Laboratory Corporation of America-Registered Trademark- Holdings
358 South Main Street
Burlington, NC 27215
Telephone: 336-584-5171
Contact: 336-436-4855 Shareholder Direct: 800-LAB-0401
Pamela Sherry www.labcorp.com
LABORATORY CORPORATION OF AMERICA-REGISTERED TRADEMARK- REPORTS
THIRD QUARTER RESULTS
Revenue Increase of 13.9 Percent Led by Strong Volume Growth and Price
Gains
Burlington, NC, October 23, 2000 - Laboratory Corporation of America-
Registered Trademark- Holdings (LabCorp-Registered Trademark-) (NYSE:
LH) today announced results for the quarter and nine months ended
September 30, 2000.
Third Quarter Results
Net sales for the third quarter were $488.1 million, operating income
was $69.3 million, and net income was $32.8 million. This compares with
net sales of $428.6 million, operating income of $40.1 million, and net
income of $17.2 million in the third quarter of 1999. Diluted earnings
per common share for the quarter were $0.94, versus $0.32 for the
comparable 1999 quarter. The 13.9 percent increase in net sales is the
result of a 9.4 percent increase in volume and a 4.5 percent increase
in price.
Earnings before interest, taxes, depreciation, and amortization
(EBITDA) were $92.1 million for the third quarter, or 18.9 percent of
net sales, versus $60.3 million, or 14.1 percent of net sales, for the
comparable period in 1999. Days sales outstanding (DSO) for the
quarter remained on target at 70 days. The balance owed on LabCorp's
term loan was reduced to $500.5 million at the end of the third
quarter, from $573.4 million at the end of 1999, and the balance on its
$450 million revolving line of credit facility remained at zero.
"LabCorp delivered another strong quarter, as positive trends in key
performance indicators such as volume, price, DSO, and cash collections
continued throughout the entire Company," said Thomas P. Mac Mahon,
chairman and chief executive officer. "NGI, our recent acquisition in
Los Angeles, was an important contributor to these results, and
continues to meet our expectations as we begin to realize the planned
benefits from this world leader in hepatitis testing."
Nine Month Results
For the nine-month period ended September 30, 2000, LabCorp generated
net sales of $1,433.3 million, operating income of $198.0 million, and
net income of $91.2 million. For the same period in 1999, net sales
were $1,276.0 million, operating income was $116.6 million, and net
income $51.2 million. Diluted earnings per common share were $2.66,
compared to $1.10 in the 1999 period. The revenue increase of
approximately 12.3 percent consists of a 8.9 percent increase in volume
and a 3.4 percent increase in price. EBITDA was $263.5 million, or
18.4 percent of net sales, versus $178.9 million, or 14.0 percent of
net sales, for the comparable period in 1999.
"Growth in genomic testing and our managed care business continues to
drive our successful strategy to leverage our national scale with our
state-of-the art testing and information-rich capabilities," said Mr.
Mac Mahon. "LabCorp is well positioned to build on these strengths to
take full advantage of key growth trends such as increased use of
testing by managed care companies for early disease detection, new
genomics tests, and favorable demographic trends."
A live broadcast of LabCorp's quarterly conference call on October 24,
2000 will be available online at www.labcorp.com or at
www.streetfusion.com beginning at 9:00 a.m. Eastern Daylight Time, with
an online rebroadcast continuing through January 31, 2001. The live
call at 9:00 a.m. is also available in a listen-only mode by dialing
212-896-6304. A telephone replay of the call will be available through
October 31, 2000 and can be heard by dialing 800-633-8284. The access
code for the telephone replay is 164-30-579.
Laboratory Corporation of America-Registered Trademark- Holdings
(LabCorp-Registered Trademark-) is a national clinical laboratory with
annual revenues of $1.7 billion in 1999. With 18,000 employees and
over 100,000 clients nationwide, the company offers more than 2,000
clinical tests ranging from simple blood analyses to sophisticated
molecular diagnostics. LabCorp leverages its expertise in innovative
clinical testing technology with its Centers of Excellence. The Center
for Molecular Biology and Pathology, in Research Triangle Park (RTP),
North Carolina, develops applications for polymerase chain reaction
(PCR) technology and its National Genetics Institute in Los Angeles is
an industry leader in developing novel, highly sensitive PCR
methods for testing hepatitis C and other infectious agents. Its Center
for Occupational Testing in RTP is one of the world's largest substance
abuse testing facilities, and the Center for Esoteric Testing in
Burlington, North Carolina, performs the largest volume of specialty
testing in the network. LabCorp's clients include physicians, state
and federal government, managed care organizations, hospitals, clinics,
pharmaceutical and Fortune 1000 companies, and other clinical
laboratories.
Each of the above forward-looking statements is subject to change based
on various important factors, including without limitation, competitive
actions in the marketplace and adverse actions of governmental and
other third-party payors. Further information on potential factors
that could affect LabCorp's financial results is included in the
Company's Form 10-K for the year ended December 31, 1999 and subsequent
SEC filings.
LABORATORY CORPORATION OF AMERICA HOLDINGS
Summarized Financial Information
(Dollars in millions, except per share data)
(Unaudited) (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ----------------------
2000 1999 2000 1999
-------------------- -----------------------
Statement of Operations Data:
Net sales $ 488.1 $ 428.6 $ 1,433.3 $ 1,276.0
Cost of sales 291.4 265.2 851.8 796.9
Selling, general and
administrative 118.8 115.6 359.3 339.1
Amortization of intangibles
and other assets 8.6 7.7 24.2 23.4
------- ------- ---------- ---------
Operating income 69.3 40.1 198.0 116.6
------- ------- ---------- ---------
Other (income) expense (0.9) 1.9 (0.2) 2.8
Interest expense 9.4 10.4 29.3 31.2
------- ------- ---------- ---------
Earnings before income taxes 60.8 27.8 168.9 82.6
Provision for income taxes (28.0) (10.6) (77.7) (31.4)
------- ------- ---------- ---------
Net earnings 32.8 17.2 91.2 51.2
Less preferred stock dividends
and accretion of mandatorily
redeemable preferred stock -- 13.1 34.6 37.1
------ ------- --------- --------
Net income attributable to
Common shareholders $ 32.8 $ 4.1 $ 56.6 $ 14.1
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Diluted earnings per share $ 0.94 $ 0.32 $ 2.66 $ 1.10
======= ======== =========== ===========
Weighted-average shares
outstanding - diluted 34.8 13.1 34.2 12.8
====== ====== ========== ==========
(Unaudited)
Nine Months Ended Year Ended
September 30, December 31,
----------------- ------------
2000 1999
----------------- ------------
Balance Sheet Data:
Cash and cash equivalents $ 15.3 $ 40.3
Accounts receivable, net 378.1 348.0
Property, plant & equipment 271.5 273.2
Intangible assets, net 806.6 804.0
Other assets 168.3 124.7
---------- ----------
$ 1,639.8 $ 1,590.2
========== ==========
Total bank debt $ 500.5 $ 573.4
Other liabilities 305.3 282.7
Redeemable preferred stock -- 558.7
Shareholders' equity 834.0 175.4
---------- ----------
$ 1,639.8 $ 1,590.2
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