CONCENTRA MANAGED CARE, INC. Announces First-Quarter 1998 Financial Results.

BOSTON--(BW HealthWire)--April 30, 1998--

Revenues up 36%; operating income increases 59%; and net income rises 48% over the first quarter last year before non-recurring charge

Concentra Managed Care, Inc. (Nasdaq/NM:CCMC) today announced that revenues for the first quarter ended March 31, 1998, increased 36% to $145,544,000, compared with revenues of $107,142,000 for the three months ended March 31, 1997. Operating income for the first quarter of 1998 increased 59% to $21,772,000, from $13,712,000 for the same period last year.

Net income for the three months ended March 31, 1998, rose 48% to $10,447,000, or $0.22 per diluted share, compared with pro forma net income of $7,080,000, or $0.15 per diluted share, for the same period last year.

These results do not include a non-recurring charge of $12,600,000 ($9,600,000 after-tax or $0.20 per diluted share) taken in the first quarter of 1998 for fees, expenses and restructuring charges primarily associated with the February 24, 1998 acquisition of Preferred Payment Systems.

"We have had a very strong beginning to the year in two critical areas - product line expansion and sales," said Donald J. Larson, Chairman and Chief Executive Officer. "Our February acquisition of Preferred Payment Systems has continued to expand our opportunities to cross-sell services to our existing customer base and futher develop our product line in the group healthcare marketplace. The unique cross-selling opportunities represented by our expanded product lines will further enhance our ability to grow our business and continue our financial success. Our unmatched capability to provide fully integrated services across the entire episode of care has earned us the highest regard and confidence among our customers and shareholders, which is reflected in our strong first quarter financial performance."

Concentra Managed Care is the leading provider and comprehensive outsource solution for cost containment and fully integrated care management in the occupational, auto, and group healthcare markets. Concentra offers prospective and retrospective services to employers and insurers of all sizes, providing pre-employment testing, loss prevention services, first report of injury, injury care, specialist networks and specialized cost containment to the disability and automobile injury markets. The company has 130 field case management offices, with approximately 1,350 field case managers who provide medical management and return to work services in 49 states, the District of Columbia, and Canada. The company also has 83 service locations that provide specialized cost containment services including utilization management, telephonic case management, and retrospective bill review. Under the name Concentra Medical Centers, the Company operates the nation's largest network of occupational healthcare centers, currently managing the practices of 261 physicians located in 145 centers in 39 markets in 20 states. -0-

This press release contains certain forward-looking statements, which the Company is making in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and that the company's actual results may differ materially from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the potential adverse impact of governmental regulation on the company's operations, and interruption in its data processing capabilities, operational, financing and strategic risks related to the company's growth strategy, possible fluctuations in quarterly and annual operations, and interruption in its data processing capabilities, possible legal liability for adverse medical consequences, competitive pressures, adverse changes in market conditions for the company's services, and dependence on key management personnel. Additional factors include those described in the company's Securities and Exchange Commission filings.

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                     Concentra Managed Care, Inc.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
          FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                              (UNAUDITED)

                                            1998             1997
                                      ---------------   -------------
REVENUES:
  Field case management                 $  41,840,000   $  32,389,000
  Specialized cost containment             44,379,000      28,370,000
                                        -------------   -------------
    Managed care services                  86,219,000      60,759,000
  Health services                          59,325,000      46,383,000
                                        -------------   -------------
    Total revenues                        145,544,000     107,142,000
COST OF SERVICES:
  Managed care services                    64,758,000      47,357,000
  Health services                          46,288,000      35,805,000
                                        -------------   -------------
    Total cost of services                111,046,000      83,162,000
                                        -------------   -------------
    Total gross profit                     34,498,000      23,980,000
General and administrative expenses        10,699,000       9,033,000
Amortization of intangibles                 2,027,000       1,235,000
Non-recurring charge                       12,600,000            --
                                        -------------   -------------
    Operating income                        9,172,000      13,712,000
Interest expense                            3,882,000       2,427,000
Interest income                              (233,000)       (851,000)
Other, net                                    109,000         327,000
                                        -------------   -------------
    Income before income taxes              5,414,000      11,809,000
Provision for income taxes                  4,567,000       4,106,000
                                        =============   =============
Net income                              $     847,000   $   7,703,000
                                        =============   =============

Pro forma net income (1)                                $   7,080,000
                                                        =============
Basic pro forma and
 actual earnings per share (1)          $        0.02   $        0.17
                                        =============   =============

Weighted average common
 shares outstanding                        44,939,000      42,383,000
                                        =============   =============

Diluted pro forma and actual
 earnings per share (1)                 $        0.02   $        0.15
                                        =============   =============
Weighted average common shares and
 equivalents outstanding                   47,769,000      46,309,000
                                        =============   =============

     (1) Net income and earnings per share for the three months ended
March 31,1997 have been calculated as if Preferred Payment Systems,
Inc. ("PPS") had been subject to federal and state income taxes for
the entire period, based upon an effective tax rate indicative of the
statutory rates in effect. Prior to its acquisition by the company
during the first quarter of 1998, PPS elected to be taxed as an S
corporation, and accordingly, was not subject to federal and state
income taxes in certain jurisdictions.

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                      Concentra Managed Care, Inc.
                      CONSOLIDATED BALANCE SHEETS
                              (UNAUDITED)

                                           March 31,     December 31,
                                             1998           1997
                                       --------------- --------------
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents             $  95,660,000   $  12,576,000
  Accounts receivable, net                110,994,000     106,963,000
  Prepaid expenses, tax assets
   and other current assets                27,314,000      26,212,000
                                        -------------   -------------
   Total current assets                   233,968,000     145,751,000
Property and equipment, at cost           115,315,000     104,054,000
  Less: Accumulated depreciation
   and amortization                       (42,142,000)    (38,351,000)
                                        -------------   -------------
   Net property and equipment              73,173,000      65,703,000
Goodwill and other intangible
 assets, net                              262,473,000     262,592,000
Other assets                               12,753,000       8,925,000
                                        -------------   -------------
                                        $ 582,367,000   $ 482,971,000
                                        =============   =============

LIABILITIES AND STOCKHOLDERS'  EQUITY
CURRENT LIABILITIES:
  Revolving credit facilities           $           0   $  49,000,000
  Current portion of long-term debt           459,000       7,497,000
  Accounts payable, accrued income
   tax and expenses                        61,473,000      52,136,000
                                        -------------   -------------
    Total current liabilities              61,932,000     108,633,000

Long-term debt, net of current portion    297,922,000     150,103,000
Deferred income taxes and other
 liabilities                               17,445,000      17,794,000

STOCKHOLDERS' EQUITY :
  Common stock                                465,000         436,000
  Paid-in capital                         256,258,000     257,022,000
  Retained deficit                        (51,655,000)    (51,017,000)
                                        -------------   -------------
    Total stockholders' equity            205,068,000     206,441,000
                                        -------------   -------------
                                        $ 582,367,000   $ 482,971,000
                                        -------------   -------------

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CONTACT: Concentra Managed Care, Inc.

Joseph F. Pesce, CFO

[phone], Ext. 5101