Revenues Up 37%; Operating Income Increases 45%; Net Income Rises 41% Over The
                           Second Quarter Last Year

    BOSTON, July 22 /PRNewswire/ -- CRA Managed Care, Inc. (Nasdaq: CRAA)
today announced that revenues for the second quarter ended June 30, 1997,
increased 37 percent to $61.1 million, compared with revenues of $44.8 million
during the three months ended June 30, 1996.  Operating income for the three
months ended June 30, 1997, increased 45 percent to $6.3 million, compared
with $4.4 million for the same period last year.
    Net income for the three months ended June 30, 1997, increased 41 percent
to $3.3 million, or $0.37 per share, compared with $2.4 million, or $0.29 per
share, for the same period last year.
    For the six months ended June 30, 1997, revenues increased 36 percent to
$115.6 million, compared with revenues of $85.0 million for the same period
last year.  In addition, operating income increased 49 percent to $12.0
million, compared with $8.1 million, also for the same period last year.  Net
income increased 46 percent to $6.4 million, or $0.71 per share, compared with
$4.4 million, or $0.56 per share, for the six months ended June 30, 1996.
    "We were extremely pleased to see strong growth across the board for our
highly diversified mix of managed care services," said Donald J. Larson,
president and chief executive officer of CRA Managed Care.  "We continue to
benefit from two important trends in our industry: the transformation of
workers' compensation to a managed care delivery system, and the increasing
interest of a variety of payors in outsourcing this critically important
function."
    As announced in April 1997, CRA and OccuSystems Inc. have agreed to a
merger that will form the nation's first fully integrated managed care company
focused on workers' compensation cost containment.  The new company created by
this merger, Concentra(R) Managed Care Inc., will provide preventive services,
first report of injury, primary care, specialist networks, specialized cost
containment services and field case management for workers' compensation as
well as for the disability and automobile  injury markets.  In the intervening
period since the merger's announcement, the companies have made significant
progress in implementing certain activities, such as joint product marketing
on both a local and national basis, to achieve the operating synergies
envisioned by the merger.  The companies note that in May, the Federal Trade
Commission granted an early termination to the applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act and that proxy materials
related to the merger are expected to be mailed to shareholders during the
week of July 28, 1997.  Special meetings of stockholders will be scheduled for
late August, and the merger is expected to close immediately thereafter
subject to the approval by the stockholders of both companies and the
satisfaction of other customary conditions.
     CRA Managed Care provides services designed to reduce the costs
associated with workers' compensation, automobile and disability insurance
claims.  The Company operates one of the largest field case-management
organizations in North America, consisting of 122 field case management
offices with approximately 1,225 field case managers who provide medical
management and return-to-work services in 49 states, the District of Columbia
and Canada.  The Company also owns FOCUS Healthcare Management Inc., one of
the country's largest specialized PPOs focused on the workers' compensation
and automobile liability marketplaces; as well as Prompt Associates Inc., a
leading provider of both inpatient and outpatient bill review services to the
healthcare marketplace for claims that fall outside of a payor's network of
hospitals or outpatient facilities.  Additionally, CRA provides a broad range
of specialized cost containment services from 83 service locations --
including utilization management, telephonic case management and retrospective
medical bill review services -- that are designed to reduce costs associated
with work- and auto-related injuries.
    This press release contains certain forward-looking statements, which the
Company is making in reliance on the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.  Investors are cautioned that all
forward-looking statements involve risks and uncertainties, and that the
Company's actual results may differ materially from the results discussed in
the forward-looking statements.  Factors that could cause or contribute to
such differences include, but are not limited to, the potential adverse impact
of governmental regulation on the Company's operations, an interruption in its
data processing capabilities, operational, financing and strategic risks
related to the Company's growth strategy, possible quarterly and annual
fluctuations in its operating results, litigation against the Company,
possible legal liability for adverse medical consequences, competitive
pressures, adverse changes in market conditions for the Company's services,
and the dependence of the Company on key management personnel. Additional
factors include those described in the Company's Form 10-K filed with the SEC
on March 31, 1997 (SEC File No. 02-25856).

                           Statement of Operations
                                 (unaudited)

                                Three Months Ended         Six Months Ended
                                  June  30                      June 30
                              1997        1996           1997         1996

    REVENUES           $61,130,000   $44,759,000 $115,619,000   $84,984,000
    COST OF SERVICES    49,876,000    36,747,000   94,447,000    70,169,000

     GROSS PROFIT       11,254,000     8,012,000   21,172,000    14,815,000
    GENERAL & ADMIN
     EXPENSES            4,922,000     3,636,000    9,173,000     6,745,000
      OPERATING INCOME   6,332,000     4,376,000   11,999,000     8,070,000
    INTEREST EXPENSE, NET  357,000       331,000      497,000       525,000
     INCOME BEFORE
     INCOME TAXES        5,975,000     4,045,000   11,502,000     7,545,000
    PROVISION FOR
     INCOME TAXES        2,629,000     1,678,000    5,061,000     3,131,000
    NET INCOME          $3,346,000    $2,367,000   $6,441,000    $4,414,000


    EARNINGS PER SHARE:      $0.37         $0.29        $0.71         $0.56
    WEIGHTED AVERAGE SHARES
    OUTSTANDING          9,081,000     8,150,000    9,092,000     7,850,000


                         Consolidated Balance Sheets
                                 (unaudited)

                                   June  30              December 31
                                     1997                   1996

    CURRENT ASSETS:
    Cash and cash equivalents        $---              $2,596,000
    Accounts receivable, net   49,340,000              36,446,000
    Prepaid expenses and
     prepaid taxes                904,000               1,012,000
    Total current assets       50,244,000              40,054,000
    PROPERTY AND EQUIPMENT, NET15,392,000               8,890,000
    GOODWILL, NET              85,045,000              48,788,000
    OTHER ASSETS                  242,000                 396,000
    TOTAL ASSETS             $150,923,000             $98,128,000

    CURRENT LIABILITIES:
    Revolving credit facilities$45,678,000             $5,700,000
    Current portion of
     long-term debt                24,000                  56,000
    Accounts payable and
     accrued expenses          19,385,000              14,953,000
    Total current liabilities  65,087,000              20,709,000
    LONG-TERM DEFERRED
     TAX LIABILITIES              841,000                 841,000
    STOCKHOLDERS' EQUITY       84,995,000              76,578,000
    TOTAL LIABILITIES
     AND EQUITY              $150,923,000             $98,128,000

Link to this page: