Exhibit 99.1 LIPMAN ELECTRONIC ENGINEERING LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - -------------------------------------------------------------------------------- IN THOUSANDS DECEMBER 31, MARCH 31, 2004 2005 ------------- ------------- (Unaudited) ------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 117,396 $ 118,287 Marketable securities 1,176 1,400 Trade receivables (net of allowance for doubtful accounts of $655 and $977 as of December 31, 2004 and March 31 2005, respectively) 42,349 45,330 Other receivables and prepaid expenses 7,835 9,056 Inventories 31,941 31,962 ------------- ------------- Total current assets 200,697 206,035 ------------- ------------- LONG-TERM ASSETS: Property, plant and equipment, net 11,971 12,534 Severance pay fund 2,674 2,820 Other long-term assets 2,054 2,081 Intangible assets, net 30,646 29,227 Goodwill 56,081 54,156 ------------- ------------- 103,426 100,818 ------------- ------------- Total assets $ 304,123 $ 306,853 ============= ============= The accompanying notes are an integral part of the consolidated financial statements. 1-1 CONSOLIDATED BALANCE SHEETS - -------------------------------------------------------------------------------- IN THOUSANDS (EXCEPT SHARE AND PER SHARE DATA) DECEMBER 31, MARCH 31, 2004 2005 ----------------- ---------------- Unaudited ---------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $ 20,028 $ 22,418 Employees and payroll accruals 4,235 2,897 Accrued expenses and other liabilities 21,200 17,192 ----------------- ---------------- Total current liabilities 45,463 42,507 ----------------- ---------------- LONG-TERM LIABILITIES: Other long term liabilities 15,257 15,150 Accrued severance pay 3,810 3,893 ----------------- ---------------- 19,067 19,043 ----------------- ---------------- Total liabilities 64,530 61,550 ----------------- ---------------- SHAREHOLDERS' EQUITY: Share capital- Ordinary shares of NIS 1.00 par value: Authorized: 70,000,000 shares as of December 31, 2004 and March 31, 2005; Issued: 28,484,796 and 28,539,396 shares as of December 31, 2004 and March 31, 2005, respectively; Outstanding: 26,559,136 and 26,613,736 shares as of December 31, 2004 and March 31, 2005, respectively 8,083 8,095 Additional paid-in capital 137,914 139,745 Accumulated other comprehensive income 4,470 3,063 Retained earnings 95,744 101,018 Treasury stock: 1,925,660 shares as of December 31, 2004 and March 31, 2005 (6,618) (6,618) ---------------- ---------------- Total shareholders' equity 239,593 245,303 ---------------- ---------------- Total liabilities and shareholders' equity $ 304,123 $ 306,853 ================ ================ The accompanying notes are an integral part of the consolidated financial statements. 1-2 CONSOLIDATED STATEMENTS OF INCOME - -------------------------------------------------------------------------------- IN THOUSANDS (EXCEPT PER SHARE DATA) THREE MONTHS ENDED MARCH 31, ------------------------------------- 2004 2005 ------------------------------------- UNAUDITED ------------------------------------- Revenues $ 32,103 $ 54,208 Cost of revenues, excluding amortization of acquired technology 16,365 31,312 Amortization of acquired technology - 283 ---------------- ---------------- Total cost of revenues 16,365 31,595 ---------------- ---------------- Gross profit 15,738 22,613 ---------------- ---------------- Operating expenses: Research and development 1,488 3,425 Selling and marketing 4,124 7,268 General and administrative 2,514 2,686 Stock-based compensation 1,840 1,337 Amortization of intangible assets 52 590 ---------------- ---------------- Total operating expenses 10,018 15,306 ---------------- ---------------- Operating income 5,720 7,307 Financial income, net 266 250 Other expenses, net - 31 ---------------- ---------------- Income before taxes on income 5,986 7,526 Taxes on income 1,146 2,252 ---------------- ---------------- Net income $ 4,840 $ 5,274 ================ ================ Basic net earnings per share $ 0.20 $ 0.20 ================ ================ Diluted net earnings per share $ 0.19 $ 0.19 ================ ================ The accompanying notes are an integral part of the consolidated financial statements. 1-3 CONSOLIDATED STATEMENTS OF CASH FLOWS - -------------------------------------------------------------------------------- IN THOUSANDS THREE MONTHS ENDED MARCH 31, ---------------------------------- 2004 2005 -------------- --------------- UNAUDITED ---------------------------------- Cash flows from operating activities: ------------------------------------- Net income $ 4,840 $ 5,274 Adjustments required to reconcile net income to net cash provided by operating activities: Depreciation 267 470 Stock-based compensation related to options issued to employees and others 1,840 1,337 Accrued severance pay, net 131 (63) Amortization of intangible assets 52 873 Gain on sale of property, plant and equipment - (17) Currency fluctuations of long-term bank loans 30 - Decrease (increase) in trade receivables 902 (3,240) Decrease (increase) in other receivables, prepaid expenses and other long-term assets 38 (1,890) Increase in inventories (2,385) (245) Increase (decrease) in trade payables (4,749) 2,558 Increase (decrease) in employee and payroll accruals, accrued expenses and other liabilities 1,227 (3,818) Deferred income taxes, net (583) 344 Tax benefit related to exercise of options 216 296 Increase in deferred income - 66 -------------- --------------- Net cash provided by operating activities 1,826 1,945 -------------- --------------- The accompanying notes are an integral part of the consolidated financial statements. 1-4 CONSOLIDATED STATEMENTS OF CASH FLOWS - -------------------------------------------------------------------------------- IN THOUSANDS THREE MONTHS ENDED MARCH 31, ---------------------------------- 2004 2005 -------------- ---------------- UNAUDITED ---------------------------------- Cash flows from investing activities: ------------------------------------- Purchase of property, plant and equipment (563) (1,128) Proceeds from sale of property, plant and equipment 23 34 -------------- ---------------- Net cash used in investing activities (540) (1,094) -------------- ---------------- Cash flows from financing activities: ------------------------------------- Exercise of options granted to employees 921 210 Proceeds from issuance of share capital 91,427 - Principal payments of long-term bank loans (35) - Loan received from minority shareholders in a subsidiary - 156 -------------- ---------------- Net cash provided by financing activities 92,313 366 -------------- ---------------- Effect of exchange rate differences on cash and cash equivalents - (326) -------------- ---------------- Increase in cash and cash equivalents 93,599 891 Cash and cash equivalents at the beginning of the period 57,465 117,396 -------------- ---------------- Cash and cash equivalents at the end of the period $ 151,064 $ 118,287 ============== ================ Supplemental disclosure of cash flows activities: ------------------------------------------------- Cash paid during the period for Income taxes $ 1,615 $ 5,166 ============== ================ The accompanying notes are an integral part of the consolidated financial statements. 1-5 NOTE 1:- SIGNIFICANT ACCOUNTING POLICIES a. These interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States for interim information. b. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2004, are applied consistently in these interim consolidated financial statements. NOTE 2:- UNAUDITED INTERIM FINANCIAL STATEMENTS The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2005 are not necessarily indicative of the results that may be expected for the year ended December 31, 2005. NOTE 3:- INVENTORIES Inventories are stated at the lower of cost or market value. Inventory write-offs are provided to cover risks arising from obsolete or slow-moving items, excess inventories and for declines in market prices below cost. To date, inventory write-offs were immaterial. --------------------------------- DECEMBER 31, MARCH 31, --------------------------------- 2004 2005 --------------------------------- Unaudited --------------------------------- Raw materials $ 12,323 $ 13,754 Work in progress 1,417 1,662 Finished goods 18,201 16,546 --------------- ------------ $ 31,941 $ 31,962 =============== ============ NOTE 4:- COMPREHENSIVE INCOME THREE MONTHS ENDED MARCH 31, --------------------------------- 2004 2005 --------------------------------- UNAUDITED --------------------------------- Unrealized gain on available- for-sale securities $ -- $ 223 Realized loss from hedging transactions, net -- 507 Foreign currency translation adjustments -- (2,137) Net income 4,840 5,274 --------------- ------------ Total comprehensive income $ 4,840 $ 3,867 =============== ============ 1-6 NOTE 5:- EARNINGS PER SHARE The following table sets forth the computation of historical basic and diluted net earnings per share: THREE MONTHS ENDED MARCH 31, ----------------------------- 2004 2005 ----------------------------- UNAUDITED ----------------------------- Net income $ 4,840 $ 5,274 =========== ============== Weighted average number of Ordinary shares outstanding 24,156 26,587 =========== ============== Dilutive effect: Employee stock options 1,150 872 =========== ============== Diluted weighted average number of Ordinary shares outstanding 25,306 27,459 =========== ============== Basic net earnings per share $ 0.20 $ 0.20 =========== ============== Diluted net earnings per share $ 0.19 $ 0.19 =========== ============== During the three months ended March 31, 2005, 54,600 options were exercised. NOTE 6:- INCOME TAXES The effective tax rate used in computing the provision for income taxes is based on projected fiscal year income before taxes, including estimated income by tax jurisdiction. The difference between the effective tax rate and the statutory rate is mainly derived from the "Approved Enterprise" status income in Israel. The higher tax rate in the three month period ended March 31, 2005 was the result of a greater portion of the revenues arising from higher tax countries than in the prior period, such as the U.K. which resulted from our inclusion of Dione's operations in 2005 and Brazil. NOTE 7:- SIGNIFICANT CUSTOMERS Sales to major customers, representing more than 10% of total revenues, are as follows: THREE MONTHS ENDED MARCH 31, ------------------------- 2004 2005 ----------- ---------- UNAUDITED ------------------------- % % ------------------------- Customer A 11 8 Customer B 10 - Customer C - 14 1-7
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6-K Filing
Lipman Electronic Engineering (LPMA) Inactive 6-KCurrent report (foreign)
Filed: 26 Apr 05, 12:00am