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HILLHAVEN ANNOUNCES RECORD QUARTERLY EARNINGS FOR ITS 1992 FOURTH QUARTER, LOSS FOR FISCAL YEAR

 HILLHAVEN ANNOUNCES RECORD QUARTERLY EARNINGS
 FOR ITS 1992 FOURTH QUARTER, LOSS FOR FISCAL YEAR
 TACOMA, Wash., June 26 /PRNewswire/ -- The Hillhaven Corp. (AMEX: HIL) today announced results for its fourth quarter and year ended May 31, 1992.
 The company reported that its fiscal fourth-quarter net income increased to $5,239,000 from $1,271,000 in the prior year quarter. Earnings per share were 4 cents, compared to 1 cent.
 As a result of the $90 million restructuring charge recorded in the second quarter, Hillhaven reported a net loss of $78,792,000, or 77 cents per share, for the fiscal year, compared to net income of $1,758,000, or 2 cents per share, in the prior year. This charge reflected the estimated loss from the announced disposition of 82 centers, approximately one quarter of Hillhaven's nursing centers.
 Reported revenues and expenses in the current periods were significantly impacted by the restructuring. Effective Dec. 1, 1991, operating results from nursing centers held for sale are excluded from revenues and expenses.
 Net operating revenues decreased 9.6 percent for the quarter to $295,011,000, from $326,215,000 in the prior year quarter. Nursing center revenue declined 13.9 percent to $246,405,000 from $286,117,000 in the same quarter last year, while pharmacy revenues grew 22.3 percent to $43,699,000 from $35,738,000 in the prior year quarter. Retirement housing operations, which were reinstated into continuing operations during the quarter, reported a 12.5-percent revenue growth to $4,907,000 from $4,360,000 in the fourth quarter of the prior year.
 For the fiscal year, net operating revenues increased 0.7 percent to $1,250,390,000 from $1,241,973,000 in the prior year. Nursing center revenue decreased 2.1 percent to $1,072,653,000 from $1,095,636,000. Pharmacy revenue grew 21.4 percent to $156,107,000, compared to $128,612,000, while retirement housing revenues increased 22.0 percent to $21,630,000 from $17,725,000 in the prior year.
 The company continued to recognize strong growth in its higher- margin specialty services. For the fiscal year, rehabilitation therapy, Alzheimer's care, subacute care and pharmaceutical sales climbed 22.8 percent to $306,391,000, and now represent 24.5 percent of total company-wide revenues.
 Hillhaven is the nation's second-largest long-term care provider. It operates 351 nursing centers (including 75 held for sale), 112 retail and institutional pharmacies, 25 retirement housing communities and two continuing care retirement communities.
 Schedules follow:
 THE HILLHAVEN CORP. - QUARTERLY FINANCIAL UPDATE
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited, dollars in thousands, except per-share amounts)
 Three Months Twelve Months
 Ended May 31: 1992(A) 1991 1992(A) 1991
 Net operating revenues $295,011 $326,215 $1,250,390 $1,241,973
 Expenses:
 Operating and
 administrative 254,371 284,306 1,087,106 1,083,260
 Interest 14,424 10,436 51,535 40,254
 Depreciation and
 amortization 12,169 9,655 44,683 33,551
 Rent 9,900 23,822 63,919 97,526
 Guarantee fees 2,141 1,755 8,336 7,016
 Restructuring charge -- -- 90,000 --
 Adjustment to carrying value
 of properties previously
 reported as discontinued
 operations 20,736 -- 20,736 --
 Total expenses 313,741 329,974 1,366,315 1,261,607
 Loss from operations (18,730) (3,759) (115,925) (19,634)
 Interest income 2,912 3,718 12,797 17,013
 Loss before taxes (15,818) (41) (103,128) (2,621)
 Income tax expense (benefit) 1,262 (22) 407 --
 Loss from continuing
 operations (17,080) (19) (103,535) (2,621)
 Reinstatement of discontinued
 operations(B) 22,319 1,290 24,743 4,379
 Net income (loss) $ 5,239 $ 1,271 $ (78,792)$ 1,758
 Earnings (loss) per
 common share $ 0.04 $ 0.01 $ (0.77)$ 0.02
 Three Months Twelve Months
 Ended May 31: 1992(A) 1991 1992(A) 1991
 Average common shares
 outstanding 104,244,141 103,164,704 104,056,225 102,866,147
 NOTE A: Financial data for the period after Dec. 1, 1991, exclude amounts related to the operations of nursing centers held for sale under the company's restructuring plan.
 NOTE B: In May 1992, the company announced its decision to retain its retirement housing business, previously reported as a discontinued operation. Revenues and expenses of the retirement housing division have been reclassified as a component of continuing operations for all periods presented.
 THE HILLHAVEN CORP. - QUARTERLY FINANCIAL UPDATE
 SELECTED FINANCIAL DATA AND OPERATING STATISTICS
 (Dollars in thousands)
 Three Months Twelve Months
 Ended May 31: 1992(A) 1991 1992(A) 1991
 Net operating revenues:
 Nursing centers $246,405 $286,117 $1,072,653 $1,095,636
 Pharmacies 43,699 35,738 156,107 128,612
 Retirement housing 4,907 4,360 21,630 17,725
 Total $295,011 $326,215 $1,250,390 $1,241,973
 Operating income before
 property-related expenses
 and the restructuring charge(B):
 Nursing centers $ 34,057 $ 35,906 $ 137,895 $ 138,978
 Pharmacies 5,767 5,906 22,307 18,541
 Retirement housing 816 97 3,082 1,194
 Total $ 40,640 $ 41,909 $ 163,284 $ 158,713
 Nursing centers owned or
 operated at end of period 259 342 259 342
 Number of licensed beds 31,942 42,239 31,942 42,239
 Nursing centers managed on
 behalf of others 17 19 17 19
 Pharmacy outlets at end of
 period 112 113 112 113
 Retirement housing communities
 at end of period 25 25 25 25
 Continuing care retirement
 communities at end of period 2 2 2 2
 NOTE A: Financial data and operating statistics for the period after Dec. 1, 1991, exclude operations of nursing centers held for sale under the company's restructuring plan.
 NOTE B: Property-related expenses include depreciation and amortization, interest, rent and guarantee fees.
 -0- 6/26/92
 /CONTACT: Tim Carroll of The Hillhaven Corp., 206-572-4901/
 (HIL) CO: The Hillhaven Corp. ST: Washington IN: HEA SU: ERN


SC-LM -- SE001 -- 4110 06/26/92 09:32 EDT
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