Exhibit 99.1 FOR IMMEDIATE RELEASE Company Contact: Investor Relations Contact: PHC, Inc. Liolios Group, Inc. Bruce A. Shear, President & CEO Ron Both Tel: 978-536-2777 Tel: 949-574-3860 PHC REPORTS RECORD FINANCIAL RESULTS FOR THE FIRST QUARTER OF FISCAL 2008 Peabody, Mass. -- November 8, 2007 -- PHC, Inc., d.b.a. Pioneer Behavioral Health (AMEX:PHC), a leading provider of inpatient and outpatient behavioral health services and pharmaceutical research, announced financial results for the first quarter ended September 30, 2007. Q1 2008 Financial and Operational Highlights o Record first quarter revenues of $12.7 million, increased 26% vs. Q1 '07 o Record first quarter net income of $0.8 million or $0.04 per share, increased 182% vs. Q1 '07 o First quarter patient care revenue increased 29% vs. Q1 '07 o Patient days increased 5% primarily due to an increase of 20 additional beds vs. Q1 '07 o Balance sheet continued to strengthen: Total liabilities reduced by $1.5 million vs. Q4 '07, primarily due to revolving debt reduction o Construction of the Seven Hills Behavioral Institute near Las Vegas, Nevada remains on track to open in early 2008. Seven Hills is projected to contribute annualized revenue of approximately $12 million, with higher margins than PHC's other inpatient facilities. o Company purchased 150,000 PHC treasury shares in the open market. Key Financial Indicators (In thousands, except per-share amounts.) Q1 2008 vs. Q1 2007 Q1 2008 Q1 2007 Change % Change Consolidated revenues $12,704 $10,062 $2,642 26% Patient care revenues $10,143 $ 7,876 $2,267 29% Net Income Before Taxes $ 1,307 $ 466 $ 841 180% Net Income $ 800 $ 283 $ 517 182% Earnings per share - Basic $ 0.04 $ 0.02 $ 0.02 100% Earnings per share - Diluted $ 0.04 $ 0.01 $ 0.03 300% 3 First Quarter Financial Results For the three months ended September 30, 2007 and compared to the same quarter a year ago: Total net revenue from operations increased 26% to $12.7 million, as compared to $10.1 million for the three months ended September 30, 2006. This increase is primarily attributable to an increase in net revenue of the Company's patient care segment, which was up 29% to $10.1 million from $7.9 million in the same year-ago period. Revenue from the pharmaceutical studies segment increased 35% to $1.4 million as compared to $1.1 million for the same quarter last year. Contract support services revenue provided by the Company's Wellplace subsidiary remained relatively stable at $1.1 million. Income from operations for the quarter totaled $1.4 million, an increase of 151% from the $0.6 million reported for the same period last year. Net income before taxes increased 180%, to a record $1.3 million from $0.5 million for the year-ago same period. Net income for the quarter was $0.8 million, or $0.04 per fully diluted share (based on 20.6 million fully diluted shares), an increase of 182% compared to net income of $0.3 million, or $0.01 per fully diluted share (based on 19.3 million shares) for the first quarter last year. Total operating expenses for the quarter increased 19% to $11.3 million from the $9.5 million reported during the first quarter of last year. Included in this increase were expenses of approximately $100,000 related to new programs and services associated with new contracts and the Seven Hills Behavioral Institute. The Company's provision for doubtful accounts decreased to $0.4 million for the quarter, compared to $0.5 million in the same quarter last year. The percentage of bad debt expense to net patient care revenue for the quarter was 4% as compared to 6% for the same period last year. Patient care operating expenses increased 31% as compared to the same year-ago period, reflecting the expenses related to new major contracts. Pharmaceutical patient care expenses increased 25% and contract support expenses decreased 4%. The increase in patient care expense reflects the Company's investments in its Las Vegas market initiatives, including the Seven Hills project and the Company's 10-year, $80 million agreement with Behavioral Healthcare Options announced in December 2006. "This quarter was another record in both revenue and profit," said Bruce A. Shear, Pioneer's president and CEO. "It was driven by a strong 29% expansion of our patient care revenues. The increase in our net profit versus the same quarter last year, once again demonstrates the return on our investment in our Las Vegas market expansion. This occurred despite incurring another $100,000 in expenses designed to enhance future returns. We continue to expect the income expansion trend to be sustained as our new Seven Hills facility comes on line in 2008. Given this and our days sales outstanding - and debt balances declining, we remain in a strong position for growth." Teleconference Information PHC will host a conference call today at 4:30 p.m., Eastern Time. A question and answer session will follow management's presentation. 4 To participate in the call, dial the appropriate number 5-10 minutes prior to the start time, request the PHC conference call and provide the conference ID. Domestic callers: 1-800-683-1525 International callers: 1-973-872-3197 Conference ID#: 9414911 A web simulcast of the call can be accessed via PHC's website at www.phc-inc.com. The call will be available for replay starting at 7:30 p.m. Eastern Time until December 8, 2007: Toll-Free Replay number: 1-877-519-4471 International Replay number: 1-973-341-3080 Replay PIN #: 9414911 If you have any difficulty connecting with the conference call or webcast, please contact the Liolios Group at 949-574-3860. About PHC, Inc. Pioneer Behavioral Health operates companies that provide inpatient and outpatient behavioral health care services, clinical research and Internet- and telephonic-based referral services. The companies contract with national insurance companies, government payors, and major transportation and gaming companies, among others, to provide such services. For more information, please visit www.phc-inc.com. Statement under the Private Securities Litigation Reform Act of 1995 This press release may include "forward-looking statements" that are subject to risks and uncertainties. Forward-looking statements include information about possible or assumed future results of the operations or the performance of the Company and its future plans and objectives. Various future events or factors may cause the actual results to vary materially from those expressed in any forward-looking statements made in this press release. For a discussion of these factors and risks, see the company's annual report on Form 10-K for the most recently ended fiscal year. 5 PHC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, June 30, ASSETS 2007 2007 ____ ____ (unaudited) Current assets: Cash and cash equivalents $ 2,759,303 $ 3,395,173 Accounts receivable, net of allowance for doubtful accounts of $2,878,902 at September 30, 2007 and $3,764,585 at June 30, 2007 6,694,412 6,524,387 Pharmaceutical receivables 1,723,159 1,942,268 Prepaid expenses 687,390 688,600 Other receivables and advances 960,527 868,628 Deferred income tax asset 1,596,796 2,015,000 ____________ __________ Total current assets 14,421,587 15,434,056 Accounts receivable, non-current 35,000 35,000 Other receivable 85,619 91,697 Property and equipment, net 2,371,375 2,121,191 Deferred financing costs, net of amortization of $179,136 at September 30, 2007 and $143,377 June 30, 2007 578,105 613,865 Customer relationships, net of amortization of $410,000 at September 30, 2007 and $380,000 at June 30, 2007 1,990,000 2,020,000 Goodwill 3,508,576 3,508,576 Other assets 3,305,609 3,465,356 ____________ __________ Total assets $26,295,871 $27,289,741 ============ =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,322,824 $ 1,261,841 Current maturities of long-term debt 1,120,110 1,134,300 Revolving credit note 562,496 1,518,742 Deferred revenue 270,492 433,301 Current portion of obligations under capital leases 195,024 205,858 Accrued payroll, payroll taxes and benefits 1,744,386 1,631,693 Accrued expenses and other liabilities 1,458,130 1,702,772 ____________ __________ Total current liabilities 6,673,462 7,888,507 Long-term debt 623,455 831,387 Obligations under capital leases 187,612 226,706 Deferred tax liability 93,000 93,000 ____________ __________ Total liabilities 7,577,529 9,039,600 ____________ __________ Stockholders' equity: Preferred Stock, 1,000,000 shares authorized, none issued or outstanding -- -- Class A common stock, $.01 par value, 30,000,000 shares authorized, 19,622,076 and 19,622,076 shares issued at September 30, 2007 and June 30, 2007, respectively 196,221 196,221 Class B common stock, $.01 par value, 2,000,000 shares authorized, 775,760 issued and outstanding at September 30, 2007 and June 30, 2007, respectively, each convertible into one share of Class A common Stock 7,758 7,758 Additional paid-in capital 26,875,513 26,812,808 Treasury stock, 349,098 shares of Class A common stock at September 30, 2007 and 199,098 at June 30, 2007, at cost (586,215) (191,700) Accumulated deficit (7,774,935) (8,574,946) ____________ __________ Total stockholders' equity 18,718,342 18,250,141 ____________ __________ Total liabilities and stockholders' equity $26,295,871 $27,289,741 ============ =========== 6 PHC, INC. AND SUBSIDIARIES Consolidated Statements of Income Three Months Ended September 30, 2007 2006 ____ ____ Revenues: Patient care, net $10,143,435 $ 7,876,432 Pharmaceutical studies 1,420,965 1,051,383 Contract support services 1,139,766 1,134,391 ___________ ___________ Total revenues 12,704,166 10,062,206 ___________ ___________ Operating expenses: Patient care expenses 5,296,074 4,054,966 Patient care expenses, pharmaceutical 609,792 486,937 Cost of contract support services 802,648 838,555 Provision for doubtful accounts 422,226 452,525 Administrative expenses 3,609,936 2,996,141 Administrative expenses, pharmaceutical 571,856 679,108 ___________ ___________ Total operating expenses 11,312,532 9,508,232 ___________ ___________ Income from operations 1,391,634 553,974 ___________ ___________ Other income (expense): Interest income 32,535 32,849 Other (expense) income 14,099 (943) Interest expense (131,381) (119,830) ___________ ___________ Total other expenses, net (84,747) (87,924) ___________ ___________ Income before provision for taxes 1,306,887 466,050 Provision for income taxes 506,876 182,767 ___________ ___________ Net income $ 800,011 $ 283,283 =========== =========== Basic net income per common share $ 0.04 $ 0.02 =========== =========== Basic weighted average number of shares outstanding 20,136,781 18,514,142 =========== =========== Diluted net income per common share $ 0.04 $ 0.01 =========== =========== Diluted weighted average number of shares outstanding 20,601,828 19,296,638 =========== =========== 7