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, 1997

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

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

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

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

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

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

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

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

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

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

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



                               PART I.

ITEM 1. BUSINESS.

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

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

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

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

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

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

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

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

                    *             *             *

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


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


                    *             *             *




                           INSURANCE SERVICES

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

LABONE, INC.

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

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

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

LabOne's Insurance Applicant Testing

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

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

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

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

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

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

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


LabOne - Operations

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

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

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

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

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

LabOne - Regulatory Affairs/Quality Improvement

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

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

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

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

LabOne - Sales and Marketing

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

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

LabOne - Competition

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

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

LabOne - Foreign Markets

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


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

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

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

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

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


LabOne - Technology Development

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

LabOne - Employees

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

AGENCY PREMIUM RESOURCE, INC.

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

INTERNATIONAL UNDERWRITING SERVICES, INC.

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


HEALTHCARE SERVICES

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


LABONE, INC.

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

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

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

LabOne's Clinical Patient Testing

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

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

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

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

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

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

LabOne's Substance Abuse Testing Services

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

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

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

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


PYRAMID DIAGNOSTIC SERVICES, INC.

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

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


                        OTHER BUSINESSES

BMA RESOURCES, INC.

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

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


TENENBAUM & ASSOCIATES, INC.

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

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


REAL ESTATE

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

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

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

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

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

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

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

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

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

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

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

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



ITEM 2.  PROPERTIES.

Properties of Registrant

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

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



ITEM 3.  LEGAL PROCEEDINGS.

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

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

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

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

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

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

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



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

None.

                EXECUTIVE OFFICERS OF REGISTRANT.

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

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

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

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

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

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

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



                                   PART II.

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

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



ITEM 6.  SELECTED FINANCIAL DATA

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

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

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

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

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

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

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



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


RESULTS OF OPERATIONS

Introductory remarks about results of operations

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

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

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

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

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



1997 Compared to 1996

Insurance Services Segment:

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

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

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

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

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

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

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

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

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

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


Healthcare Services Segment:

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

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

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

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

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

Other Segment:

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

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

Investment Income - Net:

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

Miscellaneous Items:

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

Taxes:

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

Consolidated Results:

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



1996 Compared to 1995


Insurance Services Segment:

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

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

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

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

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

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


Healthcare Services Segment:

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

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

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

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

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

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

Other Segment:

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

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

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

Investment Income - Net:

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

Interest Expense:

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

Other Income/(Loss):

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

Taxes:

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

Consolidated Results:

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

Discontinued Operations:

Healthcare Business:

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

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

Real Estate:

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

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

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

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

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

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

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

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

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

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

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

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

Publicly-Traded Subsidiaries

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



LIQUIDITY AND CAPITAL RESOURCES

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

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

Net cash provided by operations totaled $8.5 million in 1997 compared
with $35.6 million in 1996.  During 1997, the loss from continuing
operations included non-cash items of $6.3 million for depreciation
and amortization and a $6.6 million provision by LabOne for loss on
anticipated disposal of assets.  The 1997 funds provided additionally
reflect a decrease in trading portfolios of $2.6 million, a $3 million
increase in account receivable and a net change in income taxes and
other of $3.5 million.  During 1996, the loss from continuing
operations included a non-cash item of $8.8 million for deprecation
and amortization.  The 1996 funds provided additionally reflect a
decrease in trading portfolios of $19.3 million, a $1.5 million
decrease in account receivable and a net change in income taxes and
other of $9.6 million.

Net cash used by investing activities totaled $12.3 million in 1997
primarily representing LabOne's net additions to property, plant and
equipment and intangibles on its purchase of the assets and customer
list of GIB Laboratories, Inc. and purchases supporting expanded
laboratory capacity.  Net cash used by investing activities in 1996
totaled $19.1 million reflecting Response's usage of $32.1 million for
its acquisition of physician practices, $9.1 million provided by the
discontinued real estate operations and a net decrease in long-term
investments of $7.6 million.

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

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

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

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

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

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

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

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

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

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

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



TRENDS

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

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

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

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

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

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




RECENTLY ISSUED ACCOUNTING STANDARDS

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

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

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


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See Item 14(a).

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

None.


                             PART III

ITEM 10. DIRECTORS OF THE REGISTRANT.

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

ITEM 11. EXECUTIVE COMPENSATION.

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

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

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

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

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



      Cross Reference Sheet To Documents Incorporated By Reference

Item 10. Directors and Executive        Proxy Statement relating to
         Officers of the Company        Annual Meeting of Shareholders
                                        to be held May 13, 1998, under
                                        the caption "Election of
                                        Directors - Nominees and
                                        Directors whose terms expire
                                        in 1999 and 2000."

Item 11. Executive Compensation         Proxy Statement relating to
                                        Annual Meeting of Shareholders
                                        to be held  May 13, 1998,
                                        under the captions "Election
                                        of Directors - Compensation of
                                        Executive Officers."

Item 12. Security Ownership of          Proxy Statement relating to
         Certain Beneficial             Annual Meeting of Shareholders
         Owners and Management          to be held May 13, 1998, under
                                        the captions "Election of
                                        Directors - Security Ownership
                                        of Management and Security
                                        Ownership of Certain
                                        Beneficial Owners."

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



                              PART IV

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

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

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

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

Portions of Registrant's Proxy Statement for use in connection with
the 1998 Annual Meeting of Shareholders are incorporated by reference
into Part III of this report, if such Proxy Statement is filed with
the Securities and Exchange Commission on or before April 30, 1998.
If such Proxy Statement is not filed by such date, the information
required to be presented in Part III will be filed as an amendment to
this report.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    13     Annual Report to Shareholders for the year ended December
           31, 1997 - To be furnished.

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

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

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

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

   * These documents may be obtained by stockholders of Registrant
upon written request to:  Lab Holdings, Inc., P.0. Box 7568, Shawnee
Mission, KS  66207.

  ** Management Compensatory Plan

 *** Non-Management Director Compensatory Plan

(d)  Not Applicable.



                                SIGNATURES

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

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

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


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


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




INDEPENDENT AUDITORS' REPORT

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

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

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

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




                                              KPMG Peat Marwick LLP


Kansas City, Missouri
February 20, 1998



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

See accompanying notes to consolidated financial statements.



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

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

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

See accompanying notes to consolidated financial statements.



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

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



See accompanying notes to consolidated financial statements.



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

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



See accompanying notes to consolidated financial statements.



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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


RECENTLY ISSUED ACCOUNTING STANDARDS

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

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

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



NOTE 2 - DISPOSITIONS

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

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

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

As a result of the distributions, Lab Holdings' principal asset
consists of its stock holdings in LabOne.

NOTE 3 - COMMITMENTS AND CONTINGENCIES

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

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

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

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

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

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

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

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



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

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

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

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



NOTE 5 - SEGMENT DATA

The following table shows segment information from continuing
operations:

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

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

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

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

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



NOTE 6 - INCENTIVE STOCK OPTION PLAN

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

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

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

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

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

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


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

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


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

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

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

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

NOTE 7 - LEASE COMMITMENTS

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

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

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



NOTE 8 - INVESTMENT SECURITIES

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

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

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

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


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

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

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

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

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

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

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

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



NOTE 9 - INCOME TAXES

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

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

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

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

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

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

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

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

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


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



NOTE 10 - INTANGIBLE ASSETS

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

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

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

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



NOTE 11 - FOREIGN OPERATIONS

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

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

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



NOTE 12- EARNINGS PER SHARE

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

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



NOTE 13- RELATED PARTY TRANSACTIONS

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

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



NOTE 14 - BENEFIT PLANS

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

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

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



NOTE 15- DISCONTINUED OPERATIONS

Operations of Discontinued Healthcare Business

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

A summary of the discontinued healthcare business follows:

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

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

Net Assets of the Discontinued Healthcare Business

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

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

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


Operations of Discontinued Real Estate Segment

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

A summary of discontinued real estate operations follows:

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

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

Net Assets of Discontinued Real Estate Segment

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

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

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

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



NOTE 16- QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized 1997 quarterly financial data is as follows:

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

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

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

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

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


Summarized 1996 quarterly financial data is as follows:

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

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

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

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

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

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

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



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

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

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



* Uncollectible accounts written-off