Laboratory Corporation Of America® Holdings Announces 2006 First Quarter Results
Burlington, NC, April 25, 2006 — Laboratory Corporation of America® Holdings (LabCorp®) (NYSE: LH) today announced results for the first quarter ended March 31, 2006.
Net earnings increased 5.5% to $101.9 million, compared to first quarter 2005 net earnings of $96.6 million. Earnings per diluted share (EPS) increased 13.4% to $0.76, compared to $0.67 per diluted share in the first quarter of 2005. Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $223.8 million for the quarter, or 25.5% of net sales. Excluding the impact of the required change in accounting for stock based compensation, net earnings increased 9.0% to $105.3 million, EPS increased 16.4% to $0.78 per diluted share, and EBITDA was $229.6 million, or 26.1% of net sales.
Revenues for the quarter were $878.5 million, an increase of 9.9% compared to the same period in 2005. Compared to the first quarter of 2005, testing volume, measured by accessions, increased 4.6%, and price increased 5.3%.
During the quarter, the Company repurchased $185.1 million of stock, representing approximately 3.3 million shares. Operating cash flow for the quarter was $178.6 million. The balance of cash and short-term investments at the end of the quarter was $71.4 million, and there were no outstanding borrowings under the Company’s revolving line of credit.
“We are off to a solid start in 2006 and are particularly pleased with volume and price trends and key financial indicators such as EPS and operating cash flow,” said Thomas P. Mac Mahon, Chairman and Chief Executive Officer. “Actions taken in 2005 to profitably grow the Company through expansion of our managed care relationships, and through acquisitions in key esoteric testing markets, have positioned us well for continued growth in 2006 and beyond.”
Outlook For 2006
The Company is reiterating guidance for 2006, originally issued on February 16, 2006. Excluding the impact of the required change in accounting for share based compensation and any share repurchase activity after March 31, 2006, the Company expects revenue growth of 6.5% to 7.5%, EBITDA margins of approximately 26.0% to 26.5%, diluted earnings per share of between $3.15 and $3.25, operating cash flow of approximately $600 million to $620 million, capital expenditures of approximately $100 million to $115 million, interest expense of approximately $47 million, and a bad debt rate of approximately 5.3% of sales. The Company estimates that the implementation of the required change in accounting for stock based compensation will have an EBITDA impact of approximately $22 million to $23 million and an EPS impact of approximately $0.10 per diluted share.
The Company today is filing an 8-K that will include additional information on its business and operations, including financial guidance for 2006. 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 in a listen-only mode by dialing 212-896-6169. A telephone replay of the call will be available through May 2, 2006 and can be heard by dialing 800-633-8284 (402-977-9140 for international callers). The access code for the replay is 212-87-854. A live online broadcast of LabCorp’s quarterly conference call on April 25, 2006 will be available at www.labcorp.com or at www.streetevents.com beginning at 9:00 a.m. Eastern Time. This webcast will be archived and accessible continuing through May 25, 2006.
Laboratory Corporation of America® Holdings, a 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 $3.3 billion in 2005, approximately 24,000 employees nationwide, and more than 220,000 clients, LabCorp offers clinical assays ranging from routine 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; DIANON Systems, Inc. based in Stratford, CT, US LABS based in Irvine, CA, and Esoterix and its Colorado Coagulation, Endocrine Sciences, and Cytometry Associates laboratories. 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, 2005 and subsequent SEC filings.
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- Laboratory Corporation of America® Holdings
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