On a non-GAAP basis, which excludes stock-based compensation expenses, inventory write-off and inventory purchase commitments losses and investments gains, the company reported net loss of $1.6 million, or $0.08 per share, in the first quarter of 2009. This compares with a non-GAAP net income of $0.2 million, or $0.01 per diluted share, in the first quarter of 2008, and a non-GAAP net loss of $2.3 million, or $0.12 per share, for the fourth quarter of 2008.

Total cash reserves at the end of the first quarter of 2009 were $16.4 million. During the first quarter of 2009, the company used $3.6 million in cash flow for operating activities.

Management Comments

“While Q1 was another challenging quarter, increased fab utilization rates in March, as well as recent order patterns, are encouraging signs of a rebound,” said Gabi Seligsohn, President and CEO of Nova. “While the industry as a whole is still in a state of over capacity, fabs have a growing need to selectively upgrade existing equipment and increase process control measures to support the transition to smaller design rules. As recent orders from the world’s leading foundry for both our integrated and stand alone metrology solutions show, we are well positioned to take part in this transition”.

“While near term visibility remains limited, our position within the industry continues to improve, and we believe that recent increase in order volumes may indicate an improvement of the industry after several quarters of decline,” concluded Mr. Seligsohn. “Our near term plans continue to focus on strict cost control with selective technological investments to capitalize on advanced technology-related opportunities”.

The Company will host a conference call today, May 6, 2009, at 10:30am ET. To participate, please dial in the US: 1 888 723 3163; or internationally: +972 3 918 0685. A recording of the call will be available on Nova’s website, within 24 hours following the end of the call.

In addition, the conference call will also be webcast live from a link on Nova’s website at www.nova.co.il.

This press release provides financial measures that exclude non-cash charges for inventory write-off, stock-based compensation, impairment charges and amortization of intangible assets and are therefore not calculated in accordance with generally accepted accounting principles (GAAP). Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Nova’s performance because they reflect our operational results and enhances management’s and investors’ ability to evaluate Nova’s performance before charges considered by management to be outside Nova’s ongoing operating results.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management believes that it is in the best interest of its investors to provide financial information that will facilitate comparison of both historical and future results and allows greater transparency to supplemental information used by management in its financial and operational decision making. A reconciliation of each GAAP to non-GAAP financial measure discussed in this press release is contained in the accompanying financial tables.