Nova Measuring Instruments Ltd - Report of Foreign Issuer (6-K)
August 07 2008 - 4:38PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
August 7, 2008
Commission File No.:
000-30668
NOVA MEASURING INSTRUMENTS
LTD.
(Translation of
registrants name into English)
Weizmann Science Park
Building 22, 2nd Floor
Ness-Ziona 76100, Israel
+972 (8) 938-7505
(Address and telephone number of Registrant's principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F
x
Form 40-F
o
Indicate by check mark whether the registrant is submitting this Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1): ____
Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes
o
No
x
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
N/A
Attached
hereto and incorporated by way of reference herein is a managements discussion and
analysis of financial condition and results of operations with respect to the quarter
ended June 30, 2008.
This
Report on Form 6-K is hereby incorporated by reference into Nova Measuring Instruments
Ltd.s registration statements on Form S-8, filed with the Securities and Exchange
Commission on the following dates: September 13, 2000 (File No. 333-12546); March 5, 2002
(File No. 333-83734); December 24, 2002 (File No. 333-102193, as amended by Amendment No.
1, filed on January 5, 2006); March 24, 2003 (File No. 333-103981); May 17, 2004 (three
files, File Nos. 333-115554, 333-115555, and 333-115556, as amended by Amendment No. 1,
filed on January 5, 2006); March 7, 2005 (File No. 333-123158); December 29, 2005 (File
No. 333-130745); September 21, 2006 (File No. 333-137491) and November 5, 2007 (File No.
333-147140) and into Nova Measuring Instruments Ltd.s registration statement on Form
F-3, filed with the Securities and Exchange Commission on May 11, 2007 (File No.
333-142834).
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
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NOVA MEASURING INSTRUMENTS LTD.
(Registrant)
By: /s/ Gabi Seligsohn
Gabi Seligsohn
President & Chief Executive Officer
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By: /s/ Dror David
Dror David
Chief Financial Officer
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Date: August 7, 2008
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
You should read the following
discussion in conjunction with our consolidated financial statements and related notes
contained in our Annual Report on Form 20-F filed with the Securities and Exchange
Commission on March 28, 2008, as amended (the Annual Report) and other
financial information contained in our Report on Form 6-K filed with the Securities and
Exchange Commission on August 5, 2008. In addition to historical information, this
discussion may contain forward looking statements that involve risks, uncertainties and
assumptions that could cause actual results to differ materially from managements
expectations. Factors that could cause such differences include, but not limited to: our
dependency on a single integrated process control product line; the highly cyclical nature
of the markets we target; our inability to reduce spending during a slowdown in the
semiconductor industry; our ability to respond effectively on a timely basis to rapid
technological changes; risks associated with our dependence on a single manufacturing
facility; our dependency on a small number of large customers and small number of
suppliers and those other risks and factors described under the heading Risk
Factors in our Annual Report.
We
are a worldwide leading designer, developer and producer of integrated process control
metrology systems and design, manufacture and sell leading edge stand-alone metrology used
in the manufacturing process of semiconductors. Metrology systems measure various thin
film properties and critical circuit dimensions during various steps in the semiconductor
manufacturing process, allowing semiconductor manufacturers to increase quality,
productivity and yields, lower their manufacturing costs and increase their profitability.
We supply our metrology systems to major semiconductor manufacturers worldwide, either
directly or through process equipment manufacturers. Of the 20 semiconductor manufacturers
that had the highest capital equipment expenditures in 2007, 17 use our systems. The
majority of our integrated metrology systems are sold to process equipment manufacturers.
These process equipment manufacturers integrate our metrology systems into their process
equipment which is then sold to the semiconductor manufacturers. Our systems were first
installed in 1995 and, since that time, we have sold more than 1,800 metrology systems.
We have always emphasized our integrated metrology solutions as this continues to be
an area where we have a leading position. In addition, in the past few years we developed
and started manufacturing stand-alone metrology systems as well. We plan to leverage our
technology, methods, metrology expertise and market position in the integrated metrology
field to expand our offerings of stand-alone metrology systems. Today, both stand alone
and integrated metrology solutions have reached a level of maturity allowing semiconductor
manufactures to choose how to use either technology and make decisions based on merit
specific to the process step in question, always balancing between the amount of data
attained and the use made of the data for capabilities such as automated process control.
Our long-term strategy is focused on advanced metrology and process control solutions
where our integrated process control products and stand alone products are compatible or
complementary and used in a customized way to meet specific customer needs. The financial
information below reflects the operations of the Company and its subsidiaries on a
consolidated basis.
Comparison of the Three
Months Ended June 30, 2008 and 2007
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Revenues
for the second quarter ended June 30, 2008 decreased by 25.1% to $11.1 million, compared
to revenues of $14.8 million for the second quarter ended June 30, 2007. The decrease is
mainly attributed to overall decrease in demand for our integrated metrology products
resulting from an overall slow-down in the semiconductor industry.
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Cost
of revenues and gross margins
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Cost
of revenues consists of the labor, material and overhead costs of manufacturing our
systems, and the costs associated with our worldwide service and support infrastructure.
It also consists of inventory write-offs and provision for estimated future warranty
costs for systems we have sold.
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Our
cost of revenues attributable to product sales in the second quarter of 2008 was $3.5
million, a decrease of $2.0 million, or 36.2%, compared to $5.5 million in the second
quarter of 2007. This decrease is mainly attributable to the decrease in product revenues
in the second quarter of 2008. As a percentage of revenues, our cost of revenues
attributable to product sales in the second quarter of 2008 was 47.0% of product sales
compared to 45.5% in the second quarter of 2007. This increase is mainly related to our
fixed costs levels relative to the lower revenues volume.
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Our
cost of revenues attributable to services in the second quarter of 2008 was $3.3 million,
an increase of $0.7 million, or 27.6%, compared to $2.5 million in the second quarter of
2007. This increase is attributable mainly to the increase in headcount and its related
salary and overhead costs, to support our world wide service contracts.
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Our
gross margin attributable to product revenues in the second quarter of 2008 was 53.0% of
product sales, compared to 54.5% in the second quarter of 2007. This decrease is mainly
related to the lower revenues volume.
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Our
gross margin attributable to services revenue in the second quarter of 2008 was 9.6% of
services sales, compared to 5.0% of service sales in the second quarter of 2007. This
increase is attributable mainly to the increase in service revenues.
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Research
&development expenses, net
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Net
research and development expenses consist primarily of salaries and related expenses and
also include consulting fees, subcontracting costs, related materials and overhead
expenses, after offsetting conditional grants received or receivable from the Office of
the Chief Scientist (OCS). Our net research and development expenses in the
second quarter of 2008 and in the second quarter of 2007 were $2.2 million. Net research
and development expenses represented 19.6% of our revenues in the second quarter of 2008,
compared to 14.9% of our revenues in the second quarter of 2007, due to the decrease in
revenues in the second quarter of 2008.
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Sales
and marketing expenses
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Sales
and marketing expenses are comprised of salaries and related costs for sales and
marketing personnel, related travel expenses, and overhead. They also include commissions
to our representatives and sales personnel. Our sales and marketing expenses in the
second quarter of 2008 were $2 million, a decrease of $0.5 million, or 19.2%, compared to
$2.5 million in the second quarter of 2007. The decrease in sales and marketing expenses
is mainly attributed to the decrease in revenue-based sales force compensation costs.
Sales and marketing expenses represented 18.4% and 17.1%, respectively, of our revenues
in the second quarter of 2008 and second quarter of 2007.
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General
and administrative expenses
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General
and administrative expenses are comprised of salaries and related expenses and other
non-personnel related expenses such as legal expenses. Our general and administrative
expenses in the second quarter of 2008 were $0.8 million, a decrease of $0.4 million, or
31.2%, compared to $1.2 million in the second quarter of 2007. General and administrative
expenses decreased to 7.2% of our revenues in the second quarter of 2008 compared to 7.8%
of our revenues in the second quarter of 2007. This decrease is primarily attributed to a
decrease in legal expenses related to intellectual property infringement law suits which
were settled in April 2007.
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The
three months ended June 30, 2008 include a one-time $0.6 million impairment of equipment
related to Hypernex assets and liabilities.
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Comparison of the Six
Months Ended June 30, 2008 and 2007
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Revenues
for the six months ended June 30, 2008 decreased by 15.2% to $23.9 million, compared to
sales of $28.2 million for the comparable period in 2007. This decrease is mainly
attributed to the overall decrease in demand for our integrated metrology products
resulting from an overall slow-down in the semiconductor industry.
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Cost
of revenues consists of the labor, material and overhead costs of manufacturing our
systems, and the costs associated with our worldwide service and support infrastructure.
It also consists of inventory write-offs and provisions for estimated future warranty
costs for systems we have sold.
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Our
cost of revenues attributable to product sales in the six months ended June 30, 2008 was
$8.0 million, a decrease of $2.4 million, or 23%, compared to the six months ended June
30, 2007. This decrease is attributable to the decrease in product sales in the six
months ended June 30, 2007. As a percentage of product revenues, our cost of revenues in
the six months ended June 30, 2008 were 46.8% compared to 46.0% in the six months ended
June 30, 2007.
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Our
cost of revenues attributable to services in the six months ended June 30, 2008 was $6.4
million, an increase of $1.2 million, or 23%, compared to $5.2 million in the six months
ended June 30, 2007. This increase is attributable mainly to the increase in headcount
and its related salary and overhead costs, to support our world wide service contracts.
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Our
gross margin attributable to product revenues in the six months ended June 30, 2008 was
53.2% of product sales, as compared to 54.0% in the six months ended June 30, 2007.
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Our
gross margin attributable to services revenues in the six months ended June 30, 2008 was
5.6% of services sales, a decrease of 20% relative to 7% of service sales in the six
months ended June 30, 2007.
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Research
and development expenses, net
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Net
research and development expenses consist primarily of salaries and related expenses and
also include consulting fees, subcontracting costs, related materials and overhead
expenses, after offsetting conditional grants received or receivable from the OCS. Our
net research and development expenses in the six months ended June 30, 2008 were $4.1
million, a decrease of $0.4 million, compared to $4.5 million in the six months ended
June 30, 2007. This decrease is mainly attributed to the decrease in our research and
development investments in x-ray technologies and to an increase in OCS grants. Net
research and development expenses increased to 17.1% of our revenues in the six months
ended June 30, 2008 compared to 16.1% of our revenues in the six months ended June 30,
2007. This increase is due mainly to the decrease in our revenues in the six months ended
June 30, 2008, which was partially offset by the decrease in costs.
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Sales
and marketing expenses
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Sales
and marketing expenses are comprised of salaries and related costs for sales and
marketing personnel, related travel expenses, and overhead. They also include commissions
to our representatives and sales personnel. Our sales and marketing expenses in the six
months ended June 30, 2008 were $4.5 million, a decrease of $0.2 million, or 5.2%
compared to $4.7 million in the six months ended June 30, 2007. The decrease in sales and
marketing expenses is mainly attributed to decrease in revenue based sales force
compensation costs. Sales and marketing expenses represented 18.8% and 16.8%,
respectively, of our revenues in the six months ended June 30, 2008 and six months ended
June 30, 2007.
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General
and administrative expenses
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General
and administrative expenses are comprised of salaries and related expenses and other
non-personnel related expenses such as legal expenses. Our general and administrative
expenses in six months ended June 30, 2008 were $1.7 million, a decrease of $1.6 million
or 48.0% compared to $3.3 million in the six months ended June 30, 2007. This decrease is
attributed mainly to the legal expenses related to intellectual property infringement law
suits, which were settled during the second quarter of 2007. General and administrative
expenses represented 7.1% and 11.6% of our revenues in the six months ended June 30, 2008
and the six months ended June 30, 2007, respectively.
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The
six months ended June 30, 2008 include a one-time $0.6 million impairment of equipment
related to Hypernex assets and liabilities.
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Liquidity and Capital
Resources
Total cash reserves at the end of the
second quarter of 2008 amounted to $21.5 million relative to $20.4 million at the second
quarter of 2007.
Working capital at the end of the
second quarter of 2008 amounted to $23.5 million relative to $22.9 million at the end of
the second quarter of 2007.
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