Exhibit 1 [LIPMAN LOGO OMITTED] 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 2005 RESULTS Revenues of $54.1 Million Net Income of $7.8 Million, or $0.28 Per Diluted Share Excluding Stock-Based Compensation, Non-GAAP Net Income of $9.1 Million, or $0.33 Per Diluted Share ROSH HAAYIN, ISRAEL, NOVEMBER 7, 2005 - Lipman Electronic Engineering Ltd. (Nasdaq, TASE: LPMA), a leading provider of electronic payment systems, today announced financial results for the third quarter ended September 30, 2005. For the third quarter of 2005, revenues were $54.1 million, an increase of 21.6% over revenues of $44.5 million for the third quarter of 2004. Revenues increased due to the consolidation of Dione's results of operations, as well as increased sales in the United States and Latin America. Net income for the quarter was $7.8 million, or $0.28 per diluted share, compared to $9.6 million, or $0.35 per diluted share, for the comparable period in 2004. Gross profit for the quarter was $24.4 million, or 45.1% of revenues, compared to $21.1 million, or 47.5% of revenues, for the third quarter of 2004. Operating expenses for the three months ended September 30, 2005 included $1.3 million of non-cash stock-based compensation expenses compared to $1.1 million of similar expenses in the comparable period in 2004. Excluding the effect of stock-based compensation, non-GAAP net income for the quarter was $9.1 million, or $0.33 per diluted share, compared to $10.7 million, or $0.39 per diluted share, for the same period last year. As of September 30, 2005, the Company had cash and cash equivalents of $118.1 million compared to $117.4 million as of December 31, 2004. For the nine months ended September 30, 2005, revenues increased 45% to $166.6 million, from $114.9 million in the same period last year. Revenues increased due to the consolidation of Dione's results of operations, as well as increased sales in the United States and Latin America. Net income for the nine months was $20.4 million, or $0.74 per diluted share, compared to $21.0 million, or $0.80 per diluted share, in the same period in 2004. For the nine months ended September 30, 2005, gross profit was $72.5 million, or 43.5% of revenues, compared to $54.9 million, or 47.8% of revenues, for the same period in 2004. During the first nine months of 2005, the Company had amortization expenses related to intangible assets in the amount of $2.5 million, compared to $155,000 of such expenses in the comparable period in 2004. In addition, Lipman expects that due to Dione's lower then expected results, a non-cash impairment charge relating to goodwill and other intangible assets will be required to be taken at the end of 2005. Operating expenses for the nine months ended September 30, 2005 included $3.9 million of non-cash stock-based compensation expenses, compared to $4.1 million of non-cash stock-based compensation expenses in the nine-month period in 2004. Excluding the effect of stock-based compensation, non-GAAP net income for the period was $24.3 million, or $0.88 per diluted share, compared to $25.2 million, or $0.95 per diluted share, for the nine months ended September 30, 2004. Commenting on the results, Isaac Angel, President and CEO of Lipman said, "The third quarter was one of challenge and transition for Lipman. As we previously discussed, third quarter results were impacted by the substantially weaker than expected performance of our Dione subsidiary, due principally to a significant slowdown in the U.K. point of sale terminal market. We have taken steps to rectify the situation, including management changes and an adjustment of the cost structure at Dione. We believe that these steps will help Lipman improve our U.K. operations and assist us in achieving renewed growth in revenues and profitability." He continued, "Our core business remained strong and we are on track for organic growth of approximately 20% this year. Growth initiatives in the United States that we began to implement in the first quarter have continued to generate benefits, enabling Lipman to gain further traction in new segments of the U.S. market. In addition, we are seeing continued progress in our efforts to penetrate new regions such as Latin America and India, which represent substantial growth opportunities and where we have begun to establish a solid foundation." He concluded, "While this quarter was a difficult one, we believe that we will be able to continue to penetrate our markets successfully and solidify our position as one of the leading suppliers of point of sale terminals worldwide." 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 United States, 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: 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, 2005 2004 (Unaudited) (Audited) ASSETS CURRENT ASSETS: Cash and cash equivalents 118,102 117,396 Marketable securities - 1,176 Trade receivables, net 52,148 42,349 Other receivables and prepaid expenses 10,593 7,835 Inventories 48,532 31,941 ------ ------ Total current assets 229,375 200,697 Property, plant and equipment, net 13,984 11,971 Severance pay fund 2,989 2,674 Other long-term assets 2,362 2,054 Intangible assets, net 27,532 30,646 Goodwill 51,273 56,081 TOTAL ASSETS 327,515 304,123 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables 24,913 20,028 Other payables and accrued expenses 23,414 25,435 ------ ------ Total current liabilities 48,327 45,463 Other long-term liabilities 12.827 15,257 Accrued severance pay 4,173 3,810 Total shareholders' equity 262,188 239,593 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 327,515 304,123 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, 2005 2004 2005 2004 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues 54,144 44,499 166,647 114,885 Cost of revenues 29,744 23,370 94,109 59,982 ------ ------ ------ ------ Gross profit 24,400 21,129 72,538 54,903 Operating expenses: Research and development 3,554 1,640 11,100 4,734 Selling and marketing 7,336 5,051 21,981 13,463 General and administrative 2,073 2,034 6,448 6,799 Special legal expenses - - 899 600 Stock-based compensation 1,265 1,102 3,883 4,147 Amortization of intangible assets 837 52 2,456 155 --- -- ----- --- Total operating expenses 15,065 9,879 46,767 29,898 Operating income 9,335 11,250 25,771 25,005 Financial income, net 951 684 1,988 1,358 Other income (expenses), net 9 - (40) 7 - - ---- - Income before taxes on income 10,295 11,934 27,719 26,370 Taxes on income 2,494 2,382 7,275 5,335 ----- ----- ----- ----- Net income 7,801 9,552 20,444 21,035 ===== ===== ====== ====== Diluted earnings per share(*) 0.28 0.35 0.74 0.80 Number of shares for diluted earnings per share(*) 27,592,440 27,042,690 27,529,584 26,446,553 (*) 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, 2005 2004 2005 2004 (Unaudited) (Unaudited) (Unaudited) (Unaudited) CASH FLOW FROM OPERATING ACTIVITIES: 7,801 9,552 20,444 21,035 Net income for the period Adjustments require to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,370 395 4,007 1,105 Stock-based compensation related to options issued to employees and others 1,265 1,102 3,883 4,147 Increase in trade receivables and other receivables (7,680) (5,051) (14,477) (1,624) Increase in inventories (15,921) (3,578) (17,525) (5,234) Increase in trade payables & other liabilities 10,702 5,960 5,600 4,305 Tax benefit related to exercise of options 327 20 1,742 278 Gain on available-for-sale marketable securities - - (522) - Deferred income taxes, net (706) 175 (836) (640) Other 45 104 44 258 -- --- -- --- Net cash provided by (used in) operating activities (2,797) 8,679 2,360 23,630 CASH FLOW FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (1,146) (322) (3,653) (1,664) Proceed from sales of available-for-sale marketable - - securities - 431 Other (112) - (106) 65 ----- - ----- -- Net cash used in investing activities (1,258) (322) (3,328) (1,599) CASH FLOW FROM FINANCING ACTIVITIES: Exercise of options granted to employees and other 950 835 2,699 2,036 Issuance of shares, net - - - 91,347 Principal payments of long-term bank loans - (314) - (1,235) Dividend Paid (5,091) (5,091) Loan received from minority shareholders in a subsidiary 44 - 194 - -- - --- Net cash provided by (used in) financing activities 994 (4,570) 2,893 87,057 Effect of exchange rate differences on cash and cash (327) - (1,219) - equivalents Increase (Decrease) in cash and cash equivalents (3,388) 3,787 706 109,088 Cash and cash equivalents at the beginning of the period 121,490 162,766 117,396 57,465 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 118,102 166,553 118,102 166,553 ------- ------- ------- -------
- LPMA Dashboard
- Filings
-
6-K Filing
Lipman Electronic Engineering (LPMA) Inactive 6-KCurrent report (foreign)
Filed: 8 Nov 05, 12:00am