Nanometrics Incorporated today announced financial results for its first quarter ended March 28, 2015.
Q1 2015 Highlights Include:
- Improved Financial Performance. Revenue grew 27% from Q4 2014 and non-GAAP gross margin improved 2.3 percentage points; strong revenue ramp and improved operating efficiencies resulted in over 50% flow-through to operating income and return to profitability exceeding the high end of guidance.
- Record Revenues from World's Leading Foundry. Successful execution in new account penetration and market share gains contributed to record-high sales to the industry's leading pure-play foundry customer.
- Atlas® OCD Now Deployed in High-Volume Manufacturing for Every Advanced 3D Device Type. Sales for advanced 3D devices totaled 80% of Atlas revenues in the quarter, as Nanometrics Optical Critical Dimension (OCD) solutions for process control on flagship Atlas platform are now being utilized in high-volume manufacturing across all leading-edge devices, including 16nm foundry, 2nd generation 3D-NAND and 20nm DRAM.
- Growing Market for OCD Integrated Metrology. The market for integrated metrology is growing due to increased customer adoption of OCD integrated metrology. IMPULSE® integrated metrology systems utilizing NanoDiffract® OCD software proliferated across multiple fabs for lithography track, CMP and etch process control of the most advanced memory and logic devices.
Commenting on the company's results, president and chief executive officer Dr. Timothy J. Stultz said, "Our return to profitability, supported by a significant increase in revenues, clearly demonstrates the leverage in our business model and the impact of our increased focus on operating performance. Over the last several years our primary strategic objective has been to establish a strong competitive foothold in each of the major accounts within our industry. With the successes we have achieved in account penetration and share gains, we now have a more balanced customer base across all product types, allowing us to step up our focus on improving productivity, operational efficiency and financial performance. I am pleased with the execution by our team in responding to the steep ramp in demand-driven shipments, which helped us exceed our bottom-line expectations for the quarter. While some industry participants have recently moderated their expectations for wafer fab equipment spending for the year, we remain in a robust capital spending environment. We expect Q2 to be another strong quarter as our OCD solutions continue to be critical enablers for all leading-edge devices."
First Quarter 2015 Summary
Revenues for the first quarter of 2015 were $50.4 million, up 27% from $39.7 million in the fourth quarter of 2014 and down 2% from $51.6 million in the first quarter of 2014. On a GAAP basis, gross margin was 46.4%, compared to 43.7% in the prior quarter and 46.8% in the year-ago period. Operating income was $2.2 million, compared to an operating loss of $3.8 million in the prior quarter and operating income of $2.0 million in the year-ago period. Net income was $2.6 million or $0.11 per diluted share, compared to a net loss of $4.6 million or $0.19 per share in the prior quarter, and net income of $1.6 million or $0.07 per diluted share in the first quarter of 2014.
On a non-GAAP basis, which excludes amortization of acquired intangible assets, gross margin was 47.7% compared to 45.4% in the prior quarter and 48.1% in the year-ago period. Non-GAAP operating income for the first quarter excluded a $0.1 million restructuring charge and was $3.0 million, compared to an operating loss of $2.5 million in the prior quarter and operating income of $2.8 million in the first quarter of 2014. Non-GAAP net income, which adjusts for amortization of intangible assets, restructuring charges, valuation allowances related to certain deferred tax assets, and the income tax effect of non-GAAP adjustments, was $3.3 million or $0.14 per diluted share, compared to a net loss of $3.0 million or $0.12 per share in the prior quarter and net income of $2.1 million or $0.09 per diluted share in the first quarter of 2014.
Management expects second-quarter 2015 revenues in the range of $45 to $50 million, with GAAP gross margin in the range of 45.5% to 48.0% and non-GAAP gross margin in the range of 47.0% to 49.5%. Management expects second-quarter operating expenses to range between $20.7 million and $21.5 million on a GAAP basis, and between $20.6 million and $21.4 million on a non-GAAP basis. Management expects second-quarter earnings in the range of ($0.02) per share to $0.09 per diluted share on a GAAP basis, and $0.01 to $0.12 per diluted share on a non-GAAP basis.