Second quarter earnings for Bio-Reference Laboratories exceeded expectations and it’s due to the strengh in the company’s esoteric business GeneDz and a more surprising gross margin whan had been predicted. Its gross margin was 44% versus predictions of 42% ). However this was down by 175 basis points year over year propelled by reimbursement pressure. Bio-Reference Laboratories continued #PS guidance of 10% growth excluding weather of $0.10 which suggests 2014 EPS of around $1.72 and a notable fourth quarter ramp up. This fourth quarter ramp up means the EPS wouldn need to achieve an estimated $0.71 if a flat third quarter occurred.
2.364 million patients served were up 14% as it continues to be much better than the industry average of around 1% to 2% excluding the problems of bad weather which means volume would have to be higher at 17%. Down by just about 1%, perhaps a bit higher, the company’s routine business was the company’s revenue basis and that’s after adjusting for the impact of a 5% reduction in ASP on that side of the company’s business. Estimated calculations say volume was up just shy of 4%.
Acquisitions are what experts suggest was the source of the revenue growth although low single digits at that. This suggests the bulk of the strength of the quarter originated from esoteric testing, their GeneDx, as esoteric revenue was upward 23% by $25 million. The ASP assumption for the routine business assumed at about $38 in that quarter means the volume growth suggests the esoteric results became notable due to their upward spiral to 50%. ASP was however estimated to be around $200 which is down roughly 20% year over year.
BioReference Laboratories offers healthcare providers a single source for their lab testing needs both in primary and specialty health care segments. They are the third largest of the full service clinical diagnostic labs in the United States and provide testing and related services to physician offices, hospitals, offices, long term care facilities, governmental units, employers, correctional institutions. They offer a comprehensive test list that focuses on molecular diagnostics, genetics, anatomical pathology and more. It’s GeneDx subsidiary provides the above mentioned services.
Boasting a 20% compound annual growth over the past 20 years, they are also contracted with almost all the national health plans including Cigna, UHC, Humana, Aetna, Blues Plans, Coventry, and more. It has locations in nine of the US states including New Jersey, New York, Rhode Island, Maryland, Massachusetts, Florida, Ohio, California, and Texas.