UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D. C.  20549
                             FORM 10-K

(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, 1998
                                  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:  $104,231,217 (based on closing price as of 
March 5, 1999)

Number of shares outstanding of only class of Registrant's common 
stock as of March 5, 1999:  $1 par value common - 6,489,103

Documents incorporated by reference:
No documents listed on the cover of Form 10-K are incorporated 
herein.  



                               PART I.

ITEM 1. BUSINESS.

Background.

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 that is primarily engaged in the 
business of managing its investment in LabOne, Inc.  At December 31, 
1998, LabOne was 80.5% owned by the Registrant.  LabOne provides 
laboratory testing services on a world-wide basis for insurance risk 
appraisal, clinical use in the healthcare industry and employee 
screening for substance abuse

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).  SLH is now known as Syntroleum Corporation.  See Item 7 
and Notes to Consolidated Financial Statements for additional 
information.

Lab Holdings had a majority ownership position in Response.  Response 
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 1997 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.

In 1997, Lab Holdings entered into an agreement with SLH whereby SLH 
provided accounting and administrative services and record storage 
space for Lab Holdings.  Under this agreement, Lab Holdings paid 
$75,000 annually for these services and storage space.  On August 7, 
1998, SLH merged with Syntroleum Corporation and changed its name to 
Syntroleum Corporation.  Effective with this merger, Lab Holdings 
terminated its 1997 services agreement with SLH and entered into a 
facilities sharing agreement with Syntroleum whereby Syntroleum 
provides office facilities and record storage space in exchange for 
Lab Holdings' personnel providing services related to the historical 
information of SLH and its subsidiaries.

Proposed Merger.

On March 8, 1999, Lab Holdings and its subsidiary, LabOne, announced 
that the Boards of Directors of both companies had approved an 
agreement to merge the two companies.  

Under the merger agreement, Lab Holdings name will be changed to 
LabOne, Inc., its management will consist of LabOne management and its 
board will consist of nine of the current LabOne directors as well as 
three new independent non-management directors.

Stockholders of Lab Holdings will have each of their Lab Holdings 
shares split immediately before the merger into 1.5 shares.  
Stockholders of LabOne, other than Lab Holdings, may elect to have 
each of their existing LabOne shares exchanged for one share of the 
combined company or $12.75 in cash or a combination of cash and 
shares.  However, if the cash election shares exceed a cash limit of 
$16.6 million (approximately 50% of eligible shares), then the cash 
will be allocated on a pro rata basis among the cash election shares.

Lab Holdings now owns 80.5% of LabOne.  If none of the LabOne 
stockholders elect to receive cash, Lab Holdings stockholders will own 
approximately 78.9% of the combined company and stockholders of 
LabOne, other than Lab Holdings, will own about 21.1% of the combined 
company after the merger.

As reported in the Lab Holdings Report on Form 8-K dated March 7, 
1999, the combination of the two companies is designed to position 
LabOne so that it may continue its growth both internally and by 
acquisition as it implements LabOne's diversification strategy.  This 
will also allow Lab Holdings stockholders to enjoy the benefits of a 
direct investment in LabOne and its excellent management team while 
eliminating duplicate holding company management and administrative 
costs.

The merger is expected to close in June or July following the 
satisfaction of a number of closing conditions.  These include 
approval by the holders of two-thirds of the outstanding Lab Holdings 
shares and a majority of the shares voted by LabOne stockholders other 
than Lab Holdings and its affiliates.  Financing must also be obtained 
sufficient to satisfy cash elections after the use of available cash 
of LabOne and Lab Holdings.  Stockholder meetings to vote on the 
proposed merger will be scheduled as soon as a registration statement 
becomes effective with the Securities and Exchange Commission and 
proxy materials are finalized.  Lab Holdings expects to file the 
registration statement in April.

The offering of Lab Holdings common stock in the merger will only be 
made by means of the Joint Proxy Statement/Prospectus.  That document 
will contain detailed information about the proposed merger.

The Lab Holdings Report on Form 8-K, dated March 7, 1999, which is 
incorporated herein by reference, includes a copy of the Merger 
Agreement and the text of the press release announcing the merger.

Employees.

Lab Holdings had three full time and two part time employees as of 
December 31, 1998.  None of the employees is represented by a labor 
union and Lab Holdings believes its relations with employees are good.

Subsidiaries.

The following list shows the Registrant and each subsidiary 
corporation of which Registrant owned a majority interest at December 
31, 1998, 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)                                    80.5%
        Lab One Canada Inc.  (Canada)                            100%
        Systematic Business Services, Inc. (Missouri)            100%

Forward Looking Statements.

This Annual Report on Form 10-K may contain "forward-looking 
statements," including, but not limited to: projections of revenues, 
income or loss, capital expenditures, the payment or non-payment of 
dividends and other financial items, statements of plans and 
objectives, statements of future economic performance and statements 
of assumptions underlying such statements.  Forward-looking statements 
involve known and unknown risks and uncertainties.  Many factors could 
cause actual results to differ materially from those that may be 
expressed or implied in such forward-looking statements, including, 
but not limited to, the volume and pricing of laboratory tests 
performed by LabOne, competition, the extent of market acceptance of 
LabOne's testing services in the healthcare and substance abuse 
testing industries, market acceptance of the Lab Card program, intense 
competition, the loss of one or more significant customers, general 
economic conditions and other factors detailed from time to time in 
Lab Holding's reports and registration statements filed with the 
Securities and Exchange Commission, including Lab Holding's Current 
Report on Form 8-K dated October 23, 1998, which is incorporated 
herein by reference.


               INFORMATION CONCERNING LABONE, INC.

Information concerning LabOne, Inc. has been obtained from its Form 
10-K for the year ended December 31, 1998.

The Registrant's subsidiary, LabOne, Inc., was 80.5% owned by the 
Registrant and 19.5% publicly held at December 31, 1998.  LabOne is a 
publicly-traded stock (NASDAQ-LABS).  LabOne provides laboratory and 
investigative services for the insurance industry, clinical testing 
services for the healthcare industry and substance abuse testing 
services for employers.  LabOne, together with its wholly-owned 
subsidiaries, Lab One Canada Inc. and Systematic Business Services, 
Inc. (SBSI), hereinafter collectively referred to as LabOne, is the 
largest provider of life insurance laboratory testing services in the 
United States and Canada.  See Notes to Consolidated Financial 
Statements for financial information regarding foreign operations. 

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. 

Effective October 30, 1998, LabOne acquired Systematic Business 
Services, Inc., a Missouri corporation.  SBSI provides telephone 
inspections, motor vehicle reports, attending physician statements, 
and claims investigation services to life and health insurers 
nationwide.

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 Cardr, a Laboratory 
Benefits Management (LBM) program.

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.

Services Provided by LabOne

LabOne - Insurance Services:

Insurance companies require an objective means of evaluating the 
insurance risk posed by policy applicants in order to establish the 
appropriate level of premium payments or to determine whether to issue 
a policy.  Because decisions of this type are based on statistical 
probabilities of mortality and morbidity, insurance companies 
generally require 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 
insurance companies 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).  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.  
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.  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.

In association with Lincoln National Risk Management, LabOne provides 
electronic data collection services and software to enable insurance 
companies to receive data directly into their underwriting systems.  
LabOne offers LabOne NET, a combination network/software product that 
provides a connection for insurance underwriters for ordering and 
delivery of risk assessment information such as laboratory results, 
motor vehicle reports and other applicant information.  LabOne handles 
paramedical examination paperwork and assist with administration of 
data for insurance underwriting.  Additionally, LabOne can obtain 
attending physician statements, telephone inspections, motor vehicle 
reports, and perform claims investigation through its subsidiary, 
SBSI.

LabOne - Clinical Services:

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(registered trademark) Program as a 
vehicle 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.  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 has several exclusive arrangements with Managed Care 
Organizations (MCO's).  The two most significant are Principal 
Healthcare of Kansas City and BlueCross BlueShield of Tennessee.  With 
these arrangements, LabOne contracts with the MCO, and they direct all 
testing for their members through LabOne.

LabOne - Substance Abuse Testing Services:

LabOne markets substance abuse testing to large companies, third party 
administrators and occupational health providers. Certification by 
SAMHSA enables LabOne to offer substance abuse testing services to 
federally regulated industries.

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.

LabOne - Segment Information

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

                               Year ended December 31,
                         1998             1997            1996       
                      ------------    ------------    ------------ 
                                (Dollars in thousands)

Insurance             $ 69,149  68%     $61,998  79%    $50,801   85%
Clinical                18,600  18%       7,512   9%      3,942    7%
Substance abuse         14,478  14%       9,416  12%      4,689    8%
                       -------           ------          ------
   Total              $102,227          $78,926         $59,432
                       =======           ======          ======

(See Note 4 of Notes to Consolidated Financial Statements for 
operating income and identifiable assets by segment.)

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

The objective of the regulatory affairs 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 500 sample kits are prepared and 
submitted anonymously each month.  These samples have at least 15 
different indicators each representing over 7,500 challenges to the 
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.

Even though only a small portion of LabOne's business encompasses fee-
for-service Medicare/Medicaid, LabOne has appointed a Chief Compliance 
Officer and nine Co-Compliance Officers.  Additionally, LabOne
has developed the LabOne Compliance Plan, based on the Model 
Compliance Plan recommended by the Office of Inspector General (OIG) 
of the Department of Health and Human Services to ensure compliance 
with anti-fraud and abuse laws and rules governing federally-financed 
reimbursement for lab testing services.

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.

Congress recently enacted the Health Insurance Portability and 
Accountability Act of 1996.  As a transmitter of health information in 
electronic form, LabOne will be required to maintain administrative, 
technical and physical safeguards to protect the integrity and 
confidentiality of healthcare information against unauthorized uses or 
disclosures.  HIPAA will also require LabOne to convert healthcare 
information to electronic form that had previously been required under 
state law to be maintained in paper form.  Compliance with HIPAA 
regulations may be required as early as the fall of 2001.

LabOne - Sales and Marketing 

LabOne's client base 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.

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.

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 LabOne's ability to 
offer multiple reporting methods, next flight out options, dedicated 
client service representatives and rapid reporting of results.

LabOne - Competition

LabOne believes that the insurance laboratory testing market in the 
United States and Canada is approximately a $130 million industry.  
LabOne currently services more than 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 laboratory competitors, Osborn Laboratories, Inc. and 
Clinical Reference Laboratory.

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 1999.  LabOne continues to develop innovative data management 
services that differentiate its products from competitors.  These 
services enable LabOne's clients to expedite the underwriting process, 
saving time and reducing underwriting costs.

The outpatient clinical laboratory testing market is a $20 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 through the use of Lab Card and the establishment of 
exclusive arrangements to provide laboratory services with large 
groups and managed care entities.

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.

LabOne competes in the substance abuse testing market nationwide.  
There are presently 71 laboratories that are SAMHSA certified.  
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.  LabOne's focus is fast 
turnaround with high quality, low cost service.

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,
                               1998         1997*          1996 
                               ----         ----           ----
                                        (In millions)

Sales:
   United States              $95.7          72.4          53.1
   Canada                       6.5           6.6           6.4

Operating Profit:
   United States               14.2           2.0           2.4
   Canada                       0.3           0.6           0.7

Identifiable Assets:
   United States               83.8          56.8          62.1
   Canada                       2.8           3.2           2.7

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

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 1, 1999, LabOne had 895 employees, including 23 part-time 
employees, representing an increase of 230 employees from the same 
time in 1998.  The addition of SBSI accounts for approximately 65% of 
the increase.  None of LabOne's employees are represented by a labor 
union.  LabOne believes its relations with employees are good.



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 
its 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.  On August 7, 1998, SLH 
merged with its subsidiary, Syntroleum Corporation, and changed its 
name to Syntroleum Corporation.  Effective with this merger, 
Registrant terminated its previous services agreement with SLH and 
entered into a facilities sharing agreement with Syntroleum whereby 
Syntroleum provides approximately 3,400 square feet of office 
facilities and record storage space in exchange for Registrant's 
personnel providing services related to the historical information of 
SLH and its subsidiaries.  The office is located at 5000 W. 95th 
Street, Suite 260, Shawnee Mission, Kansas.  The term of the lease 
expires on April 30, 2000.  See Items 1 and 7 and Notes to 
Consolidated Financial Statements for additional information regarding 
the SLH distribution.  

On December 26, 1998, LabOne started moving into its new 268,000 
square foot, custom-designed facility located in Lenexa, Kansas, 
approximately 15 miles from Kansas City, Missouri.  This facility 
consolidates LabOne's laboratory, administrative and warehouse 
functions into one building.  The facility is owned by LabOne and is 
financed through $20 million in industrial revenue bonds issued by the 
City of Lenexa, Kansas in September 1998.  The testing laboratory has 
certain enhancements that improve the efficiency of operations.  
Conveyor systems transport inbound test kits from the receiving area 
to the laboratory and remove waste after the opening process.  All 
automated testing equipment requiring purified water is linked 
directly to a centralized water-purification system.  Over 50,000 
square feet of raised flooring allows laboratory instruments and PC's 
to be arranged or moved quickly and easily.  The security system 
includes proximity card readers to control access and a ceiling 
detector system to prevent foreign substances from being thrown into 
the laboratory.  In addition, three diesel generators and a UPS 
battery system are on-line in the event of electrical power shortage.  
These back-up power sources allow specimen testing and data processing 
to continue until full power is restored, thus assuring LabOne's 
clients of continuous laboratory operation.

SBSI utilizes two facilities in Independence, Missouri under five year 
leases expiring in 2003.  LabOne leases ten locations in Northern 
California and nine in the Midwest which serve as LabOne Service 
Centers (LSC's).  These facilities provide specimen collection 
services for patients and are typically located in medical office 
buildings.  Lab One Canada Inc. leases office space in Ontario Canada, 
which is used for sales and client services.  This lease expires in 
2000.  Additionally, Lab One Canada Inc. leases space in Quebec Canada 
for assembly and distribution of specimen collection kits for Canadian 
insurance testing.  This lease expires in 2000.

LabOne also owns two buildings which are currently under contract to 
be sold in the first and second quarters of 1999.  Prior to moving to 
the new facility, these buildings were used for laboratory operations, 
administrative offices and data processing.  LabOne's lease on its 
former warehouse facility expired in February 1999.



ITEM 3.  LEGAL PROCEEDINGS.

During 1998, the Registrant was not a party to any material overtly 
threatened or pending litigation, claims or assessments.

In the normal course of business, LabOne had certain lawsuits pending 
at December 31, 1998.

The Comptroller of the State of Texas has conducted an audit of LabOne 
for sales tax compliance and contends that LabOne's insurance 
laboratory testing services are taxable under the Texas tax code and 
has issued an audit assessment, including interest and penalties, of 
approximately $1.9 million.  LabOne has appealed this assessment 
arguing that its services do not fit within the definition of 
insurance services under the Texas code.  The assessment is under 
review by the Texas State Hearing Attorney.

LabOne's management reports, that in its opinion, after consultation 
with LabOne legal counsel and based upon currently available 
information, none of these lawsuits are expected to have a material 
impact on the financial condition or results of operations of LabOne.  
No provisions for loss related to litigation are included in the 
accompanying consolidated financial statements.



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

No matters have been submitted to a vote of stockholders during the 
fourth quarter of the fiscal year covered by this report.


                             PART II. 

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

Registrant's common stock trades on the Nasdaq Stock Market under the 
symbol "LABH".  As of February 26, 1999, the outstanding shares were 
held by 1,704 stockholders of record.  High and low sales prices for 
each quarter of 1998 and 1997 are included in the table of quarterly 
financial data in Note 14 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

The following table summarizes certain selected financial information 
and operating data regarding Lab Holdings.  This information should be 
read in conjunction with Item 7, "Management's Discussion and Analysis 
of Financial Condition and Results of Operations" and Item 14 (a)(1) 
and (2) "Consolidated Financial Statements and Schedule."  The balance 
sheet data as of December 31, 1998, 1997, 1996, 1995 and 1994, and the 
statement of operations data for each of the years in the five-year 
period ended December 31, 1998, have been derived from Lab Holdings' 
consolidated financial statements, which have been audited by KPMG 
LLP, Lab Holdings' independent certified public accountants.


December 31,            1998      1997      1996      1995      1994
---------------------------------------------------------------------
                     (In thousands except share and per share amounts)

REVENUES           $  102,227    78,926    61,878    75,246    86,027
                      ===============================================

OPERATING EARNINGS (LOSS)
Earnings (loss) from
  continuing
  operations       $    5,148    (7,855)   (4,226)   (1,826)     (276)
Earnings (loss) from
  discontinued
  healthcare business     --     (2,342)      682     1,078    (1,596)
Loss from discontinued
  real estate
  operations              --        --     (1,452)   (6,600)   (2,904)
                      -----------------------------------------------
Net earnings (loss)$    5,148   (10,197)   (4,996)   (7,348)   (4,776)
                      ===============================================

BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Earnings (loss) from
  continuing 
  operations       $      .79     (1.21)     (.65)     (.28)     (.03)
Earnings (loss) from
  discontinued
  healthcare business      --      (.36)      .10       .17      (.25)
Loss from discontinued
  real estate 
  operations               --        --      (.22)    (1.03)     (.46)
                      -----------------------------------------------
Net earnings (loss)$      .79     (1.57)     (.77)    (1.14)     (.74)
                      ===============================================

DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Earnings (loss) from
  continuing 
  operations       $      .78     (1.21)     (.65)     (.28)     (.03)
Earnings (loss) from
  discontinued
  healthcare business      --      (.36)      .10       .17      (.25)
Loss from discontinued
  real estate 
  operations               --        --      (.22)    (1.03)     (.46)
                      -----------------------------------------------
Net earnings (loss)$      .78     (1.57)     (.77)    (1.14)     (.74)
                      ===============================================

Cash dividends     $     1.20      1.20      1.20      1.20      1.20
Book value         $     8.48      8.74     26.84     28.96     31.50

Average shares 
  outstanding                                                        
  during the year   6,489,103 6,488,643 6,477,878 6,433,989 6,374,837

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

Total assets       $   98,643    74,786   196,783   198,018   234,196
Long-term debt     $   18,097       --        --        --          8



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 an 80.5% 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 on that date to Lab 
Holdings for better identification with its primary asset, the 
approximate 80.5% ownership of LabOne.

On March 8, 1999, Lab Holdings and its subsidiary, LabOne, announced 
that the boards of directors of both companies had approved a 
definitive agreement to merge the two companies.  Under the merger 
agreement, LabOne is to be merged into Lab Holdings, but the 
survivor's name will be changed to "LabOne, Inc."  Stockholders of Lab 
Holdings will have each of their Lab Holdings shares split immediately 
before the merger into 1.5 shares of the survivor.  Stockholders of 
LabOne, other than Lab Holdings, will be entitled to elect to have 
each of their existing LabOne shares exchanged for one share of the 
survivor or $12.75 in cash or a combination of cash and shares.  If 
the cash election shares exceed a cash limit of $16.6 million, then 
the cash will be allocated on a pro rata basis among the cash election 
shares.  See Item 1 for additional information and the Company's 
Report on Form 8-K dated March 7, 1999, which is incorporated herein 
by reference.  The offering of Lab Holdings common stock in the merger 
will only be made by means of the Joint Proxy Statement/Prospectus.  


1998 Compared to 1997

Insurance, Clinical and Substance Abuse Testing Segments:

LabOne's revenue for the year ended December 31, 1998 was $102.2 
million as compared to $78.9 million in 1997.  The increase of $23.3 
million, or 30%, was due to increases in clinical laboratory revenue 
of $11.1 million, insurance services revenue of $7.2 million and SAT 
revenue of $5.1 million.  Clinical laboratory revenue increased from 
$7.5 million during 1997 to $18.6 million in 1998 primarily due to 
increased testing volumes.  The insurance services segment revenue 
increased from $62 million in 1997 to $69.1 million due to an increase 
in the total number of insurance applicants tested and an increase in 
non-laboratory services, including SBSI revenue of $1.3 million, 
partially offset by a 3% decrease in the average revenue per 
applicant.  SAT revenue increased from $9.4 million in 1997 to $14.5 
million in 1998 primarily due to a 48% increase in testing volumes.

LabOne's cost of sales increased $14.7 million, or 35%, for the year 
as compared to the prior year.  This growth is primarily due to 
increases in inbound freight, laboratory and kit supplies and payroll 
expenses due to the larger specimen volume for all three business 
segments.  Insurance segment cost of sales expenses were $32.3 million 
as compared to $26.7 million during 1997.  Clinical cost of sales 
expenses were $14.5 million as compared to $8.3 million during 1997.  
SAT cost of sales expenses were $9.9 million as compared to $7 million 
during 1997.  These increases are due to increased testing volumes.

As a result of the above factors, gross profit increased $8.6 million, 
or 23%, from $36.9 million in 1997 to $45.5 million in 1998.  
Insurance gross profit increased $1.5 million, or 4%, to $36.9 million 
in 1998.  Clinical gross profit improved $4.9 million from a loss of 
$800,000 in 1997 to a gain of $4.1 million in 1998.  SAT gross profit 
increased $2.2 million to $4.5 million in 1998.

LabOne's selling, general and administrative expenses increased $3.3 
million, or 12%, in 1998 as compared to 1997 primarily due to 
increases in payroll expenses and bad debt accruals.  Clinical 
overhead expenditures were $10.3 million as compared to $7.5 million 
in 1997.  SAT overhead increased from $3.3 million in 1997 to $4.3 
million in 1998.  These increases are due to the growth in each 
segment.  The allocation of corporate overhead to the clinical and SAT 
segments increased to $5.3 million for the year, as compared to $3.3 
million in 1997, due to the increased share of total revenue for those 
segments.  Insurance overhead expenditures decreased to $16.3 million 
as compared to $16.8 million in 1997.

General and administrative expenses also were impacted at the Lab 
Holdings level during 1998.  On August 7, 1998, an agreement that 
provided Lab Holdings with management and administrative services was 
cancelled and Lab Holdings was required to employ its entire present 
staff and to increase expenses for related management, employee and 
administrative costs and expenses that had been born by SLH 
Corporation.  The total annual cash general and administrative 
expenses at the Lab Holdings level are approximately $1 million.  
General and administrative expenses also include $1.5 million of 
annual amortization of goodwill incurred in connection with prior 
purchases of LabOne shares.  That goodwill will have been fully 
amortized by April 2003.

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 increased from $2.6 million in 1997 to $14.5 
million in 1998.  The insurance services segment operating income 
increased $2.1 million to $20.6 million in 1998.  The clinical segment 
had an operating loss of $6.2 million for 1998 as compared to an 
operating loss of $8.3 million in 1997.  The SAT segment improved from 
an operating loss of $934,000 in 1997 to a gain of $204,000 in 1998.

Investment Income - Net:

Other investments include short-term and cash equivalent investments.  
The returns on these investments are included in the investment income 
line in the consolidated statements of operations.  Investment income 
decreased to $861,000 in 1998 from $4.7 million in 1997 primarily 
reflecting a $3 million gain by Lab Holdings on the sale of marketable 
common stock in 1997 and a decrease in investable funds during 1998 as 
LabOne's cash was utilized in construction of the new facilities prior 
to IRB funding.  Additionally, a net loss of $143,000 in 1998 on 
short-term investments was incurred resulting from the decline in the 
stock market during the third and fourth quarters.  

Miscellaneous Items:

Other Income/(Expense), primarily reflecting miscellaneous items at 
LabOne, was a $42,000 expense during 1998 as compared to income of 
$77,000 in 1997.

Taxes:

The income tax rate of approximately 46% in 1998 reflects non-
deductibility of goodwill amortization.  Tax expenses in 1997 
reflecting the 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 1998 earnings 
from continuing operations of $5.1 million, as compared with a $7.9 
million loss from continuing operations in 1997. 


1997 Compared to 1996

Insurance, Clinical and Substance Abuse Testing Segments:

LabOne's 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.  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.  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 cost of sales increased $9.3 million, or 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.  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.

As a result of the above factors, gross profit increased $10.2 
million, or 38%, from $26.7 million in 1996 to $36.9 million in 1997.  
Insurance gross profit increased $7 million, or 25%, in 1997 as 
compared to 1996.  Clinical gross profit improved $1.8 million from a 
loss of $2.6 million in 1996 to a loss of $800,000 in 1997.  SAT gross 
profit increased from $1 million in 1996 to $2.4 million in 1997.

LabOne's selling, general and administrative expenses increased $4.1 
million, or 17%, in 1997 as compared to 1996 due primarily to 
increases in payroll expenses, travel and amortization expenses.  
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.

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 
partially offset by an increase in the insurance segment operating 
income of $5.9 million.  The 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.

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.

Interest Expense:
Interest expense decreased to $11,000 in 1997 from $1 million in 1996.  
During 1996, Lab Holdings incurred $1 million of interest expense 
associated with a preliminary state tax audit.

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.

During 1997, Lab Holdings 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.  During 1997, SLH 
provided administrative and accounting functions to Lab Holdings under 
a services agreement for an annual fee of $75,000.

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. 


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 and were $16.3 million in 1996.  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).

Cost of the real estate sales in 1997 prior to distribution totaled 
$3.5 million and were $15.3 million in 1996, 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, a $500,000 reduction from the previous year associated with the 
substantial completion of residential projects.

In 1992, Lab Holdings' board of directors approved a plan to 
discontinue real estate operations.  Real estate after-tax losses were 
$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 
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.


TRENDS

The following is LabOne's analysis of certain existing trends that 
have been identified as potentially affecting the future financial 
results of LabOne.  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 1999 due 
to competitive pressures.  This trend may have a material impact on 
earnings from operations.

The total number of insurance applicants tested by LabOne increased 
11% in 1998 from the prior year.  Approximately 80% of the increase 
represented oral fluid HIV tested applicants.  The number of oral 
fluid tested applicants are expected to further increase in 1999.

Effective October 30, 1998 LabOne acquired Systematic Business 
Services, Inc. (SBSI) which is operated as a wholly owned subsidiary 
of the insurance services division of LabOne.  SBSI is a provider of 
information services to life and health insurers nationwide, and has 
annual revenues of approximately $7 million.  With 148 employees in 
Kansas City area, SBSI provides telephone inspections, motor vehicle 
reports, attending physician statements, and claims investigation 
services to life insurance companies.  This addition allows LabOne to 
expand the services it offers to its insurance industry clients.

In the clinical division, BlueCross BlueShield of Tennessee 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 400,000 BlueCare members are currently 
covered by the program.  To date, LabOne's Laboratory Benefit 
Management programs, including BlueCare and the Lab Card Program, have 
more than 2.3 million lives enrolled. In the fourth quarter, revenue 
from Lab Card accounts that have been active for more than one year 
rose 60% over the fourth quarter, 1997.

LabOne's new facility was financed through the City of Lenexa, Kansas, 
with industrial revenue bonds.  In conjunction with the bonds, LabOne 
expects to receive income tax credits through the State of Kansas High 
Performance Incentive Plan to be applied against state income taxes 
for up to 10 years, or until the credit is completely used.  The 
amount of the credit is expected to be approximately $4 million, and 
will lower LabOne's average income tax rate for the duration of the 
credit.


LIQUIDITY AND CAPITAL RESOURCES

On December 31, 1998, at the holding company level, Lab Holdings had 
available for operations approximately $5 million in cash and cash 
equivalents.  Operating results during 1998 decreased Lab Holdings' 
working capital by $934,000 to $5.4 million at December 31, 1998.

On a consolidated basis, Lab Holdings had $15.2 million in cash and 
cash equivalents at December 31, 1998.  Current assets totaled 
approximately $46.4 million while current liabilities totaled $15.1 
million.

Net cash provided by continuing operations totaled $10.3 million in 
1998 compared with $8.5 million in 1997.  During 1998, cash from 
continuing operations included a $5.3 million increase in accounts 
receivable at LabOne and a non-cash item of $5.6 million for 
depreciation and amortization.  The 1998 net cash provided 
additionally included a decrease in trading portfolios of $1.4 
million, a net change in income taxes and other of $1.6 million.

During 1997, the earnings from continuing operations included a 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 cash provided additionally included 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. 

Net cash used by investing activities totaled $28.9 million in 1998 
primarily representing construction of LabOne's new facility and the 
acquisition of SBSI during 1998.  LabOne's future capital asset 
purchases are expected to be approximately $3 million to $4 million 
annually.  Net cash used by investing activities in 1997 totaled $11.8 
million primarily representing LabOne's land purchases related to its 
new facility and GIB Laboratories acquisition.

Net cash provided by financing activities in 1998 totaled $11.9 
million primarily due to $19.9 million proceeds from industrial 
revenue bond financing construction of LabOne's new facilities and Lab 
Holdings' regular cash dividends of $7.8 million.  Net cash used by 
financing activities in 1997 totaled $27.4 million primarily due to 
net of the $19.6 million cash portion of the SLH dividend to Lab 
Holdings shareholders and regular cash dividends of $7.8 million.

Lab Holdings is currently a holding company.  Sources of cash are 
investments 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.  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.  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 1998, 1997 and 1996.  As an 
approximate 80.5% owner, Lab Holdings has received $7.7 million of 
cash as dividends from LabOne in 1998.  LabOne's working capital 
position declined from $35.4 million at December 31, 1997, to $25.9 
million at December 31, 1998.  This decrease is primarily due to 
dividends paid and capital additions, including building payments, in 
excess of bond proceeds and cash provided by operations.

During 1998, LabOne invested $28.5 million in additional property, 
plant and equipment, as compared to $11.5 million in 1997 and $3.2 
million in 1996.  Of the amount spent in 1998, approximately $21.6 
million was for the construction LabOne's new facility and $3 million 
net cash was used in the purchase of SBSI.  The 1997 amount included 
land purchased related to LabOne's new facility and the GIB 
Laboratories acquisition.  LabOne's future capital asset purchases are 
expected to be approximately $4 million to $5 million annually.

LabOne had no short-term borrowings during 1998 and expects to be able 
to fund operations and future dividend payments from a combination of 
cash flow from operations, cash reserves, building sales and short-
term borrowings.  Interest on the industrial revenue bonds issued to 
finance the construction of LabOne's new facility is based on a 
taxable seven day variable rate which, including letter of credit and 
remarketing fees, is approximately 5.8% as of March 1, 1999.  The 
bonds mature over 11 years in increments of $1.85 million per year 
plus interest.  LabOne's total cash and investments at December 31, 
1998, were $10.2 million, as compared to $19.5 million at December 31, 
1997.

On February 26, 1997, Response converted a $23.5 million loan from Lab 
Holdings and accrued interest of $664,000 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.  

The SLH Corporation/Syntroleum Corporation merger was completed on 
August 7, 1998.  Per the Facilities Sharing and Interim Services 
Agreement between Lab Holdings, SLH and Syntroleum, the former 
employees of SLH are now employees of Lab Holdings.  Concurrently, 
SLH/Syntroleum is providing facilities to Lab Holdings in exchange for 
certain limited accounting, bookkeeping, tax and administrative 
services by Lab Holdings personnel.

As contemplated in the March 8, 1999 merger announcement between Lab 
Holdings and LabOne, stockholders of Lab Holdings will have each of 
their Lab Holdings shares split immediately before the merger into 1.5 
shares.  Stockholders of LabOne, other than Lab Holdings, will be 
entitled to elect to have each of their existing LabOne shares 
exchanged for one share of the merged entity or $12.75 in cash or a 
combination of cash and shares up to a cash limit of $16.6 million 
(approximately 50% of eligible shares).  If cash elections reach the 
$16.6 million cash limit, it is expected that the combined company 
might need to borrow up to $15 million to satisfy cash elections and 
merger expenses after the use of available cash.  Additional cash 
could be needed to the extent that any Lab Holdings' stockholders 
perfect dissenters' rights. 



YEAR 2000  

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's laboratory operating systems and its business 
processing systems were completely rewritten as of 1991 and were 
brought into compliance with Year 2000 date standards at that time.  
Non-IT systems, which include security systems, time clocks and 
heating and cooling systems, have been replaced with certified 
compliant systems as part of construction of the new facility.  
Ongoing remediation efforts include regularly scheduled software 
upgrades and replacement of personal computers and associated 
equipment.  LabOne expects to complete all remaining internal Year 
2000 objectives by the end of the second quarter, 1999.

LabOne is assessing the Year 2000 preparation and contingency plans of 
the its clients and vendors.  LabOne has material relationships and 
dependencies with its primary telecommunications provider, Sprint 
Corp., its inbound shipping provider, Airborne Express and municipal 
services providers.  In the event of a service interruption, LabOne 
has the ability to switch telecommunications services to AT&T at any 
time, and maintains backup electrical generators capable of meeting 
its electrical needs.  LabOne currently tracks and controls routing of 
its inbound specimens and can use USPS, airlines and other common 
carriers or express delivery services in the event of delivery 
problems with Airborne Express.  LabOne currently maintains 
approximately an eight week supply of most laboratory supplies, and 
does not expect significant problems in obtaining supplies.  LabOne 
continues to review the Year 2000 plans of these providers, and does 
not currently expect significant problems in these areas, however, 
there can be no assurance that the systems of clients and vendors will 
be converted to address Year 2000 problems in a timely and effective 
manner or that such conversions will be compatible with LabOne's 
computer systems.

Resources dedicated to the remaining effort are expected to cost less 
than $300,000 and are not considered a material expense to LabOne.  
These efforts have not caused delay to LabOne's other ongoing 
information systems projects.  LabOne has not hired any outside 
consultants or other independent validation provider at this time, and 
does not expect to do so.  

There can be no assurance that LabOne's adjustments to its computer 
systems will completely eliminate all Year 2000 problems.  Failure to 
properly address the Year 2000 problem could have a material adverse 
effect on LabOne's business, financial condition and results of 
operations.

Lab Holdings has completed its Year 2000 internal compliance program 
and believes that its limited computer systems are now Year 2000 
compliant.


RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1997, the Financial Accounting Standards Board (FASB) issued 
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting 
Comprehensive Income," which established standards for reporting and 
display of comprehensive income and its components.  SFAS No. 130 
became effective for the year ended December 31, 1998.  The 
presentation of previous periods has been changed to reflect the 
provisions of this statement.

In June 1997, the FASB issued SFAS No. 131, "Disclosures About 
Segments of an Enterprise and Related Information," which established 
standards for reporting operating segments.  SFAS No. 131 became 
effective for the year ended December 31, 1998.  This statement did 
not effect the presentation of segment information.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative 
Instruments and Hedging Activities," effective for the quarter ending 
September 30, 1999.  Retroactive application will not be required.  
The Company does not expect this statement to have a significant 
impact on the Company's financial position or results of operations.



ITEM 7(a).  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A foreign currency risk exposure exists for LabOne due to billing 
Canadian subsidiary revenue in Canadian dollars and the direct 
laboratory expenses associated with this revenue being incurred in US 
dollars.  This exposure is not considered material.  Any future 
material Canadian currency fluctuations against the US dollar could 
result in a decision to hedge future foreign currency cash flows or to 
increase Canadian prices.

An interest rate risk exposure exists due to LabOne's liability of $20 
million in industrial revenue bonds.  The interest expense incurred on 
these bonds is based on a taxable seven day variable rate, which 
including letter of credit and remarketing fees, is approximately 5.8% 
as of March 1, 1999.  This exposure is not considered material.  Any 
future increase in interest rates would result in additional interest 
expense and could result in a decision to enter into a long-term 
interest rate swap transaction.



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. 

                Index to Financial Statements

Report of Independent Auditors with Respect to Lab Holdings, Inc.

Lab Holdings, Inc. Consolidated Balance Sheets as of
    December 31, 1998 and 1997

Lab Holdings, Inc. Consolidated Statements of Operations for the years
    ended December 31, 1998, 1997 and 1996

Lab Holdings, Inc. Consolidated Statements of Stockholders' Equity for 
    the years ended December 31, 1998, 1997 and 1996

Lab Holdings, Inc. Consolidated Statements of Comprehensive Income for 
    the years ended December 31, 1998, 1997 and 1996

Lab Holdings, Inc. Consolidated Statements of Cash Flows for the years
    ended December 31, 1998, 1997 and 1996

Lab Holdings, Inc. Notes to Consolidated Financial Statements





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, 1998 and 1997, 
and the results of their operations and their cash flows for each of 
the years in the three-year period ended December 31, 1998, 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, presents fairly, in all material respects, the information set 
forth therein.


KPMG LLP


Kansas City, Missouri
March 8, 1999



LAB HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
---------------------------------------------------------------------
December 31,                                       1998        1997
---------------------------------------------------------------------
                                                     (In thousands)
ASSETS
Current assets: 
  Cash and cash equivalents                   $   15,223       22,129
  Short-term investments                             --         2,648
  Accounts receivable                             18,730       12,608
  Current income taxes                               400        1,400
  Inventories                                      1,798        2,203
  Real estate available for sale                   3,515        3,515
  Prepaid expenses and other current assets        2,753        2,459
  Deferred income taxes                            3,973        3,386
                                                ---------------------
      Total current assets                        46,392       50,348
                                                ---------------------
Property, plant and equipment:
  Land                                             2,379        2,379
  Laboratory equipment                            18,101       19,044
  Data processing equipment and software          18,883       17,130
  Office and transportation equipment              5,788        4,910
  Leasehold improvements                             701          493
  Construction in progress                        27,067          --
                                                ---------------------
                                                  72,919       43,956
  Less accumulated depreciation                   35,983       33,515
                                                ---------------------
    Net property, plant and equipment             36,936       10,441
                                                ---------------------
Other assets: 
  Intangible assets                               14,825       13,058
  Bond issue costs                                   186          --
  Deferred income taxes                               65          858
  Other assets                                       239           81
                                                ---------------------
Total Assets                                  $   98,643       74,786
                                                =====================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                            $    4,393        3,367
  Retainage and construction payable               3,809          --
  Accrued payroll and benefits                     4,149        4,530
  Other accrued expenses                             610          423
  Other current liabilities                          275          303
  Current portion of long-term debt                1,860          --
                                                ---------------------
      Total current liabilities                   15,096        8,623
Long-term debt                                    18,097          --
                                                ---------------------
      Total liabilities                           33,193        8,623
                                                ---------------------
Minority interests                                10,392        9,476
                                                ---------------------
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                                  2,921        1,772
  Accumulated other comprehensive income (loss)     (683)        (544)
  Retained earnings                               75,464       78,103
                                                ---------------------
                                                  85,202       86,831
  Less cost of 1,010,897 shares
    of treasury stock                             30,144       30,144
                                                ---------------------
      Total stockholders' equity                  55,058       56,687
                                                ---------------------
Commitments and contingencies                                        
                                                ---------------------
Total Liabilities and Stockholders' Equity    $   98,643       74,786
                                                =====================

See accompanying notes to consolidated financial statements.



LAB HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
---------------------------------------------------------------------
Year Ended December 31,               1998        1997         1996
---------------------------------------------------------------------
                                           (In thousands except
                                            per share amounts)

Sales                             $ 102,227       78,926       61,878
Cost of sales                        56,720       42,017       35,488
                                   ----------------------------------
  Gross profit                       45,507       36,909       26,390

Selling, general and administrative  33,550       34,765       29,767
Provision for loss on disposal
    of assets                           --         6,553          --
                                   ----------------------------------
Earnings (loss) from operations      11,957       (4,409)      (3,377)
  Investment income - net               861        4,671        5,004
  Interest expense                      (70)         (11)      (1,044)
  Other income (expense)                (42)          77         (456)
                                   ----------------------------------
Earnings before income taxes         12,706          328          127
                                   ----------------------------------
  Taxes on income (benefits):
    Current                           5,869         (429)       3,131
    Deferred                            (30)       8,207          670
                                   ----------------------------------
      Total                           5,839        7,778        3,801
                                   ----------------------------------
Earnings (loss) before 
  minority interests                  6,867       (7,450)      (3,674)
    Minority interests                1,719          405          552
                                   ----------------------------------
Earnings (loss) from           
  continuing operations               5,148       (7,855)      (4,226)
    Earnings (loss) from 
      discontinued healthcare
      business                          --        (2,342)         682
    Loss from discontinued real
      estate operations                 --           --        (1,452)
                                   ----------------------------------
NET EARNINGS (LOSS)              $    5,148      (10,197)      (4,996)
                                   ==================================

Basic earnings (loss)
  per share of common stock:
  Earnings (loss) from          
    continuing operations        $      .79        (1.21)        (.65)
  Earnings (loss) from
    discontinued healthcare
    business                             --         (.36)         .10
  Loss from discontinued real
    estate operations                    --           --         (.22)
                                   ----------------------------------
  NET EARNINGS (LOSS) PER SHARE  $      .79        (1.57)        (.77)
                                   ==================================


Diluted earnings (loss)
  per share of common stock:
  Earnings (loss) from          
    continuing operations        $      .78        (1.21)        (.65)
  Earnings (loss) from
    discontinued healthcare
    business                             --         (.36)         .10
  Loss from discontinued real
    estate operations                    --           --         (.22)
                                   ----------------------------------
  NET EARNINGS (LOSS) PER SHARE  $      .78        (1.57)        (.77)
                                   ==================================



See accompanying notes to consolidated financial statements.



LAB HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
---------------------------------------------------------------------
Year Ended December 31,               1998         1997         1996
---------------------------------------------------------------------
                                              (In thousands)
Common stock:
  Balance, beginning and 
    end of year                  $    7,500        7,500        7,500
                                   ----------------------------------
Paid-in capital:
  Balance, beginning of year          1,772        1,748        1,747
  Issuance of common stock by 
    LabOne in connection with
    an acquisition                    1,149          --           --
  Exercise of stock options             --            24            1
                                   ----------------------------------
  Balance, end of year                2,921        1,772        1,748
                                   ----------------------------------
Accumulated other comprehensive
  income (loss):
  Balance, beginning of year           (544)        (439)        (447)
  Net change during year               (139)        (105)           8
                                   ----------------------------------
  Balance, end of year                 (683)        (544)        (439)
                                   ----------------------------------
Retained earnings:
  Balance, beginning of year         78,103      195,329      208,098
  Net earnings (loss)                 5,148      (10,197)      (4,996)
  Dividends* and distributions       (7,787)    (107,029)      (7,773)
                                   ----------------------------------
  Balance, end of year               75,464       78,103      195,329
                                   ----------------------------------
Less treasury stock:
  Balance, beginning of year         30,144       30,114       29,814
  Net issuance pursuant to stock
    option plans (1997-5,169;
    1996-22,873)                        --            30          300
                                   ----------------------------------
  Balance, end of year               30,144       30,144       30,114
                                   ----------------------------------
STOCKHOLDERS' EQUITY             $   55,058       56,687      174,024
                                   ==================================

*Cash dividends per share amounted to $1.20 in 1998, 1997 and 1996.



See accompanying notes to consolidated financial statements.



LAB HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
---------------------------------------------------------------------
Year Ended December 31,               1998         1997         1996
---------------------------------------------------------------------
                                              (In thousands)

Net earnings (loss)                $  5,148      (10,197)      (4,996)
                                                                     
Other comprehensive income (loss):
  Foreign currency translation         (139)        (105)           8
                                     --------------------------------
Total comprehensive income (loss)  $  5,009      (10,302)      (4,988)
                                     ================================



See accompanying notes to consolidated financial statements.



LAB HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
----------------------------------------------------------------------
Year Ended December 31,                    1998       1997       1996
----------------------------------------------------------------------
                                                (In thousands)
OPERATING ACTIVITIES
Earnings (loss) from continuing
  operations                         $     5,148     (7,855)   (4,226)
Adjustments to reconcile earnings
 (loss) from continuing operations
 to net cash provided by continuing
 operations:
  Depreciation and amortization            5,641      6,277     8,760
  Earnings applicable to minority
    interests                              1,719        405       552
  Provision for loss on disposal
    of assets                                --       6,553       --
  Change in trading portfolio, net         1,443      2,645    19,318
  Change in accounts receivable           (5,272)    (2,980)    1,458
  Change in accounts payable                 892        (18)      134
  Income taxes and other, net                697      3,491     9,558
                                        -----------------------------
  Net cash provided by continuing
    operations                            10,268      8,518    35,554
  Net cash used by discontinued
    healthcare business                      --      (1,006)  (32,140)
  Net cash provided by discontinued
    real estate operations                   --         581     9,107
                                        -----------------------------
  Total cash provided by operations       10,268      8,093    12,521
                                        -----------------------------

INVESTING ACTIVITIES
Sales of investments available for sale      --       1,350         4
Purchases of investments held
  to maturity                             (5,461)   (15,894)  (15,753)
Maturities of investments held 
  to maturity                              6,702     18,155    23,395
Additions to property, plant
  and equipment, net                     (25,489)    (6,683)   (3,252)
Acquisition of businesses                 (2,968)    (4,816)      --
Other, net                                (1,711)    (3,948)     (470)
                                        -----------------------------
  Net cash provided (used) by 
    investing activities                 (28,927)   (11,836)    3,924
                                        -----------------------------
FINANCING ACTIVITIES
Proceeds from issuance of bonds           19,900        --        --
Bond issue costs                            (192)       --        --
Payment of capital lease                      (2)       --        --
Regular quarterly dividends paid          (7,787)    (7,787)   (7,773)
Cash portion of SLH dividend                 --     (19,590)      --
Net issuance of treasury stock
  pursuant to stock option plans             --          (7)     (299)
                                        -----------------------------
  Net cash provided (used) by
    financing activities                  11,919    (27,384)   (8,072)
                                        -----------------------------
Effect of foreign currency translation      (166)       (72)       12
                                        -----------------------------
Net increase (decrease) in cash and
  cash equivalents                        (6,906)   (31,199)    8,385
Cash and cash equivalents at
  beginning of year                       22,129     53,328    44,943
                                        -----------------------------
Cash and cash equivalents at
  end of year                         $   15,223     22,129    53,328
                                        =============================


Supplemental disclosures of cash flow information:
  Cash paid (received)
    during the year for:
    Interest                          $      552        934        25
                                        =============================
    Income taxes, net                 $    5,451      2,676    (3,487)
                                        =============================


Supplemental schedule of noncash investing and financing activities:
  Details of acquisition:
    Fair value of assets acquired     $    6,223
    Liabilities assumed                     (645)
    LabOne stock issued                   (2,000)
                                        --------
      Cash paid                            3,578
    Less cash acquired                       610
                                        --------
      Net cash paid for acquisition   $    2,968
                                        ========



See accompanying notes to consolidated financial statements.



LAB HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998, 1997 and 1996

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. (Lab Holdings or the Company) and its 
majority-owned subsidiary, LabOne, Inc.  All significant intercompany 
transactions have been eliminated in consolidation.  Certain 1997 and 
1996 amounts have been reclassified for comparative purposes with no 
effect on net earnings.

At December 31, 1998, Lab Holdings' principal asset consists of its 
80.5% 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 Note 13 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. The Lab Holdings shareholders paid no consideration 
for any shares of SLH stock received in the distribution.  On August 
7, 1998, SLH merged with its subsidiary, Syntroleum Corporation, and 
changed its name to Syntroleum Corporation.

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.  These matters were resolved in 
1998 and early 1999 and did 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 13 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, marketable 
securities with original maturities of three months or less, money 
market investments and overnight investments that are stated at cost, 
which approximates market value.

INVESTMENT SECURITIES
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, 1998 and 1997.  
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.  

INVENTORIES
Inventories consist of completed specimen collection kits and various 
materials used in the assembly of specimen collection kits for sale to 
clients.  Inventory is valued at the lower of cost (first-in, first-
out) or market.

PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment additions are recorded at cost which 
includes interest capitalized during construction, when material.  
Facilities leased pursuant to revenue bond financing transactions are 
accounted for as purchases with the cost of the leased property 
included in property, plant and equipment and the related obligation 
included in long-term debt.

Depreciation and amortization are computed using the straight-line 
method over the estimated useful lives of the assets as follows:

              Buildings                      30 years
              Laboratory equipment          3-5 years
              Data processing equipment     3-5 years
              Office equipment                5 years

COST OF BORROWINGS
Expenses directly related to the issuance of debt are deferred and 
amortized over the period the debt is expected to be outstanding using 
the interest method.

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.

The patent process utilized in coating the plates on which blood and 
urine testing is performed was amortized on a straight-line basis over 
the estimated life of the patent (184 months at date of acquisition).  

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 in 1997 which reduced the carrying 
value to $3.5 million.  At December 31, 1998, LabOne had entered into 
real estate sales contracts to sell all real estate available for sale 
for $4.5 million.

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.

EARNINGS PER SHARE
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.

RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board (FASB) issued 
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting 
Comprehensive Income," which established standards for reporting and 
display of comprehensive income and its components.  SFAS No. 130 
became effective for the year ended December 31, 1998.  The 
presentation of previous periods has been changed to reflect the 
provisions of this statement.

In June 1997, the FASB issued SFAS No. 131, "Disclosures About 
Segments of an Enterprise and Related Information," which established 
standards for reporting operating segments.  SFAS No. 131 became 
effective for the year ended December 31, 1998.  This statement did 
not effect the presentation of segment information.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative 
Instruments and Hedging Activities," effective for the quarter ending 
September 30, 1999.  Retroactive application will not be required.  
The Company does not expect this statement to have a significant 
impact on the Company's financial position or results of operations.


NOTE 2 - ACQUISITIONS AND INTANGIBLE ASSETS

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

December 31,                                        1998        1997
----------------------------------------------------------------------
                                                      (In thousands)
Goodwill - excess of cost over fair value
    of net assets acquired                      $   31,059      27,070
Less accumulated amortization                       16,234      14,229
                                                  --------------------
                                                    14,825      12,841
                                                  --------------------
Patent                                               8,000       8,000
Less accumulated amortization                        8,000       7,783
                                                  --------------------
                                                       --          217
                                                  --------------------
Intangible assets, net of accumulated
  amortization                                  $   14,825      13,058
                                                  ====================

Effective October 30, 1998, LabOne acquired a provider of information 
support services to insurance underwriters for approximately $5.7 
million.  The purchase was comprised of $3.7 million of cash and the 
issuance of 168,885 shares of LabOne stock having a fair market value 
of $2 million.  The acquisition was accounted for using the purchase 
method of accounting.  The purchase price could increase if the 
acquired company achieves certain levels of earnings in 1999 and 2000.  
The excess of the aggregate purchase price over the fair market value 
of net assets acquired of approximately $4 million is being amortized 
over twenty years.

The operating results of the acquired company have been included in 
the consolidated statements of operations from the date of 
acquisition.  The following unaudited pro forma consolidated results 
of operations of the Company for the years ended December 31, 1998 and 
1997 assume the acquisition occurred as of January 1, 1997:

                                            1998         1997
                                        -------------------------
                                              (in thousands)
  Sales                                 $ 108,239        85,032
  Net earnings (loss) from
    continuing operations                   5,676        (7,666)
  Earnings per share:
    Basic                                     .87        (1.18)
    Diluted                                   .86        (1.18)

Pro forma data does not purport to be indicative of the results that 
would have been obtained had these events actually occurred at the 
beginning of the periods presented and is not intended to be a 
projection of future results.

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 and is being amortized over fifteen years.



NOTE 3 - LONG-TERM DEBT

Long-term debt consists of the following as of December 31, 1998
(in thousands):

  Taxable industrial revenue bonds, Series 1998A,
    principal payable annually through
    September 1, 2009, interest payable monthly
    at a rate adjusted weekly based on short-term
    United States treasury obligations (5.14% at
    December 31, 1998), secured by LabOne's facility
    and an irrevocable bank letter of credit            $  20,000

  Various capital leases, principal and interest
    payable monthly through May 2003, interest
    ranging from 7% to 12%, collateralized by
    office equipment                                           54
                                                          -------
      Total long-term debt                                 20,054

  Less:
    Current portion                                         1,860
    Unamortized discount                                       97
                                                          -------
      Long-term debt, net                               $  18,097
                                                          =======

Aggregate maturities of long-term debt as of December 31, 1998 are as 
follows (in thousands):

                               Bonds         Capital       
                              Payable        Leases         Total
                             -------------------------------------

          1999              $  1,850           10           1,860
          2000                 1,850           13           1,863
          2001                 1,850           15           1,865
          2002                 1,850           11           1,861
          2003                 1,800            5           1,805
          Thereafter          10,800           --          10,800
                             -------------------------------------
                            $ 20,000           54          20,054
                             =====================================

Interest expense in 1998 amounted to approximately $70,000, net of 
interest capitalized as a component of property, plant and equipment 
of $315,000.



NOTE 4 - SEGMENT DATA

The Company, through its subsidiary, LabOne, operates principally in 
three lines of business:  insurance, clinical testing and substance 
abuse testing.  The insurance line of business involves risk-appraisal 
laboratory testing and information services to the insurance industry.  
The tests performed and information provided by LabOne are 
specifically designed to assist an insurance company in objectively 
evaluating the risks posed by policy applicants.  Clinical testing 
services are provided to the healthcare industry to aid in the 
diagnosis and treatment of patients.  Substance abuse testing services 
are provided to both regulated and nonregulated employers who employ 
drug screening guidelines.

Operating income (loss) of each line of business is computed as sales 
less identifiable and allocated expenses.  In computing operating 
income (loss) of lines of business, none of the following items have 
been added or deducted:  general corporate expenses, investment income 
or other income (expense).  Identifiable assets by line of business 
are those assets that are used in the Company's operations in each 
line of business.  General corporate assets are principally cash and 
investment securities.

The following is a summary of line of business information as of and 
for the years ended December 31, 1998, 1997 and 1996.

                                      1998         1997         1996
---------------------------------------------------------------------
                                              (In thousands)
SALES:
  Insurance services             $   69,149       61,998       50,801
  Clinical services                  18,600        7,512        3,942
  Substance abuse testing            14,478        9,416        4,689
  Other                                 --           --         2,446
                                   ----------------------------------
    Total revenues               $  102,227       78,926       61,878
                                   ==================================
OPERATING EARNINGS (LOSS):
  Insurance services             $   19,158       17,035       11,138
  Clinical services                  (6,188)      (8,304)      (7,967)
  Substance abuse testing               204         (934)      (1,236)
  Other                                 --           --          (431)
  General corporate expenses         (1,217)      (5,774)      (4,725)
  Investment income                     861        4,671        5,004
  Interest expense                      (70)         (11)      (1,044)
  Other expense                         (42)      (6,355)        (612)
                                   ----------------------------------
  Earnings (loss) before income
    taxes and minority interests     12,706          328          127
  Income taxes                       (5,839)      (7,778)      (3,801)
  Minority interests                 (1,719)        (405)        (552)
                                   ----------------------------------
    Earnings (loss) from
      continuing operations      $    5,148       (7,855)      (4,226)
                                   ==================================

IDENTIFIABLE ASSETS:
  Insurance services             $   35,652       32,848       34,543
  Clinical services                   5,493        3,513        4,022
  Substance abuse testing             6,449        4,994        3,323
  Net assets of discontinued
    healthcare business                 --           --        48,432
  Net assets of discontinued
    real estate operations              --           --        30,466
  Other                              51,049       33,431       75,997
                                   ----------------------------------
    Total identifiable assets    $   98,643       74,786      196,783
                                   ==================================

CAPITAL EXPENDITURES:
  Insurance services             $    2,090        3,308        2,558
  Clinical services                     501          469          163
  Substance abuse testing               424          946          505
  General corporate                  22,474        2,553          --

DEPRECIATION AND AMORTIZATION:
  Insurance services             $    4,033        4,658        3,977
  Clinical services                     797          940        1,141
  Substance abuse testing               810          645          369



NOTE 5 - 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," (SFAS 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, SFAS 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 SFAS 123.

A summary of the status of the Company's stock option plans as of 
December 31, 1998, 1997 and 1996 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, 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              --
Granted                          --
Exercised                        --
                            --------
Outstanding
  December 31, 1998           60,000         26.500           20,000
                            ========


The following table summarizes information about stock options at 
December 31, 1998.

                  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        9.00      $26.50       20,000       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 net earnings 
(loss) and earnings (loss) per share would have been reduced by 
approximately the following:  $604,000, or $.09 per share, in 1998; 
$402,000, or $.06 per share, in 1997; and $161,000, or $.02 per share, 
in 1996.  Lab Holdings share of the reductions to LabOne's net 
earnings would have been $419,000 in 1998, $339,000 in 1997 and 
$161,000 in 1996.

Pro forma net earnings reflect only options granted in 1998, 1997 and 
1996.  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 1998, 
1997 and 1996 options.  Compensation cost for options granted prior to 
January 1, 1995 is not considered.



NOTE 6 - INVESTMENT SECURITIES

The Company held no investment securities at December 31, 1998.  A 
summary of investment securities information relating to quoted market 
values and holding gains and losses at December 31, 1997 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
  investments, all with
  maturities less than
  one year:
  Obligations of states
    and political
    subdivisions     $   502      501        502        --          1
  Canadian 
    government
    notes                703      703        703        --         --
                      ------------------------------------------------
                     $ 1,205    1,204      1,205        --          1
                      ================================================


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,                1998         1997         1996
----------------------------------------------------------------------
                                              (In thousands)
  Proceeds                        $     --         4,365            3
                                    ==================================
  Gross realized gains            $     --         3,015           --
                                    ==================================
  Gross realized losses           $     --           --            (1)
                                    ==================================

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

At December 31, 1996, the Company had 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.

At December 31, 1998, based on the market price of publicly traded 
shares of LabOne, the Company's 80.5% owned subsidiary, pretax 
unrealized gains of approximately $90 million ($13.00 per share) on 
this investment were not reflected in either Lab Holdings' book value 
or stockholders' equity.



NOTE 7 - 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,               1998         1997         1996
---------------------------------------------------------------------
                                              (In thousands)
Current:
  Federal                        $    4,732       (1,372)       1,722
  State                               1,020          637        1,150
  Foreign                               117          306          259
                                   ----------------------------------
                                      5,869         (429)       3,131
                                   ----------------------------------
Deferred:
  Federal                               (32)       7,718          104
  State                                  25          486          434
  Foreign                               (23)           3          132
                                   ----------------------------------
                                        (30)       8,207          670
                                   ----------------------------------
                                 $    5,839        7,778        3,801
                                   ==================================

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,               1998         1997         1996
---------------------------------------------------------------------
                                              (In thousands) 
Computed expected tax expense    $    4,320          111           43
State income taxes, net of federal 
  benefit and state valuation 
    allowance changes                   658          741        1,045
Goodwill amortization                   577          664          604
Tax exempt interest and dividends        (6)         (19)         (45)
Tax benefits not available for
  subsidiary losses                     --           --           276
Foreign taxes on repatriation of 
  foreign source income                 --           --           219
Other, net                              220         (324)        (171)
Increase in federal valuation 
  allowance, and write-off of 
  deferred tax assets                    62        6,533        1,716
Foreign tax in excess of U.S. rate        8           72          114
                                   ----------------------------------
Actual income tax expense         $   5,839        7,778        3,801
                                   ==================================

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

December 31,                                       1998         1997
---------------------------------------------------------------------
                                                      (In thousands)
Current deferred income tax assets (liabilities):
Valuation allowances on
  investments and real estate                   $  2,607        2,654
Allowance on accounts receivable                     926          380
Excess book expense accruals                         460          341
Other                                                (20)          11
State net operating loss
  carryforwards                                       --          --
                                                ---------------------
Gross current deferred income
  tax assets                                       3,973        3,386
Current valuation allowance                           --          --
                                                ---------------------
Net current deferred income
  tax assets                                       3,973        3,386
                                                ---------------------

Non-current deferred income tax assets (liabilities):
Excess book (tax) depreciation and
  amortization                                       (28)         386
Alternative minimum tax credit                       489          577
Other                                               (418)         (81)
Federal capital loss carryforwards                   699          431
Federal net operating loss
  carryforwards                                      542          524
State net operating loss
  carryforwards and capital losses                 1,050        1,399
                                                ---------------------
Gross non-current deferred
  income tax assets                                2,334        3,236
Valuation allowance for non-current
  deferred income tax assets                      (2,269)      (2,378)
                                                ---------------------
Net non-current deferred
  income tax assets                                   65          858
                                                ---------------------
Net deferred income tax
  assets                                      $    4,038        4,244
                                                =====================


The valuation allowance as of January 1, 1997 was approximately 
$3,425,000.  The valuation allowance decreased by approximately 
$1,047,000 and $109,000 during 1997 and 1998, respectively. 



NOTE 8 - FOREIGN OPERATIONS

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

Year ended December 31,                   1998        1997       1996
----------------------------------------------------------------------
                                                 (in thousands)

     Revenues                           $ 6,463       6,565      6,380
     Operating earnings                     314         645        719
     Total assets                         2,842       3,193      2,668



NOTE 9- EARNINGS PER SHARE

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.

Earnings available to common shareholders was adjusted to reflect the 
Company's share of LabOne's earnings based on a diluted ownership 
after taking into account LabOne's common stock equivalents.  The 
following table reconciles net earnings and weighted average shares 
used to computed basic and diluted earnings per share.

                                         December 31, 1998
                                 ----------------------------------
                                 Earnings from
                                  Continuing              Per Share
                                  Operations     Shares     Amount
                                 ----------------------------------
Basic earnings per share        $  5,148,000    6,489,103    .79
Effect of dilutive securities:
  Lab Holdings stock options          --           --
  LabOne stock options               (77,000)      --
                                 ----------------------------------
Dilutive earnings per share     $  5,071,000    6,489,103    .78
                                 ==================================

The weighted average common shares outstanding were used to calculate 
both the basic and diluted loss per share for the years ending 
December 31, 1997 and 1996 because of the Company's losses from 
continuing operations.  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 and 10,939 for 1997 and 1996, 
respectively.



NOTE 10- RELATED PARTY TRANSACTIONS

In 1997, the Company entered into an agreement with SLH whereby SLH 
provided accounting and administrative services and record storage 
space for Lab Holdings.  Under this agreement, Lab Holdings paid 
$75,000 annually for these services and storage space.  

On August 7, 1998, SLH merged with its subsidiary, Syntroleum 
Corporation, and changed its name to Syntroleum Corporation.  
Effective with this merger, the Company terminated its 1997 services 
agreement with SLH and entered into a facilities sharing agreement 
with Syntroleum whereby Syntroleum provides office facilities and 
record storage space in exchange for Lab Holdings' personnel providing 
services related to the historical information of SLH and its 
subsidiaries.  The level of services and office facilities provided 
under this agreement are reviewed periodically and the parties 
reimburse the other to the extent that the exchange of office 
facilities for services is not of reasonably equivalent market value.  
The total expense under this agreement in 1998 was $6,000.

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 11 - 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.  Matching contributions to the money 
purchase pension plan by Lab Holdings and participating subsidiaries 
were $100,000 for 1996.

In 1997, Lab Holdings terminated its stock purchase plan.  Matching 
contributions for this plan amounted to $32,000 and $44,000 for the 
years ended December 31, 1997 and 1996, 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 $2,466,000, $1,980,000 and $1,696,000 to the 
plans for the years ended December 31, 1998, 1997 and 1996, 
respectively.



NOTE 12 - COMMITMENTS AND CONTINGENCIES

Tax Assessment

The Comptroller of the State of Texas has conducted an audit of LabOne 
for sales and use tax compliance for the years 1991 through 1997 and 
contends that LabOne's insurance laboratory services are taxable under 
the Texas tax code.  The Texas Comptroller has issued a tax audit 
assessment, including interest and penalties, of approximately $1.9 
million.  LabOne has appealed this assessment arguing that its 
services do not fit within the definition of insurance services under 
the Texas code.  The assessment is under review by the Texas State 
Hearing Attorney.  At this time, LabOne is unable to estimate the 
possible liability, if any, that may be incurred as a result of this 
assessment.


Leases

LabOne has several noncancelable operating leases, primarily for land 
and buildings, and other commitments that expire through 2003, 
including a lease for office space from an entity owned by an 
employee.  Included with the assets and liabilities transferred to SLH 
in the Distribution were several operating leases for office space and 
equipment.  Rental expense for these operating leases during 1998, 
1997 and 1996 amounted to $539,000, $529,000 and $1,175,000, 
respectively.

Future minimum lease payments and other commitments under the LabOne 
agreements as of December 31, 1998 are as follows:

                               Year          Amount
                              -------------------------
                                         (In thousands)
                               1999          $  520
                               2000             347
                               2001             229
                               2002             196
                               2003             163


Construction Costs

The estimated cost to complete construction of LabOne's new facility 
to house its headquarters and lab approximates $1.5 million.



NOTE 13- 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 
                                July 31, 1997        December 31, 1996
----------------------------------------------------------------------
                                           (In thousands)

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



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
----------------------------------------------------------------------
                                                       (In thousands)

Revenues                                                $  16,365
                                                          =======
Loss                                                       (2,200)
Income tax benefits                                          (748)
                                                          -------
Net loss                                                $  (1,452)
                                                          =======



NOTE 14- QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized 1998 quarterly financial data is as follows:

                             Mar. 31,   Jun. 30,   Sep. 30,   Dec. 31,
Quarter Ended                  1998       1998       1998       1998
----------------------------------------------------------------------
                              (In thousands except per share amounts)

Revenues                   $  23,333     25,763     25,834     27,297
                             ========================================

Net earnings (loss)        $   1,208      1,700        977      1,263
                             ========================================

Basic earnings per share   $     .19        .26        .15        .19
                             ========================================

Diluted earnings per share $     .18        .26        .15        .19
                             ========================================

Cash dividends paid
  per share                $     .30        .30        .30        .30
                             ========================================
Stock prices:
  High                     $  24 1/2     24 1/4     23 1/2     18 5/8
  Low                      $  21 5/8     20 3/8     15 1/4     14    


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    

Stock prices shown above have not been adjusted to reflect effects of 
the SLH and Response distributions.  See Note 13 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).



NOTE 15 - SUBSEQUENT EVENT - MERGER AGREEMENT

On March 8, 1999, Lab Holdings and LabOne jointly announced that the 
Board of Directors of both companies have approved an agreement to 
merge the two companies.  Under the merger agreement, LabOne is to be 
merged into Lab Holdings and the merged entity's name will be changed 
to LabOne, Inc.  Stockholders of Lab Holdings will have each of their 
Lab Holdings shares split immediately before the merger into 1.5 
shares of the merged entity.  Stockholders of LabOne, other than Lab 
Holdings, will be entitled to elect to have each of their existing 
LabOne shares exchanged for one share of the merged entity or $12.75 
in cash or a combination of cash and shares up to a limit of $16.6 
million in cash (approximately 50% of eligible shares).  LabOne will 
use cash from operations and additional borrowings, if necessary, to 
cover the purchase of shares from stockholders that choose the cash 
election option.  The merger is subject to approval by the holders of 
two-thirds of the outstanding Lab Holdings shares and a majority of 
the shares voted by LabOne stockholders, other that Lab Holdings and 
its affiliates, and other closing conditions.


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

None.



                             PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors and Executive Officers

The directors and executive officers of Lab Holdings are as follows:

Name                     Age    Position
----------------------   ---    ---------------------------------
P. Anthony Jacobs, CFA    57     President, Chief Executive Officer
                                   and Class C Director
Steven K. Fitzwater       52     Executive Vice President, Chief 
                                   Operating and Financial Officer, 
                                   Treasurer, Secretary and Class A 
                                   Director
Linda K. McCoy            48     Vice President and Chief Accounting 
                                   Officer 
John H. Robinson, Jr.     48     Chairman of the Board and Class B 
                                   Director
Lan C. Bentsen            51     Class B Director
W. T. Grant II            47     Chairman of the Board, President and 
                                   Chief Executive Officer of LabOne
 
     Mr. Jacobs has been a director of Lab Holdings since 1987, 
President of Lab Holdings since May 1993 and Chief Executive Officer 
since September 1997.  Mr. Jacobs was Chief Operating Officer from 
1990 to September 1997 and Executive Vice President prior to May 1993. 
Mr. Jacobs also is a director of Trenwick Group, Inc., Syntroleum 
Corporation and  Response Oncology, Inc.

     Mr. Fitzwater has been a director of Lab Holdings since September 
1997, and Executive Vice President, Chief Operating and Financial 
Officer, Treasurer and Secretary since May 1998.  He was Vice 
President, Chief Financial and Accounting Officer, Treasurer and 
Secretary from  September 1997 to May 1998 and was Vice President, 
Chief Accounting Officer and Secretary of Lab Holdings from 1990 to 
September 1997. 

     Ms. McCoy has been Vice President and Chief Accounting Officer 
since May 1998.

     Mr. Robinson has been a director of Lab Holdings since 1990 and 
Chairman of the Board since September 1997.  Mr. Robinson is Managing 
Partner of Black & Veatch (design and construction).  Mr. Robinson 
also is a director of Commerce Bancshares, Inc.

     Mr. Bentsen has been a director of Lab Holdings since 1986.  He 
has been the Executive Vice President of Frontera Resources since 1996 
(oil and gas).  From 1994 to 1996 he was Managing Partner of Remington 
Partners (investments) and was previously Chairman and Chief Executive 
Officer of Sovereign National Management, Inc. (property management). 

     Mr. Grant has been Chairman, President and Chief Executive 
Officer of LabOne since November 1995.  He was a director of Lab 
Holdings from 1980 to September 1997, Chairman and Chief Executive 
Officer of Lab Holdings from May 1993 to September 1997, and President 
of Lab Holdings prior to May 1993.  Mr. Grant also is a director of 
AMC Entertainment Inc., Commerce Bancshares, Inc., Kansas City Power & 
Light Company, and Response Oncology, Inc.

Committees of the Lab Holdings' Board of Directors

     The Lab Holdings Board has established an Audit Committee 
consisting of Messrs. Bentsen (Chairman) and Robinson and a 
Compensation Committee consisting of Messrs. Robinson (Chairman) and 
Bentsen.

     During the year ended December 31, 1998, the Board met seven 
times and the Compensation Committee met four times.  The Audit 
Committee held a normally scheduled December meeting in January 1999. 
The attendance at Committee and Board meetings by all Directors in the 
aggregate was 97% and each Director attended at least 90% of the 
meetings of the Board and the Committees of which the Director was a 
member.

     The Audit Committee recommends to the Board of Directors an 
independent auditor to audit the books and records of Lab Holdings and 
its subsidiaries for the year.  It also reviews, to the extent it 
deems appropriate, the scope, plan and findings of the independent 
auditors' annual audit, recommendations of the auditor, the adequacy 
of internal accounting controls and audit procedures, Lab Holdings' 
audited financial statements, non-audit services performed by the 
independent auditor, and fees paid to the independent auditor for 
audit and non-audit services.

     The Compensation Committee recommends to the Board of Directors 
the compensation of all officers and administers Lab Holdings' 1997 
Directors' Stock Option Plan .  It also recommends to the Board of 
Directors the qualifications for new Director nominees, candidates for 
nomination, and policies concerning director compensation and length 
of service. 



ITEM 11.  EXECUTIVE COMPENSATION

Compensation of Directors

     Non-employee directors of Lab Holdings receive compensation 
consisting of annual cash retainers and meeting fees.  Each director 
also receives a one-time option to purchase 15,000 shares of Lab 
Holdings' common stock.

     Cash Compensation.  Directors who are not employees of Lab 
Holdings are paid an annual retainer for Board service of $15,000 and 
a fee of $2,000 for each meeting of the Board or a Board committee 
attended.  Directors who are employees of Lab Holdings, which 
presently consist of Messrs Jacobs and Fitzwater, are not paid any fee 
or additional remuneration for services as members of the Lab Holdings 
Board or any committee thereof.

     Directors' Stock Options.  Pursuant to Lab Holdings' 1997 
Directors' Stock Option Plan, each director of Lab Holdings received 
on adoption of the plan in September 1997, a one-time grant of an 
option to purchase 15,000 shares of Lab Holdings' common stock for a 
purchase price equal to the $26.50 fair market value of the stock on 
the date of grant. The options expire ten years from the date of grant 
and become exercisable at the rate of 5,000 per year, commencing with 
the first anniversary of the date of grant.  Unvested options become 
exercisable immediately in the case of a liquidation or dissolution, a 
merger or consolidation which contemplates that a director will not 
continue in office following the transaction or in the case of certain 
change-in-control events.  Upon termination of the director's term of 
office, options expire (i) on the earlier of twelve months following 
death or the end of the option term in the case of termination in 
connection with a merger, consolidation, liquidation, dissolution or 
certain change-in-control events, (ii) after one year in the case of 
termination due to or followed within 90 days by death, and (iii) 
after 90 days in all other cases.

Compensation of  Executive Officers

     The following table sets forth compensation received by Lab 
Holdings' Chief Executive Officer and the only other executive 
officers holding office at December 31, 1998 whose salary and bonus 
for 1998 aggregated $100,000 or more, for services rendered in all 
capacities to Lab Holdings and its subsidiaries for the last three 
years. 

                      Summary Compensation Table

                                                  Long-Term
                                                 Compensation
                                                    Awards      All
                                                  Securities   Other
                          Annual Compensation(1)  Underlying   Compen-
    Name and              ----------------------   Options/    sation-
Principal Position  Year  Salary($)     Bonus($)    SARs(#)    ($)(2)
------------------  ----  ----------------------- ----------- --------
P. Anthony Jacobs   1998  $ 39,583         --         --      $  --
  President and     1997   112,423         --       18,000(3)  797,259
  Chief Executive   1996   249,590         --        4,000(4)   44,110
  Officer of Lab
  Holdings

W. T. Grant II      1998   164,769(5)  107,261(6)     --        21,670
  Chairman of the   1997    32,363(5)  131,173(6)  78,000(7)   900,255
  Board, President  1996   331,000          --      4,000(4)    25,227
  and Chief 
  Executive Officer
  of LabOne

(1)  Compensation deferred at the election of an executive officer, 
     pursuant to Lab Holdings' or its subsidiaries' 401(k) Plans, is 
     included in the year earned. 

(2)  Includes the following contributions paid or accrued to the named 
     executive's accounts in Lab Holdings', or one of its 
     subsidiaries', as the case may be, 401(k) Plan ("401(k)") and 
     Money Purchase Pension Plan ("MPP"), pursuant to a Supplemental 
     Retirement Agreement ("SERP") with said executive and for term 
     life insurance for said executive: 

                        401(k)                     MPP
               ------------------------  ------------------------
  Executive      1998    1997    1996      1998    1997    1996
  ---------     ------  ------  ------    ------  ------  ------
  Mr. Jacobs  $    --      --    4,750       --      --   15,476
  Mr. Grant      4,526   9,922   4,750    16,421     --   15,476

                                                Term Life
                        SERP                Insurance Premiums 
               ------------------------  ------------------------
  Executive      1998     1997     1996       1998     1997     1996
  ---------    -------  -------  -------    -------  -------  -------
  Mr. Jacobs  $    --   143,197   22,309       --        656    1,575
  Mr. Grant        --    38,201    2,914       723       870    2,087

    Lab Holdings' 401(k) Plan and Money Purchase Pension Plan were 
    terminated effective as of December 31, 1996.  Mr. Grant received 
    $9,922 pursuant to LabOne's 401(k) Plan in 1997 and $4,526 in 
    1998.  Also includes (i) severance payments to Messrs. Grant and 
    Jacobs of $809,851 and $610,802, respectively and (ii) payment of 
    accrued vacation amounts upon termination of employment to Messrs. 
    Grant and Jacobs of $39,851 and $37,360, respectively.

(3)  Consists of options to purchase (i) 15,000 shares of Lab Holdings 
     common stock and (ii) 3,000 shares of common stock of LabOne.

(4)  Consists entirely of options to purchase shares of common stock
     of Response Oncology, Inc.  Numbers have been adjusted to reflect 
     a 1 for 5 reverse stock split effective November 1995. 

(5)  Since November 1995, Mr. Grant has served as President, Chairman 
     of the Board and Chief Executive officer of LabOne, an 80.5% 
     owned subsidiary of Lab Holdings; however, Mr. Grant had received 
     cash compensation only from Lab Holdings until June 1, 1997.  At 
     such time his employment with Lab Holdings was terminated.  Lab 
     Holdings paid Mr. Grant a base salary of $146,344 from January 1, 
     1997 to May 31, 1997.   LabOne paid Mr. Grant a base salary of 
     $86,019 from June 1, 1997 to December 31, 1997.

(6)  Reflects cash bonuses paid to Mr. Grant by LabOne for services 
     rendered to LabOne. 

(7)  Consists of options to purchase (i) 75,000 shares of common stock 
     of LabOne and (ii) 3,000 shares of Response Oncology, Inc.

           AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                   AND YEAR-END OPTION VALUES

     The table below provides information on option exercises in 1998 
     by the named executive officers and the values of such officers' 
     unexercised options at December 31, 1998.  No options were 
     granted to any of those executive officers during 1998. 

                                    Number of       
                                   Securities          Value of  
                                   Underlying         Unexercised
                                  Unexercised         In-the-Money
              Shares                Options              Options    
             Acquired  Value      at Year End(#)      at Year End($) 
                on    Realized ------------------   ------------------
             Exercise   ($)      Exer-    Unexer-    Exer-     Unexer-
   Name        (#)              cisable   cisable   cisable    cisable
----------------------------------------------------------------------
P. A. Jacobs    --      --       5,000(1) 10,000      --         --
W. T. Grant II  --      --      42,431(2) 60,000(2)  84,007      --

(1)  Consists entirely of shares of Lab Holdings' common stock.

(2)  Consists entirely of options to purchase shares of common stock 
     of LabOne, Inc. and the value (i.e. market value of 
     underlying securities minus option exercise price) at 
     December 31, 1998 of such options. 

   REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

    Set forth below is the report of the compensation committee of the 
Board of Directors of Lab Holdings.  The report covers all officers of 
Lab Holdings other than Mr. Grant, who is the Chairman, President and 
Chief Executive Officer of LabOne. The compensation committee did not, 
and Lab Holdings' Board of Directors also does not, have 
responsibility for and in fact does not establish compensation policy 
for officers and employees of LabOne.  The Board of Directors of 
LabOne has its own compensation committee, which establishes 
compensation policies for the executive officers of LabOne.
 
              Report of the Compensation Committee

   Compensation Committee Interlocks and Insider Participation.  The 
compensation committee of the Board of Directors of Lab Holdings 
consists of John H. Robinson, Jr. (Chairman) and Lan C. Bentsen.  Mr. 
Robinson and Mr. Bentsen, who are non-employee directors of Lab 
Holdings, have not been employees or officers of Lab Holdings or any 
of its subsidiaries and have had no relationship or transaction with 
Lab Holdings requiring disclosure under Item 404 of Regulation S-K.

    This report is provided by the committee to assist stockholders in 
understanding the committee's philosophy in establishing the 
compensation of the Chief Executive Officer and all other executive 
officers of Lab Holdings for the year ended December 31, 1998. 

    Overview and Compensation Philosophy.  During 1996, Lab Holdings 
initiated a restructuring process that contemplated the distribution 
of most of its assets other than LabOne and Response Oncology to Lab 
Holdings' shareholders through the SLH Distribution.  That 
distribution was effected on March 3, 1997.  In connection with SLH's 
move to new facilities and the termination of a lease between SLH and 
Lab Holdings on June 1, 1997, Lab Holdings and SLH entered into an 
agreement whereby SLH hired all of Lab Holdings' existing employees 
and agreed to provide to Lab Holdings  management and administrative 
services and certain office space for an annual fee of $75,000.  This 
arrangement was entered into at the time that Lab Holdings  was 
effecting a second distribution to Lab Holdings' stockholders of all 
of the common stock of Response Oncology owned by Lab Holdings.  That 
distribution  occurred on July 25, 1997.  As a consequence of the SLH 
and Response Distributions and the Services Agreement, Lab Holdings  
had no employees between June 1, 1997, and August 7, 1998.  On August 
7, 1998, the Services Agreement was terminated due to the merger of 
SLH and Syntroleum Corporation, thereby necessitating a restaffing of 
Lab Holdings.  In anticipation of the need to restaff, the 
compensation committee engaged McDaniel & Associates, Inc., a 
compensation consultant, in the spring of 1998 to assist the committee 
in developing a compensation structure for Lab Holdings' executive 
officers, who would become Lab Holdings employees.

    In developing a new compensation structure, the committee focused 
on tying Lab Holdings' business strategy to three basic elements of 
compensation: (a) base compensation, (b) severance pay and (c) 
existing stock option arrangements.  The principal business of Lab 
Holdings is to manage its investment in LabOne.  Although negotiations 
for the merger of the two companies had been terminated in 1997, the 
committee recognized that the long-term interests of both companies 
and stockholder groups was to engage in a combination or some other 
strategic transaction.  Accordingly, the committee believed that 
compensation should be structured to ensure the continuity of 
management necessary to effectively pursue this strategy or to pursue 
other strategies that might develop under the circumstances.

    Consistent with these goals, Mr. Jacobs, the President and Chief 
Executive Officer, Mr. Fitzwater, the Executive Vice President, Chief 
Operating and Financial Officer, Treasurer and Secretary and Ms. 
McCoy, the Vice President and Chief Accounting Officer, were offered 
employment agreements that provide base compensation of $100,000, 
$100,000 and $70,000, respectively, and  severance pay of two years' 
base salary for Messrs. Jacobs and Fitzwater and one year's base pay 
for Ms. McCoy.

    The committee also concluded that an amendment to the stock option 
plan was necessary to render it effective.  Under the plan, options 
would expire 90 days following the termination of director status.  
Since the $26.50 exercise price of all options granted under the plan 
was significantly above the market price of Lab Holdings' stock, it 
was concluded that benefits under the plan would have no value should 
Lab Holdings be successful in implementing its strategy.  Accordingly, 
the committee recommended an amendment, which was subsequently adopted 
by the Board, that would permit an optionee who was terminated in 
connection with a strategic transaction to exercise the option through 
the end of the option term, all of which expire on September 17, 2007.

    Compensation of the Chief Executive Officers for 1998.  The 
components of the 1998 compensation of  P. Anthony Jacobs, the 
President and Chief Executive Officer of Lab Holdings, ere also 
determined in accordance with the above discussion.  Mr. Jacobs base 
compensation was set at $100,000 under the terms of an employment 
agreement as described above.  Mr. Jacobs, as a director of Lab 
Holdings, is also the holder of options to purchase 15,000 shares of 
Lab Holdings' common stock at a price of $26.50 per share.  As 
described above, that option was amended in August 1998, to extend the 
option exercise period upon termination of his status as a director in 
connection with a merger, consolidation, liquidation or certain change 
in control transactions.

    This report is being made over the names of John H. Robinson, Jr. 
and Lan C. Bentsen, who are the present members of the committee.


Performance of Lab Holdings' Common Stock

The following performance graph compares the performance of Lab 
Holdings' common stock during the period beginning on January 1. 1994 
and ending December 31, 1998, to the NASDAQ Stock Market index (the 
"NASDAQ COMPOSITE"), and a peer group referred to as the "LabOne Peer 
Group."  The LabOne Peer Group is a group of seven testing 
laboratories selected by LabOne (Bio-References Labs, Laboratory Corp. 
Of America, Oncormed, Pharmchem, Psychemedics, Unilab and Universal 
Standard Medical).  The performance graph published by Lab Holdings 
last year also included the Russell 2000 Index.  This is an index of 
companies, the mean of whose market capitalizations approximated that 
of Lab Holdings before its 1997 distributions of SLH Corporation and 
Response Oncology, Inc.  The Russell 2000 Index was deleted from this 
year's graph due to the decline in Lab Holdings' market capitalization 
as a result of the SLH and Response distributions.  Lab Holdings' 
total return for 1998 decreased compared to the return reflected by 
the Russell 2000 Index.

The graph assumes a $100 investment in Lab Holdings' common stock and 
in each of the indexes at the beginning of the period and a 
reinvestment of dividends paid on those investments throughout the 
period.  Since dividends are included, the graph reflects the 1997 SLH 
and Response distributions, the equivalent cash value of which were 
$4.78 and $7.31 per share, respectively.

                     VALUE OF $100 INVESTMENTS 
   AT DECEMBER 31, 1993 AND AT EACH SUBSEQUENT DECEMBER 31, THROUGH
       DECEMBER 31, 1998, ASSUMING REINVESTMENT OF DIVIDENDS


             [Performance graph reflecting information
                    shown in the table below]


Year End Data          1993    1994    1995     1996     1997    1998
-------------         ------  ------  ------   ------   ------  ------
Lab Holdings, Inc.    100.00   99.67   102.3   120.53   108.45   86.74
Nasdaq US CRSP Index  100.00   97.75  138.26   170.01   208.58  293.21
LabOne Peer Group     100.00   89.51   67.97    26.49    22.13   20.38



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 
          MANAGEMENT

Security Ownership of Lab Holdings Management.

The following table and notes thereto indicate the shares of common 
stock of Lab Holdings and of LabOne, known to Lab Holdings to be 
beneficially owned as of  December 31, 1998, respectively, by each 
director (including the nominee for election as a director) of Lab 
Holdings, each of the executive officers named in the Summary 
Compensation Table, and by all directors and executive officers of Lab 
Holdings as a group.


                                                          Shares of
                          Shares of Lab                 Common Stock
                         Holdings Common                of LabOne
                             Stock           Percentage  Beneficially
                          Beneficially        of Class      Owned
Name                      Owned (1)(3)          (2)      (1) (4) (5)
---------------------   ---------------       ---------   ---------
Lan C. Bentsen                6,000              --           --
Steven K. Fitzwater           6,932              --              5
W. T. Grant II (6)          138,089              2.1%       81,596(7)
P. Anthony Jacobs             6,780              --           --
John H. Robinson, Jr.         6,652              --           --
All directors, nominees
  and executive officers
  as a group of six         164,453              2.2%       81,601(7)


(1)  A beneficial owner of a security includes a person who, directly 
     or indirectly, has or shares voting or investment power with 
     respect to such security. Voting power is the power to vote or 
     direct the voting of the security and investment power is the 
     power to dispose or direct the disposition of the security. Each 
     person listed has stated that he, either alone or with his 
     spouse, has sole voting power and sole investment power with 
     respect to the shares shown as beneficially owned, except as 
     otherwise indicated.

(2)  The percentages represent the total number of shares of common 
     stock shown in the adjacent column divided by the number of 
     issued and outstanding shares of common stock as of December 31, 
     1998 (6,489,103 shares).  Percentages of less than one percent 
     are omitted.

(3)  Shares of Lab Holdings common stock shown as beneficially owned 
     include shares issuable upon the exercise of stock options 
     granted under the Lab Holdings, Inc. 1997 Directors' Stock Option 
     Plan that were exercisable on December 31,1 998 or that become 
     exercisable within 60 days thereafter, as follows:  5,000 shares 
     for each of Messrs. Bentsen, Fitzwater, Jacobs and Robinson and 
     20,000 shares for all Directors and executive officers as a 
     group.

(4)  Shares of LabOne stock shown as beneficially owned include shares 
     issuable upon the exercise of stock options granted under the 
     LabOne Long-Term Incentive Plan that were exercisable on December 
     31, 1998 or that become exercisable within 60 days thereafter, as 
     follows: W. T. Grant II, 57,431 shares;  and all directors and 
     executive officers as a group, 57,431 shares.

(5)  Percentages of shares beneficially owned are less than 1% for all 
     directors and executive officers, individually and as a group; 
     the shares shown as beneficially owned do not include 10,712,200 
     shares of LabOne owned by Lab Holdings as to which each director 
     of Lab Holdings has shared voting and investment power as a
     member of Lab Holdings' Board of Directors. Each Board member 
     disclaims beneficial ownership of the LabOne shares owned by Lab 
     Holdings.

(6)  Includes 22,442 shares held by W. T. Grant II as custodian for 
     his children; includes 45,000 shares held in a family trust for 
     which W. T. Grant II serves as a co-trustee and in that capacity 
     shares voting and investment powers; also includes 12,480 shares 
     owned by the wife of W. T. Grant II, as to which he disclaims 
     beneficial ownership.   

(7)  Includes the 22,365 shares of LabOne common stock held in an 
     individually directed account of Mr. Grant under LabOne's 401(k) 
     profit-sharing plan, as to which Mr. Grant has sole investment 
     power only.




Security Ownership of Certain Other Beneficial Owners of Lab Holdings 
Common Stock

     The following table indicates the shares of Lab Holdings common 
stock beneficially owned by the only persons (other than persons set 
forth in the preceding table) known to Lab Holdings or its management 
as beneficially owning more than five percent of Lab Holdings' common 
stock as of December 31, 1998.


                                 Amount and Nature            Percent
Name and Address of                of Beneficial              of Class
Beneficial Owner                     Ownership                   (1)
---------------------   -------------------------------------  -------
American Century
 Companies, Inc.        Total                       682,100(2)  10.5%
4500 Main Street          sole voting power         682,100
P. O. Box 418210          shared voting power           --
Kansas City, MO  64141    sole disposition power    682,100
                          shared disposition power      --

Wallace R. Weitz        Total                       881,454(2)  13.58%
 & Company                sole voting power         881,454
9290 W. Dodge Rd.         shared voting power           --
Suite 405                 sole disposition power    881,454
Omaha, NE  68114          shared disposition power      --

The Southern            Total                       467,192(2)   7.2%
 Fiduciary Group, Inc.    sole voting power          76,000
2325 Crestmoor Rd.        shared voting power           --
Suite 202                 sole disposition power    391,192
Nashville, TN             shared disposition power      --

William D. Grant        Total                     1,086,647(2)  16.7%
One Ward Parkway,         sole voting power         500,441
Suite 130                 shared voting power       586,206
Kansas City, MO 64112     sole disposition power    500,441
                          shared disposition power  586,206

(1)  The percentage represents the total number of shares of common 
     stock shown in the adjacent column divided by the number of 
     issued and outstanding shares of common stock as of December 31, 
     1998. 

(2)  As reported in  Schedule 13G filings as of December 31, 1998.



ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    Employment Agreements and Termination of Interim Services 
Agreement. Effective August 7, 1998, Lab Holdings entered into 
employment agreements with Mr. Jacobs, Mr. Fitzwater and Ms. McCoy, 
all of whom are executive officers of Lab Holdings.  Each employment 
agreement provides for employment of the executive officer for  a term 
commencing on August 7, 1998, and continuing until the third 
anniversary of that date (the second anniversary in the case of Ms. 
McCoy's agreement).  The term is extended for successive one year 
periods on each anniversary of the agreement unless notice of non-
extension is given by either party to the other prior to that 
anniversary. 

    The initial base compensation payable under the employment 
agreements is $100,000 for each of Mr. Jacobs and Fitzwater and 
$70,000 for Ms. McCoy.  It is subject to adjustment annually by the 
Board of Directors, provided that base salary may not be decreased by 
more than five percent year to year. 

    If the officer is terminated for cause or voluntarily terminates 
his employment with Lab Holdings, then, Lab Holdings will not be 
obligated to pay the officer any amounts of compensation or benefits 
following the date of termination.  A voluntary termination does not 
include a resignation tendered at the request of the Board or 
following or in connection with a merger, consolidation, liquidation, 
dissolution or certain change in control events.  If the officer is 
terminated without cause, Lab Holdings will continue to pay the 
officer amounts equal to his base compensation, as in effect at the 
time of the termination without cause, for the remaining term of this 
employment agreement, but in no event may the payments continue for a 
period of more than two years following the termination in the case of 
Mr. Jacobs and Mr. Fitzwater and for more than one year in the case of 
Ms. McCoy.  In that case, Lab Holdings will also reimburse the officer 
for the cost of the officer's health insurance as in effect at the 
date of termination.  The merger agreement described elsewhere in this 
report contemplates that each of the officers will tender their 
resignations at the closing of the merger.  Under the employment 
agreements, those resignations will effect terminations of the 
employment agreements without cause so that each will be entitled to 
receive payments of their base compensation and health insurance 
benefits as described above.  Copies of the employment agreements are 
appended to this report as Exhibits 10.13, 10.14 and 10.15.



                              PART IV

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

(a)  The following documents are filed as part of this report:
     (1) Financial Statements:
         Report of Independent Auditors with Respect to Lab 
           Holdings, Inc.
         Lab Holdings, Inc. Consolidated Balance Sheets as of
           December 31, 1998 and 1997
         Lab Holdings, Inc. Consolidated Statements of Operations for 
           the Years ended December 31, 1998, 1997 and 1996
         Lab Holdings, Inc. Consolidated Statements of Stockholders' 
           Equity for the Years ended December 31, 1998, 1997 and 1996
         Lab Holdings, Inc. Consolidated Statements of Comprehensive
           Income for the Years ended December 31, 1998, 1997 and 1996
         Lab Holdings, Inc. Consolidated Statements of Cash Flows for
           the Years ended December 31, 1998, 1997 and 1996
         Lab Holdings, Inc. Notes to Consolidated Financial Statements

     (2) Financial Statement Schedule
           II.  Valuation and Qualifying Accounts and Reserves -
              Years ended December 31, 1998, 1997 and 1996                   

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

(b) Reports on Form 8-K.
    A Form 8-K current report dated October 16, 1998 was filed with 
the Commission reporting under Other Events that LabOne had entered 
into an agreement to acquire Systematic Business Services, Inc.

    A Form 8-K current report dated October 23, 1998 was filed with 
the Commission providing under Other Events a cautionary statement in 
order to obtain the benefits of the "safe harbor" provisions of the 
Private Securities Litigation Reform Act of 1995.

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

     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).

     2.3   Agreement and Plan of Merger by and between Lab Holdings, 
           Inc. and LabOne, Inc., dated March 7, 1999 (filed as 
           Exhibit 2 to the Registrant's Report on Form 8-K dated 
           March 7, 1999 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 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).

     4.2   Trust Indenture dated as of September 1, 1998, between the 
           City of Lenexa, Kansas and Intrust Bank, N.A. related to 
           the issuance of Taxable Industrial Revenue Bonds for the 
           LabOne, Inc., Facility Project (filed as Exhibit 4.1 of the
           LabOne, Inc. Form 10-Q for the quarter ended September 30, 
           1998 and incorporated herein by reference).

     4.3   Lease Agreement dated as of September 1, 1998 between the 
           City of Lenexa, Kansas and LabOne, Inc. related to the 
           Trust Indenture filed as Exhibit 4.1 to the Company's 
           Report on Form 10-Q for the quarter ended September 30, 
           1998 (filed as Exhibit 4.2 of the LabOne, Inc. Form 10-Q 
           for the quarter ended September 30, 1998 and incorporated 
           herein by reference).

     4.4   Reimbursement Agreement dated as of September 1, 1998 
           between LabOne, Inc. and Commerce Bank, N.A. related to 
           Exhibits 4.1 and 4.2 to the Company's Report on Form 10-Q 
           for the quarter ended September 30, 1998 (filed as Exhibit 
           4.3 of the LabOne, Inc. Form 10-Q for the quarter ended 
           September 30, 1998 and incorporated herein by reference).

     4.5   Letter agreement dated September 4, 1998, between the 
           Company and Commerce Bank, N.A. relating to the Company's 
           obligations with respect to the Reimbursement Agreement and 
           letters of credit to be issued thereunder that is filed as 
           Exhibit 4.3 to the Company's Report on Form 10-Q for the 
           quarter ending September 30, 1998 (filed as Exhibit 4.4 of 
           the Registrant's form 10-Q for the quarter ended September 
           30, 1998 and incorporated herein by reference).

    10.1   Registrant's 1997 Directors' Stock Option Plan, as amended
           (filed as Exhibit 10.4 of the Registrant's Form 10-Q for 
           the quarter ended September 30, 1998 and incorporated 
           herein by reference).***

    10.2   Form of Option Agreement with directors under the 
           Directors' Stock Option Plan, as amended (filed as Exhibit 
           10.5 of the Registrant's Form 10-Q for the quarter ended 
           September 30, 1998 and incorporated herein by 
           reference).***

    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   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).**

    10.5   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).**

    10.6   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).**

    10.7   1997 Long-Term Incentive Plan of LabOne, Inc. (filed as 
           Exhibit 10.1 to the LabOne, Inc. Form 10-Q for the quarter 
           ended June 30, 1998 (File No. 0-15975) and incorporated 
           herein by reference).**

    10.8   Form of Stock Option Agreement pursuant to the LabOne 1997 
           Long-Term Incentive Plan (filed as Exhibit 10.2 to the 
           LabOne, Inc. Form 10-Q for the quarter ended June 30, 1998 
           (File No. 0-15975) and incorporated herein by reference).**

    10.9   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).**/***

    10.10  LabOne's Annual Incentive Plan (filed as Exhibit 10.3 to 
           LabOne, Inc. Annual Report on Form 10-K for the year ended 
           December 31, 1998 (File No. 0-15975) and incorporated 
           herein by reference).**

    10.11  Lab Holdings, Inc. Facilities Sharing and Interim Services 
           Agreement, dated as of June 1, 1998 (filed as Exhibit 10.29 
           to the SLH Corporation Registration Statement on Form S-4 
           (Registration No. 333-50253) and incorporated herein by 
           reference).

    10.12  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).

    10.13  Employment agreement between the Registrant and P. Anthony 
           Jacobs, the President and Chief Executive Officer of the 
           Registrant (filed as Exhibit 10.1 to the Registrant's Form 
           10-Q for the quarter ended September 30, 1998 and 
           incorporated herein by reference).**

    10.14  Employment agreement between the Registrant and Steven K. 
           Fitzwater, the Executive Vice President and Chief Operating 
           and Financial Officer of the Registrant (filed as Exhibit 
           10.2 to the Registrant's Form 10-Q for the quarter ended 
           September 30, 1998 and incorporated herein by reference).**

    10.15  Employment agreement between the Registrant and Linda K.
           McCoy, the Vice President and Chief Accounting Officer of 
           the Registrant (filed as Exhibit 10.3 to the Registrant's 
           Form 10-Q for the quarter ended September 30, 1998 and 
           incorporated herein by reference).**

    10.16  Warrant to Purchase Shares of Common Stock of LabOne, Inc.
           issued to National Support Services, Inc. (filed as Exhibit
           4 to the LabOne, Inc. Form 10-Q for the quarter ended
           March 31, 1998 and incorporated herein by reference).

    10.17  Warrant to Purchase Shares of Common Stock of LabOne, Inc.
           issued to USA Managed Care Organization (filed as Exhibit
           4.5 to the LabOne, Inc. Annual Report on Form 10-K for the 
           year ended December 31, 1998 and incorporated herein by 
           reference).

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

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

    24     Powers of Attorney

    27     Financial Data Schedule - as filed electronically by the
           Registrant in conjunction with this 1998 Form 10-K.

    99.1   Cautionary Statement under the Safe Harbor Provisions of 
           the Private Securities Litigation Reform Act of 1995
           (incorporated by reference to the Registrant's Report on
           Form 8-K, dated October 23, 1998).

  ** 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 29, 1999

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.

Name                       Title                        Date
----------------------------------------------------------------------
/s/ John H. Robinson, Jr.  Chairman of the Board        March 29, 1999
-------------------------  and Director
John H. Robinson, Jr.

/s/ Lan C. Bentsen         Director                     March 29, 1999
-------------------------
Lan C. Bentsen

/s/ Steven K. Fitzwater    Executive Vice President,    March 29, 1999
-------------------------  Chief Operating and
Steven K. Fitzwater        Financial Officer, 
                           Secretary and Director

/s/ Linda K. McCoy         Vice President, Chief        March 29, 1999
-------------------------  Accounting Officer and
Linda K. McCoy             Assistant Secretary



                   LAB HOLDINGS, INC. AND SUBSIDIARIES
                              Schedule II
             Valuation and Qualifying Accounts and Reserves
-------------------------------------------------------------------
                                  Additions-
                                  Charged to 
                                    selling,           
                  Balance at      general and    Deductions-  Balance
                   beginning     administrative uncollectible at end
Description        of year          expenses      accounts    of year
----------------------------------------------------------------------
                                  (In thousands)
Year ended December 31, 1998
Accounts and notes receivable - 
    allowance for
    doubtful
    accounts       $   968           1,503            144       2,327

Year ended December 31, 1997
Accounts and notes receivable - 
    allowance for
    doubtful
    accounts       $ 1,022             521            575         968

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