IntegraMed® Q3 EPS Increased to $0.12 vs. $0.09; Revenue Rose 15% to a Record $69.4M

IntegraMed America, Inc. (NASDAQ: INMD):

IntegraMed America, Inc. (NASDAQ: INMD), a leader in developing, marketing and managing specialty healthcare facilities in the fertility and vein care markets, today announced results for the third quarter and the nine months ended September 30, 2011 and reviewed plans for the balance of the year.

IntegraMed CEO, Jay Higham, commented, "These results are a testament that the underlying business is healthy and that our vein care growth strategy is indeed delivering results. As we said when we launched our growth initiative in early 2010, we are building a business for the long-term and are now beginning to see the returns on those investments. In summary, we are happy with the progress we have achieved and the opportunity for long-term growth across both of our segments. We believe that our strategy is working, and are pleased to begin driving this success to the bottom line.”

"Our Attain Fertility Centers business continued to outperform the overall fertility market, showcasing the value-add that we bring to our partner and affiliate centers. Growth across this segment was driven at both partners and affiliates, with healthy underlying metrics, including growth in new patients and IVF and IUI cycles. However, contribution for the segment continues to be muted due to the re-allocation of G&A expenses from the corporate level that took place earlier this year. Going forward, this segment will benefit from our focus on new fertility center acquisitions, in-market mergers and continued expansion of the Attain IVF treatment financing program.

"As anticipated, in our Vein Clinics business, we are seeing the contribution from the recently opened clinics as well as the added operational efficiency across our mature clinics as reflected in the almost 400% increase in contribution. With net revenues increasing by 26.8% versus the prior year, this segment of our business is reflecting both same and new-store growth that will result in continued strong performance going forward. As the roll-out of new clinics has indeed proven to be successful, we expect some minor delays in bringing to market a few of the clinics previously slated for year-end. We are reaffirming plans to open 10 new clinics in 2012 with the majority of those clinics opening in the first half of the year.”

Attain Fertility Centers

The Attain Fertility Centers Division had solid demand across both its fertility partners as well as the Attain IVF program. Overall, revenue in this division grew 10.7% in Q3 ‘11, reflecting the Company’s ability to outpace the fertility market as a whole, which remains flat. Fertility partner centers also experienced healthy growth in new patient visits, with growth in IVF cycle volumes outpacing that of the lower priced IUI cycles.

During the quarter, the Company did experience a small drop in Attain IVF enrollments compared to the same period last year. Although applications continued to grow, a similar slow down in enrollments was noted in early 2009, as this is a very economically sensitive component of the Company’s business given its average price point of approximately $25,000.

Looking ahead, IntegraMed remains committed to additional fertility center acquisitions and signing new Attain IVF program affiliates that will help drive added revenue, further diversify its geographic footprint and consolidate the Company’s positions as a leader in this market.

Vein Clinics (VCA)

(1) Defined as clinics opened prior to January 1, 2010.

(2) Defined as clinics opened after January 1, 2010.

Driven by revenue from new clinics – those clinics opened after January 2010 – the Vein Clinics division was able to further leverage its top line growth contributing to the Company’s overall EPS results of $0.12 vs. $0.09 in the previous year period. Revenue from mature clinics was relatively flat as the Company continued to make adjustment to its operations and staffing. In addition, the segment continues to see approximately 98% of its revenue coming from managed care and commercial insurance reimbursement (15% of which is Medicare), with the remainder being self-pay.

IntegraMed opened one new vein clinic in Q3, bringing the total new clinics opened year-to-date and over the last twelve months to four and ten, respectively. The total number of clinics in operation stands at 44 as of the end of Q3.

As in recent quarters, Vein clinic contribution was impacted by the net new clinic start-up losses, which amounted to $0.5 million, which was consistent with what the Company experienced during the third quarter of 2010. The Company anticipates start-up losses of approximately $500,000 for Q4. In addition, it is anticipated that there will be approximately $3 million in start up losses in 2012, with half those losses occurring in Q1 2012 and the balance equally spread across the remainder of the year in a very similar pattern to 2011.

Cash Flow and Balance Sheet

IntegraMed’s cash and cash equivalents rose to $54.4 million, versus $52.2 million at September 30, 2010 and $50.2 million at year-end 2010, principally reflecting cash flow from operating activities of $17.6 million in the first nine months of 2011, inclusive of the $1.65 million pre-tax provision for the settlement of a medical malpractice suit during Q2. This compares to $19.2 million for the first nine months of 2010.

IntegraMed CFO, Tim Sheehan, added, "We are pleased with our quarterly revenue record and with our ability to continue to generate cash. In addition, our balance sheet continues to improve as reflected in the nearly 25% reduction in our overall debt position and the $4.3 million increase in our cash position.”

INTEGRAMED AMERICA, INC.
SUPPLEMENTARY DATA
(all amounts in thousands)
(unaudited)

Adjusted EBITDA Reconciliation

Adjusted EBITDA represents net income plus interest, taxes, depreciation, amortization and amortization of deferred compensation. The Company believes that the most directly comparable financial measure to Adjusted EBITDA in accordance with GAAP is net income. The following table provides a reconciliation of Adjusted EBITDA to net income for the periods presented:

About IntegraMed America, Inc.

IntegraMed is a leader in developing, marketing and managing specialty outpatient healthcare facilities, with a current focus on the fertility and vein care markets. IntegraMed supports its provider networks with clinical and business information systems, marketing and sales, facilities and operations management, finance and accounting, human resources, legal, risk management, quality assurance, and fertility treatment financing programs.

Attain Fertility Centers, an IntegraMed Specialty, is the nation’s largest fertility center network, with 14 company-managed partner centers and 25 affiliate centers, comprising over 130 locations across 34 states and the District of Columbia. Nearly one of every four IVF procedures in the U.S. is performed in an Attain Fertility Centers network practice.

Vein Clinics of America, an IntegraMed Specialty, is the leading provider of specialty vein care services in the U.S. The IntegraMed Vein Clinic network operates 44 centers across 14 states, principally in the Midwest and Southeast.

For more information about IntegraMed please visit: www.integramed.com for investor background, www.attainfertility.com for fertility, or www.veinclinics.com for vein care.

Statements contained in this press release that are not based on historical fact, including statements concerning future results, performance, expectations and expansion of IntegraMed are forward-looking statements that may involve a number of risks and uncertainties. Actual results may differ materially from the statements made as a result of various factors, including, but not limited to, the risks associated with IntegraMed's ability to identify, consummate and finance future growth, changes in insurance coverage, government laws and regulations regarding health care or managed care contracting; and other risks, including those identified in the company's most recent Form 10-K and in other documents filed by IntegraMed with the U.S. Securities and Exchange Commission. All information in this press release is as of November 3, 2011 and IntegraMed undertakes no duty to update this information.