Updates Full-Year Guidance
- Results from Continuing Operations for second quarter 2024
versus last year:
- Revenue: $3.22 billion versus
$3.03 billion
- Diluted EPS: $2.43 versus
$1.74
- Adjusted EPS: $3.94 versus
$3.42
- Free Cash Flow: $432.9 million
versus $58.2 million
- Updated Full-Year 2024 Guidance:
- Revenue range of 6.4% to 7.5%, includes Invitae impact of
~1.0%
- Adjusted EPS range of $14.30 to
$14.90, includes Invitae
dilution of ~$0.40
- Free Cash Flow of $0.85 billion
to $1.00 billion,
includes Invitae cash usage of ~$150
million
- Share repurchase authorization increased by $1.0 billion to $1.4
billion
- Launched important new tests in specialty testing areas
- Introduced Labcorp Global Trial Connect, a suite of central
laboratory solutions aimed to accelerate clinical trials
BURLINGTON, N.C., Aug. 1, 2024
/PRNewswire/ -- Labcorp (NYSE: LH), a global leader of
innovative and comprehensive laboratory services, today announced
results for the second quarter ended June
30, 2024 and updated full-year guidance.
"Labcorp delivered strong revenue and EPS growth in the second
quarter and has significant momentum as we enter the second half of
the year," said Adam Schechter,
chairman and CEO of Labcorp. "We expanded our leadership in key
therapeutic areas, including oncology, women's health and
neurology, and strengthened our position with customers through
acquisitions and innovative digital and data solutions. We will
continue driving long-term value by expanding our laboratory and
testing solutions, forging new partnerships with health systems,
and leveraging science and technology to improve health and improve
lives around the world."
Labcorp continued to progress against its growth
initiatives:
- Received approval for the acquisition of select assets
from Invitae, a leading medical genetics company. Through this
acquisition, the company will utilize genetic insights to develop
new treatments and deliver personalized care in oncology and select
rare diseases. The transaction is expected to close in early
August.
- Subsequent to quarter end, entered into a comprehensive
strategic collaboration with Naples Comprehensive Healthcare (NCH)
in Southwest Florida to manage the
daily operations of NCH's inpatient lab operations. Separately,
Labcorp will begin to serve as the primary lab for NCH's physician
network later this summer.
The company continues to make strides in science, technology,
and innovation:
- Received FDA approval as a Humanitarian Use Device for its
companion diagnostic (CDx) to determine patient eligibility for
treatment with BEQVEZ™ (fidanacogene elaparvovec-dzkt), Pfizer's
recently FDA-approved hemophilia B gene therapy.
- Introduced first trimester preeclampsia screening test to
determine the risk of developing preeclampsia before 34 weeks of
pregnancy. It is the only test of its kind available in
the United States and is relevant
for all pregnant individuals. With the addition of this test,
Labcorp is the only lab that can detect preeclampsia risk across
all trimesters.
- Launched new strategic service offerings within its precision
oncology portfolio to strengthen the company's leadership as a
premier, single-source partner for biopharmaceutical companies.
This includes the expanded availability of Labcorp® Tissue Complete
to Geneva and Shanghai and the addition of OmniSeq INSIGHT
circulating tumor DNA into the portfolio of genomic profiling
services.
- Introduced Labcorp Global Trial Connect, a suite of central
laboratory solutions aimed at increasing the speed of clinical
trials.
- Expanded Labcorp OnDemand with several new tests, including a
standard drug, complete drug, comprehensive testosterone, HIV and
complete Heart Health.
On July 25, 2024, the company
announced a quarterly cash dividend of $0.72 per share of common stock, payable on
September 13, 2024, to stockholders
of record at the close of business on August
29, 2024. In addition, the Board of Directors approved an
increase in share repurchase authorization by $1.0 billion to a total of $1.4 billion.
Consolidated Results
Second Quarter Results
Revenue for the quarter was $3.22
billion, an increase of 6.2% from $3.03 billion in the second quarter of 2023. The
increase was due to organic revenue of 3.8%, acquisitions, net of
divestitures, of 2.5%, partially offset by foreign currency
translation of (0.1%). The 3.8% increase in organic revenue was
driven by a 4.5% increase in the company's organic Base Business,
partially offset by a (0.7%) decrease in COVID-19 PCR testing
(COVID-19 Testing). Compared to the Base Business last year, Base
Business revenue grew 6.9%. Base Business includes Labcorp's
operations except for COVID-19 Testing.
Operating income for the quarter was $294.8 million, or 9.2% of revenue, compared
to $266.3 million, or 8.8%, in the
second quarter of 2023. The company recorded amortization,
restructuring charges, and special items, which together totaled
$185.1 million in the quarter,
compared to $182.0 million during the
same period in 2023. Adjusted operating income (excluding
amortization, restructuring charges, and special items) for the
quarter was $479.9 million, or 14.9%
of revenue, compared to $448.3
million, or 14.8%, in the second quarter of 2023. The
increase in operating income and margin was driven by demand and
LaunchPad savings, partially offset by personnel costs.
Net earnings from continuing operations for the quarter were
$205.6 million compared to
$155.2 million in the second quarter
of 2023. Diluted EPS from continuing operations were $2.43 in the quarter compared to $1.74 during the same period in 2023. Adjusted
EPS (excluding amortization, restructuring charges, and special
items) were $3.94 in the quarter
compared to $3.42 in the second
quarter of 2023.
Operating cash flow from continuing operations for the quarter
was $561.1 million compared to
$161.5 million in the second quarter
of 2023. The increase in operating cash flow was due to cash
earnings and working capital. Capital expenditures totaled
$128.2 million compared to
$103.3 million a year ago. As a
result, free cash flow from continuing operations (operating cash
flow from continuing operations less capital expenditures) was
$432.9 million compared to
$58.2 million in the second quarter
of 2023.
At the end of the quarter, the company's cash balance was
$265.1 million and total debt was
$5.07 billion. During the quarter,
the company invested $33.9 million in
acquisitions, paid out $60.4 million
in dividends, and used $100.0 million
for share repurchases.
Year-To-Date Results
Revenue was $6.40 billion, an
increase of 5.4% from $6.07 billion
in the first six months of 2023. The increase was due to organic
revenue of 3.0%, acquisitions, net of divestitures, of 2.1%, and
foreign currency translation of 0.2%. The 3.0% increase in organic
revenue was driven by a 4.3% increase in the company's organic Base
Business, partially offset by a (1.3)% decrease in COVID-19
Testing. Compared to the Base Business last year, Base Business
revenue grew 6.8%.
Operating income was $616.1
million, or 9.6% of revenue, compared to $596.1 million, or 9.8%, in the first six months
of 2023. The company recorded amortization, restructuring charges,
special items, and impairments, which together totaled $316.6 million in the first six months of 2024
compared to $300.0 million during the
same period in 2023. Adjusted operating income (excluding
amortization, restructuring charges, special items, and
impairments) was $932.7 million, or
14.6% of revenue, compared to $896.1
million, or 14.8%, in the first six months of 2023. The
increase in adjusted operating income was driven by organic demand
and LaunchPad savings, partially offset by personnel costs.
Net earnings from continuing operations were $433.9 million compared to $363.6 million in the first six months of 2023.
Diluted EPS were $5.13 in the first
six months of 2024 compared to $4.08
during the same period in 2023. Adjusted EPS (excluding
amortization, restructuring charges, special items, and
impairments) were $7.62 in the first
six months of 2023 compared to $6.88
during the same period in 2023.
Operating cash flow from continuing operations was $531.3 million compared to $347.2 million in the first six months of 2023.
The increase in operating cash flow was primarily due to higher
cash earnings. Capital expenditures totaled $262.0 million compared to $181.5 million during the same period in 2023. As
a result, free cash flow (operating cash flow less capital
expenditures) from continuing operations was $269.3 million compared to $165.7 million in the first six months of
2023.
Second 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 $2.52
billion, an increase of 7.9% from $2.34 billion in the second quarter of 2023. The
increase was due to organic growth of 4.7% and acquisitions, net of
divestitures, of 3.2%, partially offset by foreign currency
translation of (0.1%). The 4.7% increase in organic revenue was due
to a 5.6% increase in the Base Business, partially offset by a
(0.9%) decrease in COVID-19 Testing. Total Base Business growth
compared to the Base Business in the prior year was 8.9%.
Total volume (measured by requisitions) increased by 5.7% as
organic volume increased by 2.9%, while acquisitions, net of
divestitures increased 2.8%. Organic volume was up due to
a 3.4% increase in the Base Business, partially offset by a
(0.5%) decrease in COVID-19 Testing. Price/mix increased by 2.1%
due to organic Base Business growth of 2.2% and acquisitions of
0.4%, partially offset by COVID-19 Testing of (0.4%). Base Business
volume increased 6.3% compared to the Base Business last year.
Price/mix was up 2.5% in the Base Business compared to the Base
Business last year.
Adjusted operating income for the quarter was $441.5 million, or 17.5% of revenue, compared to
$409.7 million, or 17.5%, in the
second quarter of 2023. The increase in adjusted operating income
was driven by organic demand, acquisitions, and Launchpad savings,
partially offset by higher personnel costs.
Biopharma Laboratory Services
Revenue for the quarter was $707.0
million, an increase of 1.1% from $699.0 million in the second quarter of 2023. The
increase was due to organic growth of 1.2%, partially offset by
foreign currency translation of (0.1%).
Adjusted operating income for the quarter was $107.4 million, or 15.2% of revenue, compared to
$104.6 million, or 15.0%, in the
second 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 $2.82 billion and 1.00,
respectively. Backlog at the end of the quarter was $7.92 billion, a decrease of (0.6)% compared to
last year. The company expects approximately $2.50 billion of its backlog to convert into
revenue in the next twelve months. The company expects net orders,
net book-to-bill, and backlog to increase in the second half of the
year.
Outlook for 2024
Labcorp is updating 2024 full year guidance to reflect its
second quarter performance, the acquisition of Invitae, and full
year outlook. The following guidance assumes foreign exchange rates
effective as of June 30, 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
|
|
|
Invitae
Impact
|
|
Results
|
|
2024
Guidance
|
|
2024
Guidance
|
|
|
In
Guidance
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
Low
|
High
|
|
Low
|
High
|
|
|
at
Midpoint
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Labcorp Enterprise
(1)(2)
|
$12.2
|
|
4.8 %
|
6.4 %
|
|
6.4 %
|
7.5 %
|
|
|
1.0 %
|
|
Diagnostics
Laboratories
|
$9.4
|
|
4.8 %
|
6.0 %
|
|
6.9 %
|
7.9 %
|
|
|
1.3 %
|
|
Biopharma Laboratory
Services (3)
|
$2.8
|
|
3.7 %
|
5.7 %
|
|
3.7 %
|
5.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EPS
|
$13.56
|
|
$14.45
|
$15.35
|
|
$14.30
|
$14.90
|
|
|
($0.40)
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow from
Cont. Ops(4)
|
$0.89
|
|
$1.00
|
$1.15
|
|
$0.85
|
$1.00
|
|
|
($0.15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
August 1, 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 July 18, 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 spin-off of the company's Clinical Development and
Commercialization Services business, now Fortrea Holdings Inc.,
(iii) 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, (iv) future business strategies, (v) expected savings,
synergies and other benefits to the Company, customers or patients
from acquisitions and other transactions and partnerships, and (vi)
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) the effect of
the reorganization on the company's business generally; (ii) the
failure to receive tax-free treatment with respect to the spin-off
for U.S. federal income purposes; (iii) the impact of spin-off
related items; (iv) potential difficulties with employee retention;
(v) the trading price of the company's stock, competitive actions
and other unforeseen changes and general uncertainties in the
marketplace; (vi) changes in government regulations, including
healthcare reform; (vii) customer purchasing decisions, including
changes in payer regulations or policies; (viii) other adverse
actions of governmental and third-party payers; (ix) changes in
testing guidelines or recommendations; (x) federal, state, and
local government responses to the COVID-19 pandemic, and the volume
of COVID-19 Testing performed by the company; (xi) the impact of
global geopolitical events; (xii) the effect of public opinion on
the company's reputation; (xiii) adverse results in material
litigation matters; (xiv) the impact of changes in laws and
regulations applicable to the company; (xv) failure to maintain or
develop customer relationships; (xvi) the company's ability to
develop or acquire new products and adapt to technological changes;
(xvii) failure in information technology, systems, or data
security; (xviii) the impact of potential losses under repurchase
agreements; (xix) adverse weather conditions; (xx) the number of
revenue days in a financial period; (xxi) employee relations;
(xxii) personnel costs; (xxiii) inflation; (xxiv) increased
competition; and (xxv) 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".
|
LABCORP HOLDINGS
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in Millions, except per share
data)
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenues
|
|
$
3,220.9
|
|
$
3,033.7
|
|
$
6,397.5
|
|
$
6,071.5
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
2,294.5
|
|
2,191.5
|
|
4,573.8
|
|
4,379.2
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
926.4
|
|
842.2
|
|
1,823.7
|
|
1,692.3
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
557.8
|
|
505.8
|
|
1,066.2
|
|
963.0
|
|
Amortization of
intangibles and other assets
|
|
62.2
|
|
51.5
|
|
122.3
|
|
104.9
|
|
Goodwill and other
asset impairments
|
|
—
|
|
2.8
|
|
2.5
|
|
5.0
|
|
Restructuring and other
charges
|
|
11.6
|
|
15.8
|
|
16.6
|
|
23.3
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
294.8
|
|
266.3
|
|
616.1
|
|
596.1
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(47.6)
|
|
(49.8)
|
|
(94.5)
|
|
(100.5)
|
|
Investment
income
|
|
1.3
|
|
4.5
|
|
4.2
|
|
6.7
|
|
Equity method income
(expense), net
|
|
(0.3)
|
|
0.9
|
|
(0.2)
|
|
(1.2)
|
|
Other, net
|
|
19.5
|
|
(16.9)
|
|
39.5
|
|
(23.8)
|
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations before income taxes
|
|
267.7
|
|
205.0
|
|
565.1
|
|
477.3
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
62.1
|
|
49.8
|
|
131.2
|
|
113.7
|
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
|
205.6
|
|
155.2
|
|
433.9
|
|
363.6
|
|
Earnings from
discontinued operations, net of tax
|
|
—
|
|
33.9
|
|
—
|
|
38.8
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
205.6
|
|
189.1
|
|
433.9
|
|
402.4
|
|
Less: Net earnings
attributable to the noncontrolling interest
|
|
(0.3)
|
|
(0.2)
|
|
(0.6)
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Labcorp Holdings Inc.
|
|
$ 205.3
|
|
$ 188.9
|
|
$ 433.3
|
|
$ 401.8
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share:
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share continuing operations
|
|
$
2.44
|
|
$
1.75
|
|
$
5.15
|
|
$
4.10
|
|
Basic earnings per
common share discontinued operations
|
|
$
—
|
|
$
0.38
|
|
$
—
|
|
$
0.43
|
|
Basic earnings per
common share
|
|
$
2.44
|
|
$
2.13
|
|
$
5.15
|
|
$
4.53
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share:
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share continuing operations
|
|
$
2.43
|
|
$
1.74
|
|
$
5.13
|
|
$
4.08
|
|
Diluted earnings per
common share discontinued operations
|
|
$
—
|
|
$
0.38
|
|
$
—
|
|
$
0.43
|
|
Diluted earnings per
common share
|
|
$
2.43
|
|
$
2.12
|
|
$
5.13
|
|
$
4.51
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic
shares outstanding
|
|
84.1
|
|
88.7
|
|
84.1
|
|
88.6
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
84.3
|
|
89.0
|
|
84.5
|
|
89.0
|
|
LABCORP HOLDINGS
INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Dollars in Millions)
|
|
|
June 30,
2024
|
|
March 31,
2024
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
265.1
|
|
$
536.8
|
|
Accounts receivable,
net
|
2,088.9
|
|
1,913.3
|
|
Unbilled
services
|
157.5
|
|
185.4
|
|
Supplies
inventory
|
441.8
|
|
474.6
|
|
Prepaid expenses and
other
|
618.0
|
|
655.3
|
|
Total current
assets
|
3,571.3
|
|
3,765.4
|
|
|
|
|
|
Property, plant and
equipment, net
|
2,932.5
|
|
2,911.8
|
|
Goodwill,
net
|
6,220.2
|
|
6,142.5
|
|
Intangible assets,
net
|
3,332.0
|
|
3,342.0
|
|
Joint venture
partnerships and equity method investments
|
17.5
|
|
26.9
|
|
Other assets,
net
|
638.8
|
|
536.5
|
|
Total assets
|
$
16,712.3
|
|
$
16,725.1
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
760.6
|
|
$
827.5
|
|
Accrued expenses and
other
|
707.5
|
|
804.0
|
|
Unearned
revenue
|
388.3
|
|
421.7
|
|
Short-term operating
lease liabilities
|
182.1
|
|
165.8
|
|
Short-term finance
lease liabilities
|
6.7
|
|
6.4
|
|
Short-term borrowings
and current portion of long-term debt
|
2,019.5
|
|
999.8
|
|
Total current
liabilities
|
4,064.7
|
|
3,225.2
|
|
|
|
|
|
Long-term debt, less
current portion
|
3,047.3
|
|
4,054.7
|
|
Operating lease
liabilities
|
642.6
|
|
648.9
|
|
Financing lease
liabilities
|
76.9
|
|
78.6
|
|
Deferred income taxes
and other tax liabilities
|
376.1
|
|
417.9
|
|
Other
liabilities
|
483.9
|
|
409.3
|
|
Total
liabilities
|
8,691.5
|
|
8,834.6
|
|
|
|
|
|
Commitments and
contingent liabilities
|
|
|
|
|
Noncontrolling
interest
|
15.0
|
|
15.5
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common stock, 83.8 and
83.9 shares outstanding at June 30, 2024, and December 31,
2023,
respectively
|
7.7
|
|
7.7
|
|
Additional paid-in
capital
|
12.5
|
|
38.4
|
|
Retained
earnings
|
8,177.6
|
|
7,888.2
|
|
Accumulated other
comprehensive loss
|
(192.0)
|
|
(59.3)
|
|
Total shareholders'
equity
|
8,005.8
|
|
7,875.0
|
|
Total liabilities and
shareholders' equity
|
$
16,712.3
|
|
$
16,725.1
|
|
LABCORP HOLDINGS
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Dollars in Millions)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net earnings
|
$
205.6
|
|
$
189.1
|
|
$
433.9
|
|
$
402.4
|
|
Earnings from
discontinued operations, net of tax
|
—
|
|
(33.9)
|
|
—
|
|
(38.8)
|
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
156.9
|
|
142.9
|
|
311.4
|
|
285.0
|
|
Stock
compensation
|
30.8
|
|
34.4
|
|
62.4
|
|
67.3
|
|
Operating lease
right-of-use asset expense
|
44.5
|
|
44.6
|
|
88.6
|
|
85.1
|
|
Goodwill and other
asset impairments
|
—
|
|
2.8
|
|
2.5
|
|
5.0
|
|
Deferred income
taxes
|
(19.6)
|
|
(11.0)
|
|
(39.1)
|
|
16.2
|
|
Other
|
39.6
|
|
(6.5)
|
|
36.6
|
|
3.1
|
|
Change in assets and
liabilities (net of effects of acquisitions and
divestitures):
|
|
|
|
|
|
|
|
|
(Increase) decrease in
accounts receivable
|
(5.1)
|
|
0.8
|
|
(192.2)
|
|
(107.6)
|
|
(Increase) decrease in
unbilled services
|
(37.1)
|
|
17.2
|
|
26.8
|
|
74.1
|
|
(Increase) decrease in
supplies inventory
|
28.3
|
|
(6.1)
|
|
27.7
|
|
(16.1)
|
|
(Increase) decrease in
prepaid expenses and other
|
46.5
|
|
27.3
|
|
21.6
|
|
(30.2)
|
|
Increase (decrease) in
accounts payable
|
69.4
|
|
(82.6)
|
|
(51.7)
|
|
(160.3)
|
|
Increase (decrease) in
unearned revenue
|
10.8
|
|
18.5
|
|
(30.8)
|
|
34.8
|
|
Decrease in accrued
expenses and other
|
(9.5)
|
|
(176.0)
|
|
(166.4)
|
|
(272.8)
|
|
Net cash provided by
continuing operating activities
|
561.1
|
|
161.5
|
|
531.3
|
|
347.2
|
|
Net cash provided by
discontinued operating activities
|
—
|
|
189.9
|
|
—
|
|
125.4
|
|
Net cash provided by
operating activities
|
561.1
|
|
351.4
|
|
531.3
|
|
472.6
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(128.2)
|
|
(103.3)
|
|
(262.0)
|
|
(181.5)
|
|
Proceeds from sale of
assets
|
0.1
|
|
0.1
|
|
0.2
|
|
0.2
|
|
Proceeds from sale of
business
|
—
|
|
—
|
|
13.5
|
|
—
|
|
Investments in equity
affiliates
|
(23.0)
|
|
(4.3)
|
|
(36.7)
|
|
(10.4)
|
|
Acquisition of
businesses, net of cash acquired
|
(33.9)
|
|
(137.1)
|
|
(293.1)
|
|
(136.9)
|
|
Net cash used in
continuing investing activities
|
(185.0)
|
|
(244.6)
|
|
(578.1)
|
|
(328.6)
|
|
Net cash used in
discontinued investing activities
|
—
|
|
(9.0)
|
|
—
|
|
(24.7)
|
|
Net cash used for
investing activities
|
(185.0)
|
|
(253.6)
|
|
(578.1)
|
|
(353.3)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from
revolving credit facilities
|
698.7
|
|
593.0
|
|
951.9
|
|
1,420.9
|
|
Payments on revolving
credit facilities
|
(721.3)
|
|
(593.0)
|
|
(932.1)
|
|
(1,420.9)
|
|
Net share settlement
tax payments from issuance of stock to employees
|
(23.1)
|
|
(18.2)
|
|
(37.8)
|
|
(38.7)
|
|
Net proceeds from
issuance of stock to employees
|
—
|
|
26.8
|
|
26.7
|
|
54.4
|
|
Dividends
paid
|
(60.4)
|
|
(64.6)
|
|
(122.5)
|
|
(129.0)
|
|
Purchase of common
stock
|
(100.0)
|
|
—
|
|
(100.0)
|
|
—
|
|
Other
|
(3.9)
|
|
(8.1)
|
|
(7.9)
|
|
(11.4)
|
|
|
|
|
|
|
|
|
|
Net cash used in
continuing financing activities
|
(210.0)
|
|
(64.1)
|
|
(221.7)
|
|
(124.7)
|
|
Net cash provided by
discontinued financing activities
|
—
|
|
1,609.1
|
|
—
|
|
1,609.1
|
|
Net cash used for
financing activities
|
(210.0)
|
|
1,545.0
|
|
(221.7)
|
|
1,484.4
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(0.3)
|
|
3.3
|
|
(3.2)
|
|
6.3
|
|
Net increase (decrease)
in cash and cash equivalents
|
165.8
|
|
1,646.1
|
|
(271.7)
|
|
1,610.0
|
|
Cash and cash
equivalents at beginning of period
|
99.3
|
|
393.9
|
|
536.8
|
|
430.0
|
|
|
|
|
|
|
|
|
|
Less: Cash and cash
equivalents of discontinued operations at end of period
|
—
|
|
109.4
|
|
—
|
|
109.4
|
|
Cash and cash
equivalents at end of period
|
$
265.1
|
|
$ 1,930.6
|
|
$
265.1
|
|
$ 1,930.6
|
|
LABCORP HOLDINGS
INC.
Condensed Combined Non-GAAP Segment
Information
(Dollars in Millions)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Diagnostics
Laboratories
|
|
|
|
|
|
|
|
|
Revenues
|
$
2,524.9
|
|
$
2,340.8
|
|
$
5,004.6
|
|
$
4,723.6
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income
|
$
441.5
|
|
$
409.7
|
|
$
859.4
|
|
$
851.2
|
|
Adjusted Operating
Margin
|
17.5 %
|
|
17.5 %
|
|
17.2 %
|
|
18.0 %
|
|
|
|
|
|
|
|
|
|
Biopharma Laboratory
Services
|
|
|
|
|
|
|
|
|
Revenues
|
$
707.0
|
|
$
699.0
|
|
$
1,417.9
|
|
$
1,360.3
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income
|
$
107.4
|
|
$
104.6
|
|
$
207.3
|
|
$
178.2
|
|
Adjusted Operating
Margin
|
15.2 %
|
|
15.0 %
|
|
14.6 %
|
|
13.1 %
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
Revenues
|
$
3,220.9
|
|
$
3,033.7
|
|
$
6,397.5
|
|
$
6,071.5
|
|
|
|
|
|
|
|
|
|
Adjusted Segment
Operating Income
|
$
548.9
|
|
$
514.3
|
|
$
1,066.7
|
|
$
1,029.4
|
|
Unallocated corporate
expense
|
$
(69.0)
|
|
$
(66.0)
|
|
$
(134.0)
|
|
$
(133.3)
|
|
Consolidated Adjusted
Operating Income
|
$
479.9
|
|
$
448.3
|
|
$
932.7
|
|
$
896.1
|
|
Adjusted Operating
Margin
|
14.9 %
|
|
14.8 %
|
|
14.6 %
|
|
14.8 %
|
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.
|
LABCORP HOLDINGS
INC.
Reconciliation of Non-GAAP Measures
(Dollars
in millions, except per share data)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
$
294.8
|
|
$
266.3
|
|
$
616.1
|
|
$
596.1
|
|
Amortization of
intangibles and other assets (a)
|
|
62.2
|
|
51.5
|
|
122.3
|
|
104.9
|
|
Restructuring and other
charges (b)
|
|
11.6
|
|
15.8
|
|
16.6
|
|
23.3
|
|
Acquisition and
disposition-related costs (c)
|
|
25.1
|
|
12.6
|
|
46.0
|
|
28.7
|
|
Launchpad Costs
(d)
|
|
31.5
|
|
—
|
|
40.4
|
|
—
|
|
Spin off transaction
costs (e)
|
|
—
|
|
38.6
|
|
—
|
|
51.7
|
|
Asset impairments
(f)
|
|
—
|
|
2.8
|
|
2.5
|
|
5.0
|
|
Other
|
|
31.8
|
|
14.2
|
|
43.5
|
|
16.9
|
|
TSA Reimbursement
(g)
|
|
22.9
|
|
—
|
|
45.3
|
|
—
|
|
CDCS not included in
discontinued operations (h)
|
|
—
|
|
46.5
|
|
—
|
|
69.5
|
|
Adjusted operating
income
|
|
$
479.9
|
|
$
448.3
|
|
$
932.7
|
|
$
896.1
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
205.3
|
|
$
188.9
|
|
$
433.3
|
|
$
401.8
|
|
Impact of adjustments
to operating income
|
|
185.1
|
|
135.5
|
|
316.6
|
|
230.5
|
|
(Gains) / losses on
venture fund investments, net (i)
|
|
1.5
|
|
2.4
|
|
5.7
|
|
3.9
|
|
(Gain) / loss on sale
of business (j)
|
|
—
|
|
—
|
|
(4.9)
|
|
—
|
|
Pension settlement
(k)
|
|
—
|
|
—
|
|
—
|
|
7.9
|
|
TSA Reimbursement
(g)
|
|
(22.9)
|
|
—
|
|
(45.3)
|
|
—
|
|
Other
|
|
0.3
|
|
—
|
|
0.3
|
|
1.5
|
|
Income tax impact of
adjustments (l)
|
|
(37.3)
|
|
(45.9)
|
|
(61.5)
|
|
(69.3)
|
|
Earnings from
discontinued operations, net of tax (h)
|
|
—
|
|
(33.9)
|
|
—
|
|
(38.8)
|
|
CDCS not included in
discontinued operations (h)
|
|
—
|
|
57.2
|
|
—
|
|
74.4
|
|
Adjusted net
income
|
|
$
332.0
|
|
$
304.2
|
|
$
644.2
|
|
$
611.9
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
84.3
|
|
89.0
|
|
84.5
|
|
89.0
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share
|
|
$
3.94
|
|
$
3.42
|
|
$
7.62
|
|
$
6.88
|
|
|
|
(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, impact of delayed contract or license
transfers and other integration or disposition related
activities.
|
|
(d)
|
LaunchPad costs include
non-capitalized costs associated with the implementation of
systems, consolidation of processes, and consulting costs incurred
as part of various business process improvement
initiatives.
|
|
(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.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/labcorp-announces-2024-second-quarter-results-302212266.html
SOURCE Labcorp Holdings Inc