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DIAGNOSTEK FIRST QUARTER FISCAL 1994 RESULTS

 ALBUQUERQUE, N.M., July 14 /PRNewswire/ -- Diagnostek, Inc. (NYSE: DXK) today announced its financial results for their first quarter of fiscal 1994 ended June 30, 1993. Revenues totaled $96.9 million, an increase of 15 percent over the $84.4 million reported for the comparable period last year.
 Net earnings for the quarter totaled $2.5 million, or $.11 per share, compared with net earnings of $2.8 million, or $.11 per share, reported for the comparable last year period. Net earnings decline of $0.3 million was due mainly to higher operating costs, which included startup expenses related to the company's new RxChoice(R) and CapRx(R) products, while net earnings per share were equal to prior year results due to a decreased number of common shares outstanding.
 Net earnings increased $3.0 million, or $0.13 per share, from the net loss ($.5 million, or $.02 per share) reported for Diagnostek's fourth quarter, which included an unusual pre-tax charge of $4.3 million ($.11 per share) related to litigation and settlement costs arising from the aborted merger with Medco Containment Services, Inc. Excluding the unusual fourth quarter item, net earnings increased 22 percent or $.02 per share during the three month period.
 First quarter 1994 revenues of Diagnostek's mail pharmacy service business, Health Care Services, Inc. (HCS), were $57.8 million, approximately equal to last year, while operating income totaled $3.1 million, $.5 million or 20 percent better than last year due to improved product margins. HCS dispensed more than 759,000 mail prescriptions during the first quarter, approximately equal to last year's volume, despite the impact associated with the company's loss of a major client which occurred during December 1992.
 Diagnostek's contract pharmacy service business, HPI Health Care Services, Inc. (HPI), reported first quarter revenues of $36.7 million, an increase of $12.6 million or 52 percent over comparable prior year periods primarily attributable to HPI's contract with Cigna Health Plan of Arizona which commenced during July 1992. HPI's operating income totaled $1.6 million for the first quarter 1994, an increase of $.2 million or 15 percent over last year. Commenting on the results, Nunzio P. DeSantis, Diagnostek chairman and chief executive officer, noted that "the company continues to have marked success in expanding our business and scope of product offerings. Although industry competition has intensified, particularly in the company's mail pharmacy service segment, the company's profit margins remain stabilized. Our business segments succeeded in generating over $8.3 million in operating cash flows during the quarter through improved balance sheet management and strengthened relationships with our customers and suppliers."
 Diagnostek, Inc. is a leading provider of integrated pharmacy services designed to contain the cost of dispensing pharmaceuticals. The company dispenses prescription drugs, primarily by mail, to beneficiaries of health benefit plans and provides contract pharmacy services to hospital, managed care providers, and other institutions.
 DIAGNOSTEK, INC.
 Summary Financial Data
 ($ Millions)
 Three Months ended June 30
 Consolidated Diagnostek, Inc. 1993 1992
 Revenues (A) $ 96.9 $ 84.4
 Operating income 3.3 3.6
 Net earnings 2.5 2.8
 Net earnings per share (in dollars) $ .11 $ .11
 Weighted average number of common and
 common equivalent shares outstanding 23,921,000 24,489,000
 (A) 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 periods and had no impact on consolidated or segment operating income or earnings.
 DIAGNOSTEK, INC
 Summary Segment Financial Data
 ($ Millions)
 Three Months ended June 30
 Mail Pharmacy Services 1993 1992
 Revenues $ 57.8 $ 58.0
 Operating income 3.1 2.6
 Three Months ended June 30
 Contract Pharmacy Services 1993 1992
 Revenues $ 36.7 $ 24.1
 Operating income 1.6 1.4
 Three Months ended June 30
 Medical Imaging 1993 1992
 Revenues $ 2.4 $ 2.1
 Operating income (loss) (0.1) 0.1
 Three Months ended June 30
 Corporate items/other 1993 1992
 Revenues $ -- $ 0.2
 Operating income (loss) (1.3) (0.5)
 -0- 7/14/93
 /CONTACT: Fredric Spar of Kekst and Company, 212-593-2655, for Diagnostek, Inc./
 (DXK)


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

LD -- NY084 -- 1606 07/14/93 16:46 EDT
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Date:Jul 14, 1993
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