Metropolitan Health Networks Reports Record First Quarter 2009 Results

-- Revenue of $90.4 million, a 19% increase compared to the first quarter of 2008;

-- net income of $4.0 million or $0.09 per basic share, compared to a net loss of $337,900 or $(0.01) per basic share for the same quarter last year;

-- 7% increase in total customer months, and,

-- the repurchase of 6.3 million shares through May 1, 2009.

First Quarter Financial and Operating Results:

The Company recognized revenue of $90.4 million for the first quarter, as compared to $76.0 million in the 2008 first quarter, a 19.0% increase. Net income for the 2009 first quarter was $4.0 million or $0.09 per basic share and $0.08 per diluted share, as compared to a net loss of $337,900 or $(0.01) per share basic and diluted for the same quarter last year.

The Company's consolidated medical expense ratio, or MER, was 87.9% in the first quarter of 2009 compared to 90.0% in the same quarter of 2008 and 88.4% for full year 2008. Operating expenses dropped 44.6% from $8.3 million in the 2008 first quarter to $4.6 million in 2009, primarily the result of the sale of the Company's Medicare Advantage plan, or HMO, in August 2008.

Customer Information:

There was a net increase of 1,900 Medicare Advantage customers served by the Company between March 2008 and March 2009 to 34,900. Total customer months, the combined total customers for each month of the measurement period, increased by 7% to 105,500 in 2009, up from 98,600 in the 2008 period.

Balance Sheet Highlights:

Cash, cash equivalents and short-term investments at March 31, 2009 totaled $34.9 million. This compares to $36.3 million at December 31, 2008. During the first quarter, $2.2 million of cash was used to repurchase 1.5 million shares of the Company's common stock. The Company had a working capital surplus of $36.7 million as of March 31, 2009 as compared to a surplus of $34.5 million as of December 31, 2008. The Company has no outstanding debt and stockholders' equity increased $2.1 million from $42.8 million at December 31, 2008 to $44.9 million at March 31, 2009.

Share Repurchase Program:

On October 3, 2008, Metropolitan Health Networks announced that its Board of Directors had authorized the repurchase of up to 10 million shares of the Company's outstanding common stock. Through March 31, 2009 the Company has repurchased 5.7 million shares of its common stock at an average cost of $1.73 per share. Shares repurchased as of May 1, 2009 totaled 6.3 million. The number of shares to be repurchased and the timing of the purchases will be influenced by a number of factors, including the then prevailing market price of the common stock of the Company, other perceived opportunities that may become available to the Company, and regulatory requirements.

Michael Earley, Chairman and Chief Executive Officer, commented, "We are very pleased with our first quarter results, representing high watermarks in terms of customers served, revenues, and earnings. The results of the quarter are a reflection of the groundwork that was laid over the last 18 months by our hard working managers, medical professionals, and staff. Through various operating initiatives, and with the well-timed sale of our HMO, we are now seeing further performance being unlocked in almost every aspect of our business. With the buy-in of all team members we are building an organization ideally positioned for the future of healthcare."

Continuing, Earley noted, "The business of providing and coordinating health care services to seniors is poised for explosive growth as baby boomers begin reaching age 65. Our job remains to position our business to serve this important market and to be mindful of the changes, challenges and uncertainties facing the health care industry, and Medicare Advantage in particular. As our target population base continues to grow, we will meet the downward pressure on future premiums with a sharpened focus on our core operations and, we expect to thrive as we take full advantage of our hard earned operating expertise, our scale in the markets we serve, and our strong balance sheet. Initiatives like our early commitment to the now much-discussed Patient Centered Medical Home operating model, a model of coordinated care, e-prescribing, and our progress with the implementation of electronic medical records, are excellent examples of the current forward thinking nature of the Metropolitan organization as a whole. Combined with the trust we continue to foster with all of our working and industry partners and, above all, the customers we serve, we believe the future of our business looks bright."

Conference Call Information:

Metropolitan Health Networks will hold a conference call to review its first quarter 2009 results on Tuesday, May 5, 2009 at 11:00 a.m. Eastern. 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) 713-4218 (domestic) or (617) 213-4870 (international), pass code # 34831837. The call will also be available via web cast at www.metcare.com, http://www.streetevents.com, http://www.fulldisclosure.com.

Participants may pre-register for the call at

https://www.theconferencingservice.com/prereg/key.process?key=PKLC3RPPQ. 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 May 12, 2009, by dialing (888) 286-8010 (domestic) or (617) 801-6888 (international) using confirmation pass code 52850934. The call will also be archived on our website.

About Metropolitan Health Networks, Inc.:

Metropolitan is a growing healthcare organization in Florida that provides comprehensive healthcare services for Medicare Advantage members and other patients in Florida. To learn more about Metropolitan Health Networks, Inc. please visit its website at www.metcare.com.

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) our ability to meet our cost projections under various provider agreements with Humana; (ii) our failure to accurately estimate incurred but not reported medical benefits expense; (iii) pricing pressures exerted on us by managed care organizations and the level of payments we indirectly receive under governmental programs or from other payors; (iv) future legislation and changes in governmental regulations; (v) the impact of Medicare Risk Adjustments on payments we receive for our managed care operations; (vi) 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. The Company 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, 2008, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, which is anticipated to be filed within several business days.

Financial Tables to Follow

METROPOLITAN HEALTH NETWORKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS                                                                                 March 31, 2009      December 31,
                                                                                       (unaudited)         2008
CURRENT ASSETS
          Cash and equivalents                                                         $       2,494,005   $       2,701,243
          Investments, at fair value                                                           32,400,796          33,641,140
          Accounts receivable, net                                                             107,585             286,003
          Due from Humana                                                                      7,660,741           2,823,355
          Inventory                                                                            267,453             315,811
          Prepaid expenses                                                                     719,589             570,792
          Deferred income taxes                                                                283,522             262,874
          Other current assets                                                                 53,538              266,007
                                            TOTAL CURRENT ASSETS                               43,987,229          40,867,225
PROPERTY AND EQUIPMENT, net                                                                    1,254,831           1,336,094
RESTRICTED CASH                                                                                1,412,054           1,408,089
DEFERRED INCOME TAXES                                                                          1,030,985           980,842
OTHER INTANGIBLE ASSETS, net                                                                   1,101,946           1,184,142
GOODWILL, net                                                                                  2,587,332           2,587,332
OTHER ASSETS                                                                                   777,493             780,631
                                            TOTAL ASSETS                               $       52,151,870  $       49,144,355
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
          Accounts payable                                                             $       646,478     $       483,621
          Accrued payroll and payroll taxes                                                    1,687,650           2,288,224
          Income taxes payable                                                                 3,227,981           1,865,926
          Accrued termination costs of HMO administrative services agreement                   900,000             1,080,000
          Accrued expenses                                                                     811,228             621,854
                                            TOTAL CURRENT LIABILITIES                          7,273,337           6,339,625
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
          Preferred stock, par value $.001 per share; stated value $100 per
          share;
          10,000,000 shares authorized; 5,000 issued and outstanding                           500,000             500,000
          Common stock, par value $.001 per share; 80,000,000 shares
          authorized;
          47,104,047 and 48,251,395 issued and outstanding at March 31, 2009                   47,104              48,251
          and December 31, 2008, respectively
          Additional paid-in capital                                                           35,689,810          37,649,331
          Retained earnings                                                                    8,641,619           4,607,148
                                            TOTAL STOCKHOLDERS' EQUITY                         44,878,533          42,804,730
                                            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $       52,151,870  $       49,144,355
The accompanying notes are an integral part of the condensed
consolidated financial statements.

METROPOLITAN HEALTH NETWORKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                            Three Months Ended March 31,
                                                                  2009              2008
                                                            (unaudited)       (unaudited)
REVENUE                                                     $     90,440,732  $     76,014,498
MEDICAL EXPENSE
          Medical claims expense                                  75,921,028        65,237,005
          Medical center costs                                    3,584,522         3,151,534
                                    Total Medical Expense         79,505,550        68,388,539
                                    GROSS PROFIT                  10,935,182        7,625,959
OPERATING EXPENSES
          Payroll, payroll taxes and benefits                     2,709,095         3,752,437
          Marketing and advertising                               39,047            1,368,103
          General and administrative                              1,826,258         3,131,096
                       Total Operating Expenses                   4,574,400         8,251,636
OPERATING INCOME (LOSS)                                           6,360,782         (625,677   )
OTHER INCOME:
          Investment income                                       231,968           81,067
          Other income                                            2,985             2,859
                       Total Other Income                         234,953           83,926
INCOME (LOSS) BEFORE INCOME TAXES                                 6,595,735         (541,751   )
INCOME TAX EXPENSE (BENEFIT)                                      2,561,264         (203,850   )
                                    NET INCOME (LOSS)       $     4,034,471   $     (337,901   )
NET EARNINGS (LOSS) PER COMMON SHARE:
          Basic                                             $     0.09        $     (0.01      )
          Diluted                                           $     0.08        $     (0.01      )
The accompanying notes are an integral part of the condensed
consolidated financial statements.

SOURCE: Metropolitan Health Networks, Inc.

Metropolitan Health Networks, Inc. 
Michael Earley, Chief Executive Officer, 561-805-8500 
mearley@metcare.com 
or 
Al Palombo, Investor Relations, 212-554-5488 
al@cameronassoc.com