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FISCAL YEAR 2009 EARNINGS RELEASE

Dear Shareholders,


There is a slide that has been in our corporate investor presentation for many years. It outlines our “Multiple Markets strategy”. It states that competing in multiple defined markets, each with its own identity, marketing and clinical relevance, gives us the greatest opportunity to achieve consistent growth. It further states that our existing infrastructure allows us to leverage our assets to enter new timely markets. Lastly, it states that operating in multiple markets lessens the risk associated with a single business line whether due to reimbursement changes, economic cycles or evolving medical practice. These three principles define our underlying business strategy. At the core, this approach is all about leveraging assets. It is our belief that the assets of the clinical laboratory enterprise are unmatched among health care service providers and that these core assets remain largely under appreciated.

We believe that our performance over the past several years has validated this approach. Last year, with the economy affecting volumes in the regional business, our investment in specialty testing allowed us to avoid any slack and sustain our growth. This year, all aspects of our business have seen expansion. The regional business has flourished on the basis of better service and better support. Our regional infrastructure has become so solidly established that we are in a period of substantial growth. Women’s Health has rapidly evolved from a regional service to a national offering with a dedicated sales and marketing force that is generating sales around the country. We have seen steady, sustained growth of our GenPath oncology business and great interest in our nextgen products at GeneDx. Our Women’s Health program is based on a complex and innovative PCR platform that continues to give us an advantage over our competition. In GeneDx, we are still the only commercial laboratory offering multi-gene testing based on next generation sequencing. We are now offering CGH array testing to supplement cytogenetics testing in certain cases of leukemia offered by GenPath.

At BioReference, success is not based on the use of an innovative platform. Our process always begins with our quest to identify and answer clinically relevant questions. Once we have identified the question we then seek the best of breed method for providing the answer. The key to successful diagnostic testing is not the platform or the methodology, it is the ability to recognize clinically relevant questions and to thereafter provide results that provide answers that improve patient outcomes.

The results that we have reported for the fourth quarter and the entire 2009 fiscal year are the fruit of technological innovation, inspired marketing, creative salesmanship combined with block and tackle execution. Of course, the improvement in the economy on a year over year basis has certainly paved the way for strong comparison results. We have in the past and we will continue in the future to manage this growth and optimize it for sustained, orderly growth. We saw the economy begin to stop its slide and trend upward in the first quarter of 2009 and we expect to see that global factor begin to show up as we move into 2010. Nonetheless, we firmly believe that there are technology platforms just beginning to emerge in the diagnostic laboratory industry which will pave the way for improved patient outcomes. We are constantly seeking out those cutting edge platforms and we are not hesitant to invest in the development and marketing of the resulting advanced testing capability.

Some of our metrics require special comment. Our increase in patient count of 27% in the quarter was outstanding, the highest ever over the last fifteen years. There are a number of factors that contributed to this marked improvement. The first is related to our highly successful Women’s Health Initiative. During the course of the current fiscal year, this initiative grew from a New York area regional business to a national program that is currently being marketed throughout the country. This initiative has resulted in increased patient count, much of which comes in with only image directed thin prep requests that are reimbursed at less than the average revenue per patient. This business, however, represents a significant franchise opportunity for the Company that is based on a disruptive technology platform and provides results that physicians can use to improve patient outcomes. The second factor is related to our overall growth of the Company and a strong performance in our routine regional business, reflective of our impressive capabilities and resources within the New York Metropolitan area. This growth in routine service was accentuated due to the fact that economic conditions in the prior year period more significantly affected this segment and the resultant improvement led to an even more impressive comparison between the two periods. All of the above factors not only contributed to the increase in patent count but also to the slight decrease in revenue per patent for both last year’s corresponding period as well as the immediately preceding quarter in the current year. While more obvious in the current quarter, we note that this trend was also apparent in the current year third quarter as well.

We have continued to extend our twenty per cent compound annual growth rate into a sixteenth year. This growth is constantly fueled by an outstanding team of managers, scientists and employees who are dedicated to building a Company that brings value to its shareholders, the industry, our physician clients and most of all, to our patients. They share in our success and should be justifiably proud. We are providing guidance that in 2010 our top-line revenue will grow at least 15% and we expect that our net income will increase by at least 20%. We will continue to deliver better healthcare through better science and better service.



January 4, 2010
Elmwood Park, New Jersey
Sincerely,

Marc Grodman, M.D.
Chairman of the Board
President and Chief Executive Officer




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