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UNITED STATES 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
APRIL 25, 1996
--------------------------------
(Date of earliest event reported)
LABORATORY CORPORATION OF AMERICA HOLDINGS
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(Exact name of registrant as specified in its charter)
DELAWARE 1-11353 13-3757370
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(State or other (Commission (IRS Employer
jurisdiction or File Number) Identification
organization) Number)
358 SOUTH MAIN STREET, BURLINGTON, NORTH CAROLINA 27215
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(Address of principal executive offices)
910-229-1127
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(Registrant's telephone number, including area code)
Item 5. Other Events
On April 25, 1996, the Registrant issued a press release dated as
of such date announcing operating results of the Registrant for
the three month period ended March 31, 1996, as well as certain
other information. The press release is attached as an exhibit
hereto and the text thereof is incorporated in its entirety
herein by reference.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
(c) Exhibit
20 Press release of the Registrant dated April 25,
1996.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
LABORATORY CORPORATION OF AMERICA HOLDINGS
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(Registrant)
By:/s/ BRADFORD T. SMITH
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Bradford T. Smith
Executive Vice President,
General Counsel and Secretary
Date: May 7, 1996
EXHIBIT INDEX
Exhibit
Number Exhibit
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20 - Press release of the Registrant dated April 25, 1996.
Exhibit 20
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FOR IMMEDIATE RELEASE Contact: Pamela Sherry
(910)584-5171
Ext. 6768
LABORATORY CORPORATION OF AMERICA REPORTS
FIRST QUARTER RESULTS
Two Strategic Agreements Strengthen The Company's Future
Growth Prospects
Burlington, NC, April 25, 1996 - Laboratory Corporation of
America Holdings (NYSE: LH) (LabCorp) today announced results for
the quarter ended March 31, 1996. Results for the period reflect
the April 28, 1995, merger of LabCorp's predecessor companies --
National Health Laboratories Holdings Inc. (NHL) and Roche
Biomedical Laboratories, Inc. (RBL) -- and, therefore, are not
directly comparable to prior first quarter periods. For the
quarter, net sales were $403.9 million, operating income was
$27.8 million, net income was $5.9 million, and earnings per
share were $0.05.
"We are not happy with the results of this quarter, which
were impacted by the widespread severe weather in January and
February that depressed volume in several of our larger regional
laboratories," said Dr. James B. Powell, President and Chief
Executive Officer. "We estimate the winter storms lowered our
operating income by $10 million.
"A combination of several other factors also impacted our
results in the quarter," said Dr. Powell. "First, continued
changes in payor mix put pressure on our margins because of the
negative impact on pricing. Second, the price increase
implemented in the quarter was substantially smaller than the
price increase in the first quarter of 1995. Further routine
price increases will be implemented throughout the year with the
largest benefit expected to occur in the second half of 1996.
"Last, while we remain enthusiastic about the progress and
magnitude of our synergy program, larger than budgeted temporary
personnel and overtime expense related to that program offset a
portion of the synergy savings. These costs should return to
more normal levels later in the year." During the quarter the
Company completed the closure of its reference laboratory in
Nashville. LabCorp expects to experience more net benefit from
its ongoing synergy program during the second half of the year.
"We continue to make progress in establishing strategic
hospital affiliations and in creating new alliances," concluded
Dr. Powell.
In the first quarter, the Company finalized an agreement
with Columbia/HCA Healthcare Corporation, adding LabCorp as a
preferred provider of reference laboratory testing services to
Columbia's hospitals and surgery centers nationwide. Earlier
this month, LabCorp also entered into an exclusive five-year
agreement with PCS Systems, Inc., a wholly owned subsidiary of
Eli Lilly, permitting PCS to market LabCorp's laboratory services
in conjunction with PCS' pharmacy benefit program. As a result,
PCS will have the capability to combine laboratory and pharmacy
data to enhance the measurement of the outcomes of various
disease prevention and management programs. LabCorp expects to
begin seeing the financial benefit from the PCS agreement in
1997.
LabCorp made further progress with its small laboratory
acquisition program in the quarter. "There are still many
opportunities to acquire small laboratories which generate
favorable incremental operating margins," Dr. Powell said. In
1996 to date, two acquisitions representing approximately $10
million in annualized revenues have been completed, for purchase
prices approximating one times annual revenues.
From January 1, 1996, through March 31, 1996, LabCorp added
41 new managed care contracts representing approximately 1.2
million new lives.
The Company noted that each of the above forwardlooking
statements was 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 which
could affect the Company's financial results is included in the
Company's Form 10-K for the year ended December 31, 1995.
Laboratory Corporation of America Holdings (LabCorp) is a
national clinical laboratory organization with estimated
annualized revenues of $1.7 billion. The Company operates
primary testing facilities nationally, offering more than 1,700
different clinical assays, from routine blood analysis to more
sophisticated technologies. LabCorp performs diagnostic tests
for physicians, managed care organizations, hospitals, clinics,
long-term care facilities, industrial companies and other
clinical laboratories.
LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
Summarized Financial Information
(Dollars in Millions, except per share data)
Three Months Ended
March 31,
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1996 1995
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Net sales $ 403.9 $ 243.8
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Operating income $ 27.8 $ 36.7
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Earnings before income taxes $ 11.8 $ 23.4
Provision for income taxes (5.9) (10.6)
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Net earnings $ 5.9 $ 12.8
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Net earnings per common share $ 0.05 $ 0.15
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Earnings per common share are based on the weighted average
number of shares outstanding during the three-month periods ended
March 31, 1996 and 1995 of 122,908,722 and 84,766,768 shares,
respectively. The increase in the weighted average number of
shares in 1996 is the result of shares issued in connection with
the merger of National Health Laboratories Holdings Inc. and
Roche Biomedical Laboratories, Inc. on April 28, 1995.