INDIANAPOLIS, June 11 /PRNewswire-FirstCall/ -- Arcadia Resources, Inc. (NYSE Amex: KAD), a leading provider of innovative consumer health care services under the Arcadia HealthCare(SM) brand, today announced fourth quarter revenues of $25.5 million and a net loss of $19.2 million, or $0.11 per share, which compares to revenue of $25.9 million and a net loss of $36.7 million, or $0.27 per share for the same period in the fiscal 2009. For the fiscal year ended March 31, 2010, the Company reported revenues of $103.6 million and a net loss of $31.1 million, or $0.19 per share, which compares to revenues of $106.1 million and a net loss of $46.5 million, or $0.35 per share for fiscal 2009.

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"We achieved a number of important milestones this year, which set the foundation for continued growth for both our businesses and enhanced profitability in our DailyMed business," said Marvin R. Richardson, President and Chief Executive Officer of Arcadia. "We sold off non-strategic business units to improve our focus, grew our DailyMed business by over 150% annually to 15% of total Company revenues and maintained consistent year-over-year profitability in the Services segment despite a decline in medical staffing revenue of over $10 million for the fiscal year."

Fourth-Quarter and Recent Highlights

• Pharmacy revenues increased 103.5% over prior year quarter and 7.7% over the third quarter
• DailyMed launched by Alliance Healthcare Partners to Medicare Advantage and high risk commercial members in Illinois and Iowa
• New prime vendor agreement and $5 million line of credit established with H.D. Smith

For the fourth quarter of fiscal 2010, Arcadia reported revenues of $25.5 million, compared with revenues of $25.9 million for the same period last year. In its Pharmacy segment, Arcadia reported revenues of $4.4 million, or a 103.5% increase for its DailyMed medication management system for the fiscal 2010 fourth quarter, compared with the same period a year ago. Revenue in the Services segment was $20.7 million, a decrease of $2.5 million, or 10.9%, compared to the same quarter last year due primarily to a decline in medical staffing revenue.

Arcadia reported a net loss from continuing operations of $19.4 million, or $0.11 per share, in the fourth quarter of fiscal 2010, compared to a net loss from continuing operations of $32.7 million, or $0.24 per share, in the same period in fiscal 2009. The consolidated net loss, including discontinued operations, was $19.2 million, or $0.11 per share, in the fiscal fourth quarter in 2010 compared to a net loss of $36.7 million, or $0.27 per share, in the fiscal fourth quarter in 2009. In the fourth quarter of fiscal 2010, Arcadia reported a one-time impairment charge to goodwill of $14.6 million related to the Company's Services segment which compares to a one-time impairment charge of $23.5 million in the fourth quarter of fiscal 2009 related to the Company's Pharmacy and Catalog segments.

Commenting further on important achievements Richardson continued. "In our Pharmacy operations, we established a new prime vendor agreement with H.D. Smith which has already resulted in significant reductions in our branded and generic drug costs as well as the opportunity to participate in group purchase programs which also lowers our costs. We moved into our new headquarters in May and will move our Indianapolis pharmacy operations into this same facility this month which will allow for greater capacity and efficiency for our pharmacy operations. Finally, we have undertaken a number of new enrollment programs designed to streamline our new member acquisition capabilities."

Fiscal 2010 Fourth Quarter Results

Arcadia reported $25.5 million in revenue from continuing operations during the quarter, down slightly from $25.9 million during the same period a year ago. The Company's gross margin from continuing operations was 27.1% during the fourth quarter, a decline of 2.0% from the same period a year ago. The reduction in gross margin was driven by a shift in mix towards Pharmacy revenue, which has lower margins than the Company's Services segment.

Pharmacy: Pharmacy segment revenues increased 103.5% to $4.4 million for the fourth quarter of fiscal 2010, compared to $2.2 million in revenues for the fourth quarter of fiscal 2009. This growth was driven by the Company's DailyMed program and the continued roll-out of the program to high-risk Medicaid members. The program was launched in Virginia in August 2009 and was rolled out to California members late in fiscal fourth quarter 2010.

Pharmacy gross margin decreased to 12.3% in the fourth quarter of fiscal 2010 from 17.1% in the fourth quarter of fiscal 2009. Gross margins were negatively affected by changes in payer, member and product mix.

Services: The Company's Services segment, which includes Arcadia's home care and medical staffing business, reported revenues of $20.7 million for the 2010 fiscal fourth quarter compared to revenues of $23.2 million for the fourth quarter a year ago. Within the Services segment, home care revenues decreased by $0.8 million, or 4.9%, to $16.5 million from $17.3 million in the same period last year. The primary driver of the decrease in the Services segment was a decline in per diem medical staffing and travel nursing staffing revenue to $4.2 million in the current quarter, compared with $5.9 million during the fourth quarter of fiscal 2009. Gross margins within the Services segment was essentially level with the same period last year.

Fiscal 2010 Annual Results

For the year ended March 31, 2010, revenues decreased to $103.6 million from $106.1 million in the prior year due to a decrease of $10.9 million, or 11.2%, in the Company's Services revenues offset by an increase of $9.1 million, or 151.8%, in the Company's Pharmacy revenues. Gross profits decreased to $29.2 million, or 28.2% of revenue, for fiscal year 2010 from $31.8 million, or 29.9% of revenue, for the fiscal year 2009. The reduction in gross margins was driven by a shift in mix towards Pharmacy revenue, which has lower margins than the Company's Services segment. Gross margins in the Services business were 30.5% for both fiscal 2010 and 2009. While the overall mix of higher margin home care business increased as a percentage of total revenues, this gross margin benefit was offset by several factors, including: a reduction in margins on several state-sponsored home care programs, such as Arizona, North Carolina, Washington and California; a reduction in the percentage of business generated in some of the Company's higher margin offices and markets, including the state of Michigan; and an overall decline in the margins in the medical staffing business due to changes in staffing business mix. Gross profits in the Company's Pharmacy segment increased to $2.1 million for fiscal year 2010, an increase of 107.6% compared to fiscal year 2009. The increase in gross profit was due to higher Pharmacy revenues. Gross margins declined to 14.0% in fiscal 2010 compared to 17.0% in fiscal 2009. Gross margins were negatively affected by changes in payer, patient and product mix. Loss from continuing operations decreased to $30.0 million, or $0.18 per share, in fiscal 2010 from $43.0 million, or $0.32 per share in fiscal 2009. The decrease in the loss was primarily due to the higher impairment charge taken in fiscal 2009 compared with fiscal 2010. Net loss decreased to $31.1 million, or $0.19 per share, in fiscal 2010, from $46.5 million, or $0.35 per share in fiscal 2009.

Capital Resources and Liquidity

At March 31, 2010, the Company had total cash plus line-of-credit availability of $5.8 million. As previously announced on April 26, 2010, the Company secured a $5 million line of credit from H.D. Smith.

Arcadia reported negative cash flow from total operations of $5.9 million during fiscal 2010, compared to positive cash flow of $778,000 for fiscal 2009. The increase in negative cash flow during fiscal 2010 was primarily driven by the loss of cash generated by the businesses that were disposed of during fiscal first quarter 2010.

Conference Call Information

Arcadia will conduct a conference call and simultaneous Internet webcast to review these financial results on Friday, June 11, 2010, at 11:00 a.m. Eastern Time.

To access the webcast, visit the Company's website at www.arcadiahealthcare.com, 5-10 minutes prior to the start time and click on the webcast link. The Company's press release, which contains financial information to be discussed in the presentation, will also be available on Arcadia's website.

To participate in the live conference call, please dial 1-877-407-9205 (for U.S.-based callers) or 1-201-689-8054 (for international callers). The call can also be accessed (listen-only mode) via the Company's web site at www.arcadiahealthcare.com through the "Investors" page.

A replay of the webcast will be available approximately one hour after the completion of the call and will be accessible at www.arcadiahealthcare.com until June 25, 2010. A telephone replay will be available by dialing 1-877-660-6853 (for US-based callers) or 1-201-612-7415 (for international callers). For telephone replay, callers must use Account number 286 and Conference ID number 351716. The telephone replay will be available until June 25, 2010.

About Arcadia HealthCare

Arcadia HealthCare is a service mark of Arcadia Resources, Inc. (NYSE Amex: KAD), and is a leading provider of home care, medical staffing and pharmacy services under its proprietary DailyMed program. The Company, headquartered in Indianapolis, Indiana, has 70 locations in 18 states. Arcadia HealthCare's comprehensive solutions and business strategies support the Company's vision of "Keeping People at Home and Healthier Longer."

DailyMed(TM) Pharmacy dispenses a monthly cycle of a patient's prescriptions, over-the-counter medications and vitamins, and organizes them into pre-sorted packets clearly marked with the date and time the medications should be taken. In the dispensing process, a DailyMed pharmacist reviews each patient's medication profile and utilizes state-of-the-art medication therapy management tools in order to improve the safety and efficacy of the medications being dispensed. A DailyMed pharmacist provides routine communication with the patient, the primary care physician, caregivers and payers in order to maximize the pharmaceutical care administered. The DailyMed program improves patient care and drug utilization while reducing medical costs for private and government payers.

Forward Looking Statements

Any statements contained in this release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21A of the Securities Exchange Act of 1934, as amended and otherwise within the meaning of court opinions construing such forward-looking statements. The Company claims all safe harbor and other legal protections provided to it by law for all of its forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, estimates, uncertainties and other factors, which could cause actual financial or operating results, performances or achievements expressed or implied by such forward-looking statements not to occur or be realized, including our estimates of consumer demand for our services and products, required capital investment, competition, and other factors. Actual events and results may differ materially from those expressed, implied or forecasted in forward-looking statements due to a number of factors. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in the Company's filings with the Securities and Exchange Commission from time to time, including the section entitled "Risk Factors" and elsewhere in the Company's most recent Annual Report on Form 10-K and subsequent periodic reports. Among the factors that could cause future results to differ materially from those provided in our press release are: (i) we cannot be certain or our ability to generate sufficient cash flow to meet our obligations on a timely basis; (ii) we may be required to make significant business investments that do not produce offsetting increases in revenue; (iii) we may be unable to execute and implement our growth strategy; (iv) we may be unable to achieve our targeted performance goals for our business segments; and (v) other unforeseen events may impact our business. The forward-looking statements speak only as of the date hereof. The Company disclaims any obligation to update or alter its forward-looking statements, except as may be required by law.

    Contact:
    Matthew Middendorf
    Chief Financial Officer
    mmiddendorf@arcadiahealthcare.com
    317.569.8234

    Bill Bunting
    In-Site Communications, Inc.
    (212) 759-3929 / (415) 517-7013
    bbunting@insitecony.com

                                FINANCIAL TABLES FOLLOW

    ARCADIA RESOURCES, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (IN THOUSANDS)

                                                       March 31,
                                                          2010      2009
                                                          ----      ----
                          ASSETS
    Current assets:
      Cash and cash equivalents                         $5,444    $1,522
       Accounts receivable, net of allowance of
        $2,623 and $3,386, respectively                 12,366    15,679
       Inventories, net                                    934       863
       Prepaid expenses and other current assets         1,632     1,764
       Current assets of discontinued operations             -     5,458
                                                           ---     -----
           Total current assets                         20,376    25,286
    Property and equipment, net                          1,738     2,308
    Goodwill                                             2,500    17,053
    Acquired intangible assets, net                      7,670     8,305
    Other assets                                           412       590
    Restricted cash                                        500         -
    Assets of discontinued operations                        -     5,850
                                                           ---     -----
           Total assets                                $33,196   $59,392
                                                       =======   =======

           LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
       Lines of credit, current portion                     $-      $437
       Accounts payable                                  3,159     2,765
       Accrued expenses:
         Compensation and related taxes                  3,191     2,986
         Interest                                           82        89
         Health insurance                                  463       545
         Other                                           1,508       917
       Payable to affiliated agencies                    1,076     1,284
       Fair value of warrant liability                   1,499         -
       Long-term obligations, current portion              939       596
       Capital lease obligations, current portion           69        59
       Current liabilities of discontinued
        operations                                           -     2,037
                                                                   -----
           Total current liabilities                    11,986    11,715
    Lines of credit, less current portion                7,774    10,889
    Long-term obligations, less current
     portion                                            25,192    26,918
    Capital lease obligations, less current
     portion                                                19        37
           Total liabilities                            44,971    49,559
                                                        ------    ------

    Commitments and contingencies

    STOCKHOLDERS' EQUITY
    Preferred stock, $.001 par value,
     5,000,000 shares authorized, none
     outstanding                                             -         -
    Common stock, $.001 par value, 300,000,000
     shares authorized; 177,918,044 shares and
     161,249,529 shares issued, respectively               178       161
    Additional paid-in capital                         145,381   135,920
    Accumulated deficit                               (157,334) (126,248)
                                                      --------  --------
           Total stockholders' equity                  (11,775)    9,833
           Total liabilities and stockholders' equity  $33,196   $59,392
                                                       =======   =======

    ARCADIA RESOURCES, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                   Three-Month Period
                                         Ended              Year Ended
                                       March 31,             March 31,
                                       ---------             ---------
                                      (Unaudited)
                                     2010        2009      2010       2009
                                     ----        ----      ----       ----

    Services                      $20,683     $23,202   $86,635    $97,537
    Pharmacy                        4,422       2,173    15,154      6,019
    Catalog                           366         568     1,813      2,576
       Revenue, net                25,471      25,943   103,602    106,132
    Cost of revenues               18,564      18,379    74,374     74,370
                                                         ------     ------
       Gross profit                 6,907       7,564    29,228     31,762

    Selling, general and
     administrative                11,109      11,045    40,279     40,483
    Depreciation and
     amortization                     425         380     1,850      2,016
    Goodwill and intangible
     asset impairment              14,599      23,511    14,599     23,511
      Total operating expenses     26,133      34,936    56,728     66,010

       Operating loss             (19,226)    (27,372)  (27,500)   (34,248)

    Other expenses:
       Interest expense, net          753       1,031     3,371      4,072
       Loss on extinguishment of
        debt                            -       4,239         -      4,487
       Change in fair value of
        warrant liability            (611)          -      (979)         -
       Other                            -          22        30         75
         Total other expenses         142       5,292     2,422      8,634
                                      ---       -----     -----      -----

    Loss from continuing
     operations before income
     taxes                        (19,368)    (32,664)  (29,922)   (42,882)

    Income tax expense
     (benefit)                        (88)          2        29        122
                                                            ---        ---
       Loss from continuing
        operations                (19,280)    (32,666)  (29,951)   (43,004)

    Discontinued operations:
       Loss from discontinued
        operations                    (97)     (3,483)   (1,692)    (2,208)
       Net gain (loss) on
        disposal                      163        (563)      557     (1,258)
                                       66      (4,046)   (1,135)    (3,466)
                                      ---      ------    ------     ------

    NET LOSS                     $(19,214)   $(36,712) $(31,086)  $(46,470)
                                 ========    ========  ========   ========

    Weighted average number
     of common shares
     outstanding                  177,133     137,665   166,840    134,583

    Basic and diluted net
     loss per share:
    Loss from continuing
     operations                    $(0.11)     $(0.24)   $(0.18)    $(0.32)
    Income from discontinued
     operations                         -       (0.03)    (0.01)     (0.03)
                                      ---       -----     -----      -----
    Net loss per share             $(0.11)     $(0.27)   $(0.19)    $(0.35)
                                   ======      ======    ======     ======

    ARCADIA RESOURCES, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (IN THOUSANDS)

                                                            Year Ended
                                                             March 31,
                                                             ---------
                                                            2010       2009
                                                            ----       ----
    Operating activities
    Net loss for the year                               $(31,086)  $(46,470)
    Adjustments to reconcile net loss to net cash
     provided by (used in) operating activities:
      Provision for doubtful accounts                      1,736      4,433
      Depreciation of property and equipment               1,507      4,505
      Amortization of intangible assets                      722      1,850
      Goodwill and intangible asset impairment            14,599     26,455
      Loss on extinguishment of debt                           -      4,487
      Non-cash interest expense                            2,397      2,215
      (Gain) loss on business disposals                     (557)     1,258
      Loss on sale of property and equipment                   -         75
      Amortization of deferred financing costs and
       debt discounts                                        332        972
      Change in fair value of warrant liability             (979)         -
      Stock-based compensation expense                     1,758      1,654
    Changes in operating assets and liabilities,
     net of acquisitions:
      Accounts receivable                                  3,895       (856)
      Inventories                                            546     (1,652)
      Other assets                                           558        515
      Accounts payable                                      (596)     1,278
      Accrued expenses                                      (694)         7
      Due to affiliated agencies                             (19)        81
      Deferred revenue                                         -        (29)
                                                             ---        ---
    Net cash provided by (used in) operating
     activities                                           (5,881)       778
                                                          ------        ---

    Investing activities
    Business acquisitions, net of cash acquired             (281)      (675)
    Proceeds from business disposal                        9,498        670
    Increase in restricted cash                             (500)         -
    Purchases of property and equipment                     (574)    (1,281)
                                                            ----     ------
    Net cash provided by (used in) investing
     activities                                            8,143     (1,286)
                                                           -----     ------

    Financing activities
    Proceeds from note payable, net of fees                2,142      2,800
    Net advances (payments) on lines of credit            (3,550)    (6,416)
    Payments on notes payable and capital lease
     obligations                                          (7,175)      (705)
    Proceeds from equity financing, net of fees
     paid in cash of $857                                 10,243          -
    Net cash provided by (used in) financing
     activities                                            1,660     (4,321)
                                                           -----     ------

    Net change in cash and cash equivalents                3,922     (4,829)
    Cash and cash equivalents, beginning of period         1,522      6,351
                                                           -----      -----
    Cash and cash equivalents, end of period              $5,444     $1,522
                                                          ======     ======

SOURCE Arcadia Resources, Inc.