Microfluidics International Corporation Announces Third Quarter 2009 Financial Results

Microfluidics International Corporation Announces Third Quarter 2009 Financial
Results
Company Reports Net Income, Strong Demand by Vaccine Developers and
Manufacturers

NEWTON, Mass., Nov. 2 /PRNewswire-FirstCall/ -- Microfluidics International
Corporation (OTC Bulletin Board: MFLU), today reported unaudited financial
results for the third quarter ended September 30, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20090811/NE59652LOGO )

Third quarter accomplishments:
-- Earned net income for the third quarter of $425,000
-- Achieved $650,000 in earnings before interest, taxes, depreciation and
amortization (EBITDA)
-- Delivered strong bookings in the third quarter of $4.8 million and a
backlog of $4.75 million as of September 30, 2009

-- Generated $4.5 million in revenue for the third quarter, a 27%
increase
over the same period in 2008

"I am pleased to report that the strategic plan we implemented a year ago has
led us to our first profitable quarter since my joining the Company," said
Michael C. Ferrara, Chief Executive Officer of Microfluidics. "We will
continue to innovate with new products, increase international representative
and distributor coverage, streamline costs and improve quality in support of
our customers as we strive to carry this positive momentum through the second
half of the year and into 2010."

"The initiatives and strong cost controls implemented in the first half of the
year are yielding tangible results," said Peter Byczko, Vice President of
Finance and Chief Accounting Officer. "Demand in our product line remains
strong, especially within our core biopharmaceutical markets and customers are
exhibiting increased interest in value-added services as they realize the
importance of maximizing machine uptime and availability. We are pleased with
our results and will continue to work to improve the financial position of the
Company."

Third Quarter Financial Results:

Revenues for the three months ended September 30, 2009 were $4.5 million, an
increase of $1.0 million, or 27%, as compared to revenues of $3.5 million for
the three months ended September 30, 2008. North American revenues were $3.2
million, an increase of 63% as compared to $2.0 million in the third quarter
of 2008. The increase in North America was offset by a 19% decrease in
foreign sales from $1.5 million for the third quarter of 2008 to $1.3 million
for the third quarter of 2009. Our gross margin increased to 66% in the third
quarter of 2009. This increase is attributable to pricing actions taking
effect and appropriately adjusting our pricing to cover additional services
requested by our customers. Net income was $425,000, or $0.04 per diluted
share, for the three months ended September 30, 2009 as compared to a net loss
of $1.1 million, or $0.10 per diluted share, for the same period in 2008.

EBITDA was $650,000 for the three months ended September 30, 2009 compared
with a $930,000 EBITDA loss for the same period in 2008. EBITDA is a Non-GAAP
financial measure. A reconciliation of GAAP net income to Non-GAAP EBITDA is
provided in the financial tables that accompany this release and is discussed
under the section below titled "Non-GAAP Financial Measures."

Year to Date Financial Results:

Revenues for the nine months ended September 30, 2009 were $11.5 million, an
increase of $83,000, or 1%, as compared to revenues of $11.4 million for the
nine months ended September 30, 2008. Net loss was $442,000, or $0.04 per
diluted share, for the nine months ended September 30, 2009 as compared to
$2.3 million net loss, or $0.22 per diluted share, for the same period in
2008.

EBITDA was $230,000 for the nine months ended September 30, 2009 compared with
$2.1 million EBITDA loss for the same period in 2008.

Live Webcast:
Microfluidics International Corporation will host a webcast on Monday,
November 2, 2009 at 4:30 p.m. Eastern Time. Participants are invited to attend
the call by visiting www.microfluidicscorp.com or by dialing 866-356-4281
(within the United States) or 617-597-5395 (outside the United States). The
passcode for participants is 96732749.

A replay will be available approximately two hours after the live call through
November 9, 2009. To access the replay, dial 888-286-8010 (within the United
States) or 617-801-6888 (outside the United States). The passcode for
participants is 69691770. A replay will also be posted on the Company's
website approximately two hours after the live call and will be available for
a period of 30 days.

About Microfluidics International Corporation
Microfluidics International Corporation designs, manufactures and distributes
patented and proprietary high performance Microfluidizer® materials processing
and formulation equipment to the biotechnology, pharmaceutical, chemical,
cosmetics and inkjet ink industries. The Company applies its 20 plus years of
high pressure processing experience to produce the most uniform and smallest
liquid and suspended solid particles available and has provided manufacturing
systems for nanoparticle products for more than 15 years.

Microfluidics is a leader in advanced materials processing equipment for
laboratory, pilot scale and manufacturing applications, offering innovative
technology and comprehensive solutions for nanoparticles and other materials
processing and production. More than 3,000 systems are in use and afford
significant competitive and economic advantages to the Company's equipment
customers.

Non-GAAP Financial Measures:
In addition to the results reported in accordance with generally accepted
accounting standards (GAAP) within this release, the Company may reference
certain information that is considered a non-GAAP financial measure, including
EBITDA, which is defined as earnings before interest, taxes, depreciation and
amortization, and Adjusted EBITDA, which is defined as earnings before
interest, taxes, depreciation, and amortization, excluding non-cash stock
compensation expense recognized and severance payments. Management believes
these measures are useful and relevant to management for operational planning
and decision making purposes, and informative to investors in their analysis
of the Company's underlying business and operating performance. Non-GAAP
financial measures should not be considered a substitute for any GAAP
measures. Additionally, non-GAAP measures as presented by the Company may not
be comparable to similarly titled measures reported by other companies. A
reconciliation of GAAP to non-GAAP financial information discussed in this
release is contained in the attached exhibits.

Safe Harbor for Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 as contained in Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. You can identify these statements by the fact that they use words
such as "anticipate," "believe," "estimate," "expect," "intend," "project,"
"plan," "outlook," and other words and terms of similar meaning. These
statements involve a number of risks and uncertainties that could cause actual
results to differ materially from the potential results discussed in the
forward-looking statements. Among the factors that could cause actual results
and outcomes to differ materially from those contained in such forward-looking
statements are the following: our ability to access sufficient working
capital, including a new working capital line; our continued compliance with
the representations, warranties and covenants under our existing convertible
debenture; our continued history of losses, which includes net losses in three
of the last five fiscal years; the timing and size of customer orders for our
products; the adoption, timing and performance of new technology and products
developed by us; changes and advances in technology that may make our products
obsolete or reduce demand for our products; our ability to protect and
maintain the confidentiality of our intellectual property; our ability to
retain key employees and our reliance on a new management team; changes in
governmental rules and regulations, including those regulating the exportation
of goods; and general economic and business conditions and the financial
crisis, including those adversely effecting the pharmaceutical and
biotechnology industries. For a more detailed discussion of risks and
uncertainties which could cause actual results to differ from those contained
in our forward-looking statements, see Item 1A, "Risk Factors" of our most
recently filed Quarterly Report on Form 10-Q for the quarter ended June 30,
2009 and our other periodic reports filed with the SEC. You should not place
undue reliance on our forward-looking statements, which speak only as of the
date they are made. We are providing this information as of this date, and we
do not undertake to update the information included in this press release,
whether as a result of new information, future events or otherwise.

--Financial Charts to Follow--

MICROFLUIDICS INTERNATIONAL CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited - in thousands, except share and per share amounts)

September 30, December 31,
2009 2008
---- ----
ASSETS
Current assets:
Cash and cash equivalents $1,694 $1,895
Accounts receivable, net of allowance of
$44 at both September 30, 2009 and
December 31, 2008 2,582 2,181
Inventories 2,802 2,723
Prepaid and other current assets 338 320
--- ---
Total current assets 7,416 7,119

Property and equipment, net 954 1,121
Other non-current assets 447 480
--- ---
Total assets $8,817 $8,720
====== ======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $820 $986
Accrued expenses 1,140 1,233
Customer advances 1,039 436
----- ---
Total current liabilities 2,999 2,655

Long-term liabilities
Convertible debt 4,666 4,625
----- -----
Total liabilities 7,665 7,280
----- -----

Stockholders' equity:

Common stock; $.01 par value; 30,000,000
and 20,000,000 shares authorized;
10,622,728 and 10,592,228 shares
issued; 10,387,282 and 10,356,782
shares outstanding as of September 30,
2009 and December 31, 2008,
respectively. 106 106
Additional paid-in capital 18,196 18,042
Accumulated deficit (16,481) (16,039)
Treasury stock, 235,446 shares, at cost,
as of September 30, 2009 and December
31, 2008 (669) (669)
---- ----
Total stockholders' equity 1,152 1,440
----- -----
Total liabilities and stockholders'
equity $8,817 $8,720
====== ======

MICROFLUIDICS INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited - in thousands, except share and per share amounts)

For The Three Months Ended For The Nine Months Ended
September 30, September 30,
2009 2008 2009 2008

Revenues $4,462 $3,511 $11,490 $11,407
Cost of sales 1,533 1,708 4,679 5,542
Gross profit 2,929 1,803 6,811 5,865

Operating expenses:
Research and
development 418 569 1,263 1,631
Selling 995 1,199 3,123 3,327
General and
administrative 965 1,057 2,491 3,174

Total operating
expenses 2,378 2,825 6,877 8,132

Income (loss) from
operations 551 (1,022) (66) (2,267)
Interest expense (126) (39) (378) (50)
Interest income - - 2 21

Net Income (loss) $425 $(1,061) $(442) $(2,296)

Net loss per common
share:
Basic $0.04 $(0.10) $(0.04) $(0.22)
Diluted $0.04 $(0.10) $(0.04) $(0.22)
Weighted average
number of common
and common equivalent
shares outstanding:
Basic 10,387,282 10,299,938 10,376,949 10,278,633
Diluted 10,474,532 10,299,938 10,376,949 10,278,633

For The Three Months For The Nine Months
Ended September 30, Ended September 30,
--------------------- ---------------------
2009 2008 2009 2008
---- ---- ---- ----

Net income (loss) $425 $(1,061) $(442) $(2,297)

Net interest expense (income) 126 39 378 29
Depreciation and amortization 96 91 291 174
-- -- --- ---
EBITDA (Non-GAAP Measure) 647 (931) 227 (2,094)

Severance - - 415 164
Non-cash compensation 56 63 144 171
-- -- --- ---
Adjusted EBITDA $703 $(868) $786 $(1,759)
==== ===== ==== =======

Weighted average number
of common and common
equivalent shares
outstanding:

Basic: 10,387,282 10,299,938 10,376,949 10,278,633
Diluted: 10,474,532 10,299,938 10,376,949 10,278,633

EBITDA per common share
(Non-GAAP Measure):
Basic: $0.04 $(0.10) $(0.04) $(0.22)
Diluted: $0.04 $(0.10) $(0.04) $(0.22)

SOURCE Microfluidics International Corporation

Peter Byczko, Microfluidics International Corporation, +1-617-969-5452 ext.
243