American Medical Alert second-quarter net income increases 30% to $791,418

American Medical Alert Corp. (NASDAQ: AMAC) a provider of healthcare communication services and advanced telehealth monitoring technologies, today announced operating results for the quarter and six months ended June 30, 2010, the highlights of which are as follows:

“Net Income before Equity in net loss from investment in a limited liability company and Loss on Abandonment”

• Company-wide net income increased approximately 22% for the six months ended June 30, 2010 and 30% for the three months ended June 30, 2010 as compared to same periods last year (before effect of minority investment charge).
• HSMS division for the second consecutive quarter achieved a gross profit level of 60%.
• The Company declares second special dividend of $0.10 per share.
• Company sets date to commence aggressive advertising campaign to market its PERS and MedSmart product direct to consumers.

Revenues for the quarter ended June 30, 2010, consisting primarily of monthly recurring revenues (MRR), increased 2% to $9,712,145 as compared to $9,518,206 for the same period in 2009. Net income for the quarter ended June 30, 2010 increased 30% to $791,418 or $.08 per diluted share as compared to $608,385 or $.06 per diluted share for the same period in 2009. Net income for the quarter ended June 30, 2010 excludes $68,515 of net expense, net of income taxes, incurred with respect to the Company's joint venture with Qualcomm and Hughes Telematics, Inc. (known as "Lifecomm"). This net expense represents the Company's share of R&D and other selling, general and administrative expenses incurred for the development of the next generation mobile PERS. This expense, which is expected to increase over the next several quarters, is not related to the Company's business operations. The Company's net income for the quarter ended June 30, 2010 after taking into effect of this charge was $722,903, or $.07 per diluted share.

Revenues for the six months ended June 30, 2010 increased 1% to $19,623,392, as compared to $19,448,295 for the same period in 2009. Net income for the six months ended June 30, 2010 increased 22% to $1,678,790 or $0.17 per diluted share as compared to net income of $1,381,635 or $0.14 per diluted share for the previous year. Net income for the six months ended June 30, 2010 excludes $68,515 of net expense, net of income taxes, incurred with respect to the Company's joint venture with Qualcomm and Hughes Telematics, Inc. as discussed above. Net income for the six months ended June 30, 2010 after taking into effect of this charge was $1,610,275, or $0.16 per diluted share, which would represent a 17% increase over the prior year. Net Income for the trailing twelve months increased 31% to $3,186,668 as compared to $2,432,480 for the same period in 2009. This 31% growth rate excludes a one time non operating charge of $521,627 for loss on abandonment incurred in 2008 (which affects the results for the twelve months ended June 30, 2009), and thereby more accurately reflects the growth from an operational perspective. The trailing twelve month net income also excludes $68,515 of net expense, net of income taxes, incurred with respect to the Company's joint venture with Qualcomm and Hughes Telematics, Inc. as discussed above.

Earnings before interest, taxes and depreciation and amortization ("EBITDA") for the six months ended June 30, 2010 increased 4% to $4,597,773 as compared to $4,428,102 for the same period in 2009. EBITDA for the trailing twelve months ended June 30, 2010 and 2009 was $9,163,465 and $7,683,194, respectively.

The Company continues to demonstrate financial strength within its balance sheet even after taking into effect its $4,000,000 investment in a joint venture with Qualcomm, Inc. and Hughes Telematics, Inc. to develop a next generation mobile PERS system. The Company had cash in excess of $4,000,000 at June 30, 2010, had working capital of $9,088,062, representing a ratio of 3.78 to 1, and a debt to equity ratio of .11 to 1. As a result of its continued trend of generating positive cash flow from operations, the Company recently announced its second special dividend of $0.10 per share, following its first dividend in the same amount paid in January of this year. This dividend will be paid on or about October 1, 2010, to shareholders of record on September 13, 2010. Notwithstanding the issuance of these special cash dividends, the company's ongoing cash flow generation will also allow us to take advantage of potential strategic acquisitions and fund our advertising campaigns which are central to our growth strategy. In addition, as discussed in today's guidance report, due to the tax benefit associated with the investment made in our Lifecomm joint venture, we expect to save approximately $1.6 million in taxes over the next eighteen months which will help fuel the cash flow requirements in support of our aggressive business development expansion.

Jack Rhian, AMAC's Chief Executive Officer and President, explained, "The guidance provided today, is consistent with statements I made earlier this year that the pace of new revenue generation would increase beginning in the second half of the year. We believe these increases in revenues will continue over the next eighteen months and have a compounding affect due to the nature of our recurring revenue model. We are particularly pleased with the business development activities observed within our TBCS division which had been trailing behind that of our HSMS division.

During the past several months we have recruited a variety of seasoned sales and marketing personnel and have reorganized our sales personnel into four distinct teams with primary and secondary channel objectives within both divisions. With respect to our HSMS division, we are reactivating our Walgreens direct to consumer TV/Web advertising campaign beginning in September and, with our enhanced sales and marketing team in place, pursuing large volume PERS business-to-business channel opportunities. I am also pleased to report that development work on our cellular based Mobile PERS solution, under our Lifecomm joint venture arrangement with Qualcomm and Hughes Telmatics, is progressing well. With regard to MedSmart, our medication management system, we remain bullish that this product can become a material contributor to our HSMS division over time. In addition to the previously reported MedSmart pilot study programs we are in talks with several other national provider organizations that have expressed interest in piloting MedSmart. As we plan to launch our direct to consumer TV/Web advertising program pilots in September, we believe the collateral benefit of this advertising campaign will provide greater product awareness for our B2B sales effort. Within our TBCS group, our hospital solutions and PhoneScreen Pharmaceutical support programs continue to gain traction while the awards announced earlier this year have begun full scale implementation and related revenue generation.

We have a seasoned management team with the depth of knowledge capable of creating and executing on the opportunities arising from both our TBCS and HSMS divisions. Our product and service offerings are advanced and complementary while remaining cost sensitive. AMAC is a recognized solutions provider and we are capable of partnering and providing service to the largest and most respected healthcare and technology companies. As we execute on our plan, I am confident we can meet or exceed our guidance issued today."