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HEALTHSOURCE REPORTS 51 CENTS PER SHARE ON RECORD FIRST QUARTER REVENUES AND NET INCOME; PLAN-WIDE MEMBERSHIP GROWTH OF 35 PERCENT

HEALTHSOURCE REPORTS 51 CENTS PER SHARE ON RECORD FIRST QUARTER REVENUES AND NET INCOME; PLAN-WIDE MEMBERSHIP GROWTH OF 35 PERCENT
 CONCORD, N.H., April 29 /PRNewswire/ -- Healthsource, Inc. (NASDAQ: HLTH), a leading operator of HMOs and managed health care services, today reported a 52 percent increase in total revenues and a 19.3 percent increase in net income for the first quarter ended March 31, 1992. Revenues and Net Income Reach Record Levels
 Total revenues for the first quarter of 1992 reached $31,917,295, a 52 percent increase over the $21,067,223 recorded a year ago. Net income for the first quarter rose 19.3 percent to $4,120,804 compared with $3,455,008 for the first quarter a year ago. Earnings per share on a fully diluted basis amounted to 51 cents per share vs. 55 cents for 1991's first quarter. Weighted average shares outstanding on a fully diluted basis increased 29 percent resulting from a 1.75 million share public offering in May 1991.
 Norman C. Payson, M.D., chief executive officer of Healthsource, Inc., said today, "We are pleased with our first quarter results. As evidenced by the medical loss ratios, our health care cost containment programs are functioning very well in all our markets including our newest plan, Tennessee First Health Plan, acquired in December 1991. The operational success of the company for this first quarter is partially obscured if compared to the first quarter of 1991 in which we experienced unusually low hospital utilization. We note that operating income for the first quarter of 1992 increased approximately $1.4 million over the fourth quarter of 1991. Our 1992 results are consistent with our long standing history of excellent cost controls and medical loss ratios." Well Positioned for Growth
 Payson continued, "The company's growth strategy is succeeding. We experienced 35 percent year-to-year total membership increases at our health plans. In addition, we have positioned ourselves for further growth by the development of several new products including point-of-service plans, geographical extensions of our health plans, and by the planned acquisition of an HMO and insured PPO in Indiana."
 On April 10, 1992, Healthsource announced it had reached a definitive agreement to acquire the preferred provider group health and group life insurance business and the HMO subsidiary of the Indiana United Farm Bureau Family Life Insurance Company that had combined revenues of approximately $56 million in 1991. The transaction is subject to Indiana Insurance Department approval and certain other conditions.
 Healthsource, Inc. sponsors or manages HMOs in New Hampshire, Maine, South Carolina, North Carolina, Tennessee and New York and owns EBPA, the largest third-party claims administrator in New England. Healthsource also provides utilization review services and preferred provider networks primarily to self-insured employer plans and Blue Cross and Blue Shield of Vermont.
 HEALTHSOURCE, INC.
 Financial Summary
 (unaudited)
 Three Months Ended
 March 31,
 1992 1991
 Revenue:
 Premiums $26,956,066 $16,534,145
 Administrative fees and managed care 3,103,262 2,899,907
 Management fees 1,857,967 1,633,171
 Total revenue 31,917,295 21,067,223
 Expenses:
 Health care 19,643,898 11,189,613
 Premium tax 534,867 330,873
 Selling, general and administrative 7,949,437 5,672,727
 Total expenses 28,128,202 17,193,213
 Operating income 3,789,093 3,874,010
 Interest and other income 1,137,153 675,052
 Interest and other expense (7,191) (18,584)
 Income before equity in income of
 unconsolidated affiliates provision
 for income taxes and minority
 interest in net earnings of
 consolidated affiliate 4,919,055 4,530,478
 Equity in income of unconsolidated
 affiliates 690,749 615,553
 Provision for income taxes (1,489,000) (1,570,000)
 Minority interest in net earnings
 of consolidated entity --- (121,023)
 Net income $4,120,804 $3,455,008
 Net income per share:
 Primary 51 cents 55 cents
 Fully diluted 51 cents 55 cents
 Weighted average number of common
 and common equivalent shares
 outstanding:
 Primary 8,122,000 6,282,550
 Fully diluted 8,128,000 6,306,769
 SELECTED BALANCE SHEET
 (Unaudited) March 31, Dec. 31,
 1992 1991
 Cash, cash equivalents, and
 current marketable securities $66,748,888 $63,103,514
 Current assets 73,487,225 69,927,651
 Long-term marketable securities 21,405,865 18,535,321
 Total assets 123,324,123 115,240,060
 Medical claims payable 11,162,033 9,049,181
 Current liabilities 17,286,736 13,341,685
 Shareholders' equity 105,325,327 101,099,932
 COMMON USED RATIOS
 (Unaudited) March 31, Dec. 31,
 1992 1991
 Book value per common shares
 outstanding (7,963,000) at
 March 31, 1992 and
 7,955,000 at Dec. 31, 1991 $13.23/share $12.71/share
 Working capital $56.2 million $56.6 million
 Current ratio 4.3 5.2
 Days of health care expense
 in medical claims payable
 at Healthsource New Hampshire 50.9 days 47.4 days
 (medical claims payable divided
 by average daily health care
 expenses for the three months
 ended March 31, 1992 and the
 year ended Dec. 31, 1991)
 ---
 NOTE TO EDITORS: Additional information on membership and an operating margin analysis available upon request from Healthsource.
 -0- 4/29/92
 /CONTACT: Thomas Congoran, chief financial officer, or Tracey Turner, shareholder relations, of Healthsource, 603-225-5077; or Kerry Thalheim, 212-661-8030, or Kathy Waller, 312-266-7800, of The Financial Relations Board, Inc. for Healthsource/
 (HLTH) CO: Healthsource, Inc. ST: New Hampshire IN: HEA SU: ERN


DH-SH -- NE018 -- 4641 04/29/92 17:57 EDT
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