Nova Ltd. — Interim / Quarterly Report 2005

Aug 4, 2005

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Company Contact: Investor relations Contacts: Chai Toren, CFO and Vice President Finance Ehud Helft / Kenny Green Nova Measuring Instruments Ltd. GK International Investor Relations Tel: 972-8-938-7505 Tel: +1-866-704-6710 E-mail: info@nova.co.il E-mail : Ehud@gk-biz.com http://www.nova.co.il Kenny@gk-biz.com

Company Press Release

NOVA MEASURING INSTRUMENTS ANNOUNCES 2005 SECOND QUARTER RESULTS

Rehovoth, Israel - August 4, 2005 - Nova Measuring Instruments, Ltd. (Nasdaq: NVMI), the market leader in integrated measurement and process control for the semiconductor industry, today reported its results for the second quarter of 2005.

Total revenues for the second quarter of 2005 were $7.7 million, a 65% increase over revenues of $4.6 million as reported for the first quarter of 2005, and a 25% decrease compared with revenues of $10.2 million as reported for the second quarter of 2004.

The Company reported a gross profit of $2.5 million for the second quarter of 2005 compared with gross profit of $1.0 million for the first quarter of 2005, and gross profit of $4.7 million for the second quarter of 2004. Gross margin for the second quarter of 2005 was 32% compared with 22% for the first quarter of 2005 and 46% for the second quarter of 2004.

Net loss in the second quarter of 2005 was $1.9 million or $0.12 per share, compared with a net loss of $4.1 million or $0.27 per share for the first quarter of 2005. In the second quarter of 2004, the company reported a net income of $0.5 million or $0.03 per share. At the end of the second quarter of 2005, cash and cash equivalents, bank deposits and held to maturity securities, short and long term, stood at $23.9 million, a decrease of $4.3 million compared with that of the previous quarter.

Dr. Giora Dishon, President & CEO of Nova commented, “We are pleased with the improvement in our results this quarter. We recently launched the new line of our advanced NovaScan 3090 systems. The new line includes systems for CMP, CD and Copper. The market reception has been very good, and these new systems contributed more than 20% of the system revenue this quarter. This, together with wins of large purchase orders with strategic customers during the quarter, contributed to our revenue growth. Furthermore, in the industry as a whole we are seeing signs of recovery, even though with still limited visibility. We therefore remain cautious, but optimistic.”

Dr. Dishon continued, “As our systems continue to penetrate the process segments of Copper CMP and Etch for high volume manufacturing, we expect to gain market share in subsequent quarters. Looking to the future, towards more advanced technology nodes such as 45nm, we are continuing our investment in developing the leading edge next-generation metrology systems, which we believe will support our long-term growth.”

The Company will host a conference call on the same day, August 4[th] , 2005, at 09:00am EST. To participate please dial in the U.S: U.S Dial-in Numbers: 1-866-276-1002 or internationally : +972-3-925-5910 at least 5 minutes before the start of the call. A conference call presentation will be available for download on the company’s website www.nova.co.il, before and during the call.

About Nova

Nova Measuring Instruments Ltd. develops, designs and produces integrated process control systems in the semiconductor manufacturing industry. Nova provides a broad range of integrated process control solutions that link between different semiconductor processes and process equipment. The Company's website is www.nova.co.il.

This press release may contain forward-looking statements, including statements related to anticipated growth rates, manufacturing capacity and tax rate. Actual results may differ materially from those projected due to a number of risks, including 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, or changes in tax requirements. Nova 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 Form F-1 filed with the Securities and Exchange Commission on April 9, 2000. 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 STATEMENT OF OPERATIONS

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

REVENUESProduct salesServicesCOST OF REVENUESProduct salesServicesGROSS PROFITOPERATING EXPENSESResearch & Development expenses, netSales & Marketing expensesGeneral & Administrative expensesOPERATING LOSSINTEREST INCOMELOSS FOR THE PERIODLOSS PER SHAREShares used in calculation of basic loss per share (inthousnads)	Three- month period endedJune 30, 2005March 31, 2005(unaudited)5,6033,3632,0591,2737,6624,6363,1642,0672,0141,5715,1783,6382,4849982,1142,9171,7311,7107587114,6035,338(2,119)(4,340)196193(1,923)(4,147)(0.12)(0.27)15,40115,339

NOVA MEASURING INSTRUMENTS LTD. CONSOLIDATED STATEMENT OF OPERATIONS

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

REVENUESProduct salesServicesCOST OF REVENUESProduct salesServicesGROSS PROFITOPERATING EXPENSESResearch & Development expenses, netSales & Marketing expensesGeneral & Administrative expensesOPERATING PROFIT (LOSS)INTEREST INCOMEPROFIT (LOSS) FOR THE PERIODEARNINGS (LOSS) PER SHAREShares used in calculation of basic loss per share(in thousnads)	Three-month period endedJune 30, 2005June 30, 2004(unaudited)5,6037,9212,0592,2967,66210,2173,1643,7842,0141,7295,1785,5132,4844,7042,1142,0451,7311,6667586414,6034,352(2,119)35219698(1,923)450(0.12)0.0315,40115,261	Three-month period endedJune 30, 2005June 30, 2004(unaudited)5,6037,9212,0592,2967,66210,2173,1643,7842,0141,7295,1785,5132,4844,7042,1142,0451,7311,6667586414,6034,352(2,119)35219698(1,923)450(0.12)0.0315,40115,261
		10,2173,7841,729
		5,513
		4,704
		2,0451,666641
		4,352
		35298
		450
		0.03
		15,261

NOVA MEASURING INSTRUMENTS LTD. CONSOLIDATED STATEMENT OF OPERATIONS

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

NOCONS(U.REVENUESProduct salesServicesCOST OF REVENUESProduct salesServicesGROSS PROFITOPERATING EXPENSESResearch & Development eSales & Marketing expensesGeneral & Administrative eOPERATING PROFITINTEREST INCOMEPROFIT (LOSS) FOREARNINGS (LOSS) PER SHComments:1.Employee Stock Base2.Shares for calculationBasicDiluted	NOCONS(U.REVENUESProduct salesServicesCOST OF REVENUESProduct salesServicesGROSS PROFITOPERATING EXPENSESResearch & Development eSales & Marketing expensesGeneral & Administrative eOPERATING PROFITINTEREST INCOMEPROFIT (LOSS) FOREARNINGS (LOSS) PER SHComments:1.Employee Stock Base2.Shares for calculationBasicDiluted	VA MEA	SURING	INSTR	UMENTS	UMENTS	UMENTS	LTD.	LTD.	LTD.	LTD.
		OLIDATE	D STAT	EMENT	OF OPE
								RATION
		S. dollars in thousands, except per shar
	REVENUESProduct salesServicesCOST OF REVENUESProduct salesServicesGROSS PROFITOPERATING EXPENSESResearch & Development eSales & Marketing expensesGeneral & Administrative eOPERATING PROFITINTEREST INCOMEPROFIT (LOSS) FOREARNINGS (LOSS) PER SHComments:1.Employee Stock Base2.Shares for calculationBasicDiluted	xpenses, net xpenses(LOSS)THE PERIODAREd Compensation expensesof earnings (loss) per share				June		S3	period endJune	ed30, 2004
								(
								1
								1

NOVA MEASURING INSTRUMENTS LTD. CONSOLIDATED BALANCE SHEET

(U.S. dollars in thousands)

CURRENT ASSETSCash and cash equivalentsShort-term interest-bearing bank depositsHeld to maturity securitiesTrade accounts receivable (Net of $40 allowancefor doubtful accounts in June 30,2005, noallowance on December 31,2004)InventoriesOther current assetsLONG-TERM ASSETSLong-term interest-bearing bank depositsHeld to maturity securitiesOther long-term assetsSeverance pay fundsFixed assets, netCURRENT LIABILITIESTrade accounts payableOther current liabilitiesLONG-TERM LIABILITIESLiability for employee termination benefitsDeferred IncomeOther long-term liabilitySHAREHOLDERS' EQUITYShare capitalAdditional paid- in capitalAccumulated other comprehensive income (loss)Accumulated deficit	As of June 30, 2005(unaudited)5,7081,6236,3375,3504,7731,33825,1293,6356,6473782,0912,51415,26540,3943,7585,0748,8322,7773901003,2674673,499(261)(44,989)28,29540,394	As of June 30, 2005(unaudited)5,7081,6236,3375,3504,7731,33825,1293,6356,6473782,0912,51415,26540,3943,7585,0748,8322,7773901003,2674673,499(261)(44,989)28,29540,394	As of Dec. 31, 2004	As of Dec. 31, 2004
				(audited)12,1711,9165,2807,4615,2391,16933,2362,1459,2923822,2882,11916,22649,4625,0166,38911,4053,0753691453,5894673,3338(38,919)34,468 49,462