Increase in net earnings for Laboratory Corporation of America during third quarter

Laboratory Corporation of America^® Holdings (LabCorp^®) (NYSE: LH) today announced results for the quarter ended September 30, 2009.

Third Quarter Results

Net earnings were $131.4 million, compared to $111.9 million in the third quarter of 2008. Earnings per diluted share (EPS) were $1.21 compared to $1.00 in 2008. Earnings per diluted share, excluding restructuring and other special charges recorded in both periods (Adjusted EPS) were $1.22, compared to $1.10 in 2008.

Operating income was $234.9 million. Operating income, excluding restructuring and other special charges recorded in both periods (Adjusted Operating Income) was $237.6, or 20.0% of net sales, compared to $219.9, or 19.4% of net sales in the third quarter of 2008.

Revenues were $1,185.1 million, an increase of 4.4% compared to the same period in 2008. Compared to the third quarter of 2008, testing volume, measured by accessions, increased 0.7%, and revenue per accession increased 3.7%. Excluding the consolidation of the Company’s Ontario, Canada joint venture, revenue increased 4.3%, all driven by revenue per accession.

Operating cash flow for the quarter was $246.4 million, net of $5.9 million in transition payments to UnitedHealthcare. The balance of cash at the end of the quarter was $126.8 million, and there was $70.8 million outstanding under the Company’s $500 million revolving credit facility. During the quarter, the Company repurchased $165.1 million of stock, representing approximately 2.4 million shares. As of September 30, 2009, approximately $180.2 million of repurchase authorization remained under the Company’s approved share repurchase plan.

The Company recorded special charges of $2.7 million during the third quarter of 2009, representing the Company’s fees and expenses associated with its acquisition of Monogram Biosciences. The Company recorded pre-tax restructuring and other special charges of $17.7 million during the third quarter of 2008, primarily related to the closing of redundant and underutilized facilities.

Year To Date Results

Net earnings were $400.6 million, compared to $346.4 million in 2008. EPS were $3.67 compared to $3.06 in 2008. Adjusted EPS were $3.74 compared to $3.48 in 2008. Operating income was $720.1 million. Adjusted Operating Income was $733.0 million, or 20.8% of net sales.

Revenues were $3,529.7 million, an increase of 4.2% compared to the same period in 2008. Compared to 2008, testing volume, measured by accessions, increased 2.3%, and revenue per accession increased 1.9%. Excluding the consolidation of the Company’s Ontario, Canada joint venture, revenue increased 4.8%, with volume increasing 1.4% and revenue per accession increasing 3.4%.

Operating cash flow for the first nine months was $637.7 million, net of $21.9 million in transition payments to UnitedHealthcare. During the first nine months of 2009, the company repurchased $165.1 million of stock, representing approximately 2.4 million shares.

"We are very pleased with our third quarter and year-to-date results, particularly with our strong revenue growth and cash flow. Pricing discipline, expense control, and continued growth of our esoteric testing allowed us to deliver strong results for our shareholders.” said David P. King, Chairman and Chief Executive Officer.

Source: Laboratory Corporation of America Holdings