LabCorp plans to grow profits by increasing esoteric business

By Jennifer Lanning Drey

Eugene, Ore., Sept. 19 - LabCorp's strategy for maintaining profitability is to strengthen its core laboratory testing abilities while expanding its esoteric business, Dave King, chief operating officer of LabCorp, said Tuesday at the Banc of America investment conference.

The company's esoteric testing business covers both genetic and non-genetic testing in areas including infectious diseases, oncology and molecular and biochemical genetics.

"We're going to take advantage of our national scale, we're going to take advantage of the leverage in our business, and we're going to take advantage of being on the cutting edge of genomic and esoteric testing," King said.

Esoteric and genomic testing currently represent about 35% of the LabCorp's business, and the company expects to increase that number with the introduction of new products, King said.

"We're constantly evaluating new tests for introduction into the marketplace that will grow the esoteric business," he said.

"Our business is characterized by rapidly evolving technology, the increasing emphasis on preventative medicine and wellness, and the aging of our population, all of which drive the growth of our testing business."

LabCorp has consistently achieved 5% to 6% top-line growth per year, King said.

Stock repurchase at $1.3 billion

LabCorp also reported Tuesday that it has repurchased $1.3 billion in company stock since late 2003 through its share repurchase program.

The company implemented the program as a way to increase shareholder value in the absence of beneficial acquisition targets, according to Brad Hayes, LabCorp's chief financial officer.

"We'd like to, in administering this strategy, remain flexible to take advantage of opportunities that do present themselves," he said.

LabCorp is a Burlington, N.C.-based company that provides routine laboratory testing and develops and commercializes new diagnostic technologies.

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