_______________________________________________________

UNITED STATESSECURITIES AND EXCHANGE
COMMISSIONWashington, D.C. 20549

_____________________________

FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934
                  For the quarterly period ended March 31, 2004
                                       OR
            [ ] Transition Report Pursuant to Section 13 or 15(d) of
                     the Securities and Exchange Act of 1934
                         For the transition period from
                                ______ to ______
Commission File Number: 0-22392

Prime
Medical Services, Inc.(Exact name of registrant as specified in its charter)

| | DELAWARE                                                       |  |  |  | 74-2652727                       
| | -------------------------------------------------------------- |  |  |  | ---------------------------------
| | (State or other jurisdiction
of incorporation or organization) |  |  |  | (IRS Employer
Identification No.)

1301 Capitol of Texas
Highway Suite 200B, Austin, Texas 78746(Address of principal executive offices)                (Zip Code)

(512) 328-2892(Registrants telephone number, including area code)

|Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.YES XNO
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Indicate by check mark whether the registrant is an accelerated filer (as
described in Rule 12b-2 of the Exchange Act).YES XNO
|------------------------------------------------------------------------------------------------------------------------------

|Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
|-----------------------------------------------------------------------------------------------------------------------------

| | Title of Each Class
     Common Stock, $.01 par value |  | Number of Shares Outstanding atApril 30, 2004
20,729,877
| | ----------------------------------------------------- |  | --------------------------------------------------------



---

|PART I


ITEM 1 
FINANCIAL INFORMATION
|---------------------------------------

|2
|-



---

|PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                                   (Unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                         | Three Months Ended
March 31,
|---------------------------------------- | ----------------------------
|
|Revenue:                                 |                             
|Lithotripsy                              |                             
|Manufacturing                            |                             
|Other                                    |                             
|                                         |                             
|Total revenue                            |                             
|                                         |                             
|Cost of services and general and         |                             
|administrative expenses:                 |                             
|Lithotripsy                              |                             
|Manufacturing                            |                             
|Corporate                                |                             
|                                         |                             
|                                         |                             
|Depreciation and amortization            |                             
|                                         |                             
|                                         |                             
|                                         |                             
|Operating income                         |                             
|                                        
|Other income (expenses):                 |                             
|Interest and dividends                   |                             
|Interest expense                         |                             
|Other, net                               |                             
|                                         |                             
|                                         |                             
|                                         |                             
|Income before provision for income       |                             
|taxes and minority interests             |                             
|Minority interest in consolidated income |                             
|Provision for income taxes               |                             
|                                         |                             
|Net income                               |                             
|                                         |                             
|Basic earnings per share:                |                             
|Net income                               |                             
|                                         |                             
|Weighted average shares outstanding      |                             
|                                         |                             
|Diluted earnings per share:              |                             
|Net income                               |                             
|                                         |                             
|Weighted average shares outstanding      |                             
|                                         |                             

|See accompanying notes to consolidated financial statements.
|------------------------------------------------------------

|-3-
|---



---

|PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|-------------------------------------------------------------------------

|($ in thousands)                                   | March 31,
2004
(Unaudited) |  |   | December 31,
2003
(Audited)
|-------------------------------------------------- | -------------------------- |  | - | ---------------------------
|                                                  
|ASSETS                                             |                            |  |   |                            
|                                                  
|Current assets:                                    |                            | 
|Cash and cash equivalents                          |                            |  | $ | 13,425                     
|Accounts receivable, less allowance for doubtful   |                            | 
|accounts of $1,127 in 2004 and $512 in 2003        |                            |  |   | 20,756                     
|Other receivables                                  |                            |  |   | 1,336                      
|Deferred income taxes                              |                            |  |   | 12,269                     
|Prepaid expenses and other current assets          |                            |  |   | 3,059                      
|Inventory                                          |                            |  |   | 26,947                     
|                                                   |                            |  |   |                            
|Total current assets                               |                            |  |   | 77,792                     
|                                                   |                            |  |   |                            
|Property and equipment:                            |                            | 
|Equipment, furniture and fixtures                  |                            |  |   | 42,302                     
|Building and leasehold improvements                |                            |  |   | 11,943                     
|                                                   |                            |  |   |                            
|                                                   |                            |  |   | 54,245                     
|Less accumulated depreciation and amortization     |                            |  |   | (26,158                    
|                                                   |                            |  |   |                            
|Property and equipment, net                        |                            |  |   | 28,087                     
|                                                   |                            |  |   |                            
|Other investments                                  |                            |  |   | 2,963                      
|Goodwill, at cost, net of accumulated amortization |                            |  |   | 184,683                    
|Other noncurrent assets                            |                            |  |   | 7,405                      
|                                                   |                            |  |   |                            
|                                                   |                            |  | $ | 300,930                    
|                                                   |                            |  |   |                            

|See accompanying notes to consolidated financial statements.
|------------------------------------------------------------

|-4-
|---



---

|PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
|-------------------------------------------------------------------------------------

|($ in thousands, except share data)                                            | March 31,
2004
(Unaudited) |  |   | December 31,
2003
(Audited)
|------------------------------------------------------------------------------ | -------------------------- |  | - | ---------------------------
|
|LIABILITIES                                                                    |                            |  |   |                            
|
|Current liabilities:                                                           |                            | 
|Current portion of long-term debt                                              |                            |  | $ | 3,211                      
|Accounts payable                                                               |                            |  |   | 9,814                      
|Accrued distributions to minority interests                                    |                            |  |   | 5,655                      
|Accrued expenses                                                               |                            |  |   | 15,119                     
|Customer deposits                                                              |                            |  |   | 6,325                      
|                                                                               |                            |  |   |                            
|Total current liabilities                                                      |                            |  |   | 40,124                     
|                                                                              
|Long-term debt, net of current portion                                         |                            |  |   | 108,111                    
|Other long term obligations                                                    |                            |  |   | 1,833                      
|Deferred income taxes                                                          |                            |  |   | 18,404                     
|                                                                               |                            |  |   |                            
|Total liabilities                                                              |                            |  |   | 168,472                    
|                                                                              
|Minority interest                                                              |                            |  |   | 6,991                      
|                                                                              
|STOCKHOLDERS' EQUITY                                                           |                            | 
|                                                                              
|Preferred stock, $.01 par value; 1,000,000 shares authorized; none outstanding |                            |  |   | --                         
|Common stock, $0.01 par value; 40,000,000 shares authorized; 21,045,643 issued |                            | 
|in 2004 and 17,324,585 issued in 2003; 20,729,877 outstanding in 2004 and      |                            |  |   | 210                        
|17,081,869 outstanding in 2003                                                 |                            | 
|Capital in excess of par value                                                 |                            |  |   | 88,863                     
|Accumulated earnings                                                           |                            |  |   | 38,020                     
|Treasury stock, at cost, 315,766 shares in 2004 and 242,716 in 2003            |                            |  |   | (1,626                     
|                                                                               |                            |  |   |                            
|Total stockholders' equity                                                     |                            |  |   | 125,467                    
|                                                                               |                            |  |   |                            
|                                                                               |                            |  | $ | 300,930                    
|                                                                               |                            |  |   |                            

|See accompanying notes to consolidated financial statements.
|------------------------------------------------------------

|-5-
|---



---

|PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                      | Three Months Ended March 31,
|----------------------------------------------------- | ----------------------------
|
|
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                 |                             
|Fee and other revenue collected                       |                             
|Cash paid to employees, suppliers of goods and others |                             
|Interest received                                     |                             
|Interest paid                                         |                             
|Taxes refunded (paid)                                 |                             
|                                                      |                             
|Net cash provided by operating activities             |                             
|                                                      |                             
|CASH FLOWS FROM INVESTING ACTIVITIES:                 |                             
|Purchase of entities, net of cash acquired            |                             
|Escrow deposits                                       |                             
|Purchases of equipment and leasehold improvements     |                             
|Distributions from investments                        |                             
|Proceeds from sales of equipment                      |                             
|Other                                                 |                             
|                                                      |                             
|Net cash provided by (used in) investing activities   |                             
|                                                      |                             
|CASH FLOWS FROM FINANCING ACTIVITIES:                 |                             
|Borrowings on notes payable                           |                             
|Payments on notes payable, exclusive of interest      |                             
|Distributions to minority interest                    |                             
|Contributions by  minority interest, net of buyouts   |                             
|Exercise of stock options                             |                             
|                                                      |                             
|Net cash used in financing activities                 |                             
|                                                      |                             
|NET INCREASE  (DECREASE) IN CASH AND CASH EQUIVALENTS |                             
|                                                     
|Cash and cash equivalents, beginning of period        |                             
|                                                      |                             
|Cash and cash equivalents, end of period              |                             
|                                                      |                             

|See accompanying notes to consolidated financial statements.
|------------------------------------------------------------

|-6-
|---



---

|PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                 (Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                           | Three Months Ended March 31,
|-------------------------------------------------------------------------- | ----------------------------
|
|Reconciliation of net income to net cash provided by operating activities: |                             
|Net income                                                                 |                             
|Adjustments to reconcile net income                                        |                             
|to net cash provided by operating activities                               |                             
|Minority interest in consolidated income                                   |                             
|Depreciation and amortization                                              |                             
|Provision for uncollectible accounts                                       |                             
|Provision for deferred income taxes                                        |                             
|Equity in (earnings) loss of affiliates                                    |                             
|Stock buyback agreements                                                   |                             
|Other                                                                      |                             
|                                                                          
|Changes in operating assets and liabilities,                               |                             
|net of effect of purchase transactions                                     |                             
|Accounts receivable                                                        |                             
|Other receivables                                                          |                             
|Other assets                                                               |                             
|Accounts payable                                                           |                             
|Accrued expenses                                                           |                             
|                                                                           |                             
|Total adjustments                                                          |                             
|                                                                           |                             
|Net cash provided by operating activities                                  |                             
|                                                                           |                             

|See accompanying notes to consolidated financial statements.
|------------------------------------------------------------

|-7-
|---



---

|PRIME MEDICAL
SERVICES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED
FINANCIAL STATEMENTSMarch 31, 2004(Unaudited)
|----------------------------------------------------------------------------------------------------------------

# 1. General

|The  accompanying  unaudited  consolidated  financial  statements have been prepared in conformity  with the accounting  principles for
interim  financial  statements and with the  instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These  consolidated  financial
statements  reflect all  adjustments  which are, in our opinion,  necessary for a fair  presentation  of the statement of the financial
position as of March 31, 2004 and the results of operations and cash flows for the periods  presented.  These  statements have not been
audited  by our  independent  certified  public  accountants.  The  operating  results  for the  interim  periods  are not  necessarily
indicative of results for the full fiscal year.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The notes to consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2003 filed
with the Securities Exchange Commission should be read in conjunction with this Quarterly Report on Form 10-Q.  There have been no
significant changes in the information reported in those notes other than from normal business activities.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 2. Earnings per share

|Basic EPS is based on weighted average shares outstanding without any dilutive effects considered.  Diluted EPS reflects dilution
from all contingently issuable shares, including options and warrants.  A reconciliation of such EPS data is as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|($ in thousands, except per share data) | Basic
earningsper share | Diluted
earningsper share
|--------------------------------------- | ----------------------- | -------------------------
|                                        |                         |                          
|Three Months Ended March 31, 2004       |                         |                          
|                                        |                         |                          
|Net income                              |                         |                          
|                                        |                         |                          
|Weighted average shares outstanding     |                         |                          
|Effect of dilutive securities           |                         |                          
|                                        |                         |                          
|Shares for EPS calculation              |                         |                          
|                                        |                         |                          
|Net income per share                    |                         |                          
|                                        |                         |                          
|Three Months Ended March 31, 2003       |                         |                          
|                                        |                         |                          
|Net income                              |                         |                          
|                                        |                         |                          
|Weighted average shares outstanding     |                         |                          
|Effect of dilutive securities           |                         |                          
|                                        |                         |                          
|Shares for EPS calculation              |                         |                          
|                                        |                         |                          
|Net income per share                    |                         |                          
|                                        |                         |                          

|-8-
|---



---

|PRIME MEDICAL
SERVICES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED
FINANCIAL STATEMENTSMARCH 31, 2004 (continued)(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------

2.
          Earnings per share (continued)

|Unexercised stock options and warrants to purchase 2,567,000 and 2,824,000 shares of our common stock as of March 31, 2004 and 2003,
respectively, were not included in the computation of diluted EPS because the effect would be antidilutive.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 3. Segment Reporting

|We have two reportable  segments:  lithotripsy and  manufacturing.  The lithotripsy  segment provides services related to the operation
of the lithotripters,  including scheduling, staffing, training, quality assurance, maintenance,  regulatory compliance and contracting
with payors,  hospitals and surgery centers.  The manufacturing  segment provides  manufacturing  services and  installation,  upgrade,
refurbishment  and repair of major medical  equipment for mobile medical service  providers and the mobile broadcast and  communication
industry.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We measure  performance  based on the pretax income or loss from our operating  segments,  which do not include  unallocated  corporate
general and administrative expenses, corporate interest, revenue and expense.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|($ in thousands)      | Lithotripsy | Manufacturing
|--------------------- | ----------- | -------------
|                      |             |              
|Three Months Ended    |             |              
|March 31, 2004        |             |              
|                      |             |              
|Revenue from          |             |              
|external customers    |             |              
|                      |             |              
|Intersegment revenues |             |              
|                      |             |              
|Segment profit        |             |              
|                      |             |              
|                      |             |              
|                      |             |              
|Three Months Ended    |             |              
|March 31, 2003        |             |              
|                      |             |              
|Revenue from          |             |              
|external customers    |             |              
|                      |             |              
|Intersegment revenues |             |              
|                      |             |              
|Segment profit        |             |              
|                      |             |              

|-9-
|---



---

|PRIME MEDICAL
SERVICES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED
FINANCIAL STATEMENTSMARCH 31, 2004 (continued)(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------

|3. | Segment Reporting (continued)
|-- | -----------------------------

|The following is a reconciliation of the measure of segment profit per above to consolidated income before income taxes per the
consolidated statements of operations:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|($ in thousands)                     | Three Months ended March 31,2004                           2003
|------------------------------------ | ---------------------------------------------------------------
|                                     |                                                                
|Total segment profit                 |                                                                
|Corporate revenues                   |                                                                
|Unallocated corporate expenses:      |                                                                
|General and administrative           |                                                                
|Net interest expense                 |                                                                
|Other, net                           |                                                                
|                                     |                                                                
|Total unallocated corporate expenses |                                                                
|                                     |                                                                
|Income before income taxes           |                                                                
|                                     |                                                                

# 4. Stock-Based
Compensation

|Upon adoption of Statement of Financial  Accounting  Standards No. 123, Accounting for Stock-Based  Compensation  (Statement 123), in
1996, we have continued to measure  compensation  expense for our  stock-based  employee  compensation  plans using the intrinsic value
method  prescribed by APB Opinion No. 25,  Accounting  for Stock Issued to  Employees.  We have provided  proforma  disclosures  of net
income  and  earnings  per  share  as if the fair  value-based  method  prescribed  by  Statement  123 had been  applied  in  measuring
compensation expense.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|For purposes of proforma  disclosures,  the  estimated  fair value of the options is  amortized  to expense  over the options  vesting
period.  Our proforma information follows (in thousands except for earnings per share information):
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                  | 2004 | 2003
|--------------------------------- | ---- | ----
|Net income, as reported           |      |     
|Stock-based employee compensation |      |     
|expense, net of tax               |      |     
|                                  |      |     
|Pro forma net income              |      |     
|                                  |      |     
|Pro forma earning per share:      |      |     
|Basic                             |      |     
|Diluted                           |      |     

|-10-
|----



---

|PRIME MEDICAL
SERVICES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED
FINANCIAL STATEMENTSMARCH 31, 2004 (continued)(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------

# 5. Acquisitions

|Effective  February 20, 2004, we acquired  Medstone  International,  Inc.  (Medstone).  Medstone  manufactures,  sells, and maintains
lithotripters  and makes them available for use by health care providers under various  fee-for-service  arrangements in both fixed and
mobile  settings.  Medstone and its  subsidiaries  also market fixed and mobile tables for urological  treatments and imaging,  patient
handling  tables for use by pain  management  clinics and other  users,  and x-ray  generators  for medical  imaging.  A pioneer in the
manufacture  of  shockwave  lithotripsy,  Medstones  lithotripter  was the first FDA approved  device to treat both kidney  stones and
gallstones.  With more than 130  lithotripters  in operation  worldwide,  and more than 324 urology and patient handling tables in use,
the Medstone  devices are well established in the urology office and hospital market.  The aggregate  purchase price was  approximately
$19 million for all  outstanding  shares of Medstone  comprised  entirely of our common stock.  We  determined  the value of our common
stock by using an  average  closing  price  for the two  trading  days  prior to and  after  the  public  announcement  of the  merger.
Approximately 3.6 million shares were issued.  We recognized $6 million of goodwill related to this  transaction,  none of which is tax
deductible.  We recognized  approximately  $1 million of intangibles,  which are being  amortized over three years.  Medstone had total
assets with an estimated  fair value of $20.5  million and total  liabilities  with an  estimated  fair value of $7.2 million as of the
purchase  date.  For the year ended  December  31,  2003,  Medstone  had revenue of $21  million,  comprised  of $15 million in service
revenue and $6 million in equipment sales.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 6. Condensed Financial Information
Regarding Guarantor Subsidiaries

|Our condensed  consolidating financial information,  Guarantor Subsidiaries and Non-guarantor  Subsidiaries for March 31, 2004 and 2003
is presented  below for purposes of complying  with the  reporting  requirements  of the  Guarantor  Subsidiaries.  Separate  financial
statements and other  disclosures  concerning each Guarantor  Subsidiary  have not been presented  because we have determined that such
information  is not  material to  investors.  The  Guarantor  Subsidiaries  are  wholly-owned  subsidiaries  of ours who have fully and
unconditionally guaranteed the 8.75% unsecured senior subordinated notes.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|-11-
|----



---

|PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           Condensed Consolidating Statement of Operations
      Three Months Ended March 31, 2004
                   (Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|($ in thousands)                         | Prime Medical
Services, Inc. | Guarantor
Subsidiaries | Non-Guarantor
Subsidiaries | Eliminating
Entries | Consolidated
Total
|---------------------------------------- | ---------------------------- | ---------------------- | -------------------------- | ------------------- | ------------------
|Revenue:                                 |                              |                        |                            |                     |                   
|Lithotripsy                              |                              |                        | $                          | 2,189               |                   
|Manufacturing                            |                              |                        |                            | 1,746               |                   
|Other                                    |                              |                        |                            | --                  |                   
|                                         |                              |                        |                            |                     |                   
|Total revenue                            |                              |                        |                            | 3,935               |                   
|                                         |                              |                        |                            |                     |                   
|Cost of services and general and         |                              |                       
|administrative expenses:                 |                              |                       
|Lithotripsy                              |                              |                        |                            | --                  |                   
|Manufacturing                            |                              |                        |                            | --                  |                   
|Corporate                                |                              |                        |                            | 20                  |                   
|                                         |                              |                        |                            |                     |                   
|                                         |                              |                        |                            | 20                  |                   
|Depreciation and amortization            |                              |                        |                            | --                  |                   
|                                         |                              |                        |                            |                     |                   
|Operating income                         |                              |                        |                            | 3,915               |                   
|                                         |                              |                        |                            |                     |                   
|Other income (expenses):                 |                              |                       
|Interest and dividends                   |                              |                        |                            | 47                  |                   
|Interest expense                         |                              |                        |                            | (2,119              | )                 
|Other, net                               |                              |                        |                            | 21                  |                   
|                                         |                              |                        |                            |                     |                   
|Total other income (expenses)            |                              |                        |                            | (2,051              | )                 
|                                         |                              |                        |                            |                     |                   
|Income before provision for income       |                              |                        |                            | 1,864               |                   
|taxes and minority interest              |                              |                       
|                                        
|Minority interest in consolidated income |                              |                        |                            | --                  |                   
|                                        
|Provision for income taxes               |                              |                        |                            | 683                 |                   
|                                         |                              |                        |                            |                     |                   
|Net income                               |                              |                        | $                          | 1,181               |                   
|                                         |                              |                        |                            |                     |                   

|-12-
|----



---

|PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           Condensed Consolidating Statement of Operations
      Three Months Ended March 31, 2003
                   (Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|($ in thousands)                         | Prime Medical
Services, Inc. | Guarantor
Subsidiaries | Non-Guarantor
Subsidiaries | Eliminating
Entries | Consolidated
Total
|---------------------------------------- | ---------------------------- | ---------------------- | -------------------------- | ------------------- | ------------------
|Revenue:                                 |                              |                        |                            |                     |                   
|Lithotripsy                              |                              |                        | $                          | 2,240               |                   
|Manufacturing                            |                              |                        |                            | 2,344               |                   
|Other                                    |                              |                        |                            | --                  |                   
|                                         |                              |                        |                            |                     |                   
|Total revenue                            |                              |                        |                            | 4,584               |                   
|                                         |                              |                        |                            |                     |                   
|Cost of services and general and         |                              |                       
|administrative expenses:                 |                              |                       
|Lithotripsy                              |                              |                        |                            | --                  |                   
|Manufacturing                            |                              |                        |                            | --                  |                   
|Corporate                                |                              |                        |                            | 33                  |                   
|                                         |                              |                        |                            |                     |                   
|                                         |                              |                        |                            | 33                  |                   
|Depreciation and amortization            |                              |                        |                            | --                  |                   
|                                         |                              |                        |                            |                     |                   
|Operating income                         |                              |                        |                            | 4,551               |                   
|                                         |                              |                        |                            |                     |                   
|Other income (expenses):                 |                              |                       
|Interest and dividends                   |                              |                        |                            | 53                  |                   
|Interest expense                         |                              |                        |                            | (1,961              | )                 
|Other, net                               |                              |                        |                            | --                  |                   
|                                         |                              |                        |                            |                     |                   
|Total other income (expenses)            |                              |                        |                            | (1,908              | )                 
|                                         |                              |                        |                            |                     |                   
|Income before provision for income       |                              |                        |                            | 2,643               |                   
|taxes and minority interest              |                              |                       
|                                        
|Minority interest in consolidated income |                              |                        |                            | --                  |                   
|                                        
|Provision for income taxes               |                              |                        |                            | 816                 |                   
|                                         |                              |                        |                            |                     |                   
|Net income                               |                              |                        | $                          | 1,827               |                   
|                                         |                              |                        |                            |                     |                   

|-13-
|----



---

|PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           Condensed Consolidating Balance Sheet
      March 31, 2004
                   (Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|($ in thousands)                            | Prime Medical
Services, Inc. | Guarantor
Subsidiaries | Non-Guarantor
Subsidiaries | Eliminating
Entries | Consolidated
Total
|------------------------------------------- | ---------------------------- | ---------------------- | -------------------------- | ------------------- | ------------------
|ASSETS                                      |                              |                        |                            |                     |                   
|                                           
|Current assets:                             |                              |                       
|Cash and cash equivalents                   |                              |                        | $                          | 9                   |                   
|Accounts receivable, net                    |                              |                        |                            | --                  |                   
|Other receivables                           |                              |                        |                            | 414                 |                   
|Deferred income taxes                       |                              |                        |                            | 1,193               |                   
|Prepaid expenses and other current assets   |                              |                        |                            | --                  |                   
|Inventory                                   |                              |                        |                            | --                  |                   
|                                            |                              |                        |                            |                     |                   
|Total current assets                        |                              |                        |                            | 1,616               |                   
|                                            |                              |                        |                            |                     |                   
|Property and equipment:                     |                              |                       
|Equipment, furniture and fixtures           |                              |                        |                            | --                  |                   
|Building and leasehold improvements         |                              |                        |                            | --                  |                   
|                                            |                              |                        |                            |                     |                   
|                                            |                              |                        |                            | --                  |                   
|Less accumulated depreciation               |                              |                       
|and amortization                            |                              |                        |                            | --                  |                   
|                                            |                              |                        |                            |                     |                   
|Property and equipment, net                 |                              |                        |                            | --                  |                   
|                                            |                              |                        |                            |                     |                   
|Investment in subsidiaries                  |                              |                       
|and other investments                       |                              |                        |                            | 245,366             |                   
|Goodwill, at cost, net of amortization      |                              |                        |                            | --                  |                   
|Other noncurrent assets                     |                              |                        |                            | 2,164               |                   
|                                            |                              |                        |                            |                     |                   
|                                            |                              |                        |                            |                     |                   
|                                            |                              |                        | $                          | 249,146             |                   
|                                            |                              |                        |                            |                     |                   
|LIABILITIES                                 |                              |                       
|                                           
|Current liabilities:                        |                              |                       
|Current portion of long-term debt           |                              |                        | $                          | 188                 |                   
|Accounts payable                            |                              |                        |                            | --                  |                   
|Accrued expenses                            |                              |                        |                            | 5,694               |                   
|Accrued distributions to minority interests |                              |                        |                            | --                  |                   
|Customer deposits                           |                              |                        |                            | --                  |                   
|                                            |                              |                        |                            |                     |                   
|Total current liabilities                   |                              |                        |                            | 5,882               |                   
|Long-term debt, net of current portion      |                              |                        |                            | 100,564             |                   
|Other long term obligations                 |                              |                        |                            | --                  |                   
|Deferred income taxes                       |                              |                        |                            | 17,233              |                   
|                                            |                              |                        |                            |                     |                   
|Total liabilities                           |                              |                        |                            | 123,679             |                   
|                                            |                              |                        |                            |                     |                   
|Minority interest                           |                              |                        |                            | --                  |                   
|                                           
|STOCKHOLDERS' EQUITY                        |                              |                       
|                                           
|Common stock                                |                              |                        |                            | 210                 |                   
|Capital in excess of par value              |                              |                        |                            | 88,863              |                   
|Accumulated earnings                        |                              |                        |                            | 38,020              |                   
|Subsidiary net equity                       |                              |                        |                            | --                  |                   
|Treasury stock                              |                              |                        |                            | (1,626              | )                 
|                                            |                              |                        |                            |                     |                   
|Total stockholders' equity                  |                              |                        |                            | 125,467             |                   
|                                            |                              |                        |                            |                     |                   
|                                            |                              |                        | $                          | 249,146             |                   
|                                            |                              |                        |                            |                     |                   

|-14-
|----



---

|PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           Condensed Consolidating Statement of Cash Flow
      Three Months Ended March 31, 2004
                   (Unaudited)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|($ in thousands)                               | Prime Medical
Services, Inc. | Guarantor
Subsidiaries | Non-Guarantor
Subsidiaries | Eliminating
Entries | Consolidated
Total
|---------------------------------------------- | ---------------------------- | ---------------------- | -------------------------- | ------------------- | ------------------
|
|CASH FLOWS FROM OPERATING                      |                              |                        |                            |                     |                   
|ACTIVITIES:                                    |                              |                       
|Net cash provided by (used in)                 |                              |                       
|operating activities                           |                              |                        | $                          | (42                 | )                 
|                                               |                              |                        |                            |                     |                   
|CASH FLOWS FROM INVESTING                      |                              |                       
|ACTIVITIES:                                    |                              |                       
|Purchase of equity investments and entities    |                              |                        |                            | --                  |                   
|Purchases of property and equipment            |                              |                        |                            | --                  |                   
|Proceeds from sales of equipment               |                              |                        |                            | --                  |                   
|Distributions from subsidiaries                |                              |                        |                            | 2,878               |                   
|Distributions from investments                 |                              |                        |                            | --                  |                   
|Other                                          |                              |                        |                            | --                  |                   
|                                               |                              |                        |                            |                     |                   
|Net cash provided by (used in)                 |                              |                       
|investing activities                           |                              |                        |                            | 2,878               |                   
|                                               |                              |                        |                            |                     |                   
|CASH FLOWS FROM FINANCING                      |                              |                       
|ACTIVITIES:                                    |                              |                       
|Payments on notes payable exclusive of         |                              |                       
|interest                                       |                              |                        |                            | (3,000              | )                 
|Borrowings on notes payable                    |                              |                        |                            | --                  |                   
|Distributions to minority interest             |                              |                        |                            | --                  |                   
|Contributions by minority interest             |                              |                        |                            | --                  |                   
|Excersise of stock options                     |                              |                        |                            | 123                 |                   
|Distributions to equity owners                 |                              |                        |                            | --                  |                   
|                                               |                              |                        |                            |                     |                   
|Net cash provided by (used in)                 |                              |                       
|financing activities                           |                              |                        |                            | (2,877              | )                 
|                                               |                              |                        |                            |                     |                   
|NET INCREASE (DECREASE) IN CASH                |                              |                       
|AND CASH EQUIVALENTS                           |                              |                        |                            | (41                 | )                 
|                                              
|Cash and cash equivalents, beginning of period |                              |                        |                            | 50                  |                   
|                                               |                              |                        |                            |                     |                   
|Cash and cash equivalents, end of period       |                              |                        | $                          | 9                   |                   
|                                               |                              |                        |                            |                     |                   

|-15-
|----



---

|PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                             Condensed Consolidating Statement of Cash Flows
      Three Months Ended March 31, 2003
                                                          (Unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|($ in thousands)                               | Prime Medical
Services, Inc. | Guarantor
Subsidiaries | Non-Guarantor
Subsidiaries | Eliminating
Entries | Consolidated
Total
|---------------------------------------------- | ---------------------------- | ---------------------- | -------------------------- | ------------------- | ------------------
|CASH FLOWS FROM OPERATING                      |                              |                        |                            |                     |                   
|ACTIVITIES:                                    |                              |                       
|Net cash provided by (used in)                 |                              |                       
|operating activities                           |                              |                        | $                          | 422                 |                   
|                                               |                              |                        |                            |                     |                   
|CASH FLOWS FROM INVESTING                      |                              |                       
|ACTIVITIES:                                    |                              |                       
|Purchase of equity investments and entities    |                              |                        |                            | --                  |                   
|Escrow depoits                                 |                              |                        |                            | (3,492              | )                 
|Purchases of property and equipment            |                              |                        |                            | --                  |                   
|Proceeds from sales of equipment               |                              |                        |                            | --                  |                   
|Distributions from subsidiaries                |                              |                        |                            | 7,039               |                   
|Investments                                    |                              |                        |                            | (8,000              | )                 
|Distributions from investments                 |                              |                        |                            | --                  |                   
|                                               |                              |                        |                            |                     |                   
|Net cash provided by (used in)                 |                              |                       
|investing activities                           |                              |                        |                            | (4,453              | )                 
|                                               |                              |                        |                            |                     |                   
|CASH FLOWS FROM FINANCING                      |                              |                       
|ACTIVITIES:                                    |                              |                       
|Payments on notes payable exclusive of         |                              |                       
|interest                                       |                              |                        |                            | (4,000              | )                 
|Borrowings on notes payable                    |                              |                        |                            | 8,000               |                   
|Distributions to minority interest             |                              |                        |                            | --                  |                   
|Contributions by minority interest             |                              |                        |                            | --                  |                   
|Contributions from parent                      |                              |                        |                            | --                  |                   
|Distributions to equity owners                 |                              |                        |                            | --                  |                   
|                                               |                              |                        |                            |                     |                   
|Net cash provided by (used in)                 |                              |                       
|financing activities                           |                              |                        |                            | 4,000               |                   
|                                               |                              |                        |                            |                     |                   
|NET INCREASE (DECREASE) IN CASH                |                              |                       
|AND CASH EQUIVALENTS                           |                              |                        |                            | (31                 | )                 
|                                              
|Cash and cash equivalents, beginning of period |                              |                        |                            | 66                  |                   
|                                               |                              |                        |                            |                     |                   
|Cash and cash equivalents, end of period       |                              |                        | $                          | 35                  |                   
|                                               |                              |                        |                            |                     |                   

|-16-
|----



---

|Item 2 
Managements Discussion and Analysisof Financial Condition
andResults of Operations
|--------------------------------------------------------------------------------------------

Forward-Looking Statements

|The statements  contained in this report that are not purely  historical are  forward-looking  statements within the meaning of Section
27A of the  Securities  Act of 1933 and  Section  21E of the  Securities  Exchange  Act of 1934,  including  statements  regarding  our
expectations,  hopes,  intentions  or  strategies  regarding  the  future.  You  should not place  undue  reliance  on  forward-looking
statements.  All forward-looking  statements  included in this report are based on information  available to us on the date hereof, and
we assume no obligation to update any such  forward-looking  statements.  It is important to note that our actual  results could differ
materially from those in the  forward-looking  statements.  In addition to any risks and  uncertainties  specifically  identified below
and in the text surrounding  forward-looking  statements in this report,  you should consult our reports on Form 10-K and other filings
with the  Securities  and  Exchange  Commission,  for  factors  that could  cause our actual  results to differ  materially  from those
presented.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as
will, would, should, plans, likely, expects, anticipates, intends, believes, estimates, thinks, may, and
similar expressions, are forward-looking statements.  The following important factors, in addition to those referred to above, could
affect the future results of the health care industry in general, and us in particular, and could cause those results to differ
materially from those expressed in such forward-looking statements:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | the effects of our indebtedness, which could adversely restrict our ability to operate, could make us vulnerable to general adverse
economic and industry conditions, could place us at a competitive disadvantage compared to our competitors that have less debt, and
could have other adverse consequences;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                               
| |  | uncertainties in our establishing or maintaining relationships with physicians and hospitals;                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                               
| |  | the impact of current and future laws and governmental regulations;                                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                               
| |  | uncertainties inherent in third party payors attempts to limit health care coverages and levels of reimbursement;                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                               
| |  | the effects of competition and technological changes;                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                               
| |  | the availability (or lack thereof) of acquisition or combination opportunities; and                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                               
| |  | general economic, market or business conditions.                                                                                                                                                                                                                                                              

General

|We provide lithotripsy services and design and manufacture trailers and coaches that transport high technology medical devices and
equipment for mobile command and control centers and the media and broadcast industry.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|-17-
|----



---

|Lithotripsy Services.
According to the American  Foundation for Urologic  Disease,  nearly 10% of Americans are afflicted with kidney
stones  during their  lifetime.  Most kidney  stones occur within the 40-60 year old age group.  The two primary  forms of treatment of
kidney stones are  lithotripsy  and endoscopic  extraction,  a form of surgery.  Of the  approximately  600,000 kidney stone cases each
year,  approximately  225,000 to 250,000 are treated with lithotripsy.  Lithotripsy uses extracorporeal  shock waves to break up kidney
stones into small pieces,  which can pass naturally  through the bodys urinary tract.  This procedure is a non-invasive  procedure for
treating kidney stones,  typically  performed on an outpatient basis, that eliminates the need for lengthy hospital stays and extensive
recovery periods associated with surgery.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Our services are provided principally through limited partnerships or other entities that we manage, which use lithotripsy devices.
As of March 31, 2004, we owned 94 lithotripters, 74 of which are mobile and 20 of which are fixed site.  We do not render any medical
services.  Rather, the physicians do.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We also,  through our Medstone  subsidiary,  manufacture,  sell and  maintain  lithotripters,  and market  fixed and mobile  tables for
urological  treatments and imaging,  as well as patient handling tables for use by pain management clinics.  See Recent  Developments
for a description of our Medstone subsidiary.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|As the general  partner of the limited  partnerships,  we also provide  services  relating to operating  our  lithotripters,  including
scheduling,  staffing,  training,  quality assurance,  maintenance,  regulatory compliance,  and contracting with payors, hospitals and
surgery centers.  We do not directly bill, nor do we collect for services rendered to, Medicare or Medicaid.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Although,  for the three  months  ended  March 31,  2004 and 2003,  manufacturing  revenue was higher  than  lithotripsy  revenue,  the
operating  margins  on  lithotripsy  revenue  have  been,  historically,  much  higher  than on  manufacturing  revenue.  We  recognize
lithotripsy revenue primarily from the following sources:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Fees for lithotripsy services.
A substantial majority of our lithotripsy revenue is derived from fees related to lithotripsy treatments performed using our
lithotripters.  We, through our partnerships or other entities, facilitate the use of our equipment and provide other support
services in connection with these treatments at hospitals and other health care facilities. The professional fee payable to the
physician performing the procedure is generally billed and collected by the physician.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Fees for operating our lithotripters.

Through our partnerships and otherwise directly by us, we provide services related to operating our lithotripters and receive a
management fee for performing these services.   In addition, we provide equipment maintenance services to our partnerships and supply
them with other consumables.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Fees for equipment sales and licensing applications.
We manufacture, sell and maintain lithotripters and certain medical tables.  In addition to the original sales price we receive for
lithotripter sales, we receive a licensing fee for each patient treated from the owner of the lithotripter.  In exchange for this
licensing fee, we also provide the owner of the lithotripter with certain consumables.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Manufacturing.    
We design, construct and engineer mobile trailers, coaches, and special purpose mobile units that transport high technology medical
devices such as magnetic resonance imaging, or MRI, cardiac catheterization labs, CT scanware, lithotripters, postitron emission
tomography, or PET, and equipment designed for mobile command and control centers, and broadcasting and communications applications.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|A significant portion of our revenue has been derived from our manufacturing operations.  Manufacturing revenue is recognized at the
time we fulfill the terms of the contract under which we have sold the equipment.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|-18-
|----



---

Recent Developments

|In February  2004, we acquired  Medstone  International,  Inc., or Medstone,  for  approximately  $19 million.  Medstone  manufactures,
sells,  and  maintains  lithotripters  and makes  them  available  for use by  health  care  providers  under  various  fee-for-service
arrangements  in both fixed and mobile  settings.  Medstone and its  subsidiaries  also market fixed and mobile  tables for  urological
treatments and imaging,  patient  handling tables for use by pain management  clinics and other users, and x-ray generators for medical
imaging.  A pioneer in the manufacture of shockwave  lithotripsy,  Medstones  lithotripter  was the first FDA approved device to treat
both kidney stones and  gallstones.  With more than 130  lithotripters  in operation  worldwide,  and more than 324 urology and patient
handling  tables in use, the Medstone  devices are well  established  in the urology  office and  hospital  market.  For the year ended
December 31, 2003, Medstone had revenue of $21 million, comprised of $15 million in service revenue and $6 million in equipment sales.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In April 2004,  we announced our plans to reorganize  our  manufacturing  segment in the last half of 2004.  This  reorganization  will
rationalize plant capacity  accumulated through  acquisitions,  streamline  production,  and optimize synergies available through labor
redundancies and, purchasing and materials management.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Critical Accounting Policies and Estimates.

Management has identified the
following critical accounting policies and estimates:

|Impairments of goodwill and other intangible  assets are both a critical  accounting  policy and estimate that requires judgment and is
based on assumptions of future  operations.  We are required to test for impairments at least annually or if circumstances  change that
would reduce the fair value of a reporting unit below its carrying  value.  The fair value of each  reporting unit is calculated  using
estimated discounted future cash flow projections.  As of March 31, 2004, we had goodwill of $185 million.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|A second critical accounting policy and estimate which requires judgment of management is the estimated allowance for doubtful
accounts and contractual adjustments.  We have based our estimates on historical collection amounts, current contracts with payors,
current changes of the facts and circumstances relating to these matters and certain negotiations with related payors.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|A third critical accounting policy is consolidation of our investment in partnerships where we, as the general partner, exercise
effective control, even though our ownership is less than 50%.  We have reviewed each of the underlying agreements and determined we
have effective control; however, if it was determined this control did not exist, these investments would be reflected on the equity
method of accounting.  Although this would change individual line items within our consolidated financial statements, it would have
no effect on our net income and/or total stockholders equity.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|-19-
|----



---

|Three months ended March 31,
2004 compared to the three months ended March 31, 2003
|-----------------------------------------------------------------------------------

|Our total  revenues  for the three  months  ended  March 31,  2004  decreased  $639,000  (2%) as  compared  to the same period in 2003.
Revenues from our  lithotripter  operations  increased by $1,225,000  (8%) due to the acquisition of Medstone during February 2004. The
actual  number of  procedures  performed in the three months ended March 31, 2004  increased by 6% compared to the same period in 2003.
Actual  revenues from Medstone in the quarter  totaled $1.7 million on 748 procedures  and 2,547  licensing  applications.  We also had
$500,000 in  Medstone  equipment  sales.  Our  manufacturing  revenues  decreased  $1,838,000  (7%) due to the number of units  shipped
decreasing  from 95 during 2003 to 78 during  2004.  The  majority of the  decrease  related to our medical  manufacturing  facility in
Chicago, which continues to be negatively impacted by the global decline in demand in this business.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Our costs of services and general and  administrative  expenses  (excluding  depreciation and  amortization) for the three months ended
March 31, 2004 was consistent  with the same peiod in 2003 at 74% of revenues.  Our costs of services  associated  with our lithotripsy
operations  increased  $565,000 (9%) in absolute terms and remained  consistent at 43% of our lithotripsy  revenues.  Costs  associated
with Medstone  revenues  discussed  above totaled $1.4  million.  Our cost of services  associated  with our  manufacturing  operations
decreased  $1,344,000  (6%) in absolute terms but increased  from 90% to 91% of our  manufacturing  revenues due to decreased  sales in
medical  manufacturing  which historically has higher product margins.  Our corporate  expenses remained  consistent at 2% of revenues,
increasing $331,000 (51%) in absolute terms, but down $177,000 from fourth quarter 2003.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Depreciation  and  amortization  expense  decreased  $200,000 for the three months ended March 31, 2004  compared to the same period in
2003.
|---------------------------------------------------------------------------------------------------------------------------------------------

|Minority  interest in consolidated  income for the three months ended March 31, 2004 increased  $882,000 compared to the same period in
2003, primarily as a result of an increase in income from our lithotripsy segment.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Provision for income taxes for the three months ended March 31, 2004 decreased $323,000 compared to the same period in 2003 due to a
decrease in income.
|--------------------------------------------------------------------------------------------------------------------------------------------------------

Liquidity and Capital
Resources

Cash Flows

|Cash and cash  equivalents  were  $13,425,000 and $9,780,000 at March 31, 2004 and December 31, 2003,  respectively.  Our  subsidiaries
generally  distribute all of their  available cash  quarterly,  after  establishing  reserves for estimated  capital  expenditures  and
working  capital.  For the three months ended March 31, 2004 and 2003, our subsidiaries  distributed  cash of approximately  $7,163,000
and $8,316,000, respectively, to minority interest holders.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Cash provided by  operations,  after minority  interest,  was  $12,736,000  for the quarter ended March 31, 2004 and $8,909,000 for the
quarter ended March 31, 2003.  Fee and other revenue  collected  increased by  $5,670,000.  Cash paid to employees,  suppliers of goods
and others increased by $2,251,000.  These  fluctuations  are attributable to increased  operations from our acquisition of Medstone as
well as the timing of accounts  payable and accrued  expense  payments.  A decrease in interest  payments of $216,000 was due primarily
to our interest rate swap  agreements,  which were  terminated in January 2004.  Taxes  refunded  increased  $209,000 due to refractive
operations write-offs in 2002, which were carried back to prior taxable years.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Cash provided by our investing activities for the quarter ended March 31, 2004, was $805,000 primarily due to $3,843,000 in net cash
received from our acquisition of Medstone.  We purchased equipment and leasehold improvements totaling $3,381,000.  Cash used by our
investing activities for the quarter ended March 31, 2003, was $15,935,000 primarily due to $10,302,000 used in our acquisition of
Winemiller Communications and Aluminum Body Corporation, or ABC.  We purchased equipment and leasehold improvements totaling
$2,281,000 during that quarter.  We also deposited $3,492,000 in an escrow account related to certain contingent consideration for
the ABC acquisition.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|-20-
|----



---

|Cash used in our financing activities for the quarter ended March 31, 2004, was $9,896,000, primarily due to distributions to
minority interests of $7,163,000 and net payments on notes payable of $3,199,000.  Cash used in our financing activities for the
quarter ended March 31, 2003, was $4,038,000, primarily due to distributions to minority interests of $8,316,000, partially offset by
net borrowings on notes payable of $5,120,000.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Senior Credit Facility

|Our senior credit facility is a revolving line of credit, and it expires on July 25, 2005.  The revolving line of credit has a
borrowing limit of $50 million, none of which was drawn at March 31, 2004 and April 30, 2004.  Our senior credit facility contains
covenants that, among other things, limit the payment of cash dividends on our common stock, limit repurchases of our common stock,
restrict the amount of our consolidated debt, restrict our ability to make certain loans and investments, and provide that we must
maintain certain financial ratios.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8.75% Notes

|In addition,  we have $100 million of unsecured  senior  subordinated  notes.  The notes bear interest at 8.75% and interest is payable
semi-annually on April 1st and October 1st.  Principal is due April 2008.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The  indenture  governing  our 8.75% notes  contains  covenants  that,  among other  things:  (1) limit the  incurrence  of  additional
indebtedness;  (2) limit certain  investments;  (3) limit  restricted  payments;  (4) limit the  disposition  of assets;  (5) limit the
payment of dividends and other payment  restrictions  affecting  subsidiaries;  (6) limit  transactions with affiliates;  (7) limit the
creation of liens;  and (8) restrict  mergers,  consolidations  and transfers of assets.  In the event of a change of control under the
indenture,  we will be required to make an offer to repurchase the 8.75% notes at 101% of the principal  amount  thereof,  plus accrued
and unpaid interest to the date of the repurchase.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The 8.75% notes are  unsecured  general  obligations  and are  subordinated  in right of payment to all our existing and future  senior
indebtedness and are guaranteed by our subsidiaries on a full, unconditional, joint and several basis.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other

|Interest Rate Swap

..  In August 2002, we entered into an interest rate swap which was designated as a fair value hedge pursuant to the
provisions of FAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and FAS No. 138, Accounting for Certain
Derivative Instruments and Certain Hedging Activities, An Amendment of FASB Statement No. 133.  This swap was executed to convert $50
million of the 8.75% notes from a fixed to floating rate instrument.  The floating rate was based on LIBOR plus 4.56%.  In March
2003, we amended our interest rate swap agreement to add an additional $25 million with a floating rate based on LIBOR plus 5.11%.
We terminated the swaps in May 2003.  In August 2003, we entered into two new interest rate swaps for $25 million each which were
designated as fair value hedges.  The floating rates of the two interest rate swap agreements were based on LIBOR plus 4.72% and
4.97%, respectively.  In January 2004, we terminated these swaps.  As of March 31, 2004, approximately $800,000 in proceeds from
these swaps are capitalized and is being amortized as a reduction to future interest expense over the remaining life of the 8.75%
notes.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|-21-
|----



---

|Other long term debt.  At March 31, 2004,  we had  approximately  $4 million of debt related to our  building in Austin,  Texas,  which
bears  interest at prime plus 1% and is due in monthly  installments  until  November  2006.  We also had notes  totaling  $6.6 million
related to  equipment  purchased  by our limited  partnerships.  These notes are paid from the cash flows of the related  partnerships.
They bear interest at LIBOR or prime plus a certain premium and are due over the next three years.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Other long term obligations.  At March 31, 2004, we had an obligation  totaling $1,500,000 related to payments to the previous owner of
ABC for $75,000 per quarter  until March 31, 2008 as  consideration  for a  noncompetition  agreement.  We had an  obligation  totaling
$829,000  related to payments  to a previous  employee of Medstone  for $20,833 a month until  February  28, 2007 and $4,167  beginning
March 1, 2007 and continuing until February 28, 2009 as consideration  for a  noncompetition  agreement.  We also had an obligation for
$528,000  related to the estimated fair values of puts on our common stock held by two previous  minority  interest  owners of one of
our subsidiaries,  AK Specialty Vehicles,  which may be exercised in two equal increments of approximately  121,360 shares in June 2004
and 2005 at per share purchase prices of $7.12 and $7.19, respectively.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Stock  Repurchases.  During 1998,  we announced a stock  repurchase  program of up to $25.0  million of our common  stock.  In February
2000,  we  announced  an increase  in the  authorized  repurchase  amount from $25.0  million to $35.0  million and in January  2001 we
increased  this  amount to $45.0  million.  We have not  repurchased  any of our common  stock since  2001.  From time to time,  we may
purchase  additional shares of our common stock where, in our judgment,  market  valuations of our stock do not accurately  reflect our
past and projected  results of  operations.  We intend to fund any  additional  stock  purchases  using cash flows from  operations and
borrowings  under our senior credit  facility.  Under our  repurchase  program,  we had purchased  3,820,200  shares of our stock for a
total cost of $32,524,000.  These shares were retired in August 2002 and no additional shares have been purchased under the program.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

General

The following table presents our contractual obligations
 as of March 31, 2004 (in thousands):

|                                | Payments due by period
|------------------------------- | ----------------------
|
|Long Term Debt (1)              |                       
|Operating Leases
 (2)           |                       
|Non-compete contracts (3)       |                       
|Stock repurchase
agreements (4) |                       
|                                |                       
|Total                           |                       
|                                |                       

| | (1) | Represents long term debt as discussed above.
| | --- | ---------------------------------------------

| | (2) | Represents operating leases in the ordinary course of our business.
| | --- | -------------------------------------------------------------------

| | (3) | Represents an obligation of $1,500 due to the previous owner of ABC, at a rate of $75 per quarter and an obligation of $829 due to a
previous employee of Medstone, at a rate of $21 per month until February 28, 2007 and $4 beginning March 1, 2007 and continuing until
February 28, 2009.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Represents the estimated liability, in accordance
with SFAS No. 150, of certain put rights on our common stock discussed above under Other long term obligations.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|-22-
|----



---

|Our primary  sources of cash are cash flows from  operations  and  borrowings  under our senior  credit  facility.  Our cash flows from
operations  and  therefore  our ability to make  scheduled  payments of  principal,  or to pay the  interest on, or to  refinance,  our
indebtedness,  or to fund planned capital  expenditures,  will depend on our future performance,  which is subject to general economic,
financial,  competitive,  legislative,  regulatory and other factors.  Likewise, our ability to borrow under our senior credit facility
will depend on these  factors,  which will affect our ability to comply with the  covenants  in our  facility and our ability to obtain
waivers for, or otherwise address, any noncompliance with the terms of our facility with our lenders.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We intend to increase our lithotripsy  operations  primarily  through  forming new operating  subsidiaries in new markets as well as by
acquisitions.  We seek  opportunities to grow our manufacturing  operations  through  acquisitions,  expanding our product lines and by
selling to a broader  customer base. We intend to fund the purchase price for future  acquisitions  and  developments  using borrowings
under our senior  credit  facility  and cash flows from our  operations.  In  addition,  we may use shares of our common  stock in such
acquisitions where appropriate.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Based upon the current level of our operations and  anticipated  cost savings and revenue  growth,  we believe that cash flows from our
operations  and available  cash,  together with available  borrowings  under our senior credit  facility,  will be adequate to meet our
future  liquidity  needs both for the short term and for at least the next several years.  However,  there can be no assurance that our
business will  generate  sufficient  cash flows from  operations,  that we will realize our  anticipated  revenue  growth and operating
improvements  or that future  borrowings  will be available  under our senior credit  facility in an amount  sufficient to enable us to
service our indebtedness or to fund our other liquidity needs.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Inflation

|Our  operations  are not  significantly  affected by inflation  because we are not required to make large  investments in fixed assets.
However, the rate of inflation will affect certain of our expenses, such as employee compensation and benefits.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Adoption of Accounting
Pronouncements

|In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities, an interpretation of ARB No. 51
(FIN 46).  This Interpretation addresses the consolidation by business enterprises of variable interest entities as defined in the
Interpretation.  The Interpretation applies immediately to variable interests in variable interest entities created after January 31,
2003, and July 1, 2003 for variable interests in variable interest entities that existed at January 31, 2003 and remain in existence
at July 1, 2003.  In October 2003, the FASB delayed the implementation date for variable interests in variable interest entities that
existed at January 31, 2003 and remain in existence at July 1, 2003 until fiscal years beginning after December 31, 2003.  FIN 46 was
subsequently revised and reissued in December 2003.  The reissued guidance requires implementation by March 31, 2004.  The
application of this Interpretation did not have a material effect on our consolidated financial statements.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|-23-
|----



---

|Item 3  Quantitative and Qualitative DisclosuresAbout Market Risk
|------------------------------------------------------------------

Interest Rate Risk

|As of March 31, 2004, we had long-term debt (including current portion) totaling  $111,322,000,  of which $100 million has a fixed rate
of interest of 8.75%,  $59,000 has fixed rates of 5% to 11%,  $4,013,000  bears interest at a variable rate equal to a specified  prime
rate and  $6,498,000  bears  interest at a variable rate equal to LIBOR + 1 to 3.75%.  The remaining  $752,000  relates to our interest
rate swaps,  which are discussed below. We are exposed to some market risk due to floating  interest rate debt totaling  $10,511,000 on
which we make  monthly or  quarterly  payments of  principal  and  interest.  An increase  in  interest  rates of 1% would  result in a
$105,000 annual increase in interest expense on this existing principal balance.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Additionally, in August 2002, we entered into an interest rate swap, which was designated as a fair value hedge pursuant to the
provisions of FAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and FAS No. 138, Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an Amendment of FASB Statement No. 133.  This swap had the effect of
converting $50 million of our 8.75% notes from a fixed to floating rate instrument with a rate of LIBOR plus 4.57%.  In March 2003,
we amended our interest rate swap agreement to add an additional $25 million with a floating rate based on LIBOR plus 5.11%.  We
terminated the swaps in May 2003.  In August 2003, we entered into two new interest rate swaps for $25 million each, which were
designated as fair hedges.  The floating rates of the two interest rate swap agreements were based on LIBOR plus 4.72% and 4.97%,
respectively.  In January 2004, we terminated these swaps for approximately $150,000.  At March 31, 2004, approximately $800,000 in net proceeds from
these swaps are capitalized and is being amortized as a reduction to future interest expense over the remaining life of the 8.75%
notes.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 4  Controls
and Procedures
|--------------------------------

|At March 31, 2004,  under the supervision and with the  participation  of our  management,  including our Chief Executive  Officer (our
principal executive officer) and our Chief Financial Officer (our principal  financial officer),  we evaluated the effectiveness of our
disclosure  controls and procedures (as defined under Rule 13a-15(e) of the Securities  Exchange Act of 1934, as amended (the Exchange
Act)).  Based on this evaluation,  our Chief Executive  Officer and our Chief Financial  Officer concluded that, as of March 31, 2004,
our disclosure controls and procedures were effective.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|There have been no significant changes in our internal control over financial reporting that occurred during the period covered by
this report that have materially affected, or are reasonably likely to materially affect, such internal control over financial
reporting.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|-24-
|----



---

|PART II


OTHER INFORMATION
|---------------------------

|-25-
|----



---

# Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities.

# Issuer Purchases of Equity Securities.

|Period              | (a) Total Number of
Shares (or Units)
Purchased | (b) Average Price
Paid per Share
(or Unit) | (c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs | (d) Maximum Number
or (Approximate Dollar
value) of Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs
|------------------- | ----------------------------------------------- | ------------------------------------------ | ----------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------
|February 1, 2004(1) |                                                 | 84,071                                     |                                                                                                 | $ 5.65                                                                                                                     

|(1) On February 1, 2004, we completed the sale of certain assets of our Winemiller subsidiary
to RF Central LLC for 84,071 shares of our common stock held by a previous owner of Winemiller.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Item 4. Submission of Matters to a Vote of Security Holders.

|On February 20, 2004 we held a special meeting of our stockholders to consider and vote on the two proposals described below.

               
  
(1) Approval of our merger with Medstone International, Inc.  The proposal was approved and the votes FOR were 11,429,466, the
votes AGAINST were 78,878, and the votes ABSTAINING were 14,567.

               
  
(2) Approval of our 2003 Stock Option Plan.  The proposal was approved and the votes FOR were 10,917,066, the votes AGAINST were
571,241, and the votes ABSTAINING were 34,604.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Item 6. Exhibits and
Reports on Form 8-K.

|(a)      
         
         
         
         
         
(b) | Exhibits

12.1  Computation of ratio of earnings to fixed charges.
31.1 Certification of Chief Executive Officer
31.2 Certification of Chief Financial Officer
32.1 Certification of Chief Executive Officer
32.2 Certification of Chief Financial Officer
Current Reports on Form 8-K
         On February 2, 2004, we filed a report on Form 8-K disclosing a presentation to the investment community.

         On February 20, 2004, we filed a report on Form 8-K announcing the completion of the merger with Medstone International, Inc.


On February 24, 2004, we filed a report on Form 8-K disclosing our fourth quarter 2003 earnings release.
|--------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|-26-
|----



---

|SIGNATURES
|----------

|Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date:  May 5, 2004 | PRIME MEDICAL SERVICES, INC.
By: /s/ John Q. Barnidge
     John Q. Barnidge, Senior Vice President
         and Chief Financial Officer
|------------------ | ---------------------------------------------------------------------------------------------------------------------------------------

|-27-
|----

---