BRC Announces Third Quarter Results and Contract with MatriDigm Corporation.

DALLAS--(BUSINESS WIRE)-- Oct. 24, 1996--BRC Holdings, Inc. ("BRC") (NASDAQ -- BRCP) announced a third quarter loss of $11,045,000, or $1.59 per share, on revenues of $36,598,000.

These results compare to earnings of $3,030,000, or $.43 per share, on revenues of $36,630,000, reported during the same period last year. Third quarter results include a $15,266,000 pre-tax charge to earnings associated with the write-off of goodwill and other intangible assets related the company's health care division. Current and prior period results also reflect the inclusion of The Pace Group, Inc., a Dallas-based consulting firm which merged with BRC on Sept. 5, 1996. All stated results are unaudited and subject to adjustment based on further review.

The $15,266,000 pre-tax charge to earnings relates primarily to a write-off of goodwill and other intangible assets in compliance with the requirements of Statement of Financial Accounting Standards No. 121. The charge was precipitated by the cancellation of certain customer contracts with the Sisters of Providence Health System. Total revenues derived from the contracts were approximately $2.9 million for the three months ended Sept. 30, 1996 and $12.4 million for the 12 months ended Sept. 30, 1996.

The company also announced that it has executed a consulting contract and stock purchase agreement with MatriDigm Corporation ("MatriDigm"), a privately held corporation headquartered in Fremont, Calif. MatriDigm is in the process of developing and testing an automated technology solution to the Year 2000 computer date problem which is confronting computer systems worldwide.

Under the consulting contract with MatriDigm, BRC will provide the assistance of its chairman and chief executive officer, and certain other management services, to assist MatriDigm in the development and growth of its business and operations. In consideration for these efforts, BRC will receive a percentage of the pre-tax operating income of MatriDigm. Additionally, BRC will purchase $1,500,000 of MatriDigm common stock, constituting approximately 7 percent of the current outstanding equity of MatriDigm. The consulting contract terminates in December of 1999, and may be terminated earlier based on a number of events, including the lack of achievement of performance goals subsequent to Sept. 30, 1997. In the event of a termination of the consulting contract, MatriDigm has certain share repurchase rights with respect to a portion of the shares purchased by BRC. The company has previously entered into a sales and marketing agreement with MatriDigm which provides for commissions to be paid to BRC based on the sale of MatriDigm products and services.

"We are pleased with our growing relationship with MatriDigm," said P.E. Esping, chairman and chief executive officer of BRC. "We increasingly believe the Year 2000 computer problem will present a significant challenge to companies throughout the United states and abroad. Our hope is that through our ownership in and alliance with MatriDigm, we can be a meaningful participant in this new and evolving market." With respect to the company's third quarter charge to earnings, Esping said, "The charge represents a significant change in the way the company foresees its future health care business. Through our recent merger with The Pace Group and the hiring of new talented senior health care management, we have re-directed our emphasis towards consulting and technology services to managed care enterprises. While providing outsourcing services for the data processing departments of health care institutions will continue to be an important part of our business, we clearly believe we will be more successful by increasing our focus on departmental outsourcing solutions and technology partnerships with integrated delivery systems who are adapting to the managed care environment."

BRC, headquartered in Dallas, Texas, provides specialized information systems and services to health care institutions and local governments nationwide.

Except for the historical information contained herein, the matters discussed may include forward-looking statements that involve risks and uncertainties. The company's actual results may differ materially from those discussed in the forward-looking statements. Potential risks and uncertainties include market responses to the company's product and service offerings, pricing pressures, results from litigation, the timely development and acceptance of new products and services, changes in customer preferences and inventory risks due to shifts in market demand. Consequently, the actual results realized by the company could differ materially from the statements made herein. Stockholders of the company are cautioned not to place undue reliance on the forward-looking statements made herein. -0-

                            BRC HOLDINGS, INC.
                       1996 THIRD QUARTER EARNINGS
                               (UNAUDITED)
                                 (000's)


                         Three Months Ended      Nine Months Ended
                            September 30,           September 30,
                         ------------------      -----------------
                         1996(2)    1995(1)      1996(2)   1995(1)
                         -------    -------      -------   -------

 Revenues               $ 36,598   $ 36,630     $116,830  $104,984

 Earnings Before Taxes   (11,038)     4,991        1,727    13,971

 Income Tax Provision          7      1,961        5,066     5,518

 Net Income             $(11,045)  $  3,030     $ (3,339) $  8,453

 Earnings per Share
   Primary              $  (1.59)  $   0.43     $  (0.48) $   1.22
   Fully Diluted        $  (1.59)  $   0.43     $  (0.48) $   1.20

 Average Shares
   Primary                 6,930      7,064        6,910     6,938
   Fully Diluted           6,930      7,085        6,910     7,057

(1) The company's financial results have been restated to include an acquisition in 1996 which has been accounted for as a pooling of interests.

(2) The company's earnings before taxes for the three months and nine months ended Sept. 30, 1996 include a $15,266,000 charge associated with the write-off of goodwill and other intangible assets related the company's health care division.

CONTACT: P.E. Esping, chairman and chief executive officer,

BRC Holdings, Inc., 214/905-2300