BioReference Laboratories, Inc. Announces Record Annual Revenues and Record Revenues and Operating Income for Q4FY05; Operating income for Q4FY05 tops Q4FY04 by 16%.

ELMWOOD PARK, N.J. -- Fourth graph, fourth sentence of release should read: This clearly impacted our net profits; when compared to the previous reimbursement rates, our top line and operating income were both reduced by approximately $5 to $6 million dollars by Medicare and other payers (sted This clearly impacted our net profits; when compared to the previous reimbursement rates, our top and bottom line were both reduced by approximately $5 to $6 million dollars by Medicare and other payers). Also, in the Statements of Operations under the Year Ended October 31, Cost of Sales heading, the figure should read: 83,352 (sted 82,352).

The corrected release reads:

BIOREFERENCE LABORATORIES, INC. ANNOUNCES RECORD ANNUAL REVENUES AND RECORD REVENUES AND OPERATING INCOME FOR Q4FY05; OPERATING INCOME FOR Q4FY05 TOPS Q4FY04 BY 16%

BioReference Laboratories, Inc. (NASDAQ: BRLI) (Numbers in Thousands Except Per Share Data or where otherwise noted) released its FY2005 and fourth quarter, FY2005 earnings today. For the fourth quarter FY2005, the Company posted operating income of $4,449 and pre-tax income of $4,159 on record net revenues for the quarter of $44,289, compared to operating income of $3,839 and pre-tax income of $3,648 on revenues of $37,744 recorded in the fourth quarter of FY2004, increases of 16%, 14% and 17% respectively. On a fully diluted basis, EPS on a pre-tax basis increased to $.31 per share as compared to the prior year pre-tax EPS of $.28 per share; however, a favorable tax basis in FY2004, meant that the fully taxed EPS in the fourth quarter FY2005 was $.21 per share down from $.25 per share in the same quarter of the prior fiscal year. Gross Profit on Revenues increased to $22,241 and pushed the margin for gross profit on revenues back over 50% for the quarter compared to the prior year's $19,260 and 51%. Net income after taxes for the fourth quarter FY2005 was $2,776 compared to the prior year net income after taxes of $3,313. Patient count for the fourth quarter FY2005 was 761 compared to the prior year count of 665, an increase of 14%; revenue per patient for the fourth quarter FY2005 increased to $57.37 compared to the prior year quarterly revenue per patient of $56.20, an increase of 2%. Esoteric testing remained steady at 35% of total net revenues during Q4FY2005.

FY2005 was a challenging year for BRLI as a result of the effects of reimbursement cuts for Flow Cytometry testing, a key diagnostic used in a substantial percentage of the cases reviewed by GenPath, the Company's oncology / hematopathology laboratory. Nonetheless, BRLI was able to take on increased infrastructure expenses and reduced flow cytometry reimbursements and still grow net revenues by more than 20% and nearly match operating income on a year over year basis. Net revenues increased to $163,896 for FY2005, up from $136,184 in FY2004; operating income was $12,606 for FY2005 compared to $12,821 in the prior fiscal year. Pre-tax income in FY2005 was $11,489, down from $12,186 in FY2004, primarily due to the reduced flow cytometry reimbursements. Gross profit on revenues rose to $80,544 for the FY2005 resulting in a margin for gross profit on margins of slightly better than 49% compared to $67,983 and a little less than 50% in the prior fiscal year. Net Income after taxes for FY2005 was $7,621 resulting in fully taxed EPS of $.58 for the year compared to $8,516 and $.67 in the prior fiscal year. Patient count for FY2005 was 2,865, an increase of nearly 14% over the prior fiscal year count of 2,522. Revenue per patient for FY2005 rose more than 5% to $56.48 over the prior fiscal year average of $53.71.

The Company announced that at the end of FY2005, it acquired a pathology operation in the Hudson Valley area of New York State that provides professional pathology services and medical directorship to three primary local hospitals in the area and medical directorship to a fourth. The acquisition itself cost around $2,200 with anticipated revenues from the operations of about $3,000; however, and more importantly, the acquisition hallmarked the Company's dedication to the regional pathology and histology business that it believes will provide significant growth in the future. During the course of FY2005, the Company entered into a strategic relationship with Cytyc Corporation, as a precursor to a Women's Health Initiative that the Company also expects to generate new business opportunities. The Company's Correctional Healthcare operations were provided a substantial boost with its selection as one of the primary laboratory sub-contractors for Correctional Medical Services of St. Louis, MO, one of the largest third party correctional healthcare companies in the country. In February 2005, the Company dedicated its expanded laboratory space significantly enhancing its ability to grow in both volume and testing capability.

Marc D. Grodman M.D., President noted, "2005 was a challenging year for BioReference Laboratories. There were major events at the Company, in the industry and in the Country which have substantially improved the value of BioReference for our shareholders. The most obvious and financially material event was the reimbursement reduction for flow cytometry testing by Medicare. This clearly impacted our net profits; when compared to the previous reimbursement rates, our top line and operating income were both reduced by approximately $5 to $6 million dollars by Medicare and other payers. On the other hand, even under current reimbursement rates this is both a profitable test and one that is essential at this time for complete workups in many hematopathology cases. The change in reimbursement may have reduced our profits, but it gave us a tremendous opportunity to increase our volume as the competitive landscape changed. We believe that our cancer laboratory, GenPath, is the best hematopathology laboratory in the country and its growth over the past year is a testament to the fact that physicians throughout the country are beginning to come to that same belief. We have expanded our molecular testing menu and, in general, esoteric testing is leading our strong growth into the coming year."

Dr. Grodman continued, "The laboratory services space has changed in the last year. BioReference is the only remaining publicly traded lab to challenge the two national laboratories. Even some of the larger private laboratories have been acquired. This has enhanced our presence in the market place. For the past decade we have had a 20% compound annual growth rate. Our size has enhanced our presence in the market place. The Katrina disaster, along with major concerns in healthcare, has moved electronic medical records and pay for performance initiatives into the forefront of healthcare concerns. Since the late 1990s we have been promulgating the need for laboratories to recognize their importance in healthcare information and we have been building an informatics infrastructure to capitalize on healthcare information. Our longtime voice in this area has enhanced our presence in the marketplace."

Dr. Grodman added: "We expect to continue to grow in 2006 the way that we have shown we can grow in the past. The reimbursement changes of 2005 are behind us and we expect to get back to where we were in 2004 in improving our bottom line. We have a talented team running BioReference and we are constantly seeking to improve the team and improve our performance. A year ago, we were among the first to publicly note the change in flow cytometry reimbursements. We realized the effect this would have on our year and we were quick to publicly announce that on a year over year basis, we would be slightly down in the first quarter, down in the second quarter, even by the third quarter and positive again by the fourth quarter. On a year over year basis, our Q4FY05 operating income topped our Q4FY04 operating income by 16%. We understand our business; we not only stated what we expected to do, we accomplished what we said we would do. We intend to show improvement in 2006 the way we improved in 2003 and 2004. Revenues should continue to grow at least 15%, as they have in the past. Operating income should increase by at least 40% for the year given that there are no significant reimbursement changes on the horizon at this time; however, we do not expect these changes to be apparent until after the first quarter. Our first quarter, consisting of the holiday months of November and December followed by the weather susceptible month of January is always problematic. Given infrastructure changes that occur throughout the year, any decrease in volume, associated with holidays or the weather has an inordinate impact on first quarter performance. We were affected by the NYC transit strike in December, but we have clearly demonstrated in the past that whatever difficulties we encounter in the first quarter are addressed during the rest of the year."

The Company's year-end earnings conference call is scheduled for today at 10:30 a.m. Eastern Standard Time. The live audio Web cast will be available at the Company's corporate Web site, www.bioreference.com and through www.streetevents.com. To listen to the call please go to either Web site ten minutes before the conference call is scheduled to begin. You will need to register as well as download and install any necessary audio software. The Web cast will be archived, on both Web sites, for 30 days following the call.

About BioReference Laboratories, Inc.

The Company is the largest independent regional clinical laboratory operating in the Northeast with major market positions in physician offices, nursing homes and clinics. The Company also maintains specialized focused market offerings that are national in scope. These include GenPath, its cancer and genomics laboratory, and an expanding correctional health program. PSIMedica, a business unit of the Company, is a clinical knowledge management (CKM) organization offering an array of information solutions for reducing healthcare costs and improving quality performance based on claims data, enrollment data, prescription data and laboratory data. The Company also provides a comprehensive connectivity solution to physicians and laboratories nationwide through CareEvolve, its web based healthcare portal.

BioReference Laboratories, Inc.
                       Statements of Operations
             (Dollars In Thousands, Except Per Share Data)

                            Three Months Ended        Year Ended
                                October 31,           October 31,
                              2005       2004       2005       2004
                                (Unaudited)            (Audited)
----------------------------------------------------------------------
Net Revenues                  $44,289    $37,744   $163,896   $136,184
----------------------------------------------------------------------
Cost of Sales                  22,048     18,485     83,352     68,201
----------------------------------------------------------------------
Gross Profit on Revenues      $22,241    $19,259    $80,544    $67,983
----------------------------------------------------------------------
General and Administrative     17,792     15,421     67,937     55,163
----------------------------------------------------------------------
Operating Income               $4,449     $3,838    $12,607    $12,820
----------------------------------------------------------------------
Other Expense, Net                290        190      1,118        634
----------------------------------------------------------------------
Income Before Taxes            $4,159     $3,648    $11,489    $12,186
----------------------------------------------------------------------
Taxes                           1,383        335      3,868      3,670
----------------------------------------------------------------------
Net Income (Loss)              $2,776     $3,313     $7,621     $8,516
----------------------------------------------------------------------
Income (loss) Per Share          $.21       $.26       $.60       $.71
----------------------------------------------------------------------
Number of Shares           12,965,200 12,633,017 12,775,201 12,077,502
----------------------------------------------------------------------
Income (Loss) Per Share
 (Diluted)                       $.21       $.25       $.58       $.67
----------------------------------------------------------------------
Number of Shares (Diluted) 13,381,731 13,245,429 13,148,827 12,715,274
----------------------------------------------------------------------


                    BioReference Laboratories, Inc.
                            Balance Sheets
                        (Dollars In Thousands)
                               (Audited)

                                             October 31,   October 31,
                                                 2005          2004
----------------------------------------------------------------------
Cash & Cash Equivalents                         $4,303         $6,681
----------------------------------------------------------------------
Accounts Receivable (Net)                       53,113         40,952
----------------------------------------------------------------------
Plant, Property & Equipment (Net)               11,927          9,276
----------------------------------------------------------------------
Intangible Assets (Net)                         11,998         10,628
----------------------------------------------------------------------
Other Assets                                     6,054          4,613
----------------------------------------------------------------------
                                               $87,395        $72,151
----------------------------------------------------------------------

----------------------------------------------------------------------
Accounts Payable                               $14,346        $10,801
----------------------------------------------------------------------
Notes Payable                                   10,888         10,333
----------------------------------------------------------------------
Long-Term Debt                                   7,066          7,124
----------------------------------------------------------------------
Other Liabilities                                4,380          3,220
----------------------------------------------------------------------
Shareholder's Equity                            50,715         40,673
----------------------------------------------------------------------
                                               $87,395        $72,151
----------------------------------------------------------------------

Statements included in this release that are not historical in nature, are intended to be, and are hereby identified as "forward-looking statements". Statements looking forward in time are included in this release pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from any future performance suggested herein.

www.bioreference.com