Silicom's Momentum Continues: Q1 Sales up 84% to $6.0M with Net Income of $1.2M

- Compared to Q4 2006, Q1 Sales Up 21%, Operating Income Up 27% -

Silicom Ltd. today reported record revenues, operating income and net income for the first quarter ended March 31, 2007.

Revenues for the first quarter of 2006 were $6.0 million, an increase of 84% compared with $3.3 million in the first quarter of 2005 and 21% compared to the fourth quarter of 2006. These are the Company's highest revenues on record and its 13th consecutive quarter of rising sales.

Operating income for the quarter reached a record of $1.2 million. This represented an increase of 145% compared to the first quarter of 2006 and 27% compared to the fourth quarter of 2006. Net income for the first quarter was $1.2, or $0.22 per diluted share ($0.23 per basic share), an increase of 127% compared to $548,000, or $0.11 per share (basic and diluted) for the first quarter of 2006.

Commenting on the results, Shaike Orbach, President and CEO, said, "The momentum of our business accelerated again during the first quarter, enabling us to achieve another record quarter in terms of revenues, operating profit, net profit and cash. This strong performance demonstrates the cumulative benefit of our growing Design Win platform, together with the ramp-up of demand for our BYPASS adapters. Our business is being driven by the exciting growth of several target markets, especially the WAN Optimization market, which is still in the early growth phase. We are working to take advantage of our favorable positioning to address this and other high-potential markets, and are optimistic regarding our ability to deliver strong growth over the long term."

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