MDF Metropolitan Health Networks Common Stock

Metropolitan Health Networks, Inc. (NYSE: MDF), a leading provider of health care services in Florida, today announced its results for the fourth quarter and year ended December 31, 2011. Highlights include the following:

• Completion of the acquisition of Continucare Corporation in a transaction valued at $415.9 million
• Revenue of $459.8 million in 2011, a 25% increase compared to 2010
• Gross profit of $96.4 million in 2011, compared to $65.8 million in 2010, an increase of $30.6 million or 46.5%
• Operating income of $55.1 million in 2011, compared to $41.3 million for 2010, a 33% increase
• Medical expense ratio (“MER”) of 79.0%, compared to 82.1% for 2010
• Adjusted EBITDA of $58.6 million in 2011, compared to $44.7 million for 2010

Continucare Financial Information Included in Results:

On October 4, 2011, Metropolitan completed the acquisition of Continucare Corporation (“Continucare”). Metropolitan paid an aggregate of $404.4 million in cash and issued 2.5 million shares of its common stock to Continucare’s stockholders and option holders in consideration for their shares of Continucare common stock and options to purchase shares of Continucare common stock. To pay the cash portion of the purchase price, Metropolitan used a combination of cash and a total of $315.0 million of borrowings under its new credit facilities. Continucare’s financial results are included in Metropolitan’s financial results from October 4, 2011.

Full Year 2011 Financial Highlights:

Metropolitan recognized revenue of $459.8 million for 2011, compared to $368.2 million for 2010, an increase of $91.6 million or 25%. The increase in revenue is primarily attributable to Continucare, which contributed $78.6 million of this increase. Income before income taxes amounted to $39.6 million in 2011, compared to $41.6 million in 2010, a decrease of 4.8%. Net income was $22.7 million in 2011, as compared to $25.7 million in 2010, a decrease of 11%. These decreases are primarily attributable to transaction expenses related to the Continucare acquisition of $7.9 million and an impairment charge associated with the sleep diagnostic business of $3.5 million. Earnings per share were $0.56 basic and $0.53 diluted for 2011, compared to $0.65 basic and $0.62 diluted for 2010. Weighted average common shares outstanding for 2011 were 40.6 million, basic and 42.8 million, diluted.

The MER for 2011 was 79% compared to 82.1% in 2010.

Continucare Acquisition - Proforma Information:

On a proforma basis, assuming that the acquisition of Continucare occurred on January 1, 2011, with adjustments for items including: amortization expense of intangible assets, termination or changes in certain compensation arrangements and ongoing operating expenses, non-operating expenses not acquired in the acquisition, interest expense and income tax expense, earning per share would have been $0.78 basic and $0.74 diluted for 2011, as compared to $0.61 basic and $0.57 diluted for 2010. Total revenue for 2011 would have been $701.3 million compared to $651.6 million for 2010 and Adjusted EBITDA for the year would have been $107.8 million compared to $90.7 million for 2010.

Fourth Quarter Financial Highlights:

The Company recognized revenue of $175.1 million for the fourth quarter compared to $91.4 million for the same period in 2010, a 91.6% increase. The increase in revenue is primarily attributable to Continucare, which contributed $78.6 million of this increase. Net income for the 2011 fourth quarter was $2.8 million, or $0.07 per share basic and $0.06 diluted, compared to $6.0 million or $0.15 per share basic and $0.14 per share diluted for the same quarter last year. The decrease in net income is primarily attributable to transaction expenses relating to the Continucare acquisition totaling $4.8 million and an impairment charge associated with the sleep diagnostic business of $3.5 million. Weighted average common shares outstanding for the fourth quarter of 2011 were 42.5 million, basic and 45.1 million, diluted.

The Company’s MER was 75.8% in the fourth quarter of 2011 compared to 81.7% in the same quarter of 2010.

Customer Information:

Total Medicare and Medicaid customers under contracts with HMOs at December 31, 2011, was 71,700 comprised of 63,400 customers managed under risk arrangements and 8,300 non-risk customers. This compares to 34,800 risk customers at December 31, 2010. Total Medicare, Medicaid, and commercial customers at December 31, 2011, were 54,800, 12,800, and 4,100 respectively, compared to 34,800 Medicare customers at December 31, 2010. There were no Medicaid or commercial customers in 2010.

Total customer months, the combined total customers for each month of the measurement period for customers managed under risk arrangements, increased by 17% to 495,000 in 2011, up from 421,900 in 2010.

At January 1, 2012, our provider service network was providing services to approximately 77,800 customers under contracts with HMOs, of which approximately 60,000 are covered under Medicare risk agreements.

Balance Sheet Highlights:

Cash, cash equivalents and short-term investments at December 31, 2011 totaled $19.0 million, compared to $49.5 million at December 31, 2010. This decrease reflects the use of cash required to complete the Continucare acquisition, which was partially offset by cash provided by the additional debt to finance the acquisition as well as other activities. Metropolitan had working capital of $43.2 million as of December 31, 2011, as compared to $54.2 million as of December 31, 2010, a decrease of $11.0 million. Stockholders’ equity increased $36.8 million from $67.8 million at December 31, 2010, to $104.6 million at December 31, 2011.

“…2011 represented an exceptional year for Metropolitan…” states Michael Earley, Metropolitan’s Chairman and Chief Executive Officer.

Commenting on the 2011 results, Michael Earley, Chairman and Chief Executive Officer of Metropolitan Health Networks, Inc., stated, “We are very pleased to report another outstanding year of operating results for Metropolitan. Capped by the completion of the acquisition of Continucare Corporation in the fourth quarter, 2011 saw our company achieve several significant milestones that include the listing of our equity on the New York Stock Exchange, the relocation of our corporate headquarters to meet the demands of our growing business, and the expansion of operations into new markets with our partners, both existing and new. Adjusted for the one-time costs associated with the closing of the Continucare transaction, 2011 represented an exceptional year for Metropolitan from both top and bottom line perspectives.”

“…we will continue to seek growth, both organically and through further acquisitions …” comments Earley.

“Under the Metropolitan model of care we have come to learn over the course of the last decade that size and scale matter. The Continucare acquisition was transformative, bringing new markets, new plan partners, and additional talented health care leaders to our business. As a group, we are one of the larger provider service networks in the country. We will continue to seek growth, both organically and through further acquisitions. We will also seek to expand our relationships with our plan partners both in Florida and outside of the state,” Earley concluded.

Conference Call Information:

Metropolitan will hold a conference call to review its fourth quarter and full year 2011 results on Tuesday, March 6, 2012, at 11:00 a.m. Eastern Standard Time. The call will be hosted by Michael Earley, Chairman and Chief Executive Officer. Interested parties may access the conference call by dialing the following numbers: (888) 713-4209 (domestic) or (617) 213-4863 (international), pass code # 58421187. The call will also be available via webcast at Metropolitan’s investor page at www.metropolitanhealthnetworks.com and on http://www.streetevents.com, or http://www.fulldisclosure.com

Participants may pre-register for the call at:

https://www.theconferencingservice.com/prereg/key.process?key=PNRY6NR94

Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection.

If you are unable to participate, an audio replay of the call will be available beginning two hours after the call and will be available until 11:59 p.m. on March 13, 2012, by dialing (888) 286-8010 (domestic) or (617) 801-6888 (international) using confirmation pass code 84100053.

About Metropolitan Health Networks, Inc.:

Metropolitan is a growing health care company that provides and coordinates comprehensive health care services for Medicare Advantage, Medicaid, and other customers in Florida through its primary care-centric businesses, MetCare of Florida, Inc. and Continucare Corporation. Metropolitan currently owns and operates 33 medical centers and contracts with more than 700 primary care practices. To learn more about Metropolitan Health Networks, Inc. please visit its website at www.metropolitanhealthnetworks.com.

Note Regarding Use of Non-GAAP Financial Measures

Adjusted EBITDA is not defined under generally accepted accounting principles ("GAAP") and it may not be comparable to similarly titled measures reported by other companies. Metropolitan uses Adjusted EBITDA, along with other GAAP measures, as a measure of profitability because Adjusted EBITDA helps Metropolitan’s management to compare Metropolitan’s performance on a consistent basis by removing from Metropolitan’s operating results the impact of its capital structure, the accounting methods used to compute depreciation and amortization and the effect of non-cash stock-based compensation expense and the impairment charge. Metropolitan’s management believes Adjusted EBITDA is useful to investors as it is a widely used measure of performance and the adjustments made to Adjusted EBITDA provide further clarity on Metropolitan’s profitability. Metropolitan removes the effect of non-cash stock-based compensation from its earnings, which can vary based on share price, share price volatility and expected life of the equity instruments Metropolitan grants. In addition, this stock-based compensation expense does not result in cash payments by Metropolitan. Metropolitan also removes the effect of impairment charges since this is a non-cash expense that does not result in cash payments. Adjusted EBITDA has limitations as a profitability measure in that it does not include the interest expense on Metropolitan’s debts, provisions for income taxes, the effect of expenditures for capital assets, the effect of non-cash stock-based compensation expense and the effect of asset impairments. A reconciliation of Adjusted EBITDA to net income is included in the accompanying tables.

Forward Looking Statements:

Except for historical matters contained herein, statements made in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Without limiting the generality of the foregoing, words such as “may”, “will”, “to”, “plan”, “expect”, “believe”, “anticipate”, “intend”, “could”, “would”, “estimate”, or “continue” or the negative other variations thereof or comparable terminology are intended to identify forward-looking statements.

Investors and others are cautioned that a variety of factors, including certain risks, may affect our business and cause actual results to differ materially from those set forth in the forward-looking statements. These risk factors include, without limitation: (i) the impact of our significantly increased levels of indebtedness on our funding costs, operating flexibility and ability to fund ongoing operations with additional borrowings, particularly in light of ongoing volatility in the credit and capital markets; (ii) our ability to operate pursuant to the terms of our debt obligations; (iii) our ability to integrate the acquired operations of Continucare and to realize the anticipated revenues, economies of scale, cost synergies and productivity gains in connection with the merger and any other acquisitions that we may undertake, as and when planned, including the potential for unanticipated issues, expenses and liabilities associated with those acquisitions and the risk that Continucare fails to meet its expected financial and operating targets; (iv) the potential for diversion of management time and resources in seeking to integrate Continucare’s operations, (v) our ability to successfully establish a presence in new geographic markets (vi) our ability to meet our cost projections under various provider agreements with Humana; (vii) our failure to accurately estimate incurred but not reported medical benefits expense; (viii) pricing pressures exerted on us by managed care organizations and the level of payments we indirectly receive under governmental programs or from other payors; (ix) our still limited ability to predict the direct and indirect effects of the healthcare reform laws adopted in 2010; (x) future legislation and changes in governmental regulations; (xi ) the impact of Medicare Risk Adjustments on payments we receive for our managed care operations; (xii) a loss of any of our significant contracts or our ability to increase the number of Medicare eligible patient lives we manage under these contracts. Metropolitan is also subject to the risks and uncertainties described in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2010, its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011, June 30, 2011, and September 30, 2011, and its Annual Report on Form 10-K for the year ended December 31, 2011, which is anticipated to be filed within several business days.

  METROPOLITAN HEALTH NETWORKS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME     Years Ended December 31, Three months ended December 31, 2011 2010 2011 2010 (in thousands, except per share amounts) (in thousands, except per share amounts) REVENUE $ 459,792 $ 368,186 $ 175,143 $ 91,414   MEDICAL EXPENSE Medical claims expense 332,929 286,602 116,299 70,640 Medical center costs   30,451     15,826     16,502     4,016   Total medical expense   363,380     302,428     132,801     74,656   GROSS PROFIT 96,412 65,758 42,342 16,758 OTHER OPERATING EXPENSES Administrative payroll, payroll taxes and benefits 20,911 15,420 9,651 4,192 General and administrative 11,292 8,656 4,119 2,088 Marketing and advertising 1,271 385 815 116 Amortization of intangible assets 3,545 75 3,255 386 Impairment of goodwill 3,500 - 3,500 - Termination costs related to the Continucare acquisition   784     -     784     -   Total other operating expenses   41,303     24,536     22,124     6,782   OPERATING INCOME BEFORE GAIN ON SALE OF HMO 55,109 41,222 20,218 9,976 Gain on sale of HMO subsidiary   -     62     -     -   OPERATING INCOME 55,109 41,284 20,218 9,976 OTHER INCOME (EXPENSE) Transaction costs (7,876 ) - (4,798 ) - Interest expense (8,174 ) - (8,151 ) (72 ) Investment income, net 572 328 13 0 Other income (expense), net   3     (29 )   2     1   Total other (expense) income   (15,475 )   299     (12,934 )   (71 )   INCOME BEFORE INCOME TAXES 39,634 41,584 7,284 9,905 PROVISION FOR INCOME TAXES   16,920     15,884     4,457     3,885   NET INCOME 22,714 25,700 2,827 6,020

OTHER COMPREHENSIVE (LOSS), NET OF TAX BENEFIT OF $69

(110 ) - - - COMPREHENSIVE INCOME $ 22,604   $ 25,700   $ 2,827   $ 6,020     EARNINGS PER SHARE: Basic $ 0.56 $ 0.65 $ 0.07 $ 0.15 Diluted $ 0.53 $ 0.62 $ 0.06 $ 0.14       METROPOLITAN HEALTH NETWORKS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS     December 31, 2011 2010 ( in thousands, except share data) ASSETS CURRENT ASSETS Cash and equivalents $ 17,964 $ 10,596 Investments, at fair value 1,003 38,949

Accounts receivable from customers, net of allowance of $1,615 and $817 in 2011 and 2010, respectively

3,023 904 Due from HMOs, net 40,241 9,067 Deferred income taxes 949 517 Prepaid income taxes 3,717 - Prepaid expense and other current assets   5,243     941 TOTAL CURRENT ASSETS 72,140 60,974  

PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $4,743 and $3,443 in 2011 and 2010, respectively

21,683 1,973 RESTRICTED CASH AND INVESTMENTS 295 4,385 DEFERRED INCOME TAXES, net of current portion - 1,571

OTHER INTANGIBLE ASSETS, net of accumulated amortization of $4,371 and $1,238 in 2011 and 2010, respectively

102,053 570 GOODWILL 262,805 4,362 DEFERRED FINANCING COSTS 9,882 - OTHER ASSETS   888     888 TOTAL ASSETS $ 469,746   $ 74,723   LIABILITIES AND STOCKHOLDERS' EQUITY   CURRENT LIABILITIES Accounts payable $ 1,295 $ 436 Accrued payroll and payroll taxes 5,941 5,158 Accrued expenses 6,690 902 Accrued interest payable 2,434 - Current portion of long-term debt   12,538     318 TOTAL CURRENT LIABILITIES 28,898 6,814   LONG-TERM DEBT, net of current portion and original issue discount 296,029 159 DEFERRED INCOME TAXES   40,175     - TOTAL LIABILITIES 365,102 6,973   COMMITMENTS AND CONTINGENCIES   STOCKHOLDERS' EQUITY

Preferred stock, par value $.001 per share; $10,000,000 shares authorized; series A preferred stock, stated value $100 per share; 5,000 issued and outstanding at December 31, 2011 and 2010, respectively

500 500

Common stock, par value $.001 per share; 80,000,000 shares authorized; 43,751,000 and 40,750,000 issued and outstanding at December 31, 2011 and 2010, respectively

44 41 Additional paid-in capital 36,740 22,453 Accumulated other comprehensive (loss) (110 ) - Retained earnings   67,470     44,756 TOTAL STOCKHOLDERS' EQUITY   104,644     67,750 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 469,746   $ 74,723              

METROPOLITAN HEALTH NETWORKS, INC. AND SUBSIDIARIES

NON-GAAP ADJUSTED EBITDA RECONCILIATION

    Year Ended December 31, Three Months Ended December 31, Year Ended December 31, 2011   2010 2011   2010 2011   2010 (in thousands) (in thousands) (Pro Forma - In thousands) Net income $ 22,714 $ 25,700 $ 2,827 $ 6,020 $ 31,719 $ 23,814 Income tax expense 16,920 15,884 4,457 3,885 19,759 14,647 Interest expense (income), net of investment income 7,602 (328 ) 8,138 72 30,260 31,919 Depreciation and amortization 5,230 1,056 4,200 358 18,387 16,468 Goodwill impairment charge 3,500 - 3,500 - 3,500 Stock-based compensation   2,618   2,377     677   788   4,155   3,898 Adjusted EBITDA $ 58,584 $ 44,689   $ 23,799 $ 11,123 $ 107,780 $ 90,746