LabOne Reports First Quarter Earnings

    Business Editors/Health/Medical Writers

    LENEXA, Kan.--(BUSINESS WIRE)--May 5, 2005--LabOne, Inc. (Nasdaq: LABS) today reported revenues of $124.3 million for its first quarter ended March 31, 2005, an increase of $11.5 million, or 10% over the first quarter 2004. Compared to revenues for the same quarter last year, risk assessment services increased 6% to $67.1 million, healthcare increased 11% to $46.0 million and substance abuse testing increased 41% to $11.2 million. Excluding the impact of the acquisition of Northwest Toxicology in March 2004, substance abuse testing revenues increased 23% compared to the first quarter last year. The company reported net earnings of $6.9 million, or $0.39 per diluted share, compared to $5.9 million, or $0.34 per diluted share, for the first quarter 2004.
    For the first quarter 2005, operating earnings were $12.7 million compared to $10.7 million the same period last year, an increase of $2.0 million, or 18%. First quarter 2005 operating earnings comprised $12.7 million for risk assessment, $9.6 million for healthcare and $1.4 million for substance abuse testing, offset by $11.0 million for corporate selling, general and administrative expenses. This compares to operating earnings of $12.3 million for risk assessment, $6.8 million for healthcare and $1.3 million for substance abuse testing, offset by $9.7 million for corporate selling, general and administrative expenses for the same period in 2004. For the first quarter 2005, operating earnings included $0.1 million associated with the acquisition of Northwest Toxicology.
    "We are pleased to announce another solid quarter of increased revenues and earnings compared to the prior year," said W. Thomas Grant II, chairman, president and CEO of LabOne. "Our 6% increase in risk assessment revenues over the first quarter 2004 comprised a 4% decline in life insurance laboratory testing revenues, a 13% increase in paramedical examination revenues and a 7% increase in other insurance services revenues. Healthcare testing revenues increased 11% and substance abuse testing revenues increased 41% compared to the first quarter 2004. Excluding the impact of the acquisition of Northwest Toxicology in March 2004, substance abuse testing revenues increased 23% during the first quarter 2005."
    LabOne will conduct its quarterly conference call with W. Thomas Grant II, chairman, president and CEO, John W. McCarty, executive vice president and CFO, and Mike Asselta, executive vice president and COO, at 11:30 a.m. Eastern time, May 5, 2005. To join the conference call, dial 800-289-0494. At approximately 2 p.m. Eastern time, a recording of the call will be available as a voice mail at 888-203-1112, pass code 3544220, through June 5, 2005. The audio recording will also be available on the investor info section of the company's Web site at www.LabOne.com.

    About LabOne, Inc.

    Headquartered in the Greater Kansas City area, LabOne is a diagnostic services provider. The services and information LabOne and its subsidiaries provide include: risk assessment information services for the insurance industry; diagnostic healthcare testing to physicians, hospitals, managed care organizations and employers; and substance abuse testing services and related employee qualification products to employers and the government.

    Forward-Looking Statements

    This press release may contain "forward-looking statements." Many factors could cause actual results to differ materially from those that may be expressed or implied in such forward-looking statements, including, but not limited to, the factors detailed from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission ("SEC"), including the Company's 2004 Annual Report on Form 10-K.

SELECTED FINANCIAL DATA (in thousands, except per share data) Three months ended March 31, 2005 2004 % change --------- --------- ---------

Sales $124,310 $112,825 10% Net earnings $6,867 $5,880 17% Basic earnings per share $0.40 $0.35 Diluted earnings per share $0.39 $0.34 Total assets $362,429 $311,231 Working capital $80,957 $53,380

CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data)

March 31, December 31, 2005 2004 ------------ ------------ Assets Current assets: Cash and cash equivalents $31,259 $24,070 Accounts receivable, net of allowance for doubtful accounts of $5,468 in 2005 and $4,594 in 2004 79,426 73,027 Inventories 7,869 7,473 Prepaid expenses and other current assets 5,796 6,506 Deferred income taxes 6,982 5,556 ------------ ------------ Total current assets 131,332 116,632

Property, plant and equipment, net 68,201 62,860 Goodwill 138,499 138,163 Intangible assets, net 19,846 20,860 Other long-term assets 4,551 4,707 ------------ ------------

Total assets $362,429 $343,222 ============ ============

Liabilities and Stockholders' Equity Current liabilities: Accounts payable $24,888 $20,467 Accrued payroll and benefits 16,199 17,131 Other accrued expenses 7,434 3,381 Current portion of long-term debt 1,854 1,925 ------------ ------------ Total current liabilities 50,375 42,904

Deferred income taxes 9,034 8,694 Long-term debt 111,501 111,549 Other 145 108 ------------ ------------ Total liabilities 171,055 163,255

Commitments and contingencies

Stockholders' equity: Common stock, $0.01 par value per share. Authorized 40,000,000 shares; issued 18,027,729 shares 180 180 Additional paid-in capital 89,013 87,027 Retained earnings 109,842 102,974 Accumulated other comprehensive loss (138) (94) Treasury stock of 591,982 shares in 2005 and 796,260 shares in 2004, at cost (7,523) (10,120) ------------ ------------ Total stockholders' equity 191,374 179,967 ------------ ------------

Total liabilities and stockholders' equity $362,429 $343,222 ============ ============

CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three months ended March 31, 2004 2003 --------- ---------

Sales $124,310 $112,825 Cost of sales: Cost of sales expenses 81,841 76,070 Depreciation and amortization 1,555 1,548 --------- --------- Total cost of sales 83,396 77,618 --------- --------- Gross profit 40,914 35,207

Selling, general and administrative: Selling, general and administrative expenses 25,476 22,064 Depreciation and amortization 2,780 2,431 --------- --------- Total selling, general and administrative 28,256 24,495 --------- --------- Operating earnings 12,658 10,712

Other income (expense): Interest income 148 6 Interest expense (1,277) (1,218) Other, net 9 (26) --------- --------- Total other expense, net (1,120) (1,238) --------- --------- Earnings before income taxes 11,538 9,474 Provision for income taxes 4,671 3,594 --------- ---------

Net earnings $6,867 $5,880 ========= =========

Earnings per common share: Basic $0.40 $0.35 Diluted $0.39 $0.34

Weighted average common shares outstanding: Basic 17,301 16,944 Diluted 17,699 17,424

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CONTACT: LabOne, Inc. John McCarty, 913-577-1244 john.mccarty@LabOne.com

KEYWORD: KANSAS INDUSTRY KEYWORD: MEDICAL EARNINGS CONFERENCE CALLS SOURCE: LabOne, Inc.

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