Ladies and gentlemen, thank you for standing by. Welcome to the IntegraMed America Second Quarter Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded, Thursday, August 2, 2007. I would now like to turn the conference over to John Hlywak. Please go ahead, sir.

Good morning. This is John Hlywak, Executive Vice President and CFO of IntegraMed. Thank you for participating in today's call. Joining me today is Jay Higham, President and Chief Executive Officer. During today's call we’ll provide a brief overview of our business, offer summary comments on our second quarter and first half 2007 results, and then discuss the specific factors driving those results. We will then open the call to your questions. Before we begin, I would like to caution that comments made during this conference call by management may contain forward-looking statements that involve risks and uncertainties regarding operations and future results of IntegraMed. I encourage you to review the Company's filings with the Securities and Exchange Commission including without limitation, the Company's Form 10-K and the Form 10-Q’s, which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. The content of this conference call contains time sensitive information that is accurate only as of today, August 2, 2007. The company undertakes no obligation to revise or update any statements to reflect the events or circumstances after the date of this conference call. This call is the property of IntegraMed. Any redistribution, retransmission or rebroadcast for this call in any from without the express written consent of IntegraMed is strictly prohibited. I will now turn the call over to Jay to provide an overview of our business.

Thank you, John. To provide brief context to those new to the company, IntegraMed is the leading provider of an array of products and specialty business services to clinics, physicians, and consumers within the fertility field, a $3 billion medical sector. Our business is organized into two segments: Provider Services and Consumer Services. To providers, we offer products and services that enable long-term growth, greater patient volume, superior patient care, and operational efficiency. Our services are leveraged across a national provider network we have assembled, providing economies of scale, and improved business and clinical performance. We have two contract formats in our provider segment. Fertility centers with partner contracts get our full compliment of products and services. Fertility centers with affiliate contracts obtain distribution rights to our consumer products and services. Our provider network is comprised of both partners and affiliates. It’s the largest managed network of fertility centers in the U.S., currently comprised of 30 centers with 97 locations that account for over 22% of total US IVF procedures by volume. For consumers, we provide the products and services needed to make better clinical outcomes easier and more affordable. The lead offering in this area is the IntegraMed Shared Risk Refund program, which enables a patient to contract for a total of six Assisted Reproductive Technology treatments for an affordable fee and to qualify for up to a 100% refund if treatment does not result in a successful birth. IntegraMed developed this program in 2001, and it has become an important contributor to the company's overall performance. We've been successful in building our market position and leveraging it into improved performance for our providers and improved access to high quality treatment for our consumers. At a time when the fertility services market is experiencing increased competition, our business model resonates for providers and consumers alike. With that I will now turn the call back to John Hlywak, to summarize the second quarter results. John?

Thank you, Jay. Overall our financial performance was strong across all measures in this second quarter and first half of 2007. We achieved 7% growth in second quarter revenues which now amount to $34 million. Our growth rate well outpaced that of the fertility industry. We were successful also in leveraging that growth for the bottom line with net income expanding 53% to $817,000 in the second quarter 2007 versus $530,000 in the second quarter of 2006. On a per share basis, second quarter diluted earnings per share rose to $0.10 per share compared to $0.07 last year. Please note that all earnings per share and weighted average share numbers reflect the two separate stock dividends paid on June 21, 2006 and May 4, 2007. But second quarter results also benefited from a more favorable tax rate of 34%, compared to our 38% rate in the second quarter of 2006. The lower effect of tax rate has resulted from hiring, investing excess cash in taxes and securities. Cash flow in the quarter was strong, with net cash generated in the period of $3.3 million and $4.1 million generated in the first half of 2007. And a quick look at the balance sheet reveals strength and the growing cash position of $36.3 million at the close of the second quarter of 2007. Total shareholders equity rose to $42.5 million or approximately $5.18 per diluted share at June 30, 2007. We continue to seek ways to put our excess cash to work where we believe we can achieve the best possible returns. I will now turn the call back to Jay for further review of the business and how our operating performance was achieved. Jay?

Thank you, John. We attribute our strong Q2 performance to four principle factors. First, patient volume in the provider services segment grew at double the national average. Second, provider contribution margins continued to improve. Third, the consumer segment led by the IntegraMed Shared Risk Refund Program continued its rapid growth. And fourth, we were successful at continuing to improve leverage of Corporate G&A expenses directly benefiting the bottom line. I’ll take a few minutes to amplify these factors. First, in the Provider Services segment patient volume at the practice grew twice as fast with the national average. We have been saying for some time that the slower growth and overall IVF procedure volume in the U.S. favors our business model. Our products to managing fertility centers results in more effective operations including new patient recruitment. Our performance in the provider segment continues to bear out the advantages of our model. Patient volumes at the practice level in the second quarter grew 7% versus the same quarter in 2006. That way it was about double the industry average growth rate during the quarter based on analysis of the most recent data from the Society Assisted Reproductive Technology. We attribute this success to the strength of our total solution fertility center operations. Effective sales and marketing programs bring new patients in the door, and finely tuned operational procedures ensure that these patients are processed efficiently resulting in new revenue captured and collected. The second driver of Q2 results was the contribution margin within the provider segment. We are achieving increased operational leverage on our growing base of revenue, thereby validating our business model and enabling the Company to deliver improving bottom-line results. Provider segment contribution increased 19% over the same quarter in 2006 as a result of our continued focus on improving…

Ladies and gentlemen, please stand by, we will resume the conference shortly. I ask that everyone please remain online.

Hello [Miss Lindenberg]. I don’t know. Yeah. Nothing going on.

Ladies and gentlemen please remain online, your conference call will resume momentarily. We do thank you for your patience and once again please remain online your conference will resume momentarily. Thank you everyone for standing by. Mr. Hlywak, please go ahead.

This is Jay Higham. I think I was in the middle of speaking when we had some technical difficulties. I apologize to everybody. I am going to start my remarks over here. I am not sure exactly where the call was dropped off. So attribute our strong second quarter performance to four principal factors. First, patient volume in the Provider Services segment grew at double the national average. Second, provider contribution margins continue to improve. Third, the consumer segment led by the IntegraMed Shared Risk Refund program continued its rapid growth. And fourth, we were successful in continuing to improve leverage of Corporate G&A expenses directly benefiting the bottom-line. I will take a few minutes to amplify these drivers. First, in the Provider Services segment patient volume at a practice level grew at twice the national average. We have been saying for some time the slower growth in overall IVF procedure volume in the U.S. favors our business model. Our approach to managing fertility centers results in more effective operations, including new patient recruitment. Our performance in the provider segment continues to bear out the advantages of our model. Patient volume at the practice level in the second quarter grew 7% versus the same quarter in 2006. That way it was about double the national average growth rate during the quarter based on analysis of the most recent data available. We contribute the success to the strength of our total solution for fertility center operations. Effective sales in marketing programs bring new patients in the door and finely tuned operation procedures ensure these patients are processed efficiently, resulting in new revenue captured and collected. The second driver of Q2 results was the contribution margin within the provider segment. We are achieving increasing operational leverage on our growing base of revenues,…

Thank you. (Operator Instruction) And our first question comes from the line of Richard West of JM Dutton and Associates. Please proceed.

Good morning, great quarter.

Thanks

If one of you could go further into the Shared Risk business. I am a little confused because I am seeing on your cash flow that deposits increased $405,000 during this quarter compared to $710,000. Is that indicative of your earnings or just – that’s why I need clarification?

Well, the deposits come in well in advance of treatment and well in advance, it's gets booked at differed revenue. And so in the first quarter we had unusually strong growth in deposits. Not such great results in terms of pregnancy rates, so those deposits remained on the balance sheet.

Okay, thank you.

Again it was good for us. Thank you.

Our next question comes from the line of Kevin Goldstein at Great Gable Partners. Please proceed.

Good morning.

Hi Kevin.

Hi. I had a couple of questions, starting on the provider side of the business, the contribution margin was excellent. It's a level we haven’t seen since, I think, 2005 and I am curious if you think -- you explained how you are achieving this, but if you thought you can sustain this level for the foreseeable future?

It's in constant focus. We made it one of our highest priority this year, both margins at the practice level as well as leveraging corporate G&A. And I am very pleased with the type of performance we have been able to demonstrate during the first half of the year. It's something that -- my attitude towards that is, the job’s never done. It's the kind of thing that we have to continue to focus on, and we would like to be able to continue improving in both of those areas. With that said, there I think you do have to recognize that infrastructure, whether it’d be at the practice level or at the company level, it's a little chunky in terms of, you make a fairly sizeable investment and that’s what helps you when you kind of grow into that investment. So it's a constant challenge to manage when you make those investments. So that you can, so you are not falling down the growth of the company, but you would also don’t want to punish the income statements. So it’s something that we constantly focus on and I am very pleased with how we have been able to demonstrate improvement in that, in both of the areas.

Okay. And in that segment of the business, you are starting to, coming to appear with your anniversary at a slower growth rate. So I am just curious, the volumes are up 7% here. Does it just mean that we will start seeing the revenue rates on a percentage basis increase, because your anniversary in lower comps, or if we are kind of stuck in this 3% to 6% rates.

I guess I am not following your question, Kevin. You are talking about the provider segment?

Yeah. I mean a year ago, you provided this quarter that you are up 4% in revenue versus 12% last year. Last year had 12% growth, so it was, and now it’s going to head into a period where the comps get a little bit easier in terms of the year ago same quarter.

Yeah. I think that if take a look at our business over the longer haul, revenue growth and taking the consumer pieces out of here for the moment, the revenue growth is a combination of organic growth, sort of you know what in retail you might call same store growth at the practice level, and what we refer to here as acquisition growth and new contract growth. And in the past, I think that that’s been a little more evenly distributed and in the future and this is the partly what my comments were reflecting is that we may see a higher growth from new contract components than we will from organically. We used to grow organically at the centers by 20% to 30% a year. There was a high growth market at that time, and it's just the nature of the market-to-market that has matured some what, and the growth rate around the country have come down dramatically. We are able to hold on to a higher growth rate, taking share from competitors. But, I think that's the reality of the market and the foot side of it is, that I think we are going to see more on the consolidation side. But that's a little more difficult to predict; the timing.

Speaking of the consolidation, those were interesting comments you made about the shape of the industry and the number of calls you are getting. In the past you talked about specially doing an acquisition outside of the core IVF and here on the call you're talking about really speaking about consolidating the IVF stake and is that how..

Our focus is -- has been on the fertility market for a long time Kevin. We -- I don't think we've made any announcements about looking outside.

Okay. Well, great guys. Congratulations on good quarter.

Thank you.

(Operator Instructions) And our next question comes from the line of Henry Leong at the Henry [Heart] Capital. Please proceed.

Hi guys this is Christian. How are you today?

Very well, thank you for joining the call.

Great quarter Wanted to get some color on the health insurance, on the healthcare benefits and the insurance benefits, in terms of gross margin for the providers segment. Can you give us the feel for how that impacted -- either how much of the gross margin benefit we saw that came from those two items?

From health insurance? Yeah I don't have that data right in front of me here. It was a big impact and very certainly around the country. We've reached the point now where we have about a 1,000 employees around the country and in the past we have always gone out looking for the best deals that we can get. Not at a size of that in earlier years, where we could consolidate into one national pair insurance program. So for the first time this last year, with that size of employee base, we were able to do so and bring that benefit.

You guys mentioned in terms of health insurance, $1.3 million annualized. Is it fair to say that we recognize the full quarter for the benefit in Q2?

Absolutely. The benefits started with open enrollment in January.

Okay.

So we are experiencing a full annual effect, this year, of that.

Okay, so that was in the Q1 numbers as well there.

Correct.

And the, this type…

This type of improvement in contribution margin is a result of -- usually it's not one major factor. It's a result of really focusing on all the little components of expense that really add up. Clearly, personnel as a percentage of a revenue as percentage of expenses is a very big number. So making sure that you are utilizing personnel as efficiently as possible is always going to be part of the equation. Medical expenses, insurance follows that, and supplies and capital is also a big part of it. So we are just trying to utilize our operations as efficiently as possible.

Absolutely. The captive malpractice reduce premium, you guys mentioned 14% decrease annualized. Was that in the Q1 numbers as well. Or did that occur specifically in Q2?

No, that started in Q1 also. So we are gaining a little more momentum here in this area and as we add physicians, which we are, this is the time when new physicians start in a number of the practices, we are going to be able to utilize the fixed cost better as well so I am very pleased with the type of progress we have made in this area.

Absolutely, well great. Can you break out the affiliate number for the quarter by chance?

Affiliate number, I'll take a minute here. We have share, on the revenue for second quarter -- it's by far -- in the provider segment there by far the revenue is by far focused on the partners. We generate about 300,000 lower than 300,000; $320,000 in affiliate fees. And most of that results and it goes right down to contribution. The big part of the affiliate is not so much the monthly fees that we get from the centers though it's a Shared Risk that’s where the real money is. And probably half of our Shared Risk right now is coming out of the Partners and the other half of it is coming out of the Affiliates. The Partners represent effectively nine centers, the Affiliates 21, and so you can see the partners are a lot bigger on average and we also, because we have better control, we have the personnel there that we have better control over, we get better through out our programs and services, better implementation of the programs that we have. So that’s why these Partners are roughly important, but the Affiliates are roughly important too. It’s serving as a distribution channel for shared risk, which is where the focus is.

Absolutely, I fully understand that. The reason I was asking for the Affiliate breakout is the teams like, that’s consistent with earlier quarters, which means the margin improvement on the provider side is almost exclusively due to your Fertility Partners.

Exactly, that’s what I was trying to -- exactly, that’s exactly right.

Given that the health care and malpractice insurance was already in the Q1 numbers, sequentially quarter over quarter, there is a lot of gross margin improvement in that segment. Is there anything other than the increase in hiring doctors that you can attribute any additional color you can give us?

Like I said before, it’s just focusing on all the little details. And as volume goes up, we are at a point right now, where we really are able. This is a high fixed-cost business, relatively low volume and high margin, so incremental patients due drop disproportionately to the bottom line. And we re seeing that leverage at the practice level and we are seeing that leverage at the Company level as well, and I think that’s really the story.

Great. I had a question on the corporate expenses. It looks like that approximately $3.4 million was high, relative to what we've seen in the past and a big jump sequentially. Can you give any colors to what you can attribute those changes to?

This is John Hlywak. We continue to build infrastructure in that area and we have added a number of executives in the fertility area. We now have another Executive Director and we have filled another open position. So those are the major areas. We have been doing a pretty good job on leveraging that and we measure our G&A as a percentage of contribution.

Right.

And as a percentage of contribution it is down.

And you -- okay. So that seems like if it’s headcount mostly, that's a good run rate going forward?

Yes, I think that that's a fairly reasonable expectation as I mentioned before we're still a small company and while we have achieved a level of critical mass here, where we are able to show these types of improvements at some point, you do need to make another chunk of an investment and the big investments we made over the last year is putting a regional infrastructure in place which, because we now have 30 contracts out there across the country, we needed to hire two regional Senior Vice-Presidents to break up the country and get our operational support out into the field more than here in New York. So those were big investments for us over the last year and at some point I could envision that type of additional investment as we continued to grow the company. And they do tend to be chunky investments that all come at once and the revenue sort of has to catch up with it.

Right. Great, that's all I have. Thanks very much guys.

Thank you.

Our next question comes from the line of Reid Frayer of (inaudible) Dutton and Associates. Please proceed.

Thank you. Hi Jay and John. Can you talk a little bit about this slow-down you are seeing in the ART field? Is it something you think is secular or temporary, do you have any reasons for it?

Sure. It's really simple actually. Baby boomers are not having babies anymore. And I am at a tail end of the baby boomer generation, and I am certainly not having babies anymore. And then the next covert of people, of women coming through the sort of 25 year to 40 year old age range, is somewhat smaller than the baby boom generation. The next covert after that is much bigger, so there is going to be a bit of a dip here for the next five years or so, but then it picks up after that. So all things being equal, one would expect that procedure volume in the United States would actually go down. We are not seeing that. We are not seeing procedure volume going down, because all things aren’t equal. Treatment improves, public awareness improves and the affordability of the service improves. And so for all of those reasons you’re seeing actually a continued growth, but it is moderated over what we had in previous years.

That’s helpful. Thanks very much.

Our next question comes from the line of [Carolyn Lundberg at Randolph Partners]. Please proceed.

Hi, it was a great quarter.

Thank you.

You talked a little bit about holding the cost down at the practice level. How much ability do you have to do that, kind of in the supplies, to bear all the practice the marketing dollars they spend? Is that only what you guys are controlling?

We have a lot of control input over that. I mean, one of the first things that we do, when we have a new contract with the partner is that we put in place a seasoned Executive Director, this is done MBA level, highly paid individual and as well as the other infrastructure necessary. These are small businesses run by physicians. They are not totally efficient. They are not really very business minded and we have to make these fairly sizable infrastructure investments there and then to have to grow into it. So in the early years of a new transaction, we actually see the margins deteriorate for a period of time and then the benefit of having that infrastructure of being able to drive the growth of taking within from X to 2X in size, really begin to kick in and we’re in some of that right now. So it's a combination of having the right infrastructure to cause the growth to happen profitably, as well as having people in place who can then manage that effectively and make sure expenses are in line. So it's really a combination.

Okay. And you guys kind of have a long-term target gross margin in the provider services. Is that what you are thinking about?

I’d rather not speculate on that, Carolyn. It's tough to know, we’re as I said before, we are really focused on it. I think it can improve, but to put a projection out there right now, it's not something that we are going to do.

Okay. Do you guys think about continuing at, these are the levels you signed this quarter or is it something where you expect to?

I don’t expect, put it this way, I don’t expect it to deteriorate.

Okay.

Will the patient improvement continue? That’s hard to say. I won’t speculate on that at the moment.

Okay. And then in terms of hiring needs for the next two quarters, do you guys have any specific people that you are looking to hire?

There are open positions, there are few people here and there that we are putting in place. One of our most important aspect here is our clinical information system network, known as ARTWorks. That’s a product that is probably our most important asset here and we need to make some continued investments in that area. So I don’t want to communicate the message that our investments are done and the infrastructure is fully in place. That’s not the case. This is a constant effort to balance the needs of a solid infrastructure to serve. That’s an expanding business and to support an expanding business, with making sure that we are doing it in a thoughtful and responsible manner.

Okay. And the major infrastructure needs are head counts at this point?

Well, and then head counts there is not a lot of. IT is a really big component of our infrastructure here, so there are the usual sort of IT requirements and between head counts and IT capital, those are probably the two areas.

Okay. Great. Thanks Higs.

And Mr. Hlywak, I show no further questions at this time. So I will turn the conference back to you.

I will let Jay wrap it up.

Thank you everybody, and thank you for your forbearance on our technical difficulties. We appreciate you hanging in there and asking some very good questions. Thanks all to everybody for participating. We appreciate your ongoing interest in the company and look forward to continued communication with you. To facilitate that communication with all of you and our larger investor group, and to expand the reach of the IntegraMed story to a broader base of investors and the analysts. We have retained the services, as an outside Investor Relations firm, of Jaffoni & Collins, based in New York. Their contact information is on today's new release. With our track record of financial performance and having now approached to the $100 million market cap milestone, we believe we have a very marketable investment story and that we should see a meaningful return on investment from an extended program of communication and outreach. So, retaining external IR support should allow us to execute on that plan and to build investment awareness. So thank you again, for your support and for participating in today's call.

Ladies and gentlemen that does conclude the conference call for today. We thank you for your participation, and we ask that you please disconnect your line.