Revenue during the quarter grew 28.54 percent to $58.71 million from $45.68 million in the previous year period. Gross margin for the quarter expanded 314 basis points over the previous year period to 51.78 percent. Total expenses were 84.56 percent of quarterly revenues, down from 97.23 percent for the same period last year. This has led to an improvement of 1267 basis points in operating margin to 15.44 percent.

Operating income for the quarter was $9.07 million, compared with $1.26 million in the previous year period.

However, the adjusted operating income for the quarter stood at $9.50 million compared to $7.78 million in the prior year period. At the same time, adjusted operating margin contracted 85 basis points in the quarter to 16.18 percent from 17.03 percent in the last year period.

"Our results for the third quarter reflect continued investments in 3D-NAND, where we maintain robust market share positions with every major NAND manufacturer, augmented by strengthening contributions from our DRAM and Foundry customers," commented Dr. Timothy J. Stultz, president and chief executive officer. "Our financial performance for the third quarter continued to perform well against our target business model, with operating margins, earnings per share and free cash flow performance each setting new five-year records. We expect that continued investments in 3D-NAND, DRAM and Foundry by our key customers in Q4 will result in second-half revenues that are meaningfully stronger than the first half, and round out the remainder of 2016 to comprise another sequential year in which our revenue growth significantly outperforms overall spending on wafer fab equipment."

For the fourth-quarter, Nanometrics forecasts revenue to be in the range of $54 million to $59 million. The company expects diluted earnings per share to be in the range of $0.21 to $0.30 for the fourth-quarter. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.22 to $0.31 for the fourth-quarter.

The company has spent $39.64 million cash to meet investing activities during the nine month period as against cash inflow of $4.50 million in the last year period

Cash flow from financing activities was $4.09 million for the nine month period, up 1,915.27 percent or $3.89 million, when compared with the last year period.

Cash and cash equivalents stood at $37.42 million as on Sep. 24, 2016, down 9.96 percent or $4.14 million from $41.56 million on Sep. 26, 2015.

Working capital increases
Nanometrics has recorded an increase in the working capital over the last year. It stood at $163.32 million as at Sep. 24, 2016, up 23.09 percent or $30.64 million from $132.68 million on Sep. 26, 2015. Current ratio was at 4.56 as on Sep. 24, 2016, up from 3.79 on Sep. 26, 2015.

Cash conversion cycle (CCC) has decreased to 94 days for the quarter from 205 days for the last year period. Days sales outstanding went down to 66 days for the quarter compared with 82 days for the same period last year.

Days inventory outstanding has decreased to 63 days for the quarter compared with 180 days for the previous year period. At the same time, days payable outstanding went down to 35 days for the quarter from 57 for the same period last year.