CSTL

[comovaivoce]

TARGET: $10+ LATER IN 2007....1Q EARNINGS NEXT WEEK....

http://stockcharts.com/charts/gallery.html?cstl


*** CSTL HIGHLIGHTS:

- Profitable every year

- LOW FLOAT: 1.4M shares

- Outstanding shares: 4M

- Market cap: $13M

- $1.9/share CASH. Cash on hand has grown steadily the last 9 quarters.

- ZERO DEBT

- P/S ratio: 0.9

- Technology leader. Gaining market share. Currently No. 4 in the world

- First fax servers for VoIP environments released last month

- Heavy insider buying. Last insider sales were in 2005

- STOCK BUYBACK PROGRAM ESTABLISHED IN 3Q 2006.... $1M approved..or about 300K shares.


CSTL reported net income for 4Q 2006 of $260,000, or $0.06 per fully diluted share, compared to a net loss of $120,000, or $0.03 per fully diluted share, in 4Q of 2005.

Net income for fiscal 2006 was $669,000, or $0.15 per fully diluted share, up 16% from $579,000, or $0.13 per fully diluted share, in 2005.

CSTL increased its cash position by 22% during 2006, reporting cash and cash equivalents of $8.26 million as of December 31, 2006 (or $1.9/share), compared to $6.77 million as of December 31, 2005.

CSTL remains free of long-term debt

CSTL has a super low cost structure. CSTL now sees accelerated top line growth as a result of numerous products that had been introduced in the last few months. This can easily result in double digit net income in coming quarters.

.."Looking ahead at 2007, I believe we are well positioned for top line growth."......and obviously further net income improvement. "We are seeing an increase in enterprise-level installations as fax is becoming mission critical for many companies..."

CSTL's new generation of IP (internet protocol) fax servers were launched last month at the Spring VON event, in San Jose, California. These fax servers will enable customers to employ faxing in a VoIP (voice over IP) environment and dramatically reduce the cost of large scale fax applications. Castelle's new FoIP (fax over IP) fax server will be the first of its kind with an all-in-one solution.

"We look back on 2006 as a year of steady progress for Castelle and its fax server family," said Scott McDonald, President and CEO of Castelle. "We made a strategic shift in our product mix with the introduction of FaxPress Premier(TM), FaxPress Enterprise(TM) and, most recently, FaxPress Enterprise Redundant fax servers, which collectively accounted for more than 55% of Castelle's fax server installations..."



ABOUT CSTL:

Castelle (Nasdaq:CSTL - News), a market leader in "all-in-one" network fax solutions for business and enterprise, develops office automation systems that allow organizations to easily implement faxing over local area networks and the Internet. Castelle was founded in 1987 and is headquartered in Morgan Hill, California. Its products are available through a worldwide network of distributors, resellers, and online retailers. Visit Castelle online at www.castelle.com

[setravis]

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