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HEALTH MANAGEMENT SYSTEMS, INC. REPORTS RECORD REVENUE AND EARNINGS IN 1993 SECOND QUARTER

 NEW YORK, June 1 /PRNewswire/ -- Health Management Systems, Inc. (NASDAQ: HMSY) today announced fiscal 1993 second quarter results reflecting record levels of revenue, operating profitability and net income.
 HMSY's second quarter revenue of $10.858 million exceeded revenue realized for the comparable prior year period by 18 percent, and represented the fourth consecutive quarter of revenue growth. HMSY's three propriety service offerings (RCR(SM), CAMS(SM), and TPLR(SM) accounted for 83 percent of consolidated revenue, and grew 24 percent from the second quarter of fiscal 1992. First half revenue of $21.419 million grew 16 percent from the comparable prior year reporting period, while revenue attributable to the company's three proprietary services grew 23 percent. HMSY's second quarter operating margin was 19 percent, and operating income increased 154 percent from the second quarter of fiscal 1992, to $1.999 million. Improved operating profitability, combined with substantially reduced levels of interest expense, contributed to the realization of net income of $1.103 million and $1.567 million during the second quarter and first half of fiscal 1993, respectively.
 "HMSY's operating performance during the first half of fiscal year 1993 has met our internal targets and slightly exceeded analysts' expectations," said Scott A. Remley, chief financial officer. "We continue to realize over 90 percent of our revenue from clients retained for over a year, the business pipeline is solid, and HMSY remains highly liquid subsequent to its initial public offering of December 1992."
 Paul J. Ketz, chief executive officer, said, "Both the provider (RCR and CAMS) and payor (TPLR) segments of our business are well-established and continue to grow. As an information management company, we are ideally positioned to meet the information processing needs of our hospital and governmental clients, as they deal with whatever manner of change is mandated by the Clinton Administration, and state and local governments. We believe that our capacity to provide cost-effective information management supports to our clients, and our proven ability to enhance revenue, increase cash flow, and reduce administrative costs will result in a prominent role for HMSY in the continually changing healthcare environment."
 HMSY provides information management and data processing services to hospitals and other healthcare providers, government health and human services agencies, and other companies providing services to the healthcare industry. The company's services constitute an outsourcing of various aspects of the information processing functions associated with the healthcare payment process.
 HEALTH MANAGEMENT SYSTEMS, INC.
 Consolidated Statements of Operations
 (Unaudited, In Thousands, Except $ Per share Amounts)
 Periods Ended Three Months Six Months
 April 30, 1993 1992 1993 1992
 Revenue $10,858 $9,206 $21,419 $18,443
 Cost of services
 Compensation 5,354 5,047 10,729 9,750
 Occupancy 1,018 927 2,076 1,930
 Other 2,447 1,479 4,487 3,431
 8,819 7,453 17,292 15,111
 Operating margin 2,039 1,753 4,127 3,332
 Amortization of intangibles 40 965 223 2,173
 Operating income 1,999 788 3,904 1,159
 Merger termination expense 0 0 0 (7,133)
 Other income (expense), net 29 (651) (412) (1,284)
 Income (loss) before income
 tax expense 2,028 137 3,492 (7,258)
 Income tax expense (925) (43) (1,586) (4)
 Income (loss) before
 extraordinary item 1,103 94 1,906 (7,262)
 Extraordinary item 0 0 (306) 0
 Net income (loss) 1,103 94 1,600 (7,262)
 Accretion of preferred stock
 redemption value 0 (47) (33) (93)
 Income (loss) attributable
 to common stockholders $ 1,103 $ 47 $ 1,567 $(7,355)
 Per common share:
 Net income (loss) before
 extraordinary item $ 0.18 $ 0.01 $ 0.35 $ (2.46)
 Extraordinary item 0.00 0.00 (0.05) 0.00
 Net income (loss) $ 0.18 $ 0.01 $ 0.30 $ (2.46)
 Weighted average shares 5,982 3,322 5,309 2,986
 HEALTH MANAGEMENT SYSTEMS, INC.
 Consolidated Condensed Balance Sheets
 Periods Ended April 30, 1993 Oct. 31, 1992
 (Unaudited)
 Assets
 Current assets $ 38,294 $ 18,544
 Property and equipment, net 3,351 3,148
 Intangible assets 5,724 5,947
 Other 1,775 2,838
 Total assets 49,144 30,477
 Liabilities and stockholders'
 equity (deficiency)
 Current liabilities $ 6,874 $ 7,064
 Long-term debt 5,391 19,458
 Other liabilities 567 539
 Deferred income taxes 4,392 4,279
 Total liabilities 17,224 31,340
 Redeemable preferred stock 0 1,134
 Stockholders' equity (deficiency) 31,920 (1,997)
 Total liabilities and stockholder's
 equity (deficiency) $ 49,144 $ 30,477
 -0- 6/1/93
 /CONTACT: Scott A. Remley, chief financial officer of Health Management Systems, Inc., 212-685-4545, or Laura A. Plevyak of Noonan- Russo Communications, 212-979-9180, for Health Management Systems, Inc./
 (HMSY)


CO: Health Management Systems, Inc. ST: New York IN: HEA SU: ERN

TM-LD -- NY091 -- 4191 06/01/93 18:40 EDT
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Date:Jun 1, 1993
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