Targeted Medical Pharma Reports 2013 Third Quarter Financial Results

Targeted Medical Pharma, Inc. (OTCQB:TRGM), today announced financial results for its third quarter ended September 30, 2013. The Company posted increased revenues, gross profit and a reduction in net loss before interest, taxes, depreciation and amortization, stock based compensation, and non-recurring expenses (Adjusted EBITDA) on both a year-over-year and a quarterly basis.

Financial Overview

Year-over-Year Comparison:

Improved financial results for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012

• Total revenue of $6.9 million, an increase of 41% over the nine months ended September of 2012.
• Total gross profit of $4.7 million, an increase of 84% over the nine months ended September of 2012.
• Adjusted EBITDA* of $(2.4) million, an improvement of 36% over the nine months ended September of 2012.

Improved financial results for the quarter ended September 30, 2013 compared to the quarter ended September 30, 2012

• Total revenue of $2.2 million, an increase of 6% over the third quarter of 2012.
• Total gross profit of $1.6 million, an increase of 63% over the third quarter of 2012.
• Adjusted EBITDA of $(0.7) million, an improvement of 36% over the third quarter of 2012.

Sequential Comparison:

Improved financial results from the prior quarter ended June 30, 2013

• Total revenue of $2.2 million, an increase of 14% over the second quarter of 2013.
• Total gross profit of $1.6 million, an increase of 32% over the second quarter of 2013.
• Adjusted EBITDA of $(0.7) million, an improvement of 55% over the second quarter of 2013.

Management Comments

"The third quarter of 2013 was a tremendous quarter for our Company. As reflected in our sales, healthcare providers and their patients clearly recognize the benefits of our medical foods as an alternative to more dangerous drugs. As a result, we are experiencing significant interest in our products and an increase in our customer base,” said William Shell, M.D., Chief Executive Officer and Chief Science Officer of Targeted Medical Pharma. “The third quarter was our seventh consecutive quarter of revenue growth, on a year-over-year basis. At the same time we have significantly reduced our recurring operating costs while increasing our gross margins. As we continue to expand our revenue, through both existing and new product offerings, I am confident in our ability to continue these positive trends and achieve profitability.”

Continued 2013 Strategic Initiatives:

• Expansion of sales and marketing efforts to increase awareness and acceptance by physicians, patients and payers;
• Conduct additional clinical trials for current and pipeline products including a new medical food indicated for the dietary management of Autism and Autism Spectrum Disorders;
• Development of the Company’s dietary supplement division

A copy of Targeted Medical Pharma’s quarterly report on Form 10-Q for the period ended September 30, 2013, filed with the Securities and Exchange Commission on November 13, 2013, is accessible on the Company’s website at www.tmedpharma.com and at the SEC’s website at www.sec.gov.

About Targeted Medical Pharma, Inc.

Targeted Medical Pharma, Inc. is a Los Angeles-based biotechnology company that develops medical foods for the treatment of chronic disease, including pain syndromes, peripheral neuropathy, hypertension, obesity, sleep and cognitive disorders. The company also develops a line of dietary supplements designed to support health and wellness. The company manufactures 10 proprietary medical foods, and recently launched its first dietary supplement, Clearwayz™. The products are sold directly to physicians and pharmacies in the U.S. The company also is developing nutrient-based systems for oral stimulation of progenitor stem cells that differentiate into neurons, red blood cells, pituitary hormones including IGF-I.

Forward Looking Statement

This press release may contain forward-looking statements related to the company’s business strategy, outlook, objectives, plans, intentions or goals. The words "may," "will," "should," "plans," "explores," "expects," "anticipates," "continue," "estimate," "project," "intend," and similar expressions, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, but their absence does not mean that the statement is not forward-looking. Forward-looking statements also include any other passages that relate to expected future events or trends that can only be evaluated by events or trends that will occur in the future. The forward-looking statements are based on the opinions and estimates of management at the time the statements were made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. These risks and uncertainties include, among others, the risk of unforeseen changes in customer budgets, unanticipated loss of customers or delays in anticipated orders, the potential failure to attract new customers due to the company's inability to competitively market its products and services, the risk of fluctuating demand for the company's product, the potential failure to maintain desired customer relationships, costs and risks related to development of technologies. More information about factors that could cause actual results to differ materially from those predicted in Targeted Medical Pharma’s forward-looking statements is set out in its annual report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance upon these forward-looking statements, which speak only as to the date of this release. Except as required by law, Targeted Medical Pharma, undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.

Supplemental schedule of net loss before interest, taxes, depreciation and amortization, stock based compensation, and non-recurring items

Net loss before interest, taxes, depreciation and amortization, stock based compensation and non-recurring items refers to a financial measure that is more fully defined as net loss before net interest and other income, interest expense, income taxes, depreciation and amortization, stock based compensation, and non-recurring items related to the settlement of pending employee litigation (Adjusted EBITDA). Adjusted EBITDA is commonly used to analyze companies on the basis of leverage and liquidity. However, Adjusted EBITDA is not a measure determined under GAAP in the United States of America and may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA should not be construed as a substitute for net income or as a better measure of liquidity than cash flow from operating activities, which are determined in accordance with GAAP. Management believes that Adjusted EBITDA is a useful measure for analyzing operating results, and uses this non-GAAP financial measure to review past results and forecast future results. The following schedule reconciles Adjusted EBITDA to net loss on the company's consolidated statement of operations, which the company believes is the most directly comparable GAAP measure.

*Adjusted EBITDA is a non-GAAP financial measure which management believes reflects the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in the Company’s business, as they exclude certain income or other expenses that are not reflective of ongoing operating results. See the supplemental schedule of Adjusted EBITDA reconciliation to GAAP net income for the three and nine months ended September 30, 2013 and 2012.