Impax Laboratories Announces Reduction in Workforce

  Impax Laboratories Announces Reduction in Workforce

Business Wire

HAYWARD, Calif. -- June 5, 2013

Impax Laboratories, Inc. (NASDAQ: IPXL) today announced a reduction in its
workforce as a part of the Company’s efforts to streamline its operations in
response to the need to reduce expenses and adapt to changing market
conditions. The reduction primarily affected manufacturing operations and is
intended to reduce Impax’s cost structure and scale the organization
appropriately for its current needs.

The action resulted in a reduction of approximately 110 positions, with the
majority at the Hayward, California manufacturing facility.

"This reduction in our workforce was a difficult decision, but necessary to
position Impax for a brighter future. We recognize that our plans will have a
significant impact on many of our dedicated colleagues. We remain grateful for
their significant contributions and commitment over the years and have
established severance and outplacement assistance for those employees affected
by this action," said Dr. Larry Hsu, Impax Laboratories president and chief
executive officer.

Dr. Hsu continued, "We remain committed to advancing our generic and brand
business pipelines and growth strategy. To succeed, we must decrease our costs
while efficiently advancing our strategic growth priorities in both our
generic and brand businesses. These steps ensure the availability of
sufficient investment capital to fund these priorities.”

The reductions became necessary as a result of lower production volumes at the
Hayward facility due to the transfer of products to the Company’s more cost
efficient Taiwan plant, previously announced product discontinuances and
delayed product launches. The Company expects the reduction in both personnel
and other variable expenses, including the product discontinuances, to yield
an annual cost savings of approximately $15.0 million. The Company expects the
total savings within cost of goods sold in 2013 from these actions to be
approximately $10.0 million.

The Company will also reduce its contracted brand sales force from 84 to 64
positions, as well as four regional sales management positions. This
short-term action is due to the delay in approval for RYTARY^TM and is
expected to result in a reduction of the Company’s selling expenses of
approximately $2.0 million in 2013. The Company remains committed to receiving
RYTARY approval and expects to expand its sales force to the appropriate level
following regulatory approval of RYTARY.

The Company expects the reduction in workforce to result in a charge of
approximately $2.4 million in the second quarter 2013.

The expected savings in cost of goods sold and selling expenses in 2013 have
no impact on the Company’s 2013 financial guidance for gross margin as a
percentage of revenues and SG&A expenses (selling, general and administrative)
that was updated on May 1, 2013.

About Impax Laboratories, Inc.

Impax Laboratories, Inc. (Impax) is a technology based specialty
pharmaceutical company applying its formulation expertise and drug delivery
technology to the development of controlled-release and specialty generics in
addition to the development of central nervous system disorder branded
products. Impax markets its generic products through its Global
Pharmaceuticals division and markets its branded products through the Impax
Pharmaceuticals division. Additionally, where strategically appropriate, Impax
develops marketing partnerships to fully leverage its technology platform and
pursues partnership opportunities that offer alternative dosage form
technologies, such as injectables, nasal sprays, inhalers, patches, creams and
ointments. For more information, please visit the Company's Web site at:

“Safe Harbor” statement under the Private Securities Litigation Reform Act of

To the extent any statements made in this news release contain information
that is not historical, these statements are forward-looking in nature and
express the beliefs and expectations of management. Such statements are based
on current expectations and involve a number of known and unknown risks and
uncertainties that could cause the Company’s future results, performance or
achievements to differ significantly from the results, performance or
achievements expressed or implied by such forward-looking statements. Such
risks and uncertainties include, but are not limited to, the effect of current
economic conditions on the Company’s industry, business, financial position
and results of operations, fluctuations in revenues and operating income, the
Company’s ability to promptly correct the issues raised in the warning letter
and Form 483 observations received from the FDA, the Company’s ability to
successfully develop and commercialize pharmaceutical products in a timely
manner, reductions or loss of business with any significant customer, the
impact of consolidation of the Company’s customer base, the impact of
competition, the Company’s ability to sustain profitability and positive cash
flows, any delays or unanticipated expenses in connection with the operation
of the Company’s Taiwan facility, the effect of foreign economic, political,
legal and other risks on the Company’s operations abroad, the uncertainty of
patent litigation, the increased government scrutiny on the Company’s
agreements with brand pharmaceutical companies, consumer acceptance and demand
for new pharmaceutical products, the impact of market perceptions of the
Company and the safety and quality of the Company’s products, the difficulty
of predicting FDA filings and approvals, the Company’s ability to achieve
returns on its investments in research and development activities, the
Company’s inexperience in conducting clinical trials and submitting new drug
applications, the Company’s ability to successfully conduct clinical trials,
the Company’s reliance on third parties to conduct clinical trials and
testing, impact of illegal distribution and sale by third parties of
counterfeits or stolen products, the availability of raw materials and impact
of interruptions in the Company’s supply chain, the use of controlled
substances in the Company’s products, disruptions or failures in the Company’s
information technology systems and network infrastructure, the Company’s
reliance on alliance and collaboration agreements, the Company’s dependence on
certain employees, the Company’s ability to comply with legal and regulatory
requirements governing the healthcare industry, the regulatory environment,
the Company’s ability to protect its intellectual property, exposure to
product liability claims, changes in tax regulations, the Company’s ability to
manage growth, including through potential acquisitions, the restrictions
imposed by the Company’s credit facility, uncertainties involved in the
preparation of the Company’s financial statements, the Company’s ability to
maintain an effective system of internal control over financial reporting, the
effect of terrorist attacks on the Company’s business, the location of the
Company’s manufacturing and research and development facilities near
earthquake fault lines andother risks described in the Company’s periodic
reports filed with the Securities and Exchange Commission.Forward-looking
statements speak only as to the date on which they are made, and the Company
undertakes no obligation to update publicly or revise any forward-looking
statement, regardless of whether new information becomes available, future
developments occur or otherwise.


Impax Laboratories, Inc.
Mark Donohue, 215-558-4526
Investor Relations and Corporate Communications
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