Healthcare :: Matria Healthcare’s 2006 results and guidance for 2007

Matria Healthcare, Inc. (NASDAQ:MATR) announced its financial results for the fourth quarter and year ended December_31, 2006.

On January_6, 2006, the Company announced its strategic decision to divest Facet Technologies and Dia Real, its foreign diabetes services operation in Germany. The sales of those businesses were completed in 2006, and their results of operations are included in discontinued operations for all periods presented. The comparison between 2005 and 2006 results is for the Company?s continuing operations, which include its Health Enhancement segment, comprised of its disease management, wellness, productivity enhancement, maternity management and informatics operations.

As previously communicated, the Company will be deferring a portion of the revenues from new client implementations, including Wellmark, particularly in the first two quarters of 2007, until the outcomes data prove that the applicable performance criteria have been met, and the deferred revenues can be recognized. The recognition of the deferred revenues are expected to contribute to substantial growth in revenue and profit in the third and fourth quarters of 2007. Additionally, the Company reported that it expects to implement at least 35 new clients in the first quarter of 2007.

Richard M. Hassett, M. D., President and COO, commented, ?Our expectations for 2007 and the sequential quarter-over-quarter growth that accelerates in the third and fourth quarters are driven by a number of factors. The Wellmark account is being implemented late in the first quarter and should begin to materially impact our revenues in the second half of the year. Contributing to the significant second half revenue increase is the expectation for the recognition of previously deferred revenues from Wellmark and other clients implemented early in 2007 and late in 2006. Our MaternaLink? program in our maternity management business is also expected to generate significant growth in the third and fourth quarters. Also, pipeline activity for our existing products, including our recently announced Physician-Patient Care Alerts product, is expected to contribute to third and fourth quarter revenue growth. Lastly, our strategic alliance with Secured Independence is generating traction in the long-term care insurance industry, and we expect to receive a number of business awards from this sales channel that will commence revenue production in the third and fourth quarters.?

The Company also reaffirmed its full-year 2007 EBITDA guidance of $101 to $103 million before the effect of share-based compensation.

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