CompScript, Inc. announces third quarter results.

BOCA RATON, Fla.--(BUSINESS WIRE)--Nov. 21, 1996--CompScript, Inc. (Nasdaq Small Cap Issues: CPRX), a comprehensive provider of integrated pharmacy management services, today announced financial results for the three and nine month periods ended September 30, 1996. Results for the three and nine month periods of 1996 have been restated to reflect the acquisitions of Delta Pharmacy, Inc. and SecuRx, Inc., each of which were accounted for as a pooling of interest (See attached table).

For the three months ended September 30, 1996, revenues increased 18.3% to $5,304,280 from $4,483,493 for the same period in 1995. The Company reported an operating loss for the quarter of $199,919, which includes $301,673 in pre-tax costs associated with the acquisitions of Delta Pharmacy Services, Inc. and SecuRx, Inc., versus operating income of $212,973 for the same period last year. As a result, the Company posted a net loss for the quarter of $138,887, or $.01 per share, versus net income of $98,813, or $.03 per share, for the comparable prior year period.

For the nine months ended September 30, 1996, revenues increased 47.1% to $15,616,688 from $10,615,765 for the same period in 1995. Operating income for the 1996 nine month period was $30,274, which includes the aforementioned pre-tax acquisition costs, as compared to $286,128 for the comparable 1995 period. Net income for the 1996 nine month period was $50,657, or $.01 per share, versus net income of $81,762, or $.03 per share, for the same period last year.

Management noted that were it not for the $301,673 in pre-tax acquisition costs, net income for the three and nine month periods ended September 30, 1996 would have been approximately $49,000, or less than $.01 per share, and approximately $239,000, or $.03 per share, respectively.

Operating results for the 1996 three and nine month periods also include approximately $292,583 and $970,113, respectively, which was expensed relating to the development of the Company's mail order and pharmacy benefit management divisions, as well as approximately $95,421 and $193,549, respectively, in expenses related to software development and executive staffing. Also of note, there were approximately 7.8 million and 4.0 million additional shares outstanding during the 1996 three and nine month periods, respectively, over the comparable 1995 periods. This is primarily the result of the issuance of 7,394,983 shares of common stock in April 1996 in connection with the reverse merger with Capital Brands, Inc.

Strong Internal Growth

Brian A. Kahan, Chairman and Chief Executive Officer of CompScript, Inc., commented, "Revenue increases for the three and nine month periods were primarily attributable to internal growth as a result of increased marketing efforts to the Company's current customer base as well as new clients, and the growth and integration of new and existing products and services. In this regard, notwithstanding the pooling of interest from the acquisition of Delta Pharmacy and SecuRx, revenues generated by ongoing operations for the 1996 three and nine month periods increased 6.4% and 13.2%, respectively, over the comparable prior year periods to $2,854,315 and $8,922,424.

"Reflective of CompScript's internal growth, in response to increased customer demand we have signed a lease agreement to open an institutional pharmacy in Tampa, Florida. This new facility, which is scheduled to open in January 1997, will provide pharmacy and pharmacy related services to long-term care and sub-acute care facilities in the Tampa area. We also expect to realize significant internal growth through the development of the Company's pharmacy benefits management and mail order divisions. While currently approximately 28% of overall revenues, we believe that these new divisions, which offer attractive growth potential, will account for 50% of revenues within the next year. In this same vein, we view the costs associated with the hiring of personnel and updating and enhancing our software programs as investments in our future growth, as each will facilitate the Company's ability to expand its industry presence both internally and through strategic, synergistic acquisitions.

"Selling, general and administrative expenses as a percentage of revenues decreased to 38.1% and 37.8%, respectively, for the 1996 three and nine month periods from 38.3% and 43.5% in the comparable prior year periods. These decreases are the result of our ongoing efforts to leverage corporate overhead over a larger revenue base. Excluding the acquisition costs, lower operating margins for the 1996 three and nine month periods reflect an increase in lower margin mail order sales attributable to the acquisition of SecuRx. We are integrating our purchasing strategy in connection with both the Delta and SecuRx acquisitions in order to reduce cost of sales."

Strategic Acquisitions Continue

Mr. Kahan continued, "In a highly fragmented industry, CompScript continues to pursue strategic, synergistic acquisitions as an avenue of growth. In this regard, during the third quarter we completed the acquisition of SecuRx, Inc., a mail-order pharmacy company with annualized revenues of approximately $4 million. In November, we announced a letter of intent to acquire Medical Services Consortium, Inc. ("MSC"), a Florida-based provider of institutional pharmacy and related services with 1996 annualized revenues of approximately $9 million. Coupled with the May 1996 acquisition of Mobile, Alabama- based Delta Pharmacy Services, Inc., the acquisition of MSC, assuming completion, will significantly strengthen CompScript's presence in the southeastern United States and would represent our Company's third acquisition since going public in April 1996. Assuming the successful completion of MSC, CompScript's current annualized revenue run rate is approximately $30 million.

In closing, Mr. Kahan stated, "We have taken several significant steps towards our goal of evolving into a one-stop-shopping provider of pharmacy management services. Our new $5 million credit facility with SunTrust Bank provides the necessary access to capital to assist us in implementing our growth strategy, while our strengthened senior management team and expanded infrastructure will allow us to explore the numerous opportunities which exist in our industry."

This press release contains forward looking statements which involve numerous risks and uncertainties. Actual results could differ materially from those anticipated in such forward looking statements as a result of certain factors, including those set forth in the Company's filings with the Securities and Exchange Commission. CompScript, Inc. is a comprehensive provider of pharmacy management services to managed care networks, long-term and sub-acute care facilities, home health patients and recipients of managed care. These services include pharmacy benefits management, infusion therapy, mail order and consulting. -0-

                    CompScript, Inc. and Subsidiaries
             Consolidated Condensed Statements of Operations
                               (unaudited)

                             Three months ended      Nine months ended
                                September 30,           September 30,

                             1996        1995       1996        1995

Sales                     $5,304,280  $4,483,493 $15,616,688  $10,615,765
Cost of sales              3,179,730   2,553,598   9,383,573    5,711,652
Gross profit               2,124,550   1,929,895   6,233,115    4,904,113
Selling, general and
  administrative expenses  2,022,796   1,716,922   5,901,168    4,617,985
Merger costs                 301,673           -     301,673            -
Operating (loss) income     (199,919)    212,973      30,274      286,128
Other:
Interest and other
    income                     2,524       7,184      21,372       17,430
Interest expense             (39,158)    (33,748)    (91,518)     (67,581)
(Loss) Income before
  income taxes
  and minority interest     (236,553)    186,409     (39,872)     235,977

Benefit (provision) for
  income taxes                88,708     (87,596)     77,007     (154,215)
Minority interest in net
  loss of subsidiary           8,958           -      13,522            -

Net (loss) income          $(138,887)    $98,813     $50,657      $81,762

Net (loss) income
  per share                    $(.01)       $.03        $.01         $.03

Weighted average common
  and common equivalent
  shares used in
  computation of
  per share data          10,678,120   2,893,860   6,958,598    2,893,860

CONTACT: CompScript, Inc.

Brian A. Kahan

Chief Executive Officer

561/994-8585

or

INVESTOR RELATIONS COUNSEL:

The Equity Group Inc.

Devin Sullivan, 212/836-9608

Robert Goldstein, 212/371-8660