Onto Innovation (ONTO) 8-K Nanometrics Reports Financial Results for the Second Quarter of 2006

Exhibit 99.1

NANOMETRICS INCORPORATED    1550 Buckeye Drive     Milpitas CA 95035     Tel: 408.435.9600     Fax: 408.232.5910

News Release

Agency Contact:	Company Contact:
Bruce Hokanson	Douglas McCutcheon
Loomis Group	Nanometrics Incorporated
360-574-4000, 360-574-4447 fax	408.435.9600, 408.232.5910 fax
email: hokansonb@loomisgroup.com	email:dmccutcheon@nanometrics.com

Nanometrics Reports Financial Results for the Second Quarter of 2006

MILPITAS, California, July 27, 2006 — Nanometrics Incorporated (Nasdaq: NANO), a leading supplier of advanced integrated and standalone metrology equipment to the semiconductor industry, today announced its results for the second quarter ended July 1, 2006.

Revenues for the second quarter of 2006 were a record $23.4 million, representing a 23 percent increase over first quarter 2006 revenues of $19.0 million and a 25 percent increase from restated revenues of $18.7 million for the second quarter of 2005. Net loss for the second quarter of 2006 was $2.2 million or $0.16 per share. This compares to a net loss of $1.3 million or $0.10 per share for the first quarter of 2006 and net income of $4.5 million or $0.34 per diluted share for the restated second quarter of 2005.

Included in the net loss for the second quarter of 2006 is a non-cash charge of $1.2 million for stock-based compensation expenses as required with the adoption of Financial Accounting Standard 123R.

“We are pleased to report a record revenue quarter for Nanometrics,” commented Douglas J. McCutcheon, chief financial officer. “With a 23 percent sequential increase over the first quarter, revenues came in at the high end of our guidance range. However, we incurred several unanticipated charges to product cost of sales in the quarter as well as a decrease in our service gross margin. Those two factors, combined with increased operating and stock-based compensation expenses attributable to the Soluris, Inc. acquisition, resulted in a net loss for the second quarter. While we are disappointed by the loss, we believe the impact of the unanticipated costs is behind us.”

John Heaton, Nanometrics president and chief executive officer added, “While we are happy to be announcing record revenues for the quarter, our recent trend of improved operating performance has taken a temporary setback. For the last several quarters, our team has been focused on completing two acquisitions as well as achieving Sarbanes-Oxley compliance. Looking towards the second half of 2006, we remain encouraged by the rational growth of spending by our customers and expect to return to our trend towards achieving profitability and our target operating model for Nanometrics.”

About Nanometrics

Nanometrics is a leader in the design, manufacture and marketing of high-performance process control metrology systems used in semiconductor manufacturing. Nanometrics metrology systems

measure various thin film properties, critical circuit dimensions and layer-to-layer circuit alignment (overlay) during various steps of the manufacturing process, enabling semiconductor and integrated circuit manufacturers to improve yields, increase productivity and lower their manufacturing costs. Nanometrics maintains its headquarters in Milpitas, California, with sales and service offices worldwide. Nanometrics is traded on the Nasdaq Global Market under the symbol NANO. Nanometrics’ website is: http://www.nanometrics.com.

A conference call to discuss results for the second quarter of 2006 and the recently-announced close of Nanometrics’ acquisition of Accent Optical will be held today, July 27, 2006, at 4:30 p.m. ET (1:30 p.m. PT). To participate in the earnings conference call, the dial-in numbers are (866) 314-4483 in the United States or (617) 213-8049 for international calls. The passcode is 94252825. If you are unable to participate during the live conference call, a webcast will be made available on the “Investors” section of the Nanometrics website.

Forward Looking Statements

This press release contains forward-looking statements including, but not limited to, statements regarding Nanometrics’ expected results for its most recently completed fiscal quarter, which may be subject to adjustment in our quarterly report on 10-Q as well as statements made by our CEO and CFO concerning the Company’s expected operating performance and profitability in future periods. These statements relate to future events and involve known and unknown risks, uncertainties and other factors that may cause Nanometrics’ actual financial results, levels of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements are only predictions and actual events or results may differ materially. Nanometrics cannot provide any assurance that its future results will meet expectations. For additional information and considerations regarding the risks faced by Nanometrics, see its annual report on Form 10-K for the year ended December 31, 2005 as filed with the Securities and Exchange Commission, as well as other periodic reports filed with the SEC from time to time including its quarterly reports on Form 10-Q. Although Nanometrics believes that the expectations reflected in the forward-looking statements are reasonable, Nanometrics cannot guarantee future results, levels of activity, performance or achievements. In addition, neither Nanometrics nor any other person assumes responsibility for the accuracy or completeness of these forward-looking statements. Nanometrics disclaims any obligation to update information contained in any forward-looking statement.

NANOMETRICS INCORPORATED     1550 Buckeye Drive     Milpitas CA 95035     Tel: 408.435.9600     Fax: 408.232.5910

NANOMETRICS INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands except share amounts)

(Unaudited)

	July 1,		December 31,
	2006		2005
ASSETS
Current assets:
Cash and cash equivalents	$	29,612	$	40,445
Short-term investments		—		4,949
Accounts receivable, net of allowances of $653 and $592		22,841		18,983
Inventories		30,592		25,656
Prepaid expenses and other		2,850		1,259
Total current assets		85,895		91,292
Property, plant and equipment, net		42,314		42,928
Goodwill		3,499		—
Intangible assets		4,151		639
Other assets		5,897		1,441
Total assets	$	141,756	$	136,300
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Revolving line of credit	$	—	$	1,186
Accounts payable		5,927		3,348
Accrued payroll and related expenses		2,503		1,540
Deferred revenue		6,696		3,448
Other current liabilities		3,926		3,869
Income taxes payable		716		770
Current portion of debt obligations		358		400
Total current liabilities		20,126		14,561
Deferred income taxes and other long-term liabilities		160		—
Debt obligations		1,238		1,396
Total liabilities		21,524		15,957
Shareholders’ equity
Common stock, no par value; 50,000,000 shares authorized; 13,095,332 and 12,990,894 outstanding		110,113		107,294
Retained earnings		8,740		12,218
Accumulated other comprehensive income		1,379		831
Total shareholders’ equity		120,232		120,343
Total liabilities and shareholders’ equity	$	141,756	$	136,300

NANOMETRICS INCORPORATED     1550 Buckeye Drive     Milpitas CA 95035     Tel: 408.435.9600     Fax: 408.232.5910

NANOMETRICS INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Six Months Ended
	July 1,			July 2,			July 1,			July 2,
	2006			2005			2006			2005
Net revenues:
Products	$	20,121		$	16,535		$	36,093		$	37,545
Service		3,277			2,201			6,273			4,541
Total net revenues		23,398			18,736			42,366			42,086
Costs and expenses:
Cost of products		10,712			8,463			18,621			18,195
Cost of service		4,026			2,608			6,560			5,181
Research and development		3,062			3,656			5,590			6,835
Selling		3,940			2,851			7,042			5,994
General and administrative		4,306			2,400			8,856			4,398
Asset impairment		—			2,232			—			2,232
Merger termination fee		—			(8,300	)		—			(8,300	)
Total costs and expenses		26,046			13,910			46,669			34,535
Income (loss) from operations		(2,648	)		4,826			(4,303	)		7,551
Other income (expense):
Interest income		299			193			631			323
Interest expense		(18	)		(17	)		(31	)		(35	)
Other, net		238			(206	)		273			(476	)
Total other income (expense), net		519			(30	)		873			(188	)
Income (loss) before income taxes		(2,129	)		4,796			(3,430	)		7,363
Provision for income taxes		27			308			48			391
Net income (loss)	$	(2,156	)	$	4,488		$	(3,478	)	$	6,972
Net income (loss) per share:
Basic	$	(0.16	)	$	0.36		$	(0.27	)	$	0.55
Diluted	$	(0.16	)	$	0.34		$	(0.27	)	$	0.52
Shares used in per share computation:
Basic		13,088			12,629			13,053			12,602
Diluted		13,088			13,374			13,053			13,414