Obagi Medical Products, Inc. (Nasdaq:OMPI), a leader in topical aesthetic and therapeutic skin health systems, today reported that net sales for the first quarter ended March 31, 2012 rose 16% to a record $30.8 million from $26.5 million a year ago. Net income for the first quarter ended March 31, 2012 totaled $3.0 million, or $0.16 per share on a fully diluted basis. For the comparable quarter last year, Obagi reported a net loss of $2.4 million, or $0.13 per share. First quarter 2012 gross margin was 79.7% compared with 79.4% a year ago. Operating expenses for the first quarter of 2012 totaled $19.6 million compared to $24.9 million in the same period last year. Expenses during the three months ended March 31, 2012 included approximately $1.5 million (or an impact of $0.05 on earnings per dilutive share) of pre-tax investment expenses for the development of a broad-based e-Commerce/online pharmacy and fulfillment platform and other related growth initiatives that were previously announced. The comparable quarter last year included pre-tax litigation and settlement costs of approximately $7.2 million (or an impact of $0.23 on earnings per dilutive share). All of these costs were reflected in operating expenses. Al Hummel, the Company’s President and CEO stated, “I am pleased with this quarter’s performance, and I was especially happy to see our growth spread across all products and geographies. Beyond the financial performance achieved during the quarter, we also made great progress toward implementation of our plans to establish a web-based marketing and fulfillment operation and to create a nationwide online pharmacy to support it. We are confident that these programs and our other strategic initiatives will continue to drive strong revenue growth over the intermediate and long terms. “While our new strategic initiatives are vital to the Company’s future, we remain dedicated to maintaining our category leadership through investment in research and development and quality assurance. High performance in these important areas is required if we are to meet our goals of creating an even stronger brand and generating significantly greater growth,” said Mr. Hummel.