Milpitas, California. August 1, 2007.

Nanometrics Reports Financial Results for the Second Quarter of 2007

Record Revenues, Operating Profitability for First Time in Nine Quarters, Cash Increases 67%. Board Authorizes Stock Repurchase of Up to $4 Million.

Nanometrics Incorporated (Nasdaq: NANO), a leading supplier of advanced metrology equipment to the semiconductor industry, today announced its financial results for the second quarter ended June 30, 2007.

Revenues for the second quarter were a record $37.3 million, up slightly compared to first quarter 2007 revenues of $37.1 million and representing a 60 percent increase over revenues of $23.4 million for the second quarter of 2006. Net loss for the second quarter of 2007 was $130,000, or $0.01 per share. This compares to a net loss of $4.6 million, or $0.26 per share, for the first quarter of 2007 and a net loss of $2.2 million, or $0.16 per share, for the second quarter of 2006.

Second quarter 2007 operating income of $0.3 million includes non-cash charges of $1.7 million for amortization of acquired intangible assets and $0.6 million for stock-based compensation expenses.

“I’m very pleased to be announcing Nanometrics’ first quarter of operating profitability in more than two years,” commented Bruce C. Rhine, chief executive officer of Nanometrics. “This quarter our team made profitability, cash flow and predictability our top priorities. While we ended the quarter with a net loss on a GAAP basis, we made progress towards our goals – record revenues overall, record revenues in integrated metrology, a significant gross margin improvement and a $6.2 million increase in our cash balance. We also reduced general and administrative expenses by over 30% and are now running very close to our target model for total operating expenses as a percentage of revenue. In addition, our Board of Directors has authorized a stock repurchase program of up to $4 million. I’d like to especially thank our team for rolling up their sleeves and completing most of the integration work from last year’s acquisitions. While we have turned around performance, we still have a ways to go in achieving our goals moving forward.”

View Q2 2007 consolidated balance sheets and statement of operations [pdf]

Conference Call Details
A conference call to discuss the second quarter 2007 results will be held tomorrow, August 2nd, 2007, at 10:00 a.m. Eastern Daylight Time (7:00 a.m. PDT). To participate in the conference call, the dial-in numbers are 888-713-4215 for domestic callers and 617-213-4867 for international callers. The passcode is 62741640. 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 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’ audited financial statements, its planned stock repurchase program, as well as statements made by Mr. Rhine concerning the Company’s financial prospects. 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, 2006 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 companies Nanometrics has acquired. 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.

Contact
Investor Relations:
Claire McAdams
Headgate Partners LLC
530-265-9899 tel; 530-265-9699 fax
claire@headgatepartners.com

Company Contact:
Dan Choy
408-545-6000 tel; 408-232-5910 fax
dchoy@nanometrics.com