 

$

61,511

 

 

$

60,432

 

Gross profit margin

 

 

50.1

%

 

 

51.9

%

 

 

52.0

%

Operating income

 

$

5,290

 

 

$

5,418

 

 

$

7,629

 

Net income

 

$

6,560

 

 

$

5,526

 

 

$

7,187

 

Net income per diluted share

 

$

0.21

 

 

$

0.18

 

 

$

0.22

 

U.S. NON-GAAP

 

 

 

September 2019

 

 

June 2019

 

 

September 2018

 

Revenue

 

$

62,935

 

 

$

61,511

 

 

$

60,432

 

Gross profit margin

 

 

50.2

%

 

 

52.0

%

 

 

52.1

%

Operating income

 

$

9,662

 

 

$

9,942

 

 

$

9,304

 

Net income

 

$

9,825

 

 

$

8,987

 

 

$

8,504

 

Net income per diluted share

 

$

0.31

 

 

$

0.29

 

 

$

0.26

 

Rudolph Technologies Third Quarter 2019 GAAP Financial Results

Third quarter revenue totaled $62.9 million, an increase of 2% compared with $61.5 million for the second quarter of 2019 and an increase of 4% compared to $60.4 million in the 2018 third quarter. Gross profit margin was 50.1% of revenues in the third quarter of 2019, a decrease from 51.9% in the second quarter of 2019 and 52% in the prior year quarter. The decrease in gross profit margin from the 2019 second quarter was driven mainly by product mix which included lower software and metal metrology sales, as well as a lithography tool sale in the quarter which typically carries lower product margins.

Operating expenses for the third quarter of 2019 totaled $26.2 million, compared to $26.5 million in the second quarter of 2019 and $23.8 million in the third quarter of 2018. Operating expenses represented 42% of revenue in the 2019 third quarter compared to 43% of revenue in the second quarter and 39% of revenue in the 2018 third quarter. The decrease in operating expenses over the second quarter was primarily due to lower research and development expenses. The year-over-year increase was primarily due to costs related to the merger with Nanometrics.

GAAP net income for the third quarter of 2019 was $6.6 million, or $0.21 per diluted share, compared with net income of $5.5 million, or $0.18 per diluted share, for the 2019 second quarter and net income of $7.2 million, or $0.22 per diluted share, for the 2018 third quarter. The increase in GAAP net income over the second quarter was primarily due an increase in foreign currency gains and lower income tax expense.

Rudolph Technologies Third Quarter Non-GAAP Financial Results

Third quarter 2019 non-GAAP net income was $9.8 million, or $0.31 per diluted share, as detailed in the attached table. Second quarter 2019 non-GAAP net income was $9.0 million, or $0.29 per diluted share, and third quarter 2018 non-GAAP net income was $8.5 million, or $0.26 per diluted share. Non-GAAP results exclude merger-related expenses, share-based compensation expense and the amortization of intangible assets.

Nanometrics Incorporated

Key Financial Data for the Quarters Ended September 28, 2019,

June 30, 2019, and September 29, 2018

(in thousands, except per share amounts)

   

U.S. GAAP

 

 

 

September 2019

 

 

June 2019

 

 

September 2018

 

Revenue

 

$

73,125

 

 

$

67,620

 

 

$

76,590

 

Gross profit margin

 

 

52.9

%

 

 

52.0

%

 

 

57.0

%

Operating income

 

$

5,935

 

 

$

3,749

 

 

$

14,271

 

Net income

 

$

4,211

 

 

$

3,930

 

 

$

11,568

 

Net income per diluted share

 

$

0.17

 

 

$

0.16

 

 

$

0.47

 

U.S. NON-GAAP

 

 

 

September 2019

 

 

June 2019

 

 

September 2018

 

Revenue

 

$

73,125

 

 

$

67,620

 

 

$

76,590

 

Gross profit margin

 

 

53.5

%

 

 

53.5

%

 

 

57.0

%

Operating income

 

$

9,237

 

 

$

6,340

 

 

$

14,542

 

Net income

 

$

7,444

 

 

$

5,318

 

 

$

11,391

 

Net income per diluted share

 

$

0.30

 

 

$

0.21

 

 

$

0.47

 

Nanometrics Third Quarter 2019 GAAP Financial Results

Third quarter revenue totaled $73.1 million, an increase of 8% compared with $67.6 million for the second quarter of 2019 and down 5% from $76.6M in the third quarter of 2018. Gross profit margin was 52.9% of revenues in the third quarter of 2019 compared to 52.0% in the second quarter of 2019 and 57.0% in the year ago period. The increase in gross profit margin from the second quarter of 2019 was driven mainly by product mix.

Operating expenses for the third quarter of 2019 totaled $32.7 million, compared to $31.4 million in the second quarter of 2019 and $29.4 million for the third quarter of 2018. Operating expenses represented 45% of revenue in the 2019 third quarter compared to 47% of revenue in the second quarter of 2019 and 38% in the third quarter of 2018. The increase in operating expenses over the prior quarter was primarily due to expenses related to the merger with Rudolph Technologies.

GAAP net income for the third quarter of 2019 was $4.2 million, or $0.17 per diluted share, compared with a net income of $3.9 million, or $0.16 per diluted share, for the 2019 second quarter and net income of $11.6 million or $0.47 per diluted share, for the 2018 third quarter. The increase in GAAP net income over the prior quarter was due to the higher operating income offset by a higher tax rate in the quarter.

Nanometrics Third Quarter Non-GAAP Financial Results

Third quarter 2019 non-GAAP net income was $7.4 million, or $0.30 per diluted share detailed in the attached table. Second quarter of 2019, non-GAAP net income was $5.3 million, or $0.21 per diluted share and third quarter 2018, non-GAAP net income was $11.4 million, or $0.47 per diluted share. Non-GAAP results exclude merger and acquisition related expenses, severance costs, executive transition and search costs, gain on sale of property, amortization of intangible assets and certain discrete tax and other items.

Onto Innovation Combined Company Guidance

Onto Innovation’s fourth quarter results will not include the full results of both companies. Instead the fourth quarter results will comprise the full quarter results of Rudolph Technologies and partial results of Nanometrics from the date of the merger (October 25, 2019) to the end of the quarter per generally accepted accounting principles. As such, our guidance for the 2019 fourth quarter is as follows:

  • Fourth quarter 2019 revenue is expected to be $117 million, plus or minus 5%, excluding Nanometrics’ October revenue of $14 million that preceded the merger in the fourth quarter.
  • The Company is also expecting diluted GAAP net loss per share to be in the range of ($0.48) to ($0.30) which is anticipated to include merger-related expenses between $28 and $25 million, respectively. The merger-related expenses will include investment banking advisory, attorney and auditor fees, severance, accelerated stock compensation expense, inventory write-offs and other items. Also included in the GAAP net loss per share will be an increase in amortization for purchased intangibles.
  • Non-GAAP net income per diluted share is expected to be in the range of $0.32 to $0.42 per share.
  • Shares outstanding subsequent to the merger are approximately 50 million. Weighted average shares used in the calculation of the fourth quarter net income per diluted share will be approximately 43.5 million, which excludes the pro-rata fourth quarter Nanometrics’ shares prior to the merger closing date.
  • Reiteration of expected $20 million in annualized cost synergies exiting 2020.

Webcast & Conference Call Details

Onto Innovation will host a conference call at 4:30 p.m. Eastern Time today to discuss its third quarter 2019 financial results. To participate in the call, please dial 888-394-8218 (Domestic) or +1-720-452-9217 (International), reference confirmation code 3449338 at least five (5) minutes prior to the scheduled start time. A live webcast will also be available at www.nanometrics.com and www.rudolphtech.com.

To listen to the live webcast, please go to the website at least fifteen (15) minutes early to register, download and install any necessary audio software. There will be a replay of the conference call available from 7:30 p.m. ET on November 7 until 7:30 p.m. ET on November 14, 2019. To access the replay, please dial 888-203-1112 (Domestic) or +1-719-457-0820 (International) at any time during that period and use audio replay passcode 34493384. A replay will also be available at www.nanometrics.com and www.rudolphtech.com.

Discussion of Non-GAAP Financial Measures

Both companies prior to completion of the merger used certain non-GAAP financial measures, including non-GAAP net income and non-GAAP EPS, which exclude amortization of acquisition-related intangible assets, certain acquisition-related expenses and benefits, and significant legal-related charges or benefits and associated legal costs and in the case of Rudolph Technologies, share-based compensation. Non-GAAP net income and non-GAAP EPS can also exclude certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability, tax provisions/benefits related to the previous items, and significant discrete tax events. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods.

We utilize several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures to be helpful in assessing the performance of the ongoing operation of our business. We believe that disclosing non-GAAP financial measures provides useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. We also believe that disclosing non-GAAP financial measures provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. More specifically, management adjusts for the excluded items for the following reasons:

Amortization of purchased intangible assets: we do not acquire businesses and assets on a predictable cycle. The amount of purchase price allocated to the purchased intangible assets and the term of amortization can vary significantly and are unique to each acquisition or purchase. We believe that excluding amortization of purchased intangible assets allows the users of our financial statements to better review and understand the historic and current results of our operations, and also facilitates comparisons to peer companies.

Acquisition-related expenses and benefits: we incur expenses or benefits with respect to certain items associated with our acquisitions, such as transaction costs, changes in the fair value of contingent consideration liabilities, gain or expense on settlement of pre-existing relationships, etc. We exclude such expenses or benefits as they are related to acquisitions and have no direct correlation to the operation of our on-going business.

Significant litigation charges or benefits and legal costs: we may incur charges or benefits as well as legal costs in connection with litigation and other contingencies unrelated to our core operations. We exclude these charges or benefits, when significant, as well as legal costs associated with significant legal matters, because we do not believe they are reflective of on-going business and operating results.

Share-based compensation expense (Rudolph Technologies only): we incur expenses related to employee restricted stock units and employee stock options. The Company excludes stock-based compensation expense from its non-GAAP measures primarily because such expenses are non-cash expenses that the Company does not believe are reflective of ongoing operating results.

Income tax expense: we estimate the tax effect of the items identified to determine a non-GAAP annual effective tax rate applied to the pretax amount in order to calculate the non-GAAP provision for income taxes. We also adjust for items for which the nature and/or tax jurisdiction requires the application of a specific tax rate or treatment.

From time to time in the future, there may be other items excluded if we believe that doing so is consistent with the goal of providing useful information to investors and management.

There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact on our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release.

About Onto Innovation

Onto Innovation is a leader in process control, combining global scale with an expanded portfolio of leading-edge technologies that include: 3D metrology spanning the chip from nanometer-scale transistors to micron-level die-interconnects; macro defect inspection of wafers and packages; metal interconnect composition; factory analytics; and lithography for advanced semiconductor packaging. Our breadth of offerings across the entire semiconductor value chain helps our customers solve their most difficult yield, device performance, quality, and reliability issues. Onto Innovation strives to optimize customers’ critical path of progress by making them smarter, faster and more efficient. Headquartered in Wilmington, Massachusetts, Onto Innovation supports customers with a worldwide sales and service organization. Additional information can be found at www.ontoinnovation.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”) which include Onto Innovation’s business momentum and future growth; the benefit to customers of Onto Innovation’s products and customer service; Onto Innovation’s ability to both deliver products and services consistent with our customers’ demands and expectations and strengthen its market position; Onto Innovation’s expectations regarding the semiconductor market outlook; Onto Innovation’s fourth quarter 2019 financial outlook; as well as other matters that are not purely historical data. Onto Innovation wishes to take advantage of the “safe harbor” provided for by the Act and cautions that actual results may differ materially from those projected as a result of various factors, including risks and uncertainties, many of which are beyond Onto Innovation’s control. Such factors include, but are not limited to, the Company’s ability to leverage its resources to improve its position in its core markets; its ability to weather difficult economic environments; its ability to open new market opportunities and target high-margin markets; the strength/weakness of the back-end and/or front-end semiconductor market segments; and fluctuations in customer capital spending. Additional information and considerations regarding the risks faced by Onto Innovation are available in Rudolph Technologies’ Form 10-K report for the year ended December 31, 2018 and Nanometrics Form 10-K report for the year ended December 29, 2018 and other filings with the Securities and Exchange Commission. As the forward-looking statements are based on Onto Innovation’s current expectations, the Company cannot guarantee any related future results, levels of activity, performance or achievements. Onto Innovation does not assume any obligation to update the forward-looking information contained in this press release.

RUDOLPH TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands) - (Unaudited)

         

 

 

September 30,
2019

 

December 31,
2018

 

 

 

 

 

(Audited)

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash, cash equivalents and marketable securities

 

$

193,138

 

$

175,072

Accounts receivable, net

 

 

63,337

 

 

64,194

Inventories

 

 

104,132

 

 

96,820

Prepaid and other assets

 

 

11,571

 

 

14,821

Total current assets

 

 

372,178

 

 

350,907

Net property, plant and equipment

 

 

19,052

 

 

18,874

Intangibles, net

 

 

28,832

 

 

29,943

Other assets

 

 

31,105

 

 

18,316

Total assets

 

$

451,167

 

$

418,040

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

25,597

 

$

30,681

Other current liabilities

 

 

19,953

 

 

14,310

Total current liabilities

 

 

45,550

 

 

44,991

Other non-current liabilities

 

 

20,144

 

 

11,161

Total liabilities

 

 

65,694

 

 

56,152

Stockholders’ equity

 

 

385,473

 

 

361,888

Total liabilities and stockholders’ equity

 

$

451,167

 

$

418,040

RUDOLPH TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts) - (Unaudited)

           

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

 

 

2019

 

2019

 

2018

 

2019

 

2018

 

Revenue

 

$

62,935

 

$

61,511

 

$

60,432

 

$

185,338

 

$

211,004

 

Cost of revenue

 

 

31,424

 

 

29,600

 

 

28,978

 

 

89,897

 

 

95,393

 

Gross profit

 

 

31,511

 

 

31,911

 

 

31,454

 

 

95,441

 

 

115,611

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

12,759

 

 

13,056

 

 

12,313

 

 

38,533

 

 

36,829

 

Selling, general and administrative

 

 

13,075

 

 

13,050

 

 

11,128

 

 

37,431

 

 

35,867

 

Amortization

 

 

387

 

 

387

 

 

384

 

 

1,161

 

 

1,147

 

Total operating expenses

 

 

26,221

 

 

26,493

 

 

23,825

 

 

77,125

 

 

73,843

 

Operating income

 

 

5,290

 

 

5,418

 

 

7,629

 

 

18,316

 

 

41,768

 

Interest income, net

 

 

(1,001

)

 

(860

)

 

(607

)

 

(2,667

)

 

(1,474

)

Other expense (income), net

 

 

(617

)

 

157

 

 

(132

)

 

(841

)

 

(90

)

Income before income taxes

 

 

6,908

 

 

6,121

 

 

8,368

 

 

21,824

 

 

43,332

 

Provision for income taxes

 

 

348

 

 

595

 

 

1,181

 

 

2,162

 

 

6,318

 

Net income

 

$

6,560

 

$

5,526

 

$

7,187

 

$

19,662

 

$

37,014

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.21

 

$

0.18

 

$

0.23

 

$

0.63

 

$

1.16

 

Diluted

 

$

0.21

 

$

0.18

 

$

0.22

 

$

0.63

 

$

1.14

 

Weighted average shares

outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

31,185

 

 

31,126

 

 

31,901

 

 

31,101

 

 

31,807

 

Diluted

 

 

31,466

 

 

31,398

 

 

32,408

 

 

31,402

 

 

32,387

 

RUDOLPH TECHNOLOGIES, INC.

NON-GAAP FINANCIAL SUMMARY

(In thousands, except percentage and per share amounts) - (Unaudited)

             

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2019

 

 

June 30,
2019

 

 

September 30,
2018

 

 

September 30,
2019

 

 

September 30,
2018

 

Revenue

 

$

62,935

 

 

$

61,511

 

 

$

60,432

 

 

$

185,338

 

 

$

211,004

 

Gross profit

 

$

31,573

 

 

$

31,972

 

 

$

31,462

 

 

$

95,628

 

 

$

115,795

 

Gross margin as percentage of revenue

 

 

50.2

%

 

 

52.0

%

 

 

52.1

%

 

 

51.6

%

 

 

54.9

%

Operating expenses

 

$

21,911

 

 

$

22,030

 

 

$

22,158

 

 

$

65,866

 

 

$

68,001

 

Operating income

 

$

9,662

 

 

$

9,942

 

 

$

9,304

 

 

$

29,762

 

 

$

47,794

 

Operating margin as a percentage of revenue

 

 

15.4

%

 

 

16.2

%

 

 

15.4

%

 

 

16.1

%

 

 

22.7

%

Net income

 

$

9,825

 

 

$

8,987

 

 

$

8,504

 

 

$

28,363

 

 

$

41,402

 

Net income per diluted share

 

$

0.31

 

 

$

0.29

 

 

$

0.26

 

 

$

0.90

 

 

$

1.28

 

RECONCILIATION OF U.S. GAAP GROSS PROFIT,

OPERATING EXPENSES AND OPERATING INCOME TO NON-GAAP

GROSS PROFIT, OPERATING EXPENSES AND OPERATING INCOME

(In thousands, except percentages) - (Unaudited)

             

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2019

 

 

June 30,
2019

 

 

September 30,
2018

 

 

September 30,
2019

 

 

September 30,
2018

 

U.S. GAAP gross profit

 

$

31,511

 

 

$

31,911

 

 

$

31,454

 

 

$

95,441

 

 

$

115,611

 

Pre-tax non-GAAP items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense

 

 

62

 

 

 

61

 

 

 

8

 

 

 

187

 

 

 

184

 

Non-GAAP gross profit

 

$

31,573

 

 

$

31,972

 

 

$

31,462

 

 

$

95,628

 

 

$

115,795

 

U.S. GAAP gross margin as a percentage of revenue

 

 

50.1

%

 

 

51.9

%

 

 

52.0

%

 

 

51.5

%

 

 

54.8

%

Non-GAAP gross margin as a percentage of revenue

 

 

50.2

%

 

 

52.0

%

 

 

52.1

%

 

 

51.6

%

 

 

54.9

%

U.S. GAAP operating expenses

 

$

26,221

 

 

$

26,493

 

 

$

23,825

 

 

$

77,125

 

 

$

73,843

 

Pre-tax non-GAAP items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger related expenses

 

 

2,430

 

 

 

2,464

 

 

 

 

 

 

4,894

 

 

 

 

Amortization of intangibles

 

 

387

 

 

 

387

 

 

 

384

 

 

 

1,161

 

 

 

1,147

 

Share-based compensation expense

 

 

1,493

 

 

 

1,612

 

 

 

1,283

 

 

 

5,204

 

 

 

4,695

 

Non-GAAP operating expenses

 

 

21,911

 

 

 

22,030

 

 

 

22,158

 

 

 

65,866

 

 

 

68,001

 

Non-GAAP operating income

 

$

9,662

 

 

$

9,942

 

 

$

9,304

 

 

$

29,762

 

 

$

47,794

 

GAAP operating margin as a percentage of revenue

 

 

8.4

%

 

 

8.8

%

 

 

12.6

%

 

 

9.9

%

 

 

19.8

%

Non-GAAP operating margin as a percentage of revenue

 

 

15.4

%

 

 

16.2

%

 

 

15.4

%

 

 

16.1

%

 

 

22.7

%

RUDOLPH TECHNOLOGIES, INC.

RECONCILIATION OF U.S. GAAP NET INCOME TO

NON-GAAP NET INCOME

(In thousands, except share and per share data) - (Unaudited)

             

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2019

 

 

June 30,
2019

 

 

September 30,
2018

 

 

September 30,
2019

 

 

September 30,
2018

 

U.S. GAAP net income

 

$

6,560

 

 

$

5,526

 

 

$

7,187

 

 

$

19,662

 

 

$

37,014

 

Pre-tax non-GAAP items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger related expenses

 

 

2,430

 

 

 

2,464

 

 

 

 

 

 

4,894

 

 

 

 

Amortization of intangibles

 

 

387

 

 

 

387

 

 

 

384

 

 

 

1,161

 

 

 

1,147

 

Share-based compensation expense

 

 

1,555

 

 

 

1,673

 

 

 

1,291

 

 

 

5,391

 

 

 

4,879

 

Net tax benefit adjustments

 

 

(1,107

)

 

 

(1,063

)

 

 

(358

)

 

 

(2,745

)

 

 

(1,638

)

Non-GAAP net income

 

$

9,825

 

 

$

8,987

 

 

$

8,504

 

 

$

28,363

 

 

$

41,402

 

Non-GAAP net income per diluted share

 

$

0.31

 

 

$

0.29

 

 

$

0.26

 

 

$

0.90

 

 

$

1.28

 

NANOMETRICS INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands) - (Unaudited)

         

 

 

September 28,

2019

 

December 29,

2018

 

 

 

 

 

(Audited)

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash, cash equivalents and marketable securities

 

$

144,110

 

$

151,792

Accounts receivable, net

 

 

56,969

 

 

50,854

Inventories

 

 

69,808

 

 

62,095

Prepaid and other assets

 

 

7,398

 

 

6,140

Total current assets

 

 

278,285

 

 

270,881

Net property, plant and equipment

 

 

52,449

 

 

47,900

Operating lease - right of use assets, net

 

 

9,996

 

 

Goodwill

 

 

26,310

 

 

26,372

Intangibles, net

 

 

25,078

 

 

27,326

Other assets

 

 

4,105

 

 

3,151

Total assets

 

$

396,223

 

$

375,630

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

38,356

 

$

50,352

Operating lease liabilities

 

 

2,773

 

 

Other current liabilities

 

 

8,702

 

 

9,421

Total current liabilities

 

 

49,831

 

 

59,773

Other non-current liabilities

 

 

10,620

 

 

3,005

Total liabilities

 

 

60,451

 

 

62,778

Stockholders’ equity

 

 

335,772

 

 

312,852

Total liabilities and stockholders’ equity

 

$

396,223

 

$

375,630

NANOMETRICS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts) - (Unaudited)

             

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 28,

 

 

June 28,

 

 

September 28,

 

 

September 28,

 

 

September 29,

 

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

$

73,125

 

 

$

67,620

 

 

$

76,590

 

 

$

207,845

 

 

$

247,507

 

Cost of revenue

 

 

34,000

 

 

 

31,977

 

 

 

32,921

 

 

 

98,824

 

 

 

105,346

 

Amortization

 

 

449

 

 

 

471

 

 

 

35

 

 

 

1,385

 

 

 

105

 

Gross profit

 

 

38,676

 

 

 

35,172

 

 

 

43,634

 

 

 

107,636

 

 

 

142,056

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

13,779

 

 

 

14,098

 

 

 

12,717

 

 

 

40,864

 

 

 

35,410

 

Selling, general and administrative

 

 

18,673

 

 

 

17,036

 

 

 

16,646

 

 

 

52,896

 

 

 

51,027

 

Amortization

 

 

289

 

 

 

289

 

 

 

 

 

 

867

 

 

 

 

Total operating expenses

 

 

32,741

 

 

 

31,423

 

 

 

29,363

 

 

 

94,627

 

 

 

86,437

 

Operating income

 

 

5,935

 

 

 

3,749

 

 

 

14,271

 

 

 

13,009

 

 

 

55,619

 

Interest expense, net

 

 

38

 

 

 

15

 

 

 

104

 

 

 

144

 

 

 

245

 

Other income, net

 

 

(257

)

 

 

(828

)

 

 

(322

)

 

 

(1,355

)

 

 

(508

)

Income before income taxes

 

 

6,154

 

 

 

4,562

 

 

 

14,489

 

 

 

14,220

 

 

 

55,882

 

Provision for income taxes

 

 

1,943

 

 

 

632

 

 

 

2,921

 

 

 

3,106

 

 

 

10,258

 

Net income

 

$

4,211

 

 

$

3,930

 

 

$

11,568

 

 

$

11,114

 

 

$

45,624

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.17

 

 

$

0.16

 

 

$

0.48

 

 

$

0.45

 

 

$

1.90

 

Diluted

 

$

0.17

 

 

$

0.16

 

 

$

0.47

 

 

$

0.45

 

 

$

1.86

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

24,529

 

 

 

24,525

 

 

 

24,059

 

 

 

24,631

 

 

 

24,065

 

Diluted

 

 

24,783

 

 

 

24,843

 

 

 

24,466

 

 

 

24,952

 

 

 

24,551

 

NANOMETRICS INCORPORATED

NON-GAAP FINANCIAL SUMMARY

(In thousands, except percentage and per share amounts) - (Unaudited)

             

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 28,
2019

 

 

June 30,
2019

 

 

September 29,
2018

 

 

September 28,
2019

 

 

September 29,
2018

 

Revenue

 

$

73,125

 

 

$

67,620

 

 

$

76,590

 

 

$

207,845

 

 

$

247,507

 

Gross profit

 

$

39,125

 

 

$

36,180

 

 

$

43,669

 

 

$

110,515

 

 

$

142,182

 

Gross margin as percentage of revenue

 

 

53.5

%

 

 

53.5

%

 

 

57.0

%

 

 

53.2

%

 

 

57.4

%

Operating expenses

 

$

29,888

 

 

$

29,840

 

 

$

29,127

 

 

$

89,288

 

 

$

85,204

 

Operating income

 

$

9,237

 

 

$

6,340

 

 

$

14,542

 

 

$

21,227

 

 

$

56,978

 

Operating margin as a percentage of revenue

 

 

12.6

%

 

 

9.4

%

 

 

19.0

%

 

 

10.2

%

 

 

23.0

%

Net income

 

$

7,444

 

 

$

5,318

 

 

$

11,391

 

 

$

17,447

 

 

$

45,279

 

Net income per diluted share

 

$

0.30

 

 

$

0.21

 

 

$

0.47

 

 

$

0.70

 

 

$

1.84

 

RECONCILIATION OF U.S. GAAP GROSS PROFIT,

OPERATING EXPENSES AND OPERATING INCOME TO NON-GAAP

GROSS PROFIT, OPERATING EXPENSES AND OPERATING INCOME

(In thousands, except percentages) - (Unaudited)

             

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 28,
2019

 

 

June 30,
2019

 

 

September 29,
2018

 

 

September 28,
2019

 

 

September 29,
2018

 

U.S. GAAP gross profit

 

$

38,676

 

 

$

35,172

 

 

$

43,634

 

 

$

107,636

 

 

$

142,056

 

Pre-tax non-GAAP items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and merger related expenses

 

 

 

 

 

375

 

 

 

 

 

 

1,332

 

 

 

 

Severance included in cost of revenues

 

 

 

 

 

162

 

 

 

 

 

 

162

 

 

 

21

 

Amortization of intangibles

 

 

449

 

 

 

471

 

 

 

35

 

 

 

1,385

 

 

 

105

 

Non-GAAP gross profit

 

$

39,125

 

 

$

36,180

 

 

$

43,669

 

 

$

110,515

 

 

$

142,182

 

U.S. GAAP gross margin as a percentage of revenue

 

 

52.9

%

 

 

52.0

%

 

 

57.0

%

 

 

51.8

%

 

 

57.4

%

Non-GAAP gross margin as a percentage of revenue

 

 

53.5

%

 

 

53.5

%

 

 

57.0

%

 

 

53.2

%

 

 

57.4

%

U.S. GAAP operating expenses

 

$

32,741

 

 

$

31,423

 

 

$

29,363

 

 

$

94,627

 

 

$

86,437

 

Pre-tax non-GAAP items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and merger related expenses

 

 

2,424

 

 

 

1,015

 

 

 

 

 

 

3,603

 

 

 

 

Amortization of intangibles

 

 

289

 

 

 

289

 

 

 

 

 

 

867

 

 

 

 

Severance included in operating expenses

 

 

 

 

 

128

 

 

 

 

 

 

388

 

 

 

 

Executive transition

 

 

140

 

 

 

151

 

 

 

 

 

 

481

 

 

 

612

 

Executive search

 

 

 

 

 

 

 

 

236

 

 

 

 

 

 

621

 

Non-GAAP operating expenses

 

 

29,888

 

 

 

29,840

 

 

 

29,127

 

 

 

89,288

 

 

 

85,204

 

Non-GAAP operating income

 

$

9,237

 

 

$

6,340

 

 

$

14,542

 

 

$

21,227

 

 

$

56,978

 

GAAP operating margin as a percentage of revenue

 

 

8.1

%

 

 

5.5

%

 

 

18.6

%

 

 

6.3

%

 

 

22.5

%

Non-GAAP operating margin as a percentage of revenue

 

 

12.6

%

 

 

9.4

%

 

 

19.0

%

 

 

10.2

%

 

 

23.0

%

NANOMETRICS INCORPORATED

RECONCILIATION OF U.S. GAAP NET INCOME TO

NON-GAAP NET INCOME

(In thousands, except share and per share data) - (Unaudited)

             

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 28,
2019

 

 

June 30,
2019

 

 

September 29,
2018

 

 

September 28,
2019

 

 

September 29,
2018

 

U.S. GAAP net income

 

$

4,211

 

 

$

3,930

 

 

$

11,568

 

 

$

11,114

 

 

$

45,624

 

Pre-tax non-GAAP items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and merger related expenses

 

 

2,424

 

 

 

1,015

 

 

 

 

 

 

3,603

 

 

 

 

Amortization of intangibles

 

 

738

 

 

 

760

 

 

 

35

 

 

 

2,252

 

 

 

105

 

Other non-GAAP adjustments to non-GAAP operating income

 

 

140

 

 

 

817

 

 

 

236

 

 

 

2,363

 

 

 

1,254

 

Gain /loss on disposal of property

 

 

 

 

 

(837

)

 

 

 

 

 

(837

)

 

 

 

Net tax benefit adjustments

 

 

(69

)

 

 

(367

)

 

 

(448

)

 

 

(1,048

)

 

 

(1,704

)

Non-GAAP net income

 

$

7,444

 

 

$

5,318

 

 

$

11,391

 

 

$

17,447

 

 

$

45,279

 

Non-GAAP net income per diluted share

 

$

0.30

 

 

$

0.21

 

 

$

0.47

 

 

$

0.70

 

 

$

1.84

 

ONTO INNOVATION

SUPPLEMENTAL INFORMATION - RECONCILIATION OF FOURTH QUARTER 2019

GAAP TO NON-GAAP GUIDANCE (net of tax)

             

 

 

Low

 

 

High

 

Estimated GAAP net loss per diluted share

 

$

(0.48

)

 

$

(0.30

)

Estimated non-GAAP items:

 

 

 

 

 

 

 

 

Merger related expenses

 

 

0.65

 

 

 

0.58

 

Amortization of intangibles

 

 

0.15

 

 

 

0.14

 

Estimated non-GAAP net income per diluted share

 

$

0.32

 

 

$

0.42

 

 

Source: Nanometrics Incorporated & Rudolph Technologies, Inc. & Onto Innovation Inc.

Investors:
Michael Sheaffer
Senior Director, Corp. Communications
978.253.6273
Mike.Sheaffer@OntoInnovation.com