UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D. C.  20549
                             FORM 10-K/A
                          (Amendment No. 1)
(Mark One)
   X   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
------ EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997

                                  OR
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
------SECURITIES EXCHANGE ACT OF 1934
      For the transition period from          to
                                     --------    --------

                    Commission file number 0-16946
                                           -------
                           LAB HOLDINGS, INC.
        ------------------------------------------------------
        (Exact Name of Registrant as Specified in its Charter)
            Missouri                                43-1039532
--------------------------------     ---------------------------------
(State or other jurisdiction              (IRS Employer Incorporation
       of organization)                     or Identification Number)

       P. O. Box 7568
  5000 W. 95th Street, Suite 260
  Shawnee Mission, Kansas                                   66207
----------------------------------------------------------------------
(Address of Principal Executive Offices)                   (Zip Code)

Registrant's telephone number, including area code: (913) 648-3600
                                                    --------------
Securities registered pursuant to Section 12(b) of the Act:

                                             Name of each exchange
   Title of each class                        on which registered
   -------------------                       ---------------------
          None                                   Not Applicable
-------------------------------      ---------------------------------

Securities registered pursuant to Section 12(g) of the Act:

          Common Stock, par value $1 per share and
           common stock rights coupled therewith.
-----------------------------------------------------------------
                        (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all 
reports required by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period 
that the registrant was required to file such reports), and (2) has 
been subject to such filing requirements for the past 90 days.
   Yes    X        No
      -------         -------
Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be 
contained, to the best of Registrant's knowledge, in definitive proxy 
or information statements incorporated by reference in Part III of 
this Form 10-K or any amendment to this Form 10-K.  X
                                                   ---

Approximate aggregate market value of voting stock held by non-
affiliates of Registrant:  $152,182,710 (based on closing price as of 
March 20, 1998)

Number of shares outstanding of only class of Registrant's common 
stock as of March 20, 1998:  $1 par value common - 6,489,103

Documents incorporated by reference:
Portions of Registrant's Proxy Statement for use in connection with 
the 1998 Annual Meeting of Shareholders is incorporated by reference 
into Part III of this report, to the extent set forth therein, if such 
Proxy Statement is filed with the Securities and Exchange Commission 
on or before April 30, 1998.  If such Proxy Statement is not filed by 
such date, the information required to be presented in Part III will 
be filed as an amendment to this report.  The exhibits for this Form 
10-K are listed in Item 14.



                               PART I.

ITEM 1. BUSINESS.

Lab Holdings, Inc. was organized in Missouri as BMA Properties, Inc. 
in 1974 as a 100% owned subsidiary of Business Men's Assurance Company 
of America (which was incorporated in 1909).  In 1988, BMA Properties, 
Inc. was renamed BMA Corporation, and on June 1, 1988, became the 
parent company.  BMA Corporation changed its name to Seafield Capital 
Corporation (Seafield) in 1991.  During 1997, Seafield changed its 
name to Lab Holdings, Inc. (Lab Holdings or Registrant).  Registrant 
is a holding company whose primary subsidiary operates in the 
insurance and healthcare services areas.  

In the past, various operating subsidiaries of Registrant have 
provided risk-appraisal laboratory testing services to the insurance 
industry, clinical testing services to the healthcare industry, and 
comprehensive cancer treatment management.  In addition, Lab Holdings 
had investments in early-stage healthcare technology companies and 
either directly or through subsidiaries, also held interests in energy 
investments, marketable securities and real estate.

On March 3, 1997, Lab Holdings distributed to its shareholders all of 
the outstanding shares of common stock of its wholly-owned subsidiary, 
SLH Corporation (SLH).  In connection with this distribution and 
pursuant to a Distribution Agreement between Lab Holdings and SLH, Lab 
Holdings transferred its real estate and energy businesses and 
miscellaneous assets and liabilities to SLH.  The SLH spin-off was 
effected as a taxable dividend by Lab Holdings.  As a result of the 
SLH distribution, Lab Holdings' principal assets consisted of its 
stock holdings in LabOne, Inc. (LabOne) and Response Oncology, Inc. 
(Response).  See Item 7 and Notes to Consolidated Financial Statements 
for additional information.

Lab Holdings had a majority ownership position in Response.  Response, 
previously 67%-owned by Lab Holdings, is a publicly-traded company 
(NASDAQ-ROIX).  On February 26, 1997, Lab Holdings converted a $23.5 
million Response note receivable and accrued interest into 3,020,536 
shares of Response common stock.  The conversion increased Lab 
Holdings' ownership of Response shares outstanding from 56% at 
December 31, 1996 to approximately 67%.

On July 25, 1997, Lab Holdings distributed to its shareholders all the 
shares of common stock of Response owned by Lab Holdings.  Response's 
operations are presented as a discontinued healthcare business in Lab 
Holdings' financial statements.  The second quarter was the last 
period in which Response significantly impacted Lab Holdings' 
operating results.  The distribution of Response stock was effected as 
a taxable dividend by Lab Holdings.  See Item 7 and Notes to 
Consolidated Financial Statements for additional information.

During 1997, Lab Holdings significantly reduced its corporate 
structure and overhead costs as the SLH and Response distributions 
were finalized.  SLH provides administrative and accounting functions 
to Lab Holdings under a services agreement for an annual fee of 
$75,000.

Effective June 1, 1997, Lab Holdings terminated its services agreement 
with LabOne.  This agreement related to services and other matters 
among the parties and had been in effect since January 1, 1993.

Lab Holdings did not have any employees as of December 31, 1997.

                    *             *             *

The following list shows the Registrant and each subsidiary 
corporation of which Registrant owned a majority interest at December 
31, 1997, together with the ownership percentage and state or country 
of incorporation. See Item 7 and Notes to Consolidated Financial 
Statements for additional information.  


Lab Holdings, Inc.  (Missouri)
     LabOne, Inc.  (Delaware)                                      82%
         Lab One Canada Inc.  (Canada)                            100%
     Pyramid Diagnostic Services, Inc.  (Delaware)
         (inactive)                                                74%
     

                    *             *             *




                           INSURANCE SERVICES

The following businesses are considered to be in the insurance 
services segment:  LabOne's insurance testing segment, Agency Premium 
Resource, Inc. (APR), and International Underwriting Services, Inc. 
(IUS).  APR and IUS were sold during 1995.

LABONE, INC.

The Registrant's laboratory testing activities are conducted through 
LabOne, Inc. (LabOne), a subsidiary which was 82% owned by the 
Registrant and 18% publicly held at December 31, 1997.  LabOne is a 
publicly-traded stock (NASDAQ-LABS).  LabOne, together with its 
wholly-owned subsidiary, Lab One Canada Inc., hereinafter collectively 
referred to as LabOne, is the largest provider of laboratory services 
to the insurance industry in the United States and Canada (See Notes 
to Consolidated Financial Statements for financial information 
regarding foreign operations).  LabOne provides high-quality 
laboratory services to self-insured groups, insurance companies, 
employers and physicians nationwide.

LabOne provides risk-appraisal laboratory services to the insurance 
industry.  The tests performed by LabOne are specifically designed to 
assist an insurance company in objectively evaluating the mortality 
and morbidity risks posed by policy applicants.  The majority of the 
testing is performed on specimens of individual life insurance policy 
applicants.  LabOne also provides testing services on specimens of 
individuals applying for individual and group medical and disability 
policies. 

LabOne's clinical testing services are provided to the healthcare 
industry to aid in the diagnosis and treatment of patients.  
Additionally, LabOne is certified by the Substance Abuse and Mental 
Health Services Administration (SAMHSA) to perform substance abuse 
testing services for federally regulated employers and is currently 
marketing these services throughout the country to both regulated and 
nonregulated employers.  See the Healthcare Segment for additional 
information regarding LabOne's clinical and substance abuse testing 
services.

LabOne's Insurance Applicant Testing

In order to establish the appropriate level of premium payments or to 
determine whether to issue a policy, an insurance company requires 
objective means of evaluating the insurance risk posed by policy 
applicants.  Because decisions of this type are based on statistical 
probabilities of mortality and morbidity, an insurance company 
generally requires quantitative data reflecting the applicant's 
general health.  Standardized laboratory testing, tailored to the 
needs of the insurance industry and reported in a uniform format, 
provides an insurance company with an efficient means of evaluating 
the mortality and morbidity risks posed by policy applicants.  The use 
of standardized blood, urine and oral fluid testing has proven a cost-
effective alternative to individualized physician examinations, which 
utilize varying testing procedures and reports.

LabOne's insurance testing services consist of certain specimen 
profiles that provide insurance companies with specific information 
that may indicate liver or kidney disorders, diabetes, the risk of 
cardiovascular disease, bacterial or viral infections and other health 
risks.  LabOne also offers tests to detect the presence of antibodies 
to human immunodeficiency virus (HIV).  Standardized laboratory 
testing can also be used to verify responses on a policy application 
to such questions as whether the applicant is a user of tobacco 
products, certain controlled substances or certain prescription drugs.  
Insurance companies generally offer a premium discount for nonsmokers 
and often rely on testing to determine whether an applicant is a user 
of tobacco products.  Cocaine use has been associated with increased 
risk of accidental death and cardiovascular disorders, and as a result 
of the increasing abuse in the United States and Canada, insurance 
companies are testing a greater number of policy applicants to detect 
its presence.  Therapeutic drug testing also detects the presence of 
certain prescription drugs that are being used by an applicant to 
treat a life-threatening medical condition that may not be revealed by 
a physical examination.

Insurance specimens are normally collected from individual insurance 
applicants by independent paramedical personnel using LabOne's custom-
designed collection kits and containers.  These kits and containers 
are delivered to LabOne's laboratory via overnight delivery services 
or mail, coded for identification and processed according to each 
client's specifications.  Results are generally transmitted to the 
insurance company's underwriting department that same evening.  LabOne 
provides a one-day service guarantee on oral fluid and urine HIV 
specimen results.

LabOne offers LabOne NET, a combination network/software product that 
provides a connection for insurance underwriters for ordering, 
delivery and management of risk assessment information such as 
laboratory results, motor vehicle reports and other applicant 
information.  Additionally, LabOne will handle paramedical examination 
paperwork and assist with administration of data for group insurance 
underwriting.

The following table summarizes LabOne's revenues from services 
provided to the insurance and healthcare (clinical and substance abuse 
testing) markets:

                               Year ended December 31,
                         1997             1996            1995       
                      ------------    ------------    ------------ 
                                (Dollars in thousands)

Insurance             $ 61,998  79%    $ 50,801  85%   $ 52,544   92%
Clinical                 7,512   9%       3,942   7%      2,297    4%
Substance abuse          9,416  12%       4,689   8%      2,188    4%
                        ------           ------          ------
   Total              $ 78,926         $ 59,432        $ 57,029
                        ======           ======          ======
                           

LabOne - Operations

LabOne's operations are designed to facilitate the testing of a large 
number of specimens and to report the results to its clients, 
generally within 24 hours of receipt of specimens.  LabOne has 
internally developed, custom-designed laboratory and business 
processing systems. 

It is a centralized network system that provides an automated link 
between LabOne's testing equipment, data processing equipment and the 
clients' computer systems.  This system offers LabOne's clients the 
ability to customize their testing and reflex requirements by several 
parameters to best meet their needs.

As a result of the number of tests it has performed over the past 
several years, LabOne has compiled and maintains a large statistical 
database of test results.  These summary statistics are useful to the 
actuarial and underwriting departments of an insurance client in 
comparing that client's test results to the results obtained by 
LabOne's entire client base.  Company-specific and industry-wide 
reports are frequently distributed to clients on subjects such as 
coronary risk analysis, cholesterol and drugs of abuse. Additionally, 
LabOne's statistical engineering department is capable of creating 
customized reports to aid managed care entities or employers in 
disease management and utilization tracking to help manage healthcare 
costs.

LabOne considers the confidentiality of its test results to be of 
primary importance and has established procedures to ensure that 
results of tests remain confidential as they are communicated to the 
client that requested the tests.

Substantially all of the reagents and materials used by LabOne in 
conducting its testing are commercially purchased and are readily 
available from multiple sources.

LabOne - Regulatory Affairs/Quality Improvement

The objective of the Regulatory Affairs/Quality Improvement department 
is to ensure that accurate and reliable test results are released to 
clients.  This is accomplished by incorporating both internal and 
external quality assurance programs in each area of the laboratory.  
In addition, quality assurance specialists share the responsibility 
with all LabOne employees of an ongoing commitment to quality and 
safety in all laboratory operations.  Internal quality and education 
programs are designed to identify opportunities for improvement in 
laboratory services and to meet all required safety training and 
education issues.  These programs help ensure the reliability and 
confidentiality of test results.

Procedure manuals in all areas of the laboratory help maintain 
uniformity and accuracy and meet regulatory guidelines.  Tests on 
control samples with known results are performed frequently to 
maintain and verify accuracy in the testing process.  Complete 
documentation provides record keeping for employee reference and meets 
regulatory requirements.  All employees are thoroughly trained to meet 
standards mandated by OSHA in order to maintain a safe work 
environment.  Superblind Testing Service(trademark) controls are used 
to challenge every aspect of service at LabOne from specimen arrival 
through final billing.  Approximately 2,000 samples are prepared and 
submitted anonymously each month.  These samples are especially 
designed to challenge testing, handling and reporting procedures.  
Specimens requiring special handling are evaluated and verified by 
control analysis personnel.  A computer edit program is used to review 
and verify clinically abnormal results, and all positive HIV antibody 
and drugs-of-abuse records.  As an external quality assurance program, 
LabOne participates in a number of proficiency programs established by 
the College of American Pathologists (CAP), the American Association 
of Bioanalysts and the Centers for Disease Control.  LabOne is 
accredited by CAP.

The Office of Inspector General (OIG) of the Department of Health and 
Human Services has developed a sample Model Compliance Plan.  
Laboratories are being advised to create a similar program to ensure 
compliance with anti-fraud and abuse laws and rules governing 
federally-financed reimbursement for lab testing services.  Even 
though only a small portion of LabOne's business encompasses fee-for-
service Medicare/Medicaid, a Chief Compliance Officer and nine Co-
Compliance Officers have been appointed.  LabOne is in the process of 
developing the LabOne Compliance Plan.

LabOne is licensed under the Clinical Laboratory Improvement 
Amendments (CLIA) of 1988.  LabOne has additional licenses for 
substance abuse testing from the State of Kansas and all other states 
where such licenses are required. LabOne is certified by SAMHSA to 
perform testing to detect drugs of abuse in federal employees and in 
workers governed by federal regulations.

LabOne - Sales and Marketing 

LabOne's client base currently consists primarily of insurance 
companies in the United States and Canada.  LabOne believes that its 
ability to provide prompt and accurate results on a cost-effective 
basis and its responsiveness to customer needs have been important 
factors in servicing existing business.

All of the sales representatives for the insurance market have 
significant business experience in the insurance industry or clinical 
laboratory-related fields.  These representatives call on major 
clients several times each year, usually meeting with a medical 
director or vice president of underwriting.  An important part of 
LabOne's marketing effort is directed toward providing its existing 
clients and prospects with information pertaining to the actuarial 
benefits of, and trends in, laboratory testing.  LabOne's sales 
representatives and its senior management also attend and sponsor 
insurance industry underwriters' and medical directors' meetings.

LabOne - Competition

LabOne believes that the insurance laboratory testing market is 
approximately a $100 million to $120 million industry.  LabOne 
currently services over half the market.  LabOne has maintained its 
market leadership through the development of long term client 
relationships, its reputation for providing quality products and 
services at competitive prices, and its battery of tests which are 
tailored specifically to an insurance company's needs.  LabOne has two 
other main competitors, Osborn Laboratories, Inc. and Clinical 
Reference Laboratory.  Effective January 30, 1997, LabOne acquired 
certain assets, including customer lists, of GIB Laboratories, Inc., a 
subsidiary of Prudential Insurance Company of America.  Concurrently, 
Prudential's Individual Insurance Group agreed to use LabOne as its 
exclusive provider of risk assessment testing services.  At the time 
of the purchase, GIB served approximately 5% of the insurance 
laboratory testing market.

The insurance testing industry continues to be highly competitive.  
The primary focus of the competition has been on pricing.  This 
continued competition has resulted in a decrease in LabOne's average 
price per test.  It is anticipated that prices may continue to decline 
in 1998.

LabOne - Foreign Markets

Lab One Canada Inc. markets insurance testing services to Canadian 
clients, with laboratory testing performed in the United States.  The 
following table summarizes the revenue, profit and assets applicable 
to LabOne's domestic operations and its subsidiary, Lab One Canada, 
Inc.


                                   Year ended December 31,
                               1997 *       1996          1995 
                               ----         ----          ----
                                      (In millions)

Sales:
   United States              $72.4         $53.1         $50.8
   Canada                       6.6           6.4           6.2

Operating Profit:
   United States                2.0           2.4           1.9
   Canada                       0.6           0.7           0.3

Identifiable Assets:
   United States               56.8          62.1          64.4
   Canada                       3.2           2.7           5.7

* 1997 United States operating profit includes a one-time write-off of 
    $6.6 million.
  (See Notes to Consolidated Financial Statements)


LabOne - Technology Development

The technology development department evaluates new commercially 
available tests and technologies or develops new assays and compares 
them to competing products in order to select the most accurate 
laboratory procedures.  Additionally, LabOne's scientists present 
findings to LabOne's clients to aid them in choosing the best tests 
available to meet their requirements.  Total technology development 
expenditures are not considered significant to LabOne as a whole.

LabOne - Employees

As of March 2, 1998, LabOne had 665 full-time employees, representing 
an increase of 99 employees from the same time in 1997.  None of 
LabOne's employees are represented by a labor union.  LabOne believes 
its relations with employees are good.

AGENCY PREMIUM RESOURCE, INC.

Agency Premium Resource, Inc. (APR) was an insurance premium finance 
company serving independent insurance agents.  APR provided premium 
financing for the commercial customers of these independent insurance 
agents. On May 31, 1995, Lab Holdings sold APR.  See Item 7 and Notes 
to Consolidated Financial Statements for additional information.

INTERNATIONAL UNDERWRITING SERVICES, INC.

International Underwriting Services, Inc. (IUS) offered turnkey 
policyholder and underwriting services. This subsidiary operated only 
within the life and health insurance industry and provided some or all 
of the following services to its customers: product design, 
underwriting of applicants, policy issuance, policy service, premium 
collection and payment of commissions. On July 17, 1995, Lab Holdings 
sold IUS.  See Item 7 and Notes to Consolidated Financial Statements 
for additional information.


HEALTHCARE SERVICES

The following businesses are considered to be in the healthcare 
services segment:  LabOne's clinical and substance abuse testing 
segments and Pyramid Diagnostic Services, Inc.


LABONE, INC.

LabOne's clinical testing services are provided to the healthcare 
industry to aid in the diagnosis and treatment of patients. LabOne 
operates only one highly automated and centralized laboratory, which 
LabOne believes has significant economic advantages over other 
conventional laboratory competitors.  LabOne markets its clinical 
testing services to the payers of healthcare-insurance companies and 
self-insured groups.  LabOne does this through exclusive arrangements 
with managed care organizations and through Lab Card(registered 
trademark), a Laboratory Benefits Management (LBM) program.

The Lab Card Program provides laboratory testing at reduced rates as 
compared to traditional laboratories.  It uses a unique benefit design 
that shares the cost savings with the patient, creating an incentive 
for the patient to help direct laboratory work to LabOne.  Under the 
Program, the patient incurs no out-of-pocket expense when the Lab Card 
is used, and the insurance company or self-insured group receives 
substantial savings on its laboratory charges.

LabOne is certified by the Substance Abuse and Mental Health Services 
Administration (SAMHSA) to perform substance abuse testing services 
for federally regulated employers and is currently marketing these 
services throughout the country to both regulated and nonregulated 
employers.  LabOne's rapid turnaround times and multiple testing 
options help clients reduce downtime for affected employees and meet 
mandated drug screening guidelines.  

LabOne's Clinical Patient Testing

LabOne began offering laboratory testing services to the healthcare 
industry in 1994.  Clinical laboratory tests are generally requested 
by physicians and other healthcare providers to diagnose and monitor 
diseases and other medical conditions through the detection of 
substances in blood and other specimens.  Laboratory testing is 
generally categorized as either clinical testing, which is performed 
on bodily fluids including blood and urine, or anatomical pathology 
testing, which is performed on tissue.  Clinical and anatomical 
pathology tests are frequently performed as part of regular physical 
examinations and hospital admissions in connection with the diagnosis 
and treatment of illnesses.  The most frequently requested tests 
include blood chemistry analyses, blood cholesterol level tests, 
urinalysis, blood cell counts, PAP smears and AIDS-related tests.

Clinical specimens are collected at the physician's office or other 
specified sites.  LabOne's couriers pick up the specimens and deliver 
them to local airports for express transport to the Kansas laboratory.  
Specimens are coded for identification and processed.  LabOne's 
testing menu includes the majority of tests requested by its clients.  
Tests not performed in-house are sent to reference laboratories for 
testing, and results are transmitted into LabOne's computer system 
along with all other completed results.

LabOne has established the Lab Card Program, as well as alliances with 
major healthcare providers, as vehicles for delivering out-patient 
laboratory services.  The Lab Card Program is marketed to healthcare 
payers (self-insured groups and insurance companies), allowing them to 
avoid price mark-ups and cost shifting.  With the Program, companies 
save substantially on their outpatient laboratory testing, and 
patients pay no out-of-pocket fees when they use their Lab Card.

The clinical laboratory testing market is a $40 billion industry which 
is highly fragmented and very competitive.  LabOne faces competition 
from numerous independent clinical laboratories and hospital- or 
physician-owned laboratories.  Many of LabOne's competitors are 
significantly larger and have substantially greater financial 
resources than LabOne.  LabOne is working to establish a solid client 
base in this environment through the use of Lab Card and the 
establishment of exclusive arrangements with large groups and managed 
care entities to provide laboratory services.

LabOne's business plan is to be the premier low-cost provider of high-
quality laboratory services to self-insured employers and insurance 
companies in the healthcare market.  LabOne feels that its superior 
quality and centralized, low-cost operating structure enable it to 
compete effectively in this market.

The sales representatives for the clinical industry are experienced in 
the healthcare benefit market or clinical laboratory-related fields 
and currently work in the geographic areas which they represent.  
Marketing efforts are directed at insurance carriers, self-insured 
employers and trusts, third party administrators and other 
organizations nationwide.

LabOne's Substance Abuse Testing Services

LabOne markets substance abuse testing to Fortune 1000 companies, 
third party administrators and occupational health providers. 
Certification by SAMHSA enables LabOne to offer substance abuse 
testing services to federally regulated industries.  There are 
presently 71 laboratories that are SAMHSA certified.

Specimens for substance abuse testing are typically collected by 
independent agencies who use LabOne's forms and collection supplies.  
Specimens are sealed with bar-coded, tamper-evident seals and shipped 
overnight to LabOne.  Automated systems monitor the specimens 
throughout the screening and confirmation process.  Negative results 
are available immediately after testing is completed.  Initial 
positive specimens are verified by the gas chromatography/mass 
spectrometry method, and results are generally available within 24 
hours.  Results can be transmitted electronically to the client's 
secured computer, printer or fax machine, or the client can use 
LabOne's LabLink Dial-In software to retrieve, store, search and print 
its drug testing results.

Substance abuse marketing efforts are primarily directed at Fortune 
1000 companies, occupational health clinics and third party 
administrators. LabOne's strategy is to offer quality service at 
competitive prices.  The sales force focuses on the ability of LabOne 
to offer multiple reporting methods, next flight out options, 
dedicated client service representatives and rapid reporting of 
results.

LabOne competes in the substance abuse testing market nationwide.  
LabOne's major competitors are the three major clinical chains, 
Laboratory Corporation of America, Quest Diagnostics and Smith Kline 
Beecham Laboratories, who collectively constitute approximately two-
thirds of the substance abuse testing market.


PYRAMID DIAGNOSTIC SERVICES, INC.

The Registrant acquired a 52% ownership position in Pyramid Diagnostic 
Services, Inc. (Pyramid) in 1992.  The original $4 million purchase 
price included newly-issued shares, thereby providing expansion 
financing to Pyramid.  Pyramid ultimately expanded to nine pharmacies 
which distributed radiopharmaceuticals and related services to nuclear 
medicine departments, clinics and hospitals. During 1993, Registrant 
acquired an additional 18% ownership position for $332,000.  In 1994, 
Registrant's ownership increased by 5% (ownership totaled 74%) with a 
$l million investment. 

Pyramid entered bankruptcy proceedings in early October 1995 as a 
result of an adverse $6 million judgment entered in a lawsuit against 
Pyramid.  Pyramid's bankruptcy proceedings have not been finalized.  
The impact on Registrant's results of operations was the September 
1995 write-off of Registrant's investment in Pyramid by recording a 
pre-tax expense of approximately $3.3 million and a corresponding tax 
benefit of $2.1 million resulting in an after-tax $1.2 million charge 
to earnings.  See Item 7 and Notes to Consolidated Financial 
Statements for additional information.


                        OTHER BUSINESSES

BMA RESOURCES, INC.

BMA Resources, Inc. (Resources) was a component of the SLH 
distribution on March 3, 1997.  See Item 7 and Notes to Consolidated 
Financial Statements for additional information.  Resources held the 
Registrant's energy investments at December 31, 1996.  No new energy 
investments were being made, and it had been the Registrant's intent 
to maximize cash flow from Resources to be deployed in healthcare and 
insurance services.  The investments included oil and gas working 
interests (all of which had been sold by June 1996), oil and gas 
partnerships and a stock investment in an unconsolidated affiliate.  
The oil and gas primarily consisted of partnership interests in Texas 
gulf coast oil and gas wells and leasehold interests.

Resources has an approximate 31% equity interest in Syntroleum 
Corporation (Syntroleum(registered trademark)).  Syntroleum is the 
developer and owner of a proprietary process (Syntroleum Process) 
designed for use in the conversion of natural gas into synthetic 
liquid hydrocarbons (gas to liquids or GTL).


TENENBAUM & ASSOCIATES, INC.

Tenenbaum & Associates, Inc. (TAI) was a component of the SLH 
distribution on March 3, 1997.  See Item 7 and Notes to Consolidated 
Financial Statements for additional information.  TAI was a full 
service real estate, personal property and sales and use tax 
consulting firm providing tax consulting services on a contingency 
basis.  TAI's core business was commercial real estate.

On May 31, 1995, TAI sold certain assets to Ernst & Young U.S. LP.  
TAI retained its accounts receivable as of May 31, 1995.  The 
agreement provides for Ernst & Young to continue the work-in-process 
on current accounts (where formal or informal tax valuation protests 
have been filed but not yet resolved).  Ernst & Young will earn a fee 
for collecting the current accounts and will participate in net cash 
collected on certain accounts after third party costs and Ernst & 
Young's fees.  During June 1995, TAI distributed its remaining assets 
to shareholders and filed for dissolution.


REAL ESTATE

Scout Development Corporation (Scout) was a component of the SLH 
distribution on March 3, 1997.  See Item 7 and Notes to Consolidated 
Financial Statements for additional information.  Scout held the 
Registrant's real estate investments at December 31, 1996 which 
consisted of: approximately 1,160 acres of partially developed and 
undeveloped land in six locations, three residential development 
projects, a multi-story parking garage and a community shopping 
center.  Real estate assets were located in the following states:  
Florida, Kansas, Nevada, New Mexico, Texas, and Wyoming, all of which 
were listed for sale.

In 1992, the Registrant's board of directors approved a plan to 
discontinue real estate operations.  As a result of this decision, a 
$6 million after-tax loss provision for estimated write-downs and 
costs through final disposition was included in the discontinued real 
estate's 1992 loss.  Additional after-tax losses of $2.9 million, $6.6 
million, and $1.5 million were recorded in 1994, 1995, and 1996, 
respectively.  These losses resulted from changes in estimated net 
realizable value based upon management's analysis of recent sales 
transactions and other current market conditions.  See Item 7 and 
Notes to Consolidated Financial Statements for additional information 
concerning discontinued real estate operations.

The location and use of each majority owned property was as follows at 
December 31, 1996:  Houston, TX - 370 acres and 37 lots; Ft. Worth, TX 
- 761 acres; Olathe, KS - 16 acres; Juno Beach, FL - 6 units; and 
Santa Fe, NM - 25 units.  In addition, the Registrant had a 49.9% 
investment in a joint venture that owns a shopping center and 14 acres 
of undeveloped land in Gillette, Wyoming.

Only two properties, one of which was 100% owned and the 49.9% joint 
venture referenced above, were categorized as commercial properties.  
Registrant's net asset value of these two projects at December 31, 
1996 was $2.8 million.

The 100% owned commercial property consisted of an 850-space parking 
garage located in downtown Reno, Nevada.  The building contains a 
total of 144,500 square feet of leasable parking space.  Parking 
revenue totaled approximately $595,000 or $700 per space or $4.12 per 
square foot in 1996.  In addition, 8,258 square feet located on the 
ground floor of the garage is leased to a retail tenant under a 15-
year lease.  Revenue from the retail lease during 1996 was $133,800 or 
$16.20 per square foot.  In addition to basic rent, the retail tenant 
is responsible for its prorata share of real estate taxes and 
insurance.  During 1996, $5,400 was collected from the retail tenant 
for taxes and insurance.

The joint venture commercial property consisted of a retail shopping 
center containing approximately 163,000 square feet of net leaseable 
area.  At the end of 1996, the center was 88% occupied.  Rental 
revenue totaled $733,000 for 1996.  The average annual gross rental 
per occupied square foot was $5.62.  In addition to rental revenue, 
tenants are responsible for their share of common area maintenance 
(CAM).  During 1996, CAM collections from tenants totaled $83,000.

Information regarding real estate debt is summarized in Note 15 of the 
Notes to Consolidated Financial Statements.  The detailed information 
is as follows:

                                                          Balance at
      Property      Description     Rate      Maturity     12-31-96
---------------------------------------------------------------------
                                                        (In thousands)
Gillette, WY 
  shopping center       IRB       2.9%-4.55%    2016         $ 6,170
Olathe, KS 
  vacant land         Mortgage        8.625%    1997           1,194
                                                              ------
    Total                                                    $ 7,364
                                                              ======

In management's opinion, the real estate properties were adequately 
covered by insurance with coverages for real and personal property, 
commercial general liability, commercial crime, garagekeepers legal 
liability, earthquake, flood, windstorm and hail.

On March 3, 1997, Lab Holdings distributed to its shareholders all of 
the outstanding shares of common stock of its wholly-owned subsidiary, 
SLH.  In connection with this distribution and pursuant to a 
Distribution Agreement between Lab Holdings and SLH, Lab Holdings 
transferred its real estate and energy businesses and miscellaneous 
assets and liabilities, including two wholly-owned subsidiaries, Scout 
and Resources, to SLH.  Additionally, SLH assumed liabilities relating 
to the transfer assets as well as certain contingent Lab Holdings 
liabilities, including Lab Holdings' liability for disputed income 
taxes which the Internal Revenue Service claims to be owed by Lab 
Holdings for its 1986-1990 tax years and which the State of California 
claims to be owed for the 1987-1989 years. See Item 3 and Notes to 
Consolidated Financial Statements for additional information. 

On July 25, 1997, Lab Holdings distributed to its shareholders all the 
shares of common stock of Response owned by Lab Holdings.  Response's 
operations are presented as a discontinued healthcare business in Lab 
Holdings' financial statements.  The second quarter was the last 
period in which Response significantly impacted Lab Holdings' 
operating results.  The second quarter discontinued healthcare 
operations reflected a non-cash tax expense partially offset by Lab 
Holdings' share of Response's earnings.  The distribution of Response 
stock was effected as a taxable dividend by Lab Holdings in which Lab 
Holdings utilized tax loss carryforwards to offset the resulting $3.8 
million tax liability in the financial statements.  See Notes to 
Consolidated Financial Statements for additional information.

As a result of the distributions, Lab Holdings' principal asset 
consists of its stock holding in LabOne.  See Notes to Consolidated 
Financial Statements for additional information.



ITEM 2.  PROPERTIES.

Properties of Registrant

On March 3, 1997, Registrant distributed to its shareholders the stock 
of SLH.  In connection with this distribution, Registrant transferred 
the office lease and the real estate subsidiary and other assets and 
liabilities to SLH, subject to SLH agreeing to make necessary office 
space available to the Registrant to the extent necessary to permit 
the Registrant to conduct its operations.  See Items 1 and 7 and Notes 
to Consolidated Financial Statements for additional information 
regarding the SLH distribution.  

Registrant had a long-term lease for 13,674 square feet of office 
space at 2600 Grand Boulevard in the Crown Center complex in Kansas 
City, Missouri.  This lease, which began April 1, 1992, is for a ten 
year term with a right to cancel after seven years.  Registrant's 
previously owned real estate subsidiary held diversified types of 
properties for sale or investment purposes in various geographical 
locations.  In certain cases, projects were developed on a joint 
venture basis with one or more joint venture partners.  Title to 
property in such cases was held jointly with such partners or in the 
name of the venture.  Rights and obligations with respect to such 
properties were governed by the terms of the joint venture agreement.  
Registrant's former real estate operations are described in greater 
detail in Items 1 and 7 and Notes to Consolidated Financial 
Statements.



ITEM 3.  LEGAL PROCEEDINGS.

Under the Distribution Agreement and Assignment, SLH assumed the 
rights and obligations of Lab Holdings with respect to the following 
legal matter.

In 1986, a lawsuit was initiated in the Circuit Court of Jackson 
County, Missouri by Lab Holdings' former insurance subsidiary (i.e., 
Business Men's Assurance Company of America) against Skidmore, Owings 
& Merrill ("SOM") which is an architectural and engineering firm, and 
a construction firm to recover costs incurred to remove and replace 
the facade on the former home office building.  Because the removal 
and replacement costs had been incurred prior to the sale of the 
insurance subsidiary, Lab Holdings negotiated with the buyer for an 
assignment of the cause of action from the insurance subsidiary. In 
September 1993, the Missouri Court of Appeals reversed a $5.7 million 
judgment granted in 1992 in favor of Lab Holdings; the Court of 
Appeals remanded the case to the trial court for a jury trial limited 
to the question of whether or not the applicable statute of 
limitations barred the claim.  The Appeals Court also set aside $1.7 
million of the judgment originally granted in 1992.  In July 1996, 
this case was retried to a judge.  On January 21, 1997, the judge 
entered a judgment in favor of Lab Holdings.  The amount of that 
judgment, together with interest is approximately $5.6 million.  
Although the judgment has been appealed, counsel for the Company 
expects that it will be difficult for the defendants to cause the 
judgment to be reversed.  The final outcome is not expected for at 
least another year.  Settlement arrangements with other defendants 
have resulted in payments to plaintiff which have substantially offset 
legal fees and costs to date of approximately $502,000.  Future legal 
fees and costs can not reliably be estimated.  Pursuant to the 
Distribution Agreement, this matter was assigned to SLH Corporation.

In the opinion of management, after consultation with legal counsel 
and based upon current available information, this lawsuit is not 
expected to have a material adverse impact on the consolidated 
financial position or results of operations of Lab Holdings.

Pursuant to the Distribution Agreement, SLH assumed from Lab Holdings 
all of the contingent tax liabilities described below and acquired all 
rights to refunds, plus any interest related to these tax years.  SLH 
also assumed all contingent liabilities and refunds related to any 
issues raised for the years 1986-1990 whose resolution may extend to 
tax years beyond the 1990 tax year.

Lab Holdings received notices of proposed adjustments (Revenue Agent's 
Reports) from the Internal Revenue Service (IRS) with respect to 1986-
1990 federal income taxes.  These notices claimed total federal income 
taxes due for the entire five year period in the approximate net 
amount of $13,867,000, exclusive of interest thereon.

Lab Holdings filed protests regarding the 1986-1990 notices of 
proposed adjustments.  In 1997, Lab Holdings received a formal 
agreement to the issues and the final tax computation from the IRS.  
The agreement provides for a tax refund to SLH of approximately $5.5 
million net of interest costs.  The agreement was approved by 
Congress' Joint Committee on Taxation in January 1998.

In December 1996, the California state auditor sent Lab Holdings an 
audit report covering the 1987-1989 taxable years.  The State of 
California has determined to include, as a "unitary taxpayer," all 
majority owned non-life insurance subsidiaries and joint ventures of 
Lab Holdings.  During 1997, the California Franchise Tax Board sent a 
notice of taxes and interest due for the 1987-1989 years of 
approximately $1.8 million, which was paid.  Pursuant to the 
Distribution Agreement, SLH Corporation assumed all potential tax 
liabilities and interest thereon regarding the California audit for 
the 1987-1989 tax years.



ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS. 

None.

                EXECUTIVE OFFICERS OF REGISTRANT.

Following is a list of all executive officers of Registrant as of 
March 1, 1998, together with certain related information. There are no 
arrangements or understandings among any such persons and any other 
persons pursuant to which any was selected as an officer.  All such 
persons serve at the discretion of the board of directors.
                                                   Served as Executive
                                                       Officer with
Name            Age   Position with Registrant        Registrant Since
----------------------------------------------------------------------
S.K. Fitzwater   51   Vice President, Chief Financial        1990
                      and Accounting Officer and 
                      Secretary
                      (see note 1 below)

P.A. Jacobs      56   President and Chief Executive          1980
                      Officer    
                      (see note 2 below)

W.T. Grant II    47   Chairman, President and Chief          1980
                      Executive Officer of LabOne, Inc.
                      (see note 3 below)

Except as noted below, each executive officer of Registrant has held 
the executive position noted with Registrant as his principal 
occupation for the last five years.

     1.  Steven K. Fitzwater became Chief Financial Officer in 
September 1997.  He has been Vice President and Chief Accounting 
Officer since August 1990.  On April 1, 1993, he assumed the 
additional duties of Secretary of the Registrant.  

     2.  P. Anthony Jacobs became Chief Executive Officer in September 
1997.  He has been President and Chief Operating Officer since May 
1993.  Prior to May 1993, he had been Executive Vice President and 
Chief Operating Officer since 1990.

     3.  LabOne, Inc. is 82% owned by the Registrant.  Effective 
February 13, 1998, Registrant's board of directors designated W. T. 
Grant II as an Executive Officer of Registrant because LabOne was 
determined to constitute a principal business unit of Registrant and 
Mr. Grant became the Chairman, President and Chief Executive Officer 
of LabOne in October 1995.  Mr. Grant is not a corporate officer of 
Lab Holdings.  He was Chairman of the Board and Chief Executive 
Officer of Lab Holdings from May 1993 to September 1997.  He had been 
President and Chief Executive Officer of Lab Holdings since 1986.  



                                   PART II. 

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED 
         STOCKHOLDER MATTERS. 

Registrant's common stock is traded in the national over-the-counter 
market and is listed in the NASDAQ National Market System maintained 
by the National Association of Securities Dealers.  As of February 24, 
1998, the outstanding shares were held by 1,806 stockholders of 
record.  High and low sales prices for each quarter of 1997 and 1996 
are included in the table of quarterly financial data in Note 16 of 
the Notes to Consolidated Financial Statements.  Also set forth in the 
table are quarterly dividends paid per share.  Registrant's payment of 
future dividends will be at the discretion of its board of directors 
and can be expected to be dependent upon a number of factors, 
including future earnings, financial condition, cash needs and general 
business conditions.  The dividend-paying capabilities of subsidiaries 
may be restricted as to their transfer to the parent company.



ITEM 6.  SELECTED FINANCIAL DATA

December 31,            1997      1996      1995      1994      1993
---------------------------------------------------------------------
                     (In thousands except share and per share amounts)

REVENUES           $   78,926    61,878    75,246    86,027    92,171
                      ===============================================

OPERATING EARNINGS (LOSS)
Earnings (loss) from
  continuing
  operations       $   (7,855)   (4,226)   (1,826)     (276)    5,412
Earnings (loss) from
  discontinued
  healthcare business  (2,342)      682     1,078    (1,596)      206
Loss from discontinued
  real estate
  operations              --     (1,452)   (6,600)   (2,904)      --
                      -----------------------------------------------
Net earnings (loss)$  (10,197)   (4,996)   (7,348)   (4,776)    5,618
                      ===============================================

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Earnings (loss) from
  continuing 
  operations       $    (1.21)     (.65)     (.28)     (.03)      .81
Earnings (loss) from
  discontinued
  healthcare business    (.36)      .10       .17      (.25)      .03
Loss from discontinued
  real estate 
  operations               --      (.22)    (1.03)     (.46)       --
                      -----------------------------------------------
Net earnings (loss)$    (1.57)     (.77)    (1.14)     (.74)      .84
                      ===============================================
Cash dividends     $     1.20      1.20      1.20      1.20      1.20
Book value         $     8.74     26.84     28.96     31.50     33.52

Average shares 
  outstanding       6,488,643           6,433,989           6,714,079
  during the year             6,477,878           6,374,837      

Shares outstanding  6,489,103           6,461,061           6,733,245
  end of year                 6,483,934           6,378,261

Total assets       $   74,786   196,783   198,018   234,196   259,575
Long-term debt     $      --        --        --          8        18



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS.


RESULTS OF OPERATIONS

Introductory remarks about results of operations

The principal assets of Lab Holdings, Inc. (Lab Holdings or 
Registrant) consist of a majority ownership of LabOne, Inc. (LabOne) 
and approximately $5 million in cash and short term investments.  

Lab Holdings had investments in real estate, energy businesses and 
miscellaneous assets.  On March 3, 1997, Lab Holdings distributed to 
its shareholders all of the outstanding shares of common stock of its 
wholly-owned subsidiary, SLH Corporation (SLH).  In connection with 
this distribution and pursuant to a Distribution Agreement between Lab 
Holdings and SLH, Lab Holdings transferred its real estate and energy 
businesses and miscellaneous assets and liabilities to SLH.  The SLH 
spin-off was accounted for as a dividend.

Lab Holdings had a majority ownership position in Response Oncology, 
Inc. (Response).  Response, previously 67%-owned by Lab Holdings, is a 
publicly-traded company (NASDAQ-ROIX).  On February 26, 1997, Lab 
Holdings converted a $23.5 million Response note receivable and 
accrued interest into 3,020,536 shares of Response common stock.  The 
conversion increased Lab Holdings' ownership of Response shares 
outstanding from 56% at December 31, 1996 to approximately 67%.

On July 25, 1997, Lab Holdings distributed to its shareholders all the 
shares of common stock of Response owned by Lab Holdings.  Response's 
operations are presented as a discontinued healthcare business in Lab 
Holdings' financial statements.  The second quarter was the last 
period in which Response significantly impacted Lab Holdings' 
operating results.  The second quarter discontinued healthcare 
operations reflected a non-cash tax expense partially offset by Lab 
Holdings' share of Response's earnings.  The distribution of Response 
stock was effected as a taxable dividend by Lab Holdings in which Lab 
Holdings utilized tax loss carryforwards to offset the resulting $3.8 
million tax liability in the financial statements.

Prior to October 20, 1997, Lab Holdings was named Seafield Capital 
Corporation (Seafield).  Seafield changed its name to Lab Holdings for 
better identification with its primary asset, the 82% ownership of 
LabOne.



1997 Compared to 1996

Insurance Services Segment:

The following business is considered to be in the insurance services 
segment: LabOne's risk-appraisal laboratory testing for the life 
insurance industry.  

LabOne, an 82% owned subsidiary of Lab Holdings, is a publicly-traded 
company (NASDAQ-LABS).  LabOne changed its name from Home Office 
Reference Laboratory, Inc. in February 1994.  LabOne's clinical 
testing services are provided to the healthcare industry to aid in the 
diagnosis and treatment of patients. LabOne provides substance abuse 
testing services for federally regulated employers and is currently 
marketing these services throughout the country to both regulated and 
nonregulated employers.  See Healthcare Services Segment discussion 
below for clinical and substance abuse (SAT) laboratory testing 
services.

LabOne provides risk-appraisal laboratory services to the insurance 
industry.  The tests performed by LabOne are specifically designed to 
assist an insurance company in objectively evaluating the mortality 
and morbidity risks posed by policy applicants.  The majority of the 
testing is performed on specimens of individual life insurance policy 
applicants.  Testing services are also provided on specimens of 
individuals applying for individual and group medical and disability 
policies.

Effective January 30, 1997, LabOne acquired certain assets, including 
customer lists, of GIB Laboratories, Inc., a subsidiary of Prudential 
Insurance Company of America.  Concurrently, Prudential's individual 
insurance group agreed to use LabOne as its exclusive provider of risk 
assessment testing services.  At the time of the purchase, GIB served 
approximately 5% of the insurance laboratory testing market.

LabOne's total revenue for the year ended December 31, 1997 was $78.9 
million as compared to $59.4 million in 1996.  The increase of $19.5 
million, or 33%, is due to increases in insurance segment revenue of 
$11.2 million, SAT revenue of $4.7 million and clinical laboratory 
revenue of $3.6 million.  The insurance segment increased 22% due to 
an increase in the total number of insurance applicants tested and an 
increase in kit revenue, partially offset by a 1% decrease in the 
average revenue per applicant.  The increase in insurance segment 
revenue is primarily due to an increase in market share and changes to 
testing thresholds.

LabOne's total cost of sales increased $9.3 million (28%) for the year 
as compared to the prior year.  This increase is due primarily to 
increases in payroll, laboratory supplies and kit expenses due to the 
larger specimen volume for all three business segments. 

LabOne's total selling, general and administrative expenses increased 
$4.1 million (17%) in 1997 as compared to 1996 due primarily to 
increases in payroll expenses, travel and amortization expenses.  
These increases are due to growth in each segment.

In 1997, LabOne recorded a one-time write-down of $6.6 million on the 
value of the laboratory and administrative buildings in anticipation 
of their sale.  See notes to financial statements for additional 
information.

LabOne's operating income decreased from $3.1 million in 1996 to $2.6 
million in 1997, primarily due to the $6.6 million write down which 
offset the increase in the insurance segment operating income of $5.9 
million.

LabOne's other income decreased $700,000 in 1997 as compared to 1996, 
due to lower investment income.


Healthcare Services Segment:

The following businesses are included in the healthcare services 
segment:  LabOne's clinical and substance abuse (SAT) testing 
services.

LabOne's SAT revenue increased from $4.7 million in 1996 to $9.4 
million in 1997 due to a doubling in testing volumes.  Clinical 
laboratory revenue increased from $3.9 million in 1996 to $7.5 million 
in 1997 due to increased testing volumes and higher revenue per 
patient.

LabOne's total cost of sales increased $9.3 million (28%) for the year 
as compared to the prior year primarily reflecting increases in 
payroll, laboratory supplies and kit expenses due to the larger 
specimen volume for all three business segments.  Direct and allocated 
clinical cost of sales expenses were $8.3 million as compared to $6.5 
million during 1996.  Direct and allocated SAT cost of sales expenses 
were $7 million as compared to $3.7 million during 1996.  These 
increases are due to increased testing volumes.

Clinical overhead expenditures were $7.5 million as compared to $5.4 
million in 1996.  SAT overhead increased from $2.2 million in 1996 to 
$3.3 million in 1997.  These increases are due to the growth in each 
segment.

LabOne's clinical testing segment had an operating loss of $8.3 
million for 1997 as compared to a loss of $8 million in 1996, due to a 
$600,000 increase in corporate overhead allocation over 1996.  The SAT 
segment improved from an operating loss of $1.2 million in 1996 to a 
loss of $934,000 in 1997, including a $900,000 increase in corporate 
overhead allocation over last year.

Other Segment:

Lab Holdings' oil and gas investments were distributed to SLH on March 
3, 1997.  In 1996, revenues of $2.4 million and expenses of $2.8 
million were recorded.

During 1997, Lab Holdings significantly reduced its corporate 
structure and overhead costs as the SLH and Response distributions 
were finalized.  The increase in general and administrative expenses 
to $34.8 million in 1997 from $29.8 million in 1996 reflects both 
LabOne's increased costs associated with increased testing volumes 
discussed above and costs related to Lab Holdings' corporate structure 
reductions including position eliminations and related severance.  SLH 
provides administrative and accounting functions to Lab Holdings under 
a services agreement for an annual fee of $75,000.

Investment Income - Net:

Other investments contributing earnings include venture capital and 
liquidity investments.  The return on short-term investments is 
included in the investment income line in the consolidated statements 
of operations.  Investment income decreased slightly to $4.7 million 
in 1997 from $5 million in 1996 primarily reflecting LabOne's decrease 
in investment income.

Miscellaneous Items:

Other Income/(Expense) increased to income of $77,000 in 1997 from 
expense of $456,000 in 1996.  The 1996 expense primarily reflects Lab 
Holdings' equity share of Syntroleum's losses partially offset by 
other miscellaneous gains.

Taxes:

Tax expense increased approximately $4 million in 1997 reflecting 
write-off of approximately $5 million of the deferred income tax 
assets related to assets spun-off in the SLH distribution and the 
write-off of unused deferred income tax assets not utilized in the 
Response distribution.

Consolidated Results:

The combined effect of the above factors resulted in a 1997 loss from 
continuing operations of $7.9 million, as compared with a $4.2 million 
loss in 1996. 



1996 Compared to 1995


Insurance Services Segment:

The following business is considered to be in the insurance services 
segment in 1996: LabOne's risk-appraisal laboratory testing for the 
life and health insurance industries.  Additionally, during 1995's 
first six months, the underwriting and policy administration services 
and insurance premium finance services businesses were also included 
in the insurance services segment.

LabOne insurance segment revenue decreased in 1996 to $50.8 million 
from $52.5 million in 1995, primarily due to a 6% reduction in revenue 
per applicant, partially offset by an increase in insurance kit 
revenue.  The total number of applicants tested for the year was 
relatively the same as in 1995.

LabOne total cost of sales increased $2.8 million (9%) for the year as 
compared to the prior year.  This increase is due primarily to 
increases in inbound freight expense, kit expense and outside 
laboratory services.  These were partially offset by a decrease in 
rent expense due to the closing of certain LabOne Service Center (LSC) 
locations in 1995.

LabOne total selling, general and administrative expenses decreased 
$1.3 million (5%) in 1996 as compared to the prior year due primarily 
to decreases in depreciation, travel, insurance and legal expenses. 

LabOne total operating income increased from $2.2 million in 1995 to 
$3.1 million in 1996.  The increase is primarily attributable to a 
$200,000 increase in the insurance segment operating income and a 
$700,000 decrease in the healthcare segment operating loss.

LabOne non-operating income decreased $800,000 primarily due to a 
decrease in investment income.


Healthcare Services Segment:

The following businesses are included in 1996's healthcare services 
segment: the clinical and substance abuse laboratory testing services 
and a comprehensive cancer management company.  During 1995's first 
nine months, the radiopharmaceuticals and related nuclear medicine 
services were also included in the healthcare services segment.

LabOne's healthcare (clinical and substance abuse testing) segment 
revenues increased $4.1 million during 1996.  Healthcare revenue 
increased from $4.5 million in 1995 to $8.6 million in 1996 due to 
continued expansion efforts.

LabOne's total cost of sales increased $2.8 million (9%) during 1996 
as compared to the prior year.  This increase is due primarily to 
increases in inbound freight expense, kit expense and outside 
laboratory services.  These were partially offset by a decrease in 
rent expense due to the closing of certain LabOne Service Center (LSC) 
locations in 1995.  Healthcare cost of sales expenditures for the year 
were $10.2 million as compared to $8.6 million in 1995.

LabOne healthcare overhead expenditures increased from $5.8 million in 
1995 to $7.6 million in 1996, primarily due to an increase in 
allocated overhead and growth in healthcare segment payroll. 

LabOne total operating income increased from $2.2 million in 1995 to 
$3.1 million in 1996.  The increase is primarily attributable to a 
$200,000 increase in the insurance segment operating income and a 
$700,000 decrease in the healthcare segment operating loss.

Another healthcare subsidiary, Pyramid Diagnostic Services, Inc. 
(Pyramid), incurred a loss of $768,000 for the first nine months of 
1995.  Pyramid entered bankruptcy proceedings in early October 1995 as 
a result of an adverse $6 million judgment entered in a lawsuit 
against Pyramid.  Pyramid's bankruptcy proceedings have not been 
finalized.  The impact on Lab Holdings' results of operations was the 
September 1995 write-off of Lab Holdings' investment in Pyramid by 
recording a pre-tax expense of approximately $3.3 million and a 
corresponding tax benefit of $2.1 million resulting in an after-tax 
$1.2 million charge to earnings.  Included with the Pyramid write-off 
was $2.3 million of goodwill.  Lab Holdings consolidated Pyramid's 
nine months 1995 revenues of $7.6 million while expenses consolidated 
in 1995 were $7.7 million.  See Notes to Consolidated Financial 
Statements for additional information.

Other Segment:

Lab Holdings' oil and gas subsidiary contributed revenues of $2.4 
million in 1996 as compared to $2 million in 1995.  Variances in the 
oil and gas prices nationally impact operating results.    

The other segment's revenues and expenses in 1995 included the 
operating results of a real estate, personal property, sales and use 
taxes consulting subsidiary--Tenenbaum and Associates, Inc. (TAI).  On 
May 31, 1995, TAI sold certain assets to Ernst & Young U.S. LP.  TAI 
retained its accounts receivable as of May 31, 1995.  The agreement 
provides for Ernst & Young to continue the work-in-process on current 
accounts (where formal or informal protests have been filed but not 
yet resolved).  Ernst & Young will earn a fee for collecting the 
current accounts and will participate in net cash collected on certain 
accounts after third party costs and Ernst & Young's fees.  During 
June 1995, TAI distributed its remaining assets to shareholders and 
filed for dissolution.  

Consolidated revenues in 1995 for TAI were $5.3 million while TAI 
expenses consolidated in 1995 were $4.1 million. 

Investment Income - Net:

Other investments contributing earnings include venture capital and 
liquidity investments.  The return on short-term investments is 
included in the investment income line in the consolidated statements 
of operations.  Investment income totaled $5 million in 1996 and $4.1 
million in 1995.  Investment income was higher in 1996 reflecting both 
realized and unrealized holding gains/losses recorded on trading 
securities and improved venture capital operating results. See Notes 
to Consolidated Financial Statements for additional investment 
information.

Interest Expense:

Interest expense increased to $1 million in 1996 from $107,000 in 
1995.  During 1996, Lab Holdings incurred $1 million of interest 
expense associated with a preliminary state tax audit.

Other Income/(Loss):

The major components of other income/(loss) in 1995 included $1.1 
million of losses on subsidiary dispositions and a $3.4 million 
provision for Pyramid's bankruptcy.  The 1996 expense of $456,000 
primarily reflects Lab Holdings' equity share of Syntroleum's losses 
partially offset by other miscellaneous gains.

Taxes:

The consolidated effective tax rate in 1996 was impacted primarily by 
the accrual of state income taxes, net of federal income tax benefit, 
resulting from a California franchise tax audit for the 1987-1989 
years.  Other items affecting the tax rate were non-deductible 
goodwill and a net increase in deferred income tax valuation 
allowances.

Consolidated Results:

The combined effect of the above factors resulted in a 1996 net loss 
from continuing operations of $4.2 million compared with a $1.8 
million net loss from continuing operations in 1995. 

Discontinued Operations:

Healthcare Business:

On February 26, 1997, Lab Holdings converted its Response note 
receivable and accrued interest into Response common stock.  The 
conversion increased Lab Holdings' ownership of Response shares 
outstanding from 56% at December 31, 1996 to approximately 67%.

On July 25, 1997, Lab Holdings distributed to its shareholders all the 
shares of common stock of Response owned by Lab Holdings.  Response's 
operations are presented as a discontinued healthcare business in Lab 
Holdings' financial statements. The distribution of Response stock was 
effected as a taxable dividend by Lab Holdings in which Lab Holdings 
utilized tax loss carryforwards to offset the resulting $3.8 million 
tax liability in the financial statements.  The $2.3 million loss from 
discontinued healthcare operations in 1997 reflects a $3.8 million 
non-cash tax expense net of Lab Holdings' share of Response's 
earnings.  The second quarter of 1997 was the last period in which 
Response significantly impacted Lab Holdings' financial results.  For 
the seven months ended July 31, 1997, Response's revenues were $50 
million, costs and expenses were $46.3 million and net earnings were 
$2.1 million.  During 1996, Response's revenues were $67.3 million, 
costs and expenses were $66.3 million and net earnings were $907,000.  
During 1995, Response's revenues were $44.3 million, costs and 
expenses were $42.3 million and net earnings were $2.3 million.

Real Estate:

The real estate assets were distributed pursuant to the SLH 
Distribution Agreement.  Real estate operations are presented as 
discontinued operations in Lab Holdings' financial statements.

Net real estate assets distributed on March 3, 1997 were $23 million. 
Real estate revenues were $3.6 million in 1997's first two months 
prior to distribution, compared with $16.3 million in 1996 and $11.5 
million in 1995.  The real estate sales revenues in 1997 include the 
sale of 2 residential units in Florida and New Mexico ($1.2 million); 
547 acres of land in Texas ($2.3 million); and 7 residential lots in 
Texas ($38,000).  The real estate sales revenues in 1996 include the 
sale of 40 residential units in New Mexico and Florida ($14.8 
million), 20 acres of land in Oklahoma ($275,000). and 1.5 acres of 
land in Kansas ($580,000).  The real estate sales revenues in 1995 
include the sale of 29 residential units or lots in Florida, Missouri, 
New Mexico and Texas ($7.9 million) and 302 acres of land in Kansas 
and Texas ($2.6 million).

Cost of the real estate sales in 1997 prior to distribution totaled 
$3.5 million, compared with a cost of $15.3 million in 1996 and 
approximately $10.9 million in 1995, reflecting the mix of real estate 
sold during each period as discussed above in the revenue analysis.

Real estate operating expenses totaled $2.7 million in 1996, as 
compared with $3.2 million in 1995.  The decrease is attributable to a 
reduction in expenses associated with the substantial completion of 
the residential projects.

In 1992, Lab Holdings' board of directors approved a plan to 
discontinue real estate operations.  As a result of this decision, a 
$6 million after-tax loss provision for estimated write-downs and 
costs through final disposition was included in the discontinued real 
estate's 1992 loss.  Additional after-tax losses of $2.9 million, $6.6 
million, and $1.5 million were recorded in 1994, 1995, and 1996, 
respectively.  These losses resulted from changes in estimated net 
realizable value based upon management's analysis of recent sales 
transactions and other current market conditions.  See Item 1 and 
Notes to Consolidated Financial Statements for additional information 
concerning discontinued real estate operations.

At December 31, 1996, real estate holdings included residential land, 
undeveloped land, single-family housing and commercial structures 
located in the following states:  Florida, Kansas, Nevada, New Mexico, 
Texas and Wyoming, all of which are listed for sale.  The total 
acreage consisted of approximately 1,160 acres and approximately 68 
lots or units for sale.

Listed below is the status of the discontinued real estate operations 
as of December 31, 1996:

Land:
  North Ft. Worth, TX     297 acres sold, 547 acres listed for sale
  Ft. Worth, TX           214 acres listed for sale
  Houston, TX             1 acre sold, 30 lots sold, 370 acres and 37 
                            lots listed for sale
  Olathe, KS              5.5 acres sold, 16 acres listed for sale
  Tulsa, OK               12 acres sold

Land Lease:
  Honolulu, HI            sold
  San Diego, CA           sold
  Nashville, TN           sold

Commercial:
  Reno, NV                listed for sale
  Denver, CO              sold
  Gillette, WY            listed for sale

Residential:
  Juno Beach, FL          last 2 units listed for sale
  Juno Beach, FL          last unit and 3 marina slips listed for sale
  Santa Fe, NM            last 25 units listed for sale with 6 of the 
                            25 units under contract
  Mazatlan, Mexico        final sales remittance received in 1995

The net real estate asset amounts were influenced from period to 
period by several factors including seasonal sales cycles for projects 
in Florida and New Mexico, a decision at the end of 1993 to accelerate 
the build-out of the New Mexico project and construction on the final 
three houses in Florida.

Publicly-Traded Subsidiaries

Lab Holdings has an investment in one majority-owned entity that is 
publicly-traded, LabOne.  At December 31, 1997, based on the market 
price of publicly-traded shares of this subsidiary, pretax unrealized 
gains of approximately $138 million on this investment was not 
reflected in either Lab Holdings' book value or stockholders' equity.



LIQUIDITY AND CAPITAL RESOURCES

On December 31, 1997, at the holding company level, Lab Holdings had 
available for operations approximately $5.3 million in cash and short-
term investments.  Primarily as a result of the distribution of SLH in 
March 1997 and corporate structure cost reductions, Lab Holdings' 
working capital decreased $17.7 million during 1997 to $6.3 million at 
December 31, 1997.

On a consolidated basis, Lab Holdings had $24.8 million in cash and 
short-term investments at December 31, 1997.  Current assets totaled 
approximately $50.3 million while current liabilities totaled $8.6 
million.  Changes in most balance sheet line items resulted primarily 
from the SLH and Response stock distributions.

Net cash provided by operations totaled $8.1 million in 1997 compared 
with $12.5 million in 1996.  During 1997, the loss from continuing 
operations included non-cash items of $6.3 million for depreciation 
and amortization and a $6.6 million provision by LabOne for loss on 
anticipated disposal of assets.  The 1997 funds provided additionally 
reflect a decrease in trading portfolios of $2.6 million, a $3 million 
increase in accounts receivable, a net change in income taxes and 
other of $3.5 million and $425,000 of net cash used by discontinued 
healthcare and real estate operations.  During 1996, the loss from 
continuing operations included a non-cash item of $8.8 million for 
deprecation and amortization.  The 1996 funds provided additionally 
reflect a decrease in trading portfolios of $19.3 million, a $1.5 
million decrease in accounts receivable, a net change in income taxes 
and other of $9.6 million and $23 million of net cash used by 
discontinued healthcare and real estate operations.  The discontinued 
healthcare business used $32.1 million for the acquisition of 
physician practices and discontinued real estate operations provided 
$9.1 million. 

Net cash used by investing activities totaled $11.8 million in 1997 
primarily representing LabOne's net additions to property, plant and 
equipment and intangibles on its purchase of the assets and customer 
list of GIB Laboratories, Inc. and purchases supporting expanded 
laboratory capacity.  Net cash provided by investing activities in 
1996 totaled $3.9 million reflecting a net decrease in long-term 
investments of $7.6 million partially offset by $3.3 million in 
additions to property, plant and equipment.

Net cash used by financing activities totaled $27.4 million in 1997 
primarily due to the $19.6 million cash portion of the SLH dividend to 
Lab Holdings shareholders and regular cash dividends of $7.8 million.  
The 1996 net cash used by financing activities was $8.1 million 
primarily reflecting Lab Holdings regular cash dividends to its 
shareholders.

Lab Holdings is currently a holding company.  Sources of cash are 
investment income and sales and subsidiary dividends.  There are 
currently no restrictions that would limit LabOne's ability to make 
future dividend payments.  The primary uses of cash for Lab Holdings 
are investments, operating expenses and dividends to shareholders.

Prior to the Distribution, Lab Holdings had received notices of 
proposed adjustments (the Revenue Agent's Reports) from the Internal 
Revenue Service (IRS) with respect to its 1986-1990 federal income 
taxes.  These notices claimed total federal income taxes due for the 
entire five year period in the approximate net amount of $13,867,000, 
plus interest.  However, Lab Holdings also had claims against the IRS 
for refunds relating to a $27 million loss claimed for 1990 on a sale 
of a real estate partnership interest which the IRS claimed had not 
occurred in 1990.  In connection with the Distribution, SLH assumed 
from Lab Holdings all its contingent tax liabilities to the IRS and 
acquired all of its related rights to refunds as well as any interest 
thereon related to the Lab Holdings' 1986-1990 tax years.  During 
1997, all of the claims and disputes between Lab Holdings and the IRS 
for the 1986-1990 years were settled, entitling SLH to a net refund of 
$5.5 million.

SLH also assumed Lab Holdings' rights and liabilities with respect to 
an audit being conducted by the State of California for Lab Holdings' 
1987-1989 taxable years which SLH settled in 1998.

Pursuant to the Distribution Agreement, SLH assumed from Lab Holdings 
all of the contingent tax liabilities described above and acquired all 
rights to refunds, plus any interest related to these tax years.  Lab 
Holdings financial statements were not impacted pursuant to rights 
transferred to SLH by the Distribution Agreement.  SLH also assumed 
all contingent liabilities and refunds related to any issues raised 
for the years 1986-1990 whose resolution may extend to tax years 
beyond the 1990 tax year.  

LabOne paid regular quarterly dividends in 1997, 1996 and 1995.  As an 
82% owner, Lab Holdings has received $7.7 million of cash as dividends 
from LabOne in 1997.  LabOne's working capital position declined from 
$38.8 million at December 31, 1996, to $35.4 million at December 31, 
1997.  This decrease is the result of dividends paid, capital 
additions and the purchase of GIB assets exceeding LabOne's net cash 
provided by operations.

During 1997, LabOne invested $11.4 million in additional property, 
plant and equipment and the purchase of certain assets and customer 
lists of GIB Laboratories, Inc., as compared to $3.2 million in 1996 
and $2.9 million in 1995.  Of the amount spent in 1997, approximately 
$4.8 million was for the GIB purchase, and approximately $2.8 million 
was for land acquisition and initial development costs to construct 
LabOne's new facility.  The new facility project is expected to cost 
approximately $27.5 million and is expected to be primarily financed 
with an Industrial Revenue Bond (IRB)approved by the City of Lenexa 
(Kansas) in August 1997.  The IRB is expected to be in place during 
the second quarter 1998.  LabOne's other capital asset purchases are 
expected to be consistent with prior years.

LabOne had no short-term borrowings during 1997 and expects to be able 
to fund operations and future dividend payments from a combination of 
cash flow from operations and cash reserves.  Proceeds from the IRB 
will be used to finance the construction of LabOne's new facility.  
Interest on the bond will be based on a taxable seven day variable 
rate which would have been less than seven percent as of March 2, 
1998.  LabOne expects to repay the bond over 11 years at $2.5 million 
per year plus interest.  LabOne's total cash and investments at 
December 31, 1997, were $19.5 million, as compared to $31.9 million at 
December 31, 1996.

In April 1996, Response obtained an unsecured $10 million loan from 
Lab Holdings bearing interest at the rate of prime plus 1%, which 
after August 1, 1996, became convertible at the election of Lab 
Holdings into shares of Response's common stock.  Proceeds of the loan 
were used to finance a practice management affiliation.  The loan was 
exchanged for 909,090 shares of common stock during August 1996.

In October 1996, Response procured a $23.5 million credit facility 
from Lab Holdings to finance acquisitions and for working capital.  On 
February 26, 1997, the $23.5 million loan and accrued interest of 
$664,000 was converted into 3,020,536 shares of Response's common 
stock at a rate of $8 per share.   On July 25, 1997, Lab Holdings 
distributed to its shareholders, as a dividend, all 8,077,392 shares 
of common stock of Response owned by Lab Holdings.  

During 1997, treasury stock issued for exercised options totaled 5,169 
shares.  



TRENDS

The following is an analysis of certain existing trends that have been 
identified as potentially affecting the future financial results.  Due 
to the potential for a rapid rate of change in any number of factors 
associated with the insurance and healthcare laboratory testing 
industries, it is difficult to quantify with any degree of certainty 
LabOne's future volumes, sales or net earnings.

The insurance laboratory testing industry continues to be highly 
competitive.  The primary focus of the competition has been on 
pricing. LabOne continues to maintain its market leadership by 
providing quality products and services at competitive prices. LabOne 
management expects that prices may continue to decline during 1998 due 
to competitive pressures.  This trend may have a material impact on 
earnings from operations.

Currently, there are approximately 13.5 million individual life 
insurance policies sold in the United States annually.  However, 
laboratory services are provided on only approximately 5 million of 
these policy applicants.  During 1996, the FDA approved an oral fluid 
Western blot test as a confirmation for the oral fluid HIV-1 antibody 
test.  The noninvasive nature of oral specimen collection allows for 
lower cost collection, making testing much more affordable on smaller 
face value insurance policies.  Due to the lower collection expense 
associated with oral fluid collection devices, the potential exists 
for an expansion of the testing market.  The total number of insurance 
applicants tested by LabOne increased 22% in 1997 from the prior year.  
Approximately one-half of the increase represented oral fluid HIV 
tested applicants.  Oral fluid tested applicants are expected to 
further increase in 1998.

Effective January 30, 1997, LabOne acquired certain assets, including 
customer lists, of GIB Laboratories, Inc., a subsidiary of Prudential 
Insurance Company of America.  Concurrently, Prudential's Individual 
Insurance Group agreed to use LabOne as its exclusive provider of risk 
assessment testing services.  At the time of the purchase, GIB served 
approximately 5% of the insurance laboratory testing market.

In the clinical division, BlueCross BlueShield of Tennessee has 
selected LabOne to provide routine outpatient laboratory testing 
services for BlueCare members throughout Tennessee effective February 
1, 1998.  BlueCare is BlueCross BlueShield of Tennessee's plan for 
Tenncare participants.  Approximately 350,000 BlueCare members are 
covered by the program.  (LabOne originally announced that the 
BlueCare program covered approximately 425,000 lives.)  To date, 
LabOne's Laboratory Benefit Management programs, including BlueCare 
and the Lab Card Program, have more than 1.8 million lives enrolled 
with more than 300,000 additional lives awaiting implementation.  

LabOne is actively addressing Year 2000 computer concerns.  The 
company has established an oversight committee which includes 
management from all parts of LabOne and meets periodically to review 
progress.  LabOne expects to complete all internal Year 2000 
objectives by the end of 1998 and is assessing the Year 2000 
preparation and contingency plans of its clients and vendors.  Total 
expenses related to this project are not expected to be material.  Lab 
Holdings does not expect compliant problems.




RECENTLY ISSUED ACCOUNTING STANDARDS

Statement of Financial Accounting Standards No. 130, "Reporting 
Comprehensive Income," is effective for fiscal years beginning after 
December 15, 1997.  This standard requires companies to classify items 
of other comprehensive income by their nature in a financial statement 
and display the accumulated balance of other comprehensive income 
separately from retained earnings and additional paid-in capital in 
the equity section of a statement of financial position.

Statement of Financial Accounting Standards No. 131, "Disclosures 
about Segments of an Enterprise and Related Information," is effective 
for fiscal years beginning after December 15, 1997.  Retroactive 
application will be required.  The Company does not expect this 
statement to have a significant effect on segment disclosures.

No other recently issued accounting standards presently exist which 
will require adoption in future periods.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. 

See Item 14(a). 

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE. 

None. 


                             PART III 

ITEM 10. DIRECTORS OF THE REGISTRANT. 

See Cross Reference Sheet, "Documents Incorporated by Reference."

ITEM 11. EXECUTIVE COMPENSATION. 

See Cross Reference Sheet, "Documents Incorporated by Reference."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 
MANAGEMENT.

See Cross Reference Sheet, "Documents Incorporated by Reference."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. 

See Cross Reference Sheet, "Documents Incorporated by Reference."



      Cross Reference Sheet To Documents Incorporated By Reference 

Item 10. Directors and Executive        Proxy Statement relating to 
         Officers of the Company        Annual Meeting of Shareholders
                                        to be held May 14, 1998, under 
                                        the caption "Election of 
                                        Directors - Nominees and 
                                        Directors whose terms expire 
                                        in 1999 and 2000."

Item 11. Executive Compensation         Proxy Statement relating to 
                                        Annual Meeting of Shareholders 
                                        to be held  May 14, 1998, 
                                        under the captions "Election 
                                        of Directors - Compensation of 
                                        Executive Officers."

Item 12. Security Ownership of          Proxy Statement relating to 
         Certain Beneficial             Annual Meeting of Shareholders 
         Owners and Management          to be held May 14, 1998, under 
                                        the captions "Election of 
                                        Directors - Security Ownership 
                                        of Management and Security 
                                        Ownership of Certain 
                                        Beneficial Owners."

Item 13. Certain Relationships          Proxy Statement relating to 
         and Related                    Annual Meeting of Shareholders 
         Transactions                   to be held May 14, 1998, under 
                                        the caption "Election of 
                                        Directors - Certain
                                        Transactions."



                              PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
          FORM 8-K.

(a)(1) Financial Statements                                               
       Independent Auditors' Report                                     
       Consolidated Balance Sheets - December 31, 1997 and 1996          
       Consolidated Statements of Operations -
         Years ended December 31, 1997, 1996 and 1995                    
       Consolidated Statements of Stockholders' Equity - 
         Years ended December 31, 1997, 1996 and 1995                     
       Consolidated Statements of Cash Flows -  
         Years ended December 31, 1997, 1996 and 1995                     
       Notes to Consolidated Financial Statements                     

   (2) Financial Statement Schedule
       II.  Valuation and Qualifying Accounts and Reserves -
              Years ended December 31, 1997, 1996 and 1995                   

       All other schedules are omitted because they are not applicable
       or the information is given in the financial statements or 
       notes thereto.

   (3) Exhibits required by Item 601 of Regulation S-K (see Index to 
       Exhibits in paragraph (c) infra.) 

(b) Reports on Form 8-K.
    None.

(c) Index to Exhibits (Exhibits follow the Schedules);

     2.1   Distribution Agreement, dated December 20, 1996, between
           the Registrant and SLH Corporation (filed as Exhibit 2(a) 
           to SLH Corporation's Form 10/A (Amendment No. 1) filed 
           February 4, 1997 (File No. 0-21911) and incorporated herein 
           by reference).

     2.2   Blanket Assignment, Bill of Sale, Deed and Assumption
           Agreement, dated as of February 28, 1997, between the 
           Registrant and SLH Corporation (filed as Exhibit 2(b) to 
           SLH Corporation's Form 10/A (Amendment No. 1) filed 
           February 4, 1997 (File No. 0-21911) and incorporated 
           herein by reference).

     3.1   Registrant's Articles of Incorporation, as amended (filed 
           as Exhibit 3.1 to Amendment No. 1 to Registrant's 
           Registration Statement on Form S-4, filed April 8, 1988 
           (File No. 33-20298) and incorporated herein by reference).

     3.2   Amendment to Registrant's Articles of Incorporation, 
           effective May 15, 1991, (filed as Exhibit 3(b) to 
           Registrant's Annual Report on Form 10-K for the year ended 
           December 31, 1991 (File No. 0-16946) and incorporated 
           herein by reference).

     3.3   Registrant's Bylaws, as amended (filed as Exhibit 3(c) to
           Registrant's Annual Report on Form 10-K for the year ended
           December 31, 1992 (File No. 0-16946) and incorporated 
           herein by reference). 

     4.1   Form of Rights Agreement dated April 5, 1988, between 
           Registrant and Morgan Shareholder Services Trust Company, 
           as Rights Agent (filed as Exhibit 4.1 to Amendment No. 1 to 
           Registrant's Registration Statement on Form S-4, filed 
           April 8, 1988 (File No. 33-20298) and incorporated herein 
           by reference).

     4.2   Form of Certificate of Serial Designation of Series A 
           Preferred Stock (filed as Exhibit 4.2 to Amendment No. 1 to 
           Registrant's Registration Statement on Form S-4, filed 
           April 8, 1988, (File No. 33-20298) and incorporated herein 
           by reference).

     4.3   Amendment No. 1 to the Rights Agreement, dated November 14, 
           1988, between Registrant and Morgan Shareholder Services 
           Trust Company, as Rights Agent (filed as Exhibit 1 to the 
           Registrant's current report on Form 8-K filed November 18, 
           1988 (File No. 0-16946) and incorporated herein by 
           reference).

     4.4   Amendment No. 2 to the Rights Agreement, dated May 15, 
           1991, between Registrant and First Chicago Trust Company of 
           New York, as Rights Agent (filed as Exhibit 4(d) to 
           Registrant's Annual Report on Form 10-K for the year ended 
           December 31, 1991 (File No. 0-16946) and incorporated 
           herein by reference).

     4.5   Notice and Agreement Respecting Removal of Rights Agent and
           Appointment of Successor Rights Agent (filed as Exhibit 
           4(e) to Registrant's Annual Report on Form 10-K for the 
           year ended December 31, 1991 (File No. 0-16946) and 
           incorporated herein by reference).

    10.1   Registrant's 1997 Directors' Stock Option Plan effective 
           September 17, 1997.***

    10.2   Form of Option Agreement with directors under the 
           Directors' Stock Option Plan.***

    10.3   Form of Indemnification Agreement between Registrant and 
           its directors and corporate/executive officers (filed as 
           Exhibit 10(i) to Registrant's Annual Report on Form 10-K 
           for the year ended December 31, 1989 (File No. 0-16946) and 
           incorporated herein by reference).

    10.4   Services Agreement, dated January 1, 1993, among Registrant 
           and LabOne, Inc., relating to services and other matters 
           among the parties (filed as Exhibit 10.17 to Registrant's 
           Annual Report on Form 10-K for the year ended December 31, 
           1993 (File No. 0-16946) and incorporated herein by 
           reference).

    10.5   Long-Term Incentive Plan of LabOne, Inc., approved May 16, 
           1991 with amendments adopted May 21, 1993 and November 9, 
           1993 (filed as Exhibit 10.21 to Registrant's Annual Report 
           on Form 10-K for the year ended December 31, 1993 (File No. 
           0-16946) and incorporated herein by reference).**

    10.6   Amendment to LabOne's Long Term Incentive Plan, effective
           February 10, 1995 (filed as Exhibit 10.31 to Registrant's 
           Annual Report on Form 10-K for the year ended December 31, 
           1995 (File No. 0-16946) and incorporated herein by 
           reference).**

    10.7   Amendment to LabOne's Long Term Incentive Plan, effective
           May 9, 1997 (filed as Exhibit 10.5 to LabOne, Inc. Annual 
           Report on Form 10-K for the year ended December 31, 1997 
           (File No. 0-15975) and incorporated herein by reference).**

    10.8   LabOne's Stock Plan for non-employee directors (filed as 
           Exhibit 10.23 to Registrant's Annual Report on Form 
           10-K for the year ended December 31, 1994 (File No. 0-
           16946) and incorporated herein by reference).**/***

    10.9   LabOne's Annual Incentive Plan (filed as Exhibit 10.6 to 
           LabOne, Inc. Annual Report on Form 10-K for the year ended 
           December 31, 1997 (File No. 0-15975) and incorporated 
           herein by reference).**

    10.10  Facilities Sharing and Interim Services Agreement, dated as 
           of February 28, 1997, between the Registrant and SLH 
           Corporation (filed as Exhibit 10(a) to SLH Corporation's 
           Registration Statement on Form 10/A (Amendment No. 1) filed 
           February 4,1997 (File No. 0-21911) and incorporated herein 
           by reference).

    10.11  Tax Sharing Agreement, dated as of February 28, 1997, 
           between the Registrant and SLH Corporation (filed as 
           Exhibit 10(b) to SLH Corporation's Registration Statement 
           on Form 10/A (Amendment No. 1) filed February 4, 1997 (File 
           No. 0-21911) and incorporated herein by reference).

    10.12  Sublease and Services Agreement, dated as of June 1, 1997, 
           between Registrant and SLH Corporation.

    11     Statement regarding computation of per share earnings - see 
           Note l of Notes to Consolidated Financial Statements, 
           "Earnings Per Share."

    13     Financial Statements listed under Item 14(a)(1).

    21     Subsidiaries of Registrant (reference is made to Item 1 
           hereof).

    27     Financial Data Schedule - as filed electronically by the
           Registrant in conjunction with this 1997 Form 10-K.

    99.1   Proxy Statement for 1998 Annual Shareholders meeting - To 
           be furnished.

    99.2   SLH Corporation Registration Statement on Form 10 (filed as 
           SLH Corporation's Registration Statement on Form 10/A 
           (Amendment No. 2) on February 12, 1997 (file No. 0-21911) 
           and incorporated herein by reference).

  ** Management Compensatory Plan

 *** Non-Management Director Compensatory Plan

(d)  Not Applicable.



                                SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, Registrant has duly caused this report to be 
signed on its behalf by the undersigned, thereunto duly authorized.

                                     LAB HOLDINGS, INC.
                                     By:  /s/ P. Anthony Jacobs  
                                         -----------------------------
                                            P. Anthony Jacobs    
                                     Title: President, Chief Executive
                                            Officer and Director
                                     Date:  March 20, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons who serve 
Registrant in the capacities and on the dates indicated.


By:  /s/ John H. Robinson, Jr.       By:  /s/ Lan C. Bentsen   
    -----------------------------        -----------------------------
       John H. Robinson, Jr.                Lan C. Bentsen
Title: Chairman of the Board         Title: Director
       and Director                  Date:  March 20, 1998
Date:  March 20, 1998             


By:  /s/ Steven K. Fitzwater
    -----------------------------       
       Steven K. Fitzwater   
Title: Vice President, Chief 
       Financial and Accounting
       Officer, Secretary and
       Director
Date:  March 20, 1998        




                                                 Exhibit 13

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Lab Holdings, Inc.:

We have audited the consolidated financial statements of Lab Holdings, 
Inc. and subsidiaries as listed in Item 14(a)(1). In connection with 
our audits of the consolidated financial statements, we also have 
audited the financial statement schedule as listed in Item 14(a)(2). 
These consolidated financial statements and financial statement 
schedule are the responsibility of the Company's management. Our 
responsibility is to express an opinion on these consolidated 
financial statements and financial statement schedule based on our 
audits.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit 
to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a 
test basis, evidence supporting the amounts and disclosures in the 
financial statements. An audit also includes assessing the accounting 
principles used and significant estimates made by management, as well 
as evaluating the overall financial statement presentation. We believe 
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to 
above present fairly, in all material respects, the financial position 
of Lab Holdings, Inc. and subsidiaries at December 31, 1997 and 1996, 
and the results of their operations and their cash flows for each of 
the years in the three-year period ended December 31, 1997, in 
conformity with generally accepted accounting principles.  Also in our 
opinion, the related financial statement schedule, when considered in 
relation to the basic consolidated financial statements taken as a 
whole, present fairly, in all material respects, the information set 
forth therein.




                                              KPMG Peat Marwick LLP


Kansas City, Missouri
February 20, 1998



LAB HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
---------------------------------------------------------------------
December 31,                                       1997        1996
---------------------------------------------------------------------
                                                     (In thousands)
ASSETS
Current assets: 
  Cash and cash equivalents                   $   22,129       53,328
  Short-term investments                           2,648        6,836
  Accounts and notes receivable                   12,608       10,585
  Current income taxes                             1,400         (724)
  Inventories                                      2,203        1,360
  Real estate available for sale                   3,515          --
  Prepaid expenses and other current assets        2,459        2,239
  Deferred income taxes                            3,386        2,161
                                                ---------------------
      Total current assets                        50,348       75,785
Property, plant and equipment                     10,441       17,371
Investments: 
  Securities                                         --         4,019
  Oil and gas                                        --         1,040
Intangible assets                                 13,058       12,427
Deferred income taxes                                858        5,520
Other assets                                          81        1,723
Net assets of discontinued healthcare business       --        48,432
Net assets of discontinued real estate operations    --        30,466
                                                ---------------------
                                              $   74,786      196,783
                                                =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                            $    3,367        3,736
  Accrued payroll and benefits                     4,530        4,053
  Other accrued expenses                             423        2,162
  Other current liabilities                          303          589
                                                ---------------------
      Total current liabilities                    8,623       10,540
Accrued payroll and benefits                         --           236
Other accrued expenses                               --           250
Other liabilities                                    --           414
                                                ---------------------
      Total liabilities                            8,623       11,440
                                                ---------------------
Minority interests                                 9,476       11,319
                                                ---------------------
Stockholders' equity:
  Preferred stock of $1 par value.
    Authorized 3,000,000 shares; none issued         --           -- 
  Common stock of $1 par value.
    Authorized 24,000,000 shares;
    issued 7,500,000 shares                        7,500        7,500
  Paid-in capital                                  1,772        1,748
  Equity adjustment from foreign
    currency translation                            (544)        (439)
  Retained earnings                               78,103      195,329
                                                ---------------------
                                                  86,831      204,138
  Less cost of 1,010,897 shares of treasury stock
    (1996-1,016,066 shares)                       30,144       30,114
                                                ---------------------
      Total stockholders' equity                  56,687      174,024
                                                ---------------------
Commitments and contingencies                                        
                                                ---------------------
                                              $   74,786      196,783
                                                =====================

See accompanying notes to consolidated financial statements.



LAB HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
---------------------------------------------------------------------
Year Ended December 31,               1997        1996         1995
---------------------------------------------------------------------
                                           (In thousands except
                                            per share amounts)
REVENUES
  Insurance services              $  61,998       50,801       55,862
  Healthcare services                16,928        8,631       12,112
  Other                                 --         2,446        7,272
                                   ----------------------------------
    Total revenues                   78,926       61,878       75,246

COSTS AND EXPENSES
  Insurance services                 26,666       22,625       23,598
  Healthcare services                15,351       10,092       16,104
  Other                                 --         2,771        6,357
  Provision for loss on disposal
    of assets                         6,553          --           --
  Selling, general and
    administrative                   34,765       29,767       36,702
                                   ----------------------------------
Earnings (loss) from operations      (4,409)      (3,377)      (7,515)
  Investment income - net             4,671        5,004        4,119
  Interest expense                      (11)      (1,044)        (107)
  Other income (expense)                 77         (456)      (4,367)
                                   ----------------------------------
Earnings (loss) before income taxes     328          127       (7,870)
                                   ----------------------------------
  Taxes on income (benefits):
    Current                            (429)       3,131       (1,429)
    Deferred                          8,207          670       (5,134)
                                   ----------------------------------
      Total                           7,778        3,801       (6,563)
                                   ----------------------------------
Earnings (loss) before 
  minority interests                 (7,450)      (3,674)      (1,307)
    Minority interests                  405          552          519
                                   ----------------------------------
Loss from           
  continuing operations              (7,855)      (4,226)      (1,826)
    Earnings (loss) from 
      discontinued healthcare
      business                       (2,342)         682        1,078
    Loss from discontinued real
      estate operations                 --        (1,452)      (6,600)
                                   ----------------------------------
NET LOSS                         $  (10,197)      (4,996)      (7,348)
                                   ==================================

Basic and diluted loss per share of common stock:
  Loss from          
    continuing operations        $    (1.21)        (.65)        (.28)
  Earnings (loss) from discontinued
    healthcare business                (.36)         .10          .17
  Loss from discontinued real
    estate operations                    --         (.22)       (1.03)
                                   ----------------------------------
  NET LOSS                       $    (1.57)        (.77)       (1.14)
                                   ==================================

See accompanying notes to consolidated financial statements.



LAB HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
---------------------------------------------------------------------
Year Ended December 31,               1997         1996         1995
---------------------------------------------------------------------
                                              (In thousands)
Common stock:
  Balance, beginning and 
    end of year                  $    7,500        7,500        7,500
                                   ----------------------------------
Paid-in capital:
  Balance, beginning of year          1,748        1,747        1,002
  Exercise of stock options              24            1          745
                                   ----------------------------------
  Balance, end of year                1,772        1,748        1,747
                                   ----------------------------------
Foreign currency translation:
  Balance, beginning of year           (439)        (447)        (561)
  Net change during year               (105)           8          114
                                   ----------------------------------
  Balance, end of year                 (544)        (439)        (447)
                                   ----------------------------------
Retained earnings:
  Balance, beginning of year        195,329      208,098      223,169
  Net loss                          (10,197)      (4,996)      (7,348)
  Dividends* and distributions     (107,029)      (7,773)      (7,723)
                                   ----------------------------------
  Balance, end of year               78,103      195,329      208,098
                                   ----------------------------------
Less treasury stock:
  Balance, beginning of year         30,114       29,814       30,177
  Net issuance pursuant to stock
    option plans (1997-5,169;
    1996-22,873; 1995-82,800)            30          300         (363)
                                   ----------------------------------
  Balance, end of year               30,144       30,114       29,814
                                   ----------------------------------
STOCKHOLDERS' EQUITY             $   56,687      174,024      187,084
                                   ==================================

*Cash dividends per share amounted to $1.20 in 1997, 1996 and 1995.



See accompanying notes to consolidated financial statements.



LAB HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
----------------------------------------------------------------------
Year Ended December 31,                    1997       1996       1995
----------------------------------------------------------------------
                                                (In thousands)
OPERATING ACTIVITIES
Loss from continuing operations      $    (7,855)    (4,226)   (1,826)
Adjustments to reconcile loss from
 continuing operations to net cash
 provided by continuing operations:
  Depreciation and amortization            6,277      8,760    10,192
  Earnings applicable to minority
    interests                                405        552       519
  Provision for loss on disposal
    of assets                              6,553        --        --
  Change in trading portfolio, net         2,645     19,318    (6,339)
  Change in accounts receivable           (2,980)     1,458     4,437 
  Change in accounts payable                 (18)       134      (451)
  Income taxes and other, net              3,491      9,558    (4,110)
                                        -----------------------------
  Net cash provided by continuing
    operations                             8,518     35,554     2,422
  Net cash used by discontinued
    healthcare business                   (1,006)   (32,140)      --
  Net cash provided by discontinued
    real estate operations                   581      9,107     1,196
                                        -----------------------------
  Total cash provided by operations        8,093     12,521     3,618
                                        -----------------------------

INVESTING ACTIVITIES
Sales of investments available for sale    1,350          4        83
Purchases of investments held
  to maturity                            (15,894)   (15,753)  (65,569)
Maturities of investments held 
  to maturity                             18,155     23,395    69,459
Additions to property, plant
  and equipment, net                      (6,683)    (3,252)   (3,040)
Acquisition of assets                     (4,816)       --        --
Oil and gas investments                      --        (351)     (391)
Net increase (decrease) in notes
  receivable                                 --         183    (2,507)
Proceeds from sale of subsidiaries, net      --         --     12,054
Proceeds of securitization                   --         --      1,500
Other, net                                (3,948)      (302)   (3,017)
                                        -----------------------------
  Net cash provided (used) by 
    investing activities                 (11,836)     3,924     8,572
                                        -----------------------------
FINANCING ACTIVITIES
Payments under line of credit
  agreements, net                            --         --     (2,759)
Payment of capital lease                     --         --         (2)
Regular quarterly dividends paid          (7,787)    (7,773)   (7,723)
Cash portion of SLH dividend             (19,590)       --        --
Net issuance of treasury stock pursuant to 
  stock option plans                          (7)      (299)    1,108
                                        -----------------------------
  Net cash used by financing activities  (27,384)    (8,072)   (9,376)
                                        -----------------------------
Effect of foreign currency translation       (72)        12        21
                                        -----------------------------
Net decrease in cash and cash
  equivalents                            (31,199)     8,385     2,835
Cash and cash equivalents at
  beginning of year                       53,328     44,943    42,108
                                        -----------------------------
Cash and cash equivalents at
  end of year                         $   22,129     53,328    44,943
                                        =============================
Supplemental disclosures of cash flow information:
 Cash paid (received) during the year for:
  Interest                            $      934         25       124
                                        =============================
  Income taxes, net                   $    2,676     (3,487)   (1,693)
                                        =============================



See accompanying notes to consolidated financial statements.



LAB HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997, 1996 and 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION
The accompanying consolidated financial statements include the 
accounts of Lab Holdings, Inc. (formerly Seafield Capital Corporation) 
and all majority-owned subsidiaries and joint ventures.  Investments 
in affiliated companies of 20% to 50% in which Lab Holdings, Inc. (Lab 
Holdings) does not have a controlling interest are accounted for by 
the equity method.  All significant intercompany transactions have 
been eliminated in consolidation.  Certain 1996 and 1995 amounts have 
been reclassified for comparative purposes with no effect on net 
earnings.

At December 31, 1997, Lab Holdings' principal asset consists of its 
82% ownership of LabOne, Inc. (LabOne), a publicly-traded company.

In April 1996, Lab Holdings loaned $10 million to its subsidiary, 
Response Oncology, Inc., which was converted into 909,090 shares of 
Response common stock at the election of Lab Holdings in August 1996.  
In October 1996, Lab Holdings provided to Response a $23.5 million 
credit facility to finance acquisitions and for working capital.  This 
credit facility was converted into Response common stock in February 
1997, increasing Lab Holdings' ownership to approximately 67%.

In July 1997, Lab Holdings' Board of Directors declared a dividend to 
Lab Holdings' shareholders of all shares of common stock of Response 
owned by Lab Holdings.  For each shareholder of record on July 11, 
1997, 1.2447625 shares of Response common stock were distributed on 
July 25, 1997 for each share of Lab Holdings common stock outstanding. 
The distribution of all shares of Response stock to Lab Holdings' 
shareholders was effected as a dividend.  The Lab Holdings 
shareholders paid no consideration for any shares of Response stock 
received in the distribution.

Lab Holdings' investment in Response and Response's earnings are shown 
as a discontinued business in the accompanying financial statements.  
See Notes 2 and 15 for additional information.

On March 3, 1997, Lab Holdings distributed to its shareholders all of 
the outstanding shares of common stock of its wholly-owned subsidiary, 
SLH Corporation (SLH).  For each shareholder of record on February 24, 
1997, one share of SLH common stock was distributed for each four 
shares of Lab Holdings common stock owned.  In connection with this 
distribution and pursuant to a Distribution Agreement between Lab 
Holdings and SLH, Lab Holdings transferred its real estate and energy 
businesses and miscellaneous assets and liabilities, including two 
wholly-owned subsidiaries, Scout Development Corporation (Scout) and 
BMA Resources, Inc. (Resources), to SLH.  The spinoff was accounted 
for as a dividend.

Under the Distribution Agreement and Assignment, SLH assumed rights 
and obligations of Lab Holdings with respect to a 1986 lawsuit 
initiated by Lab Holdings' former insurance subsidiary to recover 
costs incurred to remove and replace the facade on the former home 
office building.  Pursuant to the Distribution Agreement and 
Assignment, SLH also assumed from Lab Holdings all contingent tax 
liabilities and rights to refunds and interest relating to any tax 
issues raised for the years 1986-1990.  Management believes that final 
resolution of these matters will not have any impact on the financial 
position or results of operations of Lab Holdings.

In 1992, Lab Holdings' board of directors approved a plan for the 
discontinuance of real estate.  The real estate operations are 
presented as discontinued in the accompanying consolidated financial 
statements.  See Note 15 for additional information.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates 
and assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at the 
date of the financial statements and the reported amounts of revenues 
and expenses during the reporting period.  Actual results could differ 
from those estimates.

CASH AND CASH EQUIVALENTS
Cash and cash equivalents include demand deposits in banks, money 
market investments and overnight investments that are stated at cost, 
which approximates market value.

Certain highly liquid short-term investments previously designated as 
trading securities have been reclassified to cash equivalents to more 
accurately reflect the nature of the investments and to conform with 
the current year presentation.

INVESTMENT SECURITIES
Investment securities consist of equity securities, debt securities 
and debt obligations of the United States government and state and 
political subdivisions.  Short-term investments are securities with 
maturities of less than one year.

The classification of debt and equity securities as trading, available 
for sale or held to maturity is made at the time of purchase.  Trading 
securities are stated at fair value and unrealized holding gains and 
losses are included in operations.  Marketable equity securities and 
all debt securities which are classified as available for sale are 
stated at market value, with unrealized gains and losses, if any, 
excluded from operations and reported in a separate component of 
stockholders' equity.  Securities which Lab Holdings has the intent 
and ability to hold to maturity are stated at amortized cost.

FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of all asset and liability financial 
instruments (for which it is practical to estimate fair values) 
approximate their carrying amounts at December 31, 1997 and 1996.  
Fair value of a financial instrument is defined as the amount at which 
the instrument could be exchanged in a current transaction between 
willing parties.  The company calculates the fair value of financial 
instruments using appropriate market information and valuation 
methodologies.  See note 8 for additional information regarding 
investments for which it is not practical to estimate fair values.

PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is recorded at cost with depreciation 
provided over the useful lives.  Upon sale or retirement, the costs 
and related accumulated depreciation are eliminated from the accounts.  
Any resulting gains or losses are included in the results of 
operations.  See Note 4 for additional information on depreciation.

OIL AND GAS INVESTMENTS
Lab Holdings' oil and gas investments were accounted for using the 
full cost method.  All costs incurred in acquisition and development 
were capitalized.  Depletion was computed on the units of production 
method based on all proved reserves.  All general operating costs were 
expensed as incurred.  The oil and gas investments were included in 
the net assets distributed to SLH.

INTANGIBLE ASSETS
Goodwill is recorded at acquisition as the excess of cost over fair 
value of net assets acquired and is being amortized on a straight-line 
basis over appropriate periods up to twenty years.  On a periodic 
basis, Lab Holdings estimates the fair value of the business to which 
goodwill relates in order to ensure that the carrying value of 
goodwill has not been impaired.

IMPAIRMENT OF LONG-LIVED ASSETS
When facts and circumstances indicate potential impairment, Lab 
Holdings evaluates the recoverability of carrying values of long-lived 
assets using estimates of undiscounted future cash flows over 
remaining asset lives.  When impairment is indicated, any impairment 
loss is measured by the excess of carrying values over fair values.  
During the fourth quarter of 1997, LabOne decided to dispose of its 
office and headquarters building and lab facility, which, net of 
accumulated depreciation, has been classified as real estate available 
for sale.  An impairment loss of approximately $6.6 million related to 
the anticipated sale was recorded.

DISPOSITIONS
In July 1997, Lab Holdings' Board of Directors declared a dividend to 
Lab Holdings' shareholders of all shares of common stock of Response 
owned by Lab Holdings.  The distribution of all shares of Response 
stock to Lab Holdings' shareholders was effected as a dividend.  The 
Lab Holdings shareholders paid no consideration for any shares of 
Response stock received in the distribution.  See Notes 2 and 15 for 
additional information.

On March 3, 1997, Lab Holdings distributed to its shareholders all of 
the outstanding shares of common stock of its wholly-owned subsidiary, 
SLH.  The distribution of all shares of SLH stock to Lab Holdings' 
shareholders was effected as a dividend.  The Lab Holdings 
shareholders paid no consideration for any shares of SLH stock 
received in the distribution.  In connection with this distribution 
and pursuant to a Distribution Agreement between Lab Holdings and SLH, 
Lab Holdings transferred its real estate and energy businesses and 
miscellaneous assets and liabilities, including two wholly-owned 
subsidiaries, Scout and Resources, to SLH.

Lab Holdings sold its 80.1% owned insurance premium finance 
subsidiary, Agency Premium Resource, Inc., during the second quarter 
of 1995.  The sale generated an after-tax gain of $1.5 million.

Lab Holdings completed an asset sale by its 79% owned real estate, 
personal property and sales and use tax consulting subsidiary, 
Tenenbaum and Associates, Inc., during the second quarter of 1995.  
This subsidiary then distributed its assets to shareholders and filed 
for dissolution.  The effect of the sale, distribution and dissolution 
was an after-tax gain of $500,000.

Lab Holdings sold its 80% owned underwriting and policy administration 
services subsidiary, International Underwriting Services, Inc., during 
the third quarter of 1995.  The sale generated an after-tax gain of $1 
million.

Lab Holdings's 74% owned radiopharmaceuticals subsidiary, Pyramid 
Diagnostic Services, Inc. (Pyramid), entered voluntary bankruptcy in 
the fourth quarter of 1995 as a result of an adverse judgment in a 
lawsuit.  Lab Holdings fully reserved its investment in this 
subsidiary and recorded an after-tax loss of $1.2 million.  Lab 
Holdings expects the Pyramid bankruptcy to be finalized in 1998 with 
no further financial consequences to Lab Holdings.

FEDERAL INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax 
consequences attributable to differences between the financial 
statement carrying amounts of existing assets and liabilities and 
their respective tax bases.  Deferred tax assets and liabilities are 
measured using enacted tax rates expected to apply to taxable income 
in the years in which those temporary differences are expected to be 
recovered or settled.  The effect on deferred tax assets and 
liabilities of a change in tax rates is recognized in income in the 
period that includes the enactment date.

OTHER INCOME/(EXPENSE)
The components of "Other income/(expense)" on the Consolidated 
Statements of Operations are as follows:

Year ended December 31,                     1997      1996      1995
----------------------------------------------------------------------
                                                  (In thousands)
Loss on dispositions of subsidiaries    $     --        --     (1,068)
Provision for subsidiary bankruptcy           --        --     (3,382)
Other                                          77      (456)       83
                                           ---------------------------
                                        $      77      (456)   (4,367)
                                           ===========================

EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board (FASB) 
issued Statement of Financial Accounting Standards (SFAS) No. 128, 
"Earnings Per Share," which revised the calculation and presentation 
provisions of Accounting Principles Board Opinion 15 and related 
interpretations.  SFAS No. 128 became effective for the year ended 
December 31, 1997.  Basic earnings per share is computed using the 
weighted average number of common shares and diluted earnings per 
share is computed using the weighted average number of common shares 
and dilutive stock options.  The adoption of this standard did not 
have any significant impact on the Company's reported earnings per 
share.


RECENTLY ISSUED ACCOUNTING STANDARDS

Statement of Financial Accounting Standards No. 130, "Reporting 
Comprehensive Income," is effective for fiscal years beginning after 
December 15, 1997.  This standard requires companies to classify items 
of other comprehensive income by their nature in a financial statement 
and display the accumulated balance of other comprehensive income 
separately from retained earnings and additional paid-in capital in 
the equity section of a statement of financial position.

Statement of Financial Accounting Standards No. 131, "Disclosures 
about Segments of an Enterprise and Related Information," is effective 
for fiscal years beginning after December 15, 1997.  Retroactive 
application will be required.  The Company does not expect this 
statement to have a significant effect on segment disclosures.

No other recently issued accounting standards presently exist which 
will require adoption in future periods.



NOTE 2 - DISPOSITIONS

On March 3, 1997, Lab Holdings distributed to its shareholders all of 
the outstanding shares of common stock of its wholly-owned subsidiary, 
SLH Corporation, on the basis of one share of common stock of SLH for 
each four shares of Lab Holdings common stock held.  In connection 
with this distribution and pursuant to a Distribution Agreement 
between Lab Holdings and SLH, Lab Holdings transferred its real estate 
and energy businesses and miscellaneous assets and liabilities, 
including two wholly-owned subsidiaries, Scout and Resources, to SLH.  
The net assets distributed to SLH totaled approximately $47.9 million 
on the date of distribution and approximately $36 million at December 
31, 1996.  The spinoff was accounted for as a 1997 dividend.

In April 1996, Lab Holdings loaned $10 million to Response which was 
converted into 909,090 shares of Response common stock at the election 
of Lab Holdings in August 1996.  In October 1996, Lab Holdings 
provided to Response a $23.5 million credit facility to finance 
acquisitions and for working capital.  This credit facility was 
converted into Response common stock in February 1997, increasing Lab 
Holdings' ownership to approximately 67%.

In July 1997, Lab Holdings' Board of Directors declared a dividend to 
Lab Holdings' shareholders of all shares of common stock of Response 
owned by Lab Holdings.  For each shareholder of record on July 11, 
1997, 1.2447625 shares of Response common stock were distributed on 
July 25, 1997 for each share of Lab Holdings common stock outstanding.  
The distribution of all shares of Response stock to Lab Holdings' 
shareholders was effected as a dividend.

The Lab Holdings shareholders paid no consideration for any shares of 
Response or SLH stock received in the distributions.  As a result of 
the distributions, Lab Holdings' principal asset consists of its stock 
holdings in LabOne.

NOTE 3 - COMMITMENTS AND CONTINGENCIES

In October 1997, LabOne purchased approximately 54 acres of land at 
Renner Ridge Corporate Park in Lenexa, Kansas.  LabOne is planning to 
construct a 262,000 square foot facility to house all of its 
corporate, laboratory and warehouse operations.  Construction is 
expected to be completed in the early part of 1999.  This project is 
expected to cost approximately $27.5 million and is expected to be 
primarily financed with an industrial revenue bond.

Under the Distribution Agreement and Assignment, SLH assumed the 
rights and obligations of Lab Holdings with respect to the following 
legal matter.

In 1986, a lawsuit was initiated in the Circuit Court of Jackson 
County, Missouri by Lab Holdings' former insurance subsidiary (i.e., 
Business Men's Assurance Company of America) against Skidmore, Owings 
& Merrill ("SOM") which is an architectural and engineering firm, and 
a construction firm to recover costs incurred to remove and replace 
the facade on the former home office building.  Because the removal 
and replacement costs had been incurred prior to the sale of the 
insurance subsidiary, Lab Holdings negotiated with the buyer for an 
assignment of the cause of action from the insurance subsidiary. In 
September 1993, the Missouri Court of Appeals reversed a $5.7 million 
judgment granted in 1992 in favor of Lab Holdings; the Court of 
Appeals remanded the case to the trial court for a jury trial limited 
to the question of whether or not the applicable statute of 
limitations barred the claim.  The Appeals Court also set aside $1.7 
million of the judgment originally granted in 1992.  In July 1996, 
this case was retried to a judge.  On January 21, 1997, the judge 
entered a judgment in favor of Lab Holdings.  The amount of that 
judgment, together with interest is approximately $5.6 million.  
Although the judgment has been appealed, counsel for the Company 
expects that it will be difficult for the defendants to cause the 
judgment to be reversed.  The final outcome is not expected for at 
least another year.  Settlement arrangements with other defendants 
have resulted in payments to plaintiff which have substantially offset 
legal fees and costs to date of approximately $502,000.  Future legal 
fees and costs can not reliably be estimated.  Pursuant to the 
Distribution Agreement, this matter was assigned to SLH Corporation.

In the opinion of management, after consultation with legal counsel 
and based upon current available information, this lawsuit is not 
expected to have a material adverse impact on the consolidated 
financial position or results of operations of Lab Holdings.

Pursuant to the Distribution Agreement, SLH assumed from Lab Holdings 
all of the contingent tax liabilities described below and acquired all 
rights to refunds, plus any interest related to these tax years.  SLH 
also assumed all contingent liabilities and refunds related to any 
issues raised for the years 1986-1990 whose resolution may extend to 
tax years beyond the 1990 tax year.

Lab Holdings received notices of proposed adjustments (Revenue Agent's 
Reports) from the Internal Revenue Service (IRS) with respect to 1986-
1990 federal income taxes.  These notices claimed total federal income 
taxes due for the entire five year period in the approximate net 
amount of $13,867,000, exclusive of interest thereon.

Lab Holdings filed protests regarding the 1986-1990 notices of 
proposed adjustments.  In 1997, Lab Holdings received a formal 
agreement to the issues and the final tax computation from the IRS.  
The agreement provides for a tax refund to SLH of approximately $5.5 
million net of interest costs.  The agreement was approved by 
Congress' Joint Committee on Taxation in January 1998.

In December 1996, the California state auditor sent Lab Holdings an 
audit report covering the 1987-1989 taxable years.  The State of 
California has determined to include, as a "unitary taxpayer," all 
majority owned non-life insurance subsidiaries and joint ventures of 
Lab Holdings.  During 1997, the California Franchise Tax Board sent a 
notice of taxes and interest due for the 1987-1989 years of 
approximately $1.8 million, which was paid.  Pursuant to the 
Distribution Agreement, SLH Corporation assumed all potential tax 
liabilities and interest thereon regarding the California audit for 
the 1987-1989 tax years.



NOTE 4 - PROPERTY, PLANT AND EQUIPMENT AND ACCOUNTS AND NOTES 
RECEIVABLE

A summary of property, plant and equipment is as follows:
                                      Rate of          December 31,
                                   Depreciation       1997     1996
                                  ------------------------------------
                                                      (In thousands)
Property, plant and equipment         3% - 33%    $   43,956   55,318
Less accumulated depreciation                         33,515   37,947
                                                    -----------------
                                                  $   10,441   17,371
                                                    =================

A summary of accounts and notes receivable is as follows:
                                                       December 31,
                                                      1997     1996
                                                    -----------------
                                                      (In thousands)
Accounts receivable                               $   13,626   11,346
Note receivable                                          --       261
Allowance for doubtful accounts                       (1,018)  (1,022)
                                                    -----------------
                                                  $   12,608   10,585 
                                                    =================

The interest rate on the note receivable was 6.7% in 1996.



NOTE 5 - SEGMENT DATA

The following table shows segment information from continuing 
operations:

Year ended December 31,               1997         1996         1995
---------------------------------------------------------------------
                                              (In thousands)
REVENUES:
  Insurance                      $   61,998       50,801       55,862
  Healthcare                         16,928        8,631       12,112
  Other                                 --         2,446        7,272
                                   ----------------------------------
    Total revenues               $   78,926       61,878       75,246
                                   ==================================
OPERATING EARNINGS (LOSS):
  Insurance                      $   17,035       11,138       10,987
  Healthcare                         (9,238)      (9,203)     (11,663)
  Other                                 --          (431)      (3,858)
  General corporate expenses         (5,774)      (4,725)      (7,037)
  Investment income                   4,671        5,004        4,119
  Other income (expense)             (6,355)        (612)        (311)
  Interest expense                      (11)      (1,044)        (107)
                                   ----------------------------------
  Earnings (loss) before income taxes
    and minority interests              328          127       (7,870)
  Income taxes                       (7,778)      (3,801)       6,563
  Minority interests                   (405)        (552)        (519)
                                   ----------------------------------
    Loss from continuing
      operations                 $   (7,855)      (4,226)      (1,826)
                                   ==================================

IDENTIFIABLE ASSETS:
  Insurance                      $   32,848       34,543       36,716
  Healthcare                          8,507        7,345        6,598
  Net assets of discontinued
    healthcare business                 --        48,432       15,362
  Net assets of discontinued
    real estate operations              --        30,466       42,215
  Other                              33,431       75,997       97,127
                                   ----------------------------------
    Total identifiable assets    $   74,786      196,783      198,018
                                   ==================================

Operating earnings (loss) are revenues less expenses other than 
corporate and interest expense, net of intersegment transactions.  
Depreciation and amortization amounts for 1997, 1996 and 1995 were 
$4,329,000, $6,982,000 and $6,854,000, respectively.  Goodwill 
amortization for 1997, 1996 and 1995 was $1,948,000, $1,778,000 and 
$3,338,000, respectively.  Capital expenditures and depreciation and 
amortization expense for the significant segments are as follows:

                                      1997         1996         1995
                                   ----------------------------------
                                              (In thousands)
Capital Expenditures:
  Insurance                      $    3,308        2,558        1,356
  Healthcare                          1,415          668        1,783
  General corporate                   2,553          --           --

Depreciation and amortization:
  Insurance                      $    4,658        3,977        4,821
  Healthcare                          1,585        1,510        2,772



NOTE 6 - INCENTIVE STOCK OPTION PLAN

Lab Holdings has a Directors' Stock Option Plan which provides for the 
granting of non-qualified stock options for not more than 90,000 
shares of the Company's common stock.  The plan entitles each director 
to purchase 15,000 shares at the fair market value at the date of 
grant.  All options have ten year terms and become exercisable as 
follows:  one-third on the first, second and third year anniversary 
dates of the grant.  During 1997, options for 60,000 shares were 
granted.

During 1997, Lab Holdings terminated three Stock Option Plans which 
had provided for Qualified and Nonqualified Stock Options, Stock 
Appreciation Rights (SAR's) and restricted stock awards to key 
employees and directors.  The plans entitled the grantee to purchase 
shares at prices ranging from 75% to 110% of the fair market value at 
date of grant during terms up to ten years.  All options were awarded 
at 100% of fair market value.  SAR's entitled the holder to elect to 
receive the appreciated value in cash.  Restricted stock awards were 
rights to receive or retain shares in payment of compensation earned 
or to be earned.

Additionally, Lab Holdings maintained a Stock Purchase Plan under 
which each participant's contribution was matched at a rate of 50%.  
Lab Holdings common stock was purchased on the open market each month.  
Of the 100,000 shares registered under this plan, 62,904 shares were 
eligible for issuance at December 31, 1996.  During 1997, 3,121 shares 
were issued and this plan was terminated.

The Company accounts for stock options in accordance with the 
provisions of Accounting Principles Board Opinion No. 25 "Accounting 
for Stock Issued to Employees," and related interpretations (APB 25).  
As such, compensation expense is recorded on the date of grant only if 
the current market price of the underlying stock exceeds the exercise 
price. Effective December 31, 1995, the Company adopted Statement of 
Financial Accounting Standards No. 123, "Accounting for Stock Based 
Compensation," (FAS 123) which permits entities to recognize as 
expense over the vesting period the fair value of all stock-based 
awards on the date of grant.  Alternately, FAS 123 allows entities to 
continue to apply the provisions of APB 25 and provide pro forma net 
earnings and pro forma earnings per share disclosures for employee 
stock option grants made in 1995 and future years as if the fair-
value-based method defined in SFAS 123 had been applied.  The Company 
has elected to continue to apply the provisions of APB 25 and provide 
the pro forma disclosure provisions of FAS 123.

A summary of the status of the Company's stock option plan as of 
December 31, 1997, 1996 and 1995 and changes during the years then 
ended is presented below:

                                           Weighted          Options
                            Number of       Average        Exercisable  
                              Shares     Exercise Price    at Year-end
---------------------------------------------------------------------
Outstanding
  December 31, 1994          575,263         23.055          552,422
Exercised                    392,263         23.509 
                            --------
Outstanding
  December 31, 1995          183,000         28.368          173,665
Exercised                    112,915         26.539 
Terminated or forfeited        1,500         29.250 
                            --------
Outstanding
  December 31, 1996           68,585         31.359           68,585
Granted                       60,000         26.500
Exercised                    (68,585)        32.817
                            --------
Outstanding
  December 31, 1997           60,000         26.500              --
                            ========


The following table summarizes information about stock options at 
December 31, 1997.

                  Options outstanding             Options Exercisable
               -------------------------------   ---------------------
                         Weighted                              
                          Average     Weighted                Weighted
                         Remaining    Average                  Average
Exercise      Number    Contractual   Exercise     Number     Exercise
 Price      Outstanding  Life (yrs)    Price     Exercisable    Price
--------  ------------------------------------   ---------------------
$26.50        60,000       10.00      $26.50          --          --


The difference between the per share exercise price and the cost per 
share of the treasury stock issued for stock options exercised 
increased paid-in capital by $24,000 in 1997 and $1,000 in 1996.  

The weighted-average per share fair value of stock options granted 
during 1997 was $6.08 on the date of grant using the Black Scholes 
option-pricing model with the following weighted average assumptions:  
expected dividend yield of 4.5%, risk-free interest rate of 5.5%, 
expected volatility factor of 33.7% and an expected life of four 
years.

Since the Company and its subsidiary, LabOne, apply APB 25 in 
accounting for their plans, no compensation cost has been recognized 
for stock options in the financial statements.  Had the Company and 
LabOne recorded compensation cost based on the fair value at the grant 
date for the stock options under SFAS 123, the Company's pro forma net 
loss would have been $10,599,000, $5,157,000 and $7,407,000 in 1997, 
1996 and 1995, respectively.  Pro forma basic and diluted earnings per 
share would have been $1.63, $.79 and $1.15 in 1997, 1996 and 1995, 
respectively.

Pro forma net earnings reflect only options granted in 1997, 1996 and 
1995.  Therefore, the full impact of calculating compensation cost for 
stock options under SFAS 123 is not reflected in the pro forma net 
earnings amounts presented above because compensation costs are 
reflected over the options' vesting period of five years for the 1997, 
1996 and 1995 options.  Compensation cost for options granted prior to 
January 1, 1995 is not considered.

NOTE 7 - LEASE COMMITMENTS

Included with the assets and liabilities transferred to SLH in the 
Distribution were several operating leases for office space and 
equipment.  LabOne has several noncancelable operating leases, 
primarily for land and buildings, and other commitments that expire 
through 2000.  Rental expense for these operating leases during 1997, 
1996 and 1995 amounted to $529,000, $1,175,000 and $1,323,000, 
respectively.  Because of the relocation of LabOne's facilities, the 
warehouse lease, with scheduled lease payments of $125,000 in 1998, 
has been renewed through February 1999 and is not expected to be 
renewed thereafter.

Future minimum lease payments and other commitments under these 
agreements as of December 31, 1997 are as follows:

                               Year          Amount
                              -------------------------
                                         (In thousands)
                               1998          $  425
                               1999             222
                               2000             120



NOTE 8 - INVESTMENT SECURITIES

A summary of investment securities information relating to quoted 
market values and holding gains and losses at December 31, 1997 and 
1996 is in the following table.

                                       Amount at
                                         Which         
               Amortized    Market      Shown in       
                 Cost       Value       Balance      Holding   Holding
                                         Sheet        Gains     Losses
----------------------------------------------------------------------
                                     (In thousands)
December 31, 1997
-----------------

Held to Maturity
----------------
Obligations of states
  and political
  subdivisions $    502          501          502        --          1
Canadian 
  government
  notes             703          703          703        --         --
                ------------------------------------------------------
               $  1,205        1,204        1,205        --          1
                ======================================================

At December 31, 1997, all debt securities will mature within one year.


December 31, 1996
-----------------

Available for Sale
------------------
Preferred
  stock        $  3,515        3,515        3,515        --         --
                ======================================================

Held to Maturity
----------------
Obligations of states
  and political
  subdivisions $  2,506        2,500        2,506        --        (6)
Canadian 
  government
  notes             746          746          746        --         --
                ------------------------------------------------------
               $  3,252        3,246        3,252        --        (6)
                ======================================================

Information about proceeds from sales of available for sale securities 
and the gross realized gains and losses on those sales is summarized 
in the following table.  Cost is determined by specific identification 
for computing realized gains and losses.

Year ended December 31,                1997         1996         1995
----------------------------------------------------------------------
                                              (In thousands)
  Proceeds                        $   4,365            3           83
                                    ==================================
  Gross realized gains            $   3,015          --            34
                                    ==================================
  Gross realized losses                 --           (1)           (3)
                                  $ ==================================

Trading securities primarily include United States treasury securities 
and common stock and totaled approximately $1.4 million and $4 million 
at December 31, 1997 and 1996, respectively.  The changes in net 
unrealized holding gains and losses on trading securities that have 
been included in operations are losses of $213,000, $7,000 and 
$485,000 for the years ended December 31, 1997, 1996 and 1995, 
respectively.

Included in the preferred stock available for sale at December 31, 
1996 was an investment in Oclassen Pharmaceuticals, Inc. with a 
carrying value of $2.5 million.  Oclassen was a privately owned 
pharmaceutical manufacturer which entered into an agreement and plan 
of merger with a wholly-owned subsidiary of Watson Pharmaceuticals, 
Inc. (Watson), a publicly traded company.  The merger was approved by 
stockholders on February 26, 1997 and resulted in Lab Holdings owning 
approximately 184,000 shares of Watson.  Lab Holdings sold 100,000 
shares of Watson on February 28, 1997 resulting in a gain of $3 
million.  The remaining 84,000 shares were transferred to SLH as part 
of the Distribution.  The other preferred stock investment at December 
31, 1996 was Norian Corporation, a privately owned developer of 
proprietary bone substitute technology with a carrying value of 
$1,015,000.  There was no public market for this investment and it 
also was transferred to SLH as part of the Distribution.

At December 31, 1997, based on the market price of publicly traded 
shares of LabOne, the Company's 82% owned subsidiary, pretax 
unrealized gains of approximately $138 million ($21.27 per share) on 
this investment were not reflected in either Lab Holdings' book value 
or stockholders' equity.



NOTE 9 - INCOME TAXES

Lab Holdings and those subsidiaries that are eligible file a 
consolidated U.S. federal income tax return.

During 1995, Lab Holdings generated approximately $6.6 million, in 
current capital losses that exceeded capital gains.  In 1997, Lab 
Holdings utilized approximately $5 million of these losses after 
netting current year capital gains and losses.  The remaining losses 
expire in the year 2001.  When it becomes more likely than not that a 
deferred tax asset will not be realized, a valuation allowance is 
accrued against that deferred tax asset.

The components of the provision (benefit) for income taxes on income 
from continuing operations are as follows:

Year Ended December 31,               1997         1996         1995
---------------------------------------------------------------------
                                              (In thousands)
Current:
  Federal                        $   (1,372)       1,722       (1,785)
  State                                 637        1,150          186
  Foreign                               306          259          170
                                   ----------------------------------
                                       (429)       3,131       (1,429)
                                   ----------------------------------
Deferred:
  Federal                             7,718          104       (4,203)
  State                                 486          434       (1,025)
  Foreign                                 3          132           94
                                   ----------------------------------
                                      8,207          670       (5,134)
                                   ----------------------------------
                                 $    7,778        3,801       (6,563)
                                   ==================================

The reconciliation of income tax attributable to continuing operations 
computed at the federal statutory tax rate (34%) to income tax expense 
(benefit) is as follows:

Year Ended December 31,               1997         1996         1995
---------------------------------------------------------------------
                                              (In thousands) 
Computed expected tax
  expense(benefit)               $      111           43       (2,676)
State income taxes, net of federal 
  benefit and state valuation 
    allowance changes                   741        1,045         (564)
Goodwill amortization                   664          604        1,118
Tax exempt interest and dividends       (19)         (45)        (137)
Tax benefits not available for
  subsidiary losses                      --          276          309
Losses on sale of subsidiaries           --           --       (4,239)
Deferred tax on unremitted earnings
  of foreign subsidiaries                --           --          175
Foreign taxes on repatriation of 
  foreign source income                  --          219           --
Other, net                             (324)        (171)        (518)
Increase in federal valuation 
  allowance, and write-off of 
  deferred tax assets                 6,533        1,716           --
Utilization of federal net
  operating loss                         --           --         (115)
Foreign tax in excess of U.S. rate       72          114           84
                                   ----------------------------------
Actual income tax expense
  (benefit)                       $   7,778        3,801       (6,563)
                                   ==================================

The significant components of deferred income tax assets and 
liabilities are as follows:

December 31,                                       1997         1996
---------------------------------------------------------------------
                                                      (In thousands)
Current deferred income tax assets (liabilities):
Valuation allowances on
  investments and real estate                   $  2,654           14
Allowance on accounts receivable                     380          402
Excess book expense accruals                         341          513
State income tax deficiency                           --          248
Interest accrual on state income tax                  --          382
Other                                                 11          516
State net operating loss
  carryforwards                                       --        1,017
                                                ---------------------
Gross current deferred income
  tax assets                                       3,386        3,092
Current valuation allowance                           --         (931)
                                                ---------------------
Net current deferred income
  tax assets                                       3,386        2,161
                                                ---------------------

Non-current deferred income tax assets (liabilities):
Valuation allowances                                  --        2,114
Excess book (tax) expense accruals                    --          408
Excess book (tax)partnership expenses                 --          192
Excess book (tax) oil and gas expenses                --          519
Excess book (tax) depreciation and
  amortization                                       386          238
Alternative minimum tax credit                       577          293
Other                                                (81)          (7)
Federal capital loss carryforwards                   431        2,953
Federal net operating loss
  carryforwards                                      524        1,050
State net operating loss
  carryforwards & capital losses                   1,399          254
                                                ---------------------
Gross non-current deferred
  income tax assets                                3,236        8,014
Valuation allowance for non-current
  deferred income tax assets                      (2,378)      (2,494)
                                                ---------------------
Net non-current deferred
  income tax assets (liabilities)                    858        5,520
                                                ---------------------
Net deferred income tax
  assets (liabilities)                        $    4,244        7,681
                                                =====================


The valuation allowance as of January 1, 1996 was approximately 
$1,178,000.  The valuation allowance increased during 1996 by 
$2,247,000 and decreased during 1997 by approximately $1,047,000. 



NOTE 10 - INTANGIBLE ASSETS

The cost and accumulated amortization of intangible assets are as 
follows:

December 31,                                        1997        1996
----------------------------------------------------------------------
                                                      (In thousands)
Goodwill - excess of cost over fair value
    of net assets acquired                      $   27,070      24,246
Less accumulated amortization                       14,229      12,558
                                                  --------------------
                                                    12,841      11,688
                                                  --------------------
Laboratory patent, antibodies, antigens,
    and nicotine screens                             8,000       8,000
Less accumulated amortization                        7,783       7,261
                                                  --------------------
                                                       217         739
                                                  --------------------
Intangible assets, net of accumulated
  amortization                                  $   13,058      12,427
                                                  ====================

Effective January 30, 1997, LabOne acquired certain assets, including 
customer lists, of GIB Laboratories, Inc., a subsidiary of Prudential 
Insurance Company of America, for $4.8 million.  Concurrently, 
Prudential's Individual Insurance Group agreed to use LabOne as its 
exclusive provider of risk assessment testing services.  The excess 
costs over fair value of GIB Laboratories, Inc. assets acquired was 
$4.1 million.

Any excess of the cost over the fair value of the net assets purchased 
is being amortized on a straight line basis over 15 to 20 years. The 
laboratory patent process is being amortized over 184 months from date 
of acquisition.



NOTE 11 - FOREIGN OPERATIONS

The following summarizes financial information for LabOne's wholly-
owned Canadian subsidiary, Lab One Canada Inc.:

Year ended December 31,                   1997        1996       1995
----------------------------------------------------------------------
                                                 (in thousands)

     Revenues                            $6,565       6,380      6,224
     Operating earnings                     645         719        289
     Total assets                         3,193       2,668      5,747



NOTE 12- EARNINGS PER SHARE

There were no adjustments to the loss available to common stockholders 
used in the computation of basic and diluted loss per share for all 
years presented.

The weighted average common shares outstanding were used to calculate 
both the basic and diluted loss per share because of the Company's 
loss from continuing operations for all years presented.  The 
computation of diluted loss per share did not assume the exercise of 
employee stock options because to include the common share equivalents 
would have been antidilutive.  Common share equivalents would have 
been 1,459, 10,939 and 57,291 for 1997, 1996 and 1995, respectively.



NOTE 13- RELATED PARTY TRANSACTIONS

The Company has entered into an agreement with SLH whereby SLH will 
provide accounting and administrative services and record storage 
space for Lab Holdings.  Under this agreement, Lab Holdings will pay 
$75,000 annually for these services and storage space.

During 1997, Lab Holdings purchased certain common stock investments 
for its trading portfolio for a total purchase price of approximately 
$1.2 million.  At the same time, SLH sold an identical number of 
shares of these securities.  These sales were accomplished through 
stock brokers at market rates.



NOTE 14 - BENEFIT PLANS

Effective December 31, 1996, Lab Holdings terminated its 401(k) 
savings plan and its money purchase pension plan.  Lab Holdings and 
participating subsidiaries made matching contributions to the 401(k) 
savings plan of $43,000 for 1996 and $109,000 for 1995.  Matching 
contributions to the money purchase pension plan by Lab Holdings and 
participating subsidiaries were $100,000 for 1996 and $143,000 for 
1995.

In 1997, Lab Holdings terminated its stock purchase plan.  Matching 
contributions for this plan amounted to $32,000, $44,000 and $39,000 
for the years ended December 31, 1997, 1996 and 1995, respectively.

LabOne maintains a profit sharing plan qualifying under Section 401(k) 
of the Internal Revenue Code.  LabOne also has a defined contribution 
plan.  LabOne contributed $1,980,000, $1,769,000 and $1,675,000 to the 
plans for the years ended December 31, 1997, 1996 and 1995, 
respectively.



NOTE 15- DISCONTINUED OPERATIONS

Operations of Discontinued Healthcare Business

In July 1997, Lab Holdings' Board of Directors declared a dividend to 
Lab Holdings' shareholders of all shares of common stock of Response 
owned by Lab Holdings.  Therefore, the activities of Response have 
been presented as discontinued operations.

A summary of the discontinued healthcare business follows:

                          Seven Months Ended   Year Ended December 31,
                             July 31, 1997        1996         1995
---------------------------------------------------------------------
                                              (In thousands)

Revenues                    $   50,007           67,353       44,298
                               =====================================
Earnings before income tax  $    1,579              931        1,078
Income tax                       3,921              249          --
                               -------------------------------------
Net earnings (loss)         $   (2,342)             682        1,078
                               =====================================

Net Assets of the Discontinued Healthcare Business

A summary of the net assets of the discontinued healthcare business 
follows:

                                                    December 31, 1996
---------------------------------------------------------------------
                                                       (In thousands)
Assets
  Current assets                                       $   31,718
  Management service agreements                           101,963
  Other non-current assets                                 13,306
                                                          -------
   Total assets                                           146,987
                                                          -------

Liabilities
  Current liabilities                                      16,674
  Notes payable                                            39,611
  Deferred tax liability                                   25,127
  Other non-current liabilities                               498
  Minority interests                                       16,645
                                                          -------
  Total liabilities                                        98,555
                                                          -------
Net Assets                                             $   48,432
                                                          =======


Operations of Discontinued Real Estate Segment

In 1992, Lab Holdings' board of directors approved a plan to 
discontinue real estate operations.  On March 3, 1997, Lab Holdings 
transferred its real estate assets to its wholly-owned subsidiary, SLH 
Corporation, in connection with the distribution of all of the 
outstanding shares of SLH to Lab Holdings shareholders.

A summary of discontinued real estate operations follows:

Year Ended December 31,                            1996         1995
---------------------------------------------------------------------
                                                     (In thousands)

Revenues                                      $   16,365       11,486
                                                 ====================
Loss                                              (2,200)     (10,000)
Income tax benefits                                 (748)      (3,400)
                                                 --------------------
Net loss                                      $   (1,452)      (6,600)
                                                 ====================

Net Assets of Discontinued Real Estate Segment

A summary of the net assets of the discontinued real estate operations 
follows:

                                                     December 31, 1996
----------------------------------------------------------------------
                                                        (In thousands)
Assets
  Current assets                                        $      264
  Real estate - current                                      1,223
  Real estate - non-current                                 24,202
  Other non-current assets                                   6,645
                                                           -------
   Total assets                                             32,334
                                                           -------

Liabilities
  Current liabilities                                        1,868
                                                           -------
Net Assets                                              $   30,466
                                                           =======

Included in current liabilities is a note payable of $1.2 million.  
The Company was also obligated under recourse debt (with an unpaid 
balance of $6,170,000 at December 31, 1996) of an affiliate accounted 
for on the equity method.



NOTE 16- QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized 1997 quarterly financial data is as follows:

                             Mar. 31,   Jun. 30,   Sep. 30,   Dec. 31,
Quarter Ended                  1997       1997       1997       1997
----------------------------------------------------------------------
                              (In thousands except per share amounts)

Revenues                   $  17,740     20,308     19,728     21,150
                             ========================================

Earnings (loss) from
  continuing operations    $  (2,821)    (4,286)     1,333     (2,081)
Earnings (loss) from
  discontinued healthcare
  business                       604     (2,946)       --         --
                             ----------------------------------------
Net earnings (loss)        $  (2,217)    (7,232)     1,333     (2,081)
                             ========================================

Basic and diluted earnings (loss) per share:
Earnings (loss) from
  continuing operations    $    (.43)      (.66)       .21       (.32)
Earnings (loss) from
  discontinued healthcare
  business                       .09       (.45)        --         --
                             ----------------------------------------
Net earnings (loss)        $    (.34)     (1.11)       .21       (.32)
                             ========================================

Cash dividends paid
  per share                $     .30        .30        .30        .30
                             ========================================
Stock prices:
  High                     $  42 1/8     35 3/4     35 3/4     26 1/2
  Low                      $  32 1/2     31 3/4     23         20    


Summarized 1996 quarterly financial data is as follows:

                             Mar. 31,   Jun. 30,   Sep. 30,   Dec. 31,
Quarter Ended                  1996       1996       1996       1996
----------------------------------------------------------------------
                              (In thousands except per share amounts)

Revenues                   $  13,294     15,837     15,406     17,341
                             ========================================

Earnings (loss) from
  continuing operations    $    (321)      (163)       284     (4,026)
Earnings (loss) from
  discontinued healthcare
  business                       207        349        413       (287)
Loss from discontinued real
  estate operations              --         --         --      (1,452)
                             ----------------------------------------
Net earnings (loss)        $    (114)       186        697     (5,765)
                             ========================================

Basic and diluted earnings (loss) per share:
Earnings (loss) from
  continuing operations    $    (.05)      (.02)       .04       (.62)
Earnings (loss) from
  discontinued healthcare
  business                       .03        .05        .07       (.05)
  Loss from discontinued real
    estate operations             --         --         --       (.22)
                             ----------------------------------------
Net earnings (loss)        $    (.02)       .03        .11       (.89)
                             ========================================

Cash dividends paid
  per share                $     .30        .30        .30        .30
                             ========================================
Stock prices:
  High                     $  38         39 1/2     37 3/4     39 1/2
  Low                      $  33 1/2     36         33 1/2     33 7/8

The 1996 fourth quarter loss includes a $750,000 accrual for estimated 
state income tax and $1 million of estimated interest expense as a 
result of a California franchise tax audit of prior years.  Also 
included in the 1996 fourth quarter loss is a net increase in deferred 
income tax valuation allowances of $1.7 million.

Stock prices shown above have not been adjusted to reflect effects of 
the SLH and Response distributions.  See Note 15 for a description of 
discontinued operations which affected the results of operations for 
the quarters shown above.  Quarterly earnings (loss) per share amounts 
may not add to the annual earnings (loss) per share amounts due to the 
effect of common stock equivalents and the timing of treasury stock 
purchases and net earnings (loss).



                   LAB HOLDINGS, INC. AND SUBSIDIARIES
                              Schedule II
             Valuation and Qualifying Accounts and Reserves
-------------------------------------------------------------------
                                  Additions
                              -----------------
                              Charged   Charged
                  Balance at  to Costs to Other             Balance at
                   Beginning    and    Accounts-              End of
Description        of Year    Expenses Describe  Deductions*   Year
----------------------------------------------------------------------
                                  (In thousands)
Year ended December 31, 1997
Accounts and notes receivable - 
    allowance for
    doubtful
    accounts       $ 1,022      571      --           575      1,018

Year ended December 31, 1996
Accounts and notes receivable - 
    allowance for
    doubtful
    accounts       $ 1,234      717      --           929      1,022

Year ended December 31, 1995
Accounts and notes receivable - 
    allowance for
    doubtful
    accounts       $   702      830      --           298      1,234



* Uncollectible accounts written-off