Dynacq International Announces Record Net Income for 1st Quarter.

HOUSTON--(BUSINESS WIRE)--Jan. 27, 1999--Dynacq International Inc. (Nasdaq:DYII) announced today record setting net income for the first quarter of its fiscal year, ending Nov. 30, 1998. Dynacq's first quarter net income increased by 27.8% to $291,212 from $227,839 previous year. Net income per share after provision for federal income tax increased from $0.066 to $0.084.

Dynacq's consolidated revenues increased $147,000 or 6%. Revenue attributable to its Vista operations increased significantly by 92% from the corresponding previous quarter due to increased patient referrals, primarily as a result of the company's enhanced marketing efforts. On January 7, Dynacq announced that it had had an impressive turnaround from a net loss of $1,059,195 or $0.30 per share for fiscal 1997 to a net income of $945,843 or $0.28 profit per share for fiscal 1998.

Dynacq International Inc. ( www.dynacq.com ) offers a new concept in community medical care that is designed to compete with the conventional healthcare corporations that control the majority of major medical facilities in America. In recent years, Dynacq has developed several independent medical facilities and patient services and integrated them into its first single-source health care resource center, serving the medical needs of the industrial communities southeast of Houston.

"We see ourselves as a more profitable alternative to traditional health care concepts utilized by giants like Columbia/HCA (NYSE:COL), Tenet (NYSE:THC) and various ambulatory surgical centers. Our concept is based on our belief that in today's managed care environment, health care can be delivered more easily, conveniently and cost-effectively in an integrated single-source community-based medical center than in large hospital systems. Our continuously strong financial performance proves that this concept works very well," says Chiu M. Chan, Chairman of Dynacq.

Dynacq's fully integrated medical campus contains a physician professional building, a state-of-the-art outpatient surgical center, diagnostic and laboratory services, home infusion therapy services and physician practice management services. In early 1999, the center will add a 42-bed community hospital designed to provide high-quality, personalized general medical care. Future growth plans for the campus include the addition of a physical therapy/rehabilitation center and an assisted living center.

Dynacq plans to export their concept to other communities throughout the nation.

For more information, contact David Drake at Merger Communications Inc. at 713/267-2328.

Certain statements in this release are forward looking. Although the Company believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations. For factors that may cause actual results to differ materially from expectations and underlying assumptions, see reports by the Company filed with the Securities and Exchange Commission.