IPA Interpharm Holdings, Inc.

Interpharm Holdings, Inc. (Amex: IPA), a manufacturer and distributor of generic pharmaceutical products, reported record sales of $22.83 million and net income of $1.63 million for the quarter ended September 30, 2006. For the quarter ended September 30, 2005, Interpharm�s sales were $14.55 million and it incurred a net loss of ($0.45) million. Interpharm�s gross profit percentage for the quarter ended September 30, 2006 was 39.3%, 11.9 percentage points higher than the 27.4% reported for the same quarter in the prior year. The combination of higher sales and higher gross profit percent contributed to an increase of nearly $5.0 million of gross profit dollars. Further details of Interpharm�s financial performance for the quarter ended September 30, 2006, are set forth in its quarterly report filed with the SEC on November 14, 2006. Interpharm�s research and development efforts continued during the quarter ended September 30, 2006 with expenditures of $3.4 million which Management intends to increase and accelerate during the remainder of fiscal 2007. Interpharm also continued to focus on sales and marketing with the addition of a second national sales manager in order to broaden its customer base and have the ability to support new product launches. On November 3, 2006, a termination and release agreement (the �Termination Agreement�) with Watson Pharmaceuticals, Inc. (�Watson�) became effective. Pursuant to the Termination Agreement, Interpharm acquired all rights to generic Vicoprofen� which had been the subject of a prior manufacturing and marketing agreement with Watson. Interpharm will continue to manufacture generic Vicoprofen� as it had in the past, but will market and sell it retaining all sales proceeds. Interpharm believes that the transfer of this product to it provides it with penetration into the scheduled narcotic products market and lays a foundation for future launches in this targeted product line. Cameron Reid, Interpharm�s Chief Executive Officer, stated: �Our efforts have returned Interpharm to profitability much earlier than anticipated. Moreover, we achieved significantly increased revenues and gross margins on sales of our current product line alone. With existing sales and up to ten new product launches anticipated during this fiscal year, Interpharm will be well positioned to sustain its growth and margins.� ABOUT INTERPHARM HOLDINGS INC. Interpharm currently develops, manufactures and distributes generic prescription strength and over-the-counter pharmaceutical products. Interpharm will continue to focus on growing organically through internal product development and leveraging its strength in efficient and cost effective manufacturing. In addition, Interpharm will also continue to seek consummation of mutually beneficial strategic alliances and collaborations. Headquartered on Long Island, New York, Interpharm presently employs nearly 500 people. FORWARD-LOOKING STATEMENTS Statements made in this news release, contain forward-looking statements concerning Interpharm's business and products involving risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. The actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, and additional competition from existing and new competitors, changes in technology, and various other factors beyond Interpharm's control. Other risks inherent in Interpharm's business are set forth in its filings with the SEC, including, but not limited to, its Form 10-K, filed on September 28, 2006. All information in this release is as of November 15, 2006. Interpharm undertakes no duty to update any forward-looking statements to conform the release to actual results or changes in its circumstances or expectations after the date of this release. The financial information stated above and in the tables below has been abstracted from the Company�s Form 10-Q for the quarter ended September 30, 2006, filed with the SEC on November 14, 2006, and should be read in conjunction with the information provided therein. INTERPHARM HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) ASSETS � � Sept. 30, June, 30 � 2006� � 2006� CURRENT ASSETS (Unaudited) Cash $ 11,503� $ 1,438� Accounts receivable, net 14,568� 14,212� Inventories 8,348� 8,706� Prepaid expenses and other current assets 1,451� 1,316� Deferred tax assets � 171� � 1,321� � Total Current Assets 36,041� 26,993� � Land, building and equipment, net 29,998� 29,069� Deferred tax assets 5,042� 4,849� Investment in APR, LLC 1,023� 1,023� Other assets � 570� � 933� � TOTAL ASSETS $ 72,674� $ 62,867� INTERPHARM HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) LIABILITIES AND STOCKHOLDERS� EQUITY � � Sept. 30, June 30, � 2006� � 2006� CURRENT LIABILITIES (Unaudited) Current maturities of long-term debt $ 1,733� $ 1,686� Accounts payable, accrued expenses and other liabilities 13,889� 12,650� Deferred revenue � 232� � 3,399� Total Current Liabilities � 15,854� � 17,735� � OTHER LIABILITIES Long-term debt, less current maturities 13,861� 13,952� Other liabilities � 73� � 125� � Total Other Liabilities � 13,934� � 14,077� � TOTAL LIABILITIES � 29,788� � 31,812� � COMMITMENTS AND CONTINGENCIES � � Series B-1 Redeemable Convertible Preferred Stock: 15 shares authorized; issued and outstanding � 10 at September 30, and June 30, 2006; liquidation preference of $10,000 � 8,155� � 8,225� � � Series C-1 Redeemable Convertible Preferred Stock: 10 shares authorized; issued and outstanding � 10 at September 30, 2006; liquidation preference of $10,000 � 8,352� � --� � STOCKHOLDERS� EQUITY Preferred stocks, 10,000 shares authorized; issued and outstanding � 5,132 and 5,141, respectively; aggregate liquidation preference of $3,588 and $4,291, respectively 51� 51� Common stock, $0.01 par value, 150,000 and 64,819 shares authorized and issued, respectively, at September 30, 2006, and 70,000 and 64,537 shares authorized and issued, respectively, at June 30, 2006. 648� 645� Additional paid-in capital 27,388� 24,196� Stock subscription receivable (33) (90) Accumulated other comprehensive income 111� 98� Accumulated deficit � (1,786) � (2,070) � TOTAL STOCKHOLDERS� EQUITY � 26,379� � 22,830� � TOTAL LIABILITIES AND STOCKHOLDERS� EQUITY $ 72,674� $ 62,867� INTERPHARM HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share data) � Three Months Ended September 30, 2006� 2005� � SALES, Net $22,827� $ 14,547� � COST OF SALES (including related party rent expense of $102 for the three months ended September 30, 2006 and 2005, respectively) 13,850� 10,564� � GROSS PROFIT 8,977� 3,983� � OPERATING EXPENSES Selling, general and administrative 2,637� 2,437� Related party rent 18� 18� Research and development 3,419� 2,146� � TOTAL OPERATING EXPENSES 6,074� 4,601� � OPERATING INCOME (LOSS) 2,903� (618) � OTHER EXPENSE Interest expense, net 287� 91� � INCOME (LOSS) BEFORE INCOME TAXES 2,616� (709) � PROVISION FOR (BENEFIT FROM) INCOME TAXES 986� (262) � NET INCOME (LOSS) 1,630� (447) � Series C-1 preferred stock beneficial conversion feature 1,094� --� Preferred stock dividends 293� 41� � NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 243� $ (488) � EARNINGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS Basic earnings (loss) per share $0.00� $(0.01) Diluted earnings (loss) per share $0.00� $(0.01) � Basic weighted average shares outstanding 64,720� 32,464� Diluted weighted average shares and equivalent shares outstanding 67,857� 32,464� Interpharm Holdings, Inc. (Amex: IPA), a manufacturer and distributor of generic pharmaceutical products, reported record sales of $22.83 million and net income of $1.63 million for the quarter ended September 30, 2006. For the quarter ended September 30, 2005, Interpharm's sales were $14.55 million and it incurred a net loss of ($0.45) million. Interpharm's gross profit percentage for the quarter ended September 30, 2006 was 39.3%, 11.9 percentage points higher than the 27.4% reported for the same quarter in the prior year. The combination of higher sales and higher gross profit percent contributed to an increase of nearly $5.0 million of gross profit dollars. Further details of Interpharm's financial performance for the quarter ended September 30, 2006, are set forth in its quarterly report filed with the SEC on November 14, 2006. Interpharm's research and development efforts continued during the quarter ended September 30, 2006 with expenditures of $3.4 million which Management intends to increase and accelerate during the remainder of fiscal 2007. Interpharm also continued to focus on sales and marketing with the addition of a second national sales manager in order to broaden its customer base and have the ability to support new product launches. On November 3, 2006, a termination and release agreement (the "Termination Agreement") with Watson Pharmaceuticals, Inc. ("Watson") became effective. Pursuant to the Termination Agreement, Interpharm acquired all rights to generic Vicoprofen(R) which had been the subject of a prior manufacturing and marketing agreement with Watson. Interpharm will continue to manufacture generic Vicoprofen(R) as it had in the past, but will market and sell it retaining all sales proceeds. Interpharm believes that the transfer of this product to it provides it with penetration into the scheduled narcotic products market and lays a foundation for future launches in this targeted product line. Cameron Reid, Interpharm's Chief Executive Officer, stated: "Our efforts have returned Interpharm to profitability much earlier than anticipated. Moreover, we achieved significantly increased revenues and gross margins on sales of our current product line alone. With existing sales and up to ten new product launches anticipated during this fiscal year, Interpharm will be well positioned to sustain its growth and margins." ABOUT INTERPHARM HOLDINGS INC. Interpharm currently develops, manufactures and distributes generic prescription strength and over-the-counter pharmaceutical products. Interpharm will continue to focus on growing organically through internal product development and leveraging its strength in efficient and cost effective manufacturing. In addition, Interpharm will also continue to seek consummation of mutually beneficial strategic alliances and collaborations. Headquartered on Long Island, New York, Interpharm presently employs nearly 500 people. FORWARD-LOOKING STATEMENTS Statements made in this news release, contain forward-looking statements concerning Interpharm's business and products involving risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. The actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, and additional competition from existing and new competitors, changes in technology, and various other factors beyond Interpharm's control. Other risks inherent in Interpharm's business are set forth in its filings with the SEC, including, but not limited to, its Form 10-K, filed on September 28, 2006. All information in this release is as of November 15, 2006. Interpharm undertakes no duty to update any forward-looking statements to conform the release to actual results or changes in its circumstances or expectations after the date of this release. The financial information stated above and in the tables below has been abstracted from the Company's Form 10-Q for the quarter ended September 30, 2006, filed with the SEC on November 14, 2006, and should be read in conjunction with the information provided therein. -0- *T INTERPHARM HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) ASSETS ---------------------------------------------------------------------- Sept. 30, June, 30 2006 2006 ------------------- CURRENT ASSETS (Unaudited) --------------------------------------------------- Cash $11,503 $ 1,438 Accounts receivable, net 14,568 14,212 Inventories 8,348 8,706 Prepaid expenses and other current assets 1,451 1,316 Deferred tax assets 171 1,321 ------------------- Total Current Assets 36,041 26,993 Land, building and equipment, net 29,998 29,069 Deferred tax assets 5,042 4,849 Investment in APR, LLC 1,023 1,023 Other assets 570 933 ------------------- TOTAL ASSETS $72,674 $62,867 =================== *T -0- *T INTERPHARM HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) LIABILITIES AND STOCKHOLDERS' EQUITY ---------------------------------------------------------------------- Sept. 30, June 30, 2006 2006 ------------------- CURRENT LIABILITIES (Unaudited) --------------------------------------------------- Current maturities of long-term debt $ 1,733 $ 1,686 Accounts payable, accrued expenses and other liabilities 13,889 12,650 Deferred revenue 232 3,399 ------------------- Total Current Liabilities 15,854 17,735 ------------------- OTHER LIABILITIES --------------------------------------------------- Long-term debt, less current maturities 13,861 13,952 Other liabilities 73 125 ------------------- Total Other Liabilities 13,934 14,077 ------------------- TOTAL LIABILITIES 29,788 31,812 ------------------- COMMITMENTS AND CONTINGENCIES --------------------------------------------------- Series B-1 Redeemable Convertible Preferred Stock: 15 shares authorized; issued and outstanding - 10 at September 30, and June 30, 2006; liquidation preference of $10,000 8,155 8,225 ---------------------------------------------------------------------- Series C-1 Redeemable Convertible Preferred Stock: 10 shares authorized; issued and outstanding - 10 at September 30, 2006; liquidation preference of $10,000 8,352 -- ---------------------------------------------------------------------- STOCKHOLDERS' EQUITY --------------------------------------------------- Preferred stocks, 10,000 shares authorized; issued and outstanding - 5,132 and 5,141, respectively; aggregate liquidation preference of $3,588 and $4,291, respectively 51 51 Common stock, $0.01 par value, 150,000 and 64,819 shares authorized and issued, respectively, at September 30, 2006, and 70,000 and 64,537 shares authorized and issued, respectively, at June 30, 2006. 648 645 Additional paid-in capital 27,388 24,196 Stock subscription receivable (33) (90) Accumulated other comprehensive income 111 98 Accumulated deficit (1,786) (2,070) ------------------- TOTAL STOCKHOLDERS' EQUITY 26,379 22,830 ------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $72,674 $62,867 =================== *T -0- *T INTERPHARM HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share data) Three Months Ended September 30, ---------------- 2006 2005 ---------------- SALES, Net $22,827 $14,547 ------------------------------------------------------ COST OF SALES (including related party rent expense of $102 for the three months ended September 30, 2006 and 2005, respectively) 13,850 10,564 ---------------------------------------------------------------------- GROSS PROFIT 8,977 3,983 ---------------- OPERATING EXPENSES ------------------------------------------------------ Selling, general and administrative 2,637 2,437 Related party rent 18 18 Research and development 3,419 2,146 ---------------- TOTAL OPERATING EXPENSES 6,074 4,601 ---------------- OPERATING INCOME (LOSS) 2,903 (618) OTHER EXPENSE ------------------------------------------------------ Interest expense, net 287 91 ---------------- INCOME (LOSS) BEFORE INCOME TAXES 2,616 (709) PROVISION FOR (BENEFIT FROM) INCOME TAXES 986 (262) ---------------- NET INCOME (LOSS) 1,630 (447) Series C-1 preferred stock beneficial conversion feature 1,094 -- Preferred stock dividends 293 41 ---------------- NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $243 $(488) ================ EARNINGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS ------------------------------------------------------ Basic earnings (loss) per share $0.00 $(0.01) ================ Diluted earnings (loss) per share $0.00 $(0.01) ================ Basic weighted average shares outstanding 64,720 32,464 ================ Diluted weighted average shares and equivalent shares outstanding 67,857 32,464 ================ *T