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DIANON SYSTEMS REPORTS INCREASE IN FIRST QUARTER SALES AND EARNINGS

 DIANON SYSTEMS REPORTS INCREASE IN FIRST QUARTER SALES AND EARNINGS
 STRATFORD, Conn., May 5 /PRNewswire/ -- DIANON Systems, Inc. (NASDAQ: DIAN) today reported record sales for the first quarter ended March 31, 1992.
 THREE MONTHS ENDED MARCH 31 1992 1991 Percent
 Net Sales $8,048,000 $5,863,000 37.3
 Domestic Operating Income 864,000 540,000 60.0
 International Operating Loss (336,000) (286,000)
 Income from Operations 528,000 254,000 107.9
 Net Income $ 336,000 $ 250,000 34.4
 Earnings Per Share $ .06 $ .06
 Sales for the first quarter were $8,048,000, up $2,185,000 or 37.3 percent over the first quarter of 1991. Domestic operating income was $864,000, up $324,000 or 60.0 percent over the first quarter of 1991. Net income was $336,000, up $86,000 or 34.4 percent over the first quarter of 1991. Earnings per share were $.06 versus $.06 in the first quarter of 1991.
 In reviewing the company's financial results, Richard Sandberg, chief executive officer, commented, "This quarter's sales increase represents our 34th consecutive quarter-to-quarter increase in revenues. We were pleased by the 60 percent growth in domestic operating income and by the increase in our operating margin. However, as we have indicated in the past, comparisons of net income and earnings per share in the first three quarters of this year will be adversely affected by the exhaustion of our tax loss carry forwards in 1991 and the larger share base outstanding as a result of our recent public offering."
 Jack Davis, DIANON's president and chief operating officer, added, "Sales of both Oncosite blood testing and gynecology risk testing increased over fourth quarter levels. However, the high level of non- recurring tissue testing in the fourth quarter caused first quarter tissue testing revenues to be slightly lower. European sales, which are netted in international operating losses, were $185,000.
 Gross profit margins showed minimal improvement over fourth quarter and are still down from first quarter 1991 levels. However, operating leverage improved, principally in the areas of marketing and administrative costs, which increased domestic operating margins to 10.7 percent versus 9.2 percent in the first quarter of last year.
 Inventories rose substantially during the quarter due to major purchases of raw materials for certain assays. These purchases have been designed to reduce dependence on certain suppliers and to obtain lower costs due to large purchase quantities."
 DIANON Systems is a leading provider of testing services and diagnostic information to a focused audience of 12,500 cancer treating physicians and 25,000 obstetrician/gynecologists in the United States as well as similar physicians in Europe. The Company is headquartered in Stratford, Connecticut, has recently opened a European laboratory in Amsterdam, and created a joint venture with a large reference laboratory in Paris.
 DIANON SYSTEMS, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR THE THREE MONTHS ENDED MARCH 31, 1992 AND 1991
 1992 1991
 NET SALES $8,047,541 $5,863,631
 COST OF SALES 3,194,139 2,072,533
 Gross Profit 4,853,402 3,791,098
 SELLING, GENERAL & ADMINISTRATIVE 3,276,516 2,720,315
 RESEARCH & DEVELOPMENT 713,274 530,687
 Total Expenses 3,989,790 3,251,002
 Domestic Operating Income (before
 international operating expenses
 and provision for income taxes) 863,612 540,096
 INTERNATIONAL OPERATING LOSS 335,999 285,822
 Income from operations 527,613 254,274
 INTEREST INCOME 80,741 53,316
 INTEREST EXPENSE 12,614 30,087
 Net Interest Income 68,127 23,229
 Profit before taxes 595,740 277,503
 PROVISION FOR INCOME TAXES 260,000 27,000
 Net Income $ 335,740 $ 250,503
 Primary and fully diluted
 earnings per share $ .06 $ .06
 Weighted average common shares
 outstanding 5,511,711 4,072,262
 DIANON SYSTEMS, INC.
 CONSOLIDATED BALANCE SHEET
 AS OF MARCH 31, 1992 AND DEC. 31, 1991
 MARCH 31, DEC. 31,
 1992 1991
 ASSETS
 Cash and Cash Equivalents $ 8,325,057 $ 9,815,253
 Accounts Receivable, Net of
 Allowance for Doubtful Accounts 6,992,396 6,548,328
 Prepaid Expenses and Employee Advances 737,434 474,422
 Inventory 911,514 228,732
 Total Current Assets 16,896,402 17,066,735
 Leasehold Improvements 334,620 334,620
 Laboratory and Office Equipment 5,289,726 4,990,190
 Less: Accumulated Depreciation
 and Amortization (2,347,973) (2,108,464)
 Net Fixed Assets 3,276,373 3,216,346
 Other Assets 322,935 326,591
 TOTAL ASSETS $20,495,710 $20,609,672
 LIABILITIES & STOCKHOLDERS' EQUITY
 Accounts Payable & Accrued Liabilities $ 3,783,640 $ 3,964,849
 Short Term Note Payable -- --
 Current Portion of Capitalized
 Lease Obligations 101,393 100,672
 Total Current Liabilities 3,885,033 4,065,521
 Long Term Portion of Capitalized
 Lease Obligations 274,175 299,268
 Long Term Note Payable -- --
 Minority Interest in Limited Partnership 785,300 1,127,671
 Total Liabilities and Minority Interest 4,944,508 5,492,460
 Equity:
 Common Stock 50,943 50,554
 Additional Paid in Capital 21,233,547 21,069,877
 Accumulated Deficit (5,717,036) (6,052,776)
 Foreign Currency Translation Adjustment (16,253) 49,557
 Total Stockholders' Equity 15,551,202 15,117,212
 TOTAL LIABILITIES & EQUITY $20,495,710 $20,609,672
 -0- 5/5/92
 /CONTACT: Richard A. Sandberg, chairman and chief executive officer of Dianon Systems, 203-381-4022/
 (DIAN) CO: DIANON Systems, Inc. ST: Connecticut IN: MTC SU: ERN


PS -- NY094 -- 6765 05/05/92 16:53 EDT
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