Ofer Elyakim - Vice President of Business Development Eli Ayalon - Chairman and Chief Officer for DSP Group Boaz Edan - Chief Operating Officer Dror Levy - Chief Financial Officer.

Daniel Meron - RBC Capital Markets Shaul Eyal - CIBC World Markets Matt Robison - Ferris, Baker Watts Doug Whitman - Whitman Capital

Good day ladies and gentlemen, and welcome to the ThirdQuarter 2007 DSP Group Earnings Call. At this time, all participants are in alisten-only mode. We will be conducting a question-and-answer session towardthe end of today's conference (Operator Instructions). I would now like to turn your call over to Mr. Ofer Elyakim,Vice President of Business Development. Please proceed, sir.

Thank you. Good morning, ladies and gentlemen. I'm OferElyakim, Vice President of Business Development for DSP Group, and welcome toour third quarter 2007 earnings conference call. On today's conference call we have with us Mr. Eli Ayalon,Chairman and Chief Officer for DSP Group, Mr. Boaz Edan, Chief OperatingOfficer, Mr. Brian Robertson and Mr. Dror Levy, our Chief Financial Officer. Before I begin, I'd like to remind you that during this callwe shall be making forward-looking statements about our financial projectionsfor the fourth quarter of 2007 and fiscal 2008, as well as our belief that theacquisition of NXP cordless Voice over IP terminal business will enable us toimprove the profit margins of our new products and contribute to our bottomline and that the acquisition will improve the future generation of cash flowfrom our business. And number two, that we are best positioned to take advantageof market opportunities with our new technologies and the introduction of newproducts and corporate in fact technologies will also ease pressure on ourdollar revenues and gross margin. Also our belief that 40% gross margins willbe maintained over the fourth quarter of 2007 and 2008 and our expectation toactively repurchase our common stock. We assume no obligation to update these forward-lookingstatements, which are subject to risks and uncertainties that could causeactual results to differ materially, including the risks that the acquiredbusiness will not be integrated successfully. The risk that the revenue and potential cost savings and anyother synergies from the acquisition may not be fully realized or may takelonger to realize than expected, disruption relating to the acquisition thatmakes it more difficult for us to maintain relationships with customers,influence our suppliers, slower than expected change in the nature of theresidential communications domain, unexpected delays in the introduction of newproducts, failure to achieve broad margin acceptance of existing and newproducts by existing and potential OEM customers. Our inability to add new customers and develop and producenew products at competitive costs and in a timely manner and the decline orfluctuations in gross margins and the effect on revenue and profitability. For more information regarding risks and uncertainties thatcould cause actual results to differ, as well as risks relating to our businessin general, please see the discussion of the risk factor section in our annualreport Form 10-K for fiscal 2006 and other reports which we have filed with theSecurities and Exchange Commission. Now I would like to turn to Eli Ayalon, Chairman and ChiefExecutive Officer of DSP Group. Eli, the floor is yours.

Thank you, Ofer and thank you all for joining us today. Youwill excuse me if I do not come across very clear. I lost my voice due to aflu. I'll make every effort to come across as clear as possible. I'm glad toopen this discussion of the results of the third quarter of 2007. During the third quarter, we completed the acquisition ofthe cordless and Voice over IP terminals business of NXP and we operated as onecompany during the last three weeks of the quarter. As anticipated, thecontribution of the acquired business to our non-GAAP net income and EPS forthe third quarter, excluding the in-process R&D expense and theamortization of acquired intangibles and other acquisition-related assets waspositive. We believe the acquisition will have even a greater positivefinancial impact in the fourth quarter of 2008. We have established the neworganizational structure for the combined company, and our collective employeesare now appearing to be one structure. We have also completed an extensive and full study of thecordless and Voice over IP activities of the acquired business and decided uponone unified roadmap for the Company's cordless and VoIP activities. These endeavors enable us to put in place a detailed andsynergetic plan for the acquired business, some of which have already beenimplemented. In addition, it will also allow us to redirect resources toaccelerate the completion and launch of our next generation of products. Our new technologies for products, which are now ready to beintroduced to the market, will enable new features and applications and areexpected to elevate the cordless and Voice over IP terminals business to a newand strategic marketing position. Such products are also expected to ease pressures on dollarrevenues and gross margins that exist today in our traditional cordless domain. These pressures were caused by two main factors, one, DECTproducts with a lower ASP are ramping up in quantities on account of 5.8gigahertz products with higher ASPs. And second, today's cordless market lacksinnovation and they also angle new features; as a result the market ischaracterized by pricing pressures, which also reduce the absolute price ofcordless products. Although the impact of these two factors on dollar revenuesis negative, we are succeeding in returning to a gross margin level of 40%, dueto the successful completion of new CMOS RF chip design that we have alreadyreported, and are now selling in volume. These improvements and the new composition of our productline in consideration of the acquired product line will enable us to maintainour 40% level of gross margins for the fourth quarter of 2007 and we believealso for 2008. I believe that DSP Group is best positioned among thevarious players in this domain, to take advantage of the market opportunitiespresented by the next generation of technology. In the Consumer and Electronic Show, the CES of last year;we demonstrated a series of new applications for the cordless terminal, such aswireless Internet radio, wireless transmission of MP3 Music files, wireless webbrowsing and email, and wireless picture set. The software suite implementing these fascinating newapplications was demonstrated in last year's CES on a PC. At the time, thechips that would embed these new applications were in various stages of design.Next week at the AeA Conference in Monterey and also during the upcoming CES inJanuary '08, we will demonstrate these applications running on our chips. Demo units are now in production to be delivered asevaluation kits to customers, furthermore the acquisition of the cordless andVoice over IP business of NXP is expected to enable us to improve the grossmargins of these new products. We can elaborate more on these issues if you areinterested during the Q&A session. On the acquisition side, I am very pleased with the qualityof the transferred people, the degree of synergy; we succeeded to identify withour existing business and the contribution of the acquired business to ourbottom line and the future generation of cash for the Company. Transition periods between two product generations arealways challenging, for all companies, in any market. This is the kind ofdifficulty we are facing in the last 18 months or so. Our acquisition isexpected to help us overcome the traditional impact of such a transitionalperiod with significantly better bottom-line profit and cash-generationopportunities. And also accelerate the production of our next generation ofproducts due to additional resources, which we can now inject coming from ourprofit, into these activities and the wider and more solid customer base towhom we market these products. In a moment Dror Levy, our CFO, will discuss the results ofthe third quarter of 2007 and Boaz Edan, our Chief Operating Officer, willpresent our projections for the fourth quarter of '07 and our outlook forfiscal year 2008. I would only like to mention that despite the very toughthird quarter with reduced revenues; our cash flows from operations were $8.5million in Q3. And our expectation at this stage is that the revenues of thefourth quarter of 2007 will double as compared to the fourth quarter of '06 andthe full year of 2007 revenues are expected to increase by 14.4% over 2006, andour revenues for 2008 are expected to grow by around 40% over 2007. During the third quarter, we didn't have any sharerepurchase activity due to legal limitations on repurchase during theacquisition period, which was followed by our regular quarterly black-outperiod prior to public release of earnings. We have now 3.2 million shares of our common stockauthorized for repurchase based on prior account authorization. Given thecurrent level of our stock price and our positive outlook for the business, weplan to reactivate our repurchasing activity and pursue it aggressively. Iwould now like to update you on a few organizational matters. We would like to welcome to our Board of Directors Mr.Gert-Jan Kaat, who joins our Board today. Mr. Kaat was nominated by NXP inconnection with the acquisition and has served in various significant positionswithin Philips and NXP during the last few years. His current position at NXPis VP Strategy and Business Development in the Mobile and Personal Businessunit. We are confident that his background and experience will be very valuableto the company. Separately, Mr. Tal Simchony has decided to leave thecompany to pursue other interests and Mr. Brian Robertson, previously theGeneral Manager of the acquired NXP business line, is now replacing him withimmediate effect as President of the company. Brian has served for many yearsin executive positions with the R&D and certain marketing divisions withinPhilips and NXP. I would like to take this opportunity to thank Tal for hissignificant contribution to the company and wish him success in his futureendeavors. Tal led the consolidation process of the R&D activities of theacquired business line into unified R&D rollback, and I'm happy that he hasagreed to continue to work with us on a consulting basis on marketing andR&D projects, and I would like to wish Brian success in his new andchallenging position as President of DSP Group. Now I would like to turn to Dror Levy, our CFO. Dror, thefloor is yours.

Thank you, Eli. Good morning, everyone. I will now reviewthe income statement for the third quarter of 2007 from top to bottom. Pleasenote that the financial results for the third quarter consolidated the resultsof operations of NXP's activities we acquired from the closing date September4th, 2007 to the end of the quarter. For each line item, I will provide theU.S. GAAP result, as well as equity-based compensation expenses and expensesassociated with the NXP transaction included in that line item. Revenues for the quarter were at $61.9 million. Gross marginfor the quarter was 39.9%. Gross margin for the quarter included $0.1 millionof equity-based compensation expenses and $0.6 million of amortization of acquiredintangibles and other acquisition-related assets. Both items togetherrepresented 1.2% of revenue. R&D expenses were $13.9 million, including$1.5 million of equity-based compensation expenses. Operating expenses for the quarter were $35 million, including$2.7 million of equity-based compensation expenses. Operating expenses alsoincluded IP R&D expenses in the amount of $10.1 million and amortization ofthe acquired intangibles and other acquisition-related assets of $3.1 million.Please note that the amortization amount includes amortization associated withacquired backlog in the amount of $1.3 million that will be amortized only in2007. Let me during the call Boaz Edan provide you with forecastfor amortization to take a look at the GAAP results for the fourth quarter of2007 and 2008. Interest income for the quarter was $2.6 million. Income taxbenefit for the quarter was $0.3 million. This figure includes $0.1 millionrelating to equity-based compensation expenses and $1.5 million associated withthe IP R&D expenses and with the amortization of acquired intangibles. Net loss was $7.5 million, including the net effect of $2.8million associated with equity-based compensation expenses and $12.7 millionassociated with the IP R&D expenses and amortization of acquiredintangibles and other acquisition-related items, all net of taxes. Non-GAAP netincome excluding equity-based compensation expenses, the IP R&D expensesand amortization of acquired intangibles, was $7.6 million. Loss per share was $0.25. The net impact of equity-basedcompensation expenses on the EPS was $0.09. The net impact of IP R&Dexpenses and amortization of acquired intangibles and other acquisition-relatedassets net of tax benefit was $0.42. Non-GAAP EPS, excluding equity-basedcompensation expenses and the impact of IP R&D expenses and amortization ofacquired intangible was $0.26 on a diluted basis. Please see the current report on form 8-K that we filed withthe SEC this morning for reconciliation of the non-GAAP presentation to theGAAP presentation. Now to the balance sheet, before getting into the details,let me remind you that the balance sheet data includes the amount associatedwith acquired business as of the balance sheet date. Accounts receivablesincreased from the last quarter by $12.3 million to $42.8 million, representinga level of 62 days of sales. The increase in the number of days of sales is mainly due tothe consolidation of our business with acquired business in the last month ofthe quarter. Inventory increased by $5.4 million from last quarter to $16.4million, representing a level of 40 days. Our cash and marketable securities atthe end of quarter were at $159 million, representing a decrease of $195million during the quarter. Our cash position during the quarter was affectedby the following. $0.5 million of cash generated from operations, $201 millionof cash used as a consideration for NXP transaction, $0.3 million of cashreceived from option exercises, and $0.8 million of cash used for purchase ofequity and liquidity. Now I would like to ask Boaz Edan, our Chief OperatingOfficer, to present our forecast for the fourth quarter of 2007 and for theyear 2008. Boaz, please.

Thank you Dror, good morning, everybody. I will now provideyou with our projection, our projected plan for Q4 2007 and for the full yearof 2008. Our Q4 '07 projections including the impact of equity-basedcompensation expenses and acquisition-related organization expenses are asfollows. Revenues are expected to be in the range of $80 million to$86 million. Gross margin will be between 39% and 41%, R&D will be in therange of $19.5 million to $20.5 million, operating expenses will be in therange of $38 million to $39 million, interest income will be in the range of$1.5 million to $1.7 million and the income tax provision is expected to be inthe range of zero to $200,000. Shares outstanding are expected to be in the range of $32million to 33 million shares. Our Q4 2007 projections including the followingamounts forecasted for the equity-based compensation expenses, cost of goodsold $100k to $200k, R&D $1.5 million to $1.7 million, operating expenses$3 million to $3.3 million and income tax benefits of $100k to $200k. Our fourth quarter of 2007 projections including thefollowing amounts forecasted for the acquisitions-related amortization ofintangibles, cost of goods sold $250k to $300k, operating expenses $8.5 millionto $9 million and income tax benefit of $900k to $1.1 million. Based on preliminary forecast received from our customer andour own assessment, the projected plan for 2008 including the income fromequity-based compensation expenses and acquisition-related amortizationexpenses are as follows, revenues are expected to be in the range of $325million to $355 million, gross margin will be between 38% and 42%, R&D willbe in the range of $74 to $80 million, and operating expenses will be in therange of $136 million to $142 million. Interest income will be in the range of $7 million to $8 millionand the tax provision is expected to be $2.5 million to $3.5 million. Sharesoutstanding are expected to be in the range of 33 million to 33.5 millionshares. Our 2008 projection including the following amountsforecasted for equity based compensation expenses; cost of goods sold $900,000to $1.1 million, R&D $7.5 million to $9 million, operating expenses $14million to $16 million and income tax benefits of $500,000 to $1 million. Our 2008 projection including the following amountsforecasted for the acquisition related amortization expenses; operatingexpenses $20 million to $22 million and income tax benefits of $2 million to $3million. Thank you for your attendance and we shall now open thefloor for questions.

(Operator Instructions) Your first question will come fromthe line of Daniel Meron of RBC Capital Markets. Daniel Meron - RBC Capital Markets: Thank you. Hi, everybody. A couple of questions; first ofall, can you give us the breakdown for the various product lines and how youthink we should look at them into 2008 and fourth quarter?

Product lines you said, Daniel? Daniel Meron - RBC Capital Markets: Yes, 2.4, DECT, etcetera.

In Q3 of 2007 in the quarter that we ended, the DECT wereabout 47%, 5.8 gigahertz was about 26%, 2.4 was about 22% and Voice over IPabout 6%. Going forward into 2008, we see continuous growth in DECT while wewill a decrease in the 5.8 gigahertz and a slight decrease in 2.4 gigahertz,while of course we'll see continuous growth of Voice over IP going forward into2008. Daniel Meron - RBC Capital Markets: Okay. And then a follow up; can you give us a sense onlooking on a quarterly basis in 2008, should we look to the traditionalquarterly breakdown? And also how do you expect the potential of Voice over IPwins with your design wins with integrated home networking devices to impactthe 2008?

Daniel, we shall give a quarterly distribution as we giveevery year in January. It's to far away. The reason we are giving now a generaloutlook about 2008 is because we are aware of the fact that the Street iswaiting for some kind of indication after the acquisition and this is the outlookas it is today. It is too premature to have a quarterly distribution. Generally speaking, the seasonality is about the same. Theseasonality is that Q1 is lower, and then Q2 is a bit higher, Q3 is big, Q4 isa bit lower. And that's it. With respect to, I have to add here somethingthough with respect to 2008 on the operating expenses side. Boaz has given you an indication of the operating expenses.I believe that the mid range there is something like $102 million for the year.Now as not all the synergies are going to be implemented from the first ofJanuary, it's important to note that we plan on stabilizing ourselves in thefourth quarter of 2008 on an OpEx level of let's say around $24-25 million,which is let's say on the average of $98 million. So entering into 2009, this operation will be much moreefficient from the P&L point of view, not that it is not in 2008. I thinkthat if you remember when we departed, we had an estimate of let's say annualoperating expenses of around $115 million, if I'm not wrong, or so. And we havealready implemented some of the synergies. When I discussed the unified road map, instead of steppingout twice in products and so on, we have already implemented savings here andwe have a very detailed line of additional savings so that at the end of '08,the level of OpEx is going to be even reduced further. On the revenue side, you can assume the same kind ofsimilarity. Daniel Meron - RBC Capital Markets: Okay. But what is the growth you mentioned the 40% growth topline here. But combining the two entities together it sounds like the organicgrowth remains negative. Can you give us a sense on what is the organic growthfor both companies together?

Yes. As I explained at the beginning of my talk, thetraditional cordless market is now subject to a transition period between twowaves of technologies and products. The biggest technology was the Voicewireless communication in homes, the next technology being multimedia at home.And since there are no innovations in the market in products from let's say thesecond quarter of '06 or so, there is a kind of stagnation in the positioningof the cordless handsets. In situations like and situation like this in technologyhappen in every domain every six or seven years or so. Situations like this,competition is on price because there is nothing new. When competition is onprice, ASPs go down and in order to keep your dollar revenues, you have to sellmany more units and sometimes you sell more units and you end up having lessdollars. This is the only reason. What we see as crucial forourselves in passing through this difficult period is we have to see that threefactors are really taken care of. Number one is that we do not lose our leadingposition. On this item, so far we can put a V because it's not(inaudible), after a combination like this people could expect that customershave expectations, they have now a very big company in front of them and so on.So we are keeping our dominant and leading position. The second factor that one has to take care of in situationslike this is to pass this period with as much as possible profitability. Andthis combination is giving us a significant improvement in profitability ascompared to a DSPG alone, if we wouldn't do this combination. Because it's (inaudible); we have combined here a companywith the same kind of revenues and problems related to these revenues, as Idescribed; with a much lower OpEx which improves profitability. And it has beenproven in the third quarter and our outlook from the fourth quarter is thesame. But their gross margins are also very similar to ours. The third factor after assuring our leading position andimproving our profitability is to take advantage of the bigger size, the largercustomer base that was created now in this new platform of the combinedcompany; in order to launch our new product in a much wider way and moreefficient way. And I'm personally very optimistic because I see that thetype of customers and the customers to whom we are talking about these things;these are customers to whom we did not talk before, leading customers both inthe content domain in other domains. And I can tell you that in our projection that we gavetoday, we didn't include any revenues for the new product line. We have to becautious with respect to the design cycle of the OEMers. We are talking inparallel now to many companies, it's interest is big amount of OEMers of allkinds and it will take time to complete design cycles so we didn't bid intothese figures anything for the new stuff. And as I said, the new stuff is the factor that shouldreally get the cordless handset to a new position in the market. Daniel Meron - RBC Capital Markets: Okay. Thank you, Eli and good luck going forward. I'll letothers hop on. Thanks.

Thank you.

Your next question will be from the line of Shaul Eyal ofCIBC World Markets. Shaul Eyal - CIBC World Markets: Thank you. Hi, Shaul Eyal with CIBC. Good afternoon, guys. Ithink Boaz; you mentioned 6% Voice over IP contribution in the just reportedquarter. What do you think this number could look like heading into 2008?

When we look into 2008, we believe that the quantities atleast will be doubled, percentage-wise. Shaul Eyal - CIBC World Markets: The quantity will be doubled percentage-wise, got it. Whatwas kind of the geographic breakdown this quarter?

The breakdown from geographical view, looking into third quarter,this quarter Japan about 60%, 62%, Hong Kong about 33% and Europe I'm sorry,looking into percentage I'm looking into percentage-wise, yes. The percentageof Japan consumed about 62%, Hong Kong about 33% and the rest goes to otherregions. Shaul Eyal - CIBC World Markets: Got it.

Forward into Q4 and 2008, we will see an increase…

Just a minute, one correction Boaz. I think these figuresare results of the NXP contribution. These are the DSPG contributions…

Sorry, you're right. Shaul Eyal - CIBC World Markets: Fair enough. Now…

I will give the right numbers then. Shaul Eyal - CIBC World Markets: Fair enough. On the 5.8 I think you mentioned 26%; was itmainly multi handsets? Was it multi or even single handsets?

No, it's both.

We measure it, Shaul, the way we measure it is averagenumber of handsets sold on each date. This is around 1.5 or so.

I see. Fair enough. With the addition of NXP and theintegration process kind of coming to some sort of an end, any major departuresfrom NXP's front from their management, mid-level or senior management?

No. So far, no departures; on the contrary, I think that theintegration is going very well and as we announced today, Brian has beenappointed President of the company. He will have under his supervision only thetechnology aspects of the company. Like before, the company's structure is that all theactivity reports vertically to two senior managers; Boaz, the Chief OperatingOfficer is in charge of all the shop relations, logistics, sales, testing andso on; and Brian on the technology division's R&D and marketing ofcordless. And the strategic marketing that involves the penetration ofthe new product, and so on is being led now by the VP of Business Development,Ofer Elyakim and the VP of Strategic Marketing, Ofer Schneyour; that report tome. Shaul Eyal - CIBC World Markets: Got it.

So to give you an answer regarding the regional… Shaul Eyal - CIBC World Markets: Sure.

In Q3 including the three quarters that we added the NXPbusiness, Japan was about 48% and Hong Kong about 40% to 41% and Europe 6%. Shaul Eyal - CIBC World Markets: Fair enough. Okay, thank you. I may come back later on withsome more questions, thanks.

(Operator Instructions) Your next question will be from theline of Matt Robison of Ferris, Baker Watts. Matt Robison - Ferris, Baker Watts: Hey, good morning. First of all, Boaz can you do me a favorand repeat what you said for the R&D and OpEx in 2008?

In 2008, including the R&D will be in the range of $74million to $80 million and operating expenses will be in the range of $136million to $142 million. Matt Robison - Ferris, Baker Watts: And that's with $14 million to $15 million of that is phase123 combined or is that just?

No, this includes both the (inaudible) expenses and it alsoincludes the deal amortization as Boaz gave the numbers earlier. It includesboth. Matt Robison - Ferris, Baker Watts: Okay. Thank you, sorry to make you clarify that. What's thehead count?

Including the new employees, it's around 500 employees. Matt Robison - Ferris, Baker Watts: Okay. And can you talk a little bit about the technologymix? Have you seen a meaningful increase in analog ICs in your products now?Does that have an affect on the business model?

The only clear trend that we see is because of the fact thatthis market is now in a transition between two generations of product andcompetition is on price. We see things that relate to price sensitivity andthis is an acceleration of sales of DECT. DECT, if you compare the numbers inunits sold by us in '06 as compared to what we projected now to have in '07;there is a significant increase in both units and dollars. And the opposite goes for $5.8 million and $2.4 million.This is the only clear trend; and again it can be explained the situations inthe traditional cordless market. But as I mentioned, I do not expect to beremoved or sold until we see deliveries of the new products. Matt Robison - Ferris, Baker Watts: You've got some new customers including VTech, whichaccording to their conference call commentary was a market-share gainer, atleast during the first half of the calendar year. And some of that was fromanalog 5.8, correct?

Brian, do you want to comment on this; the VTech marketthere that came up? Matt Robison - Ferris, Baker Watts: What did you say?

What it on the count of analog? Matt Robison - Ferris, Baker Watts: The last conference call you talked about how analog 5.8 wastaking some of the business away from your customers and VTech is in thatbusiness for those analog 5.8 products. And they are customer, right? What'syour content like in those types of products?

So we see, of course as we are taking that NXP business inVTech; we see we have some of course volume going into the analog 5.8 butnaturally from a dollar point of view, the outlook is not a big contribution.The major trend that we see currently is really moving from analog and goingforward into 2008 in the U.S. where we see a strong movement from 5.8(inaudible) to digital 5.8 and analog into (inaudible) in the U.S. the trendswe see with VTech, Uniden, Panasonic and other customers that we have. Matt Robison - Ferris, Baker Watts: Yes, VTech also said they expected the European business tobe their grower in the back half? How do they compare as a customer? You'vealways said Panasonic and Uniden and the folks that ship under the Motorola GEbrands and recently Philips. How do you rate VTech in your new customer mix?

VTech is now our leading customer. Matt Robison - Ferris, Baker Watts: VTech is now your leader?

Yes, in the combined company. Matt Robison - Ferris, Baker Watts: Any other new brands that have materialized as significantfrom the acquisition?

Yes, of course Siemens, Thomson and Hascalet. I think theseare the major ones. Matt Robison - Ferris, Baker Watts: What was the third one you mentioned after Thomson?

Hascalet. Matt Robison - Ferris, Baker Watts: Okay. Thanks, I'll yield the floor.

Your next question will be from the line of Doug Whitman ofWhitman Capital. Doug Whitman - Whitman Capital: Thank you. I just had a quick clarifying question. I heardthe bottom of the revenue guidance for next year; if you could clarify what yousaid the top of the revenue guidance was?

The range, as I said, for next year is $325 million to $355million. Doug Whitman - Whitman Capital: Thank you.

(Operator Instructions) And you have a follow up from MattRobison. Matt Robison - Ferris, Baker Watts: Yes, Boaz, I caught $20 million to $22 million foramortization. You broke it out between cost of goods sold and OpEx for thefourth quarter. How should we look at the cost of goods sold portion ofamortization for '08?

The amortization is '08 is all included in operatingexpenses. Matt Robison - Ferris, Baker Watts: So you're not going to have any more cost of goods soldamortization in '08?

No. The only pro forma adjustment is '08 is the (inaudible). Matt Robison - Ferris, Baker Watts: Is the what?

Is the options expenses. Matt Robison - Ferris, Baker Watts: Oh sure. Okay, thank you. That's all I've got.

I would now like to turn the call back over to Ofer Elyakimfor closing remarks.

Thank you very much for joining us today and we look forwardto report to you in 90 days.

Thank you for your participation in today's conference. Thisconcludes the presentation and you may now disconnect. Have a great day.