Lightbridge Announces Revised Fourth Quarter and Year End 2004 Financi

Lightbridge Announces Revised Fourth Quarter and Year End 2004 Financial Results in Light of Recent Lease Accounting Clarification by SEC

    Business Editors/Technology Editors

    BURLINGTON, Mass.--(BUSINESS WIRE)--March 17, 2005--Lightbridge, Inc. (NASDAQ:LTBG)

--	Company Believes the Effect of its Accounting Adjustment is Not Material to its Financial Statements For the Year Ended December 31, 2004
--	Financial Statements Contained in 2004 Form 10-K Not Affected

    Lightbridge, Inc. (NASDAQ:LTBG), a leading analytics, decisioning and e-commerce company, today reported an adjustment to its previously announced unaudited financial results for the fourth quarter and full year 2004, resulting from a change in accounting for the Company's operating leases.
    In light of views expressed by the Securities and Exchange Commission on February 7, 2005, with respect to accounting for operating leases, the Company recorded a fourth quarter 2004 adjustment related to tenant improvement allowances and rent holidays provided by landlords. The audited financial statements contained in the Company's Form 10-K for the year ended December 31, 2004, which the Company filed today, reflect the change in accounting treatment.
    The adjustment resulted in a cumulative $0.6 million increase in the net loss attributable to prior interim periods in 2004. The impact on the Company's December 31, 2004 consolidated balance sheet was an increase in property and equipment of approximately $3.2 million, and an increase in deferred rent of approximately $3.6 million. The impact on the Company's consolidated statements of cash flows was to increase both "net cash provided by operating activities" and "net cash used in investing activities" by equal amounts of approximately $3.5 million for the fiscal year ended December 31, 2004. The Company believes the effect of the adjustment is not material to the financial statements for the year ended December 31, 2004.

    About Lightbridge

    Lightbridge, Inc. (NASDAQ:LTBG) is a leading analytics, decisioning and e-commerce company that businesses trust to manage customer transactions. Lightbridge adds value to fraud screening, credit qualification, payment authorization, billing, and enhanced voice services. Lightbridge solutions leverage intelligent automated systems and human expertise, delivered primarily through the efficiencies and cost savings of an outsourced business model. Businesses around the world use Lightbridge to make smarter decisions, deliver better services, provide secure payments, reduce costs and enhance the lifetime value of their customers. For more information, visit www.lightbridge.com or call 800-LIGHTBR.

    Note to Editors: LIGHTBRIDGE is a registered trademark and the Lightbridge logo is a trademark of Lightbridge, Inc. All other trademarks and registered trademarks are the properties of their respective owners.

    Forward-looking Statements

    Certain statements in this news release that are not historical facts, including, without limitation, those relating to the Company's belief as to the materiality of the adjustments described herein are forward-looking statements that involve risks and uncertainties. Such statements are based upon the current beliefs and expectations of the management of the Company. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, (i) dependence on a limited number of clients, (ii) the Company's revenue concentration in the wireless telecommunications business and the declining subscriber growth rate in that business, (iii) continuing rapid change in the telecommunications industry, payment processing industry, and other markets in which the Company does business that may affect both the Company and its clients, (iv) current and future economic conditions generally and particularly in the telecommunications and payment processing industry, (v) uncertainties about the Company's ability to execute on, and about the impact on the Company's business and operations of, its objectives, plans or strategies as a result of potential technological, market or competitive factors, or the acquisition of Authorize.Net, (vi) the impact of restructuring and other charges, and lease accounting adjustments on the Company's business and operations, (vii) integration, employee retention, recognition of cost and other benefits and revenue synergies, and other risks associated with acquisitions including the acquisition of Authorize.Net, (viii) the industry risks associated with Authorize.Net's business and operations including, without limitation, illegal or improper uses of Authorize.Net's payment system, unauthorized intrusions and attacks on Authorize.Net's payment system that may impair the operation of its payment systems, changes in or failures to comply with credit card association rules, governmental regulation and the application of existing laws to Authorize.Net's business and dependence on relationships with third party payment processors, (ix) potential state, federal and international regulation of voice conferencing and related compliance and operating costs, regulatory assessments and potential suspensions of service pending compliance with such regulation, and (x) the factors disclosed in the Company's filings with the U.S. Securities and Exchange Commission including, without limitation, its 2004 Annual Report on Form 10-K. The Company undertakes no obligation to update any forward-looking statements.

Lightbridge, Inc. and Subsidiaries Unaudited, Condensed, Consolidated Income Statement

(in thousands, except per share data)

Quarter Ended Year Ended December 31, 2004 December 31, 2004 --------------------- --------------------- As As Previously As Previously As Reported Adjusted Reported Adjusted ----------- --------- ----------- ---------

Revenues $ 32,472 $32,472 $133,055 $133,055 ----------- --------- ---------- ---------

Cost of revenues 16,592 16,882 67,600 67,890 ----------- --------- ---------- ---------

Total gross margin 15,880 15,590 65,455 65,165 ----------- --------- ---------- ---------

Operating expenses: Engineering and development costs 6,881 7,074 28,807 29,000 Sales and marketing 5,291 5,380 22,452 22,541 General and administrative 3,698 3,791 15,894 15,987 Restructuring costs 1,722 1,722 4,346 4,346 Impairment of intangible assets 2,263 2,263 2,263 2,263 Purchased in-process research and development - 679 679 Gain on sale of Fraud Centurion assets (2,673) (2,673) (2,673) (2,673) ----------- --------- ---------- ---------

Total operating expenses 17,182 17,557 71,768 72,143 ----------- --------- ---------- ---------

Loss from operations (1,302) (1,967) (6,313) (6,978) ----------- --------- ---------- ---------

Other income, net 212 212 1,185 1,185 ----------- --------- ---------- ---------

Loss before taxes (1,090) (1,755) (5,128) (5,793)

Provision for income taxes 7,921 7,921 8,351 8,351 ----------- --------- ---------- ---------

Net Loss $ (9,011) $(9,676) $(13,479) $(14,144) =========== ========= ========== =========

Basic and diluted weighted average shares 26,504 26,504 26,643 26,643 =========== ========= ========== =========

Basic and diluted loss per share $ (0.34) $ (0.37) $ (0.51) $ (0.53) =========== ========= ========== =========

Lightbridge, Inc. and Subsidiaries Unaudited Segment Financial Information

(in thousands, except percentage amounts)

Quarter Ended Year Ended December 31, 2004 December 31, 2004 -------------------- --------------------- As As Previously As Previously As Reported Adjusted Reported Adjusted ---------- --------- ----------- ---------

Revenues: --------- TDS $ 19,279 $ 19,279 $ 88,297 $ 88,297 Payment Processing 9,859 9,859 26,836 26,836 INS 3,334 3,334 17,540 17,540 Instant Conferencing - - 382 382 --------- --------- ---------- ---------

Total revenues $ 32,472 $ 32,472 $ 133,055 $133,055 ========= ========= ========== =========

Gross Profit (loss): -------------------- TDS $ 7,242 $ 6,971 $ 37,291 $ 37,020 Payment Processing 7,452 7,435 19,597 19,580 INS 1,542 1,540 8,792 8,790 Instant Conferencing (356) (356) (225) (225) --------- --------- ---------- ---------

Total gross profit $ 15,880 $ 15,590 $ 65,455 $ 5,165 ========= ========= ========== =========

Gross Profit (loss)% -------------------- TDS 37.6% 36.2% 42.2% 41.9% Payment Processing 75.6% 75.4% 73.0% 73.0% INS 46.3% 46.2% 50.1% 50.1% Instant Conferencing N/A N/A -58.9% -58.9% --------- --------- ---------- ---------

Total gross profit % 48.9% 48.0% 49.2% 49.0% ========= ========= ========== =========

Lightbridge, Inc. and Subsidiaries Unaudited, Condensed, Consolidated Balance Sheets

(in thousands)

December 31, 2004 ------------------------------ As Previously Reported As Adjusted -------------- -------------- Assets ------

Current assets: Cash and cash equivalents $ 39,636 $ 39,636 Short-term investments 12,589 12,589 -------------- -------------- Total cash and short term investments 52,225 52,225

Accounts receivable, net 18,940 18,940 Deferred tax assets - - Other current assets 3,238 3,132 -------------- -------------- Total current assets 74,403 74,297

Property and equipment, net 13,752 16,978 Deferred tax assets - - Other assets, net 336 336 Goodwill 57,628 57,628 Intangible assets, net 21,247 21,247 -------------- --------------

Total assets $ 167,366 $ 170,486 ============== ==============

Liabilities and Stockholders' Equity ------------------------------------

Current liabilities: Accounts payable and accrued liabilities $ 16,364 $ 16,486 Deferred rent obligation - 1,592 Deferred revenues 3,681 3,681 Funds due to merchants 5,558 5,558 Reserve for restructuring 3,383 3,383 -------------- -------------- Total current liabilities 28,986 30,700 Deferred rent, less current portion - 2,709 Other long-term liabilities 787 149 -------------- -------------- Total liabilities 29,773 33,558 -------------- --------------

Commitments and contingencies

Stockholders' equity: Common stock 299 300 Additional paid-in capital 167,466 167,465 Warrants 206 206 Currency Translation (184) (184) Retained earnings (9,407) (10,072) -------------- -------------- Total 158,380 157,715 Less: treasury stock, at cost (20,787) (20,787) -------------- -------------- Total stockholders' equity 137,593 136,928 -------------- --------------

Total liabilities and stockholders' equity $ 167,366 $ 170,486 ============== ==============

--30--PP/ny*

CONTACT: Lightbridge, Inc. Lynn Ricci, 781-359-4854 lricci@lightbridge.com

KEYWORD: MASSACHUSETTS INDUSTRY KEYWORD: SOFTWARE NETWORKING INTERNET E-COMMERCE EARNINGS SOURCE: Lightbridge, Inc.

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