Inyx Reports Third-Quarter Operating Results

NEW YORK, Dec. 4  /PRNewswire-FirstCall/ -- Inyx, Inc. (OTC:IYXI) (BULLETIN BOARD: IYXI) , a specialty pharmaceutical company focused on niche drug delivery technologies and products, reported today operating results for the third quarter and nine months ended September 30, 2006.

For the third quarter of 2006, Inyx's revenues reached $18.0 million, up 39.5% from the $12.9 million reported for the comparable quarter in 2005.  The company incurred an increased net loss in the 2006 quarter of $9.7 million, or $0.19 per share, compared with a net loss of $4.9 million, or $0.12 a share, in the year-earlier period.  The 2006 net loss includes approximately $2.0 million in non-cash depreciation and amortization charges as well as $2.3 million in one-time cash expenses related to pending acquisitions.

For the first nine months of 2006, revenues totaled $59.6 million, more than double the $24 million reported for the year-ago period.  The net loss in the 2006 nine months totaled $22.2 million, or $0.45 per share, compared to a net loss of $16 million, or $0.41 a share, in the corresponding period last year.  The 2006 net loss includes approximately $6.0 million in non-cash depreciation and amortization charges as well as $5.3 million in one-time expenses related to pending acquisitions.

Detailed financials are presented in the company's Form 10-Q filed with the SEC, which can be downloaded from Inyx's website.

Inyx's increase in year-over-year revenues and solid gross margin are the result of the larger scope of its businesses this year with the addition of Ashton Pharmaceuticals in the United Kingdom and the company's new Exaeris marketing subsidiary.  The increase in net operating losses incurred this year is due largely to higher fixed operating expenses from the Exaeris and Inyx USA operations and a lack of sufficient growth in revenues at those units to adequately absorb their overheads.

The growth in revenues during the first nine months was not as strong as the company had expected because certain business has been delayed due to additional regulatory documentation and testing procedures that several of its clients have to complete before commercialization or transfer of their products to Inyx's sites can commence; this business is now expected to start up in the fourth quarter and early 2007.  Moreover, two pending acquisitions, which the company originally expected to complete in the 2006 second half, have been delayed, Inyx said.

Revised Financial Guidance

On November 24, 2006, Inyx reported revised guidance for 2006.  The company said it now expects revenues for the year to total approximately $85 million, up from $49.6 million in 2005, with net losses for 2006, based on two pending acquisitions now not being completed this year.

Inyx has a definitive agreement to acquire Pharmapac UK Ltd., one of the leading contract pharmaceutical production and packaging providers in the United Kingdom.  This acquisition is now expected to be completed on January 4, 2007.  Pharmapac expects revenues to be in excess of 7.3 million pounds Sterling ($13.9 million) with EBITDA exceeding 1.5 million pounds ($2.9 million) for 2006.

Inyx also has a pending acquisition of a German pharmaceutical production business.  Inyx is reviewing this acquisition because of a recent disclosure that significantly reduces the mid-term operating results for the German site and, consequently, Inyx is uncertain now if this transaction will be consummated.

Going-Private Consideration

As previously reported, on November 20, 2006, Inyx said that a group comprised of Inyx senior management and strategic outside investors approached the company's board of directors about taking the company private.  The Inyx board has formed a special committee comprised of three independent directors, which will evaluate any specific proposal.  The committee will retain an independent investment-banking firm to review the fairness of any proposed offer made by the group.  The group, which includes Jack Kachkar, M.D., Chairman & CEO of Inyx, and Steve Handley, President of Inyx, said that it intends to make an offer that "it believes will be in the best interests of all Inyx shareholders."  Dr. Kachkar informed the special committee that he will work to secure new debt financing for Inyx before the group tries to finalize financing for any going-private offer.

As previously reported, on November 21, 2006, Inyx informed Westernbank Puerto Rico it intended to pay off the loan amounts owed to Westernbank by December 31, 2006; this debt now totals approximately $120 million and Dr. Kachkar has pledged a personal guarantee against a portion of that amount.

About Inyx

Inyx, Inc. is a specialty pharmaceutical company with niche drug delivery technologies and products for the treatment of respiratory, allergy, dermatological, topical and cardiovascular conditions.  Inyx focuses its expertise on both prescription and over-the-counter pharmaceutical products and provides specialty pharmaceutical development and production consulting services.  In addition, Inyx is developing its own proprietary products.  The company's operations are conducted through several wholly owned subsidiaries: Inyx USA, Ltd., based in Manati, Puerto Rico; Inyx Pharma Ltd. and Inyx Europe Limited, which owns and operates Ashton Pharmaceuticals Ltd., all near Manchester, England; Inyx Canada, Inc. in Toronto; and Exaeris, Inc., based in Exton, Pennsylvania.  Inyx, Inc.'s corporate offices are in New York City. For more information, please visit: http://www.inyxgroup.com/.

Safe Harbor

Statements about Inyx's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created by these regulations.  Since these statements involve risks and uncertainties and are subject to change at any time, the Company's actual results could differ materially from expected results.

  For more information, please contact:
  Jay M. Green, Executive VP, 212-838-1111  
  Bill Kelly, VP, Investor Relations, 212-838-1111  


                                INYX, INC.
                  Consolidated Statements of Operations

                  (in thousands, except per share data)


                              For the Three Months     For the Nine Months
                               Ended September 30,      Ended September 30,
                               2006         2005         2006         2005
                                  (Unaudited)               (Unaudited)

  Net revenues               $18,006      $12,908      $59,560      $24,086
  Cost of sales               10,593        7,837       36,231       16,236
    Gross profit               7,413        5,071       23,329        7,850

  Operating expenses:
    Research and
     development                 667          929        1,834        1,876
    General and
     administrative           10,420        5,813       25,681       12,239
    Selling                    1,310          181        4,584          355
    Depreciation               1,603          903        4,655        1,619
    Amortization of
     intangible assets           448          436        1,327          845
  Total operating
   expenses                   14,448        8,262       38,081       16,934

  Loss from operations
   before interest and
   financing costs,
   provision for
   income taxes and
   extraordinary gain         (7,035)      (3,191)     (14,752)      (9,084)

  Interest and financing
   costs                       2,708        1,750        7,428        7,896

  Net loss before
   provision for income
   taxes and
   extraordinary gain         (9,743)      (4,941)     (22,180)     (16,980)

  Provision for income
   taxes                           -            -            -            -

  Net loss before
   extraordinary gain         (9,743)      (4,941)     (22,180)     (16,980)

  Extraordinary gain,
   net of taxes                    -            -            -          917

  Net loss                   $(9,743)     $(4,941)    $(22,180)   $ (16,063)

  Basic and fully
   diluted loss per
   share before
   extraordinary gain         $(0.19)      $(0.12)      $(0.45)      $(0.43)
  Basic and fully
   diluted income
   from extraordinary
   gain                            -            -            -         0.02
  Basic and fully
   diluted loss per
   share                      $(0.19)      $(0.12)      $(0.45)      $(0.41)

  Weighted-average
   number of shares
   used in computing
   basic and fully
   diluted loss per
   share                  51,985,114   39,985,613   49,127,327   39,428,431



                                INYX, INC.
                       Consolidated Balance Sheets
                  (in thousands, except per share data)

                                                  September       December
                                                   30, 2006       31, 2005
                                                 (Unaudited)
                         Assets

  Current assets:
    Cash and cash equivalents                       $1,518         $1,023
    Accounts receivable, net                        22,790         19,782
    Inventories, net                                12,117         11,331
    Prepaid expenses and other current assets        3,262          2,589
      Total current assets                          39,687         34,725

  Property, plant and equipment, net                41,528         40,781
  Deferred financing costs, net                      1,363          1,434
  Deferred costs and deposits                        5,318            431
  Advances for investment                            5,603              -
  Deposits for acquisition of office building        2,226              -
  Intangible assets, net                            18,769         14,782
                                                    74,807         57,428

      Total assets                                $114,494        $92,153

          Liabilities and Stockholders' Deficiency
  Current liabilities:
    Borrowings under lines of credit               $58,778        $30,011
    Term loans - current portion                    49,366          9,288
    Accounts payable                                13,966         11,691
    Accrued expenses                                12,218          9,557
    Deferred tax liability                           1,948          1,858
    Deferred revenues                                5,865              -
    Seller financing                                11,216         14,014
        Total current liabilities                  153,357         76,419
      Term loans, net of current portion                 -         46,134
        Total liabilities                          153,357        122,553

  Commitments and contingencies

  Stockholders' deficiency:
    Preferred stock - $0.001 par value,
     10,000,000 shares authorized - none
     issued and outstanding                              -              -
    Common stock - $0.001 par value,
     150,000,000 shares authorized -
     52,496,189 shares issued and
     outstanding at September 30, 2006,
     net of 610,461 shares of treasury
     stock; 43,389,922 shares issued
     and outstanding at December 31,
     2005, net of 209,732 shares of
     treasury stock                                     52             43
    Additional paid-in capital                      43,479         33,315
    Accumulated deficit                            (83,523)       (61,343)
    Subscriptions receivable                          (293)          (293)
    Accumulated other comprehensive income
     (loss) - foreign currency translation
     adjustment                                      1,422         (2,122)
      Total stockholders' deficiency               (38,863)       (30,400)
      Total liabilities and stockholders'
       deficiency                                 $114,494        $92,153


DATASOURCE: Inyx, Inc.



CONTACT:  Jay M. Green, Executive VP, [phone],

, or Bill Kelly, VP, Investor Relations, [phone],

 



Web site:  http://www.inyxinc.com/ 

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