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Arcadia Resources Reports Fiscal 2008 Q2 Results – Reiterates Outlook to be Cash Flow and EBITDA Positive in Q3; Reduces Debt by $10 Million

INDIANAPOLIS, November 9, 2007 -- Arcadia Health Care (AMEX: KAD), which provides innovative consumer health care services under the trade name Arcadia Health Care^sm, today announced its financial results for the second quarter and six months ended September 30, 2007.

Net revenues for fiscal second quarter 2008 were $38.7 million versus $38.3 million for the same quarter last year. The revenue increase primarily reflected organic growth of approximately $435,000 in the In-Home Health Services segment, which comprises approximately 81% of total net revenues. Revenues in the Retailer and Employer Services segment and the Durable Medical Equipment segment were essentially unchanged from the year-ago quarter.

Net loss from continuing operations for the fiscal second quarter of 2008 was $4.5 million, or $0.03 per share. Net loss from continuing operations for the year-ago second quarter was $1.6 million, or $0.02 per share.

EBITDA loss from continuing operations for the fiscal second quarter of 2008 was $2.0 million, compared with positive EBITDA from continuing operations of $452,000 a year ago.

For the first half of fiscal 2008, Arcadia reported a nearly 5% rise in net revenues, to $77.9 million. Net loss from continuing operations was $8.4 million, or $0.07 per share, versus a net loss from continuing operations of $1.9 million or $0.02 per share for the first half fiscal 2007.

During the second quarter, the Company disposed of the clinics and certain DME business operations. The financial results of those operations are reported in discontinued operations for the second quarter and six months ended September 30, 2007. The prior period results have also been recast for consistency purposes.

Discontinued operations accounted for an additional loss of $4.6 million and $8.2 million, for the second quarter and six months ended September 30, 2007, respectively. Clinic’s accounted for $6.4 million of the loss from discontinued operations for the first half of fiscal 2008.

Management Comments, Outlook

"While we are never satisfied to report a loss, we are proud of the first half of fiscal 2008 in terms of our turnaround efforts and the building of a 'new' Arcadia Health Care," commented Marvin R. Richardson, President and Chief Executive Officer. "As a result of our operational and financial progress, we strengthened the balance sheet by reducing long-term debt of approximately $10 million since March 31, 2007. And, based on recent monthly results, we are pleased to reiterate our expectation that the Company will be cash flow and EBITDA positive by the third quarter of fiscal 2008."

Commenting on several of Arcadia's strategic actions during the second quarter of fiscal 2008, Mr. Richardson noted, "We took concrete steps to deliver on our business goals, including the divesting of our Clinic operations which produced significant losses, divesting the Florida and Colorado Durable Medical Equipment business units, financing Durable Medical Equipment accounts receivable and improving Florida Medicare collections. In the process, we generated $5.8 million of cash without diluting investors."

"We also announced a major DailyMed™ initiative with the State of Indiana estimated to contribute approximately $40 million to fiscal 2009 revenues. Our collaboration with Indiana demonstrates the great potential of our DailyMed™ compliance pharmacy packaging system, which has been endorsed by multiple public agencies in Indiana and will be promoted with a state-sponsored direct-to-consumer campaign to 1.7 million Hoosier seniors. This will provide a solid foundation for additional payor contracts leading to a national launch of DailyMed planned for fiscal 2009."

"To streamline our corporate operations, we closed four Arcadia offices, moving our executive team to our new headquarters in Indianapolis. We continue to focus on improving earnings and cash flow while seeking additional SG&A cost reductions and improvement in our overall accounts receivable collections. I feel that we have delivered tangible results to our shareholders and look forward to building upon this progress," Mr. Richardson concluded.

Management Comments, Outlook

Arcadia will conduct a conference call and simultaneous Internet webcast to review these financial results on Friday, November 9, 2007 at 11:00 a.m. (Eastern Time).

To access the webcast, visit the Company’s website at www.arcadiahealthcare.com approximately 5-10 minutes prior to the start time and click on the webcast link. The webcast also will be accessible on www.investorcalendar.com.

The conference call also may be accessed by telephone by dialing 1-877-407-0778 (for US-based callers) or 1-201-689-8565 (for international callers).

A replay of the webcast will be available approximately one hour after the completion of the call and will be accessible on www.investorcalendar.com for 90 days following the call. 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 the replay, callers must use the Passcode number 286 and Conference ID number 260694. The telephone replay will be available for 14 days following the call.

Arcadia Resources, Inc. Consolidated Balance Sheets

About Arcadia Health Care
Arcadia Health Care is a service mark of Arcadia Resources, Inc. (AMEX: KAD), and is a national provider of alternate site health care services and products, including respiratory and durable medical equipment; non-medical and medical staffing, including travel nursing; comprehensive central fill and licensed pharmacy services including its proprietary DailyMed™ Pharmacy program and a catalog of healthcare-oriented products, available for purchase on http://www.ArcadiaHealthCare.com and other leading retailer websites.

Through industry partnerships, the Company is also establishing a licensed model for walk-in routine (non-emergency) medical clinics inside of retail stores. Arcadia Health Care’s comprehensive solutions help organizations operate more effectively and with greater flexibility, while enabling individuals to manage illness and injury in the comfort of their own homes or through the convenience of local health care sites. The Company’s annual report on Form 10-K for the year ended March 31, 2007 is available on the Company’s website (http://www.arcadiahealthcare.com and the SEC website (http://www.sec.gov).

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) the marketing initiatives currently planned in conjunction with the State of Indiana and its agencies may be insufficient for DailyMed™ to achieve the market penetration and the additional payor contracts necessary to meet our revenue growth targets; (iii) the metrics for the pilot launch of DailyMed™ in other geographic locations may not accurately predict the demand for DailyMed™ in Indiana; (iv) we may not succeed in executing the national launch of DailyMed™ on schedule; (v) we may be unable to execute and implement our growth strategy; (vi) our plan to reduce SG&A costs may be unsuccessful; (vii) we may be unable to improve the timely collection of our accounts receivables; and (viii) 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.

Media Contacts:
Amalia "Molly" Blanco (317)569-8234 x 103
Dan Fleshler or Davis Hodge
Kreab/Strategy XXI (212) 935-0210