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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
October 22, 2001
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(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 of File Number) Identification
incorporation) Number)
358 SOUTH MAIN STREET, BURLINGTON, NORTH CAROLINA 27215
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(Address of principal executive offices)
336-229-1127
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(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
Laboratory Corporation of America -Registered Trademark-
Holdings (LabCorp -Registered Trademark-)(NYSE:LH) announced results
for the quarter ended September 30, 2001.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(c) Exhibit
20 Press release of the Company dated October 22, 2001.
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, Secretary
and Compliance Officer
Date: October 22, 2001
Laboratory Corporation of America-Registered Trademark- Holdings
358 South Main Street
Burlington, NC 27215
Telephone: 336-584-5171
FOR IMMEDIATE RELEASE
Contact: 336-436-4855
Pamela Sherry
Investor@labcorp.com
Shareholder Direct: 800-LAB-0401
www.labcorp.com
LABORATORY CORPORATION OF AMERICA-REGISTERED
TRADEMARK- ANNOUNCES THIRD QUARTER RESULTS
Growth Strategy Continues to Drive Volume and Price Increases
Burlington, NC, October 22, 2001 - Laboratory Corporation of America-
Registered Trademark- Holdings (LabCorp-Registered Trademark-)
(NYSE: LH) today announced results for the quarter ended September 30,
2001.
Third Quarter Results
---------------------------
Net sales were $560.9 million, operating income was $100.3 million, and
net income was $51.2 million, before extraordinary item and one-time
charge relating to early extinguishment of debt. This compares with net
sales of $488.1 million, operating income of $69.3 million, and net income
of $32.8 million in the third quarter of 2000. Diluted earnings per share for
the quarter were $0.73, before extraordinary item and one-time charge,
versus $0.47 for the same quarter in 2000. The 14.9 percent increase in net
sales is the result of increases of approximately 8.6 percent in volume and
6.3 percent in price.
The extraordinary loss of $3.2 million, net of tax benefit, relates to the
write-off of unamortized bank fees associated with the Company's term
debt, which was repaid in September. The one-time charge relates to a
$8.9 million payment made to terminate an interest rate swap agreement
tied to the Company's term loan.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
were $125.4 million for the third quarter, or 22.3 percent of net sales,
versus $92.1 million, or 18.9 percent of net sales, for the same period in
2000. Days sales outstanding (DSO) decreased to 62 days.
"LabCorp's strategy for profitable growth generated another great quarter,
with all segments of our business showing strength in price and volume,"
said Thomas P. Mac Mahon, chairman and chief executive officer.
"LabCorp's initiatives in both genomics and managed care testing
continued to drive our solid price and volume gains. These initiatives
include the targeted introduction of genomics tests, strategic acquisitions,
cutting-edge technology partnerships and expanding our managed care
relationships. We plan to fully engage LabCorp's scientific and
management expertise to implement these initiatives and further our proven
record for growth."
Nine Month Results
------------------------
For the nine-month period ended September 30, 2001, LabCorp generated
net sales of $1,636.0 million, operating income of $290.2 million, and net
income of $146.9 million, before extraordinary item and one-time charge.
For the same period in 2000, LabCorp reported sales of $1,433.3 million,
operating income of $198.0 million, and net income of $91.2 million.
Diluted earnings per common share were $2.09, before extraordinary item
and one-time charge, compared to $1.33 in the 2000 period. The revenue
increase of 14.2 percent consists of increases of approximately 7.2 percent
in volume and 7.0 percent in price. EBITDA was $363.8 million, or 22.2
percent of net sales, versus $263.5 million, or 18.4 percent of net sales, for
the comparable period in 2000.
A live broadcast of LabCorp's quarterly conference call on October 23,
2001 will be available online at www.labcorp.com or at
www.streetevents.com beginning at 9:00 a.m. Eastern Time, with an online
rebroadcast continuing through January 15, 2002. The live call at 9:00
a.m. is also available in a listen-only mode by dialing 646-862-1060. A
telephone replay of the call will be available through October 30, 2001 and
can be heard by dialing 800-633-8284 (858-812-6440 for international
callers). The access code for the replay is 198-15-369.
The first national clinical laboratory to fully embrace genomic testing,
Laboratory Corporation of America-Registered Trademark- Holdings
(LabCorp-Registered Trademark-) has been a pioneer in commercializing
new diagnostic technologies. As a national laboratory with annual
revenues of $1.9 billion in 2000 and over 18,000 employees, the company
offers more than 4,000 clinical tests ranging from simple blood analyses to
sophisticated molecular diagnostics. Serving over 200,000 clients
nationwide, 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, North Carolina, offers
state-of-the-art molecular gene-based testing in infectious disease,
oncology and genetics. Its National Genetics Institute in Los Angeles is an
industry leader in developing novel, highly sensitive polymerase chain
reaction (PCR) methods for testing hepatitis C and other blood borne
infectious agents. LabCorp's Minneapolis-based Viro-Med offers
molecular microbial testing using real time PCR platforms, while its
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, 2000 and subsequent SEC filings.
- End of Text -
- Table to Follow -
LABORATORY CORPORATION OF AMERICA HOLDINGS
Summarized Financial Information
(Dollars in millions, except per share data)
(Unaudited)
Three Months Ended
September 30,
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2001 2000
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Statement of Operations Data:
Net sales $ 560.9 $ 488.1
Cost of sales 322.9 291.4
Selling, general and administrative 128.0 118.7
Amortization of intangibles and other assets 9.7 8.7
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Operating income 100.3 69.3
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Other income (expense) (0.7) 0.9
Termination of interest rate swap agreement (8.9) --
Interest expense (6.5) (9.4)
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Earnings before income taxes and
extraordinary loss 84.2 60.8
Provision for income taxes (37.9) (28.0)
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Net earnings before extraordinary loss 46.3 32.8
Extraordinary loss, net of tax benefit (3.2) --
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Net earnings after extraordinary loss 43.1 32.8
Less preferred stock dividends and accretion
of mandatorily redeemable preferred stock -- --
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Net income attributable to common
shareholders $ 43.1 $ 32.8
======= =======
Diluted earnings per share before
extraordinary loss $ 0.66 $ 0.47
Extraordinary loss, net of tax benefit (0.05) --
-------- --------
Diluted earnings per share after
extraordinary loss $ 0.61 $ 0.47
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Weighted-average shares outstanding - diluted 70.6 69.5
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LABORATORY CORPORATION OF AMERICA HOLDINGS
Summarized Financial Information (continued)
(Dollars in millions, except per share data)
(Unaudited)
Nine Months Ended
September 30,
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2001 2000
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Statement of Operations Data:
Net sales $1,636.0 $1,433.3
Cost of sales 935.5 851.8
Selling, general and administrative 380.4 359.3
Amortization of intangibles and other assets 29.9 24.2
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Operating income 290.2 198.0
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Other income (expense) (0.4) 0.2
Termination of interest rate swap agreement (8.9) --
Interest expense (22.8) (29.3)
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Earnings before income taxes and
extraordinary loss 258.1 168.9
Provision for income taxes (116.2) (77.7)
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Net earnings before extraordinary loss 141.9 91.2
Extraordinary loss, net of tax benefit (3.2) --
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Net earnings after extraordinary loss 138.7 91.2
Less preferred stock dividends and accretion
of mandatorily redeemable preferred stock -- 34.6
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Net income attributable to common
shareholders $ 138.7 $ 56.6
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Diluted earnings per share before
extraordinary loss $ 2.02 $ 1.33
Extraordinary loss, net of tax benefit (0.05) --
-------- --------
Diluted earnings per share after
extraordinary loss 1.97 1.33
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Weighted-average shares outstanding - diluted 70.5 68.5
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LABORATORY CORPORATION OF AMERICA HOLDINGS
Summarized Financial Information (continued)
(Dollars in millions, except per share data)
(Unaudited)
September 30, December 31,
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2001 2000
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Balance Sheet Data:
Cash and cash equivalents $ 55.5 $ 48.8
Accounts receivable, net 389.0 368.0
Property, plant & equipment 296.2 272.8
Intangible assets, net 952.3 865.7
Other assets 127.3 111.6
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$ 1,820.3 $ 1,666.9
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Total bank debt $ -- $ 478.5
Zero coupon - subordinated notes 437.1 --
Other liabilities 346.7 311.0
Shareholders' equity 1,036.5 877.4
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$ 1,820.3 $ 1,666.9
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