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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 22,2004
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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 12. Results of Operations and Financial Conditions
On April 22, 2004, Laboratory Corporation of America -Registered
Trademark- Holdings (LabCorp -Registered Trademark-)(NYSE:LH) issued
a press release announcing its results for the quarter ended
March 31, 2004. A copy of the press release is attached hereto
as Exhibit 99.1 and is incorporated by reference herein.
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 22, 2004
EXHIBIT INDEX
Exhibit Description
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99.1 Press Release dated April 22, 2004
EXHIBIT 99.1
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 2004 FIRST QUARTER RESULTS
EPS Increases 19.6 Percent to $0.61, EBITDA Margin Hits 25.4 Percent
of Net Sales, Operating Cash Flow Grows 9.3 Percent to $147.6 Million
Burlington, NC, April 22, 2004 - Laboratory Corporation of America-Registered
Trademark- Holdings (LabCorp-Registered Trademark-) (NYSE: LH) today announced
results for the quarter ended March 31, 2004. Net earnings increased 18.1
percent to $87.3 million, compared to first quarter 2003 net earnings of $73.9
million. Earnings per diluted share increased 19.6 percent to $0.61 per diluted
share, versus $0.51 per diluted share in the first quarter of 2003. Earnings
before interest, taxes, depreciation and amortization (EBITDA) were $191.1
million for the quarter, or 25.4 percent of net sales, compared to $165.7
million, or 23.3 percent of net sales, for the same period in 2003.
Revenues for the quarter were $752.5 million, an increase of 5.7 percent
compared to the same period in 2003. Compared to the first quarter of 2003,
testing volume, measured by accessions, increased approximately 5.7 percent,
and price was unchanged.
During the quarter, the Company repurchased approximately $67 million of stock
under its $250 million stock repurchase program, representing approximately 1.7
million shares. Operating cash flow increased 9.3 percent to $147.6 million,
and the cash balance at the end of the quarter was $169.0 million.
"Our substantial accomplishments this quarter once again underscore the
fundamental value of our strategic plan to consistently drive solid revenue
growth, strong margins, high cash flow generation and long-term growth
opportunities through scientific leadership," said Thomas P. Mac Mahon,
chairman and chief executive officer. "LabCorp is well-positioned to continue
delivering solid financial performance as we execute our strategy to
strengthen our core testing business and lead the industry in expanding our
higher-growth, higher-value esoteric and genomic testing businesses."
The Company today is filing an 8-K that will include additional information on
its business and operations, including financial guidance for 2004. This
information will also be available on the Company's Web site. Analysts and
investors are directed to this 8-K and the Web site to review this supplemental
information.
A live broadcast of LabCorp's quarterly conference call on April 22, 2004 will
be available online at www.labcorp.com or at www.streetevents.com beginning at
9:30 a.m. Eastern Time, with an online rebroadcast continuing through May 22,
2004. The live call at 9:30 a.m. is also available in a listen-only mode by
dialing 415-908-6256. A telephone replay of the call will be available through
April 29, 2004 and can be heard by dialing 800-633-8284 (402-977-9140 for
international callers). The access code for the replay is 211-88-052.
Laboratory Corporation of America-Registered Trademark- Holdings is a pioneer
in commercializing new diagnostic technologies and the first in its industry
to embrace genomic testing. With annual revenues of $2.9 billion in 2003,
over 23,000 employees nationwide, and more than 220,000 clients, LabCorp
offers over 4,400 clinical assays ranging from blood analyses to HIV and
genomic testing. 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, NC; National Genetics Institute,
Inc. in Los Angeles, CA; ViroMed Laboratories, Inc. based in Minneapolis, MN;
The Center for Esoteric Testing in Burlington, NC; and DIANON Systems, Inc.
based in Stratford, CT. LabCorp clients include physicians, government
agencies, managed care organizations, hospitals, clinical labs, and
pharmaceutical companies. To learn more about our growing organization, visit
our Web site at: www.labcorp.com.
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, 2003, 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
March 31,
(unaudited)
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2004 2003
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Net sales $ 752.5 $ 712.2
Cost of sales 434.9 415.7
Selling, general and administrative 163.0 163.3
Amortization of intangibles and
other assets 10.3 8.5
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Operating income 144.3 124.7
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Other income (expense) (0.1) (0.1)
Investment income 0.5 2.3
Interest expense (9.3) (11.4)
Income from equity investments 12.6 9.8
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Earnings before income taxes 148.0 125.3
Provision for income taxes 60.7 51.4
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Net earnings $ 87.3 $ 73.9
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Diluted earnings per common share:
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Net earnings $ 0.61 $ 0.51
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Weighted average shares outstanding 143.4 146.4
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EBITDA $ 191.1 $ 165.7
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LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Balance Sheets
(in millions, except per share data)
(Unaudited)
March 31, December 31,
2004 2003
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Cash and cash equivalents $ 169.0 $ 123.0
Accounts receivable, net 451.5 432.5
Property, plant & equipment 356.9 361.3
Intangible assets, net 1,846.9 1,857.3
Investments in equity affiliates 504.2 505.3
Other assets 150.8 135.5
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$ 3,479.3 $ 3,414.9
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Total bank debt $ 2.6 $ 2.8
Zero coupon-subordinated notes 525.8 523.2
5 1/2% senior note 353.7 353.8
Other liabilities 667.3 639.2
Shareholders' equity 1,929.9 1,895.9
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$ 3,479.3 $ 3,414.9
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Notes to Financial Tables
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1) EBITDA represents earnings before interest, income taxes,
depreciation, amortization, and nonrecurring charges, 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-month periods ended March 31,
2004 and 2003.
Three Months Ended
March 31,
2004 2003
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Earnings before income taxes $ 148.0 $ 125.3
Add (subtract):
Interest expense 9.3 11.4
Investment income (0.5) (2.3)
Other (income) expense, net 0.1 0.1
Depreciation 23.0 21.9
Amortization 10.3 8.5
Equity investments'
depreciation and
amortization 0.9 0.8
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EBITDA $ 191.1 $ 165.7
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