Exhibit 99.1
Press Releases
LabOne Reports Second Quarter Earnings
LENEXA, Kan., Aug 7, 2003 (BUSINESS WIRE) --
LabOne, Inc. (Nasdaq:LABS) today reported revenues of $84.0 million for its second quarter ended June 30, 2003, an increase of $8.9 million or 12% over the second quarter 2002. Compared to revenues for the same quarter last year, risk assessment services increased 5% to $55.7 million, healthcare increased 45% to $21.3 million and substance abuse testing decreased 5% to $7.0 million. The company reported net income of $5.0 million or $0.30 per diluted share compared to $3.6 million or $0.22 per diluted share for the second quarter 2002.
Operating earnings for the second quarter 2003 were $8.5 million compared to $6.9 million for the same period last year. Second quarter 2003 operating earnings comprised $11.8 million for risk assessment, $3.5 million for healthcare and $1.3 million for substance abuse testing, offset by $8.1 million for corporate selling, general and administrative expenses. This compares to operating earnings for the same period in 2002 of $10.2 million for risk assessment, $2.9 million for healthcare and $1.2 million for substance abuse testing, offset by $7.3 million for corporate selling, general and administrative expenses.
For the six months ended June 30, 2003, the company reported revenues of $165.9 million compared to $145.7 million for the same period last year. Net income for the six months was $9.6 million or $0.57 per diluted share compared to $6.7 million or $0.42 per diluted share for the same period in 2002.
Operating earnings for the six months ended June 30, 2003, were $16.4 million compared to $12.6 million for the same period last year. Operating earnings for the six months ended June 30, 2003, comprised $23.2 million for risk assessment, $7.4 million for healthcare and $2.0 million for substance abuse testing, offset by $16.1 million for corporate selling, general and administrative expenses. This compares to operating earnings for the same period in 2002 of $19.5 million for risk assessment, $5.5 million for healthcare and $1.6 million for substance abuse testing, offset by $14.0 million for corporate selling, general and administrative expenses.
"We continued to realize increased patient volumes and revenues in healthcare testing and increased revenues associated with additional services provided to our clients of risk assessment services," said W. Thomas Grant II, chairman and CEO of LabOne. "During the second quarter, healthcare volumes increased 37% and revenues increased 45% compared to the same quarter last year. Excluding the impact of Central Plains Laboratories acquired during the fourth quarter of 2002, healthcare revenues increased 25%, reflecting continued penetration of existing markets. Although the number of insurance applicants tested for risk assessment services declined 10% compared to the same quarter last year, average revenue per insurance applicant increased 3% due to an increase in `reflex' testing. Paramedical examination revenues increased 10% and teleunderwriting revenues increased 68% compared to the same quarter last year. Substance abuse revenues declined 5%, reflecting an 8% decline in volume offset by a 3% increase in average revenue per specimen compared to the second quarter last year. Improved efficiencies and automation in the toxicology laboratory have helped us maintain comparable profitability in spite of the soft employment market affecting substance abuse testing volumes. As we have discussed previously, we continue to aggressively evaluate opportunities that allow us to improve laboratory utilization and expand our case management approach to risk assessment services."
LabOne will conduct its quarterly conference call with W. Thomas Grant II, chairman and CEO, John W. McCarty, executive vice president and CFO and Mike Asselta, executive vice president and COO at 11 a.m. Eastern Time, August 7. To join the conference call, dial 800-556-3831 and enter the passcode 00965. Following the call, a recording of the call will be available through September 5, 2003, as a voice mail at 800-736-8106 at approximately 2:30 p.m. Eastern Time. The audio recording will also be available on the investor info section of the company's web site at www.LabOne.com.
ABOUT LABONE, INC.
LabOne is a national laboratory testing and information service provider serving insurance and clinical clients. Through its ExamOne and Intellisys companies, LabOne is a leading solutions provider to life and health insurance companies for laboratory testing, paramedical examinations, attending physician statements, motor vehicle reports, background inspections and personal history interviews. LabOne also provides diagnostic testing to physicians and managed care organizations, and drug testing for employers. The company's web site is located at http://www.LabOne.com.
FORWARD-LOOKING STATEMENTS
This press release may contain "forward-looking statements." Forward-looking statements often can be identified by the use of forward-looking terminology, such as "could," "should," "will," "will be," "intended," "continue," "believe," "may," "hope," "anticipate," "goal," "forecast," "plan," "estimate" or variations thereof. Forward-looking statements are not guarantees of future performance or results. Forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause actual results to differ materially from those that may be expressed or implied in such forward-looking statements, including, but not limited to, the volume, pricing and mix of services provided by the Company, intense competition, the loss of one or more significant customers, general economic conditions and other factors detailed from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission ("SEC"), including the Cautionary Statement filed as Exhibit 99 to the Company's Annual Report on Form 10-K.
SELECTED FINANCIAL DATA Three months ended Percent June 30, Increase 2003 2002 Sales $83,963,198 75,032,137 12% Net earnings $ 5,045,132 3,635,476 39% Basic earnings per share $ 0.36 0.26 Diluted earnings per share $ 0.30 0.22 Total assets Working capital SELECTED FINANCIAL DATA Six months ended Percent June 30, Increase 2003 2002 Sales $165,890,960 145,673,173 14% Net earnings $ 9,595,808 6,734,722 42% Basic earnings per share $ 0.69 0.47 Diluted earnings per share $ 0.57 0.42 Total assets $224,630,639 $205,914,962 Working capital $ 46,171,692 $43,545,393 CONSOLIDATED BALANCE SHEETS June 30, December 31, 2003 2002 ASSETS Current assets: Cash and cash equivalents $ 10,580,554 8,107,554 Accounts and notes receivable - trade, net of allowance for doubtful accounts of $8,101,652 in 2003 and $7,075,748 in 2002 52,331,434 48,669,148 Inventories 5,083,317 4,739,423 Prepaid expenses and other current assets 4,411,973 3,967,757 Deferred income taxes 5,044,125 3,865,539 ------------ ------------ Total current assets 77,451,403 69,349,421 Property, plant and equipment 110,031,949 106,946,090 Less accumulated depreciation 64,442,683 60,094,949 ------------ ------------ Net property, plant and equipment 45,589,266 46,851,141 Other assets: Goodwill 97,721,939 96,309,148 Other intangible assets 1,855,284 1,967,282 Debt issue costs, net of accumulated amortization of $694,746 in 2003 and $395,262 in 2002 1,231,987 1,522,552 Deposits and other assets 780,760 691,980 ------------ ------------ Total assets $224,630,639 216,691,524 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 15,649,220 15,373,393 Accrued payroll and benefits 9,720,947 9,148,323 Other accrued expenses 3,053,750 2,000,703 Income taxes payable 911,349 454,206 Current portion of long-term debt 1,944,445 2,005,596 ------------ ------------ Total current liabilities 31,279,711 28,982,221 Long-term debt 57,960,367 63,050,455 Deferred income taxes - noncurrent 4,546,135 4,598,957 Stockholders' equity: Preferred stock, $.01 par value per share; 3,000,000 total authorized shares: Series B-1: 8% convertible; 45,000 shares authorized; 40,270 shares issued in 2003, and 38,865 shares issued in 2002 40,269,981 38,865,492 Common stock, $.01 par value per share; 40,000,000 shares authorized, 13,050,020 shares issued 130,500 130,500 Additional paid-in capital 41,409,988 48,865,813 Accumulated comprehensive loss - equity adjustment from foreign currency translation (449,520) (867,147) Retained earnings 66,258,467 58,217,280 Less treasury stock of 1,327,267 shares in 2003 and 1,756,027 shares in 2002 (16,774,990) (25,152,047) ------------ ------------ Total stockholders' equity 130,844,426 120,059,891 ------------ ------------ Total liabilities and stockholders' equity $224,630,639 216,691,524 ============ ============ CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended Six months ended June 30, June 30, 2003 2002 2003 2002 ---------- ---------- ------------ ----------- Sales $83,963,198 75,032,137 $165,890,960 145,673,173 Cost of sales Cost of sales expenses 55,994,281 50,788,654 111,038,816 99,146,451 Depreciation expense 1,092,504 945,505 2,138,164 1,815,681 ----------- ----------- ------------ ------------ Total cost of sales 57,086,785 51,734,159 113,176,980 100,962,132 ----------- ----------- ------------ ------------ Gross profit 26,876,413 23,297,978 52,713,980 44,711,041 Selling, general and administrative Selling, general and administrative expenses 16,956,847 14,999,864 33,107,205 29,309,066 Depreciation expense 1,270,118 1,360,511 2,972,304 2,710,080 Amortization expense 111,693 625 221,997 70,057 ----------- ----------- ------------ ------------ Total selling, general and administrative 18,338,658 16,361,000 36,301,506 32,089,203 ----------- ----------- ------------ ------------ Operating earnings 8,537,755 6,936,978 16,412,474 12,621,838 Interest expense (698,947) (918,481) (1,415,074) (1,802,501) Investment income 14,059 40,514 104,540 56,528 Other, net 78,574 8,527 107,994 7,681 ----------- ----------- ------------ ------------ Earnings before income taxes 7,931,441 6,067,538 15,209,934 10,883,546 Income tax expense 2,886,309 2,432,062 5,614,126 4,148,824 ----------- ----------- ------------ ------------ Net earnings $ 5,045,132 3,635,476 $ 9,595,808 6,734,722 =========== =========== ============ ============ Basic earnings per share $ 0.36 0.26 $ 0.69 0.47 =========== =========== ============ ============ Diluted earnings per share $ 0.30 0.22 $ 0.57 0.42 =========== =========== ============ ============ Computation of earnings per share amounts: Net earnings $ 5,045,132 3,635,476 $ 9,595,808 6,734,722 Preferred dividend on B-1 preferred stock (787,405) (728,000) (1,554,621) (1,437,334) ----------- ----------- ------------ ------------ Net earnings available to common shareholders $ 4,257,727 2,907,476 $ 8,041,187 5,297,388 =========== =========== ============ ============ Weighted average common shares (basic) 11,691,270 11,382,827 11,680,251 11,271,735 Common shares issuable upon conversion of preferred stock 4,810,294 4,447,756 4,763,922 4,404,700 Dilutive effect of employee stock options 244,495 420,227 234,550 342,515 ----------- ----------- ------------ ------------ Weighted average common shares outstanding (diluted) 16,746,059 16,250,810 16,678,723 16,018,950 =========== =========== ============ ============