Eatontown, New Jersey, January 27, 2006 – QMed, Inc. (NASDAQ Symbol: QMED) today announced financial results for the fiscal year and fourth quarter ending November 30, 2005. Revenue for the year increased to $22,146,496 from $15,576,599 a year ago. Net income for the year totaled $3,885,545 or $0.24 per share, $0.21 per share on a diluted basis, compared to a net loss of $(1,739,445) or $(0.12) per share in the previous year. The Company had approximately $23.4 million of cash and investments at November 30, 2005. Revenue for the three-month period ended November 30, 2005 increased to $6,423,479 up approximately 34% from $4,785,815 in the prior year’s quarter. Previously deferred revenues of approximately $1,400,000 were recognized as a result of achieving or surpassing performance goals on health plan contracts with HealthPartners ($400,000) and PacifiCare ($1,000,000). Net income for the quarter was $1,146,814 or $.07 per share, $.06 per share on a diluted basis, inclusive of approximately $116,000 related to the sale of net operating losses, compared to net income of $1,136,134 or $.08 per share, $.07 per share on a diluted basis, for the same period a year ago. Michael W. Cox, QMed president and CEO said, “We are pleased to report this strong financial performance for the fourth quarter. Indeed, our Company’s performance for the entire year was quite robust, especially considering the development and operational costs associated with our QMedCare and Health e Monitoring initiatives. We are heartened that our programs continue to deliver superior and dependable quality and financial results to our health plan customers, as shown by the quarter’s recognition of deferred revenues from PacifiCare and HealthPartners contracts. Additionally, we had recognized revenue, previously deferred, under our contract with SummaCare for similar positive outcomes in the achievement of performance measures.” “These achievements demonstrate yet again that our evidence-based clinical information management system performs extremely well in multiple geographies, as well as among Medicare seniors, and that it engages, and is supported by, physicians,” he continued. “Importantly, these performance achievements reinforce the already strong case for the announced transition to Medicare Advantage Special Needs Plan (MA SNP) business that we have begun in South Dakota with our partner, DAKOTACARE. That transition will shortly be accelerated with our filing in another state, this time for a wholly owned HMO license, so that we will own as well as operate the MA SNP in that new state, creating asset value for shareholders. Meanwhile, we have received positive receptions from several middle market Medicare Advantage health plans on partnering in Special Needs Plan business.” “We are seeing increased interest in our Health e Monitoring programs from a number of diverse and prominent organizations, health plans among them. We expect that Health e Monitoring will make meaningful contributions to our Company this year and, like QMedCare, provide us with further diversification and industry leadership,” Cox added. “We expect 2006 to be an active development year for the Company. The SNP project in South Dakota was launched a few days ago and it is too early to estimate enrollment for the quarter or the year. While there is confusion surrounding the Medicare Part D prescription drug benefit, our drug benefit design covers the so-called “doughnut hole” and has been well received by pharmacies and practicing physicians in South Dakota.” “Consequently, we recently notified CMS that we intend to submit a benefit design for 2007, which may include an expanded South Dakota SNP offering. Preliminary engagement for this project with physicians, institutions and community senior centers to explain the benefits of our SNP approach is proceeding satisfactorily. In this new effort we are building an MA SNP business from scratch with a deeply talented executive QMedCare team. We are competing in an emerging arena, and we get more than our usual share of questions from physicians, clinic administrators, hospitals and patients. With our growing experience in South Dakota, we are confident that this critical migration of our expertise is the right move for our Company. As a result, we expect to submit a freestanding HMO license application to New Jersey regulators within the next few weeks, with expectations of a January 2007 go-live date for this new wholly owned SNP. In keeping with this 2007 plan, we have advised CMS of our intention to apply for a chronically ill SNP in New Jersey, with a start date of January 1, 2007,” Cox concluded. About QMed, Inc.
QMed provides evidence-based clinical information management systems around the country to its health plan customers. The system incorporates Disease Management services to patients and decision support to physicians. The Company’s QMedCare subsidiary specializes in serving high-risk populations of Medicare beneficiaries with its first project commencing in South Dakota in January 2006. Health e Monitoring is QMed’s subsidiary offering weight, obesity and health promotion programs. The Company has been selected in two Demonstrations in the vast Medicare fee-for-service program. More information on QMed, Inc. can be obtained at www.qmedinc.com, by calling (732) 544-5544 or by emailing investor@qmedinc.com
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