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Investor Relations
703.742.5393
InvestorRelations@quadramed.com

 

Reston, VA — August 8, 2007 —

QuadraMed® Corporation (Amex:QD) announced today that it will report net income of $2.2 million before preferred stock accretion for the three months ended June 30, 2007, compared to a net income of $3.8 million before preferred stock accretion for the same period in 2006. Income from operations was $1.3 million for the three months ended June 30, 2007, compared to income from operations of $3.6 million for the same period in 2006.

Cash and investments increased by $3.4 million during the three months ended June 30, 2007, to $56.2 million, and have increased $11.7 million since December 31, 2006. Cash flow from operations was $4.9 million for three months ended June 30, 2007, compared to $4.1 million for the corresponding three months in 2006.

Revenues of $34.4 million (including a $3.7 million sale of hardware to a single customer), gross margin of 53% and operating expenses of $17.0 million combined to produce the achieved operating results for the quarter. These are compared to revenues of $32.0 million, gross margin of 65% and operating expenses of $17.3 million for the same period in 2006.

Total operating expenses of $17.0 million for the three months ended June 30, 2007 are compared to $17.3 million for the three months ended June 30, 2006. After removing the effect of $0.4 million of acquisition related expenses from the 2007 figures, operating expenses decreased approximately $0.7 million between the three month periods.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was $3.1 million or 9% of revenues for the three months ended June 30, 2007, compared to EBITDA of $5.7 million or 18% of revenues for the same period in 2006.

The Company will also report net income attributable to common shareholders of $0.9 million, or $0.02 per basic and diluted share, for the three months ended June 30, 2007; this is compared to a net income attributable to common shareholders of $2.3 million, or $0.06 per basic and $0.05 per diluted share, for the same period in 2006.

"These second quarter results continue our string of profitable quarters, now five in a row and six out of the last seven. Our sales bookings for the first half of the year are ahead of the internal targets we set coming into this year. We believe this market success is beginning to validate the changes we made in the sales structure at the beginning of the year, as well as our new product strategy focused on the Care-based Revenue Cycle process. With the recent announcement of our plans to acquire the CPR product line, we are now positioning QuadraMed to actively compete in the large hospital market, which is the next logical step in our strategic plan targeted at long term success,” said Keith Hagen, QuadraMed’s President and Chief Executive Officer.

The Company reported on July 22, 2007 that it had signed a definitive agreement to acquire the Computerized Patient Record (CPR) assets and related business of Misys Healthcare, a division of Misys plc (FTSE: MSY.L), for $33 million in cash, and that the transaction is expected to close within sixty days from the date of the announcement. Misys CPR is a leading enterprise-wide computerized patient record and electronic health record system.

Management will review these results in an investment community conference call at 4:00 PM Eastern (1:00 PM Pacific) on Wednesday, August 8, 2007. To ensure fair dissemination of information, no inquiries of management should be made regarding QuadraMed’s results until after the conference call. A brief question and answer period will follow management’s presentation. The dial-in number for the conference call is 800-263-8506 domestic and 719-457-2681 international. Callers should dial in by 3:45 PM Eastern (12:45 PM Pacific) to register. The call will also be webcast live and available to the public via the Investor Relations section of QuadraMed’s webpage at www.quadramed.com. Please note that the webcast is listen-only. Listeners should access the website at 3:45 PM Eastern (12:45 PM Pacific) to register and to download and install any necessary audio software. Webcast replays will be available shortly after the live call is completed. Replay will be available until August 14, 2007. Replay telephone numbers are 719/457-0820 or 888/203-1112; replay passcode is 2711945.

Attachments	Exhibit 1	Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2007 and December 31, 2006
	Exhibit 2	Condensed Consolidated Statements of Operations (unaudited) for the Three Months Ended June 30, 2007 and 2006 and Six Months Ended June 30, 2007 and 2006
	Exhibit 3	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended June 30, 2007 and 2006 and Six Months Ended June 30, 2007 and 2006
	Exhibit 4	Reconciliation of EBITDA and Non-GAAP Measurements (unaudited) for the Three Months Ended June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006
	Exhibit 5	Reconciliation of EBITDA and Non-GAAP Measurements (unaudited) for the Six Months Ended June 30, 2007 and June 30, 2006 and the Twelve Months Ended June 30, 2007

About QuadraMed Corporation
QuadraMed Corporation advances the success of healthcare organizations through IT solutions that leverage quality care into positive financial outcomes. As evolving reimbursement scenarios challenge healthcare organizations to leverage quality of care into payment, clients committing to QuadraMed’s care-based solutions can realize market leading financial performance. Using QuadraMed’s end-to-end solutions to optimize the patient experience and leverage quality of care into payment, our clients can receive the proper reimbursement, in the shortest time, at the lowest administrative cost. Behind our products and services is a staff of almost 600 professionals whose experience and dedication to service have earned QuadraMed the trust and loyalty of customers at approximately 2,000 healthcare provider facilities. To find out more about QuadraMed, visit www.quadramed.com.

Cautionary Statement on Risks Associated with QuadraMed’s Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 by QuadraMed that are subject to risks and uncertainties. The words "believe," "expect," "anticipate," "intend," "plan," "estimate," "may," "should," "could," and similar expressions are intended to identify such statements. Forward-looking statements are not guarantees of future performance and are to be interpreted only as of the date on which they are made. QuadraMed undertakes no obligation to update or revise any forward-looking statement except as required by law. QuadraMed advises investors that it discusses risk factors and uncertainties that could cause QuadraMed’s actual results to differ from forward-looking statements in its periodic reports filed with the Securities and Exchange Commission ("SEC"). QuadraMed’s SEC filings can be accessed through the Investor Relations section of our website, www.quadramed.com, or through the SEC’s EDGAR Database at www.sec.gov (QuadraMed has EDGAR CIK No. 0001018833).

QuadraMed Affinity and Care-based Revenue Cycle are registered trademarks of QuadraMed Corporation. QuadraMed Corporation’s trademark: "Quality Care. Financial Health” is pending registration. All other trademarks are the property of their respective holders.

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