IntegraMed® Q2 Net Income Rose 45% to $1.6M, Adjusted EBITDA Increased 23% to $5.2M, and EPS Rose 8% to $0.14

IntegraMed America, Inc. (NASDAQ: INMD):

IntegraMed America, Inc. (NASDAQ: INMD), the leader in developing and managing specialty healthcare facilities in the fertility and vein care markets, today announced improved results for the second quarter and the six months ended June 30, 2010.

(1) Attain Fertility Centers segment revenue reflects the consolidation of the Company’s former Fertility Centers and Consumer Services segments into one unit comprising all fertility-related businesses. Prior year periods have been consolidated to reflect those results as if the consolidation occurred on January 1, 2008.

(2) IntegraMed uses the term "Adjusted EBITDA" when reporting financial results in accordance with Securities and Exchange Commission rules regarding the use of financial measures not calculated in accordance with generally accepted accounting principles (GAAP). The Company uses Adjusted EBITDA as a management tool to measure and monitor financial performance. The definition of Adjusted EBITDA contained herein corresponds to the definition of Adjusted EBITDA contained in the Company’s credit facility; certain of the covenants contained therein are tied to Adjusted EBITDA. While providing useful information, Adjusted EBITDA should not be considered in isolation as a measure of financial performance under GAAP. Investors should be aware that Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies and comparisons could be misleading unless all companies and analysts calculate this measure in the same fashion. A reconciliation to Adjusted EBITDA is provided below.

"The investments we have made over the last few years to diversify and strengthen our business are clearly paying off. Our improved second quarter and first half results reflect the growing operational and G&A leverage we have been able to achieve on continued top line growth," said Jay Higham, IntegraMed’s CEO.

"Our Attain® Fertility Centers division achieved year-over-year growth in revenue and contribution across both the quarter and year-to-date periods, at the same time we are actively pursuing additional fertility partner acquisitions to expand the scope of the business. Our Vein Clinics segment delivered very strong performance, achieving solid growth in revenue and even stronger improvements in contribution, showcasing the operating leverage we are achieving in this business segment.

"As the market leader in our two areas of medical specialty, we are well positioned to continue to grow by leveraging our operating infrastructure, management and marketing disciplines to help drive patient traffic. At the same time, we are very active in seeking to accelerate our growth through new partner acquisitions and new affiliate relationships in our Attain Fertility Centers business and in our Vein Clinics segment via the opening of new clinics as well as the expansion of our service offerings into complementary areas such as interventional radiology. While the timing of vein clinic openings is well within our planning and control, the acquisition-driven growth of our base of fertility partners is much more difficult to predict, though we remain very optimistic on our prospects in this area.”

Attain Fertility Centers

Commencing with the reporting of Q2 2010 results, IntegraMed has combined the operations of its Fertility Centers and Consumer Services divisions into a newly formed "Attain Fertility Centers” division. The new structure is intended to improve operating efficiencies, synergies and decision-making, while also simplifying the corporate organization from an external perspective. As previously announced, Mr. Andrew Mintz, who has substantial experience in driving growth and improved profitability at large physician-based medical groups, has been appointed president of the division. "Partner” centers refer to fertility clinics managed by IntegraMed and "Affiliate” centers refer to fertility clinics that offer the Company’s Attain IVF (in-vitro fertilization) Program of fertility treatment financing options.

The increase in Attain Fertility Centers division revenue was driven by strong growth from the Attain IVF Program combined with modest growth from fertility partners, including the contribution of three fertility partners added in Q4 ‘09 which helped to offset regional demand weakness in southern Florida and Massachusetts. Growth within the Attain IVF Program was largely the result of a recently initiated, intensive direct-to-consumer marketing effort that has generated much stronger levels of patient applications and enrollments, as well as the benefit of six new affiliates added over the past year.

Operating income growth trailed revenue growth principally due to the unsustainably high pregnancy rates that were experienced in Q2 ’09, which have returned to more normal levels this year, as well as the additional costs being incurred to support the division’s marketing activity.

Fertility Partner revenue increased year-over-year, reflecting a modest increase in new patient visits and flat IVF cycles, year-over-year. Increasingly patients are electing to pursue other lower cost fertility procedures prior to proceeding into IVF treatment. The impact of this trend has been to increase revenue from non-IVF sources while having a modest downward impact on IVF demand.

The increase in both Attain IVF applications and enrollments was driven by the growing popularity of the recently launched Attain IVF Multi Cycle program, a lower cost option that broadens the pool of potential patients who are able to benefit from the program.

IntegraMed remains active in its pursuit of additional fertility center partner contracts as well as the addition of new affiliates who will offer the Attain IVF Programs. During the second quarter, IntegraMed entered into an agreement with Houston Fertility Institute to begin offering the Attain® IVF course-of-treatment financing programs, expanding the program’s reach in this important market.

Vein Clinics (VCA)

Strong growth in Q2 ‘10 Vein Clinics revenues principally reflects the benefit of consumer outreach initiatives undertaken over the past year as well as improving overall clinic performance and the contribution from new clinic openings over the past year.

Recently opened clinics, including four in 2009 and two in the first half of 2010 have performed very well, in terms of inquiries, revenue and operating profit. This performance is mainly due to the synergies created by locating the new clinics in metropolitan areas that are contiguous to legacy clinics. This provides the new clinics immediate benefit from consumer awareness and established referral relationships created by the Company’s ongoing marketing initiatives.

IntegraMed’s more established clinics have also performed well, particularly those located in the Chicago, Atlanta and Washington D.C. markets. In addition in Q2 ‘10, IntegraMed closed its Madison, WI location as results there were not in-line with the Company’s expectations.

Vein Clinic segment contribution margin expanded by 281 bps to 12.1% versus the prior year period, more than offsetting the start up costs of recent clinic openings which have yet to reach their full operational potential.

During the quarter, IntegraMed announced plans to accelerate its new vein clinic expansion with the opening of ten new clinics across Connecticut, Illinois, Ohio, Pennsylvania, North Carolina, Tennessee and Virginia over the next nine months. IntegraMed plans for three of these clinics to offer enhanced procedure capabilities, including interventional radiology procedures, which should help expand the target market and revenue potential of these facilities.

Cash Flow and Balance Sheet

IntegraMed’s cash and equivalents rose to $50.5 million, versus $28.9 million, at year-end 2009, principally reflecting the proceeds of $19 million from the public sale of 2.8 million common shares in February 2010 and cash flow from operating activities of over $15.4 million generated in the first half of 2010. During Q2 ’10, IntegraMed repaid $9.6 million of debt, principally the outstanding balance under its line of credit. Over the next several quarters the Company plans to use a significant portion of its available cash resources to fund acquisitions within its Attain Fertility Centers division as well as to fund marketing and infrastructure initiatives to expand its current base of business, including the opening of new vein clinics. Year to date, the Company has invested an additional $3.2 million in fixed assets.

IntegraMed CFO, John Hlywak, added, "IntegraMed’s focus on driving operating efficiencies from a growing revenue base enabled the Company to deliver strong cash flow and bottom line improvements on a 10% increase in total revenue. We are particularly pleased to have delivered improved EPS performance despite the dilutive impact of our recent capital raise, and we look forward to deploying that capital in accretive transactions to support the development of our Attain Fertility Centers segment as well as to fund our Vein Clinics expansion. To help investors track our operating performance on a cash flow basis, we are now providing Adjusted EBITDA, a non GAAP financial metric commonly utilized for the valuation of public companies, as it helps to isolate non-cash impacts such as depreciation and amortization.”

About IntegraMed America, Inc.

IntegraMed is the nation’s leader in developing, marketing and managing specialty outpatient healthcare facilities in the fertility and vein care markets. IntegraMed supports its provider networks with clinical and business information systems, marketing and sales, facilities and operations management, finance and accounting, human resources, legal, risk management and quality assurance services. IntegraMed’s fertility network is the nation’s largest fertility network, with 14 partner centers and 27 affiliate centers, comprising over 125 locations across 34 states and the District of Columbia. Nearly one of every four IVF procedures in the U.S. is performed in an IntegraMed partner or affiliate practice. The IntegraMed Vein Clinic network is the leading provider of specialty vein care services in the U.S., operating 36 centers across 13 states, principally in the Midwest and Southeast.

Statements contained in this press release that are not based on historical fact, including statements concerning future results, performance, expectations and expansion of IntegraMed are forward-looking statements that may involve a number of risks and uncertainties. Actual results may differ materially from the statements made as a result of various factors, including, but not limited to, the risks associated with IntegraMed's ability to identify, consummate and finance future growth, changes in insurance coverage, government laws and regulations regarding health care or managed care contracting; and other risks, including those identified in the Company's most recent Form 10-K and in other documents filed by IntegraMed with the U.S. Securities and Exchange Commission. All information in this press release is as of July 27, 2010 and IntegraMed undertakes no duty to update this information.