_________13 May 2002

FOR IMMEDIATE RELEASE

Contact

Maya Lustig

Investor Relations & Public Relations Manager

Lipman

Tel: (972) 3 9029730

Fax: (972) 3 9029731

E-mail: maya_l

Lipman REPORTS FIRST QUARTER 2002 RESULTS

Parent Company of Lipman USA Inc. reports Net Profit Increased by 88% and stood at 21 Million NIS

Operating Profit Rose 103%

Company Registered Significant Improvement in all Parameters as Compared to the Same Quarter in the Year 2001

Rosh Ha’ayin, Israel – May 13, 2002 Lipman Electronic Engineering, LTD. (LPMA.TA) has published its financial results for the first quarter ended March 31, 2002. The quarterly results reflect a significant increase in income and profits compared to the same quarter a year ago.

The company’s revenues in the first quarter of 2002 reached 82M NIS, against 60M NIS in the same quarter of the prior year. This represents an increase of 37%. The increase in revenue is a result of natural growth in sales to both new and existing customers.

The gross profit in the first quarter of 2002 reached 48M NIS, which represents 58% of revenue, compared to 32M NIS, representing 54% of revenue in the same quarter of 2001. The growth in gross profit is a result of the devaluation of the shekel against the dollar, and more efficient exploitation of the company’s productive capacity.

The operating profit amounted to 24M NIS, against 12M NIS in last year’s parallel quarter, an increase of 103%.

The net profit stood at 21M NIS, against 11M NIS last year, an increase of 88%.

Isaac Angel, Lipman’s President and CEO, declared: “I am pleased with the results of the quarter, which reflect a significant improvement in all parameters as compared to the same period in 2001. Our technological advantages enabled us to increase our market share against our competitors. This is due to our capacity to offer our clients a wide range of solutions at different levels, and at various prices that suit their needs.” Angel added that sales of the company’s new products began in the last quarters, and he believes that sales will continue growing throughout the course of the year, and will contribute to the growth of the company’s general revenue.

The shareholder’s equity on March 31, 2002, amounted to 259M NIS, representing 85% of the balance sheet, compared to 236M NIS representing 84% of the balance sheet at the end of the previous year.

The current ratio of the company on March 31, 2002, was 6.36, against a current ratio of 5.76 for the end of 2001.

The quick ratio of the company on March 31, 2002, was 4.68 against a quick ratio of 4.31 for the end of 2001.

About Lipman Electronic Engineering Ltd.

Lipman Electronic Engineering Ltd. (LPMA.TA) is one of the primary Electronic Payment Systems & Solutions providers worldwide and has established itself as a leader in its field, innovating and integrating state-of-the-art technologies into its products.
Lipman develops, manufactures and markets its own NURIT® product line, which includes; handheld, wireless and tel-line POS terminals, electronic cash registers, retail ATM units, PIN pads, smart card readers and more. In addition, Lipman develops technologically advanced software platforms, offering overall transaction processing solutions to the field of e-payment, specifically suited to meet its customers changing needs.
Lipman products are EMV compatible and its ISO 9002 registration and accreditations confirms its total quality concept.

Lipman’s Corporate Offices and R & D department are situated in Israel. Lipman also maintains subsidiaries in the US, China, Singapore, South America, Spain, Russia and Turkey.

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From time to time the Company may issue forward-looking statements that involve a number of risks and uncertainties. The following are among the factors that could cause actual results to differ materially from the forward-looking statements: business conditions and growth in the electronics industry and general economies, both domestic and international; lower than expected customer orders; delays in receipt of orders or cancellation of orders; competitive factors, including increased competition, new product offerings by competitors and price pressures; the availability of third party parts and supplies at reasonable prices; changes in product mix; significant quarterly performance fluctuations due to the receipt of a significant portion of customer orders and product shipments in the last month of each quarter; and product shipment interruptions due to manufacturing problems. The forward-looking statements contained in this document regarding industry and revenue trends, new markets, new product introductions, technology adoption, and future business activities should be considered in light of these factors.