Lipman Reports First Quarter 2004 Financial Results

Net income for the quarter was $4.8 million, or $0.38 per diluted share, compared to $5.8 million, or $0.55 per diluted share, for the comparable period in 2003. There were 12,653,000 diluted shares outstanding in the first quarter of 2004 compared to 10,509,000 diluted shares outstanding in the first quarter of 2003. Gross profit for the quarter was $15.7 million, or 49.0% of revenues, compared to $12.7 million, or 57.1% of revenues, for the first quarter of 2003. As previously discussed, the reduction in gross margin percentage reflects the penetration and expansion into new and emerging markets. Net income for the three months ended March 31, 2004 included $1.8 million of non-cash stock-based compensation expenses compared to $118,000 of these expenses in the comparable period in the prior year. Excluding the effect of stock-based compensation, pro forma net income for the first quarter was $6.7 million, or $0.53 per diluted share, compared to pro forma net income of $5.9 million, or $0.56 per diluted share, for the three months ended March 31, 2003. As of March 31, 2004, the Company had cash and cash equivalents of $151.1 million compared to $57.5 million as of March 31, 2003. Lipmans cash balance as of March 31, 2004 include the net proceeds of approximately $91.4 million from the Companys recent initial public offering in the United States.