Delaware
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1-11353
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13-3757370
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(State or other jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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358 South Main Street,
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Burlington, North Carolina
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27215
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336-229-1127
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(Address of principal executive offices)
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(Zip Code)
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(Registrant’s telephone number including area code)
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[ ]
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Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 7.01
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Regulation FD Disclosure
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By:
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/s/ F. SAMUEL EBERTS III
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F. Samuel Eberts III
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Chief Legal Officer and Secretary
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Partner
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Clinical Area
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ARCA biopharma
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Companion Diagnostics (Cardiovascular Disease)
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BG Medicine
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Cardiovascular Disease
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Celera Diagnostics
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Breast Cancer
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Duke University
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Joint Venture in biomarker development
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Duke University
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Lung Cancer
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Exact Sciences
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Colon Cancer
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Intema Ltd.
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Prenatal Testing
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Johns Hopkins
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Melanoma
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MDxHealth
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Companion Diagnostics (Oncology)
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Medco Health Solutions
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Companion Diagnostics (Research)
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Merck
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Companion Diagnostics (Infectious Disease)
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On-Q-ity
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Circulating tumor cells
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University of Minnesota
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Lupus
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Veridex
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Prostate Cancer
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Yale University
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Ovarian Cancer (exclusive)
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Three Months Ended Jun 30,
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Six Months Ended Jun 30,
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2011
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2010
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+/(-)
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2011
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2010
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+/(-)
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Revenue
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$ 1,403.3
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$ 1,238.4
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13.3%
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$2,771.7
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$2,432.0
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14.0%
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Adjusted Operating Income (1)
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$ 279.6
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$ 270.5
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3.4%
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$543.3
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$514.0
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5.7%
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Adjusted Operating Income Margin (1)
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19.9%
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21.8%
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-190
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bp
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19.6%
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21.1%
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-150
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bp
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Adjusted EPS Excluding
Amortization(1) |
$ 1.64
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$ 1.56
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5.1%
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$3.18
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$2.96
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7.4%
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Operating Cash Flow
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$ 184.9
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$ 216.2
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-14.5%
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$ 400.2
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$ 448.2
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-10.7%
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Less: Capital Expenditures
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$ (45.8)
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$ (34.5)
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32.8%
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$ (75.2)
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$ (59.0)
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27.5%
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Free Cash Flow
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$ 139.1
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$ 181.7
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-23.4%
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$ 325.0
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$ 389.2
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-16.5%
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(1) See Reconciliation of non-GAAP Financial Measures (included herein)
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Reconciliation of non-GAAP Financial Measures
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(In millions, except per share data)
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Three Months Ended Jun 30,
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Adjusted Operating Income
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2011
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2010
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Operating income
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$ 225.7
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$ 270.5
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Restructuring and other special charges (1) (2)
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53.9
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-
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Adjusted operating income
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$ 279.6
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$ 270.5
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Adjusted EPS Excluding Amortization
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Diluted earnings per common share
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$ 1.20
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$ 1.46
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Impact of restructuring and other special charges (1) (2)
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0.32
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-
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Amortization expense
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0.12
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0.10
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Adjusted EPS Excluding Amortization (3)
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$ 1.64
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$ 1.56
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1) During the second quarter of 2011, the Company recorded restructuring and other special charges of $53.9 million. The restructuring charges include $7.5 million in net severance and other personnel costs along with
$10.8 million in net facility-related costs primarily associated with the ongoing integration of the Genzyme Genetics and Westcliff acquisitions. The special charges also include $34.5 million ($49.5 million, net of previously recorded reserves of $15.0 million) relating to the settlement of the Hunter Labs litigation, along with $1.1 million for legal costs associated with the planned acquisition of Orchid Cellmark incurred during the quarter, both of which were recorded in Selling, General and Administrative Expenses in the Company’s Statement of Operations. The after tax impact of these charges decreased net earnings for the quarter ended June 30, 2011, by $32.6 million and diluted earnings per share by $0.32 ($32.6 million divided by 102.8 million shares). |
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During the first quarter of 2011, the Company recorded restructuring and other special charges of $27.9 million. The charges included $4.0 million in severance and other personnel costs along with $9.8 million in facility-
related costs associated with the integration of Genzyme Genetics. The charges also included a $14.8 million write-off of an investment made in a prior year. For the six months ended June 30, 2011, the after tax impact of these combined charges decreased net earnings by $49.4 million and diluted earnings per share by $0.48 ($49.4 million divided by 102.6 million shares). |
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2) During the first quarter of 2010, the Company recorded net charges of $9.3 million 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. The after tax impact of these charges decreased net earnings for the six months ended June 30, 2010, by $5.7 million and diluted earnings per share by $0.06 ($5.7 million divided by 105.9 million shares). |
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3) The Company continues to grow its business through acquisitions and uses Adjusted EPS Excluding Amortization as a measure of operational performance, growth and shareholder returns. The Company believes
adjusting EPS for amortization will provide investors with better insight into the operating performance of the business. For the quarters ended June 30, 2011 and 2010, intangible amortization was $21.5 million and $17.7 million, respectively ($13.0 million and $10.8 million net of tax, respectively) and decreased EPS by $0.12 ($13.0 million divided by 102.8 million shares) and $0.10 ($10.8 million divided by 105.9 million shares), respectively. For the six months ended June 30, 2011 and 2010, intangible amortization was $43.4 million and $35.1 million, respectively ($26.5 million and $21.5 million net of tax, respectively) and decreased EPS by $0.26 ($26.5 million divided by 102.6 million shares) and $0.20 ($21.5 million divided by 105.9 million shares), respectively. |
Reconciliation of non-GAAP Financial Measures
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(In millions, except per share data)
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Six Months Ended Jun 30,
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Adjusted Operating Income
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2011
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2010
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Operating income
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$ 461.5
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$ 504.7
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Restructuring and other special charges (1) (2)
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81.8
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9.3
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Adjusted operating income
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$ 543.3
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$ 514.0
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Adjusted EPS Excluding Amortization
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Diluted earnings per common share
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$ 2.44
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$ 2.70
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Impact of restructuring and other special charges (1) (2)
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0.48
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0.06
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Amortization expense
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0.26
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0.20
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Adjusted EPS Excluding Amortization (3)
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$ 3.18
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$ 2.96
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1) During the second quarter of 2011, the Company recorded restructuring and other special charges of $53.9 million. The restructuring charges include $7.5 million in net severance and other personnel costs along with
$10.8 million in net facility-related costs primarily associated with the ongoing integration of the Genzyme Genetics and Westcliff acquisitions. The special charges also include $34.5 million ($49.5 million, net of previously recorded reserves of $15.0 million) relating to the settlement of the Hunter Labs litigation, along with $1.1 million for legal costs associated with the planned acquisition of Orchid Cellmark incurred during the quarter, both of which were recorded in Selling, General and Administrative Expenses in the Company’s Statement of Operations. The after tax impact of these charges decreased net earnings for the quarter ended June 30, 2011, by $32.6 million and diluted earnings per share by $0.32 ($32.6 million divided by 102.8 million shares). |
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During the first quarter of 2011, the Company recorded restructuring and other special charges of $27.9 million. The charges included $4.0 million in severance and other personnel costs along with $9.8 million in facility-
related costs associated with the integration of Genzyme Genetics. The charges also included a $14.8 million write-off of an investment made in a prior year. For the six months ended June 30, 2011, the after tax impact of these combined charges decreased net earnings by $49.4 million and diluted earnings per share by $0.48 ($49.4 million divided by 102.6 million shares). |
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2) During the first quarter of 2010, the Company recorded net charges of $9.3 million 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. The after tax impact of these charges decreased net earnings for the six months ended June 30, 2010, by $5.7 million and diluted earnings per share by $0.06 ($5.7 million divided by 105.9 million shares). |
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3) The Company continues to grow its business through acquisitions and uses Adjusted EPS Excluding Amortization as a measure of operational performance, growth and shareholder returns. The Company believes
adjusting EPS for amortization will provide investors with better insight into the operating performance of the business. For the quarters ended June 30, 2011 and 2010, intangible amortization was $21.5 million and $17.7 million, respectively ($13.0 million and $10.8 million net of tax, respectively) and decreased EPS by $0.12 ($13.0 million divided by 102.8 million shares) and $0.10 ($10.8 million divided by 105.9 million shares), respectively. For the six months ended June 30, 2011 and 2010, intangible amortization was $43.4 million and $35.1 million, respectively ($26.5 million and $21.5 million net of tax, respectively) and decreased EPS by $0.26 ($26.5 million divided by 102.6 million shares) and $0.20 ($21.5 million divided by 105.9 million shares), respectively. |
Laboratory Corporation of America
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Other Financial Information
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FY 2009, FY 2010 and Q1-Q2 2011
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($ in millions)
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Q1 09
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Q2 09
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Q3 09
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Q4 09
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Q1 10
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Q2 10
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Q3 10
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Q4 10
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Q1 11
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Q2 11
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Bad debt as a percentage of sales
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5.3%
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5.3%
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5.3%
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5.3%
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5.0%
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4.8%
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4.8%
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4.7%
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4.7%
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4.7%
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Days sales outstanding1
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52
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50
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48
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44
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46
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45
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44
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46
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47
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46
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(1) Excluding the impact from Genzyme Genetics, DSO was 43 days in Q4 of 2010, 45 days in Q1 of 2011 and 43 days in Q2 of 2011
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