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Laboratory Corp. of America Holdings Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: April 27, 2012 12:50PM
Laboratory Corp. of America Holdings (LH) filed Quarterly Report for the period ended 2012-03-31.
Highlight of Business Operations:The relatively mild winter weather experienced in most of the Continental United States favorably impacted the Company's first quarter 2012 revenue and volume by approximately 1.5% in comparison to the first quarter of 2011. The Company's acquisition of Orchid in December 2011 also boosted revenue and volume by 1.1% and 0.4%, respectively, in the first quarter of 2012 compared to 2011.
The increase in net sales for the three months ended March 31, 2012 as compared with the corresponding 2011 period was driven primarily by the previously mentioned contributions from milder weather and the Orchid acquisition. Genomic and esoteric testing volume as a percentage of total volume increased from 23.4% in 2011 to 23.9% in 2012. Revenue per requisition and volume growth for genomic and esoteric testing was primarily due to the incremental revenue and volume from Orchid as well as growth in the recently launched NuSwabsm series of women's health tests. Net sales of the Ontario joint venture were $82.8 for the three months ended March 31, 2012 compared to $74.1 in the corresponding 2011 period, an increase of $8.7, or 11.7%. Net sales of the Ontario joint venture were impacted by a stronger U.S. dollar in 2012 as compared with 2011. In Canadian dollars, net sales of the Ontario joint venture increased by CN$9.8, or 13.4%.
Selling, general and administrative (“SG&A”) expenses as a percentage of net sales decreased to 19.1% in the first quarter of 2012 compared to 20.7% in 2011. The decrease in SG&A as a percentage of net sales is primarily due to efficiencies from recently acquired operations that are being integrated into the Company's operating cost structure as of March 31, 2012. Additionally, bad debt expense decreased to 4.4% of net sales in 2012 as compared with 4.7% in 2011 primarily due to improved collection trends resulting from process improvement programs within the Company's billing department and field operations.