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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 28, 2003
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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 9. Regulation FD Disclosure
On April 28, 2003, Laboratory Corporation of America -Registered Trademark-
Holdings (LabCorp -Registered Trademark-)(NYSE:LH) issued a press release
announcing among other things, its results for the quarter ended March 31,
2003. A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated by reference herein.
This information is furnished under Item 9 of Form 8-K, as well as Item 12 of
Form 8-K, "Results of Operations and Financial Condition," in accordance with
interim filing guidance provided by SEC Release No. 33-8216.
Exhibits:
99.1 Press release of the Company dated April 28, 2003.
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
and Secretary
Date: April 28, 2003
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 2003 FIRST QUARTER RESULTS
Reports Strong Operating Cash Flow of $135 Million;
Combined Genomic and Esoteric Testing Revenues Increase 33
Percent
Burlington, NC, April 28, 2003 - Laboratory Corporation of America-
Registered Trademark- Holdings (LabCorp-Registered Trademark-) (NYSE:
LH) today announced results for the quarter ended March 31, 2003.
Revenues in the quarter were $712.2 million, an increase of 20.7 percent
compared to the same period in 2002. Testing volume, measured by
accessions, increased approximately 14.5 percent and price per accession
increased 6.1 percent compared to first quarter 2002.
Net income for the quarter increased to $73.9 million, or $0.51 per diluted
share, compared to 2002 first quarter net income of $65.8 million, or $0.46
per diluted share. Earnings before interest, taxes, depreciation and
amortization (EBITDA) were $165.7 million for the first quarter, or 23.3
percent of net sales, compared to $137.6 million, or 23.3 percent of net
sales, for the same period in 2002.
During the quarter, the Company repaid $115 million of the $250 million
borrowed under its revolving line of credit to fund part of the acquisition of
DIANON Systems, Inc. on January 17, 2003, and repurchased $34 million of
Company stock under its $150 million stock repurchase program. Operating
cash flow was $135.0 million and the cash balance at the end of the quarter
was $50.0 million.
"We are very pleased with LabCorp's solid performance in the quarter, " said
Thomas P. Mac Mahon, chairman and chief executive officer. "Despite
severe winter weather, our operational and financial objectives were
achieved. We continued to have high cash generation, strengthened our
balance sheet by paying down our revolving line of credit and enhanced
shareholder value by repurchasing LabCorp stock. Additionally, the
integrations of Dynacare and DIANON are firmly on track and proceeding
well, with both companies meeting our synergy expectations."
Mr. Mac Mahon continued, "Our genomic and esoteric businesses will
continue to be key growth drivers in coming years, particularly in cancer
testing. Including DIANON and LabCorp histology testing, esoteric testing
now generates approximately one-third of our revenues. As we integrate
DIANON and convert our anatomic pathology processes and procedures to
the highly regarded DIANON brand of pathology, we expect additional,
incremental revenue generating opportunities. Soon to be introduced
screening tests such as EXACT Sciences' assay for colorectal cancer, and
Correlogic Systems' test for early stage ovarian cancer, will be combined
with DIANON's specialized anatomic pathology services and LabCorp's
wide-ranging menu of oncology products to offer the most comprehensive
suite of cancer testing services available today."
A live broadcast of LabCorp's quarterly conference call on April 29, 2003
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 May 29, 2003. The live call at 9:00 a.m. is also available in a listen-
only mode by dialing 415-537-1974. A telephone replay of the call will be
available through May 6, 2003 and can be heard by dialing 800-633-8284
(402-977-9140 for international callers). The access code for the replay is
211-37-376.
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 $2.5 billion in 2002 and approximately 24,000 employees, the Company
offers more than 4,000 clinical tests ranging from routine analyses to
sophisticated molecular diagnostics. Serving over 200,000 clients
nationwide, LabCorp combines 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. DIANON Systems, Inc. its Anatomic Pathology Center of
Excellence, is a leader in oncology and genetic testing, and 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 ViroMed 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. Actual results could differ materially from those suggested by these
forward-looking statements. 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, 2002 and subsequent SEC filings.
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LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Statements of Operations
(Dollars in millions, except per share data)
Three Months Ended
March 31,
(Unaudited)
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2003 2002
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Net sales $ 712.2 $ 590.1
Cost of sales 415.7 331.6
Selling, general and administrative 163.3 137.0
Amortization of intangibles and
other assets 8.5 5.1
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Operating income 124.7 116.4
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Other income (expense) (0.1) (0.6)
Investment income 2.3 0.8
Interest expense (11.4) (4.2)
Income from equity investments, net 9.8 --
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Earnings before income taxes 125.3 112.4
Provision for income taxes 51.4 46.6
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Net earnings $ 73.9 $ 65.8
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Diluted earnings per common share:
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Net earnings $ 0.51 $ 0.46
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Weighted average shares outstanding 146.4 142.2
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EBITDA $ 165.7 $ 137.6
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LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Balance Sheets
(Dollars in millions, except per share data)
(Unaudited)
March 31, December 31,
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2003 2002
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Cash and cash equivalents $ 50.0 $ 56.4
Accounts receivable, net 440.5 393.0
Property, plant & equipment 370.1 351.2
Intangible assets and
goodwill, net 1,824.2 1,217.5
Investments in equity affiliates 442.4 400.8
Other assets 167.7 173.1
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$ 3,294.9 $ 2,592.0
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Total bank debt $ 138.0 $ 3.5
Zero coupon-subordinated notes 515.4 512.9
5 1/2% senior note 350.0 --
Other liabilities 614.8 463.9
Shareholders' equity 1,676.7 1,611.7
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$ 3,294.9 $ 2,592.0
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Notes to Financial Tables
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3) EBITDA represents earnings before net interest expense, income
taxes, depreciation and amortization and includes the Company's
proportional share of the underlying EBITDA of the income from equity
investments. The Company uses EBITDA extensively as an internal
management performance measure and believes it is a useful, and
commonly used measure of financial performance in addition to
earnings before taxes and other profitability measurements under
generally accepted accounting principles ("GAAP"). EBITDA is not a
measure of financial performance under GAAP. It should not be
considered as an alternative to earnings before income taxes (or any
other performance measure under GAAP) as a measure of performance or
to cash flows from operating, investing or financing activities as an
indicator of cash flows or as a measure of liquidity. The following
table reconciles earnings before income taxes, representing the most
comparable measure under GAAP, to EBITDA for the quarters ended March
31, 2003 and 2002:
Quarter Ended March 31,
2003 2002
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Earnings before income taxes $ 125.3 $ 112.4
Add:
Interest expense, net 9.2 3.4
Other (income) expense -- 0.6
Depreciation 21.9 16.1
Amortization 8.5 5.1
Equity investment's depreciation and
amortization 0.8 --
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EBITDA $ 165.7 $ 137.6
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