TCR_Public/960725.MBX BANKRUPTCY CREDITORS' SERVICE, INC.


Bankruptcy and Troubled Company News


July 25, 1996



  1. EndoSonics Corporation Reports Record Revenues
  2. Hexcel Reports Second Quarter Results...
  3. The Clothestime Inc. delisted from NASDAQ
  4. The Krystal Company reports 2nd quarter results
  5. Dow Announces Quarterly Earnings of $2.20 per share
  6. Huntway Partners Files Consent Solicitation Disclosure Statement With S.E.C.
  7. Matria Healthcare, Inc. Announces 2nd Quarter Results
  8. Morrison Knudesn Posts 2nd Quarter Results
  9. Warnaco and Authentic Fitness Terminate Merger Agreement
  10. AHI Healthcare Systems Anticipates Larger Than Expected 2nd Quarter Loss





Return To The InterNet Bankruptcy Library Homepage


EndoSonics Corporation Reports Record Revenues


        


            RANCHO CORDOVA, Calif.  --  July 25, 1996  --  EndoSonics Corporation (NASDAQ-ESON) reported today that
        revenues for the second quarter increased 75% to $7.1 million,
        compared to $4.0 million for the second quarter of 1995.  The
        principal reasons for this increase are:  continued growth in demand
        for intravascular ultrasound (IVUS) products both in the U.S. and
        overseas markets; increased sales through the Company's agreement
        with Cordis Corporation (now a subsidiary of Johnson & Johnson); and
        growth at the Company's CardioVascular Dynamics, Inc. (CVD)
        subsidiary which produces non-ultrasound, advanced therapeutic
        catheters.  Revenues for the first half of 1996 increased to $12.8
        million from $6.8 million -- an 89% increase over 1995 results.
        


            The Company's net loss for the second quarter of 1996 was $4.4
        million ($0.33 per share) compared with $3.3 million ($0.33 per
        share) in the second quarter of 1995.  Non-recurring expenses of
        $3.0 million were taken in the second quarter of 1996.  Adjusting
        for these previously announced expenses (June 20, 1996) would result
        in a loss of $1.4 million ($0.10 per share) for the quarter.  The
        non-recurring $3.0 million expenses are associated with the
        consolidation of the Company's IVUS operations and with the start-up
        production of the new Five-64 imaging catheters.  The net loss for
        the Company in the first six months of 1996 was reduced to $5.6
        million ($0.42 per share) from $6.5 million ($0.65 per share) in
        1995.  Adjusting for the $3.0 million non-recurring expenses would
        result in a loss of $2.6 million ($0.20 per share).
        


            After adjusting for the effect of the $3.0 million of non-
        recurring expenses, the decrease in loss for the quarter as compared
        with a year ago is due to improved product margins as the Company
        realized better manufacturing efficiencies from higher production
        levels.  Although the Company continued to invest in research and
        development and build its manufacturing and marketing capabilities,
        operating expenses were reduced as a percentage of revenues.
        


            On June 19, 1996, CVD successfully completed an Initial Public
        Offering (IPO) of 3,400,000 shares at $12 per share, followed by an
        additional 510,000 shares issued in July 1996 (over-allotment option
        granted to CVD's underwriters).  EndoSonics currently owns 46% of
        the outstanding shares of CVD (49% as of June 30, 1996).  This
        transaction is key to EndoSonics' strategy of focusing on
        applications of its ultrasound technology and will provide funding
        for CVD to aggressively pursue its business plan.
        


            Prior to the IPO, CVD's financial statements were consolidated
        with those of the Company.  On June 20, 1996, the company began
        using the equity method of accounting to reflect the results of CVD
        in its financial statements.  Revenues for IVUS products were $5.4
        million and losses associated with this business were $0.6 million
        for the second quarter of 1996 before the adjustment for the $3.0
        million of non-recurring expenses; $3.6 million in losses after the
        adjustment.
        


            Commenting on these results, Reinhard Warnking, EndoSonics'
        President and Chief Executive Officer stated, "We are pleased with
        the strong increase in IVUS revenues.  During the quarter we
        launched our In-Vision user interface and are working on a variety
        of other enhancements which make our products easier to use while
        taking full advantage of our all-electronic, all-digital platform
        and superior image quality.  The ramp-up of the new Five-64 imaging
        catheter at the Rancho Cordova facility is on schedule and we are
        producing and shipping imaging systems at record levels."
        


            EndoSonics Corporation develops and markets intravascular
        imaging systems, diagnostic imaging catheters and combined
        angioplasty/imaging catheters.  CardioVascular Dynamics, Inc.
        develops and markets site-specific drug delivery catheters, combined
        angioplasty/drug delivery catheters and advanced therapeutic
        catheters.
        


            This press release contains forward-looking statements that
        involve risks and uncertainties.  The Company's actual results may
        differ significantly from the results discussed in the forward-
        looking statements.  For a discussion of factors that might result
        in different outcomes, see the Company's Form 10-K filed with the
        Securities and Exchange Commission on April, 1, 1996.


       
                         ENDOSONICS CORPORATION
                 FINANCIAL RESULTS  -- SECOND QUARTER 1996
  
          
             (In Thousands, except share and per share amounts)
                
                             (Unaudited)
        
                                  Second Quarter              Six Months
                               1996          1995         1996         1995
        
        Sales Revenues            $7,101       $4,048       $12,773
        $6,770
        
        Net Loss                 ($4,388)(a)  ($3,281)      ($5,627)
        ($6,514)
        
        Net Loss per Share        ($0.33)      ($0.33)       ($0.42)
        ($0.65)
        
        Shares used in the
          calculation of net
        loss per share    13,448,205   10,027,619    13,271,181   10,007,385
        

        (a)  Second quarter 1996 includes $3 million in expenses, reserves
        and restructuring charge.  Net loss adjusted for these costs is $1.4
        million or ($.10) per share.
        


        CONTACT:  EndoSonics Corp.
                  Donald D. Huffman, 916/638-8008



Hexcel Reports Second Quarter Results; Net Loss of $23.7 Million Includes Previously Announced Charge for Business Acquisition and Consolidation Activities of $29.2 Million


        


            PLEASANTON, Calif.  --  July 25, 1996  --  Hexcel Corp.
        (NYSE/PSE: HXL) today reported results for the second quarter ended
        June 30, 1996.
        


            Results for the second quarter of 1996 include the composites
        business acquired from Ciba-Geigy Limited and Ciba-Geigy Corp.
        (collectively, "Ciba") on Feb. 29, 1996, but do not reflect the
        composite products business acquired from Hercules Incorporated
        ("Hercules") on June 27, 1996.  Net sales for the quarter were
        $166.8 million, compared with net sales for the second quarter of
        1995 of $91.0 million.  Excluding sales attributable to the business
        operations acquired from Ciba, sales for the second quarter of 1996
        were approximately $98 million.  Gross margin for the 1996 quarter
        was $35.2 million, or 21.1 percent of sales, compared with gross
        margin for the 1995 quarter of $18.1 million, or 19.8 percent of
        sales.  
        


            Hexcel incurred a net loss of $23.7 million in the second
        quarter of 1996, or $0.65 per share, compared with net income of
        $1.8 million in the second quarter of 1995, or $0.10 per share.  The
        1996 quarter includes a previously announced charge for business
        acquisition and consolidation activities of $29.2 million (of which
        $9.3 million was for non-cash write-downs).  The business
        consolidation is intended to integrate acquired assets and
        operations into Hexcel, reorganize the Company's manufacturing and
        research activities around strategic centers dedicated to select
        product technologies, and eliminate excess manufacturing capacity
        and redundant administrative functions.
        


            The total expense of this consolidation program, which is
        expected to take up to three years to complete, is estimated to be
        approximately $49 million.  This estimate includes $5.2 million of
        expenses incurred in the first quarter of 1996 and another $15
        million of expenses to be recorded in future periods, as well as the
        $29.2 million charge recorded in the second quarter of 1996.
        


            For the year-to-date ended June 30, 1996, net sales were $293.2
        million, compared with $176.2 million for the comparable period of
        1995.  Excluding sales attributable to the business operations
        acquired from Ciba, sales for the first half of 1996 were
        approximately $197 million.
        


            Gross margin for the first half of 1996 was $62.0 million, or
        21.1 percent of sales, versus gross margin for the same period of
        1995 of $32.9 million, or 18.6 percent of sales.  The 1996 year-to-
        date net loss was $21.8 million, or $0.72 per share, including $34.4
        million of business acquisition and consolidation expenses and $3.0
        million of other income.  
        


            The net loss for the first half of 1995 was $0.7 million, or
        $0.05 per share, including bankruptcy reorganization expenses of
        $3.0 million.
        


            On July 24, 1996, Hexcel completed an offering of $114.5 million
        in convertible subordinated notes due in 2003, including $14.5
        million in notes sold to the underwriters pursuant to the exercise
        of an over-allotment option.  
        


            The convertible subordinated notes carry an annual interest rate
        of 7 percent and are convertible into Hexcel common stock at a
        conversion price of $15.81 per share.  As a result of the issuance
        of the convertible subordinated notes, maximum availability under
        the Company's revolving credit facility was reduced from $310
        million to approximately $250 million, in accordance with the terms
        of that facility.
        


            John J. Lee, chairman and chief executive officer of Hexcel,
        said: "After adjusting for the impact of the business acquisition on
        Feb. 29, 1996, the Company's second-quarter results reflect a
        continuation of the sales and gross margin performance achieved in
        the first quarter of the year.  
        


            "Hexcel continued to benefit from increased sales volumes,
        particularly to the commercial aerospace market, and from improved
        manufacturing productivity.  The performance of the Company's
        Composite Materials and Special Process business units was
        especially encouraging and reflects Hexcel's leading position in the
        manufacture and machining of composite materials and parts."
        


            Lee went on to say:  "The costs of integrating the businesses
        acquired from Ciba and Hercules will be substantial, as evidenced by
        the $29.2 million charge taken in the second quarter.  However, I
        believe that these acquisitions have significantly enhanced Hexcel's
        competitiveness, improving our ability to control the cost, quality
        and delivery of our products, and our ability to market those
        products to a broad range of customers throughout the world.
        


            "In addition, through the successful sale of the convertible
        subordinated notes, the Company has secured the financial resources
        necessary not only to integrate the acquired businesses, but also to
        respond to future challenges and opportunities.  The sale of these
        notes, along with the new revolving credit facility, has enhanced
        Hexcel's financial flexibility and revealed a considerable degree of
        investor interest in the Company.  All in all, the long-term outlook
        for Hexcel is encouraging."  
        


            Hexcel Corp. is an international developer and manufacturer of
        lightweight, high-performance composite materials, parts and
        structures for use in the commercial aerospace, space and defense,
        recreation and general industrial markets.


        
        Hexcel Corporation and Subsidiaries
        Condensed Consolidated Statements of Operations

        (in thousands, except per share data)
        
                                             Unaudited
                             The Quarter Ended   The Year-to-Date Ended
                             June 30,    July 2,  June 30,     July 2,
                              1996        1995     1996          1995
        
        Net sales                $166,770   $91,023   $293,188    $176,178
        
        Cost of sales            (131,582)  (72,968)  (231,217)   (143,328)
        
        Gross margin               35,188    18,055     61,971      32,850
        
        Selling, general and
         administrative expenses  (23,879)  (12,106)   (41,361)    (24,272)
        Business acquisition and
         consolidation expenses   (29,209)        0    (34,420)          0
        Other income, net             288         0      2,985           0
        
        Operating income (loss)   (17,612)    5,949    (10,825)      8,578
        Interest expense           (4,849)   (2,079)    (8,482)     (4,442)
        Bankruptcy reorganization
         expenses                       0      (826)         0      (2,951)
        
        Income (loss) from
         continuing operations
         before income taxes      (22,461)    3,044    (19,307)      1,185
        Provision for income taxes (1,206)   (1,094)    (2,512)     (1,604)
        
          Income (loss) from
           continuing operations  (23,667)    1,950    (21,819)       (419)
        
        Discontinued operations:
         Losses during
         phase-out period               0      (185)         0        (297)
        
          Net income (loss)      $(23,667)   $1,765   $(21,819)      $(716)
        
        Net income (loss) per share
        and equivalent share:
        Primary and fully diluted:                                      
          Continuing operations    $(0.65)    $0.11     $(0.72)     $(0.03)
          Discontinued operations    0.00     (0.01)      0.00       (0.02)
          
           Net income (loss)   $(0.65)    $0.10     $(0.72)     $(0.05)
        
        Weighted average shares
         and equivalent shares     36,547    18,007     30,483      13,391
        

        CONTACT: Hexcel Corp.
                 William P. Meehan, 510/847-9500


The Clothestime Inc. delisted from NASDAQ


        


            ANAHEIM, Calif.  --  July 25, 1996  --  The Clothestime
        Inc.
(NASDAQ:CTMEQ) Thursday announced that its common stock,
        trading under the symbol CTMEQ, is scheduled to be delisted from the
        NASDAQ Stock Market Inc. effective with the opening of business on
        Friday, July 26, 1996, because the company no longer complies with
        the criteria established by the NASDAQ Stock Market for continuation
        of listing.
        


            The company continues to operate its business maintaining high
        levels of liquidity currently averaging in excess of $15 million.
        As a result, the company has not used its debtor-in-possession
        financing facility of up to $25 million, except to provide letters
        of credit.
        


            Although its securities will be delisted from the NASDAQ Stock
        Market, to the extent market makers in the company's stock continue
        to enter bids, the company's common stock will be quoted in the OTC
        Bulletin Board or, in the alternative, in the National Quotation
        Bureau's Pink Sheets.  There is, however, no assurance that this
        will occur.
        


            On Dec. 8, 1995, the company and five of its subsidiaries filed
        voluntary petitions for relief under Chapter 11 of the U.S.
        Bankruptcy Code.  The company is in the process of developing a long-
        term business plan around which the framework of a plan of
        reorganization will be developed.
        


            The company cannot, at the present time, predict contents of any
        proposed plan of reorganization, or when or whether it will be
        accepted by the creditors or approved by the Bankruptcy Court.
        


            It is the company's hope that a successful implementation of a
        plan of reorganization will allow the company to be in a position to
        reapply for listing of its common stock on the NASDAQ Stock Market
        or another national exchange.
        


            The Clothestime Inc. currently operates approximately 370
        women's apparel stores in 17 states and Puerto Rico, offering
        primarily in-season, moderately priced, brand-name and private-label
        sportswear, dresses and accessories at a discount from the upscale
        department and specialty stores.
        


        CONTACT:  The Clothestime Inc.
                  Andrew G. Tepper, 714/779-5881, Ext. 2260 or 2200



THE KRYSTAL COMPANY REPORTS 2ND QUARTER RESULTS


        


            CHATTANOOGA, TN  --  July 25, 1996  --  The Krystal Company
        (Nasdaq-NNM: KRYSQ), an operator and franchisor of quick-service
        hamburger restaurants, today reported net income for its second
        quarter ended June 30, 1996, of $426,000, or six cents per share
        versus net income of $1,215,000, or 16 cents per share for the
        second quarter of 1995.  Administrative costs associated with the
        Company's Chapter 11 bankruptcy proceeding, initiated on December
        15, 1995, were $545,000 pre-tax and $338,000 after-tax, or four
        cents per share. Without these costs, net income would have been
        $764,000, or 10 cents per share.  Following a first quarter loss of
        10 cents per share, the Company reported a net loss for the six
        months ended June 30, 1996, of $320,000, or four cents per share.
        Year to date bankruptcy administrative costs were $1,512,000 pre-tax
        and $937,000 after-tax, or 12 cents per share.  Without these costs,
        six months net income would have been $617,000, or eight cents per
        share versus $1,542,000 in the same period last year, or 21 cents
        per share.  According to Carl D. Long, Chief Executive Officer of
        The Krystal Company, the persistent heavy discounting and new
        product introductions, throughout the industry continue to be the
        primary contributors to the Company's soft sales and profitability.
        


            Total quarterly revenues were $60.9 million, down approximately
        4.1% from 1995's second quarter.  Total year to date revenues were
        $118.6 million, compared with the $121.7 million in 1995.
        Restaurant sales for the quarter decreased 3.9% to $58.9 million.
        Restaurant sales for the first six months of 1996 were $114.7
        million compared to $117.3 million for 1995.
        


            Company-owned average same restaurant sales for the quarter were
        down 2.6% versus the same 1995 period.  For the first six months of
        1996, the average same restaurant sales were down 2.0% versus the
        same period in 1995.  The Company had 251 restaurants, open at the
        end of the second quarter of 1996 compared to 255 at the end of the
        second quarter of 1995.
        


            The Company opened no new restaurants in the first six months of
        1996 versus six in the first six months of 1995.  Franchisees opened
        five new restaurants in the first six months of 1996 compared to
        seven in the first six months of 1995.
        


            Second quarter revenues included franchise fees and royalties of
        $779,000 compared with $740,000 in the second quarter of 1995, an
        increase of 5.3%.  Year to date franchise fees and royalties were
        $1,430,000 compared with $1,317,000 through the same period in 1995,
        an increase of 8.6%.  Krystal began franchising in late 1990 and had
        84 franchised restaurants in operation at the end of the second
        quarter 1996 compared to 69 at the end of the second quarter 1995.
        Sales by franchisees were $15.2 million for the quarter, up 18.4%
        over the same period in 1995.  Year to date sales by franchisees
        were $28.8 million, up 19.1% over the same period in 1995.
        


            On December 15, 1995, the Company filed a voluntary petition
        under Chapter 11 of the United States Bankruptcy Code for the
        purpose of completely and finally resolving various claims filed
        against the Company by current and former employees alleging
        violations of the Fair Labor Standards Act.  The Company is a debtor-
        in-possession for purposes of the bankruptcy case.  Approximately
        8,000 current or former employees have filed claims, mostly in
        unspecified amounts, alleging that they worked time for which they
        were not compensated.  The Company expects to contest any claims
        which it believes to be invalid.  The Company's period of
        exclusivity to file a Chapter 11 Plan of Reorganization expires
        August 15, although the Company has filed a motion seeking to extend
        this period of exclusivity.  Four previously disclosed lawsuits
        filed against the Company under the FLSA have been stayed by the
        bankruptcy filing.  Company management currently believes that the
        reserve previously established with respect to the FLSA claims is
        adequate to resolve these claims.  However, due to the uncertainty
        surrounding the ultimate number and amount of employee claims,
        additional reserves may be required in the near term.  The Company
        is recording the known administrative costs of the Chapter 11
        proceeding as they are determined.
        


            The Krystal Company operates 251 restaurants in Alabama,
        Arkansas, Florida, Georgia, Kentucky, Mississippi, South Carolina,
        and Tennessee. Krystal franchisees operate 84 restaurants located in
        Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana,
        Mississippi, North Carolina, South Carolina, Tennessee, and
        Virginia.
        


            Founded in 1932, Krystal is one of the oldest fast-food chains
        in the United States.  The Krystal Company's common stock is traded
        on the Nasdaq National Market System under the symbol KRYSQ.
        




           Second Quarter:                     1996             1995
        Revenues                           $60,903,000     $63,501,000
        Net income before the effect of
         reorganization item(a)            $   764,000     $ 1,215,000
        Net income                         $   426,000     $ 1,215,000
        Average shares                       7,492,000       7,511,000
        Net income per share before the
         effect of reorganization item(a)  $       .10     $       .16
        Net income per share               $       .06     $       .16
        
           Six Months:                         1996             1995
        Revenues                          $118,570,000    $121,697,000
        Net income before the effect of
         reorganization item(a)           $    617,000    $  1,542,000
        Net income (loss)                 $   (320,000)   $  1,542,000
        Average shares                       7,507,000       7,510,000
        Net income per share before the
         effect of reorganization item(a) $        .08    $        .21
        Net income (loss) per share       $       (.04)   $        .21
        
            (a) Reorganization item represents legal and professional fees
        and administrative costs incurred in connection with Chapter 11
        proceeding.
        
                          KRYSTAL COMPANY & SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                  (in thousands)
        
                                                        6/30/96    12/31/95
           ASSETS                                     (Unaudited)  (Audited)
           Current Assets:
        Cash and temporary investments               $ 19,961   $ 13,713
        Receivables                                     1,996      1,752
        Income tax receivable                             888        609
        Net investment in direct financing leases -
         current portion                                  770        856
        Inventories                                     2,034      2,322
        Deferred tax asset                              5,553      5,553
        Prepayments and other                           1,272        830
        Total current assets                           32,474     25,635
        Net investments in direct financing leases,
         excluding current portion                        532        867
        Property, buildings and equipment, net         94,442     98,546
        Leased properties, net                          1,756      1,863
           Other assets:
        Cash surrender value of life insurance          5,332      5,117
        Other                                             742        667
        Total other assets                              6,074      5,784
        Total assets                                 $135,278   $132,695
        
           LIABILITIES AND SHAREHOLDERS' EQUITY

           Current Liabilities:
        Accounts payable                             $  3,163   $  1,681
        Accrued liabilities                            13,170      9,427
        Current portion of long-term debt                 751        432
        Current portion of capital lease obligations      588        653
        Total current liabilities                      17,672     12,193
        Liabilities Subject to Compromise              54,366     56,909
        Long-term debt, excluding current portion       3,273      3,621
        Capital lease obligations, excluding current
         portion                                        2,479      2,754
        Deferred income taxes                           2,719      2,719
        Other long-term liabilities                     8,269      7,852
           Shareholders' equity:
        Preferred stock, without par value; 5,000,000
         shares authorized; no shares issued or
         outstanding                                      ---        ---
        Common stock, without par value; 15,000,000
         shares authorized; shares issued and
         outstanding, 7,491,768 at June 30, 1996
         and 7,526,808 at Dec. 31, 1995                40,556     40,830
        Retained earnings                               7,875      8,195
        Deferred compensation                          (1,931)    (2,378)
        Total shareholders' equity                     46,500     46,647
        Total liabilities and shareholders' equity   $135,278   $132,695
        
        NOTE:  This is not a complete set of financial statements.
        
                       THE KRYSTAL COMPANY AND SUBSIDIARY
                      Consolidated Statements of Operations

                      (In thousands, except per share data)
                                   (unaudited)
        
                                          3 mos. ended       6 mos. ended
                                        6/30/96  7/2/95    6/30/96   7/2/95
           Revenues:
        Restaurant sales               $58,867  $61,269  $114,743  $117,309
        Franchise fees                      89      163       122       228
        Royalties                          690      577     1,308     1,089
        Other revenue                    1,257    1,492     2,397     3,071
        Total                           60,903   63,501   118,570   121,697
           Costs and expenses:
        Cost of restaurant sales        48,471   49,942    95,240    96,610
        Deprec. and amort. expense       2,800    3,121     5,602     6,071
        Gen. and admin. expenses         6,549    6,465    12,989    12,477
        Other expenses, net                988    1,155     1,951     2,365
        Total                           58,808   60,683   115,782   117,523
        
        Operating income                 2,095    2,818     2,788     4,174
           Reorganization Item:
        Professional fees and other
         expenses                         (545)     ---    (1,512)      ---
        Interest expense                (1,004)  (1,026)   (2,013)   (2,116)
        Interest income                    144      166       226       430
        Income (loss) before provision
         for (benefit from) income
         taxes                             690    1,958      (511)    2,488
        Provision for (benefit from)
         income taxes                      264      743      (191)      946
        Net income (loss)              $   426  $ 1,215  $   (320) $  1,542
           Earnings (loss) per
            common share               $  0.06  $  0.16  $  (0.04) $   0.21
        Wtd. avg. number of common
         shares outstanding              7,492    7,511     7,507     7,510
        
            NOTE:  This is not a complete set of financial statements.
        Certain reclassifications were made to interest expense and interest
        income in the second quarter of 1996.

CONTACT:  Cam Scearce, Krystal Company, 423-757-1510


DOW ANNOUNCES QUARTERLY EARNINGS OF $2.20 PER SHARE


        


            MIDLAND, Mich.,  --  July 25, 1996  --  The following was
        released by Dow Chemical Company (NYSE: DOW):
        


        Second Quarter of 1996 Highlights
        





                             (In millions, except for per share amounts)
                                3 Months Ended       6 Months Ended
                                    June 30              June 30
                               1996       1995       1996       1995
        
        Net Sales             $5,176     $5,517     $10,158    $10,722
        Operating Income      $  896     $1,207     $ 1,764    $ 2,282
        Income from Continuing
         Operation            $  546     $  334     $ 1,022    $   898
        Earnings per Common
         Share from Continuing
          Operations          $ 2.20     $ 1.22     $  4.10    $  3.25
        Earnings Per Common
         Share                $ 2.20     $ 1.84     $  4.10    $  3.94
        

Note:  Results for 1995 have been restated to show Dow's
        pharmaceutical businesses as discontinued operations after their
        sale in second quarter of 1995.
        


        Review of Quarterly Results
        


            The Dow Chemical Company today announced sales of $5.2 billion
        and operating income of $896 million for the second quarter of 1996.
        Total earnings were $2.20 per share, the highest since 1989.
        


            "This was a strong quarter and we are on track for another good
        year," said J. Pedro Reinhard, financial vice president and chief
        financial officer.  "Volume was up and we benefited from our
        continued productivity improvements.  We are particularly pleased
        with the continued growth in our Performance Chemicals and
        Performance Plastics segments, which now account for over half of
        the company's operating income."
        


            Sales for the quarter of $5.2 billion were off 6 percent from
        $5.5 billion during the same period a year ago.  Operating income
        was $896 million compared to $1.2 billion in the second quarter of
        1995. Despite a 10 percent decrease from very high pricing levels a
        year ago, operating income as a percent of sales declined by only
        4.6 percentage points reflecting the impact of volume gains, growth
        in the Performance Chemicals and Performance Plastics segments, and
        continued productivity improvements.
        


            Total earnings were $2.20 per share compared to $1.84 per share
        for the same period last year.  In the second quarter of 1995, Dow's
        earnings were impacted by a gain on the sale of Dow's pharmaceutical
        businesses of 62 cents per share and a charge of $1.24 per share
        related to Dow Corning's filing for protection under Chapter 11 of
        the United States Bankruptcy Code.  Excluding these items, Dow's
        earnings per share in the second quarter of 1995 were $2.46.
        


            Chemicals and Metals posted sales of $790 million and operating
        income of $205 million, compared to sales of $899 million and
        operating income of $313 million in the second quarter of 1995.
        Lower prices were the primary reason for the sales and earnings
        declines in this segment.
        


            Performance Chemicals sales were $1.2 billion, flat with a year
        ago. Operating income was $237 million compared to $259 million in
        the second quarter of 1995.  Both the Specialty Chemicals and
        Emulsion Polymers businesses had strong quarters posting higher
        earnings compared to the same period last year.   This is the tenth
        consecutive quarter that Specialty Chemicals has posted a sales
        increase versus the previous year.  Unfavorable climatic conditions,
        primarily in North America, negatively impacted sales and earnings
        for Agricultural Chemicals.
        


            Plastics sales were $966 million down 12 percent from $1.1
        billion in the second quarter of 1995.  Operating income was $223
        million, down from $467 million for the same period last year.  The
        strong volume growth experienced in this segment was not enough to
        offset the substantial price declines versus a year ago.
        Polyethylene prices globally have been trending upward since the
        beginning of the year and polystyrene prices have risen in Europe,
        reversing the general pricing decline for Plastics.
        


            Performance Plastics posted sales of $1.4 billion, down slightly
        from the same period a year ago, reflecting the transfer of Dow's
        elastomers business to DuPont Dow Elastomers L.L.C.  However,
        operating income was up 25 percent to $325 million from $261 million
        in the second quarter of 1995.  Polyurethanes, Epoxies, Engineering
        Plastics, Fabricated Products and the Adhesives, Sealants and
        Coatings businesses all reported higher earnings than a year ago.
        These results demonstrate the value of the company's continued focus
        on these businesses.
        


            Hydrocarbons and Energy sales were $595 million, down 15 percent
        from $697 million in the second quarter of 1995.  The segment
        experienced an operating loss of $20 million, about flat with a year
        ago.
        


            The Diversified Businesses and Unallocated segment posted sales
        of $276 million, up 10 percent from $252 million a year ago.  The
        segment recorded a loss of $74 million, about equal to the second
        quarter of 1995.  DowBrands experienced its fourth consecutive
        profitable quarter reflecting successful restructuring efforts.
        


            In the second quarter of 1996, Dow repurchased 6 million shares,
        bringing the year-to-date total to 10 million shares.  This
        completed the repurchase program of  25 million shares initiated in
        July 1995.  In July 1996, the company authorized an additional
        program to repurchase a further 20 million shares.  Since the
        beginning of 1995, Dow has bought back 39 million shares, or about
        15 percent of its outstanding shares.
        


            "The overall global economic scenario is improving.  Growth in
        North America is stable, economic activity is increasing in Japan,
        and we have seen the first indicators of an upward move in Europe,"
        said Reinhard. "The inventory correction is over and the pricing
        environment for many of our key products has improved.  These
        factors, combined with our on- going productivity initiatives and
        business portfolio restructuring, should result in another good year
        for Dow."
        



                   The Dow Chemical Company and Subsidiaries
                       Consolidated Statements of Income

        In millions, except for share amounts
        

                                      Three Months Ended    Six Months Ended
                                       June 30  June 30     June 30  June 30
                                       1996     1995        1996     1995

        Net Sales                     $5,176   $5,517     $10,158  $10,722
        Operating Costs and Expenses
        Cost of sales                  3,539    3,571       6,923    6,897
        Insurance and finance company
         operations, pretax income       (14)      (9)        (36)     (22)
        Research and development
         expenses                        194      193         385      406
        Promotion and advertising
         expenses                        102      109         187      226
        Selling and administrative
         expenses                        446      437         913      913
         Amortization of intangibles      13        9          22       20
        Total operating costs and
         expenses                      4,280    4,310       8,394    8,440
        Operating Income                 896    1,207       1,764    2,282
        Other Income (Expense)
        Equity in earnings of 20%-50%
         owned companies                  24       15          40       40
        Interest expense and amortization
         of debt                        (118)     (98)       (242)    (199)
        Interest income and foreign
         exchange-net                     75       35         150       73
        Net loss on investment (Note B)    0     (330)          0     (330)
        Sundry income - net               62        3         110       14
        Total other income (expense)      43     (375)         58     (402)
        Income before Provision for Taxes
         on Income                       939      832       1,822    1,880
        Provision for Taxes on Income    344      420         670      834
        Minority Interests' Share
         in Income                        48       77         127      145
        Preferred Stock Dividends          1        1           3        3
        Income from Continuing
         Operations                     $546     $334      $1,022     $898
        Discontinued Operations
         Income from pharmaceutical business, net
         of taxes on income                0        0           0       18
        Gain on sale of pharmaceutical business,
         net of taxes on income (Note C)   0      169           0      169
        Net Income Available for
         Common Stockholders            $546     $503      $1,022   $1,085
        Average Common Shares
         Outstanding                   247.7    273.5       249.3    275.2
        Earnings per Common Share from
         Continuing Operations         $2.20    $1.22       $4.10    $3.25
        Earnings per Common Share      $2.20    $1.84       $4.10    $3.94
        Common Stock Dividends Declared
         per Share                     $0.75    $0.75       $1.50    $1.40
        Depreciation                    $308     $309        $616     $668
        Capital Expenditures            $341     $575        $605     $778

        
        Notes to the Financial Statements
        


            Note A:   The unaudited interim financial statements reflect all
        adjustments (consisting of normal recurring accruals) which, in the
        opinion of management, are considered necessary for a fair
        presentation of the results for the periods covered.  Certain
        reclassifications of prior year amounts have been made to conform to
        current year presentation.  These statements should be read in with
        the financial statements and notes thereto included in the Company's
        Form 10-K for the year ended December 31, 1995.
        


            Note B:  In May 1995, Dow Corning Corporation filed for
        protection under Chapter 11 of the United States Bankruptcy Code.
        The Company is a 50 percent shareholder in Dow Corning Corporation.
        As a result of Dow Corning's Chapter 11 filing and its 1995 second
        quarter loss, the Company recognized a pretax charge against income
        of $330 million, fully reserved its net investment in Dow Corning
        and will not recognize its 50 percent share of future equity
        earnings while Dow Corning remains in Chapter 11.  The charge
        impacted the Company's second quarter of 1995 earnings by $1.24 per
        share.
        


            Note C:  In June 1995, the Company sold its 197 million shares
        of Marion Merrell Dow to Hoechst for $5.1 billion or $25.75 per
        share. In addition, subsidiaries of the Company sold the Company's
        Latin American pharmaceutical business based in Argentina, Brazil
        and Mexico to Roussel Uclaf S.A. for $133 million.  These two
        transactions, net of taxes on income of $382 million, increased the
        Company's second quarter of 1995 earnings by $169 million or 62
        cents per share.
        


CONTACT:  Darlene MacKinnon of The Dow Chemical Company,
        517-636-2876



HUNTWAY PARTNERS, L.P. FILES CONSENT SOLICITATION DISCLOSURE STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION


        


            NEWHALL, Calif., July 24, 1996  --  Huntway Partners, L.P.
        (NYSE: HWY) today filed a Consent Solicitation Disclosure Statement
        and related consent materials with the Securities and Exchange
        Commission (SEC) in connection with its previously announced debt
        restructuring plan.
        


            The debt restructuring plan has been approved by four of its
        five senior lenders, representing 86% of Huntway's senior debt, as
        well as the two holders of junior debt.  Because the remaining
        holder of 14% of Huntway's senior debt has still not agreed to the
        restructuring plan, the partnership has concluded that it will seek
        to accomplish the debt restructuring plan through a "prepackaged"
        reorganization plan with the U.S. bankruptcy court.  The consent
        solicitation materials filed today with the SEC seek the approval by
        common unitholders of the prepackaged reorganization plan and
        certain other matters.  The partnership anticipates that it will
        distribute definitive consent solicitation materials to common
        unitholders promptly following the applicable SEC review period.
        Any such prepackaged plan will provide for the continuing and timely
        payments in full of all of the partnership's obligations to
        suppliers, other trade creditors and employees under normal trade
        terms.
        


            As previously announced, the debt restructuring plan will reduce
        total indebtedness to $25.6 million from $95.5 million effective
        January 1, 1996.
        


            Accordingly, upon closing, debt will be reduced by approximately
        $70 million, resulting in positive unitholder equity of
        approximately $40 million, while annual interest expense will be
        reduced approximately $2 million.  Under the agreement, the new debt
        will mature on December 31, 2005 and will amortize over years three
        through ten of the agreement.  No cash interest or principal
        payments are required to be paid in 1996 under the agreement.
        


            As consideration for the restructuring, the partnership will
        issue approximately 13.8 million new common units to its lenders,
        including approximately 1.1 million to its junior debt holders as
        part of this transaction.  Huntway currently has approximately 11.6
        million common units outstanding.  Additionally, the partnership
        will retire approximately 3.9 million warrants previously
        distributed to the lenders.  The agreement specifies that management
        will be issued new options for 10% of the company on a fully-diluted
        basis (inclusive of approximately one million options already
        issued) at a strike price of $.50 a unit.
        


            Commenting on the announcement, Huntway's Executive Vice
        President and Chief Financial Officer, Warren Nelson, said that,
        "The filing of the consent solicitation materials today with the SEC
        is another step forward in achieving our goal of completing the debt
        restructuring plan. The next step will be to solicit unitholder
        approval, to be followed by completing the transaction with the U.S.
        bankruptcy court, which now appears to be likely given the inability
        to reach a consensual agreement with all of our senior lenders."
        


            Huntway Partners, L.P. owns and operates two refineries at
        Wilmington and Benicia, California, which primarily process
        California crude oil to produce liquid asphalt for use in road
        construction and repair, as well as smaller amounts of gas oil,
        naphtha, kerosene distillate and bunker fuels.  The company's third
        refinery, at Coolidge, Arizona, is shut down although it may be
        reopened as a terminal in 1997 or beyond.
        


            The company's preference units are traded on the New York Stock
        Exchange under the symbol HWY.
        


CONTACT:  Warren J. Nelson, Executive Vice President and Chief
        Financial Officer or Earl Fleisher, Controller, both of Huntway
        Partners, L.P., 805-286-1582



MATRIA HEALTHCARE, INC. ANNOUNCES SECOND QUARTER FINANCIAL RESULTS


        


            MARIETTA, Ga., July 25, 1996  --  MATRIA HEALTHCARE, INC.
        (Nasdaq: MATR) today announced its financial results for the Second
        Quarter and Six Months ended June 30, 1996.  The Second Quarter
        represents Matria's first full quarter of operations since the
        merger (the "Merger") of Tokos Medical Corporation and Healthdyne,
        Inc. (whose sole remaining operating unit was Healthdyne Maternity
        Management) on March 8, 1996.
        


            Revenues of $35.6 million in the Second Quarter of 1996 for
        Matria, produced a net profit of $120,000 before deduction of $8.7
        million, or $0.25 per share, of goodwill amortization and other
        intangibles arising principally from the Merger.  This compares to
        revenues of $22.1 million and a loss of $6.3 million, or $0.36 per
        share, in the Second Quarter of 1995.  The financial results for the
        month of June 1996 of National Reproductive Medical Centers, Inc., a
        California based provider of infertility services recently acquired
        by Matria, are also included in Matria's Second Quarter results.
        


            For the Six Months ended June 30, 1996, Matria had revenues of
        $60.3 million and a net loss of $3.0 million, or $0.10 per share,
        before deduction of $26.7 million, or $0.94 per share, in goodwill
        amortization, restructuring charges and other expenses arising from
        the Merger.  This compares to revenues of $46 million and a loss of
        $8.7 million, or $0.50 per share, for the comparable period in 1995.
        


            Robert F. Byrnes, President and Chief Executive Officer, stated,
        "We have made substantial progress in our consolidation efforts and
        in blending the product lines and service approaches of Tokos and
        Healthdyne. These efforts will be substantially completed by the end
        of the 3rd Quarter of 1996.  The acquisition during the Quarter of
        National Reproductive Medical Centers, a premier infertility-focused
        healthcare company, provides Matria with an exciting new and
        complementary line of business that we intend to significantly
        expand in the next few years."
        


            This press release contains forward-looking statements that
        involve risks and uncertainties, including developments in the
        healthcare industry, third-party reimbursement policies and
        practices and regulatory requirements affecting the approval and
        sale of medical devices, as well as other risks detailed from time
        to time in the Company's reports filed with the Securities and
        Exchange Commission.
        


            Matria Healthcare, Inc., is the leading provider of
        comprehensive obstetrical homecare and maternity management services
        to HMOs, indemnity carriers and employers.
        



                           MATRIA HEALTHCARE, INC.
                    Consolidated Condensed Balance Sheets

                           (Amounts in thousands)
                                (Unaudited)
        
         ASSETS                                            6/30/96 12/31/95
        Current assets:
          Cash and short-term investments                 $ 39,569 $  8,066
          Trade accounts receivable, net                    24,306   17,767
          Inventories                                        2,219    1,384
          Other current assets                               4,209      612
          Total current assets                              70,303   27,829
        Property and equipment, net                         15,460    7,858
        Goodwill and other intangibles, net                164,099    4,556
        Other assets                                         3,277    4,340
          Total                                           $253,139   44,583
        
        Liabilities and Shareholders' Equity
        Current Liabilities:
          Current installments of long-term debt and
            obligations under capital leases                 2,902    1,914
          Accounts payable, principally trade                6,802    2,625
          Other current liabilities                         35,021    8,431
          Total current liabilities                         44,725   12,970
        Long-term debt and obligations under capital
          leases, excluding current installments             4,163    2,124
        Other long-term liabilities                         11,094      ---
          Total liabilities                                 59,982   15,094
        Shareholders' equity                               193,157   29,489
          Total                                           $253,139  $44,583
        
                            MATRIA HEALTHCARE, INC.
                Consolidated Condensed Statements of Operations
                    (in thousands, except per share data)
                                 (Unaudited)
        
          Three months ended                               6/30/96  6/30/95
        Net Revenues                                      $ 35,588 $ 22,067
        Cost and expenses:
        Cost of revenues                                    15,317    9,753
        Selling, general and administrative                 18,385   12,049
        Provision for doubtful accounts                      2,086    1,324
        Amortization of goodwill and other intangibles       8,687      432
        Restructuring costs                                    ---      530
        Settlement of litigation                               ---    4,300
          Total                                             44,475   28,388
          Operating loss                                    (8,887)  (6,321)
        Interest income                                        365      246
        Other expense, net                                     (45)    (101)
          Loss before income taxes                          (8,567)  (6,176)
        Income tax expenses                                    ---       75
          Net loss                                          (8,567)  (6,251)
        Loss per common and common equivalent share       $   (.25)    (.36)
        Weighted average number of common shares and
         common share equivalents                           34,960   17,338
        
          Six months ended                                 6/30/96  6/30/95
        Net Revenues                                      $ 60,338 $ 45,931
        Cost and expenses:
        Cost of revenues                                    26,041   19,895
        Selling, general and administrative                 34,034   25,017
        Provision for doubtful accounts                      3,553    2,758
        Amortization of goodwill and other intangibles      11,698      724
        Restructuring costs                                 15,025    2,053
        Settlement of litigation                               ---    4,300
          Total                                             90,351   54,747
          Operating loss                                   (30,013)  (8,816)
        Interest income                                        402      496
        Other expense, net                                     (46)    (202)
          Loss before income taxes                         (29,657)  (8,522)
        Income tax expenses                                    ---      150
          Net loss                                         (29,657)  (8,672)
        Loss per common and common equivalent share       $  (1.04)    (.50)
        Weighted average number of common shares and
         common share equivalents                           28,505   17,311


CONTACT:  Donald R. Millard, Chief Financial Officer, Matria
        Healthcare, Inc., 770-423-4529


MK POSTS SECOND QUARTER RESULTS


        


            BOISE, July 25, 1996  --  Morrison Knudsen Corporation
        (NYSE: MRN) today reported that due to $30.7 million in charges
        associated with the company's financial reorganization and
        discontinued transit operations, the company reported a net loss of
        $28.1 million ($.85 per share) on revenue of $353 million for the
        quarter ended June 30, 1996 compared to a net loss of $12.4 million
        ($.37 per share) on revenue of $459 million for the second quarter
        of 1995.
        


            The company reported operating income from continuing operations
        for the quarter of $17.8 million, compared to $10.6 million
        operating income for the second quarter of 1995.  In addition, the
        company reported income from continuing operations of $3.9 million
        before reorganization items and income taxes, compared to a loss of
        $10.1 million for the second quarter of 1995.  Backlog of all
        uncompleted contracts at June 30, 1996 was $3.5 billion.
        


            "Our core engineering, construction, environmental and mining
        businesses continue to perform well, both operationally and
        financially," said Robert A. Tinstman, MK's President and Chief
        Executive Officer.  "Following the merger with Washington
        Construction Group, Inc., MK will be well-positioned for 1997."
        


            Operational highlights during the quarter include the award of a
        three-year-extension contract from the Tennessee Valley Authority
        (TVA) for construction modifications and supplemental maintenance at
        TVA's Fossil and Hydro electric generating plants and additional TVA
        facilities.  The extension contract, awarded to G-UB-MK
        Constructors, a joint venture of MK, Parsons Power Group, Inc. and
        Union Boiler Company, is valued at $256 million, bringing the total
        contract value to $634 million.
        


            In April, an MK-led joint-operations team was awarded an
        engineering, procurement and construction-management contract for
        installation of coal processing, stockpiling and ship loading
        equipment for a 3.8-million-ton-capacity surface mine in Indonesia.
        Under the new contract, the MK consortium will direct the 24-month-
        long project to install equipment and construct facilities valued at
        $80 million, permitting coal loading into ocean-going Panamax-class
        vessels for export throughout the Pacific Rim.
        


            Also during the second quarter, MK was awarded a cost-plus-fixed-
        fee contract to provide management and technical services during
        construction of the $700 million Pinglin Tunnel, a major segment of
        a new four-lane expressway connecting Taipei City with Ilan County
        on the Pacific coast.  The project is the largest underground
        construction project currently underway in the world.
        


            Morrison Knudsen Corporation, founded in 1912, serves the
        world's heavy construction, industrial process, mining,
        environmental, power, operations & maintenance and transportation
        markets as an engineer and constructor.
        



           MORRISON KNUDSEN CORPORATION
           CONSOLIDATED STATEMENT OF OPERATIONS

           THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1996 AND 1995
        (UNAUDITED)
           (Thousands of dollars except share data)
        
                                Three Months Ended    Six Months Ended
                                     June 30,             June 30,
                                 1996     1995 (a)    1996      1995 (a)
        
           Revenue             $  353,481  $ 459,209   $ 677,684 $ 825,695
           Cost of revenue       (335,635)  (448,581)   (645,109) (810,359)
           Operating income from
        continuing operations  17,846     10,628      32,575    15,336
           General and
        administrative
        expenses              (10,529)   (15,165)    (24,027)  (25,784)
           Interest expense        (4,924)    (9,008)    (10,148)  (14,439)
           Other income
        (expense), net                     2,248                 2,563
           Equity in net income
        of unconsolidated
        affiliates              1,517      2,514       4,757    14,461
           Gain (loss) on
        disposition of
        investments in
        affiliates, and
        other assets, net                 (1,282)      2,130   (21,301)
           Income (loss) from
        continuing operations
        before reorganization
        items and income taxes 3,910     (10,065)      5,287   (29,164)
           Reorganization items  (20,904)                (20,904)
           Loss from continuing
        operations before
        income taxes         (16,994)    (10,065)    (15,617)  (29,164)
           Income tax expense     (1,275)       (440)     (2,357)     (977)
           Loss from continuing
        operations           (18,269)    (10,436)    (17,974)  (30,072)
           Discontinued operations:
         Loss from
          discontinued MK
          Rail and Transit
          operations                      (1,952)               (8,135)
         Loss on disposition
          of discontinued
          operations          (9,805)                (9,805)   (25,500)
           Net loss            $ (28,074)  $ (12,388) $ (27,779)  $(63,707)
           Loss per common share:
         Continuing operations $(.55)      $(.31)     $(.54)   $  (.91)
         Discontinued
          operations            (.30)       (.06)      (.30)     (1.02)
           Net loss                $(.85)      $(.37)     $(.84)    $(1.93)
           Common shares used to
        compute loss
        per share         33,044,000  33,042,000 33,044,000 32,954,000
        
           BACKLOG NEW BUSINESS (Thousands of dollars)
        
           New business booked during the period       $341,200   $340,200
           Backlog at end of period                  $3,527,900 $3,649,200
        

            (a) Certain amounts reclassified to conform to 1996 financial
        statement presentation.
        


CONTACT:  Brent D. Brandon, Vice President of Corporate
        Communications of Morrison Knudsen, 208-386-6611



WARNACO AND AUTHENTIC FITNESS TERMINATE MERGER AGREEMENT


        


            NEW YORK, July 25, 1996  --  The Warnaco Group, Inc. (NYSE:
        WAC) and Authentic Fitness Corporation (NYSE: ASM) jointly announced
        the termination of their merger agreement after it became clear that
        Authentic Fitness will report a loss for its fourth fiscal quarter
        ended June 30, 1996, and, consequently, report earnings below street
        estimates for its 1996 fiscal year due, in large measure, to the
        previously announced loss of a major customer, Herman's, which filed
        for bankruptcy in May, as well as the attendant previously announced
        decline in revenues for the fourth quarter of 1996 resulting in
        lower gross profits.
        


            Authentic Fitness said that sales for the fourth fiscal quarter
        and into early July were softer than expected.  Authentic Fitness
        said that fiscal 1997 will be profitable but lower than current
        Street estimates. Authentic Fitness said it believes the impact of
        Herman's selling unsold Speedo inventory into the marketplace at
        deep discounts is accounting for the drop in demand and that once
        the inventory is sold, sales volume will improve.
        


            Authentic Fitness agreed to terminate the merger agreement after
        being advised by the Warnaco board that it would not recommend the
        transaction to its shareholders and that it was extremely unlikely
        they would reconsider their position.
        


            Separately, Warnaco confirmed that its sales and earnings are in
        line with street estimates.
        


            Linda J. Wachner, Chairman and Chief Executive Officer of
        Warnaco, said that, "The Board agreed that while the strategic logic
        of a business combination between Warnaco and Authentic Fitness
        makes sound strategic sense, it must be done only on a prudent and
        responsible financial basis in order for the shareholders of both
        companies to truly benefit and assure that the operations of the
        businesses are strengthened.  The board, therefore, unanimously
        concluded to terminate the merger agreement at this time.
        


            "We will continue to work, as in the past, seeking continuously
        to build and deliver value for the shareholders of each company
        through improved performance and the exploration of new growth
        opportunities for each," said Mrs. Wachner.
        


            The Warnaco Group, Inc., headquartered in New York, is a leading
        manufacturer of intimate apparel, menswear and accessories sold
        under such brand names as Warner's(R), Olga(R), Valentino Intimo(R),
        Fruit of the Loom(R) bras and Hathaway(R), Chaps by Ralph Lauren(R),
        Calvin Klein(R) men's underwear and women's intimate apparel,
        Catalina(R) men's sportswear and Lejaby(R) intimate apparel and
        swimwear.
        


            Authentic Fitness Corporation, headquartered in Los Angeles,
        California, designs and markets swimwear, swim accessories and
        fitness apparel under the Speedo(R), Speedo(R) Authentic Fitness(R),
        Oscar de la Renta(R), Catalina(R), Cole of California(R), and Anne
        Cole(R) brand names, skiwear, activewear, swimwear and accessories
        under the White Stag(R) brand name and skiwear under the
        Edelweiss(R), Mountain Goat(R) and Skiing Passport(R) brand names.
        


CONTACT:  Linda J. Wachner, 212-370-8204, or William S.
        Finkelstein, 212-370-8287, both for Warnaco; or Jeffrey Taufield of
        Kekst and Company, 212-593-2655



AHI HEALTHCARE SYSTEMS, INC. ANTICIPATES A LARGER THAN EXPECTED LOSS IN SECOND QUARTER


        


            DOWNEY, Calif., July 25, 1996  --  AHI Healthcare Systems,
        Inc. (Nasdaq-NNM: AHIS) today announced that it anticipates
        reporting a larger than expected loss for the second quarter ended
        June 30, 1996, primarily due to higher than expected medical costs
        in the quarter. Losses are expected to continue until at least the
        end of 1996.  The company also announced that it plans to engage an
        investment advisor to explore strategic alliances and other ways to
        maximize stockholder value.  Specific plans, including a yet-to-be-
        determined organizational restructuring and a restructuring of the
        company's bank loan agreement, are expected to be announced later in
        1996.
        


            Leonardo A. Berezovsky, M.D., chairman and chief executive
        officer, stated, "While management is obviously disappointed in our
        progress to date, we are exploring a number of strategic initiatives
        to capitalize on opportunities that exist in the marketplace.
        Although we believe that AHI has built an organization and
        infrastructure which has long- term value, short-term cost and
        membership growth issues necessitate a realignment of resources and,
        perhaps, a strategic alliance to achieve our objectives.  We look
        forward to improved financial results once the company has
        restructured its operations and membership growth is achieved."
        


            AHI estimates a loss of at least $7 million for the second
        quarter of 1996.  These results include changes in reserve estimates
        relating to both professional and hospital medical costs.  AHI
        expects to report total operating revenue for the quarter ended June
        30, 1996 of approximately $28 million, which includes a reduction in
        risk share revenue of about $2 million - primarily due to higher
        than expected hospital costs.  Additionally, the loss includes an
        increase in the cost of medical services of approximately $2.5
        million, reflecting recent experience in claims payments.  In
        addition, the company noted that it does not expect to recognize
        income tax benefits in the second quarter of 1996.
        


            For the second quarter ended June 30, 1995, the company reported
        total operating revenue of $29.5 million and a net loss of $789,000.
        


            AHI Healthcare Systems, Inc. integrates individual and small
        groups of primary care physicians and specialists into comprehensive
        local managed health care delivery networks, providing affiliated
        physicians with access to managed care contracts and single-source
        access to health maintenance organizations.
        


            This release contains certain forward looking statements.
        Although AHI Healthcare Systems, Inc. believes that its expectations
        are based upon reasonable assumptions within the bounds of its
        knowledge of its business and operations, there can be no assurance
        that actual results will not materially differ from its
        expectations.  Factors which could cause actual results to differ
        from expectations include the difficulty in increasing and managing
        growth in covered lives, controlling and estimating health care
        costs, estimating revenue from shared-risk arrangements, as well as
        the possible negative effects of the health care regulatory
        environment and the effects of competition.  For other important
        factors which may cause actual results to materially differ from
        expectations and underlying assumptions, refer to the Registration
        Statement on Form S-1 and periodic reports filed by AHI Healthcare
        Systems, Inc., including its Annual Report on Form 10-K for the year
        ended December 31, 1995, with the Securities and Exchange
        Commission.
        


        CONTACT:  H.R. Brereton Barlow, Chief Financial Officer of AHI
        Healthcare Systems, Inc., 310-803-0100; or Gary S. Maier or Cecilia
        Wilkinson, 310-207-9300, both of Pondel Parsons & Wilkinson