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LabOne announces year-end results for 1994.

LENEXA, Kan.--(BUSINESS WIRE)--Feb. 10, 1995--LabOne, Inc. reported net earnings of $1.5 million or $0.12 per share for the fourth quarter 1994.

This compares with net earnings of $2.3 million or $0.17 per share for the fourth quarter 1993. Revenues for the fourth quarter were $15.4 million compared to revenues of $16.9 million in the same quarter last year.

In the 12 months ended December 31, 1994, revenues declined 12% to $60.7 million from $69.4 million, and net earnings declined 46% to $5.7 million, or $0.43 per share from $10.6 million, or $0.80 per share in the comparable 1993 period. The decrease in net earnings for 1994 can be primarily attributed to price reductions, volume decreases, and restructuring charges.

In the fourth quarter, total revenue decreased by 9% when compared with the same quarter in 1993. This was due to both a decline in the total number of insurance applicants tested and revenue per applicant. The decline in insurance applicants tested is primarily attributable to the overall reduction in the number of life insurance polices written nationwide.

The Company incurred $2.0 million in expenses associated with clinical diversification in the fourth quarter. Absent these expenses, LabOne's core insurance testing business would have shown a significant rebound in profitability. Bert H. Hood, Chairman, President and Chief Executive Officer said: "In the fourth quarter, the profitability from the Company's insurance business returned to the 1993 profit level. This level of profitability was accomplished by management's focus on the core business with fundamentals such as expense reduction, consolidation and price stabilization."

LabOne plans to offer a saliva-based risk assessment testing product to its insurance clients in the second quarter 1995. Hood said: "We have been working with key individuals from the insurance industry to bring a saliva-based product to the market. The Company believes this product provides an opportunity to enhance its product portfolio to the insurance industry."

During 1994, LabOne's clinical diversification strategy was developed and implemented. The Company announced in 1994 that it would be offering significant savings on laboratory testing for insurance carriers as well as self-insured employers. Hood stated: "LabOne has shifted from the laboratory industry's basic sales paradigm and has included the payer as a major decision maker. The HMO segment has negotiated lower laboratory fees from traditional clinical laboratories. At the same time, the highly fragmented non-HMO segment is charged higher laboratory fees, resulting in little or no reduction in overall laboratory testing costs. We have developed a strategy that avoids cost shifting and offers an excellent service at a consistently low price."

The Company also announced in 1994 its agreement with a large pharmaceutical benefits manager, PCS Health Systems, to perform LabOne's eligibility verification and claims processing. LabOne is utilizing a membership card to offer enhanced laboratory benefits to plan participants of its client companies. Under current agreements with several clients, LabOne will have over 160,000 Lab Card(tm) holders who will be eligible for participation by the end of February. Hood said: "Since rolling out its Lab Card program in December 1994, LabOne has experienced positive acceptance from Lab Card participants at its Patient Service Centers in Northern California."

At their regularly scheduled meeting on February 10, the LabOne Board of Directors approved a regular quarterly cash dividend of $0.18 per share. The dividend is payable on Thursday, March 2, 1995, to stockholders of record at the close of business on Tuesday, February 21, 1995.

LabOne operates a centralized laboratory in the Kansas City area which markets clinical, substance abuse and insurance laboratory testing services. The Company currently serves insurance companies throughout the United States and Canada. -0-



SELECTED FINANCIAL DATA


 THREE MONTHS ENDED DEC. 31, % DECREASE
 1994 1993
Sales $15,411,851 $16,854,198 9%
Net earnings 1,532,903 2,286,866 33%
Earnings per common share 0.12 0.17
Dividends per common share 0.18 0.18


 TWELVE MONTHS ENDED DEC. 31, % DECREASE
 1994 1993
Sales $60,725,982 $69,377,511 12%
Net earnings 5,687,128 10,565,936 46%
Earnings per common share 0.43 0.80
Dividends per common share 0.54 0.72
Total assets 76,626,713 81,129,952
Working capital 48,559,407 48,648,814


SALES DETAIL


 THREE MONTHS ENDED DEC. 31,
 1994 1993
Blood chemistry profiles $ 4,416,446 $ 4,835,430
AIDS-related tests 3,156,710 3,536,767
Urinalyses 2,482,382 2,504,821
Controlled substance tests 2,670,135 2,901,133
Other (primarily specimen kits) 2,686,178 3,076,047
 $15,411,851 $16,854,198


 TWELVE MONTHS ENDED DEC. 31,
 1994 1993
Blood chemistry profiles $17,370,109 $19,852,827
AIDS-related tests 12,406,680 14,766,199
Urinalyses 9,686,602 10,199,261
Controlled substance tests 10,326,413 12,702,244
Other (primarily specimen kits) 10,936,178 11,856,980
 $60,725,982 $69,377,511


CONSOLIDATED BALANCE SHEETS


 DECEMBER 31,
 1994 1993
ASSETS


Current assets:
 Cash and cash equivalents $ 4,420,806 $11,514,400
 Short-term investments 36,574,027 30,837,360
 Accounts receivable-trade,net of
 allowance for doubtful accounts
 of $81,426 in 1994 and
 $81,700 in 1993 8,791,894 8,058,819
 Inventories 787,339 784,068
 Prepaid expenses and other
 current assets 3,375,420 3,335,710
 Total current assets 53,949,486 54,530,357
Investments with maturities of
 more than one year, at cost 508,590 1,515,004
Property, plant and equipment 52,498,806 52,357,195
 Less accumulated depreciation 34,315,020 31,909,372
 Net property, plant and
 equipment 18,183,786 20,447,823
Other assets:
 Intangible assets, net of
 accumulated amortization 3,589,527 4,336,278
 Deposits and other assets 395,324 300,490
 Total assets $76,626,713 81,129,952


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable $ 2,024,572 2,074,722
 Income taxes payable - 93,125
 Payable to Seafield Capital Corp. 113,575 -
 Accrued payroll benefits 1,915,457 2,314,549
 Other accrued expenses 1,270,337 700,628
 Other current liabilities 66,138 698,519
 Total current liabilities 5,390,079 5,881,543
Deferred income taxes - 484,479
 Total liabilities 5,390,079 6,366,022


Stockholders' equity:
 Preferred stock, $.01 par value per share;
 1,000,000 shares authorized, none issued - -
 Common stock, $.01 par value per share;
 40,000,000 shares authorized, 15,000,000
 shares issued 150,000 150,000
 Additional paid-in capital 13,347,455 12,739,088
 Equity adjustment from foreign
 currency translation (683,383) (424,698)
 Retained earnings 80,639,341 84,305,203
 93,453,413 96,769,593


 Less treasury stock of 1,957,988 shares
 in 1994 and 2,039,578 shares in 1993,
 at cost 22,216,779 22,005,663
 Total stockholders' equity 71,236,634 74,763,930
 Total liabilities and stockholders'
 equity $76,626,713 81,129,952


CONSOLIDATED STATEMENT OF EARNINGS


 Three months ended
 December 31,
 1994 1993
Sales $15,411,851 16,854,198
Cost of sales 7,813,725 7,661,381
 Gross profit 7,598,128 9,192,817


Selling, general and administrative
 expenses 5,781,018 5,460,965
 Earnings from operations 1,817,108 3,731,852


Other income (expense) 592,699 (183,770)
 Earnings before income taxes 2,409,807 3,548,082


Income taxes 876,904 1,261,216
 Net earnings $ 1,532,903 2,286,866


 Twelve months ended
 December 31,
 1994 1993
Sales $60,725,982 69,377,511
Cost of sales 29,072,508 30,018,455
 Gross profit 31,653,474 39,359,056


Selling, general and administrative
 expenses 24,760,918 22,694,920
 Earnings from operations 6,892,556 16,664,136


Other income (expense) 1,640,464 869,606
 Earnings before income taxes 8,533,020 17,533,742


Income taxes 2,845,892 6,967,806
 Net earnings 5,687,128 10,565,936


 Three months ended
 December 31,
 1994 1993
Earnings per common share $ 0.12 0.17


Dividends per common share $ 0.18 0.18


Weighted average common shares
 outstanding 13,182,503 13,269,965


Twelve months ended
 December 31,
 1994 1993
Earnings per common share $ 0.43 0.80


Dividends per common share $ 0.72 0.72


Weighted average common shares
 outstanding 13,276,590 13,154,070






CONTACT: LabOne Inc., Lenexa

Gregg Sadler or Bonnie Ondick, 913/888-8397
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