ASSETS		June 30, 2008 (UNAUDITED)		December 31, 2007
CURRENT ASSETS:
Cash and cash equivalents	$	16,480,426	$	473,222
Accounts receivable – net		25,011,813		16,965,316
Prepaid expenses and other current assets		1,824,294		1,203,454
Deferred tax assets		2,811,047		1,829,895
TOTAL CURRENT ASSETS		46,127,580		20,471,887

PROPERTY AND EQUIPMENT – NET		1,877,916		1,458,844

GOODWILL AND OTHER INTANGIBLE ASSETS		58,795,818		45,155,300

OTHER ASSETS		287,046		274,359
TOTAL ASSETS	$	107,088,360	$	67,360,390

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	3,281,899	$	3,943,555
Accrued other liabilities		9,810,654		10,369,346
Current portion – capital leases and notes payable		4,596,945		653,891
TOTAL CURRENT LIABILITIES		17,689,498		14,966,792

LONG-TERM LIABILITIES:
Revolving credit facility		—		12,386,783
Notes payable		3,000,000		4,000,000
Long term deferred tax liabilities		1,481,750		776,672
Other liabilities		417,006		388,230
TOTAL LONG-TERM LIABILITIES		4,898,756		17,551,685
TOTAL LIABILITIES		22,588,254		32,518,477

COMMITMENTS AND CONTINGENCIES		—		—

STOCKHOLDERS’ EQUITY:
Preferred stock, par value $0.05; authorized 2,000,000 shares; none issued or outstanding		—		—
Common stock, par value $0.10; authorized 10,000,000 shares; 8,131,790 and 7,808,819 issued and outstanding		813,179		780,882
Treasury stock, at cost, 2,276,898 shares		—		(8,877,641	)
Additional paid-in capital		64,551,981		30,198,671
Retained earnings		19,134,946		12,740,001
TOTAL STOCKHOLDERS’ EQUITY		84,500,106		34,841,913
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	107,088,360	$	67,360,390

			Three months ended June 30,
			2008			2007
Net service revenues	$		48,700,372		$	32,509,503
Cost of service revenue (excluding amortization and depreciation)			22,780,475			15,541,684
Gross margin			25,919,897			16,967,819
General and administrative expenses:
Salaries and benefits			12,988,447			8,835,801
Other			6,261,283			4,616,580
Total general and administrative expenses			19,249,730			13,452,381
Operating income			6,670,167			3,515,438
Interest expense, net			(170,756	)		(241,220	)
Income from continuing operations before income taxes			6,499,411			3,274,218
Income tax expense			(2,600,457	)		(1,310,738	)
Net income from continuing operations			3,898,954			1,963,480
Discontinued operations, net of tax of $22,619 and ($2,348)			(34,936	)		17,642
Net income	$		3,864,018		$	1,981,122

Per share amounts-basic:
Average shares outstanding			7,642,806			5,433,679
Income from continuing operations	$		0.51		$	0.36
(Loss) income from discontinued operations		-	—			—
Net income	$		0.51		$	0.36

Per share amounts-diluted:
Average shares outstanding			7,809,475			5,638,665
Income from continuing operations	$		0.50		$	0.35
(Loss) income from discontinued operations			—			—
Net income	$		0.50		$	0.35

		Six months ended June 30,
		2008		2007
Net service revenues	$	87,727,325		$	64,282,682
Cost of service revenue (excluding amortization and depreciation)		41,402,549			30,979,221
Gross margin		46,324,776			33,303,461
General and administrative expenses:
Salaries and benefits		23,540,855			17,681,653
Other		11,664,808			8,886,067
Total general and administrative expenses		35,205,663			26,567,720
Operating income		11,119,113			6,735,741
Interest expense, net		(378,757	)		(496,928	)
Income from continuing operations before income taxes		10,740,356			6,238,813
Income tax expense		(4,266,792	)		(2,450,052	)
Net income from continuing operations		6,473,564			3,788,761
Discontinued operations, net of tax of $50,902 and $35,048		(78,620	)		(141,348	)
Net income	$	6,394,944		$	3,647,413

Per share amounts-basic:
Average shares outstanding		6,592,203			5,400,946
Income from continuing operations	$	0.98		$	0.70
Loss from discontinued operations		(0.01	)		(0.03	)
Net income	$	0.97		$	0.67

Per share amounts-diluted:
Average shares outstanding		6,753,403			5,602,962
Income from continuing operations	$	0.96		$	0.68
Loss from discontinued operations		(0.01	)		(0.03	)
Net income	$	0.95		$	0.65

		Six months ended June 30,
		2008			2007
Cash flows from operating activities:
Net income	$	6,394,944		$		3,647,413
Loss from discontinued operations		(78,620	)			(141,348	)
Income from continuing operations		6,473,564				3,788,761
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization		642,674				428,888
Provision for uncollectible accounts		1,221,959				402,711
Stock-based compensation		333,332				202,371
Deferred income taxes		(276,073	)			355,771
		8,395,456				5,178,502
Change in certain net assets, net of the effects of acquisitions:
(Increase) decrease in:
Accounts receivable		(6,787,893	)			(2,600,820	)
Prepaid expenses and other current assets		(577,650	)			(247,401	)
Other assets		(12,687	)			(29,519	)
Increase (decrease) in:
Accounts payable and accrued expenses		397,696				165,801
Net cash provided by operating activities		1,414,922				2,466,563

Cash flows from investing activities:
Capital expenditures		(322,053	)			(272,855	)
Acquisitions, net of cash acquired		(14,493,231	)			(547,599	)
Net cash used in investing activities		(14,815,284	)			(820,454	)

Cash flows from financing activities:
Net revolving credit facility repayments		(12,387,721	)			(1,178,323	)
Proceeds from stock option exercises		42,800				107,187
Purchase of common stock in connection with option exercises		—				(3,804,883	)
Tax benefit from non-qualified stock option exercises		78,667				677,954
Proceeds from Stock Offering, net		41,808,449				—
Principal payments on capital leases and notes payable		(56,009	)			(1,013,720	)
Net cash provided by (used in) financing activities		29,486,186				(5,211,785	)

Cash flows from discontinued operations:
Operating activities		(78,620	)			(141,348	)
Investing activities		—				—
Financing activities		—				—
Net cash used in discontinued operations		(78,620	)			(141,348	)

Net increase (decrease) in cash and cash equivalents		16,007,204				(3,707,024	)
Cash and cash equivalents at beginning of period		473,222				4,125,592
Cash and cash equivalents at end of period	$	16,480,426				418,568

Summary of non-cash investing and financing activities:
Acquisitions funded by notes payable	$	3,000,000		$		—
Acquisitions funded by stock	$	1,000,000		$		—

The accompanying unaudited consolidated financial statements for the three and six months ended June 30, 2008 and 2007 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to such rules and regulations. Accordingly, the reader of this Form 10-Q is referred to our Form 10-K for the year ended December 31, 2007 for further information. In the opinion of management of Almost Family, Inc., (the Company), the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position at June 30, 2008 and the results of operations and cash flows for the three and six month periods ended June 30, 2008 and 2007.

The results of operations for the three and six month periods ended June 30, 2008 and 2007 are not necessarily indicative of the operating results for the year.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Certain amounts have been reclassified in the 2007 consolidated financial statements and related notes in order to conform to the 2008 presentation. Such reclassifications had no effect on previously reported net income.

In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 141R, “Business Combinations” (“SFAS 141R”). SFAS 141R provides guidance to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about its business combinations and its effects. SFAS 141R establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, the goodwill acquired and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. For instance, acquisition-related costs, with the exception of debt and equity issuance costs, are to be recorded in the period that the costs are incurred and the services are received. SFAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Accordingly, any business combinations we engage in will be recorded and disclosed in accordance with existing accounting principles generally accepted in the United States until January 1, 2009. We expect SFAS 141R will have an impact on accounting for business combinations once adopted but the effect is dependent upon acquisitions at that time.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment to ARB No. 51” (“SFAS 160”). SFAS 160 requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements, but separate from the equity of the parent company. The statement further requires that consolidated net income be reported as amounts attributable to the parent and the noncontrolling interest, rather than expensing the income attributable to the minority interest holder. This statement also requires that companies provide sufficient disclosures to clearly identify and distinguish between the interests of the parent company and the interests of the noncontrolling owners, including a disclosure on the face of the consolidated statements for income attributable to the noncontrolling interest holder. This statement is effective for the fiscal years beginning on or after December 15, 2008 or our first quarter of 2009. Early adoption is prohibited. We have not completed our evaluation of the potential impact, if any, of the adoption of SFAS 160 on our consolidated financial position, results of operations and cash flows.

The Company is paid for its services primarily by Federal and state third-party reimbursement programs, commercial insurance companies, and patients. Revenues are recorded at established rates in the period during which the services are rendered. Appropriate allowances to give recognition to third party payment arrangements are recorded when the services are rendered.

Laws and regulations governing the Medicare and Medicaid programs are extremely complex and subject to interpretation. It is common for issues to arise related to: 1) medical coding, particularly with respect to Medicare, 2) patient eligibility, particularly related to Medicaid, 3) the determination of cost-reimbursed revenues, and 4) other reasons unrelated to credit risk, all of which may result in adjustments to recorded revenue amounts. Management continuously evaluates the potential for revenue adjustments and when appropriate provides allowances for losses based upon the best available information. There is at least a reasonable possibility that recorded estimates could change by material amounts in the near term.

The Company has two reportable segments, Visiting Nurse (VN) and Personal Care (PC). Reportable segments have been identified based upon how management has organized the business by services provided to customers and the criteria in SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.”

The Company’s VN segment provides skilled medical services in patients’ homes largely to enable recipients to reduce or avoid periods of hospitalization and/or nursing home care. VN Medicare revenues are generated on a per episode basis rather than a fee per visit or day of care. Approximately 94% of the VN segment revenues are generated from the Medicare program while the balance is generated from Medicaid and private insurance programs.

The Company’s PC segment services are also provided in patients’ homes. These services (generally provided by paraprofessional staff such as home health aides) are generally of a custodial rather than skilled nature. PC revenues are generated on an hourly basis. Approximately 70% of the PC segment revenues are generated from Medicaid and other government programs while the balance is generated from insurance programs and private pay patients.

Certain general and administrative expenses incurred at the corporate level have not been allocated to the segments.

The Company has service locations in Florida, Kentucky, Ohio, Connecticut, Massachusetts, Alabama, Missouri, Illinois and Indiana (in order of revenue significance).

		2008		2007		2008	2007
Net Revenues
Home Health Care
Visiting nurses	$	38,857,909	$	23,460,195	$	68,696,167	$	46,508,313
Personal care		9,842,463		9,049,308		19,031,158		17,774,368
Net revenues	$	48,700,372	$	32,509,503	$	87,727,325	$	64,282,682
Operating Income
Home Health Care
Visiting nurses	$	8,586,003	$	4,566,720	$	14,040,673	$	8,882,511
Personal care		820,534		1,052,642		1,562,027		1,714,016
Operating income before unallocated corporate expenses		9,406,537		5,619,362		15,602,700		10,596,527
Unallocated corporate expenses		2,736,370		2,103,924		4,483,587		3,860,786
Operating income	$	6,670,167	$	3,515,438	$	11,119,113	$	6,735,741

Consistent with AICPA Statement of Position 98-1, the Company capitalizes the cost of internally generated computer software developed for the Company’s own use. Software development costs of approximately $61,000 and $21,000 were capitalized in the three months ended June 30, 2008 and 2007, respectively, and $114,000 and $41,000 were capitalized in the six months ended June 30, 2008 and 2007, respectively. Capitalized software development costs are amortized over a three-year period following the initial implementation of the software.

All goodwill acquired is stated at cost. Subsequent to its acquisitions, the Company conducts the required annual tests for impairment under SFAS No. 142, “Goodwill and Other Intangible Assets.” The Company has completed its most recent annual impairment test required by SFAS No. 142 as of December 31, 2007 and has determined that no impairment exists.

The following is a progression of goodwill by segment for the six months ended June 30, 2008:

Intangible assets consist of licenses, provider numbers, non-compete agreements, and trade name. Intangibles are amortized on a straight-line basis over their estimated useful lives. The cost of licenses and provider numbers is amortized over 15 years, trade name over 5 years and non-compete agreements over the life of the agreement, usually 3 years, beginning after earn out period. The Company reviews intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

	2008								2007
	Gross					Net		Gross						Net
	carrying		Accumulated			carrying		carrying			Accumulated			carrying
	amount		amortization			amount		amount			amortization			amount
Licenses	$	971,000	$	(66,107	)	$	904,893	$		420,000	$	(16,333	)	$	403,667
Provider Numbers		2,750,000		(116,236	)		2,633,764			350,000		(13,611	)		336,389
Other intangibles		609,202		(133,301	)		475,901			350,000		(23,333	)		326,667
Total intangible assets	$	4,330,202	$	(315,644	)	$	4,014,558	$		1,120,000	$	(53,277	)	$	1,066,723

Amortization expense recognized on intangible assets was $103,158 and $22,833 for the three months ended June 30, 2008 and 2007, respectively and $216,700 and $45,666 for the six months ended June 30, 2008 and 2007, respectively.

At June 30, 2008 the Company had a $40.0 million credit facility with JP Morgan Chase Bank, NA as amended November 30, 2007, with an expiration date of June 30, 2010.The credit facility bore an interest rate option at either the bank’s prime rate less a margin (ranging from -1.50% to -0.25%, currently -1.00%), or one-month LIBOR plus a margin (ranging from +1.25% to +2.50%) dependent upon total leverage and was secured by substantially all assets and the stock of the Company’s subsidiaries. The weighted average interest rates were 4.0% and 7.5% for the quarters ended June 30, 2008 and 2007, respectively. The Company paid a commitment fee of 0.25% per annum on the unused facility balance. Borrowings were available equal to the greater of: a) a multiple of 3.5 times earnings before interest, taxes, depreciation and amortization (As Defined EBITDA) or b) an asset based formula, primarily based on accounts receivable. “As Defined EBITDA” of acquired operations, up to 75% of base “As Defined EBITDA,” may have been included in the availability calculations. Borrowings under the facility may have been used for working capital, capital expenditures, acquisitions, development and growth of the business and other corporate purposes. As of June 30, 2008, the formula permitted approximately $40.0 million to be used, of which $0 was outstanding. The Company had irrevocable letters of credit, totaling $2.1 million outstanding in connection with its self-insurance programs. Thus, a total of $37.9 million was available for use at June 30, 2008. The Company’s revolving credit facility was subject to various financial covenants. As of June 30, 2008, the Company was in compliance with the covenants. Under the most restrictive of its covenants, the Company was required to maintain minimum net worth of at least $10.5 million.

On July 15, 2008 the Company entered into a new $75.0 million credit facility and concurrently terminated the $40.0 million credit facility as described under “Subsequent Events.”

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”(“SFAS 157”). SFAS 157 requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. SFAS 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. The provisions of SFAS 157 were effective as of January 1, 2008; however, FASB Staff Position No. 157-2 defers the effective date for certain non-financial assets and liabilities not re-measured at fair value on a recurring basis to fiscal years beginning after November 15, 2008 or the first quarter of fiscal 2009.

SFAS 157 requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:

As of June 30, 2008, we do not have any assets or liabilities carried at fair value that are measured on a recurring basis.

Stock option grant date fair values are determined at the date of grant using a Monte Carlo option valuation model with suboptimal exercise behavior. In the quarter ended March 31, 2008, 70,000 options were issued at a strike price of $21.90 (fair market value on the date of grant) to directors, members of management and employees and will vest over three years with an expiration date of March 6, 2018.

In addition, on March 12, 2008, the Company granted 29,750 restricted shares of Common Stock to executives and certain employees pursuant to the Company’s 2007 Stock and Incentive Compensation Plan. The share price is $20.39, which was the closing price on the date of grant. These shares provide for “cliff” vesting upon the third anniversary of date of grant.

There were no adjustments required to be made to net income for purposes of computing basic and diluted earnings per common share. A reconciliation of the weighted average shares outstanding used in the calculation of basic and diluted earnings per common share is as follows:

On April 11, 2008 the Company filed a Prospectus Supplement whereby 2,250,000 shares of common stock were offered for sale at a price of $17.75 per share. Pursuant to this offering, all shares were sold and delivered on April 16, 2008 resulting in net proceeds, after underwriting discounts and estimated offering expenses to the Company, of $37,340,950. Additionally, the underwriter in this transaction was granted an option to purchase up to 337,500 additional shares of common stock at the public offering price, less underwriting discounts and commissions. On May 9, 2008 the underwriter of the public offering exercised its over-allotment option in part and purchased 262,500 additional shares of common stock at the public offering price of $17.75 per share. Including the over-allotment, the Company sold 2,512,500 shares in the offering for net proceeds of $41.8 million, after deducting the underwriting discounts and estimated offering expenses.

The Company bears significant insurance risk under its large-deductible workers’ compensation insurance program and its self-insured employee health program. Under the workers’ compensation insurance program, the Company bears risk up to $400,000 per incident. The Company purchases stop-loss insurance for the employee health plan that places a specific limit, generally $100,000, on its exposure for any individual covered life.

Malpractice and general patient liability claims for incidents which may give rise to litigation have been asserted against the Company by various claimants. The claims are in various stages of processing and some may ultimately be brought to trial. The Company is aware of incidents that have occurred through June 30, 2008 that may result in the assertion of additional claims. The Company currently carries professional and general liability insurance coverage for this exposure with no deductible. Prior to April 1, 2007 the Company carried coverage with a deductible per claim of $500,000.

Total premiums, excluding the Company’s exposure to claims and deductibles, for all its non-health insurance programs were approximately $1.1 million for the contract year ending March 31, 2008. On April 1, 2008, the Company completed its renewal for the contract year ending March 31, 2009 with total estimated premiums of $961,000.

The Company records estimated liabilities for its insurance programs based on information provided by the third-party plan administrators, historical claims experience, the life cycle of claims, expected costs of claims incurred but not paid, and expected costs to settle unpaid claims. The Company monitors its estimated insurance-related liabilities on a monthly basis. As facts change, it may become necessary to make adjustments that could be material to the Company’s results of operations and financial condition.

The Company is currently, and from time to time, subject to claims and suits arising in the ordinary course of its business, including claims for damages for personal injuries. In the opinion of management, the ultimate resolution of any of these pending claims and legal proceedings will not have a material effect on the Company’s financial position or results of operations.

On March 26, 2008, the Company acquired the fixed assets of all the home health agencies owned by Apex Home Healthcare Services, L.L.C. (“Apex Home Healthcare”), the assets of the healthcare rehabilitation business owned by Apex Health and Rehab Center L.L.C., the assets of the healthcare staffing business owned by Apex Healthcare Solutions, L.L.C. and the assets of the home care physician practice owned by Apex House Call Doctors, L.L.C. for a purchase price of $16.1 million, consisting of $12.1 million in cash, two promissory notes totaling $3 million plus $1 million in value (i.e. 47,619 shares) of Almost Family, Inc. common stock (restricted). The cash portion of the transaction was funded from borrowings available on the Company’s existing senior credit facility with JP Morgan Chase Bank, NA.

The following table summarizes the approximate estimated fair values of the assets acquired and liabilities assumed of the Apex Home Healthcare acquisition on March 26, 2008.

The Company is currently in the process of valuing the assets acquired and liabilities assumed for the Apex Home Healthcare acquisition, to assist it in allocating the purchase price to the individual assets acquired and liabilities assumed. The preliminary allocation of purchase price included in the current period balance sheet is based on the Company’s current best estimate and is subject to revision based on final determination of fair value. The Company has engaged an independent valuation firm to assist with the valuation of Apex Home Healthcare, which is expected to be completed prior to the first anniversary of the acquisition.

The unaudited pro forma results of operations of the Company as if the Apex Home Healthcare acquisition had been made at the beginning of 2007 are as follows:

		Three Months ended June 30,				Six Months ended June 30,
		2008		2007		2008		2007
Revenues	$	48,700,372	$	36,471,611	$	92,683,235	$	71,970,814
Net Income from continuing operations	$	3,917,441	$	2,046,736	$	6,684,480	$	4,081,682
Net Income	$	3,882,505	$	2,064,378	$	6,605,860	$	3,940,334
Earnings per share from continuing operations
Basic	$	0.51	$	0.37	$	1.01	$	0.75
Diluted	$	0.50	$	0.36	$	0.99	$	0.72
Earnings per share
Basic	$	0.51	$	0.38	$	1.00	$	0.72
Diluted	$	0.50	$	0.36	$	0.98	$	0.69

The pro forma information presented above is presented for illustrative purposes only and may not be indicative of the results of operations that would have actually occurred if the transaction described had been completed as of the beginning of 2007. In addition, future results may vary significantly from the results reflected in such information.

On August 1, 2008, the Company acquired all the stock of Patient Care, Inc. as described under “Subsequent Events.”

The Company adopted the provisions of FASB interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” ("FIN 48"), on January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement 109, “Accounting for Income Taxes” and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Based on the Company’s evaluation, it has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The evaluation was performed for the tax years ended December 31, 2003 through 2007. For federal tax purposes, the Company is

currently subject to examinations for tax years 2005 and 2007 while for state purposes, tax years 2003 and forward are subject to examination, depending on the specific state rules and regulations. The Internal Revenue Service has completed its examination of the tax years ending December 31, 2006. The tax impact of the 2006 audit assessment including interest was immaterial to the financial statements.

The Company may from time to time be assessed interest and penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to its financial results. Assessments for interest and/or penalties are classified in the financial statements as general and administrative expenses other.

The Company’s effective income tax rate from continuing operations for the three month periods ended June 30, 2008 and 2007 was approximately 40.0%. This effective rate differs from the Federal statutory rate of 35% primarily due to state and local taxes, net of Federal benefit of approximately 5.0%.

The Company’s effective income tax rate from continuing operations for the six month periods ended June 30, 2008 and 2007 was approximately 39.7% and 39.3%, respectively. This effective rate differs from the Federal statutory rate of 35% primarily due to state and local taxes, net of Federal benefit of approximately 4.7% in 2008 and 4.3% in 2007.

The Company follows the guidance in SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” and, when appropriate, reclassifies operating units closed, sold, or held for sale out of continuing operations and into discontinued operations for all periods presented. During 2007, the PC segment had three facilities that met the criteria to be reclassified as discontinued operations. During the three month period ending June 30, 2008, no additional facilities met the criteria to be reclassified as discontinued operations. These facilities have been reclassified in this report for all periods presented. Net revenues from discontinued operations were approximately ($33,000) and $199,000 in the quarters ended June 30, 2008 and 2007, respectively. Net (losses) income from the discontinued operations was approximately ($35,000) and $18,000 in the quarters ended June 30, 2008 and 2007, respectively. Net revenues from discontinued operations were approximately ($38,000) and $538,000 in the six months ended June 30, 2008 and 2007, respectively. Net losses from the discontinued operations were approximately ($79,000) and ($141,000) in the six months ended June 30, 2008 and 2007, respectively. Such amounts are included in net loss from discontinued operations in the accompanying financial statements.

On August 1, 2008, the Company acquired the stock of Patient Care, Inc. Patient Care and its subsidiaries own and operate eight Medicare-certified home health agency locations in New Jersey, Connecticut, and Pennsylvania. In 2007 Patient Care’s annual revenues were approximately $47.8 million.

The total purchase price for the stock was $45.2 million in cash, reduced by a working capital adjustment of $3.8 million as of the closing date, subject to a subsequent adjustment thirty days from closing. Additionally, the Company assumed approximately $1.3 million in capital lease obligations. The Company also provided an insurer of Patient Care a $4.7 million letter of credit. The cash portion of the transaction paid at closing plus the letter of credit was funded from the Company’s existing cash and borrowings available on the Company’s existing senior credit facility with JP Morgan Chase Bank, NA.

On July 15, 2008, the Company entered into a $75.0 million three year senior secured revolving credit agreement with JPMorgan Chase Bank, N.A., as

Administrative Agent, Fifth Third Bank, as Syndication Agent and certain other lenders. The agreement consists of: (i) a $75.0 million credit line with a maturity date of July 2011, (ii) availability of borrowings up to 3.0 times Earnings Before Taxes, Depreciation and Amortization (“EBITDA”), as defined, and (iii) an accordion feature providing for potential future expansion of the facility to $100 million. This new facility increases the available resources to continue the pursuit of the Company’s development objectives.

The Company terminated its existing $40.0 million credit agreement, initially dated as of August 3, 1999 and subsequently amended, with JPMorgan Chase Bank, N.A., as lender, concurrently with the effectiveness of the new agreement.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Almost Family, Inc. ^TM and subsidiaries (collectively “Almost Family”) is a leading regional provider of home health nursing services. In this report, the terms “Company,” “we,” “us” or “our” mean Almost Family, Inc. and all subsidiaries included in our consolidated financial statements.

Certain statements contained in this quarterly report on Form 10-Q, including, without limitation, statements containing the words “believes,” “anticipates,” “intends,” “expects,” “assumes,” “trends” and similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon the Company’s current plans, expectations and projections about future events. However, such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, the following:

For a detailed discussion of these and other factors that could cause the Company’s actual results to differ materially from the results contemplated by the forward-looking statements, please refer to Item 1A. “Risk Factors” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for year ending December 31, 2007. The reader is encouraged to review these risk factors and filings.

The reader should not place undue reliance on forward-looking statements, which speak only as of the date of this report. Except as required by law the Company assumes no responsibility for updating forward-looking statements to reflect unforeseen or other events after the date of this report.

Refer to the “Critical Accounting Policies” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Form 10-K for the year ended December 31, 2007 for a detailed discussion of our critical accounting policies.

We have two reportable segments, Visiting Nurse (VN) and Personal Care (PC). Reportable segments have been identified based upon how management has organized the business by services provided to customers and the criteria in SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.”

The VN segment provides skilled medical services in patients’ homes largely to enable recipients to reduce or avoid periods of hospitalization and/or nursing home care. VN Medicare revenues are generated on a per episode basis rather than a fee per visit or day of care. Approximately 94% of the VN segment revenues are generated from the Medicare program while the balance is generated from Medicaid and private insurance programs.

The PC segment services are also provided in patients’ homes. These services (generally provided by paraprofessional staff such as home health aides) are generally of a custodial rather than skilled nature. PC revenues are generated on an hourly basis. Approximately 70% of the PC segment revenues are generated from Medicaid and other government programs while the balance is generated from insurance programs and private pay patients.

Certain general and administrative expenses incurred at the corporate level have not been allocated to the segments.

We have service locations in Florida, Kentucky, Ohio, Connecticut, Massachusetts, Alabama, Missouri, Illinois and Indiana (in order of revenue significance).

Consolidated three months ended June 30,
		2008					2007					Change
		Amount		% Rev			Amount		% Rev			Amount		%
Net revenues:
Visiting Nurse	$	38,857,909		79.8	%	$	23,460,195		72.2	%	$	15,397,714		65.6	%
Personal Care		9,842,463		20.2	%		9,049,308		27.8	%		793,155		8.8	%
	$	48,700,372		100.0	%	$	32,509,503		100.0	%	$	16,190,869		49.8	%
Operating income before corporate expenses:
Visiting Nurse	$	8,586,003		22.1	%	$	4,566,721		19.5	%	$	4,019,282		88.0	%
Personal Care		820,534		8.4	%		1,052,642		11.6	%		(232,108	)	-22.1	%
		9,406,537		19.3	%		5,619,363		17.3	%		3,787,174		67.4	%
Corporate expense		2,736,370		5.6	%		2,103,925		6.5	%		632,445		30.1	%
Operating income		6,670,167		13.7	%		3,515,438		10.8	%		3,154,729		87.7	%
Interest expense, net		(170,756	)	0.4	%		(241,220	)	0.7	%		70,464		-29.2	%
Income tax expense		(2,600,457	)	5.3	%		(1,310,738	)	4.0	%		(1,289,719	)	98.4	%
Net income from continuing operations	$	3,898,954		8.0	%	$	1,963,480		6.0	%	$	1,935,474		98.6	%

EBITDA from continuing operations	$	7,214,248		14.8	%	$	3,864,105		11.9	%	$	3,350,143		86.7	%

On a consolidated basis, our second quarter 2008 net service revenues increased 49.8% to $48.7 million compared to $32.5 million in the second quarter of 2007. Organic revenue growth was approximately $8.3 million or just over 51.1% of our growth, while acquisitions provided the balance of the increase at approximately $7.9 million.

Operating income as a percent of revenue increased to 13.7% in the second quarter of 2008 versus 10.8% in 2007 based on our ability to leverage our existing infrastructure over a larger revenue base. Net income from continuing operations for the second quarter of 2008 was $3.9 million or $0.50 per diluted share compared to $2.0 million or $0.35 per diluted share in 2007. The 42.9% EPS increase was attributable to both organic growth and acquisition activity. The effect of the stock offering decreased earnings $0.16 per diluted share or 24.2%.

Interest expense was incurred on funds borrowed to finance our acquisition activities. Our effective interest rate on our bank credit facility was 4.0% in 2008 and 7.5% in 2007.

The effective income tax rate from continuing operations was approximately 40.0% in 2008 and 2007.

Three months ended June 30,
	2008					2007			Change
		Amount	% Rev			Amount	% Rev			Amount	%
Net service revenues	$	38,857,909	100.0	%	$	23,460,195	100.0	%	$	15,397,714	65.6	%
Cost of service revenue		16,006,348	41.2	%		9,402,189	40.1	%		6,604,159	70.2	%
Gross margin		22,851,561	58.8	%		14,058,006	59.9	%		8,793,555	62.6	%
General and administrative expenses:
Salaries and benefits		10,118,707	26.0	%		6,606,554	28.2	%		3,512,153	53.2	%
Other		4,146,851	10.7	%		2,884,732	12.3	%		1,262,119	43.8	%
Total general and administrative expenses		14,265,558	36.7	%		9,491,286	40.5	%		4,774,272	50.3	%
Operating income	$	8,586,003	22.1	%	$	4,566,720	19.5	%	$	4,019,283	88.0	%

Average number of locations		58				47				11	23.4	%

All payors:
Patient Months		29,791				18,547				11,244	60.6	%
Admissions		9,400				7,311				2,089	28.6	%
Billable visits		240,757				143,078				97,679	68.3	%

Medicare statistics:
Revenue	$	36,428,290	93.7	%	$	21,703,970	92.5	%	$	14,724,320	67.8	%
Billable visits		222,673				129,704				92,969	71.7	%
Admissions		8,638				6,569				2,069	31.5	%
Episodes		12,485				8,058				4,427	54.9	%

Revenue per episode	$	2,886			$	2,617			$	269	10.3	%
Visits per episode		17.3				15.7				1.6	10.0	%

Net revenues in the visiting nurse segment for the second quarter of 2008 rose 65.6% to $38.9 million. The $15.4 million increase came from a combination of organic growth of $7.8 million and from acquired operations of $7.6 million. Our VN organic growth rate was 33.2%.

Operating income before corporate expense in the VN segment for the second quarter of 2008 increased 88.0% to $8.6 million from $4.6 million in 2007.

Gross margin decreased from 59.9% in 2007 to 58.8% in 2008 due to the effect of flat Medicare reimbursement rates and continuing increases in direct care wages and mileage reimbursement. This is offset by lower general and administrative expenses which were leveraged against substantial volume growth. As a result, the VN segment’s operating income improved as noted above.

The Company’s acquisitions of Quality of Life in October 2007 and Apex Home Healthcare in March 2008 impact comparability of our operating results.

The following table is presented comparing revenue growth by acquisition for the quarters ended June 30, 2008 and 2007:

		2008		2007		Change	%
Quality of Life
Days in Period		91		-		91
Revenue	$	2,824,796	$	-	$	2,824,796

Apex Home Healthcare
Days in Period		91		-		91
Revenue		4,778,970		-		4,778,970
Acquired Total		7,603,766		-		7,603,766

Organic Revenue		31,254,143		23,460,195		7,793,948	33.2%
Total Revenue	$	38,857,909	$	23,460,195	$	15,397,714	65.6%

Three months ended June 30,
			2008			2007								Change
		Amount		% Rev					Amount	% Rev				Amount			%
Net service revenues	$	9,842,463		100.0	%		$	9,049,308			100.0	%	$	793,155		8.8		%
Cost of service revenues		6,786,560		69.0	%			6,139,495			67.9	%		647,065		10.5		%
Gross margin		3,055,903		31.0	%			2,909,813			32.1	%		146,090		5.0		%
General and administrative expenses:
Salaries and benefits		1,385,351		14.1	%			1,287,816			14.2	%		97,535		7.6		%
Other		850,018		8.6	%			569,355			6.3	%		280,663		49.3		%
Total general and administrative expenses		2,235,369		22.7	%			1,857,171			20.5	%		378,198		20.4		%
Operating income	$	820,534		8.3	%		$	1,052,642			11.6	%	$	(232,108	)	-22.1		%

Admissions		965						824						141		17.1		%
Patient months of care		11,447						10,301						1,146		11.1		%
Patient days of care		143,308						131,627						11,681		8.9		%
Billable hours		568,492						507,202						61,290		12.1		%
Revenue per billable hour	$	17.31					$	17.84					$	(0.53	)	-3.0		%

Net revenues in the personal care segment for the second quarter increased 8.8% to $9.8 million from $9.0 million in the same period of last year on an increased volume of 0.8% and higher pricing of 7.9%. Operating income before corporate expense in the PC segment for the second quarter of 2008 was $0.8 million, a 22.1% decrease from $1.1 million in the second quarter of 2007. This is a result of incremental bad debt expense and increased workers compensation and general liability insurance expense in 2008.

Admissions increased from the prior year reflecting a change in the mix of business. Revenue per billable hour decreased due to a combination of rate increases and changes in the mix of business across payors and locations.

Consolidated six months ended June 30,
		2008				2007						Change
		Amount		% Rev			Amount		% Rev			Amount		%
Net revenues:
Visiting Nurse	$	68,696,167		78.3	%	$	46,508,313		72.3	%	$	22,187,854		47.7	%
Personal Care		19,031,158		21.7	%		17,774,368		27.7	%		1,256,789		7.1	%
		87,727,325		100.0	%		64,282,682		100.0	%		23,444,643		36.5	%
Operating income before corporate expenses:
Visiting Nurse		14,040,673		20.4	%		8,882,511		19.1	%		5,158,162		58.1	%
Personal Care		1,562,027		8.2	%		1,714,016		9.6	%		(151,989	)	-8.9	%
		15,602,700		17.8	%		10,596,527		16.5	%	$	5,006,173		47.2	%
Corporate expense		4,483,587		5.1	%		3,860,786		6.0	%		622,801		16.1	%
Operating income		11,119,113		12.7	%		6,735,741		10.5	%		4,383,372		65.1	%
Interest expense, net		(378,757	)	0.4	%		(496,928	)	0.8	%		118,171		-23.8	%
Income tax expense		(4,266,792	)	4.9	%		(2,450,052	)	3.8	%		(1,816,740	)	74.2	%
Net income from continuing operations	$	6,473,564		7.4	%	$	3,788,761		5.9	%	$	2,684,803		70.9	%

EBITDA from continuing operations	$	12,095,119		13.8	%	$	7,367,000		11.5	%	$	4,728,119		64.2	%

On a consolidated basis, our 2008 net service revenues increased 36.5% to $87.7 million compared to $64.3 million in 2007. Organic revenue growth was approximately $12.5 million or just over 53.5% of our growth, while acquisitions provided the balance of the increase at approximately $10.9 million.

Operating income for 2008 increased to 12.7% of revenue versus 10.5% in 2007 based on our ability to leverage our existing infrastructure over a larger revenue base. Net income from continuing operations for 2008 were $6.5 million or $0.96 per diluted share compared to $3.8 million or $0.68 per diluted share in 2007. The 41.2% EPS increase was attributable to both organic growth and acquisition activity. The effect of the stock offering decreased earnings $0.15 per diluted share or 13.5%.

Interest expense was incurred on funds borrowed to finance our acquisition activities. Our effective interest rate on our bank credit facility was 4.72% in 2008 and 7.5% in 2007.

The effective income tax rate from continuing operations was approximately 39.7% and 39.3% in 2008 and 2007, respectively.

		2008			2007				Change
		Amount	% Rev			Amount	% Rev			Amount	%
Net service revenues	$	68,696,167	100.0	%	$	46,508,313	100.0	%	$	22,187,854	47.7	%
Cost of service revenues		28,183,703	41.0	%		18,741,783	40.3	%		9,441,920	50.4	%
Gross margin		40,512,464	59.0	%		27,766,530	59.7	%		12,745,934	45.9	%
General and administrative expenses:
Salaries and benefits		18,293,672	26.6	%		13,124,573	28.2	%		5,169,099	39.4	%
Other		8,178,119	11.9	%		5,759,446	12.4	%		2,418,673	42.0	%
Total general and administrative expenses		26,471,791	38.5	%		18,884,019	40.6	%		7,587,772	40.2	%
Operating Income	$	14,040,673	20.4	%	$	8,882,511	19.1	%	$	5,158,162	58.1	%

Average Number of Locations		58				47				11	23.4	%

All Payors:
Patient Months		53,974				37,141				16,833	45.3	%
Admissions		17,810				14,816				2,994	20.2	%
Billable Visits		428,097				286,617			$	141,480	49.4	%

Medicare Statistics:
Revenue	$	64,397,617	93.7	%	$	43,261,558	93.0	%		21,136,059	48.9	%
Billable Visits		393,078				260,364				132,714	51.0	%
Admissions		16,223				13,375				2,848	21.3	%
Episodes		22,839				16,194				6,645	41.0	%

Revenue per episode	$	2,826			$	2,614			$	212	8.1	%
Visits per episode		17.3				15.7				1.6	10.1	%

Net revenues in the visiting nurse segment for the six months of 2008 rose 47.7% to $68.7 million. The $22.2 million increase came from a combination of organic growth of $11.6 million and from acquired operations of $10.6 million. Our VN organic growth rate was 25.0%.

Operating income before corporate expense in the VN segment for the six months of 2008 increased 58.1% to $14.0 million from $8.9 million in 2007.

Gross margin decreased from 59.7% in 2007 to 59.0% in 2008 due to the effect of flat Medicare reimbursement rates and continuing increases in competitive direct care wages and mileage reimbursement. This is offset by lower general and administrative expenses which were leveraged against substantial volume growth.

The Company’s acquisitions of Quality of Life in October 2007 and Apex Home Healthcare in March 2008 impact comparability of our operating results.

The following table is presented comparing revenue growth by acquisition for the quarters ended June 30, 2008 and 2007:

		2008		2007		Change	%
Quality of Life
Days in Period		182		-		182
Revenue	$	5,537,848	$	-	$	5,537,848

Apex Home Healthcare
Days in Period		96		-		96
Revenue		5,043,194		-		5,043,194
Acquired Total		10,581,042		-		10,581,042

Organic Revenue		58,115,125		46,508,313		11,606,812	25.0%
Total Revenue	$	68,696,167	$	46,508,313	$	22,187,854	47.7%

		2008			2007			Change
		Amount	% Rev			Amount	% Rev			Amount		%
Net service revenues	$	19,031,158	100.0	%	$	17,774,368	100.0	%	$	1,256,790		7.1	%
Cost of service revenues		13,218,802	69.5	%		12,237,438	68.8	%		981,364		8.0	%
Gross margin		5,812,356	30.5	%		5,536,930	31.2	%		275,426		5.0	%
General and administrative expenses:
Salaries and benefits		2,648,608	13.9	%		2,609,511	14.7	%		39,097		1.5	%
Other		1,601,721	8.4	%		1,213,404	6.8	%		388,317		32.0	%
Total general and administrative expenses:		4,250,329	22.3	%		3,822,915	21.5	%		427,414		11.2	%
Operating Income	$	1,562,027	8.2	%	$	1,714,016	9.6	%	$	(151,989	)	-8.9	%

Admissions		1,918				1,818				100		5.5	%
Patient Months of Care		22,060				20,859				1,201		5.8	%
Patient Days of Care		276,649				261,280				15,369		5.9	%
Billable Hours		1,084,780				1,015,054				69,726		6.9	%
Revenue per Billable Hour	$	17.54			$	17.51			$	0.03		0.2	%

Net revenues in the personal care segment for the six months increased 7.1% to $19.0 million from $17.8 million in the same period of last year on a decreased volume of 0.3% and higher pricing of 7.4%. PC operating income for the six months was about $1.6 million versus $1.7 million in the corresponding period of last year. This decrease was the result of incremental bad debt expense and increased workers compensation and general liability insurance expense.

Admissions increased about 5.5% from the prior year while patient months increased reflecting a change in the mix of business, particularly in the first quarter. Revenue per billable hour increased due to a combination of rate increases and changes in the mix of business across payors and locations.

We bear significant insurance risk under our large-deductible workers’ compensation insurance program and our self-insured employee health program. Under the workers’ compensation insurance program, we bear risk up to $400,000 per incident. We purchase stop-loss insurance for the employee health plan that places a specific limit, generally $100,000, on our exposure for any individual covered life.

Malpractice and general patient liability claims for incidents which may give rise to litigation have been asserted against us by various claimants. The claims are in various stages of processing and some may ultimately be brought to trial. We are aware of incidents that have occurred through June 30, 2008 that may result in the assertion of additional claims. We currently carry professional and general liability insurance coverage for this exposure with no deductible.

Total premiums, excluding our exposure to claims and deductibles, for all our non-health insurance programs were approximately $1.1 million for the contract year ending March 31, 2008. On April 1, 2008, we completed our renewal for the contract year ending March 31, 2009 with total estimated premiums of $961,000.

We record estimated liabilities for our insurance programs based on information provided by the third-party plan administrators, historical claims experience, the life cycle of claims, expected costs of claims incurred but not paid, and expected costs to settle unpaid claims. We monitor our estimated insurance-related liabilities on a monthly basis. As facts change, it may become necessary to make adjustments that could be material to our results of operations and financial condition.

Prior to July 15, 2008 we had a $40.0 million credit facility with JP Morgan Chase Bank, NA as amended November 30, 2007, with an expiration date of June 30, 2010.The credit facility bore an interest rate option at either the bank’s prime rate less a margin (ranging from -1.50% to -0.25%, currently -1.00%), or one-month LIBOR plus a margin (ranging from +1.25% to +2.50%) dependent upon total leverage and was secured by substantially all assets and the stock of our subsidiaries. The weighted average interest rates were 4.0% and 7.5% for the quarters ended June 30, 2008 and 2007, respectively. We paid a commitment fee of 0.25% per annum on the unused facility balance. Borrowings were available equal to the greater of: a) a multiple of 3.5 times earnings before interest, taxes, depreciation and amortization (As Defined EBITDA) or b) an asset based formula, primarily based on accounts receivable. “As Defined EBITDA” of acquired operations, up to 75% of base “As Defined EBITDA,” may have been included in the availability calculations. Borrowings under the facility may have been used for working capital, capital expenditures, acquisitions, development and growth of the business and other corporate purposes. As of June 30, 2008, the formula permitted approximately $40.0 million to be used, of which $0 was outstanding. We had irrevocable letters of credit, totaling $2.1 million outstanding in connection with our self-insurance programs. Thus, a total of $37.9 million was available for use at June 30, 2008. Our revolving credit facility was subject to various financial covenants. As of June 30, 2008, we were in compliance with the covenants. Under the most restrictive of covenants, we were required to maintain minimum net worth of at least $10.5 million.

On July 15, 2008, we entered into a $75.0 million three year senior secured revolving credit agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, Fifth Third Bank, as Syndication Agent and certain other lenders. The agreement consists of: (i) a $75.0 million credit line with a maturity date of July 2011, (ii) availability of borrowings up to 3.0 times Earnings before Taxes, Depreciation and Amortization (“EBITDA”), as defined, and (iii) an accordion feature providing for potential future expansion of the facility to $100 million. This new facility increases the available resources to continue the pursuit of our development objectives.

We terminated our existing $40.0 million credit agreement, initially dated as of August 3, 1999 and subsequently amended, with JPMorgan Chase Bank, N.A., as lender, concurrently with the effectiveness of the new agreement.

Key elements to the Consolidated Statements of Cash Flows for the six months ending June 30, 2008 and 2007 were:

Net cash provided by operating activities resulted principally from current period income, net of changes in accounts receivable, accounts payable and accrued expenses. Accounts receivable days revenues outstanding were 42 at June 30, 2007, and 45 at December 31, 2006. The cash used in investing activities is primarily due to an acquisition completed in January 2007. Net cash used in financing activities resulted primarily from stock option exercises and the payment of a note payable from a 2005 acquisition. The Company’s stock option plans permit optionees to have option shares withheld on exercises in lieu of submitting to the Company the amount necessary for income tax withholdings. Such withholding of shares in lieu of taxes is shown in the cash flow statement as a repurchase of shares in the amount of $3.8 million. The Company receives a current tax deduction for compensation expense subject to IRS limits. Such deductions related to stock option exercises in the first six months of 2007 are shown in the cash flow statement as a cash inflow of approximately of $678,000.

The health care industry has experienced, and is expected to continue to experience, extensive and dynamic change. In addition to economic forces and regulatory influences, continuing political debate is subjecting the health care industry to significant reform. Health care reforms have been enacted as discussed elsewhere in this document. Proposals for additional changes are continuously formulated by departments of the Federal government, Congress, and state legislatures.

Government officials can be expected to continue to review and assess alternative health care delivery systems and payment methodologies. Changes in the law or new interpretations of existing laws may have a dramatic effect on the definition of permissible or impermissible activities, the relative cost of doing business, and the methods and amounts of payments for medical care by both governmental and other payors. Legislative changes to “balance the budget” and slow the annual rate of growth of expenditures are expected to continue. Such future changes may further impact our reimbursement. There can be no assurance that future legislation or regulatory changes will not have a material adverse effect on our operations.

Federal and State legislative proposals continue to be introduced that would impose more limitations on payments to providers of health care services such as us. Many states have enacted, or are considering enacting, measures that are designed to reduce their Medicaid expenditures.

We cannot predict what additional government regulations may be enacted in the future affecting our business or how existing or future laws and regulations might be interpreted, or whether we will be able to comply with such laws and regulations in our existing or future markets.

Refer to the sections on “Cautionary Statements – Forward Outlook and Risks” and the “Notes to the Consolidated Financial Statements” and elsewhere in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information.

In August 2007 the Centers for Medicare & Medicaid Services ("CMS") published final regulations updating and revising the Medicare prospective payment system for home health ("HH-PPS") for 2008 (the “2008 Final Rule”). The 2008 Final Rule became effective on January 1, 2008.

Under the HH-PPS providers are reimbursed on the basis of a 60-day episode following a formula dependent upon, among other factors, the patient’s medical condition, the number of visits performed in the episode and the locale in which the patient resides.

The 2008 refinements did not have a significant effect on our overall results for the quarter or six months ended June 30, 2008.

Management does not believe that inflation has had a material effect on income during the past several years.

The information provided in the some of the tables use certain non-GAAP financial measures as defined under Securities and Exchange Commission ("SEC") rules. In accordance with SEC rules, the Company has provided, in the supplemental information below, a reconciliation of those measures to the most directly comparable GAAP measures.

EBITDA is defined as income before depreciation and amortization, net interest expense and income taxes. EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America. It should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities, or any other measure calculated in accordance with generally accepted accounting principles. The items excluded from EBITDA are significant components in understanding and evaluating financial performance and liquidity. Management routinely calculates and communicates EBITDA and believes that it is useful to investors because it is commonly used as an analytical indicator within our industry to evaluate performance, measure leverage capacity and debt service ability, and to estimate current or prospective enterprise value. EBITDA is also used in certain covenants contained in our credit agreement.

The following table sets forth a reconciliation of Net Income from Continuing Operations -- As Adjusted to EBITDA:

			Three months ended June 30,					Six months ended June 30,
		2008			2007		2008			2007
Net income from continuing operations	$	3,898,954		$	1,963,480	$	6,473,564		$	3,788,761

Add back:
Interest expense		170,756			241,220		378,757			496,928
Income tax expense		2,600,457			1,310,738		4,266,792			2,450,052
Depreciation and amortization		336,791			218,170		642,674			428,888
Amortization of stock-based compensation		207,290			130,497		333,332			202,371
Earnings before interest, income taxes, depreciation and amortization (EBITDA)from continuing operations	$	7,214,248		$	3,864,105	$	12,095,119		$	7,367,000

Our primary market risk exposure with regard to financial instruments is to changes in interest rates.

At June 30, 2008, a hypothetical 100 basis point increase in short-term interest rates would result in an increase of approximately $164,000 in annual pre-tax earnings.

Disclosure Controls and Procedures – As of June 30, 2008, the Company’s management, with participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2008.

Changes in Internal Control Over Financial Reporting - There were no changes in the Company’s internal control over financial reporting during the second quarter of 2008, that have materially affected, or are reasonably likely to materially affect, Almost Family, Inc.’s internal control over financial reporting.

Information regarding risk factors appears in our Form 10-K for the year ending December 31, 2007, under the heading “Special Caution Regarding Forward – Looking Statements” and in the Form 10-K Part I, Item 1A. Risk Factors. There have been no material changes from the risk factors previously disclosed in our Form 10-K.

10.2 Credit Agreement, dated as of July 15, 2008 among Almost Family, Inc., the lenders party thereto, JPMorgan Chase Bank, N.A. as Administrative Agent and Fifth Third Bank as Syndication Agent. (Except for Schedule 5.09, schedules have been omitted. Almost Family undertakes to furnish supplemental copies of any of the omitted schedules upon request by the Securities and Exchange Commission.) (Incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K dated July 15, 2008.)

Certifications of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certifications of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2008
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________to____________
Commission file number 001-09848

ALMOST FAMILY, INC.
(Exact name of Registrant as specified in its charter)

Delaware	06-1153720
(State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification Number)

9510 Ormsby Station Road, Suite 300, Louisville, Kentucky 40223
(Address of principal executive offices)

(502) 891-1000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer x
Non-accelerated filer o Smaller Reporting Company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class of Common Stock $0.10 par value Shares outstanding at August 5, 2008 8,130,540

	Visiting		Personal
	Nurses		Care		Total
Balance at December 31, 2007	$	38,840,382	$	3,826,862	$	42,667,244
Acquisitions		12,114,016		-		12,114,016
Balance at June 30, 2008	$	50,954,398	$	3,826,862	$	54,781,260

	Shares			Wtd. Avg Ex. Price
December 31, 2007	317,014		$	11.87

Granted	70,000			21.90
Exercised	(10,000	)		4.28
Terminated	(7,000	)		19.40
June 30, 2008	370,014		$	14.04

Accounts receivable - net	$	2,481,000
Property, plant & equipment		516,000
Other Assets		50,000
Goodwill and other intangibles		13,199,000
Assets acquired		16,246,000
Liabilities assumed		(151,000)
Net assets acquired	$	16,095,000

Net Change in Cash and Cash Equivalents		2008		2007
Provided by (used in):
Operating activities	$	1,414,922	$	2,466,563
Investing activities		(14,815,284)		(820,454)
Financing activities		29,486,186		(5,211,785)
Discontinued operations activities		(78,620)		(141,348)
Net decrease in cash and cash equivalents	$	16,007,204	$	(3,707,024)