Laboratory Corporation of America Holdings (NYSE:LH) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
International Business Payments
Robert Willoughby – Bank of America Merrill Lynch: It looked like the accounts receivable did rise a bit more expected on a slightly lower revenue base. Any dynamic going on there?
William B. Hayes – EVP and CFO: Hey, Bob, this is Brad. Just some timing of payments in one of our international businesses specifically, and I think the typical in the first quarter more going to patients in the form of copays and deductibles slowed things down a little bit.
Robert Willoughby – Bank of America Merrill Lynch: And just the pace of M&A, Dave, it slowed down here a bit of late. Is this just the kind of the eye before the storm or what do you anticipate over the remainder of the year from a transaction standpoint?
David P. King – Chairman and CEO: Bob, I think the pace continues to be about the same in terms of opportunities that are available. We’ve looked at quite a few things, a number of them we don’t like the valuations and so we’re biding our time and waiting for things to come along where we think the valuations are more reasonable for us, but there’s still a lot of opportunities in M&A and we continue to be focused on doing the right deals that will be accretive, that will give us the target, return on invested capital and that will contribute to long-term growth, and I would say, we think of MEDTOX as a terrific example of doing all those things. Accretive, good ROIC, long-term growth and expanding our capabilities and further diversification of our payor mix…
Robert Willoughby – Bank of America Merrill Lynch: And anecdotally, on the MEDTOX, Dave, what’s left to accomplish there from a consolidation standpoint?
David P. King – Chairman and CEO: There’s still some integration and standardization activities, particularly around platforms, reagents and supplies, but the bulk of the work has been done. It’s been a great team effort between the LabCorp team and the old MEDTOX team, and we’re very pleased with the way that business has not only maintained the pace at which we acquired it, but has grown.
Overall Industry Volumes
Thomas Gallucci – Lazard Capital Markets: I guess, just first on the volumes. Still good compared to some, but maybe a little bit lower than what you saw in the second half of last year from an organic standpoint. Do you have any thoughts about what we’re seeing in terms of overall industry trend? Is there any sense that maybe the higher copays and deductibles that you mentioned a second ago, Brad, are they getting that much higher this year versus last year that maybe we’re seeing a skewing of the seasonality a little bit in terms of when people are going to use health care or any thoughts you have about that would be interesting?
David P. King – Chairman and CEO: Tom, it’s Dave. I think you’ve identified a couple of the major factors here. So if you look sequentially at organic volume growth last year, other than the first quarter, which was a little bit of an oddity because of the year-over-year comp and the lack of weather, basically was 50 basis points in the third quarter, 70 basis points in the fourth quarter and now we’re back to essentially flat. I’d attribute it to a couple of things. One, there is more patient responsibility. There is more going toward patient. We actually saw a little uptick in uninsured volume in the first quarter as well. Then the last thing I would say is the overall utilization environment, just what I’m seeing in terms of others reporting, whether it’s hospitals, other health care services companies, does seem to have ticked down a little bit in the first quarter, and that’s what I attribute probably the bulk of the difference between the fourth quarter organic growth and the first quarter organic growth. But we’re doing the same things. I think we’re doing the same things. I think we’re executing well on our strategic priorities and again, I think this is a very solid result in terms of what we see in the environment around us…
Thomas Gallucci – Lazard Capital Markets: Can you just remind us, what is the sort of percent of your business that’s uninsured at this point?
David P. King – Chairman and CEO: Tom, I think it’s about 7% of our revenue, plus or minus, in that range.
William B. Hayes – EVP and CFO: That’s right, 7%.
Thomas Gallucci – Lazard Capital Markets: Then Dave, I think in your prepared remarks, you mentioned some of the analytics tools that you’re working with out there with some of the customers. Is this something that you get paid for separately, if so, how? Or is it something more that’s an additive benefit of doing business with you and it’s ultimately more of a volume driver?
David P. King – Chairman and CEO: At this point, because we’re in pilots with a couple of sizable IPAs and physician groups, we are not getting paid separately for the analytics tools. What we are doing is, in my view, demonstrating our ability to integrate clinical data with lab data and then provide analytics to physicians that will support improved outcomes and better care. I think over time, the development of the payment model around the analytics and the integration of clinical data will occur, and it remains to be seen how we will be compensated for that. But I think it’s a very important value-added service. It’s a key component of our strategy and I’m very pleased with where we are on it today, given how hard we’ve been working on it for the last year and half.