HCRI EPS Rises 40% in First Quarter

* Base Business EPS Up 55%

* Net Income $1.4 million vs. $1.1 million Last Year



Apr 25, 2001, 01:00 ET from Healthcare Recoveries, Inc.

     LOUISVILLE, Ky., April 25 /PRNewswire Interactive News Release/ --
 Healthcare Recoveries, Inc. (Nasdaq: HCRI) today reported 1st quarter results.
 Earnings per diluted share for the quarter were $0.14 compared to
 $0.10 earnings per diluted share for the same quarter of 2000.  Net income for
 the quarter increased 22% to $1.4 million, from $1.1 million in the comparable
 period of 2000.  Revenues for the quarter were $16.3 million, a decrease from
 $16.6 million a year ago.
     Substantially all of the revenue in the quarter was derived from the
 Company's base business.  Net income from the Company's base business was
 $1.7 million compared to net income of $1.2 million from its base business in
 the 1st quarter of 2000.  Earnings on the base business were $0.17 per diluted
 share, compared with base business earnings per diluted share of $0.11 in the
 comparable quarter of 2000.  (The Company's "base business" is its historical
 healthcare recovery products and services and, therefore, references to and
 comparisons involving the "base business" exclude the $90,000 of Special
 Committee expense in the 1st quarter of 2000 as well as pretax losses in the
 first quarter of 2001 from TransPaC Solutions of approximately $242,000 and
 from Troveris of approximately $303,000.)
     Three factors were primarily responsible for earnings growth in the
 quarter:
 
     * Gross margin on the base business expanded to 53% from 49% in the same
       period of 2000 due to operating improvements instituted in 2000.
     * Base business support expenses decreased approximately 8% because of
       expense control measures undertaken in the previous year.
     * The Company acquired 1,467,765 shares of its own stock during 2000, most
       of it in the second half of the year.
 
 
 
                    Condensed Quarterly Statements of Income
                    (In thousands, except per share results)
 
                                                          3 months ended
                                                             March 31,
                                                        2001          2000
     Claims revenues                                 $ 16,255       $ 16,567
     Cost of services                                   7,738          8,466
      Gross profit                                      8,517          8,101
     Support expenses                                   4,496          4,541
     Special Committee expenses                             0             90
     Research and development                             134              0
      EBITDA                                            3,887          3,470
     Depreciation & amortization                        1,585          1,536
     Interest income                                      350            239
     Interest expense                                     303            242
      Income before income taxes                        2,349          1,931
     Provision for income taxes                           974            801
      Net income                                     $  1,375       $  1,130
 
     Basic weighted average shares                      9,789         11,225
     Diluted weighted average shares                    9,889         11,236
     Basic earnings per common share                 $   0.14       $   0.10
 
     Diluted earnings per common share               $   0.14       $   0.10
 
     The following tables (which exclude the results of TransPaC Solutions and
 Troveris) present certain key operating indicators for the period.
 
                            Lives Sold and Installed
                                 (In millions)
 
                                                            3 months ended
                                                              March 31,
                                                         2001           2000
 
     Cumulative Lives Sold, Beginning of Period          52.5           55.6
      Lives from existing client loss, net`              (2.8)          (1.7)
      Lives added from contracts with existing clients     .4             .5
      Lives added from contracts with new clients          .7             .3
     Cumulative Lives Sold, End of Period                50.8           54.7
 
     Lives Installed, End of Period                      47.8           51.8
 
     HCRI ended the quarter with 50.8 million lives sold, a net decrease of
 1.7 million lives, or 3%, from the end of the 4th quarter of 2000.  Compared
 to the end of the same quarter last year, lives sold decreased by 3.9 million,
 or 7%.  These declines resulted primarily from the loss of lives associated
 with clients that were acquired by insurers that are not clients of the
 Company.
     Installed lives decreased during the first quarter of 2001 from
 48.7 million to 47.8 million because of the loss of lives mentioned above.
 Compared to the same quarter last year, lives installed decreased by
 4.0 million, for the same reason.
 
 
                            Key Operating Indicators
                             (Dollars in millions)
 
 
                                                           3 months ended
                                                              March 31,
                                                       2001            2000
 
     Backlog (A)                                    $ 1,207.3       $1,150.0
     Claims Recoveries                              $    60.5       $   61.7
     Throughput (B)                                       5.1%           5.5%
     Effective Fee Rate                                  26.8%          26.7%
 
     Direct Operation Employees                           544            599
     Support Staff Employees                              137            155
     Total Employees                                      681            754
 
     (A) Backlog is the total dollar amount of potentially recoverable claims
         that the Company is pursuing or auditing on behalf of clients at a
         given point in time.
     (B) Throughput equals recoveries for the period divided by the average
         backlog at the beginning and end of the period.
 
     Total backlog of $1,207.3 million at March 31, 2001 represents an increase
 of 2%, or $25.3 million, compared to total backlog of $1,182.0 million at
 December 31, 2000.  Compared to the end of the same quarter last year, total
 backlog increased by 5% or $57.3 million.  The decrease in throughput from the
 quarter ended March 31, 2000 is largely the effect of a 7% increase in the
 average backlog and a 2% decrease in total recoveries.  However, compared to
 the quarter ended December 31, 2000, throughput increased modestly, primarily
 as a result of increased recoveries.
     During the first quarter of 2001, the Company did not repurchase shares of
 its common stock under its stock repurchase program.  Of the $10 million
 authorized by the Board for the stock repurchase program, approximately
 $3 million remains available.
     This news release contains statements that constitute "Forward-looking
 Statements" within the meaning of the Securities Act of 1933 and the
 Securities Exchange Act of 1934, as amended by the Private Securities
 Litigation Reform Act of 1995.  Forward-looking statements in this news
 release include current operating trends and HCRI's future financial
 performance and operating results, as well as the assumptions on which such
 statements are based.  The Company's "base business" includes existing
 healthcare recovery products and services but excludes TransPaC Solutions, a
 recently launched property and casualty subrogation recovery division, and
 Troveris, a recently announced software development initiative, the expenses
 of which are presented as "Research and Development" in the Company's income
 statement starting in the fourth quarter of 2000.  Forward-looking statements
 in this news release also include the assumptions on which such estimates are
 based.  Prospective investors are cautioned that such forward-looking
 statements are not guarantees of future performance and involve risks and
 uncertainties, and that actual results may differ materially from those
 contemplated by such forward-looking statements.  Important factors currently
 known to management that could cause actual results to differ materially from
 those contemplated in this news release include, but are not limited to: the
 Company's lack of operating history in the property and casualty market, the
 ability of HCRI to successfully implement its sales and marketing strategy,
 product development strategy, operating strategy and acquisition strategy,
 HCRI's ability to manage growth, changes in laws and government regulations
 applicable to HCRI, and changes in the historical relationships among such key
 operating indicators as lives sold, lives installed, backlog and throughput
 and in the predictive value of these indicators with respect to certain
 aspects of HCRI's financial results; and all risks inherent in the
 development, introduction and implementation of a new product or service.
 Additional factors that could cause actual results to differ materially from
 those contemplated in this news release can be found in HCRI's Safe Harbor
 Compliance Statement included as Exhibit 99.1 to its Annual Report on Form 10-
 K for the year ended December 31, 2000.
     HCRI is a leading provider of health insurance subrogation and related
 recovery services for private healthcare payors.
     Investors can access a live video and audio presentation concerning this
 news release on Wednesday, April 25, 2001 at 10:00 a.m., Eastern time through
 HCRI's website at www.hcrec.com/current.html.  A copy of this release, the
 presentation concerning this release and other investor relations materials
 can be accessed through HCRI's website at www.hcrec.com/invest.html.
 
 
                          HEALTHCARE RECOVERIES, INC.
                            CONDENSED BALANCE SHEETS
                  (In thousands, except per share information)
 
                                                    March 31,     December 31,
                                                        2001          2000
                            ASSETS
     Current assets:
      Cash and cash equivalents                     $   1,423      $   1,297
      Restricted cash                                  22,806         21,647
      Accounts receivable, less allowance
       for doubtful accounts of
       $445 - March 31, 2001 and
       $434 - December 31, 2000                         8,506          7,660
      Other current assets                              2,214          2,153
        Total current assets                           34,949         32,757
     Property and equipment, at cost:
      Buildings and land                                4,001          4,001
      Furniture and fixtures                            3,237          3,230
      Office equipment                                  1,997          1,992
      Computer equipment                               14,581         13,883
      Leasehold improvements                            1,323          1,308
                                                       25,139         24,414
      Accumulated depreciation and amortization       (14,720)       (13,781)
        Property and equipment, net                    10,419         10,633
     Cost in excess of net assets acquired, net        28,738         29,143
     Identifiable intangibles, net                      4,794          4,934
     Other assets                                       1,952          1,978
       Total assets                                 $  80,852       $ 79,445
 
            LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
      Trade accounts payable                        $   1,441       $  1,231
      Accrued expenses                                  8,577          9,906
      Funds due clients                                12,734         12,437
      Income taxes payable                              2,258          1,385
        Total current liabilities                      25,010         24,959
     Other liabilities                                  2,271          2,324
     Long-term borrowings                              14,000         14,000
        Total liabilities                              41,281         41,283
     Commitments and contingencies
     Stockholders' equity:
      Preferred stock
       $.001 par value, 2,000 shares authorized,
        no shares issued or outstanding                    --             --
      Common stock
       $.001 par value, 20,000 shares authorized,
        9,789 - March 31, 2001 and 9,771 -
        December 31, 2000 shares issued and
        outstanding                                        12             12
      Capital in excess of par value                   22,686         22,637
      Other                                              (927)          (912)
      Treasury stock at cost, 1,773 shares at
       March 31, 2001 and
       December 31, 2000                               (7,037)        (7,037)
 
     Retained earnings                                 24,837         23,462
       Total stockholders' equity                      39,571         38,162
       Total liabilities and stockholders' equity    $ 80,852       $ 79,445
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE Healthcare Recoveries, Inc.
     LOUISVILLE, Ky., April 25 /PRNewswire Interactive News Release/ --
 Healthcare Recoveries, Inc. (Nasdaq: HCRI) today reported 1st quarter results.
 Earnings per diluted share for the quarter were $0.14 compared to
 $0.10 earnings per diluted share for the same quarter of 2000.  Net income for
 the quarter increased 22% to $1.4 million, from $1.1 million in the comparable
 period of 2000.  Revenues for the quarter were $16.3 million, a decrease from
 $16.6 million a year ago.
     Substantially all of the revenue in the quarter was derived from the
 Company's base business.  Net income from the Company's base business was
 $1.7 million compared to net income of $1.2 million from its base business in
 the 1st quarter of 2000.  Earnings on the base business were $0.17 per diluted
 share, compared with base business earnings per diluted share of $0.11 in the
 comparable quarter of 2000.  (The Company's "base business" is its historical
 healthcare recovery products and services and, therefore, references to and
 comparisons involving the "base business" exclude the $90,000 of Special
 Committee expense in the 1st quarter of 2000 as well as pretax losses in the
 first quarter of 2001 from TransPaC Solutions of approximately $242,000 and
 from Troveris of approximately $303,000.)
     Three factors were primarily responsible for earnings growth in the
 quarter:
 
     * Gross margin on the base business expanded to 53% from 49% in the same
       period of 2000 due to operating improvements instituted in 2000.
     * Base business support expenses decreased approximately 8% because of
       expense control measures undertaken in the previous year.
     * The Company acquired 1,467,765 shares of its own stock during 2000, most
       of it in the second half of the year.
 
 
 
                    Condensed Quarterly Statements of Income
                    (In thousands, except per share results)
 
                                                          3 months ended
                                                             March 31,
                                                        2001          2000
     Claims revenues                                 $ 16,255       $ 16,567
     Cost of services                                   7,738          8,466
      Gross profit                                      8,517          8,101
     Support expenses                                   4,496          4,541
     Special Committee expenses                             0             90
     Research and development                             134              0
      EBITDA                                            3,887          3,470
     Depreciation & amortization                        1,585          1,536
     Interest income                                      350            239
     Interest expense                                     303            242
      Income before income taxes                        2,349          1,931
     Provision for income taxes                           974            801
      Net income                                     $  1,375       $  1,130
 
     Basic weighted average shares                      9,789         11,225
     Diluted weighted average shares                    9,889         11,236
     Basic earnings per common share                 $   0.14       $   0.10
 
     Diluted earnings per common share               $   0.14       $   0.10
 
     The following tables (which exclude the results of TransPaC Solutions and
 Troveris) present certain key operating indicators for the period.
 
                            Lives Sold and Installed
                                 (In millions)
 
                                                            3 months ended
                                                              March 31,
                                                         2001           2000
 
     Cumulative Lives Sold, Beginning of Period          52.5           55.6
      Lives from existing client loss, net`              (2.8)          (1.7)
      Lives added from contracts with existing clients     .4             .5
      Lives added from contracts with new clients          .7             .3
     Cumulative Lives Sold, End of Period                50.8           54.7
 
     Lives Installed, End of Period                      47.8           51.8
 
     HCRI ended the quarter with 50.8 million lives sold, a net decrease of
 1.7 million lives, or 3%, from the end of the 4th quarter of 2000.  Compared
 to the end of the same quarter last year, lives sold decreased by 3.9 million,
 or 7%.  These declines resulted primarily from the loss of lives associated
 with clients that were acquired by insurers that are not clients of the
 Company.
     Installed lives decreased during the first quarter of 2001 from
 48.7 million to 47.8 million because of the loss of lives mentioned above.
 Compared to the same quarter last year, lives installed decreased by
 4.0 million, for the same reason.
 
 
                            Key Operating Indicators
                             (Dollars in millions)
 
 
                                                           3 months ended
                                                              March 31,
                                                       2001            2000
 
     Backlog (A)                                    $ 1,207.3       $1,150.0
     Claims Recoveries                              $    60.5       $   61.7
     Throughput (B)                                       5.1%           5.5%
     Effective Fee Rate                                  26.8%          26.7%
 
     Direct Operation Employees                           544            599
     Support Staff Employees                              137            155
     Total Employees                                      681            754
 
     (A) Backlog is the total dollar amount of potentially recoverable claims
         that the Company is pursuing or auditing on behalf of clients at a
         given point in time.
     (B) Throughput equals recoveries for the period divided by the average
         backlog at the beginning and end of the period.
 
     Total backlog of $1,207.3 million at March 31, 2001 represents an increase
 of 2%, or $25.3 million, compared to total backlog of $1,182.0 million at
 December 31, 2000.  Compared to the end of the same quarter last year, total
 backlog increased by 5% or $57.3 million.  The decrease in throughput from the
 quarter ended March 31, 2000 is largely the effect of a 7% increase in the
 average backlog and a 2% decrease in total recoveries.  However, compared to
 the quarter ended December 31, 2000, throughput increased modestly, primarily
 as a result of increased recoveries.
     During the first quarter of 2001, the Company did not repurchase shares of
 its common stock under its stock repurchase program.  Of the $10 million
 authorized by the Board for the stock repurchase program, approximately
 $3 million remains available.
     This news release contains statements that constitute "Forward-looking
 Statements" within the meaning of the Securities Act of 1933 and the
 Securities Exchange Act of 1934, as amended by the Private Securities
 Litigation Reform Act of 1995.  Forward-looking statements in this news
 release include current operating trends and HCRI's future financial
 performance and operating results, as well as the assumptions on which such
 statements are based.  The Company's "base business" includes existing
 healthcare recovery products and services but excludes TransPaC Solutions, a
 recently launched property and casualty subrogation recovery division, and
 Troveris, a recently announced software development initiative, the expenses
 of which are presented as "Research and Development" in the Company's income
 statement starting in the fourth quarter of 2000.  Forward-looking statements
 in this news release also include the assumptions on which such estimates are
 based.  Prospective investors are cautioned that such forward-looking
 statements are not guarantees of future performance and involve risks and
 uncertainties, and that actual results may differ materially from those
 contemplated by such forward-looking statements.  Important factors currently
 known to management that could cause actual results to differ materially from
 those contemplated in this news release include, but are not limited to: the
 Company's lack of operating history in the property and casualty market, the
 ability of HCRI to successfully implement its sales and marketing strategy,
 product development strategy, operating strategy and acquisition strategy,
 HCRI's ability to manage growth, changes in laws and government regulations
 applicable to HCRI, and changes in the historical relationships among such key
 operating indicators as lives sold, lives installed, backlog and throughput
 and in the predictive value of these indicators with respect to certain
 aspects of HCRI's financial results; and all risks inherent in the
 development, introduction and implementation of a new product or service.
 Additional factors that could cause actual results to differ materially from
 those contemplated in this news release can be found in HCRI's Safe Harbor
 Compliance Statement included as Exhibit 99.1 to its Annual Report on Form 10-
 K for the year ended December 31, 2000.
     HCRI is a leading provider of health insurance subrogation and related
 recovery services for private healthcare payors.
     Investors can access a live video and audio presentation concerning this
 news release on Wednesday, April 25, 2001 at 10:00 a.m., Eastern time through
 HCRI's website at www.hcrec.com/current.html.  A copy of this release, the
 presentation concerning this release and other investor relations materials
 can be accessed through HCRI's website at www.hcrec.com/invest.html.
 
 
                          HEALTHCARE RECOVERIES, INC.
                            CONDENSED BALANCE SHEETS
                  (In thousands, except per share information)
 
                                                    March 31,     December 31,
                                                        2001          2000
                            ASSETS
     Current assets:
      Cash and cash equivalents                     $   1,423      $   1,297
      Restricted cash                                  22,806         21,647
      Accounts receivable, less allowance
       for doubtful accounts of
       $445 - March 31, 2001 and
       $434 - December 31, 2000                         8,506          7,660
      Other current assets                              2,214          2,153
        Total current assets                           34,949         32,757
     Property and equipment, at cost:
      Buildings and land                                4,001          4,001
      Furniture and fixtures                            3,237          3,230
      Office equipment                                  1,997          1,992
      Computer equipment                               14,581         13,883
      Leasehold improvements                            1,323          1,308
                                                       25,139         24,414
      Accumulated depreciation and amortization       (14,720)       (13,781)
        Property and equipment, net                    10,419         10,633
     Cost in excess of net assets acquired, net        28,738         29,143
     Identifiable intangibles, net                      4,794          4,934
     Other assets                                       1,952          1,978
       Total assets                                 $  80,852       $ 79,445
 
            LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
      Trade accounts payable                        $   1,441       $  1,231
      Accrued expenses                                  8,577          9,906
      Funds due clients                                12,734         12,437
      Income taxes payable                              2,258          1,385
        Total current liabilities                      25,010         24,959
     Other liabilities                                  2,271          2,324
     Long-term borrowings                              14,000         14,000
        Total liabilities                              41,281         41,283
     Commitments and contingencies
     Stockholders' equity:
      Preferred stock
       $.001 par value, 2,000 shares authorized,
        no shares issued or outstanding                    --             --
      Common stock
       $.001 par value, 20,000 shares authorized,
        9,789 - March 31, 2001 and 9,771 -
        December 31, 2000 shares issued and
        outstanding                                        12             12
      Capital in excess of par value                   22,686         22,637
      Other                                              (927)          (912)
      Treasury stock at cost, 1,773 shares at
       March 31, 2001 and
       December 31, 2000                               (7,037)        (7,037)
 
     Retained earnings                                 24,837         23,462
       Total stockholders' equity                      39,571         38,162
       Total liabilities and stockholders' equity    $ 80,852       $ 79,445
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X88518455
 
 SOURCE  Healthcare Recoveries, Inc.