UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 22, 2009
(Date of earliest event reported)
LABORATORY CORPORATION
OF
AMERICA HOLDINGS
| DELAWARE | 1-11353 | 13-3757370 | ||
| (State or other jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
| 358 SOUTH MAIN STREET, BURLINGTON, NORTH CAROLINA |
27215 | 336-229-1127 | ||
| (Address of principal executive offices) | (Zip Code) |
(Registrant's telephone number including area code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 7.01. Regulation FD Disclosure
Summary information of the Company dated October 22, 2009.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Laboratory Corporation of America Holdings (Registrant) |
||||
| Date: October 22, 2009 | By: | /s/F. Samuel Eberts III | ||
| F. Samuel Eberts III, Chief Legal Officer and Secretary |
||||
1
8-K Filed October 22, 2009
2
Introduction
This slide presentation contains forward-looking statements which are
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 the Company’s financial results
is included in the Company’s
Form 10-K for the year ended December 31, 2008, and subsequent SEC
filings. The Company has no obligation to provide any updates to these
forward-looking statements even if its expectations change.
3
Third Quarter Results
(In millions, except per share data)
2009
2008
+/(-)
Revenue
1,185.1
$
1,135.1
$
4.4%
Adjusted Operating Income
(1)
237.6
$
219.9
$
8.0%
Operating Income Margin
(1)
20.0%
19.4%
60
bp
Adjusted EPS
(1)
1.22
$
1.10
$
10.9%
Operating Cash Flow
246.4
$
194.4
$
26.7%
Less: Capital Expenditures
(22.7)
$
(41.5)
$
-45.3%
Free Cash Flow
223.7
$
152.9
$
46.3%
(1) See Reconciliation of non-GAAP Financial Measures (included herein)
Three Months Ended Sept 30,
4
Cash Flow Trends
10% OCF CAGR
2004-2008
5
Revenue by Payer- US
2009 YTD
6
Revenue by Business Area - US
2009 YTD
7
Revenue by Payer
(in millions, except PPA)
YTD Q3-2007
YTD Q3-2008
YTD Q3-2009
Revenue
Revenue
Revenue
$'s
%
Accns
PPA
$'s
%
Accns
PPA
$'s
%
Accns
PPA
Client
800.8
$
26%
25.701
31.16
$
895.7
$
28%
26.844
33.37
$
911.6
$
27%
26.641
34.22
$
Patient
283.8
9%
1.787
158.83
$
280.1
9%
1.708
164.00
$
256.8
8%
1.596
160.91
$
Third Party
(Medicare/Medicaid)
558.7
18%
13.816
40.44
$
602.0
19%
14.220
42.33
$
677.9
20%
14.960
45.31
$
Managed Care:
- Capitated
127.8
4%
11.463
11.15
$
135.5
4%
11.409
11.88
$
127.4
4%
11.269
11.30
$
- Fee for service
1,291.3
42%
28.169
45.84
$
1,282.4
40%
28.352
45.23
$
1,375.4
41%
29.225
47.06
$
Total Managed Care
1,419.1
46%
39.632
35.81
$
1,417.9
44%
39.761
35.66
$
1,502.8
45%
40.494
37.11
$
LabCorp Total - US
3,062.5
$
100%
80.936
37.84
$
3,195.6
$
100%
82.533
38.72
$
3,349.1
$
100%
83.691
40.02
$
LabCorp Total - Canada
-
$
-
-
-
190.4
$
5.957
31.97
$
180.5
$
6.855
26.33
$
LabCorp Total
3,062.5
$
80.936
37.84
$
3,386.1
$
88.490
38.26
$
3,529.7
$
90.546
38.98
$
8
Revenue by Business Area
(in millions, except PPA)
YTD Q3-2007
YTD Q3-2008
YTD Q3-2009
Revenue
Revenue
Revenue
$'s
%
Accns
PPA
$'s
%
Accns
PPA
$'s
%
Accns
PPA
All Genomic
471.4
$
15%
6.382
73.87
$
486.7
$
15%
6.539
74.43
$
516.8
$
15%
6.812
75.87
$
Other Esoteric
332.7
11%
8.118
40.98
378.6
12%
9.086
41.67
452.8
14%
10.607
42.69
Histology
244.8
8%
2.013
121.64
241.9
8%
1.921
125.94
221.5
7%
1.823
121.49
All Genomic / Esoteric
1,049.0
34%
16.513
63.52
1,107.1
35%
17.545
63.10
1,191.1
36%
19.242
61.90
Core
2,013.5
66%
64.423
31.25
2,088.5
65%
64.987
32.14
2,158.0
64%
64.449
33.48
LabCorp Total - US
3,062.5
$
100%
80.936
37.84
$
3,195.6
$
100%
82.533
38.72
$
3,349.1
$
100%
83.691
40.02
$
LabCorp Total - Canada
-
$
-
-
-
190.4
$
5.957
31.97
$
180.5
$
6.855
26.33
$
LabCorp Total
3,062.5
$
100%
80.936
37.84
$
3,386.1
$
88.490
38.26
$
3,529.7
$
90.546
38.98
$
9
Financial Guidance - 2009
Excluding the impact of restructuring and other special charges
and share repurchase activity after September 30, 2009,
guidance for 2009 is:
Revenue growth:
Approximately 4%
Adjusted EPS (1):
$4.84 to $4.89
Operating cash flow of approximately(2):
$825 Million
Capital expenditures of approximately:
$115 Million
(1) Excludes restructuring and other special charges, but includes the impact from the operations
of Monogram
Biosciences, which is expected to be approximately eight cents dilutive in
2009.
(2) Operating cash flow guidance excludes any transition payments to UnitedHealthcare and includes a
$54.8 million
reduction due to required
contributions to the Company’s defined benefit retirement plan.
10
Supplemental Financial
Information
YTD
Q1 09
Q2 09
Q3 09
2009
Depreciation
$31.8
$32.9
$33.1
$97.8
Amortization
$15.1
$15.2
$15.9
$46.2
Capital expenditures
$30.7
$23.7
$22.7
$77.1
Cash flows from operations
$208.9
$182.4
$246.4
$637.7
Bad debt as a percentage of sales
5.3%
5.3%
5.3%
5.3%
Effective interest rates on debt:
Zero-coupon subordinated notes
2.00%
2.00%
2.00%
2.00%
5 1/2% Senior Notes
5.38%
5.38%
5.38%
5.38%
5 5/8% Senior Notes
5.75%
5.75%
5.75%
5.75%
Term loan
3.67%
3.67%
3.67%
3.67%
Revolving credit facility (weighted average)
0.97%
0.76%
0.70%
0.70%
Days sales outstanding
52
50
48
48
UnitedHeathcare transition payments - Billed
$5.5
$12.4
$6.8
$24.7
UnitedHeathcare transition payments - Paid
$5.5
$10.5
$5.9
$21.9
Laboratory Corporation of America
Other Financial Information
($ in million's)
September 30, 2009
11
Reconciliation of non-GAAP
Financial Measures
2009
2008
Adjusted Operating Income
Operating income
$234.9
$202.2
Restructuring and other special charges (1)
$2.7
$17.7
Adjusted operating income
$237.6
$219.9
Adjusted EPS
Diluted earnings per common share
$1.21
$1.00
Impact of restructuring and other special charges (2)
0.01
0.10
Adjusted EPS
$1.22
$1.10
2008: $11.2 million divided by 112.0 million shares.
Three Months Ended Sept 30,
(1) 2009 includes $2.7 million ($1.6 million, net of tax) of fees and expenses associated with
the acquisition of Monogram Biosciences. 2008 includes net restructuring charges of $17.7
million ($11.2 million, net of tax) primarily related to the Company's general and
administrative workforce.
Reconciliation of non-GAAP Financial Measures
(In millions, except per share data)
(2) 2009: $1.6 million divided by 108.8 million shares.
12