Able Laboratories Reports Record Sales of $52.9 million for 2002.

Business Editors

SOUTH PLAINFIELD, N.J.--(BUSINESS WIRE)--March 5, 2003

Able Laboratories, Inc. (Nasdaq:ABRX)(BSE:AAB):

-- Operating Income Increases to Record $10.9 Million From Prior Year Loss

-- Net income increases to $23 Million Due To One-Time Tax Benefit From Net Operating Loss Carryforward

Able Laboratories, Inc. (Nasdaq:ABRX)(BSE:AAB), today announced financial results for the three months ended December 31, 2002, and for the year ended December 31, 2002. For the year ended December 31, 2002, the Company reported diluted earnings per share of $1.44, which includes the one-time, non-recurring net tax benefit from a net operating loss carryforward. Adjusted for this one-time net tax benefit and other non-recurring items, the Company earned $0.63 per diluted share for 2002.

Fourth Quarter 2002 Financial Results

The Company reported net sales of $16,101,638 for the quarter ended December 31, 2002, a slight increase over net sales reported for the third quarter of 2002 of $15,024,914 and a 127.9% increase from sales of $7,066,599 for the quarter ended December 31, 2001.

Gross margins were $7,999,806, or 49.7% of net sales, versus $7,348,151, or 48.9% of net sales, for the third quarter of 2002 and $3,010,248, or 42.6% of net sales, for the fourth quarter of 2001. The Company achieved higher gross margins through manufacturing operating efficiencies and economies of scale, partially offset by a charge of approximately $300,000 to cost of sales relating to a December 2002 product recall.

Operating income for the quarter was $3,347,419, or 20.8% of net sales, versus $3,377,255, or 22.5% of net sales, for third quarter 2002 and operating income of $546,932, or 7.7% of net sales, for the fourth quarter of 2001. This slight decrease from third quarter to fourth quarter was due to increased selling, general and administrative (SG&A) expenses, as well as the product recall charge of $300,000.

SG&A increased to $2,650,274 from $1,755,912 for third quarter 2002 and $1,646,920 for the fourth quarter of 2001. SG&A accounted for 16.5% of net sales for the fourth quarter of 2002, compared with 11.7% of net sales for the third quarter of 2002 and 23.3% of net sales for the fourth quarter of 2001. The increase was primarily due to the Company's recording a provision for bad debt expense of $491,000. In addition, approximately $403,000 of the increase represents higher administrative expenses incurred to support Company growth.

Research and development ("R&D") expenses decreased marginally to $2,002,113 from $2,214,984 for the third quarter of 2002 and increased 145.2%, as compared with $816,396 for the fourth quarter of 2001. The increase over the prior year primarily resulted from additional research and coinciding bio-studies conducted to further develop the Company's product pipeline. R&D expenses accounted for 12.4% of net sales for the fourth quarter versus 14.7% of net sales for the third quarter of 2002 and 11.6% of net sales for the fourth quarter of 2001. The Company received 4 Abbreviated New Drug Application (ANDA) approvals during the fourth quarter of 2002 and currently has 16 ANDAs pending approval by the U.S. Food and Drug Administration (FDA).

Net income applicable to common stockholders, which included a $15.1 million one-time net tax benefit partially offset by a $2.0 million write-off of a note receivable, was $16,274,453, or $0.98 per diluted share, a substantial improvement over the fourth quarter of 2001 net loss of ($2,573,868), or ($0.26) per diluted share, and the third quarter of 2002 net income applicable to common stockholders of $2,885,018, or $0.19 per diluted share.

Excluding the one-time net tax benefit and the write-off, the Company earned $3,251,523, or $0.19 per diluted share, for the fourth quarter of 2002.

Fiscal 2002 Financial Results

For the year ended December 31, 2002, the Company reported net sales of $52,930,121, a 170.1% increase from net sales reported for 2001 of $19,594,231. After adjusting for net sales of $3,067,567 from our former distribution subsidiary, which was sold in February 2001, net sales at the Able facility increased 220.3%.

Gross margins were $25,568,511, or 48.3% of net sales for 2002, versus $7,060,791, or 36.0% of net sales, for 2001. The Company achieved higher gross margins from manufacturing efficiencies and economies of scale, which were partially offset by the $300,000 product recall charge to cost of sales noted above. Excluding the January and February 2001 operations of our former distribution subsidiary, gross margins for 2001 were 41.2% of net sales.

Operating income was $10,869,406, or 20.5% of net sales for 2002, versus a reported loss of ($1,201,120) for 2001 and an adjusted loss for 2001, excluding the operations of our former distribution subsidiary, of ($874,669). The increase in operating income resulted from the Company achieving increased net sales and gross margins, which exceeded the greater selling, general and administrative expenses incurred to support continued Company growth.

SG&A expenses increased to $7,754,153, or 14.6% of net sales, versus $5,909,245, or 30.2% of net sales, for 2001. The increase is primarily due to certain non-cash expenses, additional depreciation and amortization expense and an increase in sales and administrative personnel to support the Company's growth. The reduced percentage is achieved by increased operating efficiencies. Excluding the operations of our former distribution subsidiary, SG&A, as a percentage of net sales for 2001, was 32.2%.

R&D expenses increased to $6,944,952, or 13.1% of net sales for 2002, versus $2,352,666, or 12.0% of net sales, for 2001. The increase for the year is primarily due to additional research and coinciding bio-studies conducted to further develop the Company's product pipeline. During 2002, the Company received 10 ANDA approvals.

For the year ended December 31, 2002, the Company reported net income applicable to common stockholders of $22,964,797, or $1.44 per diluted share, as compared with a net loss of ($13,532,931), or ($1.57) per diluted share, for 2001. Net income for 2002 included a one-time net tax benefit, in the amount of $15,130,000, related to the recognition of a deferred federal tax asset for the carryforward of net operating losses, as well as an approximately $2 million non-recurring charge relating to the writedown in value of a note receivable. Excluding these items, the Company earned $10,309,343, or $0.63 per diluted share, for 2002.

The Company had cash and cash equivalents of $1,801,127 and working capital of $12,075,725 as of December 31, 2002, as compared with cash and cash equivalents of $1,155,266 and working capital of $6,148,610 as of December 31, 2001.

One-Time, Non-Recurring Items

As noted above, net income for fourth quarter and year ended December 31, 2002, includes two material, one-time, non-recurring items:

-- Income Tax Benefit -- As of December 31, 2002, the Company has

a net operating loss carry-forward for federal income tax

purposes. During the fourth quarter 2002, management

determined that it was more likely than not that these

benefits will be realized in future periods prior to

expiration of the carry-forward period. Therefore, Able has

recognized the related deferred tax asset, which resulted in a

one-time federal tax benefit that increased net income by

$15,130,000, or $0.93 per diluted share, for 2002.

Because it recognized these tax benefits during the fourth

quarter of 2002, in future profitable periods the Company

expects to report its net income as if it were fully taxed.

The Company does not, however, expect to pay federal income

taxes until it fully utilizes its net operating loss carry-

forward.

-- Other expenses -- Based upon the financial information

currently available, management has increased its reserve for

the RxBazaar note receivable to cover the full carrying value

of the note. The result is a $1,993,403 charge to income for

2002, or a $0.12 reduction to diluted earnings per share.

The Company has presented certain of its operating results above excluding the effect of these non-recurring items. While recognizing these items comports with generally accepted accounting principles, they each depend in part on factors other than the Company's operations for the quarter and fiscal year ended December 31, 2002. Therefore, management believes that excluding them for comparison purposes produces a meaningful basis for comparing operating results to those that the Company achieved for periods in which such non-recurring items did not occur. Furthermore, the Company has presented certain of its operating results above by excluding the operating results of its former distribution subsidiary, which was sold in February 2001. Management believes that presenting its operating results in this manner, while different from the results achieved by applying generally accepted accounting principles, may provide investors a meaningful alternative basis for comparing results from the Company's ongoing operations among periods.

"We are pleased with Able's financial progress, as we continued to increase net sales and earnings while executing on our strategy during the fourth quarter 2002," commented Jay Wadekar, President and Chief Executive Officer. "Our 2002 results were driven primarily by our ANDA approvals and market penetration into certain key accounts. Our fundamentals and pipeline are strong as we are awaiting approvals on several promising ANDAs. Additionally, we have an aggressive R&D program and we believe 2003 will be an overall up year for the Company. Our continued growth, especially on a quarter-to-quarter basis, will also depend upon the timing of pending ANDA approvals some of which could be first-to-market opportunities. We continue to focus on managing our growth and controlling our costs and look forward to an exciting 2003."

Fourth Quarter 2002 -- Corporate Highlights

-- In October 2002, the Company announced that the FDA approved

two ANDAs for three formulations of Hydrocodone Bitartrate and

Acetaminophen Tablets USP, 7.5mg/325mg, 10mg/325mg and

10mg/650mg. Also, the Company announced that it expanded its

Hydrocodone Bitartrate and Acetaminophen Tablet product line

by receiving FDA approval for Hydrocodone Bitartrate and

Acetaminophen Tablets, USP, 7.5mg/750mg.

-- In October 2002, the Company announced completion of a $4.0

million equipment financing credit facility with Citizens Bank

of Massachusetts, an indirect subsidiary of The Royal Bank of

Scotland. Subsequently, in February 2003, the Company

completed an increase in this facility by adding $1.7 million

to the equipment financing line and closing on a new $4.0

million working capital revolving credit facility.

-- In November 2002, the Company continued to expand its

Hydrocodone Bitartrate and Acetaminophen Tablet product line

with FDA approval of two additional Company ANDAs for

Hydrocodone Bitartrate and Acetaminophen Tablets USP 5mg/500mg

and 10mg/500mg.

-- In November 2002, the Company's Listing Application for Nasdaq

SmallCap market was approved and the Company began trading its

Common Stock on the exchange. Subsequently, in February 2003,

the Company's Listing Application for Nasdaq National Market

was approved and the Company began trading its Common Stock on

the exchange.

-- In December 2002, the Company announced the appointment of

Jerry Treppel to its Board of Directors. Mr. Treppel spent 15

years on Wall Street as an equity analyst focusing on the

specialty pharmaceuticals and generic drugs sectors.

-- In December 2002, the Company announced the appointment of

Robert Weinstein as Vice President and Chief Financial

Officer. Mr. Weinstein has over 20 years of experience as a

Certified Public Accountant, investment banker, financial

consultant and operating officer.

Additional 2002 Highlights

The Company increased its number of full time employees to 285 at December 31, 2002, from 146 at December 31, 2001, or an increase of 95%. This increase is directly attributable to the need to support increasing net sales, manufacturing, research and development, quality and all other supporting activities.

The Company increased its total facilities square footage to approximately 110,000 square feet, in four principal locations in South Plainfield, New Jersey, from its original single 46,000 square foot facility. To equip these facilities, the Company incurred approximately $6.4 million of capital expenditures to increase its production capacity by building additional infrastructure and purchasing additional equipment. These capital expenditures should allow the Company adequate manufacturing capacity for the next 12 to 18 months.

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 Standard Time (7:30 a.m. Pacific Time). To participate in the live call via telephone, please call [phone] or [phone] internationally. A telephone replay will be available for 48 hours following the call by dialing [phone] or [phone] internationally and entering reservation number 8820427.

Individuals interested in listening to the conference call via the Internet may do so by visiting our 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. Since March 2001, Able has received 24 ANDA approvals. 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 operations and growth, the current or expected market size for the Company's products, the adequacy of the Company's manufacturing capacity, the availability of sufficient capital, the success of current or future product offerings, 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 continue to achieve the sales levels necessary to make its operations profitable or that ANDA filings and approvals will be completed and obtained 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 nine months ended September 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             Year Ended
                  ------------------------- --------------------------
                  December 31, December 31, December 31, December 31,
                      2002         2001         2002         2001
                  ------------ ------------ ------------ -------------

Sales, net        $16,101,638   $7,066,599  $52,930,121   $19,594,231
Cost of sales       8,101,832    4,056,351   27,361,610    12,533,440
                  ------------ ------------ ------------ -------------
 Gross profit       7,999,806    3,010,248   25,568,511     7,060,791
                  ------------ ------------ ------------ -------------
Operating
 expenses:
 Selling, general
  and
  administrative    2,650,274    1,646,920    7,754,153     5,909,245
 Research and
  development       2,002,113      816,396    6,944,952     2,352,666
                  ------------ ------------ ------------ -------------
 Total operating
  expenses          4,652,387    2,463,316   14,699,105     8,261,911
                  ------------ ------------ ------------ -------------
 Operating income
  (loss)            3,347,419      546,932   10,869,406    (1,201,120)
                  ------------ ------------ ------------ -------------
Other income
 (expense):
 Interest and
  financing
  expense            (148,403)    (169,823)    (517,723)   (1,077,100)
 Loss on
  investment
  securities       (1,993,403)  (2,680,000)  (1,993,403)   (2,730,000)
 Miscellaneous
  income
  (expense)            52,507      (50,877)     (42,340)      535,313
                  ------------ ------------ ------------ -------------
 Other income
  (expense), net   (2,089,299)  (2,900,700)  (2,553,466)   (3,271,787)
                  ------------ ------------ ------------ -------------
Income (loss)
 before income
 taxes              1,258,120   (2,353,768)   8,315,940    (4,472,907)
Income tax
 benefit           15,130,000           --   15,130,000            --
                  ------------ ------------ ------------ -------------
Net income (loss)  16,388,120   (2,353,768)  23,445,940    (4,472,907)
Less returns to
 preferred
 stockholders:
 Beneficial
  conversion
  features                 --       23,810           --     8,536,886
 Dividends paid
  and accrued         113,667      196,290      481,143       523,138
                  ------------ ------------ ------------ -------------
Net income (loss)
 applicable to
 common
 stockholders     $16,274,453  $(2,573,868) $22,964,797  $(13,532,931)
                  ============ ============ ============ =============

Net income (loss)
 per share:
  Basic                 $1.37       $(0.26)       $1.98        $(1.57)
                  ============ ============ ============ =============
  Diluted               $0.98       $(0.26)       $1.44        $(1.57)
                  ============ ============ ============ =============

Weighted average
 shares
 outstanding:
  Basic            11,838,429    9,767,422   11,587,905     8,629,371
                  ============ ============ ============ =============
  Diluted          16,727,876    9,767,422   16,322,234     8,629,371
                  ============ ============ ============ =============


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

                                ASSETS

                                             December 31, December 31,
                                                 2002         2001
                                             ------------ ------------
Current assets:
Cash and cash equivalents                     $1,801,127   $1,155,266
Accounts receivable, net of allowances of
 $13,054,246 and $8,116,822                    7,873,526    4,646,203
Inventory                                     12,903,939    4,718,909
Prepaid expenses and other current assets        123,104      783,482
                                             ------------ ------------
    Total current assets                      22,701,696   11,303,860
                                             ------------ ------------

Property and equipment, net                    9,932,523    4,495,511
                                             ------------ ------------

Other assets:
Investment in RxBazaar securities                     --    1,040,000
Debt financing costs, net of accumulated
 amortization                                    168,206      182,606
Cash deposits with bond trustee                  517,262      505,095
Deferred income tax asset                     17,640,000           --
Deposits and other assets                        168,414      110,617
                                             ------------ ------------
    Total other assets                        18,493,882    1,838,318
                                             ------------ ------------
                                             $51,128,101  $17,637,689
                                             ============ ============


                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Notes payable and current portion of long-
 term debt                                      $890,000     $586,807
Accounts payable and accrued expenses          9,735,971    4,568,443
                                             ------------ ------------
    Total current liabilities                 10,625,971    5,155,250
Long-term debt, less current portion           5,810,355    2,290,500
Deferred gain on sale of subsidiary                   --    1,296,597
                                             ------------ ------------
    Total liabilities                         16,436,326    8,742,347
                                             ------------ ------------

Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000
 shares authorized, 53,150 shares of Series Q
 in 2002 and 67,910 shares of Series L and Q
 in 2001 (liquidation value $5,315,000 and
 $6,791,000)                                         532          679
Common stock, $.01 par value, 25,000,000
 shares authorized, 12,554,206 and 11,301,976
 shares issued and outstanding                   125,542      113,020
Additional paid-in capital                    82,423,790   80,011,072
Accumulated deficit                          (47,783,489) (71,229,429)
Unearned stock-based compensation                (74,600)          --
                                             ------------ ------------
    Total stockholders' equity                34,691,775    8,895,342
                                             ------------ ------------
                                             $51,128,101  $17,637,689
                                             ============ ============