Nichols Institute, SAN JUAN CAPISTRANO

Nature of Business: Medical laboratory testing; , develops and distributes diagnostic test kits.

Total Employees: 3,894

In Orange County: 840

Stock Listing in The Times: On AMEX as “NichlsA�

Ticker Symbol: “LABA�

Friday’s Close: $10.63

One-Week Change: Down $0.50

Analyst Review: “Nichols Institute is a leading esoteric lab and they’re at the cutting edge of most diagnostic procedures. But one of the problems they’ve been going through is that they’ve tried to expand a little too aggressively. And like any small company that gets bigger, they’ve experienced some growing pains. They entered into a lab sharing venture with three Dallas hospitals. That brought a lot of different corporate cultures together, and it created more problems than Nichols had anticipated. But they’re the kind of company that won’t let a problem fester, so they restructured. Since 1991 wasn’t going to be a good year for them anyway, they bit the bullet and took their hits in the fourth quarter. But Nichols is still a good company, and it’s well run. This has all the earmarks of being a one-time event. They’ll get over this. Until the Dallas problem, they had been growing about 20% a year. I think this will be a year of recovery assuming the economy gets back to some level of health.

--Ken Bohringer, analyst, Prudential Securities Inc., New York

SALES VS. PROFITS

Fiscal year ending Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 1987 1988 1989 1990 1991 Net Revenue $55.2 $90.7 $129.7 $174.8 $236.3 Net Profit (Loss) $1.4 $3.0 $4.8 $6.9 $3.4

Corporate Outlook: “We are in a transitional process of integrating our operations, particularly in Texas where we took a large restructuring charge in December. We believe by midyear we will have accomplished most of our restructuring goals. We’re going to be focused inwardly over the next several months, but looking out over the next several years we believe there will continue to be a number of attractive acquisition opportunities. We’re bullish about the future. “

--James W. Whitmer, chief financial officer

5-YEAR SUMMARY: RETURN ON STOCKHOLDER INVESTMENT

Fiscal year ending Dec. 31 Dec. 31 Dec. 31 Dec. 31 1987 1988 1989 1990 52-Week High $8.83 $13.63 $13.25 $18.63 52-Week Low $3.59 $5.34 $6.13 $11.00 Book Value Per Share $3.18 $2.27 $3.50 $5.44 Price Per Share $5.56 $11.33 $12.50 $16.38 Net Earnings Per Share $0.15 $0.32 $0.43 $0.49 Price-to-Earnings Ratio 37:1 35:1 29:1 33:1 Avg. Return on Investor Equity 12% 14% 12% 9%

Fiscal year ending Dec. 31 1991 52-Week High $17.00 52-Week Low $10.50 Book Value Per Share $5.63 Price Per Share $13.75 Net Earnings Per Share $0.23 Price-to-Earnings Ratio 59:1 Avg. Return on Investor Equity 4%

* Nichols Institute sold 766,350 shares in a public offering July, 1987, raising $11.9 million; in a subsequent offering in August, 1990, the company sold 1.1 million shares, raising $20.0 million.

Source: Nichols Institute

For more information call or write, Nichols Institute: 26441 Via de Anza, San Juan Capistrano, Calif., 92675. (714) 661-8000