Bio-Reference Earnings Slowed Little by Winter
The severe winter slowed down Bio-Reference Laboratories, but not by much. The New Jersey-based Bio-Reference reported record revenues for its fiscal second quarter, ending April 30, as they reached $201.4 million, up 14 percent from the $176.5 million reported a year ago. Net income dipped slightly, down to $10.3 million, compared to $11.3 million in […]
The severe winter slowed down Bio-Reference Laboratories, but not by much. The New Jersey-based Bio-Reference reported record revenues for its fiscal second quarter, ending April 30, as they reached $201.4 million, up 14 percent from the $176.5 million reported a year ago. Net income dipped slightly, down to $10.3 million, compared to $11.3 million in the second quarter of 2013, a drop of 9 percent. Nevertheless, the company estimated that the severe weather during the first part of 2014 dragged down revenues by about $5 million and net income by about $1.4 million. “Our net income during the current quarter, when adjusted for the impact of the weather, is comparable to where we were in the same quarter last year despite the changes in reimbursement and the added infrastructure from our investments in Florida and California,” said Marc Grodman, M.D., Bio-Reference’s chief executive officer. Esoteric testing, led by the GeneDx division that focuses on cancer and woman’s health testing, was up 23 percent and accounted for about 12.5 percent of revenue. “The growth at GeneDx was fueled by our leadership position in exome analysis, the cutting edge and differentiating genetic service we provide, as well our growing volume of inherited cancer testing,” Grodman said. Grodman added that the reimbursement headwinds from Medicare appear to be behind it now, and he doesn’t expect any significant changes again until 2017. Test/patient volumes approached 2.4 million, up 14 percent. Amanda Murphy and J.P. McKim of William Blair & Co. observed that the growth “was exceedingly better than the industry average of closer to 1% to 2%,” and it would have hit 17 percent if the weather had been better. Bio-Reference’s numbers beat Wall Street’s projections. As a result, its stock surged more than $6 a share, or more than 20 percent, to $32.74 when it released its earnings on June 5. Its price has since settled down to around $29 a share in trading on Nasdaq, still more than 10 percent above its pre-earnings price. Murphy and McKim projected continued growth for the remainder of the year, with a strong ramp-up to occur during the fourth quarter. They bumped their year-end revenue projections up from $810 million to $816 million. Takeaway: Esoteric testing continues to be the one reliable driver of growth in the laboratory sector.