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Investor Relations
703.742.5393
InvestorRelations@quadramed.com

 

Reston, VA — May 8, 2008 —

QuadraMed® Corporation (Amex:QD) announced today that it will report net income of $0.3 million before preferred stock accretion and dividends declared for the three months ended March 31, 2008, compared to a net income of $2.6 million for the same period in 2007. Included in the current period results is approximately $0.6 million of severance costs related to the change in the Company's product development strategy announced in February 2008.

Revenues of $35.3 million, gross margin of 56% and operating expenses of $19.4 million combined to produce the achieved operating results for the quarter. These are compared to revenues of $29.2 million, gross margin of 62% and operating expenses of $16.1 million for the same period in 2007. The increases in revenues and expenses are primarily attributable to the September 2007 acquisition of the CPR business assets from Misys plc.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was $1.5 million for the three months ended March 31, 2008, compared to EBITDA of $3.7 million for the same period in 2007. EBITDA adjusted for non-cash compensation of $0.8 million and $0.4 million respectively, and severance costs of $0.6 million and zero respectively, was $2.9 million for the three months ended March 31, 2008 and $4.1 million for the three months ended March 31, 2007.

Cash and investments increased by $4.6 million during the three months ended March 31, 2008, to $22.1 million from $17.5 million at December 31, 2007. Cash flow from operations was $7.9 million for three months ended March 31, 2008, compared to $8.9 million for the corresponding three months in 2007. Cash flow in both periods was significantly influenced by the collection of annual maintenance billings which are billed early in the first quarter.

The Company will also report net loss attributable to common shareholders of $(1.1) million, or $(0.02) per basic and diluted share for the three months ended March 31, 2008; this is compared to a net income attributable to common shareholders of $1.3 million, or $0.03 per basic and diluted share for the same period in 2007.

"Achieving a 20% revenue growth in our Q1 year-over-year results was an important step toward hitting our 2008 revenue target. This success, the QCPR win at Sibley Hospital and the successful QCPR conversion and live operation of InterSystem's Cache are all important execution steps for our business. These accomplishments demonstrate progress toward the operational improvements and market success outlined in our strategic plan." said Keith Hagen, QuadraMed president and chief executive officer.

The Company also reported that on February 13, 2008 Washington, D.C.-based Sibley Memorial Hospital selected QuadraMed's Computerized Patient Record (QCPR) as part of its initiative to build a longitudinal electronic health record (EHR) to further drive its patient safety and care delivery. Sibley concluded that the selection of QuadraMed's enterprise-wide computer-based patient record system would leverage its previous investment in QuadraMed's solutions while also contributing to its goal of vendor consolidation to integrate and streamline data flow within the enterprise. Additionally, QCPR met the hospital's functionality requirements including computerized physician order entry, clinical decision support tools and electronic medication administration. Sibley, which is upgrading from QuadraMed's Affinity to QCPR, plans to integrate that solution with QuadraMed's Patient Registration, Revenue Cycle Management and Electronic Document Management applications.

Management will review these results in an investment community conference call at 5:00 PM Eastern (2:00 PM Pacific) on Thursday, May 8, 2008. 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 877-718-5099 domestic and 719-325-4746 international. Callers should dial in by 4:45 PM Eastern (1:45 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 4:45 PM Eastern (1:45 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. The replay will be available until midnight, May 15, 2008. Replay telephone numbers are 719-457-0820 or 888-203-1112; replay passcode is 1535400.

Attachments	Exhibit 1	Condensed Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007
	Exhibit 2	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2008 and 2007
	Exhibit 3	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007
	Exhibit 4	Reconciliation of EBITDA and Non-GAAP Measurements for the Three Months Ended March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006, and June 30, 2006

About Adjusted EBITDA and other Non-GAAP Measurements
The Company's use and presentation of the terms EBITDA, Adjusted EBITDA and other Non-GAAP Measurements included in this press release and Exhibit 4 thereto, and the reconciliations of those items to the most directly comparable GAAP financial measure with equal or greater prominence as the non-GAAP financial measures, have been prepared in direct response to questions from its investors and other interested parties. Although the Company has frequently discussed these reconciling items when they occur, both in its filings as well as in investment community conference calls that are open to the public at large, many inquiries are still made as to the nature of these items, and the impact of removing these items from the GAAP financial results. As a result, the Company believes it is important to provide these reconciliations, so that the requesting investors will not have to perform the arithmetic themselves and so that all interested parties will benefit from the disclosures and reconciliations, through a straightforward and unambiguous presentation. The Company believes that the use and presentation of the terms EBITDA, Adjusted EBITDA and the other non-GAAP financial measures is useful because it allows readers of its financial information to evaluate its performance for different periods on a more comparable basis by excluding items that are unique in nature such as non-cash compensation, or do not relate to the ongoing operation of its core business. The items presented in calculating Adjusted EBITDA and other Non-GAAP reconciliations represent specific events or items as follows (please see Exhibit 4 to this press release):

Cash Severance -- costs associated with restructuring and downsizing of the Company's employee base during the three-month periods ended March 31, 2008;

Non-cash Compensation – the costs of employee stock options and restricted stock;

Tax benefit, Net – the amount recorded in the period resulting from the release of a portion of the reserve against the Company's deferred tax assets, net of deferred income tax expense recorded in the period;

Strategic Initiatives – the expenses recorded in connection with merger and acquisition activities during the three-month period ended June 30, 2007 and December 31, 2007;

Employment Matters – the cost of the Company's review of wage/hour classifications for certain employees during the three-month periods ended December 31, 2007 and September 30, 2007.

About QuadraMed Corporation
QuadraMed Corporation advances the success of healthcare organizations through IT solutions that leverage quality care into positive financial outcomes. QuadraMed provides real world solutions that help healthcare professionals deliver outstanding patient care efficiently and cost effectively. Behind the company's products and services is a staff of 650 professionals whose experience and dedication have earned QuadraMed the trust and loyalty of clients at over 2,000 healthcare provider facilities. For more information about QuadraMed, visit www.quadramed.com

Cautionary Statement on Risks Associated with QuadraMed 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 is a registered trademark of QuadraMed Corporation. All other trademarks are the property of their respective holders.

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