American Medical Alert announces operating results for the third quarter of 2009

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 nine months ended September 30, 2009, the highlights of which are as follows:

• Company-wide net income increased approximately 61% for the three months ended September 30, 2009 as compared to same period last year and increased approximately 55% for the nine months ended September 30, 2009 as compared to same period last year.
• Company has built up cash on hand in excess of $5,500,000 at September 30, 2009 and now has working capital of approximately $8,900,000.
• Company executes agreement with Apria Healthcare Group Inc. to form a strategic alliance in which the two companies will collaborate to provide personal emergency response systems. Under the new agreement, AMAC will be Apria’s exclusive provider of PERS products and services.

Revenues for the quarter ended September 30, 2009, consisting primarily of monthly recurring revenues (MRR), increased 5% to $10,121,804 as compared to $9,671,087 for the same period in 2008. Net income for the quarter ended September 30, 2009 increased 61% to $744,145 or $.08 per diluted share as compared to $461,534 or $.05 per diluted share for the same period in 2008.

Revenues for the nine months ended September 30, 2009 increased 2% to $29,536,343, as compared to $28,846,153 for the same period in 2008. Net income for the nine months ended September 30, 2009 increased 55% to $2,125,780 or $0.22 per diluted share as compared to net income of $1,371,917 or $0.14 per diluted share for the previous year. Net Income for the trailing twelve months ended September 30, 2009 and 2008 was $2,193,464 and $1,689,252 respectively, representing an increase of 30%. Earnings before interest, taxes and depreciation and amortization (“EBITDA”) for the nine months ended September 30, 2009 increased 16% to $6,723,948 as compared to $5,780,627 for the same period in 2008. EBITDA for the trailing twelve months ended September 30, 2009 and 2008 was $8,045,690 and $7,611,341.

The Company continues to generate positive operating cash flow and at September 30, 2009 had a cash balance of $5,546,314, as compared to $2,473,733 at December 31, 2008. Along with this, the Company had working capital of $8,919,179 as of September 30, 2009, compared to $5,886,000 at December 31, 2008, representing a 52% increase. The Company also reduced its long-term debt by $1,518,282 during the period from December 31, 2008 to September 30, 2009.

The Company anticipates it will exceed its earnings guidance of $2,750,000 issued on July 30, 2009 by approximately 4% while revenue guidance of $40,750,000 is projected to fall short by approximately 2%. The adjustment to the revenue guidance is primarily the result in the delay of the commercial release of the MedSmart medication and management system. Due to the Company’s ability to operate at higher operating margins than anticipated, the Company is able to forecast greater earnings results despite the revenue shortfall.

Jack Rhian, AMAC’s Chief Executive Officer and President, explained, “The third quarter operating metrics including net earnings, EBITDA and cash flow further validate that our current book of recurring revenue is capable of generating substantial profitability. As we indicated last quarter, management’s primary focus is now directed at revenue enhancement.

AMAC has established a compelling value proposition as a provider of remote patient monitoring products and healthcare communication services. Nationally respected healthcare entities and technology players are recognizing AMAC as a company to collaborate with because of either the full spectrum of our monitoring portfolio and/or strength of our communication center infrastructure. Most recently, Apria Healthcare chose to work exclusively with AMAC for the provision of PERS service to offer our monitoring solution to their vast patient population. MedSmart™, our medication adherence and reporting system is now commercially available and receiving positive reviews from our first customers. We plan to market this innovative product through multiple business to business and direct to consumer channels. We expect MedSmart to become an incremental revenue growth driver for HSMS in 2010. Our TBCS group is also proving the value proposition of providing customer centric, hospital based and clinical trial call center support to the pharmaceutical industry and large hospitals.

Concurrently, we also continue to work on refining and deploying a low cost telehealth solution whereby we can direct the collective data from both medication adherence and vital signs capture and report cumulative information to clinical professionals in a useful and efficient format. We believe that the duality of this data set will prove most helpful for providers to manage large numbers of patients with a variety of chronic conditions including CHF, hypertension, asthma and diabetes in efficient fashion.”

Rhian continued, “As we all wait to see the final details of the federal government’s proposed healthcare reform, we believe AMAC has uniquely positioned itself to succeed and prosper because of the following:

• The onset of a rapidly growing aging population will increase the prevalence of chronic illness.
• Today’s healthcare system is grossly unprepared for millions of baby boomers about to become eligible for Medicare.
• There is an increasing demand for inexpensive, high touch solutions to connect healthcare practitioners to patients to obtain quality healthcare and promote adherence.

We believe the scope of new revenue generation that can arise from these opportunities, when added to our current, stable and profitable book of recurring revenue, allows us to look forward with optimism to 2010.”