HMS Holdings Corp. Announces Q3 2008 Results, 2008 Revised Guidance and Initial 200...(268 264 Capital in exc...),Health

Capital in excess of par value 139,132 127,887

Retained earnings 34,504 20,187

Treasury stock, at cost; 1,662,846

shares at September 30, 2008

and December 31, 2007 (9,397) (9,397)

Accumulated other comprehensive loss (144) (192)

Total shareholders' equity 164,363 138,749

Total liabilities and

shareholders' equity $206,745 $188,100

HMS HOLDINGS CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2008 and 2007

(in thousands)

(unaudited)

Nine months ended Sept 30,

2008 2007

Operating activities:

Net income $14,317 $10,920

Adjustments to reconcile net

income to net cash provided

by operating activities:

Loss on disposal of fixed assets 53 80

Depreciation and amortization 8,834 7,698

(Increase)/decrease in

deferred tax asset (640) 2,873

Share-based compensation expense 2,351 1,420

Changes in assets and liabilities:

Increase in accounts receivable (7,380) (8,625)

(Increase)/decrease in prepaid

expenses and other

current assets 985 (135)

Increase in other
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