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
October 23, 2000
------------------
(Date of earliest event reported)
LABORATORY CORPORATION OF AMERICA HOLDINGS
------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 1-11353 13-3757370
-------------- ----------- --------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
358 SOUTH MAIN STREET, BURLINGTON, NORTH CAROLINA 27215
-------------------------------------------------------
(Address of principal executive offices)
336-229-1127
------------
(Registrant's telephone number, including area code)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(c) Exhibit Summary information of the Company dated
October 23, 2000.
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
------------------------------------------
(Registrant)
By:/s/ BRADFORD T. SMITH
------------------------------
Bradford T. Smith
Executive Vice President,
General Counsel, Secretary
and Compliance Officer
Date: October 23, 2000
This information contains forward-looking statements which
are 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 the Company's financial results is
included in the Company's Form 10-K for the year ended
December 31, 1999 and subsequent filings.
Overview of LabCorp
- Nationwide network of 25 primary testing facilities and
900
patient service centers
- Conducts tests on 260,000 specimens daily
- Offers more than 2,000 test procedures
- Serves over 100,000 physicians and other health care
providers
- 8,000 employees nationwide
The Clinical Laboratory Testing Market
US market is approximately $30-32 billion
CLINICAL LABORATORY TESTING INDEPENDENT CLINICAL LABORATORIES
Hospitals 49% All others 86%
Physician Offices 13% LabCorp($1.699b) 14%
Independent Clinical Labs 39%
Source: Lab Industry Reports 2/99 & 1999 YE revenue
for LabCorp
Strategic Goals
1. Strengthen standing as a national laboratory that
provides a full range of laboratory services
2. Leverage broad-reaching infrastructure to expand
leadership position in esoteric testing
2000 Strategic Approach
- Maintain national coverage for all key customers
- Expand upon leading position in Genomic testing
- Evaluate appropriate acquisition candidates
- Continue to move to single billing system
- Expand relationships with key health care /
- e-commerce providers
- Develop strategy to tap full potential of LabCorp's
extensive database
Financial Performance
Price & Volumes: Trends by Payor Type
*Pro-Forma 9/30/00
1998 1999 YTD ACTUAL
PPA Accessions PPA Accessions PPA Accessions
$ millions $ millions $ millions
---------------- ------------------ ---------------
Client (Physicians) 22.21 25.9 21.46 27.0 22.29 20.4
Patient 79.62 2.2 92.56 2.3 102.23 1.6
Third Party 29.13 12.2 27.75 11.7 29.26 8.3
(MC/MD/Insurance)
Managed Care
- Capitated 9.88 9.1 10.06 8.4 9.30 7.7
- Fee for service 40.43 10.3 39.28 12.7 41.41 12.0
------ ----- ------ ---- ------ ----
Total 26.09 19.4 27.68 21.1 28.93 19.7
------ ----- ------ ---- ------ ----
LabCorp Total $27.01 59.7 $27.35 62.1 $28.64 50.0
*(1) Adjusted accessions for Client
(2) Reported PPA for Client was $22.36 with 25.9
accessions
(3) Reported PPA for Company was $27.84 with 61.0
accessions
Financial Performance
Revenue Analysis by Business Area
YTD SEPT 1999 YTD SEPT 2000
REVENUE ACCN %ACCNS PPA REVENUE ACCNS %ACCNS PPA
$Millions 000 to total $ $Millions 000 to total $
--------- ----- -------- ---- --------- ---- -------- ------
CMBP 77.3 761.1 1.7% 101.57 94.6 858.5 1.7% 110.25
Powell
Esoteric 117.1 2,610.6 5.7% 44.85 135.0 2,964.4 5.9% 45.52
Core 1,081.6 42,649.0 92.7% 25.36 1,203.7 46,218.3 92.4% 26.04
------- -------- ----- ----- ------- -------- ----- -----
Total 1,276.0 46,020.7 100.0% 27.73 1,433.3 50,041.2 100.0% 28.64
======= ======== ====== ===== ======= ======== ===== =====
99 VS 00
PPA
Incr/(Decr)
-----------
CMBP 8.5%
Powell
Esoteric 1.5%
Core 2.7%
---
Total 3.3%
===
Year-End Financials
12-31-97 12-31-98 12-31-99
-------- -------- --------
Revenue 1,579.9 1,612.6 1,698.7
Operating Expense 1,473.8 1,485.0 1,549.0
------- ------- -------
Operating Income 106.1 127.6 149.7
------- ------- -------
Margin 6.7% 7.9% 8.8%
EBITDA 191.2 210.4 233.4
======= ======= ======
Margin 12.1% 13.0% 13.7%
------- ------- ------
Bad Debt % to revenue 9.6% 10.2% 11.3%
------- ------- ------
DSO 79 83 74
------- ------- ------
THIRD QUARTER OPERATING RESULTS
9/30/99 9/30/00
------- -------
Revenue 428.6 488.1
Operating Expense 388.5 418.8
----- -----
Operating Income 40.1 69.3
----- -----
Margin 9.4% 14.2%
EBITDA 60.3 92.1
==== ====
Margin 14.1% 18.9%
---- ----
Bad Debt % to revenue 11.4% 10.2%
---- ----
DSO 76 70
2000 THIRD QUARTER ACHIEVEMENTS
- Increased revenues 13.9% (volume 9.4%; price 4.5%)
- Increased EBITDA 53%
- Increased diluted EPS 194%
- Completed acquisition of National Genetics Institute
7/31/00.
NINE MONTH OPERATING RESULTS
YTD 9/99 YTD 9/00
-------- --------
Revenue 1,276.0 1,433.3
Operating Expense 1,159.4 1,235.3
------- -------
Operating Income 116.6 198.0
------- -------
Margin 9.1% 13.8%
EBITDA 178.9 263.5
====== =======
Margin 14.0% 18.4%
------ -------
Bad Debt % to revenue 11.6% 10.2%
------ -------
DSO 76 70
2000 Nine Months YTD Achievements
- Increased revenues 12.3% (volume 8.9%; price 3.4%)
- Increased EBITDA 47%
- Increased diluted EPS 142%
- Increased operating cash flow 38%
- DSO reduced 4 days from year end 1999 to 70 days
- Reduced interest rate to LIBOR plus 37.5 basis points
Financial Goals for 2000
- Increase overall revenues by approximately 12%
- Increase EBITDA margins to approximately 17.5% of
revenue
- Increase diluted EPS to approximately $3.20 per share
- Reduce debt by approximately $90 million
- Lower DSO to approximately 69 days
Financial Goals for 2001
- Increase overall revenues 10-12%
- Increase EBITDA margins to approximately
20-21% of sales
- EPS growth of approximately 50% compared to 2000
- Reduce debt by approximately $132 million
- Lower DSO to the mid 60's range
Opportunity for Investors
- A proven strategy for growth
- LabCorp is a pioneer in identifying and commercializing
innovative technologies the first to fully embrace
molecular diagnostics
- LabCorp's national infrastructure connects large scale
proficiency with wide scale technological expertise
- New advances in scientific research will generate growth
and demand for molecular testing
