Daou Shareholders Approve Two New Board Members In Annual Meeting

EXTON, Pa., July 22 /PRNewswire-FirstCall/ -- In their annual meeting today, the shareholders of Daou Systems, Inc. elected two continuing members of Daou's Board of Directors - Douglas L. Cox and Robert F. Radin, Ph.D.

Cox, executive vice president and chief financial officer of Opinion Research Corporation, and Radin, adjunct professor at Boston College, had been appointed to the Board of Directors in June 2004 and now will each serve a three-year term. "These distinguished professionals expand the base of business expertise on our board, and we are delighted they are working with us," said Vincent K. Roach, Daou's recently appointed Chief Executive Officer. "They will make a significant contribution as our company pursues new opportunities and builds on the successes we have achieved over the past several years."

In addition, the shareholders ratified the selection of Ernst & Young LLP as Daou's independent auditors.

As announced earlier this week, Daniel J. Malcolm left the company as CEO, a position he held since 2003, to pursue other business interests. Malcolm simultaneously resigned as a member of the Board of Directors. Another board member, James T. Roberto, whose term expired today, tendered his resignation from the board effective July 19, 2004. Roberto and Malcolm headed up the core turnaround team hired in 2001 to help Daou regain operational soundness. "We thank these men for their hard work and the contribution they have made in positioning Daou for the future," said Larry R. Ferguson, chairman of Daou's board. "And we wish them the greatest success in their new endeavors."

Daou is planning to announce its second quarter 2004 earnings results in a press release and conference call on August 5, 2004.

About Daou

Daou Systems, Inc. (BULLETIN BOARD: DAOU) provides expert consulting and management services to healthcare organizations in the design, deployment and support of IT infrastructure and application systems. Daou offers a range of comprehensive services, from mobile health and web services strategies to application implementation and support; from government and commercial integration services to best practices in Help Desk, break/fix and desktop support. Daou has provided services to more than 1,600 healthcare organizations, including leading private and public hospitals, managed care organizations on both the payer and provider sides of the market, as well as integrated healthcare delivery networks and some of the nation's largest government healthcare entities. Daou Systems, Inc. is a publicly traded company listed on the OTC Bulletin Board under the stock symbol DAOU.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of Daou Systems, Inc. You should not place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Forward-looking statements usually contain the word "estimate," "anticipate," "hope," "believe," "think," "expect," "intend," "plan" or similar expressions, and are subject to numerous known and unknown risks and uncertainties. In evaluating such statements, you should carefully review various risks and uncertainties identified in this report, including the matters set forth under the captions "Risk Factors" and in Daou's other SEC filings, including those more fully set forth in the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other sections of Daou's Form 10-K for the year ended December 31, 2003 on file with the SEC. These risks and uncertainties could cause Daou's actual results to differ materially from those indicated in the forward-looking statements. We do not undertake any obligation to update or publicly announce revisions to any forward-looking statements to reflect future events or developments.

CONTACT: Linda Healan of Char Baxter Communications, +1-678-546-9523,lhealan@charbaxter.com, for Daou Systems, or Sandra Taylor, Ph.D., VicePresident of Marketing of Daou, +1-610-594-2700, sandra.taylor@daou.com

Web site: http://www.daou.com/