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COMMUNITY PSYCHIATRIC CENTERS SUSPENDS DIVIDEND

 LAGUNA HILLS, Calif., April 29 /PRNewswire/ -- The board of directors of Community Psychiatric Centers (NYSE: CMY) has suspended payment of the corporation's dividend, it was announced today. The board adopted this policy in order to assist the company with funding for the optimal expansion of Transitional Hospitals Corp. (THC), the company's new long-term acute care subsidiary.
 CPC Chairman and Chief Executive Officer Richard L. Conte, said, "The board firmly believes that significant opportunities exist within the long-term acute care market which may be lost to THC unless they are aggressively pursued. THC has the potential to become one of the market leaders in this fledgling sector and in the process to produce excellent returns for its shareholders. Inevitably, optimal expansion of THC will require substantial short- term funding. It would be imprudent to use the company's resources to pay a dividend if this were to inhibit the opportunity for capital growth, or alternatively, require additional borrowing. Over the next 18 months we are focusing on the creation of THC units in existing CPC psychiatric hospitals, renovation of recent THC acquisitions in Tampa and Las Vegas, and acquisitions in markets where we currently do not own facilities. We are very optimistic about our future in this fast-growing area of health care, and our board is committed to the development of THC to its full potential as rapidly as possible."
 Although CPC reported a loss and a restructuring charge for its first quarter ended Feb. 28, 1993, a major cost-reduction program implemented in its U.S. psychiatric hospital division has already returned the hospital group to profitability in the month of March.
 CPC chose to diversify beyond psychiatric care in 1992 to seek opportunities for new growth potential and to make better use of its physical assets, which are likely to remain underutilized by the company's core business. In May 1992, CPC launched THC, opened its first two units at the end of that year and acquired its first two freestanding facilities in March and
April 1993. The company is also expanding its psychiatric business in the United Kingdom, where it recently opened its seventh hospital and has commenced construction on its eighth; and has numerous smaller projects in psychiatric treatment and kidney dialysis underway as well.
 CPC delivers psychiatric and long-term acute care services through a network of 53 facilities in the United States, Puerto Rico and the United Kingdom. The company's stock is traded on the New York, Boston, Midwest and Pacific exchanges.
 -0- 4/29/93
 /CONTACT: Suzanne S. Hovdey of Community Psychiatric Centers, 714-831-1166/
 (CMY)


CO: Community Psychiatric Centers ST: California IN: HEA SU: DIV

JL-BP -- LA016 -- 2469 04/29/93 09:03 EDT
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Publication:PR Newswire
Date:Apr 29, 1993
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