ATC Healthcare Announces Fourth Quarter and Fiscal Year End 2007 Results of Operations

  
    
  
  
    
      ATC Healthcare, Inc. (AMEX:AHN), 
      a leader in medical staffing, today reported results for its fourth 
      quarter and fiscal year end 2007, which ended February 28, 2007.
    
    
      Year over Year Results
    
    
      Revenues increased by $17.9 million, or 25%, to $89.4 million for the 
      Fiscal Year ended 2007, compared to $71.5 million for Fiscal Year ended 
      2006. The increase in revenues resulted primarily from strong organic 
      growth in both licensed offices and Company-owned offices. In addition, 
      we recorded strong revenue of $7.5 million from our June 2006 
      acquisition of Critical Nursing Solutions. Service costs were 78.7% of 
      total revenues for Fiscal Year ended 2007 as compared to 76.5% for 
      Fiscal Year ended 2006. Service costs represent all direct costs of 
      providing services to our clients. The increase was due primarily to 
      higher wages and benefits paid to nurses based on the market conditions. 
      As a result the Company will work to pursue higher margin business 
      throughout Fiscal 2008.
    
    
      Income from operations for Fiscal Year ended 2007 decreased by $.2 
      million to $.3 million compared to $.5 million for Fiscal Year ended 
      2006. Net loss for Fiscal Year ended 2007 decreased by $.2 million to a 
      loss of $(2.1) million or $(.07) per basic and diluted share compared to 
      $(2.3) million or $(.08) per basic and diluted share for Fiscal Year 
      ended 2006. The Company’s results were 
      impacted by $.4 million in stock-based compensation expense and $.4 
      million in legal expense due to a litigation settlement. In Fiscal 2008 
      the Company’s stock-based compensation expense 
      is expected to be lower and legal expenses should decrease.
    
    
      Fourth Quarter Results
    
    
      Revenues increased by $5.5 million, or 30%, to $23.9 million for the 
      three months ended February 28, 2007 compared to $18.4 million for the 
      same period 2006. Service costs were 79.6% of total revenues in the 
      three months ended in 2007 as compared to 76.1% for the three months 
      ended in 2006. Income from operations decreased by $.6 million from $.3 
      million for the three months ended in 2006 to a loss of $.3 million for 
      the three months ended in 2007. Net loss increased by $1.0 million from 
      a net loss of $(.2) million for the three months ended in 2006, to a net 
      loss of $(1.2) million for the three months ended in 2007. Basic and 
      diluted loss per share was $(.03) for the three months ended in 2007 and 
      basic and diluted loss per share was $(.01) for the three months ended 
      in 2006.
    
    
      Management Comments
    
    
      “We are very pleased with the continued 
      revenue growth of 25% for Fiscal Year 2007”, 
      remarked David Savitsky, Chief Executive Officer. “As 
      anticipated, our acquisition of Critical Nursing Solutions in June has 
      contributed nicely to these revenue increases. Equally exciting is that 
      our existing offices have shown significant organic growth and we have 
      also added offices to penetrate and grow certain territories. As we 
      enter a new year of operations we believe the demand for temporary 
      nurses and our services will continue to increase. In Fiscal 2008 we are 
      working towards attracting higher margin business while working 
      diligently to control our expenses. As we continue to grow revenues, we 
      look forward to ATC attaining profitability."
    
    
      ATC Fourth Quarter and Year End Earnings Call
    
    
      In conjunction with this release, management will host a conference call 
      to discuss the earnings release at 1:00 PM EST, on Thursday, May 31, 
      2007. To listen to the call, participants in the US and Canada should 
      dial: [phone], five minutes prior to the start time of the call. 
      The access code is 3664180. A telephonic replay of the call may 
      be accessed by dialing [phone] and entering access code 3664180. 
      The replay will be available from 3:30 PM EDT, on May 31, 2007 until 
      midnight, Central Standard Time, June 1, 2007. This release, along with 
      any additional financial or statistical information to be presented on 
      the call, will be archived on the Corporate Press Releases section of 
      our website, www.atchealthcare.com
    
    
      Forward Looking Statements
    
    
      Certain statements contained in this release that are not statements of 
      historical facts are “forward-looking 
      statements” within the meaning of the Private 
      Securities Litigation Reform Act of 1995. The words — 
      “believe”, “expect”, 
      “anticipate”, “intend”, 
      “will”, and 
      similar expressions are examples of words that identify forward-looking 
      statements. Forward-looking statements include, without limitation, 
      statements regarding our future financial position, timing of future 
      revenue, business strategy and cost savings. These forward-looking 
      statements are based on our current beliefs, as well as assumptions we 
      have made based upon information currently available to us. These 
      forward-looking statements may be affected by the risks and 
      uncertainties in our business and are qualified in their entirety by the 
      cautionary statements and risk factor disclosure contained in our 
      filings with the Securities and Exchange Commission, including our 
      annual report on Form 10-K for the year ended February 28, 2006. We do 
      not assume, and expressly disclaim, any obligation to update these 
      forward-looking statements.
    
    
      About ATC Healthcare, Inc.
    
    
      ATC is a national leader in medical staffing personnel to hospitals, 
      nursing homes, clinics and other healthcare facilities with 52 locations 
      in 31 states. ATC provides supplemental staffing, outsourcing and human 
      resource solutions to hospitals, nursing homes, medical and research 
      facilities and industry. Drawing from a pool of over 15,000 healthcare 
      professionals spanning more than 50 specialties, the company supplies 
      both clinical and non-clinical personnel for short-term, long-term, and “traveling” 
      contract assignments. To learn more about the company’s 
      services, visit their website at www.atchealthcare.com.
    
    
      
        
          
            ATC HEALTHCARE, INC. AND SUBSIDIARIES
          
          
            CONSOLIDATED STATEMENTS OF OPERATIONS
          
          
            (dollars in thousands, except per share data)
          
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          For the Three Months Ended
        
        
        
        
          For the Fiscal Years Ended
        
      
      
        
        
        
        
        
          February 28, 2007
        
        
        
        
          February 28, 2006
        
        
        
        
          February 28, 2007
        
        
        
        
          February 28, 2006
        
      
      
        
        
        
        
        
          (Unaudited)
        
        
        
        
        
        
        
        
        
      
      
        
          REVENUES:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Service revenues
        
        
        
        
          $
        
        
          23,856 
        
        
           
        
        
          $
        
        
          18,367 
        
        
           
        
        
          $
        
        
          89,401 
        
        
           
        
        
          $
        
        
          71,528 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          COSTS AND EXPENSES:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Service costs
        
        
        
        
        
        
          18,994 
        
        
        
        
        
        
          13,986 
        
        
        
        
        
        
          70,394 
        
        
        
        
        
        
          54,721 
        
      
      
        
          General and administrative expenses
        
        
        
        
        
        
          4,727 
        
        
        
        
        
        
          3,974 
        
        
        
        
        
        
          17,896 
        
        
        
        
        
        
          15,830 
        
      
      
        
          Depreciation and amortization
        
        
        
        
        
        
          135 
        
        
        
        
        
        
          77 
        
        
        
        
        
        
          510 
        
        
        
        
        
        
          517 
        
      
      
        
          Loss on litigation settlement
        
        
        
        
           
        
        
          342 
        
        
           
        
        
           
        
        
          - 
        
        
           
        
        
           
        
        
          342 
        
        
           
        
        
           
        
        
          - 
        
      
      
        
          Total operating expenses
        
        
        
        
           
        
        
          24,198 
        
        
           
        
        
           
        
        
          18,037 
        
        
           
        
        
           
        
        
          89,142 
        
        
           
        
        
           
        
        
          71,068 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          INCOME (LOSS) FROM OPERATIONS:
        
        
        
        
           
        
        
          (342)
        
        
           
        
        
           
        
        
          330 
        
        
           
        
        
           
        
        
          259 
        
        
           
        
        
           
        
        
          460 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          INTEREST AND OTHER EXPENSE (INCOME):
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest expense, net
        
        
        
        
        
        
          761 
        
        
        
        
        
        
          435 
        
        
        
        
        
        
          2,292 
        
        
        
        
        
        
          2,188 
        
      
      
        
          Other expense (income), net
        
        
        
        
           
        
        
          213 
        
        
           
        
        
           
        
        
          70 
        
        
           
        
        
           
        
        
          173 
        
        
           
        
        
           
        
        
          (23)
        
      
      
        
          Total interest and other expense (income)
        
        
        
        
           
        
        
          974 
        
        
           
        
        
           
        
        
          505 
        
        
           
        
        
           
        
        
          2,465 
        
        
           
        
        
           
        
        
          2,165 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
        
        
        
        
           
        
        
          (1,316)
        
        
           
        
        
           
        
        
          (175)
        
        
           
        
        
           
        
        
          (2,206)
        
        
           
        
        
           
        
        
          (1,705)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          INCOME TAX (BENEFIT) PROVISION
        
        
        
        
           
        
        
          (100)
        
        
           
        
        
           
        
        
          - 
        
        
           
        
        
           
        
        
          (47)
        
        
           
        
        
           
        
        
          50 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NET LOSS FROM CONTINUING OPERATIONS
        
        
        
        
           
        
        
          (1,216)
        
        
           
        
        
           
        
        
          (175)
        
        
           
        
        
           
        
        
          (2,159)
        
        
           
        
        
           
        
        
          (1,755)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          DISCONTINUED OPERATIONS:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Loss from discontinued operations net of tax benefit of $1,452 in 
          Fiscal 2005
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
           
        
        
          - 
        
        
           
        
        
           
        
        
          - 
        
        
           
        
        
           
        
        
          - 
        
        
           
        
        
           
        
        
          (577)
        
      
      
        
          NET LOSS
        
        
        
        
          $
        
        
          (1,216)
        
        
           
        
        
          $
        
        
          (175)
        
        
           
        
        
          $
        
        
          (2,159)
        
        
           
        
        
          $
        
        
          (2,332)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          DIVIDENDS ACCRETED TO PREFERRED STOCKHOLDERS'
        
        
        
        
           
        
        
          19 
        
        
           
        
        
           
        
        
          119 
        
        
           
        
        
           
        
        
          526 
        
        
           
        
        
           
        
        
          273 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NET LOSS AVAILABLE TO COMMON STOCKHOLDERS'
        
        
        
        
          $
        
        
          (1,235)
        
        
           
        
        
          $
        
        
          (294)
        
        
           
        
        
          $
        
        
          (2,685)
        
        
           
        
        
          $
        
        
          (2,605)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss Per Share:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Loss from continuing operations:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Loss per basic and diluted common share
        
        
        
        
          $
        
        
          0.03 
        
        
           
        
        
          $
        
        
          0.01 
        
        
           
        
        
          $
        
        
          (0.07)
        
        
           
        
        
          $
        
        
          (0.06)
        
      
      
        
          Loss from discontinued operations:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Loss per basic and diluted common share
        
        
        
        
          $
        
        
          - 
        
        
           
        
        
          $
        
        
          - 
        
        
           
        
        
          $
        
        
          - 
        
        
           
        
        
          $
        
        
          (0.02)
        
      
      
        
          Net loss:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Loss per basic and diluted common share
        
        
        
        
          $
        
        
          0.03 
        
        
           
        
        
          $
        
        
          0.01 
        
        
           
        
        
          $
        
        
          (0.07)
        
        
           
        
        
          $
        
        
          (0.08)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average basic and dilute common shares outstanding
        
        
        
        
           
        
        
          40,619 
        
        
           
        
        
           
        
        
          36,898 
        
        
           
        
        
           
        
        
          39,394 
        
        
           
        
        
           
        
        
          31,955