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Arcadia Health Care

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Arcadia Resources Announces Improved Fiscal 2011 Third Quarter Results

* DailyMed active patient count increases 21% over second quarter to 6,200
* DailyMed revenues up 23% and prescriptions up 41% over prior year quarter
* Services segment revenues highest since same quarter a year ago
* EBITDA loss narrows to $1.7 million, improves 13% over prior year quarter


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Press Release Source: Arcadia HealthCare On Wednesday February 9, 2011, 8:32 am EST

INDIANAPOLIS--(BUSINESS WIRE)-- Arcadia Resources, Inc. (NYSE Amex: KAD), a leading provider of innovative consumer health care services under the Arcadia HealthCare℠ brand, today announced fiscal 2011 third quarter net revenues of $26.2 million and a consolidated net loss of $2.3 million, or $0.01 per share, which compares to net revenue of $25.7 million and a consolidated net loss of $3.2 million, or $0.02 per share, for the same period in fiscal 2010.

“During the third quarter our operating results improved in both our Pharmacy and Services segments,” said Marvin R. Richardson, President and Chief Executive Officer of Arcadia. “In our Pharmacy segment, we saw substantial growth in active patients, solid growth in our core DailyMed revenue, and progress towards overall segment profitability as we continue to leverage our SG&A compared to the prior quarter. In our Services segment, we saw an increase in revenue and margins compared to the prior quarter and consistent operating contribution. We expect continued improvement during fiscal fourth quarter.”

“We remain in on-going discussions with several large managed care payors who have a strong interest in using DailyMed to improve patient outcomes and manage escalating health care costs. Additionally, we have expanded our market reach for DailyMed into the growing market for transitional care with the addition of pilot programs with highly respected transitional care providers, including Cleveland Clinic. As such, we now have a broader range of opportunities going forward to grow our revenue from both the dispensing of drugs as well as pharmacy services,” Richardson said.

Fiscal 2011 Third Quarter Results

Arcadia reported $26.2 million in revenue from continuing operations during the quarter, up from $25.7 million during the same period a year ago. The Company’s gross margin from continuing operations was 27.6% during the third quarter, a decline of 0.8% from the same period a year ago. The reduction in gross margin was driven by a shift in mix towards Pharmacy revenue, which has lower margins than the Company’s Services segment. For the second quarter of fiscal 2011, revenues and gross margin from continuing operations were $25.8 million and 27.3%, respectively.

Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations were a negative $1.7 million during the quarter, an improvement of 13.4% over the prior year quarter of negative $1.9 million. EBITDA from continuing operations improved by $0.8 million, or 32.0%, from the second quarter of fiscal 2011.

Arcadia reduced its net loss from continuing operations to $2.5 million, or $0.01 per share, in the third quarter of fiscal 2011, compared to a net loss from continuing operations of $3.0 million, or $0.02 per share, in the same period in fiscal 2010. The consolidated net loss, including discontinued operations, was $2.3 million, or $0.01, in the fiscal third quarter in 2011 compared to a net loss of $3.2 million, or $0.02 in the fiscal third quarter in 2010. In the second quarter of fiscal 2011, the net loss from continuing operations and the consolidated net loss were $3.1 million and $2.9 million, respectively.

Segment highlights:

Pharmacy: Pharmacy segment revenues increased to $5.0 million for the third quarter of fiscal 2011, an increase of 2.0% compared to $4.9 million in the previous quarter. Third quarter revenue increased 7.6% compared with the second quarter in the Company’s Indianapolis and California pharmacy locations. Quarter-over-quarter revenues were positively impacted by a 21% growth in active patient count, but were impacted negatively by the loss of certain customers at the Company’s Minnesota pharmacy and the conversion of brand name drugs to generics during the quarter. Pharmacy gross margins were 16.2% in the third quarter of fiscal 2011 compared to 15.6% in the prior quarter. While the Pharmacy experienced reimbursement pressure relating to its California patient base, the margin improvement reflects an increase in higher margin non-drug revenue and improved drug and packaging costs. The Pharmacy segment had an EBITDA loss of $1.4 million during the quarter, a 10.7% improvement compared to the EBITDA loss of $1.5 million in the second quarter of fiscal 2011.

Pharmacy segment revenues of $5.0 million for the third quarter of fiscal 2011 increased 22.6% compared to $4.1 million in revenues for the third quarter of fiscal 2010. Pharmacy gross margins were 16.2% in the third quarter of fiscal 2011 compared to 17.3% in the third quarter of fiscal 2010. EBITDA for the Pharmacy segment was a negative $1.4 million compared to a negative $1.2 million in the same quarter a year ago.

Services: The Company’s Services segment, which includes Arcadia’s home care and medical staffing business, reported net revenue of $21.1 million in the third quarter, an increase of 1.0% compared to net revenues of $20.9 million for the second quarter of fiscal 2011. Home care revenues increased by $180,000, or 1.1%, to $17.0 million from $16.8 in the second quarter. Medical staffing and travel staffing revenue was $4.2 million during the third quarter compared to $4.1 million in the previous quarter. Total Services segment revenue was at its highest level since the third quarter of fiscal 2010. Gross margin within the Services segment was 30.3% in the third quarter of fiscal 2011 compared to 30.0% in the second quarter. The Services segment EBITDA for the third quarter was $1.3 million compared to $1.4 million for the second quarter.

Services segment net revenues of $21.1 million in the third quarter were down slightly compared to net revenues of $21.6 million for the third quarter a year ago. Home care revenues decreased by $124,000, or 0.7%, to $17.0 million from $17.1 million in the same period last year. Medical staffing and travel staffing revenue declined $300,000 to $4.2 million in the third quarter of fiscal 2011 compared to $4.5 million in the same period last year. Gross margin within the Services segment was 30.3% in the third quarter of fiscal 2011 compared to 30.5% in the same period last year. The Services segment EBITDA improved by 18.3%, or $0.2 million, to $1.3 million compared to the prior year quarter.

“These results continue to move us down the path of achieving profitability and becoming cash flow positive. We have seen steady improvement in our Services segment profitability, even though underlying market conditions remain challenging. In our Pharmacy segment, we continue to improve our EBITDA quarter over quarter through higher sales, increased fee for service revenue and operating efficiencies. Our progress is steady and we expect to accelerate the rate of improvement in future quarters,” Richardson commented.

The Company sold its former Catalog segment during the quarter and the Catalog’s operating results are included in discontinued operations.

Capital Resources and Liquidity

Cash flow from operations during the third fiscal quarter improved by $1.1 million to negative $2.3 million compared to negative $3.4 million in the second fiscal quarter of 2011, inclusive of changes in operating assets and liabilities in each quarter of negative $0.9 million and negative $1.1 million, respectively.

At December 31, 2010, the Company had total cash plus line-of-credit availability of $4.4 million. On November 2, 2010, the Company finalized a $4.6 million equity financing transaction, net of fees, whereby it sold 15,606,000 shares of common stock at $0.32 per share. The additional cash will be used to fund and grow the DailyMed operations.

The Company previously announced that it had entered into a new credit facility with Comerica Bank covering its Services segment. The amendment changed certain terms of the agreement, including extension of the maturity date until April 2012, and required a $500,000 increase to the restricted cash account used to collateralize the debt balance.

“While we are continuing to manage our short-term cash flows carefully, we are focused on how we deal with the debt that matures in April 2012. We are exploring a variety of alternatives for handling these debt maturities and we intend to have a plan in place over the next several months,” said Matt Middendorf, Chief Financial Officer.

[Los Fisherman]

Form 10-Q for ARCADIA RESOURCES, INC

9-Feb-2011

Quarterly Report


ITEM 2. Management's Discussion And Analysis Of Financial Condition And Results Of Operations

The following discussion and analysis provides information we believe is relevant to an assessment and understanding of our results of operations and financial condition for the three and nine month periods ended December 31, 2010 and 2009. This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included herein, the consolidated financial statements and notes and the related Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended March 31, 2010 and Form 10-Q for the periods ended June 30, 2010 and September 30, 2010 filed with the SEC on June 11, 2010, August 6, 2010 and November 9, 2010, respectively, which are incorporated herein by this reference.
Cautionary Statement Concerning Forward-Looking Statements The MD&A should be read in conjunction with the other sections of this report on Form 10-Q, including the consolidated financial statements and notes thereto beginning on page 2 of this Report. Historical results set forth in the financial statements beginning on page 2 and this section should not be taken as indicative of our future operations.
We caution you that statements contained in this report (including our documents incorporated herein by reference) include forward-looking statements. The Company claims all safe harbor and other legal protections provided to it by law for all of its forward-looking statements. Forward-looking statements involve known and unknown risks, assumptions, uncertainties and other factors about our Company, which could cause actual financial or operating results, performances or achievements expressed or implied by such forward-looking statements not to occur or be realized. Such forward-looking statements generally are based on our reasonable estimates of future results, performances or achievements, predicated upon current conditions and the most recent results of the companies involved and their respective industries. Forward-looking statements are also based on economic and market factors and the industry in which we do business, among other things. Forward-looking statements are not guaranties of future performance. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "can," "will," "could," "should," "project," "expect," "plan," "predict," "believe," "estimate," "aim," "anticipate," "intend," "continue," "potential," "opportunity" or similar terms, variations of those terms or the negative of those terms or other variations of those terms or comparable words or expressions.
Unless otherwise provided, "Arcadia," "we," "us," "our," and the "Company" refer to Arcadia Resources, Inc. and its wholly-owned subsidiaries. Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. Important factors that could cause actual results to differ materially include, but are not limited to (1) our ability to compete with our competitors; (2) our ability to obtain additional debt or equity financing, if necessary, and/or to restructure existing indebtedness, which may be difficult due to our history of operating losses and negative cash flows; (3) the ability of our affiliated agencies to effectively market and sell our services and products; (4) our ability to procure product inventory for resale; (5) our ability to recruit and retain temporary workers for placement with our customers; (6) the timely collection of our accounts receivable; (7) our ability to attract and retain key management employees; (8) our ability to timely develop new services and products and enhance existing services and products; (9) our ability to execute and implement our growth strategy; (10) the impact of governmental regulations;
(11) marketing risks; (12) our ability to adapt to economic, political and regulatory conditions affecting the health care industry; (13) our ability to successfully integrate acquisitions; (14) the ability of our management team to successfully pursue our business plan; (15) other unforeseen events that may impact our business; and (16) the risks, uncertainties and other factors described in Part II, Item 1A of this Report which are incorporated herein by this reference.

Table of Contents

Overview
Arcadia Resources, Inc., a Nevada corporation, together with its wholly-owned subsidiaries (the "Company"), is a national provider of home care, medical staffing and pharmacy services operating under the service mark Arcadia HealthCare. In May and June 2009, the Company disposed of its Home Health Equipment ("HHE"), retail pharmacy software and industrial staffing businesses. In October 2010, the Company disposed of its home-health oriented mail-order catalog and website business ("Catalog"). Subsequent to these divestitures, the Company operates in two reportable business segments: Home Care/Medical Staffing Services ("Services") and Pharmacy. The Company's corporate headquarters are located in Indianapolis, Indiana. The Company conducts its business from approximately 65 facilities located in 18 states. The Company operates pharmacies in Indiana, California and Minnesota and has customer service centers in Michigan and Indiana.
Critical Accounting Policies
See Part II, Item 7 - Critical Accounting Policies, our consolidated financial statements and related notes in Part IV, Item 15 of our Annual Report on Form 10-K for the year ended March 31, 2010 filed with the SEC on June 11, 2010 for accounting policies and related estimates we believe are the most critical to understanding our condensed consolidated financial statements, financial condition and results of operations and which require complex management judgment and assumptions, or involve uncertainties.
Three-Month Period Ended December 31, 2010 Compared to the Three-Month Period Ended December 31, 2009
Results of Continuing Operations (in thousands, except per share amounts)

Three-Month Period
Ended December 31,
2010 2009
Revenues, net $ 26,172 $ 25,669
Cost of revenues 18,952 18,374

Gross profit 7,220 7,295

Selling, general and administrative 8,904 9,239
Depreciation and amortization 334 484

Total operating expenses 9,238 9,723


Operating loss (2,018 ) (2,428 )

Other expenses:
Interest expense, net 1,003 934
Change in fair value of warrant liability (541 ) (367 )

Total other expenses 462 567


Net loss before income tax expense (2,480 ) (2,995 )
Income tax expense 30 16

Net loss from continuing operations $ (2,510 ) $ (3,011 )


Weighted average number of shares - basic and diluted 187,309 168,788
Net loss from continuing operations per share - basic and
diluted $ (0.01 ) $ (0.02 )


Table of Contents

Revenues, Cost of Revenues and Gross Profits The following table summarizes revenues, cost of revenues and gross profit by segment for the three-month periods ended December 31, (in thousands):

% of Total % of Total $ Increase/ % Increase/
2010 Revenue 2009 Revenue (Decrease) (Decrease)
Revenues, net:
Services $ 21,139 80.8 % $ 21,564 84.0 % $ (425 ) -2.0 %
Pharmacy 5,033 19.2 % 4,105 16.0 % 928 22.6 %

26,172 100.0 % 25,669 100.0 % 503 2.0 %


Cost of revenues:
Services 14,733 14,980 (247 ) -1.6 %
Pharmacy 4,219 3,394 825 24.3 %

18,952 18,374 578 3.1 %


Gross Gross
Margin % Margin %

Gross margins:
Services 6,406 30.3 % 6,584 30.5 % (178 ) -2.7 %
Pharmacy 814 16.2 % 711 17.3 % 103 14.5 %

$ 7,220 27.6 % $ 7,295 28.4 % $ (75 ) -1.0 %


Services Segment
The following table summarizes the Services segment revenues by type for the
three-month periods ended December 31, (in thousands):

% of Total % of Total $ Increase/ % Increase/
2010 Revenue 2009 Revenue (Decrease) (Decrease)

Home care $ 16,971 80.3 % $ 17,095 79.4 % $ (124 ) -0.7 %
Per diem medical staffing 2,831 13.4 % 2,941 13.6 % (110 ) -3.8 %
Travel staffing 1,337 6.3 % 1,527 7.0 % (190 ) -12.5 %

Total Services $ 21,139 100.0 % $ 21,564 100.0 % $ (425 ) -2.0 %


The Services segment remains the largest source of revenue for the Company. Services revenue comes from two business lines, Home Care and Medical Staffing. Medical Staffing consists of both per diem staffing as well as travel nursing and allied health staffing.
For the quarter ending December 31, 2010, Home Care revenue as a percentage of total Services segment revenue increased to 80.3% as compared with 79.4% for the prior year period. Home Care revenues fell by $124,000, or 0.7%, to $16,971,000 from $17,095,000 compared to the prior year quarter. Home Care revenue from government programs declined compared to the prior year period as various state waiver and community-based programs reduced reimbursement rates, limit hours per program participant or a combination of the two. This impacted the Company's business in several key markets, including Arizona, Washington, North Carolina and California. In addition, private duty Home Care revenue was impacted compared to the prior year by high unemployment rates and the resulting availability of family caregivers in lieu of our services, and the impact of lower retirement savings and investment accounts on the demand for private pay services.

Table of Contents

Total Medical Staffing revenue declined 6.7% compared to the prior year quarter to $4,168,000 from $4,468,000. Per diem medical staffing declined 3.8% over the prior year quarter, while travel nursing and allied health medical staffing decreased 12.5% over the prior year quarter. Overall demand for temporary medical staffing remains depressed driven by low patient censuses, the return of retired or part-time staff to full time status and the increases in overtime accepted by permanent staff at many facilities. The increase in travel staffing revenue was driven primarily by a higher level of orders from a large correctional customer.
The Services segment operates independently and through a network of affiliated agencies ("Affiliates") throughout the United States. These affiliated agencies are independently-owned, owner-managed businesses, which have been contracted by the Company to sell services under the Arcadia name. The affiliated agency's commission is based on a percentage of gross profit (see additional discussion in the "Selling, General and Administrative" section). Revenue generated from the Affiliate locations was $14,113,000 for the three-month period ended December 31, 2010 compared to $14,824,000 for the prior year quarter. This $711,000, or 4.8%, decrease in revenue was driven by lower levels of Medical Staffing as well as some reduction in Home Care revenues in some Affiliate locations. The Company-Owned locations revenue increased by $2,874,000, or 4.3%, to $7,026,000 during the fiscal third quarter 2011 compared to the prior year quarter. The Affiliate locations accounted for 66.8% of total Services segment revenue during the fiscal third quarter 2011, and this percentage is down slightly from 68.3% for the prior year quarter.
Gross margin in the Services segment was 30.3% for the fiscal second quarter 2011, which represents a slight decrease from 30.5% for the prior year quarter. While the overall mix of higher margin Home Care business increased as a percentage of total revenues, this gross margin benefit was offset by several factors. These factors included a reduction in margins on several state-sponsored home care programs, such as Arizona, North Carolina, Washington and California; a reduction in the percentage of business generated in some of the Company's higher margin offices and markets, including the state of Michigan; and an overall decline in the margins in the medical staffing business due to changes in staffing business mix. Pharmacy Segment
The revenue in the Pharmacy segment increased by $928,000, or 22.6%, to $5,033,000 during fiscal third quarter 2011 compared to the prior year quarter. The growth in the Pharmacy segment continues to be driven by the Company's DailyMed program and its relationship with payers who are ultimately responsible for the total healthcare spend of its patient members. In August 2010, the Company announced the amendment and extension of its agreement with WellPoint, which was originally executed in June 2009. Under this agreement, the Company continues to roll out the DailyMed medication management program to WellPoint's high-risk Medicaid members in states where WellPoint companies provide Medicaid managed care benefits. The initial five states are: California, Virginia, New York, Kansas and South Carolina. Starting in August 2009, the program is gradually being rolled out to WellPoint's high risk members in these states, and to date, the program has been launched in Virginia, California, South Carolina and Kansas. The increase in revenue during the fiscal third quarter 2011 was primarily driven by new California patients.
The costs of revenue in the Pharmacy segment include the cost of medications and packaging for the DailyMed proprietary dispensing system. Gross margins for the three-month period ended December 31, 2010 were 16.2% compared to 17.3% for the prior year quarter. The decrease in margin was primarily driven by reimbursement pressure relating to the California patient base.

Table of Contents

Selling, General and Administrative
The following table summarizes selling, general and administrative expenses by
segment for the three-month periods ended December 31, (in thousands):

% of Total % of Total $ Increase/ % Increase/
2010 SG&A 2009 SG&A (Decrease) (Decrease)

Services $ 5,121 57.6 % $ 5,496 59.6 % $ (375 ) -6.8 %
Pharmacy 2,177 24.5 % 1,938 20.9 % 239 12.3 %
Corporate 1,606 17.9 % 1,805 19.5 % (199 ) -11.0 %

$ 8,904 100.0 % $ 9,239 100.0 % $ (335 ) -(3.6 %)


SG&A as a % of net revenue 34.5 % 36.8 %


Services Segment
The Services segment selling, general and administrative expense decreased to $5,121,000 for the three-month period ended December 31, 2010 compared to $5,496,000 for same quarter a year ago. This $375,000, or 6.8%, decrease was primarily due to decreases in commissions paid to Affiliates and bad debt expense. Affiliate commissions are based on the gross margins of the individual Affiliates, and the $185,000, or 6.7%, decrease is approximately consistent with the 4.8% decrease in Affiliate revenue. Additionally, bad debt expense has decreased by $110,000 over the prior year quarter. The Services business has focused on improving its cash collections on both current and past due accounts and has both reduced the absolute dollar level of past due accounts, particularly over 150 days, as well as decreased its days' sales outstanding. The improved management of accounts receivable has resulted in the need for a lower bad debt provision than in the prior year quarter. Pharmacy Segment
The Pharmacy segment selling, general and administrative expense increased by $239,000, or 12.3%, to $2,177,000 during the fiscal third quarter 2011 compared to the prior year quarter. In general, the increase in Pharmacy expenses was due to the significant growth in prescription volume, patients and revenue in this segment. Labor costs were the primary driver for the increase in expense compared to the prior year quarter as a certain portion of the Pharmacy's labor is variable and will fluctuate with volume. Additionally, the Company opened a Pharmacy in California during the fiscal third quarter 2010. The California volume has grown significantly since that time, which has resulted in an increase in certain expenses, including labor, occupancy, and shipping. As the Pharmacy segment continues to grow, management expects selling, general and administrative expenses to grow as well but at a lower rate than revenue as the business continues to leverage its overhead costs and improve its overall efficiencies.
The DailyMed program includes a significant level of patient care and value-added services designed to improve compliance, adherence and safety of a patient's medication regimen. These pharmacy services include consolidation, synchronization and transfer of prescriptions and medication therapy management (MTM) services. The Company makes a significant investment in these services as they are a key part to achieving the patient benefits and health care cost reductions associated with DailyMed. The Company's business model contemplates that payers will be willing to share some of these cost savings as they are realized either through a "per member per month (PMPM)" fee, fees for services provided, or some type of cost savings arrangement.

Table of Contents

Corporate
Corporate selling, general and administrative expense decreased by $199,000, or 11.0%, to $1,606,000 for fiscal third quarter 2011 compared to $1,805,000 for the prior year quarter. This decrease reflects reductions in professional fees, employee benefits, and insurance costs. The reduction in legal fees was the primary driver in the lower professional fees as the Company was involved in fewer disputes and claims in the current year quarter compared to the prior year. Employee benefits decreased during the current year quarter due to a decrease in workers' compensation costs as the Company continues to focus on managing claims. Insurance costs were lower due to reductions in premiums effective with the policy year that began in September 2010. Depreciation and Amortization
The following table summarizes depreciation and amortization expense for the three-month periods ended December 31 (in thousands):

$ Increase/ % Increase/
2010 2009 (Decrease) (Decrease)
Depreciation and amortization of
property and equipment $ 191 $ 325 (134 ) -41.2 %
Amortization of acquired intangible
assets 143 159 (16 ) -10.1 %

Depreciation and amortization $ 334 $ 484 $ (150 ) -31.0 %


Depreciation and amortization of property and equipment decreased by $134,000 or 41.2%, during the three-month period ended December 31, 2010 compared to the prior year period. The decrease reflects the decrease in the depreciation expense relating to certain pharmacy software that became fully depreciated during fiscal 2010.
Amortization of acquired intangible assets decreased by $16,000, or 10.1%, during fiscal third quarter 2011 compared to the prior year quarter. The decrease reflects a slight decrease in the amortization expense associated with customer relationships. The amortization expense is adjusted annually and attempts to match the expense to the economic benefit generated by the specific intangible asset.
Interest Expense and Income
The following table summarizes interest expense and income for the three-month periods ended December 31, (in thousands):

$ Increase/ % Increase/
2010 2009 (Decrease) (Decrease)
Interest expense $ 1,006 $ 940 $ 66 7.0 %
Interest income (3 ) (6 ) 3 -50.0 %

$ 1,003 $ 934 $ 69 7.4 %


Interest expense for fiscal third quarter 2011 was $1,006,000, which represents a $66,000, or 7%, increase compared to the prior year quarter expense of $940,000. Total interest expense includes the amortization of debt discounts and deferred financing costs of $101,000 and $157,000 for fiscal third quarter 2011 and 2010, respectively. Additionally, interest expense includes non-cash interest of $748,000 and $608,000 that was added to the principal balance of the outstanding debt for fiscal third quarter 2011 and 2010, respectively. The average interest bearing liabilities balance (sum of the balances at the end of each quarter divided by the number of quarters) for fiscal third quarter 2011 was $38.8 million compared to $34.7 million for fiscal third quarter 2010, which represents an increase of 11.8%. The increase was primarily due to the increase in the amounts due to H.D. Smith under the line of credit agreement executed in April 2010, and the additional H.D. Smith borrowings were the primary driver for the increase in interest expense during the current year quarter.

Table of Contents

Change in Fair Value of Warrant Liability The 7,135,713 warrants issued in November 2009 in conjunction with the equity financing transaction and an additional 500,000 warrants issued in conjunction with the H.D. Smith debt financing are recorded as a liability at fair value with subsequent changes in fair value recorded in earnings. The fair value of the warrants is determined using the Black-Scholes pricing model and is affected by changes in inputs to that model, including: our stock price, expected stock price volatility, and contractual terms. To the extent that the fair value of the warrant liability increases or decreases, the Company records a loss or gain in the statement of operations. The total gain of $541,000 on the change in fair value of the warrant liability during fiscal third quarter 2011 was primarily due to the changes in our stock price.
Income Taxes
Income tax expense was $30,000 for the three-month period ended December 31, 2010 compared to $16,000 for the same period a year ago.
Due to the Company's losses in recent years, it has paid nominal federal income taxes. For federal income tax purposes, the Company had significant permanent and timing differences between book income and taxable income resulting in combined net deferred tax asset balance to be utilized by the Company for which an offsetting valuation allowance has been established for the entire amount. The Company has a net operating loss carryforward for tax purposes totaling $63.3 million that expires at various dates through 2029. Internal Revenue Code
Section 382 rules limit the utilization of certain of these net operating loss carryforwards upon a change of control of the Company. It has been determined that a change in control took place at the time of the reverse merger in 2004, and as such, the utilization of $700,000 of the net operating loss carryforwards will be subject to severe limitations in future periods.

Table of Contents

Earnings (Loss) from Discontinued Operations The following table summarizes the components of the earnings (loss) from discontinued operations for the three-month period ended December 31, (in thousands):

Three Month Period
Ended December 31,
2010 2009
Revenues, net:
Catalog $ - $ 437

$ - $ 437


Loss from operations:
Services - Industrial Staffing $ (7 ) $ (3 )
Catalog (28 ) (10 )
Home Health Equipment (1 ) (124 )
Pharmacy - Software - (20 )

$ (36 ) $ (157 )


Gain (loss) on disposal:
Services - Industrial Staffing $ 292 $ 15
Catalog $ (64 ) $ -

$ 228 $ 15


Earnings (loss) from discontinued operations:
Services - Industrial Staffing $ 285 $ 12
Catalog (92 ) (10 )
. . .

[martins.c]

Prese 30mila a0,1925... Inspiegabile! Trimestrale buona, in netto miglioramento, hanno da poco chiuso un offerta di azioni a inv sopra 30 cents... Io le tengo...target almeno 50 cents

[Devilfish]

Originalmente inviato da martins.c

Prese 30mila a0,1925... Inspiegabile! Trimestrale buona, in netto miglioramento, hanno da poco chiuso un offerta di azioni a inv sopra 30 cents... Io le tengo...target almeno 50 cents

hai fatto bene la stavo guardando anchio ieri

tra oggi e domani entro anchio

[Devilfish]

0,15 dovrebbe toccare per entrare sul titolo

[martins.c]

non penso arriverà cosi in basso... la trimestrale era in netto miglioramento e, considerando che hanno venduto molti assets a fine 2009, stanno gia ritornando ad investire e a crescere come prima del 2009... vuol dire che si stanno rafforzando...

titolo sottile ma con pazienza darà i suoi frutti...

[Devilfish]

0,14 supporto

[Devilfish]

entrato a 0,1589

vediamo se vogliono scendere ancora

un piu 20% e me ne esco fuori

[Los Fisherman]

ancora a monitor,vediamo se in chiusura entro anch'io
il calo di questi giorni mi sa di opera di istituzionali
intanto siamo vicini al minimo storico (0.125 se non erro)