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ADVANTAGEHEALTH 1993 OPERATING INCOME INCREASES 31 PERCENT OVER 1992

 WOBURN, Mass., Oct. 4 /PRNewswire/ -- AdvantageHEALTH Corporation (NASDAQ: ADHC) reported today that its fourth quarter net revenue increased 20 percent to $26,484,000 vs. $22,022,000 in the same period last year. The company achieved fourth quarter net income of $1,354,000 and earnings per share of 23 cents, as previously announced.
 "For the full fiscal year the company reported a 20 percent increase in net revenues to $97,245,000," said Robert Spencer, chief financial officer. In addition Spencer said, "Patient service revenue of $83.9 million increased 19.4 percent over 1992, and management service revenue increased approximately 59 percent during the same period. The increase in our management service revenue clearly reflects the impact of the company's strategy of affiliating in a variety of ways with tertiary hospitals, community hospitals and health systems in New England. Further the company's income from operations increased 31 percent to $11,189,000 vs. $8,551,000 last year. Fiscal 1993 net income increased 33.5 percent to $6,454,000 and earnings per share increased 10.3 percent to $1.07 per share (before a one time, non-cash extraordinary charge incurred in 1992)." Spencer attributed the revenue and earnings gains primarily to increased volume at the company's outpatient facilities, reduced interest costs, and an increased level of visits from the home health division.
 Raymond J. Dunn, chairman and CEO said, "We are confident that the company's regional growth strategy will allow us to continue to expand and capitalize on our already existing alliances with 18 major tertiary and dominant community hospitals in New England. The demand for rehabilitation services remains exceptionally strong as the company experienced record levels of referrals, admissions, and discharges during 1993. On a year-to-date basis during 1993, inpatient days increased 4.2 percent to 171,608 days and outpatient treatments increased 59 percent to 718,344 treatments. We fully expect to maintain our focus on the rapid growth of our outpatient services, as well as to concentrate on the closing of new strategic alliances with strong regional health care networks, many of which are currently under development."
 AdvantageHEALTH Corporation operates the largest network of comprehensive medical rehabilitation facilities in New England. The company currently employs in excess of 3,300 employees at 69 locations in seven states.
 ADVANTAGEHEALTH CORPORATION AND SUBSIDIARIES
 Consolidated Statements of Income
 (dollar amounts in thousands, except share and per share data)
 Three Months Ended
 Aug. 31, 1993 Aug. 31, 1992
 (unaudited) (unaudited)
 Revenues:
 Net patient service revenue $22,988 $18,805
 Management service revenue 2,047 1,557
 Other operating revenue 1,449 1,660
 Total 26,484 22,022
 Expenses:
 Operating and administrative
 expenses 22,800 17,967
 Interest expense 355 409
 Depreciation and amortization 794 636
 Total 23,949 19,012
 Income from Operations 2,535 3,010
 Nonoperating gains (losses):
 Income on investments in
 limited partnerships and
 other affiliates 23 (83)
 Minority interest in net
 income of subsidiary (22) (8)
 Total 1 (91)
 Income before taxes 2,536 2,919
 Income taxes 1,182 1,252
 Net Income $1,354 $1,667
 Net income applicable
 to common stock $1,354 $1,667
 Net income per share 23 cents 28 cents
 Weighted average common and
 common share equivalents
 outstanding 6,000,064 6,043,181
 ADVANTAGEHEALTH CORPORATION AND SUBSIDIARIES
 Consolidated Statements of Income
 (dollar amounts in thousands, except share and per share data)
 Year Ended
 Aug. 31, 1993 Aug. 31, 1992
 Revenues:
 Net patient service revenue $83,887 $70,240
 Management service revenue 7,460 4,452
 Other operating revenue 5,898 6,068
 Total 97,245 80,760
 Expenses:
 Operating and administrative
 expenses 81,787 67,043
 Interest expense 1,477 2,829
 Depreciation and amortization 2,792 2,337
 Total 86,056 72,209
 Income from operations 11,189 8,551
 Nonoperating gains (losses):
 Income on investments in
 limited partnerships and
 other affiliates 436 169
 Minority interest in income
 of subsidiary (61) (32)
 Total 375 137
 Income before taxes and
 extraordinary item 11,564 8,688
 Income taxes 5,110 3,854
 Income before extraordinary item 6,454 4,834
 Extraordinary item, net of tax
 benefit of $356 --- 527
 Net income $6,454 $4,307
 Net income applicable to common
 stock, after deduction of
 preferred stock dividends $6,454 $4,227
 Income per share before
 extraordinary item $1.07 97 cents
 Extraordinary item per share --- (11 cents)
 Net income per share $1.07 86 cents
 Weighted average common and
 common share equivalents
 outstanding 6,035,038 4,897,011
 Summary Financial Results
 (in thousands, except share and per share data)
 Three Months Ended Year Ended
 Aug. 31, Aug. 31, Aug. 31, Aug. 31,
 1993 1992 1993 1992
 Net revenues $26,484 $22,022 $97,245 $80,760
 Net income $1,354 $1,667 $6,454 $4,834(a)
 Weighted average
 common & common
 equivalent shares
 outstanding 6,000,064 6,043,181 6,035,038 4,897,011
 Earnings per share 23 cents 28 cents $1.07 97 cents(a)
 (a) Denotes before extraordinary item.
 AdvantageHEALTH Corporation and Subsidiaries
 Condensed Consolidated Balance Sheets
 (in thousands, except share and per share data)
 Aug. 31, Aug. 31,
 1993 1992
 Current Assets:
 Cash and cash equivalents $14,344 $17,977
 Accounts receivable, less
 allowances of $1,445 and $1,842
 for uncollectible accounts,
 respectively 16,720 11,225
 Prepaid expenses and other
 current assets 4,695 2,614
 Total current assets 35,759 31,816
 Property, plant & equipment, net 22,511 20,195
 Other Assets:
 Goodwill, less accumulated
 amortization of $3,294 and
 $2,344, respectively 27,000 25,446
 Deferred financing costs, less
 accumulated amortization of $499
 and $284, respectively 1,226 1,382
 Investments in limited partnerships
 and other affiliates, and other
 assets 3,074 2,228
 Total $89,570 $81,067
 Current Liabilities:
 Accounts payable and
 accrued expenses $4,202 $3,304
 Accrued compensation, amounts
 withheld and related payroll taxes 4,623 3,515
 Income taxes payable 3,040 2,098
 Amounts payable to third party
 payors 1,758 3,039
 Current portion of long-term
 debt 3,879 2,107
 Total current liabilities $17,502 $14,063
 Long-term debt, less current
 portion 22,975 23,383
 Deferred income taxes and other 1,785 1,799
 Stockholders Equity:
 Preferred stock, 1 cent par value;
 authorized 5,000,000 shares; none
 issued --- ---
 Common stock, 1 cents par value;
 authorized 15,000,000 shares;
 issued and outstanding 6,044,094
 shares in 1993 and 5,749,364 in
 1992 60 57
 Class B common stock, nonvoting
 1 cent par value; authorized
 1,440,000 shares; none issued --- ---
 Additional paid-in capital 40,071 40,101
 Retained earnings 8,118 1,664
 Total capital and retained
 earnings 48,249 41,822
 Less treasury shares, 75,000
 at cost (941) ---
 Total stockholders equity 47,308 41,822
 Total $89,570 $81,067
 -0- 10/4/93
 /CONTACT: Raymond J. Dunn, chairman and CEO of AdvantageHEALTH, 617-935-2500/
 (ADHC)


CO: AdvantageHEALTH Corporation ST: Massachusetts IN: HEA SU: ERN

DJ-JL -- NE021 -- 8557 10/04/93 17:18 EDT
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Date:Oct 4, 1993
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