Dynacq International Reports Continued Strong Growth In First Quarter Fiscal Year 2003 Results.

Business Editors/Health & Medical Writers

HOUSTON--(BUSINESS WIRE)--Jan. 14, 2003

Dynacq International Inc. (Nasdaq:DYII) today reported continued strong growth in overall financial performance in the first quarter ending Nov. 30, 2002 for fiscal year 2003. Net revenue increased 30% to $17,933,926, from $13,763,110 for the corresponding prior year quarter, and net income before cumulative effect of a change in accounting principle increased 24% to $4,185,666, from $3,377,615 for the corresponding prior year quarter. Basic earnings per share increased 22% to $0.28 from $0.23 and fully diluted earnings per share increased 17% to $0.27 from $0.23 for the corresponding prior year quarter. During the first quarter of Fiscal 2003, Dynacq adopted SFAS 142, Goodwill and Other Intangible Assets, which required Dynacq to record a one-time gain of $528,000, net of taxes, associated with the recognition of unamortized negative goodwill. The basic and diluted earnings per share after this one-time gain increased to $0.32 and $0.30, respectively. The following table summarizes selected financial highlights before this one-time gain recognition:

                                      Three Months Ended November 30,
                                     2002           2001     %Increase
                                    -----           ----     ---------
Net Revenue                      $17,933,926    $13,763,110       30
Net Income (1)                    $4,185,666     $3,377,615       24
Basic Earnings Per Share (1)           $0.28          $0.23       22
Diluted Earnings Per Share (1)         $0.27          $0.23       17
Cash Flow Provided
 By Operating Activities          $6,642,935     $5,371,013       24

(1) Before cumulative effect of a change in accounting principle
    related to recognition of unamortized negative goodwill.

Dynacq Chairman and CEO Chiu M. Chan said, "I am pleased to report continued strong growth during Dynacq's first quarter for fiscal year 2003. The increases reflect Dynacq's goal in providing high quality healthcare services and facilities for our patients and medical professionals."

"Our new hospital located in Baton Rouge, La., is scheduled to begin accepting patients this month and soon should become a financial contributor to shareholder value. The opening of the new facility signifies the success of our management and business model," Chan added.

Dynacq International Inc. (www.dynacq.com) provides surgical healthcare services and related ancillary services through surgical hospital facilities and outpatient surgical centers. Dynacq specializes in creating surgical facilities that are models of quality patient care, efficiency, technology, clinical skills and profitability.

For more information, please see our Web site at http://www.dynacq.com or contact Emily Rodgers of Dynacq at [e-mail], 713/378-3092.

Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, Dynacq's ability to continue growing, the success of the Baton Rouge hospital, and Dynacq's ability to continue to provide high quality healthcare services and facilities. 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. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. More detailed information about factors that may cause actual results to materially differ is contained in the Company's filings with the Securities and Exchange Commission. The words "looking forward," "believe," "expect," "likely" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date that such statements were made. The Company undertakes no obligation to update any forward-looking statements contained in this press release.