IT’ S QUARTERLY EARNINGS TIME, which makes it possible to evaluate trends in the laboratory services marketplace by looking at the performance of public laboratory companies.
Because of their large size and market dominance, the two national laboratory companies are closely watched to see how they have reacted to marketplace issues during the previous quarter. However, one public laboratory company which doesn’t attract nearly as much attention is Bio-Reference Laboratories, Inc. (BRLI) of Elmwood Park, New Jersey.
BRLI is the third largest public lab company serving the market segment of physicians’ offices. At about $215 million in annual revenues, it is a far distant third to the multi-billion revenues of its two larger competitors. But it has enjoyed substantial success in the past two years.
Different Reporting Period
With a fiscal year ending October 31, BRLI’s earnings releases come at a different time than most those public companies. For its third quarter 2003 earnings statement (period ending July 31, 2003), Bio-Reference Labs posted revenue gains of 14.8%. Its revenue was $28.9 million, compared to $24.9 million in the same quarter last year.
With this growth has come substantial increases in net profit, due to the
unique economics of clinical laboratories. BRLI’s net income nearly doubled, climbing to $3 million, compared to $1.5 million for same quarter last year. This performance is reflected in its stock price. During the past 12 months, it has climbed from the $5.00 range to over $17.00.
Doing Well In NY Area
BRLI competes primarily in the New York City metro and nearby areas in New Jersey and Connecticut. Thus, its success at generating profitable new revenues indicates that regional laboratories can compete effectively against the national laboratories—even in difficult managed care markets like the Northeast.
Bio-Reference Laboratories has emphasized sales and marketing. It is following a niche strategy, offering specialized services in areas such as oncology, hematology, and an expanded coagulation laboratory. It also offers enriched laboratory information services to both physicians and payers with its Carevolve.com and PsiMedica divisions.
There is plenty of optimism and energy at Bio-Reference Laboratories. Its ability to sustain growth, confirmed by the similar experiences at private lab companies like CPL in Austin Texas and PAML in Spokane, Washington, indicate that there are still good business opportunities for regional laboratories.