Laboratory Corporation of America(R) Announces 2003 Fourth Quarter and Full Year Results
Strong Quarterly Performance Yields $144.2 Million in Operating Cash Flow;
Growth in Operating Income, EBITDA and EPS in Excess of 40 Percent
BURLINGTON, N.C., Feb. 12 /PRNewswire-FirstCall/ -- Laboratory Corporation of America(R) Holdings (LabCorp(R)) (NYSE: LH) today announced results for the quarter ended December 31, 2003.
Fourth Quarter Results
Revenues for the quarter were $731.5 million, an increase of 12.5 percent compared to the same period in 2002. Testing volume, measured by accessions, increased approximately 7.0 percent and price per accession increased approximately 5.5 percent compared to fourth quarter 2002.
Net earnings before restructuring and other special items for the quarter increased 44.4 percent to $76.5 million, compared to 2002 fourth quarter net earnings of $53.0 million. Before these items, earnings per diluted share increased 47.2 percent to $0.53 per diluted share, versus $0.36 per diluted share in the fourth quarter of 2002. Earnings before interest, taxes, depreciation, amortization and nonrecurring restructuring items (EBITDA) were $174.4 million for the quarter, or 23.8 percent of net sales, compared to $123.9 million, or 19.1 percent of net sales, for the same period in 2002.
The Company recorded a net pre-tax restructuring credit of $1.8 million during the fourth quarter of 2003, representing the net of restructuring charges and adjustments. After recording the net credit, diluted earnings per share were $0.54 for the fourth quarter of 2003.
During the quarter, the Company repaid $25 million in borrowings under its revolving line of credit. Operating cash flow increased 21.7 percent to $144.2 million, and the cash balance at the end of the quarter was $123.0 million.
Full Year Results
Revenues for the year were $2,939.4 million, an increase of 17.2 percent compared to 2002. Testing volume, measured by accessions, increased approximately 11.7 percent and price per accession increased approximately 5.5 percent, compared to 2002.
Net earnings before restructuring and other special charges for the year increased to $321.9 million, or $2.22 per diluted share, compared to 2002 net earnings of $264.8 million, or $1.84 per diluted share. EBITDA was $711.5 million, or 24.2 percent of net sales, compared to $563.8 million, or 22.5 percent of net sales, for 2002. Operating cash flow increased 26.8 percent to $564.3 million.
"I am delighted to report that we successfully accomplished all of our goals for 2003 and delivered another year of excellent financial performance," said Thomas P. Mac Mahon, chairman and chief executive officer. "Our solid financial results are only matched by the continued progress we have made in enhancing our scientific capabilities and expanding our geographic reach. While completing the successful integration of two large acquisitions and bringing new tests to market, LabCorp once again generated significant amounts of cash and strong growth in revenues, profitability and EPS."
Mr. Mac Mahon added, "The year ahead promises exciting opportunities to again deliver strong results, and to continue our efforts to lead the industry in introducing medically important new tests. Our existing genomic and esoteric testing businesses are poised for continued growth, and we remain focused on further strengthening our core business and building upon our excellence in customer service."
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 February 12, 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 March 12, 2004. The live call at 9:30 a.m. is also available in a listen-only mode by dialing 415-908-6200. A telephone replay of the call will be available through February 19, 2004 and can be heard by dialing 800-633-8284 (402-977-9140 for international callers). The access code for the replay is 211-80-749.
Laboratory Corporation of America(R) 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, approximately 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, 2002 and subsequent SEC filings, and will be available in the Company's Form 10-K for the year ended December 31, 2003, when filed.
LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Statements of Operations
(in millions, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
Net sales $731.5 $650.1 $2,939.4 $2,507.7
Cost of sales 430.8 396.2 1,714.8 1,445.9
Selling, general and
administrative 161.7 158.2 651.8 585.5
Amortization of
intangibles and other
assets 10.1 7.4 37.6 23.8
Restructuring and other
special items (1.8) - 1.5 17.5
Operating income 130.7 88.3 533.7 435.0
Other income (expense) (0.6) (0.2) (1.2) (0.6)
Investment income 0.3 0.8 5.1 3.7
Interest expense (10.0) (5.5) (40.9) (19.2)
Income from equity
investments 11.1 7.2 43.7 13.4
Earnings before income
taxes 131.5 90.6 540.4 432.3
Provision for income
taxes 53.9 37.6 219.4 177.7
Net earnings $77.6 $53.0 $321.0 $254.6
Net earnings before
restructuring and other
special items $76.5 $53.0 $321.9 $264.8
Diluted earnings per
common share:
Net earnings $0.54 $0.36 $2.22 $1.77
Net earnings before
restructuring and other
special items $0.53 $0.36 $2.22 $1.84
Weighted average shares
outstanding 143.0 146.4 144.8 144.2
EBITDA $174.4 $123.9 $711.5 $563.8
LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Balance Sheets
(in millions, except per share data)
December 31, December 31,
2003 2002
Cash and cash equivalents $123.0 $56.4
Accounts receivable, net 432.5 393.0
Property, plant and equipment 361.3 351.2
Intangible assets and goodwill, net 1,860.4 1,217.5
Investments in equity affiliates 507.1 400.6
Other assets 130.6 173.3
$3,414.9 $2,592.0
Total bank debt $2.8 $3.5
Zero coupon-subordinated notes 523.2 512.9
5 1/2% senior note 353.8 -
Other liabilities 639.2 463.9
Shareholders' equity 1,895.9 1,611.7
$3,414.9 $2,592.0
Notes to Financial Tables
1) During the third quarters of 2003 and 2002, the Company recorded
restructuring and other special items of $3.3 million and
$17.5 million, respectively, principally relating to costs to be
incurred as part of its integration efforts on its DIANON and
Dynacare acquisitions. During the fourth quarter of 2003, the
Company recorded a net pre-tax restructuring credit of $1.8
million, representing the net of restructuring charges and
adjustments.
2) 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- and twelve-month periods ended December 31, 2003
and 2002:
Three Months Year
Ended December 31, Ended December 31,
2003 2002 2003 2002
Earnings before income taxes $131.5 $90.6 $540.4 $432.3
Add (subtract):
Interest expense 10.0 5.5 40.9 19.2
Investment income (0.3) (0.8) (5.1) (3.7)
Other (income) expense, net 0.6 0.2 1.2 0.6
Depreciation 23.4 20.6 91.6 73.0
Amortization 10.1 7.4 37.6 23.8
Restructuring and other
special items (1.8) - 1.5 17.5
Equity investments'
depreciation and
amortization 0.9 0.4 3.4 1.1
EBITDA $174.4 $123.9 $711.5 $563.8
3) The following table reconciles net earnings to net earnings before
restructuring and other special items:
Three Months Year
Ended December 31, Ended December 31,
2003 2002 2003 2002
Net earnings $77.6 $53.0 $321.0 $254.6
Restructuring and other
special items (1.8) - 1.5 17.5
Provision for income taxes 0.7 - (0.6) (7.3)
(1.1) - 0.9 10.2
Net earnings before
restructuring and
other special charges $76.5 $53.0 $321.9 $264.8
SOURCE Laboratory Corporation of America Holdings
-0- 02/12/2004
/CONTACT: Pamela Sherry of Laboratory Corporation of America Holdings,
+1-336-436-4855, or [email protected], or Shareholders Direct,
+1-800-LAB-0401/
/Web site: http://www.labcorp.com /
(LH)
CO: Laboratory Corporation of America Holdings
ST: North Carolina
IN: HEA MTC
SU: ERN CCA MAV
CF-JT
-- CLTH011 --
3981 02/12/2004 07:07 EST http://www.prnewswire.com