Laboratory Corporation of America(R) Holdings Announces 2007 First Quarter Results



    
    First Quarter Net Sales Growth of 13.7% Drives Operating Cash Flow of
    $185.8 Million and EPS Increase of 28.9%
    

    BURLINGTON, N.C., April 26 /CNW/ -- Laboratory Corporation of America(R)
Holdings (LabCorp(R)) (NYSE:   LH) today announced results for the quarter ended
March 31, 2007.

    
    First Quarter Results
    
    Net earnings increased 20.2% to $122.5 million, compared to first quarter
2006 net earnings of $101.9 million.  Earnings per diluted share (EPS)
increased 28.9% to $0.98, compared to $0.76 per diluted share in the first
quarter of 2006.  Earnings before interest, taxes, depreciation and
amortization and restructuring and other special charges (EBITDA) were $260.5
million for the quarter, or 26.1% of net sales, compared to $223.8 million, or
25.5% of net sales, in the first quarter of 2006.
    Net sales for the quarter were $998.7 million, an increase of 13.7%
compared to the same period in 2006. Compared to the first quarter of 2006,
testing volume, measured by accessions, increased 12.3%, and price increased
1.4%.
    During the quarter, the Company repurchased $358 million of stock,
representing 5.2 million shares.   As of March 31, 2007, approximately $492
million of repurchase authorization remained under the Company's approved
repurchase plan.  Operating cash flow for the quarter was $185.8 million,
compared to $178.6 million in the first quarter of 2006.  The balance of cash
and short-term investments at the end of the quarter was $76.7 million, and
the balance outstanding under the Company's revolving credit facility was
$80.0 million.
    "Our results for the first quarter were outstanding by every measure,"
said David P. King, Chief Executive Officer.  "Net sales, net earnings and EPS
all grew significantly, and our industry-leading EBITDA margins increased by
sixty basis points over the first quarter of 2006.  We saw revenue growth
across the board, demonstrating that our strategy of true partnership with
managed care companies is working, and that entering into our ground-breaking
ten-year partnership with UnitedHealthcare was the right thing to do for our
company.  Our service, quality, convenience and scientific capabilities make
us the clear choice for physicians, patients and managed care organizations."

    
    Outlook for 2007
    
    The Company issued updated guidance for 2007.  Excluding any share
repurchase activity after March 31, 2007, the Company expects:
    
     - Net sales growth of 12% to 14%,
     - EBITDA margins of approximately 26.4% to 26.9%,
     - Diluted earnings per share of between $4.11 and $4.27,
     - Operating cash flow of approximately $690 million to $710 million,
       excluding any transition payments related to the Company's agreement
       with UnitedHealthcare,
     - Capital expenditures of approximately $110 million to $120 million,
       excluding any additional capital expenditures related to the Company's
       agreement with UnitedHealthcare,
     - Net interest of approximately $45 million, and
     - A bad debt rate of approximately 4.8% of net sales.
    

    The Company today is filing an 8-K that will include additional
information on its business and operations, including financial guidance for
2007. 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 in a listen-only mode by
dialing 416-620-2406. A telephone replay of the call will be available through
May 3, 2007 and can be heard by dialing 800-633-8284 (402-977-9140 for
international callers). The access code for the replay is 21336594.  A live
online broadcast of LabCorp's quarterly conference call on April 26, 2007 will
be available at www.labcorp.com or at www.streetevents.com beginning at 9:00
a.m. Eastern Time. This webcast will be archived and accessible continuing
through May 25, 2007.

    
    About LabCorp(R)
    
    Laboratory Corporation of America(R) Holdings, a 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 $3.6 billion in
2006, over 25,000 employees nationwide, and more than 220,000 clients, LabCorp
offers clinical assays ranging from routine blood analyses to HIV and genomic
testing. LabCorp combines its expertise in innovative clinical testing
technology with its Centers of Excellence: The Center for Molecular Biology
and Pathology, in Research Triangle Park, NC; National Genetics Institute,
Inc. in Los Angeles, CA; ViroMed Laboratories, Inc. based in Minneapolis, MN;
The Center for Esoteric Testing in Burlington, NC; DIANON Systems, Inc. based
in Stratford, CT; US LABS based in Irvine, CA; and Esoterix and its Colorado
Coagulation, Endocrine Sciences, and Cytometry Associates laboratories.
LabCorp clients include physicians, government agencies, managed care
organizations, hospitals, clinical labs, and pharmaceutical companies. To
learn more about our growing organization, visit our Web site at:
www.labcorp.com.

    Each of the above 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, 2006, and subsequent
SEC filings.



    
                  LABORATORY CORPORATION OF AMERICA HOLDINGS
                    Consolidated Statements of Operations
                     (in millions, except per share data)

                                             Three Months Ended
                                                  March 31,
                                              2007        2006
    Net sales                                $998.7      $878.5
    Cost of sales                             577.0       505.8
    Selling, general and administrative       205.0       190.9
    Amortization of intangibles and
     other assets                              13.3        13.0

    Operating income                          203.4       168.8

    Other income (expense)                     (0.4)       (0.6)
    Investment income                           2.1         0.4
    Interest expense                          (12.6)      (11.9)
    Income from joint venture partnerships     16.4        15.4
    Earnings before income taxes              208.9       172.1
    Provision for income taxes                 86.4        70.2
    Net earnings                             $122.5      $101.9

    Diluted earnings per common share:
    Diluted earnings per share              $  0.98     $  0.76

    Weighted average shares outstanding       125.3       136.8

    EBITDA                                 $  260.5    $  223.8



                  LABORATORY CORPORATION OF AMERICA HOLDINGS
                         Consolidated Balance Sheets
                     (in millions, except per share data)

                                          March 31,     December 31,
                                            2007           2006

    Cash and short term investments           $76.7      $186.9
    Accounts receivable, net                  609.9       541.3
    Property, plant and equipment             407.4       393.2
    Intangible assets and goodwill,
     net                                    2,090.5     2,094.2
    Investments in joint venture
     partnerships                             591.9       577.9
    Other assets                              182.8       207.3
                                           $3,959.2    $4,000.8


    Zero coupon-subordinated notes           $556.9      $554.4
    5 1/2% senior notes due 2013              352.5       352.6
    5 5/8% senior notes due 2015              250.0       250.0
    Other liabilities                       1,012.7       866.7
    Shareholders' equity                    1,787.1     1,977.1
                                           $3,959.2    $4,000.8



                   Consolidated Statement of Cash Flow Data
                     (in millions, except per share data)

                                         March 31,     March 31,
                                           2007          2006

    Net cash provided by operating
     activities                            $  185.8    $  178.6
    Net cash provided by (used for)
     investing activities                      12.8       (52.0)
    Net cash used for financing activities   (243.7)     (147.0)
    Effect of exchange rates on cash            0.1         0.2
    Net increase (decrease) in cash           (45.0)      (20.2)
    Cash at beginning of period                51.5        45.4
    Cash at ending of period                 $  6.5     $  25.2

    Free Cash Flow:
    Net provided by operating activities   $  185.8     $ 178.6
    Less: Capital expenditures                (40.8)      (20.8)
    Free cash flow                         $  145.0   $  157.8

    Notes to Financial Tables
    (1) EBITDA represents earnings before interest, income taxes,
        depreciation, amortization, and nonrecurring charges, and includes
        the Company's proportional share of the underlying EBITDA of the
        income from joint venture partnerships.  The Company uses EBITDA
        extensively as an internal management performance measure and believes
        it is a useful, and commonly used measure of financial performance in
        addition to earnings before taxes and other profitability measurements
        under generally accepted accounting principles ("GAAP").  EBITDA is
        not a measure of financial performance under GAAP. It should not be
        considered as an alternative to earnings before income taxes (or any
        other performance measure under GAAP) as a measure of performance or
        to cash flows from operating, investing or financing activities as an
        indicator of cash flows or as a measure of liquidity.  The following
        table reconciles earnings before income taxes, representing the most
        comparable measure under GAAP, to EBITDA for the three-month periods
        ended March 31, 2007 and 2006:



                                                Three Months
                                               Ended March 31,
                                              2007        2006

    Earnings before income taxes           $  208.9    $  172.1
    Add (subtract):
      Interest expense                         12.6        11.9
      Investment income                        (2.1)       (0.4)
      Other (income) expense, net               0.4         0.6
      Depreciation                             26.3        25.3
      Amortization                             13.3        13.0
      Joint venture partnerships' depreciation
       and amortization                         1.1         1.3
      EBITDA                               $  260.5    $  223.8


    (2) Effective January 1, 2007, the Company adopted the provisions of
        Financial Standards Accounting Board Interpretation No. 48 Accounting
        for Uncertainty in Income Taxes ("FIN 48") an interpretation of FASB
        Statement No. 109 ("SFAS 109").  As a result of the implementation of
        FIN 48, the Company recognized approximately $0.5 million as an
        increase to its reserve for uncertain tax positions and a
        corresponding reduction of shareholders' equity at January 1, 2007.

    




For further information:

For further information: Scott Fleming, Investors, +1-336-436-4879, 
investor@labcorp.com, Pam Sherry, Media, +1-336-436-4855, 
sherryp@labcorp.com, both of LabCorp, or Shareholder Direct, +1-800-LAB-0401
Web Site: http://www.labcorp.com

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LABORATORY CORPORATION OF AMERICA HOLDINGS

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