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AMERICA SERVICE GROUP ANNOUNCES SETTLEMENT OF LITIGATION

 NEW CASTLE, Del., Feb. 16 /PRNewswire/ -- America Service Group Inc. (NASDAQ-NMS: ASGR), announced that earlier today the company reached a settlement in the litigation brought in March of 1992 by one of its founders, Doyle H. Moore, arising out of the company's repurchase of Moore's shares in June of 1991.
 Under the settlement and term of dismissal of Moore's claims and the company's counterclaims, the company will pay $1.3 million to Moore. Neither ASGR nor Moore admitted any wrongdoing or liability.
 Jeffrey A. Reasons, president and chief executive officer, said, "Although we continue to believe we have meritorious defenses, the board decided to settle the claim because of continuing litigation expenses, the prolonged court process, and the need to concentrate management time on the business of health care."
 The settlement will be charged against earnings for the fourth quarter of 1992. An earnings announcement will be made in the next three weeks.
 America Service Group Inc. trades as "ASGR" on the NASDAQ National Market System. Through its subsidiaries, Prison Health Services, Inc. (PHS) and ASG Management Company, Inc. (ASGM), ASGR contracts to provide managed health care services to correctional facilities throughout the United States and to federal governmental agencies. Through its newest subsidiary, UniSource, ASGR packages and sells pharmaceutical and related products to physicians, maritime vessels and to institutions where health care services are currently being delivered through PHS and ASGM.
 /delval/
 -0- 2/16/93
 /CONTACT: Margaret O. Harrison, CFO of America Service Group, 302-888-0200/
 (ASGR)


CO: America Service Group Inc. ST: Delaware IN: HEA SU:

LJ-MJ -- PH025 -- 6954 02/16/93 16:34 EST
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Date:Feb 16, 1993
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