Renal Care Group, Inc. Announces 44% Increase in Earnings

Nashville, Tennessee (May 3, 1999) — Renal Care Group, Inc. (Nasdaq/NM:RCGI) today announced a 44% increase in earnings per share for the first quarter ended March 31, 1999.
 
Mr. Sam Brooks, president and chief executive officer of Renal Care Group, Inc., said, "Our strong financial performance in the first quarter continues to validate our physician-led focus on quality patient care.  Renal Care Group's success to date is directly attributable to our physicians and associates consistently giving first priority to improving patient outcomes."
 
Revenues for the quarter increased 50% to $120.9 million compared with revenues of $80.5 million for the same period in 1998 prior to restatement for a pooling-of-interests transaction.  Net income increased 58% to $11.9 million, or $0.26 per share, compared with net income of $7.5 million, or $0.18 per share, in the same period last year.  Among the factors contributing to this quarter's growth was an increase of 9% in same-store treatments and an increase of 17% in same-store revenues.
 
As restated to give effect to the merger with Dialysis Centers of America which, for accounting purposes, was treated as a pooling-of-interests, revenues increased 32% to $120.9 million as compared with $91.5 million for the same period in 1998.  Net income increased 68% to $11.9 million, or $0.26 per share, compared with net income of $7.1 million, or $0.16 per share, in the same period of last year.
 
In closing, Mr. Brooks said, "We believe our three year track record as a public company of 30% plus average annual growth in earnings per share is remarkable and is a clear indication of the success of our strategy.  We remain focused on quality patient outcomes as we continue to execute a disciplined acquisition and internal growth strategy."
 
Since January 1, 1999, the Company has completed acquisitions that increased by over 2,000 the patients it serves.  These acquisitions include the Company's merger transaction with Dialysis Centers of America, a premier Chicago, Illinois-based provider operating 12 dialysis centers in Chicago and surrounding areas, which added 25 nephrologists and approximately 1,700 patients to Renal Care Group's existing network.  The Company also completed transactions in Wisconsin and Alaska that added an additional 350 patients.
 
Renal Care Group, Inc. is a nephrology services company that focuses on providing care to patients with kidney disease, including patients suffering from chronic kidney failure.  The Company treats approximately 13,400 patients through 177 dialysis centers, in addition to providing acute dialysis services in 102 hospitals.   Over 3,800 associates provide services in the Company's 22-state network.
 
This press release contains forward-looking statements that involve various risks and uncertainties.  Actual results could differ materially from those contained in these forward-looking statements due to certain factors, including business and economic conditions and availability of financing.  These and other risks and uncertainties are detailed in the Company's reports filed with the SEC.
 

RENAL CARE GROUP, INC. Unaudited Consolidated Statements of Earnings (In thousands, except share data)                                      Three Months Ended March 31,                                                    As Previously                                              Restated1  Reported                                     1999        1998        1998   Net revenue                      $120,861     $91,542        463 Operating costs and expenses       92,742      73,660     63,490 Depreciation and amortization       6,163       4,613      3,937 Income from operations             21,956      13,269     13,036   Interest income (expense) net      (1,405)     (1,246)      (562) Income before merger costs,   minority interest and taxes        20,551      12,023     12,474   Minority interest                   1,500         547        547   Net income before merger costs and income taxes             19,051      11,476     11,927 Income taxes                        7,144       4,373      4,413 Net income before merger costs    $11,907      $7,103     $7,514   Diluted earnings per share     before merger costs                 $0.26       $0.16      $0.18   Net income after merger costs      $8,107      $6,662     $7,073   Diluted earnings per share     after merger costs                  $0.17       $0.15      $0.17   Weighted average shares                    outstanding                        46,400      45,035     41,850   1Restated amounts give effect to the merger with DCA which was effective January 29, 1999, and was accounted for as a pooling of interests.