PRIMEDEX HEALTH SYSTEMS REPORTS 3RD QUARTER LOSS.

Primedex Health Systems, Inc., Los Angeles, Calif., (OTCBB:PMDX), owner and operator of 52 California medical diagnostic imaging facilities, has reported a third quarter loss of $5,122,000.

Companywide, net revenue for the quarter ended July 31, 2002, was approximately $35.6 million compared to $29.5 million for the quarter ended July 31, 2001, a 21% increase in net revenue over the same period in 2001. At the same time, total operating expenses rose from approximately $24.1 million for the July 31, 2001 quarter to approximately $35.8 million for the July 31, 2002 quarter, a 48% increase. The result was a $5.1 million loss for the current quarter versus a $2.1 million gain for the July 31, 2001 quarter.

Net revenue for centers that were open for the entire period in the third quarter of both fiscal 2001 and 2002 (same store centers) continued to show strength and was approximately $29.8 million for the quarter ended July 31, 2002 versus $26.9 million for the quarter ended July 31, 2001, which is an 11% increase in same-store net revenue.

Howard G. Berger, M.D., president of PMDX, while expressing his disappointment with the third quarter results noted that a large portion of the loss resulted from a convergence of unusual events during the third quarter.

Since July 31, 2001, the company has opened or acquired eight new sites. In connection with those sites the company has incurred net losses for the quarter of approximately $1 million. At the Modesto site, acquired in May 2001, the company lost approximately $300,000 for the quarter. For the nine months ended July 31, 2002, Dr. Berger noted that the new centers and Modesto comprised approximately $3 million of the $3.37 million net loss for that period. Contrary to expectations the cost of stabilizing physician employment at these sites coupled with the employment of very expensive interim personnel has in and of itself resulted in a deficiency in the amount of business which was anticipated for this period. At the same time the overall shortage in qualified radiologists has caused an increase in professional salaries companywide for the quarter by $1.5 million.

Additionally, the company experienced an $850,000 loss related to the writeoff of uncollectible accounts receivable (primarily affecting three same store centers), the majority of which was attributable to a single contracting party having ceased business. PMDX also experienced a loss of $220,000 when it elected to upgrade certain equipment and dispose of the equipment replaced.

To deal with the physician shortage and rising cost PMDX has retained a nationally prominent medical director to oversee physician recruitment and staffing. The new director has already arranged for the hiring of 12 new physicians during the third quarter and first month of the fourth quarter of fiscal 2002. In addition PMDX is working to solidify its physicians at the majority of the sites while increasing the volume of interpretations done by physicians at the PMDX main offices utilizing newly installed computer technology for medical image transfer.

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