UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 31, 1999
-----------------------------------
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 1-11353
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LABORATORY CORPORATION OF AMERICA HOLDINGS
- ------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3757370
- ------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
358 South Main Street, Burlington, North Carolina 27215
- ------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(336) 229-1127
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(Registrant's telephone number, including area code)
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 ___
The number of shares outstanding of the issuer's common stock is
126,254,500 shares as of April 30, 1999, of which 61,329,256
shares are held by indirect wholly owned subsidiaries of Roche
Holding Ltd.
The number of warrants outstanding to purchase shares of the
issuer's common stock is 22,151,308 as of April 30, 1999, of which
8,325,000 are held by an indirect wholly owned subsidiary of Roche
Holding Ltd.
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<TABLE>
LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<CAPTION>
March 31, December 31,
1999 1998
---------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 16.3 $ 22.7
Accounts receivable, net 383.6 375.4
Inventories 30.4 30.7
Prepaid expenses and other 15.8 12.3
Deferred income taxes 79.5 78.0
-------- --------
Total current assets 525.6 519.1
Property, plant and equipment, net 260.5 259.1
Intangible assets, net 827.4 836.2
Other assets, net 24.9 26.5
-------- --------
$1,638.4 $1,640.9
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 43.4 $ 50.2
Accrued expenses and other 139.2 128.7
Current portion of long-term debt 83.3 72.5
-------- --------
Total current liabilities 265.9 251.4
Long-term debt, less current portion 548.9 571.3
Capital lease obligations 3.8 4.2
Other liabilities 128.4 132.8
Commitments and contingent liabilities -- --
Mandatorily redeemable preferred stock
(30,000,000 shares authorized):
Series A 8 1/2% Convertible
Exchangeable Preferred Stock,
$0.10 par value, 4,363,178 shares
issued and outstanding at
March 31, 1999 and December 31, 1998
(aggregate preference value of
$218.2 at March 31, 1999 and
December 31, 1998) 213.1 213.0
Series B 8 1/2% Convertible Pay-in-Kind
Preferred Stock, $0.10 par value,
6,545,752 and 6,409,548 shares issued
and outstanding at March 31, 1999 and
December 31, 1998, respectively
(aggregate preference value of
$327.3 and $320.5, respectively) 320.2 313.8
Shareholders' equity:
Common stock, $0.01 par value;
520,000,000 shares authorized;
126,254,500 and 125,280,346
shares issued and outstanding
at March 31, 1999 and
December 31, 1998, respectively 1.2 1.2
Additional paid-in capital 417.0 415.7
Accumulated deficit (257.6) (260.5)
Accumulated other comprehensive income (2.5) (2.0)
-------- --------
Total shareholders' equity 158.1 154.4
-------- --------
$1,638.4 $1,640.9
======== ========
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
</TABLE>
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<TABLE>
LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<CAPTION>
Three Months Ended
March 31,
---------------------
1999 1998
--------- --------
<S> <C> <C>
Net sales $ 417.9 $ 387.7
Cost of sales 266.5 255.7
-------- --------
Gross profit 151.4 132.0
Selling, general and
administrative expenses 109.1 95.0
Amortization of intangibles
and other assets 7.9 7.6
-------- --------
Operating income 34.4 29.4
Other income (expenses):
Gain (loss) on sale of assets (1.2) 2.0
Investment income 0.1 0.3
Interest expense (10.5) (12.9)
-------- --------
Earnings before income taxes 22.8 18.8
Provision for income taxes 8.7 9.5
-------- --------
Net income 14.1 9.3
Less preferred stock dividends (11.0) (11.0)
Less accretion of mandatorily redeemable
preferred stock (0.2) (0.2)
-------- --------
Net income (loss) attributable to
common shareholders $ 2.9 $ (1.9)
======== ========
Basic and diluted income (loss)
per common share $ 0.02 $ (0.01)
========= ========
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
</TABLE>
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<TABLE>
LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<CAPTION>
Three Months Ended
March 31,
-------------------
1999 1998
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 14.1 $ 9.3
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 21.2 21.3
Net (gains) losses on sale of assets 1.2 (2.0)
Deferred income taxes (4.0) 1.5
Change in assets and liabilities:
Net decrease in restructuring reserves (1.3) (2.1)
Increase in accounts receivable, net (8.2) (13.3)
Decrease in inventories 0.3 5.6
Increase in prepaid
expenses and other (3.0) (1.5)
Change in income taxes receivable -- 6.3
Increase (decrease) in accounts payable (6.8) 3.9
Increase (decrease) in accrued
expenses and other 11.6 (1.1)
Other, net -- 0.5
------ ------
Net cash provided by operating activities 25.1 28.4
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (15.5) (17.1)
Proceeds from sale of assets 0.1 11.0
Refund of lease guaranty -- 8.0
------ ------
Net cash provided by (used for) investing
activities (15.4) 1.9
------ ------
(continued)
</TABLE>
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<TABLE>
LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<CAPTION>
Three Months Ended
March 31,
-------------------
1999 1998
------- -------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on revolving credit
facilities $ -- $ (30.0)
Payments on long-term debt (11.6) --
Payments on long-term lease obligation (0.4) (0.5)
Deferred payments on acquisitions (0.8) (1.4)
Payment of preferred stock dividends (4.6) (4.6)
Net proceeds from issuance of stock to
employee stock plan 1.3 1.6
------ ------
Net cash used for financing activities (16.1) (34.9)
------ ------
Net decrease in cash and cash equivalents (6.4) (4.6)
Cash and cash equivalents at
beginning of period 22.7 23.3
------ ------
Cash and cash equivalents at
end of period $ 16.3 $ 18.7
====== ======
Supplemental schedule of cash
flow information:
Cash paid during the period
for:
Interest $(13.3) $(10.3)
Income taxes, net of refunds (3.4) (2.4)
Disclosure of non-cash financing
and investing activities:
Preferred stock dividends 6.4 6.4
Accretion of mandatorily redeemable
preferred stock 0.2 0.2
Unrealized loss on securities available-
for-sale (net of tax) (0.5) --
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
</TABLE>
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<TABLE>
LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<CAPTION>
Additional
Common Paid-in Accumulated
Stock Capital Deficit
------- ----------- ------------
<S> <C> <C> <C>
PERIOD ENDED MARCH 31, 1998
Balance at beginning of year $ 1.2 $ 412.8 $ (284.9)
Comprehensive income:
Net income -- -- 9.3
------ ------ -------
Comprehensive income -- -- 9.3
Issuance of common stock -- 1.6 --
Preferred stock dividends -- -- (11.0)
Accretion of mandatorily
redeemable preferred stock -- -- (0.2)
------ ------ -------
BALANCE AT MARCH 31, 1998 $ 1.2 $ 414.4 $ (286.8)
====== ====== =======
PERIOD ENDED MARCH 31, 1999
Balance at beginning of year $ 1.2 $ 415.7 $ (260.5)
Comprehensive income:
Net income -- -- 14.1
Other comprehensive income:
Unrealized loss on securities,
net of tax -- -- --
------ ------ -------
Comprehensive income -- -- 14.1
Issuance of common stock -- 1.3 --
Preferred stock dividends -- -- (11.0)
Accretion of mandatorily
redeemable preferred stock -- -- (0.2)
------ ------ -------
BALANCE AT MARCH 31, 1999 $ 1.2 $ 417.0 $ (257.6)
====== ====== =======
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<CAPTION>
Accumulated
Other Total
Comprehensive Shareholders'
Income Equity
------------- --------------
<S> <C> <C>
PERIOD ENDED MARCH 31, 1998
Balance at beginning of year $ -- $ 129.1
Comprehensive income:
Net income -- 9.3
------- --------
Comprehensive income -- 9.3
Issuance of common stock -- 1.6
Preferred stock dividends -- (11.0)
Accretion of mandatorily
redeemable preferred stock -- (0.2)
------- --------
BALANCE AT MARCH 31, 1998 $ -- $ 128.8
======= ========
PERIOD ENDED MARCH 31, 1999
Balance at beginning of year $ (2.0) $ 154.4
Comprehensive income:
Net income -- 14.1
Other comprehensive income:
Unrealized loss on securities,
net of tax (0.5) (0.5)
------- --------
Comprehensive income (0.5) 13.6
Issuance of common stock -- 1.3
Preferred stock dividends -- (11.0)
Accretion of mandatorily
redeemable preferred stock -- (0.2)
------- --------
BALANCE AT MARCH 31, 1999 $ (2.5) $ 158.1
======= ========
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
</TABLE>
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LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
1. BASIS OF FINANCIAL STATEMENT PRESENTATION
The condensed consolidated financial statements include the
accounts of Laboratory Corporation of America Holdings and its
wholly owned subsidiaries (the "Company") after elimination of all
material intercompany accounts and transactions.
The accompanying condensed consolidated financial statements
of the Company are unaudited. In the opinion of management, all
adjustments (which include only normal recurring accruals)
necessary for a fair presentation of such financial statements
have been included. Interim results are not necessarily
indicative of results for a full year.
The financial statements and notes are presented in
accordance with the rules and regulations of the Securities and
Exchange Commission and do not contain certain information
included in the Company's annual report. Therefore, the interim
statements should be read in conjunction with the consolidated
financial statements and notes thereto contained in the Company's
annual report.
2. RECLASSIFICATIONS
In 1999, the Company reclassified $14.7 for the quarter ended
March 31, 1998 to selling, general and administrative expenses
from net sales adjustments to be consistent with the 1999
classification. The reclassification had no effect on operating
income.
3. EARNINGS PER SHARE
Basic and diluted earnings (loss) per share are based upon
the weighted average number of shares outstanding during the three
months ended March 31, 1999 and 1998 of 126,139,466 shares and
124,397,655 shares, respectively.
The effect of conversion of the Company's redeemable
preferred stock, or exercise of the Company's stock options or
warrants was not included in the computation of diluted earnings
per common share as it would have been anti-dilutive for all
applicable periods presented.
4. RESTRUCTURING CHARGES
The following represents the Company's restructuring
activities for the period indicated:
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LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Asset Lease and
Severance revaluations other facility
costs and write-offs obligations Total
--------- -------------- -------------- ------
Balance at
December 31, 1998 $ 2.5 $ 3.5 $ 27.0 $ 33.0
Cash payments (0.2) -- (1.1) (1.3)
------ ------ ------ ------
Balance at
March 31, 1999 $ 2.3 $ 3.5 $ 25.9 $ 31.7
====== ====== ====== ======
Current $ 16.6
Non-current 15.1
------
$ 31.7
======
5. ACCUMULATED OTHER COMPREHENSIVE INCOME
At March 31, 1999, the Company recorded an unrealized loss on its
shares of Universal Standard Healthcare, Inc. of $0.5, net of related
deferred tax benefit of $0.3.
6. INTEREST RATE SWAP
The existing rate collar transaction and swap have effectively
changed the interest exposure on $500.0 of floating rate debt to a
weighted average fixed interest rate of 6.04%. The notional amounts
of the agreements are used to measure interest to be paid or received
and do not represent the amount of exposure to credit loss.
7. COMMITMENTS AND CONTINGENCIES
The Company is involved in litigation which purports to be a class
action brought on behalf of certain patients, private insurers and
benefit plans that paid for laboratory testing services during the
time frame covered by the 1996 Government Settlement. The Company has
also received certain similar claims brought on behalf of certain other
insurance companies, some of which have been resolved for immaterial
amounts. These claims for private reimbursement are similar to the
government claims settled in 1996. However, no amount of damages has
been specified at this time and, with the exception of the above, no
settlement discussions have taken place. The Company is carefully
evaluating these claims, however, due to the early stage of the claims,
the ultimate outcome of these claims cannot presently be predicted.
The Company is also involved in certain claims and legal
actions arising in the ordinary course of business. These matters
include, but are not limited to, inquiries from governmental
agencies and Medicare or Medicaid carriers requesting comment on
allegations of billing irregularities that are brought to their
attention through billing audits or third parties. In the opinion
of management, based upon the advice of counsel and consideration
of all facts available at this
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LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
time, the ultimate disposition of these matters will not have a
material adverse effect on the financial position, results of
operations or liquidity of the Company.
8. NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging
Activities," was issued. This Statement is effective for fiscal
years beginning after June 15, 1999, and standardizes the
accounting for derivative instruments by requiring that an entity
recognize those items as assets or liabilities and measure them at
fair value. Adoption is not expected to have a material impact on
the Company's financial position or results of operations.
OVERVIEW
- --------
This quarterly report on Form 10-Q contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. In addition, from time to time, the Company
or its representatives have made or may make forward-looking
statements, orally or in writing. Such forward-looking statements
may be included in, but are not limited to, various filings made by
the Company with the Securities and Exchange Commission, press
releases or oral statements made by or with the approval of an
authorized executive officer of the Company. Actual results could
differ materially from those projected or suggested in any forward-
looking statements as a result of a wide variety of factors and
conditions, which have been described in the section of the Company's
Annual Report on Form 10-K for the year ended December 31, 1998,
entitled, "Cautionary Statement for Purposes of the `Safe Harbor'
Provisions of the Private Securities Litigation Reform Act of 1995"
and other documents the Company files from time to time with the
Securities and Exchange Commission including the Company's quarterly
reports on Form 10-Q and current reports on Form 8-K, and shareholders
are specifically referred to these documents with regard to factors
and conditions that may affect future results.
RESULTS OF OPERATIONS
- ---------------------
THREE MONTHS ENDED MARCH 31, 1999 COMPARED WITH THREE MONTHS ENDED
MARCH 31, 1998.
Net sales for the three months ended March 31, 1999 were $417.9,
an increase of approximately 7.8% from $387.7 for the comparable 1998
period. The sales increase is a result of a 4.4% increase in price and
a 3.4% increase in testing volume resulting from continued
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LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
momentum achieved by appropriate pricing and focusing on growing
the base business as well as growing the specialized testing
businesses (such as genotyping and phenotyping, which is
critically important for the treatment of HIV/AIDS patients).
Sales for the first quarter of 1999 were impacted by 2.8% by the
three acquisitions made in 1998 (Universal Standard Healthcare,
Inc., Medlab and Coastal Medical).
Cost of sales, which includes primarily laboratory and
distribution costs, was $266.5 for the three months ended March
31, 1999 compared to $255.7 in the corresponding 1998 period, an
increase of $10.8. Cost of sales increased $8.5 due to the
increase in volume, $5.5 due to an increase in salaries and
benefits and $2.3 primarily relating to testing supplies and
consulting fees. These increases were partially offset by
decreases totaling $5.3 in telephone, insurance, depreciation and
freight expenses. Cost of sales as a percentage of net sales was
63.8% for the three months ended March 31, 1999 and 66.0% in the
corresponding 1998 period. The decrease in the cost of sales
percentage of net sales primarily resulted from the Company's
continued cost reduction efforts.
Selling, general and administrative expenses increased to
$109.1 for the three months ended March 31, 1999 from $95.0 in the
same period in 1998. The primary reason for the increase is due
to an increase to bad debt expense. Bad debt expense increased
$10.9 as a result of delays in payments from several large managed
care and hospital payors in certain regions of the country. See
"Liquidity and Capital Resources." As a percentage of net sales,
selling, general and administrative expenses were 26.1% and 24.5%
for the three months ended March 31, 1999 and 1998, respectively.
The increase in the selling, general and administrative percentage
primarily resulted from the bad debt increase as noted above as
well as slight increases in marketing and consulting fees.
The amortization of intangibles and other assets was $7.9 and
$7.6 for the three months ended March 31, 1999 and 1998,
respectively.
Net interest expense was $10.4 for the three months ended
March 31, 1999 compared with $12.6 for the same period in
1998. As previously discussed, the interest rate that the Company
pays on its debt is linked to the Company's financial performance.
As of September 30, 1998, the interest rate that the Company pays
on its long term debt has been reduced from LIBOR plus 1.0% to
LIBOR plus 0.5%. This decrease, along with the reduction of
outstanding indebtedness and the general decline in interest rates
over the past year, has reduced the Company's interest by $2.2.
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LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
The provision for income taxes as a percentage of earnings
before taxes was 38.2% for the three months ended March 31, 1999
compared to 50.5% for the three months ended March 31, 1998.
During the three months ended March 31, 1999, the Company
reduced its valuation allowance applied against its deferred tax
assets by $2.5, thereby reducing its provision for income taxes
as a percentage of earnings before taxes.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net cash provided by operating activities was $25.1 and $28.4
for the three months ended March 31, 1999 and March 31, 1998,
respectively. The decrease in cash flow from operations primarily
resulted from a decrease in accounts payable, changes in income
taxes, an increase in inventories, and an increase in accounts
receivable, partially offset by improved earnings and an increase
in accrued expenses. Capital expenditures were $15.5 and $17.1
for the first three months of 1999 and 1998, respectively.
The Company made a scheduled loan payment of $11.6 on its
Amended Term Loan Facility on March 31, 1999 and in addition, the
Company made a special payment on its Amended Term Loan Facility
on April 15, 1999 of $25.3, based on a contractual formula
contained in the Amended Credit Agreement.
The Company's days sales outstanding (DSO) at March 31, 1999 was
83 days, level with the end of the year 1998. The Company is focusing
on reducing its DSO through the conversion of the entire Company to a
single, centralized billing system. The Company expects to be fully
converted to the new billing system by the end of the year 2000.
For a discussion of legal proceedings which may impact the
Company's liquidity and capital resources see "Note 7 to the
Company's Unaudited Condensed Consolidated Financial Statements".
Cash and cash equivalents on hand, cash flows from operations and
additional borrowing capabilities under the Amended Revolving Credit
Facility are expected to be sufficient to meet anticipated operating
requirements and provide funds for capital expenditures, potential
acquisitions and working capital for the foreseeable future.
YEAR 2000 UPDATE
- ----------------
During the first quarter of 1999, the Company has spent
approximately $1.5 specifically related to the Year 2000 project
and estimates an additional $20.0 of Year 2000 expenditures during
1999. The Company is in the remediation phase of its Year 2000
project work plan and is on schedule with all major components of
that plan.
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LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See "Note 7 to the Company's Unaudited
Condensed Consolidated Financial Statements"
for the three months ended March 31, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(electronically filed version only).
(b) Reports on Form 8-K
(1) A current report on Form 8-K dated
February 22, 1999 was filed on
March 29, 1999, by the registrant,
in connection with the press release
dated February 22, 1999 announcing
operating results of the Company for
the three and twelve month periods ended
December 31, 1998.
(2) A current report on Form 8-K dated
February 24, 1999 was filed on
March 29, 1999, by the registrant,
in connection with the press release
dated February 24, 1999 announcing that
it has signed a long-term, multi-year
contract with Compliance Software,
located in Salt Lake City, Utah, to
provide the Company and its corporate
clients with new drug testing software
developed by Compliance Software.
(3) A current report on Form 8-K dated March 17,
1999 was filed on March 29, 1999,
by the registrant, in connection with
the press release dated March 17, 1999
announcing that its Board of Directors
declared dividends on the Company's
8 1/2% Series A Convertible Exchangeable
Preferred Stock and the Company's 8 1/2%
Series B Convertible Pay-in-Kind
Preferred Stock.
(4) A current report on Form 8-K dated
March 30, 1999 was filed on May 7, 1999,
by the registrant, in connection with the
press release dated March 30, 1999
announcing the termination of its
August 3, 1998 laboratory services
agreement with Universal Standard
Healthcare of Michigan, Inc.
<PAGE>
<PAGE>
Item 6. Exhibits and Reports on Form 8-K - Continued
(5) A current report on Form 8-K dated
April 7, 1999 was filed on May 7, 1999,
by the registrant, in connection with the
press release dated April 7, 1999
announcing that it reached an agreement
with Universal Standard Healthcare of
Michigan, Inc. (Universal), for the
Company to continue providing laboratory
services for Universal and its customers,
and an earlier notice of termination of
services by the Company was rescinded,
effective April 7, 1999.
(6) A current report on Form 8-K dated
April 19, 1999 was filed on May 7, 1999,
by the registrant, in connection with
the press release dated April 19, 1999
announcing that along with PCS Health
Systems, which is the nations largest
pharmaceutical care management company,
the Company will jointly provide
laboratory benefits to the approximately
1 million members of the Mail Handlers
Benefit Plan.
(7) A current report on Form 8-K dated
April 22, 1999 was filed on May 7, 1999,
by the registrant, in connection with the
press release dated April 22, 1999
announcing operating results of the Company
for the quarter ended March 31, 1999.
<PAGE>
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S I G N A T U R E S
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.
LABORATORY CORPORATION OF AMERICA HOLDINGS
Registrant
By:/s/ THOMAS P. MAC MAHON
---------------------------------
Thomas P. Mac Mahon
Chairman, President and Chief
Executive Officer
By:/s/ WESLEY R. ELINGBURG
---------------------------------
Wesley R. Elingburg
Executive Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
Date: May 13, 1999
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000920148
<NAME> LABORATORY CORPORATION OF AMERICA HOLDINGS
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 16,300
<SECURITIES> 0
<RECEIVABLES> 559,800
<ALLOWANCES> 176,200
<INVENTORY> 30,400
<CURRENT-ASSETS> 525,600
<PP&E> 501,600
<DEPRECIATION> 241,100
<TOTAL-ASSETS> 1,638,400
<CURRENT-LIABILITIES> 265,900
<BONDS> 548,900
533,300
0
<COMMON> 1,200
<OTHER-SE> 156,900
<TOTAL-LIABILITY-AND-EQUITY> 1,638,400
<SALES> 417,900
<TOTAL-REVENUES> 417,900
<CGS> 266,500
<TOTAL-COSTS> 266,500
<OTHER-EXPENSES> 117,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,400
<INCOME-PRETAX> 22,800
<INCOME-TAX> 8,700
<INCOME-CONTINUING> 14,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,100
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
