LabCorp 2014 Annual Report Download - page 10

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exchanges, increased knowledge of the human genome leading to an enhanced appreciation of the value of gene-based diagnostic
assays and the development of new therapeutics that have a “companion diagnostic” to help identify the subset of the population
for whom it is effective or that may suffer adverse events.
The Company believes its enhanced esoteric menu, geographic footprint and operating efficiency provide a strong platform
for growth. Additional factors that may lead to future volume growth include an increase in the number and types of tests that are
readily available (due to advances in technology and increased cost efficiencies) for testing and diagnosis of disease and the general
aging of the population in the U.S. The impact of these factors is expected to be partially offset by declines in volume as a result
of increased controls over the utilization of laboratory services by Medicare, Medicaid, and other third-party payers, particularly
MCOs. In addition, movement by patients into consumer driven health plans may have an impact on the utilization of laboratory
testing.
Company Mission and Strategy
The Company's mission is to be a trusted knowledge partner for stakeholders, leading to growth in its businesses and continued
creation of shareholder value. The Company will achieve this plan through the disciplined execution of its five-pillar strategy.
• Deploy capital to investments that enhance its business and return capital to shareholders,
• Enhance IT capabilities to improve the physician and patient experience,
• Continue to improve efficiency to remain the most efficient and highest value provider of laboratory services,
• Continue scientific innovation to offer new tests at reasonable and appropriate pricing, and
• Develop knowledge services.
The Company believes that the successful execution of this five-pillar strategy will fulfill its core mission of becoming a trusted
knowledge partner for stakeholders, by offering the highest quality laboratory testing and most compelling value to its customers.
Pillar One: Deploy capital to investments that enhance the Company's business and return capital to shareholders
As discussed above, the Company completed its acquisition of Covance on February 19, 2015. In the fourth quarter of 2014,
the Company completed its acquisitions of LipoScience, Inc., a premier esoteric laboratory focused on personalized diagnostics
for cardiovascular and metabolic disorders, and Bode Technology Group, Inc., a provider of specialized forensic DNA analysis,
proprietary DNA collection products, and relationship testing.
Since 2009, the Company has invested approximately $7.9 billion in strategic business acquisitions. These acquisitions have
strengthened the Company's geographic presence and expanded its specialty testing operations. The Company believes the
acquisition market remains attractive with a number of opportunities to strengthen its scientific capabilities, grow esoteric testing
and increase presence in key geographic areas.
The Company believes it has some of the premier genetics, oncology and infectious disease businesses in the laboratory industry.
With its acquisition of Genzyme Genetics1 in December of 2010, combined with its existing genomic capabilities, the Company
offers prenatal genetic testing and access to novel testing technologies such as the SMA molecular genetics assay, and the entire
Reveal® family of SNP Microarrays, the Inheritest® carrier testing assays and a complete suite of BRCA mutation tests. As market
demand for prenatal genetics increases, the Company believes it is well positioned to provide the broadest range of offerings,
including the services of approximately 140 genetic counselors. In oncology, the Company's broad molecular oncology test menu
and specialized sales force complement the strong pathology expertise of Genzyme Genetics and two of the Company's earlier
acquisitions - Accupath Diagnostic Laboratories, Inc. dba US Labs2 and Dianon Systems, Inc.3 In the area of Infectious Disease,
with the acquisition of Monogram Biosciences, Inc. in 2009, the Company expanded its offerings around HIV and HCV detection
and monitoring for enhanced management of these diseases.
In 2014, the Company continued to deploy cash and return value to shareholders through share repurchases. During the year,
the Company acquired approximately 2.7 million LabCorp shares for $269.0 million. Since 2003, the Company has repurchased
approximately $5.9 billion in shares at an average price of approximately $69 per share. Following the announcement of the
Covance acquisition, the Company suspended its share repurchases. The Company does not anticipate resuming its share repurchase
activity in until it reaches its targeted ratio of total debt to consolidated EBITDA of 2.5 to 1.0.
1. Genzyme Genetics and its logo are trademarks of Genzyme Corporation, a Sanofi Company, and used by Esoterix Genetic Laboratories, LLC,
a wholly-owned subsidiary of LabCorp, under license. Esoterix Genetic Laboratories and LabCorp are operated independently from Genzyme
Corporation. The reproductive genetics services of Esoterix Genetic Laboratories are now offered through the Company’s Integrated Genetics
business.