LabCorp 2010 Annual Report Download - page 4

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2
Our฀long-term฀nancial฀performance฀reects฀the฀soundness฀of฀our฀business฀model฀and฀
our strategy. During the past five years, including two of economic turmoil, we increased
revenue and Adjusted Earnings Per Share at a 9 and 15 percent compound annual growth
rate, respectively.
What went on behind the numbers in 2010? Simply put, we executed against each prong
of our strategy.
USE FREE CASH FLOW TO MAKE STRATEGIC ACQUISITIONS THAT ENHANCE OUR TEST
MENU AND EXPAND OUR GEOGRAPHIC FOOTPRINT
With the 2010 acquisition of Genzyme Genetics, a business unit of Genzyme Corporation,
LabCorp completed one of the most important transactions in its history. Genzyme Genetics’
impressive assets include a talented management team, a strong brand with high levels
of customer satisfaction and an extensive menu of high-value, high-quality esoteric tests.
Genzyme Genetics’ excellence in reproductive genetic testing and screening, and in hematology-
oncology testing, is a valuable differentiator and a great fit with LabCorp’s strengths. The
approximately 130 board-certified geneticists and genetic counselors that interact daily with
physicians and patients create a significant strategic opportunity to expand customer relationships
and grow our businesses.
The Genzyme Genetics acquisition aligns extremely well with our objectives of expanding
esoteric testing and advancing our leadership in personalized medicine. This acquisition
enhances LabCorp’s capabilities in reproductive, genetic, hematology, oncology and clinical
trials work, and creates an opportunity to generate meaningful increases in esoteric revenue.
With the addition of Genzyme Genetics, we have met our previously stated objective of
deriving approximately 40 percent of revenue from esoteric testing. The future of esoteric
testing is bright and our new goal is to generate 45 percent of revenue from esoteric testing
within the next three to five years.
Genzyme Genetics was the crown jewel of our acquisitions this year, but we should not overlook
the฀overall฀performance฀of฀our฀Mergers฀and฀Acquisitions฀team.฀In฀addition฀to฀Genzyme฀Genetics,฀
we evaluated 27 opportunities and completed 15 acquisitions, the most sizable being Westcliff
Medical฀Laboratories฀and฀DCL฀Medical฀Laboratories.฀These฀acquisitions฀will฀be฀important฀
contributors to expanding our footprint in California and Indiana, respectively.
We gained entry to the Empire BlueCross BlueShield plan in New York, the largest plan in the
New York metro area by membership. This has been a long-standing goal for the Company
and provides us with a solid growth opportunity in the New York metropolitan area.
For some time, we have discussed expanding the international footprint of our clinical trials
business. In 2010 we achieved that objective, entering into a collaborative relationship with
Clearstone Central Laboratories, a global central laboratory specializing in drug development
and pharmaceutical services. The relationship provides us with access to labs in China, France,
Singapore฀and฀Canada,฀in฀addition฀to฀our฀existing฀labs฀in฀the฀United฀States฀and฀Belgium.฀
Quality Team
Broad Capabilities
Customer Satisfaction
Expansion
Building
Forward