Char Baxter Communications Launches Third Year of Partnership with Daou
Contract Awarded for Ongoing Integrated Marketing and Public Relations Services

ATLANTA—(April 19, 2004)—Char Baxter Communications, a branding consultancy providing integrated marketing and public relations services to the technology industry, has begun a third year as partner agency for Daou Systems, Inc.

Brand and positioning projects include the 2003 Annual Report and web site updates, as well as print and online advertising and ongoing public relations services for the healthcare IT consulting firm based in Exton, Pa.

"We first contracted with Char Baxter Communications in early 2002 as part of Daou's repositioning in the marketplace," said Daniel J. Malcolm, Daou's president and CEO. "It was one of the best decisions we've ever made, and we're delighted to be continuing the partnership."

Malcolm was part of the new management team brought in to lead Daou's market reemergence with a list of ambitious short-term goals. "We set out to restructure the company for stronger operational performance and profitability," he said. "At the same time, we knew our focus had to be more than an internal one for Daou's comeback to succeed. We invested in brand strategy to distinguish the company in the marketplace, with Char Baxter Communications guiding the effort. The firm's work has been vitally important to our success."

Today, Daou is an operationally sound company that is achieving its goals of profitability and positive brand recognition in the marketplace.

"Char Baxter Communications has helped us to be recognized for our core competency of healthcare IT know-how across the provider, payer and government segments of the healthcare industry, as well as among shareholders, analysts and the media. Char and her team have helped us strategically focus our message, and tactically deploy that strategy to the right audiences in a concentrated, budget-wise, consistent manner. That's the value we derive from their integrated approach to branding."

Char Baxter, CEO and founder of Char Baxter Communications, said Daou's success is a good illustration of what can be achieved when a company invests in its brand as part of an overall growth strategy. "Dan Malcolm and his executive team at Daou understand that branding is more than a one-time event," Baxter said. "By investing in its brand year after year, Daou continues to build value and to see strong return on its initial repositioning investment as the brand evolves."

Sandra Taylor, Ph.D., Daou's vice president of marketing, said Char Baxter Communications' role goes far beyond what one would typically expect from an advertising and public relations firm. "We view Char Baxter and her team as consultants, not vendors," she said.

"The results of our investment with Char Baxter Communications are quantified through employees who have a clearer sense of Daou's mission, the many healthcare CIOs who attend Daou's CIO Forums held across the country, through the increased attention we've received among editors who turn to us as experts in healthcare IT, and through the growing number of organizations in our pipeline that are expressing interest in Daou's enhanced IT consulting offerings. Char Baxter Communications helped us to structure stand-alone services into bundled, focused solutions under the aegis of Daou's R.A.P.I.D.™ IT Solutions program, and to successfully launch them at this year's HIMSS conference."

Taylor and Malcolm first worked with Char Baxter Communications in the late 1990s, when they led Laserlink.net through a branding effort that resulted in the ISP's acquisition by Covad Communications. "When we joined the new management team at Daou in 2001, we knew exactly where to turn for a partner to help Daou reposition in the marketplace," said Taylor. "It was the right investment at the right time. In this third year of our association with Char Baxter Communications, we are building on that investment with smart initiatives that will keep Daou top-of-mind in the healthcare IT marketplace. It's a joy to know our brand has a guardian as capable as Char Baxter Communications."

About Daou

Daou Systems, Inc. (OTCBB: 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 (IDNs) 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.

About Char Baxter Communications

Char Baxter Communications is one of the leading integrated branding and marketing firms specializing in the high technology industry. Founded in 1991, the consultancy has created winning marketing strategies for local, national and international clients, including some of the largest and best-known technology companies in the world.

Char Baxter Communications most recently played a key role in the success of the 2003 Georgia Technology Celebration. Char Baxter, the firm's CEO, chaired the Celebration's public relations and advertising efforts. As part of this effort, the firm created the Technology Timeline, which chronicles a century of growth for Georgia's technology industry. Baxter was recently nominated for the 2004 Woman of the Year in Technology Award sponsored by the Technology Association of Georgia.