Medical Biller/Collector Orion HealthCorp Shrinks Loss in Third Quarter

Orion HealthCorp, Inc. today announced its financial results for the third quarter and nine months ended September 30, 2006.

For the three months ended September 30, 2006, net operating revenues were $7.5 million compared with $7.3 million for the same period in the prior year. Net loss was $488,000, or $0.04 per basic share, for the third quarter of 2006 compared with a net loss of $6.1 million, or $0.53 per basic share, for the prior year period. The net loss for the three month period ended September 30, 2005, includes a loss from operations of discontinued businesses of $4.2 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $47,000 for the third quarter of 2006 as compared to an EBITDA loss of $1.1 million for the three months ended September 30, 2005. (A reconciliation of EBITDA to net income is provided on the attached un-audited consolidated condensed statements of operations.)

Terrence L. Bauer, chief executive officer of Orion HealthCorp, said, ?We believe that these results reflect the continued improvement in the financial performance of our company. We remain focused on building our core business, providing billing and collection services and practice management solutions to physicians, both through organic growth and strategic acquisition. Demand for revenue cycle management services continues to grow as there is escalating pressure on physicians to operate more efficiently and outsource the management of billing and collections. Furthermore, the quantity and quality of acquisition opportunities in our pipeline continue to improve as market consolidation activity remains robust.?

For the nine months ended September 30, 2006, net operating revenues were $21.6 million compared with $22.5 million for the same period in the prior year. Loss from continuing operations was $773,000, or $0.06 per basic share, for the nine months ended September 30, 2006, compared with a loss from continuing operations of $4.7 million, or $0.48 per basic share, for the same period in 2005. Net loss, including income from discontinued operations of $576,000, was $197,000, or $0.01 per basic share, for the nine months ended September 30, 2006, compared with a net loss, including a loss from discontinued operations of $11.4 million, (including a charge for impairment of intangible assets of $9.8 million) of $16.1 million, or $1.65 per basic share, for the same period in 2005. EBITDA totaled $163,000 for the nine months ended September 30, 2006, compared with an EBITDA loss of $2.1 million for the prior year period.

The results for the three months and nine months ended September 30, 2006 and 2005, respectively, include the consolidated results of Orion HealthCorp, with two of its business units: Integrated Physician Solutions, Inc., which provides business and management services to pediatric physician groups, and Medical Billing Services, Inc., 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? is reported as discontinued operations for the three months and nine months ended September 30, 2006 and 2005.