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REHABCLINICS, INC. REPORTS RECORD REVENUES AND EARNINGS

 KING OF PRUSSIA, Pa., Nov. 11 /PRNewswire/ -- RehabClinics, Inc. (NASDAQ-NMS: RCII) today announced another quarter of record revenues and earnings for the three months ended September 30, 1993. Net revenues grew 90 percent for the quarter to $21,459,000, compared to $11,308,000 the prior year. Gross profit was $7,986,O00 and operating profit reached $3,129,000, compared to $4,262,000 and $930,000 in the third quarter 1992. Net income and earnings per share of common stock were $1,252,000 and $.15 for the most recent quarter, compared with $441,000 and $.06 for the same period a year ago.
 On a quarter-to-quarter basis, RCI's results continued to improve. Compared to the second quarter ended June 30, 1993, net revenues, gross profit, operating profit and net income increased 19 percent, 11 percent, 16 percent and 18 percent, respectively. Earnings per share of common stock of $.15 compared favorably with the $.13 per share earned in the second quarter.
 For the nine months ended September 30, 1993, RCI generated net revenues, gross profit, and operating profit of $54,022,000, $20,508,000 and $7,353,000. Compared to the same period last year, this represents increases of 80 percent in net revenues, 84 percent in gross profit and 238 percent in operating profits. Net income available to common stock of $2,990,000 improved significantly over the $200,000 earned during the nine months ended September 30, 1992. Earnings per share of common stock was $.37 as compared to $.04 for the prior comparable period.
 During the most recent quarter, RCI added 42 outpatient physical therapy clinics to its network, a 31 percent increase, and expanded its operations into seven (7) additional states. James C. New, President, said, "Our acquisition backlog is at an all-time high and we continue to see an increasing number of excellent practices for sale."
 In mid-October, RCI announced a definitive agreement and plan of merger with NovaCare, Inc., the largest provider of contract rehabilitation therapy and orthotic and prosthetic patient care in the United States. The merger requires regulatory and stockholder approvals and is expected to close early next year. Under the plan of merger, each outstanding share of RCI common stock will be exchanged for 1.60 shares of NovaCare common stock. "By offering a broader range of rehabilitative services, we believe the combined companies will be able to contract more effectively with managed care organizations, employers and other groups. Also, NovaCare's strong financial position will allow us to continue to implement our acquisition strategy in the outpatient segment," said Mr. New.
 RCI's strategy is to develop the most extensive network of outpatient physical therapy clinics in selected markets through acquisitions and internal growth. This strategy is designed to capitalize on the highly fragmented nature of outpatient physical therapy by integrating innovative management and information systems, and marketing and sales programs into strong local clinical practices. RCI has established itself as one of the largest outpatient physical therapy companies in the country with 180 clinics in 22 states.
 REHABCLINICS, INC.
 SUMMARY FINANCIAL INFORMATION
 (in thousands, except share data)
 Statement of Operations Data:
 Three Months Ended Nine Months Ended
 September 30, September 30,
 1993 1992 1993 1992
 Net Revenues $21,459 $11,308 $54,022 $29,953
 Gross Profit 7,986 4,262 20,508 11,153
 Operating Profit (A) 3,129 930 7,353 2,174
 Income Before Tax 2,030 751 5,068 587
 Net Income 1,252 441 2,990 251
 Net Income Available to Common
 Stock 1,252 441 2,990 200
 Earnings Per Common Share 0.15 0.06 0.37 0.04
 Shares used in earnings per common
 share computation 8,444,960 7,615,424 8,179,253 5,516,407
 Balance Sheet Data:
 September 30, 1993
 Cash and Cash Equivalents $ 7,024
 Other Current Assets 20,268
 Total Current Assets 27,292
 Fixed Assets and other 108,098
 Total Assets $135,390
 Current Liabilities $ 16,077
 Long-Term Liabilities 50,526
 Total Liabilities 66,603
 Stockholders' Equity 68,787
 Total Liabilities & Equity $135,390
 (A) Before interest expense, interest income, and amortization of goodwill.
 -0- 11/11/93
 /CONTACT: James C. New, president, or Alan N. Vinick, senior vice president of RehabClinics, 215-992-7600; Susan Noonan of Noonan/Russo Communications, Inc. 212-696-4455/
 (RCII)


CO: RehabClinics, Inc. ST: Pennsylvania IN: HEA SU: ERN

LG-SH -- NY011 -- 3106 11/11/93 09:25 EST
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Publication:PR Newswire
Date:Nov 11, 1993
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