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HEALTH RISK MANAGEMENT, INC. REPORTS 524 PERCENT INCREASE IN NET INCOME FOR ITS THIRD QUARTER

 MINNEAPOLIS, May 4 /PRNewswire/ -- Health Risk Management, Inc. (NASDAQ: HRMI)(HRM) today announced that revenues for its fiscal third quarter ended March 31, 1993, increased 27 percent to $10,668,000 compared to $8,404,000 in the third quarter last year. The company reported quarterly net income of $811,000 or $.20 per share compared to $130,000 or $.03 per share a year ago. This is a 524 percent increase over the third quarter a year ago.
 HRM's revenues for the first nine months of this fiscal year were $30,187,000, up 60 percent from $18,873,000 for the same period last year. Net income for the year-to-date was $1,600,000 or $.40 per share compared to a loss of $214,000 or $.05 per share for the same period a year ago.
 Gary T. McIlroy, M.D., chairman and CEO of HRM, said, "The 27 percent revenue increase in the third quarter accurately reflects growth in our overall business, with cost of services only increasing 18 percent over the same period. Our cost of services has decreased in each of the last four quarters from approximately 63 percent to 59 percent of revenue.
 "Orders for services to be delivered in the first fiscal quarter 1994 beginning July 1, 1993 are ahead of last year. Interest in the company's QualityFIRST(TM) clinical practice guidelines is growing significantly in all markets, including HMOs, hospitals, insurance companies and physician groups. To accommodate both of these trends, operating expenses as a percent of revenues will increase in the fourth quarter compared to the third quarter."
 Headquartered in Minneapolis, HRM provides a broad range of integrated managed health care services to self-insured employers, unions, governmental entities, HMOs, PPOs, insurance companies and physician groups.
 HEALTH RISK MANAGEMENT, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except share data)
 (Unaudited)
 Three Months Ended
 3/31/93 Percent 3/31/92 Percent
 Revenues:
 Care review, case management
 and price control services $7,096 66.5 $5,414 64.4
 Claims administration services 3,055 28.6 2,821 33.6
 Information management and
 consulting services 517 4.9 169 2.0
 Total revenues 10,668 100.0 8,404 100.0
 Operating expenses:
 Cost of services 6,248 58.6 5,282 62.9
 Depreciation and amortization,
 principally cost of services 1,067 10.0 824 9.8
 Selling and marketing 1,410 13.2 1,198 14.2
 Administration 1,035 9.7 917 10.9
 Reorganization charge -- 0.0 -- 0.0
 Total operating expenses 9,760 91.5 8,221 97.8
 Operating income (loss) 908 8.5 183 2.2
 Other income (expense):
 Interest income 12 0.1 72 0.8
 Interest expense (90) (0.8) (120) (1.4)
 Total other income (expense) (78) (0.7) (48) (0.6)
 Income (loss) before income taxes 830 7.8 135 1.6
 Provision for income taxes 19 0.2 5 0.1
 Net income (loss) $811 7.6 $130 1.5
 Net income (loss) per common and
 common equivalent share $.20 -- $.03 --
 Weighted average common and common
 equivalent shares 4,078,113 -- 3,916,655 --
 Nine Months Ended
 3/31/93 Percent 3/31/92 Percent
 Revenues:
 Care review, case management
 and price control services $20,388 67.5 $14,663 77.7
 Claims administration services 8,691 28.8 3,681 19.5
 Information management and
 consulting services 1,108 3.7 529 2.8
 Total revenues 30,187 100.0 18,873 100.0
 Operating expenses:
 Cost of services 18,003 59.6 11,651 61.7
 Depreciation and amortization,
 principally cost of services 3,128 10.4 1,931 10.2
 Selling and marketing 4,134 13.7 2,843 15.1
 Administration 3,024 10.0 2,203 11.6
 Reorganization charge -- 0.0 600 3.2
 Total operating expenses 28,289 93.7 19,228 101.8
 Operating income (loss) 1,898 6.3 (355) (1.8)
 Other income (expense):
 Interest income 49 0.1 399 2.1
 Interest expense (282) (0.9) (248) (1.3)
 Total other income (expense) (233) (0.8) 151 0.8
 Income (loss) before income taxes 1,665 5.5 (204) (1.0)
 Provision for income taxes 65 0.2 10 0.1
 Net income (loss) $1,600 5.3 $(214) (1.1)
 Net income (loss) per common and
 common equivalent share $.40 -- $(.05) --
 Weighted average common and common
 equivalent shares 3,990,490 -- 3,901,064 --
 HEALTH RISK MANAGEMENT, INC.
 BALANCE SHEET INFORMATION
 3/31/93 12/31/92 9/30/92 6/30/92
 Assets
 Cash and cash equivalents $3,480 $3,027 $2,270 $4,125
 Other current assets 6,266 6,331 6,255 4,783
 Fixed assets, contract rights,
 software, etc., net 18,149 17,598 17,797 17,774
 Other assets 1,796 1,948 1,563 1,631
 -- $29,691 $28,904 $27,885 $28,313
 Liabilities and shareholders' equity
 Current liabilities $7,004 $6,429 $5,936 $6,493
 Other liabilities 1,733 2,507 2,569 2,760
 Shareholders' equity 20,954 19,968 19,380 19,060
 -- $29,691 $28,904 $27,885 $28,313
 -0- 5/4/93
 /CONTACT: Nancy Hurd of Health Risk Management, 612-829-3749/
 (HRMI)


CO: Health Risk Management, Inc. ST: Minnesota IN: MTC INS SU: ERN

AL -- MN001 -- 4127 05/04/93 08:00 EDT
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Date:May 4, 1993
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