American HomePatient Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2004.

BRENTWOOD, Tenn. -- Company Also Provides Inhalation Drug Reimbursement Update

American HomePatient, Inc. (OTCBB:AHOM) today reported net income of $3.0 million and revenues of $83.5 million for the third quarter ended September 30, 2004. For the nine months ended September 30, 2004, the Company reported net income of $5.0 million and revenues of $251.6 million.

The Company's net income of $3.0 million for the third quarter of 2004 compares to net income of $0.4 million for the third quarter of 2003 representing an increase of $2.6 million. The Company's net income of $5.0 million for the first nine months of 2004 compares to net income of $9.3 million for the first nine months of 2003. Net income for the first nine months of 2003 excluded approximately $10.0 million in non-default interest expense that would have been paid had the Company not sought bankruptcy protection. Net income for the first nine months of 2003 included approximately $3.8 million of reorganization items compared to $0.5 million for the same period in 2004.

The Company's revenues of $83.5 million for the third quarter of 2004 represent a decrease of $0.4 million, or 0.5%, from the third quarter of 2003. The Company's revenues of $251.6 million for the first nine months of 2004 represent an increase of $2.3 million, or 1.0%, over the first nine months of 2003. Revenues in the current quarter and first nine months of 2004 were reduced by approximately $1.8 million, or 2.2%, and $5.6 million, or 2.2%, respectively, as a result of an approximate 15.8% reduction in the Medicare reimbursement rates for inhalation drugs effective January 1, 2004. The sale of inhalation drugs comprised approximately 12% of the Company's total revenues for the third quarter and first nine months of 2004.

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. EBITDA for the third quarter of 2004 and for the third quarter of 2003 was $14.6 million and $11.3 million, respectively. For the third quarter of 2004, adjusted EBITDA (calculated as EBITDA excluding reorganization items) was $15.0 million or 18.0% of revenues. For the third quarter of 2003, adjusted EBITDA was $12.2 million or 14.5% of revenues. EBITDA for the first nine months of 2004 and for the first nine months of 2003 was $39.2 million and $31.9 million, respectively. For the first nine months of 2004, adjusted EBITDA was $39.8 million or 15.8% or revenues. For the first nine months of 2003, adjusted EBITDA was $35.6 million or 14.3% of revenues.

Bad debt expense for the third quarter of 2004 decreased by approximately $0.3 million compared to the third quarter of 2003. Bad debt expense for the first nine months of 2004 increased by approximately $0.9 million compared to the first nine months of 2003. Bad debt expense in the current year has been impacted by disruptions in cash collections resulting from the inability of certain third-party payors to effectively process electronic claims due to the implementation of the new HIPAA Transaction and Code Sets. Also impacting bad debt expense has been payment delays associated with certain state Medicaid programs. Bad debt expense improved in the third quarter of 2004 compared to the third quarter of 2003 due to improved cash collections of patient receivables in the third quarter of 2004 compared to the third quarter of 2003. Certain intermediaries have begun processing claims in a more timely manner, which has improved collections in the third quarter of 2004.

Total operating expenses decreased by approximately $3.1 million in the third quarter of 2004 compared to the third quarter of 2003 and decreased by approximately $4.4 million in the first nine months of 2004 compared to the same period in 2003. These decreases are primarily the result of the Company's initiatives to reduce personnel costs in its branches and billing centers.

Inhalation Drug Reimbursement Update

As previously announced by the Company, healthcare providers and patients had expressed concern that the inhalation drug reimbursement reductions scheduled for January 2005 could force providers to exit the market and create patient access issues for these critical drugs. On October 8, 2004, CMS indicated that, based on a recent GAO report and other public sources, a reasonable monthly dispensing fee would be in the range of $55.00 to $64.00. The Medicare fee schedule for inhalation drugs has not yet been finalized, but based on that range the Company expects to continue in the inhalation drug business. The Company appreciates the efforts of the Department of Health and Human Services (HHS), the Center for Medicare & Medicaid Services (CMS), congressional leaders, and members of the current Administration in trying to solve the patient access problem.

American HomePatient, Inc. is one of the nation's largest home health care providers with 280 centers in 35 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. provides information related to non-GAAP financial measurements such as, EBITDA, 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, such as adjusted EBITDA, 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 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 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.

American HomePatient, Inc.                                  Schedule A
Summary Financial Data
(In thousands, except per share
 data)

                                 Three Months Ended Nine Months Ended
                                    September 30,      September 30,
                                 ------------------ ------------------
                                    2004     2003      2004     2003
                                 ------------------ ------------------
                                    (unaudited)        (unaudited)

Revenues, net                    $ 83,502 $ 83,893  $251,587 $249,264
Cost of sales and related
 services                          17,463   17,342    53,919   52,084
Cost of rentals and other
 revenues, including rental
 equipment depreciation             9,937    9,562    29,084   26,958
Operating expenses                 41,316   44,380   127,913  132,311
Bad debt expense                    2,708    2,955     9,187    8,278
General and administrative
 expenses                           4,201    4,337    12,710   13,009
Earnings from unconsolidated
 joint ventures                    (1,026)    (964)   (3,257)  (3,385)
Depreciation, excluding rental
 equipment, and amortization          797      942     2,434    2,713
Interest expense, net               4,587    4,269    13,894    4,219
Other income, net                     (40)    (376)     (122)    (282)

                                 --------- -------- --------- --------
Income from operations before
 reorganization items and income
 taxes                              3,559    1,446     5,825   13,359

Reorganization items                  449      920       520    3,776

                                 --------- -------- --------- --------
Income from operations before
 income taxes                       3,110      526     5,305    9,583

Provision for income taxes            100      100       300      300

                                 --------- -------- --------- --------
Net income                       $  3,010 $    426  $  5,005 $  9,283
                                 ========= ======== ========= ========



Basic income per common share    $   0.18 $   0.03  $   0.30 $   0.57
Diluted income per common share  $   0.18 $   0.02  $   0.29 $   0.49

----------------------------------------------------------------------

                                 September 30,   December 31,
                                     2004             2003
                                 -------------   ------------
                                  (unaudited)

Cash and equivalents             $  9,147          $  2,571
Restricted cash                       650               400
Net patient receivables            52,202            56,940
Other receivables                   1,281             1,935
                                 -------------   ------------
        Total receivables          53,483            58,875
Other current assets               18,024            20,606
                                 -------------   ------------
        Total current assets       81,304            82,452
Property and equipment, net        58,197            56,831
Goodwill                          121,834           121,834
Other assets                       19,836            22,923
                                 -------------   ------------
        Total Assets             $281,171          $284,040
                                 =============   ============

Accounts payable                 $ 16,961          $ 17,518
Current portion of long-term debt
 and capital leases                 6,931            11,720
Other current liabilities          33,846            33,097
                                 -------------   ------------
        Total current liabilities  57,738            62,335

Long-term debt and capital
 leases, less current portion     250,009           251,194
Other noncurrent liabilities        2,079             4,262
                                 -------------   ------------
        Total liabilities         309,826           317,791

        Minority interest             534               498

        Total shareholders'
         deficit                  (29,189)          (34,249)
                                 -------------   ------------
        Total Liabilities and
         Shareholders' Deficit   $281,171          $284,040
                                 =============   ============


American HomePatient, Inc.                                  Schedule B
Reconciliation of Non-GAAP Financial
 Measurements to GAAP Financial
 Statements
(In thousands)

                             Three Months Ended    Nine Months Ended
                                 September 31,        September 30,
                             -------------------- --------------------
                                 2004     2003        2004     2003
                             -------------------- --------------------
                                  (unaudited)          (unaudited)

 Net income                      $3,010     $426      $5,005   $9,283

 Add:

   Provision for income taxes       100      100         300      300

   Interest expense, net          4,587    4,269      13,894    4,219

   Rental equipment
    depreciation                  6,071    5,513      17,600   15,342

   Other depreciation  and
    amortization                    797      942       2,434    2,713
                             ----------- -------- ----------- --------

 Earnings before interest,
  taxes, depreciation, and
  amortization (EBITDA)         $14,565  $11,250     $39,233  $31,857

 Add:

   Reorganization items             449      920         520    3,776
                             ----------- -------- ----------- --------

 Adjusted EBITDA (EBITDA
  excluding reorganization
  items)                        $15,014  $12,170     $39,753  $35,633
                             =========== ======== =========== ========