Laboratory Corporation of America® Holdings Announces 2013 First Quarter Results

  Laboratory Corporation of America® Holdings Announces 2013 First Quarter
  Results

  *Revenue of $1.44 billion
  *Diluted EPS of $1.56
  *Adjusted EPS Excluding Amortization of $1.74, reduced by a $0.04 impact
    from inclement weather
  *2013 Guidance maintained at revenue growth of 2% - 3% and Adjusted EPS
    Excluding Amortization of $6.85 - $7.15

Business Wire

BURLINGTON, N.C. -- April 19, 2013

Laboratory Corporation of America^® Holdings (LabCorp^®) (NYSE: LH) today
announced results for the quarter ended March 31, 2013.

First Quarter Results

Net earnings were $147.2 million and earnings per diluted share (EPS) were
$1.56 in the first quarter of 2013. Non-GAAP earnings per diluted share,
excluding amortization, restructuring and other special charges recorded in
the first quarter of 2013 (Adjusted EPS Excluding Amortization) were $1.74.
Inclement weather reduced EPS and Adjusted EPS Excluding Amortization by
approximately $0.04.

Operating income for the quarter was $262.0 million. Non-GAAP operating income
excluding restructuring and other special charges recorded in the quarter
(Adjusted Operating Income) was $269.5 million, or 18.7% of revenue. Margins
were negatively affected by weather, Medicare payment reductions and the
number of days in the quarter.

Revenues for the quarter were $1,440.9 million, an increase of1.2% over the
first quarter of 2012. Testing volume, measured by requisitions, increased
1.1% and revenue per requisition increased0.2%. On a per day basis, revenue
increased 2.9% and testing volume increased 2.7% over the first quarter of
2012. Inclement weather reduced volume growth by approximately 0.5%.

Operating cash flow for the quarter was $198.2 million. The balance of cash at
the end of the quarter was $185.8 million, and there were $30.0 million of
borrowings outstanding under the Company’s $1 billion revolving credit
facility. During the quarter, the Company repurchased $113.9 million of stock,
representing 1.3 million shares. As of March 31, 2013, $954.1 million of
repurchase authorization remained under the Company’s previously approved
share repurchase plan.

The Company recorded restructuring and other special charges of $7.5 million
during the first quarter of 2013.

“We delivered another solid quarter, highlighted by revenue growth of
approximately 3.0% per day,” said David P. King, Chairman and Chief Executive
Officer. “We continue to execute our strategic initiatives, and we remain
pleased with the performance of our business, particularly Medtox, our most
recent acquisition.”

Outlook for 2013

The Company is reaffirming its 2013 guidance, expecting revenue growth in the
range of approximately 2.0% to 3.0%; Adjusted EPS Excluding Amortization of
$6.85 to $7.15, which includes a negative impact of approximately $0.35 due to
Medicare payment reductions and excludes the impact of any share repurchase
activity after March 31, 2013; operating cash flow of approximately $870
million to $900 million; and capital expenditures of approximately $200
million to $220 million. The Company’s capital expenditure guidance is higher
than historical levels due to near-term investments in facility consolidation
and the replacement of a major testing platform.

Use of Adjusted Measures

The Company has provided in this press release and accompanying tables
“adjusted” financial information that has not been prepared in accordance with
GAAP, including Adjusted EPS, Adjusted EPS Excluding Amortization, Adjusted
Operating Income, and Free Cash Flow. The Company believes these adjusted
measures are useful to investors as a supplement to, but not as a substitute
for, GAAP measures, in evaluating the Company’s operational performance. The
Company further believes that the use of these non-GAAP financial measures
provides an additional tool for investors in evaluating operating results and
trends, and in comparing the Company’s financial results with other companies.
Reconciliations of these non-GAAP measures to the most comparable GAAP
measures are included in the tables accompanying this press release.

The Company today is filing an 8-K that will include additional information on
its business and operations. 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 conference call discussing LabCorp's quarterly results will be held today at
9:00 a.m. Eastern Time and is available by dialing 866-202-0886 (617-213-8841
for international callers). The access code is 96415501. A telephone replay of
the call will be available through April 26, 2013 and can be heard by dialing
888-286-8010 (617-801-6888 for international callers). The access code for the
replay is 15533574. A live online broadcast of LabCorp’s quarterly conference
call on April 19, 2013 will be available at http://www.labcorp.com/ or at
http://www.streetevents.com/ beginning at 9:00 a.m. Eastern Time. This webcast
will be archived and accessible continuing through May 17, 2013.

About LabCorp^®

Laboratory Corporation of America^® Holdings, an S&P 500 company, is a pioneer
in commercializing new diagnostic technologies and the first in its industry
to embrace genomic testing. With annual revenues of $5.7 billion in 2012, over
34,000 employees worldwide, and more than 220,000 clients, LabCorp offers more
than 4,000 tests ranging from routine blood analyses to reproductive genetics
to companion diagnostics. LabCorp furthers its scientific expertise and
innovative clinical testing technology through its LabCorp Specialty Testing
Group: The Center for Molecular Biology and Pathology, National Genetics
Institute, ViroMed Laboratories, Inc., The Center for Esoteric Testing,
Litholink Corporation, Integrated Genetics, Integrated Oncology, DIANON
Systems, Inc., Monogram Biosciences, Inc., Colorado Coagulation, Cellmark
Forensics, MedTox, and Endocrine Sciences. LabCorp conducts clinical trials
testing through its LabCorp Clinical Trials division. LabCorp clients include
physicians, government agencies, managed care organizations, hospitals,
clinical labs, and pharmaceutical companies. To learn more about our
organization, visit our Web site at: www.labcorp.com.

This press release contains forward-looking statements. Each of the
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, 2012, and subsequent SEC filings.

LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Statements of Operations
(in millions, except per share data)
                                                              
                                                     Three Months Ended
                                                     March 31,
                                                     2013          2012
                                                                   
Net sales                                            $ 1,440.9     $ 1,423.3
Cost of sales                                          868.7         847.2
Selling, general and administrative                    283.2         271.2
Amortization of intangibles and other assets           19.5          21.4
Restructuring and other special charges               7.5         (3.6    )
                                                                   
Operating income                                      262.0       287.1   
                                                                   
Other income (expense)                                 (0.6    )     (0.5    )
Investment income                                      0.2           0.2
Interest expense                                       (24.5   )     (21.5   )
Equity method income, net                             4.3         4.3     
Earnings before income taxes                           241.4         269.6
Provision for income taxes                            93.8        107.6   
Net earnings                                           147.6         162.0
Less net earnings attributable to                     (0.4    )    (0.4    )
noncontrolling interest
Net earnings attributable to Laboratory              $ 147.2      $ 161.6   
Corporation of America Holdings
                                                                   
Adjusted Operating Income
Operating Income                                     $ 262.0       $ 287.1
Restructuring and other special charges               7.5         (3.6    )
Adjusted operating income                            $ 269.5      $ 283.5   
                                                                   
Adjusted EPS Excluding Amortization
Diluted earnings per common share                    $ 1.56        $ 1.63
Impact of restructuring and other special              0.05          (0.02   )
charges
Amortization expense                                  0.13        0.13    
Adjusted EPS Excluding Amortization                  $ 1.74       $ 1.74    
                                                                   
Weighted average shares outstanding                   94.5        99.1    
                                                                             

LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Balance Sheets
(in millions, except per share data)
                                                            
                                                    March 31,     December 31,
                                                   2013          2012
                                                                  
Cash and short term investments                     $ 185.8       $  466.8
Accounts receivable, net                              793.8          718.5
Property, plant and equipment                         634.6          630.8
Intangible assets and goodwill, net                   4,539.2        4,569.4
Investments in joint venture partnerships             86.8           78.1
Other assets                                        329.3        331.4   
                                                   $ 6,569.5    $  6,795.0 
                                                                  
Zero-coupon subordinated notes                      $ 117.7       $  130.0
Senior notes                                          2,175.0        2,525.0
Credit facility                                       30.0           -
Other liabilities                                     1,449.6        1,401.9
Noncontrolling interest                               20.9           20.7
Shareholders' equity                                2,776.3      2,717.4 
                                                   $ 6,569.5    $  6,795.0 
                                                                  
                                                                  
Consolidated Statement of Cash Flow Data
(in millions, except per share data)
                                                                  
                                                  For the Three Months Ended
                                                    March 31,     March 31,
                                                  2013            2012
                                                                  
Net cash provided by operating activities           $ 198.2       $  197.1
Net cash used for investing activities                (61.5   )      (36.2   )
Net cash provided by (used for) financing             (412.7  )      (191.6  )
activities
Effect of exchange rates on cash                    (5.0    )     1.3     
Net (decrease) increase in cash                       (281.0  )      (29.4   )
Cash at beginning of period                         466.8        159.3   
Cash at end of period                              $ 185.8      $  129.9   
                                                                  
Free Cash Flow:
Net cash provided by operating activities           $ 198.2       $  197.1
Less: Capital expenditures                          (41.7   )     (34.2   )
Free cash flow                                     $ 156.5      $  162.9   

Notes to Financial Tables

1) During the first quarter of 2013, the Company recorded net restructuring
and other special charges of $7.5 million. The charges included $7.6 million
in severance and other personnel costs along with $1.8 million in costs
associated with facility closures and general integration initiatives. The
Company reversed previously established reserves of $0.6 million in unused
severance and $1.3 million in unused facility-related costs. The after tax
impact of these charges decreased net earnings for the quarter ended March 31,
2013, by $4.7 million and diluted earnings per share by $0.05 ($4.7 million
divided by 94.5 million shares).

2) During the first quarter of 2012, the Company recorded a net credit of $3.6
million in restructuring and other special charges. The Company reversed
previously established reserves of $3.8 million in unused severance and $2.4
million in unused facility-related costs. This net credit also includes
charges of $1.7 million in severance and other personnel costs along with $0.9
million in facility-related costs primarily related to ongoing integration
activities for Orchid and Genzyme Genetics. The after tax impact of the net
credit increased net earnings for the quarter ended March 31, 2012, by $2.2
million and diluted earnings per share by $0.02 ($2.2 million divided by 99.1
million shares).

3) The Company continues to grow the business through acquisitions and uses
Adjusted EPS Excluding Amortization as a measure of operational performance,
growth and shareholder returns. The Company believes adjusting EPS for
amortization provides investors with better insight into the operating
performance of the business. For the quarters ended March 31, 2013 and 2012,
intangible amortization was $19.5 million and $21.4 million, respectively
($12.0 million and $13.1 million net of tax, respectively) and decreased EPS
by $0.13 ($12.0 million divided by 94.5 million shares) and $0.13 ($13.1
million divided by 99.1 million shares), respectively.

Contact:

Laboratory Corporation of America^® Holdings
Stephen Anderson, 336-436-5076
Investor@labcorp.com
 
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