HMS (HMSY) 8-K HMS HOLDINGS CORP. ANNOUNCES FIRST QUARTER 2008 FINANCIAL RESULTS First Quarter Revenue Increases 20.8% over Prior Year; 2008 Guidance Reaffirmed

NASDAQ: HMSY

Q1 2008 Investor Call

Robert M. Holster, CEO

William C. Lucia, President

Walter D. Hosp, CFO

Contact:

Christine Rogers

crogers@hmsy.com

212.857.5986

Safe Harbor Statement

Certain statements in this presentation constitute “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 (the “Reform Act”). Such forward-looking statements involve known and
unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements
of HMSY, or industry results, to be materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. The important factors that could cause actual results to
differ materially from those indicated by such forward-looking statements include, but are not limited to (i) the
information being of a preliminary nature and therefore subject to further adjustment; (ii) the uncertainties of
litigation; (iii) HMSY’s dependence on significant customers; (iv) changing conditions in the healthcare industry
which could simplify the reimbursement process and adversely affect HMSY’s business; (v) government regulatory
and political pressures which could reduce the rate of growth of healthcare expenditures and/or discourage the
assertion of claims for reimbursement against and delay the ultimate receipt of payment from third party payors;
(vi) competitive actions by other companies, including the development by competitors of new or superior services
or products or the entry into the market of new competitors; (vii) all the risks inherent in the development,
introduction, and implementation of new products and services; and (viii) other risk factors described from time to
time in HMSY’s filings with the SEC, including HMSY’s Form 10-K for the year ended December 31, 2007.  HMSY
assumes no responsibility to update the forward-looking statements contained in this release as a result of new
information, future events or otherwise. When/if used in this presentation, the words “focus,” “believe,”
“confident,” “anticipate,” “expected,” “strong,” “potential,” and similar expressions are intended to identify
forward-looking statements, and the above described risks inherent therein.

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Q1 2008 Earnings Call

Discussion Outline

Q1 2008 financial performance

New business

2008 guidance

Q & A

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Q1 2008 Earnings Call

Consolidated Statements of Income ($ in thousands)

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          $   0.11

$   0.12

Net income per fully diluted share

Three Months Ended

March 31

2008

2007

Revenue

            $38,943

       $32,238

Cost of Services:

    Compensation

              16,556

13,073

    Data Processing

2,966

2,147

    Occupancy

2,590

1,981

    Direct project costs

5,493

5,157

    Other operating costs

4,487

2,843

    Amortization of related intangibles

1,162

1,163

          Total cost of services

$33,254

$26,364

Operating income

             $ 5,689

           $ 5,874

Net interest expense

(218)

(604)

    Income before income taxes

              $  5,471

           $  5,270

Income taxes

2,298

2,298

          Net income

             $ 3,173

          $ 2,972

Q1 2008 Earnings Call

Condensed Balance Sheets ($ in thousands)

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March 31, 2008

December 31, 2007

Assets

Current assets:

Cash and cash equivalents and short-term investments

$16,704

$21,275

Accounts receivable, net

41,956

39,704

Prepaid expenses and other current assets

3,269

3,970

Total current assets

$61,929

$64,949

Property and equipment, net

16,866

16,496

Other non-current assets

105,579

106,655

Total assets

$184,374

$188,100

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable, accrued expenses and other liabilities

$13,705

$21,539

Current portion of long-term debt

6,300

6,300

Total current liabilities

20,005

27,839

Long-term debt

15,750

17,325

Other liabilities

4,217

4,187

Total liabilities

$39,972

$49,351

Total shareholders' equity

144,402

138,749

Total liabilities and shareholders' equity

$184,374

$188,100

Q1 2008 Earnings Call

Condensed Statements of Cash Flow ($ in thousands)

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         Three Months Ended

           March 31

 20082007

Net income

      $3,173  

        $ 2,972

Net cash provided by (used in) operating
activities

       (2,584)

845

Net cash used in investing activities

(2,224)

        (2,402)

Net cash provided by (used in) financing
activities

         237

  (2,500)

Net (decrease)/ increase in cash and cash
equivalents

      $ (4,571)

     $ (4,057)

Cash / cash equivalents at beginning of period

$21,275

$12,527

Cash / cash equivalents at end of period

$16,704

$ 8,470

Q1 2008 Earnings Call

EBITDA Reconciliation ($ in thousands)

                Three Months Ended

                            March 31,

2008

2007

Net income

$ 3,173

$ 2,972

Net interest expense (income)

218

604

Income taxes

2,298

 2,298

Depreciation and amortization, net of deferred
financing costs included in net interest expense

2,860

2,346

Earnings before interest, taxes, depreciation
and amortization  (EBITDA)

$ 8,549

$ 8,220

Share based compensation expense

798

551

Adjusted EBITDA

$ 9,347

$ 8,771

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Q1 2008 Earnings Call

State Government

California Workers’ Compensation: North and South

New Jersey Cost Report Audits

Contract extensions:  FL, WV, WI, MO, MI

Managed Care

NEW PLANS

CalOptima (300,000 lives)

Molina: California: (289,000 lives)

UHC: Tennessee, NY, and Wisconsin (366,000 lives)

Wellcare: Florida plan (362,000 lives)

EXPANSIONS

Centene: Pharmacy recovery and medical recovery

Molina: Ohio & Indiana Pharmacy Recovery

New Business

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Q1 2008 Earnings Call

2008 Guidance

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Q1 2008 Earnings Call

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Appendix: EBITDA

EBITDA is defined as earnings before interest, taxes, depreciation and amortization and adjusted
EBITDA represents EBITDA adjusted for share based compensation expense. EBITDA is a measure
commonly used by the capital markets to value enterprises. Interest, taxes, depreciation and
amortization can vary significantly between companies due in part to differences in accounting
policies, tax strategies, levels of indebtedness and interest rates. Excluding these items provides
insight into the underlying results of operations and facilitates comparisons between HMSY and
other companies. EBITDA is also a useful measure of the company’s ability to service debt and is
one of the measures used for determining debt covenant compliance.  In addition, because of the
varying methodologies for determining stock-based compensation expense, and the subjective
assumptions involved in those determinations, we believe excluding stock-based compensation
expense from EBITDA enhances the ability of management and investors to compare our core
operating results over multiple periods with those of other companies.  Management believes
EBITDA and adjusted EBITDA information is useful to investors for these reasons. Both EBITDA
and adjusted EBITDA are non-GAAP financial measures and should not be viewed as an
alternative to GAAP measures of performance. Management believes the most directly comparable
GAAP financial measure is net income and has provided a reconciliation of EBITDA and adjusted
EBITDA to net income in this presentation.

Q1 2008 Earnings Call

NASDAQ: HMSY