www.ontoinnovation.com<\/a>.<\/p>\nDiscussion of Non-GAAP Financial Measures<\/b><\/p>\n
\nThe Company has provided in this release non-GAAP financial measures, including non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share and non-GAAP operating margin, which exclude amortization of acquisition-related intangible assets, certain acquisition-related expenses and benefits, litigation expenses and restructuring costs. Non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share and non-GAAP operating margin can also exclude certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability, tax provisions\/benefits related to the previous items, and significant discrete tax events. We exclude the above items because they are outside of our normal operations and\/or, in certain cases, are difficult to forecast accurately for future periods.<\/p>\n
\nWe utilize several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures to be helpful in assessing the performance of the ongoing operation of our business. We believe that disclosing non-GAAP financial measures provides useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. We also believe that disclosing non-GAAP financial measures provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. More specifically, management adjusts for the excluded items for the following reasons:<\/p>\n
Amortization of purchased intangible<\/i>assets<\/i>:<\/i> we do not acquire businesses and assets on a predictable cycle. The amount of purchase price allocated to the purchased intangible assets and the term of amortization can vary significantly and are unique to each acquisition or purchase. We believe that excluding amortization of purchased intangible assets allows the users of our financial statements to better review and understand the historic and current results of our operations, and also facilitates comparisons to peer companies.<\/p>\n
Merger or acquisition related expenses and benefits:<\/i> we incur expenses or benefits with respect to certain items associated with our mergers and acquisitions, such as transaction and integration costs, change in control payments, adjustments to the fair value of assets, etc. We exclude such expenses or benefits as they are related to acquisitions and have no direct correlation to the operation of our on-going business.<\/p>\n
Restructuring charges<\/i>: we incur restructuring and impairment charges on individual or groups of employed assets, which arise from unforeseen circumstances and\/or often occur outside of the ordinary course of our on-going business. Although these events are reflected in our GAAP financials, these unique transactions may limit the comparability of our on-going operations with prior and future periods.<\/p>\n
Significant litigation charges or benefits and legal costs:<\/i> we may incur charges or benefits as well as legal costs in connection with litigation and other contingencies unrelated to our core operations. We exclude these charges or benefits, when significant, as well as legal costs associated with significant legal matters, because we do not believe they are reflective of on-going business and operating results.<\/p>\n
Income tax expense<\/i>:<\/i> we estimate the tax effect of the items identified to determine a non-GAAP annual effective tax rate applied to the pretax amount in order to calculate the non-GAAP provision for income taxes. We also adjust for items for which the nature and\/or tax jurisdiction requires the application of a specific tax rate or treatment.<\/p>\n
\nFrom time to time in the future, there may be other items excluded if we believe that doing so is consistent with the goal of providing useful information to investors and management.<\/p>\n
\nThere are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact on our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release.<\/p>\n
Forward-Looking Statements<\/b><\/p>\n
\nThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the \u201cAct\u201d) which include, but are not limited to, statements regarding Onto Innovation\u2019s business momentum and future growth; the benefit to customers and capabilities of Onto Innovation\u2019s products and customer service; Onto Innovation\u2019s ability to both deliver products and services consistent with our customers\u2019 demands and expectations and strengthen its market position; Onto Innovation\u2019s expectations regarding the semiconductor market outlook; Onto Innovation\u2019s future quarterly and annual financial outlook; as well as other matters that are not purely historical data. Onto Innovation wishes to take advantage of the \u201csafe harbor\u201d provided for by the Act and cautions that actual results may differ materially from those projected as a result of various factors, including risks and uncertainties, many of which are beyond Onto Innovation\u2019s control. Such factors include, but are not limited to, the Company\u2019s ability to leverage its resources to improve its position in its core markets; its ability to weather difficult economic environments; its ability to open new market opportunities and target high-margin markets; the strength\/weakness of the back-end and\/or front-end semiconductor market segments; fluctuations in customer capital spending; the Company\u2019s ability to effectively manage its supply chain and adequately source components from suppliers to meet customer demand; the effects of political, economic, legal, and regulatory changes or conflicts on the Company’s global operations; its ability to adequately protect its intellectual property rights and maintain data security; the effects of natural disasters or public health emergencies, such as the current COVID-19 pandemic, on the global economy and on the Company\u2019s customers, suppliers, employees, and business; its ability to effectively maneuver global trade issues and changes in trade and export regulations and license policies; the Company\u2019s ability to maintain relationships with its customers and manage appropriate levels of inventory to meet customer demands; and the Company\u2019s ability to successfully integrate acquired businesses and technologies. Additional information and considerations regarding the risks faced by Onto Innovation are available in Onto Innovation\u2019s Form 10-K report for the year ended December 31, 2022, and other filings with the Securities and Exchange Commission. As the forward-looking statements are based on Onto Innovation\u2019s current expectations, the Company cannot guarantee any related future results, levels of activity, performance, or achievements. Onto Innovation does not assume any obligation to update the forward-looking information contained in this press release, except as required by law.<\/p>\n
About Onto Innovation<\/b><\/p>\n
\nOnto Innovation is a leader in process control, combining global scale with an expanded portfolio of leading-edge technologies that include: Un-patterned wafer quality; 3D metrology spanning chip features from nanometer scale transistors to large die interconnects; macro defect inspection of wafers and packages; elemental layer composition; overlay metrology; factory analytics; and lithography for advanced semiconductor packaging. Our breadth of offerings across the entire semiconductor value chain combined with our connected thinking approach results in a unique perspective to help solve our customers\u2019 most difficult yield, device performance, quality, and reliability issues. Onto Innovation strives to optimize customers\u2019 critical path of progress by making them smarter, faster and more efficient. With headquarters and manufacturing in the U.S., Onto Innovation supports customers with a worldwide sales and service organization. Additional information can be found at www.ontoinnovation.com<\/a>.<\/p>\n\nSource: Onto Innovation Inc.
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ONTO-I<\/p>\n
\n(Financial tables follow)<\/p>\n
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