November 21, 2006 - Days after a business unit reorg and executive shuffle, Nova Measuring Instruments Ltd. has announced layoffs of about 8% of its workforce in all parts of the organization, but mainly in R&D and operations and including management positions. The company will take a $300K charge in 4Q06 to cover termination expenses and other costs, but foresees saving $2 million in 2007.

The company had seen positive results from its localization initiative laid out last year, which involved increasing headcount for customer support and sales in specific regions, but that increase in resources has had to become balanced by lowering expenses in other areas, explained Gabi Seligsohn, president and CEO of Nova, in a statement. "This was done in order to fit to a new set of requirements, as we accelerate the penetration of our new offerings and begin developing our next generation of products. The new management team has acted as quickly as possible to complete this organizational realignment in order to reduce our breakeven point and accelerate the attainment of our business goals," he said.

Days ago Nova shuffled its management team and reorganized business units around profit lines and to integrate the operations of recently acquired HyperNex. The company also posted a 3Q net loss of $800K, slightly more than 2Q net loss of $400K but less than its year-ago net loss of $1 million. Quarterly revenue rose 9% sequentially and 40% year-on-year to $12.5 million.

The gradual improvement in the business side offsets distractions from the legal end of things. Last month Nanometrics filed a new patent infringement lawsuit against Nova over optical critical dimension technology, following similar litigation in the spring regarding its UV reflectometry and optical critical dimension tools. Nova itself filed suit against Nanometrics in early 2005, over its US patent #6,752,689, "Apparatus for optical inspection of wafers during polishing."

In September, Nova put a number of lithography metrology patents up for auction, relating to use of a lithography tool with integrated metrology. The company "invited" bids from approximately 100 companies, including leading-edge IC manufacturers, semiconductor equipment manufacturers, and metrology firms, and indicated it would be open to selling outright ownership in the technology.