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Aug 13 2008, 8:00 AM EST

IVAX Diagnostics Reports Second Quarter Results

News source: Business Wire

IVAX Diagnostics, Inc. (AMEX:IVD) reported net revenues of $10,605,000 for the six months ended June 30, 2008, an increase of $538,000, or 5.3%, from net revenues of $10,067,000 for the same period in 2007. Net revenues were $5,363,000 for the second quarter of 2008, an increase of $242,000, or 4.7%, from net revenues of $5,121,000 for the second quarter of 2007. Net income for the six months ended June 30, 2008 was $642,000, compared to net loss of $701,000 for the same period in 2007, while net income for the second quarter of 2008 was $297,000, compared to net loss of $463,000 for the second quarter of 2007.

The $1,343,000 improvement in year-to-date net income and the $760,000 improvement in second quarter net income, compared to the same periods of 2007, were primarily due to reductions in expenses, contributing to higher gross profit and improved operating income. The decreases in expenses in the three and six month periods ended June 30, 2008, compared to the same periods of 2007, were primarily due to management and other personnel reductions which had begun during 2007, the impact of our decision to suspend further development of the PARSEC(R) System, and a bad debt expense recorded in Italy in the second quarter of 2007.

Kevin Clark, acting Chief Executive Officer and Chief Operating Officer of IVAX Diagnostics, said, "We are very excited about achieving profitability for the second consecutive quarter. The progress we are making continues to demonstrate the positive impact of our previously announced plans to contain expenses. With the debut of our promotion of the DSXTM and DS2TM automated instruments from Dynex Technologies, together with the introduction of our proprietary reagent racks for use with the Dynex instruments, at the recent Clinical Lab Expo at the American Association for Clinical Chemistry (AACC), we expect to continue to grow our business by reaching an expanded customer base. Our dedicated team continues to work to improve our company through organic growth and the development of additional strategic business and scientific relationships."

About IVAX Diagnostics, Inc.

IVAX Diagnostics, Inc., headquartered in Miami, Florida, develops, manufactures and markets proprietary diagnostic reagents, instrumentation, and software in the United States and Italy through its three subsidiaries: Diamedix Corporation, Delta Biologicals S.r.l., and ImmunoVision, Inc. Teva Pharmaceutical Industries Limited, through its wholly-owned IVAX Corporation subsidiary, owns approximately 72% of IVAX Diagnostics, Inc.

Except for the historical matters contained herein, statements in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements involve risks and uncertainties that may affect the business and prospects of IVAX Diagnostics, Inc., including, without limitation: that IVAX Diagnostics' efforts to contain expenses may not result in further reductions in expenses; that IVAX Diagnostics may not achieve revenue or income growth; that IVAX Diagnostics may not achieve improved financial performance on a sustained basis, or at all; that IVAX Diagnostics' promotion of the DSXTM and DS2TM automated instruments from Dynex Technologies, together with the introduction of IVAX Diagnostics' proprietary reagent racks for use with the Dynex instruments, may not grow IVAX Diagnostics' business or allow IVAX Diagnostics to reach an expanded customer base; that IVAX Diagnostics may not achieve organic growth; that IVAX Diagnostics may not develop additional strategic business and scientific relationships; that, in the event IVAX Diagnostics develops additional strategic business and scientific relationships, any such relationships may not be successful or otherwise result in improved financial performance for IVAX Diagnostics; that IVAX Diagnostics may not successfully implement the change in its strategic direction to focus on the development of the Mago(R) 4 as a platform for marketing its kits and to place any further development of the PARSEC(R) System on hold indefinitely; and other risks and uncertainties that may cause results to differ materially from those set forth in the forward-looking statements. In addition to the risks and uncertainties set forth above, investors should consider the economic, competitive, governmental, technological and other risks and uncertainties discussed in IVAX Diagnostics' filings with the Securities and Exchange Commission, including, without limitation, the risks and uncertainties discussed under the heading "Risk Factors" in such filings.

IVAX DIAGNOSTICS, INC. RESULTS OF OPERATIONS (Unaudited) Period Ended June 30, Three months Six months 2008 2007 2008 2007 ----------- ----------- ---------- ---------- Net revenues $ 5,363,340 $ 5,121,164 $10,605,196 $10,067,354 Cost of sales 2,137,186 2,141,448 4,161,601 4,099,829 ----------- ----------- ----------- ------------ Gross profit 3,226,154 2,979,716 6,443,595 5,967,525 ----------- ----------- ----------- ------------ Operating expenses: Selling 1,313,443 1,374,017 2,481,195 2,727,433 General and administrative 1,178,313 1,577,284 2,595,963 3,031,918 Research and development 438,988 608,114 888,425 1,080,124 ----------- ----------- ----------- ------------ Total operating expenses 2,930,744 3,559,415 5,965,583 6,839,475 ----------- ----------- ----------- ------------ Income (loss) from operations 295,410 (579,699) 478,012 (871,950) Other income: Interest income 45,004 90,483 139,804 179,466 Other income (expense), net (9,469) 62,579 89,407 63,131 ------------ ----------- ----------- ------------ Total other income, net 35,535 153,062 229,211 242,597 ------------ ----------- ----------- ------------ Income (loss) before income taxes 330,945 (426,637) 707,223 (629,353) Provision for income taxes 33,854 36,094 64,848 71,666 ----------- ----------- ----------- ------------ Net income (loss) $ 297,091 $ (462,731) $ 642,375 $ (701,019) =========== ============ =========== ============ Net income (loss) per share Basic and diluted $ 0.01 $ (0.02) $ 0.02 $ (0.03) ============ ============ =========== ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic 27,649,887 27,649,887 27,649,887 27,649,887 ============ ============ =========== ============ Diluted 27,649,887 27,649,887 27,649,887 27,649,887 ============ ============ =========== ============

IVAX DIAGNOSTICS, INC. CONDENSED BALANCE SHEETS (Unaudited) June 30, December 31, 2008 2007 ------------- ------------- ASSETS ------------------------------------------ Current assets: Cash and cash equivalents $ 3,210,450 $ 3,900,564 Marketable debt securities - 1,925,000 Accounts receivable, net of allowances for doubtful accounts of $1,082,818 in 2008 and $1,052,797 in 2007 7,301,294 6,287,654 Inventories, net 4,392,040 4,013,312 Other current assets 310,700 374,579 ------------- ------------- Total current assets 15,214,484 16,501,109 Property, plant and equipment, net 2,077,653 1,845,292 Marketable securities 3,859,875 4,100,000 Equipment on lease, net 170,748 163,113 Product license 1,242,936 1,242,936 Goodwill, net 870,290 870,290 Other assets 1,121,442 1,045,592 ------------- ------------- Total assets $ 24,557,428 $ 25,768,332 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------------ Current liabilities: Accounts payable $ 774,303 $ 1,217,408 Accrued license payable 157,945 147,184 Accrued expenses and other current liabilities 3,801,081 5,404,372 ------------- ------------- Total current liabilities 4,733,329 6,768,964 ------------- ------------- Other long-term liabilities: Deferred tax liabilities 206,454 174,708 Other long-term liabilities 945,833 850,177 ------------- ------------- Total other long-term liabilities 1,152,287 1,024,885 ------------- ------------- Commitments and contingencies Shareholders' equity: Common stock, $0.01 par value, authorized 50,000,000 shares, issued and outstanding 27,649,887 in 2008 and 2007 276,498 276,498 Capital in excess of par value 40,931,346 40,910,677 Accumulated deficit (22,567,566) (23,209,941) Accumulated other comprehensive income (loss) 31,534 (2,751) ------------- ------------- Total shareholders' equity 18,671,812 17,974,483 ------------- ------------- Total liabilities and shareholders' equity $ 24,557,428 $ 25,768,332 ============= ============= *T

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