IGI, Inc. Announces Profitable First Quarter Results

BUENA, NJ May 7, 2008 - IGI, INC. (AMEX: IG) a premier provider of topical formulation development, analytical, manufacturing and packaging services announces first quarter 2008 results.

Highlights of First Quarter 2008:

“Our consolidated business is performing to our expectations. We saw a healthy revenue increase with increased profitability. We continued the turnaround we began last year with another quarter of profitable growth” stated Rajiv Mathur, President and CEO.

First Quarter

The company reported net income of $40,000 or $.00 per share, for the three month period ended March 31, 2008 compared to a net loss of $(410,000), or $(.03) per share for the comparable period in 2007, which represents a 110% increase.

Total revenues increased by $679,000 for the three month period ended March 31, 2008 to $1,500,000, which represents an increase of 83% over revenues for the comparable period in 2007. Research and Development income decreased $12,000 for the three months ended March 31, 2008 compared to the comparable period in 2007. Licensing and royalty income decreased by $5,000 in 2008 compared to 2007.

Cost of sales increased for the three month period ended March 31, 2008 as a result of the increase in product sales offset by the change in the product mix for the period ended March 31, 2008. Products sold in 2008 had higher gross margin than those products sold in the comparable period in 2007; this also allowed for a higher gross margin percentage for the three month period ended March 31, 2008. Gross margin as a percentage of total revenues was 55% for the three month period ended March 31, 2008 compared to 37% for the comparable period in 2007.

Selling, general and administrative expenses for three month period ended March 31, 2008 increased as a result of higher stock based compensation expense of $46,000 from the issuance of stock options to our CEO, higher consulting fees of $28,000 from the Sarbanes Oxley compliance consultants which we did not engage until the second quarter of last year, and higher employer match contribution in our 401k plan of $12,000 as a result of changing our 401k plan.

Product development and research expenses increased by $2,000 for the three month period ended March 31, 2008, or 2%, compared to the comparable period in 2007.

Interest expense amounted to $3,000 (net of income) for the three month period ended 2008 compared to interest expense of $19,000 (net of income) in 2007. Interest expense decreased in 2008 as a result of a decrease in the Company’s short term notes payable principal balance and a reduction in the Company’s average interest rate on its short term notes payable in 2008.

The Company had positive working capital of $1,175,000 for the three months ended March 31, 2008 and a cash balance of $603,000 at March 31, 2008.

IGI is a company committed to growth by applying proprietary technologies to achieve cost-effective solutions for varied customer needs. IGI offers the patented Novasome® micro-vesicular delivery technology which contributes value-added qualities to cosmetics, skin care products, dermatological formulations and other consumer products, providing improved dermal absorption, controlled and sustained release as well as improved stability and greater ease of formulation.

This report contains forward-looking statements relating to IGI's hopes and expectations for the future. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "will," "possible," "one time," "provides an opportunity," "continue" and similar expressions are intended to identify forward-looking statements. Such statements involve a number of risks and uncertainties and actual future events and results could differ materially from those indicated by such forward-looking statements due to general economic conditions, and the risk factors detailed in IGI's periodic reports and registration statements filed with the Securities and Exchange Commission.

IGI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share information)
(Unaudited)

 

                     Three months ended March 31,
 

 2008

2007  

Revenues:

    

     Product sales

      $    1,300

      $    604

     Research &development income

65

 

     Licensing and royalty income

            135

            140

         Total revenues

            1,500

            821
     

Cost and expenses:

    

     Cost of sales

            681

            516

     Selling, general and administrative expenses

            663

            585

     Product development and research expenses

            113

            111

Operating income (loss)

          43

          (391)

Interest expense, net                                                                

             (3)

             (19)
     
     
     

Net income (loss)

$       40  

$       (410)

     

 

    

Basic income (loss) per share

 $        .00

 $        (.03)

Diluted income (loss) per share

 $        .00

$        (.03)
     
     
     

 

    
     
     

IGI, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share information)

 

 March 31, 2008
     (unaudited)  

December 31, 2007*
     

ASSETS

    

Current assets:

    

     Cash and cash equivalents

    $     603

       $       914

     Accounts receivable, less allowance for doubtful accounts

    

       of  $28 and $48 in 2008 and 2007, respectively

          875

                666

     Licensing and royalty income receivable

         126

                356

     Inventories

          531

                376

     Prepaid expenses and other current assets

          129

                 93

          Total current assets

       2,264

            2,405

Property, plant and equipment, net
Restricted cash – long term

       2,355
50

            2,410
50

Other assets – long term

18

-

License fee, net

          775

            800

          Total assets

  $     5,462

   $       5,665
     

LIABILITIES AND STOCKHOLDERS’ EQUITY

   

Current liabilities:
     Note payable – related party

$       250

$          500

     Accounts payable

  486

       282

     Accrued expenses

          345

                419

     Deferred income, current

            8

             219

          Total current liabilities
     Deferred income, long term
     Other long term liabilities

       1,089
                43
            31

            1,420
45
               60     

          Total liabilities

       1,163

          1,525
     

Stockholders’ equity:
     Series A Convertible Preferred stock, $.01 par value,
       100 shares authorized; 50 shares issued and outstanding as of March 31, 2008 and December 31, 2007, respectively;
        Liquidation preference- $500,000                                                 

                   500

500

     Common stock, $.01 par value, 50,000,000 shares
       authorized; 16,799,202 and 16,795,202 shares issued                                                              
       and outstanding as of March 31, 2008 and December 31, 2007,        respectively

         168

            168

     Additional paid-in capital

27,530

       27,411

     Accumulated deficit

          (22,504)

      (22,544)

     Less treasury stock, 1,965,740 shares at cost         

     (1,395)

       (1,395)

          Total stockholders’ equity

      4,299

         4,140

             Total liabilities and stockholders' equity

 $   5,462

     $  5,665

* Derived from the audited December 31, 2007 financial statements

Contact:

	Rajiv Mathur
	President & Chief Executive Officer
	IGI, Inc.
	856-697-1441 ext. 102
	www.askigi.com