CHILDREN'S COMPREHENSIVE SERVICES REPORTSWITHDRAWAL OF TWO PREVIOUSLY ANNOUNCED CONTRACTS WITH...

MURFREESBORO, Tenn.--(BUSINESS WIRE)--June 11, 1997--William J. Ballard, Chairman and Chief Executive Officer of Children's Comprehensive Services, Inc. ("CCS") (Nasdaq/NM:KIDS), today reported that CCS has voluntarily withdrawn its decision to proceed with two previously announced contracts with

Mr. Ballard commented, "Despite having signed contracts for the two programs, CCS believed that it was appropriate for it to withdraw from the contracts and thereby provide the opportunity for the State of Ohio to reissue requests for proposals for the contracts. Two factors formed the basis of this decision. First, an Ohio-based company formerly providing services for one of the contracts filed a lawsuit against the state to overturn the state's award of the contract to CCS. Second, the Company was unable to secure the necessary zoning approvals needed to initiate the programs in the building it had chosen for the residential center to house both programs. Typically, we would have proceeded immediately to secure another location for the programs. However, securing another site prior to the required July 1, 1997 opening date for the programs was not possible. Consequently, because of the pressure brought to bear on the state by the lawsuit of the former provider, the state, in concert with CCS, determined that it would be in the best interest of all concerned to reopen the contracts to competitive bid.

"In addition to the strengths that resulted in CCS's winning the contracts originally, we believe that our continuing to work in complete good faith with the state personnel has positioned us to remain a viable candidate for these contracts. We currently expect the state to award the contracts this summer and for the programs to be initiated in September 1997. We do not believe that the state's actions on these contracts will negatively affect our ability to pursue and be awarded future business in Ohio or in other states."

As previously announced, the two contracts were with the Ohio Department of Youth Services. Both contracts were for 25-bed residential programs for at risk and troubled youth, one for sex offenders and the other for youth who have been determined to need specialized mental health services as well as substance abuse treatment. The contracts together were expected to produce aggregate revenues of $4.8 million during their initial two-year terms.

Separately, the Company's contract to operate a residential youth center in Eufaula, Alabama has been expanded to accommodate an additional 30 juvenile males, raising to 90 the maximum capacity under the contract. The Company expects to begin to receive additional youth immediately. Incremental annual revenues from this expansion are expected to approximate $1 million.

CCS, based in Murfreesboro, Tennessee, provides either directly or through management contracts, education and treatment services for at-risk and troubled youth. CCS offers these services through the operation and management of specialized education programs and both open and secured residential treatment centers and day treatment centers located in 11 states.

CONTACT: Children's Comprehensive Services, Inc., Murfreesboro

Donald B. Whitfield, 615/896-3100