Able Laboratories Reports 2002 Third Quarter Results; Net Sales Increase 20% Sequentially to $15.0 Million; Net Income Increases 28% Sequentially to $3.0 Million.

Business Editors, Health/Medical Writers

SOUTH PLAINFIELD, N.J.--(BUSINESS WIRE)--Oct. 30, 2002

Company Reports Basic EPS of $0.25

Able Laboratories, Inc. (OTCBB: ABLA) (BSE: AAB) today announced financial results for the three months ended September 30, 2002. For the third quarter of 2002, the Company reported net sales of $15.0 million, a 20% increase from net sales of $12.5 million reported in the 2002-second quarter, primarily due to higher demand for the Company's larger product family.

Third quarter 2002 net income was $3.0 million, an increase of 28% over the 2002-second quarter. The Company reported net income applicable to common stockholders of $2.9 million, or $0.25 per basic share, compared with net income of $2.2 million, or $0.19 per basic share, in the second quarter of 2002. Diluted earnings per share increased to $0.19 per share for the 2002 third quarter compared with $0.15 per share for the 2002-second quarter.

The third quarter 2002 cost of sales was $7.7 million, resulting in gross margins of 49%. This compares favorably with cost of sales of $6.6 million, and 47% gross margins reported in the prior quarter. The slight increase in gross margins is due to increased manufacturing efficiencies realized from higher production volumes.

Research and development expenses increased 30% to $2.2 million in the third quarter of 2002 from $1.7 million in the prior quarter. The increase is primarily due to additional research and coinciding biostudies conducted to develop the Company's product pipeline. In October 2002, the Company received three ANDA approvals and currently has 17 ANDAs pending approval by the FDA.

Selling, general and administrative (SG&A) expenses for the 2002 third quarter decreased to $1,756,000 from $1,803,000 in the prior quarter. SG&A accounted for 12% of net sales, compared with 14% of net sales in the prior quarter. This improvement resulted from increased sales and cost controls.

The Company had cash and cash equivalents of $1.8 million and working capital of $9.0 million as of September 30, 2002.

"We are very pleased with our financial progress as Able Labs continued to increase earnings and execute on our strategy during the third quarter," commented Jay Wadekar, President and Chief Executive Officer of Able Laboratories. "We are focused on managing our growth, controlling our costs and look forward to finishing off the year on a strong note."

Third Quarter 2002 -- Corporate Highlights

-- In July, the Company announced that the U.S. Food and Drug Administration (FDA) approved its Abbreviated New Drug Application (ANDA) for Tramadol Hydrochloride Tablets, 50 mg. Able Laboratories has an ANDA Transfer and Marketing Agreement with IVAX Pharmaceuticals, Inc., a wholly owned subsidiary of IVAX Corporation (AMEX:IVX) (LSE:IVX.L), for this drug.

-- In August, the Company announced the FDA approval of its ANDAs for Acetaminophen and Codeine Phosphate Tablets, USP 300 mg/ 30 mg Acetaminophen and Codeine Phosphate Tablets, USP 300 mg/ 60 mg. These products are equivalent to the Tylenol(R) with Codeine #3 and Tylenol(R) with Codeine #4 of R.W. Johnson.

-- Also during August, the Company announced the following senior management appointments: Konstantin "Kon" Ostaficiuk, Vice President, Sales and Marketing; Hemanshu "Hem" Pandya, Vice President, Corporate Development and Commercial Operations; and Adam Drapczuk III, CPA as Accounting Manager.

Conference Call Information

Able Laboratories has scheduled a conference call and web cast regarding this announcement to be held today, beginning at 10:30 a.m. Eastern Time (7:30 a.m. Pacific Time). To participate in the live call via telephone, please call [phone]. A telephone replay will be available for 48 hours following the call by dialing [phone], and entering reservation number 6392319.

Individuals interested in listening to the conference call via the Internet may do so by visiting the web site www.ablelabs.com. A replay will be available on the web site for 90 days.

Able Laboratories is a developer and manufacturer of generic pharmaceuticals. Further information on Able may be found on the Company's web site, www.ablelabs.com.

Except for historical facts, the statements in this news release, as well as oral statements or other written statements made or to be made by Able Laboratories, Inc., are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. For example, statements about the Company's anticipated growth, operations, capital-raising transactions and financial accounting, the current or expected market size for its products, the success of current or future product offerings, the research and development efforts and the Company's ability to file for and obtain U.S. Food and Drug Administration approvals for future products, are forward-looking statements. Forward-looking statements are merely the Company's current predictions of future events. The statements are inherently uncertain, and actual results could differ materially from the statements made herein. There is no assurance that the Company will achieve the sales levels that will make its operations profitable or that it will complete filings and obtain approvals for additional generic drugs as anticipated. For a description of additional risks, and uncertainties, please refer to the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2001 and its Form 10-Q for the six months ended June 30, 2002. The Company assumes no obligation to update its forward-looking statements to reflect new information and developments.

                        ABLE LABORATORIES, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                              (Unaudited)

                      Three Months Ended         Nine Months Ended
                        September 30,              September 30,
                      2002         2001         2002          2001

Sales, net        $15,024,914   $5,070,600  $36,828,483   $12,527,632
Cost of sales       7,676,763    2,997,511   19,259,778     8,477,089
Gross profit        7,348,151    2,073,089   17,568,705     4,050,543
Operating
 expenses:
Selling, general
 and
 administrative     1,755,912    1,351,523    5,103,879     4,262,325
Research and
 development        2,214,984      527,024    4,942,839     1,536,270
Total operating
 expenses           3,970,896    1,878,547   10,046,718     5,798,595
Operating income
 (loss)             3,377,255      194,542    7,521,987    (1,748,052)
Other income
 (expense):
Interest and
 financing
 expense             (175,088)    (141,447)    (369,320)     (907,277)
Loss on
 investment
 securities                --           --           --       (50,000)
Miscellaneous
 income (expense)    (196,549)     426,504      (94,847)      586,190
Other income
 (expense), net      (371,637)     285,057     (464,167)     (371,087)
Net income (loss)   3,005,618      479,599    7,057,820    (2,119,139)
Less returns to
 preferred
 stockholders:
Beneficial
 conversion
 features                  --    6,552,244           --     8,513,076
Dividends paid
 and accrued          120,600      170,068      367,476       326,848
Net income (loss)
 applicable to
 common
 stockholders      $2,885,018  $(6,242,713)  $6,690,344  $(10,959,063)

Net income (loss)
 per share:
Basic                   $0.25       $(0.71)       $0.58        $(1.36)
Diluted                 $0.19       $(0.71)       $0.44        $(1.36)

Weighted average
 shares
 outstanding:
Basic              11,586,562    8,751,703   11,503,156     8,046,865
Diluted            15,870,836    8,751,703   16,162,339     8,046,865


                        ABLE LABORATORIES, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                              (Unaudited)

                                                September   December
                                                   30,         31,
ASSETS                                            2002        2001

Current assets:
Cash and cash equivalents                      $1,822,911  $1,155,266
Accounts receivable, net of allowances of
 $18,676,326 and $8,116,822                     5,163,215   4,646,203
Inventory                                      12,021,001   4,718,909
Prepaid expenses and other current assets         850,375     783,482
    Total current assets                       19,857,502  11,303,860

Property and equipment, net                     8,147,891   4,495,511

Other assets:
Investment in RxBazaar securities                      --   1,040,000
RxBazaar note receivable                        1,993,403          --
Debt financing costs, net of accumulated
 amortization                                     171,806     182,606
Cash deposits with bond trustee                   548,540     505,095
Deposits and other assets                         195,927     110,617
    Total other assets                          2,909,676   1,838,318
                                              $30,915,069 $17,637,689

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Notes payable and current portion of long-
 term debt                                      $244,000     $586,807
Accounts payable and accrued expenses         10,625,283    4,568,443
    Total current liabilities                 10,869,283    5,155,250
Long-term debt, less current portion           4,060,765    2,290,500
Deferred gain on sale of subsidiary                   --    1,296,597
    Total liabilities                         14,930,048    8,742,347

Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000
 shares authorized, 59,650 shares of Series
 Q in 2002 and 67,910 shares of Series L and
 Q in 2001 (liquidation value $5,965,000 and
 $6,791,000)                                         597          679
Common stock, $.01 par value, 25,000,000
 shares authorized, 11,589,564 and
 11,301,976 shares issued and outstanding        115,896      113,020
Additional paid-in capital                    80,040,137   80,011,072
Accumulated deficit                          (64,171,609) (71,229,429)
    Total stockholders' equity                15,985,021    8,895,342
                                             $30,915,069  $17,637,689


                        ABLE LABORATORIES, INC.
                            QUARTERLY DATA
                              (UNAUDITED)
                 (In thousands, except per share data)

                                                       2002
                                             Third    Second    First
                                            Quarter  Quarter   Quarter

Sales, net                                  $15,025  $12,500   $9,304
Cost of sales                                 7,677    6,568    5,015
    Gross profit                              7,348    5,932    4,289
Selling, general and administrative           1,756    1,803    1,545
Research and development                      2,215    1,708    1,020
    Operating income (loss)                   3,377    2,421    1,724
Loss on investment securities                    --       --       --
Interest and financing expense                 (175)    (114)     (80)
Miscellaneous income (expense)                 (196)      43       59
    Net income (loss)                         3,006    2,350    1,703
Less returns to preferred stockholders         (121)    (120)    (127)
Net income (loss) applicable to common
 stock                                       $2,885   $2,230   $1,576
Net income (loss) per share:
     Basic                                    $0.25    $0.19    $0.14
     Diluted                                  $0.19    $0.15    $0.10
Weighted average shares outstanding:
     Basic                                   11,587   11,524   11,397
     Diluted                                 15,871   16,097   16,414

Operating statistics:
     Quarterly sales growth                      20%      34%      32%
     Gross profit margin                         49%      47%      46%
     Selling, general and administrative         12%      14%      17%
     Research and development                    15%      14%      11%
     Operating income                            22%      19%      19%
Additions to property and equipment          $2,253     $640   $1,318

                                                       2001
                                            Fourth    Third    Second
                                            Quarter  Quarter   Quarter

Sales, net                                   $7,066   $5,071   $3,531
Cost of sales                                 4,056    2,998    2,848
    Gross profit                              3,010    2,073      683
Selling, general and administrative           1,646    1,352    1,093
Research and development                        816      527      570
    Operating income (loss)                     548      194     (980)
Loss on investment securities                (2,680)      --       --
Interest and financing expense                 (170)    (141)    (279)
Miscellaneous income (expense)                  (52)     427      124
    Net income (loss)                        (2,354)     480   (1,135)
Less returns to preferred stockholders         (219)  (6,723)    (291)
Net income (loss) applicable to common
 stock                                      $(2,573) $(6,243) $(1,426)
Net income (loss) per share:
     Basic                                   $(0.26)  $(0.71)  $(0.19)
     Diluted                                 $(0.26)  $(0.71)  $(0.19)
Weighted average shares outstanding:
     Basic                                    9,767    8,752    7,651
     Diluted                                  9,767    8,752    7,651

Operating statistics:
     Quarterly sales growth                      39%      44%     N/M
     Gross profit margin                         43%      41%     19%
     Selling, general and administrative         23%      27%     31%
     Research and development                    12%      10%     16%
     Operating income                             8%       4%    (28)%
Additions to property and equipment            $589     $272    $536