Elite Pharmaceuticals, Inc. Reports Financial Results for the Third Quarter of Fiscal 2011

Revenues Up 34% - Operating Profit Achieved

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| Source: Elite Pharmaceuticals, Inc.

NORTHVALE, N.J., Feb. 14, 2011 (GLOBE NEWSWIRE) -- Elite Pharmaceuticals, Inc. (OTCBB:ELTP), a specialty pharmaceutical company dedicated to developing and commercializing oral controlled release product formulations, announced results for the fiscal third quarter ended December 31, 2011.

For the third quarter, consolidated revenues were $1.2 million, an increase of 34% compared with last year's third quarter, with substantially all revenues being derived from the manufacture, sale and lab services related to the Lodrane family of products. 

Profits from operations were $72,931 for the third quarter, as compared to last year's third quarter operating losses of $509,893. This marks the first quarter in which the company has achieved an operating profit and is indicative of results achieved pursuant to the continuing efforts by management to increase manufacturing efficiency and reduce operating costs.

GAAP net income, including non-cash revenues and expenses relating to the accounting treatment of preferred share derivatives and the fair value of warrant derivatives, was $5.9 million. Basic net income was $0.06 per share and fully diluted net income was $0.02 per share.

For the first nine months of fiscal 2011, cash flow from operations was a positive $318,457, compared to a negative operating cash flow of ($1.1 million) for the same period last year.  Approximately $400,000 of cash has been invested in the purchases, previously announced, of three approved ANDA's, and in the continued expansion and improvement of Elite's manufacturing facilities. Total net cash flow for the first three quarters, inclusive of cash from operations and cash used in investing and financing activities was a negative $162,993. Our cash balance as of December 31, 2010 was $415,194.

The company is currently in discussions to license its once daily oxycodone product, ELI-154, to a European marketing partner and is progressing towards scale-up in the development of its abuse-resistant formulation of oxycodone, ELI-216.

The Company will host a conference call to discuss the results of operations and provide an update on recent business developments today at 10:00 AM EST. Company executives will also conduct a question and answer session following their remarks.

To access the conference call:

Domestic callers: (800) 346-7359
International callers: (973) 528-0008
Conference Entry Code: 98840

A digital telephone replay will be available approximately one hour after the conclusion of the call for two weeks until February 28, 2011 by dialing:

Domestic callers: (800) 332-6854
International callers: (973) 528-0005
Conference entry code: 98840

Financial Statements

ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
    December 31, 2010 March 31, 2010
    (Unaudited) (Audited)
CURRENT ASSETS      
Cash and cash equivalents   $415,194 $578,187
Accounts receivable, (net of allowance for doubtful accounts of zero)   626,242 404,961
Inventories (net of allowance of $494,425 and $ 494,425, respectively)   1,302,142 1,371,292
Prepaid expenses and other current assets   55,268 131,507
       
Total current assets   2,398,846 2,485,947
       
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $3,954,837 and $3,840,279, respectively   3,945,845 4,095,814
       
INTANGIBLE ASSETS – net of accumulated amortization of zero   562,681 96,407
       
OTHER ASSETS      
Investment in Novel Laboratories Inc.   3,329,322 3,329,322
Security deposits   28,377 14,652
Restricted cash – debt service for EDA bonds   346,300 294,836
EDA Bond offering costs, net of accumulated amortization of $74,365 and $64,767, respectively   279,086 289,685
       
Total other assets   3,983,085 3,928,495
       
TOTAL ASSETS   $10,890,457 $10,606,663
       
       
LIABILITIES AND STOCKHOLDERS (DEFICIT) 
    December 31, 2010 March 31, 2010
    (Unaudited) (Audited)
CURRENT LIABILITIES      
EDA Bonds payable   $3,385,000 $3,385,000
Short term loans and current portion of long-term debt   12,614 82,302
Accounts payable and accrued expenses   1,215,169 986,777
Customer deposits   39,400 ---
Deferred revenues – current   13,333 ---
Preferred share derivative interest payable   385,559 306,440
       
Total Current Liabilities   5,051,075 4,760,519
       
LONG TERM LIABILITIES      
Deferred Revenues   182,223 ---
Long-term debt, less current portion   75,801 19,823
Derivative Liability – Preferred Shares   8,439,304 7,924,763
Derivative Liability – Warrants   3,710,930 8,499,423
       
Total Long-Term Liabilities   12,408,258 16,444,009
       
Total Liabilities   17,459,333 21,204,528
       
COMMITMENTS AND CONTINGENCIES:      
       
STOCKHOLDERS (DEFICIT)       
       
Common Stock – par value of $0.001, Authorized 355,516,558      
Issued and outstanding – 97,520,813 shares and 83,950,168 shares, as of Sept. 30 and March 31, 2010, respectively   97,521 83,950
       
Additional paid-in capital   91,896,273 90,903,896
       
Accumulated deficit   (98,255,829) (101,278,870)
       
Treasury stock, at cost (100,000 common shares)   (306,841) (306,841)
       
Total Stockholders (Deficit)    (6,568,876) (10,597,865)
       
TOTAL LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY   $10,890,457 $10,606,663
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES      
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS      
     
    Three Months Ended
    December 31, 
    2010 2009
    (unaudited) (unaudited)
REVENUES:      
Manufacturing Revenues   $901,653 $744,948
Lab Fee Revenues   92,902 ---
Royalties   231,742 172,435
Total Revenues   1,226,297 917,383
       
Cost of Revenues    641,524 609,416
Gross Profit   584,773 307,967
       
OPERATING EXPENSES      
Research and Development   179,525 247,773
General and Administrative   315,537 498,884
Non-cash compensation through issuance of stock options and warrants   7,580 28,488
Depreciation and amortization   9,200 39,715
Total Operating Expenses   511,842 814,860
       
INCOME / (LOSS) FROM OPERATIONS   72,931 (509,893)
       
OTHER INCOME / (EXPENSES):      
Interest expense   (58,059) (67,342)
Change in fair value of outstanding warrant derivatives   2,064,745 (5,086,610)
Change in fair value of preferred share derivatives   4,156,097 (3,325,418)
Interest expense attributable to dividends accrued to preferred share derivative liabilities   (306,440) (350,010)
Discount in Series E issuance attributable to beneficial conversion features   --- (254,212)
Total Other Income / (Expense)   5,856,343 (9,083,592)
       
INCOME / (LOSS) BEFORE PROVISION FOR INCOME TAXES   5,929,274 (9,590,485)
       
Provision for Income Taxes   1,062 ---
       
NET INCOME / (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS    $ 5,928,212  $ (9,590,485)
       
NET INCOME / (LOSS) PER SHARE      
BASIC    $ 0.06 ($0.12)
DILUTED    $ 0.02 ($0.12)
       
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDINGS      
BASIC   96,873,523 78,620,207
DILUTED   307,839,425 78,620,207

About Elite Pharmaceuticals, Inc.

Elite Pharmaceuticals, Inc. is a specialty pharmaceutical company that develops and manufactures oral, controlled-release products using proprietary technology. Elite's strategy includes the development of life cycle management products to lengthen the franchise life of drug products facing patent expiration, the development of controlled-release formulations of existing products to improve their clinical profile, the development of abuse-resistant opioids to mitigate misuse of these drugs, and the development of generic versions of controlled-release brand drug products with high barriers to entry.  Elite developed and manufactures for its partner, ECR Pharmaceuticals, Lodrane 24® and Lodrane 24D®, a non-sedating antihistamine for the treatment of allergy symptoms. The company recently purchased, and expects to soon launch three approved generic products. In addition, Elite has a pipeline of additional generic and branded drug candidates under active development. Two of the branded products under active development are ELI-216, an abuse resistant oxycodone product, and ELI-154, a once-a-day oxycodone product. Elite conducts research, development and manufacturing in its facility in Northvale, New Jersey.

The Elite Pharmaceuticals, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8737

This news release contains forward-looking statements, including those related to the preliminary nature of the clinical program results and the potential for further product development, that involve known and unknown risks, delays, uncertainties and other factors not under the control of Elite, which may cause actual results, performance or achievements of the companies to be materially different from the results, performance or other expectations implied by these forward-looking statements. In particular, because substantial future testing will be required prior to approval, the results described above may not be supported by additional data or by the results of subsequent trials. These risks and other factors, including the timing or results of pending and future clinical trials, regulatory reviews and approvals by the Food and Drug Administration and other regulatory authorities, and intellectual property protections and defenses, are discussed in Elite's filings with the Securities and Exchange Commission such as the 10K, 10Q and 8K reports. Elite undertakes no obligation to update any forward-looking statements.

For Elite Pharmaceuticals, Inc.
Dianne Will, Investor Relations, 518-398-6222

www.elitepharma.com