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<SEC-DOCUMENT>0001094366-04-000027.txt : 20041025
<SEC-HEADER>0001094366-04-000027.hdr.sgml : 20041025
<ACCEPTANCE-DATETIME>20041025100128
ACCESSION NUMBER:		0001094366-04-000027
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20041025
FILED AS OF DATE:		20041025
DATE AS OF CHANGE:		20041025

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			RADWARE LTD
		CENTRAL INDEX KEY:			0001094366
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-BUSINESS SERVICES, NEC [7389]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-30324
		FILM NUMBER:		041093065

	BUSINESS ADDRESS:	
		STREET 1:		22 RAOUL WALLENBERG STREET
		CITY:			TEL AVIV
		STATE:			L3
		ZIP:			69710

	MAIL ADDRESS:	
		STREET 1:		575 CORPORATE DR
		STREET 2:		LOBBY 2
		CITY:			MAHWAH
		STATE:			NJ
		ZIP:			07430
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>f6kq304results4.htm
<TEXT>
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<TITLE><B>UNITED STATES</TITLE>
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<META NAME="date" CONTENT="10/25/2004">
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>FORM 6-K</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Washington D.C. 20549</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Report of Foreign Private Issuer</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Pursuant to Rule 13a-16 or 15d-16 Under</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>The Securities Exchange Act of 1934</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">For the month of October, 2004</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Commission File Number: 0-30324</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Radware Ltd.</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>&nbsp;(Translation of Registrant&#146;s Name into English)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>22 Raoul Wallenberg Street, Tel Aviv 69710, Israel</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>(Address of Principal Executive Offices)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F: &nbsp;&nbsp;</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Form 20-F &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>X</U> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form 40-F___</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): N/A</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): N/A</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: &nbsp;</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Yes _______ No &nbsp;&nbsp;<U>X</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>If &#147;Yes&#148; is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- N/A</P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CONTENTS</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>This report on Form 6-K of Radware Ltd. consists of the following documents, which are attached hereto and incorporated by reference herein:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify>1. Press Release: <B>RADWARE LTD. &nbsp;ANNOUNCES RECORD RESULTS,</B> Dated October 25, 2004.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SIGNATURES</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>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.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
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<P style="margin:0pt; text-indent:226.8pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>RADWARE LTD.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Date: October 25, 2004</P>
<P style="margin:0pt; text-indent:226.8pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>By: <U>/s/ Meir Moshe</U></P>
<P style="margin:0pt; text-indent:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Meir Moshe</P>
<P style="margin:0pt; text-indent:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Chief Financial Officer</P>
<P style="margin:0pt; text-indent:252pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>EXHIBIT INDEX</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
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<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Exhibit Number</P>
<P style="margin:0pt; text-indent:144pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Description of Exhibit</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:144pt; text-indent:-144pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">10.1</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:144pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Press Release: RADWARE LTD. &nbsp;ANNOUNCES RECORD RESULTS, </B>Dated October 25, 2004.</P>
<P style="margin:0pt; padding-left:144pt; text-indent:432pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
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<P style="margin-top:5pt; margin-bottom:6pt; line-height:20pt; font-family:Times New Roman; font-size:12pt" align=center><B>EXHIBIT 10.1</B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Contact: &nbsp;</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Meir Moshe, Chief Financial Officer, Radware Ltd.</B></P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>011-972-3766-8610</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Dennis S. Dobson, for Radware Ltd.</B></P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>(203) 255-7902</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>RADWARE LTD. &nbsp;ANNOUNCES RECORD RESULTS</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; line-height:20pt; font-family:Times New Roman; font-size:12pt"><B>* Record Quarterly revenues of $17.6 million</B></P>
<P style="margin:0pt; line-height:20pt; font-family:Times New Roman; font-size:12pt"><B>* Record Quarterly profit of $3.6 million or $0.19 per diluted share</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">Tel Aviv, Israel, October 25, 2004 &#151; Radware (Nasdaq: RDWR), the leader in Intelligent Application Switching (IAS), ensuring the availability, performance and security of networked applications across the enterprise, today reported its twelfth consecutive quarter of growth in revenues with record revenues of $17.6 million for the third quarter of 2004, an increase of 25% compared with revenues of $14.0 million for the third quarter of 2003, and a sequential increase of 8% vs. $16.3 million revenues for the second quarter of 2004. </P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">Net profit for the third quarter of 2004 was $3.6 million, an increase of 96% compared with net profit of $1.9 million in the third quarter of 2003 and a sequential increase of 19% vs. net profit of $3.0 million in the second quarter of 2004.</P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">Diluted net earnings per share for the third quarter of 2004 were $0.19, compared to $0.10 in the third quarter of 2003 and $0.16 in the second quarter of 2004.</P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">The Company continued to maintain a positive operational cash flow, and in the third quarter of 2004 generated cash in the amount of $4.0 million, leading it to a balance of $149.2 million in cash, short-term and long-term bank deposits and marketable securities.</P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">&#147;We are pleased with our strong results and accelerated growth&#148;, said Roy Zisapel, President and CEO, Radware. &#147;Our strong earnings attest to the momentum we established with carriers and enterprises worldwide.&#148;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:17pt; font-family:Times New Roman"><B>During the quarter ended September 30, 2004, Radware released the following significant announcements:</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol">&#8226;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Symbol"><FONT FACE="Times New Roman">St.George Bank Deploys Radware for Guaranteed Application Availability, Performance and Security</FONT></P>
<P style="margin:0pt; text-indent:2.25pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol">&#8226;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Symbol"><FONT FACE="Times New Roman">Radware Raises Guidance For Third Quarter Results</FONT></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol">&#8226;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Symbol"><FONT FACE="Times New Roman">Radware Highlights Five Year Anniversary of NASDAQ Trading by Opening the NASDAQ Market </FONT></P>
<P style="margin:0pt; text-indent:4.5pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol">&#8226;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Symbol"><FONT FACE="Times New Roman">F5 Networks and Radware Settle Cookie Persistence Patent Lawsuit</FONT></P>
<P style="margin:0pt; text-indent:4.5pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol">&#8226;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Symbol"><FONT FACE="Times New Roman">Windows IT Pro Names Radware WSD Reader's Choice Award Winner</FONT></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol">&#8226;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Symbol"><FONT FACE="Times New Roman">Radware Partners with Oracle to Deliver Optimized and Secure Enterprise Applications</FONT></P>
<P style="margin:0pt; text-indent:4.5pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol">&#8226;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Symbol"><FONT FACE="Times New Roman">Radware Introduces its Next Generation SynApps Architecture</FONT></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol">&#8226;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Symbol"><FONT FACE="Times New Roman">Ace Hardware Eliminates Downtime with Radware Application Infrastructure Solution</FONT></P>
<P style="margin:0pt; text-indent:4.5pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol">&#8226;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Symbol"><FONT FACE="Times New Roman">Radware Files Patent Infringement Lawsuit Against F5 Networks</FONT></P>
<P style="margin:0pt; padding-right:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">Company management will host a quarterly investor conference call at 8:45 AM (EDT) on October 25, 2004. The call will focus on financial results for the quarter ended September 30, 2004, and certain other matters related to the Company&#146;s business.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">The conference call will be webcast on October 25, 2004 at 8:45 AM (EDT) in the &#147;listen only&#148; mode via the Internet at:</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><FONT COLOR=#0000FF><U>http://www.radware.com/content/company/investorrelations/default.asp</U></FONT></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>About Radware</B></P>
<P style="margin:0pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">Radware (NASDAQ:RDWR) is the Global Leader in Intelligent Application Switching, enabling the complete security, maximum performance and full availability of all mission critical networked applications while dramatically cutting operating and scaling costs. </P>
<P style="margin:0pt; padding-right:0.9pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">Radware&#146;s integrated Application Security, Application Infrastructure and End-to-End Connectivity solutions are deployed by over 2,500 enterprises and carriers worldwide. Radware offers the broadest product line in the industry, meeting application needs at every critical point across the network, including Web and Application Servers, Firewalls, VPNs, ISP links, Anti-Virus Gateways and Cache. </P>
<P style="margin:0pt; padding-right:0.9pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">Learn more on how Radware Intelligent Application Switching Solutions can enable the security, performance and availability of mission critical applications at</P>
<P style="margin:0pt; padding-right:0.9pt; font-family:Times New Roman; font-size:12pt"><FONT COLOR=#0000FF><U>www.radware.com</U></FONT>.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Humanst521 Lt BT; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Humanst521 Lt BT; font-size:12pt" align=center><B>###</B></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><B>This press release contains forward-looking statements. &nbsp;Such statements involve various risks that may cause actual results to differ materially. &nbsp;These risks and uncertainties include, but are not limited to: market demand for the Company&#146;s products, successful implementation of the Company&#146;s products, economic and competitive factors, international market conditions, technological developments, the ability to finance operations and other factors which are detailed in the Company&#146;s SEC filings.</B></P>
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<TABLE cellspacing=0><TR><TD valign=top width=103.2>&nbsp;</TD><TD valign=top width=384 colspan=5><P style="margin:0pt; font-family:Times New Roman" align=center><B>Condensed Consolidated Balance Sheets</B></P>
</TD></TR>
<TR><TD valign=top width=103.2>&nbsp;</TD><TD valign=top width=384 colspan=5><P style="margin:0pt; font-family:Times New Roman" align=center><B>(U.S. Dollars in Thousands)</B></P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>December 31, 2003</B></P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>September 30, </B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>2004</B></P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=center>(Audited)</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=center>(Unaudited)</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman"><B>Current assets</B></P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Cash and cash equivalents </P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>31,771</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>26,804</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Short-term bank deposits </P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>-</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>64,243</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Times New Roman">Short-term marketable securities </P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>31,111</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>18,849</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Trade receivables, net</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>9,690</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>11,654</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Times New Roman">Other receivables and prepaid &nbsp;&nbsp;expenses</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>1,089</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>1,835</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Inventories</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>2,998</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>3,583</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>76,659</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>126,968</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Humanst521 Lt BT; font-size:12pt"><B><U>Long-term investments</U></B></P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=bottom width=116.267>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=116.267>&nbsp;</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Times New Roman">Long-term bank deposits</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>72,017</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>9,661</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Long-term marketable securities</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>4,122</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>29,680</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Severance pay funds</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>1,435</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>1,730</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>77,574</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>41,071</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Property and equipment, net</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>3,479</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>3,720</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Other assets, net</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>402</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>1,003</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Total assets</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>158,114</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>172,762</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman"><B>Current liabilities</B></P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Trade payables</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>4,285</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>3,897</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Times New Roman">Deferred revenues, other payables and accrued expenses</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>11,897</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>14,343</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>16,182</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>18,240</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Accrued severance pay</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>1,625</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>2,070</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Minority interest</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>61</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>-</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Total liabilities</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>17,868</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>20,310</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman"><B>Shareholders&#146; equity</B></P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267>&nbsp;</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Share capital</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>439</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>448</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Additional paid-in capital</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>138,552</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>141,268</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Times New Roman">Accumulated other comprehensive loss</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>(38)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>10</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Times New Roman">Retained earnings</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>1,293</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>10,726</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; font-family:Times New Roman">Total shareholders&#146; equity</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>140,246</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right>152,452</P>
</TD></TR>
<TR><TD valign=top width=223.2 colspan=2><P style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Times New Roman">Total liabilities and shareholders' equity</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>158,114</P>
</TD><TD valign=top width=15.733>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=116.267><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>172,762</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<TABLE cellspacing=0><TR><BR>
<BR>
<BR>
<BR>
<TD valign=top width=691.133 colspan=7><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Condensed Consolidated Statements Of Operations</B></P>
</TD></TR>
<TR><TD valign=top width=691.133 colspan=7><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(U.S. Dollars In thousands, except share and per share data)</B></P>
</TD></TR>
<TR><TD valign=top width=181.6 colspan=2>&nbsp;</TD><TD valign=top width=81.733>&nbsp;</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B><U>For the Three months ended September 30, 2003</U></B></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B><U>For the Three months ended September 30, 2004</U></B></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B><U>For the Nine months ended September 30, 2003</U></B></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B><U>For the Nine months ended September 30, 2004</U></B></P>
</TD></TR>
<TR><TD valign=top width=181.6 colspan=2>&nbsp;</TD><TD valign=top width=81.733>&nbsp;</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=center>(Unaudited)</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=center>(Unaudited)</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=center>(Unaudited)</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=center>(Unaudited)</P>
</TD></TR>
<TR><TD valign=top width=181.6 colspan=2>&nbsp;</TD><TD valign=top width=81.733>&nbsp;</TD><TD valign=top width=106.6>&nbsp;</TD><TD valign=top width=107.067>&nbsp;</TD><TD valign=top width=107.067>&nbsp;</TD><TD valign=top width=107.067>&nbsp;</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Revenues</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right>14,014</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17,572 </P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>39,775 </P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>49,392 </P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Cost of revenues</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,520</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,130 </U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,151 </U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,789 </U></P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Gross profit</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,494 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,442 </P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32,624</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;40,603</P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Research and development</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right>2,147</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>2,660</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>6,189 </P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>7,464 </P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Sales and marketing</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,329 </P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,989 </P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,234 </P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23,496 </P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">General and administrative</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,048</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,192 </U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,108 </U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,250 </U></P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Total operating expenses</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,524 </P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,841 </P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31,531 </P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34,210 </P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Operating income</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;970</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,601</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>1,093</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>6,393</P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Financial income, net</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;919</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,137</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,832</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,212</U></P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Income before taxes on income </P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right>1,889</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>3,738</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>3,925</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>9,605</P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Taxes on income</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;113</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;206</U></P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Income after taxes on income</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right>1,889</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>3,625</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>3,925</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right>9,399</P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; padding-left:7.1pt; text-indent:-7.1pt; font-family:Times New Roman">Minority interest in losses (earnings) of a subsidiary</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(39)</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(73)</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34</U></P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Net income </P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,850</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,625</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,852</U></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,433</U></P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman"><BR></P>
</TD><TD valign=top width=106.6>&nbsp;</TD><TD valign=top width=107.067>&nbsp;</TD><TD valign=top width=107.067>&nbsp;</TD><TD valign=top width=107.067>&nbsp;</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Basic net earnings per share</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right><B><U>&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.11 </U></B></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><B><U>&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.20 </U></B></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><B><U>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.23</U></B></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><B><U>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.53</U></B></P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; padding-left:7.1pt; text-indent:-7.1pt; font-family:Times New Roman">Weighted average number of shares used to compute basic net earnings per share</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>17,181,665 &nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>18,055,063 &nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>17,094,728</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>17,912,380</P>
</TD></TR>
<TR><TD valign=top width=144.2><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
</TD><TD valign=top width=119.133 colspan=2>&nbsp;</TD><TD valign=top width=106.6>&nbsp;</TD><TD valign=top width=107.067>&nbsp;</TD><TD valign=top width=107.067>&nbsp;</TD><TD valign=top width=107.067>&nbsp;</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; font-family:Times New Roman">Diluted net earnings per share</P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right><B><U>&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.10 </U></B></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><B><U>&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.19 </U></B></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><B><U>&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.21 </U></B></P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><B><U>&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.48 </U></B></P>
</TD></TR>
<TR><TD valign=top width=263.333 colspan=3><P style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Times New Roman">Weighted average number of shares used to compute diluted net earnings per share</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
</TD><TD valign=top width=106.6><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>19,150,890 &nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>19,399,481 &nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>18,287,744</P>
</TD><TD valign=top width=107.067><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>19,684,063</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
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