Innovex: Fiscal 2Q08 Financial Results

Innovex reported revenue of $13.3 million and
revenue excluding pass through material of $8.7 million for the fiscal
2008 second quarter ending March 29, 2008. In the fiscal 2008 first
quarter Innovex, Inc. reported revenue of $20.8
million and revenue excluding pass through material of $11.0 million.

The Company’s net loss was $9.2 million or $0.47 per share in the
second quarter of fiscal 2008 as compared to a net loss of $7.9
million or $0.41 per share in the first quarter of fiscal 2008. The
fiscal 2008 second quarter loss includes restructuring charges of
$700,000 or $0.04 per share. The Company’s fiscal 2008 second quarter
net loss excluding the restructuring charge was $8.5 million or $0.44
per share. The Company’s fiscal 2008 first quarter net loss was $5.6
million or $0.29 per share excluding restructuring charges of $2.3
million.

Actuator Flex Circuit (AFC) revenue was 44% of total revenue for
the fiscal 2008 second quarter as compared to 34% for the first
quarter. Flat Panel Display (FPD) product revenue was 38% for the
fiscal 2008 second quarter as compared to 29% for the first quarter,
Flex Suspension Assembly (FSA) products constituted 11% of the
Company’s net sales for the fiscal 2008 second quarter down from 34%
in the fiscal 2008 first quarter, and integrated circuit packaging,
network system and other application revenue was 7% for the current
quarter as compared to 3% for the prior quarter.

The fiscal 2008 second quarter decrease in revenue from the fiscal
2008 first quarter was primarily driven by the $5.7 million reduction
in FSA revenue as it reached its end of life during the quarter as
expected. While increases were expected in AFC and FPD revenue in the
fiscal 2008 second quarter as compared to the fiscal 2008 first
quarter, they experienced decreases of $1.1 million and $900,000,
respectively.

The reduction in AFC was mostly the result of the delay in the
expected production ramp up for the Company’s new actuator flex
customer as disclosed in the Company’s March 6, 2008 second quarter
update. As previously noted, the issues causing the delay have been
resolved and the production ramp up at the new customer is now
expected to begin in May.

The reduction of FPD revenue during the quarter was the result of
a large FPD program beginning its end of life earlier than forecasted
during the quarter while several replacement products were not taken
to production or released later than our customer had anticipated.
While several FPD programs did begin their production ramp up during
the fiscal 2008 second quarter, one significant volume program was
impacted by component shortages at the Company’s customer.

"While we are very disappointed with our quarterly revenue we made
significant progress during the quarter to position the Company for
future growth. We have resolved the performance issue causing the
delayed ramp up of our new actuator flex customer and now expect the
next high volume program with that customer to begin ramping in May.
We also expect a number of new FPD programs to begin ramping up during
the fiscal 2008 third quarter. As a result, we are projecting revenue
in our fiscal 2008 third quarter to be at least 20 percent higher than
our fiscal 2008 second quarter," stated Terry Dauenhauer, Innovex’s
President and Chief Executive Officer. "We also are beginning to
penetrate several new markets and continue to experience high levels
of prototype activity with a number of new customers which we expect
will favorably impact revenue late in fiscal 2008 and in fiscal 2009."

Gross margins for the fiscal 2008 second quarter were impacted by
lower than expected revenue. The Company expects gross margins to
improve as an increase in revenue is expected in the fiscal 2008 third
quarter.

Fiscal 2008 second quarter cash used in operating activities was
$5.3 million. The Company’s liquidity on March 29, 2008 was $20.5
million, which was comprised of $8.7 million of cash on hand and $11.8
million of availability under the Company’s existing credit
facilities. The $11.8 million was comprised of $7.1 million available
under our long-term credit facility and $4.6 million under our
short-term packing credit and working capital facilities. Utilization
of the $7.1 million available under our long-term credit facility is
based on the incurrence of capital expenditures and utilization of our
packing credit facility availability is dependent on presenting
qualifying customer purchase orders to the banks for draw down.
Capital expenditures for the fiscal 2008 second quarter were $310,000.

"We are encouraged by the support our Thai banks have shown our
business," stated Randy Acres, Innovex’s new Chief Financial Officer.
"We have not yet completed the approval process for restructured
credit facilities but the bank Senior Managers have indicated they
will continue to support our business plan."

The Company continues to explore alternatives for generating
additional working capital as well as other opportunities to better
leverage its assets.

Innovex, Inc.