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news.Laboratory Corporation of America Holdings (LabCorp), a in vitro diagnostics company, has reported revenues of $4.5 billion for the full year of 2008, compared with the revenues of $4.1 billion in the previous year-end. It reported net earnings of $464.5 million, or $4.16 per diluted share, for the full year of 2008, compared with the net earnings of $476.8 million, or $3.93 per diluted share, in the previous year-end.
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Fourth Quarter Results
Net earnings were $118.1 million, against fourth quarter 2007 net earnings of $114.4 million. Excluding restructuring and other special items recorded in 2008 and 2007, net earnings were $120.3 million, against $121.9 in the fourth quarter 2007 (Adjusted Net Earnings). Earnings per diluted share (EPS) were $1.08, against $0.98 in the fourth quarter of 2007. Diluted earnings per share, excluding restructuring and other special items recorded in 2008 and 2007 (Adjusted EPS) were $1.10 against $1.04 in the fourth quarter of 2007. Earnings before interest, taxes, depreciation, amortization, and restructuring and other special items (Adjusted EBITDA) were $265.8 million for the quarter, or 23.6% of net sales.
Revenues for the quarter were $1,119.1 million, an increase of 11.3% against the same period in 2007. Compared to the fourth quarter of 2007, testing volume, measured by accessions, increased 10.9%, and revenue per accession increased 0.4%. Excluding the consolidation of the company’s Ontario, Canada joint venture and a special charge, revenue increased 6.2% with volume increasing 3.0% and revenue per accession increasing 3.2%.
Operating cash flow for the quarter was $215.3 million, net of $12.5 million in transition payments to UnitedHealthcare. The balance of cash at the end of the quarter was $219.7 million, and there was $70.8 million outstanding under the company’s revolving credit facility.
The company recorded total pre-tax restructuring and other special items of $15.4 million during the fourth quarter of 2008. Included in this amount were $4.2 million of restructuring and other special charges primarily related to workforce reductions and the closing of redundant and underutilized facilities; $3.7 million of accelerated retirement benefits related to the previously announced retirement of the company’s executive vice president, corporate affairs; and the special charge for a $7.5 million cumulative revenue adjustment relating to certain historic overpayments made by Medicare for claims submitted by a subsidiary of the company. In addition, the company recorded a $7.1 million favorable adjustment to its fourth quarter tax provision relating to tax treaty changes adopted by the United States and Canada.
Full Year Results
Adjusted net earnings increased to $514.4 million, against $506.9 million in 2007. EPS increased to $4.16, against $3.93 in 2007. Adjusted EPS increased 10.0% to $4.60 in 2008, against $4.18 in 2007. Adjusted EBITDA was $1,118.2 million, or 24.8% of net sales.
Excluding the consolidation of the company’s Ontario, Canada joint venture and a special charge, revenue increased 4.8% with volume increasing 2.2% and revenue per accession increasing 2.6%.
Operating cash flow for 2008 increased 10% to $780.9 million, net of $42.3 million in transition payments to UnitedHealthcare, against $709.7 million in 2007. During 2008, the company repurchased $330.4 million of stock, representing 4.6 million shares. As of December 31, 2008, about $95.4 million of repurchase authorization remained under the company’s approved repurchase plan.
“We are pleased to have reported strong volume and earnings growth in 2008, despite a challenging economic environment,” said David P. King, chief executive officer. “Our sales, earnings and cash flow grew and we maintained industry leading volume growth and margins. Looking forward, we will continue our leadership in scientific development and personalized medicine while working aggressively to bring increased automation and efficiency to our labs.”
Guidance For 2009
The company continues to expect revenue growth of 2.0% to 4.0% and diluted EPS in the range of $4.75 to $4.95, excluding the impact of any share repurchase activity after December 31, 2008; operating cash flow, excluding any transition payments to UnitedHealthcare, of about $800 million; and capital expenditures of about $130 million. The operating cash flow guidance includes a $56 million reduction due to required contributions to the company’s defined benefit retirement plan.