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EMPLOYEE BENEFIT PLANS REPORTS THIRD-QUARTER RESULTS; COMMENTS ON OUTLOOK

 EMPLOYEE BENEFIT PLANS REPORTS THIRD-QUARTER RESULTS;
 COMMENTS ON OUTLOOK
 MINNEAPOLIS, April 13 /PRNewswire/ -- Employee Benefit Plans (NYSE: EBP) today reported financial results for the third quarter and nine months ended Feb. 29. In addition, the company commented on expected operating margins for the next three to four quarters.
 Revenues for the quarter ended Feb. 29 were $57.5 million, compared with $44.6 million a year ago, a 28.9 percent increase. Operating earnings were $6.0 million, compared with $5.5 million in the 1991 period, a 9 percent increase. EBP's third-quarter net earnings were $2.8 million, or $.34 per share, compared with earnings before extraordinary item of $3.2 million, or $.40 per share, a year ago.
 Revenues for the first nine months of fiscal 1992 were $161.5 million, compared with $118.3 million in 1991. Nine-month operating earnings were $18.9 million, compared with $13.8 million in the first nine months of 1991. Nine-month net earnings were $8.9 million, or $1.08 per share, compared with earnings before extraordinary item of $7.8 million, or $1.07 per share, last year.
 EBP's third-quarter client base grew to 2,525, representing 568,200 covered employees. This compares with 2,200 clients and 496,400 employees in the year-earlier period. The chart below demonstrates EBP's quarterly client growth since February 1991:
 February November August May February
 1992 1991 1991 1991 1991
 Client Base(a) 2,525 2,302 2,363 2,261 2,200
 Reinsurance 2,028 2,000 2,007 1,911 1,858
 Managed Care 1,629 1,370 1,372 1,298 1,285
 Though the company said it expects annual revenue growth of 15 percent to 20 percent, the competitive climate in the health care industry has resulted in slower growth in several of EBP's markets. EBP is committed to expanding both its four core product lines and sales distribution system, not only to increase revenue from its current customer base, but also to generate incremental revenue from prospective clients. Acquisitions of local and regional third-party administrators also will be a component of the company's growth plans.
 The third-quarter reinsurance loss ratio was 56.8 percent, compared with 50.2 percent for the same quarter last year. The loss ratio for the first nine months of fiscal 1992 was 53.8 percent, compared with 50.1 percent for the year-earlier period. The higher loss ratio is due to both increased competition in certain markets, which puts downward pressure on pricing, and a greater incidence of large claims.
 To maintain growth in the face of increased competition and higher expenditures to support and expand its sales, managed care and claims processing functions, the company said operating margins will be lower for the next three to four quarters.
 EBP, headquartered in Minneapolis, is a leader in designing and managing self-funded employee benefit programs for companies throughout the United States.
 (a) Segment client data overlap and therefore do not sum.
 EMPLOYEE BENEFIT PLANS, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended Nine Months Ended
 2/29/92 2/28/91 2/29/92 2/28/91
 Revenues:
 Managed health care $19,461,252 $16,792,545 $54,632,708 $43,048,144
 Reinsurance 35,629,973 26,953,575 100,434,259 73,071,327
 Investment 2,424,511 901,449 6,495,802 2,182,323
 -- 57,515,736 44,647,569 161,562,769 118,301,794
 Operating expenses:
 Loss and loss adjustment
 expenses 20,234,039 13,526,363 54,076,641 36,694,173
 Salaries and
 benefits 10,137,332 8,012,574 28,202,824 21,005,638
 Policy acquisition
 costs 12,943,408 11,221,563 37,524,025 29,446,823
 General and
 administrative 8,117,947 6,336,526 22,775,244 17,430,536
 -- 51,432,726 39,097,026 142,578,734 104,477,170
 Earnings from
 operations 6,083,010 5,550,543 18,984,035 13,824,624
 Interest expense 1,390,567 201,773 4,085,563 533,709
 Earnings before provision
 for income taxes and
 extraordinary item 4,692,443 5,348,770 14,898,472 13,290,915
 Provision for income
 taxes 1,887,000 2,144,000 5,956,000 5,419,000
 Earnings before
 extraordinary item 2,815,443 3,204,770 8,942,472 7,871,915
 Extraordinary item -
 tax benefit resulting
 from utilization of
 loss carryforward -- 313,000 -- 3,520,000
 Net earnings $2,815,443 $3,517,770 $8,942,472 $11,391,915
 Earnings per common
 and common equivalent
 share:
 Earnings before
 extraordinary equivalent $.34 $.40 $1.08 $1.07
 Extraordinary item -- .03 -- .48
 Net earnings .34 .43 1.08 1.55
 Weighted average common and
 common equivalent shares
 outstanding 8,230,805 8,096,395 8,250,624 7,333,749
 BALANCE SHEET DATA
 2/29/92 5/31/91
 Working capital 60,240,205 41,772,266
 Total assets 200,794,973 187,767,362
 Long term debt, including
 current portion 80,735,330 76,901,449
 Shareholders' equity 79,867,470 68,909,701
 -0- 4/13/92
 /CONTACT: Lynne M. Warne of Employee Benefit Plans, 612-546-4353/
 (EBP) CO: Employee Benefit Plans, Inc. ST: Minnesota IN: HEA,INS SU: ERN


DS -- MN005 -- 7642 04/13/92 10:16 EDT
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Date:Apr 13, 1992
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