Good morning, ladies and gentlemen. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the IntegraMed fourth quarter 2009 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator instructions) Thank you. Mr. Hlywak, you may begin your conference.

Thank you. 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. Before we begin, I'd like to caution that comments made during this conference call by management may contain forward-looking statements that involve risks and uncertainties regarding the 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 Form 10-Qs, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. The content in this conference call contains time-sensitive information that is accurate only as of today, February 5, 2010. IntegraMed undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. With that, I will now turn the call over to Jay, President and CEO of IntegraMed. Jay?

Thank you, John. And good morning, everyone. Thank you for joining us today. Let me begin with some general comments on our Q4 and full year 2009 results and the overall health of the company. And I’ll briefly review our growth strategy and prospects before turning the call over to John to review our results in greater detail. Overall, IntegraMed delivered healthy fourth quarter and full year results. Despite some business headwinds, they were largely a result of the prolonged economic challenges affecting many consumers. Specifically, our overall business achieved 9% growth in revenue for both the quarter and full year, and 16% and 14% increase in operating income, or what we call contribution, for the quarter and full year respectively. On the bottom line, IntegraMed achieved 14% and 15% increases in net income for the quarter and full year of 2009, resulting in EPS of $0.14 and $0.51 for the fourth quarter and full year respectively. As John will explain in greater detail, EPS was impacted by approximately $0.02 due to a tax adjustment related to one of our jurisdictions. Importantly, our Q4 results suggest that the worst may be over as far as the impact of the economic downturn has had on our business performance. Moving on to each of our business segments, our Fertility Center segment continued to perform well despite some lingering economy-driven challenges, generating top-line growth of 5% in both Q4 and full year 2009 and growing contributions by 13% and 14% on a quarterly and annual comparison. The performance drivers in this business were the following. Sales and marketing execution that continued to drive top-line performance above industry rates; ongoing operating discipline that has led to increased margin expansion; revenue cycle management improvements that led to a decrease in days sales outstanding or DSO;…

Thank you, Jay. As Jay mentioned, facing a weakened consumer, the overall strength and diversity of our business model enabled us to weather the challenging economy and deliver modest top-line growth and stronger bottom line growth. Overall, compared to the fourth quarter of 2008, total revenues grew 9% to $54.7 million, while operating income grew 16% to $5.4 million and EPS grew 17% to $0.14 per share. Comparing the full year 2009 to 2008, total revenues grew by 9% to $216.8 million, operating income grew 14% to $20.9 million, and EPS grew 13% to $0.51 per share. It is important to note that the fourth quarter’s tax rate and EPS was negatively impacted by a catch-up adjustment for taxes in one state, which amounted to an approximately $0.02 per share negative impact on EPS and brought our tax rate up to 48%. Going forward, we expect taxes in this jurisdiction when we have a nominal impact on our tax rate and that tax rate should settle back to just under 42%. Gross margin improved by 50 basis points to 9.9% for the quarter and 40 basis points to 9.6% for the full year. Net income also improved by 14% for the quarter to $1.2 million and by 15% to $4.5 million for the full year. Drilling down to divisional performance, beginning with our Fertility Centers segment, revenue increased by 5% to $35.8 million in Q4 and by 5% to $145.3 million for the full year, both healthy gains in light of the economic slowdown and a deterioration of consumer demand, as well as a loss of the third-party contract mentioned earlier in the year. Contribution in operating income increased by 13% for the quarter to $2.9 million and by 14% on a full year basis to $11.6 million. The gross…

(Operator instructions) Our first question will come from the line of Greg Williams with Sidoti & Company.

I had a couple questions on the fertility centers. You guys had nice margins around 8%. And I’m just wondering with the ramp-up of the three new partnerships, is it safe to assume that that 8% might get flipped a little bit or do you think that’s sustainable?

No, I think that -- look, one of the things we’ve talked about, first of all, is that the newer -- the historic margins in this business are going to be improving. We have better deal terms that we are able to get now because we do command a pretty substantial position in this marketplace. So we are going to continue to see margin expansion is my expectation.

Nice. And if you look at sequentially in the fertilities, it sounds like you guys are down in visits about 9%. I was wondering you can comment on that.

Yes. You are talking about from the third quarter to the fourth quarter, Greg?

Yes.

Yes. The fourth quarter is a tricky -- it's a tricky period. It’s a period when we tend to see a lot more volatility in the business, and I think in other quarters, our labs for the most part close down for much of the month of December. Patients don’t typically like to initiate treatment when the holidays are approaching. So when you take a look at some of those things, like new patient visits or even IVF treatments, those tend to be more volatile. And I’m not sure I would put too much faith in that as an indicator of the health of the business in the fourth quarter. It’s kind of a volatile period.

Okay. And then revenue seemed actually relatively flat sequentially though. So is there a pricing increase going on or something?

No, not really. It’s -- again, we did get the benefit of our -- in December of the new three new additions. So you don’t really see much pricing power in healthcare services these days.

All right. Sure. And just moving on to consumer, is the Multi-Cycle Attain IVF offer, is there any risk that you think of cannibalization or maybe patients opting downstream to that lower-priced offer?

That’s a great question, Greg. Very perceptive. It was definitely one of the things that was foremost in our mind and we rolled this out very carefully. We tested it at several leading centers before we made it more widely available to see what type of consumer response we were going to get from it. And there has been very little cannibalization, if any. It’s -- the biggest impact from this program is by making a wider patient population have availability to the benefits of this type of program. So with the regular refund program, not everybody will qualify for that. So there is a big segment of the population who can’t get access historically to the benefit of these types of programs. With the Multi-Cycle, it’s effectively making it accessible to everybody who requires IVF treatment. And so what we are seeing is -- and we do track this. Very little -- very few people who would qualify for the refund or actually opting for the Multi-Cycle, it tends to be more the case of people who didn’t have -- who didn’t qualify for the refund at all are the ones who are enrolling.

Okay. So do you think that’s money you would have -- that would have fell off the table offset any cannibalization there?

Absolutely. In fact, well more than offset at this point.

Okay. Good to know. And moving to the vein care segment, you supplied same-center sales -- or margins, rather, in fertility clinics, and you mentioned that margins will be maybe depressed as you expand and accelerate your clinics. Do you have maybe a contribution margin for Vein Clinics that have been around for a year-plus or a range?

The contribution -- the average contribution margin for, what we’ll call the mature clinics, the ones who have been around for more than one year is 25%.

25%.

Yes. And so we lose a few percentage points when you include all clinics, new as well as the ones that have been here for more than a year. So we lose maybe between 4% and 5% on those when you lump it all together. But the mature clinics generate on average 25% contribution margin.

Okay. And John, I just had a question with the -- in lieu of the two set of taxes, what can we look at? Is 40% a good tax rate going forward?

Greg, I think it’s more closer to 42% going forward.

42%. Okay. And I did have some follow-on offering [ph] questions, but it sounds like I have to wait and see. Okay. Thanks, guys.

Thank you.

Our next question will come from the line of Brooks O'Neil with Dougherty & Company.

Couple of questions. First, Jay, you mentioned that it’s likely that your pace of acquisitions in the Fertility Clinic business might accelerate. And you also mentioned in response to Greg’s question that you are seeing somewhat better pricing in that arena, which is great. Have there been any other changes in the acquisition environment or in the types of practices you might be able to look at in the last year or so?

Another great question, Brooks. Thanks for that. Yes, we are certainly -- if you go back over, say, a ten-year period of time for the company, we’ve been very disciplined in our approach to acquisition. We tend -- historically we’ve tend to do maybe one a year and put overwhelming focus on making sure that we are doing a really good job of integrating those acquisitions and then growing that business. So for a company that’s been in business for 25 years, we have 14 full service partners under this program that has come through acquisitions. So our pace of acquisition historically over that period of time, it’s not what I would call a rollout strategy. Okay? We do see, however, an opportunity to accelerate that pace for a couple of reasons. Reason number one is that we are a bigger company. We have more infrastructure and we have more capacity. That’s number one. Reason number two is that we have developed over that 25-year period of time a really solid reputation in this field of being able to deliver on what we promise. And so physicians have a lot of visibility into what IntegraMed is all about and what they are likely to get from an affiliation with us. And then reason number three is that the market environment that we are entering right now is one that I think is uniquely suited to what we call the benefit of the IntegraMed effect, which is physicians are really going to not only benefit from the historic two to three times growth in revenue that they can get on their own, but an increasing focus of ours, which we, I think, demonstrated very nicely this year of margin expansion. So we are really excited about the opportunity to -- and again, in a disciplined way, begin to expand the phase of acquisitions. And we saw that in December where we were able to land these three transactions. So it’s not the case that you are going to see us go from two to ten in a year, we are going to do two to three to four in a year. And then the last point I would make on that is historically our sweet spot has been what we call modest-sized fertility centers, the $5 million in patient billings and then to grow those over a period of time to two, three, four, 5X in size. We are seeing an opportunity to upsize the transactions to get into the larger centers. And these are centers that are not -- that are doing $15 million, $20 million, $25 million in patient billings. So, not only do we think we can increase the number, but I think we also feel that we can increase the size of these transactions.

Yes. And just as a follow-on, and I know you haven’t done it yet, so I’m asking you maybe to speculate a little bit. I understand it’s an uncomfortable environment to do that. But do you think you have opportunities or you would have opportunities to grow those larger centers, maybe not two, three, four times, but at some respectable rate post-transaction?

Yes, absolutely. I mean, this is still a highly fragmented field. Our historic growth has been a function of bringing new physicians into these centers out of residency or fellowship training who will benefit from infrastructure, sales and marketing, and the operational support that we have. But it’s also a function -- this doesn’t get quite as much visibility, but it’s also a function of taking physicians out of competing centers who already have a base of business and bringing them over to ours, and in some cases, even doing some end market mergers. And we’ve had a consistent track record of doing that as well. So -- there is plenty of opportunity for us to take these big centers and continue to grow and develop those centers. After all, we have four of the top five centers in the United States today by volume. And those are growing just like the smaller ones.

That’s great. Okay. I want to shift gears to the vein business. And I just want to ask you -- clearly it’s performing well. Has it performed to your expectations since the acquisition? And it sounds like you are prepared to perhaps ramp up the growth rate in 2010. Maybe if you could just talk a little bit more about how you see that and how that will impact the company this year.

Okay. I couldn’t be more pleased with what’s transpired with the Vein Clinic acquisition. It met every one of our expectations and even exceeded some. We have -- I think we delivered exactly what we said we were going to deliver. And we’ve got a really great team of people in place out there. We did have to do some retooling on the business. We knew that going in. We made the investments we needed to make. And we are benefiting from that right now. If I could find two or three more Vein Clinic type opportunities, that would be a great boon to the business. We are 100% focused on continuing to drive growth and development in that segment as well as the others of our business. We are optimistic that we are going to be able to accelerate the new clinic. I mean, I can’t conceive of accelerating the new patient volume any faster than what we have this year. I mean, this was an absolute home run for us as far as really retooling the marketing. So from a marketing point of view, I think we are hitting on all cylinders. It’s unlikely that that’s going to increase at a faster pace. I mean, let’s be honest about that. So we do need to shift our focus and get better results in terms of new clinics. And what that boils down to for us is being good at recruiting new doctors. The business model that we have in place for the Vein Clinics is a startup model. It requires us to find physicians, recruit physicians from where they are currently -- what they are currently doing into, in effect, a new career. We take primary care doctors, family practice, internal medicine, ER physicians. Also now we’ve recruited…

Great. And then I have just one last question. I think a lot of people view your business as maybe driven by private-pay. And I’m just curious if you see it that way, and if not, maybe you could describe how you see it.

Another excellent question. So -- yes, I think entering sort of around this point last year, the casual observer took a look at IntegraMed and said, okay, this is a company that is obviously in the fertility market, that’s a heavy self-pay, high-ticket item situation. That’s going to get crushed. And they looked at the Vein Clinic and not really knowing too much about it, but they thought it was cosmetic in nature. And I think that we’ve kind of put those issues to rest during this last year in terms of the performance. Yes, fertility does have a healthy self-pay component in fact. If you look at our Fertility Centers business, 50% of the revenue in that business is self-pay and 50% of it is covered by insurance. So there is a very healthy self-pay piece to it. But I think what people don’t appreciate, we haven’t been through this, is that there is a very significant emotional component. And patients, if at all possible, are going to figure out how to overcome the economic challenges. So yes, there was a bit of a slowdown and there was a bit of a shift from some of the self-pay piece to more insurance-based, but nowhere near the type of impact that the economy -- that one would have expected based on the sort of self-pay exposure here. So I guess the way to describe it is, from a patient point of view, this is anything but discretionary. This is not viewed as a discretionary situation for patients. When they have infertility and they want to start a family, this is not a discretionary situation. They will put off doing almost anything else. And then I guess if you move on to the Vein Clinic piece, that one is also a very big misperception. This is not cosmetic. If you look at -- it's medical. If you look at the revenue, we get -- 95% of our revenue in that business is insurance reimbursement. So insurance is definitely not reimbursing for a cosmetic situation. There are cosmetic procedures that we will do and can do. That’s become a very minor part of the business that people want it. We are certainly willing and capable of doing it. But overwhelmingly, this is a medical condition that gets good reimbursement from insurance companies. And then just to round it out, obviously the Consumer Service piece is completely self-pay. It’s a very expensive, high-ticket. It’s the price of an automobile, you know, $25,000. But there again, just to show the resiliency and the emotional component behind this and the value that we provide for that fee, patients who really stepped up and are continuing to buy this, and even though I would say everybody would concede that we are not completely out of the recession, that business has really came on strong in the fourth quarter and we are back on track.

That’s great. Thank you very much.

Thank you.

(Operator instructions) Our next question will come from the line of Dennis Van Zelfden [ph] with Brazos Research [ph].

Gentlemen, I do not have the S-1 filing in front of me, but can you tell me what the use of proceeds are for the recent offering -- recent filing?

The use of proceeds is in the filing. And I would encourage you it’s readily available on file and easily accessible for you. And again, my -- the attorneys are about ready to jump at me right now if I say anything more about that.

But that’s just -- it’s just a fact. I mean, it’s public knowledge what to use. I just -- my computer is acting up and I just can’t pull it up and I couldn’t last night either.

Okay. Then I can summarize just by saying that the use of proceeds is for pursuing what we were discussing earlier in this release, which is to more fertility center acquisitions and vein clinic openings.

Okay. I suspected that was the case. I guess given that, is your balance sheet, which I think you even described as fairly strong, and/or your unused credit lines not large enough to make an acquisition first?

We have been making -- continuing to run the business. We made some acquisitions in December, as I mentioned. Unless you get in and really understand the company in great detail, it does appear that we have a lot of cash that should be able to be sufficient for the type of transactions that we’ve been talking about. There is really not as much available cash as what it appears. We have a fair chunk of that that’s due to the physicians for their compensation that we really can’t tap. There is another very significant component there that is being held for as patient deposits for this Attain IVF program and really need to be made available for paying -- again, paying physicians for treatment, paying our centers for treatment. So it’s -- once you start drilling down into what our available cash is, it’s much less than what you see there on the balance sheet.

Okay. What kind of multiple of EBITDA do you typically pay for acquisitions? Can you tell me that?

We are typically -- we don’t do it on a multiple of EBITDA basis, but we are paying typically around five times what we call pre-distribution earnings, which are earnings available for distribution among shareholders.

Okay. I am new to your company. I have been a sell-side analyst for 25 years, but I’m new to your company. So forgive me for if I just don’t know the complete history. But just a general comment, by my calculations, your current enterprise value to EBITDA for your company is approximately four times, give or take. And it just seems that that is an incredibly low valuation to be selling stock, particularly 2.5 million shares on, say, 8.8 million outstanding. Can the current business, as you have it right now, not grow EBITDA fairly substantially -- or decently, or whatever number -- whatever word you want to use, over the next year such that the stock price hopefully will rise and you can sell at a lot higher and not have to sell it so cheaply?

Well, it’s hard to speculate as to what’s going to happen in the future, Dennis. I mean, we’ve been -- you know, I’ve been here for 15 years. We’ve certainly been pursuing I think a very disciplined approach to growth. And at times the stock has been valued at a higher level; at times it’s been valued at a lower level. It’s hard to know what’s going to happen over the short-term.

I just hate to see any company -- and again, I have no history with you, but I just hate to see any company sell stock at four times price value to EBITDA. Thank you, gentlemen, for your comments.

Thank you.

And we have no further questions at this time. Are there any closing remarks?

Okay. Thanks, operator. I guess I can conclude by saying -- by thanking everybody for participating in today’s call. I’d also like to take the opportunity to acknowledge the dedication of all the members of the IntegraMed team for their hard work as well as the physicians and patients who choose to work with us. As we begin 2010, our business is focused, energized, and well positioned to take on leadership and growth opportunities before us. We built the foundation for a promising future for our partners, our employees, and our investors. And we are incredibly excited about the future. We look forward to speaking with all of you in the future and reporting on our progress, as we progress through 2010 and close out another quarter. In the interim, if you have questions or wish to schedule a meeting or call with management, please contact Norberto Aja with our Investor Relations firm Jaffoni & Collins at 212-835-8500. Thank you very much.

Ladies and gentlemen, this does conclude today’s teleconference. You may all disconnect.