Laboratory Corp. of America Holdings : Laboratory Corporation of America(R) Holdings Announces 2012 First Quarter Results
04/19/2012| 08:35am US/Eastern
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BURLINGTON, N.C., Apr 19, 2012 (BUSINESS WIRE) --Laboratory
Corporation of America(R) Holdings (LabCorp(R)) (NYSE: LH)
today announced results for the quarter ended March 31, 2012.
First Quarter Results
Net earnings were $161.6 million and earnings per diluted
share (EPS) were $1.63 in the first quarter of 2012. Non-GAAP
earnings per diluted share, excluding amortization,
restructuring and other special charges recorded in the first
quarter of 2012 and 2011 (Adjusted EPS Excluding
Amortization) were $1.74 and $1.52, respectively.
Operating income for the first quarter was $287.1 million.
Non-GAAP operating income excluding restructuring and other
special charges recorded in the first quarter of 2012 and
2011 (Adjusted Operating Income) was $283.5 million and
$263.7 million, respectively.
Revenues for the quarter were $1,423.3 million, an increase
of 4.0% over the first quarter of 2011. Testing volume,
measured by requisitions, increased 2.8%, and revenue per
requisition increased 1.2%. The quarter benefited from
comparatively mild weather, which increased the revenue and
volume growth rate by approximately 1.5%.
Operating cash flow for the quarter was $197.1 million. The
balance of cash at the end of the quarter was $129.9 million,
and there were $460.0 million of borrowings outstanding under
the Company's $1.0 billion revolving credit facility.
During the quarter, the Company repurchased approximately
$122.3 million of stock, representing approximately 1.4
million shares. As of March 31, 2012, approximately $462.1
million of repurchase authorization remained under the
Company's previously approved share repurchase plan.
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.
"We delivered another quarter of strong earnings and
margin growth. Our core business continues to perform well,
and we remain extremely pleased with the performance of the
Genzyme Genetics and Orchid Cellmark acquisitions," said
David P. King, Chairman and Chief Executive Officer.
Outlook for 2012
The Company is reaffirming its 2012 guidance, expecting
revenue growth of approximately 2.0% - 3.5%; Adjusted EPS
Excluding Amortization in the range of $6.75 to $7.05,
excluding the impact of any share repurchase activity after
March 31, 2012; operating cash flow of approximately $950
million; and capital expenditures of approximately $155
million. The Company expects that Genzyme Genetics will be
slightly accretive to 2012 earnings.
Use of Adjusted Measures
The Company has provided in this press release
"adjusted" financial information that has not been
prepared in accordance with GAAP, including Adjusted EPS,
Adjusted EPS Excluding Amortization and Adjusted Operating
Income. 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 to use 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 866-578-5771 (617-213-8055 for international
callers). The access code is 53136963. A telephone replay of
the call will be available through April 26, 2012 and can be
heard by dialing 888-286-8010 (617-801-6888 for international
callers). The access code for the replay is 76415696. A live
online broadcast of LabCorp's quarterly conference call
on April 19, 2012 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 19, 2012.
About LabCorp(R)
Laboratory Corporation of America(R) 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 $5.5 billion in 2011, over
31,000 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, 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, 2011, and subsequent SEC filings.
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LABORATORY CORPORATION OF AMERICA HOLDINGS
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Consolidated Statements of Operations
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(in millions, except per share data)
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Three Months Ended
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March 31,
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2012
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2011
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Net sales
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$
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1,423.3
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$
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1,368.4
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Cost of sales
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847.2
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800.0
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Selling, general and administrative
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271.2
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282.8
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Amortization of intangibles and other assets
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21.4
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21.9
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Restructuring and other special charges
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(3.6
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27.9
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Operating income
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287.1
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235.8
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Other income (expense)
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(0.5
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0.1
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Investment income
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0.2
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0.3
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Interest expense
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(21.5
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(24.0
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Equity method income, net
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4.3
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1.5
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Earnings before income taxes
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269.6
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213.7
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Provision for income taxes
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107.6
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83.1
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Net earnings
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162.0
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130.6
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Less net earnings attributable to noncontrolling interest
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(0.4
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(3.5
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Net earnings attributable to Laboratory Corporation of
America
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$
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161.6
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$
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127.1
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Adjusted Operating Income
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Operating Income
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$
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287.1
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$
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235.8
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Restructuring and other special charges
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(3.6
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27.9
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Adjusted operating income
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$
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283.5
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$
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263.7
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Adjusted EPS Excluding Amortization
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Diluted earnings per common share
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$
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1.63
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$
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1.23
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Impact of restructuring and other special charges
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(0.02
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0.16
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Amortization expense
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0.13
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0.13
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Adjusted EPS Excluding Amortization
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$
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1.74
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$
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1.52
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Weighted average shares outstanding
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99.1
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103.2
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LABORATORY CORPORATION OF AMERICA HOLDINGS
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Consolidated Balance Sheets
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(in millions, except per share data)
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March 31,
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December 31,
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2012
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2011
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Cash and short term investments
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$
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129.9
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$
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159.3
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Accounts receivable, net
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751.7
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699.8
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Property, plant and equipment
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577.2
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578.3
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Intangible assets and goodwill, net
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4,296.9
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4,302.5
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Investments in joint venture partnerships
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79.9
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76.8
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Other assets
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295.0
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319.9
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$
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6,130.6
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$
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6,136.6
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Zero-coupon subordinated notes
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$
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136.0
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$
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135.5
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Senior notes
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1,525.4
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1,525.5
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Term loan and credit facility
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460.0
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560.0
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Other liabilities
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1,391.0
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1,391.9
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Noncontrolling interest
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20.6
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20.2
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Shareholders' equity
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2,597.6
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2,503.5
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$
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6,130.6
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$
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6,136.6
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Consolidated Statement of Cash Flow Data
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(in millions, except per share data)
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For the Three Months Ended
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March 31,
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March 31,
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2012
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2011
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Net cash provided by operating activities
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$
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197.1
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$
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215.3
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Net cash used for investing activities
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(36.2
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(44.5
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Net cash provided by (used for) financing activities
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(191.6
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(207.1
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Effect of exchange rates on cash
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1.3
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1.0
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Net (decrease) increase in cash
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(29.4
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(35.3
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Cash at beginning of period
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159.3
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230.7
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Cash at end of period
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$
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129.9
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$
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195.4
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Free Cash Flow:
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Net cash provided by operating activities
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$
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197.1
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$
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215.3
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Less: Capital expenditures
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(34.2
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(29.4
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Free cash flow
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$
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162.9
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$
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185.9
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Notes to Financial Tables
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1)
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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).
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2)
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During the first quarter of 2011, the Company recorded
restructuring and other special charges of $27.9 million.
The charges included $4.0 million in severance and other
personnel costs along with $9.8 million in
facility-related costs associated with the integration of
Genzyme Genetics. The charges also included a $14.8
million write-off of an investment made in a prior year.
The after tax impact of these charges decreased net
earnings for the quarter ended March 31, 2011, by $16.9
million and diluted earnings per share by $0.16 ($16.9
million divided by 103.2 million shares).
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3)
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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, 2012 and 2011, intangible
amortization was $21.4 million and $21.9 million,
respectively ($13.1 million and $13.2 million net of tax,
respectively) and decreased EPS by $0.13 ($13.1 million
divided by 99.1 million shares) and $0.13 ($13.2 million
divided by 103.2 million shares), respectively.
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SOURCE: Laboratory Corporation of America(R)
Laboratory Corporation of America(R) Holdings
Stephen Anderson, 336-436-5274
Investor@labcorp.com
distributed by
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