Onto Innovation (ONTO) 8-K Nanometrics Reports Second Quarter 2008 Financial Results

Exhibit 99.1

	Nanometrics Incorporated	Tel: 408.545.6000
	1550 Buckeye Drive	Fax: 408.232.5910
	Milpitas, CA 95035	www.nanometrics.com

News Release

Investor Relations Contact:	Company Contact:
Claire McAdams	Gary Schaefer, CFO
Headgate Partners LLC	Nanometrics Incorporated
530.274.0551, 530.274.0531 fax	408.545.6000, 408.232.5910 fax
email: claire@headgatepartners.com	email: gschaefer@nanometrics.com

Nanometrics Reports Second Quarter 2008 Financial Results

MILPITAS, Calif., July 31, 2008 — Nanometrics Incorporated (Nasdaq: NANO), a leading supplier of advanced process control metrology equipment, today announced financial results for its second quarter ended June 28, 2008.

Revenues for the second quarter were $23.8 million, representing a 32% decrease from first quarter 2008 revenues of $34.7 million and a 36% decrease from second quarter 2007 revenues of $37.3 million. Net loss for the second quarter was $18.9 million, or $1.02 per share. This compares to a net loss of $0.7 million, or $0.04 per share, for the first quarter of 2008 and a net loss of $0.1 million, or $0.01 per share, for the second quarter of 2007.

The second quarter net loss includes non-cash expenses of $16.6 million. We took a FAS 144 asset impairment charge of $13.2 million, primarily consisting of intangible assets related to the 2006 acquisitions of Accent Optical and Soluris. Other non-cash charges include $1.3 million for amortization of acquired intangible assets, $1.1 million for stock-based compensation expenses and $1.0 million for depreciation.

Operating expenses include $0.3 million in severance charges related to a 3% workforce reduction during the second quarter.

“In a difficult market environment, we are gratified to see the benefit of our restructuring efforts evidenced in part by achieving 42% gross margins in spite of the sharp decline in revenues,” commented Tim Stultz, president and chief executive officer. “So far this year, we have also strengthened our product portfolio by launching new solutions in every one of our primary served markets as well as completing the acquisition of Tevet, which has already led to new customer wins in the solar photovoltaics industry.”

“We took an impairment charge in the second quarter that will reduce our amortization of acquired intangible assets expense by approximately $700,000 per quarter,” continued Dr. Stultz. “We recently completed a $13.5 million real estate loan transaction on our Milpitas headquarters that will improve our cash position. Going forward we will continue to aggressively seek ways to improve both our operational and capital efficiencies.”

Selected Revenue Segment Information

Revenues by Product			Revenues by Region
Automated Metrology	42	%	Japan	38	%
Integrated Metrology	13	%	South Korea	19	%
Materials Characterization	23	%	United States	17	%
Service	22	%	ROW	26	%

Conference Call Details

A conference call to discuss the second quarter results will be held later today at 4:30 p.m. Eastern Daylight Time (1:30 p.m. PDT). To participate in the conference call, the dial-in numbers are 800-659-1966 for domestic callers and 617-614-2711 for international callers. The passcode is 13506760. A live and recorded webcast will be made available on the investor page of 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 primarily in semiconductor manufacturing. Nanometrics standalone and integrated 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, which remain subject to adjustment in connection with the preparation of Nanometrics’ financial statements and periodic report on Form 10-Q for the quarter ended June 28, 2008. For additional information and considerations regarding the risks faced by Nanometrics, see its annual report on Form 10-K, as amended, for the year ended December 29, 2007 as filed with the Securities and Exchange Commission, as well as other periodic reports filed with the SEC from time to time. 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. Nanometrics disclaims any obligation to update information contained in any forward-looking statement.

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NANOMETRICS INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands except share amounts)

(Unaudited)

	June 28, 2008			December 30, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	9,653		$	14,919
Accounts receivable, net of allowances of $320 and $323		28,663			34,855
Inventories		33,962			33,343
Inventories - delivered systems		230			785
Prepaid expenses and other		3,453			2,598
Total current assets		75,961			86,500
Property, plant and equipment, net		42,631			44,419
Goodwill and indefinite lived intangible assets		54,018			52,532
Intangible assets, net		9,244			21,820
Other assets		1,555			1,805
Total assets	$	183,409		$	207,076
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Revolving line of credit	$	—		$	—
Accounts payable		10,642			13,931
Accrued payroll and related expenses		4,484			4,514
Deferred revenue		1,134			2,501
Other current liabilities		7,911			7,243
Income taxes payable		110			1,101
Current portion of debt obligations		151			148
Total current liabilities		24,432			29,438
Deferred income taxes		382			382
Debt obligations and other long term liabilities		610			1,412
Total liabilities		25,424			31,232
Stockholders' equity
Common stock, $0.001 par value; 47,000,000 shares
authorized; 18,648,250 and 18,620,682, respectively, outstanding		19			19
Additional paid-in capital		189,281			187,180
Accumulated deficit		(33,555	)		(13,917	)
Accumulated other comprehensive income		2,240			2,562
Total stockholders’ equity		157,985			175,844
Total liabilities and stockholders' equity	$	183,409		$	207,076

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NANOMETRICS INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 28, 2008			June 30, 2007			June 28, 2008			June 30, 2007
Net revenues:
Products	$	18,504		$	32,732		$	46,433		$	65,258
Service		5,257			4,603			12,056			9,192
Total net revenues		23,761			37,335			58,489			74,450
Costs of net revenues:
Cost of products		9,162			16,372			22,824			33,855
Cost of service		4,532			4,839			9,770			10,668
Total costs of net revenues		13,694			21,211			32,594			44,523
Gross profit		10,067			16,124			25,895			29,927
Operating expenses:
Research and development		4,422			4,739			8,677			9,325
Selling		4,844			4,668			9,683			10,033
General and administrative		5,302			4,762			10,826			11,755
Amortization of intangible assets		1,330			1,663			2,615			3,212
Asset impairment		13,213			—			13,213			—
Restructuring charge		—			—			870			—
Total operating expenses		29,111			15,832			45,884			34,325
Income (loss) from operations		(19,044	)		292			(19,989	)		(4,398	)
Other income (expense):
Interest income		34			29			132			52
Interest expense		(26	)		(46	)		(103	)		(85	)
Other, net		(32	)		(541	)		422			(422	)
Total other income (expense), net		(24	)		(558	)		451			(455	)
Loss before income tax provision (benefit)		(19,068	)		(266	)		(19,538	)		(4,853	)
Income tax provision (benefit)		(154	)		(136	)		100			(112	)
Net loss	$	(18,914	)	$	(130	)	$	(19,638	)	$	(4,741	)
Net loss per share:
Basic	$	(1.02	)	$	(0.01	)	$	(1.06	)	$	(0.27	)
Diluted	$	(1.02	)	$	(0.01	)	$	(1.06	)	$	(0.27	)
Shares used in per share computation:
Basic		18,632			17,857			18,611			17,758
Diluted		18,632			17,857			18,611			17,758

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