Lawndale Amends National Home Health Care 13D Filing - Finds Merger Price Inadequate; Will Vote Against Transaction And Requests

MILL VALLEY, Calif., Dec. 20  /PRNewswire/ -- Lawndale Capital Management LLC, the owner of 7% of National Home Health Care Corp. (NASDAQ:NHHC), in a December 19, 2006 letter attached as an exhibit in an amended Schedule 13D filed earlier today with the SEC, informed NHHC's Board of Directors of its opposition to the proposed merger of NHHC with affiliates of Angelo Gordon, in partnership with Eureka Capital Partners and members of management.

Commenting on the proposed transaction, Andrew Shapiro, Managing Member of Lawndale Capital Management, LLC, a Mill Valley, CA-based investment manager, stated "As one of NHHC's largest independent shareowners, we have significant concerns as to both the price and the sales process. The price is at a discount to NHHC's recent market and historical values, ignoring the Company's strong debt-free balance sheet, which stockpiles over $20 million in cash."

Shapiro added, "There is no evidence that any auction seeking the highest price for shareowners ever took place."  Noting that several companies comparable to NHHC, were acquired at much higher purchase multiples this year after holding such an "auction" process, Shapiro said, "We have asked the Committee to enable its Advisor, Houlihan Lokey, to overtly contact likely interested parties. Unfortunately, the agreement inexplicably prohibits the Company from going out and soliciting higher bids.  Any interested bidders have to first find and bang on the Special Committee's door, to present written 'bona fide' proposals."

Noting that NHHC's senior executives will be continuing with the company in partnership with the buying group, Shapiro added, "It appears to us that NHHC Insiders used their skills to find their own best partner rather than finding the highest bid for all shareowners."  Noting that the merger price was locked into prior to the anniversary of many of NHHC's non-recurring and temporary operating expenses, Shapiro questioned, "Was management's timing for the sale a coincidence?"

Copy of Lawndale's December 19, 2006 letter to NHHC's board at the SEC EDGAR website: http://www.sec.gov/Archives/edgar/data/728389/000093583606000369/nhhc13d.htm

ABOUT LAWNDALE CAPITAL MANAGEMENT, LLC:

Lawndale Capital Management, LLC and the funds it manages have been long-term shareowners of National Home Health Care Corp. and have become its third largest independent shareowner, owning 394,048 shares, or 7.0% of National Home Health Care's outstanding shares

Headquartered in Mill Valley CA, Lawndale Capital Management, LLC is an investment advisor that manages activist hedge funds that have focused on creating and unlocking shareholder value micro- and small-cap companies for almost 14 years. 

DATASOURCE: Lawndale Capital Management LLC



CONTACT:  Larry Dennedy of MacKenzie Partners, [phone], for

Lawndale Capital Management; or Andrew Shapiro, of Lawndale Capital

Management, LLC, [phone]

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