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Revenues, gross margin, operating income and net income before taxes were at record levels for both the quarter and the year. While drive increases both in the top and bottom lines we improved our gross margin and operating margin for the year and further strengthened our balance sheet. Within clinical laboratory services, clinical trial services clients generated approximately $5 million in revenues in 2007 up from $4.5 million in 2006. In addition to the two preferred provider contracts, we also entered the New Year with signed contracts for $5.5 million. Over the past five years we have been expanding our clinical capabilities in servicing our occupational health clinic clients and for clinical trial services. The revenue increased growth diagnostics (2000) operating income to $3.6 million from $2.1 million in the previous year a 71% increase. In 2007 revenue increased 15% largely from new clients, which exceeds the prior three year average year-over-year growth rate of 10.7%. Here are some details regarding the quarter and the year. We experienced top line growth of 14% for the fourth quarter, and 15% for the year. In our lab business, fourth quarter revenues were $14.8 million, up 10% from the fourth quarter of last year. For the full year, revenues in our lab business grew 13% to $61.3 million. Revenues for specialty laboratory services were up 12% for the quarter and 12% for the year due to higher average price per test and an increase in overall sample volume. In our POC diagnostic business, fourth quarter revenues were $4.9 million, up 28% from last year, for the full year, POC diagnostic revenues grew by 20% to $19 million. Our overall gross margin was 43.3% in the fourth quarter, up from 43.2% last year, for the full year our overall gross margin was 45.3% up 90 basis points from 44.4% last year. Our lab business operated at a 37.2% margin in the fourth quarter, down 70 basis points from 37.9% in the fourth quarter of last year. For the year gross margins in our lab business was 40.1%, up from 39.4% last year. Margins in our diagnostic division were 61.6% in the fourth quarter compared to 61.7% last year. For the year gross margins in our diagnostic division were 62.1% compared to 61.6% last year. For the quarter our selling, general and administration expenses were $6 million up from $5.2 million in the fourth quarter last year. For the full year our selling, general and administration expenses increased to $23.7 million compared to $20.6 million last year, but remained consistent as a percentage of sales at 29.6%. Research and development expenses were $639,000 in the quarter up $53,000 from the fourth quarter of last year. For the year research and development expenses were $2.6 million or 3.2% of sales compared to $2.2 million or 3.1% of sales last year. For the year other expenses were $707,000 compared to $1 million last year primarily due to lower interest expense related to reductions in our average debt levels. Net income for the quarter was $1,435,000 up 39% from $1,036,000 last year. For the year net income was $6,690,000 up 47% from $4,548,000 by last year. Diluted earnings per share were $0.16 in the quarter up 33% from $0.12 per share in the fourth quarter last year. For the year diluted earnings per share were $0.75 up 44% from $0.52 per share last year. In terms of the balance sheet, trade receivables are up from their previous year end levels due to strong November and December sales and timing of cash receipts. Our day sales outstanding was 54.5 days for the year compared to 53.6 days last year. For the year capital expenditures were $9 million and reflect an increased investment in our clinical laboratory. Depreciation and amortization was $4 million for the year. First of all, Dick, you mentioned having had some success down the stretch end of the year in terms of renewing some contracts with major customers in CTS and landing some new ones. Can you give us some feel for where you were a year ago, so we have some frame of reference on that $5.5 million, it sounds pretty good, but maybe you could give us where you were 12 months ago? And is the nature of the signed contracts you have this year very similar type business or is it more run rate business less project business what can you talk about composition? The only thing I would say that's different from a year ago is it's probably a little bit more balanced between our project oriented business and what we call clinic or ongoing central lab services business. When the collection testing products in 2007 was $16.6 million, our contract manufacturing revenue was $1.4 million and then other diagnostic products were at $1 million. The government business in 2007 seemed to have a very strong year. Best guess was maybe up 50%, certainly 40%, maybe you could comment on that, but your comment was that you hope that business can have another strong year. We did grow very nicely in government last year, and we expect that percentage growth over 2007 to be met again or exceeded in 2008. Well couple of things number one we have been a national player in that market for a number of years so taking on national customers is not new to us nor is it particularly difficult. The one thing I would add to that is we've made an effort from last three to four years to really concentrate on the occupational health clinic market and we're going to continue to push hard in that markets.

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Posted Under: Allergy and Immunology, Microbiology