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SIERRA TUCSON COMPANIES INC. ANNOUNCES UNAUDITED SECOND QUARTER RESULTS

                    SIERRA TUCSON COMPANIES INC.
             ANNOUNCES UNAUDITED SECOND QUARTER RESULTS
    TUCSON, Ariz., July 21 /PRNewswire/ -- Sierra Tucson Companies Inc. (NASDAQ: STSN) today announced its unaudited results of operations for the second quarter ended June 30, 1992.
    Revenues for the quarter ended June 30, 1992, increased $492,573 to $11,821,821, or 4 percent more than the corresponding quarter of 1991.  Net income, excluding the effects of a non-recurring charge decreased $1,524,903 to $682,032, or 69 percent less than the corresponding quarter of 1991.  The non-recurring charge relating to the previously announced closure of Sierra Garmisch amounted to $1,565,000.  In addition, a recent corporate restructuring and cessation of the company's other foreign expansion efforts resulted in additional charges totaling over $900,000 in the second quarter. The restructuring is expected to result in annualized savings in excess of $2,000,000.
    The increase in revenues resulted primarily from the newly established adolescent center and an increase in the daily rates charged at the Arizona facility.  The earnings decline from the corresponding quarter of 1991 resulted from lower utilization levels at both the main facility and the German facility and losses at the adolescent facility.  Utilization levels have been impacted by reimbursement, industry and recessionary pressures.
    William T. O'Donnell, Jr., president and chairman of the board, said, "The company has taken decisive action in the first half of 1992 to address internal organizational matters and external challenges in the marketplace.  Closing the German facility and reorganizing Sierra Tucson's domestic operations will help us posture the company for improved performance.  In spite of near term operating uncertainties, I believe that our existing operations and developing program niches will prove successful."
                    SIERRA TUCSON COMPANIES INC.
                   Unaudited Statement of Results
                            Consolidated
                     Second Quarter Ended        Six Months Ended
                            June 30,                  June 30,
                       1992         1991         1992         1991
                   (Unaudited)   (Unaudited)  (Unaudited) (Unaudited)
    Total
     revenues      $11,821,821  $11,329,248  $24,678,359  $22,014,814
    Income (loss)
     before taxes &
     extraordinary
     item           (1,623,366)   3,881,229      211,168    7,909,061
    Income (loss)
     before
     extraordinary
     item             (882,968)   2,546,729      192,675    5,009,561
    Earnings per
     share before
     extraordinary
     item                 (.10)        0.36          .02         0.70
    Extraordinary item
     (loss on early
     retirement of debt)   ---      339,794          ---      339,794
    Net income
     (loss)           (882,968)   2,206,935      192,675    4,669,767
    Earnings per
     share                (.10)        0.31          .02         0.65
    W.A. common
     equivalents     8,496,887    7,140,330    8,494,382    7,140,330
    -0-                  7/21/92
    /CONTACT:  John H. Schmitz, CFO, or Jim Rianoshek, investor relations, 602-792-5800, of Sierra Tucson Companies/
    (STSN) CO:  Sierra Tucson Companies Inc. ST:  Arizona IN: SU:  ERN CH-AL -- LA014 -- 1288 07/21/92 11:36 EDT
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Date:Jul 21, 1992
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