Bio-Reference Labs to acquire gene-based testing laboratory GeneDx; Q3 revenue hits $49 million

By Elaine Rigoli

Tampa, Fla., Aug. 29 - Bio-Reference Laboratories, Inc. said it will acquire GeneDx, a gene-based testing laboratory located in Gaithersburg, Md. The acquisition is expected to be completed within the next two to three weeks.

"DNA sequencing is the current gold standard of genetic testing and GeneDx ... holds a preeminent position in this diagnostic testing area," Bio-Reference chief executive officer Marc Grodman said in a company news release.

"GeneDx had revenues last year that were just short of $5 million with EBITDA margins that surpassed 30%. This year, the company has seen an increase in revenues of over 35% with equally strong EBITDA margins.

"The purchase price will be as much as $17 million if all contingencies and goals are achieved," he added.

GeneDx also released its earnings for the third fiscal quarter ended July 31. Revenues reached $49.026 million, which represents the company's best-ever quarter in terms of revenue and an increase of 15% over the $42.723 million of revenues recorded in the third quarter of fiscal 2005.

Net income in the third quarter was $3.679 million, resulting in fully diluted earnings per share of $0.27, up 48% from net income of $2.493 million and earnings per share of $0.19 for the third quarter of fiscal 2005.

Gross profit on revenues for the third quarter was $24.343 million, resulting in a margin for gross profit on revenues of 50%, versus the $21.170 million of gross profit on revenues reported for the third quarter of fiscal 2005, which also had a 50% margin.

Revenues for the first nine months of the fiscal year increased by 16% to $139.133 million from $119.607 million for the same period of fiscal 2005.

Net income for the first nine months of the year was $7.580 million, resulting in an earnings per share of $0.56; this was an increase of 56% from the same period of fiscal 2005, when net income was $4. 845 million and earnings per share were $0.37, the release said.

The company reported gross profit on revenues for the first nine months of $68.455 million, resulting in a margin for gross profit on revenues of just over 49%, compared with the same period of fiscal 2005, when gross profit on revenues was $58.303 million and the margin was just under 49%.

Cash and cash equivalents were $8.222 million at July 31, up from $6.681 million at Oct. 31, 2005.

Bio-Reference is an independent regional clinical laboratory located in Elmwood Park, N.J.

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