Emblaze Ltd. Trading Statement

Business Wire, Feb 7, 2005

RA'ANANA, Israel -- Emblaze Ltd. (Emblaze or "the Group") (LSE:BLZ) provides an audited trading update for the 12 month period ended 31 December 2004:

Highlights

--Revenues up over seven-fold to $45.1m and projecting more than doubling of revenues to $120m in 2005

--Moved to profit in H2 of 2004 with losses for the year halved to $23.2m and projecting profitability for the full year 2005

--Stopped cash burn with $345.3m in total assets and $1.5 increase in net cash

--Strong business growth across all group business units

Financials and Operations

--Full year 2004 revenues increased to $45.1m (FY 2003: $6.5 million, net of revenues from discontinued operations)

--Following reorganization steps and rise in telecom sector business, the Group has stopped its cash burn and generated net profit of $6.3m in the second half thus reducing the Group net loss for the full year to $23.2m (H1 2004 loss: $29.4m) and halved the loss from $46.0m in financial year 2003

--Strong balance sheet with $345.3m in total assets (FY 2003: $289.3m)

--The Group confirms that it sees a continuation in profitability from the last two quarters and it expects to be profitable for the full year 2005

--Group restructured, streamed lined and positioned to take advantage of the expected upturn in the telecom sector - Emblaze Semiconductor was sold to Zoran Corporation; acquired a majority interest in Innostream, a Korean mobile phone manufacturer to substantially increase and secure production capacity for Emblaze Mobile handsets in order to meet demand for 2005 and beyond

--Following the change in strategy, Emblaze Mobile sold 200,000 mobile handsets through channels in the far east, 50,000 better than first expected

--Successful listing of Orca on AIM. Deals in India and Ireland together with successful subscriber benchmarking establishes it as a leading middleware player in the IPTV market

--Merged Emblaze Transcoding with the Transcoding business of Philips to create Adamind, a global leader media adaptation software provider

--Merged Emblaze Defence with Canadian Girit Projects Inc. and AVLogic Inc. to create Visual Defence Inc. as a global leader in visual security solutions over wireless and fixed IP networks

Eli Reifman, Chief Executive Officer of Emblaze said: "The numbers speak for themselves. The telecom downturn is over and we are now back in business. I want to thank my Investors, partners and board of directors for the long-term support and faith in our way through the difficult times. We remain optimistic as always and fully committed to the growth of our business and shareholders' value."

Emblaze Mobile

During 2004 the company has undergone re-focus of the business into new geographies, customer profiles and channel strategy. Emblaze Mobile provides end-to-end server and handset solutions to global operators for the introduction of rich-media value added services over 2.5G and 3G networks. It's unique new business model addresses directly the needs of the operators for ARPU-generating devices built around next generation applications, operators' requirements and specific market segments. This approach provides operators specific added value and higher ARPU per handset that in-turn enables Emblaze Mobile to sustain healthy margins over time without going into "price wars" with competitors. Emblaze Mobile is a unique combination of Israeli and Korean technology, design and manufacturing with highly experienced European management.

The company has achieved penetration in the Far East via distribution partners and looking to penetrate predominantly European markets over the next year.

In October 2004, Emblaze Mobile acquired a majority of the shares of a handset design and manufacturing factory in Korea in order to secure production and design capacity for 2005 against growth in demand and the need for lower unit costs. Laurence Alexander, the former UK Director of products at O2, was recruited to become CEO of Emblaze Mobile and expand the business into Europe and other regions. In parallel to the establishment of the company's clientele and brand the division is anticipated to move into operational profitability during next year.

Orca Interactive

Orca's provides a software solution that enables fixed-line telecom operators to offer TV entertainment services such as broadcast TV, video-on-demand, games and other interactive services over telephone lines (xDSL, FTTH etc.). This market has emerged as a consequence of cable operators moving into the telephony business on top of TV and data/internet (all three services combined are called the "Triple Play") and thus taking away business and subscribers from the telecom operators. The operators, that historically provide telephony and data/internet services now need to match their offer to the cable companies with a full triple play solution that includes TV services as well. Orca's products are effectively the management software ("Middleware") of all the components in the solution such as set-top boxes, video servers, billing, electronic programming guide (EPG), xDSL modems, conditional access technologies etc. The company's solutions are embedded in the heart of the IPTV infrastructure and manage many third party vendor components to provide a one comprehensive solution for Telco IPTV. Orca works with numerous technology and IPTV component vendors and has strong alliances with top tier players in the filed such as HP, Nokia, Samsung and many others.