AMERICAN HEALTHCORP REPORTS EARNINGS OF $0.12 PER SHARE FOR THE SECOND QUARTER OF FISCAL 1995.

NASHVILLE, Tenn.--(BUSINESS WIRE)--March 20, 1995--Thomas G. Cigarran, Chairman and Chief Executive Officer of American Healthcorp, Inc. (Nasdaq/NM: AMHC), today announced financial results for the second quarter and first six months of fiscal 1995. Total revenues for the quarter, which ended February 28, 1995, were $14,136,000, a 7.7% increase over $13,130,000 for the second quarter of fiscal 1994. Net income was $976,000, or $0.12 per share, for the quarter compared with $1,453,000, or $0.17 per share, for the same period the prior year. For the first six months of fiscal 1995, total revenues increased 7.7% to $27,631,000 from $25,661,000 for the first half of fiscal 1994. Net income was $2,147,000, or $0.26 per share, versus $2,892,000, or $0.34 per share.

Commenting on the announcement, Mr. Cigarran said, "DTCA's financial results for the second quarter included a previously discussed increase in the Company's ongoing investment in new product development, support and sales of $0.06 per share over the second quarter of fiscal 1994 and legal expenses of $0.02 per share related to a previously announced civil lawsuit brought against the Company by a former employee.

"In addition, the standardized contracting agreement with Columbia/HCA, which we reported in October 1994, was principally responsible for a 12% decline in same-center revenues from a strong prior-year quarter. The evolution of the structure of DTCA's contracts to reduce emphasis on revenue generation and increase emphasis on new cost reduction products is making good progress, even though contracts restructured during the past year have not yet reached their previous levels of profitability.

"DTCA signed contracts for the quarter for four new centers compared with two new contract signings for the second quarter of the last fiscal year. Three contracts were discontinued for the quarter, including two unprofitable contracts terminated by DTCA, compared with six contracts which were discontinued for the same period the previous fiscal year.

"In our discussions with managed care organizations across the country, we have found a high level of awareness and concern regarding the costs of diabetes to their health plans, an acceptance of their need to effectively manage these costs and an increasing understanding of the difficulty of implementing a comprehensive diabetes management program. In this climate, we are positioning DTCA as the leading organization able to help them develop meaningful solutions to their problems. Because of this leadership position, we have previously stated that we expected to be the first company to actually deliver large scale, comprehensive diabetes services on a capitated basis. We are therefore pleased to report that we have begun initial implementation activities for such a contract in anticipation of its final approval.

"The progress made in these efforts continues to support our confidence that DTCA will become a major factor in the managed care industry's movement to diabetes disease management and that this business will become the driver of DTCA's future growth. Emphasizing this confidence, we had repurchased 256,800 shares of the Company's common stock by the end of the quarter under a program to repurchase up to 400,000 shares, which was approved by the Board of Directors in January 1995."

Mr. Cigarran added, "AmSurg achieved substantially improved results for the second quarter compared with the second quarter of fiscal 1994. Revenues rose 94.0% and centers in operation doubled. In addition to the 15 centers in operation at the end of the quarter, AmSurg had 10 other centers either in development, awaiting certificate of need approval or under executed letters of intent. We intend to continue to expand AmSurg aggressively."

"During the quarter, AmSurg closed a bank credit agreement that provides up to $7 million at the prime interest rate or below to assist in funding further AmSurg development and acquisitions. This bank financing is being provided based solely on AmSurg's operating results and financial position and without the guaranty of the Company.

"American Healthcorp remains well positioned to finance its future growth," concluded Mr. Cigarran. "In spite of an expenditure of approximately $1.7 million for the stock repurchase during the quarter and additional AmSurg investments, the Company's cash position increased from $11.8 million to $12.0 million at the quarter's end."

American Healthcorp, Inc., through its wholly-owned subsidiary, Diabetes Treatment Centers of America, Inc., is the nation's leading provider of specialized services for people with diabetes. Through its majority ownership of AmSurg Corp., the Company also develops, acquires and manages physician practice-based ambulatory surgery centers in partnership with surgical and other group practices. The Company also wholly owns ArthritisCare Centers of America, which operates two comprehensive treatment centers for individuals with arthritis.

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                          AMERICAN HEALTHCORP, INC.
                       Unaudited Financial Highlights

                     Three Months Ended          Six Months Ended
                         February 28,              February 28,
                      1995         1994         1995         1994
Revenues:
  DTCA and other $  9,455,000 $ 10,717,000 $ 18,953,000 $ 21,396,000
  AmSurg            4,681,000    2,413,000    8,678,000    4,265,000
    Total        $ 14,136,000 $ 13,130,000 $ 27,631,000 $ 25,661,000
Net income:
  DTCA and other $    823,000 $  1,459,000 $  1,857,000 $  3,006,000
  AmSurg              153,000       (6,000)     290,000     (114,000)
    Total        $    976,000 $  1,453,000 $  2,147,000 $  2,892,000
Net income
 per share       $       0.12 $       0.17 $       0.26 $       0.34
Average shares
 outstanding        8,305,000    8,573,000    8,343,000    8,521,000

CONTACT: American Healthcorp Inc., Nashville

Henry D. Herr, 615/665-1122