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DAMON CORPORATION ANNOUNCES 1992 FOURTH QUARTER AND YEAR-END RESULTS IN LINE WITH PREVIOUSLY RELEASED ESTIMATES

 NEEDHAM HEIGHTS, Mass., March 16 /PRNewswire/ -- Damon Corporation (NYSE: DCL) announced today net income per common share of $0.11 for its fourth quarter ended Dec. 31, 1992, and $1.14 per common share for 1992. In the 1991 fourth quarter and year, a net loss per common share of ($1.87) and ($4.18), respectively, was realized.
 Net income for the 1992 fourth quarter was $1,739,000. This compares to a net loss applicable to common stockholders (before extraordinary item) of ($623,000) in the 1991 fourth quarter. Sales for the 1992 fourth quarter rose 28.4 percent to $86,374,000 compared to $67,285,000 for the 1991 fourth quarter. 1992 fourth quarter operating cash flow, or earnings before depreciation, amortization, net interest expense, net other (income) expense, and taxes and after minority interests ("EBITDA"), increased 7.2 percent to $8,579,000 compared to $8,005,000 in the 1991 fourth quarter. The company noted that the fourth quarter is historically the least profitable, with the lowest margins and, therefore, is most sensitive to sales variances.
 For the 12 months ended Dec. 31, 1992, sales rose 21.0 percent to $317,043,000 from $262,005,000 in the comparable 1991 period, and EBITDA increased 18.5 percent to $47,201,000 from $39,846,000. Net income for 1992 was $18,036,000 compared to a net loss applicable to common stockholders (before extraordinary item) of ($7,431,000) for 1991. Net results for 1992 included $705,000 of net other income, compared with $2,038,000 in 1991. Also, 1992 results benefited from utilizing a net operating tax loss carryforward, which at year-end had been fully utilized. These results are within the estimated ranges provided in Damon's Jan. 11, 1993, preliminary fourth quarter and year-end results.
 Robert L. Rosen, Damon's chairman of the board and chief executive officer, stated, "Damon's 1992 results showed strong increases in sales and EBITDA. Damon acquired Preferred Laboratory and substantially all of the assets of Med-Chek Laboratory on Aug. 1, 1992, and Oct. 1, 1992, respectively, and, therefore, their results are fully reflected in Damon's 1992 fourth quarter results."
 Mr. Rosen continued, "As previously reported, the lower than anticipated fourth quarter results were principally due to lower than anticipated sales caused by several factors. These factors primarily included a temporary slowdown in net new sales production due to a greater number of open sales positions, reduced sales production during the dissolutions of the Michigan and Northern California joint ventures, and economic weakness in California and New England. EBITDA for the fourth quarter was also lower than expected due to the reduced sales growth previously mentioned, and due to certain non-recurring expenses principally related to the dissolution of the two joint ventures and to opening a new laboratory facility in Houston. EBITDA was also reduced by costs associated with the accelerated rate of opening new patient service centers and the substantial expansion of our sales and client service forces. While these efforts increase current costs and decrease margins, they will provide us with needed capacity for growth in key markets and position us for increased net new sales production.
 "1992 was a successful year for Damon, even though the fourth quarter fell short of our expectations. Sales and EBITDA growth of 21.0 percent and 18.5 percent, respectively, are attractive and within our targeted goals for future growth. In the clinical laboratory testing business, where price is a less important growth factor, acquisitions are very valuable, and for Damon will likely play an increasing role in our growth. Although the first half of 1993 is expected to reflect carryover slowness from the reduction in net new sales production experienced in the latter part of 1992, we believe that the rate of internal sales growth will improve over the course of 1993.
 "There has recently been a great deal of speculation and discussion regarding healthcare reform. The Clinton Administration's healthcare reform program is expected to include proposals both to contain the cost of and broaden access to healthcare services. Although healthcare reform's impact on our industry cannot be analyzed until we see the administration's proposal, clinical laboratory testing is a cost effective diagnostic tool. Accordingly, we believe that a reform program that focuses on controlling costs, preventive healthcare and broadened access to the 37 million uninsured Americans should, over time, benefit the larger clinical laboratory companies.
 "The administration has proposed further reductions in Medicare reimbursement to clinical laboratories from 88 percent to 76 percent of the national median. Medicare reductions are not new to our industry, as net Medicare reimbursement has declined by about 3 percent on average each year over the last five years while Damon has continued to increase sales and EBITDA. Although our operating results in the near term would be adversely impacted by a larger than usual Medicare reduction, the adverse impact on laboratories with a higher share of Medicare business, particularly the small independent and physician office laboratories, should be greater, leading to accelerating industry consolidation. Damon is well positioned to play an important part in the restructuring of the nation's healthcare system," Mr. Rosen stated.
 Damon Corporation is a leader in the rapidly growing clinical laboratory testing industry, operating 12 regional laboratories throughout the United States and one in Mexico. A full range of routine and esoteric testing services provided by Damon are used in the diagnosis, monitoring and treatment of disease. Damon delivers high quality testing and customized client services to physicians, hospitals, managed care organizations, nursing homes, corporations, and the U.S. government.
 DAMON CORPORATION
 Summary Consolidated Statements of Operations
 (In thousands, except per share amounts)
 Periods Ended Three Months 12 Months
 Dec. 31 1992 1991 1992 1991
 (Unaudited) (Unaudited) (Audited)
 Sales $86,374 $67,285 $317,043 $262,005
 Gross profit 30,015 24,820 119,612 100,582
 Selling, general &
 administrative expenses 23,273 17,740 76,854 64,474
 Amortization of goodwill 1,532 1,329 5,700 5,346
 Operating profit 5,210 5,751 37,058 30,762
 Interest expense, net 2,607 4,980 10,156 26,803
 Other (income) expense, net 24 21 (705) (2,038)
 Minority interests 571 852 3,943 3,200
 Inc. (loss) bef. prov. for
 taxes and extraord. item 2,008 (102) 23,664 2,797
 Provision for inc. taxes 269 274 5,628 2,193
 Net income (loss) before
 extraordinary item 1,739 (376) 18,036 604
 Extraordinary loss on early
 extinguishment of debt, net
 of inc. tax benefit of $1,084 -- 24,188 -- 24,188
 Net income (loss) 1,739 (24,564) 18,036 (23,584)
 Preferred divs. and accretion -- 247 -- 8,035
 Net income (loss) applicable
 to common stockholders $ 1,739 $(24,811) $ 18,036 $(31,619)
 Net inc. (loss) bef. extraord.
 item per common share $0.11 $(0.05) $1.14 $(0.98)
 Net inc. (loss) per com. shr. $0.11 $(1.87) $1.14 $(4.18)
 Weighted average common
 shares outstanding 16,129 13,255 15,875 7,568
 Other data:
 Operating profit $5,210 $5,751 $37,058 $30,762
 Depreciation & amortization 3,940 3,106 14,086 12,284
 Minority interests (571) (852) (3,943) (3,200)
 Operating cash flow (EBITDA) $8,579 $8,005 $47,201 $39,846
 -0- 3/16/93
 /CONTACT: David C. Asheim, vice president-investor relations of Damon, 617-449-0800/
 (DCL)


CO: Damon Corporation ST: Massachusetts IN: HEA SU: ERN

GK-OS -- NY013 -- 6451 03/16/93 10:10 EST
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Date:Mar 16, 1993
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