CHILDREN'S COMPREHENSIVE SERVICES PLANS ACCOUNTING CHANGE FOR 1993 RESTRUCTURING EXPENSES.

MURFREESBORO, Tenn.--(BUSINESS WIRE)--Jan. 19, 1995--Children's Comprehensive Services, Inc. ("CCS") (Nasdaq/NM: KIDS) today announced the expected restatement of its financial statements for the year ended March 31, 1993 and subsequent periods to reflect a change related to the timing of the recognition of certain refinancing costs provided for in CCS's fiscal year ended March 31, 1993.

In its audited financial statements for fiscal year 1993, CCS established a provision for restructuring expenses that included an $880,000 accrual for the expenses expected to be incurred in connection with the Company's planned refinancings.

In reviewing its financial statements in light of recent accounting emphasis on restructuring costs and the registration statement recently filed by the Company covering proposed sales of CCS common stock by certain CCS shareholders, CCS has determined that it would be appropriate to change the accounting treatment for the $880,000 accrual. The restatement will eliminate the accrual from the expected restructuring costs established in fiscal year 1993 and instead capitalize the actual costs incurred (approximately $416,000 in fiscal 1994 and $226,000 in fiscal 1995) in the refinancings completed in September 1994. These costs will be amortized over the terms of the related loans.

The restatement will cause a decrease of approximately $880,000 in the net loss reported for the year ended March 31, 1993, a decrease of approximately $255,000 in the net income reported for the year ended March 31, 1994, a decrease of approximately $78,000 in the net income reported for the quarter ended June 30, 1994, and a decrease of approximately $172,000 in the net income reported for the quarter ended September 30, 1994. Future operating results will include amortization expense at the rate of approximately $20,000 per quarter over the terms (ranging from one to five years) of the related loans. CCS anticipates filing amended reports for the affected periods with the Securities and Exchange Commission to reflect this accounting change as soon as practicable.

Children's Comprehensive Services provides, either directly or through management contracts, education and treatment services for at-risk youth. It currently offers these services through the operation and management of special education schools and both open and secured residential treatment centers for local, state and federal government agencies in Alabama, California, Louisiana and Tennessee.

CONTACT: Children's Comprehensive Services Inc.

Donald B. Whitfield, 615/896-3100