DRCA Medical Corporation Reports Increased Nine Month Revenues On Increases From Orthopedics-Related Services.

HOUSTON--(BUSINESS WIRE)--Nov. 14, 1996--DRCA Medical Corporation (AMEX: DRC) announced today it reported a 12% increase in revenues from orthopedics-related services as compared to the third quarter last year.

Nine month revenues from orthopedics-related services rose 51% as compared to the first nine months of 1995. DRCA has expanded its orthopedically-related services to include general orthopedics, spine surgery, interventional radiology, physical medicine and rehabilitation, and pain management services; all of which contributed to the three and six month increases in orthopedics-related revenue. Revenues reflect the initial results of the company's entry into the Physician Practice Management ("PPM") market as a consolidator of orthopedic and orthopedics-related medical practices. The company is actively pursuing an expansion strategy based on practice acquisitions.

Overall, nine month revenues rose $474,083 (4%) to $12,264,848. Three month revenues declined by $166,239 (4%) to $4,063,467. Earnings for the nine and three month periods were $359,034 ($0.05 per share) and $79,781 ($0.01 per share) as compared to $686,404 ($0.13 per share) and $160,230 ($0.03 per share) in the prior year, respectively. Revenue comparisons in both the nine and three month periods were negatively impacted as a result of the sale of a wholly-owned subsidiary in March, 1996 and the discontinuance of the operations of one occupational medicine clinic in November, 1995. Year-to-date operating costs were impacted by non-capitalized legal and accounting costs associated with the private placement of preferred stock, expenses incurred in conjunction with the sale of the subsidiary, and an increase in the provision for doubtful accounts arising from revised estimates of collectibility due to reductions in reimbursement rates from certain of the company's payors. Earnings per share, as compared to 1995, were reduced by approximately 12% due to the dilutive effect of the issuance of $2.5 million of cumulative convertible preferred stock in June, 1996. Proceeds of the private placement are invested short-term and are being used primarily to support the company's acquisition strategy.

DRCA Medical Corporation is a Physician Practice Management company specializing in the development of an integrated orthopaedic network and musculoskeletal-related healthcare delivery system.

CONTACT: DRCA Medical Corporation

Jose E. Kauachi, Chairman & CEO 

713/439-7511

Fax: [phone]