Faulding profitable in 4th quarter due to new drugs introduced; Company has 14 submissions at FDA for approval.

ELIZABETH, N.J.--(BUSINESS WIRE)--Aug. 30, 1996--Faulding Inc. earned $666,000 on sales of $23.6 million in the fiscal fourth quarter ended June 30, compared with a restated loss of $603,000 and restated sales of $16.4 million in the fourth quarter of the 1995 fiscal year.

Richard Moldin, president and chief executive officer of Faulding Inc., stated that the return to profitability was generated by extra sales volume resulting from new product approvals, particularly diclofenac. Faulding Inc.'s financial results have been restated to include the preacquisition results of the businesses acquired on Feb. 29, 1996. After preferred dividends, the per share amount was break-even for the 4th quarter versus a restated loss of 7 cents in the corresponding 1995 period.

For the fiscal year ended June 30, 1996, the company had a restated loss of $5.0 million on restated sales of $75.8 million, compared with a restated loss of $1.6 million on restated sales of $64.9 million in the 1995 fiscal year. Moldin noted that "the restated net loss of $5.0 million for the full year was brought about substantially by the inclusion of $4.1 million in pretax losses from the newly acquired Injectable and Medical Device businesses, of which $3.0 million was incurred prior to the acquisition by Faulding Inc., and $1.9 million of acquisition costs and restructuring expenses incurred during the year."

He added that "at the time of the acquisition of these potentially higher margin new businesses, we were aware that bringing them to profitability would take some time." After preferred dividends, the restated loss was 49 cents a share for fiscal 1996 compared with a restated loss of 25 cents in the prior year.

"For the full year, the ongoing Purepac oral drug line showed a small profit in fiscal 1996 after a loss in fiscal 1995," said Moldin.

"In fiscal 1996, the Company reorganized its management, including the establishment of project development teams to better focus on new drug development and rapid commercialization. We have introduced four new drugs in the past year, compared with only two in the previous year. In addition, we have commenced contract manufacturing of a fifth important new drug, KADIAN(TM)."

Looking forward, Moldin revealed that Faulding presently has 14 product submissions with the Food and Drug Administration, compared with only five submissions on file with the FDA at the same time the prior year. Present expectations are that the company will receive an additional three approvals by the end of the calendar year, each of which has the potential to allow the company to participate at the initial generic market formation.

Faulding Inc. is the former Purepac Inc., a generic drug manufacturer with oral, injectable and medical device products. The company's shares are traded on NASDAQ under the symbol "FAUL." -0-

            Condensed Summary of Operations (Unaudited)
         (Dollars in millions, except per share earnings)

                            Three Months Ended    Twelve Months Ended
                                  June 30,              June 30,
                              1996       1995       1996       1995

Net sales                   $ 23.6     $ 16.4     $ 75.8     $ 64.9
Cost of sales                 16.1       12.5       58.4       49.3
Gross profit                   7.5        3.9       17.4       15.6
Expenses:
 Selling, general and
  administrative               3.7        2.9       11.9       10.2
 Research and development      2.6        2.1       10.3        7.7
 Acquisition expenses           --         --        1.0         --
 Restructuring costs           0.2         --        0.9         --
Total expenses                 6.5        5.0       24.1       17.9
Income (loss)
 from operations               1.0       (1.1)      (6.7)      (2.3)
Other income (expense), net     --       (0.3)       1.0       (0.4)
Income (loss) before
 income taxes                  1.0       (1.4)      (5.7)      (2.7)
Provision (benefit) for
 income taxes                  0.3       (0.8)      (0.7)      (1.1)
Income (loss) before
 preferred stock dividends     0.7       (0.6)      (5.0)      (1.6)
Preferred stock dividends      0.7        0.5        2.3        2.1
Net income (loss), available
 for common stock           $   --     $ (1.1)    $ (7.3)    $ (3.7)

Primary earnings per
 common share (Note 1)
 Net income (loss)          $  .00     $ (.07)    $ (.49)    $ (.25)

Weighted average number
 of common shares
 outstanding (millions)     15.065     15.020     15.039     14.977

Earnings per common share
 assuming full dilution (Note 2)

Note 1: Primary earnings per common share is computed by adjusting
 for the company's preferred stock dividend.
Note 2: Fully diluted earnings per common share is not presented as
 the effect would be anti-dilutive.
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                          Balance Sheets

                                           (Unaudited)
                                    6/30/1996       6/30/1995

Assets:
 Cash and cash equivalents            $  1.9          $  1.2
 Other current assets                   50.2            39.6
 Property, plant and
  equipment, net                        41.5            40.6
 Other assets                            5.1             4.5
  Total assets                      $   98.7        $   85.9

Liabilities and stockholders' equity:
 Current liabilities                $   15.8        $   13.8
 Long term liabilities                    --              --
 Stockholders' equity                   82.9            72.1
  Total liabilities and
   stockholders' equity             $   98.7        $   85.9

CONTACT: Faulding Inc., Elizabeth

Lee Craker, 908/527-9100