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Basis of Presentation | 3 Months Ended
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Mar. 28, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract] |
Basis of Presentation | NOTE 1. Basis of Presentation The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared by Onto Innovations Inc. (the “Company” or “Onto”) and in the opinion of management reflect all adjustments, consisting of normal recurring accruals, necessary for their fair presentation in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Preparing financial statements requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual amounts could differ materially from reported amounts. The interim results for the three months ended March 28, 2020 are not necessarily indicative of results to be expected for the entire year or any future periods. This interim financial information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”) filed with the Securities and Exchange Commission (“SEC”) on February 25, 2020. The accompanying Condensed Consolidated Balance Sheet at December 31, 2019 has been derived from the audited consolidated financial statements included in the 2019 Form 10-K. As further discussed in Note 2 of Notes to the Condensed Consolidated Financial Statements, Rudolph Technologies, Inc. (“Rudolph”) and Nanometrics Incorporated (“Nanometrics”) completed a merger effective October 25, 2019 (the “Merger”). Upon consummation of the Merger, the combined company was renamed Onto Innovation. The Merger was accounted for as a reverse acquisition where Rudolph was the accounting acquirer and Nanometrics was the legal acquirer in accordance with Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations” (“ASC 805”). Accordingly, Rudolph’s historical results of operations replaced the Nanometrics historical results of operations for all periods prior to the merger. Specifically, the accompanying Condensed Consolidated Financial Statements for all periods prior to the Merger are those of Rudolph and for the period after the Merger, also include Nanometrics. The Condensed Consolidated Financial Statements reflect the assets and liabilities of Rudolph at historical cost basis and the assets and liabilities of Nanometrics are reflected at fair value under the acquisition method. While Rudolph applied the acquisition method of accounting to Nanometrics, the legal capital in the current and prior periods has been retroactively adjusted to reflect the legal capital of Nanometrics. Accordingly, earnings per share has been retroactively restated for periods prior to the merger date. On February 28, 2020, the Board of Directors of Onto Innovation Inc. (the “Company”) determined it is in the best interests of the Company to change its fiscal year end from December 31 to a 52-53 week fiscal year ending on the Saturday closest to December 31. The change is intended to align the Company’s fiscal periods more closely with industry peers and improve comparability. The Company made the fiscal year change on a prospective basis and has not adjusted operating results for prior periods. The change affects the prior year comparability of the Company’s fiscal quarters in 2020 and will result in shifts in the quarterly periods, which will not have a material impact on quarterly financial results. The first fiscal quarter of 2020 began on January 1, 2020 and ended March 28, 2020 and is referred to throughout this report as the “three months ended March 28, 2020” or the “first quarter of 2020.” The registrant’s current fiscal year will end on December 26, 2020. Reclassifications. In conjunction with the Merger, the Company assessed the need to realign its financial statement presentation and certain income statement classifications were adjusted with prior periods reclassified to conform with current period presentation. The changes made were as follows:
| • | Amounts related to sales and marketing are now presented on a separate line on the Condensed Consolidated Statements of Operations and were previously reported under the caption “Selling, general and administrative.”
| • | Amounts related to applications engineering are now presented under the caption, “Sales and marketing” on the Condensed Consolidated Statements of Operations and were previously reported under the caption “Research and development.”
Impact of COVID-19 on our Business The impact of the COVID-19 pandemic continues to unfold. The extent of the pandemic’s effect on the Company’s operational and financial performance will depend in large part on future developments, which cannot be predicted with confidence at this time. Future developments include the duration, scope and severity of the pandemic, the actions taken to contain or mitigate its impact, the impact on governmental programs and budgets, the development of treatments or vaccines, and the resumption of widespread economic activity. Due to the inherent uncertainty of the unprecedented and rapidly evolving situation, the Company is unable to predict with any confidence the likely impact of the COVID-19 pandemic on its future operations. Recent Accounting Pronouncements Recently Adopted Effective January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU is part of the Financial Account Standard Board’s (“FASB”) larger disclosure framework project intended to improve the effectiveness of financial statement footnote disclosure. ASU No. 2018-13 modifies required fair value disclosures related primarily to Level 3 investments. This ASU is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. The adoption of ASU No. 2018-13 did not have a material impact on the Company’s consolidated financial position, results of operations, and cash flows. Effective January 1, 2020, the Company adopted ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” This ASU amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Accounting Standards Codification (“ASC”) 718. The ASU is effective for the fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The adoption of ASU No. 2017-09 did not have a material impact on the Company’s consolidated financial position, results of operations, and cash flows. Effective January 1, 2020, the Company adopted ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which represents a credit loss standard that changes the impairment model for most financial assets and certain other financial instruments. Specifically, this guidance requires entities to utilize a new “expected loss” model as it relates to trade receivables, notes receivable and other commitments to extend credit held by a reporting entity. In addition, entities are required to recognize an allowance for estimated credit losses on available-for-sale debt securities, regardless of the length of time that a security has been in an unrealized loss position. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods, with early adoption permitted. The adoption of ASU No. 2016-13 did not have a material impact on the Company’s consolidated financial position, results of operations, and cash flows. Recently Issued In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. ASU No. 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this new standard on its consolidated financial position, results of operations, and cash flows. Recently issued accounting guidance not discussed above is not applicable or is not expected to have a material impact to the Company’s consolidated financial position, results of operations, and cash flows.

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