This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

March 25, 2009 - Bio-Reference Labs, Inc. (BRLI-NASDAQ) provides clinical laboratory testing services primarily in the greater New York metropolitan area. It offers various chemical diagnostic tests, including blood and urine analysis, blood chemistry, hematology services, serology, radio immuno analysis, toxicology, pap smears, tissue pathology, and other tissue analysis.

The company's diagnostic genetic testing laboratory, GeneDx, specializes in testing for rare and compelex genetic conditions through the use of DNA sequencing. It serves both national and international customers. The GenPath division is Bio-Reference's national oncology laboratory.

In addition, BRLI operates a Web-based connectivity portal solution for laboratories and physicians. Bio-Reference Laboratories provides its services directly to physicians, geneticists, hospitals,clinics, and correctional and other health facilities. The company was founded in 1981 and is headquartered in Elmwood Park, New Jersey.

Sales are ramping for Bio-Reference. In 2006, they were $193.1 million, then went to $250.4 million. Last year, they hit $301.1 million. This year, analysts predict $341.82 million and next year $380.23 million.

Earnings have been strong as well, averaging annual increases of 21.53% over the last 5 years. In 2005, they were 58 cents a share, then 85 cents, followed by $1.01 and $1.12 last year. This year, analysts expect $1.33, then $1.54 next year. Next quarterly earnings will be out in May (fiscal year ends in October). Look for 27 cents a share, up from 25 cents last year in the same period. Next quarter, anticipate 39 cents, up from 34 cents in the comparable quarter last year.

Earnings for the January ending period were released on March 5. They were up 63%, mostly from higher revenue from the Esoteric Testing Divisions. Net income was 26 cents a share, well ahead of the 16 cents from the same quarter last year. Revenues were up 15.6% to $77.34 million compared to last year's same period. The number of patients served increased only slightly to 965,000 vs 962,000 last year in the same quarter. Revenue per patient improved by 13% to $77.79, up from $68.83. Esoteric business was 51.1% of total net revenues, compared to 46% of total net revenue last year in the same period.

Marc D. Grodman M.D., President noted: "Over the past year, we have dedicated a great deal of resources and effort in our esoteric programs at BioReference. In September, we introduced our next generation Women's Health Initiative and this program has clearly played a leadership role in the strong first quarter numbers that we reported. We have greatly strengthened all aspects of our GenPath oncology program, through advanced testing capability, along with revised and improved report formats that produce more concise information for our provider customers. We have introduced next generation sequence testing at GeneDx and are the first commercial laboratory in the country, possibly the world, to provide the comprehensive genetic testing that will enable traditional providers to take advantage of the advances revolutionizing our understanding of genetic science. These initiatives have paved the way for our solid financial results in the first quarter."

Dr. Grodman stated: "Our reported numbers included a non-recurring event that resulted in some of our financial metrics being favorably affected. However, we have limited our discussion in this earnings release to the results that would have been reported were it not for that non-recurring event. We are pleased with our results from continuing operations. We expect that top line revenues will continue to be led by our esoteric programs over the upcoming quarters. We expect to expand the footprint of our women's health program beyond our traditional clinical footprint and to that end we have added several new sales representatives to introduce the program outside the New York Metropolitan area. We are now licensed in the State of California and we have begun expanding our GenPath oncology program into the West Coast. We have continued to expand our capacity in next generation genetic testing and have opened our cardiac program to expansion in both testing capability and sales efforts."

Dr. Grodman continued: "It is no secret that the country has been severely impacted by the global economic conditions. While we have seen some flatness in our routine business probably due to volume reductions on the physician level, our program to re-affirm our leadership in esoteric testing over the past year has enabled BioReference to continue to sustain growth. We reported top line revenues that are the best first quarter numbers in our corporate history. We have continued to maintain the discipline that we asserted after the second quarter of last year and have remained relatively flat in our expenses for the third consecutive quarter."

More numbers: Price to Sales is .94. Price to Book is 2.77. Operation margin for the last 12 months was 9.44% while Profit margin was 5.5%. Return on assets was 10.9%. There's $13.24 million in cash for 96 cents a share. Total Debt is $39.63 million. Current ratio is 1.95. Book Value per share is $7.65. There are 13.8 million shares outstanding. Insiders own 13.92%. Institutions have 13.92%.

Look further into BRLI if a growth company is of interest. While it's still small, all the numbers are pointing in the right direction. The stock hit $35.80 in 2007 and has drifted lower ever since, getting to $18.35 last November.

Company Web site: www.bio-referencelabs.com

- Ted Allrich