Bio-Reference Laboratories, Inc. Reports Record Quarterly Success

Bio-Reference Laboratories, Inc. (NASDAQ: BRLI) (Numbers in Thousands Except Per Share Data or where otherwise noted) released its second quarter, fiscal year 2011 earnings today for the three months ending April 30. The Company recorded current quarter revenues of $137,658, the best ever quarter in corporate history and an increase of 25% over the $110,447 recorded in the second quarter, fiscal year 2010. Operating income for Q2FY11 was $13,313, an increase of 23% over the Q2FY10 operating income of $10,852. Net income after taxes in Q2FY11 came in at $7,211 (pro forma) resulting in earnings per share (EPS) of $.26 (pro forma), up from the prior fiscal year second quarter net income after taxes of $5,787 and EPS of $.21, increases of 25% and 24% respectively. Gross profit on revenues for the current quarter was $65,639 resulting in a margin for gross profit on revenues of about 48%, a 22% improvement over the $53,668 reported for the prior fiscal year second quarter which resulted in a 49% margin. Revenue per patient for the second quarter of the current fiscal year was $81.33, an increase of 2% over the $80.00 reported for the same quarter of the prior fiscal year. The number of patients served increased 23% to 1,680 in the current quarter from the prior year second quarter total of 1,370. Esoteric business for the Company was 58% of revenues for the second quarter of the current fiscal year compared to 56% in the same quarter of the prior fiscal year. The Company further noted that Days Sales Outstanding (DSO) was 90 days compared to Q1FY11 of 98 days and the prior fiscal year second quarter when the DSO was 95 days.

Six-month revenues increased to $259,317, an increase of 24% over the same period revenues of $209,709, in the prior fiscal year. Operating income for the first six months of FY11 was $22,031, an increase of 20% over the prior fiscal year six month Operating income of $18,311. Net income after taxes for the first six months of the current year was $12,046 resulting in an EPS of $.43 (pro forma), an increase of 23% from the prior year same period net income after taxes of $9,792 which resulted in an EPS of $.35. The Company reported gross profit on revenues for the current six month period of $122,444, resulting in a margin for gross profit on revenues of 47%, down slightly from the prior year same period of $101,176 which resulted in a margin of 48%. The number of patients served increased 21% to 3,172 in the first half of the current year from the prior year same period total of 2,612. Cash flow from operations for the H1FY11 was $10,196, up substantially from the prior year same period when cash flow from operations was virtually flat.

During the current quarter, the Company received $1,087 from the State of New York as a result of a lawsuit brought by thirty five laboratories, including BioReference, against the New York State Department of Health contesting excessive fees charged in relation to laboratory regulation by the state. On a reporting basis, inclusion of this payment increased Q2FY11 Net Income before Taxes in the current quarter to $14,020, increased Net Income after Taxes to $7,817 and increased fully diluted EPS to $.28 per share. This refund has not been included in the pro forma numbers. On a six-month basis, inclusion of the pro forma exclusions from both the first and second quarters, the H1FY11 Net Income before Taxes would have been $27,999, Net Income after Taxes would have been $15,802 and EPS would have been $.56 per share.

Marc D. Grodman, MD, CEO, commented: "When given a chance, physicians choose BioReference. Better service and better science differentiate us and permeate all of our offerings. Our northeast, mid-Atlantic regional business has grown. GenPath Oncology has done well. We have grown on the basis of state of the art testing, superior service and consistency in our professional, sales, marketing and support staff, along with disruptions in the marketplace. Later in the year we will introduce genotyping of solid tumors that we hope will change the paradigm of molecular testing with an expansive yet cost effective approach. We have grown in Women’s Health with a specially trained sales force of over 100 who work nationally to bring our service to the Ob-Gyn market. With a national sales force and the unique offerings of GeneDx, our goal this year is to build out an unmatched one stop shop for the entire spectrum of pre-natal test offerings, from a more comprehensive approach for understanding the carrier status of expectant parents to advanced sequencing tests that will be recommended after abnormalities are seen on sonograms or on other genomic studies. Though we currently absorb the development costs of these new initiatives, we believe they will further differentiate us in a disruptive, ever-changing market landscape.”

Dr. Grodman continued: "The result of these efforts is unprecedented growth, organic growth, increasing market share not only in revenues but also in number of new accounts and patients serviced. Increase of patients serviced this past quarter was up 23%, our revenue increase was 25%. Our growth was in all elements of our business. Revenue per patient was just over $81, up from $80 in the same period last year and on par where we were in the fourth quarter of last year and reflective of our strong growth in the regional market. Percent of esoteric testing moved up slightly to 58%, again reflective of the increase in all elements of our business.”

Dr. Grodman finally noted: "During the current quarter, we were able to benefit from a non-operating cash benefit of over a million dollars from the State of New York. We have excluded the refund from our pro forma report since the funds were not generated through operations. We saw an improvement in cash flow from operations over the prior year first half and a solid improvement in our DSOs. We had our national sales and marketing conference a few weeks ago and it was gratifying to see the enthusiasm and energy that our two hundred plus salespersons are bringing to the market. Our growth is built on the premise that these representatives, along with the entire Company, are dedicated to raising the standard of service and support that physicians across the country can and should expect from their laboratory providers. We answer relevant clinical questions with innovative technology and gold standard service and support; the result is continued growth. This is our pathway to the future.”

The Company’s second quarter earnings conference call is scheduled for today at 10:30 a.m. Eastern Standard Time. The live audio Web cast will be available at the Company’s corporate Web site, www.bioreference.com and through www.streetevents.com. To listen to the call, please go to either Web site ten minutes before the conference call is scheduled to begin. You will need to register as well as download and install any necessary audio software. The Web cast will be archived, on both Web sites, for 30 days following the call.

About BioReference Laboratories, Inc.

BRLI is the fourth largest full service laboratory in the United States and the largest independent regional laboratory in the Northeastern market, primarily a clinical testing laboratory servicing physician offices with concentrations in the focused markets of esoteric testing, molecular diagnostics, anatomical pathology, women’s health and correctional health care. BRLI operates as a national oncology laboratory as GenPath. Better science, superior technology and better service have enabled GenPath to earn a reputation as one of the premier hematopathology laboratories in the country. BRLI’s innovative technology platform for sexually transmitted infections has enabled it to expand as a national laboratory in the area of Women’s Health. GeneDx, a wholly owned subsidiary, is the BRLI genetics laboratory and is typically recognized as the leading laboratory for testing of rare genetic diseases; GeneDx has now become a technology leader with GenomeDx, based on a CGH array platform and its NextGen sequence offerings that are currently offered in cardiology and will be offered in the future in other disease specific areas.

Statements included in this release that are not historical in nature, are intended to be, and are hereby identified as "forward-looking statements”. Statements looking forward in time are included in this release pursuant to the "safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks and uncertainties that may cause the Company’s actual results in future periods to be materially different from any future performance suggested herein.

www.bioreference.com