IVD Ivax Diagnostics, Inc.

IVAX Diagnostics, Inc. (NYSE Amex: IVD), a fully integrated in vitro diagnostics company, reports its financial results for the quarter and nine months ended September 30, 2011.

Kevin D. Clark, Chief Executive Officer, Chief Operating Officer and President of IVAX Diagnostics, said, “Our initiatives to reduce expenses while positioning ourselves for expected growth continued during the third quarter of 2011. Our operating expenses for the third quarter of 2011 decreased 5.3% compared to the same period of 2010. During the third quarter of 2011. we continued our strategy of expanding our suite of high-quality, reliable products as well as increasing our global footprint.”

Mr. Clark concluded, “For the remainder of this year, we intend to continue our focus on cost control as we position IVAX Diagnostics for growth in 2012.”

Financial Highlights for the Quarter and Nine Months Ended September 30, 2011

Net revenues for the quarter ended September 30, 2011 were $4,060,000 compared with $3,953,000 in the quarter ended September 30, 2010, an increase of $107,000, or 2.7%. The increase in net revenues during the quarter ended September 30, 2011 compared to the same period of 2010 resulted from an increase of $272,000 in revenue from European operations, offset by a decrease of $165,000 in domestic revenue. European revenues benefited by $118,000 from changes in currency exchange rates. Net revenues for the nine months ended September 30, 2011 were $12,569,000, compared with $13,002,000 in the same period of 2010, a decline of $433,000, or 3.3%. Net revenue results for the nine months ended September 30, 2011 benefited by $275,000 from currency exchange rates.

Gross profit in the quarter ended September 30, 2011 decreased by $45,000, or 2.1%, from the comparable period in 2010. Gross profit as a percentage of net revenues decreased to 51.4% in the quarter ended September 30, 2011 from 53.9% in the same period of 2010 primarily due to higher instrument sales by our European subsidiary, which have a lower gross margin percentage than reagent sales. Gross profit in the nine months ended September 30, 2011 decreased by $393,000, or 5.7%, from the comparable period in 2010. Gross profit as a percentage of net revenues decreased to 52.2% in the nine months ended September 30, 2011 from 53.5% in the same period of 2010 primarily due to lower margins at our European operations.

Operating expenses for the quarter ended September 30, 2011 decreased 5.3% to $3,083,000 from $3,255,000 for the same period of 2010. The decrease in operating expenses was primarily the result of a $444,000, or 24.7%, decrease in general and administrative expenses, partially offset by an increase of $222,000, or 20.2%, in selling and administrative expenses and an increase of $50,000, or 13.8%, in research and development expenses. The decrease in general and administrative expenses for the quarter ended September 30, 2011 was primarily due to severance costs included in the same period of 2010 and a decrease in the number of executive officers in the 2011 period. Selling and administrative expenses for the quarter ending September 30, 2011 increased due to the addition of sales force personnel. Research and development expenses for the quarter ended September 30, 2011 increased due to the increase in new product development, including additional staff allocated to research and development activities. For the nine months ended September, 30 2011, operating expenses were $9,726,000 compared with $10,204,000 in the same period of 2010, a reduction of 4.7%.

Loss from operations for the quarter ended September 30, 2011 was $997,000 compared with $1,124,000 in the same period of 2010. Net loss for the quarter ended September 30, 2011 was $1,234,000, or $0.04 loss per share, compared with net loss of $1,177,000, or $0.04 loss per share, in the same period of 2010. Loss from operations for the nine months ended September 30, 2011 was $3,166,000 compared with $3,250,000 in the same period of 2010. For the nine months ended September 30, 2011, net loss was $3,021,000, or $0.10 loss per share, compared with net loss of $3,445,000, or $0.12 loss per share, in the same period of 2010.

About IVAX Diagnostics, Inc.

IVAX Diagnostics, Inc. (www.ivaxdiagnostics.com), headquartered in Miami, Florida, is a fully integrated in vitro diagnostics company that develops, manufactures and distributes in the United States and internationally, proprietary diagnostic reagents, test kits and instrumentation, primarily for autoimmune and infectious diseases, through its three subsidiaries: Diamedix Corporation (U.S.), Delta Biologicals S.r.l. (Europe) and ImmunoVision, Inc. (U.S.).

Safe Harbor Statement

Except for the historical matters contained herein, statements in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements involve risks and uncertainties that may affect the business and prospects of IVAX Diagnostics, Inc., including, without limitation: IVAX Diagnostics’ ability to successfully improve its financial condition, results of operations and cash flows; IVAX Diagnostics’ ability to successfully implement cost containment efforts and achieve a reduction in its expenses; IVAX Diagnostics’ ability to successfully grow its business, whether during the anticipated time frame or at all; IVAX Diagnostics’ ability to successfully expand its suite of products; IVAX Diagnostics’ ability to successfully increase its global footprint, whether by increasing sales in the U.S. and other markets or otherwise; economic, competitive, political, governmental and other factors affecting IVAX Diagnostics and its operations, markets and products; the success of IVAX Diagnostics’ technological, strategic and business initiatives; IVAX Diagnostics’ ability to achieve cost advantages from its own manufacture of instrument systems, reagents and test kits; and other risks and uncertainties that may cause results to differ materially from those set forth in the forward-looking statements. In addition to the risks and uncertainties set forth above, investors should consider the economic, competitive, governmental, technological and other risks and uncertainties discussed in IVAX Diagnostics’ filings with the Securities and Exchange Commission, including, without limitation, the risks and uncertainties discussed under the heading “Risk Factors” in such filings.

IVAX DIAGNOSTICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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  Period Ended September 30, Three months Nine months   2011   2010   2011   2010   Net revenues $ 4,059,598 $ 3,952,606 $ 12,568,953 $ 13,001,930 Cost of sales   1,973,863   1,821,597   6,008,085   6,048,179 Gross profit   2,085,735   2,131,009   6,560,868   6,953,751   Operating expenses: Selling and marketing 1,320,244 1,097,877 4,054,260 3,655,070 General and administrative 1,350,734 1,794,444 4,274,806 5,337,478 Research and development   412,231   362,251   1,397,333   1,211,541 Total operating expenses   3,083,209   3,254,572   9,726,399   10,204,089   (Loss) from operations (997,474 ) (1,123,563 ) (3,165,531 ) (3,250,338 )   Other income (expense): Interest income (expense) (1,892 ) 2,352 (9,112 ) 3,249 Other income (expense), net   (205,699 )   (28,044 )   (166,762 )   (115,197 ) Total other income (expense), net   (207,591 )   (25,692 )   (175,874 )   (111,948 )   Loss before income taxes (1,205,065 ) (1,149,254 ) (3,341,405 ) (3,362,286 )   Provision (credit) for income taxes   28,614   27,503   (320,224 )   83,189   Net loss $ (1,233,679 ) $ (1,176,758 ) $ (3,021,181 ) $ (3,445,475 )     Net loss per share Basic and diluted $ (0.04 ) $ (0.04 ) $ (0.10 ) $ (0.12 )       WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic   34,391,554   27,649,887   29,943,392   27,649,887 Diluted   34,391,554   27,649,887   29,943,392   27,649,887

IVAX DIAGNOSTICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

  September 30, December 31, 2011   2010   ASSETS   Current assets: Cash and cash equivalents $ 3,939,189 $ 1,826,228 Accounts receivable, net of allowances for doubtful accounts of $648,251 in 2011 and $399,376 in 2010 5,775,146 5,344,205 Inventories, net 4,293,854 4,077,896 Other current assets   262,836     146,366   Total current assets 14,271,025 11,394,695   Property, plant and equipment, net 1,532,155 1,618,136 Equipment on lease to customers, net 693,683 679,438 Product license 282,936 282,936 Goodwill 870,290 870,290 Restricted deposits 107,066 228,680 Other assets   45,815     26,847   Total assets $ 17,802,970   $ 15,101,022     LIABILITIES AND SHAREHOLDERS’ EQUITY   Current liabilities: Accounts payable $ 2,235,539 $ 1,597,555 Accrued license payable 135,970 132,521 Revolving line of credit 379,661 - Accrued expenses and other current liabilities 2,333,343 2,511,698 Capital lease obligation, current   76,795     71,826   Total current liabilities   5,161,308     4,313,600     Other long-term liabilities: Capital lease obligation, long-term 42,378 100,612 Deferred tax liabilities 412,803 365,184 Other long-term liabilities   1,036,163     955,056   Total other long-term liabilities   1,491,344     1,420,852     Commitments and contingencies   Shareholders’ equity: Common stock, $0.01 par value, authorized 50,000,000 shares, issued and outstanding 27,649,887 in 2010 and 2009 343,915 276,498 Stock subscription receivable (10,000,000 ) - Capital in excess of par value 56,035,037 41,389,404 Accumulated deficit (34,707,653 ) (31,686,472 ) Accumulated other comprehensive loss   (520,981 )   (612,860 ) Total shareholders’ equity   11,150,318     9,366,570   Total liabilities and shareholders’ equity $ 17,802,970   $ 15,101,022