SOURCE: Pharma-Bio Serv, Inc.

March 20, 2007 09:35 ET

Pharma-Bio Serv, Inc. Announces First Quarter 2007 Financial Results

Company Generated Revenues of $3.6 Million and Net Income of $329,000 for Three Months Ending January 31, 2007

DORADO, PUERTO RICO -- (MARKET WIRE) -- March 20, 2007 -- Pharma-Bio Serv, Inc. (OTCBB: PBSV), Puerto Rico's leading pharmaceutical validation and compliance consulting service firm, announced its first fiscal quarter 2007 financial results.

First fiscal quarter 2007 highlights include:

--  Revenues of $3.6 million, an increase of 6.3% from $3.4 million in
    first fiscal quarter 2006.
--  Earnings before Interest and Taxes (EBIT) of $714,000.
--  Net Income of $329,000.
Additional financial detail and discussion can be found with the complete January 31, 2007 10QSB filing with the Securities Exchange Commission.

In commenting on the results, CFO of Pharma-Bio Serv, Manuel Morera, said, "Our financial performance for the first quarter of 2007 demonstrates our ability to effectively execute validation and consulting assignments for our clients. Costs were expected to be slightly higher due to this transition period of becoming a public entity, but our financial results continue to demonstrate the success embedded in our operating model."

Pharma-Bio Serv expects to continue to aggressively pursue consulting assignments with new clients while maintaining its current list of world-renowned pharmaceutical companies. Pharma-Bio Serv completed a reverse merger to bring the company public in January 2006 and the shares recently commenced trading in December 2006 on the OTC bulletin board under the ticker PBSV.

About Pharma-Bio Serv, Inc.

Pharma-Bio Serv, Inc. operates as a validation and compliance consulting service firm. The company assists its clients in complying with government regulations by offering a range of consulting services in the areas relating to compliance with the regulations of Food and Drug Administration, as well as matters relating to providing compliance support for new facilities start up and the introduction of new pharmaceutical products into manufacturing, technology transfer, commissioning, qualification and validation, regulatory compliance and support for filing to regulatory agencies, project management, laboratory, engineering, technical documentation and training services. The company offers its services to pharmaceutical, chemical, biotechnology, and medical devices and allied products companies in Puerto Rico, the United States, and Europe. The company was founded in 1993 and is based in Dorado, Puerto Rico. For more information, please visit the Company's web site at www.pharmaservpr.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of historical information, the statements set forth above include forward-looking statements that involve risk and uncertainties. The Company wishes to caution readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include, but are not limited to, the risk factors noted in the Company's filings with the United States Securities and Exchange Commission, such as the rapidly changing nature of technology, evolving industry standards and frequent introductions of new products, services and enhancements by competitors; the competitive nature of the markets for the Company's products and services; the Company's ability to gain market acceptance for its products and services; the Company's ability to fund its operational growth; the Company's ability to attract and retain skilled personnel; the Company's ability to diversify its revenue streams and customer concentrations; and the Company's reliance on third-party suppliers.

                            PHARMA-BIO SERV, INC.
                    Consolidated Balance Sheet (Unaudited)
                           As of January 31, 2007

Assets:
Current assets
   Cash and cash equivalents                                    $ 2,423,192
   Accounts receivable                                            4,039,843
   Other                                                            208,670
                                                                -----------
Total current assets                                              6,671,705

Property and equipment                                              348,083

Other assets, mainly intangible assets                              185,767
                                                                -----------

Total Assets                                                    $ 7,205,555
                                                                ===========

Liabilities and Stockholders' Equity:
   Current liabilities
   Current portion-obligations under capital leases             $    39,651
   Accounts payable and accrued expenses                          1,118,628
   Due to affiliate - current                                     2,818,744
   Income taxes                                                     168,764
                                                                ===========
Total current liabilities                                         4,145,787
                                                                ===========

Long-term liabilities
   Due to affiliate                                               2,412,828
   Other long-term liabilities                                      131,444
                                                                -----------
Total long-term liabilities                                       2,544,272
                                                                -----------

Total Liabilities                                                 6,690,059

Stockholders' Equity:
Preferred Stock, $0.0001 par value; authorized
 10,000,000 shares; none outstanding                                      -
Common Stock, $0.0001 par value; authorized 50,000,000 shares;
 issued and outstanding 19,615,539 shares                             1,961
Additional paid-in capital                                           39,022
Retained earnings                                                   474,513
                                                                -----------
Total Stockholders' Equity                                          515,496
                                                                -----------

Total Liabilities and Stockholders' Equity                      $ 7,205,555




                               PHARMA-BIO SERV, INC.
                    Consolidated Statements of Income (Unaudited)
              For the Three-Month Periods Ended January 31, 2007 and 2006


                                                       2007        2006
                                                    ----------- -----------

Revenues                                            $ 3,618,330 $ 3,404,182

Cost of Services                                      2,167,128   2,033,339
                                                    ----------- -----------

Gross Profit                                          1,451,202   1,370,843

Selling, General and
 Administrative Expenses                                736,585     455,398

Interest Expense                                        129,246           -
                                                    ----------- -----------

Income Before Income Tax                                585,371     915,445

Income Tax                                              255,955      21,873
                                                    ----------- -----------

Net Income                                          $   329,416 $   893,572
                                                    ----------- -----------

Basic Earnings Per Common Share                     $      0.02 $      0.50

Diluted Earnings Per Common Share                   $      0.01 $      0.16

Weighted Average Number of Common
 Shares Outstanding- Basic                           18,724,953   1,791,985

Weighted Average Number of Common
 Shares Outstanding- Diluted                         22,231,227   5,417,925



                          PHARMA-BIO SERV, INC.
             Consolidated Statements of Cash Flows (Unaudited)
        For the Three-Month Periods Ended January 31, 2007 and 2006

                                                     2007          2006
                                                 -----------   -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the period                        $   329,416   $   893,572
Loss on disposition of property and equipment         19,863         3,664
Stock-based compensation                              39,022             -
Depreciation and amortization                         54,497        30,144
Imputed interest expense                             126,611             -
Decrease in accounts receivable                    1,761,246     1,481,792
Decrease (increase) in other assets                   48,660      (150,305)
Increase (decrease) in liabilities                   288,489      (149,922)
                                                 -----------   -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES          2,667,804     2,108,945
                                                 -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                   (10,221)      (87,028)
Cash acquired as part of the acquisition of
 Plaza                                                     -        28,943
                                                 -----------   -----------
NET CASH USED IN INVESTING ACTIVITIES                (10,221)      (58,085)
                                                 -----------   -----------

CASH FLOW FROM FINANCING ACTIVITIES:
Net proceeds from the sale of preferred stock              -    10,000,000
Payment for purchase of Plaza stock                        -    (9,900,000)
Payment for non-compete covenant                           -      (100,000)
Payments on capital lease obligations                 (9,426)       (8,649)
Payment to affiliate                              (2,500,000)            -
Distributions to stockholder                               -      (749,554)
                                                 -----------   -----------
NET CASH USED IN FINANCING ACTIVITIES             (2,509,426)     (758,203)
                                                 -----------   -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS            148,157     1,292,657

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD    2,275,035     1,791,557
                                                 -----------   -----------

CASH AND CASH EQUIVALENTS - END OF PERIOD        $ 2,423,192   $ 3,084,214
                                                 ===========   ===========

PAYMENTS OF:
Income tax                                       $         -   $         -
                                                 ===========   ===========
Interest                                         $   503,708   $     3,412
                                                 ===========   ===========

NONCASH INVESTING AND FINANCING ACTIVITIES:
Conversion of cashless exercise warrants to
 shares of common stock                          $       130   $         -
                                                 ===========   ===========
Income tax withheld by clients but used as a
 credit in the income tax return of a
 stockholder (noncash distribution)              $         -   $    84,561
                                                 ===========   ===========
Income tax withheldby clients to be used as a
 credit in the credit in the Company's income
 tax return                                      $     8,361   $         -
                                                 ===========   ===========
Debt incurred in the acquisition of certain
 assets from another company                     $         -   $   200,000
                                                 ===========   ===========
Debt payable to officer originated in the
 acquisition of Plaza, net of $1,025,000
 imputed interest                                $         -   $ 7,225,000
                                                 ===========   ===========

Contact Information

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    Thomas Sauve (Investors / Media)
    (646) 245-2465
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