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<SEC-DOCUMENT>0001119083-05-000010.txt : 20051116
<SEC-HEADER>0001119083-05-000010.hdr.sgml : 20051116
<ACCEPTANCE-DATETIME>20051116094338
ACCESSION NUMBER:		0001119083-05-000010
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20051116
FILED AS OF DATE:		20051116
DATE AS OF CHANGE:		20051116

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MIND CTI LTD
		CENTRAL INDEX KEY:			0001119083
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-31215
		FILM NUMBER:		051208353

	BUSINESS ADDRESS:	
		STREET 1:		INDUSTRIAL PARK BUILDING 7
		CITY:			YOQNEAM ILIT ISRAEL
		STATE:			L3
		ZIP:			20692
		BUSINESS PHONE:		97249936666

	MAIL ADDRESS:	
		STREET 1:		PO BOX 144
		CITY:			YOQNEAM ILIT ISRAEL
		ZIP:			20692
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>mindcti6k.htm
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">

<html>
<head>
	<title>MIND CTI </title>
</head>
<body bgcolor="#ffffff" text="#000000" link="#0000ff" vlink="#0000ff" alink="#ff0000">
<P ALIGN="CENTER"><strong>FORM 6-K</strong></P>
<CENTER>
<P ALIGN="CENTER"><STRONG>SECURITIES AND EXCHANGE COMMISSION</STRONG></P>
<P ALIGN="CENTER"><STRONG>Washington D.C. 20549</STRONG></P>
<P><STRONG>Report of Foreign Private Issuer</STRONG></P>
<P ALIGN="CENTER">
<STRONG>Pursuant to Rule 13a-16 or 15d-16</STRONG></P>
<P ALIGN="CENTER"><STRONG>of the Securities Exchange Act of 1934</STRONG></P>
<P align="left">For the month of November, 2005</P>
<P align="left">Commission File Number: 000-31215</P>
<P></P>
<P><STRONG>MIND C.T.I. LTD.</STRONG></P>
<P>(Translation of registrant's name into English)</P>
<P><STRONG>&nbsp;</STRONG></P>
<P><STRONG>Industrial Park, Building 7, Yokneam 20692 , Israel</STRONG></P>
<P>(Address of principal executive offices)</P>
</CENTER>
<P>Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:</P>
<P ALIGN="CENTER">Form 20-F&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp; Form 40-F_______</P>
<P>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>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>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:</P>
<P>&nbsp;</P>
<P ALIGN="CENTER">
	Yes _______  No&nbsp;&nbsp;&nbsp;&nbsp; X
</P>
<P>If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- N/A</P>
<!-- _________________________________________________________________________________________________-->
<p>
<hr width="100%">
<BR>

<P ALIGN="CENTER"><STRONG>INCORPORATION BY REFERENCE</STRONG></P>
<p>The financial statements included in the press release attached as Exhibit 1 to this Report on Form 6-K are hereby incorporated by reference into: (i) the Registrant's Registration Statement on Form S-8, Registration No. 333-117054; (ii) the Registrant's Registration Statement on Form S-8, Registration No. 333-100804; and (iii) the Registrant's Registration Statement on Form S-8, Registration No. 333-54632.</P>
<P ALIGN="CENTER">
	<STRONG>CONTENTS</STRONG>
</P>
<P>This report on Form 6-K of the registrant consists of the following document, which is attached hereto and incorporated by reference herein:</P>
<OL>
	<LI>Press Release: MIND CTI Reports 2005 Third Quarter Results.<br>
	 Dated November 15, 2005.</LI>
</OL>
<P ALIGN="CENTER">
<STRONG>
	SIGNATURES
</STRONG>
</P>
<P>&nbsp;</P>
<P>
	Pursuant to the requirements of the Securities Exchange Act 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
</P>
<P>
	Date: November 16, 2005</P>
<TABLE>
<TR>
<TD WIDTH="50%">&nbsp;

</TD>
<TD>
	MIND CTI Ltd.
<P>
	/s/ Monica Eisinger
<BR>
	Title: Chairperson of the Board of Directors, President and Chief Executive Officer
</TD>
</TR>
</TABLE>
<BR>

<P ALIGN="CENTER"><STRONG>EXHIBIT INDEX</STRONG></P>
<table cellpadding="2">
	<tr><td width="150">Exhibit Number</td><td>Description of Exhibit</td></tr>
	<tr><td align="right" valign="top">1.</td><td>Press Release: MIND CTI Reports Sequential Revenue Growth and Increased Visibility<br>
	 Dated November 15, 2005.</td></tr>
</table>

<center>
	<h1>MIND CTI Reports Sequential Revenue Growth and Increased Visibility</h1>
</center>

<b>Key Highlights of Q3 2005</b><br>
<ul>
	<li> Completed acquisition of US based company and integration of products and teams is on track.</li>
	<li> Revenues were $4.06 million, a 19% increase from $3.42 million in the previous quarter and a 12% decrease from $4.6 million in the third quarter of 2004.</li>
	<li> Operating income was $586 thousand, compared to $687 thousand in the previous quarter and $809 thousand in the third quarter of 2004.</li>
	<li> Net income for the third quarter was $742 thousand or $0.03 per diluted share, compared with a net income of $1.81 million or $0.08 per diluted share in the third quarter of 2004.</li>
	<li> Three new customer wins and multiple customer upgrades (both license and services upgrades).</li>
</ul>

<p>
	Yoqneam, Israel, November 15, 2005- MIND CTI Ltd. (NASDAQ: MNDO), a leading provider of convergent end-to-end billing and customer care solutions for VoIP, Mobile, 3G and Triple-play carriers worldwide, today announced results for the third quarter ended September 30, 2005.
</p><p>
	Monica Eisinger, MIND chairperson and chief executive officer, commented: "We had an exciting quarter, full of activity and achievements. One major event influenced our activity in the third quarter, the acquisition of Sentori, a US based provider of customer care and billing solutions to wireless carriers and mobile virtual network operators (MVNO's). Through the acquisition we added experienced professionals to our team and increased the customer base, with customers in Scandinavia, the Caribbean and the US. With our combined, stronger team, focused on the wireless space, we are able to enhance support to all our customers and are prepared to supply their future needs.
</p><p>
	As previously estimated, the acquisition was neutral to earnings per share in the third quarter, excluding acquisition related costs and the financial income was lower this quarter due to a decrease in interest gained on our cash. We expect to reach again the level of 20% operating margins in the near future.
</p><p>
	The valuable customer base, well supported by our devoted professional team; the ongoing investment in development of enhanced functionality and state-of-the-art technology; and the talented team in sales and business development are the basis for our expected continuous growth. The larger deals we secured and the long term contracts add to our visibility."
</p><p>
	<strong>Revenue Distribution for Q3 2005</strong><br />
	The geographic revenue breakdown, as a percentage of total revenues, was as follows: sales in the Americas represented 41%, Europe represented 40%, Africa and APAC represented 12% and Israel represented 7%.
</p><p>
	Revenue from our customer care and billing software totaled $3.10 million, while revenue from our enterprise call management software was $954 thousand. The revenue breakdown from our business lines of products was $1.56 million, or 39%, from licenses, $1.44 million, or 35%, from maintenance and $1.05 million, or 26%, from services.
</p><p>
	As of September 30, 2005, we had 270 employees in our offices in Israel, Romania, the United States and China.
</p><p>
	<strong>Conference Call Information </strong><br />
	MIND will host a conference call on November 16, at 8:30 a.m., Eastern Time, to discuss the Company's third quarter results and other financial and business information, including trends and guidance for the near future. The call will be carried live on the Internet via www.fulldisclosure.com and the MIND website, www.mindcti.com. For those unable to listen to the live web cast, a replay will be available.
</p><p>
	<strong>About MIND</strong><br />
	MIND CTI Ltd. (http://www.mindcti.com) is a leading global provider of real-time billing and customer care solutions for pre-paid and post-paid voice, data and video. Since 1997 MIND has been a pioneer in enabling the VoIP technology for emerging and incumbent service providers. MIND solutions include "best-in-class" solutions for Service Enabling of IP services in the wireless arena, end-to-end convergent billing solutions and internal billing for large enterprises. MIND operates from offices in Europe, Israel, the United States and China.
 </p><p>
	For financial information, reports and presentations, please visit the Investor Relations site: http://www.mindcti.com/ir
</p><p>
	<font size="2">Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995: All statements other than historical facts included in the foregoing press release regarding the Company's business strategy are "forward looking statements." These statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements are not guarantees of future performance, and actual results may materially differ. The forward looking statements involve risks, uncertainties, and assumptions, including the risks discussed in the Company's filings with the United States Securities Exchange Commission.  The Company does not undertake to update any forward-looking information.</font>
</p><p>
<b>For more information please contact:</b><br>
Andrea Dray<br>
MIND CTI Ltd.<br>
Tel: +972-4-993-6666<br>
investor@mindcti.com
</p>
<center>(tables to follow)</center>
<!-- _________________________________________________________________________________________________-->
<p>
<hr width="100%">

<a name="table"></a>
<a href="#top"><font size="1"><b>Back to top</b></font></a>

<center><h2>CONDENSED CONSOLIDATED BALANCE SHEETS</h2></center>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr>
	<td></td>
	<td colspan="2" align="center"><b><font size="2">September 30</font></b></td>
	<td align="center"><b><font size="2">December 31</font></b></td></tr>
<tr>
	<td></td>
	<td align="center"><font size="2">2005</font></td>
	<td align="center"><font size="2">2004</font></td>
	<td align="center"><font size="2">2004</font></td></tr>
<tr>
	<td></td>
	<td align="center" colspan="2"><font size="2">(Unaudited)</font></td>
	<td align="center"><font size="2">(Audited)</font></td></tr>
<tr>
	<td></td>
	<td align="center"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="center"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="center"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td></td>
	<td colspan="3" align="center"><font size="2">U.S. $ in thousands</font></td></tr>
<tr>
	<td></td>
	<td colspan="3" align="center"><HR WIDTH="100%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td align="center"><b><font size="2">A  s  s  e  t  s</font></b></td>
	<td colspan="3"></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><b><font size="2">CURRENT ASSETS:</font></b></td>
	<td colspan="3"></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Cash and cash equivalents</font></p></td>
	<td align="right"><font size="2">$10,984</font></td>
	<td align="right"><font size="2">$7,870 </font></td>
	<td align="right"><font size="2">$18,687</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Accounts receivable:</font></p></td>
	<td colspan="3"></td></tr>
<tr>
	<td><p style="margin-left:40px"><font size="2">Trade</font></p></td>
	<td align="right"><font size="2">3,694</font></td>
	<td align="right"><font size="2">3,071</font></td>
	<td align="right"><font size="2">3,418</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:40px"><font size="2">Interest accrued on long-term bank deposits</font></p></td>
	<td align="right">&nbsp;</td>
	<td align="right"><font size="2">1,511</font></td>
	<td align="right"><font size="2">242</font></td></tr>
<tr>
	<td><p style="margin-left:40px"><font size="2">Other</font></p></td>
	<td align="right"><font size="2">716</font></td>
	<td align="right"><font size="2">800</font></td>
	<td align="right"><font size="2">773</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Inventories</font></td>
	<td align="right"><font size="2">18</font></td>
	<td align="right"><font size="2">11</font></td>
	<td align="right"><font size="2">18</font></td></tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:60px"><font size="2">T o t a l  current assets</font></td>
	<td align="right"><font size="2">15,415</font></td>
	<td align="right"><font size="2">13,263</font></td
	>
	<td align="right"><font size="2">23,138</font></td></tr>
<tr>
	<td><b><font size="2">LONG-TERM BANK DEPOSITS</font></b></td>
	<td align="right"><font size="2">30,000</font></td>
	<td align="right"><font size="2">47,000</font></td>
	<td align="right"><font size="2">30,000</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><b><font size="2">OTHER ASSESTS </font></b></td>
	<td align="right"><font size="2">437</font></td>
	<td align="right"><font size="2">485</font></td>
	<td align="right"><font size="2">538</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td><font size="2"><b>PROPERTY AND EQUIPMENT,</b> net of accumulated depreciation and amortization</font></td>
	<td align="right"><font size="2">2,057</font></td>
	<td align="right"><font size="2">1,768</font></td>
	<td align="right"><font size="2">1,790</font></td></tr>
<tr>
	<td><font size="2"><strong>GOODWILL AND OTHER INTANGIBLE ASSETS, </strong>net of  accumulated amortization</font></td>
	<td align="right"><font size="2">8,800</font></td>
	<td align="right"><font size="2">300</font></td>
	<td align="right"><font size="2">250</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td><p style="margin-left:60px"><font size="2">T o t a l  assets</font></td>
	<td align="right"><font size="2">$56,706</font></td>
	<td align="right"><font size="2">$62,816</font></td>
	<td align="right"><font size="2">$55,716</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td align="center"><b><font size="2">Liabilities and shareholders' equity</font></b></td>
	<td colspan="3"></td></tr>
<tr>
	<td><b><font size="2">CURRENT LIABILITIES -</font></b></td>
	<td colspan="3"></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Accounts payable and accruals:</font></p></td>
	<td colspan="3"></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Trade</font></td>
	<td align="right"><font size="2">$809</font></td>
	<td align="right"><font size="2">$322</font></td>
	<td align="right"><font size="2">$466</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Deferred revenues</font></td>
	<td align="right"><font size="2">4,614</font></td>
	<td align="right"><font size="2">*1,675</font></td>
	<td align="right"><font size="2">1,680</font></td>
</tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Other</font></td>
	<td align="right"><font size="2">1,912</font></td>
	<td align="right"><font size="2">*1,944</font></td>
	<td align="right"><font size="2">2,124</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td><p style="margin-left:60px"><font size="2">T o t a l  current liabilities</font></td>
	<td align="right"><font size="2">7,335</font></td>
	<td align="right"><font size="2">3,941</font></td>
	<td align="right"><font size="2">4,270</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><b><font size="2">BANK LOANS</font></b></td>
	<td align="right"><font size="2"></font></td>
	<td align="right"><font size="2">10,000 </font></td>
	<td align="right"><font size="2"></font></td></tr>
<tr>
	<td><b><font size="2">OTHER LONG TERM LIABILITIES</font></b></td>
	<td align="right"><font size="2">97</font></td>
	<td align="right"><font size="2"></font></td>
	<td align="right"><font size="2"></font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><b><font size="2">EMPLOYEE RIGHTS UPON RETIREMENT</font></b></td>
	<td align="right"><font size="2">1,098</font></td>
	<td align="right"><font size="2">1,117</font></td>
	<td align="right"><font size="2">1,200</font></td></tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:60px"><font size="2">T o t a l liabilities</font></p></td>
	<td align="right"><font size="2">8,530</font></td>
	<td align="right"><font size="2">15,058</font></td>
	<td align="right"><font size="2">5,470</font></td></tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><b><font size="2">SHAREHOLDERS' EQUITY:</font></b></td>
	<td colspan="3"></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Share capital</font></p></td>
	<td align="right"><font size="2">53</font></td>
	<td align="right"><font size="2">53</font></td>
	<td align="right"><font size="2">53</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Additional paid-in capital</font></p></td>
	<td align="right"><font size="2">59,399</font></td>
	<td align="right"><font size="2">58,728</font></td>
	<td align="right"><font size="2">59,079</font></td>
</tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Accumulated deficit</font></p></td>
	<td align="right"><font size="2">(11,276)</font></td>
	<td align="right"><font size="2">(11,023)</font></td>
	<td align="right"><font size="2">(8,886)</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td><p style="margin-left:60px"><font size="2">T o t a l  shareholders' equity</font></td>
	<td align="right"><font size="2">48,176</font></td>
	<td align="right"><font size="2">47,758</font></td>
	<td align="right"><font size="2">50,246</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td><p style="margin-left:60px"><font size="2">To t a l  liabilities and shareholders' equity</font></td>
	<td align="right"><font size="2">$56,706</font></td>
	<td align="right"><font size="2">$62,816</font></td>
	<td align="right"><font size="2">$55,716</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
</table>
<p align="center">* Reclassified</p>
<p><center><font size="2">I</font></center>
<!-- _________________________________________________________________________________________________-->
<hr width="100%">
</p>

<a name="table2"></a>
<a href="#top"><font size="1"><b>Back to top</b></font></a>

<center><h2>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</h2></center>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr>
	<td></td>
	<td align="center" colspan="2"><font size="2"><b>Nine months ended September 30</b></font></td>
	<td align="center" colspan="2"><font size="2"><b>Three months ended September 30</b></font></td>
	<td align="center"><font size="2"><b>Year ended December 31,</b></font></td></tr>
<tr>
	<td></td><td align="right"><font size="2"><b>2005</b></font></td>
	<td align="right"><font size="2"><b>2004</b></font></td>
	<td align="right"><font size="2"><b>2005</b></font></td>
	<td align="right"><font size="2"><b>2004</b></font></td>
	<td align="right"><font size="2"><b>2004</b></font></td></tr>
<tr>
	<td></td>
	<td align="center" colspan="2"><font size="2"><b>(Unaudited)</b></font></td>
	<td align="center" colspan="2"><font size="2"><b>(Unaudited)</b></font></td>
	<td align="center"><font size="2"><b>(Audited)</b></font></td></tr>
<tr>
	<td></td>
	<td align="center" colspan="2"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="center" colspan="2"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="center"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td></td>
	<td align="center" colspan="6"><font size="2"><b>U.S. $ in thousands (except per share data)</b></font></td></tr>
<tr>
	<td></td>
	<td align="center" colspan="6"><HR WIDTH="100%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><font size="2"><b>REVENUES</b></font></td>
	<td align="right"><font size="2">$10,562</font></td>
	<td align="right"><font size="2">$12,926</font></td>
	<td align="right"><font size="2">$4,058</font></td>
	<td align="right"><font size="2">$4,602</font></td>
	<td align="right"><font size="2">$17,806</font></td></tr>
<tr>
	<td><font size="2"><b>COST OF REVENUES</b></font></td>
	<td align="right"><font size="2">2,691</font></td>
	<td align="right"><font size="2">3,189</font></td>
	<td align="right"><font size="2">1,084</font></td>
	<td align="right"><font size="2">1,102</font></td>
	<td align="right"><font size="2">4,394</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr>
	<td><font size="2"><b>GROSS PROFIT</b></font></td>
	<td align="right"><font size="2">7,871</font></td>
	<td align="right"><font size="2">9,337</font></td>
	<td align="right"><font size="2">2,974</font></td>
	<td align="right"><font size="2">3,500</font></td>
	<td align="right"><font size="2">13,412</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><font size="2"><b>RESEARCH AND DEVELOPMENT EXPENSES - net</b></font></td>
	<td align="right"><font size="2">3,561</font></td>
	<td align="right"><font size="2">2,870</font></td>
	<td align="right"><font size="2">1,452</font></td>
	<td align="right"><font size="2">1,024</font></td>
	<td align="right"><font size="2">3,833</font></td></tr>
<tr>
	<td><font size="2"><b>SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:</b></font></td>
	<td></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Selling</font></td>
	<td align="right"><font size="2">1,566</font></td>
	<td align="right"><font size="2">3,460</font></td>
	<td align="right"><font size="2">546</font></td>
	<td align="right"><font size="2">1,130</font></td>
	<td align="right"><font size="2">4,517</font></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">General and administrative</font></td>
	<td align="right"><font size="2">1,143</font></td>
	<td align="right"><font size="2">1,243</font></td>
	<td align="right"><font size="2">390</font></td>
	<td align="right"><font size="2">537</font></td>
	<td align="right"><font size="2">1,864</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr>
	<td><font size="2"><b>OPERATING INCOME</b></font></td>
	<td align="right"><font size="2">1,601</font></td>
	<td align="right"><font size="2">2,164</font></td>
	<td align="right"><font size="2">586</font></td>
	<td align="right"><font size="2">809</font></td>
	<td align="right"><font size="2">3,198</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td><font size="2"><b>FINANCIAL AND OTHER INCOME - net</b></font></td>
	<td align="right"><font size="2">1,186</font></td>
	<td align="right"><font size="2">2,697</font></td>
	<td align="right"><font size="2">165</font></td>
	<td align="right"><font size="2">1,044</font></td>
	<td align="right"><font size="2">3,841</font></td></tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr BGCOLOR="#CCEEFF">
	<td><font size="2"><b>INCOME BEFORE TAXES ON INCOME</b></font></td>
	<td align="right"><font size="2">2,787</font></td>
	<td align="right"><font size="2">4,861</font></td>
	<td align="right"><font size="2">751</font></td>
	<td align="right"><font size="2">1,853</font></td>
	<td align="right"><font size="2">7,039</font></td></tr>
<tr>
	<td><font size="2"><b>TAXES ON INCOME</b></font></td>
	<td align="right"><font size="2">34</font></td>
	<td align="right"><font size="2">121</font></td>
	<td align="right"><font size="2">9</font></td>
	<td align="right"><font size="2">44</font></td>
	<td align="right"><font size="2">162</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr>
	<td><font size="2"><b>NET INCOME</b></font></td>
	<td align="right"><font size="2">$2,753</font></td>
	<td align="right"><font size="2">$4,740</font></td>
	<td align="right"><font size="2">$742</font></td>
	<td align="right"><font size="2">$1,809</font></td>
	<td align="right"><font size="2">$6,877</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr BGCOLOR="#CCEEFF">
	<td><font size="2"><b>EARNING PER SHARE:	</b></font></td>
	<td colspan="5"></td></tr>
<tr>
	<td><font size="2">Basic</font></td>
	<td align="right"><font size="2">$0.13</font></td>
	<td align="right"><font size="2">$0.23</font></td>
	<td align="right"><font size="2">$0.03</font></td>
	<td align="right"><font size="2">$0.09</font></td>
	<td align="right"><font size="2">$0.33</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><font size="2">Diluted</font></td>
	<td align="right"><font size="2">$0.13</font></td>
	<td align="right"><font size="2">$0.22</font></td>
	<td align="right"><font size="2">$0.03</font></td>
	<td align="right"><font size="2">$0.08</font></td>
	<td align="right"><font size="2">$0.32</font></td></tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr>
	<td><font size="2"><b>WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES USED IN COMPUTATION OF EARNINGS   PER  ORDINARY SHARE - IN THOUSANDS:</b></font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Basic</font></td>
	<td align="right"><font size="2">21,438</font></td>
	<td align="right"><font size="2">21,056</font></td>
	<td align="right"><font size="2">21,477</font></td>
	<td align="right"><font size="2">21,089</font></td>
	<td align="right"><font size="2">21,089</font></td></tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr>
	<td><p style="margin-left:20px"><font size="2">Diluted</font></td>
	<td align="right"><font size="2">21,579</font></td>
	<td align="right"><font size="2">21,511</font></td>
	<td align="right"><font size="2">21,582</font></td>
	<td align="right"><font size="2">21,486</font></td>
	<td align="right"><font size="2">21,468</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
</table>

<p><center><font size="2">II</font></center>
<!-- _________________________________________________________________________________________________-->
<hr width="100%">
</p>

<a name="table3"></a>
<a href="#toc"><font size="1"><b>Back to top</b></font></a>

<center><h2>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</h2></center>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr>
	<td></td>
	<td align="center" colspan="2"><font size="2"><b>Nine months ended September 30</b></font></td>
	<td align="center" colspan="2"><font size="2"><b>Three months ended September 30</b></font></td>
	<td align="center"><font size="2"><b>Year ended December 31,</b></font></td></tr>
<tr>
	<td></td><td align="right"><font size="2"><b>2005</b></font></td>
	<td align="right"><font size="2"><b>2004</b></font></td>
	<td align="right"><font size="2"><b>2005</b></font></td>
	<td align="right"><font size="2"><b>2004</b></font></td>
	<td align="right"><font size="2"><b>2004</b></font></td></tr>
<tr>
	<td></td>
	<td align="center" colspan="2"><font size="2"><b>(Unaudited)</b></font></td>
	<td align="center" colspan="2"><font size="2"><b>(Unaudited)</b></font></td>
	<td align="center"><font size="2"><b>(Audited)</b></font></td></tr>
<tr>
	<td></td>
	<td align="center" colspan="2"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="center" colspan="2"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="center"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td></td>
	<td align="center" colspan="6"><font size="2"><b>U.S. $ in thousands</b></font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><font size="2"><b>CASH FLOWS FROM OPERATING ACTIVITIES:</b></font></td>
	<td colspan="5"></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Net Income</font></td>
	<td align="right"><font size="2">$2,753</font></td>
	<td align="right"><font size="2">$4,740</font></td>
	<td align="right"><font size="2">$742</font></td>
	<td align="right"><font size="2">$1,809</font></td>
	<td align="right"><font size="2">$6,877</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Adjustments to reconcile net income  to net cash provided by or used in operating activities:</font></td>
	<td colspan="5"></td></tr>
<tr>
	<td><p style="margin-left:40px"><font size="2">Depreciation and amortization</font></td>
	<td align="right"><font size="2">668</font></td>
	<td align="right"><font size="2">520</font></td>
	<td align="right"><font size="2">330</font></td>
	<td align="right"><font size="2">172</font></td>
	<td align="right"><font size="2">680</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:40px"><font size="2">Accrued severance pay - net</font></td>
	<td align="right"><font size="2">(8)</font></td>
	<td align="right"><font size="2">119</font></td>
	<td align="right"><font size="2">(20)</font></td>
	<td align="right"><font size="2">62</font></td>
	<td align="right"><font size="2">202</font></td></tr>
<tr>
	<td><p style="margin-left:40px"><font size="2">Capital gain  on sale of property and equipment - net</font></td>
	<td align="right"><font size="2">(39)</font></td>
	<td align="right"><font size="2">(12)</font></td>
	<td align="right"><font size="2">(9)</font></td>
	<td align="right"><font size="2">(18)</font></td>
	<td align="right"><font size="2">(7)</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:40px"><font size="2">Changes in operating asset and liability items:</font></td>
	<td colspan="5"></td></tr>
<tr>
	<td><p style="margin-left:60px"><font size="2">Decrease (increase) in accounts receivable:</font></td>
	<td colspan="5"></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:80px"><font size="2">Trade</font></td>
	<td align="right"><font size="2">(109)</font></td>
	<td align="right"><font size="2">(890)</font></td>
	<td align="right"><font size="2">(1,009)</font></td>
	<td align="right"><font size="2">(720)</font></td>
	<td align="right"><font size="2">(1,237)</font></td></tr>
<tr>
	<td><p style="margin-left:80px"><font size="2">Interest accrued on long-term bank deposits</font></td>
	<td align="right"><font size="2">242</font></td>
	<td align="right"><font size="2">(1,029)</font></td>
	<td align="right"><font size="2">29</font></td>
	<td align="right"><font size="2">(628)</font></td>
	<td align="right"><font size="2">240</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:80px"><font size="2">Other</font></td>
	<td align="right"><font size="2">71</font></td>
	<td align="right"><font size="2">64</font></td>
	<td align="right"><font size="2">24</font></td>
	<td align="right"><font size="2">27</font></td>
	<td align="right"><font size="2">93</font></td></tr>
<tr>
	<td><p style="margin-left:60px"><font size="2">Increase (decrease) in accounts payable and accruals:</font></td>
	<td colspan="5"></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:80px"><font size="2">Trade</font></td>
	<td align="right"><font size="2">(574)</font></td>
	<td align="right"><font size="2">(396)</font></td>
	<td align="right"><font size="2">(446)</font></td>
	<td align="right"><font size="2">(999)</font></td>
	<td align="right"><font size="2">(252)</font></td>
</tr>
<tr>
	<td><p style="margin-left:80px"><font size="2">Deferred Revenues </font></td>
	<td align="right"><font size="2">(86)</font></td>
	<td align="right">&nbsp;</td>
	<td align="right"><font size="2">79</font></td>
	<td align="right">&nbsp;</td>
	<td align="right">&nbsp;</td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:80px"><font size="2">Other</font></td>
	<td align="right"><font size="2">(1,240)</font></td>
	<td align="right"><font size="2">896</font></td>
	<td align="right"><font size="2">(837)</font></td>
	<td align="right"><font size="2">176</font></td>
	<td align="right"><font size="2">1,081</font></td></tr>
<tr>
	<td><p style="margin-left:60px"><font size="2">Decrease (increase) in Inventories</font></td>
	<td align="right" colspan="2"></td>
	<td align="right"><font size="2">1</font></td>
	<td align="right"></td>
	<td align="right"><font size="2">(7)</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Net cash provided by (used in) operating activities</font></td>
	<td align="right"><font size="2">1,678</font></td>
	<td align="right"><font size="2">4,012</font></td>
	<td align="right"><font size="2">(1,116)</font></td>
	<td align="right"><font size="2">(119)</font></td>
	<td align="right"><font size="2">7,670</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td><b><font size="2">CASH FLOWS FROM INVESTING ACTIVITIES:</font></b></td>
	<td colspan="5"></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Purchase of property and equipment</font></td>
	<td align="right"><font size="2">(543)</font></td>
	<td align="right"><font size="2">(1,030)</font></td>
	<td align="right"><font size="2">(122)</font></td>
	<td align="right"><font size="2">(328)</font></td>
	<td align="right"><font size="2">(1,226)</font></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Acquisition of subsidiary (a)</font></td>
	<td align="right"><font size="2">(4,233)</font></td>
	<td align="right"></td>
	<td align="right"><font size="2">(4,233)</font></td>
	<td align="right"></td>
	<td align="right"></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Amounts withdrawal (funded) in respect of accrued severance pay</font></td>
	<td align="right"><font size="2">43</font></td>
	<td align="right"><font size="2">(67)</font></td>
	<td align="right"><font size="2">2</font></td>
	<td align="right"><font size="2">(37)</font></td>
	<td align="right"><font size="2">(120)</font></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Investments in long-term bank deposits</font></td>
	<td align="right"><font size="2">(10,000)</font></td>
	<td align="right"><font size="2">(10,000)</font></td>
	<td align="right"><font size="2"></font></td>
	<td align="right">&nbsp;</td>
	<td align="right"><font size="2">(40,000)</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Withdrawal of long-term bank deposits</font></td>
	<td align="right"><font size="2">10,000 </font></td>
	<td align="right"><font size="2">3,000 </font></td>
	<td align="right"><font size="2">10,000 </font></td>
	<td align="right"></td>
	<td align="right"><font size="2">50,000</font></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Proceeds from sale of property and equipment</font></td>
	<td align="right"><font size="2">175</font></td>
	<td align="right"><font size="2">86</font></td>
	<td align="right"><font size="2">57</font></td>
	<td align="right"><font size="2">79</font></td>
	<td align="right"><font size="2">145</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Net cash provided by (used in) investing activities</font></td>
	<td align="right"><font size="2">(4,558)</font></td>
	<td align="right"><font size="2">(8,011)</font></td>
	<td align="right"><font size="2">5,704</font></td>
	<td align="right"><font size="2">(286)</font></td>
	<td align="right"><font size="2">8,799</font></td>
</tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td><b><font size="2">CASH FLOWS FROM FINANCING ACTIVITIES:</font></b></td>
	<td colspan="5"></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Bank loans received</font></td>
	<td align="right"></td>
	<td align="right"><font size="2">10,000</font></td>
	<td align="right"></td>
	<td align="right">&nbsp;</td>
	<td align="right"></td></tr>
<tr>
	<td><p style="margin-left:20px"><font size="2">Employee stock options exercised and paid</font></td>
	<td align="right"><font size="2">320</font></td>
	<td align="right"><font size="2">214</font></td>
	<td align="right"><font size="2">42</font></td>
	<td align="right"><font size="2">94</font></td>
	<td align="right"><font size="2">563</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><p style="margin-left:20px"><font size="2">Dividend paid</font></td>
	<td align="right"><font size="2">(5,143)</font></td>
	<td align="right"><font size="2">(2,736)</font></td>
	<td align="right">&nbsp;</td>
	<td align="right">&nbsp;</td>
	<td align="right"><font size="2">(2,736)</font></td>
</tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><font size="2">Net cash provided by (used in) financing activities</font></td>
	<td align="right"><font size="2">(4,823)</font></td>
	<td align="right"><font size="2">7,478</font></td>
	<td align="right"><font size="2">42</font></td>
	<td align="right"><font size="2">94</font></td>
	<td align="right"><font size="2">(2,173)</font></td></tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td><b><font size="2">NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</font></b></td>
	<td align="right"><font size="2">(7,703)</font></td>
	<td align="right"><font size="2">3,479</font></td>
	<td align="right"><font size="2">4,630</font></td>
	<td align="right"><font size="2">(311)</font></td>
	<td align="right"><font size="2">14,296</font></td>
</tr>
<tr>
	<td><b><font size="2">BALANCE OF CASH AND CASH  EQUIVALENTS AT BEGINNING OF PERIOD</font></b></td>
	<td align="right"><font size="2">18,687</font></td>
	<td align="right"><font size="2">4,391</font></td>
	<td align="right"><font size="2">6,354</font></td>
	<td align="right"><font size="2">8,181</font></td>
	<td align="right"><font size="2">4,391</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td><b><font size="2">BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD</font></b></td>
	<td align="right"><font size="2">$10,984</font></td>
	<td align="right"><font size="2">$7,870</font></td>
	<td align="right"><font size="2">$10,984</font></td>
	<td align="right"><font size="2">$7,870</font></td>
	<td align="right"><font size="2">$18,687</font></td></tr>
<tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
</table>

<p><center><font size="2">III</font></center>
<!-- _________________________________________________________________________________________________-->
</p>

<a name="table2"></a>
<a href="#top"><font size="1"><b>Back to top</b></font></a>

<hr width="100%">
<center><h2>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</h2></center>
<table border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td valign="top"><p><strong>&nbsp;</strong></p></td>
    <td valign="top" width="150" align="center"><font size="2"><b>Nine months ended September 30, 2005</b></font></td>
  </tr>
  <tr>
	<td></td>
	<td align="center" colspan="2"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
 </tr><tr>
    <td valign="top"><p><strong>&nbsp;</strong></p></td>
    <td valign="top" align="center"><font size="2"><b>U.S. $ in thousands</b></font></td>
  </tr><tr BGCOLOR="#CCEEFF">
	<td><b><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of subsidiary:</font></b></td>
    <td  valign="top">&nbsp;</td>
  </tr>
  <tr>
	<td><font size="2">Assets and liabilities of the subsidiary upon acquisition:</font></td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr BGCOLOR="#CCEEFF">
	<td><font size="2">Working capital (excluding cash and cash Equivalents)</font></td>
	<td align="right"><font size="2">(4,761)</font></td>
  </tr>
  <tr>
	<td><font size="2">Long-lived assets</font></td>
	<td align="right"><font size="2">277</font></td>
  </tr>
  <tr BGCOLOR="#CCEEFF">
	<td><font size="2">Intangible assets</font></td>
	<td align="right"><font size="2">1,871</font></td>
  </tr>
  <tr>
	<td><font size="2">Long-term loans and other liabilities</font></td>
	<td align="right"><font size="2">(120)</font></td>
  </tr>
  <tr BGCOLOR="#CCEEFF">
	<td><font size="2">Goodwill arising on acquisition</font></td>
	<td align="right"><font size="2">6,966</font></td>
  </tr><tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
  </tr><tr BGCOLOR="#CCEEFF">
	<td><font size="2">Cash paid- net</font></td>
	<td align="right"><font size="2">4,233</font></td>
  </tr>
  <tr>
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
  </tr><tr BGCOLOR="#CCEEFF">
	<td></td>
	<td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td>
  </tr>
</table>
<p><center><font size="2">IV</font></center>
<!-- _________________________________________________________________________________________________-->
</p>

<a name="table2"></a>
<a href="#top"><font size="1"><b>Back to top</b></font></a>
<center><font size="2"> - end of file - </font></center>
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