IMPAX Reports Second Quarter Financial Results

July 28, 2003
Monday July 28, 4:00 am ET

Quarter Highlighted by Record Revenues and Operating Results Improvement

HAYWARD, Calif.--(BUSINESS WIRE)--July 28, 2003--IMPAX Laboratories, Inc. (Nasdaq:IPXL - News) today reported financial results for the three months and six months ended June 30, 2003.

Revenues for the second quarter of 2003 were $14,067,000, up more than 173% compared with revenues of $5,145,000 in the prior year's second quarter, and up more than 23% over total revenues of $11,425,000 in the first quarter of 2003. The significant year-over-year increases came primarily on over-the-counter (OTC) Loratadine and Pseudoephedrine Sulfate Extended Release 12-hour Tablets shipped to Schering-Plough and Wyeth during the second quarter of 2003; sales of Minocycline Hydrochloride Capsules launched in the third quarter of 2002; higher sales of Fludrocortisone Acetate Tablets, introduced at the end of the first quarter of 2002; higher Lipram sales; revenue from our strategic OTC agreements; and lower product returns.

The net loss for the 2003 second quarter was $2,284,000, or $(0.05) per share, compared with a net loss of $5,938,000, or $(0.13) per share, in the prior-year second quarter. The net loss narrowed due to increased sales and improved plant capacity utilization.

For the six months ended June 30, 2003, the Company reported revenues of $25,492,000 compared with $8,577,000 in the comparable period of the previous year. The net loss for the first half of 2003 was $5,497,000, or $(0.11) per share. This compares with a net loss of $11,359,000, or $(0.24) per share, for the first half of 2002.

Unrestricted cash, cash equivalents and short-term investments were $26.8 million at June 30, 2003, compared to $10.2 million at December 31, 2002. The increase in the cash balance was primarily due to the May 2003 $25 million private placement.

"The second quarter's results reflect the momentum we have been building in developing our products, moving them through the regulatory and legal pathways and then bringing them to market," said Barry R. Edwards, Co-Chief Executive Officer of IMPAX. "We are comfortable that we will be able to maintain this momentum going forward," Mr. Edwards continued.

IMPAX has 20 applications pending at the FDA, including three tentatively approved that address approximately $6.2 billion in U.S. branded product sales for the twelve months ended April 30, 2003. Fifteen of these filings were made under Paragraph IV of the Hatch-Waxman Amendments.

IMPAX Laboratories, Inc. is a technology-based specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of branded products. IMPAX markets its generic products through its Global Pharmaceuticals division and intends to market its branded products through the IMPAX Pharmaceuticals division. Additionally, where strategically appropriate, IMPAX has developed marketing partnerships to fully leverage its technology platform. IMPAX Laboratories is headquartered in Hayward, and has a full range of capabilities in its Hayward and Philadelphia facilities. For more information, please visit the Company's Web site at:

As previously announced, the Company has scheduled a conference call to discuss this announcement beginning at 8:30 a.m. Eastern Time today. To participate in the call, a few minutes prior to the start time, please dial 888-803-7396 in the U.S. or 706-634-1052 for international callers. Those unable to participate are invited to listen to a recording of the call and Question and Answer session from 9:30 a.m. Eastern Time, July 28, 2003 through 11:59 p.m. Eastern Time, July 30, 2003, by dialing 800-642-1687 in the U.S. or 706-645-9291 for international callers, and entering reservation code 1824737. Alternatively, individuals may listen to the call by visiting the investor relations section of the Company's Web site at To listen to the live call, please go to the Web site 15 minutes prior to its start to register, download, and install the necessary audio software. A recording of the call will be available for 14 days on the site beginning on July 28, 2003.

                       IMPAX LABORATORIES, INC.
                       STATEMENTS OF OPERATIONS
        (dollars in thousands, except share and per share data)

                      Three Months Ended         Six Months Ended
                           June 30,                  June 30,
                       2003         2002         2003         2002

Net sales          $    13,460  $     5,145  $    24,526  $     8,577

Other revenues             607            0          966            0

Total revenues          14,067        5,145       25,492        8,577

Cost of sales            9,321        3,982       17,468        7,121

Gross margin             4,746        1,163        8,024        1,456

Research and
 development             4,347        4,476        8,102        7,366

Less: Teva
 payments                  (22)        (138)        (154)        (304)

Research and
 development, net        4,325        4,338        7,948        7,062

Selling expenses           438          646        1,006        1,304

General and
 expenses                2,083        1,939        4,205        4,109

Other operating
 income (expense),
 net                        10           21           21           (9)

Net loss from
 operations             (2,090)      (5,739)      (5,114)     (11,028)

Interest income             70          167          112          402

Interest expense          (264)        (366)        (495)        (733)

Net loss           $    (2,284) $    (5,938) $    (5,497) $   (11,359)

Net loss per share
 (basic and
 diluted)          $     (0.05) $     (0.13) $     (0.11) $     (0.24)

Weighted average
common shares
 outstanding        50,608,445   47,306,741   49,250,049   47,061,223

                       IMPAX LABORATORIES, INC.
                        CONDENSED BALANCE SHEET
                            (in thousands)

                                               June 30,   December 31,
                                                 2003        2002
                                              (unaudited)  (unaudited)

Cash, cash equivalents and short-term
 investments                                    $ 26,793     $ 10,219

Restricted cash (a)                               10,000       10,000

Accounts receivable, net                           8,584        6,524

Inventory                                         15,042       10,478

Property, plant and equipment, net                36,600       37,065

Goodwill and intangibles, net                     28,145       28,337

Other assets                                       1,907        1,780

 Total assets                                   $127,071     $104,403


Current liabilities                             $ 25,843     $ 23,248

Long-term debt, net of current portion             9,394        9,105

Refundable deposit (b)                            22,000       22,000

Deferred revenues and other liabilities            2,737        1,486

Mandatory redeemable convertible preferred
 stock                                             7,500        7,500

Stockholders' equity                              59,597       41,064

 Total liabilities and stockholders' equity     $127,071     $104,403

(a) Represents cash held as collateral for the $25 million revolving
    credit facility and term loan with Congress Financial.
(b) As of the date of this press release, we expect to pay the
    refundable deposit to Teva in IMPAX common stock.