Onto Innovation (ONTO) 8-K Nanometrics Reports Fourth Quarter and Full Year Financial Results for 2006

Exhibit 99.1

Nanometrics Incorporated 1550 Buckeye Drive Milpitas, CA 95035 www.nanometrics.com Tel: 408.435.9600 Fax: 408.232.5910

News Release

Investor Relations Contact:	Company Contact:
Claire McAdams	Douglas McCutcheon
Headgate Partners LLC	Nanometrics Incorporated
530.274.0551, 530.274.0531 fax	408.435.9600, 408.232.5910 fax
email: claire@headgatepartners.com	email: dmccutcheon@nanometrics.com

Nanometrics Reports Fourth Quarter and Full Year Financial Results for 2006

MILPITAS, California, February 15, 2007 — Nanometrics Incorporated (Nasdaq: NANO), a leading supplier of advanced integrated and standalone metrology equipment to the semiconductor industry, today announced its results for the fourth quarter and fiscal year ended December 30, 2006.

Revenues for the fourth quarter were $24.9 million, representing a 14 percent decrease from third quarter 2006 revenues of $29.1 million and a 75 percent increase over revenues of $14.2 million for the fourth quarter of 2005. Net loss for the fourth quarter of 2006 was $12.1 million or $0.69 per share on a GAAP basis. This compares to a net loss of $6.6 million or $0.39 per share for the third quarter of 2006 and a net loss of $2.1 million or $0.16 per share for the fourth quarter of 2005.

As reflected in the attached tables, included in the net loss for the fourth quarter of 2006 are non-cash charges of $2.6 million for amortization of acquired intangible assets and other acquisition-related charges, and $1.6 million for stock-based compensation expenses as required with the adoption of Financial Accounting Standard 123R.

For the fiscal year ended December 30, 2006, Nanometrics’ revenues were $96.4 million, an increase of 37 percent over 2005 revenues of $70.5 million. Net loss for fiscal 2006 was $22.1 million or $1.47 per share on a GAAP basis compared to net income of $1.5 million or $0.11 per diluted share for fiscal 2005. Non-cash charges for the full year totaled $5.3 million for amortization of acquired intangible assets and other acquisition-related charges, and $4.8 million for stock-based compensation.

“The fourth quarter of 2006 was a challenging transition period for our company, as evidenced by revenues coming in below guidance,” commented John Heaton, president and chief executive officer of Nanometrics. “While we are pleased with the growth opportunities and increased scale we have gained by completing two acquisitions in 2006, the integration of our global manufacturing, sales, service and support organizations has proven to be a multi-quarter undertaking. That being said, we believe that current market dynamics – including our customers’ capital spending outlook and the consolidation of suppliers in the markets we serve – are favorable to Nanometrics over the longer term.”

“We continue to work through the challenge of rationalizing and consolidating our manufacturing facilities while meeting the needs of our customers at the same time,” added Douglas J. McCutcheon, chief financial officer of Nanometrics. “In order to ensure that we have the balance sheet to meet that challenge, we have recently secured a multi-year, multi-currency, $15 million revolving line of credit with a major U.S. bank. Our earnings have been negatively impacted as we have grown, yet we believe we will realize the benefits of our growth strategy in 2007.”

Non-GAAP Financial Results

Nanometrics reports its results on a Generally Accepted Accounting Principles (“GAAP”) basis, and also provides results excluding certain non-cash expenses, such as amortization of acquired intangible assets and other acquisition-related charges, and stock-based compensation. Management uses the presentation of adjusted non-GAAP results internally to evaluate the Company’s operating and financial results. The Company believes the presentation of adjusted non-GAAP results is useful to investors for analyzing ongoing business trends, comparing performance to prior periods, and enhancing the investor’s ability to view the Company’s results from management’s perspective. A table presenting a reconciliation of adjusted non-GAAP results to results under GAAP is included at the end of this press release and on the Company’s web site.

Conference Call Details

A conference call to discuss the fourth quarter and full year 2006 results will be held today, February 15, 2007, at 5:00 p.m. ET (2:00 p.m. PT). To participate in the earnings conference call, the dial-in numbers are 800-706-7745 for domestic callers and 617-614-3472 for international callers. The passcode is 80955306. If you are unable to participate during the live conference call, a webcast will be made available on the Nanometrics website at www.nanometrics.com.

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 dimensions, overlay control and optical, electrical and material properties, including the structural composition of silicon and compound semiconductor devices, during various steps of the manufacturing process. These systems enable semiconductor manufacturers to improve yields, increase productivity and lower their manufacturing costs. The Company maintains its headquarters in Milpitas, California, with sales and service offices worldwide. Nanometrics is traded on NASDAQ Global Market under the symbol NANO. Nanometrics’ website is http://www.nanometrics.com.

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 and fiscal year, which may be subject to adjustment in its annual report on Form 10-K, as well as statements made by its CEO and CFO concerning the Company’s expected operating performance 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. Other factors that may impact reported results include challenges in integrating the operations of recently-acquired companies such as Accent Optical and Soluris, purchase accounting adjustments to our earnings related to acquired businesses and compliance with changes in accounting rules, such as FAS 123R. 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

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(UNAUDITED)

	December 30, 2006			December 31, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	7,957		$	40,445
Short-term investments		—			4,949
Accounts receivable, net of allowances of $841 and $592		24,888			18,983
Inventories		47,813			25,656
Prepaid expenses and other		3,639			1,259
Total current assets		84,297			91,292
Property, plant and equipment, net		43,294			42,928
Goodwill		54,817			—
Intangible assets		27,983			639
Other assets		1,985			1,441
Total assets	$	212,376		$	136,300
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Revolving line of credit	$	—		$	1,186
Accounts payable		9,155			3,060
Accounts payable to related party		181			288
Accrued payroll and related expenses		5,227			1,540
Deferred revenue		10,451			3,448
Other current liabilities		8,371			3,869
Income taxes payable		695			770
Current portion of debt obligations		356			400
Total current liabilities		34,436			14,561
Deferred income taxes		1,852			—
Debt obligations		1,457			1,396
Total liabilities		37,745			15,957
Shareholders’ equity
Common stock, $0.001 par value; 47,000,000 shares authorized; 18,141,589 and 12,990,894, respectively, outstanding		18			107,294
Additional paid-in capital		182,096			—
Retained earnings		(9,909	)		12,218
Accumulated other comprehensive income		2,426			831
Total shareholders’ equity		174,631			120,343
Total liabilities and shareholders’ equity	$	212,376		$	136,300

NANOMETRICS INCORPORATED

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share amounts)

(UNAUDITED)

	Three Months Ended						Year Ended
	December 30, 2006			December 31, 2005			December 30, 2006			December 31, 2005
Net revenues:
Products	$	19,771		$	11,695		$	80,636		$	61,012
Service		5,146			2,530			15,738			9,531
Total net revenues		24,917			14,225			96,374			70,543
Costs and expenses:
Cost of product sales		14,506			4,745			47,726			29,173
Cost of service		5,270			2,886			16,610			10,695
Research and development		4,455			2,407			14,253			12,533
Selling		5,734			2,556			18,605			10,945
General and administrative		7,002			4,135			21,305			11,882
Merger termination fee		—			—			—			(8,300	)
Asset impairment and disposition		—			—			—			2,232
Total costs and expenses		36,946			16,729			118,499			69,160
Loss from operations		(12,029	)		(2,504	)		(22,125	)		1,383
Other income (expense):
Interest income		64			387			851			998
Interest expense		(16	)		(38	)		(60	)		(73	)
Other, net		(741	)		(85	)		(1,116	)		(579	)
Total other income (expense), net		(693	)		264			(325	)		346
Income (loss) before income taxes		(12,722	)		(2,240	)		(22,450	)		1,729
Provision (credit) for income taxes		(639	)		(180	)		(323	)		218
Net income (loss)	$	(12,083	)	$	(2,060	)	$	(22,127	)	$	1,511
Net income (loss) per share:
Basic	$	(0.69	)	$	(0.16	)	$	(1.47	)	$	0.12
Diluted	$	(0.69	)	$	(0.16	)	$	(1.47	)	$	0.11
Shares used in per share computation:
Basic		17,622			12,981			15,075			12,760
Diluted		17,622			12,981			15,075			13,471

NANOMETRICS INCORPORATED

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended December 30, 2006									Year Ended December 30, 2006
	GAAP			Non-GAAP Adjustments			As Adjusted			GAAP			Non-GAAP Adjustments			As Adjusted
	(in thousands, except per share amounts) (unaudited)
Net revenues:
Products	$	19,771		$	—		$	19,771		$	80,636		$	—		$	80,636
Service		5,146			—			5,146			15,738			—			15,738
Total net revenues		24,917			—			24,917			96,374			—			96,374
Costs and expenses:
Cost of product sales		14,506			(1,831	) (a)		12,546			47,726			(3,454	) (a)		43,918
					(129	) (b)								(354	) (b)
Cost of service		5,270			(107	) (b)		5,163			16,610			(305	) (b)		16,305
Research and development		4,455			(387	) (b)		4,068			14,253			(1,313	) (b)		12,940
Selling		5,713			(770	) (a)		4,625			18,605			(1,628	) (a)		15,989
					(318	) (b)								(988	) (b)
General and administrative		7,002			(673	) (b)		6,329			21,305			(2,065	) (b)		19,240
Total costs and expenses		36,946			(4,215	)		32,731			118,499			(10,107	)		108,392
Income (loss) from operations		(12,029	)		4,215			(7,814	)		(22,125	)		10,107			(12,018	)
Other income (expense):
Interest income		64			—			64			851			—			851
Interest expense		(16	)		—			(16	)		(60	)		—			(60	)
Other, net		(741	)		—			(741	)		(1,116	)		—			(1,116	)
Total other income (expense), net		(693	)		—			(693	)		(325	)		—			(325	)
Income (loss) before income taxes		(12,722	)		4,215			(8,507	)		(22,450	)		10,107			(12,343	)
Benefit for income taxes		(639	)		—			(639	)		(323	)		—			(323	)
Net income (loss)	$	(12,083	)	$	4,215		$	(7,868	)	$	(22,127	)	$	10,107		$	(12,020	)
Net loss per share:
Basic	$	(0.69	)				$	(0.45	)	$	(1.47	)				$	(0.80	)
Diluted	$	(0.69	)				$	(0.45	)	$	(1.47	)				$	(0.80	)
Shares used in per share computation:
Basic		17,622						17,622			15,075						15,075
Diluted		17,622						17,622			15,075						15,075

(a) Amortization of intangible assets and step-up to fair value of inventories from the Accent and Soluris acquisitions

(b) Stock-based compensation