May 12, 2003

LSR ANNOUNCES FIRST QUARTER RESULTS

East Millstone, New Jersey, May 12, 2003 – Life Sciences Research, Inc. (OTCBB:LSRI) announced today that revenues for the quarter ended March 31, 2003 were $31.9 million, 22.2% above the revenues for the same period in the prior year of $26.1 million. Excluding the effect of exchange rate movements, the increase was 11.5%.  The Company reported net loss for the quarter ended March 31, 2003 of $0.4 million, compared with a net loss of $3.3 million for the quarter ended March 31, 2002.   Net loss per common share for the quarter ended March 31, 2003 was $0.03 compared with net loss of $0.48 in the quarter ended March 31, 2002. 

The net loss in the three months ended March 31, 2003 included Other Expense of $0.5 million reflecting 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.  In the three months ended March 31, 2002, Other Expense of $2.6 million related to merger/offer costs of $1.5 million together with the non-cash foreign exchange remeasurement loss of $1.1 million pertaining to the Convertible Capital Bonds. Excluding those Other Expenses, Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) was $3.7 million for the first quarter of 2003, or 11.7% of revenues, compared with $2.1 million, or 8.0% of revenues, for the same period in the prior year.

Net cash used by operating activities totaled $0.3 million in the first quarter of 2003 ($1.9 million in first quarter 2002), including $2.6 million in increased working capital. Net days sales outstanding were 13 days at March 31, 2003, up from 9 at year-end 2002, but a significant improvement over the 45 days at March 31, 2002. Capital expenditure totaled $2.3 million in the first quarter of 2003.

Cash on hand at March 31, 2003 was $11.1 million ($5.1 million at March 31, 2002). Long term debt was reduced to $82.6 million at March 31, 2003 ($84.9 million at March 31, 2002). Subsequent to March 31, 2003, the Company repurchased a further $450,000 of its Capital Bonds, and repaid $424,000 of related party debt.

Brian Cass, LSR's President and Managing Director said "First quarter results continued the strong performance we’ve been building for the past year. The revenue trend has remained positive and we’re delighted with the growth exhibited over last year. New order signings for the quarter were some 10% ahead of revenues and roughly flat with last year. After an exceptionally strong market in 2002, we have built a considerable volume of booked on work. This will be of particular value as we, and our competitors, have seen some softening in demand recently with uncertainty in customers’ development programs; such variations are a regular phenomenon and we remain confident of the long term potential of our market.”

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, 2002, as filed with the US Securities and Exchange Commission. 

(Dollars in thousands, except per share data)

March 31,

December 31,

2003

2002

ASSETS

Unaudited

audited

Current assets:

Cash and cash equivalents

$11,098

$14,644

Accounts receivable, net of allowance of $307 and $287 in 2003 and 2002 respectively

20,176

Unbilled receivables

9,157

9,108

Inventories

1,756

1,556

Prepaid expenses and other current assets

3,635

3,075

Total current assets

$45,644

$48,559

Property and equipment, net

93,279

94,574

Investments

234

248

Unamortized capital bonds issue costs

503

563

Deferred income taxes

4,316

4,466

Total assets

$143,976

$148,410

LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)

Current liabilities:

Accounts payable

$10,366

$8,574

Accrued payroll and other benefits

1,716

1,773

Accrued expenses and other liabilities

10,653

12,990

Fees invoiced in advance

24,662

26,066

Total current liabilities

$47,397

$49,403

Long-term debt

82,137

83,717

Related party loans

415

358

Pension liabilities

17,059

17,712

Deferred income taxes

4,692

5,024

Total liabilities

$151,700

$156,214

Commitments and contingencies

-

-

Shareholders' equity/(deficit)

Voting Common Stock, $0.01 par value.  Authorized 50,000,000

Issued and outstanding at March 31, 2003: 11,932,338 (December 31, 2002: 11,932,338)

119

Non-Voting Common Stock, $0.01 par value.  Authorized 5,000,000         -

-

Issued and oustanding: None

Preferred Stock, $0.01 par value.  Authorized at 5,000,000

-

-

Issued and outstanding: None

Paid in capital

75,098

75,098

Less: Promissory notes for the issuance of common stock

(621)

(684)

Accumulated comprehensive loss, including minimum pension liability of $13,264 at March 31, 2003 ($13,507 on December 31, 2002) – deficiency on UK defined benefit pension plan, net of deferred tax

(18,201)

(18,576)

Accumulated deficit

(64,119)

(63,761)

Total shareholders' equity /(deficit)

(7,724)

$(7,804)

Total liabilities and shareholders' equity /(deficit)

$143,976

$148,410