Brilliant Acquisition Corporation

First-quarter fiscal 2015 net revenue was $208.833 million versus $181.270 million a year ago, up 15%. Gross profit was $89.755 million, a 43% gross margin, compared with $72.154 million and a 40% margin last year. Operating income was $11.928 million versus $5.880 million, up 103%, and EPS was $0.24 versus $0.11. Patient count increased 7% to 2.352 million, and net revenue per patient rose 8% to $88.09 from $81.17. Working capital was $213.792 million, up from $207.285 million at October 31, 2014. Management reaffirmed full-year guidance of greater than 10% net revenue growth and 20% net earnings growth; no next-quarter numeric guidance was provided.

Dr. Marc Grodman framed the quarter as evidence that Bio-Reference is emerging from the 2013 reimbursement reset with a stronger margin structure and a bigger mix of genomic and sequencing-based testing. He emphasized a strategy centered on precision diagnostics, provider-centric relationships, and partnerships that extend the value of genomics and informatics. His tone was confident and expansive, while also acknowledging ongoing uncertainty around regulation and reimbursement.

Sam Singer said the quarter delivered $208.833 million of revenue, $89.755 million of gross profit, 43% gross margin, $11.928 million of operating income, and $0.24 EPS. He noted patient count rose to 2.352 million, revenue per patient increased to $88.09, working capital was $213.792 million, and DSO was 113 days. On cash generation, he and management highlighted operating cash flow of just over $10 million and free cash flow of just shy of $4.3 million, both unusually strong for a first quarter. Management also said bad debt was around 8.5% and expected to stay relatively consistent, while SG&A would remain elevated because of legal expenses.

Analyst Amanda Murphy asked whether routine testing growth could improve later in the year, especially if managed care contract changes materialized, and whether the slight sequential decline in growth and price per accession was just normal first-quarter seasonality. Management said routine and regional testing can vary by month and weather, that no major managed care changes had yet occurred, and that first-quarter softness is a recurring pattern because of holidays and deductible timing. She also asked about the strong cash flow and rising DSOs; management said DSOs were mainly a function of lower seasonal sales rather than a deterioration in receivables collection. On next-generation sequencing coding changes at CMS and EMA, Grodman said there was too much uncertainty to draw conclusions.