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Biotech / Medical : Bio-Reference Labs (BRLI)

BRLI 4.700

-44.0%

Dec 22 3:00 PM EDT

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To: Sol Rosenburg who wrote (210)	11/26/1997 9:57:00 AM
From: catman	Read Replies (1) of 223

Did anyone notice the amended 8K filed 11/20. It restates the 9 month 1997 and FY 96 Income statements and the 7/97 Balance Sheet to reflect the sale of GenCare. On the balance sheet, liabilities dropped $2.7 million while Shareholders equity increased $3.2 million, as management used much of the proceeds to pay down debt. On the Income Statement, Gencare accounted for 7.3% of revenue in 1997 and 6.2% in 1996. Restated EPS though dropped from 0.15 to 0.07 for 9 months 97 and from 0.10 to 0.08 for FY 96. Seems as though Gencare was an important, and growing, part of BRLI's earnings if not of sales. This would explain the higher price they got for GenCare. What does this mean for BRLI going forward? I have to wonder why they would sell such a profitable part of the company. It has higher growth, gross margins (72% in 1997) and profit margins than the core business (3% vs. 1.7%). Why sell this off? Does management feel that they can buy something better? Tough to beat 72% gross margins. Any comments? Mark

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