Encorium Reports First Quarter 2009 Financial Results

Net Loss Significantly Reduced to $195,220 in First Quarter on Cost Cutting

WAYNE, Pa., May 19 /PRNewswire-FirstCall/ -- Encorium Group, Inc. (Nasdaq:
ENCO), a full service multinational contract research organization (CRO) that
provides design, development, and management capabilities for clinical trials
and patient registries to many of the world's leading pharmaceutical
companies, today announced its financial results for the first quarter ended
March 31, 2009.

Net revenue for the first quarter of 2009 was $7.0 million, a decrease of 6.1%
from $7.5 million for the first quarter of 2008. The decrease in net revenues
was primarily due to an $800,000 decrease in revenues generated by our
European operations of which approximately $668,000 was related to unfavorable
foreign currency fluctuations for the three months ended March 31, 2009
compared with the same prior year period. The Company's U.S. operations saw a
$340,000 increase in net revenues during the quarter primarily due to a delay
in recognizing revenue on a legacy project and additional revenue resulting
from a significant increase in contract value for an ongoing clinical study
that was signed during the first quarter of 2009. The Company had a
consolidated backlog at March 31, 2009 of $31.2 million which included
approximately $3.5 million of new business wins in the first quarter of 2009
compared to a backlog of $34.4 million at December 31, 2008 and $40.0 million
at March 31, 2008.

Direct expenses for the first quarter of 2009 were $4.4 million, or 62.2% of
net revenues, compared to $5.5 million, or 74.0% of net revenues, for the
comparable prior year period. While the decrease in direct expenses was
partially the result of approximately $440,000 of favorable foreign currency
fluctuations absorbed by the Company's European operations in the first
quarter of 2009, direct expenses also decreased as a result of reductions in
staff and subcontractors utilized on active clinical studies being conducted
in the U.S. and Europe.

Selling, general, and administrative expenses (SG&A) decreased by 23.2% to
$2.7 million, or 38.0% of net revenue, for the three months ended March 31,
2009, compared to $3.5 million, or 46.4% of net revenue, for the three months
ended March 31, 2008. The decrease in SG&A resulted primarily from staff
reductions and reductions in overhead expenses in the Company's U.S.
operations.

Depreciation and amortization expense decreased by 70.4% to $190,929 for the
three months ended March 31, 2009 from $645,277 for the three months ended
March 31, 2008 primarily as a result of certain intangible assets acquired as
part of the Remedium acquisition being fully amortized.

The Company reported a significant reduction in its net loss for the first
quarter of 2009 to $195,220, or $(0.01) per diluted share, from a net loss of
$2.0 million, or $(0.10) per diluted share in the first quarter of 2008.

Encorium has entered into two letters of intent ("LOI") with respect to the
sale of the assets used to conduct its U.S. operations and for the sale of its
wholly owned European subsidiary, Encorium Oy.

Dr. David Ginsberg, Encorium Group's Chief Executive Officer, commented, "We
are very pleased with the results of our cost cutting efforts, which
significantly reduced our direct expenses and SG&A to better align our costs
to our current book of business. We have entered into two separate LOIs to
sell the assets used in the U.S. Operations and the European Operations, which
we believe will maximize stockholder value and are in the best interest of our
stockholders, customers and employees."

Financial Position
Encorium's balance sheet at March 31, 2009 reflected cash and cash equivalents
of $2.3 million and stockholders' equity of $3.6 million. The Company has no
outstanding debt. The Company's latest financials have been prepared on a
going concern basis. As previously disclosed, Encorium's independent
registered public accounting firm reported that the Company's audited
consolidated financial statements for the fiscal year ended December 31, 2008,
included in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on April 27, 2009, contains a paragraph that indicates
that, while the Company's financial statements have been prepared on a going
concern basis, there is substantial doubt about its ability to continue as a
going concern, and that no adjustments have been made to the financial
statements that might result from the outcome of this uncertainty.

In the event the sales described above are not consummated, the Company
anticipates it will be able to meet its cash requirements at least into the
first quarter of 2010 assuming it is able to fully implement its cost cutting
initiatives, win additional contracts during fiscal 2009 and maintain current
customer contracts. If the Company is unable to fully implement its cost
cutting initiatives, win additional contracts during fiscal 2009 and maintain
current customer contracts, it will need additional capital, which it may not
be able to raise on terms acceptable to it or at all, and may need to
significantly reduce operating costs, which may include the cessation of
operations in some countries.

About Encorium Group, Inc.
Encorium Group, Inc. is a global clinical research organization specializing
in the design and management of complex clinical trials and Patient Registries
for the pharmaceutical, biotechnology and medical device industries. The
Company's mission is to provide its clients with high quality, full-service
support for their biopharmaceutical and medical device development programs.
Encorium offers therapeutic expertise, experienced team management and
advanced technologies. The Company has drug and biologics development as well
as clinical trial experience across a wide variety of therapeutic areas such
as infectious diseases, cardiovascular, vaccines, oncology, diabetes
endocrinology/metabolism, gene therapy, immunology, neurology,
gastroenterology, dermatology, hepatology, women's health and respiratory
medicine. Encorium believes that its expertise in the design of complex
clinical trials, its therapeutic experience and commitment to excellence, and
its application of innovative technologies, offer its clients a means to more
quickly and cost effectively move products through the clinical development
process. Encorium is headquartered in Wayne, Pennsylvania with its European
base of operations in Espoo, Finland. The Company has a geographic footprint
that includes over one billion people in North America,
Western/Central/Eastern Europe, Scandinavia, and the Baltics.

This press release contains forward-looking statements identified by words
such as "estimate," "project," "expect," "intend," "believe," "anticipate" and
similar expressions regarding the potential sale of the U.S. business and
Encorium Oy and our expectations regarding the effects of such transactions.
Those statements involve risks and uncertainties, and actual results could
differ materially from those discussed. Factors that could cause or
contribute to such differences include, but are not limited to: (i) the timing
of the closing, if any, of the transactions; (ii) the completion to the
purchasers' satisfaction of due diligence; (iii) the acquisition by us of a
fairness opinion relating to the purchase price for the sale of Encorium Oy;
(iv) our ability to negotiate definitive agreements with the Purchasers; (v)
the possibility that the transactions may not close; and (vi) the risk that
any distributions to stockholders in connection with the transactions will not
result in a premium to the current stock price.

Additional risks and uncertainties that could affect the Company's future
operating results and financial condition generally include, without
limitation: (i) the risk that we may not have sufficient funds to operate our
business; (ii)our success in attracting new business and retaining existing
clients and projects; (iii) the size, duration and timing of clinical trials
we are currently managing may change unexpectedly; (iv) the termination, delay
or cancellation of clinical trials we are currently managing could cause
revenues and cash-on-hand to decline unexpectedly; (v) the timing difference
between our receipt of contract milestone or scheduled payments and our
incurring costs to manage these trials; (vi) outsourcing trends in the
pharmaceutical, biotechnology and medical device industries; (vii) the ability
to maintain profit margins in a competitive marketplace; (viii) our ability to
attract and retain qualified personnel; (ix) the sensitivity of our business
to general economic conditions; (x) other economic, competitive, governmental
and technological factors affecting our operations, markets, products,
services and prices; (xi) announced awards received from existing and
potential customers are not definitive until fully negotiated contracts are
executed by the parties; (xii) our backlog may not be indicative of future
results and may not generate the revenues expected; (xiii) our ability to
successfully integrate the business of Remedium Oy, which we acquired on
November 1, 2006; (xiv) the performance of the combined businesses to operate
successfully and generate growth; and (xv) uncertainties regarding the
availability of additional capital and continued listing of our common stock
on Nasdaq. You should not place undue reliance on any forward-looking
statement. We undertake no obligation to publicly release the result of any
revision of these forward-looking statements to reflect events or
circumstances after the date they are made or to reflect the occurrence of
unanticipated events. Please refer to the section entitled "Risk Factors" in
the Form 10-K for a more complete discussion of factors which could cause our
actual results and financial position to change.

You should not place any undue reliance on these forward-looking statements
which speak only as of the date of this press release. Additional information
concerning factors that might affect our business or stock price which could
cause actual results to materially differ from those in forward-looking
statements is contained in Encorium Group's SEC filings, including its Annual
Report on Form 10-K for the year ended December 31, 2008 and other periodic
reports under the Securities Exchange Act of 1934, as amended, copies of which
are available upon request from Encorium Group's investor relations
department.

ENCORIUM GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)

Three Months Ended
March 31,
2009 2008

Net revenue $7,025,426 $ 7,483,606
Reimbursement revenue 1,706,165 1,106,030
Total Revenue 8,731,591 8,589,636

Operating Expenses
Direct (exclusive of
depreciation and amortization) 4,367,176 5,539,671
Reimbursement out-of-pocket expenses 1,706,165 1,106,030
Selling, general and administrative 2,666,874 3,472,871
Depreciation and amortization 190,929 645,277
Total Operating Expenses 8,931,144 10,763,849

Loss from Operations (199,553) (2,174,213)

Interest Income 10,919 54,573
Interest Expense (14,524) (3,103)
Net Interest (Expense) Income (3,605) 51,470

Net Loss before Income Taxes (203,158) (2,122,743)

Income Tax Benefit (7,938) (115,363)

Net Loss $(195,220) $(2,007,380)

Net Loss per Common Share
Basic $ (0.01) $ (0.10)
Diluted $ (0.01) $ (0.10)

Weighted Average Common and Common
Equivalent Shares Outstanding
Basic 20,523,883 20,603,140
Diluted 20,523,883 20,603,140

ENCORIUM GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)

March 31, December 31,
2009 2008
Assets
Current Assets
Cash and cash equivalents $ 2,322,266 $ 5,705,818
Investigator advances 1,239,963 1,088,768
Accounts receivable, less
allowance of $97,000 for
March 31, 2009 and
December 31, 2008, respectively 4,251,154 4,624,161
Prepaid expenses and other 984,239 1,206,088
Prepaid taxes 50,203 28,290
Costs and estimated earnings
in excess of related billings
on uncompleted contracts 1,508,727 1,443,427
Total Current Assets 10,356,552 14,096,552

Property and Equipment, Net 1,077,078 1,211,929

Intangible Assets
Goodwill 1,280,107 1,366,269
Other intangibles, Net 3,431,844 3,733,517
Other assets 665,687 684,666
Total Assets $16,811,268 $21,092,933

Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 3,135,627 $ 3,624,071
Accrued expenses 2,577,778 3,004,627
Deferred taxes 130,212 206,173
Obligations under capital leases 70,261 72,542
Billings in excess of related
costs and estimated earnings
on uncompleted contracts 2,506,893 3,307,347
Customer advances 3,492,910 5,297,000
Total Current Liabilities 11,913,681 15,511,760

Long Term Liabilities
Obligations under capital leases 157,078 189,680
Deferred taxes 823,405 897,204
Other liabilities 280,090 316,516
Total Long Term Liabilities 1,260,573 1,403,400
Total Liabilities 13,174,254 16,915,160

Stockholders' Equity
Common stock, $.001 par value
35,000,000 shares authorized,
20,834,004 shares issued
and 20,523,833 shares outstanding,
respectively 20,834 20,834
Additional paid-in capital 32,473,715 32,417,250
Additional paid-in capital warrants 905,699 905,699
Accumulated deficit (29,932,650) (29,737,430)
Accumulated other comprehensive income 896,105 1,298,109
Less: 4,363,703 4,904,462
Treasury stock, at cost,
310,121 shares (726,689) (726,689)
Total Stockholders' Equity 3,637,014 4,177,773
Total Liabilities and
Stockholders' Equity $16,811,268 $21,092,933

SOURCE Encorium Group, Inc.

Philip L. Calamia, Chief Financial Officer of Encorium Group, Inc.,
+1-610-975-9533; or Alison Ziegler of Cameron Associates, +1-212-554-5469,
alison@cameronassoc.com