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ADVANTAGEHEALTH 1992 OPERATING INCOME INCREASES 39 PERCENT OVER 1991

ADVANTAGEHEALTH 1992 OPERATING INCOME INCREASES 39 PERCENT OVER 1991
 WOBURN, Mass., Oct. 7 /PRNewswire/ -- Advantage HEALTH Corp. (NASDAQ: ADHC) reported today that its fourth quarter net revenue increased 23 percent to $22,022,000 vs. $17,963,000 in the same period last year. Fiscal 1991 net revenue excludes income from prior year settlements with third party payors. Net income for the quarter increased $4,228,000 t0 $1,667,000. Earnings per share for the quarter increased $1.23 per share to 28 cents.
 For the full fiscal year, the company reported a 20 percent increase in net revenues to $80,760,000. Patient service revenue of $70,240,000 increased 19 percent over 1991, and management services revenue increased 56 percent during the same period. Fiscal 1992 net income increased to $4,307,000 which is $5,491,000 higher than 1991 and earnings per share increases $1.48 to 97 cents per share (before one time non-cash extraordinary charge).
 Raymond Dunn, chairman and CEO, said, "The company entered into agreements in the fourth quarter to open nine new sites of service in 4 New England states. This furthers the company's regional hub and spoke strategy of affiliating and joint venturing with premier New England hospitals," Dunn also said. "These new ventures include both owned and managed inpatient and outpatient facilities, contract therapy, physical therapy practice acquisitions and existing site expansion."
 Robert Spencer, chief financial officer, continued to attribute the earnings gains to improved payor mix which he said, "Was a result of being the low cost provider in the company's market area, revenue growth at existing inpatient and outpatient facilities, additional leverage of fixed overhead costs and reduced interest costs." On a year-to-date basis during 1992, inpatient days increased 13 percent to 164,763 days and outpatient treatments increased 44 percent to 451,931 treatments.
 Advantage HEALTH Corporation operates the largest network of comprehensive medical rehabilitation facilities in New England. The company currently employs in excess of 2,500 employees with 45 locations in seven states.
 ADVANTAGEHEALTH CORPORATION AND SUBSIDIARIES
 Consolidated Statements of Operations
 (dollar amounts in thousands, except per share data)
 Quarter Ended Year Ended
 (unaudited) (audited)
 Aug. 31, Aug. 31, Aug. 31, Aug. 31,
 1992 1991 1992 1991
 Revenues:
 Net patient
 service revenue $18,805 $15,639 $70,240 $59,222
 Management
 service revenue 1,557 844 4,452 2,855
 Other operating
 revenue 1,660 1,480 6,068 5,449
 Changes to prior year
 settlements with third
 party payors 2,443 2,443
 Total 22,022 20,406 80,760 69,969
 Expenses:
 Operating and
 administrative 17,967 14,983 67,043 56,429
 Interest expense 409 1,125 2,829 5,185
 Depreciation and
 amortization 636 553 2,337 2,186
 Total 19,012 16,661 72,209 63,800
 Income from
 Operations 3,010 3,745 8,551 6,169
 Non-operating gains
 (losses):
 Income (loss) on
 investments in
 limited partnerships
 and other affiliates (83) (2,228) 169 (2,475)
 Minority interest in
 net income (loss)
 of subsidiary (8) 11 (32) 58
 Other (5,400) (5,400)
 Total (91) (7,617) 137 (7,817)
 Income (loss) before income
 taxes and
 Extraordinary item 2,919 (3,872) 8,688 (1,648)
 Income taxes (benefit) 1,252 (1,311) 3,854 (464)
 Income (loss) before
 extraordinary item 1,667 (2,561) 4,834 (1,184)
 Extraordinary item,
 net of tax benefit
 of $356 N/A N/A 527 N/A
 Net Income (loss) $1,667 (2,561) $4,307 (1,184)
 Net income (loss) applicable
 to common stock, after
 deduction of preferred
 stock dividends $1,667 (2,615) $4,228 (1,399)
 Income (loss) per share
 before extraordinary
 item 28 cents (95 cents) 97 cents (51 cents)
 Extraordinary item
 per share --- --- (11 cents) ---
 Net income (loss)
 per share 28 cents (95 cents) 86 cents (51)cents
 Weighted average
 common shares and
 common share
 equivalents
 outstanding 6,043,181 2,759,364 4,897,011 2,759,364
 Consolidated Balance Sheets
 (in thousands)
 Aug. 31, Aug. 31,
 1992 1991
 (Audited)
 Current Assets:
 Cash and cash equivalents $17,977 $9,831
 Accounts receivable, less
 allowances of $1,842 and $1,960
 for uncollectible accounts,
 respectively 11,225 9,945
 Due from third party payors 1,913 1,972
 Supplies inventory 283 242
 Prepaid expenses and other
 current assets 2,683 1,199
 Total current assets 34,081 23,189
 Property, plant & equipment, net 20,195 19,772
 Other Assets:
 Goodwill, less accumulated
 amortization of $2,344 and
 $1,405, respectively 25,446 26,256
 Deferred financing costs, less
 accumulated amortization of $284
 and $155, respectively 1,382 670
 Investments in limited partnerships
 and other affiliates 771 619
 Other 1,105 719
 Subtotal 28,704 28,264
 Total $82,980 $71,225
 Current Liabilities:
 Accounts payable and
 accrued expenses $3,304 $5,549
 Accrued compensation, amounts
 withheld and related payroll taxes 3,515 2,623
 Income taxes payable 2,098 68
 Amounts payable to third party
 payors 4,952 8,501
 Current portion of long-term
 debt 2,107 3,866
 Total current liabilities $15,976 $20,607
 Other liabilities:
 Long-term debt, less current
 portion 23,383 47,274
 Deferred income taxes 905 ---
 Other 894 997
 Total 25,182 48,271
 Redeemable preferred stock --- 2,315
 Stockholders Equity:
 Preferred stock --- ---
 Common stock 57 28
 Class B common stock --- ---
 Additional paid-in capital 40,101 2,567
 Retained earnings (deficit) 1,664 (2,563)
 Total stockholders' equity 41,822 32
 $82,980 $71,225
 Summary Financial Results
 (Unaudited, in thousands, except per share data)
 Quarter Ended Year Ended
 Aug. 31, Aug. 31,
 1992 1991 1992 1991
 Net revenues $22,022 $20,406(a) $80,760 $69,969(a)
 Net income (loss) 1,667 (2,561) 4,834(b) (1,184)
 Weighted average
 common & common
 equivalent shares
 outstanding 6,043,181 2,759,364 4,897,011 2,759,364
 Earnings per share 28 cents (95 cents) 97 cents(b)(51 cents)
 (a) Includes prior year settlements with third party payors of $2,443.
 (b) Prior to extraoerdinary debt extinguishment charge incurred in 2nd quarter.
 -0- 10/7/92
 /CONTACT: Raymond J. Dunn, chairman and CEO of AdvantageHEALTH, 617-935-2500/
 (ADHC) CO: AdvantageHEALTH Corporation ST: Massachusetts IN: HEA SU: ERN


TM -- NE001 -- 7340 10/07/92 08:54 EDT
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