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Matria's Second Quarter Profits to Exceed High End Guidance and Securities Litigation Dismissed

MARIETTA, Ga.--(BUSINESS WIRE)--July 20, 2004--Matria Healthcare, Inc. (NASDAQ/NM:MATR) announced today that it expects to exceed the high end of its previously announced second quarter of 2004 guidance of $0.21 earnings per share, excluding the loss on the retirement of the Company's 11% Senior Notes and the gain on the sale of assets of the Company's Pharmacy and Supplies business. The Company's second quarter of 2004 results will be released after the close of the market on Thursday, July 22, 2004.

The Company also announced today that the previously disclosed securities class action filed against it and certain individuals has again been dismissed by the United States District Court. Parker H. Petit, Chairman and Chief Executive Officer, stated, "We have always believed the lawsuit was without merit, and we are gratified that the Court has dealt with the case quickly." General Counsel Roberta McCaw explained "The Court's ruling is particularly noteworthy in several respects, including the specific holding that there were no allegations to support a claim that the Company or its executives violated the securities laws. Since this is the second time this case has been dismissed by the court, we hope this ruling will put this matter to rest."

In another unrelated matter, the Company also announced that it recently has been awarded two new disease management employer accounts in addition to its previously announced awards of business. The Company was notified that it has been again selected as a provider of disease management services for the employees of a state government. With this award, Matria will manage the conditions of diabetes, coronary artery disease (CAD), cancer, congestive heart failure (CHF) and obesity for the state's employees and their dependents. This award is the Company's third state employer award to manage multiple diseases and conditions. The other new award of business was the Company's selection to provide diabetes, CAD, CHF and low back pain disease management programs for the U.S. employees and dependents of an employer listed on the London Stock Exchange.

Matria Healthcare is a leading provider of comprehensive disease management programs to health plans and employers. Matria manages the following major chronic diseases and episodic conditions - diabetes, cardiovascular diseases, respiratory diseases, high-risk obstetrics, cancer, chronic pain and depression. Headquartered in Marietta, Georgia, Matria has more than 40 offices in the United States and internationally. More information about Matria can be found on line at www.matria.com.

This press release contains forward-looking statements. Such statements include, but are not limited to, the Company's financial expectations for the second quarter of 2004, the resolution of the securities class action filed against the Company and awards of new disease management accounts. These statements are based on current information and beliefs and are not guarantees of future performance. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include the failure to achieve the Company's financial expectations for the second quarter of 2004, an appeal of the dismissal of the securities class action, failure to convert awards of business into implemented disease management contracts, developments in the healthcare industry, third-party actions over which Matria does not have control, regulatory requirements applicable to Matria's business, inability to grow profitably through acquisitions and the risk factors detailed from time to time in Matria's periodic reports and registration statements filed with the Securities and Exchange Commission, including Matria's Annual Report on Form 10-K for the year ended December 31, 2003. By making these forward-looking statements, Matria does not undertake to update them in any manner except as may be required by Matria's disclosure obligations in filings it makes with the Securities and Exchange Commission under the federal securities laws.

    CONTACT: Matria Healthcare, Inc., Marietta
             Stephen M. Mengert, 770-767-4500

    SOURCE: Matria Healthcare, Inc.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Alere Medical, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.