Safeguard Health Enterprises Inc. ▼

Exhibit 99.1

Media Contact:     Lisa Haines

818.676.7912

lisa.j.haines@health.net

Investor Contact: David Olson

818.676.6978

david.w.olson@health.net

HEALTH NETS FIRST QUARTER EPS

CLIMBS TO $.57 PER SHARE

Expanding Margins, Solid Health Plan and TRICARE Performance Highlight Results

                LOS ANGELES, May 5, 2003 Health Net, Inc. (NYSE:HNT) today announced that 2003 first quarter earnings per diluted share climbed 43 percent to $.57, compared with $.40 in the first quarter of 2002.

Health Net reported net income of $68,229,000 in the first quarter of 2003.  Net income in the first quarter of 2002 amounted to $49,814,000, or $.40 per diluted share, including a $.07 per share impact of goodwill impairment charges associated with the adoption of SFAS No. 142 in the first quarter of 2002.

                Highlights of the first quarter of 2003 included:

                  Total Health Plan enrollment increased by 139,000 members compared to the first quarter of 2002, excluding the loss of CalPERS membership as of January 1, 2003;

                  The companys margin on Earnings Before Interest expense, Taxes, Depreciation, Amortization, Net Investment Income and Asset impairment and restructuring charges (EBITDA) improved 43 basis points to 4.5 percent compared with the first quarter of 2002.  Pretax margin was 4.1 percent for the first quarter of 2003, a 42 basis point improvement compared with the first quarter of 2002.  A reconciliation of EBITDA margin to pretax margin is presented in a reconciliation table at the end of this news release;

                  Operating cash flow of $81,823,000, an improvement of $114,995,000 compared with the first quarter of 2002 and consistent with the levels of net income plus depreciation and amortization in the period;

                  A Health Plan Medical Care Ratio (MCR) of 83.3 percent, an improvement of 47 basis points compared to the same period last year;

                  An Administrative Ratio of 10.6 percent for the period, a 22 basis point improvement over the same period last year, while funding the companys systems consolidation effort;

                  A Debt-to-Total Capital ratio of 23.5 percent, below the companys stated target of 30 percent and down from 29.8 percent at the end of the first quarter of 2002;

                  Return on Equity (ROE) of 22.1 percent, exceeding the companys 20 percent target for the third consecutive quarter (a table showing the calculation of ROE is presented at the end of this news release);

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                  The repurchase of 3,478,600 shares of the companys common stock during the quarter.  The company has repurchased 10,148,200 shares through March 31, 2003 under the stock repurchase program announced on May 2, 2002;

                  Reserves for claims and other settlements were $1,114,687,000 as of March 31, 2003, an increase of $86,756,000 compared with the end of 2002s first quarter.  Days in claims payable were 52.0, consistent with the companys expectations as claims payment cycles improve; and

                  Prior year health plan claim reserves released in the first quarter of 2003 amounted to less than one-tenth of 1 percent of incurred health plan health care costs for the 12 months ended March 31, 2003.

We believe these results speak to our focus on profitable enrollment growth, increasing G&A efficiencies and the prudent use of cash to benefit stockholders, said Jay Gellert, president and chief executive officer of Health Net.

We are especially pleased with the substantial improvements in our Arizona health plan and our behavioral health subsidiary compared with the first quarter of last year, Gellert added.

Revenues

                Health Nets total revenues rose 9.8 percent in the first quarter of 2003 to $2,713,021,000 from $2,469,818,000 in the first quarter of 2002.  Health plan services revenue climbed 6.9 percent to $2,234,568,000 compared to $2,090,317,000 for the first quarter of 2002.

Health plan services revenue gains of 6.9 percent in the first quarter of 2003 compared with the same period in 2002 were the result of higher commercial, Medicare and Medicaid premium yields across the companys health plans.  The overall premium yield per member per

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month (PMPM) in the first quarter of 2003 rose 8.7 percent.  The premium yield on commercial rose by 14.2 percent compared to the first quarter of 2002.

Overall, commercial enrollment declined by 3.6 percent, or approximately 98,800 members, in the first quarter of 2003 compared to the same period in 2002, due to Health Nets January 1, 2003 exit from the CalPERS account which resulted in the loss of approximately 175,000 members.  Excluding the impact of CalPERS, overall commercial enrollment grew by 3.2 percent from the first quarter of 2002, and California commercial enrollment grew by 134,000 members.  The majority of the overall commercial growth came in the small group market that grew by 14.7 percent compared with the first quarter of 2002.  New products and improved broker relationships fueled this growth.

We continue to believe that small group and mid-market in California offer excellent opportunities going forward, Gellert commented.

In the first quarter of 2003, Health Nets Government contracts revenue rose 29.8 percent from the prior years first quarter, reaching $453,556,000.  This significant rise was due to higher change order volume, higher prices on new option periods, and an increase in risk sharing of higher health care costs.  The higher costs were primarily the result of deployment of reservists in support of the nations heightened military activity.  In addition, an increased number of enrollees sought care in the private sector as many military health care professionals were deployed out of the country.  As more care is provided in the private sector, contract costs and revenues rise.

We are proud of our participation in the TRICARE program as we support our troops overseas and at home, Gellert said.

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Other income decreased by $2,605,000 compared to the first quarter of 2002, primarily due to the sale of a claims processing subsidiary in the second quarter of 2002.

In the first quarter of 2003, net investment income was $13,075,000, a decrease of  $2,497,000 from the comparable prior year quarter, primarily due to the lower interest rate environment in 2003 compared to 2002.

Health Care Costs

                Overall PMPM health plan health care costs rose by 8.1 percent in the first quarter of 2003 compared to the first quarter of 2002.  Continuing 2002s favorable trends, the 2003 first quarter health plan MCR improved by 47 basis points from the first quarter of 2002 to 83.3 percent.

                We believe that seasonal patterns helped, but we also see that our commercial pricing discipline is contributing to consistent and predictable MCR trends, Gellert explained.

Government Contracts Costs

The Government contracts cost ratio, at 96.5 percent, improved by 65 basis points compared to the first quarter of 2002.  The improved performance was the result of higher pricing on new option periods and higher change order volume.

Administrative Expenses

                In the first quarter of 2003, Health Nets administrative ratio (G&A plus depreciation) dropped by 22 basis points year-over-year to 10.6 percent.  Total general, administrative and depreciation expenses were $239,174,000 in the period.  The companys focus on expense controls helped drive the ratio lower in the period, even as spending on operational and systems consolidation projects continued.

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Our Health Net One project is now more than 40 percent complete and we are encouraged that we are on schedule and on budget with this vital effort, Gellert commented.

We are pleased to announce that the conversion of Arizona to the Health Net One claims system was successfully completed approximately 10 days ago, slightly ahead of schedule, he added.

                Health Nets selling expenses increased by $6,612,000 to $54,636,000 compared to $48,024,000 in the same period in 2002, consistent with the strong growth in broker-driven segments such as small group.  The selling cost ratio was 2.4 percent for the first quarter of 2003, higher by 15 basis points over the same period last year.

Balance Sheet Highlights

                Health Nets balance sheet continued to strengthen in the first quarter of 2003, as it has consistently over the past several years.

Cash and investments as of March 31, 2003 stood at $1,777,258,000 compared with $1,850,139,000 at the end of 2002.  Continued share repurchase activity, an increase in the TRICARE receivable and the timing of Medicare payments were the primary reasons for the decrease of cash and investments in the quarter.

The TRICARE receivable increased by $64,401,000 from the end of 2002 to $142,805,000.  This increase was a consequence of heightened military activity as a result of the war in Iraq.  We expect the receivable to remain in the $120 - $150 million range through the third quarter of this year, Gellert added.

Debt remained essentially unchanged from the fourth quarter of 2002, and down by $120,067,000 from March 31, 2002, as the company reduced the outstanding balance on its revolving debt to zero in the third quarter of 2002.  The debt-to-total capital ratio stood at

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23.5 percent, well below the companys target of 30 percent.  The debt-to-total capital ratio at the end of the first quarter of 2002 was 29.8 percent.