Dynacq Healthcare, Inc. Announces Financial Results for the Fiscal Quarter Ended May 31, 2008

HOUSTON–(EMWNews)–Dynacq Healthcare, Inc. (DYII) today reported financial results for the

third fiscal quarter ended May 31, 2008. For the fiscal quarter ended

May 31, 2008, the Company had income from continuing operations of $1.2

million, or $0.07 per share, compared to $2.9 million, or $0.18 per

share, in the fiscal quarter ended May 31, 2007. All per share amounts

are calculated on a fully diluted basis. The decline in income from

continuing operation of $1.7 million, or 58%, was primarily due to a

change in the Company’s revenue recognition

method to recognize the lower reimbursement amounts payable for workers’

compensation cases as a result of the Texas Workers’

Compensation (TWCC) Fee Guidelines effective March 1, 2008. The Company’s

revenue recognition method for the corresponding third fiscal quarter of

prior year ended May 31, 2007 was based on the trailing twelve months

average collection ratio.

Results of Operations

Net patient service revenues for the quarter increased by $1.6 million,

or 13%, from $12.6 million in 2007 to $14.2 million in 2008. The

increase in revenues is primarily due to an increase in inpatient cases

and additional revenues of $1.3 million recognized based on settlements

reached with insurance carriers for Medical Dispute Resolution (MDR)

accounts receivable with dates of service ranging from 2001 to 2005,

offset by the reduction in net revenue recognized on workers’

compensation cases based on the new TWCC Fee Guidelines effective March

1, 2008.

Net income for the quarter ended May 31, 2008 was $1 million, or $0.06

per share, versus $2.6 million, or $0.17 per share, in the quarter ended

May 31, 2007.

Net patient service revenues for the nine months ended May 31, 2008

increased by $17.3 million, or 54%, from $31.8 million in 2007 to $49.1

million in 2008. The increase in revenues includes additional revenues

of $5.8 million on closed MDR accounts receivable, offset by the

reduction in net revenue recognized on workers’

compensation cases based on the new TWCC Fee Guidelines effective March

1, 2008. Income from continuing operations for the nine months ended May

31, 2008 was $8.3 million, or $0.50 per share, versus $2.2 million, or

$0.14 per share, in the same period in 2007.

Net income was $10.8 million, or $0.65 per share, for the nine months

ended May 31, 2008 versus $573,000, or $0.04 per share, for the same

period in 2007.

Recent Developments

The DeAn Joint Venture, which was formed for the purpose of

constructing, owning and operating a hospital in Shanghai, China, had

entered into land use agreements with the Chinese government under which

it leased, for a term of 50 years, approximately 28.88 acres of

government-owned land. On July 14, 2008, the Company agreed to sell its

interest in the property owned by the DeAn Joint Venture for the

construction of the hospital for approximately $4.6 million U.S., net of

commissions.

The Company has formed a wholly owned subsidiary, Dynacq Huai Bei

Healthcare, Inc., a Chinese corporation, to provide healthcare

management services in China, and has entered into a management

agreement with RuiAn City Department of Health to manage the operations,

human resources and financials of the RuiAn Hospital in China effective

June 1, 2008.

Additional Information

Dynacq Healthcare, Inc. (“www.dynacq.com“)

is a holding company. Its subsidiaries provide surgical healthcare

services and related ancillary services through hospital facilities.

Certain statements included in this press release, which are not

historical facts, are forward-looking statements. Such forward-looking

statements are made pursuant to the safe harbor provisions of the

Private Securities Litigation Reform Act of 1995. These forward-looking

statements represent our expectations or beliefs, intentions, future

events, future performance, business prospects and involve certain risks

and uncertainties, including those described in our public filings with

the United States Securities and Exchange Commission, also including,

but not limited to, changes in interest rates, competitive pressures,

changes in customer mix, changes in third party reimbursement rates,

financial stability of major customers, changes in government

regulations or the interpretation of these regulations, changes in

supplier relationships, growth opportunities, cost savings, revenue

enhancements, synergies and other benefits anticipated from acquisition

transactions, difficulties relative to integrating acquired business,

the accounting and tax treatments of acquisitions, and asserted and

unasserted claims, which could cause actual results to differ materially

from those indicated in the forward-looking statements. The

forward-looking statements by their nature involve substantial risks and

uncertainties, certain of which are beyond our control, and actual

results may differ materially depending on a variety of important

factors. You are cautioned not to place undue reliance on these

forward-looking statements that speak only as of the date herein. The

risks and uncertainties that may cause these forward-looking statements

to prove to be incorrect include, without limitation, adverse effects of

litigation or regulatory actions, inability to negotiate desired terms

with proposed joint venture partners, and favorable regulatory

determinations for availability of financing options and other

transactions.

Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89

Get Unlimited Organic Website Traffic to your Website 
TheNFG.com now offers Organic Lead Generation & Traffic Solutions