Bio-Reference Laboratories, Inc. Records 27% Increase in Q1 Net Revenu

Bio-Reference Laboratories, Inc. Records 27% Increase in Q1 Net Revenues, Expands Infrastructure to Meet National Demands

    Business Editors

    ELMWOOD PARK, N.J.--(BUSINESS WIRE)--March 3, 2005--

Company Reports Largest Dollar Growth of Quarterly Net Revenue in Company's History
    Bio-Reference Laboratories, Inc. (NASDAQ: BRLI) (Numbers in Thousands Except Per Share Data or where otherwise noted) released its first quarter, fiscal year 2005 earnings today for the three months ending January 31. The Company had net revenues for the quarter of $36,835, an increase of 27% over the $28,950 of net revenue recorded in the first quarter fiscal year 2004. The net revenue increase was based on patient count of 648, a 14% increase over the prior year quarterly patient count of 569. The remainder of the increase in net revenue is attributable to higher revenue per patient resulting from the expansion of BRLI esoteric testing, especially in the area of cancer diagnostics. On a fully taxed basis, the Company reported net income of $925, resulting in a fully diluted EPS of $.07 per share compared to the same quarter prior year net income of $919 and also $.07 per share. The Company reported gross profit on revenues for the current quarter of $17,444, resulting in a margin for gross profit on revenues of 47% compared to the prior year $13,905 which resulted in a margin of 48%. Net income before taxes for the current quarter fell slightly to $1,420 from the prior year quarter net income before taxes of $1,461.
    The Company noted that the margins were affected by the substantial investment that was made in technical, professional, marketing and technology resources intended to take advantage of competitive opportunities in the cancer diagnostics market. On a year over year basis, revenue per patient increased to $56.06 for the quarter up from $50.85 the prior year as esoteric testing comprised slightly more than 34% of revenues for the quarter. The Company pointed out that during the past week, it announced its new GenFlow(R) product which allows remote physicians to access their flow cytometry data via the internet through CareEvolve.com, the Company's web-based connectivity solution. The Company further pointed out that this week there was an announcement about its strategic alliance with Cytyc Corporation.
    Marc D. Grodman M.D., President noted, "BioReference has continued to show strong, unprecedented growth in the first quarter of the year. For the second consecutive quarter our growth has been greater than 25% more than the prior year same quarter. We have identified growth areas of our business and we are marketing to those areas with vigor and success. We observed during our fourth quarter earnings report that there is a price to pay for maintaining and sustaining such substantial growth. In order to fuel this growth we have had to invest in our infrastructure, invest in our technology, invest in our capacity. The immediate result of that investment is that our margins are not keeping pace with the stellar performance of our top line achievement. We began this build-up of capacity and capability in the middle of last year and we believe that over the next few quarters we will see the return on that investment as we leverage off those building blocks. Well over half of the increase in direct personnel costs in the quarter was attributable to excellent technical, professional, physician and pathology personnel who work in our cancer diagnostic units. Moreover, our depreciation / amortization increased by over $400 for the current quarter as we continued to upgrade our capacity; while this increase brought us to around 2.5% of our net revenues for the quarter, this is still the lowest in our sector for depreciation / amortization. I believe we have built the finest cytogenetic and hematopatholgy units in the country over the past year. That is a lasting asset from which we will prosper going forward."
    Dr. Grodman continued, "We announced last week that in cooperation with Becton Dickinson, one of the two leading manufacturers of flow cytometry devices and reagents, we have introduced our new GenFlow(R) product. GenFlow(R) enables physicians to remotely access flow cytometry data run in our Elmwood Park facilities using the internet and our CareEvolve connectivity solution from anywhere in the country, or the world for that matter. We introduced this product two weeks ago and the response so far has been superb. We announced earlier this week that we are working together with Cytyc Corporation, a leading provider of Thin-prep diagnostic testing, to deliver the Cytyc Thin-prep Imaging System not only to our own customers, but to community-based providers throughout the country. This new Cytyc initiative will enable us to expand our marketing into additional new areas which will leverage our existing marketing force. The pieces are in place for our recent investments to pay off as the year progresses. We are advising our investors that we expect net revenues this year to continue to grow by approximately 20% for the year; we expect our net income to be flat as the revenue catches up to the investment that we have made in the infrastructure. The path of growth may take time to build, but we look forward to the returns that will begin to show up as the year progresses."
    The Company's first 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 Bio-Reference Laboratories, Inc.

    The Company is the largest independent regional clinical laboratory in the Northeast and has major market positions in physician offices, nursing homes and correctional institutions. The Company is a full service clinical laboratory with specialty capability, especially in the areas of genomics, oncology, correctional health, and complimentary medicine. PSIMedica, a business unit of the Company, is a clinical knowledge management (CKM) organization offering an array of information solutions for reducing healthcare costs and improving quality performance that are based on a flexible, scalable software analytical engine that utilizes all available source information, including claims data, enrollment data, prescription data and laboratory data. The Company provides a comprehensive connectivity solution to physicians, which includes disease management, laboratory reporting and ordering, as well as claims and eligibility processing through CareEvolve, its web-based healthcare portal.

Bio-Reference Laboratories, Inc. Statements of Operations (Dollars in Thousands Except Per Share Data) (Unaudited) Three Months Ended

January 31, 2005 2004 ---------------------------------------------------------------------- Net Revenues $36,835 $28,950 ---------------------------------------------------------------------- Cost of Sales 19,391 15,045 ---------------------------------------------------------------------- Gross Profit on Revenues $17,444 $13,905 ---------------------------------------------------------------------- General and Administrative 15,790 12,290 ---------------------------------------------------------------------- Operating Income $1,654 $1,615 ---------------------------------------------------------------------- Other Expense, Net 234 154 ---------------------------------------------------------------------- Income Before Taxes $1,420 $1,461 ---------------------------------------------------------------------- Taxes (Benefit) 495 542 ---------------------------------------------------------------------- Net Income (Loss) $925 $919 ---------------------------------------------------------------------- Income (loss) Per Share $.07 $.08 ---------------------------------------------------------------------- Number of Shares 12,666,689 11,522,606 ---------------------------------------------------------------------- Income (Loss) Per Share (Diluted) $.07 $.07 ---------------------------------------------------------------------- Number of Shares (Diluted) 13,345,183 13,124,209 ----------------------------------------------------------------------

Bio-Reference Laboratories, Inc. Balance Sheets (Dollars in Thousands) (Unaudited)

January 31, October 31, 2005 2004 ---------------------------------------------------------------------- Cash & Cash Equivalents $7,385 $6.681 ---------------------------------------------------------------------- Accounts Receivable (Net) 43,934 40,952 ---------------------------------------------------------------------- Plant, Property & Equipment (Net) 9,795 9,276 ---------------------------------------------------------------------- Intangible Assets (Net) 10,459 10,628 ---------------------------------------------------------------------- Other Assets 4,698 4,614 ---------------------------------------------------------------------- $76,271 $72,151 ----------------------------------------------------------------------

---------------------------------------------------------------------- Accounts Payable $9,599 $10,801 ---------------------------------------------------------------------- Note Payable-Bank 13,514 10,333 ---------------------------------------------------------------------- Long-Term Debt 2,016 2,334 ---------------------------------------------------------------------- Other Liabilities 9,435 8,010 ---------------------------------------------------------------------- Shareholder's Equity 41,707 40,673 ---------------------------------------------------------------------- $76,271 $72,151 ----------------------------------------------------------------------

    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

--30--KL/ny*

CONTACT: For Bio-Reference Laboratories Kara Kelly, 201-791-2600 Fax, 201-791-1941 kkelly@bioreference.com

KEYWORD: NEW JERSEY INDUSTRY KEYWORD: BIOTECHNOLOGY PHARMACEUTICAL MEDICAL EARNINGS CONFERENCE CALLS SOURCE: Bio-Reference Laboratories, Inc.

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