Nanometrics Investor Presentation. CEO Investor Summit July 2014

Transcription

1 Nanometrics Investor Presentation CEO Investor Summit July 2014

2 Forward-Looking Statements This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to statements regarding Nanometrics ( us our or the Company ) future financial results, including, but not limited to our market share; industry demand and growth. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. In any forward-looking statement in which Nanometrics expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the result will be achieved. The risks and uncertainties include, but are not limited to: our ability to achieve desired product mix and pricing; our ability to achieve desired market position; growth in target industries; levels of capital expenditures in our target industries; customer adoption of certain technologies; market acceptance and timing of acceptance of our new products; interruptions or changes to supply chain; our ability to identify, complete and integrate acquisitions; and other economic, business, competitive and/or regulatory factors affecting Nanometrics businesses generally, including those set forth in Nanometrics filings with the SEC, including its Annual Report on Form 10-K for its most recent fiscal year, its most recent Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. All forward-looking statements included in this communication are based on information available to Nanometrics on the date hereof. We disclaim any intent or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise. 2

3 NANO: Leading Solutions for In-Line Process Control Flagship Products: Industry-Leading and Highly Differentiated Atlas / Lynx IMPULSE NanoCD UniFire SPARK Non-Destructive, Optical Technologies Ellipsometry Scatterometry Interferometry Photoluminescence Inspection Addressing Leading-Edge Applications and Critical Technology Inflection Points 3D Device Structures: FinFET / V-NAND / Advanced Packaging Complex Lithography: Multiple Patterning / EUV Advanced Materials: High-K / Metal Gates 3

4 Initiatives and Tailwinds Exiting Key Initiatives Selections, Qualifications or Tool-of-Record Achievements FinFET OCD Proliferation Expanded to 3 Key Accounts V-NAND Penetration 3 Atlas OCD Accounts 1 IMPULSE Account Advanced 3D Packaging Adoption Expanded to 7 UniFire Accounts and 2 SPARK Accounts Increase Foundry Penetration Expanded to 4 Atlas OCD Accounts and 3 UniFire Accounts 1 IMPULSE Account 4

5 Increased Penetration into Pure-Play Foundry Portion of NANO Foundry Revenues Serving Pure-Play Foundries FY '11 FY '12 FY '13 Other Foundry Pure-Play Foundry Other Foundry Pure-Play Foundry Other Foundry Pure-Play Foundry 5

6 3D Technologies Driving Growth Opportunities Node Shrinks Continue FinFET Memory Density Increasing V-NAND 3-D Device Integration Advanced Packaging Foundry Penetration 3D on all Roadmaps For 16nm and below Expanded Role of Integrated Metrology CMP Lithography Etch Deposition 6

7 V-NAND Transition Drives Increased Demand for Process Control Process Implications ~20% increase in process steps over planar favoring: Deposition Etch Process control Market Drivers Scalable bit density Lower power consumption Higher data rates Lower cost/bit Enabling architecture steps are OCD-controlled: Many layer deposition/etch High aspect ratio structures Roadmap drives additional process steps and tool demand: 24 layer Now 32 layer layers Future Samsung August 2013 Flash Memory Summit 7

8 All Leading-Edge Logic is Converting to FinFET Market Drivers: Improved performance demands from end users Highly competitive foundry landscape for high volume wins Aggressive timing for technology integration and launch Process Implications: FF process flow is more complex and extensive than planar 3D architecture poses complex metrology challenges Samsung Analyst Day 2013 ARM TechCon 2013 Increasing reliance on OCD for critical layer process control 8

9 NANO is the Leader in OCD Solutions for FinFET ATLAS II + Process Control for all Critical Steps Fab Deployment: Transistor Lithography Contact BEOL 16/14nm: FinFET 10nm: Replacement Channel Future: NanoWire IMPULSE Integrated Solutions for Critical Lot and Wafer-to-Wafer Control Fab Deployment: CMP Track Etch Lithograpy: (Track) Gate Etch: (Critical Etch) Metal CMP: 9

10 NANO Production OCD Recipes Accelerating Adoption of OCD at the Leading Edge CAGR by node: 4X nm 35 % 3X nm 48 % 2X nm 95 % 1X nm 175 % YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 Q

11 OCD: Key Enabling Technology for All Device Types Device Type Node Sampling Steps/ Parameters Relative Intensity (current node) Segment Opportunity/ 10K wspm NAND 1X/1Y 10/5 1.0 $4M - $6M VNAND 1X 12/5 1.1 $5M - $7M DRAM 3X/2X 20/5 1.2 $5M - $8M FOUNDRY 2X/2Y 20/ $6M - $10M FOUNDRY 1X/1Y 25/ $8M - $12M LOGIC 2Y/1X 30/ $10M - $15M Source: Company Estimates wspm: wafer starts per month capacity 11

12 Expanding Role of Advanced Process Control (APC) Adoption of In-line, Integrated & In-Situ APC Drives Increased Opportunity for: Metrology Data Feedback Loop Standalone Systems Integrated Thin Film & OCD In-Situ Thin Film Systems 12

13 Advanced 3D Packaging An Emerging Market Multi-Die Package Market Drivers: Higher performance Lower power consumption Smaller form factor Interposer / 2.5D 3D Stacked Die Metrology Opportunities: High value point in process sequence requires ~ 100% inspection either full wafer or field-by-field UniFire qualified for TSV and micro-pillar applications SPARK qualified for wafer bond uniformity applications 13

14 UniFire + SPARK: The Complete Solution TSV Formation Cu Pillar Formation UniFire TSV and µbump Via lithography metrology Via etch critical dimension/depth Bump topography Wafer-wafer overlay Wafer to Carrier Bonding Wafer Thinning Backside TSV Reveal & Passivation SPARK Backside processing De-bonding Edge trim, glue dispense µbump De-Bonding 3D Stacking Temporary bonding integrity Post-thinning inspection De-bonding residuals 14

15 Positive Spending Environment for 2014 and 2015 $40 Wafer Fab Equipment Spending (WFE) $B $35 $30 $25 $20 $15 $10 $5 $0 $34.8 $24.0 $13.2 $30.2 $33.7 $28.9 $28.4 $31.7 $ Est Est. Source: Average WFE estimate from at least 10 industry analysts as of May

16 Strong Multi-Year Cycle Driven by Top Spenders Semiconductor CapEx by Top Industry Spenders $14.0 $13.0 $12.0 $11.0 $10.0 $9.0 $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $- Samsung Intel TSMC Global Foundries SK Hynix Toshiba / SanDisk Micron Alliance Est Est. 16

17 100% Rapid Consolidation of Semiconductor Capital Spending 90% 29% 80% 38% All Others 70% 60% 73% 60% 5% 6% 8% SK Hynix 50% 7% 17% Global Foundries 40% 12% TSMC 10% 30% 20% 3% 3% 6% 4% 4% 9% 18% 18% Intel 10% 11% 14% 19% 21% Samsung 0% 4% Est Source: Capex by company obtained from press releases, SEC filings and conference call transcripts. Total Capex for each period is an average from at least 10 industry analysts as of May

18 12% Process Control Spending Patterns During Investment Cycle Drive Underperform/Outperform Periods 10% 8% 6% 4% 2% Quarterly Revenues from Samsung and Samsung Capex (Each as a % of Total Across 4 Year Cycle) Calculated as Rolling Average of Current Quarter, Last Quarter, Forward Quarter 0% Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14E Samsung Qtrly Capex % of Total Spent NANO Revs Rec'd from Samsung as % of 4yr Total 18

19 Outperformance Period Currently Underway Significant Achievements and Tailwinds Exiting 2013 Technology Changes Driving Growth Opportunities OCD Leadership Position and Increasing Industry Adoption Expanding Penetration into Foundry Strong Growth Trajectory Entering

20 Thank You

21 Q1 14 Revenue Segmentation Reflects Concentration of Spending Total Revenues by Geography Total Revenues by Product/Svc Product Revenues by End Market 26% 31% 5% 16% 12% 8% 23% 0% 30% 13% 13% 66% 16% 41% South Korea N. America China EMEA ROW Automated Integrated Mat. Char. Service DRAM Flash Logic/IDM Foundry LED/Discrete/Si FY % 24% 26% 17% 12% 18% 14% 33% 9% 8% 57% 32% 21% South Korea N. America EMEA ROW Automated Integrated Mat. Char. Service Mat. Char. = Materials Characterization Metrology Systems DRAM Flash Logic/IDM Foundry LED/Discrete/Si 21

22 Reconciliation of GAAP gross profit to non-gaap gross profit Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 GAAP gross profit $ 25,066 $ 24,759 $ 22,152 $ 11,951 $ 83,928 $ 10,486 $ 14,480 $ 15,801 $ 21,909 $ 62,676 $ 24,149 Inventory write-down ,439-2,439 - Amortization of intangible assets , , Reconciliation of GAAP operating income (loss) to non-gaap operating income (loss) Non-GAAP gross profit $ 25,703 $ 25,396 $ 22,781 $ 12,597 $ 86,477 $ 11,144 $ 15,127 $ 18,898 $ 22,579 $ 67,748 $ 24,823 GAAP operating income (loss) $ 4,106 $ 4,296 $ 3,614 $ (6,538) $ 5,478 $ (9,603) $ (6,156) $ (7,242) $ 1,292 $ (21,709) $ 2,016 Non-GAAP adjustments to operating income (loss): Inventory write-down ,439-2,439 (b) - Amortization of intangible assets included in cost of revenues , , Amortization of intangible assets included in operating expenses Restructuring ,740-1,740 (c) - Total non-gaap adjustments to operating income (loss) , , , Reconciliation of GAAP net income (loss) to non-gaap net income (loss) Non-GAAP operating income (loss) $ 4,935 $ 5,128 $ 4,436 $ (5,696) $ 8,803 $ (8,747) $ (5,314) $ (2,210) $ 2,075 $ (14,196) $ 2,798 GAAP operating income (loss) $ 4,106 $ 4,296 $ 3,614 $ (6,538) $ 5,478 $ (9,603) $ (6,156) $ (7,242) $ 1,292 $ (21,709) $ 2,016 Other income (expense) (392) (280) (355) 168 (859) (161) (822) (445) (428) (1,856) 166 GAAP income (Loss) before income taxes 3,714 4,016 3,259 (6,370) 4,619 (9,764) (6,978) (7,687) 864 (23,565) 2,182 Provision (benefit) for income taxes 2,011 (490) 1,356 (2,723) 154 (4,182) (2,412) (3,133) 308 (9,419) 587 Non-GAAP adjustments to net income (loss): NANOMETRICS INCORPORATED RECONCILIATION OF GAAP TO NON-GAAP RESULTS (In thousands, except per share amounts) (Unaudited) Fiscal 2012 Fiscal 2013 Fiscal 2014 GAAP net income (loss) $ 1,703 $ 4,506 $ 1,903 $ (3,647) $ 4,465 $ (5,582) $ (4,566) $ (4,554) $ 556 $ (14,146) $ 1,595 Total non-gaap adjustments to non-gaap operating income (loss) , , , Tax effect of non-gaap adjustments to operating income (loss) (303) (304) (300) (307) (1,214) (306) (299) (1,785) (317) (2,706) (282) Discrete tax adjustment 655 (1,955) - - (1,300) (a) Non-GAAP net income (loss) $ 2,884 $ 3,079 $ 2,425 $ (3,112) $ 5,276 $ (5,032) $ (4,023) $ (1,307) $ 1,022 $ (9,339) $ 2,095 Per share data: GAAP net income (loss) per diluted share $ 0.07 $ 0.19 $ 0.08 $ (0.16) $ 0.19 $ (0.24) $ (0.20) $ (0.20) $ 0.02 $ (0.61) $ 0.07 Non-GAAP net income (loss) per diluted share $ 0.12 $ 0.13 $ 0.10 $ (0.13) $ 0.22 $ (0.22) $ (0.17) $ (0.06) $ 0.04 $ (0.40) $ 0.09 Shares used in non-gaap diluted income per share calculation 23,981 23,877 23,760 23,408 23,845 23,341 23,138 23,261 23,913 23,290 24,159 Notes: (a) Reflects the tax benefit for certain first quarter foreign losses related to entity classification elections that w ere approved by the IRS in the second quarter. The tax benefit of these first quarter losses w as recorded as a decrease to the second quarter tax provision on a GAAP basis. The discrete tax adjustment for the second quarter also excludes the one-time benefit associate w ith the recognition of deferred tax assets related to the entity classification elections, resulting in a combined first and second quarter Non-GAAP tax rate of approximately 36.5%. (b) Represents charges associated w ith w riting dow n inventory related to a discontinued product line. (c) Includes severance and RSU modification charges accrued in connection w ith the notification of future closure of our Nanometrics Germany Inc office (Nanda). 22