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QMed, Inc. Reports Year-End and Fourth Quarter Results
Date:3/26/2008

EATONTOWN, N.J., March 26 /PRNewswire-FirstCall/ -- QMed, Inc. (Nasdaq: QMED) today announced financial results for the fiscal year and fourth quarter ending November 30, 2007. Revenue for the year decreased to $5,246,789 from $8,136,305 a year ago. Net loss for the year totaled $(11,252,361) or $(0.66) per share on a diluted basis, compared to a net loss of $(14,236,224) or $(0.85) on a diluted basis the previous year. Revenue for the three-month period ended November 30, 2007 decreased to $1,527,094 from $1,817,943. Net income for the quarter was $1,816,011 or $0.11 per share on a diluted basis, compared to net loss of $(5,311,278) or ($0.32) per share a year ago.

As previously reported, the Company has discontinued its Special Needs Plan activities within South Dakota and New Jersey. As of November 1, 2007, the Company's captive insurance entity ceased taking risk on the members enrolled in the South Dakota SNP Plan. Effective January 1, 2008, there were no members enrolled in the QMedCare SNP in New Jersey. In addition, the Company sold its medical equipment business in the fourth quarter resulting in a gain of sale of $216,952 or $.01 per share on a diluted basis. As a result, the activities of the SNPs and the equipment business have been reflected as discontinued operations and the financial statements have been restated for all prior periods presented. The loss from discontinued operations for the year ended was $(6,405,545) or $(0.38) per share on a diluted basis, compared to a loss of $(4,740,861) or $(0.28) on a diluted basis the previous year.

The net income reported within the fourth quarter of 2007 is primarily attributable to the execution of a settlement agreement with DAKOTACARE settling its liability for $750,000 in connection with its SNP activities in South Dakota. This resulted in a non-cash reversal of approximately of $7.4 million offset by the Company's cost of approximately $0.9 million for exiting this business segment, the net of which is reflected as part of discontinued operations.

Given the continuing losses and the Company's current cash position available for working capital, the November 30, 2007 financial statements contain an unqualified opinion with a going concern uncertainty emphasis paragraph that raises substantial doubt about the Company's ability to continue as a going concern.

About QMed, Inc.

QMed has developed evidence-based clinical information management systems for use by health plan customers. The QMed systems incorporate Disease Management services to patients and decision support to physicians. The Company's subsidiaries have specialized in serving high-risk populations of Medicare beneficiaries.

Except for historical information contained herein, matters discussed in this news release are forward-looking statements that involve risks and uncertainties. They include but are not limited to those relating to the timely implementation of programs, the impact of competitive product introductions, acceptance and pricing, and those risks detailed in the Company's filings with the Securities and Exchange Commission (SEC). Actual results may differ materially from any forward-looking statements due to these risks and uncertainties.

Contact: William Schmitt, QMed, Inc. - 732-544-5544 x1112

QMED, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

November 30,

Assets

Restated

2007 2006

Current assets

Cash and cash equivalents $1,196,030 $2,313,261

Investments in securities - 8,547,525

Accounts receivable, net of

allowance for doubtful accounts

of $58,980 and $53,558,

respectively 535,810 1,803,804

Prepaid professional fees 228,000 10,000

Prepaid expenses and other current

assets 189,654 231,322

Assets related to discontinued

operations 6,126,492 4,156,805

8,275,986 17,062,717

Property and equipment, net 717,229 939,988

Product software development costs,

net 1,769,931 2,052,132

Acquired intangibles, net 421,224 587,027

Other assets 137,190 146,202

Investment in joint ventures - 23,703

$11,321,560 $20,811,769

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable and accrued

liabilities $1,607,840 $2,053,533

Leases payable, current portion 41,116 65,881

Accrued salaries and commissions 245,888 388,002

Fees reimbursable to health plans 12,900 47,005

Contract billings in excess of

revenues 197,380 1,396,423

Income taxes payable 12,786 -

Liabilities related to discontinued

operations 3,952,421 1,214,766

6,070,331 5,165,610

Leases payable, long term 49,134 11,645

Accrued severance payable, long term 309,258 619,643

6,428,723 5,796,898

Commitments and contingencies

Stockholders' equity

Common stock, $.001 par value,

40,000,000 shares authorized,

17,042,959 and 16,858,539 shares

issued 17,020,959 and 16,836,539

outstanding, respectively 17,043 16,859

Paid-in capital 54,558,476 53,433,095

Accumulated deficit (49,607,057) (38,354,696)

Accumulated other comprehensive

income

Unrealized losses on securities

available for sale - (4,762)

4,968,462 15,090,496

Less treasury stock at cost,

22,000 common shares (75,625) (75,625)

Total stockholders' equity 4,892,837 15,014,871

$11,321,560 $20,811,769

QMED, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

For the Three Months Ended November 30,

Restated

2007 2006

Revenue $1,527,094 $1,817,943

Cost of revenue 577,644 691,583

Gross profit 949,450 1,126,360

Selling, general and administrative expenses 1,455,554 4,475,553

Research and development expenses 543,391 377,459

Loss from continuing operations (1,049,495) (3,726,652)

Interest expense (7,489) (4,168)

Interest income 10,021 152,425

Income (loss) from operations of joint venture 20,426 (20,000)

Other income 150 -

Loss before income tax provision and

discontinued operations (1,026,387) (3,598,395)

Provision for income taxes (13,162) (7,561)

Loss from operations before discontinued

operations (1,039,549) (3,605,956)

Discontinued Operations:

Income (loss) from operations 2,638,608 (1,705,322)

Gain from sale 216,952 -

Net income (loss) $1,816,011 $(5,311,278)

Basic income (loss) per share

Weighted average shares outstanding 17,012,637 16,829,367

Basic (loss) income per share - continuing

operations $(.06) $(.22)

Basic income (loss) per share - discontinued

operations .17 (.10)

Basic income (loss) per share $.11 $(.32)

Diluted income (loss) per share

Weighted average shares outstanding 17,051,856 16,829,367

Diluted (loss) income per share - continuing

operations $(.06) $(.22)

Diluted income (loss) per share - discontinued

operations .17 (.10)

Diluted income (loss) per share $.11 $(.32)

QMED, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

For the Years Ended November 30,

Restated Restated

2007 2006 2005

Revenue $5,246,789 $8,136,305 $21,957,689

Cost of revenue 2,740,880 4,764,436 7,333,249

Gross profit 2,505,909 3,371,869 14,624,440

Selling, general and administrative

expenses 7,798,511 12,397,618 7,585,837

Research and development expenses 2,096,477 1,558,325 1,323,397

(Loss) income from continuing

operations (7,389,079) (10,584,074) 5,715,206

Interest expense (28,333) (19,314) (27,294)

Interest income 223,488 696,512 441,353

Loss from operations of joint

venture (4,547) (77,365) (847,830)

Other income 2,375,550 450,000 3,486

(Loss) income before income tax

(provision) benefit and

discontinued operations (4,822,921) (9,534,241) 5,284,921

Gain on sale of state tax

benefits - - 115,912

(Provision) benefit for income

taxes (23,895) 38,878 (392,000)

(Loss) income from operations

before discontinued operations (4,846,816) (9,495,363) 5,008,833

Discontinued Operations:

Loss from operations (6,622,497) (4,740,861) (1,123,288)

Gain from sale 216,952 - -

Net (loss) income $(11,252,361) $(14,236,224) $3,885,545

Basic (loss) income per share

Weighted average shares

outstanding 16,968,431 16,810,667 16,465,178

Basic (loss) income per share -

continuing operations $(.28) $(.57) $.30

Basic (loss) income per share -

discontinued operations (.38) (.28) (.06)

Basic (loss) income per share $(.66) $(.85) $.24

Diluted (loss) income per share

Weighted average shares

outstanding 16,968,431 16,810,667 18,457,101

Diluted (loss) income per share -

continuing operations $(.28) $(.57) $0.27

Diluted (loss) income per share -

discontinued operations (.38) (.28) (.06)

Diluted (loss) income per share $(.66) $(.85) $.21


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SOURCE QMed, Inc.
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