Exhibit 99.1
LabOne Reports Third Quarter Earnings
LENEXA, Kan., Nov 8, 2004 (BUSINESS WIRE) -- LabOne, Inc. (Nasdaq: LABS) today reported revenues of $117.8 million for its third quarter ended September 30, 2004, an increase of $29.7 million or 34% over the third quarter 2003. Compared to revenues for the same quarter last year, risk assessment services increased 11% to $64.6 million, healthcare increased 85% to $42.2 million and substance abuse testing increased 50% to $11.0 million. Excluding the impact of the acquisition of Alliance Laboratory Services in January 2004 and Northwest Toxicology in March 2004, healthcare revenues increased 23% and substance abuse testing revenues increased 9% compared to the third quarter last year. The company reported net income of $6.6 million or $0.38 per diluted share compared to $5.4 million or $0.32 per diluted share for the third quarter 2003. Results for the third quarter 2004 benefited from a $0.4 million adjustment related to foreign and state income taxes, and a $0.2 million pre-tax reimbursement from the Hea lth Alliance for certain transition costs incurred by the company in connection with its integration of Alliance Laboratory Services.
For the third quarter 2004, operating earnings were $11.6 million compared to $9.3 million the same period last year, an increase of $2.3 million or 25%. Third quarter 2004 operating earnings comprised $12.4 million for risk assessment, $7.6 million for healthcare and $2.0 million for substance abuse testing, offset by $10.4 million for corporate selling, general and administrative expenses. This compares to operating earnings of $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 for the same period in 2003. For the third quarter 2004, operating earnings included $1.3 million and $0.2 million associated with Alliance Laboratory Services and Northwest Toxicology, respectively.
For the nine months ended September 30, 2004, the company reported revenues of $348.1 million compared to $254.0 million for the same period last year. For the nine months ended September 30, 2004, revenues attributable to the acquisitions of Alliance Laboratory Services and Northwest Toxicology were $43.7 million and $7.5 million, respectively. Net income for the nine months was $18.8 million or $1.08 per diluted share compared to $15.0 million or $0.89 per diluted share for the same period in 2003.
For the nine months ended September 30, 2004, operating earnings were $33.6 million compared to $25.7 million for the same period last year. For the nine months ended September 30, 2004, operating earnings comprised $38.4 million for risk assessment, $19.9 million for healthcare and $5.1 million for substance abuse testing, offset by $29.8 million for corporate selling, general and administrative expenses. This compares to operating earnings of $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 for the same period in 2003. For the nine months ended September 30, 2004, operating earnings included $2.0 million and $0.8 million associated with Alliance Laboratory Services and Northwest Toxicology, respectively.
"Laboratory testing volumes increased 31% during the third quarter, from 2.5 million specimens in 2003, to 3.3 million in 2004," said W. Thomas Grant II, chairman, president and CEO of LabOne. "Excluding the impact of the Alliance Laboratory Services and Northwest Toxicology acquisitions, volumes increased 7% to 2.7 million. During the quarter, insurance testing volumes remained the same as the third quarter last year while healthcare volumes increased 80% and substance abuse testing volumes increased 44%. Excluding the impact of the Alliance Laboratory Services and Northwest Toxicology acquisitions, healthcare volumes increased 19% and substance abuse volumes increased 11%. During the third quarter 2004, insurance testing revenues decreased 2%, paramedical revenues increased 20% and other insurance service revenues increased 19% compared to the same period last year. Other insurance revenues include a 42% increase in teleunderwriting revenues compared to the third quarter 2003. Although results for the q uarter benefited from our cost reduction initiatives for Alliance Laboratory Services, we continue to be challenged by increased corporate overhead expenses, principally associated with information technology initiatives and compliance with Sarbanes-Oxley."
LabOne will conduct its quarterly conference call with W. Thomas Grant II, chairman, president and CEO, John W. McCarty, executive vice president and CFO, and Mike Asselta, executive vice president and COO, at 11 a.m. Eastern time, Nov. 8, 2004. To join the conference call, dial 877-502-9276. At approximately 2 p.m. Eastern time, a recording of the call will be available as a voice mail at 888-203-1112, pass code 823875, through Dec. 8, 2004. 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, hospitals, managed care organizations and employers; and substance abuse testing services and related employee qualification products to employers and the government.
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, contractual and logistical limitations, 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 Company's 2003 Annual Report on Form 10-K and the Company's Form S-3 Registration Statement filed with the SEC on September 10, 2004.
SELECTED FINANCIAL DATA (in thousands, except per share data) Three months ended Nine months ended September 30, September 30, 2004 2003 % change 2004 2003 % change ------------------------------------------------------- Sales $117,839 $88,115 34% $348,146 $254,006 37% Net earnings $6,615 $5,388 23% $18,781 $14,983 25% Basic earnings per share $0.39 $0.39 $1.10 $1.07 Diluted earnings per share $0.38 $0.32 $1.08 $0.89 Total assets $335,402 $235,315 Working capital $65,567 $47,163
CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) September 30, December 31, 2004 2003 ------------- ------------ Assets Current assets: Cash and cash equivalents $20,592 $4,651 Accounts receivable, net of allowance for doubtful accounts of $4,329 in 2004 and $6,123 in 2003 73,429 57,928 Inventories 6,397 5,472 Prepaid expenses and other current assets 6,590 5,202 Deferred income taxes 5,833 4,990 ------------- ------------ Total current assets 112,841 78,243 Property, plant and equipment, net 58,232 47,405 Goodwill 137,699 99,103 Intangible assets, net 21,694 11,345 Other long-term assets 4,936 1,526 ------------- ------------ Total assets $335,402 $237,622 ============= ============ Liabilities and Stockholders' Equity Current liabilities: Accounts payable $23,355 $13,617 Accrued payroll and benefits 17,193 11,769 Other accrued expenses 4,771 2,787 Current portion of long-term debt 1,955 2,014 ------------- ------------ Total current liabilities 47,274 30,187 Deferred income taxes 6,683 5,619 Long-term debt 111,448 56,094 Other 34 21 ------------- ------------ Total liabilities 165,439 91,921 Commitments and contingencies Stockholders' equity: Common stock, $0.01 par value per share. Authorized 40,000,000 shares; issued 18,027,729 shares in 2004 and 2003 180 180 Additional paid-in capital 86,361 84,066 Retained earnings 95,031 76,250 Accumulated other comprehensive loss (247) (245) Treasury stock of 894,071 shares in 2004 and 1,144,840 shares in 2003, at cost (11,362) (14,550) ------------- ------------ Total stockholders' equity 169,963 145,701 ------------- ------------ Total liabilities and stockholders' equity $335,402 $237,622 ============= ============
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three months ended Nine months ended September 30, September 30, 2004 2003 2004 2003 --------- -------- --------- --------- Sales $117,839 $88,115 $348,146 $254,006 Cost of sales: Cost of sales expenses 79,126 59,009 234,128 170,048 Depreciation and amortization 1,712 1,154 4,934 3,292 --------- -------- --------- --------- Total cost of sales 80,838 60,163 239,062 173,340 --------- -------- --------- --------- Gross profit 37,001 27,952 109,084 80,666 Selling, general and administrative: Selling, general and administrative expenses 22,730 17,125 68,020 50,232 Depreciation and amortization 2,670 1,515 7,502 4,710 --------- -------- --------- --------- Total selling, general and administrative 25,400 18,640 75,522 54,942 --------- -------- --------- --------- Operating earnings 11,601 9,312 33,562 25,724 Other income (expense): Interest income 54 7 121 112 Interest expense (1,340) (742) (3,814) (2,157) Other, net (29) (38) (35) 70 --------- -------- --------- --------- Total other expense, net (1,315) (773) (3,728) (1,975) --------- -------- --------- --------- Earnings before income taxes 10,286 8,539 29,834 23,749 Provision for income taxes 3,671 3,151 11,053 8,766 --------- -------- --------- --------- Net earnings $6,615 $5,388 $18,781 $14,983 ========= ======== ========= ========= Preferred stock dividends $- $(794) $- $(2,349) --------- -------- --------- --------- Net earnings available to common shareholders $6,615 $4,594 $18,781 $12,634 ========= ======== ========= ========= Earnings per common share: Basic $0.39 $0.39 $1.10 $1.07 Diluted $0.38 $0.32 $1.08 $0.89 Weighted average common shares outstanding: Basic 17,113 11,908 17,039 11,757 Diluted 17,477 16,975 17,459 16,796
SOURCE: LabOne, Inc.
LabOne, Inc. John McCarty, 913-577-1244 john.mccarty@LabOne.com