SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
December 3, 1997 (December 2, 1997)
Date of Report (Date of earliest event reported)
Quest Diagnostics Incorporated
(formerly known as Corning Clinical Laboratories Inc.)
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-12215 16-1387862
(Commission File Number) (IRS Employer Identification No.)
One Malcolm Avenue, Teterboro, NJ 07608
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (201) 393-5000
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Item 5. Other Events.
The information contained in Exhibit 20 hereto is incorporated herein
by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit Number Description
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20 The Registrant's press release
dated December 2, 1997
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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 hereunto duly authorized.
December 3, 1997
Quest Diagnostics Incorporated
By /s/ Robert A. Carothers Vice President and
------------------------ Chief Financial Officer
Robert A. Carothers
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EXHIBIT 20
QUEST DIAGNOSTICS TO CONSOLIDATE NETWORK OF CLINICAL LABORATORIES
TETERBORO, N.J., DECEMBER 2, 1997--Quest Diagnostics Incorporated (NYSE: DGX)
today announced a series of actions aimed at reducing excess capacity in its
network of clinical laboratories and improving its cost structure. The actions
reflect the need to better match lab capacity and staffing levels with business
conditions.
Quest Diagnostics will convert its Regional Laboratories in Atlanta and Tampa to
Local Customer Centers with rapid-turnaround (STAT) laboratories for
time-sensitive testing. Most of the testing currently performed in Atlanta and
Tampa will be transferred to laboratories located elsewhere in its national
network. In addition, Quest Diagnostics said it would significantly reduce the
size of its Regional Laboratory in St. Louis and several smaller branch
laboratories in other regions.
Client service will remain paramount throughout the Quest Diagnostics network
during the transition. Quest Diagnostics will continue to provide patients
served by its physician, hospital, managed care and employer clients with high
quality, reliable lab service through the Regional Laboratory in St. Louis and,
in Atlanta and Tampa, through Local Customer Centers with sales representatives,
STAT testing capability, couriers and phlebotomists.
"Given the overcapacity that characterizes our industry, reducing the size of
these facilities was a difficult but necessary decision," said Kenneth W.
Freeman, chairman and chief executive officer. "To improve our competitive
position and effectiveness in the rapidly changing health care marketplace, we
are accelerating our efforts to reduce our lab capacity and improve our overall
efficiency and profitability."
The charges to earnings associated with the consolidation are expected to total
from $60 million to $70 million on a pre-tax basis and from $43 million to $49
million, or $1.46 to $1.67 per share, after taxes. The vast majority of these
charges will be recognized in the fourth quarter of 1997, ending December 31.
The charges primarily cover severance costs and the write-down of assets in
Atlanta, St. Louis and Tampa, as well as consolidation costs in several other
locations. Over the next 12 months, these actions will result in a net workforce
reduction of approximately 1,000 positions, or approximately 6% of the total
workforce. Affected employees will be offered severance benefits, including
counseling services and outplacement assistance.
The total cash outlay associated with these charges, the majority of which will
occur in 1998, is expected to be approximately $40 million before taxes. The
benefits of these actions will begin to be realized in 1998; by the beginning of
1999, when the programs are fully implemented, annual benefits are expected to
be in excess of $20 million before taxes.
Quest Diagnostics Incorporated is one of the nation's leading providers of
diagnostic testing, information and services with laboratories across the United
States. The wide variety of tests performed on human tissue and fluids help
doctors and hospitals diagnose,
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treat and monitor disease. Its Nichols Institute unit conducts research;
specializes in esoteric testing using genetic screening and other advanced
technologies; and manufactures and distributes diagnostic test kits and
instruments. Formerly known as Corning Clinical Laboratories Inc., Quest
Diagnostics was spun off to Corning Incorporated stockholders in a tax-free
distribution of shares on December 31, 1996.
The statements in this press release which are not historical facts or
information are forward-looking statements. These forward-looking statements
involve risks and uncertainties that could cause the outcome to be materially
different. Certain of these risks and uncertainties are listed in the Quest
Diagnostics Incorporated 1996 Form 10-K and subsequent filings.
