May 5, 2004

LSR ANNOUNCES FIRST QUARTER RESULTS

East Millstone, New Jersey, May 5, 2004 – Life Sciences Research, Inc. (OTCBB: LSRI) announced today that revenues for the quarter ended March 31, 2004 were $37.2 million, operating profit was $2.3 million, and EBITDA excluding foreign exchange remeasurement gains associated with the Company’s bonds was $4.7 million, each representing record quarterly levels for the past five years.

Revenues for the quarter were 16.7% above the revenues for the same period in the prior year of $31.9 million. Excluding the effect of exchange rate movements, the increase was 4.7%.  The Company reported net income for the quarter ended March 31, 2004 of $1.4 million, compared with a net loss of $0.4 million for the quarter ended March 31, 2003.   Net income per common share for the quarter ended March 31, 2004 was $0.12 compared with net loss of $0.03 in the quarter ended March 31, 2003. 

The net income in the three months ended March 31, 2004 included Other Income of $1.4 million reflecting a non-cash foreign exchange remeasurement gain pertaining to the Convertible Capital Bonds. In the three months ended March 31, 2003, Other Expense of $0.5 million comprised a non-cash foreign exchange remeasurement loss of $0.9 million pertaining to the Convertible Capital Bonds, offset by $0.4 million gain on the repurchase of Capital Bonds. Excluding those Other Income/(Expenses), Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) was $4.7 million for the first quarter of 2004, or 12.5% of revenues, compared with $3.7 million, or 11.7% of revenues, for the same period in the prior year.

Net cash generated by operating activities totaled $1.5 million in the first quarter of 2004 (compared with net cash used of $0.3 million in first quarter 2003), after using $1.7 million in increased working capital ($2.6 million in 2003). Net days sales outstanding were 17 days at March 31, 2004, the same as at December 31 2003. Capital expenditure totaled $2.3 million in the first quarter of 2004, the same as the first quarter in 2003.

Cash on hand at March 31, 2004 was $15.4 million ($17.3 million at December 31, 2003). Long-term debt has increased to $88.3 million at March 31, 2004 ($87.6 million at December 31, 2003) as a result of exchange rate movements of $1.2 million on the Company’s GBP 22.6 million debt, offset by repayments of $0.5 million.

Andrew Baker, LSR’s Chairman and CEO said, “We are proud to be reporting another quarter of improving results and strong momentum on our key financial metrics. We have enjoyed  solid revenue and operating margin growth and we are encouraged by the strong growth in orders in the first quarter of 2004. Cash balances at the end of the quarter were $15.4 million compared to $11.1 million a year ago, and we continue to invest in new capital projects to strengthen our facilities and capabilities such as the expansion of our the inhalation capacity in our US facility that is scheduled to be operational by the end of this the second quarter”.

Brian Cass, LSR’s President and Managing Director said, “When we announced our results for 2003 I noted that new business enquiries remained strong and that we were seeing indications of strong order demand in the beginning of the year.  I am pleased to report that net new orders in the first quarter were a record for this company, 34% up on the first quarter of 2003 and 29% ahead of the last quarter of 2003. This growth in orders has increased backlog, and helped support the continuing growth in revenues. Toxicology and pharmaceutical chemistry, two of the company’s core competencies have shown particularly strong growth in orders."

Mr. Cass added “While strong industry demand and encouraging revenue growth are important, we remain focused on driving operating margin improvement in 2004. The restructuring of our UK facilities was completed during the first quarter.  This was designed to improve the efficiency of our operations whilst not hampering our near term capacity for meeting clients needs or our commitment to client service, and the benefits will start to be felt during the second quarter."

Life Sciences Research, Inc. is a global contract research organization providing product development services to the pharmaceutical, agrochemical and biotechnology industries.  LSR brings leading technology and capability to support its clients in non-clinical safety testing of new compounds in early stage development and assessment.  The purpose of this work is to identify risks to humans, animals or the environment resulting from the use or manufacture of a wide range of chemicals which are essential components of LSR's clients' products.  The Company's services are designed to meet the regulatory requirements of governments around the world.  LSR operates research facilities in the United States (the Princeton Research Center, New Jersey) and the United Kingdom (Huntingdon and Eye, England).

This announcement contains statements that may be forward-looking as defined by the USA’s Private Securities Litigation Reform Act of 1995.  These statements are based largely on LSR’s expectations and are subject to a number of risks and uncertainties, certain of which are beyond LSR’s control, as more fully described in the Company’s Form 10-K for the fiscal year ended December 31, 2003, as filed with the US Securities and Exchange Commission.

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