First American Health Concepts reports 32 percent rise in revenues.

PHOENIX--(BUSINESS WIRE)--Oct. 11, 1996--First American Health Concepts Inc., (NASDAQ:FAHC) reported a 32 percent increase in revenues for the fourth quarter ended July 31, 1996, fueled by a year-long investment in people and technology that has resulted in lower net earnings.

FAHC, which markets and administers third-party managed vision care plans nationwide under the trade name Eye Care Plan of America (ECPA), reported revenues of $1,551,000 for the quarter, compared to $1,172,000 in the prior year. Net income for the quarter was $74,000 or $.03 per share on 2,554,000 equivalent shares outstanding compared with $133,000 or $.05 per share for the same period in fiscal 1995.

For the fiscal year ended July 31, 1996, revenues increased 22 percent to a record $5,678,000 compared to $4,657,000 a year earlier. Net income was $359,000 or $.14 per share on 2,565,000 equivalent shares compared to $668,000 or $.25 per share a year ago.

FAHC chairman John W. Heidt said, "Management and the board remain confident the previously announced investments in quality assurance activities, integrated managed care information systems and sales infrastructure, resulting in short-term earnings sacrifices, will pay off in higher revenues and earnings growth rates. Benefits are already being felt through an improved competitive position and increased sales activity."

"ECPA's insured and self-funded plans are the fastest growing segment of our business," FAHC president and CEO John A. Raycraft said. "We expect new enrollments to accelerate as plan sponsors recognize our ability to provide significant cost-containment, quality and accessibility in ECPA benefit plans."

Revenues from the company's non-insured vision care plans increased 20 percent over 1995 reflecting the continuing popularity of those plans among value-conscious employers and consumers.

FAHC's overall financial condition and liquidity remain strong with nearly $4.2 million in cash and marketable securities. Working capital exceeds $3.7 million. Total assets were $6.7 million at July 31, 1996, up six percent from $6.3 million at July 31, 1995.

FAHC serves nearly 10 million members, an estimated 24 million people including dependents, and maintains the largest provider network of its type. -0-

                 First American Health Concepts Inc.
                        Financial Highlights

Fourth Quarter recap     Fiscal 1996    Fiscal 1995
Revenues                 $1,551,000     $1,172,000
Operating Expenses       $1,464,000     $1,050,000
Net Income               $   74,000     $  133,000
Net Income Per Share     $0.03          $0.05

Fiscal Year recap        Fiscal 1996    Fiscal 1995
Revenues                 $5,678,000     $4,657,000
Operating Expenses       $5,297,000     $3,822,000
Net Income               $  359,000     $  668,000
Net Income Per Share     $0.14          $0.25

CONTACT: Charlotte Buchen Communications, Phoenix

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