August 16, 2007 – Following months of trimmings and reorganizations, Nanometrics Inc. is further shrinking its corporate footprint with the closure of its machine shop and plating facility in Milpitas, CA. The move will result in a ~$4 million charge to write off assets; the company says it is trying to lease the facility and sell related assets.
“A key element of our restructuring plan is to unwind our vertical integration strategy, converting fixed costs to variable costs,” said Bruce Rhine, current CEO of Nanometrics, in a statement, noting that the machining and plating business adds no value, and disposing of it and the facility will improve the company’s cost structure and lower its breakeven profitability point.
Rhine is slated to move up to the chairman’s seat later this month to make room for new incoming president/CEO Timothy Stultz (formerly top exec at Imago Scientific Instruments). At the time of that announcement a few weeks ago, execs hinted that the company’s recent activities apparently haven’t gone as smoothly as hoped. Nanometrics founder Vincent Coates noted Rhine’s guidance “through some of the most challenging tasks we have faced as a company,” most notably “turning around a troubled business integration,” and Rhine himself remarked on “a number of challenges in integrating and consolidating its operations worldwide.”
It’s been a tumultuous year for Nanometrics, with a number of executive shuffles, selling off certain product assets, and moving other product lines overseas. Since last summer’s acquisition of metrology firms Soluris Inc. and Accent Optical Technologies (AOI), the firm has watched former CEO John Heaton leave the company with little explanation, followed a month later by CFO Dave McCutcheon “to pursue other interests”. More recently Nanometrics has announced it will consolidate all its overlay metrology production in Korea (and close the Soluris site in Concord, MA), where it already makes its Orion and Caliper systems. And weeks ago Nanometrics sold off the Yosemite CD-SEM technology originally developed by Soluris and AOI’s DiVA series of IV instruments primarily for use in the RF microwave industry, both for undisclosed amounts.