LabCorp 2007 Annual Report Download - page 7

Laboratory Corporation of America® Holdings 2007 5
compete. We will continue to look for
innovative collaborations that bring
increased effi ciency to hospital laboratory
operations and allow them to maintain their
strong relationships with the communities
they serve.
A Three-Year Initiative to
Further Effi ciency
Whether it’s a routine blood test or a complex
genetic analysis, our physicians and patients
expect and deserve convenience, accuracy
and timeliness. We remain committed to
running the best laboratories in the industry
and work continuously to improve our
effectiveness in this area.
To this end, we have announced a three-
year plan, LabCorp 2010. This initiative will
drive growth by providing improved tools to
our employees, increasing automation in the
preanalytical process, using robotics in the
laboratory, optimizing logistics and maximiz-
ing the supply chain. Specifi c LabCorp 2010
activities will begin rolling out in 2008, and
we are confi dent that this program will help
ensure excellent customer service and
continued industry-leading operating margins.
Strong Performance
Continued in 2007
Personalized medicine and LabCorp 2010
are the newest in a series of initiatives –
such as the War on DSO – that have helped
to ensure a consistently strong fi nancial
performance over the past decade. We
continued that record in 2007. Net sales
increased 13.3 percent to $4.1 billion. Before
restructuring and other special charges,
earnings per diluted share grew from
$3.30 to $4.18, a 26.7 percent increase.
The Company’s cash generation remains
impressive. Operating cash fl ow rose to
$709.7 million in 2007, as compared to
$632.3 million in 2006. Earnings before
interest, taxes, depreciation and amortiza-
tion were 26.3 percent of net sales, an
improvement of 20 basis points compared
to 2006.
LabCorp’s balance sheet is as healthy
as its income statement. With a debt-to-
equity ratio of 1.5 and a new $1 billion credit
facility, we have the resources and fl exibility
for continued investment in our business.
During the year, we returned value to our
shareholders through the repurchase of
$924 million of stock.
More Potential to Realize
As you can see, 2007 was a watershed
year for LabCorp. It was likewise a
watershed year for me in my new role as
CEO. It is a humbling experience to lead
an organization of 26,000 talented and
committed employees, and I am grateful
to them for their daily contributions to our
cause. It is humbling, as well, to contem-
plate the responsibility with which millions
of physicians and patients entrust us. And
it is also humbling to recognize the trust that
you, our valued shareholders, place in us
to deliver consistent value.
We are fortunate to work in a Company
and an industry where our actions build
value for our shareholders and improve
people’s lives in profound and vital ways.
Rest assured that we are working
diligently to realize our full potential. We
appreciate your confi dence in us and
your support.
Sincerely,
Dave King
President and Chief Executive Offi cer
“We have announced a three-year plan,
LabCorp 2010. This initiative will drive
growth by providing improved tools to our
employees, increasing automation in the
preanalytical process, using robotics in
the laboratory, optimizing logistics and
maximizing the supply chain.”