Lernout & Hauspie to Vigorously Defend Against Class-Action Suit; Company Considers Lawsuit to be Without Merit

Business Wire, Jan 20, 1999

BURLINGTON, Mass.--(BUSINESS WIRE)--Jan. 20, 1999--Lernout & Hauspie (NASDAQ:LHSPF)(EASDAQ:LHSP) (L&H(tm)), a worldwide market leader in speech and linguistic technologies, products and services, announced today that it has received a copy of a class action complaint filed by two individual stockholders of the Company in the United States District Court Eastern District of New York against the Company and certain of its executive officers. The complaint covers the period between February 3, 1998 and December 1, 1998. The Complaint alleges that the Company engaged in improper accounting practices relating to the write-off of in process research and development costs in connection with certain acquisitions. As previously disclosed on Dec. 1, the Company may be required to reduce its in-process research and development write-offs, if new guidelines recently published by the Securities and Exchange Commission are applied retroactively.

The Company strongly believes that it has always properly accounted for its acquisitions in accordance with U.S. Generally Accepted Accounting Principles. The Company considers all claims in the complaint to be without merit and will vigorously defend against these claims.

About L&H

Lernout & Hauspie Speech Products (L&H) is a global leader in advanced speech and language solutions for computers, automobiles, telecommunications, embedded products, consumer goods and the Internet. The company is making the speech user interface (SUI) the keystone of simple, convenient interaction between humans and technology, and is using advanced translation technology to break down cultural barriers. L&H's products and services originate in four basic areas: automatic speech recognition (ASR), text-to-speech (TTS), digital speech and music compression (SMC) and text-to-text (translation). For more information, please visit Lernout & Hauspie Web site at www.lhs.com.

This Press Release contains forward-looking information, including but not limited to statements relating to the anticipated outcome of the class action lawsuit filed against the Company. However, litigation is unpredictable and, as a result, there can be no guarantee that the Company will be successful. L&H cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. L&H expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the L&H's expectations or any change in events, conditions or circumstance on which any such statement is based.