AHN Atc Healthcare,

ATC Healthcare, Inc. (AMEX: AHN), a national leader in medical staffing, today announced results for its fourth quarter and fiscal year end 2006, which ended February 28, 2006. Revenues for the fourth quarter ended February 28, 2006 increased 17.2% to $18.4 million compared to $15.7 million net of discontinued operations for the quarter ended February 28, 2005. Net loss for the quarter ended February 28, 2006 was $294,000 or $0.01 per diluted share (EPS), versus a net loss of $8.8 million including a loss on discontinued operations of $2.7 million or $0.35 per diluted share for the quarter ended February 28, 2005. Revenues net of discontinued operations for the year ended February 28, 2006, increased 5.3% to $71.5 million net of discontinued operations, compared to $67.9 million for the year ended February 28, 2005 net of discontinued operations. Loss from operations net of discontinued operations for the year ended February 28, 2006 was $2.0 million versus a loss from operations net of discontinued operations of $8.5 million in the prior fiscal year. Net loss for the year ended February 28, 2006 including discontinued operations was $2.6 million or $0.08 per diluted share (EPS), versus net loss of $10.5 million or $0.42 per diluted share for the year ended February 28, 2005. February 28, 2005 year end results were negatively impacted by a $5.3 million charge to write-off goodwill associated with the closing of offices and the sale of the AllCare Nursing business and a deferred tax valuation allowance of $2.5 million. "I'm very pleased to report that this past year has been a significant turnaround for ATC. Our strategic plan to restructure the balance sheet, reduce costs and re-grow sales was completed with good results", remarked David Savitsky, Chief Executive Officer. "We are seeing Quarter over Quarter sales growth and an overall strengthening of the medical staffing marketplace. Most important is that we have recorded three positive Quarters of EBITDA and have positive EBITDA for the past year. ATC is now positioned for a profitable FY 07." In conjunction with this release, management will host a teleconference Thursday, June 1, 2006 at 1:00 pm Eastern time. The dial in number is 1-800-946-0706 and refer to confirmation code 4529527. A telephonic replay of the call may be accessed by dialing 1-888-203-1112, code 4529527. The replay will be available from 6:00 pm Eastern time on June 1, 2006 until midnight June 2, 2006. About ATC Healthcare, Inc. ATC is a national leader in medical staffing personnel to hospitals, nursing homes, clinics and other health care facilities with 54 locations doing business in 31 states. ATC provides supplemental staffing, outsourcing and human resources solutions to hospitals, nursing homes, medical and research facilities and industry. Drawing from a pool of over 15,000 healthcare professionals spanning more than 50 specialties, the Company supplies both clinical and non-clinical personnel for short-term, long-term, and "traveling" contract assignments. To learn more about the company's services, visit their web site at www.atchealthcare.com. This press release contains forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in ATC Healthcare, Inc. Annual Report on Form 10-K for the year ended February 28, 2006 as filed with the Securities and Exchange Commission on May, 29, 2005. -0- *T ATC HEALTHCARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except earnings per share data) For the Three Months For the Year Ended (unaudited) Ended February February February February 28, 2006 28, 2005 28, 2006 28, 2005 -------- -------- -------- -------- REVENUES: Service revenues $18,367 $15,683 $71,528 $ 67,937 ---------------------------------------------------------------------- COSTS AND EXPENSES: Service costs 13,986 13,862 54,721 54,732 General and administrative expenses 3,974 3,896 15,830 17,033 Depreciation and amortization 77 199 517 700 Office closing and restructuring charge - 982 - 1,431 ---------------------------------------------------------------------- Total operating expenses 18,037 18,939 71,068 73,896 ---------------------------------------------------------------------- INCOME (LOSS) FROM OPERATIONS 330 (3,256) 460 (5,959) ---------------------------------------------------------------------- INTEREST AND OTHER EXPENSES (INCOME): Interest expense, net 435 568 2,188 2,191 Other expense (income), net 70 (223) (23) (914) Expense related to TLCS liability -- -- (2,293) ---------------------------------------------------------------------- Total interest and other expenses 505 345 2,165 (1,016) ---------------------------------------------------------------------- LOSS FORM CONTINUING OPERATIONS BEFORE INCOME TAXES (175) (3,601) (1,705) (4,943) INCOME TAX PROVISION 0 2,526 50 3,516 ---------------------------------------------------------------------- NET LOSS FROM CONTINUING OPERATIONS $(175) $(6,127) $(1,755) $ (8,459) ---------------------------------------------------------------------- DISCONTINUED OPERATIONS NET(LOSS) INCOME FROM DISCONTINUED OPERATIONS - $(2,695) $ (577) $ (1,945) ---------------------------------------------------------------------- NET LOSS $(175) $(8,822) $(2,332) $(10,404) ---------------------------------------------------------------------- DIVIDENDES ACCRETED TO PREFERRED SHAREHOLDERS $ 119 $ 17 $ 273 $ 70 NET LOSS AVAILABLE TO COMMON SHAREHOLDERS $(294) $(8,839) $(2,605) $(10,474) ---------------------------------------------------------------------- (LOSS) INCOME EARNINGS PER SHARE: (Loss) income from continuing operations: (Loss) income per common share Basic and Diluted $(0.01) $ (0.24) $ (0.06) $ (0.34) ====================================================================== (Loss) income from discontinued operations: (Loss) income Per common share Basic and Diluted $(0.00) $ (0.11) $ (0.02) $ (0.08) ====================================================================== NET LOSS PER COMMON SHARE BASIC AND DILUTED $(0.01) $ (0.35) $ (0.08) $ (0.42) ====================================================================== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic 36,898 25,695 31,955 25,113 ====================================================================== Diluted 36,898 25,695 31,955 25,113 ====================================================================== *T