LabOne Reports Earnings, Discontinues Quarterly Dividend, Announces Stock Repurchase Program.Business Editors LENEXA Le·nex·a A city of eastern Kansas, a suburb of Kansas City. Population: 41,200. , Kan Kan, river, China: see Gan. .--(BUSINESS WIRE)--Feb. 11, 2000 LabOne, Inc. (NasdaqNMS: LABS) reported $119.7 million in revenue for the year ended Dec. 31, 1999, an increase of 17 percent from $102.2 million in 1998. Net earnings decreased to $2.9 million or $0.27 in diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of in 1999, from $4.9 million or $0.50 in diluted earnings per share in 1998. Amortization of goodwill increased to $3.2 million from $2.6 million. Cash earnings (net income excluding goodwill amortization) declined to $6.1 million, or $0.58 per share, from $7.4 million, or $0.76 per share. Earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. was $16.5 million. The company reported net earnings for the fourth quarter 1999 of $0.5 million, or $0.05 per share, as compared to $1.2 million, or $0.12 per share, for the fourth quarter 1998. Amortization of goodwill increased to $1.0 million from $0.7 million. Cash earnings (net income excluding goodwill amortization) were $1.6 million, or $0.14 per share, as compared to $1.9 million, or $0.19 per share, for the fourth quarter of 1998. Earnings before interest, taxes, depreciation, and amortization was $4.1 million for the quarter. The decline in fourth-quarter earnings is due to amortization expense related to the August 1999 merger with the company's parent company and increased operating costs operating costs npl → gastos mpl operacionales associated with two events in our insurance services division: the development of infrastructure for ExamOne World Wide and preparation for the influx of new business into SBSI SBSI Step by Step Interactive (Microsoft training program) SBSI Separation by Bonding Silicon Islands (semiconductor fabrication) . Elimination of Dividend -- Focus on Growth In order to retain cash flow to finance the company's growth plans and for other corporate purposes, the board of directors has decided to eliminate the company's quarterly dividend. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program The board also approved a stock repurchase program pursuant to which LabOne is authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. up to $10 million of its common stock. The company has arranged for an increase in its credit line facility from $15 million to $25 million to accommodate stock repurchases. The timing of purchases and the actual number of shares purchased will depend upon market conditions. The company is authorized to repurchase shares in the open market or in privately negotiated transactions at prices deemed appropriate by management. Shares repurchased will be held in the treasury for reissue re·is·sue v. re·is·sued, re·is·su·ing, re·is·sues v.tr. To issue again, especially to make available again. v.intr. To come forth again. n. 1. for various corporate purposes, including the issuance of shares in any future acquisitions and in connection with the company's employee and director benefit plans. The board of directors did not set a time limit for completion of the program. W. Thomas Grant Thomas Grant (1816-1870) was a Catholic bishop. Born at Ligny-les-Aires, Arras, France, on November 25, 1816, the son of Bernard Grant, an Irishman who enlisted in the British army, became sergeant, and finally purchased a commission. II, chairman, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of LabOne, commented: &uot;We believe that investing in the company's common stock at current prices represents an attractive use of capital. The company's solid balance sheet and earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. program and maintain our future growth plans. We view the board's decision as a positive for the future of the company and our shareholders.&uot; Divisional Results In the fourth quarter, insurance services revenue increased $5.7 million (31 percent) to $23.7 million, healthcare (formerly named the clinical testing division) revenue increased $1.6 million (31 percent) to $6.8 million, and substance abuse testing revenue increased $0.4 million (10 percent) to $4.4 million. The increase in insurance services revenue is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the fourth-quarter acquisition of ExamOne World Wide and last year's fourth-quarter acquisition of SBSI. Comments on Results &uot;With our new facility, the merger with our parent company, and the purchase of our new paramedical par·a·med·i·cal adj. 1. Of, relating to, or being a person trained to give emergency medical treatment or assist medical professionals. 2. service ExamOne World Wide, 1999 was a year of transition that has prepared the company for an exciting year in 2000,&uot; said Grant. &uot;The insurance services division revenue grew 12 percent from $69.1 million to $77.7 million. After adding paramedical services to our menu for insurers, the ExamOne World Wide group has had an immediate impact on the insurance services division's revenue growth. They now provide national coverage and have grown to an annual revenue run rate in excess of $20 million, up from $9 million at the time of acquisition. With the paramedical services, in addition to the telephone inspection and physician statement services added by the SBSI acquisition, the division has all the components in place to better serve our insurance clients. &uot;The healthcare division grew its revenue 33 percent from $18.6 million to $24.8 million in 1999. The success included continued growth of the Lab Card(R) Program in profit, membership and in card utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be . With the addition of more than 400,000 lives to Lab Card in the first quarter of 2000, our healthcare division is off to an excellent start to 2000. &uot;Finally, our substance abuse testing division expanded 19 percent from $14.4 million to $17.2 million in 1999. The February February: see month. 2000 launch of Intercept intercept in mathematical terms the points at which a curve cuts the two axes of a graph. (TM), the first laboratory-based oral fluid drug testing service available in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , is an exciting development for the division and our company.&uot; LabOne, Inc. LabOne is a national laboratory company with three operating divisions: risk appraisal testing and related services for insurers (Insurance Services Division), healthcare-related testing for managed care organizations, physicians and insured The person who obtains or is otherwise covered by insurance on his or her health, life, or property. The insured in a policy is not limited to the insured named in the policy but applies to anyone who is insured under the policy. insured n. members (Healthcare Division), and drug testing for employers (Substance Abuse Testing Division). The company's web site is located at www.LabOne.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release may contain forward-looking statements, as well as historical information. Forward-looking statements include projections, statements of plans and objectives, statements of future economic performance and statements of assumptions underlying such statements. 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in such forward-looking statements, including, but not limited to, the volume and pricing of laboratory tests performed by the Company, competition, the extent of market acceptance of the Company's testing services in the healthcare and substance abuse testing industries, 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.
SELECTED FINANCIAL DATA
THREE MONTHS ENDED DECEMBER 31, % INCREASE
1999 1998
Sales $ 34,951,971 27,297,339 28%
Net earnings $ 542,974 1,195,662 -55%
Earnings per common share $ 0.05 0.12
Dividends per common share $ 0.18 0.20
Total assets
Working capital
YEAR ENDED DECEMBER 31, % INCREASE
1999 1998
Sales $119,666,534 102,227,216 17%
Net earnings $ 2,858,776 4,877,280 -41%
Earnings per common share $ 0.27 0.50
Dividends per common share $ 0.76 0.80
Total assets $118,442,724 98,007,173
Working capital $ 19,448,800 31,296,683
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, DECEMBER 31,
ASSETS 1999 1998
Current assets:
Cash, cash equivalents and short-term
investments $ 2,983,644 $ 15,223,336
Accounts receivable - trade, net of
allowance for doubtful accounts 26,331,960 18,729,939
Income taxes receivable 1,643,520 399,776
Inventories 3,186,853 1,798,481
Real estate available for sale -- 3,515,000
Prepaid expenses and other current
assets 1,772,884 2,752,732
Deferred income taxes 1,328,027 3,972,575
Total current assets 37,246,888 46,391,839
Property, plant and equipment 80,910,886 72,919,414
Less accumulated depreciation 38,106,948 35,983,169
Net property, plant and equipment 42,803,938 36,936,245
Other assets:
Intangible assets, net of accumulated
amortization 38,037,777 13,956,604
Deferred income taxes - noncurrent 93,326 484,621
Deposits and other assets 260,795 237,864
Total assets $ 118,442,724 $ 98,007,173
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,852,403 $ 8,201,882
Current portion of long-term debt 1,873,577 1,860,168
Accrued expenses and other current
liabilities 4,072,108 5,033,106
Total current liabilities 17,798,088 15,095,156
Long-term payable 1,360,000 --
Long-term debt 28,255,139 18,097,308
Total liabilities 47,413,227 33,192,464
Minority interests -- 10,275,611
Stockholders' equity:
Preferred stock, $.01 par value per
share; 3,000,000 shares authorized,
none issued -- --
Common stock, 40,000,000 shares
authorized; $.01 par value per
share 13,050,020 shares issued
in 1999 130,500 --
Common stock, 36,000,000 shares
authorized; $.67 par value per
share 11,250,000 shares issued
in 1998 -- 7,500,000
Additional paid-in capital 32,035,445 2,920,357
Equity adjustment from foreign
currency translation (750,115) (683,270)
Retained earnings 69,758,872 74,945,615
Less treasury stock of 1,516,527
shares in 1999 and 1,516,345
shares in 1998 30,145,205 30,143,604
Total stockholders' equity 71,029,497 54,539,098
Total liabilities and
stockholders' equity $ 118,442,724 $ 98,007,173
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998
Sales $ 34,951,971 27,297,339 119,666,534 102,227,216
Cost of sales
depreciation and
amortization 548,433 560,377 2,287,162 2,298,150
Other cost of
sales 21,237,792 14,839,319 69,256,370 54,421,453
Gross profit 13,165,746 11,897,643 48,123,002 45,507,613
Selling, general
and administrative
depreciation 863,077 333,892 2,979,557 1,329,642
Selling, general
and administrative
amortization 1,017,663 663,639 3,225,681 2,554,831
Other selling,
general and
administrative
expenses 9,589,680 7,802,145 33,873,050 30,216,411
Earnings from
operations 1,695,326 3,097,967 8,044,714 11,406,729
Interest income
(expense) and
other (421,587) 300,861 (1,063,865) 748,906
Earnings before
income taxes 1,273,739 3,398,828 6,980,849 12,155,635
Income tax expense 730,765 1,744,110 3,355,698 5,620,047
Earnings before
minority interest 542,974 1,654,718 3,625,151 6,535,588
Minority interest -- 459,056 766,375 1,658,308
Net earnings $ 542,974 1,195,662 2,858,776 4,877,280
Basic and diluted
earnings per
common share $ 0.05 0.12 0.27 0.50
Dividends per
common share $ 0.18 0.20 0.76 0.80
Basic weighted
average common
shares
outstanding 11,533,493 9,733,655 10,443,728 9,733,655
Diluted weighted
average common
shares
outstanding 11,533,493 9,733,655 10,451,432 9,733,655
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