Quest Diagnostics 2002 Annual Report Download - page 5

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QUEST DIAGNOSTICS 3
COMMITTED TO EMPLOYEES Our talented and committed employees share a collective vision:
“Dedicated people improving the health of patients through unsurpassed diagnostic insights.” When
Quest Diagnostics became an independent company at the end of 1996, we established a strong ethical
foundation based on six core values, starting with quality and integrity. We are committed to making Quest
Diagnostics one of the very best places to work.
Whether delivering accurate and timely test results or reporting financial results, we insist on highly ethical
behavior from all employees. The very nature of our business demands it, and we demand it of ourselves.
COMMITTED TO PERFORMANCE Our ongoing commitment to customer and employee satisfaction
yielded outstanding financial performance once again in 2002. We increased net earnings per diluted share
more than 40% for the third consecutive year, to $3.23. Revenues increased 13% to $4.1 billion. EBITDA, a
measure of operating effectiveness, expanded from 15.3% to 17.7% of revenues. Cash generated from
operations was almost $600 million.
We reliably generate substantial cash flows, which we invest to drive future growth. Strong cash generation
enables us to pursue selective acquisitions such as American Medical Laboratories (AML) and Unilab
Corporation, while strengthening the balance sheet and improving our credit profile. We repaid the entire
$475 million in debt from the acquisition of AML within nine months of completing the transaction, and
ended the year with nearly $100 million of cash on hand. These acquisitions broaden our leadership position
to additional geographies, including California, Nevada, Washington, D.C., and Virginia, and their impact
can be seen in the expanded number of patient service centers, rapid response laboratories, employees,
and patient encounters that are cited throughout the Annual Report.
COMMITTED TO YOU…TOMORROW Our commitment to you is for today, and tomorrow. We manage
the company for long-term, sustainable growth. The population is growing and aging, requiring more
diagnostic tests. The genomics and proteomics revolution is spurring an unprecedented development effort,
and our industry is the initial beneficiary. Rapid advances in information technology enable us to interact
more effectively and efficiently with customers, improving customer satisfaction and loyalty.
Quest Diagnostics is well positioned to provide superior financial performance in 2003 and beyond.
We are the leader across the various facets of diagnostic testing, from routine testing to the most
sophisticated esoteric and gene-based tests, as well as drugs of abuse testing. We will continue to grow
through two approaches: organically, through a relentless focus on Six Sigma quality and on meeting customer
requirements; and through selective strategic acquisitions in an industry that remains highly fragmented.
At the same time, we will continue to expand profit margins by further standardizing operations to fully
realize the economies of scale available to us.
I am extremely proud of the commitment of every employee to our values and to placing the patient at
the center of everything we do. Through our strong commitment to customers and employees, we
improve the health of tens of millions of patients served by Quest Diagnostics each year, and enhance
shareholder value. Thank you for your continued trust and support.
Kenneth W. Freeman
Chairman and Chief Executive Officer