NMHC Reports Fourth Quarter and Fiscal Year 2007 Financi...(.5 millionrelating to the Claims Payable...),Health

Date:9/10/2007

.5 million relating to the Claims Payable Error as defined and discussed above offsets the $1.5 million relating to the Rebate Error as noted above. Primarily due to changes in our customer mix, gross profit as a percentage of revenue, or gross margin, for the fiscal year ended June 30, 2007 increased to 12.9 percent as compared to 10.6 percent for the same period last year.

Gross profit per adjusted prescription for the fiscal year ended June 30, 2007 increased to $3.53 as compared to $2.76 for the same period last year.

For the fiscal year ended June 30, 2007, SG&A expenses increased $11.6 million or 15.3 percent, from $75.9 million to $87.5 million for the same period last year. This increase is primarily the result of (i) $5.8 million net increase in compensation related costs, inclusive of a $2.3 million increase in one-time termination benefits primarily related to our senior management changes, (ii) $2.9 million increase in professional fees and insurance, primarily related to the review of various financial transactions in conjunction with the filings of our Quarterly Report on Form 10-Q for the periods ended December 31, 2006 and September 30, 2006, settlements of various legal proceedings, as well as an increase in our insurance premiums, (iii) $1.2 million increase in IT related costs, which includes a $657,000 impairment loss related to the cancellation of various capitalized projects, (iv) $1.9 million increase in bad debt expense (inclusive of the $831,000 Claims Payable Error as noted above), of which $1.2 million was incurred during the fourth quarter of fiscal 2007, and (v) $384,000 of net increases in other SG&A expenses. These increases were offset by $584,000 related to the Lease Error as defined and discussed above.

NMHC's effective tax rate was 92.9 percent for the fiscal year ended June 30, 2007, as compared to 42.1 percent for the same period last year. The increase in the effective tax rate primarily resulted from lower pre
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SOURCE National Medical Health Card Systems, Inc. Copyright©2007 PR Newswire. All rights reserved

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