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DIANON SYSTEMS REPORTS INCREASE IN THIRD QUARTER SALES AND EARNINGS

    DIANON SYSTEMS REPORTS INCREASE IN THIRD QUARTER SALES AND EARNINGS
    STRATFORD, Conn., Nov. 5 /PRNewswire/ -- Dianon Systems, Inc. (NASDAQ: DIAN) today reported record sales for the third quarter ended Sept. 30, 1991.  Sales for the third quarter were $6,862,000, up $1,715,000 or 33.3 percent over the third quarter of 1990.  Domestic operating income was $495,000, up $127,000 or 34.5 percent over the third quarter of 1990.  Net income was $144,000, up $34,000 or 30.9 percent over the third quarter of 1990.  Earnings per share were $.03.
    For the first nine months of 1991, sales were $19,367,000, up $4,381,000 or 29.2 percent over the same period in 1990.  Domestic operating income was $1,695,000, up $640,000 or 60.7 percent over the same period in 1990, and net income was $797,000, up $294,000 or 58.4 percent over the same period in 1990.
    In reviewing the company's financial results, Richard Sandberg, chief executive officer, commented, "The increase in this quarter's sales represents our 32nd consecutive quarter-to-quarter increase in revenues.  We are especially proud that the second and third quarter increases were achieved during a period when much time and energy on the part of senior management was devoted to our initial public offering."
    Jack Davis, Dianon's president and chief operating officer, added, "As in the second quarter, sales growth was spread over both biomarker and tissue testing services.  The increased percentage of tissue testing services (which have lower margins than blood testing services) combined with the increased cost of certain blood test reagents from new vendors had a negative impact on gross profit margins, lowering them to 61.2 percent.  We expect to improve gross profit margins over the next few quarters as lower cost reagent strategies are implemented and as projected increases in tissue testing gross profit margins are realized. The company had significantly higher marketing expenses in the third quarter due to one-time expenses associated with launching our Obstetric/Gynecology service line and our new Immunohistochemistry Oncology test service and with supporting Prostate Cancer Awareness Week."
    Sandberg noted, "While third quarter earnings are below second quarter, domestic operating income is up more than 34 percent over the same quarter last year.  In addition, the excellent sales performance for the last three quarters makes us highly confident of achieving our earnings goals for the year and should put us in a strong position to enter 1992."
    Dianon Systems is a leading provider of oncology testing services and diagnostic information to a focused audience of 12,500 cancer treating physicians in the United States.  The company is headquartered in Stratford, Conn., and has recently opened a European laboratory in Amsterdam, The Netherlands.
                          DIANON SYSTEMS, INC.
                 Consolidated Statements of Operations
                              (Unaudited)
    Periods ended              Three Months              Nine Months
     Sept. 30;               1991        1990         1991         1990
    Net sales          $6,861,955  $5,146,874  $19,367,152  $14,985,559
    Cost of sales       2,661,661   1,833,715    7,049,552    5,347,855
    Gross profit        4,200,294   3,313,159   12,317,600    9,637,704
    SG&A                3,191,619   2,597,610    8,971,947    7,227,357
    Research & devel.     513,525     347,427    1,650,314    1,355,683
    Total expenses      3,705,144   2,945,037   10,622,261    8,583,040
    Domestic oper. inc.
     (before int'l
     operating expenses)  495,150     368,122    1,695,339    1,054,664
    Intl oper. expenses   291,131     279,119      804,323      592,045
    Income from opers.    204,019      89,003      891,016      462,619
    Interest income        64,333      89,982      156,503      161,487
    Interest expense       38,275      66,198       97,242      108,643
    Net int. inc. (exp.)   26,058      23,784       59,261       52,844
    Profit bef. taxes     230,077     112,787      950,277      515,463
    Prov. for inc. taxes   86,112       2,594      153,112       12,034
    Net income            143,965     110,193      797,165      503,429
    Wtd. avg. shares
     outstanding        4,756,185   4,076,799    4,294,625    4,084,232
    Earns. per share         $.03        $.03         $.19         $.12
                            DIANON SYSTEMS, INC.
                        Consolidated Balance Sheets
    Periods ended                       Sept. 30, 1991  Dec. 31, 1990
                                          (Unaudited)
       Assets
    Cash                                   $9,219,714   $3,904,972
    Accounts receivable, net
     of allowance for doubtful accounts     6,034,775    4,113,045
    Prepaid expenses & employee advances      583,432      262,731
    Inventory                                 527,096      143,138
    Total current assets                   16,365,017    8,423,886
    Equipment & leasehold improvements      5,480,628    3,622,535
    Less: accumulated depreciation         (2,137,840)  (1,591,048)
    Net fixed assets                        3,342,788    2,031,487
    Other assets                              103,698      102,402
    Total assets                           19,811,503   10,557,775
      Liabilities & Stockholders' Equity:
    Accounts payable & accrued liabilities  3,570,946    2,252,826
    Short-term note payable                        --      153,745
    Current portion of
     capitalized lease obligations             97,618       55,930
    Total current liabilities               3,668,564    2,462,501
    Long-term portion of
     capitalized lease obligations            323,143      149,177
    Long-term note payable                         --      519,339
    Deferred income                                         10,498
    Minority int. in limited partnership    1,417,707    1,961,404
      Equity:
    Preferred stock                                --           --
    Common stock                               49,955       36,761
    Additional paid-in capital             20,929,148   12,803,034
    Accumulated deficit                    (6,587,774)  (7,384,939)
    Foreign currency translation adjustment    10,760           --
    Total equity                           14,402,089    5,454,856
    Total liabilities & equity             19,811,503   10,557,775
    -0-             11/5/91
    /CONTACT:  Richard A. Sandberg, chairman & CEO of Dianon Systems, 203-381-4022/
    (DIAN) CO:  Dianon Systems, Inc. ST:  Connecticut IN:  MTC SU:  ERN JT -- NY084 -- 1467 11/05/91 18:43 EST
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Date:Nov 5, 1991
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