##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

|      |                                                                                        
|----- | ---------------------------------------------------------------------------------------
|[ X ] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002

OR

|       |                                                                                         
|------ | ----------------------------------------------------------------------------------------
|[    ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 0-22879

BIORELIANCE CORPORATION
(Exact name of the registrant as specified in its charter)

|                                         |  |                    
|---------------------------------------- |  | -------------------
|Delaware                                 |  | 52-1541583         
|(State or other jurisdiction of          |  | (I.R.S. Employer   
|incorporation or organization)           |  | Identification No.)
|                                         |  |                    
|14920 Broschart Road                     |  |                    
|Rockville, Maryland                      |  | 20850              
|(Address of principal executive offices) |  | (Zip code)         

Registrants telephone number, including area code:(301) 738-1000



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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YES X      NO

As of October 15, 2002, 8,453,592 shares of registrants common stock, par
value $.01 per share, were outstanding.



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1



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##### 



BIORELIANCE CORPORATION

TABLE OF CONTENTS

|                                                                         |  |                                                                                                                     |  |       
|------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------- |  | ------
|                                                                         |  |                                                                                                                     |  | Page  
|                                                                         |  |                                                                                                                     |  | Number
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  |                                                                                                                     |  |       
|PART I                                                                   |  | FINANCIAL INFORMATION                                                                                               |  |       
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  | Item 1 - Financial Statements:                                                                                      |  |       
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  | Consolidated Balance Sheets as of December 31, 2001
     and September 30, 2002 (Unaudited)                         |  | 3     
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  | Consolidated (Unaudited) Statements of Income for the Three and
     Nine Months Ended September 30, 2001 and 2002. |  | 4     
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  | Consolidated (Unaudited) Statements of Cash Flows for the Nine
     Months Ended September 30, 2001 and 2002.       |  | 5     
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  | Notes to Consolidated (Unaudited) Financial Statements                                                              |  | 6     
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  | Item 2 - Managements Discussion and Analysis of Financial
     Condition and Results of Operations                 |  | 9     
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  | Item 3 - Quantitative and Qualitative Disclosures About Market Risks                                                |  | 20    
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  | Item 4 - Controls and Procedures                                                                                    |  | 21    
|                                                                         |  |                                                                                                                     |  |       
|                                                                         |  |                                                                                                                     |  |       
|PART II                                                                  |  | OTHER INFORMATION                                                                                                   |  | 22    
|                                                                         |  |                                                                                                                     |  |       
|SIGNATURES                                                               |  | 23                                                                                                                 
|                                                                         |  |                                                                                                                     |  |       
|CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 |  | 24                                                                                                                 
|                                                                         |  |                                                                                                                     |  |       
|EXHIBIT INDEX                                                            |  | 26                                                                                                                 

2



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##### 



BIORELIANCE CORPORATION

CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

|                                             |                                                                                                                   |                            |                                            |        |        |              |        |             |        |               |  | 
|-------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ------ | ------ | ------------ | ------ | ----------- | ------ | ------------- |  | 
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |             |        | September 30,
|                                             |                                                                                                                   |                            |                                            |        |        | December 31, |        | 2002       
|                                             |                                                                                                                   |                            |                                            |        |        | 2001         |        | (Unaudited)
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |            
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |             |        |               |  | 
|Assets                                      
|Current assets:                              |                                                                                                                   |                            |                                            |        |        |              |        |            
|                                             | Cash and cash equivalents                                                                                         |                            | $                                          | 27,536 |        |              | $      | 35,808      |       
|                                             | Accounts receivable, net                                                                                          |                            |                                            | 22,335 |        |              |        | 22,496      |       
|                                             | Other current assets                                                                                              |                            |                                            | 1,747  |        |              |        | 3,156       |       
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |            
|                                             |                                                                                                                   | Total current assets       |                                            |        | 51,618 |              |        |             | 61,460 |              
|Property and equipment, net                  |                                                                                                                   |                            | 39,177                                     |        |        |              | 40,392 |            
|Deposits and other assets                    |                                                                                                                   |                            | 280                                        |        |        |              | 212    |            
|Deferred income taxes                        |                                                                                                                   |                            | 1,062                                      |        |        |              | 825    |            
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |            
|                                             |                                                                                                                   |                            | Total assets                               |        | $      | 92,137       |        |             | $      | 102,889       | 
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |            
|Liabilities and Stockholders Equity        
|Current liabilities:                         |                                                                                                                   |                            |                                            |        |        |              |        |            
|                                             | Current portion of long-term debt and capital lease obligations                                                   |                            | $                                          | 919    |        |              | $      | 918         |       
|                                             | Accounts payable                                                                                                  |                            |                                            | 2,312  |        |              |        | 1,929       |       
|                                             | Accrued employee compensation and benefits                                                                        |                            |                                            | 5,323  |        |              |        | 3,885       |       
|                                             | Other accrued liabilities                                                                                         |                            |                                            | 2,544  |        |              |        | 4,925       |       
|                                             | Customer advances                                                                                                 |                            |                                            | 4,972  |        |              |        | 5,776       |       
|                                             | Deferred income taxes                                                                                             |                            |                                            | 4,102  |        |              |        | 4,779       |       
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |            
|                                             |                                                                                                                   | Total current liabilities  |                                            |        | 20,172 |              |        |             | 22,212 |              
|Long-term debt and capital lease obligations |                                                                                                                   |                            | 10,977                                     |        |        |              | 10,883 |            
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |            
|                                             |                                                                                                                   |                            | Total liabilities                          |        |        | 31,149       |        |             |        | 33,095        | 
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |            
|Stockholders equity:                        |                                                                                                                   |                            |                                            |        |        |              |        |            
|                                             | Preferred stock, $.01 par value: 6,900,000 shares authorized;
no shares issued and outstanding                    |                            |                                            |       |        |              |        |            |       
|                                             | Common stock, $.01 par value: 15,000,000 shares authorized;
8,362,040 and 8,451,656 shares issued and outstanding |                            |                                            | 84     |        |              |        | 85          |       
|                                             | Additional paid-in capital                                                                                        |                            |                                            | 55,018 |        |              |        | 55,610      |       
|                                             | Retained earnings                                                                                                 |                            |                                            | 7,782  |        |              |        | 15,856      |       
|                                             | Accumulated other comprehensive loss                                                                              |                            |                                            | (1,896 | )      |              |        | (1,757      | )     
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |            
|                                             |                                                                                                                   | Total stockholders equity |                                            |        | 60,988 |              |        |             | 69,794 |              
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |            
|                                             |                                                                                                                   |                            | Total liabilities and stockholders equity |        | $      | 92,137       |        |             | $      | 102,889       | 
|                                             |                                                                                                                   |                            |                                            |        |        |              |        |            

The accompanying notes are an integral part of these consolidated financial statements.

3



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##### 



BIORELIANCE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |        |        | 
|-------------------------- | ----------------------------------- | ------------------------ | ------ | ------------------ | ------ | ----------------- | ------ | ------ | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                           |                                     |                          |        | Three Months Ended |        | Nine Months Ended
|                           |                                     |                          |        | September 30,      |        | September 30,    
|                           |                                     |                          |        | 2001               |        | 2002              |        | 2001   |        | 2002
|                           |                                     |                          |        |                    |        |                   |        |        |        |     
|Revenue                    |                                     | $                        | 18,578 |                    |        | $                 | 21,594 |        |        | $    | 50,177 |        |        | $ | 61,340 |       
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|Expenses:                  |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|                           | Cost of sales                       |                          |        | 11,197             |        |                   |        | 12,090 |        |      |        | 32,402 |        |   |        | 35,083 |       
|                           | Selling, general and administrative |                          |        | 3,984              |        |                   |        | 4,215  |        |      |        | 11,748 |        |   |        | 12,736 |       
|                           | Research and development            |                          |        | 284                |        |                   |        | 225    |        |      |        | 1,027  |        |   |        | 681    |       
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|                           |                                     | Total operating expenses |        |                    | 15,465 |                   |        |        | 16,530 |      |        |        | 45,177 |   |        |        | 48,500 | 
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|Income from operations     |                                     |                          | 3,113  |                    |        |                   | 5,064  |        |        |      | 5,000  |        |        |   | 12,840 |       
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|Other (income) expense:    |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|                           | Interest income                     |                          |        | (196               | )      |                   |        | (191   | )      |      |        | (682   | )      |   |        | (508   | )     
|                           | Interest expense                    |                          |        | 198                |        |                   |        | 236    |        |      |        | 629    |        |   |        | 658    |       
|                           | Other (income) expense              |                          |        | 22                 |        |                   |        | 20     |        |      |        | 293    |        |   |        | (30    | )     
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|                           |                                     | Net other expense        |        |                    | 24     |                   |        |        | 65     |      |        |        | 240    |   |        |        | 120    | 
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|Income before income taxes |                                     |                          | 3,089  |                    |        |                   | 4,999  |        |        |      | 4,760  |        |        |   | 12,720 |       
|Income tax provision       |                                     |                          | 853    |                    |        |                   | 1,825  |        |        |      | 1,248  |        |        |   | 4,643  |       
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|Net income                 |                                     | $                        | 2,236  |                    |        | $                 | 3,174  |        |        | $    | 3,512  |        |        | $ | 8,077  |       
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|Net income per share:      |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |        |        | 
|                           | Basic                               |                          | $      | 0.27               |        |                   | $      | 0.38   |        |      | $      | 0.43   |        |   | $      | 0.96   |       
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       
|                           | Diluted                             |                          | $      | 0.26               |        |                   | $      | 0.36   |        |      | $      | 0.41   |        |   | $      | 0.91   |       
|                           |                                     |                          |        |                    |        |                   |        |        |        |      |        |        |        |   |        |       

The accompanying notes are an integral part of these consolidated financial statements.

4



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BIORELIANCE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |       |        |        |        |  
|------------------------------------------------------------ | --------------------------------------------------------------------------------- | ----------------------------------------------------- | ------------------------------------------------ | --------------------------------------------------- | ------ | ----------------- | ------ | ----- | ------ | ------ | ------ | -
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        | Nine Months Ended
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        | September 30,    
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                  
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        | 2001              |        | 2002 
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|Cash flows from operating activities:                        |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|                                                             | Net income                                                                        |                                                       | $                                                | 3,512                                               |        |                   | $      | 8,077 |       
|                                                             | Adjustments to reconcile net income to net cash provided
by operating activities: |                                                       |                                                  |                                                     |        |                   |        |       |       
|                                                             |                                                                                   |                                                       | Depreciation                                     |                                                     |        | 3,361             |        |       |        | 3,475  |       
|                                                             |                                                                                   |                                                       | Compensation element of options                  |                                                     |        | 39                |        |       |        |       |       
|                                                             |                                                                                   |                                                       | Amortization expense                             |                                                     |        | 37                |        |       |        | 10     |       
|                                                             |                                                                                   |                                                       | Amortization of bond discounts                   |                                                     |        | (114              | )      |       |        |       |       
|                                                             |                                                                                   |                                                       | Loss on disposal                                 |                                                     |        | 94                |        |       |        | 136    |       
|                                                             |                                                                                   |                                                       | Deferred income taxes, net                       |                                                     |        | 463               |        |       |        | 914    |       
|                                                             |                                                                                   |                                                       | Changes in current assets and liabilities:       |                                                     |        |                   |        |       |        |        |       
|                                                             |                                                                                   |                                                       |                                                  | Accounts receivable, net                            |        |                   | (1,960 | )     |        |        | 161    |  
|                                                             |                                                                                   |                                                       |                                                  | Other current assets                                |        |                   | (276   | )     |        |        | (1,368 | )
|                                                             |                                                                                   |                                                       |                                                  | Accounts payable                                    |        |                   | (281   | )     |        |        | (521   | )
|                                                             |                                                                                   |                                                       |                                                  | Accrued employee compensation and benefits          |        |                   | 254    |       |        |        | (1,468 | )
|                                                             |                                                                                   |                                                       |                                                  | Other accrued liabilities                           |        |                   | 637    |       |        |        | 2,353  |  
|                                                             |                                                                                   |                                                       |                                                  | Customer advances                                   |        |                   | 2,504  |       |        |        | 453    |  
|                                                             |                                                                                   |                                                       | (Increase) decrease in deposits and other assets |                                                     |        | (80               | )      |       |        | 135    |       
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|                                                             |                                                                                   |                                                       |                                                  | Net cash provided by operating activities           |        | 8,190             |        |       |        | 12,357 |       
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|Cash flows from investing activities:                        |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|                                                             |                                                                                   | Purchases of marketable securities                    |                                                  |                                                     | (2,455 | )                 |        |       |       |       
|                                                             |                                                                                   | Proceeds from the maturities of marketable securities |                                                  |                                                     | 11,000 |                   |        |       |       |       
|                                                             |                                                                                   | Purchases of property and equipment                   |                                                  |                                                     | (2,770 | )                 |        |       | (5,021 | )     
|                                                             |                                                                                   | Proceeds from the sale of property and equipment      |                                                  |                                                     |       |                   |        |       | 124    |       
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|                                                             |                                                                                   |                                                       |                                                  | Net cash provided by (used in) investing activities |        | 5,775             |        |       |        | (4,897 | )     
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|Cash flows from financing activities:                        |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|                                                             |                                                                                   |                                                       | Proceeds from exercise of stock options          |                                                     |        | 421               |        |       |        | 593    |       
|                                                             |                                                                                   |                                                       | Payments on debt and capital lease obligations   |                                                     |        | (918              | )      |       |        | (700   | )     
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|                                                             |                                                                                   |                                                       |                                                  | Net cash used in financing activities               |        | (497              | )      |       |        | (107   | )     
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|Effect of exchange rate changes on cash and cash equivalents |                                                                                   |                                                       | 120                                              |                                                     |        |                   | 919    |      
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|Net increase in cash and cash equivalents                    |                                                                                   |                                                       | 13,588                                           |                                                     |        |                   | 8,272  |      
|Cash and cash equivalents, beginning of period               |                                                                                   |                                                       | 8,231                                            |                                                     |        |                   | 27,536 |      
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      
|Cash and cash equivalents, end of period                     |                                                                                   | $                                                     | 21,819                                           |                                                     |        | $                 | 35,808 |      
|                                                             |                                                                                   |                                                       |                                                  |                                                     |        |                   |        |      

The accompanying notes are an integral part of these consolidated financial statements.

5



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##### 



BIORELIANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(1) Description of the Business

BioReliance Corporation (the Corporation) is a contract service
organization that provides testing and development, and manufacturing services
for biologics and other biomedical products to biotechnology and pharmaceutical
companies worldwide.

(2) Interim Financial Statements Presentation

The accompanying interim financial statements are unaudited and have been
prepared by the Corporation pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC) regarding interim financial reporting.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements,
and therefore these consolidated financial statements should be read in
conjunction with the audited consolidated financial statements, and related
notes thereto, included in the Corporations Annual Report on Form 10-K. In
the opinion of management, the unaudited consolidated financial statements for
the three-month and nine-month periods ended September 30, 2001 and 2002
include all normal and recurring adjustments that are necessary for a fair
presentation of the results of the interim period. The results of operations
for the three-month and nine-month periods ended September 30, 2001 and 2002
are not necessarily indicative of the results for the entire year ending
December 31, 2002.

(3) Net Income Per Share

The Corporation calculates earnings per share (EPS) on both a basic and
diluted basis. Dilutive securities are excluded from the computation in
periods in which they have an anti-dilutive effect. Net income available to
common stockholders and common equivalent stockholders is equal to net income
for all periods presented.

The following table represents reconciliations between the weighted
average common stock outstanding used in basic EPS and the weighted average
common and common equivalent shares outstanding used in diluted EPS for each of
the periods presented (in thousands):

|                                                                 |  |                    |       |                   |  |      |       |      |  |  |       |  |  |  |       | 
|---------------------------------------------------------------- |  | ------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  |  | ----- |  |  |  | ----- | 
|                                                                 |  | Three Months Ended |       | Nine Months Ended
|                                                                 |  | September 30,      |       | September 30,    
|                                                                 |  |                    |       |                  
|                                                                 |  | 2001               |       | 2002              |  | 2001 |       | 2002
|                                                                 |  |                    |       |                   |  |      |       |     
|                                                                 |  |                    |       |                   |  |      |       |      |  |  |       |  |  |  |       | 
|Weighted average common stock
outstanding                        |  |                    | 8,225 |                   |  |      | 8,444 |      |  |  | 8,208 |  |  |  | 8,425 | 
|Stock options, as if converted                                   |  |                    | 322   |                   |  |      | 432   |      |  |  | 349   |  |  |  | 474   | 
|                                                                 |  |                    |       |                   |  |      |       |      |  |  |       |  |  |  |       | 
|Weighted average common and
common equivalent shares
outstanding |  |                    | 8,547 |                   |  |      | 8,876 |      |  |  | 8,557 |  |  |  | 8,899 | 
|                                                                 |  |                    |       |                   |  |      |       |      |  |  |       |  |  |  |       | 

6



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##### 



(4) Segment Information

Summarized financial information concerning the Corporations reportable
segments for the three months and nine months ended September 30 is shown in
the following table (in thousands):

|                    |                         |       |       |        |                     |        |                     |        |       |        |      |        |        |        |   |        |        |        | 
|------------------- | ----------------------- | ----- | ----- | ------ | ------------------- | ------ | ------------------- | ------ | ----- | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                    |                         |       |       |        | Three Months        |        | Nine Months        
|                    |                         |       |       |        | Ended September 30, |        | Ended September 30,
|                    |                         |       |       |        |                     |        |                    
|                    |                         |       |       |        | 2001                |        | 2002                |        | 2001  |        | 2002
|                    |                         |       |       |        |                     |        |                     |        |       |        |     
|                    |                         |       |       |        |                     |        |                     |        |       |        |      |        |        |        |   |        |        |        | 
|Revenue:            |                         |       |       |        |                     |        |                     |        |       |        |      |        |        |        |   |       
|                    | Testing and Development |       | $     | 15,777 |                     |        | $                   | 18,131 |       |        | $    | 42,737 |        |        | $ | 51,477 |       
|                    | Manufacturing           |       |       | 2,801  |                     |        |                     | 3,463  |       |        |      | 7,440  |        |        |   | 9,863  |       
|                    |                         |       |       |        |                     |        |                     |        |       |        |      |        |        |        |   |       
|                    |                         |       | Total |        | $                   | 18,578 |                     |        | $     | 21,594 |      |        | $      | 50,177 |   |        | $      | 61,340 | 
|                    |                         |       |       |        |                     |        |                     |        |       |        |      |        |        |        |   |       
|Gross Profit (Loss) |                         |       |       |        |                     |        |                     |        |       |        |      |        |        |        |   |       
|                    |                         |       |       |        |                     |        |                     |        |       |        |      |        |        |        |   |        |        |        | 
|                    | Testing and Development |       | $     | 7,688  |                     |        | $                   | 9,717  |       |        | $    | 18,984 |        |        | $ | 26,319 |       
|                    | Manufacturing           |       |       | (307   | )                   |        |                     | (213   | )     |        |      | (1,209 | )      |        |   | (62    | )     
|                    |                         |       |       |        |                     |        |                     |        |       |        |      |        |        |        |   |       
|                    |                         | Total |       | $      | 7,381               |        |                     | $      | 9,504 |        |      | $      | 17,775 |        |   | $      | 26,257 |       
|                    |                         |       |       |        |                     |        |                     |        |       |        |      |        |        |        |   |       

Summarized financial information concerning the Corporations revenue and
gross profit by geographic region for the three months and nine months ended
September 30 is shown in the following table (in thousands):

|              |               |               |       |        |       |                     |       |                     |       |        |       |        |        |        |        |        |        |        |        | 
|------------- | ------------- | ------------- | ----- | ------ | ----- | ------------------- | ----- | ------------------- | ----- | ------ | ----- | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | 
|              |               |               |       |        |       | Three Months        |       | Nine Months        
|              |               |               |       |        |       | Ended September 30, |       | Ended September 30,
|              |               |               |       |        |       |                     |       |                    
|              |               |               |       |        |       | 2001                |       | 2002                |       | 2001   |       | 2002  
|              |               |               |       |        |       |                     |       |                     |       |        |       |       
|Revenue:      |               |               |       |        |       |                     |       |                     |       |        |       |        |        |        |        |       
|              | United States |               | $     | 15,624 |       |                     | $     | 17,304              |       |        | $     | 41,949 |        |        | $      | 50,050 |       
|              | Europe        |               |       | 2,954  |       |                     |       | 4,290               |       |        |       | 8,228  |        |        |        | 11,290 |       
|              |               |               |       |        |       |                     |       |                     |       |        |       |        |        |        |        |       
|              |               |               | Total |        | $     | 18,578              |       |                     | $     | 21,594 |       |        | $      | 50,177 |        |        | $      | 61,340 |       
|              |               |               |       |        |       |                     |       |                     |       |        |       |        |        |        |        |       
|Gross Profit: |               |               |       |        |       |                     |       |                     |       |        |       |        |        |        |        |       
|              |               | United States |       | $      | 6,060 |                     |       | $                   | 7,051 |        |       | $      | 13,909 |        |        | $      | 20,046 |       
|              |               | Europe        |       |        | 1,321 |                     |       |                     | 2,453 |        |       |        | 3,866  |        |        |        | 6,211  |       
|              |               |               |       |        |       |                     |       |                     |       |        |       |        |        |        |        |       
|              |               |               |       | Total  |       | $                   | 7,381 |                     |       | $      | 9,504 |        |        | $      | 17,775 |        |        | $      | 26,257 | 
|              |               |               |       |        |       |                     |       |                     |       |        |       |        |        |        |        |       

(5) New Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. (FAS) 141, Business
Combinations (FAS 141) and FAS 142, Goodwill and Other Intangible Assets
(FAS 142). FAS 141 addresses the initial recognition and measurement of
goodwill and other intangible assets acquired in a business combination. FAS
142 addresses the initial recognition and measurement of intangible assets
acquired outside of a business combination, whether acquired individually or
with a group of other assets, and the accounting and reporting for goodwill and
other intangibles subsequent to their acquisition. These standards require all
future business combinations to be accounted for using the purchase method of
accounting. Goodwill will no longer be amortized but instead will be subject
to impairment tests at least annually. The Corporation was required to adopt
FAS 141 and FAS 142 on a prospective basis as of January 1, 2002; however,
certain provisions

7



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##### 



of these new standards may also apply to any acquisitions concluded after
June 30, 2001. The initial adoption of this guidance did not have a material
impact on the Corporations results of operations or financial position. The
guidance may impact the way in which the Corporation will account for future
transactions.

In October 2001, the FASB issued FAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets (FAS 144). FAS 144 supercedes
FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of. FAS 144 applies to all long-lived
assets (including discontinued operations) and consequently amends Accounting
Principles Board Opinion No. 30, Reporting Results of Operations-Reporting the
Effects of Disposal of a Segment of a Business. The Corporation adopted FAS
144 on January 1, 2002. The initial adoption of this guidance has not had a
material impact on the Corporations results of operations or financial
position.

In April 2002, the FASB issued FAS No. 145, Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections (FAS 145). FAS 145 rescinds FAS No. 4, Reporting Gains and
Losses from Extinguishment of Debt, and an amendment of that statement, FAS
No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.
FAS No. 145 also rescinds FAS No. 44, Accounting for Intangible Assets of
Motor Carriers and amends FAS No. 13, Accounting for Leases, to eliminate an
inconsistency between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. FAS 145 also amends
other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions. The Corporation does not believe that adoption of FAS No. 145 will
have a material impact on its results of operations or financial position.

In June 2002, the Financial Accounting Standards Board issued FAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities (FAS 146).
FAS 146 addresses financial accounting and reporting for costs associated with
exit or disposal activities and nullifies Emerging Issues Task Force (EITF)
Issue No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). The provisions of this Statement are effective for exit
or disposal activities that are initiated after December 31, 2002, with early
application encouraged. The Corporation does not expect application of this
Statement to have a material impact on the Corporations financial statements.

8



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##### 



|        |  |                                                                                      
|------- |  | -------------------------------------------------------------------------------------
|Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results
of Operations

Certain statements made in this Report on Form 10-Q are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include, without limitation, any statement
that may predict, forecast, indicate, or imply future results, performance, or
achievements, which generally are not historical in nature, and may contain the
words believe, anticipate, expect, estimate, project, will be,
will continue, will likely result, or similar words or phrases.
Forward-looking statements in this Report on Form 10-Q include, among others,
statements regarding:



| |  |  | the anticipated growth of revenue and improvement in profit
margins,                                                                                                          
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | the Corporations ability to use additional capacity in its
manufacturing facility and the effect on earnings of underutilization
of this facility,                           
| |  |  | the Corporations plans to expand capacity in both its testing and
development and manufacturing business segments, including the timing
and completion of any such expansion,
| |  |  | the anticipated increase in selling, general and administrative
expenses and the hiring of new employees,                                                                     
| |  |  | plans to improve the Corporations information systems and sales and marketing infrastructure,                                                                                
| |  |  | the anticipated leveling off of research and development expenses,                                                                                                            
| |  |  | the amount and impact of a change in tax rates,                                                                                                                               
| |  |  | the Corporations ability to fund its operations with existing
cash, cash flows from operations and its line of credit, and                                                   
| |  |  | the impact of foreign currency exchange rate fluctuations on the
Corporation.                                                                                                 

Forward-looking statements involve risks and uncertainties which may cause
actual results to differ materially from the forward-looking statements. The
risks and uncertainties are detailed from time to time in reports filed by
BioReliance with the SEC, including in its Forms 10-K.

As and when made, management believes that these forward-looking
statements are reasonable. The Corporation undertakes no obligation to revise
or publicly release the results of any revision to these forward-looking
statements. Therefore, readers are cautioned not to place undue reliance on
these forward-looking statements since new risk factors emerge from time to
time and it is not possible for management to predict all such risk factors,
nor can it assess the impact of all such risk factors on the Corporations
business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any
forward-looking statements.

The following discussion and analysis of the Corporations financial
condition and results of operations should be read in conjunction with the
Corporations consolidated financial statements and related notes thereto
included elsewhere in this Form 10-Q.

9



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##### 



Results of Operations
(Dollars in tables are in thousands)

For the three months ended September 30, 2002, the Corporation had gross
revenue of $21.6 million, an increase of 16% over gross revenue of $18.6
million for the three months ended September 30, 2001. Earnings per share for
the three months ended September 30, 2002 were $0.36 (diluted) compared with
$0.26 (diluted) for the three months ended September 30, 2001.

For the nine months ended September 30, 2002, the Corporation had gross
revenue of $61.3 million, an increase of 22% over gross revenue of $50.2
million for the nine months ended September 30, 2001. Earnings per share for
the nine months ended September 30, 2002 were $0.91 (diluted) compared with
$0.41 (diluted) for the nine months ended September 30, 2001.

Gross Revenue by Segment

The following table shows a comparison of revenue by operational segment
for the three months and nine months ended September 30, 2001 and 2002:

|                        |  |                    |        |                   |  |                 |        |      |  |      |    |                 |  |   |        |  |  |   |        |  |  |  |    |  
|----------------------- |  | ------------------ | ------ | ----------------- |  | --------------- | ------ | ---- |  | ---- | -- | --------------- |  | - | ------ |  |  | - | ------ |  |  |  | -- | -
|                        |  | Three Months Ended |        | Nine Months Ended
|                        |  | September 30,      |        | September 30,    
|                        |  |                    |        |                  
|                        |  | 2001               |        | 2002              |  | Fav. (Unfav.) % |        | 2001 |  | 2002 |    | Fav. (Unfav.) %
|                        |  |                    |        |                   |  |                 |        |      |  |      |    |                
|                        |  |                    |        |                   |  |                 |        |      |  |      |    |                 |  |   |        |  |  |   |        |  |  |  |    |  
|Testing and Development |  | $                  | 15,777 |                   |  | $               | 18,131 |      |  |      | 15 | %               |  | $ | 42,737 |  |  | $ | 51,477 |  |  |  | 20 | %
|                        |  |                    |        |                   |  |                 |        |      |  |      |    |                 |  |   |        |  |  |   |        |  |  |  |    |  
|Manufacturing           |  |                    | 2,801  |                   |  |                 | 3,463  |      |  |      | 24 | %               |  |   | 7,440  |  |  |   | 9,863  |  |  |  | 33 | %
|                        |  |                    |        |                  
|                        |  |                    |        |                   |  |                 |        |      |  |      |    |                 |  |   |        |  |  |   |        |  |  |  |    |  
|Total                   |  | $                  | 18,578 |                   |  | $               | 21,594 |      |  |      | 16 | %               |  | $ | 50,177 |  |  | $ | 61,340 |  |  |  | 22 | %
|                        |  |                    |        |                  

The increases in testing and development revenue for the three months and
nine months ended September 30, 2002 are due primarily to the continued
increases in the rates of new orders, both in the U.S. and Europe. The
increase in U.S. testing and development revenue results from increases in both
biologics testing services and toxicology services. Additionally, U.S. testing
and development revenue for the three months and nine months ended September
30, 2002 includes an adjustment of approximately $150,000 relating to long-term
contracts. The increase in European testing and development revenue was driven
by increases in revenue generated in all major service areas.

The increases in manufacturing revenue for the three months and nine
months ended September 30, 2002 represent increases in both the U.S. and
Europe. U.S. increases are attributable to increases in virtually all
manufacturing services as a result of the continued ramp-up of the
Corporations U.S. manufacturing facility. Revenue growth for the three months
and nine months ended September 30, 2002 continued to be impacted by project
delays resulting from client requests for additional process development and
client regulatory issues.

Price increases provided a relatively minor portion of the revenue
increases in both of the Corporations business segments for the three months
and nine months ended September 30, 2002.

10



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##### 



Approximately 20% of the Corporations manufacturing revenue for the three
and nine months ended September 30, 2002, resulted from work performed under
the Corporations smallpox vaccine contracts. Approximately 7% and 6% of the
Corporations total revenue for the three months and nine months ended
September 30, 2002, respectively, resulted from work performed under these
smallpox vaccine contracts. Work under these contracts is subject to
government prime contractor-issued task orders, contract amendments and
potential expansion and acceleration; thus, the future revenue related to these
contracts cannot be predicted with certainty. As with all government related
contracts, these contracts are subject to termination by the government at any
time.

Gross Revenue by Geographic Region

The following table shows a comparison of revenue by geographic region for
the three months and nine months ended September 30, 2001 and 2002:

|              |  |                    |        |                   |  |                 |        |      |  |      |    |                 |  |   |        |  |  |   |        |  |  |  |    |  
|------------- |  | ------------------ | ------ | ----------------- |  | --------------- | ------ | ---- |  | ---- | -- | --------------- |  | - | ------ |  |  | - | ------ |  |  |  | -- | -
|              |  | Three Months Ended |        | Nine Months Ended
|              |  | September 30,      |        | September 30,    
|              |  |                    |        |                  
|              |  | 2001               |        | 2002              |  | Fav. (Unfav.) % |        | 2001 |  | 2002 |    | Fav. (Unfav.) %
|              |  |                    |        |                   |  |                 |        |      |  |      |    |                
|              |  |                    |        |                   |  |                 |        |      |  |      |    |                 |  |   |        |  |  |   |        |  |  |  |    |  
|United States |  | $                  | 15,624 |                   |  | $               | 17,304 |      |  |      | 11 | %               |  | $ | 41,949 |  |  | $ | 50,050 |  |  |  | 19 | %
|              |  |                    |        |                   |  |                 |        |      |  |      |    |                 |  |   |        |  |  |   |        |  |  |  |    |  
|Europe        |  |                    | 2,954  |                   |  |                 | 4,290  |      |  |      | 45 | %               |  |   | 8,228  |  |  |   | 11,290 |  |  |  | 37 | %
|              |  |                    |        |                  
|Total         |  | $                  | 18,578 |                   |  | $               | 21,594 |      |  |      | 16 | %               |  | $ | 50,177 |  |  | $ | 61,340 |  |  |  | 22 | %
|              |  |                    |        |                  

The increases in revenue generated in the United States for the three
months and nine months ended September 30, 2002 resulted from increases in
orders, which fueled increased revenue from both the testing and development
and manufacturing segments. Revenue generated in the United States for the
three and nine months ended September 30, 2002 includes an adjustment of
approximately $150,000 relating to long-term contracts.

The increases in revenue generated in Europe for the three months and nine
months ended September 30, 2002 reflect an increase in revenue generated both
in the Corporations U.K. and German facilities. As the German facility
continues to run near capacity, revenue fluctuations in that facility are
primarily attributable to different pricing structures among contracts, and
revenue growth, if any, will likely be modest for the remainder of 2002.

The Corporation expects that testing and development revenue will continue
to increase in the foreseeable future, and it expects that manufacturing
revenue in the U.S. will increase with the Corporations smallpox vaccine and
other commercial contracts in the U.S. manufacturing facility, but there can be
no assurance that any such expectations will prove to be correct. The
Corporation is planning for laboratory expansions that would become available
to meet anticipated growth in the U.S. and Europe over a two-to-three year
period.

11



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Gross Profit by Operating Segment

The following table compares gross profit and gross margin by operational
segment for the three months and nine months ended September 30, 2001 and 2002:

|                        |              |                     |   |       |       |      |   |                    |       |      |  |      |    |                   |   |        |        |               |   |        |        |    |  |    |    |  
|----------------------- | ------------ | ------------------- | - | ----- | ----- | ---- | - | ------------------ | ----- | ---- |  | ---- | -- | ----------------- | - | ------ | ------ | ------------- | - | ------ | ------ | -- |  | -- | -- | -
|                        |              |                     |   |       |       |      |   | Three Months Ended |       |      |  |      |    | Nine Months Ended
|                        |              |                     |   |       |       |      |   | September 30,      |       |      |  |      |    |                   |   |        |        | September 30, |   |        |        |   
|                        |              |                     |   |       |       |     
|                        |              |                     |   | 2001  |       | 2002 |   | Fav. (Unfav.) %    |       | 2001 |  | 2002 |    | Fav. (Unfav.) %  
|                        |              |                     |   |       |       |      |   |                    |       |      |  |      |    |                  
|Testing and Development |              |                     |   |       |       |      |   |                    |       |      |  |      |    |                   |   |        |        |               |   |        |        |    |  |   
|                        | Gross Profit |                     | $ | 7,688 |       |      | $ | 9,717              |       |      |  | 26   | %  |                   | $ | 18,984 |        |               | $ | 26,319 |        |    |  | 39 | % 
|                        | Gross Margin |                     |   | 49    | %     |      |   | 54                 | %     |      |  |      |    |                   |   | 44     | %      |               |   | 51     | %      |    |  |    |   
|                        |              |                     |   |       |       |      |   |                    |       |      |  |      |    |                   |   |        |        |               |   |        |        |    |  |    |    |  
|Manufacturing           |              |                     |   |       |       |      |   |                    |       |      |  |      |    |                   |   |        |        |               |   |        |        |    |  |   
|                        |              | Gross Profit (Loss) |   |       | (307  | )    |   |                    | (213  | )    |  |      | 31 | %                 |   |        | (1,209 | )             |   |        | (62    | )  |  |    | 95 | %
|                        |              | Gross Margin        |   |       | (11   | %)   |   |                    | (6    | %)   |  |      |    |                   |   |        | (16    | %)            |   |        | (1     | %) |  |    |    |  
|                        |              |                     |   |       |       |     
|                        |              |                     |   |       |       |      |   |                    |       |      |  |      |    |                   |   |        |        |               |   |        |        |    |  |    |    |  
|Total                   |              |                     |   |       |       |      |   |                    |       |      |  |      |    |                   |   |        |        |               |   |        |        |    |  |   
|                        |              | Gross Profit        |   | $     | 7,381 |      |   | $                  | 9,504 |      |  |      | 29 | %                 |   | $      | 17,775 |               |   | $      | 26,257 |    |  |    | 48 | %
|                        |              | Gross Margin        |   |       | 40    | %    |   |                    | 44    | %    |  |      |    |                   |   |        | 35     | %             |   |        | 43     | %  |  |    |    |  
|                        |              |                     |   |       |       |     

The increases in testing and development gross margins for the three
months and nine months ended September 30, 2002 were driven by increased gross
profits generated in both the U.S. and the U.K. The increased gross profits
are a result of increased revenue, combined with lower expenses related to
decreased consulting fees, and operating tax credits that pertained largely to
prior periods. These decreased costs were only partially offset by increases
in variable costs relating to labor, direct materials, and subcontracted work.

The improvement in manufacturing gross margins for the three months ended
September 30, 2002 reflects an increase in gross profits from European
manufacturing operations, offset partly by a decrease in U.S. manufacturing
margins. U.S. manufacturing margins decreased because of project delays
resulting from client requests for additional process development.

The improvement in manufacturing gross margins for the nine months ended
September 30, 2002 is due to a significant decrease in the losses generated in
the U.S. as well as an increase in the gross profit from European manufacturing
operations. Increased revenue was partially offset by increases in both
variable and fixed costs.

The Corporation expects future revenue growth to exceed cost increases
related to its U.S. manufacturing facility, thereby improving gross margins.
However, the build-out and validation of this facility has demanded and will
continue to demand considerable time and resources, and there are high fixed
costs related to the facility. The Corporation continues to utilize
substantially less than full capacity in this facility. This facility will
likely constrain earnings for the Corporation at least for the foreseeable
future. Management cannot predict when, if ever, the facility will generate
profits. Without the results of operations of this facility, the Corporations
total gross margins would have been 52% and 49% respectively for the three
months and nine months ended September 30, 2002, as compared to 46% and 43%
respectively, for the three months and nine months ended September 30, 2001.

12



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Gross Profit by Geographic Region

The following table compares gross profit and gross margin by geographic
region for the three months and nine months ended September 30, 2001 and 2002:

|              |              |  |                    |       |                   |  |                 |       |      |  |      |    |                 |  |   |        |   |  |   |        |   |  |  |    |  
|------------- | ------------ |  | ------------------ | ----- | ----------------- |  | --------------- | ----- | ---- |  | ---- | -- | --------------- |  | - | ------ | - |  | - | ------ | - |  |  | -- | -
|              |              |  | Three Months Ended |       | Nine Months Ended
|              |              |  | September 30,      |       | September 30,    
|              |              |  |                    |       |                  
|              |              |  | 2001               |       | 2002              |  | Fav. (Unfav.) % |       | 2001 |  | 2002 |    | Fav. (Unfav.) %
|              |              |  |                    |       |                   |  |                 |       |      |  |      |    |                
|United States |              |  |                    |       |                   |  |                 |       |      |  |      |    |                 |  |   |        |   |  |   |        |   |  |  |   
|              | Gross Profit |  | $                  | 6,060 |                   |  | $               | 7,051 |      |  |      | 16 | %               |  | $ | 13,909 |   |  | $ | 20,046 |   |  |  | 44 | %
|              | Gross Margin |  |                    | 39    | %                 |  |                 | 41    | %    |  |      |    |                 |  |   | 33     | % |  |   | 40     | % |  |  |    |  
|              |              |  |                    |       |                   |  |                 |       |      |  |      |    |                 |  |   |        |   |  |   |        |   |  |  |    |  
|Europe        |              |  |                    |       |                   |  |                 |       |      |  |      |    |                 |  |   |        |   |  |   |        |   |  |  |   
|              | Gross Profit |  |                    | 1,321 |                   |  |                 | 2,453 |      |  |      | 86 | %               |  |   | 3,866  |   |  |   | 6,211  |   |  |  | 61 | %
|              | Gross Margin |  |                    | 45    | %                 |  |                 | 57    | %    |  |      |    |                 |  |   | 47     | % |  |   | 55     | % |  |  |    |  
|              |              |  |                    |       |                  
|              |              |  |                    |       |                   |  |                 |       |      |  |      |    |                 |  |   |        |   |  |   |        |   |  |  |    |  
|Totals        |              |  |                    |       |                   |  |                 |       |      |  |      |    |                 |  |   |        |   |  |   |        |   |  |  |   
|              | Gross Profit |  | $                  | 7,381 |                   |  | $               | 9,504 |      |  |      | 29 | %               |  | $ | 17,775 |   |  | $ | 26,257 |   |  |  | 48 | %
|              | Gross Margin |  |                    | 40    | %                 |  |                 | 44    | %    |  |      |    |                 |  |   | 35     | % |  |   | 43     | % |  |  |    |  
|              |              |  |                    |       |                  

The increase in U.S. gross margins for the nine months ended September 30,
2002 resulted from improved gross profits in the testing and development
segment and reduced losses in the manufacturing segment. The increased gross
profit is a result of increased revenue, combined with lower expenses related
to decreased consulting fees, and operating tax credits that pertained largely
to prior periods. These decreased costs were only partially offset by
increases in variable costs relating to labor, direct materials, and
subcontracted work. The increase in U.S. gross margins for the three months
ended September 30, 2002 reflect increases in U.S. testing and development
margins, partially offset by decreases in U.S. manufacturing margins, resulting
from those factors described above. Without the results of operations of the
U.S. manufacturing facility, U.S. gross margins would have been 50% and 48%
respectively for the three months and nine months ended September 30, 2002, as
compared to 46% and 42% respectively, for the three months and nine months
ended September 30, 2001.

The improvement in European gross margins for the three months and nine
months ended September 30, 2002 is attributable to increased profits in both
the testing and development and manufacturing segments resulting from continued
efficient utilization of capacity, higher revenue, and a more favorable product
mix. European gross margins exceeded U.S. gross margins for the three months
and nine months ended September 30, 2002, largely because U.S. margins are
affected by fixed costs associated with the U.S. manufacturing facility. The
U.S. testing and development segment also includes several units with
historically low margins, which are not part of the U.K. testing and
development business.

The Corporation expects margins in the testing and development segment,
both in the U.S. and Europe, to improve moderately with economies of scale in
the foreseeable future. The rate of improvement is expected to be impacted by
expenditures related to planned additions to capacity beginning in 2003 in
Europe and the U.S.

13



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Operating Expenses

The following table shows a comparison of operating expenses, other than
cost of sales, for the three months and nine months ended September 30, 2001
and 2002:

|                                    |  |                    |       |                   |  |                 |       |      |  |      |    |                 |  |   |        |  |  |   |        |  |  |  |    |   
|----------------------------------- |  | ------------------ | ----- | ----------------- |  | --------------- | ----- | ---- |  | ---- | -- | --------------- |  | - | ------ |  |  | - | ------ |  |  |  | -- | --
|                                    |  | Three Months Ended |       | Nine Months Ended
|                                    |  | September 30,      |       | September 30,    
|                                    |  |                    |       |                  
|                                    |  | 2001               |       | 2002              |  | Fav. (Unfav.) % |       | 2001 |  | 2002 |    | Fav. (Unfav.) %
|                                    |  |                    |       |                   |  |                 |       |      |  |      |    |                
|Selling, General and
Administrative |  | $                  | 3,984 |                   |  | $               | 4,215 |      |  |      | (6 | %)              |  | $ | 11,748 |  |  | $ | 12,736 |  |  |  | (8 | %)
|                                    |  |                    |       |                   |  |                 |       |      |  |      |    |                 |  |   |        |  |  |   |        |  |  |  |    |   
|Research and Development            |  |                    | 284   |                   |  |                 | 225   |      |  |      | 20 | %               |  |   | 1,027  |  |  |   | 681    |  |  |  | 34 | % 
|                                    |  |                    |       |                  
|Total                               |  | $                  | 4,268 |                   |  | $               | 4,440 |      |  |      | (4 | %)              |  | $ | 12,775 |  |  | $ | 13,417 |  |  |  | (5 | %)
|                                    |  |                    |       |                  

Selling, general and administrative expenses increased for the three
months and nine months ended September 30, 2002 primarily due to increases in
professional fees associated with special projects and labor and fringe costs.
These increases were partially offset by a reduction in the Corporations bad
debt expense. Selling, general and administrative expenses are expected to
increase as the Corporation hires additional administrative staff, implements
additional applications for its information systems and makes additional
investments for technical sales support and its marketing infrastructure. As a
percentage of revenue, selling, general and administrative expenses decreased
to 20% and 21% for the three months and nine months ended September 30, 2002
respectively from 21% and 23% for the three months and nine months ended
September 30, 2001, respectively. The decrease can be attributed principally
to increased revenues, continued programs to control expenses, and the
successful integration of past enhancements and expansion in sales, marketing
and information systems.

Research and development expenses represent the investment of internal
resources to develop new methods and tests to support the Corporations
services. The decrease in these expenses is related to a shift in the
Corporations priorities from undertaking long-term research projects to the
development of tests that can be delivered to the clients in a relatively
shorter period. The Corporation expects these expenses to remain near these
levels for the foreseeable future.

14



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##### 



Non-Operating Expenses

The following table shows a comparison of non-operating expenses for the
three months and nine months ended September 30, 2001 and 2002:

|              |                |   |                    |     |                   |   |                 |       |      |  |      |      |                 |   |     |       |   |   |     |       |   |  |    |      |   
|------------- | -------------- | - | ------------------ | --- | ----------------- | - | --------------- | ----- | ---- |  | ---- | ---- | --------------- | - | --- | ----- | - | - | --- | ----- | - |  | -- | ---- | --
|              |                |   | Three Months Ended |     | Nine Months Ended
|              |                |   | September 30,      |     | September 30,    
|              |                |   |                    |     |                  
|              |                |   | 2001               |     | 2002              |   | Fav. (Unfav.) % |       | 2001 |  | 2002 |      | Fav. (Unfav.) %
|              |                |   |                    |     |                   |   |                 |       |      |  |      |      |                
|              |                |   |                    |     |                   |   |                 |       |      |  |      |      |                 |   |     |       |   |   |     |       |   |  |    |      |   
|Other Expense |                | $ | 24                 |     |                   | $ | 65              |       |      |  | (171 | %)   |                 | $ | 240 |       |   | $ | 120 |       |   |  | 50 | %   
|              |                |   |                    |     |                  
|              |                |   |                    |     |                   |   |                 |       |      |  |      |      |                 |   |     |       |   |   |     |       |   |  |    |      |   
|Income Taxes  |                |   |                    |     |                   |   |                 |       |      |  |      |      |                 |   |     |       |   |   |     |       |   |  |    |     
|              | Provision      |   | $                  | 853 |                   |   | $               | 1,825 |      |  |      | (114 | %)              |   | $   | 1,248 |   |   | $   | 4,643 |   |  |    | (272 | %)
|              | Effective Rate |   |                    | 28  | %                 |   |                 | 37    | %    |  |      |      |                 |   |     | 26    | % |   |     | 37    | % |  |    |      |   
|              |                |   |                    |     |                  

The Corporations net other expense improved to $120,000 for the nine
months ended September 30, 2002 compared to $240,000 in the corresponding
period of the previous year. The improvement was primarily due to foreign
currency translation gains and business tax refunds, partially offset by
increased losses on the disposal of fixed assets and increased net interest
expense (income) due to lower interest rates on the Corporations money market
investments. The Corporations net other expense increased to $65,000 for the
three months ended September 30, 2002 compared to $24,000 in the corresponding
period of the previous year. The increase was primarily due to increased net
interest and foreign currency exchange losses resulting from a recent
strengthening of the dollar against the euro.

The increase in the effective tax rate for the three months and nine
months ended September 30, 2002 is the result of the Corporations reversion in
2002 to a tax rate more in line with the Corporations long-term historical
rates. The lower tax rate for the three months and nine months ended September
30, 2001 resulted from the utilization of tax credits and carry forwards in
2001. The Corporation expects tax rates to remain at current levels for the
remainder of 2002 and into the foreseeable future. Since the Corporation has
international operations, its effective tax rate may vary from quarter to
quarter due to changes in the distribution of its pre-tax earnings, among other
factors.

Liquidity and Capital Resources

The Corporation has funded its business through existing cash, cash flows
from operations, long-term bank loans and capital leases. At September 30,
2002, the Corporation had cash and cash equivalents of $35.8 million, compared
to $27.5 million at December 31, 2001.

The Corporation generated cash flows from operations of $12.4 million for
the nine months ended September 30, 2002, compared to $8.2 million for the nine
months ended September 30, 2001. Net income as adjusted for depreciation,
amortization, compensation element of options, loss on disposal and deferred
income taxes, provided $12.6 million and $7.4 million for the nine months ended
September 30, 2002 and 2001, respectively. Changes in other assets and
liabilities used cash of $0.2 million for the nine months ended September 30,
2002, primarily due to increases in other current assets and decreases in accounts
payable and accrued employee compensation and benefits, only partially offset
by increases in other accrued liabilities and customer advances. Changes in
other assets and liabilities provided cash of $0.8 million for the nine months
ended September 30, 2001, primarily due to increases in customer advances and
other accrued liabilities, only partially offset by increases in accounts
receivable.

Foreign currency exchange fluctuations accounted for increases in cash of
$0.9 million for the nine months ended September 30, 2002 as a result of the
euro and the pound sterling both strengthening against the dollar as compared
to $0.1 million for the nine months ended September 30, 2001.

15



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##### 



Working capital, net of a cash increase of $8.3 million, decreased by $0.5
million as a result of an increase in current liabilities of $2.0 million,
partially offset by an increase in current assets, excluding cash. The
increase in current liabilities was primarily due to an increase in other
accrued liabilities, customer advances and deferred income taxes, partially
offset by decreases in accounts payable and accrued employee compensation and
benefits. Current assets increased primarily as a result of an increase in
other current assets.

The Corporation believes that its existing cash and cash equivalents of
$35.8 million at September 30, 2002, cash flows from operations for 2002, and
available borrowings of $2.0 million under its revolving loan agreement will
provide sufficient liquidity to meet the Corporations operating plan, planned
capital expenditures, and interest and principal payments on the Corporations
debt for 2002.

A decrease in demand for the Corporations services could reduce operating
cash flows, which in turn would impact liquidity. The key factors that could
affect the Corporations sources of cash include the following:



| |  |  | the Corporations ability to generate orders for new contracts;                                        
| | - |  | -------------------------------------------------------------------------------------------------------
| |  |  | the ability of the Corporation to utilize its facilities,
particularly the U.S. manufacturing facility;
| |  |  | the size and growth of the overall markets for biopharmaceuticals; and,                                
| |  |  | the economies in the U.S. and Europe.                                                                  

Additionally, a significant deterioration in the Corporations financial
performance and ratios could accelerate the maturity of principal outstanding
under the Corporations loans.

Capital Leases

The Corporations U.S. manufacturing facility in Rockville, Maryland
became operational in the second quarter of 2000. The Corporation leases this
facility under three capital leases that require it to make net noncancelable
lease payments totaling approximately $11.7 million through 2034. The
Corporation has also guaranteed indebtedness related to the construction of
this facility of approximately $4.3 million at September 30, 2002. A portion
of the lease payments is equivalent to the interest and principal due on the
indebtedness.

Under an interest rate swap with respect to one of these capital leases,
the variable interest rate portion of the indebtedness was effectively
converted into debt with a fixed rate of 6.14% per annum. This swap expires on
November 1, 2009. Amounts paid or received under the interest rate swap are
recognized as interest income or expense in the periods in which they accrued
and are recorded in the same category as that arising from the indebtedness.
As a result of a decrease in the variable interest rate, for the three months
and nine months ended September 30, 2002, the Corporation recorded $47,000 and
$144,000, respectively, of additional interest expense related to this interest
rate swap. In accordance with the Statement of Financial Accounting Standard
(FAS) 133, the Corporation adjusted the liability for the change in the fair
value of this swap from $232,000 at December 31, 2001 to $648,000 at September
30, 2002. The corresponding amount is reflected in other comprehensive
expense, as the Corporation has met the criteria of FAS 133 to record the
contract as a cash flow hedge. This hedge will be extinguished with the lease
obligation to which it pertains.

The Corporation accounts for the leases and subleases of its U.S.
manufacturing facility as capital leases. The assets underlying the capital
leases are included with the Corporations owned property and equipment at
September 30, 2002. Property and equipment at September 30, 2002 included
approximately $7.0 million, net of accumulated depreciation and amortization,
related to these capital leases. The related obligation is included in the
Corporations liabilities at September 30, 2002.

16



---



##### 



Capital Expenditures

During the nine months ended September 30, 2002 and 2001, the Corporation
invested $5.0 million and $2.8 million, respectively, for capital expenditures.
These capital expenditures were for additional equipment related to the
Corporations U.S. manufacturing facility, upgrade of its information systems,
and other operating needs including the routine replacement and upgrade of
operating equipment.

Estimated capital expenditures of $1.5 million for the remainder of 2002
include capacity expansions in U.S. biologics testing, U.S. manufacturing and
German manufacturing. The Corporations plans also include additional
investments in information systems, as well as normal replacements.

The Corporation expects to continue expanding its operations through
internal growth, and expansion of capacity in most or all of its operating
facilities. The Corporation expects to fund its growth and its planned capital
expenditures from existing cash and cash flows from operations. In the future,
the Corporation may also undertake additional bank borrowings and leases or other
financing, to the extent that funds are available on favorable terms and
conditions. While the Corporation remains confident that expansion of its
capacity will contribute to growth, there can be no assurance that such
expansion will be fully utilized or that funding for the plans will meet with
the Corporations expectations.

Although the Corporation has no agreements or arrangements in place with
respect to any future acquisition, there may be acquisition or other growth
opportunities that require additional external financing, and the Corporation
may, from time to time, seek to obtain funds from public or private issuances
of equity or debt securities on a strategic basis. There can be no assurances
that such financing will be available on terms acceptable to the Corporation.

Borrowings and Credit Facilities

The Corporation has a mortgage loan of $4.3 million from Bank of America
with a maturity date of November 30, 2009 that was used to finance the
construction of one of its facilities in Rockville, Maryland. In addition to a
principal payment of $10,576 per month, the mortgage loan bears interest at the
London Inter-Bank Offering Rate (LIBOR) plus the applicable LIBOR Rate
Additional Percentage (LIBOR Rate Option). The LIBOR Rate Option ranges from
1.0% to 2.15% depending on the Corporation achieving certain funded debt to
EBITDA ratios. At September 30, 2002, the applicable interest rate on the
mortgage loan was 1.81% and the LIBOR Rate Option was 1.40%. At September 30,
2002, approximately $2.2 million was outstanding on the mortgage loan.

Under an interest rate swap, the variable interest rate portion of the
mortgage loan was effectively converted into debt with a fixed rate of 6.14%
per annum. This swap expires November 1, 2009. Amounts paid or received under
the interest rate swap are recognized as interest income or expensed in the
periods in which they accrued and are recorded in the same category as that
arising from the mortgage loan. As a result of a decrease in the variable
interest rate, for the three months and nine months ended September 30, 2002,
the Corporation recorded $24,000 and $73,000, respectively, of additional
interest expense related to the interest rate swap. In accordance with FAS
133, the Corporation adjusted the liability for the change in the fair value of
this swap from $116,000 at December 31, 2001 to $305,000 at September 30, 2002.
The corresponding amount is reflected in other comprehensive expense, as the
Corporation has met the criteria of FAS 133 to record the contract as a cash
flow hedge. This hedge will be extinguished with the mortgage loan to which it
pertains.

The Corporation has available borrowings up to $2.0 million under a
revolving loan agreement with Bank of America. The revolving loan agreement
requires monthly interest payments on the unpaid

17



---



##### 



principal. The unpaid principal and all unpaid accrued interest is
payable in full on May 31, 2003, and the line of credit expires at that time.
Amounts borrowed under the revolving loan agreement bear interest at the LIBOR
rate plus the applicable LIBOR Rate Option that ranges from 0.85% to 2.0%
depending on the Corporation achieving certain funded debt to EBITDA ratios.
During the first nine months of 2002, no amounts were borrowed under this
revolving loan agreement.

All of the Corporations agreements with Bank of America are cross
collateralized and are secured by a deed of trust on one of the Corporations
laboratory facilities in Rockville, Maryland. The agreements require the
Corporation to comply with financial and restrictive covenants, including fixed
charge coverage and funded debt to EBITDA ratios. Specifically:



| |  |  | Maintain a ratio of total funded indebtedness to EBITDA not
greater than 3.50 to 1.00 as of the end of each fiscal quarter,
calculated on the preceding four-quarter period. EBITDA is defined
as earnings before interest, taxes, depreciation and amortization.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Maintain a fixed charge coverage ratio as of the end of each
quarter of at least 1.25 to 1.00. This ratio is determined by
dividing EBITDA by the sum of interest expense and
current-maturities of long-term debt and capital leases.                           

At September 30, 2002, the Corporation was in compliance with all
covenants under its loan agreements.

The Corporation has a $3.0 million loan from the Department of Business
and Economic Development, a department of the State of Maryland. The
Corporation was required to use the proceeds to expand and relocate its
activities in Rockville, Maryland. The loan requires quarterly principal
payments of $107,143 plus accrued interest and matures on June 30, 2006. The
loan bears interest at rates from 0.0% to 7.5% based on the Corporations
achieving specific employment levels through 2005. The current interest rate
is 0.0%. The terms of the loan contain annual reporting requirements,
including the reporting of employment data. At September 30, 2002,
approximately $1.6 million was outstanding on the loan.

Foreign Currency

The accounts of the Corporations international subsidiaries are measured
using local currency as the functional currency. Assets and liabilities of
these subsidiaries are translated into United States dollars at period-end
exchange rates, and revenue and expense accounts are translated at average
monthly exchange rates. Net exchange gains and losses resulting from these
translations are excluded from net income and are accumulated in a separate
component of stockholders equity. Translation gains and losses that arise
from some intercompany transactions denominated in a currency other than the
functional currency are included in the results of operations as incurred. The
Corporation recorded net exchange gains of $0.1 million and $0.3 million for
the three months ended September 30, 2002 and 2001 respectively. The
Corporation recorded net exchange gains of $0.7 million for the nine months
ended September 30, 2002 compared to minimal net exchange losses for the nine
months ended September 30, 2001.

Since the revenues and expenses of the Corporations international
operations generally are denominated in local currencies, exchange rate
fluctuations between such local currencies and the United States dollar will
subject the Corporation to currency translation risk with respect to the
reported results of its international operations as well as to other risks
sometimes associated with international operations. The Corporation derived
20% and 16% of its revenue for the three months ended September 30, 2002 and
2001, respectively, and 18% and 16% of its revenue for the nine months ended
September 30, 2002 and September 30, 2001, respectively, from services
performed in the United Kingdom and Germany. In addition, the Corporation may
be subject to currency risk when the Corporations service

18



---



##### 



contracts are denominated in a currency other than the currency in which
the Corporation incurs expenses related to such contracts.

The Corporation may experience fluctuations in financial results from the
Corporations operations outside the United States, and the Corporation may not
be able, contractually or otherwise, to reduce the currency risks associated
with its operations. At the present time, the Corporation does not use
derivative financial instruments to manage or control foreign currency risk
because most of its revenue and related expenses are in the same functional
currencies. While the Corporation may use such financial instruments in the
future, these financial instruments may not be successful in managing or
controlling foreign currency risk.

European Monetary Union

Within Europe, the European Economic and Monetary Union (the EMU)
introduced a new currency, the euro, on January 1, 1999. The new currency is
in response to the EMUs policy of economic convergence to harmonize trade
policy, eliminate business costs associated with currency exchange and to
promote the free flow of capital, goods and services.

On January 1, 1999, the participating countries adopted the euro as their
local currency, initially available for currency trading on currency exchanges
and non-cash (banking) transactions. As of July 1, 2002, the participating
countries were scheduled to withdraw all legacy currency and use the euro
exclusively. The introduction of the euro has not had a material adverse
effect on the Corporation, and the Corporation does not anticipate any material
adverse effects as a result of the euro conversion. However, unforeseen
legislation, changes in commercial cross-border practices or a significant
devaluation of the euro could have an adverse effect on the future results of
operations and financial position of the Corporation.

19



---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Corporation is exposed to market risk from adverse changes in interest
rates and foreign currency exchange rates.

Interest Rate Risks

The Corporation is exposed to interest rate risk primarily through its
investments in cash equivalents. The Corporations investment policy stipulates
investment in short-term, low-risk instruments. At September 30, 2002, had
$35.8 million in cash and cash equivalents. If interest rates fall, floating
rate securities may generate less interest income. The Corporation does not
believe that it is exposed to any material interest rate risk as a result of
its investments in cash equivalents.

At September 30, 2002, the Corporation had total debt of $11.8 million,
most of which bears interest at a fixed interest rate. Thus, the Corporation
does not believe that it is exposed to any material interest rate risk as a
result of borrowing activities.

Foreign Currency Exchange Risk

The Corporations international operations are subject to foreign exchange
rate fluctuations. The Corporation derived 20% and 18% of its revenue for the
three months and nine months ended September 30, 2002, respectively, from
services performed in the United Kingdom and Germany. The Corporation does not
hedge its foreign currency exposure. Management does not believe that the
Corporations exposure to foreign currency rate fluctuations is material. See
Foreign Currency in Managements Discussion and Analysis of Financial
Condition and Results of Operation for a more detailed discussion of our
foreign currency risks and exposures.

20



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##### 



Item 4. Controls and Procedures

Within 90 days prior to the filing date of this Quarterly Report on Form
10-Q, the Corporations management, including its Chief Executive Officer and
Chief Financial Officer, evaluated the effectiveness of the Corporations
design and operation of its disclosure controls and procedures pursuant to Rule
13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934. Based upon
that evaluation, such officers concluded that the Corporations disclosure
controls and procedures are effective in timely alerting them to material
information relating to the Corporation, required to be included in this
Quarterly Report on Form 10-Q.

The Corporations management has also evaluated the Corporations internal
controls and there have been no significant changes in the Corporations
internal controls or in other factors, which could significantly affect
internal controls subsequent to the date that the Corporation carried out its
evaluation.

21



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##### 



PART II  OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 2. Changes in Securities and Use of Proceeds

As of September 30, 2002, the Corporation had used approximately $19.5
million of the net proceeds from its initial public offering toward planning
and construction for manufacturing expansion, purchases of laboratory equipment
and information systems hardware and software, and debt repayments.

At September 30, 2002, approximately $12.7 million of the net proceeds of
the initial public offering were invested in money market funds.

Item 3. Defaults upon Senior Securities

None

Item 4. Submission of Matters to Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits

|     |  |                                                                             
|---- |  | ----------------------------------------------------------------------------
|10.1 |  | Employment Agreement  Ronald R. Baker                                      
|     |  |                                                                             
|10.2 |  | Employment Agreement  John L. Coker                                        
|     |  |                                                                             
|10.3 |  | Employment Agreement  Raymond F. Cosgrove, Ph.D.                           
|     |  |                                                                             
|10.4 |  | Employment Agreement  Allan J. Darling, Ph.D.                              
|     |  |                                                                             
|10.5 |  | Employment Agreement  David Jacobson-Kram, Ph.D.                           
|     |  |                                                                             
|10.6 |  | Employment Agreement  Capers W. McDonald                                   
|     |  |                                                                             
|10.7 |  | Form of Employee Confidentiality, Trade Secrets
and Noncompetition Agreement
|     |  |                                                                             
|99.1 |  | Officer Certification of Chief Executive Officer                            
|     |  |                                                                             
|99.2 |  | Officer Certification of Chief Financial Officer                            

(b)  Reports on Form 8-K

None

22



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##### 



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Dated: November 14, 2002

| |  |  |  |                                                                                                                                                        
| |  |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  |  | BioReliance Corporation
      (Registrant)                                                                                                             
|
|
| |  |  |  | By /s/ Capers W. McDonald                                                                                                                              
| |  |  |  | Capers W. McDonald
President and Chief Executive Officer                                                                                               
|
|
| |  |  |  | By   /s/ John L. Coker                                                                                                                                 
| |  |  |  | John L. Coker
Vice President, Finance and Administration, Chief
Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)

23



---



##### 



BIORELIANCE CORPORATION

CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Capers W. McDonald, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of BioReliance
Corporation;                                                                                                                                                                                                                                           
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;              
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                 

|   |  |                                                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
|   |  |                                                                                                                                                                                                                                                                                                
|b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|   |  |                                                                                                                                                                                                                                                                                                
|c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |  |                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
|   |  |                                                                                                                                                                                                                                                                                               
|b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 14, 2002

___/s/ Capers W. McDonald

Capers W. McDonald
President and Chief Executive Officer

24



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##### 



BIORELIANCE CORPORATION

CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, John L. Coker, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of BioReliance
Corporation;                                                                                                                                                                                                                                           
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;              
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                 

|   |  |                                                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
|   |  |                                                                                                                                                                                                                                                                                                
|b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|   |  |                                                                                                                                                                                                                                                                                                
|c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |  |                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
|   |  |                                                                                                                                                                                                                                                                                               
|b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 14, 2002

/s/ John L. Coker

John L. Coker
Vice President, Finance and Administration
and Chief Financial Officer

25



---



##### 



EXHIBIT INDEX

|            |  |                                                                              |  |  |  | 
|----------- |  | ---------------------------------------------------------------------------- |  |  |  | 
|EXHIBIT NO. |  | DESCRIPTION                                                                  |  |  |  | 
|            |  |                                                                              |  |  |  | 
|10.1        |  | Employment Agreement  Ronald R. Baker                                      
|           
|10.2        |  | Employment Agreement  John L. Coker                                        
|           
|10.3        |  | Employment Agreement  Raymond F. Cosgrove, Ph.D.                           
|           
|10.4        |  | Employment Agreement  Allan J. Darling, Ph.D.                              
|           
|10.5        |  | Employment Agreement  David Jacobson-Kram, Ph.D.                           
|           
|10.6        |  | Employment Agreement  Capers W. McDonald                                   
|           
|10.7        |  | Form of Employee Confidentiality, Trade Secrets and Noncompetition Agreement
|           
|99.1        |  | Officer Certification of Chief Executive Officer                            
|           
|99.2        |  | Officer Certification of Chief Financial Officer                            

26