American HomePatient Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2008

Business Wire, July 31, 2008

BRENTWOOD, Tenn. -- American HomePatient, Inc. (OTCBB: AHOM), one of the nation's largest home health care providers, today announced its financial results for the second quarter and six months ended June 30, 2008.

Revenues for the second quarter of 2008 were $64.2 million compared to $73.3 million for the second quarter of 2007, representing a decrease of $9.1 million, or 12.4%. Revenues for the six months ended June 30, 2008 were $133.4 million compared to $150.3 million for the same period in 2007, representing a decrease of $16.9 million, or 11.2%. The revenue decreases for the second quarter and six months were primarily attributable to a change in inhalation drug product mix and the Company's reduced emphasis on less profitable product lines such as non-respiratory durable medical equipment and infusion therapy. Also contributing to the overall decrease in revenues was the effect during the second half of 2007 of Company initiatives designed to improve patient co-pay collections and provide appropriate service levels to patients. The Company believes most of the revenue lost as a result of these initiatives was unprofitable.

Operating expenses declined in the second quarter of 2008 compared to the second quarter of 2007 by approximately $1.0 million, or 2.8%. Operating expenses for the six months ended June 30, 2008 compared to the same period in 2007 declined by $1.7 million, or 2.4%. The decreases in operating expenses for the second quarter and six months were primarily the result of improved operating efficiencies and the resulting reduced operating costs, partially offset by increases in certain expenses associated with the development and implementation of initiatives designed to provide additional productivity improvements.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a non-GAAP financial measurement that is calculated as net income excluding interest, taxes, depreciation and amortization. Adjusted EBITDA (EBITDA excluding discontinued operations and change of control expense) was $10.5 million, or 16.4% of net revenue, for the second quarter of 2008 compared to $12.3 million, or 16.7% of net revenue, for the same period of 2007. Adjusted EBITDA was $24.5 million, or 18.4% of net revenue for the six months ended June 30, 2008 compared to $25.8 million, or 17.2% of net revenue, for the same period of 2007. The decline in adjusted EBITDA in the current year is primarily the result of the aforementioned revenue decreases partially offset by reductions in operating expenses resulting from improved operating efficiencies and reduced bad debt expense attributable to improvements made in the Company's accounts receivable collection processes.

Net loss for the second quarter of 2008 was $(2.1) million, or $(0.12) per diluted share, compared to net loss of $(6.4) million, or $(0.36) per diluted share, for the second quarter of 2007. Net loss for the six months ended June 30, 2008 was $(1.6) million, or $(0.09) per diluted share, compared to a net loss of $(5.3) million, or $(0.30) per diluted share, for the same period of 2007. The comparison of net income for the second quarter and six months ended June 30, 2008 to the same periods in 2007 was affected by the recording of a change of control expense of $6.6 million, partially offset by a gain on discontinued operations of $2.2 million.

American HomePatient, Inc. is one of the nation's largest home health care providers with operations in 33 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. American HomePatient, Inc.'s common stock is currently traded in the over-the-counter market or, on application by broker-dealers, in the NASD's Electronic Bulletin Board under the symbol AHOM or AHOM.OB.

American HomePatient, Inc. prepares its financial statements in accordance with U.S. generally accepted accounting principles (GAAP). American HomePatient, Inc. also provides information related to non-GAAP financial measurements such as EBITDA, and from time to time, other non-GAAP financial measurements that adjust for certain items outside of the ordinary course of its business. To enable interested parties to reconcile non-GAAP measures to the Company's GAAP financial statements, the Company clearly defines EBITDA and quantifies all other adjustments to GAAP measurements (see Schedule B). The Company provides EBITDA information, a widely used non-GAAP financial measurement, as a performance measure to assist in analyzing the Company's operations and in comparing the Company to its competitors. The Company provides other non-GAAP financial measurements that adjust for certain items outside of the ordinary course of business in order to assist in comparing the Company's current operating performance to its historical performance. These adjustments typically reflect non-recurring items but sometimes reflect items, such as dispositions of assets and restructuring charges that are not technically non-recurring but are outside of the ordinary course of operations. Investors should note that such measures may not be comparable to similarly titled measures used by other companies, and investors are encouraged to use this information only in connection with the information contained in the Company's GAAP financial statements.