Continental Home Healthcare Announces Year-End Results; Revenues Up 39%, Reserve for Accounts Receivable Increases.

Business Editors

GLENDALE, Calif.--(BUSINESS WIRE)--May 21, 2002

Continental Home Healthcare announced today its financial results for the fourth quarter and year ended December 31, 2001.

Three months ended Dec. 31, 2001 compared with three months ended
Dec. 31, 2000

-- Revenues up 22%
                                        Q4 2001      Q4 2000
                                        -------      -------
Sales                                $8,649,457   $7,104,891
EBITDA(1) (loss)                     $(1,489,886)     $991,479
Net Income (loss)                  $(1,594,618)     $203,085
EPS (loss) - basic                      $(0.13)        $0.02
           - diluted                    $(0.13)        $0.02


Twelve months ended Dec. 31, 2001 compared with twelve months ended
Dec. 31, 2000

-- Revenues up 39%
                                       2001             2000
                                       ----             ----
Sales                           $34,048,606      $24,431,244
EBITDA                           $1,848,939       $2,865,770
Net Income (loss)                $(877,275)         $684,645
EPS (loss) - basic                  $(0.07)            $0.06
           - diluted                $(0.07)            $0.06

(1) Earnings before interest, taxes, depreciation, amortization

Robert Thornton, President and C.E.O., said "2001 marked a year of growth and change for the Company. Revenues continued to grow both in the fourth quarter and year-to-date results. However, net income substantially declined based on a significant charge relating to accounts receivable."

At year-end Continental completed a thorough review of aged receivables, which resulted in management's decision to significantly increase its accounts receivable reserve. The accounts under scrutiny are on the books as a result of acquisitions completed during 1999 and 2000, and accounts aged beyond one year. While these accounts are individually quite small in value and technically collectable, the Company believes, following a detailed analysis, that the collection costs would outweigh the benefits. Overall, these accounts serve as an impediment to the Company's current collections, which, as a result of changes in collection policies and procedures, have shown a significant improvement.

Although increasing the reserve by greater than $3 million dollars has resulted in a net loss for the year, the Company will realize operational efficiencies through the substantial reduction of its non-current accounts receivable. The Company will also recapture taxes paid for the prior year. This is a reflection of Continental's focus on liquidity and cash flow, which will improve the Company's position for future growth.

Continental experienced a 39% increase in revenues in 2001, a large portion of which came from increases in high margin, rental revenues and revenues from respiratory products and services. A key factor contributing to the increased rental and respiratory business was the acquisition of CarePoint Health Services, of Van Nuys, California and Medical Mart of Las Vegas, Nevada. "Both companies are strategically positioned in demographically strong areas for organic growth", added Mr. Thornton.

The CarePoint acquisition included a preferred provider contract with the UCLA Medical Center, one of Los Angeles' largest medical facilities, providing Continental with ongoing access to a very large patient base and referral network. The acquisition has had a positive impact on internal growth at the Glendale branch. During 2001, Continental moved all assets from the CarePoint operation into the Glendale facility. The integration will enable Continental to realize efficiencies in its product distribution systems and reduce both administrative and overhead costs.

The Medical Mart acquisition provided Continental with an expanded market share in Las Vegas and additional capabilities to service the Company's preferred provider contract with the 130,000-member, Las Vegas-based Hotel Employees and Restaurant Employees International Union Welfare Fund. In the coming months Continental will integrate its two Las Vegas locations into a new facility, creating further operational economies and the ability to offer a comprehensive product selection at one convenient location.

During the year Continental completed a private placement for proceeds of $700,000. The Company is expected to complete a subordinated debenture financing totalling $4 million during the second quarter of 2002. The proceeds will be used to augment working capital needs, which stem in part from recent acquisitions and the expectation of another year of strong internal growth.

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; Vancouver, British Columbia.

The Company's shares trade on the Toronto Stock Exchange under the symbol "CHT". Updates can be found at www.continentalhomehealth.com

For Further Information Please Contact:

Ellen Leesti or                                   [phone]
Cathy Hume                                        [phone]
Hume, Kieran Inc., Investor Relations Counsel

Robert Thornton, President & C.E.O.               [phone]
Continental Home Healthcare Ltd.

Toll free Continental investor information        1-800-286-4566