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HBO RECORDS 60 PERCENT EPS GROWTH ON 17 PERCENT REVENUE INCREASE

 HBO RECORDS 60 PERCENT EPS GROWTH ON 17 PERCENT REVENUE INCREASE
 ATLANTA, Oct. 20 /PRNewswire/ -- Healthcare information systems vendor HBO & Company (NASDAQ: HBOC) today announced increased earnings for its third quarter ended Sept. 30, 1992.
 Income from continuing operations totaled $3.7 million for the quarter -- up 74 percent over last year's third quarter and a 39 percent increase over the second quarter of 1992. Earnings per share from continuing operations were 24 cents, a healthy 60 percent increase over the prior year's third quarter and 41 percent over the prior quarter. "Domestic sales and installations of STAR systems, coupled with productivity increases and cost controls continue to drive earnings," said Chief Executive Officer Charles W. McCall. McCall added, "Revenue per employee for the last 12 months reached $118,000, the highest in the company's history."
 Additionally, the company generated record cash flow during the quarter enabling it to pay off its remaining $7 million of long-term debt by quarter-end. McCall noted, "Our goal was to be debt free by year-end, so I am pleased that we were able to beat that target."
 Revenue from continuing operations for the quarter reached $50.7 million, a 17 percent increase over the third quarter of 1991 and a 12 percent increase over the previous quarter. Continued high levels of UNIX/RISC solution installations of STAR systems spurred the revenue increase. Increased Connect Technology Group local area and wide area network installations and higher TRENDSTAR Decision Support software and HealthQuest package software sales also contributed to the higher revenue level.
 Operating expense totaled $44.9 million for the quarter, a 13 percent increase over the third quarter of 1991 and an 8 percent increase over the prior quarter. Expenses have been held in check by cost control programs initiated in mid-1991.
 Other significant developments on the domestic front during the quarter included the announcement of the availability of HBO's entire minicomputer STAR product line on Digital Equipment Corporation (DEC) computers using the VMS open operating system. HBO's software will also run on DEC's new Alpha AXP family of RISC-based processors. "Since HBO's STAR products also run on Data General and Hewlett Packard RISC processors in a UNIX environment, HBO's clients have a wide range of hardware choices," McCall observed. Further, HBO's new outsourcing business unit signed a five-year contract extension with one of its largest existing facility management customers. Lastly, HBO recently finalized its previously announced proposal to form a joint venture with Healthcare Affiliated Services, Inc., a wholly-owned subsidiary of Blue Cross of Western Pennsylvania (BCWP), to jointly offer BCWP member hospitals and others new information system products and services.
 In addition to the healthy domestic performance, several items of note took place on the international scene in the third quarter. The company signed a multi-year agreement with a group of healthcare facilities in the United Kingdom for CLINSTAR-Patient Care and TRENDSTAR Decision Support systems. The company also signed an agreement with McDonnell Douglas Information Systems Pty Ltd., of Sydney, Australia for distribution of HBO's TRENDSTAR Decision Support software. "These activities boost our international presence and momentum," noted McCall.
 For the nine months ended Sept. 30, 1992, revenue from continuing operations reached $141.4 million, an increase of 17 percent over the prior year period. Expenses for the period grew only 8 percent to $129.2 million (excluding the $10.9 million nonrecurring charge from the 1991 period's operating expense). Income from continuing operations totaled $7.7 million compared to a loss of nearly $6.9 million for the nine months ended Sept. 30, 1991. Year-to-date earnings per share were 51 cents compared to a 50-cent loss per share from continuing operations for the first nine months of 1991.
 HBO & Company delivers a wide range of patient care, clinical and financial products, as well as networking technologies, outsourcing and other services to healthcare organizations in the United States, United Kingdom, Canada, Australia and New Zealand.
 The following results are unaudited and prior period results are restated to reflect the company's discontinuance of its equipment maintenance business in 1991:
 CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
 (000s omitted, except for per-share data)
 3 mos. ended 9 mos. ended
 9/30/92 9/30/91 9/30/92 9/30/91
 Revenue $50,669 $43,354 $141,398 $120,483
 Operating expense:
 Cost of operations 27,946 23,910 81,098 70,894
 Marketing 5,400 4,747 15,562 14,490
 Research & development 4,510 4,928 14,108 14,144
 General & administrative 7,049 6,295 18,420 19,724
 Nonrecurring charge --- --- --- 10,883
 Total operating expense 44,905 39,880 129,188 130,135
 Operating income (loss) 5,764 3,474 12,210 (9,652)
 Interest expense, net 215 362 472 727
 Income (loss) from cont. opers.
 before provision (credit)
 for income taxes 5,549 3,112 11,738 (10,379)
 Provision (credit) for
 income taxes 1,887 1,012 3,991 (3,529)
 Income (loss) from cont.
 operations 3,662 2,100 7,747 (6,850)
 Income (loss) from discont.
 opers., net of income taxes
 $435 and $(313) in 1991 --- 724 --- (540)
 Net income (loss) $ 3,662 $ 2,824 $ 7,747 $ (7,390)
 Earnings (loss) per share:
 Primary:
 Continuing operations $ 0.24 $ 0.15 $ 0.51 $ (0.50)
 Discont. operations --- 0.05 --- (0.04)
 Total primary $ 0.24 $ 0.20 $ 0.51 $ (0.54)
 Fully diluted:
 Continuing operations $ 0.24 $ 0.15 $ 0.51 $ (0.50)
 Discont. operations --- 0.05 --- (0.04)
 Total fully diluted $ 0.24 $ 0.20 $ 0.51 $ (0.54)
 Weighted average shares outstanding:
 Primary 15,504 13,870 15,247 13,766
 Fully diluted 15,504 14,107 15,287 13,766
 Cash dividends declared
 per share $ 0.075 $ 0.075 $ 0.225 $ 0.225
 -0- 10/20/92
 /CONTACT: Jeanne N. Bateman, assistant treasurer/investor relations of HBO & Co., 404-393-6577/
 (HBOC) CO: HBO & Company ST: Georgia IN: CPR SU: ERN


CM-BN -- AT002 -- 2037 10/20/92 09:09 EDT
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Date:Oct 20, 1992
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