NMHC Reports Fourth Quarter and Fiscal Year 2007 Financi...(pSelling general and administrative ( SG...),Health

Date:9/10/2007

p>Selling, general and administrative ("SG&A") expenses increased $7.0 million, or 36.8 percent, from $19.0 million for the 2006 fiscal fourth quarter to $26.0 million for the 2007 fiscal fourth quarter. This increase is primarily related to (i) $3.0 million net increase in compensation related costs, including a $2.0 million increase in one-time termination benefits incurred in connection with our senior management changes, (ii) $1.5 million increase in bad debts, (iii) $1.0 million increase in professional fees and legal settlement costs related to settlements of various legal issues and increases in other professional fees, (iv) $1.0 million increase in information-technology ("IT") costs which includes a $657,000 impairment loss related to the cancellation of various capitalized projects, and (v) $400,000 increase in other costs.

Our operating loss for the 2007 fiscal fourth quarter was $4.9 million as compared to operating income of $2.8 million for the 2006 fiscal fourth quarter.

Our effective tax rate was 25.9% for the 2007 fiscal fourth quarter, as compared to 39.7% for the 2006 fiscal fourth quarter. The 25.9% effective tax rate provides us with a tax benefit for the 2007 fiscal fourth quarter whereas the 39.7% effective tax rate resulted in tax expense for the 2006 fiscal fourth quarter. The decrease in the effective tax rate is primarily from employee stock options in accordance with SFAS No. 123( R ).

Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) for the 2007 fiscal fourth quarter was $(2.2) million, as compared to $4.9 million for the 2006 fiscal fourth quarter. EBITDA before stock-based compensation expense for the 2007 fiscal fourth quarter was $(1.5) million, as compared to $6.2 million for the same period last year. EBITDA per adjusted prescription decreased to $(0.42) during the 2007 fiscal fourth quarter from $0.65 during the same period last year. During both the fiscal fourth quarters of 2006 an
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SOURCE National Medical Health Card Systems, Inc. Copyright©2007 PR Newswire. All rights reserved

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