Graymark Healthcare Resupply Orders Reach Record Levels in Q1 2011, Up 107% Year-Over-Year

OKLAHOMA CITY, April 7, 2011 /PRNewswire/ -- Graymark Healthcare Inc. (NASDAQ: GRMH), the nation's second largest provider of diagnostic sleep services and an innovator in comprehensive care for obstructive sleep apnea (OSA), realized a 107% year-over-year increase in patient resupply shipments in the first quarter of 2011. Resupply shipments were also up slightly sequentially, setting a record in what is typically the slowest quarter of the year.

In the first quarter of 2011, Graymark shipped 2,244 resupply packages relating to its Continuous Positive Airway Pressure (CPAP) machines, versus 1,084 in the same year-ago quarter and 2,220 in the previous quarter. The increase is an extension of the growth in the number of sleep studies performed through the company's higher margin outreach program. The number of sleep therapy setups were also up 10% from the year-ago quarter, from 620 to 680 in the first quarter of 2011.

The resupply portion of the business represents an important recurring revenue aspect of Graymark's business model. Patients compliant on their CPAP devices typically receive four shipments of maintenance supplies annually.

"Building upon the record January we previously reported, the remainder of the quarter finished strong," said Stanton Nelson, chairman and CEO of Graymark Healthcare. "We improved platform metrics across the board despite this quarter typically being the most challenging due to the resetting of patient deductibles. These results validate the strength of our organic growth strategy in the fast growing sleep management market, especially how we overcame the typical adverse seasonal factors by surpassing the fourth quarter of 2010."

Graymark's effective five-step clinical approach to managing sleep disorders includes a convenient referral process, accurate and timely assessment, diagnosis, treatment and long-term follow-up to maximize patient compliance. All steps are managed by a board certified Sleep Medicine physician. By more completely integrating the diagnostic and treatment processes, Graymark has substantially improved patient compliance with CPAP care and overall disease management.

"It's important to note that increasing rates of CPAP resupply orders and higher margin agreements are key barometers for how we are successfully providing timely and high-quality sleep management programs," added Nelson. "This record quarter demonstrates momentum in our comprehensive care model."

Graymark is also benefiting from a strengthening overall sleep disorder market. A 2010 Frost and Sullivan study forecasts spending on sleep apnea products to grow at a compounded rate of 13% and reach $5.3 billion by 2014.

About Graymark Healthcare

Headquartered in Oklahoma City, Okla., Graymark Healthcare Inc. (NASDAQ: GRMH) is the nation's second largest provider of sleep management solutions. In addition to diagnosing and treating over 80 sleep disorders, the company specializes in comprehensive care for Obstructive Sleep Apnea (OSA). Graymark offers its services through 98 sleep laboratories throughout the United States, including standalone or IDTF facilities, rural outreach sites and hospital or provider agreements. For more information, visit www.graymarkhealthcare.com.

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SOURCE Graymark Healthcare Inc.