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Bio-Reference Laboratories (BRLI)

Q1 2013 Earnings Call

February 28, 2013 10:30 am ET


Tara Mackay

Marc D. Grodman - Founder, Chairman, Chief Executive Officer, President and Managing Director

Sam Singer - Chief Financial Officer, Chief Accounting Officer, Senior Vice President and Director


Amanda Murphy - William Blair & Company L.L.C., Research Division

Robert M. Willoughby - BofA Merrill Lynch, Research Division

Raymond A. Myers - The Benchmark Company, LLC, Research Division

L. Mitra Ramgopal - Sidoti & Company, LLC



Good day, ladies and gentlemen, and welcome to the Bio-Reference Laboratories Inc. First Quarter Fiscal Year 2013 Earnings Conference Call. My name is Steve, and I'll be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. And now I would like to turn the call over to Tara Mackay, Investor Relations Coordinator. Please go ahead, ma'am.

Tara Mackay

Thank you. Good morning, and welcome to Bio-Reference Laboratories' First Quarter 2013 Earnings Conference Call. Bio-Reference Laboratory is one of the largest independent regional full-service laboratories in the country with focused marketing capabilities in the areas of genomics, oncology, women's health, correctional health and physician office pathology. Leading us on the call today will be Dr. Marc Grodman, President and Chief Executive Officer; and Sam Singer, Chief Financial Officer.

Some of the commentary made in this presentation may relate to future results and events. Statements regarding the company's revenue and earnings guidance are based on the company's current expectations. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: general economic and business conditions; future regulatory requirement and mandated pricing reimbursement; the service, customer and geographic market mix of any particular period; the company's ability to effectively manage its operating cost and collect its receivables in a timely fashion; on the level of demand for the company's products and services; and on the company's ability to manage its supply and delivery logistics in such an environment. Additional discussion of these and other factors affecting the company's business and prospectus is contained in the company's periodic filings with the Securities and Exchange Commission.

I will now turn the call over to Dr. Marc Grodman, President and Chief Executive Officer.

Marc D. Grodman

Tara, thank you very much. This quarter, we demonstrated a continued strong growth of over 16% despite the effects of Hurricane Sandy and despite a tough comparable quarter last year. I'm going to speak more about these -- about this later in the call.

But right now, I want to start somewhere else. I've been a champion for the clinical laboratory industry. Clinical laboratories are not simple businesses. We're a service industry with a high degree of technical and scientific regulation. We impact patients lives more frequently than any other diagnostic medium, and we typically provide diagnostic results even before we initiate the billing process. We hold the key to advances in personalized therapeutics, provide more informatics support to the medical industry without any additional remuneration. We run complex logistical operations that could pick up bone marrow on one side of the country one day and report a diagnosis and a prognosis of the leukemia the next morning.

But from the outside looking in, our industry is often simplified, commoditized and misunderstood. It's within this context that Bio-Reference stands with a record of growth and innovation that is simply unmatched as an enterprise for over 20 years.

Obviously, I'll have more to say about these issues. But first, I want to ask Sam Singer to comment on the results of this first quarter. Sam?

Sam Singer

Good morning, everyone. During the first quarter of fiscal year 2013, which ended on January 31, Bio-Reference reported net revenues of $161,256,000 compared to $138,793,000 in the first quarter of the prior year, an increase of 16%. Gross profit on net revenues for the current quarter was $70,922,000, representing a 44% gross profit margin. In the first quarter of the prior year, gross profit on net revenues was $60,117,000, representing a 43% gross profit margin. On January 31, 2013, operating income was $15,759,000 as compared to $13,282,000 for the same quarter of last year, an increase of 19%. Earnings per share on net income was $0.31 per share in the current quarter as compared to $0.26 per share in the prior year quarter.

Patient count for the current quarter increased to 1,973,000 from 1,814,000 for the prior year quarter, an increase of 9%. Our net revenue per patient for the first quarter just ended was $81.13 compared to $75.87 per patient in the same quarter of the prior fiscal year, an increase of 7%. On January 31, working capital was $151,624,000 as compared to $151,625,000 that we reported on October 31, 2012. Our days sales outstanding on January 13 -- excuse me, on January 31, 2013, was 92 days.

Thank you, and I return the call to Dr. Grodman.

Marc D. Grodman

Sam, Thank you very much. This was a very successful quarter. Over 16% growth despite Hurricane Sandy and a tough comparable quarterly comparison. Our strength and record of combining growth and innovation has never been more evident. Prior to today's announcement of our results, we announced the reaffirmation of yearly guidance, and we believe that this first quarter performance demonstrates the substance of that confirmation.

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