Continental Home Healthcare Acquires Assets of Medical Mart.

Business Editors

GLENDALE, Calif.--(BUSINESS WIRE)--June 26, 2001

Continental Home Healthcare Ltd. today announced the acquisition of substantially all the assets of Medical Mart of Las Vegas, Nevada, a home medical business with current annual revenues of US$1.4 million. Continental acquired the assets and liabilities of the company with no cash payments for a net purchase price of US$180,000 in debt. The purchase price is likely to be reduced further as a result of negotiations concerning vendor agreements. The principal and founder of Medical Mart, Tom Gray, will remain with Continental to continue to deliver the high level of patient care and service for which he and Medical Mart are renowned.

The business is strategically located across the street from Las Vegas's largest medical facility, the Columbus/Sunrise Hospital, and has excellent retail exposure and constant walk-in traffic as a result. Medical Mart has operated successfully in Las Vegas for 19 years and specializes in rehabilitation products and supply of ostomy, urological and woundcare products, areas that will augment the current product offering from the Las Vegas branch. The expanded product offering through the acquired supply line provides additional marketing opportunities to Continental's preferred provider contract with the 130,000-member, Las Vegas-based, Hotel Employees and Restaurant Employees International Union Welfare Fund. In addition, the company has a large contract with Pacific Care, an insurance organization, to provide rehabilitative products and supplies to its customers.

Robert Thornton, President and C.E.O., said the Medical Mart acquisition will be immediately accretive to earnings per share as the company is exposed to Continental's large patient base and existing contracts, has access to the volume discounts available through Continental's buying network and vendor supply agreements, and reduces administrative costs and overhead achieved through economies of scale. He added that Tom Gray's exceptional reputation and extensive market knowledge coupled with a much larger product line should enable significant and rapid growth at the Las Vegas branch.

The home medical equipment business is highly fragmented and management will continue to seek out strategic acquisitions which add to Continental's extensive product offering, provide geographic distribution and offer other significant opportunities for profitable growth. The industry is supported by a demographic shift of the aging North American population. As a result, the industry is forecast to grow at 12-14% into 2005. In addition, the Company anticipates strong internal growth during the remainder of the year. As the Company moves into the second half of fiscal 2001 the outlook remains positive.

Continental Home Healthcare Ltd. acquires, consolidates and manages healthcare equipment retailers that provide equipment such as hospital beds, custom power and manual wheelchairs, scooters, respiratory products and services, bathroom safety products, ambulatory aids, and aids for daily living sold to individuals and healthcare institutions. Branches are located in Glendale and Indian Wells, California; Las Vegas, Nevada; Penticton and Vancouver, British Columbia.

The Company's shares trade on the Toronto Stock Exchange under the symbol "CHT". Current Company updates can be found at the web site: www.continentalhomehealth.com If you wish to receive company press releases via email, please advise Christina Osler at [e-mail]