HealthWise of America reports record third quarter earnings.

NASHVILLE, Tenn.--(BUSINESS WIRE)--Oct. 26, 1995--For the quarter ended Sept. 30, 1995, HealthWise of America's operating revenues were $53.7 million compared to operating revenues of $41.5 million for the comparable quarter in 1994, an increase of 29%.

Net income for the quarter was $2.2 million, or $.33 per share, compared with earnings of $1.8 million, or $.28 per share for 1994, a per share increase of 18%.

For the nine months ended Sept. 30, 1995, the company's operating revenues were $153.3 million compared to operating revenues of $119.8 million for the same nine months of 1994. This was an increase of 28%. Net income for the nine months ended Sept. 30, 1995, was $6.2 million, or $.93 per share, compared with earnings of $4.8 million, or $.76 per share for the same nine months for 1994, a per share increase of 22%.

"We are pleased with the quarter's and the year-to-date's performance," said Ken Melkus, HealthWise's chairman and chief executive officer. Melkus added, "While we experience strong growth and profitability, we continue to commit substantial resources to developing and marketing new products and to absorbing the start-up losses of our new HMOs."

HealthWise completed the third quarter with approximately 139,000 members compared with 106,000 for the comparable quarter ended in 1994, or 31% growth.

Melkus added, "While competitive efforts continue to grow, we are enthusiastic about the future of managed care and are positioning the company to take advantage of these opportunities. We believe proposals for Medicare reform currently under consideration by Congress will benefit managed care organizations such as HealthWise. Our Medicare-risk product in Baltimore is progressing well with additional enrollment gains expected for fiscal year 1996. Expansion of this product to other HealthWise markets is a priority for next year."

HealthWise of America operates HMOs in Kentucky, Maryland, Tennessee and Arkansas, and recently received approval to begin operations in Virginia. The company is traded on the Nasdaq Stock Market (National Market) under the symbol HOAM. -0-

                HealthWise of America, Inc. and Subsidiaries
                      Consolidated Statements of Income
                   (in thousands, except per share amounts)
                                (unaudited)

                            Three Months Ended    Nine Months Ended
                             9/30/95   9/30/94    9/30/95   9/30/94
Operating Revenues:
 Managed care premiums      $ 53,187  $ 40,944  $ 152,291  $ 117,897
 Management services             469       543      1,020      1,856
 Total operating revenues     53,656    41,487    153,311    119,753

Expenses:
 Medical services costs       41,423    31,976    118,654     91,670
 Selling, general and
  administrative               8,079     6,076     23,079     16,719
 Depreciation and amortization   273       217        828        429
 Total expenses               49,775    38,269    142,561    108,818
Operating income               3,881     3,218     10,750     10,935
Investment and other income      703       684      2,426      1,764
Interest expense                (232)     (385)      (798)      (535)
Income before income taxes
 and minority interests        4,352     3,517     12,378     12,164
Provision for income taxes    (1,540)   (1,131)    (4,314)    (3,069)
Minority interests in
 earnings of partnerships
 and consolidated subsidiary    (595)     (618)    (1,855)    (4,296)
Net income                    $2,217    $1,768     $6,209     $4,799
Weighted average number of
 common and common
 equivalent shares             6,727     6,340      6,702      6,350
Net income per share           $0.33     $0.28      $0.93      $0.76

CONTACT: HealthWise of America, Nashville

Ken Melkus, Harold Simpson, 615/385-4666