[LIPMAN LOGO] FOR FURTHER INFORMATION CONTACT ISRAEL: UNITED STATES: Liat Angel Jeff Corbin/Lee Roth Investor Relations & Public Relations coordinator 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 972-3-902-9730 jcorbin@kcsa.com/lroth@kcsa.com liata@lipman.co.il LIPMAN ELECTRONIC ENGINEERING LTD. REPORTS FIRST QUARTER 2006 FINANCIAL RESULTS ROSH HAAYIN, ISRAEL, MAY 8, 2006 - Lipman Electronic Engineering Ltd. (Nasdaq, TASE: LPMA), a leading provider of electronic transaction systems and solutions, today announced financial results for the first quarter ended March 31, 2006. For the first quarter of 2006, revenues were $57.6 million, an increase of 6.3% over revenues of $54.2 million for the first quarter of 2005. Excluding revenues from its Dione subsidiary, Lipman's revenues in the first quarter of 2006 increased 22.6% compared to the same period in 2005. Net income for the quarter before cumulative effect of an accounting change was $6.6 million, or $0.24 per diluted share, compared to net income of $5.3 million, or $0.19 per diluted share, in the first quarter of 2005. Prior to January 1, 2006, the Company recognized stock-based compensation expense based on the provisions of FAS 123. Effective January 1, 2006, recognition of this expense is based on FAS 123R which amended FAS 123. FAS 123R provides that in determining the amount of stock-based compensation expense a company must take into account an estimate of outstanding options that will be forfeited prior to vesting. Prior to the effectiveness of FAS 123R, the Company did not estimate forfeitures in determining stock-based compensation expense. FAS 123R requires the Company to recognize the cumulative effect of the change in these accounting principles to reverse compensation cost recognized in the financial statements in periods prior to January 1, 2006 for those options that are not expected to vest. As a result, $1.3 million is added to net income in the consolidated statement of operations for the quarter ended March 31, 2006 to reflect the cumulutive effect of this accounting change, net of taxes. The Company's net income for the quarter after the cumulative effect of this accounting change, net of taxes, was $8.0 million, or $0.29 per diluted share. LIPMAN ELECTRONIC ENGINEERING LTD. - -------------------------------------------------------------------------------- 11 Haamal Street, Park Afek, Rosh Haayin 48092, Israel Tel: +972-3-9029730 Fax: +972-3-9029731 e-mail:mail@lipman.co.il www.lipman.biz [LIPMAN LOGO] Non-GAAP net income for the three months ended March 31, 2006, which excludes $801,000 of non-cash stock-based compensation expenses and the cumulative effect of the accounting change, was $7.4 million, or $0.27 per diluted share, compared to $6.6 million, or $0.24 per diluted share, for the comparable period of 2005. Non-cash stock-based compensation expenses for the three months ended March 31, 2005 totaled $1.3 million. Gross profit for the quarter was $24.5 million, or 42.5% of revenues, compared to $22.9 million, or 42.2% of revenues, for the first quarter of 2005. Cash flow from operating activities for the three months ended March 31, 2006 was $4.8 million compared to $1.9 million for the comparable period in 2005. During the first quarter of 2006, the Company purchased 343,600 of its ordinary shares for an aggregate amount of $8.7 million in accordance with its previously announced share buyback program. As of March 31, 2006, the Company had cash and cash equivalents of $120.0 million compared to $124.4 million as of December 31, 2005. Recent highlights included: o Lipman and Verifone entered into a definitive agreement for VeriFone to acquire Lipman in a transaction valued at $793 million, based on VeriFone's share price at the close of trading on April 7, 2006. The acquisition is expected to close by October 31, 2006 and is subject to approval by shareholders of both companies and customary regulatory approvals. o Lipman received a $3.2 million follow-on order for its Dione Secura(TM) PIN Entry Devices from a leading Mexican bank. Commenting on the results, Isaac Angel, President and CEO of Lipman, said, "Our first quarter results were in line with expectations. The results reflected strength in emerging markets such as Eastern Europe and Mexico, as well as the continued improvement at Dione. Following the closing of our recently announced agreement with Verifone, we will work to leverage our technological and geographic synergies and believe the combined company will be well positioned to lead the electronic payment industry as it continues to grow." LIPMAN ELECTRONIC ENGINEERING LTD. - -------------------------------------------------------------------------------- 11 Haamal Street, Park Afek, Rosh Haayin 48092, Israel Tel: +972-3-9029730 Fax: +972-3-9029731 e-mail:mail@lipman.co.il www.lipman.biz [LIPMAN LOGO] ABOUT LIPMAN Lipman is a leading worldwide provider of electronic transaction systems and solutions. 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, Brazil, Argentina, Mexico, Australia and India. For more information visit www.lipman.biz 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: the risk that the transaction with VeriFone will not close; 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. On April 10, 2006, Verifone Holdings, Inc. and Lipman announced that they have entered into a definitive agreement, which provides for VeriFone to acquire Lipman. In connection with the proposed transaction, VeriFone intends to file a registration statement on Form S-4, including a proxy statement/prospectus of VeriFone and Lipman, and VeriFone and Lipman will file other materials with the SEC. Investors and security holders are urged to read the registration statement and the proxy statement/prospectus which will be sent to stockholders in connection with the merger and any other relevant documents filed with the SEC when they become available, as well as any amendments or supplements to those documents, because they will contain important information. Investors and security holders may obtain a free copy of documents filed with the SEC at the SEC's Internet web site at (www.sec.gov). These documents may also be obtained free of charge from VeriFone by directing such request to the investor relations section of verifone.com. (Tables to follow) LIPMAN ELECTRONIC ENGINEERING LTD. - -------------------------------------------------------------------------------- 11 Haamal Street, Park Afek, Rosh Haayin 48092, Israel Tel: +972-3-9029730 Fax: +972-3-9029731 e-mail:mail@lipman.co.il www.lipman.biz [LIPMAN LOGO] LIPMAN ELECTRONIC ENGINEERING LTD. CONSOLIDATED BALANCE SHEETS U.S. DOLLARS IN THOUSANDS DECEMBER 31, MARCH 31, 2005 2006 (Audited) (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents 124,413 120,039 Trade receivables, net 46,921 44,805 Other receivables and prepaid expenses 13,667 15,147 Inventories 53,906 57,432 ------- ------- Total current assets 238,907 237,423 Property, plant and equipment, net 14,969 16,505 Severance pay fund 3,120 3,248 Long term recievable and other 2,192 2,263 Intangible assets, net 26,247 25,618 Goodwill 39,607 40,138 TOTAL ASSETS 325,042 325,195 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables 20,864 19,460 Other payables and accrued expenses 28,221 29,267 ------- ------- Total current liabilities 49,085 48,727 Other long term liabilities 11,514 11,013 Accrued severance pay 4,394 4,535 Total shareholders' equity 260,049 260,920 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 325,042 325,195 LIPMAN ELECTRONIC ENGINEERING LTD. - -------------------------------------------------------------------------------- 11 Haamal Street, Park Afek, Rosh Haayin 48092, Israel Tel: +972-3-9029730 Fax: +972-3-9029731 e-mail:mail@lipman.co.il www.lipman.biz [LIPMAN LOGO] LIPMAN ELECTRONIC ENGINEERING LTD. CONSOLIDATED STATEMENTS OF OPERATIONS U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE AND PER SHARE DATA) THREE MONTHS ENDED MARCH 31, 2005 2006 (Unaudited) (Unaudited) Revenues 54,208 57,632 Cost of revenues 31,312 33,132 ----------- ----------- Gross profit 22,896 24,500 Operating expenses: Research and development 3,425 3,383 Selling and marketing 7,268 8,663 General and administrative 2,265 2,246 Special legal expenses 421 -- Stock-based compensation 1,337 801 Amortization of intangible assets 873 870 ----------- ----------- Total operating expenses 15,589 15,963 Operating income 7,307 8,537 Financial income, net 250 802 Other income (expenses), net (31) 19 ----------- ----------- Income before taxes on income 7,526 9,358 Taxes on income 2,252 2,732 ----------- ----------- Net income 5,274 6,626 =========== =========== Cummulutive effect of accounting change net of taxes -- 1,338 Net Income after cumulative effect of accounting change 5,274 7,964 =========== =========== Diluted earnings per share 0.19 0.24 Diluted earnings per share after cumulative effect of accounting change 0.19 0.29 Number of shares for diluted earnings per share 27,459,411 27,324,610 LIPMAN ELECTRONIC ENGINEERING LTD. - -------------------------------------------------------------------------------- 11 Haamal Street, Park Afek, Rosh Haayin 48092, Israel Tel: +972-3-9029730 Fax: +972-3-9029731 e-mail:mail@lipman.co.il www.lipman.biz [LIPMAN LOGO] LIPMAN ELECTRONIC ENGINEERING LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. DOLLARS IN THOUSANDS THREE MONTHS ENDED MARCH 31, 2005 2006 (Unaudited) (Unaudited) CASH FLOW FROM OPERATING ACTIVITIES: Net income for the period 5,274 7,964 Adjustments required to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,343 1,640 Stock-based compensation related to options issued to employees and others 1,337 801 Decrease (increase) in trade receivables and other receivables (5,130) 918 Increase in inventories (245) (3,391) Decrease in trade payables & other liabilities (1,260) (4,019) Increase in deferred Income 66 2,997 Deferred income taxes, net 344 (790) Tax benefit related to exercise of options 296 -- Cumulative effect of accounting change, net of taxes -- (1,338) -------- Other (80) 42 -------- -------- Net cash provided by operating activities 1,945 4,824 CASH FLOW FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (1,128) (2,317) Proceed from sales of available-for-sale marketable securities -- 428 Other 34 83 -------- -------- Net cash used in investing activities (1,094) (1,806) CASH FLOW FROM FINANCING ACTIVITIES: Exercise of options granted to employees 210 1,366 Tax benefit related to exercise of options -- 80 Purchase of treasury stock at cost -- (8,680) Loan received from minority shareholders in a subsidiary 156 -------- Net cash provided by (used in) financing activities 366 (7,234) Effect of exchange rate differences on cash and cash equivalents (326) (158) -------- -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 891 (4,374) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 117,396 124,413 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 118,287 120,039 ======== ======== LIPMAN ELECTRONIC ENGINEERING LTD. - -------------------------------------------------------------------------------- 11 Haamal Street, Park Afek, Rosh Haayin 48092, Israel Tel: +972-3-9029730 Fax: +972-3-9029731 e-mail:mail@lipman.co.il www.lipman.biz
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6-K Filing
Lipman Electronic Engineering (LPMA) Inactive 6-KCurrent report (foreign)
Filed: 9 May 06, 12:00am