Hi-Tech Pharmacal Reports a 15% Sales Increase and 33% EPS Increase for Fiscal 2006

Business Wire, July 12, 2006

Hi-Tech is a specialty pharmaceutical company developing, manufacturing and marketing branded and generic prescription and OTC products. The Company specializes in difficult to manufacture liquid and semi-solid dosage forms and produces a range of sterile ophthalmic, otic and inhalation products. The Company's Health Care Products Division is a leading developer and marketer of branded prescription and OTC products for the diabetes marketplace.

Forward-looking statements (statements which are not historical facts) in this Press Release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements are not promises or guarantees and investors are cautioned that all forward-looking statements involve risks and uncertainties, including but not limited to the impact of competitive products and pricing, product demand and market acceptance, new product development, the regulatory environment, including without limitation, reliance on key strategic alliances, availability of raw materials, fluctuations in operating results and other results and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. These statements are based on management's current expectations and are naturally subject to uncertainty and changes in circumstances. We caution you not to place undue reliance upon any such forward looking statements which speak only as the date made. Hi-Tech is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a results of new information, future events or otherwise.

Twelve Months              Three Months
                   ------------------------- -------------------------
                     4/30/2006    4/30/2005    4/30/2006    4/30/2005
                   ------------ ------------ ------------ ------------
Net sales          $78,020,000  $67,683,000  $18,077,000  $17,640,000
Cost of goods sold  35,833,000   31,360,000    9,245,000    8,567,000

Gross profit        42,187,000   36,323,000    8,832,000    9,073,000

Selling, general,
 administrative
 expenses           23,210,000   19,574,000    5,858,000    5,826,000
Research & product
 development costs   3,334,000   4,373,0000    1,070,000      635,000
Contract research
 (income)              (27,000)     (50,000)           -      (25,000)
Interest expense        12,000       24,000        2,000        5,000
Interest (income)
 and other          (1,937,000)    (655,000)    (826,000)    (249,000)
Total               24,592,000   23,266,000    6,104,000    6,192,000

Income before
 income taxes       17,595,000   13,057,000    2,728,000    2,881,000
Provision for
 income taxes        6,142,000    4,769,000      644,000    1,003,000

Net income         $11,453,000   $8,288,000   $2,084,000   $1,878,000

Basic net earnings
 per common share          .96          .70          .17          .16

Diluted net
 earnings per
 common share              .85          .64          .15          .15

Weighted average
 common shares
 outstanding-
 basic              11,939,000   11,858,000   12,162,000   11,659,000

Effect of
 potential common
 shares              1,465,000    1,130,000    1,444,000    1,113,000

Weighted average
 common shares
 outstanding -
 diluted            13,404,000   12,988,000   13,606,000   12,772,000