ATC Healthcare Announces Fourth Quarter and Fiscal Year End 2007 Results of Operations

Business Wire,  May 29, 2007  

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Revenue Increased 25% Year Over Year

Fourth Quarter Revenue Up 30%

LAKE SUCCESS, N.Y. -- ATC Healthcare, Inc. (AMEX:AHN), a leader in medical staffing, today reported results for its fourth quarter and fiscal year end 2007, which ended February 28, 2007.

Year over Year Results

Revenues increased by $17.9 million, or 25%, to $89.4 million for the Fiscal Year ended 2007, compared to $71.5 million for Fiscal Year ended 2006. The increase in revenues resulted primarily from strong organic growth in both licensed offices and Company-owned offices. In addition, we recorded strong revenue of $7.5 million from our June 2006 acquisition of Critical Nursing Solutions. Service costs were 78.7% of total revenues for Fiscal Year ended 2007 as compared to 76.5% for Fiscal Year ended 2006. Service costs represent all direct costs of providing services to our clients. The increase was due primarily to higher wages and benefits paid to nurses based on the market conditions. As a result the Company will work to pursue higher margin business throughout Fiscal 2008.

Income from operations for Fiscal Year ended 2007 decreased by $.2 million to $.3 million compared to $.5 million for Fiscal Year ended 2006. Net loss for Fiscal Year ended 2007 decreased by $.2 million to a loss of $(2.1) million or $(.07) per basic and diluted share compared to $(2.3) million or $(.08) per basic and diluted share for Fiscal Year ended 2006. The Company's results were impacted by $.4 million in stock-based compensation expense and $.4 million in legal expense due to a litigation settlement. In Fiscal 2008 the Company's stock-based compensation expense is expected to be lower and legal expenses should decrease.

Fourth Quarter Results

Revenues increased by $5.5 million, or 30%, to $23.9 million for the three months ended February 28, 2007 compared to $18.4 million for the same period 2006. Service costs were 79.6% of total revenues in the three months ended in 2007 as compared to 76.1% for the three months ended in 2006. Income from operations decreased by $.6 million from $.3 million for the three months ended in 2006 to a loss of $.3 million for the three months ended in 2007. Net loss increased by $1.0 million from a net loss of $(.2) million for the three months ended in 2006, to a net loss of $(1.2) million for the three months ended in 2007. Basic and diluted loss per share was $(.03) for the three months ended in 2007 and basic and diluted loss per share was $(.01) for the three months ended in 2006.

Management Comments

"We are very pleased with the continued revenue growth of 25% for Fiscal Year 2007", remarked David Savitsky, Chief Executive Officer. "As anticipated, our acquisition of Critical Nursing Solutions in June has contributed nicely to these revenue increases. Equally exciting is that our existing offices have shown significant organic growth and we have also added offices to penetrate and grow certain territories. As we enter a new year of operations we believe the demand for temporary nurses and our services will continue to increase. In Fiscal 2008 we are working towards attracting higher margin business while working diligently to control our expenses. As we continue to grow revenues, we look forward to ATC attaining profitability."

ATC Fourth Quarter and Year End Earnings Call

In conjunction with this release, management will host a conference call to discuss the earnings release at 1:00 PM EST, on Thursday, May 31, 2007. To listen to the call, participants in the US and Canada should dial: (800) 238-9007, five minutes prior to the start time of the call. The access code is 3664180. A telephonic replay of the call may be accessed by dialing (888) 203-1112 and entering access code 3664180. The replay will be available from 3:30 PM EDT, on May 31, 2007 until midnight, Central Standard Time, June 1, 2007. This release, along with any additional financial or statistical information to be presented on the call, will be archived on the Corporate Press Releases section of our website, www.atchealthcare.com

Forward Looking Statements

Certain statements contained in this release that are not statements of historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words -- "believe", "expect", "anticipate", "intend", "will", and similar expressions are examples of words that identify forward-looking statements. Forward-looking statements include, without limitation, statements regarding our future financial position, timing of future revenue, business strategy and cost savings. These forward-looking statements are based on our current beliefs, as well as assumptions we have made based upon information currently available to us. These forward-looking statements may be affected by the risks and uncertainties in our business and are qualified in their entirety by the cautionary statements and risk factor disclosure contained in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended February 28, 2006. We do not assume, and expressly disclaim, any obligation to update these forward-looking statements.