Needham, MA, July 28, 1998 - CareMatrix Corporation (AMEX: CMD), a fully integrated assisted living company, today announced record results for the quarter and six-month period ended June 30, 1998.

The Company reported net income of $4,150,535 or $0.23 per share on revenues of $34,166,646 for the second quarter ended June 30, 1998. This compares to net income of $1,228,364 or $0.07 per share on revenues of $14,930,479 for the second quarter of 1997.

For the six-month period ended June 30, 1998 the Company reported net income of $7,515,725 or $0.42 per share on revenues of $63,812,349 compared to net income of $2,042,964 or $0.12 per share on revenues of $28,021,997 for the same period in 1997.

Robert Kaufman, Chief Executive Officer of CareMatrix commented, "We are pleased to report record results that exceeded consensus estimates for both revenues and earnings. In the past three months we opened seven facilities totaling 870 units, and we now have seventy-seven facilities in development representing nearly 10,000 units, including thirty-one facilities in construction representing 3,400 units. Our pipeline includes seven campus developments which are expected to be a strategic component of the Company's future expansion plans. The occupancy levels for our stabilized facilities continued to be high at 93.2% and operating margins for these facilities increased by .5% over the first quarter to 38.9%. The fill rates for the facilities opened in the fourth quarter of 1997 remain strong and are well ahead of plan."

Recently, the Company announced that it had entered into an agreement to acquire SeniorCare Group, Ltd., a leading provider of assisted living services and Alzheimer's care located in Long Island, New York. SeniorCare owns and operates seven facilities, six in Long Island and one in New Jersey. Three additional facilities are in the development stage. The total capacity of the ten facilities will be 2,100 residents. Also, the Company announced that it had entered into an affiliation agreement with George Wagner, Principal of National Assisted Living Limited Partnership (NALLP), providing an option to acquire up to 600 units in nine facilities once they achieve stabilized occupancy. This is in addition to the long-term leases it acquired on two senior housing facilities totaling 331 units in Arizona in March of this year and lease agreements for seven facilities totaling 685 units in operation or development in southwestern Connecticut in January of this year.

Mr. Kaufman added, "The above transactions will add resident capacity of over 3,100 seniors once the projects are completed. They are strategically located within our targeted cluster markets. We will have a resident capacity in operation or development of over 6,500 in the New York marketplace and nearly 900 in Arizona. These are both deep and affluent markets. Our cluster focus offers significant market and operating synergies. In addition, this depth fits well with our plan to increase the number of campus projects we will develop to offer seniors multiple entry points and to extend the average stay as the residents age in place."

The Company currently operates 34 facilities totaling 3,839 units. Mr. Kaufman concluded, "Our development pipeline is very strong. We expect to open twenty facilities totaling 2,400 units during the next six months. With these openings and the SeniorCare acquisition, we expect our operating facilities to accommodate over 7,500 residents at that time. This is over three times the capacity of one year ago. In addition, several of these openings represent our first facilities in metropolitan markets, such as Philadelphia and San Francisco. A majority of our development facilities will offer Alzheimer's care, a very large and under served market. Alzheimer's is expected to comprise an increasing percentage of our overall revenue. Finally, the affiliation agreement allows us to acquire stabilized facilities at a reasonable price. While the agreement currently covers 600 units, we believe it could include several additional sites in the near future."

CareMatrix Corporation is a leading provider of senior housing services, including assisted living, independent, supportive independent living and specialized programs for people with Alzheimer's disease.

This release contains forward-looking statements regarding the Company's future plans, operations and prospects. The Company's actual results could differ materially from the results anticipated in these forward looking statements as a result of uncertainties, including risks relating to demand, pricing, competition, construction, and other factors identified in the Company's filings with the Securities and Exchange Commission.

EDITOR’S NOTE: This release is available on the Internet at http://www.carematrix.com.