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Letter from the CFO

Dear Expectant Parents,

Cord blood banking is one of the most exciting and important investments your family will make, so it’s important to Cord Blood Registry (CBR) that you feel confident you’ve chosen the right partner for your banking needs.

For more than a decade, families have entrusted their cord blood stem cells to us. More expectant parents are choosing to bank with CBR than any other family bank in the world. By 2008, we anticipate that nearly a quarter of a million newborns will be banked with CBR.

Our financial success has also been well-established for the last several years. Since 1995, we’ve seen steady and predictable annual revenue growth, and every year since 1999 we’ve achieved positive cash flow from operations. Today, we’re the largest family cord blood bank with market share 40 percent higher than our next largest competitor. We also have strong cash and investment reserves totaling more than $20 million, and we have no outstanding debt on our books.

I believe there are several factors that have contributed to the success of our company and will continue to do so going forward. First, we’ve invested in superior technology and a state-of-the-art processing and storage facility that is unparalleled in the industry. To maintain our competitive advantage and continue delivering the best possible banking experience, we regularly reinvest our profits into further advancing the stem cell storage and collection process. These investments have paid off for our clients – our patented CellAdvantage™ system delivers the highest published stem cell recovery rate in the industry, which means we’re able to store more cells for families.

While our business has expanded over the past several years, we’ve always maintained a persistent focus on the quality of our operations to ensure we’re delivering the best possible product and client experience. I believe this is a primary reason why we have a 95 percent client satisfaction rate, and why Ob-Gyns recommend CBR more than any other cord blood bank.

No other family cord blood bank comes close to equaling our successful track record. With significant cash reserves and financial backing from institutions managing over $10 billion in assets, we will be here to protect your family’s cord blood stem cells, now and in the future.

I’m proud to be a part of a strong company involved in one of the most exciting medical advancements of our time. Along with the rest of the CBR leadership team, I appreciate the trust placed in us by our clients and business partners, and commit to you that we’ll maintain that trust, now and in the future.

Please feel free to contact me with any questions you may have about CBR. Thank you for expressing interest in our business, and best wishes for the future.

Sincerely,
Johnnie Domingue
Chief Operating Officer and Chief Financial Officer