9 August 2010


Nanometrics’ record revenue of $50.8m in Q2 aided by LED growth

For second-quarter 2010, Nanometrics Inc of Milpitas, CA, USA (a supplier of process control metrology systems primarily for manufacturing semiconductors, high-brightness LEDs, data storage devices and solar photovoltaics) has reported record revenue of $50.8m, up 37% on Q1 and 250% on a year ago (and exceeding the prior record by more than 30%).

Service revenue of $7.4m is down 14% on Q1 but up 12% on a year ago. Product revenue of $43.4m is up 52% on Q1 and 450% on a year ago.

“The level of revenues reflects our strong position with numerous customers, across several geographic regions and all device types, including logic, DRAM, Flash and high-brightness LEDs,” says president & CEO Dr Timothy J. Stultz. In particular, growth accelerated for overlay, integrated metrology and high-brightness LED products, with the latter contributing about two-thirds of the revenue of the materials characterization business (which grew more than 50% in Q2).

Significantly, in Q2, Nanometrics added three countries (Japan, Taiwan and China) as regions that each generated at least 10% of revenue (joining North America and South Korea, which are dominated by Nanometrics’ 10%-customers Intel, Samsung and, since Q2, Hynix). This reflects “growing adoption of our products by a broader customer base over expanded geographic regions, and a healthy reduction in revenue concentration”.

Gross margin of 55.1% was roughly flat on Q1’s 55.3% but up on 41.4% a year ago, due mainly to improved product gross margin, the higher overall sales volume and improved factory absorption.

Compared with a net loss of $7m a year ago, net income has almost doubled from Q1’s $5.9m to $11.6m. Cash and equivalents rose by $9.1m to $54.9m.

“Our second quarter results are testimony to the progress we have made against the operational and performance objectives we are consistently driving toward, namely: strengthening the competitiveness of our products to drive key customer wins and strong gross margin performance; improving our predictability by managing to a robust and sustainable business model; and demonstrating the operational leverage, profitability and cash flow ensuing from our greater scale and improved cost structure,” says Stultz.

“Our position with leading logic and memory companies, which have been sizeable customers for us since mid-2009, will enable us to continue to benefit from planned capacity expansions, ramping of the next technology nodes and fan-outs of our tool-of-record designations,” adds Stultz. “Our business pipeline is also benefiting from increased spending by other major semiconductor customers as well as contributions from our newer product offerings, which address rapidly-growing segments such as high-brightness LEDs and advanced wafer-scale packaging.”

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