EXHIBIT 99.2
[GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
MARCH 24, 2003
HEALTHSOUTH TAKES STEPS TO STABILIZE COMPANY
AND ADDRESS CURRENT ISSUES
-PriceWaterhouseCoopers, Alvarez & Marsal and Skadden Arps Retained to Assist-
-Stock Trading Remains Halted-
BIRMINGHAM, Alabama - HEALTHSOUTH Corporation (NYSE:HRC) announced today that it
has taken important actions to address its current situation and stabilize the
company. Most significantly, HEALTHSOUTH has hired experienced outside
professionals to provide vital management assistance to evaluate future
financing alternatives and to coordinate the company's legal strategy.
The company also announced today that, in light of the recent Securities and
Exchange Commission and Department of Justice investigations into its financial
reporting and related activity calling into question the accuracy of the
company's previously filed financial statements, such financial statements
should no longer be relied upon. Meanwhile, trading of HEALTHSOUTH shares on The
New York Stock Exchange remains halted.
The Special Investigative Committee of the Board, led by Director Jon F. Hanson,
has engaged a forensic auditing team from PriceWaterhouseCoopers, to fully
investigate all issues related to the SEC's allegations concerning the company's
previous financial reports. The forensic auditing team began work Friday.
"HEALTHSOUTH is committed to fully investigating and resolving all issues
relating to its financial reporting, and will take appropriate actions against
any employee found to have committed any fraud or other wrongdoing," said Joel
C. Gordon, HEALTHSOUTH's acting chairman of the board.
Alvarez & Marsal Inc., a leading turnaround advisory firm, has been retained to
work directly with HEALTHSOUTH to help stabilize operations, address financial
and liquidity concerns and to position the company for successful restructuring
as it moves forward. Bryan P. Marsal, who has more than two decades of hands-on
operational and financial experience, will lead the engagement team. Mr. Marsal
has most recently served as Chief Restructuring Manager of Arthur Andersen LLP.
The firm will have an integral role in helping the company address key issues
with its lenders and bondholders.
-more-
HEALTHSOUTH has also designated the law firm of Skadden, Arps, Slate, Meagher &
Flom LLP to serve as lead coordinating counsel on both corporate and litigation
matters. Skadden Arps represents nearly one-half of the Fortune 250 industrial
and service corporations, as well as many financial and governmental entities.
"HEALTHSOUTH is working very hard to stabilize this situation, and adding this
level of outside expertise to the team at this time will make significant
strides in our ability to achieve some forward momentum," said Mr. Gordon. "In
the meantime, our business is continuing to operate in the ordinary course."
HEALTHSOUTH is the nation's largest provider of outpatient surgery, diagnostic
imaging and rehabilitative healthcare services, with nearly 1,700 locations in
all 50 states, the United Kingdom, Australia, Puerto Rico, Saudi Arabia and
Canada. HEALTHSOUTH can be found on the Web at www.healthsouth.com.
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Statements contained in this press release which are not historical facts are
forward-looking statements. In addition, HEALTHSOUTH, through its senior
management, may from time to time make forward-looking public statements
concerning the matters described herein. Such forward-looking statements are
necessarily estimates based upon current information, involve a number of risks
and uncertainties and are made pursuant to the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. HEALTHSOUTH's actual results
may differ materially from the results anticipated in these forward-looking
statements as a result of a variety of factors, including those identified in
this press release and in the public filings made by HEALTHSOUTH with the
Securities and Exchange Commission, including HEALTHSOUTH's Annual Report on
Form 10-K for the year ended December 31, 2001 and its Quarterly Reports on Form
10-Q, and forward-looking statements contained in this press release or in other
public statements of HEALTHSOUTH or its senior management should be considered
in light of those factors. There can be no assurance that such factors or other
factors will not affect the accuracy of such forward-looking statements.
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