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DIAGNOSTEK, INC. REPORTS FISCAL 1993 RESULTS

 ALBUQUERQUE, N.M., June 15 /PRNewswire/ -- Diagnostek, Inc. (NYSE: DXK) today reported that revenues for the fiscal year ended March 31, 1993 were $383.5 million, representing a 24 percent increase over fiscal year 1992 revenues of $308.3 million.
 For the fourth quarter ended March 31, 1993, revenues were $102.6 million, representing a 22 percent increase over the $84.0 million reported for the comparable period of 1992.
 Net earnings for fiscal 1993 were $2.8 million, or $.12 per share, as compared to net earnings of $13.1 million, or $.61 per share for fiscal 1992. The 1993 results include an unusual pre-tax charge of $6.8 million ($.17 per share) for merger, litigation and settlement-related costs arising from the aborted merger with Medco Containment Services, Inc.
 For the fourth quarter of 1993, there was a loss of $.02 per share after the unusual pre-tax charge of approximately $.11 per share to account for the aborted Medco merger. Before the unusual charge, fourth quarter earnings were $.09 per share, up 13 percent over third quarter levels, but $.08 per share lower than the same period last year.
 Fiscal 1993 revenues of Diagnostek's mail pharmacy service business, Heath Care Services, Inc. (HCS), were $240.5 million, an increase of 16 percent over the $207.5 million reported in 1992. For fiscal 1993, operating income of $4.0 million at HCS was impacted by lower product margins and losses due to bad debts, and declined from $17.6 million in fiscal 1992.
 For the quarter, HCS revenues were $59.7 million, a decrease of 5 percent from third quarter levels, with an operating loss of $1.1 million, mainly due to the higher provisions for bad debts, which offset a stabilization of HCS product margins. HCS dispensed more than 3.1 million mail prescriptions during 1993, an increase of 9 percent versus 1992.
 Fiscal 1993 revenues of the company's contract pharmacy service business, HPI Health Care Services, Inc. (HPI) totaled $132.9 million for fiscal 1993, representing a 44 percent increase over the prior year. Operating income of $6.5 million was 15 percent higher than 1992.
 For the fourth quarter 1993, HPI revenues were $38.7 million, representing an 8 percent increase over the third quarter and a 57 percent increase over the comparable prior year period. Fourth quarter operating income totaled $2.5 million, an increase of 55 percent over fiscal 1992. During 1993, HPI served more than 550,000 HMO members and dispensed more than 2.7 million retail prescriptions.
 "Diagnostek's results for 1993 were substantially affected by merger, litigation and settlement costs as well as the loss of business momentum resulting from the aborted merger with Medco Containment," said Nunzio P. DeSantis, chairman and chief executive officer.
 "Despite these circumstances and the intensified industry competition, particularly in the company's mail pharmacy service segment, Diagnostek's product margins stabilized in the fourth quarter and we have strengthened relationships with our customers and suppliers. The company recently extended its relationship with Lovelace Medical Center for a two-year period.
 "We are in the introductory phase with new products and services designed to respond to the competitive environment as well as to the opportunities we believe pending health care reform will entail. We are encouraged about the prospects of our two month-old RxChoice product, which is a point-of-service prescription plan combining the strengths of the company's mail pharmacy delivery system for maintenance medications with a retail network of about 30,000 pharmacies for delivery of acute care drugs. In March 1993, Diagnostek acquired part ownership of Medical Service Agency, Inc., an administrator of prescription card programs, to provide the company with immediate access to the retail pharmacy market."
 Diagnostek, Inc., is a leading provider of integrated pharmacy services designed to contain the cost of dispensing pharmaceuticals. The company dispenses prescription drugs, primarily by mail, to beneficiaries of health benefit plans and provides contract pharmacy services to hospitals, managed care providers, and other institutions.
 DIAGNOSTEK, INC.
 Summary Financial Data
 ($ in millions)
 Three Months Fiscal Year
 Periods ended March 31, 1993 (a) 1992 1993 (b) 1992
 Revenues (c) $ 102.6 $ 84.0 $383.5 $ 308.3
 Operating income (.8) 5.4 6.1 21.3
 Net earnings (.5) 4.1 2.8 13.1
 Net earnings per share
 (in dollars) $ (.02) $ .17 $ .12 $ .61
 (a) Fiscal fourth quarter 1993 includes unusual pre-tax loss of $4.4 million ($.11 per share) representing litigation and settlement costs associated with the company's aborted merger with Medco Containment Services, Inc.
 (b) Total fiscal year 1993 includes unusual pre-tax loss of $6.8 million ($.17 per share) representing merger, litigation and settlement costs associated with the company's aborted merger with Medco Containment Services, Inc.
 (c) During 1993, the company began to classify as revenue certain drug and medical items supplied to contract pharmacy service customers that had been previously netted against cost of sales. Amounts have been reclassified for prior quarter and annual periods and had no impact on consolidated or segment operating income or earnings.
 DIAGNOSTEK, INC.
 Summary Segment Financial Data
 ($ in Millions)
 Three Months Fiscal Year
 Periods ended March 31, 1993 1992 1993 1992
 Mail Pharmacy Services
 Revenues $ 59.7 $ 57.1 $ 240.5 $ 207.5
 Operating income (1.1) 3.7 4.0 17.6
 Three Months Fiscal Year
 Periods ended March 31, 1993 1992 1993 1992
 Contract Pharmacy Services
 Revenues $ 38.7 $ 24.6 $ 132.9 $ 92.6
 Operating income 2.5 1.6 6.5 5.7
 Three Months Fiscal Year
 Periods ended March 31, 1993 1992 1993 1992
 Medical Imaging
 Revenues $ 4.2 $ 2.3 $ 10.1 $ 8.2
 Operating income (.7) 0.5 (0.2) 1.1
 Three Months Fiscal Year
 Periods ended March 31, 1993 1992 1993 1992
 Corporate Items and Other
 Operating income (1.5) (.4) (4.2) (3.1)
 -0- 6/15/93
 /CONTACT: Fredric Spar of Kekst and Company, 212-593-2655, for Diagnostek/
 (DXK)


CO: Diagnostek, Inc. ST: New Mexico IN: MTC SU: ERN

WB -- NY097 -- 2367 06/15/93 17:26 EDT
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