MINNEAPOLIS, May 20 /PRNewswire/ -- Health Fitness Corporation (OTC Bulletin Board: HFIT) reported today revenues from continuing operations increased 12.5 percent to $6,948,000 for the first quarter ending March 31, 1999 compared to revenues of $6,177,000 in the same period last year. Increased revenues were due to growth in the company's new fitness center management and International Fitness Club Network contracts. Net loss was $(1,152,000) for the quarter compared to net income of $30,000 for the same period last year. The net loss for the first quarter of 1999 included income from continuing operations of $273,000. Gross profit was $1,766,000 for the first quarter of 1999 compared to $1,614,000 a year ago, while operating expenses were $1,296,000 compared to $1,182,000 for the same period last year. Loss from discontinued operations was $(1,425,000) for the first quarter of 1999 compared to a loss of $(398,000) for the first quarter of 1998. The increased losses from discontinued operations were due to actual operating losses exceeding earlier estimates, changes in the net realizable value of certain assets, changes in the estimated sales price of the divisions, and increased employee severance costs. During the quarter, the company focused on strengthening its core business of managing corporate fitness facilities, improving its capital resources, and continuing the process to dispose of its freestanding physical therapy clinics business segment and its fitness equipment business segment. Health Fitness recently sold the majority of its free-standing physical therapy clinics, for which the company received $3.6 million in cash. Net proceeds from the sale of $2.25 million were used to reduce the company's debt. The company also announced that Charles E. Bidwell has resigned from his positions as chairman and as chief financial officer of the company but retains his position as a director. The Board of Directors elected director James A. Bernards of Brightstone Capital, Ltd, as chairman; James L. Nichols of Manchester Companies, Inc. as acting chief financial officer; and Robert Peterson as vice president of finance. Health Fitness Corporation of Minneapolis, Minn. is the nation's largest manager of corporate fitness centers and hospital-based fitness centers throughout the United States, and provides a wide range of additional preventive health care services to corporations. This press release contains forward-looking statements regarding the company's anticipated future operations and growth; these statements should be read in conjunction with the various factors affecting the company's ability to finance and manage such growth discussed in the Management's Discussion and Analysis of Financial Condition and Results of Operations portion of the company's Annual Report on Form 10-K for the year ended December 31, 1998. HEALTH FITNESS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited Three Months Ending March 31 1999 1998 Revenues $6,948,000 $6,177,000 Costs of revenue 5,182,000 4,563,000 Gross profit 1,766,000 1,614,000 Operating expenses 1,296,000 1,182,000 Operating income 470,000 432,000 Interest expense (241,000) (101,000) Other income 45,000 109,000 Income from continuing operations before income taxes 274,000 440,000 Income taxes 1,000 12,000 Income from continuing operations 273,000 428,000 Loss from discontinued operations (1,425,000) (398,000) Net income (loss) $ (1,152,000) $ 30,000 Basic net income (loss) per share $(0.10) $0.00 Diluted net income (loss) per share $(0.09) $0.00  