Updates Full-Year Guidance
- Results from Continuing Operations for first quarter 2024
versus last year:
- Revenue: $3.18 billion versus
$3.04 billion or up 4.6% | Base
Business grew 6.7%
- Diluted EPS: $2.69 versus
$2.34
- Adjusted EPS: $3.68 versus
$3.46
- Full-Year 2024 Guidance: Raised midpoint and narrowed range of
adjusted EPS to $14.45 to
$15.35; Free Cash Flow remains
$1.00 billion to $1.15 billion
- Year to date announced/completed five acquisitions that support
our strategy
- Significantly expanded our test menu in key therapeutic
areas
BURLINGTON, N.C., April 25,
2024 /PRNewswire/ -- Labcorp (NYSE: LH), a
global leader of innovative and comprehensive laboratory services,
today announced results for the first quarter ended March 31, 2024 and updated full-year
guidance.
"Labcorp's first quarter performance sets a strong foundation
for the year ahead," said Adam
Schechter, chairman and CEO of Labcorp. "We have a strong
position as a partner of choice for health systems and
regional/local laboratories, announcing or completing several
transactions in the quarter. Additionally, we continue to harness
science, technology and innovation as we expand Labcorp's test menu
to meet patients' evolving needs. The Labcorp team will build off
this momentum and continue to deliver value for customers,
shareholders and employees as we further our mission to improve
health and improve lives."
Labcorp advanced key growth initiatives that supported its
strategy.
- Selected as the winning bidder for select assets of Invitae.
This transaction will advance our strategy to launch and scale
specialty testing in areas such as oncology and rare diseases.
- Entered into an agreement to acquire select assets of
BioReference Health's diagnostic business. The company expects this
transaction will increase access to Labcorp's high-quality clinical
laboratory services, focused on clinical diagnostics and
reproductive and women's health.
- Closed three transactions in the quarter, including health
system agreements with Baystate Health in Massachusetts and Providence in California and a regional lab acquisition in
California.
The company continues to make advances in science, technology,
and innovation:
- Launched a test to identify the presence or absence of pTau217,
a pivotal blood biomarker that helps diagnose Alzheimer's and
monitor patient treatment.
- Introduced a GFAP blood biomarker test, for the early detection
of neurodegenerative diseases and neurological injuries.
- Launched Labcorp® Plasma Detect™, the first clinically
validated, whole-genome sequencing molecular residual disease (MRD)
solution for early-stage colon cancer, extending its leadership
into MRD clinical research.
- Introduced its Weight Loss Management portfolio, a new offering
that supports individuals and physicians with accessible and
convenient testing options to guide weight loss management
decisions and treatment.
- Labcorp OnDemand introduced a Magnesium Test and Micronutrient
Test to measure key vitamin and mineral levels to support
individual wellness.
- Launched a sexually transmitted infection test for
mycoplasma genitalium, which can be as widespread as
chlamydia and gonorrhea.
- Received emergency use authorization from the U.S. Food and
Drug Administration (FDA) for its Mpox PCR Test Home Collection
Kit, the first mpox at-home collection kit authorized by the
FDA.
Today Labcorp announced that it intends to implement a new
holding company structure on May 17,
2024. The name of the new holding company will be Labcorp
Holdings Inc. The new parent company will replace Laboratory
Corporation of America Holdings as the publicly-traded entity and
Laboratory Corporation of America Holdings will become a wholly
owned subsidiary of Labcorp Holdings Inc. The new parent's name is
more closely aligned with the brand name, and the company will have
a structure that is optimized to reflect the company's operations.
Common stock will continue to trade on the NYSE on an uninterrupted
basis under the existing symbol "LH" and Laboratory Corporation of
America stockholders will automatically become stockholders of
Labcorp Holdings Inc. on a one-for-one basis with all of the same
rights.
On April 11, 2024, Labcorp issued
its 2023 Corporate Responsibility Report. The report offers an
overview of the company's governance profile, inclusion, diversity
and belonging initiatives, environmental sustainability impact and
community engagement.
On April 11, 2024, the company
announced a quarterly cash dividend of $0.72 per share of common stock, payable on
June 12, 2024, to stockholders of
record at the close of business on May 28,
2024.
Consolidated Results
First Quarter Results
Revenue for the quarter was $3.18
billion, an increase of 4.6% from $3.04 billion in the first quarter of 2023. The
increase was due to organic revenue of 2.3%, acquisitions, net of
divestitures, of 1.8%, and foreign currency translation of 0.5%.
The 2.3% increase in organic revenue was driven by a 4.2% increase
in the company's organic Base Business, partially offset by a
(1.9%) decrease in COVID-19 PCR testing (COVID-19 Testing).
Compared to the Base Business last year, Base Business revenue grew
6.7%. Base Business includes Labcorp's operations except for
COVID-19 Testing.
Operating income for the quarter was $321.3 million, or 10.1% of revenue,
compared to $329.8 million, or 10.9%,
in the first quarter of 2023. The company recorded amortization,
restructuring charges, and special items, which together totaled
$131.5 million in the quarter,
compared to $118.0 million during the
same period in 2023. Adjusted operating income (excluding
amortization, restructuring charges, and special items) for the
quarter was $452.8 million, or 14.3%
of revenue, compared to $447.8
million, or 14.7%, in the first quarter of 2023. The
increase in operating income was driven by base business demand and
LaunchPad savings, partially offset by personnel costs and a
reduction in COVID-19 Testing. The margin decline was due to lower
COVID-19 Testing.
Net earnings from continuing operations for the quarter were
$228.3 million compared to
$208.4 million in the first quarter
of 2023. Diluted EPS from continuing operations were $2.69 in the quarter compared to $2.34 during the same period in 2023. Adjusted
EPS (excluding amortization, restructuring charges, and special
items) were $3.68 in the quarter
compared to $3.46 in the first
quarter of 2023.
Operating cash flow from continuing operations for the quarter
was a use of $29.8 million compared
to $185.7 million generated in the
first quarter of 2023. The decrease in operating cash flow was due
to lower cash earnings and the timing of working capital
requirements. Capital expenditures totaled $133.8 million compared to $78.2 million a year ago. As a result, free cash
flow from continuing operations (operating cash flow from
continuing operations less capital expenditures) was a use of
$163.6 million compared to
$107.5 million generated in the first
quarter of 2023.
At the end of the quarter, the company's cash balance was
$99.3 million and total debt was
$5.09 billion. During the quarter,
the company invested $259.2 million
on acquisitions and paid out $62.1
million in dividends.
First Quarter Segment
Results
The company's two segments include Diagnostics Laboratories and
Biopharma Laboratory Services (comprised of Central Laboratories
and Early Development Research Laboratories). The following segment
results exclude amortization, restructuring charges, special items,
and unallocated corporate expenses.
Diagnostics
Laboratories
Revenue for the quarter was $2.48
billion, an increase of 4.1% from $2.38 billion in the first quarter of 2023. The
increase was due to organic growth of 1.8% and acquisitions, net of
divestitures, of 2.2%. The 1.8% increase in organic revenue was due
to a 4.3% increase in the Base Business, partially offset by a
(2.5%) decrease in COVID-19 Testing. Total Base Business growth
compared to the Base Business in the prior year was 6.8%.
Total volume (measured by requisitions) increased by 3.4% as
acquisition volume, net of divestitures contributed 2.2%, while
organic volume increased by 1.2%. Organic volume was up due to a
2.6% increase in the Base Business, including the negative impact
from adverse weather of approximately 1%. This was partially offset
by a (1.4%) decrease in COVID-19 Testing. Price/mix increased by
0.6% due to organic Base Business growth of 1.7%, partially offset
by COVID-19 Testing of (1.1%). Base Business volume increased 4.9%
compared to the Base Business last year. Price/mix was up 1.9% in
the Base Business compared to the Base Business last year.
Adjusted operating income for the quarter was $417.9 million, or 16.9% of revenue, compared to
$441.5 million, or 18.5%, in the
first quarter of 2023. The decrease in adjusted operating income
was due to a reduction in COVID-19 Testing. The decrease in
adjusted operating income margin was due to the reduction COVID-19
Testing, weather, and the mix impact from lab management
agreements, which we expect to improve over time.
Biopharma Laboratory
Services
Revenue for the quarter was $710.9
million, an increase of 7.5% from $661.3 million in the first quarter of 2023. The
increase was due to organic growth of 5.1% and foreign currency
translation of 2.4%.
Adjusted operating income for the quarter was $99.9 million, or 14.1% of revenue, compared to
$73.6 million, or 11.1%, in the first
quarter of 2023. Adjusted operating income and margin increased due
to organic growth and LaunchPad savings, partially offset by higher
personnel costs.
Net orders and net book-to-bill during the trailing twelve
months were $2.83 billion and 1.00,
respectively, which we expect to increase throughout the year.
Backlog at the end of the quarter was $7.90
billion, an increase of 0.2% compared to last year. The
company expects approximately $2.46
billion of its backlog to convert into revenue in the next
twelve months.
Outlook for 2024
Labcorp is updating 2024 full year guidance to reflect its first
quarter performance and full year outlook. The following guidance
assumes foreign exchange rates effective as of March 31, 2024, for the remainder of the year.
Enterprise level guidance includes the estimated impact from
currently anticipated capital allocation, including acquisitions,
share repurchases and dividends.
(Dollars in
billions, except per share data)
|
|
|
|
Previous
|
|
Updated
|
|
Results
|
|
2024
Guidance
|
|
2024
Guidance
|
|
|
|
|
|
|
|
|
|
2023
|
|
Low
|
High
|
|
Low
|
High
|
Revenue
|
|
|
|
|
|
|
|
Labcorp Enterprise
(1)(2)
|
$12.2
|
|
4.7 %
|
6.5 %
|
|
4.8 %
|
6.4 %
|
Diagnostics
Laboratories
|
$9.4
|
|
3.2 %
|
4.8 %
|
|
4.8 %
|
6.0 %
|
Biopharma Laboratory
Services (3)
|
$2.8
|
|
5.5 %
|
7.5 %
|
|
3.7 %
|
5.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EPS
|
$13.56
|
|
$14.30
|
$15.40
|
|
$14.45
|
$15.35
|
|
|
|
|
|
|
|
|
Free Cash Flow from
Cont. Ops(4)
|
$0.89
|
|
$1.00
|
$1.15
|
|
$1.00
|
$1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 2024 Guidance
includes an impact from foreign currency translation of
0.1%.
|
(2) Enterprise level
revenue is presented net of intersegment transaction
eliminations.
|
(3) 2024 Guidance
includes an impact from foreign currency translation of
0.4%.
|
(4) 2023 Free Cash
Flow from continuing operations excluding spin-related
items.
|
|
Use of Adjusted Measures
The company has provided in this press release and accompanying
tables "adjusted" financial information that has not been prepared
in accordance with GAAP, including adjusted net income, adjusted
EPS (or adjusted net income per share), adjusted operating income,
adjusted operating margin, free cash flow, and certain segment
information. The company believes these adjusted measures are
useful to investors as a supplement to, but not as a substitute
for, GAAP measures, in evaluating the company's operational
performance. The company further believes that the use of these
non-GAAP financial measures provides an additional tool for
investors in evaluating operating results and trends, and growth
and shareholder returns, as well as in comparing the company's
financial results with the financial results of other companies.
However, the company notes that these adjusted measures may be
different from and not directly comparable to the measures
presented by other companies. Reconciliations of these non-GAAP
measures to the most comparable GAAP measures and an identification
of the components that comprise "special items" used for certain
adjusted financial information are included in the tables
accompanying this press release.
The company today is providing an investor relations
presentation with additional information on its business and
operations, which is available in the investor relations section of
the company's website at www.Labcorp.com. Analysts and investors
are directed to the website to review this supplemental
information.
A conference call discussing Labcorp's quarterly results will be
held today at 9:00 a.m. ET and is
available by registering at this link, which will provide a dial-in
number and unique PIN to access the call. It is recommended that
participants join 10 minutes prior to the start of the call,
although participants may register and join at any time during the
call. A live webcast of Labcorp's quarterly conference call on
April 25, 2024, will be available at the Labcorp Investor
Relations website beginning at 9:00
a.m. ET. This webcast will be archived and accessible
through April 11, 2025.
About Labcorp
Labcorp (NYSE: LH) is a global leader of innovative and
comprehensive laboratory services that helps doctors, hospitals,
pharmaceutical companies, researchers and patients make clear and
confident decisions. We provide insights and advance science to
improve health and improve lives through our unparalleled
diagnostics and drug development laboratory capabilities. The
company's more than 67,000 employees serve clients in approximately
100 countries, provided support for 84% of the new drugs and
therapeutic products approved in 2023 by the FDA, and performed
more than 600 million tests for patients around the world. Learn
more about us at www.Labcorp.com.
Cautionary Statement Regarding
Forward-Looking Statements
This press release contains forward-looking statements,
including, but not limited to, statements with respect to (i) the
estimated 2024 guidance and related assumptions, (ii) the planned
holding company reorganization, including statements regarding the
expectation that the reorganization ("Reorganization") will be
consummated, the anticipated timing of the Reorganization, and the
benefits of the Reorganization, (iii) the recently completed
spin-off of the company's Clinical Development and
Commercialization Services business, now Fortrea Holdings Inc.,
(iv) the impact of various factors on operating and financial
results, including the projected impact of the COVID-19 pandemic on
the company's businesses, operating results, cash flows and/or
financial condition, as well as global economic and market
conditions, (v) future business strategies, (vi) expected savings,
synergies and other benefits to the Company, customers or patients
from acquisitions and other transactions and partnerships, and
(vii) opportunities for future growth.
Each of the forward-looking statements is subject to change
based on various important factors, many of which are beyond the
company's control, including without limitation: (i) uncertainties
as to the completion and timing of the Reorganization; (ii) the
effect of the announcement of the Reorganization on the company's
business generally; (iii) unexpected issues that arise in the
continued planning for the Reorganization; (iv) market reaction to
the announcement, updates on, and planning for the Reorganization;
(v) the failure to receive tax-free treatment with respect to the
spin-off for U.S. federal income purposes; (vi) the impact of
spin-off related items; (vii) potential difficulties with employee
retention; (viii) the trading price of the company's stock,
competitive actions and other unforeseen changes and general
uncertainties in the marketplace; (ix) changes in government
regulations, including healthcare reform; (x) customer purchasing
decisions, including changes in payer regulations or policies; (xi)
other adverse actions of governmental and third-party payers; (xii)
changes in testing guidelines or recommendations; (xiii) federal,
state, and local government responses to the COVID-19 pandemic, and
the volume of COVID-19 Testing performed by the company; (xiv) the
impact of global geopolitical events; (xv) the effect of public
opinion on the company's reputation; (xvi) adverse results in
material litigation matters; (xvii) the impact of changes in laws
and regulations applicable to the company; (xviii) failure to
maintain or develop customer relationships; (xix) the company's
ability to develop or acquire new products and adapt to
technological changes; (xx) failure in information technology,
systems, or data security; (xxi) the impact of potential losses
under repurchase agreements; (xxii) adverse weather conditions;
(xxiii) the number of revenue days in a financial period; (xxiv)
employee relations; (xxv) personnel costs; (xxvi) inflation;
(xxvii) increased competition; and (xxviii) the effect of exchange
rate fluctuations. These factors, in some cases, have affected and
in the future (together with other factors) could affect the
company's ability to implement the company's business strategy, and
actual results could differ materially from those suggested by
these forward-looking statements. As a result, readers are
cautioned not to place undue reliance on any of the forward-looking
statements.
The company has no obligation to provide any updates to these
forward-looking statements even if its expectations change. All
forward-looking statements are expressly qualified in their
entirety by this cautionary statement. Further information on
potential factors, risks and uncertainties that could affect
operating and financial results is included in the company's most
recent Annual Report on Form 10-K and subsequent Forms 10-Q,
including in each case under the heading RISK FACTORS, and in the
company's other filings with the SEC. The information in this press
release should be read in conjunction with a review of the
company's filings with the SEC including the information in the
company's most recent Annual Report on Form 10-K, and subsequent
Forms 10-Q, under the heading "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS".
LABORATORY
CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Dollars in Millions,
except per share data)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2024
|
|
2023
|
Revenues
|
|
$
3,176.6
|
|
$
3,037.8
|
|
|
|
|
|
Cost of
revenues
|
|
2,279.3
|
|
2,187.7
|
|
|
|
|
|
Gross profit
|
|
897.3
|
|
850.1
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
508.4
|
|
457.2
|
Amortization of
intangibles and other assets
|
|
60.1
|
|
53.4
|
Goodwill and other
asset impairments
|
|
2.5
|
|
2.2
|
Restructuring and other
charges
|
|
5.0
|
|
7.5
|
|
|
|
|
|
Operating
income
|
|
321.3
|
|
329.8
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Interest
expense
|
|
(46.9)
|
|
(50.7)
|
Investment
income
|
|
2.9
|
|
2.2
|
Equity method income
(expense), net
|
|
0.1
|
|
(2.1)
|
Other, net
|
|
20.0
|
|
(6.9)
|
|
|
|
|
|
Earnings from
continuing operations before income taxes
|
|
297.4
|
|
272.3
|
|
|
|
|
|
Provision for income
taxes
|
|
69.1
|
|
63.9
|
|
|
|
|
|
Earnings from
continuing operations
|
|
228.3
|
|
208.4
|
Earnings from
discontinued operations, net of tax
|
|
—
|
|
4.9
|
|
|
|
|
|
Net earnings
|
|
228.3
|
|
213.3
|
Less: Net earnings
attributable to the noncontrolling interest
|
|
(0.3)
|
|
(0.4)
|
|
|
|
|
|
Net earnings
attributable to Laboratory Corporation of America
Holdings
|
|
$
228.0
|
|
$
212.9
|
|
|
|
|
|
Basic earnings per
common share:
|
|
|
|
|
Basic earnings per
common share continuing operations
|
|
$
2.71
|
|
$
2.35
|
Basic earnings per
common share discontinued operations
|
|
$
—
|
|
$
0.06
|
Basic earnings per
common share
|
|
$
2.71
|
|
$
2.41
|
|
|
|
|
|
Diluted earnings per
common share:
|
|
|
|
|
Diluted earnings per
common share continuing operations
|
|
$
2.69
|
|
$
2.34
|
Diluted earnings per
common share discontinued operations
|
|
$
—
|
|
$
0.05
|
Diluted earnings per
common share
|
|
$
2.69
|
|
$
2.39
|
|
|
|
|
|
Weighted average basic
shares outstanding
|
|
84.1
|
|
88.4
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
84.7
|
|
89.0
|
LABORATORY
CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(Dollars in
Millions)
|
|
|
March 31,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
99.3
|
|
$
536.8
|
Accounts receivable,
net
|
2,083.7
|
|
1,913.3
|
Unbilled
services
|
120.4
|
|
185.4
|
Supplies
inventory
|
475.0
|
|
474.6
|
Prepaid expenses and
other
|
678.1
|
|
655.3
|
Total current
assets
|
3,456.5
|
|
3,765.4
|
|
|
|
|
Property, plant and
equipment, net
|
2,897.8
|
|
2,911.8
|
Goodwill,
net
|
6,218.9
|
|
6,142.5
|
Intangible assets,
net
|
3,394.1
|
|
3,342.0
|
Joint venture
partnerships and equity method investments
|
17.7
|
|
26.9
|
Other assets,
net
|
546.0
|
|
536.5
|
Total assets
|
$
16,531.0
|
|
$
16,725.1
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
695.5
|
|
$
827.5
|
Accrued expenses and
other
|
649.3
|
|
804.0
|
Unearned
revenue
|
377.5
|
|
421.7
|
Short-term operating
lease liabilities
|
171.3
|
|
165.8
|
Short-term finance
lease liabilities
|
6.4
|
|
6.4
|
Short-term borrowings
and current portion of long-term debt
|
2,041.5
|
|
999.8
|
Total current
liabilities
|
3,941.5
|
|
3,225.2
|
|
|
|
|
Long-term debt, less
current portion
|
3,047.6
|
|
4,054.7
|
Operating lease
liabilities
|
624.6
|
|
648.9
|
Financing lease
liabilities
|
77.1
|
|
78.6
|
Deferred income taxes
and other tax liabilities
|
397.2
|
|
417.9
|
Other
liabilities
|
468.2
|
|
409.3
|
Total
liabilities
|
8,556.2
|
|
8,834.6
|
|
|
|
|
Commitments and
contingent liabilities
|
|
|
|
Noncontrolling
interest
|
15.2
|
|
15.5
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common stock, 84.3 and
83.9 shares outstanding at March 31, 2024, and December 31,
2023,
respectively
|
7.7
|
|
7.7
|
Additional paid-in
capital
|
82.0
|
|
38.4
|
Retained
earnings
|
8,055.3
|
|
7,888.2
|
Accumulated other
comprehensive loss
|
(185.4)
|
|
(59.3)
|
Total shareholders'
equity
|
7,959.6
|
|
7,875.0
|
Total liabilities and
shareholders' equity
|
$
16,531.0
|
|
$
16,725.1
|
LABORATORY
CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Dollars in
Millions)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net earnings
|
$
228.3
|
|
$
213.3
|
Earnings from
discontinued operations, net of tax
|
—
|
|
(4.9)
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
154.5
|
|
142.1
|
Stock
compensation
|
31.6
|
|
32.9
|
Operating lease
right-of-use asset expense
|
44.1
|
|
40.5
|
Goodwill and other
asset impairments
|
2.5
|
|
2.2
|
Deferred income
taxes
|
(19.5)
|
|
27.2
|
Other
|
(3.0)
|
|
9.6
|
Change in assets and
liabilities (net of effects of acquisitions and
divestitures):
|
|
|
|
Increase in accounts
receivable
|
(187.1)
|
|
(108.4)
|
Decrease in unbilled
services
|
63.9
|
|
56.9
|
Increase in supplies
inventory
|
(0.6)
|
|
(10.0)
|
Increase in prepaid
expenses and other
|
(24.9)
|
|
(57.5)
|
Decrease in accounts
payable
|
(121.1)
|
|
(77.7)
|
Increase (decrease) in
unearned revenue
|
(41.6)
|
|
16.3
|
Decrease in accrued
expenses and other
|
(156.9)
|
|
(96.8)
|
Net cash provided by
continuing operating activities
|
(29.8)
|
|
185.7
|
Net cash provided by
discontinued operating activities
|
—
|
|
(64.5)
|
Net cash provided by
(used for) operating activities
|
(29.8)
|
|
121.2
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Capital
expenditures
|
(133.8)
|
|
(78.2)
|
Proceeds from sale of
assets
|
0.1
|
|
0.1
|
Proceeds from sale of
business
|
13.5
|
|
—
|
Investments in equity
affiliates
|
(13.7)
|
|
(6.1)
|
Acquisition of
businesses, net of cash acquired
|
(259.2)
|
|
0.2
|
Net cash used in
continuing investing activities
|
(393.1)
|
|
(84.0)
|
Net cash used in
discontinued investing activities
|
—
|
|
(15.7)
|
Net cash used for
investing activities
|
(393.1)
|
|
(99.7)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds from
revolving credit facilities
|
253.2
|
|
827.9
|
Payments on revolving
credit facilities
|
(210.8)
|
|
(827.9)
|
Net share settlement
tax payments from issuance of stock to employees
|
(14.7)
|
|
(20.5)
|
Net proceeds from
issuance of stock to employees
|
26.7
|
|
27.6
|
Dividends
paid
|
(62.1)
|
|
(64.4)
|
Other
|
(4.0)
|
|
(3.3)
|
|
|
|
|
Net cash used in
continuing financing activities
|
(11.7)
|
|
(60.6)
|
Net cash provided by
discontinued financing activities
|
—
|
|
—
|
Net cash used for
financing activities
|
(11.7)
|
|
(60.6)
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(2.9)
|
|
3.0
|
Net decrease in cash
and cash equivalents
|
(437.5)
|
|
(36.1)
|
Cash and cash
equivalents at beginning of period
|
536.8
|
|
430.0
|
|
|
|
|
Less: Cash and cash
equivalents of discontinued operations at end of period
|
—
|
|
99.1
|
Cash and cash
equivalents at end of period
|
$
99.3
|
|
$
294.8
|
LABORATORY
CORPORATION OF AMERICA HOLDINGS
|
Condensed Combined
Non-GAAP Segment Information
|
(Dollars in
Millions)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Diagnostics
Laboratories
|
|
|
|
Revenues
|
$
2,479.7
|
|
$
2,382.8
|
|
|
|
|
Adjusted Operating
Income
|
$
417.9
|
|
$
441.5
|
Adjusted Operating
Margin
|
16.9 %
|
|
18.5 %
|
|
|
|
|
Biopharma Laboratory
Services
|
|
|
|
Revenues
|
$
710.9
|
|
$
661.3
|
|
|
|
|
Adjusted Operating
Income
|
$
99.9
|
|
$
73.6
|
Adjusted Operating
Margin
|
14.1 %
|
|
11.1 %
|
|
|
|
|
Consolidated
|
|
|
|
Revenues
|
$
3,176.6
|
|
$
3,037.8
|
|
|
|
|
Adjusted Segment
Operating Income
|
$
517.8
|
|
$
515.1
|
Unallocated corporate
expense
|
$
(65.0)
|
|
$
(67.3)
|
Consolidated Adjusted
Operating Income
|
$
452.8
|
|
$
447.8
|
Adjusted Operating
Margin
|
14.3 %
|
|
14.7 %
|
The consolidated revenue and adjusted segment operating income
are presented net of intersegment transaction eliminations and
other amounts not used in determining segment performance. Adjusted
operating income and adjusted operating margin are non-GAAP
measures. See the subsequent reconciliation of non-GAAP financial
measures.
LABORATORY
CORPORATION OF AMERICA HOLDINGS
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in millions,
except per share data)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2024
|
|
2023
|
|
|
|
|
|
Adjusted Operating
Income
|
|
|
|
|
Operating
Income
|
|
$
321.3
|
|
$
329.8
|
Amortization of
intangibles and other assets (a)
|
|
60.1
|
|
53.4
|
Restructuring and other
charges (b)
|
|
5.0
|
|
7.5
|
Acquisition and
disposition-related costs (c)
|
|
20.9
|
|
16.1
|
Launchpad Costs
(d)
|
|
8.9
|
|
—
|
Spin off transaction
costs (e)
|
|
—
|
|
13.1
|
Asset impairments
(f)
|
|
2.5
|
|
2.2
|
Other
|
|
11.7
|
|
2.7
|
TSA Reimbursement
(g)
|
|
22.4
|
|
—
|
CDCS not included in
discontinued operations (h)
|
|
—
|
|
23.0
|
Adjusted operating
income
|
|
$
452.8
|
|
$
447.8
|
|
|
|
|
|
Adjusted Net
Income
|
|
|
|
|
Net Income
|
|
$
228.0
|
|
$
212.9
|
Impact of adjustments
to operating income
|
|
131.5
|
|
95.0
|
(Gains) / losses on
venture fund investments, net (i)
|
|
4.2
|
|
1.5
|
(Gain) / loss on sale
of business (j)
|
|
(4.9)
|
|
—
|
Pension settlement
(k)
|
|
—
|
|
7.9
|
TSA Reimbursement
(g)
|
|
(22.4)
|
|
—
|
Other
|
|
—
|
|
1.5
|
Income tax impact of
adjustments (l)
|
|
(24.2)
|
|
(23.4)
|
Earnings from
discontinued operations, net of tax (h)
|
|
—
|
|
(4.9)
|
CDCS not included in
discontinued operations (h)
|
|
—
|
|
17.2
|
Adjusted net
income
|
|
$
312.2
|
|
$
307.7
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
84.7
|
|
89.0
|
|
|
|
|
|
Adjusted earnings per
share
|
|
$
3.68
|
|
$
3.46
|
(a)
|
Amortization of
intangible assets acquired as part of business
acquisitions.
|
|
|
(b)
|
Restructuring and other
charges represent amounts incurred in connection with the
elimination of redundant positions and facilities within the
organization in connection with our LaunchPad initiatives, the
spin-off of Fortrea Holdings Inc. (Fortrea), and acquisitions or
dispositions of businesses by the company.
|
|
|
(c)
|
Acquisition and
disposition-related costs include due-diligence legal and advisory
fees, retention bonuses and other integration or disposition
related activities.
|
|
|
(d)
|
LaunchPad costs include
non-capitalized costs associated with the implementation of systems
and consulting costs incurred as part of the LaunchPad business
process improvement initiative.
|
|
|
(e)
|
The company incurred
various costs to prepare for the spin-off of Fortrea and
reorganization of the remaining Labcorp business.
|
|
|
(f)
|
The company impaired
certain fixed assets and capitalized software costs which are no
longer realizable by the business.
|
|
|
(g)
|
Represents transition
services fees charged to Fortrea related to administrative and IT
systems support. The costs to provide these services are
included in operating income but the service fees are included in
other income.
|
|
|
(h)
|
These adjustments
remove the impact of the Clinical Development and Commercialization
Services business pursuant to the spin-off of Fortrea.
|
|
|
(i)
|
The company makes
investments in companies or investment funds developing promising
technology related to its operations. The company recorded net
gains and losses related to several distributions from venture
funds, increases in the market value of investments, and
impairments of other investments due to the underlying performance
of the investments.
|
|
|
(j)
|
The company recorded a
gain on the disposition of the Beacon Laboratory Benefits Solutions
business.
|
|
|
(k)
|
The company incurred a
charge related to the US pension plan due to settlement of certain
obligations to retired employees.
|
|
|
(l)
|
Income tax impact of
adjustments calculated based on the tax rate applicable to each
item.
|
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SOURCE Laboratory Corporation of America Holdings