UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, 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, 2000

            [ ] 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                    (I.R.S. Employer
    incorporation or organization)                    Identification No.)


                 1301 Capital of Texas Highway, Austin, TX 78746
               (Address of principal executive office) (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 x NO

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

                                                Number of Shares Outstanding at
      Title of Each Class                               April 30, 2000
  Common Stock, $.01 par value                            16,210,034

<PAGE>







                                     PART I


                                        2
<PAGE>
                  PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                          Three Months Ended
                                                              March 31,
($ in thousands, except per share data)                2000               1999
                                                      ------             ------
Revenue:
     Lithotripsy:
         Fee revenues                                $19,070            $19,496
         Management fees                                 894              1,351
         Equity income                                   570                562
                                                      ------             ------
                                                      20,534             21,409

     Manufacturing                                     5,527              3,400
     Refractive                                        2,935                --
     Prostatherapy                                       402                518
     Other                                                45                 55
                                                      ------             ------
         Total revenue                                29,443             25,382

Cost of services and general
   and administrative expenses:
     Lithotripsy                                       5,395              6,042
     Manufacturing                                     4,290              2,454
     Refractive                                        1,501                --
     Prostatherapy                                       359                457
     Other                                                50                 61
     Corporate                                           956                871
                                                      ------             ------
                                                      12,551              9,885
Depreciation and amortization                          2,920              2,475
                                                      ------             ------
                                                      15,471             12,360
                                                      ------             ------

Operating income                                      13,972             13,022

Other income (deductions):
     Interest and dividends                              358                405
     Interest expense                                 (2,426)            (2,329)
     Loan fees                                           (84)               --
     Other, net                                           (5)              (338)
                                                      ------             ------
                                                      (2,157)            (2,262)

Income before provision for income
   taxes and minority interests                       11,815             10,760

Minority interest in consolidated income               6,455              5,443

Provision for income taxes                             2,063              2,155
                                                      ------             ------

Net income                                            $3,297             $3,162
                                                      ======             ======

Basic earnings per share:
     Net income                                       $ 0.20             $ 0.18
                                                      ======             ======

     Weighted average shares outstanding              16,435             17,387
                                                      ======             ======

Diluted earnings per share:
     Net income                                       $ 0.20             $ 0.18
                                                      ======             ======

     Weighted average shares outstanding              16,607             17,495
                                                      ======             ======

          See accompanying notes to consolidated financial statements.


                                       3
<PAGE>
                  PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)



                                               March 31,            December 31,
($ in thousands)                                 2000                  1999
                                               ---------             ---------

ASSETS

Current assets:
    Cash and cash equivalents                    $25,435                $20,064
    Investments                                      639                  4,120
    Accounts receivable, less allowance
       for doubtful accounts of $246 in
       2000 and $224 in 1999                      21,918                 23,273
    Other receivables                              2,560                  3,491
    Deferred income taxes                            987                  1,066
    Prepaid expenses and other current assets      1,847                  2,322
    Inventory                                      4,906                  3,676
                                               ---------              ---------

       Total current assets                       58,292                 58,012
                                               ---------              ---------

Property and equipment:
    Equipment, furniture and fixtures             43,766                 42,128
    Building and leasehold improvements            2,227                  2,092
                                               ---------              ---------

                                                  45,993                 44,220

    Less accumulated depreciation
       and amortization                          (26,881)               (25,567)
                                               ---------              ---------

       Property and equipment, net                19,112                 18,653
                                               ---------              ---------

Other investments                                 18,945                 18,963
Goodwill, at cost, net of amortization           151,370                149,088
Other noncurrent assets                            2,395                  2,110
                                               ---------              ---------

                                                $250,114               $246,826
                                               =========              ==========




















          See accompanying notes to consolidated financial statements.


                                       4
<PAGE>
                  PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (continued)
                                   (Unaudited)



                                               March 31,            December 31,
($ in thousands, except share data)               2000                  1999
                                               ---------             ---------

LIABILITIES

Current liabilities:
    Current portion of long-term debt             $1,822                 $1,763
    Accounts payable                               3,564                  3,290
    Accrued distributions to minority
       interests                                   5,280                  8,332
    Accrued expenses                               8,276                  7,108
                                               ---------              ---------

       Total current liabilities                  18,942                 20,493

Long-term debt, net of current portion           104,475                103,797
Deferred income taxes                              7,302                  6,400
                                               ---------              ---------

       Total liabilities                         130,719                130,690

Minority interest                                 20,569                 19,454

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;
    19,372,267 shares issued in 2000 and
    19,367,267 shares issued in 1999                 194                    194
Capital in excess of par value                    88,019                 87,655
Accumulated earnings                              36,951                 33,654
Treasury stock, at cost; 3,053,400 shares
    in 2000 and 2,875,300 shares in 1999         (26,338)               (24,821)
                                               ---------              ---------

       Total stockholders' equity                 98,826                 96,682
                                               ---------              ---------

                                                $250,114               $246,826
                                               =========              =========

























          See accompanying notes to consolidated financial statements.


                                       5
<PAGE>
                  PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                          Three Months Ended
                                                              March 31,
($ in thousands)                                       2000               1999
                                                      ------             ------

CASH FLOWS FROM OPERATING ACTIVITIES:
    Fee and other revenue collected                  $29,620            $24,637
    Cash paid to employees, suppliers of goods
       and others                                    (14,029)           (16,917)
    Proceeds from sales and maturities of
       investments                                     3,510                --
    Interest received                                    328                405
    Interest paid                                       (207)            (4,515)
    Taxes paid                                          (297)              (832)
                                                      ------             ------

       Net cash provided by operating
         activities                                   18,925              2,778
                                                      ------             ------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of entity                                (3,740)               --
    Purchases of equipment and leasehold
       improvements                                   (1,252)              (585)
    Distributions from investments                       748              1,064
    Other                                                (15)               466
                                                      ------             ------

       Net cash provided by (used in)
         investing activities                         (4,259)               945
                                                      ------             ------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Borrowings on notes payable                        1,079              1,508
    Payments on notes payable, exclusive
       of interest                                      (329)              (406)
    Distributions to minority interest                (8,934)            (9,200)
    Contributions by minority interest                   275              1,224
    Purchases of treasury stock                       (1,516)            (2,241)
    Exercise of stock options, and sales
       and purchases of put options                      130                 12
                                                      ------             ------

       Net cash used in financing activities          (9,295)            (9,103)
                                                      ------             ------

NET INCREASE (DECREASE) IN CASH AND CASH
    EQUIVALENTS                                        5,371             (5,380)

Cash and cash equivalents, beginning
    of period                                         20,064             40,146
                                                      ------             ------

Cash and cash equivalents, end of period             $25,435            $34,766
                                                      ======             ======




















          See accompanying notes to consolidated financial statements.

                                       6
<PAGE>
                  PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                   (Unaudited)



                                                          Three Months Ended
                                                              March 31,
($ in thousands)                                       2000               1999
                                                      ------             ------

Reconciliation of net income to cash
   provided by operating activities:
 Net income                                           $3,297             $3,162
 Adjustments to reconcile net income
   to cash provided by operating
   activities
   Minority interest in consolidated income            6,455              5,443
   Depreciation and amortization                       2,920              2,475
   Provision for deferred income taxes                   981                 92
   Equity in earnings of affiliates                     (874)              (562)
   Other                                                  10                141

 Changes in operating assets and liabilities,
   net of effect of purchase transactions
   Investments                                         3,481                 --
   Accounts receivable                                 1,333                156
   Other receivables                                     931             (1,502)
   Other assets                                       (1,050)            (1,257)
   Accounts payable                                      273             (1,972)
   Accrued expenses                                    1,168             (3,398)
                                                      ------             ------

 Total adjustments                                    15,628               (384)
                                                      ------             ------

Net cash provided by operating activities            $18,925             $2,778
                                                      ======             ======


































          See accompanying notes to consolidated financial statements.


                                       7
<PAGE>

                              FINANCIAL INFORMATION
                          PRIME MEDICAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000
                                   (Unaudited)


1. General
----------
The accompanying  unaudited consolidated financial statements have been prepared
in conformity  with the accounting  principles  stated in the audited  financial
statements  for the year ended  December  31, 1999 and  reflect all  adjustments
which are, in the opinion of  management,  necessary for a fair statement of the
financial  position as of March 31, 2000 and the results of  operations  for the
periods  presented.  These  statements  have not been  audited by the  Company's
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 the Company's Annual
Report  on Form  10-K  for the year  ended  December  31,  1999  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  of the
Company.

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:
                                             Basic                    Diluted
                                            earnings                  earnings
($ in thousands, except per share data)    per share                 per share
                                           ---------                 ---------

Three Months Ended March 31, 2000
---------------------------------

Net income                                   $3,297                     $3,297
                                            =======                    =======

Weighted average shares outstanding          16,435                     16,435
Effect of dilutive securities                   --                         172
                                            -------                    -------

     Shares for EPS calculation              16,435                     16,607
                                            =======                    =======

Net income per share                          $0.20                      $0.20
                                            =======                    =======

Three Months Ended March 31, 1999
---------------------------------

Net income                                   $3,162                     $3,162
                                            =======                    =======

Weighted average shares outstanding          17,387                     17,387
Effect of dilutive securities                   --                         108

     Shares for EPS calculation              17,387                     17,495
                                            =======                    =======

Net income per share                          $0.18                      $0.18
                                            =======                    =======


                                       8
<PAGE>

                          PRIME MEDICAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 1999 (continued)
                                   (Unaudited)


2. Earnings per share (continued)
---------------------------------

Unexercised  stock  options and  warrants to purchase  1,209,000  and  1,186,500
shares of the  Company's  common  stock as of March  31,  2000 and 1999 were not
included  in the  computation  of  diluted  EPS  because  the  effect  would  be
antidilutive.

3. Segment Reporting
--------------------

The  Company  has three  reportable  segments:  lithotripsy,  manufacturing  and
refractive.  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.  The refractive segment provides
services  related to the  operations of refractive  vision  correction  centers.
Other  operating  segments,  which do not meet the  quantitative  thresholds for
reportable  segments,   include  prostatherapy  services.

The Company  measures  performance  based on the pretax  income or loss from its
operating  segments,  which do not  include  unallocated  corporate  general and
administrative expenses and corporate interest revenue and expense.

<TABLE>
<S>                                   <C>                <C>                  <C>               <C>
($ in thousands)                       Lithotripsy        Manufacturing        Refractive        Other
                                       ----------         -------------        ----------        -----
Three Months Ended March 31, 2000
---------------------------------

Revenue from external customers          $20,534              $5,527             $2,935           $447

Intersegment revenues                        --                   95                --             --

Segment profit                             6,879                 866                281              9


Three Months Ended March 31, 1999
---------------------------------

Revenue from external customers          $21,409              $3,400                --            $573

Intersegment revenues                        --                   46                --             --

Segment profit (loss)                      7,890                 621                --             (18)

</TABLE>


                                       9
<PAGE>

                          PRIME MEDICAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 1999 (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:

                                                  Three Months ended March 31,
($ in thousands)                                   2000                   1999
                                                  ------                 ------

Total segment profit                              $8,035                 $8,493

Unallocated corporate expenses:

    General and administrative                      (956)                  (871)

    Net interest expense                          (1,606)                (1,939)

    Loan fees                                        (84)                   --

    Other, net                                       (29)                  (366)

Total unallocated corporate expenses              (2,675)                (3,176)
                                                  ------                 ------

Income before income taxes                        $5,360                 $5,317
                                                  ======                 ======

4. Acquisitions
---------------

Effective  March 1,  2000  the  Company  purchased  a 60%  interest  in the Mann
Berkeley Caplan Laser Center of Austin,  Texas, a refractive  vision  correction
center.  The  Company  paid  approximately  $3,765,000  in cash and  warrants to
purchase 55,000 shares of common stock,  and has accounted for this  transaction
using the purchase method of accounting. Total goodwill recognized of $3,389,000
is being  amortized  over  twenty  five  years.  The  proforma  effects  of this
acquisition is not material.

5. Condensed Financial Information Regarding Guarantor Subsidiaries
-------------------------------------------------------------------
Condensed consolidating  financial information regarding the Company,  Guarantor
Subsidiaries  and  Non-guarantor  Subsidiaries  for March  31,  2000 and 1999 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 management
has determined that such information is not material to investors. The Guarantor
Subsidiaries  are wholly  owned  subsidiaries  of the Company who have fully and
unconditionally guaranteed the 8.75% unsecured senior subordinated Notes.

                                       10
<PAGE>
                  PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   Condensed Consolidating Statement of Income
                        Three Months Ended March 31, 2000
                                   (Unaudited)



<TABLE>
<S>                                        <C>              <C>             <C>             <C>             <C>
                                            Prime Medical     Guarantor     Non-Guarantor    Eliminating      Consolidated
($ in thousands)                            Services, Inc.   Subsidiaries    Subsidiaries       Entries           Total
                                           ---------------  --------------  --------------  --------------   --------------

Revenue:
  Lithotripsy:
    Fee revenues                                  $    -          $  4,197       $  14,873       $     -          $  19,070
    Management fees                                    -               523             371             -                894
    Equity income                                    6,938           4,260             115         (10,743)             570
                                           ---------------  --------------  --------------  --------------   --------------
                                                     6,938           8,980          15,359         (10,743)          20,534
  Manufacturing                                        -               -             5,527             -              5,527
  Refractive                                           288             402           2,583            (338)           2,935
  Prostatherapy                                        -               -               402             -                402
  Other                                                -                45             -               -                 45
                                           ---------------  --------------  --------------  --------------   --------------
    Total revenue                                    7,226           9,427          23,871         (11,081)          29,443
                                           ---------------  --------------  --------------  --------------   --------------

Cost of services and general and
  administrative expenses:
    Lithotripsy                                        -               348           5,047             -              5,395
    Manufacturing                                      -               -             4,290             -              4,290
    Refractive                                         -               -             1,501             -              1,501
    Prostatherapy                                      -               (72)            431             -                359
    Other                                              -                50             -               -                 50
    Corporate                                            9             947             -               -                956
                                           ---------------  --------------  --------------  --------------   --------------
                                                         9           1,273          11,269             -             12,551
Depreciation and amortization                          -             1,432           1,488             -              2,920
                                           ---------------  --------------  --------------  --------------   --------------
                                                         9           2,705          12,757             -             15,471
                                           ---------------  --------------  --------------  --------------   --------------

Operating income                                     7,217           6,722          11,114         (11,081)          13,972
                                           ---------------  --------------  --------------  --------------   --------------

Other income (deductions):
  Interest and dividends                               149              99             110             -                358
  Interest expense                                  (2,259)            407            (574)            -             (2,426)
  Loan fees                                            (84)            -               -               -                (84)
  Other, net                                            (3)             (2)            -               -                 (5)
                                           ---------------  --------------  --------------  --------------   --------------
    Total other income (deductions)                 (2,197)            504            (464)            -             (2,157)
                                           ---------------  --------------  --------------  --------------   --------------

Income before provision for income
  taxes and minority interest                        5,020           7,226          10,650         (11,081)          11,815

Minority interest in consolidated income               -               -               -             6,455            6,455

Provision for income taxes                           1,723             -               340             -              2,063
                                           ---------------  --------------  --------------  --------------   --------------

Net income                                        $  3,297        $  7,226       $  10,310       $ (17,536)       $   3,297
                                           ===============  ==============  ==============  ==============   ==============
</TABLE>

                                       11
<PAGE>
                  PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   Condensed Consolidating Statement of Income
                        Three Months Ended March 31, 1999
                                   (Unaudited)



<TABLE>
<S>                                        <C>              <C>             <C>             <C>             <C>
                                            Prime Medical     Guarantor     Non-Guarantor    Eliminating      Consolidated
($ in thousands)                            Services, Inc.   Subsidiaries    Subsidiaries       Entries           Total
                                           ---------------  --------------  --------------  --------------   --------------

Revenue:
  Lithotripsy:
    Fee revenues                                 $     -        $    5,009       $  14,487      $      -         $   19,496
    Management fees                                    -               789             562                            1,351
    Equity income                                    7,999           4,434             -           (11,871)             562
                                           ---------------  --------------  --------------  --------------   --------------
                                                     7,999          10,232          15,049         (11,871)          21,409
  Manufacturing                                        -               -             3,400             -              3,400
  Prostatherapy                                        -               -               518             -                518
  Other                                                -                55             -               -                 55
                                           ---------------  --------------  --------------  --------------   --------------
    Total revenue                                    7,999          10,287          18,967         (11,871)          25,382
                                           ---------------  --------------  --------------  --------------   --------------

Cost of services and general and
 administrative expenses:
  Lithotripsy                                          -               545           5,497             -              6,042
  Manufacturing                                        -               -             2,454             -              2,454
  Prostatherapy                                        -               -               457             -                457
  Other                                                -                61             -               -                 61
  Corporate                                             29             842             -               -                871
                                           ---------------  --------------  --------------  --------------   --------------
                                                        29           1,448           8,408             -              9,885
Depreciation and amortization                            2           1,206           1,267             -              2,475
                                           ---------------  --------------  --------------  --------------   --------------
    Total operating expenses                            31           2,654           9,675             -             12,360
                                           ---------------  --------------  --------------  --------------   --------------

Operating income                                     7,968           7,633           9,292         (11,871)          13,022
                                           ---------------  --------------  --------------  --------------   --------------

Other income (deductions):
  Interest and dividends                               205             139              61             -                405
  Interest expense                                  (2,281)            -               (48)            -             (2,329)
  Other, net                                          (607)            265               4             -               (338)
                                           ---------------  --------------  --------------  --------------   --------------
   Total other income (deductions)                  (2,683)            404              17             -             (2,262)
                                           ---------------  --------------  --------------  --------------   --------------

Income before provision for income
 taxes and minority interest                         5,285           8,037           9,309         (11,871)          10,760

Minority interest in consolidated income               -               -               -             5,443            5,443

Provision for income taxes                           2,123              38              (6)            -              2,155
                                           ---------------  --------------  --------------  --------------   --------------

Net income                                       $   3,162       $   7,999       $   9,315       $ (17,314)       $   3,162
                                           ===============  ==============  ==============  ==============   ==============

</TABLE>

                                       12
<PAGE>
                  PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      Condensed Consolidating Balance Sheet
                                 March 31, 2000
                                   (Unaudited)



<TABLE>
<S>                                        <C>              <C>             <C>             <C>             <C>
                                            Prime Medical     Guarantor     Non-Guarantor    Eliminating      Consolidated
($ in thousands)                            Services, Inc.   Subsidiaries    Subsidiaries       Entries           Total
                                           ---------------  --------------  --------------  --------------   --------------

ASSETS

Current assets:
  Cash                                           $   9,417      $   12,465       $   3,553       $     -          $  25,435
  Investments                                          639             -               -               -                639
  Accounts receivable, net                             -             2,977          18,941             -             21,918
  Other receivables                                    291           1,237           1,032             -              2,560
  Deferred income taxes                                 15             972             -               -                987
  Prepaid expenses and other current                    35             418           1,394             -              1,847
  Inventory                                            -               -             4,906             -              4,906
                                           ---------------  --------------  --------------  --------------   --------------
    Total current assets                            10,397          18,069          29,826             -             58,292
                                           ---------------  --------------  --------------  --------------   --------------

Property and equipment:
  Equipment, furniture and fixtures                    -             5,642          38,124             -             43,766
  Building and leasehold improvements                  -               533           1,694             -              2,227
                                           ---------------  --------------  --------------  --------------   --------------
                                                       -             6,175          39,818             -             45,993
 Less accumulated depreciation
   and amortization                                    -           (4,581)         (22,300)            -            (26,881)
                                           ---------------  --------------  --------------  --------------   --------------
  Property and equipment, net                          -             1,594          17,518             -             19,112
                                           ---------------  --------------  --------------  --------------   --------------

Investment in subsidiaries
  and other investments                            196,801          42,123             -          (219,979)          18,945
Goodwill, at cost, net of amortization                 -           142,375           8,995             -            151,370
Other noncurrent assets                                362             680           1,353             -              2,395
                                           ---------------  --------------  --------------  --------------   --------------
                                                $  207,560      $  204,841      $   57,692      $ (219,979)      $  250,114
                                           ===============  ==============  ==============  ==============   ==============

LIABILITIES

Current liabilities:
  Current portion of long-term debt             $      -         $     -         $   1,822     $      -          $    1,822
  Accounts payable                                     151           2,157           1,256            -               3,564
  Accrued expenses                                   6,144             858           6,554            -              13,556
                                           ---------------  --------------  --------------  --------------   --------------
    Total current liabilities                        6,295           3,015           9,632            -              18,942

Long-term debt, net of current portion             100,000             162           4,313            -             104,475
Deferred income taxes                                2,439           4,863             -              -               7,302
                                           ---------------  --------------  --------------  --------------   --------------
    Total liabilities                              108,734           8,040          13,945            -             130,719
                                           ---------------  --------------  --------------  --------------   --------------

Minority interest                                      -               -               -            20,569           20,569

STOCKHOLDERS' EQUITY

Common stock                                           194             -               -               -                194
Capital in excess of par value                      88,019             -               -               -             88,019
Accumulated earnings                                36,951             -               -               -             36,951
Treasury stock                                     (26,338)            -               -               -            (26,338)
Subsidiary net equity                                  -           196,801          43,747        (240,548)             -
                                           ---------------  --------------  --------------  --------------   --------------
    Total stockholders' equity                      98,826         196,801          43,747        (240,548)          98,826
                                           ---------------  --------------  --------------  --------------   --------------
                                                $  207,560      $  204,841      $   57,692     $  (219,979)      $  250,114
                                           ===============  ==============  ==============  ==============   ==============
</TABLE>


                                       13
<PAGE>
                  PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 Condensed Consolidating Statement of Cash Flows
                        Three Months Ended March 31, 2000
                                   (Unaudited)



<TABLE>
<S>                                        <C>              <C>             <C>             <C>             <C>
                                            Prime Medical     Guarantor     Non-Guarantor    Eliminating      Consolidated
($ in thousands)                            Services, Inc.   Subsidiaries    Subsidiaries       Entries           Total
                                           ---------------  --------------  --------------  --------------   --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net cash provided by
    operating activities                         $   1,988       $  15,494       $   1,443         $   -          $  18,925
                                           ---------------  --------------  --------------  --------------   --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of entity                                   -            (3,740)            -               -             (3,740)
  Purchases of equipment and leasehold
    improvements                                       -              (198)         (1,054)            -             (1,252)
  Distributions from subsidiaries                    6,772           4,251             -           (11,023)             -
  Distributions from investments                       -               748             -               -                748
  Other                                                -               -               (15)            -                (15)
                                           ---------------  --------------  --------------  --------------   --------------

  Net cash provided by (used in)
    investing activities                             6,772           1,061          (1,069)        (11,023)          (4,259)
                                           ---------------  --------------  --------------  --------------   --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings on notes payable                          -               -             1,079             -              1,079
  Payments on notes payable exclusive of
    interest                                           -               -              (329)            -               (329)
  Contributions by minority interest                   -               -               275             -                275
  Distributions to minority interest                   -               -               -            (8,934)          (8,934)
  Exercise of stock options, and sales and
    purchases of put options                           130             -               -               -                130
  Purchases of treasury stock                       (1,516)            -               -               -             (1,516)
  Distributions to equity owners                       -            (6,772)        (13,185)         19,957              -
                                           ---------------  --------------  --------------  --------------   --------------

  Net cash provided by (used in)
    financing activities                            (1,386)         (6,772)        (12,160)         11,023           (9,295)
                                           ---------------  --------------  --------------  --------------   --------------

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                               7,374           9,783         (11,786)            -              5,371

Cash and cash equivalents, beginning
  of period                                          2,043           2,682          15,339             -             20,064
                                           ---------------  --------------  --------------  --------------   --------------

Cash and cash equivalents, end of period         $   9,417       $  12,465       $   3,553       $     -          $  25,435
                                           ===============  ==============  ==============  ==============   ==============


</TABLE>

                                       14
<PAGE>
                  PRIME MEDICAL SERVICES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 Condensed Consolidating Statement of Cash Flows
                        Three Months Ended March 31, 1999
                                   (Unaudited)



<TABLE>
<S>                                        <C>              <C>             <C>             <C>             <C>
                                            Prime Medical     Guarantor     Non-Guarantor    Eliminating      Consolidated
($ in thousands)                            Services, Inc.   Subsidiaries    Subsidiaries       Entries           Total
                                           ---------------  --------------  --------------  --------------   --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net cash provided by (used in)
    operating activities                        $   (5,503)       $  1,947       $   6,334        $    -          $   2,778
                                           ---------------  --------------  --------------  --------------   --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of equipment and leasehold
    improvements                                       -              (114)           (471)            -               (585)
  Distributions from subsidiaries                    7,551           4,864             -           (12,415)             -
  Distributions from investments                       -             1,064             -               -              1,064
  Other                                                -              (105)            571             -                466
                                           ---------------  --------------  --------------  --------------   --------------

  Net cash provided by (used in)
    investing activities                             7,551           5,709             100         (12,415)             945
                                           ---------------  --------------  --------------  --------------   --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings on notes payable                          -               -             1,508             -              1,508
  Payments on notes payable exclusive of
    interest                                           -               -              (406)            -               (406)
  Distributions to minority interest                   -               -               -            (9,200)          (9,200)
  Contributions by minority interest                   -               -             1,224             -              1,224
  Purchases of treasury stock                       (2,241)            -               -               -             (2,241)
  Other                                                 12             -               -               -                 12
  Distributions to equity owners                       -            (7,551)        (14,064)         21,615              -
                                           ---------------  --------------  --------------  --------------   --------------

  Net cash provided by (used in)
    financing activities                            (2,229)         (7,551)        (11,738)         12,415           (9,103)
                                           ---------------  --------------  --------------  --------------   --------------

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                (181)            105          (5,304)            -             (5,380)

Cash and cash equivalents, beginning
  of period                                         15,798           7,585          16,763             -             40,146
                                           ---------------  --------------  --------------  --------------   --------------

Cash and cash equivalents, end of period         $  15,617       $   7,690      $   11,459       $     -          $  34,766
                                           ===============  ==============  ==============  ==============   ==============


</TABLE>

                                       15
<PAGE>





                      Management's Discussion and Analysis
                           of Financial Condition and
                              Results of Operations

Revenues
--------

Total  revenues for the three months ended March 31, 2000  increased  $4,061,000
(16%)  as  compared  to the same  period  in 1999.  Revenues  from  lithotripter
operations  decreased by $875,000 (4%).  Renegotiation  of contracts  during the
past year resulted in decreases in average revenue per procedure; however, these
decreases have been partially offset by increases in procedures performed, which
the Company  believes is indicative of its market share  preservation.  Revenues
from  manufacturing  increased  $2,127,000  (63%) due to increased  sales of MRI
trailers  as  well  as  expansion  into   manufacturing  and  sales  of  cardiac
catheterization labs. Revenues from refractive services were $2,935,000,  due to
procedure  growth and the  acquisition of 60% of the Mann Berkeley  Caplan Laser
Center effective March 1, 2000. Revenues from prostatherapy  operations declined
$116,000 (22%) due to lower  procedure  volume.  During the second quarter Prime
will be upgrading the Prostatron  software which will reduce procedure time from
over an hour to 30 minutes.

Expenses
--------

Costs and expenses  (excluding  depreciation and  amortization) for three months
ended March 31, 2000  increased  from 39% to 43% of revenues,  primarily  due to
increases in the  manufacturing  and refractive  operations,  both of which have
lower margins than the lithotripsy operations.  Cost of services and general and
administrative expenses associated with manufacturing increased $1,836,000 (75%)
due to increased sales. Costs of services associated with lithotripsy operations
decreased  $647,000  (11%) in absolute  terms and  decreased  from 28% to 26% of
lithotripsy  revenues  primarily due to the writeoff of start up costs  incurred
during the  quarter  ended March 31,  1999.  Cost of  services  associated  with
prostatherapy  operations decreased $98,000 (21%) due to lower procedure volume,
partially offset by the writeoff of start up costs associated with the formation
of a new prostatherapy  partnership.  Corporate expenses remained constant at 3%
of  revenues,  increasing  $85,000  (10%)  in  absolute  terms,  as the  Company
continues  to  successfully  grow  without   proportionately   adding  corporate
overhead.

Other Income (Deductions)
-------------------------

Other  deductions for the three months ended March 31, 2000  decreased  $105,000
(5%) compared to the same period in 1999,  primarily due to the 1999 writeoff of
costs  related to a proposed  acquisition  that was not  consummated,  partially
offset by expense of $84,000  related to a  restructuring  of the Company's $100
million revolving credit facility and a $97,000 increase in interest expense due
to higher outstanding debt balances in the first quarter of 2000 compared to the
same period in 1999.

Minority Interest In Consolidated Income
----------------------------------------

Minority  interest in  consolidated  income for the three months ended March 31,
2000 increased  $1,012,000  compared to the same period in 1999,  primarily as a
result  of  the  refractive   acquisitions  and  the  reengineering  of  certain
lithotripsy  partnerships.  Earnings before  interest,  taxes,  depreciation and
amortization  (EBITDA)  attributable to minority interest was $7,377,000 for the
three months ended March 31, 2000 compared to $6,236,000  for the same period in
1999.  EBITDA  is not  intended  to  represent  net  income or cash  flows  from
operating activities in accordance with generally accepted accounting principles
and  should  not be  considered  a measure  of the  Company's  profitability  or
liquidity.

                                       16
<PAGE>

Provision for income taxes
--------------------------

Provision  for income taxes for the three months ended March 31, 2000  decreased
$92,000  compared to the same period in 1999 due to a decrease in the  effective
tax rate.

Liquidity and Capital Resources
-------------------------------

Cash was  $25,435,000  and  $20,064,000 at March 31, 2000 and December 31, 1999,
respectively.  Cash provided by operations  for the quarter ended March 31, 2000
was  $18,925,000  compared to cash provided by operations  for the quarter ended
March 31,  1999 of  $2,778,000.  The  increase  was  attributable  to  increased
operations,  the timing of accounts receivable collections and accounts payable,
accrued expense and income tax payments, as well as proceeds received from sales
and maturities of investments of $3,510,000.

Cash used in  investing  activities  for the  quarter  ended  March 31, 2000 was
$4,259,000  compared to cash  provided by investing  activities  for the quarter
ended  March  31,  1999  of  $945,000.  The  decrease  was  attributable  to the
acquisition  of 60% of the Mann Berkeley  Caplan Laser Center and an increase in
the purchase of  equipment.  Cash used in financing  activities  for the quarter
ended  March  31,  2000 was  $9,295,000  compared  to cash  used  for  financing
activities for the quarter ended March 31, 1999 of  $9,103,000.  The increase in
cash used was primarily due to a decrease in contributions  provided by minority
interest partially offset by a decrease of cash used to purchase treasury stock.

The Company's  existing  senior credit facility is comprised of a revolving line
of credit.  The revolving line of credit has a borrowing  limit of $100 million,
none of which was drawn at March 31, 2000 and April 30, 2000.

On March 27, 1998,  the Company  completed an offering of $100 million of senior
subordinated notes due 2008 (the "Notes") to qualified institutional buyers. The
net proceeds  from the offering of  approximately  $96 million was used to repay
all  outstanding  indebtedness  under  the  Company's  bank  facility,  with the
remainder used for general corporate purposes, including acquisitions. 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  Company  intends  to  increase  the  number of its  lithotripsy  operations
primarily through acquisitions and the number of its RVC operations through both
acquisitions and development. The Company intends to fund the purchase price for
future  acquisitions and  developments  using borrowings under its senior credit
facility and cash flow from operations.  In addition, the Company may use shares
of its common stock in such acquisitions where appropriate.

During 1998,  the Company  announced a stock  repurchase  program of up to $25.0
million of common stock.  In February 2000 the Company  announced an increase in
the authorized  repurchase amount from $25.0 million to $35.0 million. From time
to time, the Company may purchase  additional  shares of its common stock where,
in the judgment of management,  market valuations of its stock do not accurately
reflect the Company's  past and  projected  results of  operations.  The Company
intends  to fund any  such  purchases  using  available  cash,  cash  flow  from
operations  and  borrowings  under its senior credit  facility.  The Company has
purchased  3,172,900  shares of stock for a total of $27,384,000 as of April 30,
2000.

The Company's ability to make scheduled  payments of principal of, or to pay the
interest on, or to  refinance,  its  indebtedness,  or to fund  planned  capital
expenditures will depend on its future performance,  which, to a certain extent,
is subject to general economic, financial, competitive,  legislative, regulatory
and other  factors that are beyond its control.  Based upon the current level of
operations and anticipated cost savings and revenue growth,  management believes
that cash flow from  operations  and available  cash,  together  with  available
borrowings  under its  senior  credit  facility,  will be  adequate  to meet the
Company's future  liquidity needs for at least the next several years.  However,
there can be no assurance that the Company's  business will generate  sufficient
cash flow  from  operations,  that  anticipated  revenue  growth  and  operating
improvements  will be realized or that future borrowings will be available under
the senior  credit  facility  in an amount  sufficient  to enable the Company to
service its indebtedness or to fund its other liquidity needs.



                                       17
<PAGE>

Impact of Inflation
-------------------

The assets of the Company are not  significantly  affected by inflation  because
the Company is not required to make large investments in fixed assets.  However,
the rate of inflation  will affect  certain of the Company's  expenses,  such as
employee compensation and benefits.

Forward-Looking Statements
--------------------------

The  statements  contained  in this  Report  on Form  10-Q  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  the  Company's   expectation,   hopes,
intentions or strategies  regarding the future.  Readers  should not place undue
reliance on forward-looking  statements. All forward-looking statements included
in this document are based on  information  available to the Company on the date
hereof, and the Company assumes no obligation to update any such forward-looking
statements.  It is important to note that the  Company's  actual  results  could
differ materially from those in such forward-looking  statements. In addition to
any risks and uncertainties specifically identified in the text surrounding such
forward-looking  statements,  the reader should consult the Company's reports on
Form 10-K and other filings under the  Securities Act of 1933 and the Securities
Exchange  Act of 1934,  for factors  that could cause  actual  results to differ
materially from those presented.

The forward looking statements  included herein are necessarily based on various
assumptions  and  estimates  and are  inherently  subject to  various  risks and
uncertainties,  including  risks  and  uncertainties  relating  to the  possible
invalidity of the underlying  assumptions and estimates and possible  changes or
developments  in  social,  economic,   business,  industry,  market,  legal  and
regulatory circumstances and conditions and actions taken or omitted to be taken
by  third  parties,  including  customers,   suppliers,  business  partners  and
competitors and  legislative,  judicial and other  governmental  authorities and
officials.  Assumptions  related to the foregoing involve judgments with respect
to, among other things,  future economic,  competitive and market conditions and
future business  decisions,  all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company.  Any of such
assumptions  could be inaccurate and  therefore,  there can be no assurance that
the  forward-looking  statements included in this Report on Form 10-Q will prove
to be accurate.

                                       18
<PAGE>










                                     PART II


                                OTHER INFORMATION

                                       19
<PAGE>

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

(a)      Exhibits

         12.      Computation of ratio of earnings to fixed charges.

(b)      Current Reports on Form 8-K

         NONE


                                       20
<PAGE>

                                   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.

                                   PRIME MEDICAL SERVICES, INC.



Date:    May 12, 2000              By: /s/ Cheryl L. Williams
                                       ----------------------
                                      Cheryl L. Williams, Senior Vice President
                                      and Chief Financial Officer


                                       21
<PAGE>