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
July 22, 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 July 22, 2003, Laboratory Corporation of America -Registered Trademark-
Holdings (LabCorp -Registered Trademark-)(NYSE:LH) issued a press release
announcing its results for the quarter ended June 30, 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 July 22, 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: July 22, 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 SECOND QUARTER RESULTS
Reports EPS of $0.60; Operating Cash Flow Increases 32 Percent to
$123 Million; Combined Genomic and Esoteric Testing Revenues
Increase 34 Percent
Burlington, NC, July 22, 2003 - Laboratory Corporation of America-
Registered Trademark-Holdings (LabCorp-Registered Trademark-) (NYSE:
LH) today announced results for the quarter ended June 30, 2003.
Second Quarter Results:
Revenues for the quarter were $743.7 million, an increase of 21.5
percent compared to the same period in 2002. Testing volume,
measured by accessions, increased approximately 16.0 percent and
price per accession increased approximately 5.5 percent compared to
second quarter 2002.
Net income for the quarter increased to $86.4 million, or $0.60 per diluted
share, compared to 2002 second quarter net income of $78.5 million, or $0.55
per diluted share. Earnings before interest, taxes, depreciation and
amortization (EBITDA) were $187.4 million for the quarter, or 25.2 percent
of net sales, compared to $156.4 million, or 25.5 percent of net sales, for
the same period in 2002.
During the quarter, the Company repaid $50 million in borrowings
under its revolving line of credit, and repurchased approximately
$53 million of Company stock. Operating cash flow was $123.2 million
and the cash balance at the end of the quarter was $33.9 million.
"Our financial results, which include solid revenue growth and
EBITDA performance, continued to be strong," said Thomas P. Mac
Mahon, chairman and chief executive officer. "Cash generation was
substantial, debt was further reduced, additional shares of LabCorp
stock were repurchased, and our integration and synergy savings
objectives for Dynacare and DIANON were achieved. Importantly, our
financial performance was enhanced by our successful strategy to
increase our genomic and esoteric testing businesses. We anticipate
that our August launch of EXACT Sciences' colorectal cancer
screening test will further demonstrate the value and significance
of this strategy."
Six-Month Results:
Revenues for the period were approximately $1,455.9 million, an
increase of 21.1 percent compared to the same period in 2002.
Testing volume, measured by accessions, increased approximately 15.0
percent and price per accession increased approximately 6.0 percent,
compared to the comparable period in 2002.
Net income for the period increased to $160.3 million, or $1.10 per
diluted share, compared to 2002 six-month net income of $144.3
million, or $1.01 per diluted share. EBITDA was $353.1 million, or
24.3 percent of net sales, compared to $294.0 million, or 24.4
percent of net sales, for the same period in 2002.
A live broadcast of LabCorp's quarterly conference call on July 22,
2003 will be available online at www.labcorp.com or at
www.streetevents.com beginning at 10:00 a.m. Eastern Time, with an
online rebroadcast continuing through August 29, 2003. The live call
at 10:00 a.m. is also available in a listen-only mode by dialing
415-908-6208. A telephone replay of the call will be available
through July 29, 2003 and can be heard by dialing 800-633-8284 (402-
977-9140 for international callers). The access code for the replay
is 211-51-445.
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 blood 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
(in millions, except per share data)
Three Months Ended
June 30,
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(unaudited)
2003 2002
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Net sales $ 743.7 $ 612.4
Cost of sales 427.2 336.1
Selling, general and administrative 164.1 137.0
Amortization of intangibles and
other assets 9.5 5.2
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Operating income 142.9 134.1
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Other income (expense) (0.2) 0.2
Investment income 2.4 1.2
Interest expense (10.0) (4.2)
Income from equity investments 11.3 --
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Earnings before income taxes 146.4 131.3
Provision for income taxes 60.0 52.8
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Net earnings $ 86.4 $ 78.5
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Diluted earnings per common share:
Net earnings $ 0.60 $ 0.55
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Weighted-average shares
outstanding 145.0 143.4
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EBITDA $ 187.4 $ 156.4
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LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Statements of Operations
(in millions, except per share data)
Six Months Ended
June 30,
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(unaudited)
2003 , 2002
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Net sales $ 1,455.9 $ 1,202.4
Cost of sales 842.9 667.7
Selling, general and administrative 327.4 273.9
Amortization of intangibles and
other assets 18.0 10.3
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Operating income 267.6 250.5
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Other income (expense) (0.3) (0.4)
Investment income 4.7 2.0
Interest expense (21.4) (8.4)
Income from equity investments 21.1 --
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Earnings before income taxes 271.7 243.7
Provision for income taxes 111.4 99.4
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Net earnings $ 160.3 $ 144.3
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Diluted earnings per common share:
Net earnings $ 1.10 $ 1.01
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Weighted-average shares
outstanding 145.7 142.9
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EBITDA $ 353.1 $ 294.0
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LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Balance Sheets
(in millions, except per share data)
(Unaudited)
June 30, December 31,
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2003 2002
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Cash and cash equivalents $ 33.9 $ 56.4
Accounts receivable, net 444.5 393.0
Property, plant & equipment 368.2 351.2
Intangible assets and goodwill, net 1,834.2 1,217.5
Investments in equity affiliates 481.9 400.6
Other assets 177.7 173.3
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$ 3,340.4 $ 2,592.0
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Total bank debt $ 88.1 $ 3.5
Zero coupon-subordinated notes 518.0 512.9
5 1/2% senior note 354.1 --
Other liabilities 639.6 463.9
Shareholders' equity 1,740.6 1,611.7
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$ 3,340.4 $ 2,592.0
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Notes to Financial Tables
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1. 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 three- and six-month periods ended June 30, 2003 and
2002:
Three Months Six Months
Ended June 30, Ended June 30,
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2003 2002 2003 2002
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Earnings before income taxes $ 146.4 $ 131.3 $ 271.7 $ 243.7
Add:
Interest expense 10.0 4.2 21.4 8.4
Investment income (2.4) (1.2) (4.7) (2.0)
Other (income) expense, net 0.2 (0.2) 0.3 0.4
Depreciation 22.8 17.1 44.7 33.2
Amortization 9.5 5.2 18.0 10.3
Equity investments' depreciation
And amortization 0.9 -- 1.7 --
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EBITDA $ 187.4 $ 156.4 $ 353.1 $ 294.0
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