Nova Ltd. — Earnings Release 2010

Nov 2, 2010

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Company Contact: Dror David, Chief Financial Officer Nova Measuring Instruments Ltd. Tel: 972-8-938-7505 E-mail: info@nova.co.il http://www.nova.co.il

Investor relations Contacts: Ehud Helft / Kenny Green CCG Investor Relations Tel: +1-646-201-9246 E-mail: nova@ccgisrael.com

Company Press Release

NOVA ANNOUNCES RECORD QUARTERLY FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2010

Record bookings reflect strong business momentum across all product lines Accelerating standalone customer penetration further strengthens market position and outlook

Rehovot, Israel - November 2, 2010 - Nova Measuring Instruments Ltd. (Nasdaq: NVMI) , provider of leading edge stand alone metrology and the market leader of integrated metrology solutions to the semiconductor process control market, today reported its 2010 third quarter financial results.

Highlights for the Third Quarter of 2010

•  Record revenues of $24.2 million

•  Record gross margins of 56%

•  Record net income of $7.3 million, or $0.27 per diluted share; net margin of 30%

•  $7.9 million positive operating cash flow; strong balance sheet with cash reserves of $54.8 million

Management Comments

“Q3 was another excellent quarter, with record performance achieved in all aspects of our business”, said Gabi Seligsohn, President and CEO of Nova. “During the quarter we also continued to execute on our strategy of expanding our customer base with the stand alone metrology product line, adding two new foundry customers and one new memory customer. We expect to recognize most of the related revenues at the beginning of 2011.”

“On the integrated metrology front, we continued to enjoy record business volumes with many fabs ordering and installing dozens of tools per fab. Given the significant challenges experienced in

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design rule shrink in all our served markets, the extent by which integrated metrology is being deployed is the highest it has ever been. Meanwhile, we successfully started the proliferation of our latest integrated metrology product, the Nova i500, and continued the delivery of the Nova T500 stand alone tool. We believe that the combination of new products and the recent customer design wins will support further growth in the future.”

2010 Fourth Quarter and Annual Guidance

For the fourth quarter of 2010, management expects revenues of $24.5-$26 million, with net profitability of 26%-29%.

In terms of the company’s existing 2010 annual guidance, of revenues of $78-$85 million and net profitability of 21%-24%, management expects to reach or slightly exceed the top-end of this guidance.

2010 Third Quarter Results

Total revenues for the third quarter of 2010 were $24.2 million, an increase of 112% relative to the third quarter of 2009, and an increase of 25% relative to the second quarter of 2010.

Gross margin for the third quarter of 2010 was 56%, compared with 48% in the third quarter of 2009, and 54% in the second quarter of 2010.

Operating expenses in the third quarter of 2010 were $6.4 million, compared with $4.0 million in the third quarter of 2009, and $5.8 million in the second quarter of 2010.

The company reported net income of $7.3 million, or $0.27 per diluted share, in the third quarter of 2010. This compares to a net income of $1.7 million, or $0.08 per share, in the third quarter of 2009, and a net income of $4.7 million, or $0.18 per diluted share, in the second quarter of 2010.

The company generated $7.9 million in cash from operating activities during the third quarter of 2010, and total cash reserves at the end of the third quarter of 2010 were $54.8 million.

The Company will host a conference call today, November 2, 2010, at 10:00am ET. To participate, please dial in the US: 1 866 850 2201; in Israel: 03 721 9510 or internationally: +1 212 444 0482. A recording of the call will be available on Nova’s website, within 24 hours following the end of the call. In addition, a presentation to accompany the conference call will be available together with a live webcast of the conference call. This will be accessible from a link on Nova’s website at www.nova.co.il.

About Nova

Nova Measuring Instruments Ltd. develops, produces and markets advanced integrated and stand alone metrology solutions for the semiconductor manufacturing industry. Nova is traded on the NASDAQ & TASE under the symbol NVMI. The Company's website is www.nova.co.il.

This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, such as statements regarding trends, demand for

our products, expected deliveries, transaction, expected revenues, operating results, earnings and profitability. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward looking statements. These risks and other factors include but are not limited to: our dependency on two integrated process control product lines; 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; our dependency on OEM suppliers; risks associated with our dependence on a single manufacturing facility; our ability to expand our manufacturing capacity or marketing efforts to support our future growth; our dependency on a small number of large customers and small number of suppliers; risks related to our intellectual property; changes in customer demands for our products; new product offerings from our competitors; changes in or an inability to execute our business strategy; unanticipated manufacturing or supply problems; changes in tax requirements; changes in customer demand for our products; risks related to currency fluctuations; and risks related to our operations in Israel. We cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading “Risk Factors” in Nova’s Annual Report on Form 20-F for the year ended December 31, 2009 filed with the Securities and Exchange Commission on March 26, 2010. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. Nova Measuring Instruments Ltd. does not assume any obligation to update the forward-looking information contained in this press release.

(Tables to Follow)

NOVA MEASURING INSTRUMENTS LTD. CONSOLIDATED BALANCE SHEET

(U.S. dollars in thousands)

CURRENT ASSETS Cash and cash equivalents Short-term interest-bearing bank deposits Trade accounts receivable Inventories Other current assets LONG-TERM ASSETS Long-term interest-bearing bank deposits Other Long-term assets Severance pay funds FIXED ASSETS, NET Total assets CURRENT LIABILITIES Trade accounts payable Deferred income Other current liabilities LONG-TERM LIABILITIES Liability for employee severance pay Deferred income Other long-term liability SHAREHOLDERS' EQUITY Total liabilities and shareholders' equity	As of September 30, As of December 31, 2010 2009 10,977 9,861 43,228 8,607 12,523 11,545 10,041 3,949 3,088 1,728 79,857 35,690 570 561 167 142 2,525 2,368 3,262 3,071 2,422 2,163 85,541 40,924 8,644 3,715 5,115 1,671 6,801 5,237 20,560 10,623 3,478 3,168 1,502 183 26 35 5,006 3,386 59,975 26,915 85,541 40,924	As of September 30, As of December 31, 2010 2009 10,977 9,861 43,228 8,607 12,523 11,545 10,041 3,949 3,088 1,728 79,857 35,690 570 561 167 142 2,525 2,368 3,262 3,071 2,422 2,163 85,541 40,924 8,644 3,715 5,115 1,671 6,801 5,237 20,560 10,623 3,478 3,168 1,502 183 26 35 5,006 3,386 59,975 26,915 85,541 40,924
		2009 9,861 8,607 11,545 3,949 1,728 35,690 561 142 2,368 3,071 2,163 40,924 3,715 1,671 5,237 10,623 3,168 183 35 3,386 26,915 40,924

NOVA MEASURING INSTRUMENTS LTD. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data)

REVENUES Product sales Services COST OF REVENUES Products Services GROSS PROFIT OPERATING EXPENSES Research & Development expenses, net Sales & Marketing expenses General & Administration expenses OPERATING PROFIT Interest income, net NET INCOME FOR THE PERIOD Net income per share: Basic Diluted Shares used for calculation of net income per share: Basic Diluted	Three months ended September 30, 2010 June 30, 2010 September 30, 2009 20,350 15,889 8,717 3,860 3,551 2,677 24,210 19,440 11,394 8,182 6,554 3,699 2,542 2,452 2,191 10,724 9,006 5,890 13,486 10,434 5,504 2,783 2,828 1,850 2,810 2,242 1,523 795 679 594 6,388 5,749 3,967 7,098 4,685 1,537 176 24 153 7,274 4,709 1,690 0.29 0.19 0.09 0.27 0.18 0.08 25,008 24,808 19,417 26,478 26,406 19,942	Three months ended September 30, 2010 June 30, 2010 September 30, 2009 20,350 15,889 8,717 3,860 3,551 2,677 24,210 19,440 11,394 8,182 6,554 3,699 2,542 2,452 2,191 10,724 9,006 5,890 13,486 10,434 5,504 2,783 2,828 1,850 2,810 2,242 1,523 795 679 594 6,388 5,749 3,967 7,098 4,685 1,537 176 24 153 7,274 4,709 1,690 0.29 0.19 0.09 0.27 0.18 0.08 25,008 24,808 19,417 26,478 26,406 19,942	Three months ended September 30, 2010 June 30, 2010 September 30, 2009 20,350 15,889 8,717 3,860 3,551 2,677 24,210 19,440 11,394 8,182 6,554 3,699 2,542 2,452 2,191 10,724 9,006 5,890 13,486 10,434 5,504 2,783 2,828 1,850 2,810 2,242 1,523 795 679 594 6,388 5,749 3,967 7,098 4,685 1,537 176 24 153 7,274 4,709 1,690 0.29 0.19 0.09 0.27 0.18 0.08 25,008 24,808 19,417 26,478 26,406 19,942	Three months ended September 30, 2010 June 30, 2010 September 30, 2009 20,350 15,889 8,717 3,860 3,551 2,677 24,210 19,440 11,394 8,182 6,554 3,699 2,542 2,452 2,191 10,724 9,006 5,890 13,486 10,434 5,504 2,783 2,828 1,850 2,810 2,242 1,523 795 679 594 6,388 5,749 3,967 7,098 4,685 1,537 176 24 153 7,274 4,709 1,690 0.29 0.19 0.09 0.27 0.18 0.08 25,008 24,808 19,417 26,478 26,406 19,942	Three months ended September 30, 2010 June 30, 2010 September 30, 2009 20,350 15,889 8,717 3,860 3,551 2,677 24,210 19,440 11,394 8,182 6,554 3,699 2,542 2,452 2,191 10,724 9,006 5,890 13,486 10,434 5,504 2,783 2,828 1,850 2,810 2,242 1,523 795 679 594 6,388 5,749 3,967 7,098 4,685 1,537 176 24 153 7,274 4,709 1,690 0.29 0.19 0.09 0.27 0.18 0.08 25,008 24,808 19,417 26,478 26,406 19,942
			June 30, 2010 15,889 3,551 19,440 6,554 2,452 9,006 10,434 2,828 2,242 679 5,749 4,685 24 4,709 0.19 0.18 24,808 26,406
					2009 8,717 2,677 11,394 3,699 2,191 5,890 5,504 1,850 1,523 594 3,967 1,537 153 1,690 0.09 0.08 19,417 19,942

NOVA MEASURING INSTRUMENTS LTD. YEAR TO DATE CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data)

REVENUES Product sales Services COST OF REVENUES Product sales Services GROSS PROFIT OPERATING EXPENS Research & Developm Sales & Marketing ex General & Administra OPERATING PROFIT INTEREST INCOME, NET INCOME (LOSS) Net income (loss) per Basic	REVENUES Product sales Services COST OF REVENUES Product sales Services GROSS PROFIT OPERATING EXPENS Research & Developm Sales & Marketing ex General & Administra OPERATING PROFIT INTEREST INCOME, NET INCOME (LOSS) Net income (loss) per Basic	(U.S. d	ollars in t	housands	, except p	, except p	er share d	er share d	ata)
	REVENUES Product sales Services COST OF REVENUES Product sales Services GROSS PROFIT OPERATING EXPENS Research & Developm Sales & Marketing ex General & Administra OPERATING PROFIT INTEREST INCOME, NET INCOME (LOSS) Net income (loss) per Basic	ES ent expenses, net penses tion expenses (LOSS) NET FOR THE PERIOD share:				Nine-mont September 30, 2010 49,140 10,491 59,631 20,214 7,383 27,597 32,034 8,165 7,248 2,125 17,538 14,496 186 14,682 061				hs ended September 30, 2009 16,993 7,085 24,078 7,333 6,554 13,887 10,191 4,816 3,989 1,581 10,386 (195) 132 (63) (000)
								49,1 10,4
	Diluted Shares used for calculation of net income (loss) per share: Basic Diluted							. 0.57 24,182 25,540			. 19,391

NOVA MEASURING INSTRUMENTS LTD. QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

CASH FLOW – OPERATING ACTIVITIES Net income for the period Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization Amortization of deferred stock-based compensation Increase (decrease) in liability for employee termination benefits, net Net recognized gains on investments Decrease (increase) in trade accounts receivables Decrease (increase) in inventories Decrease (Increase) in other short and long term assets Increase (decrease) in trade accounts payables Increase in other current and long-term liabilities Increase (decrease) in short and long term deferred income Net cash from operating activities CASH FLOW – INVESTMENT ACTIVITIES Increase in short-term interest-bearing bank deposits Proceeds from long-term interest-bearing bank deposits Investments in long-term deposits Additions to fixed assets Net cash from (used in) investment activities CASH FLOW – FINANCING ACTIVITIES Shares issued under employee share-based plans Shares issued in public offering Net cash from financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents – beginning of period Cash and cash equivalents – end of period	Three September 30, 2010 7,274 354 215 (10) -- (1,670) (2,065) (776) 2,095 1,738 746 7,901 (3,934) -- -- (453) (4,387) 625 -- 625 4,139 6,838 10,977	Three	months ended	September 30, 2009 1,690 311 130 (2) 4 (622) 790 45 (662) 1,039 (857) 1,866 -- 4,595 (2) (72) 4,521 -- 142 142 6,529 9,017 15,546
			June 30, 2010 4,709 323 122 105 -- 67 (1,855) (388) 289 1,130 1,769 6,271 (10,701) -- -- (307) (11,008) 51 -- 51 (4,686) 11,524 6,838

NOVA MEASURING INSTRUMENTS LTD. YEAR TO DATE CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

CASH FLOW – OPERATING ACTIVITIES Net income (loss) for the period Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization Amortization of deferred stock-based compensation Increase in liability for employee termination benefits, net Increase in trade accounts receivables Decrease (increase) in inventories Decrease (increase) in other current and long term assets Increase (decrease) in trade accounts payables and other long term liabilities Increase (decrease) in current liabilities Increase (decrease) in short and long term deferred income Net cash from (used in) operating activities CASH FLOW – INVESTMENT ACTIVITIES Decrease (increase) in short-term interest-bearing bank deposits Proceeds from (investment in) long-term deposits Additions to fixed assets Net cash used in investment activities CASH FLOW – FINANCING ACTIVITIES Shares issued under employee share-based plans Shares issued in public offering Net cash from financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents – beginning of period Cash and cash equivalents – end of period	Nine months ended September 30, 2010 September 30, 2009 14,682 (63) 1,001 907 453 336 143 28 (978) (2,819) (6,187) 1,946 (1,423) 134 4,929 (1,964) 1,762 (600) 4,763 (1,795) 19,145 (3,890) (34,621) 50 (9) 19 (1,165) (100) (35,795) (31) 798 142 16,968 -- 17,766 142 1,116 (3,779) 9,861 19,325 10,977 15,546	Nine months ended September 30, 2010 September 30, 2009 14,682 (63) 1,001 907 453 336 143 28 (978) (2,819) (6,187) 1,946 (1,423) 134 4,929 (1,964) 1,762 (600) 4,763 (1,795) 19,145 (3,890) (34,621) 50 (9) 19 (1,165) (100) (35,795) (31) 798 142 16,968 -- 17,766 142 1,116 (3,779) 9,861 19,325 10,977 15,546	Nine months ended September 30, 2010 September 30, 2009 14,682 (63) 1,001 907 453 336 143 28 (978) (2,819) (6,187) 1,946 (1,423) 134 4,929 (1,964) 1,762 (600) 4,763 (1,795) 19,145 (3,890) (34,621) 50 (9) 19 (1,165) (100) (35,795) (31) 798 142 16,968 -- 17,766 142 1,116 (3,779) 9,861 19,325 10,977 15,546
			2009 (63) 907 336 28 (2,819) 1,946 134 (1,964) (600) (1,795) (3,890) 50 19 (100) (31) 142 -- 142 (3,779) 19,325 15,546