Quest Diagnostics 2001 Annual Report Download - page 4

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Diagnostic laboratory testing is critically important to
healthcare, and we are proud to be the leading provider
of this vital service. Our company achieved many
memorable milestones during 2001. We reported record
sales and earnings, continued to strengthen our financial
position, established significant new partnerships to bring
developments in genomics to the market, and realized
initial benefits from our Six Sigma quality initiative.
September 11, 2001
However, these milestones paled in comparison to the
horrific events of September 11th and the heroic way
people around the world and the people of Quest
Diagnostics responded. Our employees put patient care
first. They responded with compassion, creativity and
energy to provide continuous, uninterrupted service.
Staff pilots flew with special permission from the
government during the airspace lockdown to bring
perishable specimens into our laboratories for critical
testing. Couriers drove through the night in stages—
Pony Express style—to relay specimens to our labs. In
Manhattan, couriers completed their routes on foot.
The heartwarming response was all directed to meeting
the immediate needs of physicians and their patients.
I am very proud of the thousands of employees who went
above and beyond to serve patients and physicians during
a time of crisis. We have a highly dedicated and richly
diverse team of 29,000 employees that make up Quest
Diagnostics, and we continue to attract outstanding talent.
Every day, they live our values and personify our vision:
“Dedicated people improving the health of patients
through unsurpassed diagnostic insights.” My heartfelt
thanks go to all of the talented people who are Quest
Diagnostics in the eyes of our customers.
Performance
During 2001, we achieved several significant
financial milestones:
•We improved earnings for a fifth consecutive year.
•We completed the successful integration of
SmithKline Beecham Clinical Laboratories, which
is generating approximately $140 million in synergies
on an annualized basis.
•We attained an investment grade credit rating.
•With our steady cash flow we paid down debt,
lowered our interest costs and funded
several acquisitions.
We also continued to deliver outstanding financial results:
•Earnings increased dramatically in 2001 compared
to 2000, a year when earnings more than doubled.
•Revenues grew more than $200 million, or 6%,
to $3.6 billion.
•Adjusted EBITDA, a measure of cash flow, grew
21% to $557 million.
•We ended the year with $122 million in cash,
and more than $550 million available in unused
credit facilities.
Consistent and strong cash generation, combined with
our improved credit status, positions us well for growth.
The diagnostic testing industry remains highly fragmented,
and we see opportunities to put our strong cash flow
to work with selective acquisitions. As this letter goes
to press, we are announcing a definitive agreement
to acquire American Medical Laboratories, which will
broaden our geographic reach and enhance service
offerings for our customers, further strengthening our
leadership in esoteric testing.
TO OUR SHAREHOLDERS,
CUSTOMERS AND EMPLOYEES: