Item 2.02.  Results of Operations and Financial Condition. 

          On February 23, 2006 the Registrant issued a press release announcing its earnings for the fourth quarter and fiscal year ended December 31, 2005 and announcing guidance for the first quarter of 2006. A copy of the press release announcing the fourth quarter and year ended December 31, 2005 earnings is furnished herewith as Exhibit 99.1.

          The attached press release includes the following non-GAAP measures, each of which is discussed in more detail below: (i) a presentation of earnings from continuing operations and diluted earnings per share from continuing operations, excluding certain unusual items for the year ended December 31, 2004 (the “2004 Exclusions”); (ii) a presentation of revenues, earnings from continuing operations and diluted earnings per share from continuing operations that include results from operations of assets held for sale that, under the equivalent GAAP measure are included in the Company’s discontinued operations (the “Reclassified Financials”); and (iii) forecasted 2006 EBITDA and forecasted 2006 earnings from continued operations and diluted earnings per share from continuing operations for the first quarter of 2006 (the “2006 Forecasts”), both of which exclude the effects of share-based compensation under FAS 123R, which was adopted by the Company effective January 1, 2006.  Each of these measures is not a measure of financial performance under GAAP and should not be considered as an alternative to the comparable GAAP measures discussed below.  The Company has provided reconciling information to the most comparable GAAP measure for each of these non-GAAP measures in the press release.

The 2004 Exclusions

          With respect to the 2004 Exclusions, the Company considers earnings from continuing operations and diluted earnings per share from continuing operations, to be the most comparable GAAP measures.  The 2004 Exclusions exclude the costs associated with repurchasing $120 million in aggregate principal amount of the Company’s 11% Series B Senior Notes due 2008 and the gain from the sale of substantially all of the assets of the Company’s Pharmacy and Supplies Business.  Management uses earnings measures adjusted to exclude such items as part of its evaluation of the performance of the Company.  The Company believes that these measures provide useful information to investors because the items that are excluded related to unusual events that resulted in a significant impact and are not likely to recur regularly or in predictable amounts and, consequently, presenting earnings from continuing operations and diluted earnings per share from continuing operations, excluding such unusual items, is meaningful supplemental information for investors. 

The Reclassified Financials

          With respect to the Reclassified Financials, the Company considers revenues, earnings from continuing operations and diluted earnings per share from continuing operations, to be the most comparable GAAP measures.  On January 6, 2006, the Company announced the strategic decision to divest Facet Technologies, Matria’s diabetes product design, development and assembly business, and Matria’s foreign diabetes service operations in Germany.  The Company believes that showing the Reclassified Financials, which are presented as if such businesses were not included in discontinued operations, provides useful information to investors as such operations have historically been included in the Company’s results from continuing operations and the Company’s forecasts for 2005 did not contemplate such businesses as discontinued operations.