[LIPMAN LOGO OMITTED] Exhibit 1 FOR FURTHER INFORMATION CONTACT ISRAEL: UNITED STATES: Maya Lustig Jeff Corbin/Lee Roth Investor Relations & Public Relations Manager KCSA Worldwide Lipman Electronic Engineering Ltd. 800 Second Ave. 11 Haamal Street, Park Afek New York, NY 10017 Rosh Haayin 48092, Israel (212) 896-1214/(212) 896-1209 972-3-902-8603 jcorbin@kcsa.com/lroth@kcsa.com maya_l@lipman.co.il LIPMAN ELECTRONIC ENGINEERING LTD. REPORTS THIRD QUARTER 2004 FINANCIAL RESULTS - - - - - Revenues of $44.5 Million for the Third Quarter of 2004; 42.7% year-over-year growth; Third Quarter Net Income of $9.6 Million, or $0.35 Per Diluted Share; Excluding Stock-Based Compensation, Third Quarter Non-GAAP Net Income of $10.7 Million, or $0.39 Per Diluted Share; Rosh Haayin, Israel, October 25, 2004. Lipman Electronic Engineering Ltd. (Nasdaq, TASE: LPMA) today announced financial results for the third quarter ended September 30, 2004. For the third quarter of 2004, revenues were $44.5 million, an increase of 42.7% over revenues of $31.2 million for the third quarter of 2003. Net income for the quarter was $9.6 million, or $0.35 per diluted share, compared to $6.9 million, or $0.32 per diluted share, for the comparable period in 2003. There were 27,042,690 diluted shares outstanding in the third quarter of 2004 compared to 21,329,696 diluted shares outstanding in the third quarter of 2003. All share and per share data have been retroactively adjusted to reflect a two-for-one stock split effected on June 22, 2004. Gross profit for the quarter was $21.1 million, or 47.5% of revenues, compared to $15.7 million, or 50.2% of revenues, for the third quarter of 2003. Operating expenses for the three months ended September 30, 2004 included $1.1 million of non-cash stock-based compensation expenses compared to $247,000 of non-cash stock-based compensation expenses in the comparable period in the prior year. Excluding the effect of stock- based compensation, non-GAAP net income for the third quarter was $10.7 million, or $0.39 per diluted share, compared to non-GAAP net income of $7.1 million, or $0.33 per diluted share, for the three months ended September 30, 2003. As of September 30, 2004, the Company had cash and cash equivalents of $166.6 million compared to $57.5 million as of December 31, 2003. Lipman's cash balance as of September 30, 2004 includes net proceeds of approximately $91.3 million from the Company's initial public offering in the United States. During the quarter the Company paid a cash dividend of $5.1 million. On October 4, 2004, Lipman used approximately $69 million of its cash balance to pay the purchase price for all of the shares of Dione Plc. For the nine months ended September 30, 2004, revenues increased 42.2% to $114.9 million, from $80.8 million in the same period last year. Net income for the nine months was $21.0 million, or $0.80 per diluted share, compared to $19.8 million, or $0.93 per diluted share, in the same period in 2003. There were 26,446,553 diluted shares outstanding in the nine months ended September 30, 2004 compared to 21,278,584 diluted shares outstanding in the first nine months of 2003. For the nine months ended September 30, 2004, gross profit was $54.9 million, or 47.8% of revenues, compared to $40.7 million, or 50.4% of revenues, for the same period in 2003. Operating expenses for the nine months ended September 30, 2004 included $4.1 million of non-cash stock-based compensation expenses and $600,000 of special severance pay compared to $1.1 million of non-cash stock-based compensation expenses in the nine-month period in 2003. Excluding the effect of stock-based compensation and special severance pay, non-GAAP net income for the period was $25.8 million, or $0.97 per diluted share, compared to non-GAAP net income of $20.8 million, or $0.98 per diluted share, for the nine months ended September 30, 2003. Cash flow from operating activities for the nine months ended September 30, 2004 was $23.6 million. Commenting on the results, Isaac Angel, President and Chief Executive Officer of Lipman said, "The third quarter was of great importance to Lipman as we successfully completed our acquisition of Dione, Plc. As we previously mentioned, the Dione transaction provides Lipman with new customer relationships, an expanded suite of offerings and Dione's talented and seasoned management team. It also provides us with an entree into new markets, particularly South Africa and Finland, as well as a significantly expanded presence in the United Kingdom. Having accomplished this milestone in our growth strategy, we are confident that as the integration of Dione into the Lipman organization takes hold, the combination with Dione will greatly enhance Lipman's top line and profitability." He concluded, "During the third quarter Lipman delivered another solid quarter operationally as we continued to achieve strong revenue growth, while enhancing our competitive position in a number of our key target markets. As we recently announced, Lipman received EMV 2000 approval for our NURIT terminals. This positions us well in a number of major markets throughout the world where we conduct business, including Turkey, Spain, Italy, UK, Greece, Latin America and Russia. Lipman will be exhibiting its latest products and technologies at Cartes & IT Security 2004 in Paris from November 2 - 4, 2004. Please be sure to visit Lipman representatives for a product demonstration and to discuss the latest trends in security for point of sale technology. ABOUT LIPMAN Lipman is a leading worldwide provider of electronic payment systems. Lipman develops, manufactures and markets a variety of handheld, wireless and landline POS terminals, electronic cash registers, retail ATM units, PIN pads and smart card readers, as well as integrated pin and smart card ("Chip & Pin") solutions. In addition, Lipman develops technologically advanced software platforms that offer comprehensive and customized transaction processing solutions for its customers, as well as managed professional services such as on-site and call-center support with remote terminal management. Lipman's corporate headquarters and R&D facilities are located in Israel. Lipman also maintains offices in the US, United Kingdom, Turkey, China, Spain, Finland, Russia, Italy, Canada and Latin America. Statements concerning Lipman's business outlook or future economic performance; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements" as that term is defined under U.S. Federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: our dependence on distributors and customers; the competitive market for our products; market acceptance of new products and continuing products; timely product and technology development/upgrades and the ability to manage changing market conditions; manufacturing in Israel; compliance with industry and government standards and regulations; dependence on key personnel; possible business disruption from acquisitions; and other factors detailed in Lipman's filings with the U.S. Securities and Exchange Commission. Lipman assumes no obligation to update the information in this release. (Tables to follow) LIPMAN ELECTRONIC ENGINEERING LTD. CONSOLIDATED BALANCE SHEET U.S. DOLLARS IN THOUSANDS SEPTEMBER 30, DECEMBER 31, 2004 2003 (Unaudited) (Audited) ASSETS CURRENT ASSETS: Cash and cash equivalents 166,553 57,465 Trade receivables, net 24,599 23.473 Other receivables and prepaid expenses 6,946 5,114 Inventories 34,085 28,889 ------- ------- Total current assets 232,183 114,941 Long term marketable securities 1,600 1,600 Property, plant and equipment, net 7,620 6,966 Severance pay fund 2,524 2,196 Other long-term assets 889 123 Intangible assets, net 7,041 7,196 Goodwill 1,150 1,150 TOTAL ASSETS 253,007 134,172 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term bank loans -- 145 Trade payables 13,958 11,917 Other payables and accrued expenses 13,781 11,517 ------- ------- Total current liabilities 27,739 23,579 Long-term bank loans -- 1,119 Accrued severance pay 3,705 3,083 Total shareholders' equity 221,563 106,391 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 253,007 134,172 LIPMAN ELECTRONIC ENGINEERING LTD. CONSOLIDATED STATEMENTS OF OPERATIONS U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE AND PER SHARE DATA) THREE MONTHS NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, 2004 2003 2004 2003 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues 44,499 31,173 114,885 80,809 Cost of revenues 23,370 15,510 59,982 40,068 ------ ------ ------- ------ Gross profit 21,129 15,663 54,903 40,741 Operating expenses: Research and development 1,640 1,259 4,734 3,577 Selling and marketing 5,051 4,107 13,463 11,630 General and administrative 2,034 1,452 6,799 4,379 Special severance pay - - 600 - Stock-based compensation 1,102 247 4,147 1,054 Amortization of intangible assets 52 51 155 154 -- -- --- --- Total operating expenses 9,879 7,116 29,898 20,794 Operating income 11,250 8,547 25,005 19,947 Financial income, net 684 64 1,358 2,303 Other income, net - 8 7 117 - - - --- Income before taxes on income 11,934 8,619 26,370 22,367 Taxes on income 2,382 1,738 5,335 2,609 ------ ------ ------- ------ Net income 9,552 6,881 21,035 19,758 ====== ====== ======= ====== Diluted earnings per share(*) 0.35 0.32 0.80 0.93 Number of shares for diluted earnings per share(*) 27,042,690 21,329,696 26,446,553 21,278,584 (*) All share and per share data have been retroactively adjusted for a two-for-one stock split effected on June 22, 2004. LIPMAN ELECTRONIC ENGINEERING LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. DOLLARS IN THOUSANDS THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2004 2003 2004 2003 (Unaudited) (Unaudited) (Unaudited) (Unaudited) CASH FLOW FROM OPERATING ACTIVITIES: Net income for the period 9,552 6,881 21,035 19,758 Adjustments required to reconcile net income to net cash provided by operating activities: Depreciation and amortization 343 258 950 733 Stock-based compensation related to options issued to 1,102 247 4,147 1,054 employees and others Decrease (increase) in trade receivables and other (5,051) (7,097) (1,624) (12,949) receivables Decrease (increase) in inventories (3,578) (795) (5,234) 1,365 Increase (decrease) in trade payables & 5,960 2,954 4,305 6,766 other liabilities Deferred income taxes, net 175 (283) (640) (156) Other 176 634 691 (2) ------- ------ ------- ------ Net cash provided by (used in) operating activities 8,679 2,799 23,630 16,569 CASH FLOW FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (322) (186) (1,664) (546) Marketable securities and short-term 1,854 1,854 deposit Other -- (504) 65 (188) ------- ------ ------- ------ Net cash provided by (used in) investing activities (322) 1,164 (1,599) 1,120 CASH FLOW FROM FINANCING ACTIVITIES: Exercise of options granted to employees 835 1,174 2,036 1,613 Issuance of shares, net -- -- 91,347 -- Principal payments of long-term bank loans (314) (32) (1,235) (96) Dividend Paid (5,091) -- (5,091) (4,661) ------- ------ ------- ------ Net cash provided by (used in) financing activities (4,570) 1,142 87,057 (3,144) INCREASE IN CASH AND CASH EQUIVALENTS 3,787 5,105 109,088 14,545 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 162,766 44,962 57,465 35,522 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 166,553 50,067 166,553 50,067 ------- ------ ------- ------
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6-K Filing
Lipman Electronic Engineering (LPMA) Inactive 6-KCurrent report (foreign)
Filed: 26 Oct 04, 12:00am