IGI Laboratories Announces First Quarter 2015 Results

BUENA, N.J., April 28, 2015 /PRNewswire/ -- IGI Laboratories, Inc. (NYSE MKT: IG), a New Jersey based specialty generic pharmaceutical company, announced its financial results for the first quarter ended March 31, 2015.

First Quarter 2015 Highlights

• Total revenues of $10.7 million in the first quarter of 2015, an increase of 56% over the same quarter in 2014
• Total net revenues generated from the sale of IGI label generic topical pharmaceutical products for the three months ended March 31, 2015 and 2014 of $8.1 million, and $2.9 million, respectively
• Gross profit for the three months ended March 31, 2015 equaled 53% as compared to 42% in the same period of 2014
• IGI filed one Abbreviated New Drug Application (ANDA), in the first quarter of 2015 with the U.S. Food and Drug Administration (FDA), and one ANDA on April 28, 2015  
• Operating income was $1.1 million in the first quarter of 2015 compared to $0.2 million in the same period in 2014
• Adjusted EBITDA (as defined and reconciled to GAAP below) for the three months ended March 31, 2015 and 2014 was $1.7 million and $0.6 million, respectively
• Adjusted net income per fully diluted share (as defined and reconciled to GAAP below) for the three months ended March 31, 2015 and 2014 was $0.00 and $0.01, respectively

IGI's President and Chief Executive Officer, Jason Grenfell-Gardner, stated, "Consistent with our expectations, based on historical trends in our portfolio and significant incremental sales in the fourth quarter of 2014, we experienced a decline in first quarter revenue as compared to the fourth quarter of 2014. Looking forward, as a result of recent changes in our customer mix and market pricing, particularly for econazole nitrate, we anticipate revenue from our econazole nitrate cream products to decline in the second quarter of 2015. While the impact of this change has not fully taken effect, we now expect second quarter 2015 revenue in a range of $7.0 to $8.0 million.   As we continue to evaluate and respond to these changes, we intend to update the investment community as quickly as practical to share our outlook on the market and any adjustments to our business that we see necessary to provide updated guidance for the full year 2015."

Mr. Grenfell-Gardner continued, "These changes in the market dynamics of one product in the short term will not distract us from our dedication to the creation of long-term shareholder value through the execution of our TICO strategy to expand our presence in the topical, injectable, complex and ophthalmic markets.  We still believe that 2015 is the year dedicated to building our foundation, focused on the advancement of our research and development pipeline.  We believe that we are making good progress on the injectable and ophthalmic product projects, as well as our first 505(b)2 topical project, so we are actively pursuing all areas of our TICO strategy.  As of today, we have twenty-four ANDAs pending with the FDA.  Based on February 2015 IMS Health data, the addressable market for our pipeline of twenty-four ANDAs, pending approval by the FDA, is estimated at $702 million.  Our team has now filed its first two ANDAs for 2015, and is on target to file at least another four in the second quarter of 2015.  Including the products currently on stability, our team has almost doubled productivity over this time last year, and we expect to be on target to file 20 topical ANDA submissions in 2015." 

The Company will hold a conference call today at 4:15 pm ET to discuss 1st quarter 2015 results.

The Company invites you to listen to the call by dialing 1-888-346-3479. International participants should call 1-412-902-4260. Canadian participants should call 1-855-669-9657.  Participants should ask to be joined into the IGI Laboratories, Inc. call.

This call is being webcast by MultiVu (a PR Newswire Company) and can be accessed in the Investor Relations Section of IGI's website at www.igilabs.com.

About IGI Laboratories, Inc.

IGI Laboratories is a specialty generic pharmaceutical company. Our mission is to be a leading player in the specialty generic prescription drug market.

Forward Looking Statements

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," "believe," "target," "estimated," "continue" or words of similar meaning. These statements are based on our current beliefs or expectations and are inherently subject to various risks and uncertainties, including those included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in our most recent Annual Report on Form 10-K, as updated by Quarterly Reports on Form 10-Q and other reports we file with the Securities and Exchange Commission. Actual results may differ materially from these expectations. Factors that could cause actual results to differ materially from these expectations include, but are not limited to: our inability to meet current or future regulatory requirements in connection with existing or future ANDAs; our inability to achieve profitability; our failure to obtain FDA approvals as anticipated; our inability to execute and implement our business plan and strategy; the potential lack of market acceptance of our products; our inability to protect our intellectual property rights; changes in and the impact of global political, economic, business, competitive, market, regulatory and other factors; and our inability to complete successfully future product acquisitions.  We assume no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Non-GAAP Financial Measures

In addition to reporting financial information required in accordance with U.S. generally accepted accounting principles (GAAP), IGI Labs is also presenting EBITDA and Adjusted EBITDA which are non-GAAP financial measures. Since EBITDA and Adjusted EBITDA are non-GAAP financial measures, they should not be used in isolation or as a substitute for consolidated statements of operations and cash flow data prepared in accordance with GAAP. In addition, IGI's definition of Adjusted EBITDA may not be comparable to similarly titled non-GAAP financial measures reported by other companies.

Adjusted EBITDA, as defined by the Company, is calculated as follows:

Net income, plus:

Depreciation and amortization
Interest expense, net
Provision for income taxes
Amortization of acquisition costs related to Econazole purchase
Non-cash expenses, such as share-based compensation expense

Less change in the fair value of derivative liability

Adjusted Net Income, as defined by the Company, is calculated as follows:

Net income, plus:

Non-cash interest expense, net
Provision for income taxes
Amortization of acquisition costs related to Econazole purchase
Non-cash expenses, such as share-based compensation expense

Less change in the fair value of derivative liability

Adjusted Net Income Per Fully Diluted Share is equal to Adjusted Net Income divided by the actual or anticipated diluted share count for the applicable period.

The Company believes that EBITDA is a meaningful indicator, to both Company management and investors, of the past and expected ongoing operating performance of the Company. EBITDA is a commonly used and widely accepted measure of financial performance. Adjusted EBITDA is deemed by the Company to be a useful performance indicator because it includes an add back of non-cash and non-recurring operating expenses and change in the fair value of derivative liability which have little to no bearing on cash flows and may be subject to uncontrollable factors not reflective of the Company's true operational performance (i.e. fair value adjustments to the derivative liability).

While the Company uses Adjusted Net Income, EBITDA and Adjusted EBITDA in managing and analyzing its business and financial condition and believes these non-GAAP financial measures to be useful to investors in evaluating the Company's performance, it is open to certain shortcomings. Adjusted Net Income, EBITDA and Adjusted EBITDA does not take into account the impact of capital expenditures on either the liquidity or the financial performance of the Company and likewise omits share-based compensation expenses, which may vary over time and may represent a material portion of overall compensation expense. Due to the inherent limitations of Adjusted Net Income, EBITDA and Adjusted EBITDA, the Company's management utilizes comparable GAAP financial measures to evaluate the business in conjunction with Adjusted Net Income, EBITDA and Adjusted EBITDA and encourages investors to do likewise.

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SOURCE IGI Laboratories, Inc.