- Revenue: Q4 of $4.5 billion, up from $3.0 billion last year;
Full year of $14.0 billion, up from $11.6 billion last year
- Diluted EPS: Q4 of $9.54, up from $2.32 last year; Full year of
$15.88, up from $8.35 last year
- Adjusted EPS: Q4 of $10.56, up from $2.86 last year; Full year
of $23.94, up from $11.32 last year
- Free Cash Flow: Q4 of $675 million, up from $442 million last
year; Full year of $1.8 billion, up from $1.0 billion last
year
- Q4 COVID-19 Testing Innovations: First FDA EUA at-home PCR
collection kit without a prescription; first to make FDA EUA
semi-quantitative antibody test available in the U.S.; first with
FDA EUA for high-throughput method using heat extraction
- Scaled genetic sequencing program with the CDC to identify
COVID-19 variants
- Full Year 2021 Guidance: Adjusted EPS of $19.00 to $23.00 and
Free Cash Flow of $1.7 billion to $1.9 billion
Labcorp (NYSE: LH), a leading life sciences company, today
announced results for the fourth quarter and year ended December
31, 2020, and full year 2021 guidance.
“Labcorp’s science and innovation throughout the pandemic led to
strong performance in the quarter and for the full year. In
addition to our leadership in testing, our capabilities are being
leveraged to identify variants to the virus through genetic
sequencing and to support biotechnology and pharmaceutical
companies in developing new therapies and vaccines to fight
COVID-19,” said Adam Schechter, chairman and CEO, Labcorp.
“We are encouraged about the future of our base business. In the
fourth quarter, our base diagnostics business continued to improve
as more people focused on managing their health and chronic
conditions. Our drug development business also grew and delivered
strong quarterly performance, with a book-to-bill of 1.43 on a
trailing twelve-month basis driven by strong demand across
therapeutic areas.
I want to thank our over 75,000 employees worldwide who have
tirelessly served our clients and patients during the pandemic. We
are entering 2021 with a renewed commitment to advancing health on
a global basis.”
Labcorp made substantial progress on its strategic priorities in
2020, which was a transformational year for the company:
- Accelerated growth through the power of our platform:
Brought Labcorp’s combined science, technology and innovation
capabilities to market quickly. Labcorp was the first to receive an
FDA Emergency Use Authorization ("EUA") to launch several COVID-19
PCR tests, including the Pixel by Labcorp at-home COVID-19 specimen
collection kit for PCR testing, which also received the first EUA
to be available through retail without a prescription, and helped
bring multiple treatments and vaccines to market in record time.
Our science and technology are also being leveraged to genetically
sequence thousands of virus samples each week to identify variants
that can inform future vaccines and treatments.
- Advanced our leadership position in oncology: Expanded
Labcorp’s leadership through strategic partnerships in oncology
testing, major customer wins in late-stage clinical trials and the
addition of leaders in the field to further build our Enterprise
Oncology team.
- Integrated artificial intelligence, data, digitization and
analytics across our business: Increased COVID-19 testing
capacity through the use of robotics and technology, and developed
proprietary insight and analytics capabilities for clients to
improve their operations, guide patient care and support clinical
trials across a larger number of programs and therapeutic
areas.
- Put customers at the center of all that we do: Broadened
access of COVID-19 testing to millions of people through hospitals,
pharmacies, employers, physicians, drive thrus, and our Pixel by
Labcorp at-home collection kit; responded to customer demand by
rapidly increasing testing capacity to 275,000 COVID-19 PCR tests
per day; delivered test results quickly and more easily through our
websites and patient apps; and made testing affordable, charging no
upfront out-of-pocket costs to consumers who needed a COVID-19
test.
- Evaluated and executed on high-growth opportunities:
Focused on deploying shareholder capital to grow the company’s
business in diagnostic testing through targeted lab acquisitions,
and accelerated wins in clinical trials with the addition of
digital and mobile technology capabilities through the acquisitions
of GlobalCare and SnapIOT.
Consolidated Results
Fourth Quarter Results
Revenue for the quarter was $4.49 billion, an increase of 52.0%
over $2.95 billion in the fourth quarter of 2019. The increase in
revenue was due to organic growth of 50.1%, acquisitions of 0.9%,
and favorable foreign currency translation of 1.0%. The 50.1%
increase in organic revenue includes a 46.4% contribution from
COVID-19 Testing and a 3.7% increase in the company's organic Base
Business. "Base Business" includes the company's business
operations except for PCR and antibody COVID-19 testing ("COVID-19
Testing"). The increase in organic Base Business includes the
negative impact from lower Medicare and Medicaid pricing as a
result of PAMA of (0.6%).
Operating income for the quarter was $1,293.2 million, or 28.8%
of revenue, compared to $336.4 million, or 11.4%, in the fourth
quarter of 2019. The increase in operating income and margin was
primarily due to COVID-19 Testing, organic Base Business growth,
acquisitions, and LaunchPad savings, partially offset by the
negative impact from PAMA of ($18.3) million and higher personnel
costs. The company recorded amortization, restructuring charges,
and special items, which together totaled $136.3 million in the
quarter, compared to $85.6 million during the same period in 2019.
This increase was primarily due to COVID-19 related costs and
increased amortization. Adjusted operating income (excluding
amortization, restructuring charges, and special items) for the
quarter was $1,429.5 million, or 31.8% of revenue, compared to
$422.0 million, or 14.3%, in the fourth quarter of 2019.
Net earnings for the quarter were $938.3 million, compared to
$227.1 million in the fourth quarter of 2019. Diluted EPS were
$9.54 in the quarter, up from $2.32 in the same period in 2019.
Adjusted EPS (excluding amortization, restructuring charges, and
special items) were $10.56 in the quarter, up from $2.86 in the
fourth quarter of 2019.
Operating cash flow for the quarter was $774.6 million, compared
to $569.8 million in the fourth quarter of 2019. The increase in
operating cash flow was due to higher cash earnings, partially
offset by higher working capital to support growth. In addition,
operating cash flow for the fourth quarter of 2020 was reduced by
$132.1 million due to the company's decision to return the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
Provider Relief Funds that the company received during the second
and third quarters of 2020. Capital expenditures totaled $99.4
million, down from $128.2 million a year ago, despite the
expenditures associated with the increase in COVID-19 Testing
capacity. As a result, free cash flow (operating cash flow less
capital expenditures) was $675.2 million, up from $441.6 million in
the fourth quarter of 2019.
At the end of the quarter, the company’s cash balance and total
debt were $1.3 billion and $5.8 billion, respectively. During the
quarter, the company invested $58.8 million on acquisitions. As of
December 31, 2020, the company had $800.0 million of authorization
remaining under its share repurchase program.
Full Year Results
Revenue was $13.98 billion, an increase of 21.0% over $11.55
billion last year. The increase in revenue was due to organic
growth of 19.0%, acquisitions of 1.8%, and favorable foreign
currency translation of 0.4%, partially offset by the disposition
of a business of (0.2%). The 19.0% increase in organic revenue
includes the 24.1% contribution from COVID-19 Testing, partially
offset by the (5.1%) reduction in the company's organic Base
Business due to the pandemic. The decline in organic Base Business
includes the negative impact from PAMA of (0.6%).
Operating income was $2.45 billion, or 17.5% of revenue,
compared to $1.33 billion, or 11.5%, in 2019. The increase in
operating income and margin was primarily due to COVID-19 Testing
and LaunchPad savings, partially offset by the negative impact from
the pandemic (including the impairments to goodwill and other
assets), higher personnel costs, and ($72.1) million from PAMA. The
company recorded amortization, restructuring charges, special
items, and impairments, which together totaled $886.5 million,
compared to $380.6 million in 2019. This increase includes the
$437.4 million of COVID-19 related impairments on goodwill and
other assets that the company recorded in the first quarter of
2020. In addition, the company recorded $63.9 million of other
COVID-19 related costs. Adjusted operating income (excluding
amortization, restructuring charges, special items, and
impairments) was $3.33 billion, or 23.8% of revenue, compared to
$1.71 billion, or 14.8%, in 2019. The $1.62 billion increase in
adjusted operating income and 900 basis point increase in adjusted
operating margin were primarily due to the increase in COVID-19
Testing and LaunchPad savings, partially offset by the reduction in
the Base Business (due to the pandemic) and higher personnel
costs.
Net earnings in 2020 were $1,556.1 million, or $15.88 per
diluted share, compared to $823.8 million, or $8.35 per diluted
share, in 2019. Adjusted EPS (excluding amortization, restructuring
charges, special items, and impairments) were $23.94, an increase
of 111.5% over $11.32 in 2019.
Operating cash flow was $2.14 billion, compared to $1.44 billion
in 2019. The increase in operating cash flow was due to higher cash
earnings, partially offset by higher working capital to support
growth. Capital expenditures totaled $381.7 million, down from
$400.2 million in 2019, despite the expenditures associated with
the increase in COVID-19 Testing capacity. As a result, free cash
flow (operating cash flow less capital expenditures) was $1.75
billion, compared to $1.04 billion in 2019.
During the year, the company invested $267.6 million on
acquisitions, repurchased $100.0 million of stock representing
approximately 0.6 million shares, and paid down $412.2 million of
debt.
Fourth Quarter Segment Results
The following segment results exclude amortization,
restructuring charges, special items, and unallocated corporate
expenses. The segments that are now referred to as Diagnostics and
Drug Development were formerly referred to as LabCorp Diagnostics
and Covance Drug Development.
Diagnostics
Revenue for the quarter was $3.15 billion, an increase of 79.5%
over $1.76 billion in the fourth quarter of 2019. The increase in
revenue was due to organic growth of 78.5%, acquisitions of 0.9%,
and favorable foreign currency translation of 0.1%. The 78.5%
increase in organic revenue was due to a 78.0% contribution from
COVID-19 Testing and a 0.5% increase in the Base Business, which
includes the negative impact from PAMA of (1.0%). This represents
the first quarter of 2020 with organic Base Business revenue growth
versus prior year.
Total volume (measured by requisitions) increased by 33.9% as
organic volume increased by 33.3% and acquisition volume
contributed 0.6%. The organic volume growth was due to the 41.0%
contribution from COVID-19 Testing demand, partially offset by a
(7.7%) reduction in the Base Business volume due to the pandemic.
Price / mix increased by 45.5% primarily due to COVID-19 Testing of
37.0% and organic Base Business of 8.2%, which includes the
negative impact from PAMA of (1.0%). In the fourth quarter,
Diagnostics achieved its highest contribution from COVID-19 Testing
volume, as well as the strongest year-over-year volume in the Base
Business since the pandemic began in March 2020.
Adjusted operating income for the quarter was $1,234.4 million,
or 39.1% of revenue, compared to $277.1 million, or 15.8%, in the
fourth quarter of 2019. The $957.3 million increase in adjusted
operating income and 2,340 basis point increase in adjusted
operating margin were primarily due to the increase in COVID-19
Testing and LaunchPad savings, partially offset by the negative
impact from PAMA of ($18.3) million and higher personnel costs. The
company remains on track to deliver approximately $200 million of
net savings from its three-year Diagnostics LaunchPad initiative by
the end of 2021. The company continues to develop and execute new
LaunchPad programs to support profitable growth in Diagnostics.
Drug Development
Revenue for the quarter was $1.40 billion, an increase of 16.4%
over $1.20 billion in the fourth quarter of 2019. The increase in
revenue was due to organic growth of 13.1%, acquisitions of 0.9%,
and favorable foreign currency translation of 2.3%. The 13.1%
increase in organic revenue was due to an 8.4% increase in the Base
Business and a 4.7% contribution from COVID-19 Testing performed
through its Central Laboratories business. While continuing to be
negatively impacted by the pandemic, Drug Development achieved its
highest quarter of organic Base Business growth in 2020, benefiting
from broad-based demand across all service lines, including
COVID-19 vaccine and therapeutic work.
Adjusted operating income for the quarter was $248.4 million, or
17.8% of revenue, compared to $183.2 million, or 15.2%, in the
fourth quarter of 2019. The $65.2 million increase in adjusted
operating income and 250 basis point increase in adjusted operating
margin were primarily due to COVID-19 Testing, organic Base
Business demand, and LaunchPad savings, partially offset by higher
personnel costs. The company achieved its goal to deliver
approximately $150 million of net savings from its three-year Drug
Development LaunchPad initiative. While the target was achieved,
the company continues to develop and execute new LaunchPad programs
to support profitable growth in Drug Development.
Net orders and net book-to-bill during the trailing twelve
months were $6.96 billion and 1.43, respectively. Backlog at the
end of the quarter was $13.76 billion, compared to $12.46 billion
last quarter, and the company expects approximately $4.5 billion of
its backlog to convert into revenue in the next twelve months.
Outlook for 2021
The following guidance assumes foreign exchange rates effective
as of December 31, 2020 for the full year. Enterprise level
guidance includes the estimated impact from currently anticipated
capital allocation, including acquisitions and share
repurchases.
(Dollars in billions, except per share
data)
Results
2021 Guidance
2020
Low
High
Revenue
Total Labcorp Enterprise (1)(2)
$
13.98
(1.0%)
4.5%
Base Business (2)
$
11.19
11.0%
13.5%
COVID-19 Testing (2)
$
2.78
(50.0%)
(35.0%)
Total Diagnostics (3)
$
9.25
(7.5%)
(0.5%)
Base Business
$
6.47
11.0%
14.0%
COVID-19 Testing
$
2.78
(50.0%)
(35.0%)
Total Drug Development (4)
$
4.88
8.0%
10.5%
Base Business
$
4.76
9.5%
12.0%
Adjusted EPS
$
23.94
$
19.00
$
23.00
Free Cash Flow (5)
$
1.75
$
1.70
$
1.90
(1) 2021 Guidance includes a benefit from
foreign currency translation of 0.9%.
(2) Enterprise level revenue is presented
net of intersegment transaction eliminations, including Drug
Development COVID-19 Testing revenue.
(3) 2021 Guidance includes a benefit from
foreign currency translation of 0.1%.
(4) 2021 Guidance includes a benefit from
foreign currency translation of 2.2%.
(5) Free Cash Flow consists of operating
cash flow less capital expenditures.
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 http://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 dialing 877-898-8036
(720-634-2811 for international callers). The conference ID is
7378794. A telephone replay of the call will be available through
Feb. 25, 2021, and can be heard by dialing 855-859-2056
(404-537-3406 for international callers). The conference ID for the
replay is 7378794. A live online broadcast of Labcorp’s quarterly
conference call on Feb. 11, 2021, will be available at Labcorp
Investor Relations website beginning at 9:00 a.m. ET. This webcast
will be archived and accessible through Jan. 28, 2022.
About Labcorp
Labcorp is a leading global life sciences company that provides
vital information to help doctors, hospitals, pharmaceutical
companies, researchers, and patients make clear and confident
decisions. Through our unparalleled diagnostics and drug
development capabilities, we provide insights and accelerate
innovations to improve health and improve lives. With over 75,000
employees, we serve clients in more than 100 countries. Labcorp
(NYSE: LH) reported revenue of $14.0 billion in 2020. Learn more
about us at www.Labcorp.com or follow us on LinkedIn and Twitter
@Labcorp.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements,
including, but not limited to, statements with respect to the
estimated 2021 guidance and the related assumptions, 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, statements relating to our responses to and the expected
future impacts of the COVID-19 pandemic, on our business more
generally as well as on general economic, business, and market
conditions, future business strategies, expected savings and
synergies (including from the LaunchPad initiative and from
acquisitions), and the 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, the impact of the
COVID-19 pandemic and its impact on our business and financial
condition and on general economic, business, and market conditions,
our ability (or inability) to execute on our plans to respond to
the COVID-19 pandemic, competitive actions and other unforeseen
changes and general uncertainties in the marketplace, changes in
government regulations, including healthcare reform, customer
purchasing decisions, including changes in payer regulations or
policies, other adverse actions of governmental and third-party
payers, changes in testing guidelines or recommendations, federal,
state, and local government responses to the COVID-19 pandemic, the
effect of public opinion on the company’s reputation, adverse
results in material litigation matters, the impact of changes in
tax laws and regulations, failure to maintain or develop customer
relationships, our ability to develop or acquire new products and
adapt to technological changes, failure in information technology,
systems or data security, adverse weather conditions, the number of
revenue days in a financial period, employee relations, personnel
costs, and 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 our 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.
- End of Text - - Tables to Follow -
LABORATORY CORPORATION OF
AMERICA HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in Millions, except per
share data)
Three Months Ended December
31,
Twelve Months Ended December
31,
2020
2019
2020
2019
Revenues
$
4,489.8
$
2,953.4
$
13,978.5
$
11,554.8
Cost of revenues
2,584.9
2,132.7
9,025.7
8,302.3
Gross profit
1,904.9
820.7
4,952.8
3,252.5
Selling, general and administrative
expenses
518.0
413.9
1,729.3
1,624.5
Goodwill and other asset impairments
1.2
—
462.1
—
Amortization of intangibles and other
assets
90.8
64.2
275.4
243.2
Restructuring and other charges
1.7
6.2
40.6
54.6
Operating income
1,293.2
336.4
2,445.4
1,330.2
Other income (expense):
Interest expense
(48.3
)
(64.4
)
(207.4
)
(240.7
)
Equity method income, net
4.7
1.9
2.9
9.8
Investment income
2.6
4.0
10.3
8.8
Other, net
(9.5
)
15.0
(32.1
)
(3.2
)
Earnings before income taxes
1,242.7
292.9
2,219.1
1,104.9
Provision for income taxes
304.1
65.6
662.1
280.0
Net earnings
938.6
227.3
1,557.0
824.9
Less: Net earnings attributable to the
noncontrolling interest
(0.3
)
(0.2
)
(0.9
)
(1.1
)
Net earnings attributable to Laboratory
Corporation of America Holdings
$
938.3
$
227.1
$
1,556.1
$
823.8
Basic earnings per common share
$
9.62
$
2.34
$
15.99
$
8.42
Diluted earnings per common share
$
9.54
$
2.32
$
15.88
$
8.35
Weighted average basic shares
outstanding
97.5
97.2
97.3
97.9
Weighted average diluted shares
outstanding
98.3
98.0
98.0
98.6
LABORATORY CORPORATION OF
AMERICA HOLDINGS AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Dollars in Millions)
December 31,
2020
December 31,
2019
ASSETS
Current assets:
Cash and cash equivalents
$
1,320.8
$
337.5
Accounts receivable, net of allowance for
doubtful accounts of $22.1 and $19.0 as of December 31, 2020 and
2019, respectively
2,479.8
1,543.9
Unbilled services
536.8
481.4
Supplies inventory
423.2
244.7
Prepaid expenses and other
364.8
373.7
Total current assets
5,125.4
2,981.2
Property, plant and equipment, net
2,729.6
2,636.6
Goodwill, net
7,751.5
7,865.0
Intangible assets, net
3,961.1
4,034.5
Joint venture partnerships and equity
method investments
73.5
84.9
Deferred income taxes
20.6
8.8
Other assets, net
410.0
435.4
Total assets
$
20,071.7
$
18,046.4
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
638.9
$
632.3
Accrued expenses and other
1,357.7
942.4
Unearned revenue
506.5
451.0
Short-term operating lease liabilities
192.0
206.5
Short-term finance lease liabilities
6.7
8.4
Short-term borrowings and current portion
of long-term debt
376.7
415.2
Total current liabilities
3,078.5
2,655.8
Long-term debt, less current portion
5,419.0
5,789.8
Operating lease liabilities
677.6
596.6
Financing lease liabilities
84.4
91.1
Deferred income taxes and other tax
liabilities
905.4
942.8
Other liabilities
526.4
383.2
Total liabilities
10,691.3
10,459.3
Commitments and contingent liabilities
Noncontrolling interest
20.7
20.1
Shareholders’ equity
Common stock, 97.5 and 97.2 shares
outstanding at December 31, 2020 and 2019, respectively
9.0
9.0
Additional paid-in capital
110.3
26.8
Retained earnings
9,402.3
7,903.6
Accumulated other comprehensive loss
(161.9
)
(372.4
)
Total shareholders’ equity
9,359.7
7,567.0
Total liabilities and shareholders’
equity
$
20,071.7
$
18,046.4
LABORATORY CORPORATION OF
AMERICA HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Dollars in Millions)
Three Months Ended December
31,
Twelve Months Ended December
31,
2020
2019
2020
2019
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net earnings
$
938.6
$
227.3
$
1,557.0
$
824.9
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
183.9
155.8
624.7
577.2
Stock compensation
26.8
23.5
111.7
107.0
Loss on sale of business
—
1.3
—
13.2
Operating lease right-of-use asset
expense
49.6
50.0
200.3
194.1
Goodwill and other asset impairments
1.2
—
462.1
—
Deferred income taxes
1.5
5.9
(47.0
)
29.2
Other, net
28.2
(7.1
)
83.4
(6.5
)
Change in assets and liabilities (net of
effects of acquisitions and divestitures):
(Increase) decrease in accounts
receivable
(366.5
)
80.2
(913.4
)
(64.1
)
Increase (decrease) in unbilled
services
75.3
0.5
(42.5
)
(59.0
)
Increase in inventory
(49.1
)
(7.4
)
(196.6
)
(21.9
)
Increase in prepaid expenses and other
(31.5
)
(48.4
)
(5.4
)
(42.6
)
Increase (decrease) in accounts
payable
(22.6
)
15.4
(5.3
)
(12.8
)
Increase in deferred revenue
4.3
39.1
48.4
38.1
Increase (decrease) in accrued expenses
and other
(65.1
)
33.7
257.9
(132.1
)
Net cash provided by operating
activities
774.6
569.8
2,135.3
1,444.7
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures
(99.4
)
(128.2
)
(381.7
)
(400.2
)
Purchases of investments
(10.8
)
(6.2
)
(40.1
)
(27.5
)
Proceeds from sale of assets
41.0
1.9
42.1
7.7
Proceeds from sale or distributions of
investments
—
1.8
1.0
11.2
Proceeds from sale of business
—
—
—
—
Proceeds from exit of swaps
—
1.7
3.1
1.7
Acquisition of businesses, net of cash
acquired
(58.8
)
(23.1
)
(267.6
)
(876.0
)
Net cash used for investing activities
(128.0
)
(152.1
)
(643.2
)
(1,283.1
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from Senior Notes offerings
—
1,050.0
—
1,050.0
Payments on Senior Notes
—
(687.9
)
(412.2
)
(687.9
)
Proceeds from term loan
—
—
—
850.0
Payments on term loan
—
(752.0
)
—
(1,002.0
)
Proceeds from revolving credit
facilities
—
22.0
151.7
495.0
Payments on revolving credit
facilities
—
(22.0
)
(151.7
)
(495.0
)
Payment of debt issuance costs
—
(11.6
)
—
(11.6
)
Net share settlement tax payments from
issuance of stock to employees
(2.5
)
(0.2
)
(34.5
)
(40.6
)
Net proceeds from issuance of stock to
employees
5.3
5.7
55.9
64.7
Purchase of common stock
—
(50.0
)
(100.0
)
(450.0
)
Other
(3.8
)
(3.4
)
(26.6
)
(25.3
)
Net cash used for financing activities
(1.0
)
(449.4
)
(517.4
)
(252.7
)
Effect of exchange rate changes on cash
and cash equivalents
8.0
8.1
8.6
1.8
Net increase (decrease) in cash and cash
equivalents
653.6
(23.6
)
983.3
(89.3
)
Cash and cash equivalents at beginning of
period
667.2
361.1
337.5
426.8
Cash and cash equivalents at end of
period
$
1,320.8
$
337.5
$
1,320.8
$
337.5
LABORATORY CORPORATION OF
AMERICA HOLDINGS
Condensed Combined Non-GAAP
Adjusted Segment Information
(Dollars in Millions)
Three Months Ended December
31,
Twelve Months Ended December
31,
2020
2019
2020
2019
Diagnostics
Revenues
$
3,154.6
$
1,757.8
$
9,253.4
$
6,999.9
Adjusted Operating Income
$
1,234.4
$
277.1
$
2,801.3
$
1,229.1
Adjusted Operating Margin
39.1
%
15.8
%
30.3
%
17.6
%
Drug Development
Revenues
$
1,398.3
$
1,201.7
$
4,877.7
$
4,578.1
Adjusted Operating Income
$
248.4
$
183.2
$
721.6
$
637.9
Adjusted Operating Margin
17.8
%
15.2
%
14.8
%
13.9
%
Consolidated
Revenues
$
4,489.8
$
2,953.4
$
13,978.5
$
11,554.8
Adjusted Segment Operating Income
$
1,482.8
$
460.3
$
3,522.9
$
1,867.0
Unallocated corporate expense
$
(53.3
)
$
(38.3
)
$
(191.0
)
$
(156.2
)
Consolidated Adjusted Operating Income
$
1,429.5
$
422.0
$
3,331.9
$
1,710.8
Adjusted Operating Margin
31.8
%
14.3
%
23.8
%
14.8
%
The consolidated revenue and adjusted segment operating income
are presented net of intersegment transaction eliminations.
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 December
31,
Twelve Months Ended December
31,
2020
2019
2020
2019
Adjusted Operating Income
Operating Income
$
1,293.2
$
336.4
$
2,445.4
$
1,330.2
Amortization of intangibles and other
assets
(a)
90.8
64.2
275.4
243.2
Goodwill and other asset impairments
(b)
1.2
—
462.1
—
Restructuring and other charges
(c)
1.7
6.2
40.6
54.6
Acquisition and disposition-related
costs
(d)
13.0
15.3
30.2
69.2
LaunchPad system implementation costs
(e)
—
2.7
1.3
10.1
Executive transition expenses
(f)
2.2
7.0
14.6
15.2
COVID-19 related costs
(g)
21.2
—
63.9
—
Other
6.2
(9.8
)
(1.6
)
(11.7
)
Adjusted operating income
$
1,429.5
$
422.0
$
3,331.9
$
1,710.8
Adjusted Net Income
Net Income
$
938.3
$
227.1
$
1,556.1
$
823.8
Impact of adjustments to operating
income
136.3
85.6
886.5
380.6
(Gains) and losses on venture fund
investments, net
(h)
2.4
(19.0
)
27.8
(20.9
)
Loss on sale of business
(i)
0.7
1.4
1.2
13.3
Debt refinancing costs
(j)
—
3.1
(1.6
)
3.1
Income tax impact of adjustments
(k)
(39.0
)
(17.6
)
(123.9
)
(83.4
)
Adjusted net income
$
1,038.7
$
280.6
$
2,346.1
$
1,116.5
Weighted average diluted shares
outstanding
98.3
98.0
98.0
98.6
Adjusted net income per share
$
10.56
$
2.86
$
23.94
$
11.32
(a)
Amortization of intangible assets acquired
as part of business acquisitions. Amortization for 2020 includes
the acceleration of the amortization of certain intangible assets
related to the Covance trade name as a result of the company's
rebranding initiative.
(b)
The company determined that certain
goodwill and long-lived assets were impaired. These charges were
triggered by the economic conditions as a result of the COVID-19
pandemic and the termination of a customer contract.
(c)
Restructuring and other charges represent
amounts incurred in connection with the elimination of redundant
positions and facilities as a result of our LaunchPad initiatives
and acquisitions or dispositions of businesses by the company.
(d)
Acquisition and disposition-related costs
include due-diligence legal and advisory fees, retention bonuses
and other integration and disposition related activities in
connection with contemplated and completed transactions.
(e)
LaunchPad system implementation costs
include non-capitalized costs associated with the implementation of
a system as part of the LaunchPad business process improvement
initiative.
(f)
Represents executive transition expenses
related to various management reorganizations.
(g)
Costs related to incremental operating
expenses and receivables reserves incurred as a result of the
COVID-19 pandemic.
(h)
The company makes venture fund 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.
(i)
Represents the loss on sale of the CRP
business as part of the Envigo transaction during the second
quarter of 2019.
(j)
Represents the costs and accelerated
amortization of deferred financing costs associated with the
issuance and early repayment of debt.
(k)
Income tax impact of adjustments
calculated based on the tax rate applicable to each item.
# # #
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210211005467/en/
Clarissa Willett (investors) – 336-436-5076
Investor@Labcorp.com Christopher Allman-Bradshaw (media)
– 336-436-8263 Media@Labcorp.com
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