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CYCARE SYSTEMS INC. COMPLETES SALE OF DIVISION, APPROVES RESTRUCTURING CHARGE AND STOCK REPURCHASE PROGRAM

 SCOTTSDALE, Ariz., Nov. 10 /PRNewswire/ -- CyCare Systems Inc. (NYSE: CYS) today announced that it has completed the sale of substantially all of the assets and certain liabilities of its Practice Management Division to Medaphis Corp. (NASDAQ: MEDA) for $24 million in cash. In conjunction with the sale, the board of directors also approved a fourth-quarter charge of $11.9 million primarily related to its decision to focus the company's efforts on those products and services perceived to be most attractive to the healthcare marketplace. In addition, the company's board of directors has authorized the repurchase of up to 1.25 million shares of its common stock to be purchased in the open market from time to time at prevailing market prices.
 As a result of the sale, the company will operate fewer offices, eliminate certain product lines, and reduce corporate overhead.
 The company plans to write down certain assets and establish reserves for related expenses when reporting fourth-quarter results.
 Jim Houtz, chairman and chief executive officer of CyCare Systems, said, "With the sale of the Practice Management Division and a more simplified cost structure, we will be more focused on our core Group Practice and electronic claims processing businesses, allowing us to concentrate our energies and resources on those areas where we hold a leading market position."
 Houtz concluded, "The proceeds of the sale will be used to pay down debt, repurchase stock, and increase working capital. Moving forward with a stronger balance sheet and a more focused strategic direction, the company is well positioned for long-term growth and profitability."
 CyCare Systems Inc. is one of the nation's leading providers of information systems and services to the healthcare industry, including medical group practices and physicians.
 -0- 11/10/93
 /CONTACT: Mark Schonau, CFO of CyCare Systems, 602-596-4374; or Eugene G. Heller of Silverman Heller Associates, 310-208-2550/
 (CYS MEDA)


CO: CyCare Systems Inc.; Medaphis Corp. ST: Arizona IN: CPR SU: TNM

EH-JB -- LA020 -- 2745 11/10/93 12:04 EST
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Publication:PR Newswire
Date:Nov 10, 1993
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