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Laboratory Corporation Of America® Holdings Announces 2012 Fourth Quarter And Full Year Results

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 866-272-9941 (617-213-8895 for international callers). The access code is 20958126. A telephone replay of the call will be available through February 15, 2013 and can be heard by dialing 888-286-8010 (617-801-6888 for international callers). The access code for the replay is 38000350. A live online broadcast of LabCorp’s quarterly conference call on February 8, 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 March 8, 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, 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, and will be available in the Company’s Form 10-K for the year ended December 31, 2012, when filed.

 
LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Statements of Operations
(in millions, except per share data)
       
Three Months Ended Year Ended
December 31, December 31,
2012 2011 2012 2011
 
Net sales $ 1,405.3 $ 1,366.1 $ 5,671.4 $ 5,542.3
Cost of sales 867.3 816.5 3,421.7 3,267.6
Selling, general and administrative 278.8 270.4 1,114.6 1,159.6
Amortization of intangibles and other assets 23.2 21.2 86.3 85.8
Restructuring and other special charges   20.7     10.6     25.3     80.9  
 
Operating income   215.3     247.4     1,023.5     948.4  
 
Other income (expense) (0.5 ) (3.8 ) (7.2 ) (5.6 )
Investment income 0.3 0.5 1.0 1.3
Interest expense (27.6 ) (22.1 ) (94.5 ) (87.5 )
Equity method income, net   4.0     2.9     21.4     9.5  
Earnings before income taxes 191.5 224.9 944.2 866.1
Provision for income taxes   70.9     86.8     359.4     333.0  
Net earnings 120.6 138.1 584.8 533.1
Less net earnings attributable to noncontrolling interest   (0.4 )   (2.7 )   (1.7 )   (13.4 )
Net earnings attributable to Laboratory Corporation of America Holdings $ 120.2   $ 135.4   $ 583.1   $ 519.7  
 

Adjusted Operating Income

Operating Income $ 215.3 $ 247.4 $ 1,023.5 $ 948.4
Restructuring and other special charges 20.7 10.6 25.3 116.5
Termination of licensing agreement 6.2 - 6.2 -
Acquisition fees and expenses   -     -     9.9     -  
Adjusted operating income $ 242.2   $ 258.0   $ 1,064.9   $ 1,064.9  
 

Adjusted EPS Excluding Amortization

Diluted earnings per common share $ 1.26 $ 1.34 $ 5.99 $ 5.11
Impact of restructuring and other special charges 0.13 0.06 0.29 0.72
Loss on divestiture of assets - 0.03 - 0.03
Amortization expense   0.15     0.13     0.54     0.51  
Adjusted EPS Excluding Amortization $ 1.54   $ 1.56   $ 6.82   $ 6.37  
 
Weighted average shares outstanding   95.3     101.0     97.4     101.8  
 
 
LABORATORY CORPORATION OF AMERICA HOLDINGS
Consolidated Balance Sheets
(in millions, except per share data)
   
December 31, December 31,
2012 2011
 
Cash and short term investments $ 466.8 $ 159.3
Accounts receivable, net 718.5 699.8
Property, plant and equipment 630.8 578.3
Intangible assets and goodwill, net 4,569.4 4,302.5
Investments in joint venture partnerships 78.1 76.8
Other assets   346.1     309.6  
$ 6,809.7   $ 6,126.3  
 
Zero-coupon subordinated notes $ 130.0 $ 135.5
Senior notes 2,525.0 1,525.5
Credit facility - 560.0
Other liabilities 1,416.6 1,381.6
Noncontrolling interest 20.7 20.2
Shareholders' equity   2,717.4     2,503.5  
$ 6,809.7   $ 6,126.3  
 
 
Consolidated Statement of Cash Flow Data
(in millions, except per share data)
 

For the Years Ended

December 31, December 31,
2012 2011
 
Net cash provided by operating activities $ 841.4 $ 855.6
Net cash used for investing activities (534.2 ) (280.3 )
Net cash provided by (used for) financing activities (0.8 ) (645.0 )
Effect of exchange rates on cash   1.1     (1.7 )
Net (decrease) increase in cash 307.5 (71.4 )
Cash at beginning of period   159.3     230.7  
Cash at end of period $ 466.8   $ 159.3  
 

Free Cash Flow:

Net cash provided by operating activities $ 841.4 $ 855.6
Less: Capital expenditures   (173.8 )   (145.7 )
Free cash flow $ 667.6   $ 709.9  
 

Notes to Financial Tables

1) During the fourth quarter of 2012, the Company recorded net restructuring and other special charges of $20.7 million. The charges consisted of $4.8 million in severance- related liabilities and $17.1 million in net facility-related costs associated with ongoing consolidation of recent acquisitions and other operations. These charges were partially offset by the reversal of previously established reserves of $1.2 million in unused severance. The after tax impact of these net charges decreased net earnings for the three months ended December 31, 2012 by $12.8 million and diluted earnings per share by $0.13 ($12.8 million divided by 95.3 million shares).

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