Exhibit 99.1
Press Release
LabOne Reports Third-Quarter Earnings
LENEXA, Kan., Nov 12, 2003 (BUSINESS WIRE) -- LabOne, Inc. (Nasdaq:LABS) today reported revenues of $88.1 million for its third quarter ended September 30, 2003, an increase of $13.5 million, or 18% over the third quarter 2002.
Compared to revenues for the same quarter last year, risk assessment services increased 12% to $58.0 million, healthcare increased 48% to $22.8 million and substance abuse testing remained $7.3 million. The company reported net income of $5.4 million, or $0.32 per diluted share, compared to $3.7 million, or $0.23 per diluted share, for the third quarter 2002.
Operating earnings for the third quarter 2003 were $9.3 million compared to $7.3 million for the same period last year. Third-quarter 2003 operating earnings comprised $11.6 million for risk assessment, $5.0 million for healthcare and $1.4 million for substance abuse testing, offset by $8.7 million for corporate selling, general and administrative expenses. This compares to operating earnings for the same period in 2002 of $10.1 million for risk assessment, $2.9 million for healthcare and $1.1 million for substance abuse testing, offset by $6.8 million for corporate selling, general and administrative expenses.
For the nine months ended September 30, 2003, the company reported revenues of $254.0 million, compared to $220.3 million for the same period last year. Net income for the nine months was $15.0 million, or $0.89 per diluted share, compared to $10.5 million, or $0.65 per diluted share for the same period in 2002.
Operating earnings for the nine months ended September 30, 2003, were $25.7 million, compared to $19.9 million for the same period last year. Operating earnings for the nine months ended September 30, 2003, comprised $34.7 million for risk assessment, $12.4 million for healthcare and $3.4 million for substance abuse testing, offset by $24.8 million for corporate selling, general and administrative expenses. This compares to operating earnings for the same period in 2002 of $29.5 million for risk assessment, $8.5 million for healthcare and $2.7 million for substance abuse testing, offset by $20.8 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 third quarter, healthcare volumes increased 37% and revenues increased 48% compared to the same quarter last year. Excluding the impact of Central Plains Laboratories, acquired during the fourth quarter of 2002, healthcare revenues increased 28% reflecting continued penetration of existing markets. Risk assessment revenues increased 12% reflecting an increase of 19% in paramedical revenues, a 33% increase in other risk assessment services, including teleunderwriting, offset by a 5% decline in revenues for laboratory testing. We continue to evaluate new initiatives and alliances, which will 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 11:00 a.m. Eastern Time, November 12. 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 December 10, 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.
Headquartered in the Greater Kansas City area, LabOne is a diagnostic services provider. The services and information LabOne and its subsidiaries provide include: risk assessment information services for the insurance industry; diagnostic healthcare testing to physicians, managed care organizations and employers; and drug testing services and related employee qualification products to 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, government reimbursement policies, 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 Nine months ended Sept. 30, %Increase ended Sept. 30, %Increase 2003 2002 2003 2002 - ---------------------------------------------------------------------- Sales $88,115,050 74,577,461 18% $254,006,010 220,250,634 15% Net earnings $5,387,684 3,746,571 44% $14,983,492 10,481,293 43% Basic earnings per share $0.39 0.26 $1.07 0.73 Diluted earnings per share $0.32 0.23 $0.89 0.65 Total assets $235,314,678 206,157,530 Working capital $47,162,592 42,588,388 Consolidated Balance Sheets September 30, December 31, ASSETS 2003 2002 - ---------------------------------------------------------------------- Current assets: Cash and cash equivalents $9,673,197 8,107,554 Accounts and notes receivable - trade, net of allowance for doubtful accounts of $9,171,391 in 2003 and $7,075,748 in 2002 57,751,207 48,669,148 Inventories 5,139,741 4,739,423 Prepaid expenses and other current assets 5,206,750 3,967,757 Deferred income taxes 5,608,726 3,865,539 ----------- ----------- Total current assets 83,379,621 69,349,421 Property, plant and equipment 112,513,420 106,946,090 Less accumulated depreciation 66,697,302 60,094,949 ----------- ----------- Net property, plant and equipment 45,816,118 46,851,141 Other assets: Goodwill 97,647,999 96,309,148 Other intangible assets 6,766,621 1,967,282 Debt issue costs, net of accumulated amortization of $898,269 in 2003 and $395,262 in 2002 1,028,464 1,522,552 Deposits and other assets 675,855 691,980 ----------- ----------- Total assets $235,314,678 216,691,524 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY - ---------------------------------------------------------------------- Current liabilities: Accounts payable $17,869,698 15,373,393 Accrued payroll and benefits 12,252,192 9,148,323 Other accrued expenses 3,619,500 2,000,703 Income taxes payable 560,481 454,206 Current portion of long-term debt 1,915,158 2,005,596 ----------- ----------- Total current liabilities 36,217,029 28,982,221 Long-term debt 56,225,772 63,050,455 Deferred income taxes - noncurrent 4,655,486 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; 32,744 shares issued in 2003, and 38,865 shares issued in 2002 32,743,756 38,865,492 Common stock, $.01 par value per share; 40,000,000 shares authorized, 14,050,071 shares issued in 2003, and 13,050,020 shares issued in 2002 140,500 130,500 Additional paid-in capital 50,436,247 48,865,813 Accumulated comprehensive loss - equity adjustment from foreign currency translation (486,960) (867,147) Retained earnings 70,851,949 58,217,280 Less treasury stock of 1,220,212 shares in 2003 and 1,756,027 shares in 2002 (15,469,101) (25,152,047) ----------- ----------- Total stockholders' equity 138,216,391 120,059,891 ----------- ----------- Total liabilities and stockholders' equity $235,314,678 216,691,524 =========== =========== Consolidated Statements of Operations Three months ended Nine months ended September 30, September 30, 2003 2002 2003 2002 - ---------------------------------------------------------------------- Sales $88,115,050 74,577,461 $254,006,010 220,250,634 Cost of sales Cost of sales expenses 59,008,775 50,822,212 170,047,590 149,968,663 Depreciation expense 1,153,815 1,037,833 3,291,979 2,853,514 ----------- ----------- ----------- ----------- Total cost of sales 60,162,590 51,860,045 173,339,569 152,822,177 ----------- ----------- ----------- ----------- Gross profit 27,952,460 22,717,416 80,666,441 67,428,457 Selling, general and administrative Selling, general and administrative expenses 17,124,893 14,155,260 50,232,098 43,464,326 Depreciation expense 1,230,367 1,276,652 4,202,671 3,986,733 Amortization expense 285,189 625 507,186 70,682 ----------- ----------- ----------- ----------- Total selling, general and administrative 18,640,449 15,432,537 54,941,955 47,521,741 ----------- ----------- ----------- ----------- Operating earnings 9,312,011 7,284,879 25,724,486 19,906,716 Interest expense (741,986) (1,134,565) (2,157,060) (2,964,541) Investment income 7,160 121,236 111,700 177,764 Other, net (37,806) (5,603) 70,187 29,554 ----------- ----------- ----------- ----------- Earnings before income taxes 8,539,379 6,265,947 23,749,313 17,149,493 Income tax expense 3,151,695 2,519,376 8,765,821 6,668,200 ----------- ----------- ----------- ----------- Net earnings $5,387,684 3,746,571 $14,983,492 10,481,293 =========== =========== =========== =========== Basic earnings per share $0.39 0.26 $1.07 0.73 =========== =========== =========== =========== Diluted earnings per share $0.32 0.23 $0.89 0.65 =========== =========== =========== =========== Computation of earnings per share amounts: Net earnings $5,387,684 3,746,571 $14,983,492 10,481,293 Preferred dividend on B-1 preferred stock (794,202) (737,707) (2,348,823) (2,175,041) ----------- ----------- ----------- ----------- Net earnings available to common shareholders $4,593,482 3,008,864 $12,634,669 8,306,252 =========== =========== =========== =========== Weighted average common shares outstanding (basic) 11,908,231 11,623,275 11,757,079 11,390,203 Common shares issuable upon conversion of preferred stock 4,756,442 4,535,290 4,774,983 4,448,708 Dilutive effect of employee stock options 310,239 308,809 264,202 334,400 ----------- ----------- ----------- ----------- Weighted average common shares outstanding (diluted) 16,974,912 16,467,374 16,796,264 16,173,311 =========== =========== =========== ===========