LabCorp's first-quarter revenues increase by 3.3% to $1,193.6 million

Laboratory Corporation of America^® Holdings (LabCorp^®) (NYSE: LH) today announced results for the quarter ended March 31, 2010.

“Despite unprecedented severe weather throughout the country, we delivered strong earnings and generated significant free cash flow. We are pleased with our performance and continue to focus on delivering profitable growth”

First Quarter Results

Net earnings were $132.7 million, compared to $132.8 million in the first quarter of 2009. Earnings per diluted share (EPS) were $1.25 compared to $1.22 in 2009. Earnings per diluted share, excluding restructuring and other special charges recorded in 2010 (Adjusted EPS) were $1.30 compared to $1.22 in 2009.

Operating income was $234.2 million. Operating income, excluding restructuring and other special charges (Adjusted Operating Income) was $243.5 million, or 20.4% of net sales.

Revenues for the quarter were $1,193.6 million, an increase of 3.3%. Testing volume, measured by requisitions, decreased 3.0% and revenue per requisition increased 6.4%. Excluding the consolidation of the Company's Ontario, Canada joint venture, revenue increased 2.2%, testing volume decreased by 3.3% and revenue per requisition increased 5.7%.

During the quarter inclement weather had a significant impact on the Company's results, reducing volumes by an estimated 1.3%, revenue by approximately $23 million and EPS by approximately eight cents. The continuing impact of two large government contracts terminated during 2009 reduced volume by an additional 2.4%. Excluding the impact from weather and lost contracts, volume increased 0.4% in the quarter.

Operating cash flow for the quarter was $232.0 million, net of $14.5 million in transition payments to UnitedHealthcare. The balance of cash at the end of the quarter was $172.2 million, and there was $20.0 million outstanding under the Company's $500.0 million revolving credit facility. During the quarter, the Company repurchased $105.7 million of stock, representing approximately 1.4 million shares.

The Company recorded pre-tax restructuring and other special charges of $9.3 million during the first quarter of 2010, relating to severance payments and the closing of redundant and underutilized facilities as well as the write-off of development costs incurred on systems abandoned during the quarter.

"Despite unprecedented severe weather throughout the country, we delivered strong earnings and generated significant free cash flow. We are pleased with our performance and continue to focus on delivering profitable growth," said David P. King, Chairman and Chief Executive Officer.

Outlook for 2010

The Company is reaffirming its 2010 guidance, expecting revenue growth of approximately 2.5% - 4.5%; Adjusted EPS in the range of $5.35 to $5.55, excluding the impact of any share repurchase activity after March 31, 2010; operating cash flow of approximately $870 million, excluding any transition payments to UnitedHealthcare; and capital expenditures of approximately $135 million.