8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest

Event Reported): March 8, 2006

WJ COMMUNICATIONS, INC.

(Exact name of registrant as specified in its charter)

Commission file number 000-31337

DELAWARE	94-1402710
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
401 River Oaks Parkway, San Jose, California	95134
(Address of principal executive offices)	(Zip Code)

(408) 577-6200

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition.

On March 8, 2006, WJ Communications, Inc. (the “Company”) issued a press release related to its financial results for the quarterly period and year ended December 31, 2005. A copy of the Company’s Press Release and the financial statements which were included in the Press Release, is attached hereto as Exhibit 99.1 and is being furnished under Item 2.02 of this Report on Form 8-K. The information furnished shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or incorporated by reference into any filing thereunder or under the Securities Act of 1933 unless expressly set forth by specific reference in such filing.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits

99.1Press Release dated March 8, 2006 announcing the Company’s financial results for the quarterly period and year ended December 31, 2005.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	WJ COMMUNICATIONS, INC.
	By:	/s/ DAVID R. PULVINO
		David R. Pulvino
		Principal Accounting Officer
Dated: March 8, 2006

2

EXHIBIT INDEX

Exhibit Number	Description
99.1	Text of Press Release dated March 8, 2006 (furnished pursuant to Item 2.02).

3

EX-99.1

Exhibit 99.1

NEWS

For Release March 8, 2006 at 1:05 p.m. PST:

WJ Communications Announces Fourth Quarter and Fiscal Year 2005 Results

•Fourth Quarter Sales of $11.7 million Up 45% Sequentially

•Company Also Announces a Second-Source Strategic Foundry Relationship with Global Communication Semiconductors, Inc. (GCS)

March 8, 2006 - San Jose, CA - WJ Communications, Inc. (NASDAQ: WJCI), a leading designer and supplier of RF solutions for the wireless infrastructure and RFID reader markets, today announced results for its fourth quarter and fiscal year ended December 31, 2005.

Revenue for the fourth quarter of 2005 was $11.7 million up 45% sequentially from $8.1 million in the prior quarter, and above the previously raised fourth quarter guidance range of $10.0 to $10.5 million.  Fourth quarter revenue is up 48% from $7.9 million in the same period last year, which consisted of $7.7 million from the core business and $0.2 million from the legacy wireless assembly business.  Legacy business contribution in the fourth quarter of 2005 was negligible.

Fourth quarter gross margin was reported at 49.5%, down sequentially from 53.4% reported in the prior quarter. This result includes an inventory write-down of approximately $400,000, which resulted in an approximate 3.4% decline to the fourth quarter reported gross margin.  The Company expects that gross margins will be in the low 50% range in future quarters depending on product mix and excluding the impact of FAS 123R.

The Company reported a net loss of $2.1 million for the fourth quarter of 2005, or $0.03 per common share which, included a charge of $260,000 related to employee separation and the inventory write-down of $400,000.  This compares to a net loss of $3.4 million or $0.05 per common share in the prior quarter,

401 River Oaks Parkway, San Jose, CA 95134     Phone:  800-WJ1-4401     Fax:  408-577-6621

which included a charge of $400,000 related to employee separation and a tax benefit of $0.1 million and compares to a net loss of $4.0 million or $0.07 per common share for the fourth quarter of 2004.

Revenues for the year ended December 31, 2005 were $31.6 million compared to $32.3 million for the year ended 2004.  Reported results for the year ended 2005 were a net loss of $21.0 million, or $0.33 per common share which compares to net loss for the year ended 2004 of $9.1 million or $0.15 per common share.

As of December 31, 2005, the Company had cash, cash equivalents and short-term investments of $30.2 million with no long-term debt outstanding.

“We were pleased with our fourth quarter revenue which was significantly above our upward revised guidance given in December,” said Bruce Diamond, the Chief Executive Officer and President of WJ Communications.  “We saw strong sequential improvements in our wireless infrastructure business, driven by our large North American and European telecom equipment OEM’s as they ordered more products in support of new 3G network build outs.  In addition, we had a substantial increase in sales from a leading Chinese PHS OEM and also continued to see solid demand from our customers in Korea.  Our RFID business performed well during the quarter, and we made strong progress in developing partnerships with leading companies focused on RFID, such as our announcement today with Intelleflex.”

“Internally, our operations showed dramatic improvement demonstrated by our ability to service a 45% sequential increase in sales this quarter,” continued Mr. Diamond.  “We are also pleased to announce today a second-source strategic foundry relationship with GCS.  This relationship will give us more flexibility as we develop the most optimal manufacturing structure for WJ and for our customers.  For the year, we are planning a number of innovative new products for our wireless infrastructure business and continue to focus internally on accelerating the time to market of their release.”

“Our ability to control expenses and strong revenue performance reduced our operating loss by $1.4 million sequentially,” added Rainer Growitz, Interim Chief Financial Officer of WJ Communications. “Looking forward, we have strong business prospects and expect the seasonally soft first quarter to be somewhat flat to slightly ahead of our strong fourth quarter.  This leads us to revenue guidance for the first quarter of 2006 in the range of $11.5 million to $12.0 million.”

WJ Communications will host a conference call for analysts and investors to discuss its quarterly results today at 5:00 p.m. ET.  The Company’s 2005 financial performance and certain additional first quarter and full year 2006 guidance, including the impact of FAS 123R and certain expenses will be discussed on the conference call.  A live Webcast of the conference call will also be accessible from the “Investor Relations” section of the WJ Communications Website (www.wj.com).  Following the live Webcast, an archived version will be available on the WJ Communications website.

About WJ Communications

WJ Communications, Inc. is a leading provider of radio frequency (RF) solutions serving multiple markets targeting wireless communications, RF identification (RFID), and broadband cable. WJ addresses the RF challenges in these multiple markets with its highly reliable amplifiers, mixers, RF integrated circuits (RFICs), RFID reader modules, chipsets, and multi-chip (MCM) modules. For more information visit www.wj.com or call 408-577-6200.

This release contains forward-looking statements including financial projections, statements as to the plans and objectives of management for future operations, and statements as to the Company’s future economic performance, financial condition or results of operations. These forward-looking statements are not historical facts but rather are based on current expectations and our beliefs. Words such as “may,” “will,” “expects,” “intends,” “plans,” “believes,” “seeks,” “could” and “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. The Company’s actual results may differ materially from those projected in these forward-looking statements as a result of a number of factors, including, but not limited to, the success of the GCS foundry relationship, our ability to develop the most optimal manufacturing structure for WJ and customers, actual business trends, gross margin and revenues for the first quarter of 2006, the risk factors contained in the Company’s Form 10-K for year ended 2004 and such other factors as described from time to time in the Company’s filings with the Securities & Exchange Commission which are available on the SEC website at www.sec.gov.  Readers of this release are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly update or revise the forward-looking statements contained herein to reflect changed events or circumstances after the date of this press release.

# # #

WJ Communications:		Investor Relations Contacts:
Rainer Growitz	or	Chris Danne, Rakesh Mehta
Interim Chief Financial Officer		The Blueshirt Group for WJ Communications
408-577-6200		415-217-7722
www.wj.com		chris@blueshirtgroup.com
		rakesh@blueshirtgroup.com

WJ Communications Inc. and Subsidiaries

Unaudited Consolidated Statements of Operations

(in thousands, except per share amounts)

	Three Months Ended									Year Ended
	December 31, 2005			October 2, 2005			December 31, 2004			December 31, 2005			December 31, 2004
Sales
Core business (1)	$	11,653		$	8,044		$	7,686		$	31,201		$	29,808
Legacy (2)	53			50			235			396			2,528
Total sales	11,706			8,094			7,921			31,597			32,336
Cost of goods sold	5,914			3,774			4,240			16,906			15,278
Gross profit	5,792			4,320			3,681			14,691			17,058
Operating expenses:
Research & development	4,480			4,451			4,650			18,070			17,238
Selling & administrative	3,650			3,632			3,176			15,295			12,503
Acquired in-process research & development	—			—			—			3,400			8,500
Restructuring reversals	—			—			—			—			(3,845		)
Total operating expenses	8,130			8,083			7,826			36,765			34,396
Loss from operations	(2,338		)	(3,763		)	(4,145		)	(22,074		)	(17,338		)
Interest income, net	255			243			163			952			578
Other income, net	3			3			5			14			5
Income (loss) before income taxes	(2,080		)	(3,517		)	(3,977		)	(21,108		)	(16,755		)
Income tax benefit	3			(123		)	—			(120		)	(7,674		)
Net loss	$	(2,083	)	$	(3,394	)	$	(3,977	)	$	(20,988	)	$	(9,081	)
Basic and diluted net loss per share	$	(0.03	)	$	(0.05	)	$	(0.07	)	$	(0.33	)	$	(0.15	)
Basic and diluted weighted average shares	65,084			64,516			60,968			64,162			60,397

(1)      Core business sales includes sales of our semiconductor components, multi-chip modules and RFID reader modules.

(2)      Legacy sales includes sales of our wireless and fiber optic products.

WJ Communications Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

	December 31, 2005 (1)		December 31, 2004 (2)
ASSETS
Cash and cash equivalents	$	14,169	$	24,392
Short-term investments	16,052		18,732
Accounts receivable, net	7,135		6,841
Inventory	4,826		5,148
Other current assets	2,632		3,183
Total current assets	44,814		58,296
Property, plant and equipment	7,919		9,679
Goodwill	6,806		1,368
Intangible assets, net	1,884		180
Other assets	221		210
Total assets	$	61,644	$	69,733
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	16,452	$	11,572
Long-term obligations	14,075		16,864
Stockholders’ equity	31,117		41,297
Total liabilities and stockholders’ equity	$	61,644	$	69,733

(1)     Unaudited

(2)     Derived from the Company’s audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2004.