Orion Healthcorp Announces Third Quarter 2007 Results

Business Wire, Nov 14, 2007

ATLANTA -- Orion HealthCorp, Inc. (AMEX: ONH) today announced its financial results for the third quarter and nine months ended September 30, 2007.

Terrence L. Bauer, chief executive officer of Orion HealthCorp, said, "We are pleased to report our financial and operating results for the third quarter. We continue to make progress in the integration of the two recent acquisitions, and we are having success in generating organic growth at the new locations. Also, the operating performance of our existing core business is meeting our expectations."

Mr. Bauer added, "In addition to a continuing focus on the growth and development of our business, we are working towards the completion of our previously announced transaction to take the Company private. We continue to believe that this transaction is in the best interests of our company and its customers as well as employees and shareholders."

For the three months ended September 30, 2007, net operating revenues were $8.6 million, a 50.9% increase over the $5.7 million for the same period in the prior year. Loss from continuing operations for the third quarter of 2007 was $757,000, or $0.01 per basic share, compared with a loss from continuing operations of $639,000, or $0.05 per basic share, for the third quarter of 2006. Net loss was $757,000 for the third quarter of 2007 compared with a net loss, including income from discontinued operations of $151,000, of $488,000 for the third quarter of 2006. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $329,000 for the third quarter of 2007 as compared with an EBITDA loss of $113,000 for the third quarter ended September 30, 2006. (A reconciliation of EBITDA to net income for the third quarter and nine months ended September 30, 2007, is provided on the attached unaudited consolidated condensed statements of operations.)

For the nine months ended September 30, 2007, net operating revenues were $25.0 million, a 50.6% increase over the $16.6 million for the same period in the prior year. Loss from continuing operations for the nine months ended September 30, 2007, was $2.5 million or $0.02 per basic share, compared with a loss from continuing operations of $1.2 million, or $0.09 per basic share, for the same period of 2006. Net loss, including income from discontinued operations of $1.0 million, was $1.4 million, or $0.01 per basic share, compared with net income, including income from discontinued operations of $993,000, of $197,000, or $0.01 per basic share, for the same period of 2006. EBITDA totaled $724,000 for the nine months ended September 30, 2007, compared with an EBITDA loss of $278,000 for the prior year period.

The results for the quarter and nine months ended September 30, 2007, included revenues and expenses for Rand Medical Billing and the On Line companies, which the Company acquired in December 2006. In addition, results for the three months and nine months ended September 30, 2007 and 2006, respectively, include the consolidated results of Orion HealthCorp, including its two reportable segments: Practice Management, which provides business and management services to pediatric physician groups, and Revenue Cycle Management, which provides physician billing and collection services and practice management solutions, primarily to hospital-based physicians. The surgery center business operated under the name "SurgiCare" and certain assets of Integrated Physician Solutions (IPS) are reported as discontinued operations for the three months and nine months ended September 30, 2007 and 2006. Certain reclassifications have been made in the 2006 financial statements to conform to the reporting format in 2007. Such reclassifications had no effect on previously reported earnings. In addition, the third quarter 2006 financial statements were restated to reflect operations discontinued subsequent to the third quarter of 2006.

In closing, Mr. Bauer added, "I want to express my thanks to our investors and other constituencies for all of their support over the past three years. Assuming we transition from a public to a private company in the near future, we are committed to taking full advantage of reduced administrative and other costs in order to become an even better employer, physician partner and high growth company. We believe that we have a strong base of business, experienced management and a sound business strategy to move the Company forward. We hope you will continue to be interested in our company as we take the next step in our successful evolution as a force in the healthcare industry."

The live broadcast of Orion HealthCorp's third quarter conference call will begin at 11:00 a.m. Eastern Time on Thursday, November 15, 2007. An online replay of the call will be available for 30 days following the conclusion of the live broadcast. A link for these events can be found on the Company's website at www.orionhealthcorp.com or at www.earnings.com.

Orion's mission is to provide superior billing, collections, practice, business and financial management services for physicians, resulting in optimal profitability for its clients and increased enterprise value for its stakeholders. For more information on Orion HealthCorp, Inc., visit the Company's website at www.orionhealthcorp.com.