TETERBORO, N.J., April 23 /PRNewswire Interactive News Release/ -- Quest
Diagnostics Incorporated (NYSE: DGX), the nation's leading provider of
diagnostic testing, information and services, announced that for the first
quarter ended March 31, 2001, net income increased to $35.7 million, or $0.74
per diluted share, from $17.8 million, or $0.39 per diluted share, in the
first quarter of 2000. Cash earnings, or earnings before amortization of
intangible assets, rose to $0.94 per diluted share from $0.63 per diluted
share for the 2000 period.
First quarter revenues of $883 million grew 7% over last year, when
adjusted for the prior-year gross-up of revenues and expenses associated with
the company's network management business. First quarter revenues grew
approximately 3% from the reported prior-year level. Revenue per requisition
during the first quarter grew 8% compared to the prior year. Clinical testing
volume, measured by the number of requisitions, increased approximately 1%
over the prior year period, after adjusting for business contributed to
unconsolidated joint ventures, which reduced volume by approximately 1.5%. As
a result, reported volume during the first quarter was approximately 1% below
the prior year's level.
"We had strong financial performance during the quarter, doubling net
income compared to last year," said Kenneth W. Freeman, Chairman and Chief
Executive Officer. "Now that laboratory consolidations are essentially behind
us, we are directing our focus toward accelerating revenue growth,
standardizing our operations and expanding our Six Sigma Quality efforts.
Looking ahead, we now expect 2001 full year earnings per diluted share to grow
at least 50% from last year, to between $3.40 and $3.50 on reported revenue
growth of 5% to 7%."
Earnings before interest, taxes, depreciation and amortization (EBITDA),
were $122 million, or 13.9% of revenues, compared to $98 million, or 11.4% of
revenues, for the prior year period. The increase in EBITDA was due to the
company's continued pricing discipline, a shift to higher value testing
services and the realization of synergies associated with the integration of
SmithKline Beecham Clinical Laboratories.
Bad debt expense improved to 6.3% from 7.3% a year ago and remained
unchanged from the fourth quarter 2000 level. During the quarter, days sales
outstanding improved to 51 days from 56 days at the end of the fourth quarter.
The company ended the quarter with $121 million in cash and no borrowings
outstanding under its $250 million revolving credit facility. Net interest
expense for the quarter was reduced to $22.7 million from $29.8 million a year
ago. Capital expenditures totaled $44 million for the quarter.
Quest Diagnostics will discuss results for the first quarter during a
conference call on April 24 at 8:00 A.M. Eastern Time. To hear a simulcast of
the call over the Internet, or a replay, registered analysts may access
StreetEvents at: http://www.streetevents.com and all others may access the
Quest Diagnostics website at: http://www.questdiagnostics.com. In addition, a
replay of the call will also be available from 10 A.M. on April 24 through
5 P.M. on April 26 to investors in the U.S. by dialing 800-342-8825. Investors
outside the U.S. may dial 402-220-9674. No password is required for either
number.
Quest Diagnostics is the nation's leading provider of diagnostic testing,
information and services with annual revenues of $3.4 billion in 2000. The
company's diagnostic testing yields information that enables health care
professionals and consumers to make better decisions to improve health. Quest
Diagnostics offers patients and physicians the broadest access to diagnostic
testing services through its national network of approximately 30 full-service
laboratories, 150 rapid response laboratories and more than 1,300 patient
service centers, where specimens are collected. Quest Diagnostics is the
leading provider of esoteric testing, including gene-based testing, and is the
leader in routine medical testing, drugs of abuse testing, and anatomic
pathology testing. Through partnerships with pharmaceutical, biotechnology and
information technology companies, Quest Diagnostics provides support to help
speed the development of health care insights and new therapeutics. Additional
company information can be found on the Internet at:
http://www.questdiagnostics.com.
The statements in this press release which are not historical facts or
information may be forward-looking statements. These forward-looking
statements involve risks and uncertainties that could cause the outcome to be
materially different. Certain of these risks and uncertainties are described
in the Quest Diagnostics Incorporated 2000 Form 10-K and subsequent filings.
Quest Diagnostics Incorporated and Subsidiaries
Consolidated Statements of Operations
For the Three Months Ended March 31, 2001 and 2000
(in millions, except per share data)
Three Months Ended
March 31,
2001 2000
Net revenues $882.6 $857.5
Costs and expenses:
Cost of services 529.1 529.0
Selling, general and administrative 252.8 249.8
Interest, net 22.7 29.8
Amortization of intangible assets 11.1 11.9
Minority share of income 1.1 2.1
Other, net 0.4 (0.3)
Total 817.2 822.3
Income before taxes 65.4 35.2
Income tax expense 29.7 17.4
Net income $35.7 $17.8
Basic earnings per common share:
Net income $0.78 $0.40
Weighted average common
shares outstanding -- basic 45.9 44.1
Diluted earnings per common share:
Net income $0.74 $0.39
Cash earnings 0.94 0.63
Weighted average common
shares outstanding -- diluted 48.3 45.6
EBITDA $122.4 $98.1
Quest Diagnostics Incorporated and Subsidiaries
Consolidated Balance Sheet Information
March 31, 2001 and December 31, 2000
(in millions)
March 31, December 31,
2001 2000
Assets
Cash and cash equivalents $120.7 $171.5
Accounts receivable, net 509.3 485.6
Intangible assets, net 1,297.7 1,261.6
Other assets 975.5 945.8
Total assets $2,903.2 $2,864.5
Liabilities and Stockholders' Equity
Short-term debt $265.0 $265.4
Long-term debt 758.5 760.7
Other liabilities 780.5 807.6
Common stockholders' equity 1,099.2 1,030.8
Total liabilities and
stockholders' equity $2,903.2 $2,864.5
Notes to Financial Tables
(1) Results for 2000 included the effects of testing performed by third
parties under the Company's laboratory network management
arrangements. As laboratory network manager, Quest Diagnostics
included in its consolidated revenues and expenses the cost of testing
performed by third parties. This treatment added $32.4 million to both
reported revenues and cost of services for the three months ended
March 31, 2000. This treatment also served to increase cost of
services as a percentage of net revenues and decrease selling, general
and administrative expenses as a percentage of net revenues.
(2) Depreciation expense totaled $23.2 million and $21.2 million for the
three months ended March 31, 2001 and 2000, respectively.
(3) Net income per common share is computed by dividing net income less
dividends on preferred stock (approximately $30 thousand per quarter)
by the weighted average number of common shares outstanding.
Potentially dilutive common shares primarily represent stock options.
(4) Cash earnings per common share is calculated as cash earnings less
preferred dividends, divided by the diluted weighted average common
shares outstanding. Cash earnings represents income before
amortization of all intangible assets, net of applicable taxes.
(5) EBITDA represents income before income taxes, net interest expense,
depreciation and amortization.
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SOURCE Quest Diagnostics Incorporated
CONTACT: Investors - Cathy Doherty, 201-393-5030, or Media - Gary