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LH · Labcorp Holdings

31 filings

10-K

LH 10-K Annual Reports

Labcorp Holdings - 31 annual reports

Filing record · 2016–202610-K1310-Q338-K382

2025
Labcorp Holdings Annual Report, Year Ended Dec 31, 2025
Labcorp Holdings Inc. (LH) reported 2025 revenues of $13,951.7 million, up 7.2% from $13,008.9 million in 2024, driven by organic revenue growth of 4.4%, acquisitions net of divestitures of 2.5%, and favorable foreign currency translation of 0.4%. Operating income rose to $1,384.7 million from $1,086.7 million, and net earnings attributable to Labcorp Holdings Inc. were $876.5 million, versus $746.0 million in 2024. Diluted EPS was $10.46, compared with $8.84 in 2024. Dx (Diagnostics Laboratories) generated $10,876.5 million in revenue with segment operating income of $1,779.9 million, while BLS (Biopharma Laboratory Services) generated $3,098.2 million with segment operating income of $498.5 million. Cash flow from operations was $1,640.5 million, compared with $1,585.8 million in 2024. Cash and cash equivalents fell to $532.3 million from $1,518.7 million, reflecting $1,194.0 million used for investing activities (including $582.0 million in acquisitions and $434.5 million in capital expenditures) and $1,457.0 million used for financing activities, which included $450.0 million in share repurchases and $240.7 million in dividends. Senior notes principal totaled $5.2 billion, and the company had $1.0 billion available under its revolving credit facility at year-end. The filing also highlights ongoing reimbursement pressure from PAMA, with rate reductions frozen for 2026 and capped at 15% per year for 2027 to 2029 under the Consolidated Appropriations Act. Management plans to raise capital expenditures to approximately 4.0% of revenues. Pending legal matters include the Ravgen patent judgment, which the company is appealing, and the AMCA data incident, for which the company has reached a term sheet to settle the class action.
Feb 24, 2026
2024
Labcorp Holdings Annual Report, Year Ended Dec 31, 2024
Labcorp Holdings Inc. (LH) reported 2024 revenues of $13,008.9 million, up 7.0% from $12,161.6 million in 2023. Organic revenue grew 3.9% (Base Business up 4.9%, partly offset by a 1.0% decrease in COVID-19 Testing), acquisitions net of divestitures contributed 2.8%, and favorable foreign currency translation added 0.2%. Operating income rose to $1,086.7 million from $725.6 million, aided by the absence of the prior year's $349.0 million goodwill and asset impairment charge. Diluted EPS from continuing operations was $8.84, versus $4.33 in 2023. Net earnings attributable to Labcorp Holdings were $746.0 million, compared with $418.0 million in 2023. Operating cash flow from continuing operations was $1,585.8 million. Diagnostics Laboratories (Dx) generated $10,144.3 million of revenue and $1,606.3 million of segment operating income, a 15.8% operating margin. Biopharma Laboratory Services (BLS) generated $2,922.6 million of revenue and $458.9 million of segment operating income, a 15.7% operating margin. The company invested $839.0 million in acquisitions during 2024, including Invitae and BioReference Health, and repurchased $250.1 million of stock. It paid $243.1 million in dividends and ended the year with $1,518.7 million in cash. Total senior notes principal was about $6.2 billion, and the company issued $2.0 billion of new senior notes in September 2024. The filing highlights regulatory and reimbursement risk. The 2026 PAMA reduction of $100.0 million in Medicare reimbursement is expected, unless implementation is further delayed or changed. FDA's final rule on laboratory-developed tests (LDTs), with first compliance obligations starting May 6, 2025, is under legal challenge. The company also disclosed ongoing litigation, including the Ravgen patent verdict, in which the court awarded damages and ongoing royalties, and the AMCA data incident litigation.
Feb 25, 2025
2023
Labcorp Holdings Annual Report, Year Ended Dec 31, 2023
Laboratory Corporation of America Holdings (Labcorp) reported 2023 revenues from continuing operations of $12,161.6 million, up 2.5% from $11,863.9 million in 2022, with organic revenue growth of 0.6% and acquisitions, net of divestitures, contributing 1.7%. Diluted earnings per share from continuing operations were $4.33, down from $10.94 in 2022, and operating income fell to $725.6 million from $1,436.5 million. The decline was driven by lower COVID-19 Testing revenue, goodwill and other asset impairments of $349.0 million (including $333.6 million for the Early Development reporting unit in BLS), higher personnel costs, and $644.1 million in general corporate and unallocated expenses, which included spin-off transaction costs. Cash flows from continuing operating activities were $1,202.3 million, compared with $1,764.8 million in 2022. The defining event of the year was the June 30, 2023 spin-off of Fortrea Holdings Inc., the former clinical development and commercialization services business. Fortrea's results are presented as discontinued operations. Fortrea paid the Company approximately $1,600.0 million, which the Company used to repurchase approximately $1,000.0 million of common stock through accelerated share repurchases and to repay $300.0 million of debt maturing in 2023, with the remainder to be returned to shareholders through future repurchases and/or dividends. The Company paid $254.0 million in common stock dividends in 2023 and declared a $0.72 per share first-quarter 2024 dividend, and it reported $530.4 million of remaining repurchase authorization at year end. The Company's principal risks include macroeconomic conditions, reimbursement changes (including the Protecting Access to Medicare Act (PAMA) fee schedule rules and the phase-in of further rate reductions), competition, regulatory developments such as FDA oversight of laboratory-developed tests, cybersecurity incidents (including the AMCA Incident), and litigation, notably the Ravgen patent judgment of $100.0 million in enhanced damages and a $272.0 million jury award. At December 31, 2023, the Company had $4.2 billion of senior notes outstanding in aggregate principal, of which $1.0 billion was payable within 12 months, and it stated it expects to refinance that amount.
Feb 26, 2024
2022
Labcorp Holdings Annual Report, Year Ended Dec 31, 2022
Laboratory Corporation of America Holdings (Labcorp) reported 2022 revenues of $14,876.8 million, down from $16,120.9 million in 2021, a decrease of 7.7% driven by a 10.0% decline in COVID-19 Testing that was partially offset by a 2.5% increase in the organic Base Business. Diluted earnings per share fell to $13.97 from $24.39, and operating income dropped to $1,773.9 million from $3,259.5 million. The company cited a $260.0 million goodwill impairment in its early development reporting unit within the DD segment, triggered by a supplier's loss of critical testing supplies in December 2022. Operating cash flow was $1,955.9 million, compared with $3,109.6 million in 2021. The company is pursuing a planned tax-free spin-off of its Clinical Development and Commercialization Services business, which will be named Fortrea, with completion targeted for mid-2023. Labcorp expects COVID-19 Testing demand in 2023 not to match 2022 levels. Management also returned capital during 2022, paying $195.2 million in dividends and repurchasing $1,100.0 million of stock, and on February 7, 2023 the board authorized a new $1,000.0 million repurchase plan. Acquisitions totaled $1,164.0 million in cash during 2022. Key risks for investors include the Ravgen patent verdict of $272 million (with post-trial motions seeking enhanced damages of up to $817 million), the AMCA data-security incident litigation, ongoing PAMA reimbursement uncertainty, and $5,450.0 million of senior notes outstanding at December 31, 2022.
Feb 28, 2023
2021
Labcorp Holdings Annual Report, Year Ended Dec 31, 2021
Laboratory Corporation of America Holdings (LH) reported 2021 revenues of $16,120.9 million, up 15.3% from $13,978.5 million in 2020, with operating income of $3,259.5 million versus $2,445.4 million and diluted earnings per share of $24.39 versus $15.88. Growth was driven mainly by organic growth of 13.8%, with the Base Business (non-COVID-19 testing) contributing 14.0%, partly offset by a 0.2% decrease in COVID-19 Testing. The Diagnostics (Dx) segment generated $10,363.6 million in revenue and $2,988.5 million in operating income, while Drug Development (DD) generated $5,845.5 million in revenue and $547.7 million in operating income, compared with $37.3 million in 2020 that included goodwill and other asset impairments. Operating cash flow rose to $3,109.6 million from $2,135.3 million. Following a strategic review of its structure and capital allocation, the company announced in December 2021 that it will initiate a quarterly dividend in the second quarter of 2022 with a target payout of 15% to 20% of adjusted earnings, and authorized a $2,500.0 million share repurchase program. Of that program, $1,000.0 million is being executed through an accelerated share repurchase expected to complete by the end of April 2022. The company repurchased $1,668.5 million of stock in 2021 and had $1,631.5 million of authorization remaining at year-end. It also launched a LaunchPad initiative targeting $350.0 million of savings over three years and plans capital expenditures of approximately 4.0% of 2022 revenues. The filing also flags risks tied to COVID-19 testing demand, which management expects will not match 2021 levels, as well as payer reimbursement changes under PAMA, data privacy and anti-kickback compliance, and the AMCA security incident litigation. Subsequent events include an agreement with Ascension to manage its hospital-based laboratories in 10 states and acquire select outreach laboratory assets for $400.0 million, and the February 2022 closing of the Personal Genome Diagnostics acquisition for $450.0 million in cash plus up to $125.0 million in milestones.
Feb 25, 2022
2020
Labcorp Holdings Annual Report, Year Ended Dec 31, 2020
Laboratory Corporation of America Holdings (Labcorp) reported a strong 2020 as COVID-19 testing drove results. Revenues rose to $13,978.5 million from $11,554.8 million, operating income increased to $2,445.4 million from $1,330.2 million, and diluted earnings per share were $15.88 versus $8.35 in 2019. Net earnings attributable to the company were $1,556.1 million. The Labcorp Diagnostics (Dx) segment generated $9,253.4 million of revenue and $2,634.9 million of operating income, while the Labcorp Drug Development (DD) segment generated $4,877.7 million of revenue but only $37.3 million of operating income after $450.5 million of goodwill and other asset impairments tied to the pandemic. The company stated that COVID-19 Testing contributed 24.1% to organic growth, offset by a 5.1% decline in its Base Business. Management expects COVID-19 testing demand to fall as vaccines roll out and does not expect it to match 2020 levels, while expecting other diagnostic testing and drug development activity to grow in 2021. Cash flow from operations was $2,135.3 million, and the company ended the year with $1,320.8 million in cash and cash equivalents. Total Senior Notes principal was approximately $5,450.0 million, and the company held $800.0 million of remaining share repurchase authorization. Key risks highlighted in the filing include payer reimbursement changes under PAMA, which reduced CLFS revenue by approximately $72.0 million in 2020, the possibility of FDA regulation of laboratory-developed tests, cybersecurity and third-party breaches (including the AMCA incident), COVID-19 volatility, and dependence on the biopharmaceutical industry for DD revenues. The company stated it has not historically paid dividends and does not presently anticipate paying them.
Feb 25, 2021
2019-A
Labcorp Holdings Annual Report (Amendment), Year Ended Dec 31, 2019
This filing is the Item 15 section of Laboratory Corporation of America Holdings (now Labcorp Holdings Inc.), which lists the financial statements and schedules and provides an index of exhibits. It states that the consolidated financial statements and the report of the independent registered public accounting firm are included, and that financial statement schedules are omitted because they are inapplicable or their information appears in the consolidated financial statements or notes. The text contains no reported revenue, earnings, or other financial results. The exhibit index shows the company's recent debt and governance activity. It lists the Thirteenth and Fourteenth Supplemental Indentures, both dated November 25, 2019, which cover the form of the 2024 Notes and the form of the 2029 Notes. It also lists an Amended and Restated By-Laws document, as amended February 5, 2020, and a Term Loan Credit Agreement dated June 3, 2019, with Bank of America, N.A. as administrative agent. Several exhibits are management contracts or compensatory plans, including executive employment, transition, and retirement agreements and equity incentive plans. The filing also indicates that the Chief Executive Officer and Chief Financial Officer certifications for a Form 10-K/A are filed with it, along with the list of subsidiaries, the auditor consent from PricewaterhouseCoopers LLP, powers of attorney for directors, and XBRL cover-page and inline XBRL exhibits. Items marked as previously filed were filed with the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
Mar 5, 2020
2019
Labcorp Holdings Annual Report, Year Ended Dec 31, 2019
Laboratory Corporation of America Holdings, now Labcorp Holdings Inc., reported 2019 revenues of $11,554.8 million, up 2.0% from $11,333.4 million in 2018, driven by acquisitions (2.3%) and organic growth (1.6%), partially offset by business dispositions (1.4%) and negative currency translation (0.5%). Net earnings attributable to the company fell to $823.8 million from $883.7 million, and diluted EPS was $8.35 versus $8.61. The decline reflected lower reimbursement from the Protecting Access to Medicare Act (PAMA), which reduced revenue by approximately $107.0 million in 2019 and is expected to reduce it by a further $90.0 million in 2020, along with higher personnel and cybersecurity costs at the LabCorp Diagnostics (LCD) segment. The two segments diverged sharply. LCD revenue declined 0.4% to $7,000.1 million and its operating margin fell to 15.5% from 16.6%. Covance Drug Development (CDD) revenue rose 6.1% to $4,578.1 million and its operating margin improved to 9.0% from 7.0%, helped by acquisitions including Envigo's nonclinical contract research services business for $601.0 million. Operating cash flow increased to $1,444.7 million from $1,305.4 million, and capital expenditures were $400.2 million. The filing also discloses the July 2018 ransomware incident and the May 2019 AMCA data security incident, which has generated multiple lawsuits and regulatory inquiries. The company repurchased $450.0 million of stock in 2019, leaving $900.0 million of authorization, and it has not historically paid dividends. Total debt at year-end was approximately $6.2 billion in scheduled payments, and the company reported a 3.1 to 1.0 ratio of total debt to pro forma EBITDA.
Feb 28, 2020
2018
Labcorp Holdings Annual Report, Year Ended Dec 31, 2018
Laboratory Corporation of America Holdings (now Labcorp Holdings Inc.) reported 2018 net revenues of $11.33 billion, up from $10.31 billion in 2017, a 9.9% increase driven by acquisitions (7.6%) and organic growth (2.7%). Operating income rose to $1.33 billion from $1.31 billion, while net earnings attributable to the Company fell to $883.7 million from $1,227.1 million, which included a provisional net benefit of $519.0 million from the Tax Cuts and Jobs Act in 2017. The company reports two segments: LabCorp Diagnostics (LCD), which contributed 62% of 2018 revenues but saw operating income decline 10.3% to $1.17 billion amid PAMA reimbursement cuts, and Covance Drug Development (CDD), which contributed 38% of revenues and grew 25.0% to $4.31 billion with operating income up 109.5% to $303.6 million. The filing highlights continued pressure from the Protecting Access to Medicare Act (PAMA), which reduced net reimbursement by approximately $70.0 million in 2018 and is expected to reduce it by a further $115.0 million in 2019 absent changes. Management is pursuing value-based care, drug development streamlining, and consumer initiatives such as LabCorp at Walgreens and Pixel by LabCorp. The company also disclosed a July 2018 ransomware attack that cost $12.6 million in expenditures and $9.8 million in estimated lost revenue, and it carries $6.0 billion of long-term debt. Share repurchases totaled $700.0 million in 2018, and the board authorized a new $1.25 billion repurchase plan on February 6, 2019. The company has not historically paid dividends.
Feb 28, 2019
2017
Labcorp Holdings Annual Report, Year Ended Dec 31, 2017
Laboratory Corporation of America Holdings (LabCorp) reported net revenues of $10.21 billion for 2017, up 8.1% from $9.44 billion in 2016, with growth from acquisitions of 5.8% and organic growth of 2.3%. Net earnings attributable to the company were $1.27 billion ($12.21 diluted EPS), compared with $732.1 million in 2016; the 2017 result includes a provisional net benefit of $519.0 million from the Tax Cuts and Jobs Act. Operating income rose to $1.36 billion from $1.31 billion. The company operates two segments: LabCorp Diagnostics (70.3% of 2017 net revenues) and Covance Drug Development (29.7%), the latter expanded by the September 2017 acquisition of Chiltern International Group Limited for approximately $1.22 billion in cash. The filing highlights margin pressure and reimbursement risk. Under the Protecting Access to Medicare Act (PAMA), the company estimates 2018 Clinical Laboratory Fee Schedule rates will reduce LCD revenue by approximately 8% ($70.0 million). CDD's operating margin fell to 6.8% from 9.6%, and the company expects the new revenue recognition standard to reduce LCD revenue while increasing CDD reported revenue. Total debt includes $6.0 billion of senior notes outstanding, and the company issued $1.2 billion of senior notes in August 2017 and a $750.0 million term loan in September 2017. The company has not historically paid dividends and repurchased $338.1 million of stock in 2017, with $401.4 million remaining under authorization.
Feb 27, 2018
2016
Labcorp Holdings Annual Report, Year Ended Dec 31, 2016
Laboratory Corporation of America Holdings (LabCorp) reported net revenues of $9.44 billion for 2016, up 11.0% from $8.51 billion in 2015, driven mainly by the full-year inclusion of Covance and solid organic growth and acquisitions, partly offset by foreign currency translation. Net earnings attributable to the company were $732.1 million, or $7.02 diluted earnings per share, compared with $437.6 million, or $4.35 per diluted share, in 2015. Operating income rose to $1.31 billion from $996.8 million, while restructuring and other special charges fell to $58.4 million from $113.9 million. The company operates two segments: LabCorp Diagnostics (LCD), which generated $6.59 billion (69.9% of net revenues), and Covance Drug Development (CDD), which generated $2.84 billion (30.1%). LCD's net revenue grew 6.4%, with acquisitions adding 2.5% and revenue per requisition adding 2.7%. CDD's revenue rose 23.3%, reflecting a full year of Covance results versus roughly ten months in 2015. Operating cash flow increased to $1.18 billion from $982.4 million, and capital expenditures were $278.9 million. Balance sheet and capital allocation remain central to the investment case. Senior notes outstanding totaled about $5.2 billion in principal and the term loan stood at $565.0 million at year-end 2016, with the company stating it is committed to maintaining an investment grade rating (Baa2/BBB). The company resumed share repurchases in the fourth quarter of 2016, buying 0.3 million shares for $43.9 million, and $739.5 million of authorization remained. Management highlighted regulatory risk, including PAMA-driven Medicare fee schedule changes starting in 2018 and the uncertain effect of potential ACA changes under the new administration.
Feb 27, 2017
2015-A
Labcorp Holdings Annual Report (Amendment), Year Ended Dec 31, 2015
Laboratory Corporation of America Holdings (now Labcorp Holdings Inc.) reported 2015 net revenues of $8,505.7 million, up from $6,011.6 million in 2014, driven primarily by the February 19, 2015 acquisition of Covance Inc. for $6,150.7 million. The company now reports two segments: LabCorp Diagnostics (LCD), contributing 72.9% of net revenues, and Covance Drug Development (CDD), contributing 27.1%. Net earnings attributable to the company fell to $436.9 million from $511.2 million, and diluted earnings per share fell to $4.34 from $5.91, reflecting higher interest expense of $274.9 million, restructuring and other special charges of $113.9 million, and amortization of intangibles of $164.5 million. LCD net revenues rose 6.2% to $6,199.3 million, with organic requisition volume growth of 3.2% and acquisitions adding 2.5%. Management cites Project LaunchPad, which generated net savings of approximately $65.0 million in 2015 and is expected to deliver more than $150.0 million between 2015 and 2017. Reimbursement remains a headwind: the filing describes ongoing Medicare and Medicaid pressure, a PAMA-driven move toward market-based Clinical Laboratory Fee Schedule rates beginning in 2017, and a $10.7 million reduction in Physician Fee Schedule revenue over 2016 and 2017. Capital allocation has shifted: share repurchases were suspended after the Acquisition was announced, total debt rose to $6,417.0 million in long-term obligations, and the company reported a total debt to consolidated EBITDA ratio of 3.6 to 1.0 against a stated target of 2.5 to 1.0. Cash flow from operations was $982.4 million, up from $739.0 million, while capital expenditures were $255.8 million. Shareholders' equity rose to $4,944.4 million. The company also disclosed pending litigation, including a $50.0 million jury verdict in the Wuth case that is under review by the Washington Supreme Court, and a False Claims Act suit (NPT Associates) that the company says it will vigorously defend.
Mar 1, 2016
2015
Labcorp Holdings Annual Report, Year Ended Dec 31, 2015
Laboratory Corporation of America Holdings (LabCorp) reported 2015 net revenues of $8,505.7 million, up from $6,011.6 million in 2014, driven primarily by the February 19, 2015 acquisition of Covance Inc. for $6,150.7 million. The company reports two segments: LabCorp Diagnostics (LCD), with net revenues of $6,199.3 million (72.9% of total), and Covance Drug Development (CDD), with $2,306.4 million (27.1%). Net earnings attributable to the company fell to $436.9 million from $511.2 million, reflecting $113.9 million of restructuring and other special charges, $164.5 million of amortization of intangibles, and higher interest expense of $274.9 million, which increased from $109.5 million after the acquisition financing. LCD faces ongoing reimbursement pressure. The filing describes reductions from the Protecting Access to Medicare Act (PAMA) and related Medicare fee schedule changes, with a $10.7 million net revenue reduction over 2016 and 2017 in the physician fee schedule, and says PAMA will set future Clinical Laboratory Fee Schedule rates based on private payer data beginning in 2017. Capitated MCO contracts accounted for approximately $219.9 million, or 3.5% of LCD net revenues. The company also discloses several significant litigation matters, including a $50.0 million jury verdict in the Wuth prenatal testing case, which was affirmed on appeal, and multiple False Claims Act suits. Balance sheet leverage increased materially: long-term debt rose to $5,992.1 million from $2,682.7 million, and total assets rose to $14,221.7 million from $7,301.8 million. Share repurchases were suspended following the Covance announcement, with $789.5 million of authorization remaining, and the company does not anticipate resuming buybacks until its total debt to consolidated EBITDA approaches 2.5 to 1.0, which was 3.6 to 1.0 at December 31, 2015. The company has not historically paid dividends.
Feb 29, 2016
2014
Labcorp Holdings Annual Report, Year Ended Dec 31, 2014
Laboratory Corporation of America Holdings (LabCorp), headquartered in Burlington, North Carolina, reported 2014 net sales of $6,011.6 million, up from $5,808.3 million in 2013, with net earnings attributable to the company of $511.2 million, down from $573.8 million, and diluted EPS of $5.91 versus $6.25. Total test volume (requisitions) rose 5.3% year over year, while revenue per requisition fell 1.7%, reflecting changes in test and payer mix. Operating income declined to $910.4 million from $990.9 million, with SG&A rising to 19.9% of net sales from 19.4%, and higher interest expense of $109.5 million. The company is the second largest independent clinical laboratory in the U.S. by 2014 net revenues, with 39 primary laboratories and about 1,750 patient service centers. The dominant event is the acquisition of Covance Inc., which closed on February 19, 2015 for approximately $6.2 billion, consisting of $75.76 in cash and 0.2686 shares per Covance share, with former Covance stockholders owning about 15.5% of the combined company. Funding included a $1.0 billion five-year term loan, $2.9 billion of senior notes issued January 30, 2015, and a $400.0 million 60-day cash bridge loan. Management expects a significant increase in the total debt to consolidated EBITDA ratio, which was 2.5 to 1.0 at December 31, 2014, and has suspended share repurchases until the ratio reaches a target of 2.5 to 1.0. Reimbursement pressure remains a central risk. Medicare and Medicaid accounted for about 15.0% of 2014 revenues, the clinical laboratory fee schedule was reduced by 0.75% in 2014 (a $6.0 million revenue reduction), and the Physician Fee Schedule faces a 21.2% conversion factor decrease on April 1, 2015 unless Congress acts. The Canadian Alberta joint venture faces a contract award appeal that could substantially reduce its revenues if the award stands. Management also points to Project LaunchPad, which it expects to generate savings in excess of $150.0 million over three years.
Feb 26, 2015
2013
Labcorp Holdings Annual Report, Year Ended Dec 31, 2013
Laboratory Corporation of America Holdings, headquartered in Burlington, North Carolina, reported 2013 net sales of $5.81 billion, up 2.4% from $5.67 billion in 2012, on 4.0% higher volume offset by a 1.6% decline in revenue per requisition. Net earnings attributable to the Company were $573.8 million, or $6.25 diluted earnings per share, compared with $583.1 million, or $5.99 per diluted share, in 2012. Operating income declined to $990.9 million from $1,023.5 million. The Company attributes margin pressure to government payment reductions and molecular pathology payment delays and denials, which it estimates reduced 2013 operating margins by about 150 basis points and operating cash flow by more than an estimated $100.0 million. Cash from operations fell to $818.7 million from $841.4 million. The Company describes its strategy as a five-pillar plan covering capital deployment, IT enhancement through LabCorp Beacon, operating efficiency, scientific innovation (152 new assays introduced in 2013), and knowledge services. It invested $1,015.6 million to repurchase 10.4 million shares in 2013, leaving $1,058.5 million of repurchase authorization at year-end. Total debt rose to $3.0 billion in long-term obligations, and the ratio of total debt to consolidated EBITDA was 2.4 to 1.0 against a covenant maximum of 3.0 to 1.0. The Company issued $700.0 million of senior notes in November 2013 and expects capital expenditures of $185.0 million to $205.0 million in 2014. The filing highlights regulatory and reimbursement risk, including a 2% sequestration reduction effective April 1, 2013, a 0.75% reduction to the Clinical Lab Fee Schedule in 2014, and CMS plans to evaluate 1,250 CLFS codes starting in 2015. Several False Claims Act and Medicaid overcharge lawsuits are pending, and a Washington jury returned a $50.0 million verdict in a prenatal genetic testing case, which the Company intends to appeal. The Company's Chief Financial Officer, William B. Hayes, announced plans to retire around the second quarter of 2014.
Feb 25, 2014
2012
Labcorp Holdings Annual Report, Year Ended Dec 31, 2012
Laboratory Corporation of America Holdings, headquartered in Burlington, North Carolina, describes itself as the second largest independent clinical laboratory company in the United States based on 2012 net revenues, operating a national network of 50 primary laboratories and approximately 1,800 patient service centers. Net sales for 2012 were $5,671.4 million, up from $5,542.3 million in 2011, with net earnings attributable to the Company of $583.1 million and diluted earnings per share of $5.99. Growth in 2012 was driven by a 1.7% increase in volume and a 0.6% increase in revenue per requisition, with the MEDTOX and Orchid acquisitions contributing, while Super Storm Sandy reduced revenues by an estimated $16.0 million. Cost of sales rose to 60.3% of net sales from 59.0% in 2011, while SG&A fell to 19.7% of sales from 20.9%. The filing highlights significant 2013 headwinds from government reimbursement cuts. The Company estimates these payment reductions will reduce 2013 revenue by over $50.0 million and diluted earnings per share by approximately $0.35, and a possible 2% sequestration reduction to the Clinical Lab Fee Schedule and a separate 2% reduction to the Physician Fee Schedule could take effect April 1, 2013. Medicare and Medicaid represented approximately 17.6% of 2012 net sales, and the Company faces ongoing False Claims Act and Medicaid billing inquiries, though management does not believe the outcomes will have a material adverse effect on financial condition. Capital allocation remained a priority. Operating cash flow was $841.4 million, capital expenditures were $173.8 million with 2013 guidance of $200.0 to $220.0 million, and the Company repurchased $516.5 million of stock in 2012. On February 8, 2013, the Board authorized up to $1.0 billion of additional share repurchases. Total debt to consolidated EBITDA was 2.0 to 1.0 at year-end, against a covenant maximum of 3.0 to 1.0, and the Company has discussed raising that ratio over time to 2.5 to 1.0.
Feb 26, 2013
2011-A
Labcorp Holdings Annual Report (Amendment), Year Ended Dec 31, 2011
Laboratory Corporation of America Holdings reported net sales of $5.54 billion for 2011, up from $5.00 billion in 2010, with operating income of $948.4 million versus $978.8 million a year earlier. Net earnings attributable to Laboratory Corporation of America Holdings were $519.7 million, or $5.11 diluted earnings per share, compared with $558.2 million, or $5.29 per diluted share, in 2010. Results were affected by net restructuring and special charges, including $44.6 of net restructuring charges and $18.9 of fixed asset impairments, along with a $2.8 loss on the divestiture of Orchid's U.S. government paternity business required by the FTC. The company's acquisition activity was significant. It bought Orchid Cellmark for a total purchase price of approximately $85.4 and acquired various laboratories for $137.3 in cash during 2011, following the $925.2 Genzyme Genetics acquisition completed on December 1, 2010. Long-term debt rose to $2,085.5 million at year-end 2011 from $1,826.7 million, driven mainly by a $560.0 million drawn balance on a new $1.0 billion revolving credit facility entered into in December 2011. Cash and cash equivalents declined to $159.3 million, and net cash provided by operating activities was $855.6 million. Capital return was a major use of cash. The company purchased 7.4 million shares of common stock for $643.9 million in 2011, and in February 2012 its board authorized an additional $500.0 million repurchase program. Management concluded that internal control over financial reporting was effective as of December 31, 2011, and PricewaterhouseCoopers LLP issued an unqualified opinion. The company operates as one reportable segment and describes itself as the second largest independent clinical laboratory company in the United States based on 2011 net revenues.
Aug 2, 2012
2011
Labcorp Holdings Annual Report, Year Ended Dec 31, 2011
Laboratory Corporation of America Holdings (now Labcorp Holdings Inc.), headquartered in Burlington, North Carolina, describes itself as the second largest independent clinical laboratory company in the United States based on 2011 net revenues. It operates 54 primary laboratories, over 1,700 patient service centers, and has over 31,000 employees. Net sales for 2011 were $5,542.3 million, up 10.8% from $5,003.9 million in 2010. The filing attributes 6.8 points of that growth to the December 2010 acquisition of Genzyme Genetics. Net earnings attributable to the company were $519.7 million ($5.11 diluted earnings per share), compared with $558.2 million ($5.29) in 2010. Genomic and esoteric testing revenue rose 20.9% to $2,089.0 million. Margins and earnings were pressured by several items. Cost of sales rose to 59.0% of sales from 58.1%, which the company attributes mainly to recently acquired businesses not yet fully integrated. Restructuring and other special charges were $80.9 million, and a $34.5 million net litigation settlement expense was recorded in selling, general and administrative expenses. Government payers remain a key exposure: Medicare and Medicaid represented approximately 19.0% of 2011 net sales, and legislation passed on February 17, 2012 will reduce the Medicare clinical laboratory fee schedule by 2% effective January 1, 2013. Capitated contracts accounted for approximately 2.9% of net sales. The company generated $855.6 million of operating cash flow in 2011 and spent $145.7 million on capital expenditures. It repurchased $643.9 million of stock (7.4 million shares), and its Board authorized an additional $500.0 million repurchase program on February 10, 2012. The company entered a $1,000.0 million senior unsecured revolving credit facility on December 21, 2011, with $560.0 million outstanding at year-end. It does not pay dividends. Debt ratings were Baa2 from Moody's and BBB+ from Standard & Poor's. Open legal matters include a False Claims Act lawsuit (United States ex rel. NPT Associates) and a DIANON wrongful termination judgment of approximately $10.0 million that is under appeal.
Feb 24, 2012
2010-A
Labcorp Holdings Annual Report (Amendment), Year Ended Dec 31, 2010
This Form 10-K/A (Amendment No. 1) for Laboratory Corporation of America Holdings, the fiscal year ended December 31, 2010, was filed solely to update Exhibit 15 to furnish interactive XBRL data files as Exhibit 101. The XBRL files cover the Consolidated Balance Sheets, Consolidated Statements of Operations, Changes in Shareholders' Equity, Cash Flows, Notes to Consolidated Financial Statements, and Financial Statement Schedule II - Valuation and Qualifying Accounts and Reserves. The amendment states that no other changes were made to the original Form 10-K and that it does not reflect subsequent events or update any disclosures in that report. The filing reports that the registrant is a large accelerated filer and a Delaware corporation headquartered in Burlington, North Carolina, with its common stock listed on the New York Stock Exchange. The aggregate market value of common stock held by non-affiliates was approximately $7.8 billion as of June 30, 2010, and 100.0 million shares were outstanding as of February 18, 2011. The exhibit index references several corporate actions during 2010, including an Underwriting Agreement dated November 16, 2010 with Citigroup Global Markets Inc., an Asset Purchase Agreement with Genzyme Corporation dated September 13, 2010, and new indentures dated November 19, 2010 with U.S. Bank National Association covering 2016 and 2020 notes. Financial figures and operating results are not presented in this amendment's text; they reside in the XBRL exhibit.
Mar 7, 2011
2010
Labcorp Holdings Annual Report, Year Ended Dec 31, 2010
Laboratory Corporation of America Holdings, headquartered in Burlington, North Carolina, describes itself as the second largest independent clinical laboratory company in the United States based on 2010 net revenues. It operates 51 primary laboratories and over 1,700 patient service centers, employs over 31,000 people, and processes more than 440,000 patient specimens daily. Net sales for 2010 were $5,003.9 million, up from $4,694.7 million in 2009, and net earnings attributable to the company were $558.2 million, compared with $543.3 million in 2009. Diluted earnings per share were $5.29 versus $4.98 a year earlier. Growth was driven in part by genomic and esoteric testing, which generated $1.7 billion in revenue in 2010, and by acquisitions, most notably Genzyme Genetics, acquired on December 1, 2010 for approximately $925.2 million in cash. The company's balance sheet expanded materially in 2010. Total assets rose to $6,187.8 million from $4,837.8 million, and long-term debt increased to $1,826.7 million from $977.2 million, largely due to $925.0 million of senior notes issued in November 2010 to fund the Genzyme Genetics deal. The company repurchased $337.5 million of stock during 2010 and announced a new $500.0 million repurchase authorization in February 2011. It has not historically paid dividends. Operating cash flow was $883.6 million. The filing highlights risk from government and third-party payer reimbursement pressure, including Medicare fee schedule reductions mandated by the Patient Protection and Affordable Care Act. It also discloses numerous legal matters, including Medicaid billing investigations, a qui tam lawsuit in California, and a Federal Trade Commission administrative challenge to the Westcliff Medical Laboratories acquisition. Management states that most of these matters are not expected to have a material adverse effect on the company's financial position, though they may affect results of operations or cash flows.
Mar 1, 2011
2009
Labcorp Holdings Annual Report, Year Ended Dec 31, 2009
Laboratory Corporation of America Holdings, headquartered in Burlington, North Carolina, reported net sales of $4.69 billion for 2009, up from $4.51 billion in 2008 and $4.07 billion in 2007. Operating income was $935.9 million and net earnings attributable to the Company were $543.3 million, or $4.98 per diluted share, compared with $464.5 million and $4.16 per diluted share in 2008. The Company describes itself as the second largest independent clinical laboratory company in the United States based on 2009 net revenues, with 38 primary laboratories, over 1,500 patient service centers, and more than 28,000 employees. Its strategy centers on scientific differentiation, managed care, and customer service, with an increasing focus on personalized medicine. Genomic and esoteric testing generated $1.6 billion in net sales in 2009, and the August 2009 acquisition of Monogram Biosciences, Inc. for approximately $160.0 million in cash expanded its HIV resistance and oncology capabilities. The filing highlights several risks for investors. Medicare and Medicaid accounted for 19.1% of net sales in 2009, and the filing notes that the 2010 clinical lab fee schedule CPI update is a reduction of 1.9% and that the physician fee schedule conversion factor faces a scheduled 21.2% reduction absent further legislation. Capitated managed care contracts accounted for approximately $167.4 million, or 3.6%, of net sales. The Company is also subject to a California Medicaid billing qui tam lawsuit, Medicaid and OIG subpoenas, and a $10.0 million state court judgment against its DIANON subsidiary, which it is appealing. Cash flow from operations was $862.4 million in 2009, and total debt included $977.2 million of long-term debt plus $417.2 million of short-term borrowings and current portion, including the zero-coupon convertible subordinated notes that holders may convert in the first quarter of 2010 or put to the Company in September 2011. The Company's board authorized an additional $250.0 million share repurchase on February 11, 2010, and the Company states that it has not historically paid dividends on its common stock. The Ontario, Canada joint venture remains at an 85.6% ownership interest after a February 2010 transaction in which the Company acquired and resold partnership units for CN$147.8, and the Company reported that Canadian joint venture net sales were $247.5 million in 2009.
Feb 24, 2010
2009
Labcorp Holdings Annual Report, Year Ended Feb 26, 2009
Laboratory Corporation of America Holdings (Burlington, North Carolina) filed its annual report on Form 10-K for fiscal 2008, reporting net sales of $4,505.2 million, up from $4,068.2 million in 2007, and net earnings of $464.5 million, down from $476.8 million. Diluted earnings per share were $4.16 versus $3.93. The Company describes itself as the second largest independent clinical laboratory company in the United States based on 2008 net revenues, with 36 primary laboratories, over 1,600 patient service centers, and over 28,000 employees. Growth drivers cited include managed care volume, acquisitions, and a shift in test mix toward higher-priced genomic and esoteric testing, which generated $1.5 billion in revenue. Profitability was pressured in 2008. Bad debt expense rose to 6.2% of net sales from 4.8%, largely due to a $45.0 million increase in the provision for doubtful accounts in the second quarter. Restructuring and other special charges totaled $37.9 million, and cost of sales rose to 58.4% of sales. Operating cash flow was $780.9 million, and the Company acquired the remaining control of its Ontario, Canada joint venture effective January 1, 2008, consolidating it for the first time, which added $249.0 million in net sales. Total debt grew, with long-term debt of $1,600.5 million at year end, including a $573.5 million accreted balance on zero-coupon convertible notes that holders may put to the Company on September 11, 2011. The Company repurchased $330.6 million of stock in 2008 and had about $95.2 million remaining under its repurchase authorization. It has not historically paid dividends, and its senior credit facilities limit dividend payments. The filing notes that Lehman Brothers' subsidiaries had a $28.0 million commitment in the $500.0 million revolving facility, and that Lehman filed for bankruptcy in September 2008.
Feb 26, 2009
2008
Labcorp Holdings Annual Report, Year Ended Feb 26, 2008
Laboratory Corporation of America Holdings (LabCorp), headquartered in Burlington, North Carolina, reported 2007 net sales of $4,068.2 million, up from $3,590.8 million in 2006, with net earnings of $476.8 million (diluted EPS of $3.93, versus $3.24 in 2006). The Company describes itself as the second largest independent clinical laboratory company in the United States based on 2007 net revenues, operating 37 primary laboratories and over 1,600 patient service centers, with more than 26,000 employees. Growth was attributed to managed care volume, acquisitions, and a shift in test mix toward genomic and esoteric testing, which accounted for 34.3% of 2007 net sales. Managed care revenue rose to 46.1% of net sales in 2007 from 40.2% in 2005. The filing highlights a ten-year exclusive national laboratory agreement with UnitedHealthcare, effective January 1, 2007, under which the Company committed to reimburse up to $200 million in transition costs over the first three years. Restructuring charges of $50.6 million were recorded in 2007, and the Company acquired medical reference laboratories for about $222.3 million. Total long-term obligations rose to $1,667.0 million, reflecting a new $1.0 billion senior unsecured credit facility (including a $500.0 million term loan), and shareholders' equity fell to $1,725.3 million after $924.2 million of share repurchases in 2007. The filing flags material risks tied to government reimbursement. Medicare and Medicaid represented about 18.3% of 2007 net sales, the Medicare clinical lab fee schedule has been frozen for CPI updates for 2004 through 2008, and CMS has proposed a competitive acquisition demonstration in San Diego that local parties have sued to block. Company management also notes that compliance with fraud and abuse, CLIA, and HIPAA rules could carry material penalties, and that the Ontario, Canada joint venture was consolidated beginning January 1, 2008 after the Company raised its ownership to 85.6%.
Feb 26, 2008
2006
Labcorp Holdings Annual Report, Year Ended Dec 31, 2006
Laboratory Corporation of America Holdings (now Labcorp Holdings Inc.) reported 2006 net sales of $3,590.8 million, up from $3,327.6 million in 2005, a 7.9% increase as stated in the filing. Net earnings rose to $431.6 million from $386.2 million, and diluted earnings per share were $3.24 compared with $2.71. The filing attributes the growth to a shift in test mix toward higher-priced genomic and esoteric tests, the 2005 acquisitions of US LABS and Esoterix, and improved routine testing pricing and volume. Genomic and esoteric net sales were $1,243.2 million, with a stated growth rate of 10.0%. The company describes itself as the second largest independent clinical laboratory company in the United States based on 2006 net revenues, with 36 primary laboratories, over 1,700 service sites and more than 25,000 employees. Its most significant 2006 development was a ten-year agreement, effective January 1, 2007, to become UnitedHealthcare's exclusive national laboratory. The company expects over $3 billion of additional revenue from UnitedHealthcare and associated business over the term, and has committed to reimburse up to $200 million of transition costs during the first three years. Capitated contracts accounted for $144.0 million, or 4.0%, of net sales, and Medicare and Medicaid beneficiaries generated about 20% of net sales. Cash flow and capital structure were solid. Operating activities provided $632.3 million, capital expenditures were $115.9 million, and the company repurchased $435.1 million of stock. Shareholders' equity was $1,977.1 million against total assets of $4,000.8 million. Debt included $554.4 million of zero coupon convertible subordinated notes (holders may require purchase on September 11, 2011 at $819.54 per note) and $603.0 million of long-term debt. The filing cites debt ratings of Baa3 from Moody's and BBB from Standard and Poor's, and notes that the company does not expect to contribute to its defined benefit pension plan in 2007.
Feb 27, 2007
2006
Labcorp Holdings Annual Report, Year Ended Feb 28, 2006
Laboratory Corporation of America Holdings, headquartered in Burlington, North Carolina, describes itself as the second largest independent clinical laboratory company in the United States based on 2005 net revenues. It operates 36 primary laboratories and over 1,300 service sites, employs approximately 24,000 people, and processes more than 360,000 patient specimens daily. For 2005, net sales rose to $3.33 billion from $3.08 billion in 2004, with net earnings of $386.2 million ($2.71 diluted EPS) versus $363.0 million ($2.45 diluted EPS). The Company attributes growth mainly to a shift in test mix toward higher-priced genomic and esoteric tests, which were 34.0% of 2005 sales, along with improved routine test pricing. Genomic and esoteric net sales grew 16.9% to $1.13 billion. The 2005 acquisitions of US Pathology Labs (about $155 million) and Esoterix (about $150 million) expanded its cancer and specialty testing capabilities, and the Company expects roughly $30 million in pre-tax cost reductions over time from integrating them. Cash from operations was $574.2 million, and the Company repurchased $588.7 million of stock during 2005. Long-term debt was $604.5 million at year-end, after a $250 million 5 5/8% senior notes offering due 2015, and the zero coupon convertible subordinated notes of $544.4 million are classified as current because holders may put them on September 11, 2006. Key risks cited include government and third-party reimbursement reductions, Medicare fee schedule freezes, compliance with fraud and abuse and CLIA regulations, managed care price pressure, and dependence on licensed new technologies. Pending litigation includes a securities class action from 2003 and a patent case that the Supreme Court agreed to hear, with argument scheduled for March 21, 2006.
Feb 28, 2006
2005
Labcorp Holdings Annual Report, Year Ended Mar 3, 2005
Laboratory Corporation of America Holdings and its subsidiaries, headquartered in Burlington, North Carolina, describes itself as the second largest independent clinical laboratory company in the United States based on 2004 net revenues. The Company operates 32 primary laboratories and over 1,300 service sites, employs approximately 23,500 people, and processes more than 355,000 patient specimens daily. Its growth strategy centers on genomic and advanced testing, oncology testing built on the DIANON and US LABS acquisitions, and licensing agreements with technology partners such as EXACT Sciences, Celera, and Correlogic. Financially, net sales for 2004 were $3,084.8 million, up from $2,939.4 million in 2003, and net earnings rose to $363.0 million from $321.0 million. Diluted earnings per share were $2.45, compared with $2.11 in 2003. Net cash provided by operating activities was $538.1 million, and the Company repurchased $378.1 million of common stock during 2004 under its repurchase programs. Total shareholders' equity was $1,999.3 million at year-end 2004. The filing also flags material risks. Medicare and Medicaid represented about 20% of 2004 net sales, and the MMA froze the clinical lab fee schedule CPI update for 2004 through 2008. A securities class action filed in June 2003 remains pending, and the Company is appealing a patent judgment of approximately $7.8 million. The US LABS acquisition, for approximately $155 million in cash, closed on February 3, 2005.
Mar 3, 2005
2004
Labcorp Holdings Annual Report, Year Ended Mar 11, 2004
Laboratory Corporation of America Holdings, headquartered in Burlington, North Carolina, describes itself as the second largest independent clinical laboratory company in the United States based on 2003 net revenues, operating 31 primary laboratories and over 1,200 service sites with approximately 23,000 employees. Net sales for 2003 were $2,939.4 million, up 17.2% from $2,507.7 million in 2002, with testing volume (accessions) up approximately 11.7% and price per accession up approximately 5.5%. Net earnings rose to $321.0 million ($2.22 diluted EPS) from $254.6 million ($1.77 diluted EPS), supported by the acquisitions of DIANON Systems (January 2003, about $596.0 million including fees) and Dynacare (July 2002). Growth in 2003 was driven partly by acquisitions, and cost of sales and interest expense increased, with interest expense reaching $40.9 million from $19.2 million. The balance sheet expanded substantially, with total assets of $3,414.9 million at year-end 2003 versus $2,580.4 million a year earlier, and goodwill rising to $1,285.9 million. The company issued $350.0 million of 5 1/2% Senior Notes due 2013 to fund the DIANON deal, and it repurchased about $154.9 million of stock during 2003 under programs that were authorized in 2002 and December 2003 (the latter for up to $250.0 million). Operating cash flow was $564.3 million. Key risks disclosed include the $744.0 million principal-at-maturity zero coupon convertible notes that holders may put to the company in September 2004, 2006 and 2011, a patent judgment under appeal, a Chiron lawsuit, a securities class action filed in June 2003, and ongoing Medicare and Medicaid reimbursement pressures. The company has not historically paid dividends on its common stock, and it intends to fund future share repurchases from operating cash flow. Management's strategy centers on genomic and advanced testing in infectious disease and oncology, supported by licensing arrangements with partners such as EXACT Sciences, Myriad Genetics, Celera, Atherotech and BioPredictive.
Mar 11, 2004
2002
Labcorp Holdings Annual Report, Year Ended Dec 31, 2002
Laboratory Corporation of America Holdings, headquartered in Burlington, North Carolina, reported net sales of $2,507.7 million for 2002, up 14.0% from $2,199.8 million in 2001, with net earnings of $254.6 million versus $179.5 million, and diluted earnings per share of $1.77 versus $1.27. The company describes itself as the second largest independent clinical laboratory company in the United States based on 2002 net revenues, operating 47 primary laboratories and over 1,200 service sites, and it processed an average of approximately 310,000 patient specimens per day in 2002. Growth in 2002 was driven by the July 2002 acquisition of Dynacare Inc. and an emphasis on genomic and advanced testing, including oncology, infectious disease and partnerships with Myriad Genetics, EXACT Sciences, Celera Diagnostics and Correlogic Systems. Subsequent to year end, the company completed the acquisition of DIANON Systems, Inc. on January 17, 2003 for $47.50 per share in cash, or approximately $598.6 million, and issued $350.0 million of 5 1/2% Senior Notes due 2013. The filing states that 2003 revenues are expected to grow approximately 22% over 2002. Total assets rose to $2,611.8 million at December 31, 2002 from $1,929.6 million, and shareholders' equity rose to $1,611.7 million. The company's zero coupon-subordinated notes carry put dates in 2004, 2006 and 2011, and the filing notes that Standard & Poor's lowered the company's rating to BBB from BBB+ in connection with the DIANON financing. Risks highlighted in the filing include reliance on Medicare and Medicaid, which together accounted for about 16% of net sales, pricing pressure from managed care and capitated contracts, regulatory and anti-fraud exposure, HIPAA compliance costs, and an adverse patent judgment under appeal. The company does not pay dividends and has a $150.0 million stock repurchase program authorized in October 2002, under which no shares were bought in 2002.
Mar 28, 2003
2001
Labcorp Holdings Annual Report, Year Ended Dec 31, 2001
Laboratory Corporation of America Holdings, headquartered in Burlington, North Carolina, is the second largest independent clinical laboratory company in the United States based on 2001 net revenues, operating 24 primary testing facilities and approximately 1,200 service sites serving clients in 50 states. Net sales rose to $2,199.8 million in 2001 from $1,919.3 million in 2000, an increase of 14.6%, driven by 8.2% volume growth and 5.9% higher price per accession. Net earnings were $179.5 million, or $2.54 diluted earnings per share, compared with $112.1 million in 2000. Growth was supported by the Path Lab Holdings and Viro-Med acquisitions, exclusive licensing agreements with EXACT Sciences and Myriad Genetics, and continued expansion of specialty and niche testing. The company's balance sheet strengthened during 2001. Cash and cash equivalents rose to $149.2 million, and shareholders' equity increased to $1,085.4 million. The company repaid its $412.5 million term loan using proceeds from $744.0 million aggregate principal amount at maturity of zero coupon convertible subordinated notes due 2021, and in February 2002 it entered into $300 million of new senior credit facilities. Standard & Poor's upgraded the company to BBB+ in early 2002. The company does not pay dividends, and Roche's planned sale of 7.7 million shares was expected to reduce its ownership to 5.24%. Key risks include Medicare and Medicaid reimbursement reductions, the company's reliance on those programs for about 16% of net sales, regulatory and fraud-and-abuse exposure, a class action regarding alleged overbilling of privately insured patients, and HIPAA compliance deadlines in 2002 and 2003. Management expects the adoption of SFAS No. 142 to reduce 2002 amortization expense by approximately $26.0 million.
Mar 18, 2002
2000
Labcorp Holdings Annual Report, Year Ended Dec 31, 2000
Laboratory Corporation of America Holdings, headquartered in Burlington, North Carolina, describes itself as the second largest independent clinical laboratory company in the United States based on 2000 net revenues, operating 24 primary testing facilities and approximately 1,200 service sites serving clients in 50 states. Net sales for 2000 were $1,919.3 million, up 13.0% from $1,698.7 million in 1999, with sales growth of approximately 9.0% attributed to volume and 4.0% to price per accession. Operating income rose to $245.6 million from $149.7 million, and net earnings were $112.1 million compared with $65.4 million in 1999. Diluted earnings per share were $3.22 versus $1.16 a year earlier. Shareholders' equity increased to $877.4 million from $175.5 million, largely due to the conversion of preferred stock into common stock during 2000. The company's balance sheet and cash generation improved during 2000. Net cash provided by operating activities was $246.7 million, and days sales outstanding fell to 68 days from 74 days at the end of 1999. Total debt was reduced, with approximately $95.0 million repaid on the term loan, and Standard & Poor's upgraded the company's corporate credit rating from BB+ to BBB in November 2000. The company also completed several acquisitions in 2000, the largest being National Genetics Institute, Inc. for approximately $56.0 million in cash plus $16.0 million in future payments. Investors should note ongoing risks disclosed in the filing, including reimbursement pressure from Medicare and Medicaid, where about 16% of 2000 net sales were derived from those programs. The company also faces a class action lawsuit related to claims similar to those resolved by the 1996 government settlement, and it has stated that management does not expect the outcome of these claims to exceed existing reserves. The filing also notes HIPAA compliance costs that cannot yet be estimated.
Mar 9, 2001
1999
Labcorp Holdings Annual Report, Year Ended Dec 31, 1999
Laboratory Corporation of America Holdings, headquartered in Burlington, North Carolina, is the second largest independent clinical laboratory company in the United States based on 1999 net revenues. It operates 25 major laboratories and approximately 1,200 service sites, offers more than 2,000 clinical tests, and serves clients in 50 states. Net sales rose 5.3% to $1,698.7 million in 1999 from $1,612.6 million in 1998, with sales growth of 3.1% from price per accession and 2.2% from volume. Operating income increased to $149.7 million from $127.6 million, and net earnings were $65.4 million, or $0.12 per share, compared with $68.8 million, or $0.20 per share, in 1998. Net earnings attributable to common shareholders were $15.0 million after $49.6 million of preferred stock dividends. Management cites specialty and niche testing, including esoteric, genetic, oncology and infectious disease testing, as the primary growth emphasis, and expects consolidated revenues to rise 4% to 5% in 2000. Cash flow from operations was $180.5 million in 1999, up from $125.1 million in 1998, and days sales outstanding improved to 74 days from 83 days. Total debt repayment of about $70.3 million on the term loan reduced long-term obligations, which stood at $1,041.5 million including redeemable preferred stock. The company discontinued common dividends in 1994, and its credit agreement restricts dividend payments. The filing highlights regulatory and reimbursement exposure: about 20% of 1999 net sales came from Medicare and Medicaid beneficiaries, and the company states that further Medicare reductions could materially affect earnings. A class action and related claims tied to the 1996 government settlement remain pending, with outcomes that cannot presently be predicted. Management believes the Year 2000 project was completed with only minor, quickly remediated issues.
Mar 17, 2000