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NOVACARE ANNOUNCES RECORD ANNUAL EARNINGS UP 83 PERCENT

 NOVACARE ANNOUNCES RECORD ANNUAL EARNINGS UP 83 PERCENT
 VALLEY FORGE, Pa. Aug. 6 /PRNewswire/ -- NovaCare, Inc. (NYSE: NOV)


today announced record results for the fourth quarter and fiscal year ended June 30, 1992. Net revenues for the quarter totaled $108.8 million, a 47 percent increase over the fourth quarter of fiscal 1991. Fourth quarter net income was $.23 per share, compared to $.09 in the prior year.
 Fourth quarter income from operations totaled $17.3 million, compared to $8 million for the fourth quarter of fiscal 1991. Both periods included non-recurring charges. The most recent quarter reflected a $741,000 charge related to the company's decision to discontinue plans for a new rehabilitation hospital in Las Vegas, Nev. Results for the fourth quarter of 1991 reflected $3.2 million of non- recurring expenses associated with the Rehab Systems Company merger.
 For fiscal 1992, net revenues totaled $385.1 million, an increase of 52 percent over the prior year. Income from operations increased 68 percent to $57.9 million, compared to $34.5 million for fiscal 1991. Net income for the year was a record $.75 per share, up 67 percent from fiscal 1991 net income of $.45 per share. Before non-recurring expenses, fiscal 1992 net income totaled $.83 per share. This is compared to fiscal 1991 net income before non-recurring expenses of $.52 per share. All historical as well as current financial results have been restated to reflect the consolidation of Orthopedic Services, Inc., which merged with NovaCare effective March 18, 1992.
 C. Arnold Renschler, M.D., president and chief operating officer, stated, "Our excellent fourth quarter performance reflected our continued success in recruiting and retaining clinical professionals in an industry with too few clinicians. Company-wide productivity improvements, higher occupancy in the inpatient business and continued growth in the orthotics and prosthetics business also contributed to our growth."
 The company reported that a record 528 full-time equivalent therapists were hired in the contract services business in the fourth quarter. Full-time equivalent therapists increased 39 percent over the course of fiscal 1992 and totaled 3,148 at June 30, 1992. Fourth quarter occupancy in the inpatient business increased to 60 percent from 55 percent in the fourth quarter of 1991, reflecting strengthened referral sources and the expansion of specialty programs.
 John H. Foster, chairman and chief executive officer, stated, "Our strong 1992 performance across all businesses is particularly gratifying because we were able to grow earnings by over 80 percent while making important investments in management, systems, training and technology." He added, "I believe that these strategic investments, in combination with our exceptional management team, strong financial condition and customer-centered focus are the keys to our continued success."
 The company's performance also improved on a quarter-to-quarter basis. Compared with the three months ended March 31, 1992, net revenues and income from operations before non-recurring expenses for the June 30, 1992, quarter increased 10 percent and 12 percent, respectively. Net income for the June quarter of $.23 per share, compared to $.21 per share in the March quarter. Before non-recurring expenses, fourth quarter 1992 net income totaled $.24 per share.
 NovaCare, Inc. is the largest provider of contract rehabilitation therapy and orthotic and prosthetic patient care services in the United States. The company also operates seven acute rehabilitation hospitals and seven community integrated programs.
 NOVACARE, INC.
 Consolidated Statements of Operations
 (In thousands, except share-related data)
 (Unaudited)
 Three months ended 6/30/92 6/30/91(A) 3/31/92(A)
 Net revenues $108,807 $73,846 $99,225
 Cost of services 70,407 49,460 64,903
 Gross profit 38,400 24,386 34,322
 S,G&A expenses 20,392 13,220 18,221
 Merger and other non-
 recurring expenses 741 3,157 --
 Income from operations 17,267 8,009 16,101
 Other income
 (expense), net (148) (172) (267)
 Income before
 income taxes 17,119 7,837 15,834
 Income taxes 5,595 3,332 5,179
 Net income 11,524 4,505 10,655
 Net income applicable
 to common stock 11,524 4,505 10,655
 Net income per share $0.23 $0.09 $0.21
 Weighted average
 number of shares
 outstanding 50,131,595 49,073,497 50,672,998
 12 months ended June 30 1992 1991
 Net revenues $385,099 $252,532
 Cost of services 252,263 169,751
 Gross profit 132,836 82,781
 S,G&A
 expenses 70,250 45,103
 Merger and other non-
 recurring expenses 4,730 3,157
 Income from operations 57,856 34,521
 Other income
 (expense), net (1,009) (2,870)
 Income before
 income taxes 56,847 31,651
 Income taxes 19,353 11,199
 Net income 37,494 20,452
 Net income applicable
 to common stock 37,494 20,255
 Net income per share $0.75 $0.45
 Weighted average
 number of shares
 outstanding 50,249,638 45,117,233
 (A) -- Restated to conform to 1992 fourth quarter classifications.
 -0- 8/6/92
 /CONTACT: Susan J. Campbell of NovaCare, 215-650-0841, or Anthony J. Russo of Noonan/Russo Communications, 212-979-9180, for NovaCare/
 (NOV) CO: NovaCare, Inc. ST: Pennsylvania IN: HEA SU: ERN


CK-DC -- NY002 -- 7384 08/06/92 08:01 EDT
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