IGI Laboratories, Inc. Announces Second Quarter Results

BUENA, NJ August 14, 2008 - IGI Laboratories, Inc. (AMEX: IG) a premier provider of topical formulation development, analytical, manufacturing and packaging services announces second quarter 2008 results.

Highlights:

Economic factors weighed heavily on our results for the second quarter of 2008. We unfortunately experienced a decline in sales from several of our existing customers due to their loss of retail sales in the first half of 2008. Despite this decrease in sales, the Company continues to upgrade all aspects of our business as we become a premier provider of pharmaceutical products. We have increased our personnel; purchased additional manufacturing equipment and continued with our development of five pharmaceutical products. As mentioned in our two previous press releases, we have two new pharmaceutical customers for whom we will begin manufacturing product for in the fourth quarter of this year.

Six months ended June 30, 2008 Results

Total revenues increased by $261,000 for the six month period ended June 30, 2008 to $2,182,000, which represents an increase of 14% over revenues for the comparable period in 2007.

Cost of sales increased for the six month period ended June 30, 2008 as a result of the increased costs associated with the higher sales volume and the hiring of additional personnel. Products sold in 2008 had a slightly higher gross margin than those products sold in the comparable period in 2007; cost of sales as a percentage of product sales and research and development income was 65% for the six month period ended June 30, 2008 compared to 70% for the comparable period in 2007.

Selling, general and administrative expenses for six month period ended June 30, 2008 increased as a result of higher stock based compensation expense of $87,000 from the issuance of stock options to our CEO and higher employer match contribution in our 401k plan of $13,000 as a result of changing our 401k plan.

Product development and research expenses increased by $11,000 for the six month period ended June 30, 2008, or 5%, compared to the comparable period in 2007.

The company reported net loss of $(659,000) or $(.04) per share, for the six month period ended June 30, 2008 compared to a net loss of $(582,000), or $(.04) per share for the comparable period in 2007, which represents a 13% increase.

Interest expense amounted to $6,000 (net of income) for the six month period ended 2008 compared to interest expense of $27,000 (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 $683,000 for the six months ended June 30, 2008 and a cash balance of $746,000 at June 30, 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 press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as "will," "possible," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of similar meaning. These statements may contain, among other things, guidance as to future revenue and earnings, operations, prospects of the business generally, intellectual property and the development of products. These statements are based on our current beliefs or expectations and are inherently subject to various risks and uncertainties, including those set forth under the caption "Risk Factors" in IGI's most recent Annual Report on Form 10-KSB as filed with the Securities and Exchange Commission and as revised or supplemented by IGI's quarterly reports on Form 10-Q. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors or IGI's ability to implement business strategies. IGI does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.




IGI LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share information)

(Unaudited)

 

 

 

Three months ended June 30,

   Six months ended June 30,

 

2008

    2007

      2008

      2007

Revenues:

 

 

 

 

     Product sales

$    477

$    741

$   1,777

$  1,345

     Research and development income

        63

      211

        128

       288

     Licensing and royalty income

      142

      148

        277

       288

         Total revenues

      682

   1,100

     2,182

    1,921

 

 

 

 

 

Cost and expenses:

 

 

 

 

     Cost of sales

      563

      622

     1,244

    1,138

     Selling, general and administrative expenses

      697

      596

     1,360

    1,182

     Product development and research expenses

      123

      114

        236

       225

Operating loss

     (701)

     (232)

       (658)

      (624)

Interest expense (net)

         (3)

        (8)

           (6)

        (27)

Other income

 

          5

        64

            5

         64

Loss from continuing operations

     (699) 

     (176)

       (659)

      (587)

Gain from discontinued operations

           -

           5

             -

           5

 

 

 

 

 

Net loss

$   (699)

$   (171)

$     (659)

$    (582)

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss Per Share

 

 

 

 

Continued operations net loss per share

$   (.05)

$   (.01)

$     (.04)

$    (.04)

Discontinued operations income per share

          -

          -

            -

           -

 

 

 

 

 

  Net loss per share

$   (.05)

$   (.01) 

$     (.04)

$    (.04)

 

 

 

 

 

Weighted Average of Common Stock and

Common Stock Equivalents Outstanding

 

 

 

 

  Basic and diluted

14,877,572

14,612,899

14,854,887

13,997,904

 

 

IGI LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share information)

 

 

   June 30, 2008

     (unaudited)  

 

December 31, 2007*

 

 

 

ASSETS

 

 

Current assets:

 

 

     Cash and cash equivalents

    $     746

       $       914

     Accounts receivable, less allowance for doubtful accounts

 

 

       of  $62 and $48 in 2008 and 2007, respectively

          296

                666

     Licensing and royalty income receivable

        101

                356

     Inventories

          509

                376

     Prepaid expenses and other current assets

          132

                 93

          Total current assets

       1,784

            2,405

Property, plant and equipment, net

Restricted cash – long term

       2,371

50

            2,410

50

Other assets – long term

20

-

License fee, net

          750

            800

          Total assets

  $     4,975

   $       5,665

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

Current liabilities:

     Note payable – related party

 

$       250

 

$          500

     Accounts payable

  544

       282

     Accrued expenses

          299

                419

     Deferred income, current

            8

             219

          Total current liabilities

     Deferred income, long term

     Other long term liabilities

       1,101

                42

            -

            1,420

45

               60     

          Total liabilities

       1,143

          1,525

 

 

 

Stockholders’ equity:

     Series A Convertible Preferred stock, $.01 par value,

       100 shares authorized; 50 shares issued and outstanding as of June 30, 2008 and December 31, 2007, respectively;

        Liquidation preference- $500,000                                                 

 

 

 

                  

                   500

 

 

 

 

500

     Common stock, $.01 par value, 50,000,000 shares authorized;

       16,873,218 and 16,795,202 shares issued and outstanding                                                              

       as of June 30, 2008 and December 31, 2007, respectively

 

 

         168

 

 

            168

     Additional paid-in capital

 

27,762

       27,411

     Accumulated deficit

          (23,203)

      (22,544)

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

     (1,395)

       (1,395)

          Total stockholders’ equity

      3,832

         4,140

             Total liabilities and stockholders' equity

 $   4,975

     $  5,665

 

 

 

* Derived from the audited December 31, 2007 financial statements

Contact:

	Rajiv Mathur
	President & Chief Executive Officer
	IGI, Inc.
	856-697-1441 ext. 211
	www.askigi.com