BUENA, N.J., July 23, 2015 /PRNewswire/ -- IGI Laboratories, Inc. (NYSE MKT: IG), a New Jersey-based specialty generic pharmaceutical company, announced its financial results for the second quarter ended June 30, 2015.

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Second Quarter 2015 Highlights


    --  Total revenues of $8.9 million in the second quarter of 2015, an
        increase of 37% 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 June 30, 2015 and
        2014 of $6.7 million and $3.4 million, respectively
    --  Gross profit for the three months ended June 30, 2015 equaled 41% as
        compared to 45% in the same period in 2014
    --  IGI filed four Abbreviated New Drug Applications (ANDAs) in the second
        quarter of 2015 with the U.S. Food and Drug Administration (FDA)
    --  Operating loss was $1.9 million in the second quarter of 2015 compared
        to $0.3 million in the same period in 2014, primarily attributable to an
        increase in research and development costs of $1.4 million over the same
        period in 2014
    --  Adjusted EBITDA (as defined and reconciled to GAAP below) for the three
        months ended June 30, 2015 and 2014 was $(1.2) million and $0.1 million,
        respectively
    --  Adjusted net loss per fully diluted share (as defined and reconciled to
        GAAP below) for the three months ended June 30, 2015 and 2014 was $0.04
        and $0.00, respectively

Full Year 2015 Financial Guidance


    --  The Company expects sequential improvement quarter over quarter in total
        revenue for the remainder of the year, and therefore still expects total
        revenue between $35.0 and $40.0 million for the year ended December 31,
        2015.
    --  The Company anticipates sequential improvement in gross margin quarter
        over quarter for the remainder of the year, and therefore expects gross
        margin of 45% to 50% for the year ended December 31, 2015.
    --  The Company intends to submit up to 20 ANDAs with the FDA by the end of
        2015.  In order to complete all of the development work required for the
        2015 filings, the Company continues to expect to spend between $13 and
        $14.5 million in research and development by the end of 2015.
    --  As a result of the expected sequential increase in total revenue in the
        third and fourth quarters of 2015, the Company intends to improve its
        operating margin to approach break even in the fourth quarter of 2015,
        sequentially.

IGI's President and Chief Executive Officer, Jason Grenfell-Gardner, stated, "We are pleased with our steady progress this quarter. On the regulatory front, we received the FDA's final approval for our diclofenac sodium 1.5% topical solution earlier this month. We also added another six ANDA submissions during fiscal 2015, including the submission filed today. While there have been some changes in the econazole market earlier this quarter, we have regained market share for that product again over the last two months." Mr. Grenfell-Gardner continued, "Our long-term vision continues to focus on the creation of a diversified product portfolio, built around our topical, injectable, complex and ophthalmic, or TICO, strategy. During the second quarter, we submitted a Prior Approval Supplement to the FDA for our first injectable product, and we are working hard to target the launch of that product before the end of 2015."

Mr. Grenfell-Gardner concluded, "As of today, we have twenty-eight ANDAs pending with the FDA. Based on May 2015 IMS Health data, the addressable market for our pipeline of such twenty-eight ANDAs is estimated at $1.2 billion. We continue to see positive momentum in our correspondence with the FDA with regard to applications filed after October 1, 2014, or the third year after implementation of the Generic Drug User Fee Amendments of 2012. We are committed to responding effectively to the FDA's accelerated deadlines for applications currently under review, so we plan to submit up to a further fourteen ANDAs with the FDA this year, for a total of up to twenty new topical submissions in 2015."

The Company will hold a conference call today at 4:15 pm ET to discuss 2nd 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 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 do not take into account the impact of capital expenditures on either the liquidity or the financial performance of the Company and likewise omit 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.


                                                              IGI LABORATORIES, INC. AND SUBSIDIARIES

                                                               CONDENSED CONSOLIDATED BALANCE SHEETS

                                                       (in thousands, except share and per share information)



                                                                           June 30, 2015                         December 31,
                                                                            (Unaudited)
                                                                             ----------

                                                                               2014*
                                                                                ----

    ASSETS

    Current assets:

         Cash and cash equivalents                                                             $150,221                        $158,883

         Accounts receivable, net                                                                17,285                          14,366

         Inventories                                                                              4,096                           2,784

         Prepaid expenses and other
          receivables                                                                             1,530                           1,185
                                                                                                  -----                           -----

              Total current assets                                                              173,132                         177,218

    Property, plant and equipment, net                                                            4,300                           3,262

    Product acquisition costs, net                                                               12,061                          10,604

    Debt issuance costs, net                                                                      4,762                           5,132

    Other                                                                                           460                             862
                                                                                                    ---                             ---

              Total assets                                                                     $194,715                        $197,078
                                                                                               ========                        ========


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

         Accounts payable                                                                        $2,589                          $1,643

         Accrued expenses                                                                         4,440                           5,141

         Payable for product acquisition costs                                                    6,000                           6,000

         Other current liabilities                                                                  180                             218
                                                                                                    ---                             ---

              Total current liabilities                                                          13,209                          13,002


    Convertible 3.75% senior notes, net
     of debt discount (face of $143,750)                                                        103,544                         100,311

    Fair value of derivative liability -
     convertible 3.75% senior notes                                                                   -                         41,400

    Note payable, bank                                                                            3,160                           3,160

    Other long term liabilities                                                                     210                              71
                                                                                                    ---                             ---

              Total liabilities                                                                 120,123                         157,944
                                                                                                -------                         -------


    Stockholders' equity:

        Series A Convertible Preferred stock,
         $0.01 par value, 100 shares
         authorized; 0 shares issued and
         outstanding as of June 30, 2015 and
         December 31, 2014, respectively                                                              -                              -

        Series C Convertible Preferred stock,
         $0.01 par value, 1,550 shares
         authorized; 0 shares issued and
         outstanding as of June 30, 2015 and
         December 31, 2014, respectively                                                              -                              -

         Common stock, $0.01 par value,
          100,000,000 and 60,000,000 shares
          authorized; 52,862,453 and
          52,819,787 shares issued and
          outstanding as of June 30, 2015 and
          December 31, 2014, respectively                                                           548                             548

         Additional paid-in capital                                                              97,699                          78,172

         Accumulated deficit                                                                   (23,655)                       (39,586)
                                                                                                -------                         -------

              Total stockholders' equity                                                         74,592                          39,134
                                                                                                 ------                          ------

                 Total liabilities and stockholders'
                  equity                                                                       $194,715                        $197,078
                                                                                               ========                        ========


                                                *Derived from the audited December 31, 2014 financial statements


                                              IGI LABORATORIES, INC. AND SUBSIDIARIES

                                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                       (in thousands, except share and per share information)



                                                            Three months ended June 30,                Six months ended June 30,

                                                                     2015                         2014                     2015        2014
                                                                     ----                         ----                     ----        ----

    Revenues:

         Product sales, net                                        $8,647                       $6,021                  $19,157     $12,520

         Research and
          development income                                          187                          437                      238         750

         Licensing, royalty
          and other revenue                                            59                           25                      169          66
                                                                      ---                          ---                      ---         ---

              Total revenues                                        8,893                        6,483                   19,564      13,336


    Costs and Expenses:

         Cost of revenues                                           5,227                        3,580                   10,270       7,567

         Selling, general and
          administrative
          expenses                                                  2,141                        1,156                    4,041       2,438

         Product development
          and research
          expenses                                                  3,436                        2,028                    6,066       3,393
                                                                    -----                        -----                    -----       -----

              Total costs and
               expenses                                            10,804                        6,764                   20,377      13,398

    Operating income
     (loss)                                                       (1,911)                       (281)                   (813)       (62)


    Other Income (Expense):

         Change in the fair
          value of derivative
          liability                                                14,519                            -                  23,144           -

         Interest and other
          expense, net                                            (3,232)                        (52)                 (6,400)      (104)
                                                                   ------                          ---                   ------        ----

    Income (loss) before
     income tax expense                                             9,376                        (333)                  15,931       (166)


    Income tax expense                                                  -                          12                        -         12
                                                                      ---                         ---                      ---        ---


    Net income (loss)                                              $9,376                       $(345)                 $15,931      $(178)
                                                                   ======                        =====                  =======       =====


       Basic earnings per
        share                                                       $0.18                      ($0.01)                   $0.30       $0.00

       Diluted earnings
        (loss) per share                                          ($0.03)                     ($0.01)                 ($0.02)      $0.00


    Weighted average shares of common stock outstanding:

      Basic                                                    52,861,167                   47,107,094               52,851,587  46,967,688

      Diluted                                                  67,125,905                   47,107,094               67,174,546  46,967,688


                                            IGI LABORATORIES, INC. AND SUBSIDIARIES

                                        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                        For the six months ended June 30, 2015 and 2014

                                                         (in thousands)



                                                     June 30,                           June 30,

                                                                         2015                        2014
                                                                         ----                        ----

    Cash flows from operating activities:

         Net
         income
         (loss)                                                       $15,931                      $(178)

         Non-
         cash
         (income)
         expenses                                                    (18,208)                        944

         Changes
         in
         operating
         assets
         and
         liabilities                                                  (3,445)                    (1,236)
                                                                       ------                      ------


     Net
     cash
     used
     in
     operating
     activities                                                       (5,722)                      (470)


     Net
     cash
     used
     in
     investing
     activities                                                       (2,795)                      (312)


     Net
     cash
     (used
     in)
     provided
     by
     financing
     activities                                                         (145)                        443
                                                                         ----                         ---


     Net
     decrease
     in
     cash
     and
     cash
     equivalents                                                      (8,662)                      (339)

     Cash
     and
     cash
     equivalents
     at
     beginning
     of
     period                                                           158,883                       2,101
                                                                      -------                       -----


     Cash
     and
     cash
     equivalents
     at
     end
     of
     period                                                          $150,221                      $1,762
                                                                     ========                      ======


                       IGI LABORATORIES, INC. AND SUBSIDIARIES

                         RECONCILIATION OF NON-GAAP MEASURES

                                    (in thousands)



                       Three months ended June 30,                 Six months ended June 30,

                                 2015                         2014                       2015    2014
                                 ----                         ----                       ----    ----


    Net income (loss)          $9,376                       $(345)                   $15,931  $(178)


    Depreciation and
     amortization
     expense                      148                          117                        290     235

    Interest expense,
     net                        1,386                           44                      2,770      89

    Non-cash interest
     expense                    1,845                            8                      3,630      16

    Provision for
     income taxes                   -                          12                          -     12
                                  ---                         ---                        ---    ---

    EBITDA                     12,755                        (164)                    22,621     174


    Amortization of
     product
     acquisition costs             30                           30                         60      60

    Stock-based
     compensation
     expense                      528                          260                        906     519

    Change in the fair
     value of
     derivative
     liability               (14,519)                           -                  (23,144)      -
                              -------                          ---                   -------     ---

    Adjusted EBITDA          $(1,206)                        $126                       $443    $753
                              =======                         ====                       ====    ====


                                               IGI LABORATORIES, INC. AND SUBSIDIARIES

                                           RECONCILIATION OF NON-GAAP ADJUSTED NET INCOME

                                       (in thousands, except share and per share information)



                                                            Three months ended June 30,                Six months ended June 30,

                                                                     2015                         2014                      2015       2014
                                                                     ----                         ----                      ----       ----


    Net income (loss)                                              $9,376                       $(345)                  $15,931     $(178)


    Non-cash interest
     expense                                                        1,845                            8                     3,630         16

    Provision for
     income taxes                                                       -                          12                         -        12

    Amortization of
     product
     acquisition costs                                                 30                           30                        60         60

    Non-cash stock-
     based compensation
     expense                                                          528                          260                       906        519

    Change in the fair
     value of
     derivative
     liability                                                   (14,519)                           -                 (23,144)         -
                                                                  -------                          ---                  -------        ---

    Adjusted net Income                                          $(2,740)                       $(35)                 $(2,617)      $429
                                                                  =======                         ====                   =======       ====


    Adjusted net income
     (loss) per diluted
     share                                                        $(0.04)                     $(0.00)                  $(0.04)     $0.01
                                                                   ======                       ======                    ======      =====


    Weighted average shares of common stock outstanding:

      Diluted                                                  67,125,905                   47,107,094                67,174,546 46,967,688


                                      IGI LABORATORIES, INC. AND SUBSIDIARIES

                                              GROSS TO NET CALCULATION

                                                   (in thousands)



                                          Three months ended June 30,              Six months ended June 30,

                                                   2015                       2014               2015           2014
                                                   ----                       ----               ----           ----


    Gross IGI product
     sales                                      $27,861                     $5,770            $50,180        $10,795


    Reduction to gross product sales:

                  Chargebacks and
                   billbacks                     15,576                      1,884             28,088          3,468

                  Sales discounts and
                   other allowances               5,612                        504              7,322          1,001
                                                  -----                        ---              -----          -----

    Total reduction to
     gross product sales                         21,188                      2,388             35,410          4,469


    IGI product sales,
     net                                          6,673                      3,382             14,770          6,326


    Contract
     manufacturing
     product sales                                1,974                      2,639              4,387          6,194
                                                  -----                      -----              -----          -----


    Total product sales                          $8,647                     $6,021            $19,157        $12,520
                                                 ======                     ======            =======        =======

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SOURCE IGI Laboratories, Inc.