American HomePatient Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2007.

BRENTWOOD, Tenn. -- American HomePatient, Inc. (OTCBB: AHOM), one of the nation's largest home health care providers, today announced its financial results for the fourth quarter and year ended December 31, 2007.

Revenues for the fourth quarter of 2007 were $71.5 million compared to $83.1 million for the fourth quarter of 2006, representing a decrease of $11.6 million, or 14.0%. Revenues for the year ended December 31, 2007 were $293.0 million compared to $321.8 million for the same period in 2006, representing a decrease of $28.8 million, or 8.9%. A significant portion of the revenue decrease for the fourth quarter and year ended December 31, 2007 was due to a planned decrease in revenues associated with non-focus product lines, such as non-respiratory durable medical equipment and infusion therapy. Also contributing to the decrease in revenues was the effect of Company initiatives implemented in late 2006 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. The Company's revenue was also negatively affected in the current year by temporary disruptions in certain sales and marketing processes during the Company's implementation of various operational initiatives, which have resulted in improved operating efficiencies and reduced costs. In addition, Medicare reimbursement reductions implemented in 2007 reduced revenues in the current year by approximately $4.6 million.

Operating expenses declined in the fourth quarter of 2007 compared to the fourth quarter of 2006 by approximately $0.9 million, or 2.5%. Operating expenses for the year ended December 31, 2007 compared to the same period in 2006 declined by $10.5 million, or 7.0%. These decreases were primarily the result of improved operating efficiencies and the resulting reduced costs.

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 $13.7 million, or 19.2% of net revenue, for the fourth quarter of 2007 compared to $13.7 million, or 16.5% of net revenue, for the same period of 2006. For the twelve months of 2007, adjusted EBITDA was $52.7 million, or 18.0% of net revenue, compared to $48.2 million, or 15.0% of net revenue, for the twelve months of 2006. The improvement in adjusted EBITDA in the current year was primarily the result of improved operating efficiencies.

Net loss for the fourth quarter of 2007 was $(0.3) million, or $(0.02) per diluted share, compared to a net income of $1.4 million, or $0.08 per diluted share, for the fourth quarter of 2006. Net loss for 2007 was $(5.5) million, or $(0.31) per diluted share, compared to a net loss of $(2.6) million, or $(0.15) per diluted share, for the same period of 2006. The comparison of net loss for 2007 to net income for 2006 was negatively affected by expenses associated with a change of control in 2007 and positively affected by the recognition of discontinued operations which included a gain on the sale of assets in 2007. Also affecting the comparison of net loss in the current year to the prior year was the recording of non-cash income tax expense of $3.5 million in 2007 related to a deferred tax liability associated with indefinite-lived intangible assets. Net income in 2007, excluding the above items, improved compared to the prior year primarily as a result of the change in focus to more profitable revenue and the operating efficiencies mentioned above.

As previously announced, the Company's 2008 Annual Meeting of Stockholders is scheduled to be held on June 4, 2008. The Company's proxy statement and information indicating time and place of Annual Meeting will be sent to the Company's stockholders of record at a later date.

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 adjusted 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 adjusted 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.

Certain statements made in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause the Company's actual results or performance to materially differ from any future results or performance expressed or implied by such forward-looking statements. These statements involve risks and uncertainties, including, without limitation, risks and uncertainties regarding current and future reimbursement rates, as well as reimbursement reductions and the Company's ability to mitigate the impact of the reductions. These risks and uncertainties are in addition to risks, uncertainties, and other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company cautions investors that any forward-looking statements made by the Company are not necessarily indicative of future performance. The Company is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet services.

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