Fortrea Reports Fourth Quarter and Full-Year 2024 Results; Issues Full-Year 2025 Guidance
Fortrea (FTRE) has released its Q4 and full-year 2024 financial results, reporting Q4 revenue of $697.0 million and full-year revenue of $2,696.4 million. The company posted a Q4 GAAP net loss of $(73.9) million and full-year net loss of $(271.5) million.
Key highlights include:
- Q4 book-to-bill ratio of 1.35x, with trailing twelve-month ratio at 1.16x
- Q4 adjusted EBITDA of $56.0 million; full-year adjusted EBITDA of $202.5 million
- Backlog of $7,699 million as of December 31, 2024
- Cash position of $118.5 million with gross debt of $1,142.0 million
For 2025, Fortrea projects revenue between $2,450-2,550 million and adjusted EBITDA of $170-200 million. The company has also secured a credit agreement amendment providing additional financial covenant flexibility through Q4 2026.
Fortrea (FTRE) ha pubblicato i risultati finanziari del quarto trimestre e dell'intero anno 2024, riportando un fatturato del Q4 di 697,0 milioni di dollari e un fatturato annuale di 2.696,4 milioni di dollari. L'azienda ha registrato una perdita netta GAAP nel Q4 di $(73,9) milioni e una perdita netta annuale di $(271,5) milioni.
Le principali evidenze includono:
- Rapporto book-to-bill del Q4 di 1,35x, con un rapporto degli ultimi dodici mesi pari a 1,16x
- EBITDA rettificato del Q4 di 56,0 milioni di dollari; EBITDA rettificato annuale di 202,5 milioni di dollari
- Portafoglio ordini di 7.699 milioni di dollari al 31 dicembre 2024
- Posizione di liquidità di 118,5 milioni di dollari con debito lordo di 1.142,0 milioni di dollari
Per il 2025, Fortrea prevede un fatturato compreso tra 2.450-2.550 milioni di dollari e un EBITDA rettificato di 170-200 milioni di dollari. L'azienda ha anche ottenuto una modifica dell'accordo di credito che fornisce ulteriore flessibilità nei vincoli finanziari fino al Q4 2026.
Fortrea (FTRE) ha publicado sus resultados financieros del cuarto trimestre y del año completo 2024, reportando ingresos del Q4 de 697,0 millones de dólares y ingresos anuales de 2.696,4 millones de dólares. La compañía registró una pérdida neta GAAP en el Q4 de $(73,9) millones y una pérdida neta anual de $(271,5) millones.
Los puntos destacados incluyen:
- Relación book-to-bill del Q4 de 1,35x, con una relación de los últimos doce meses de 1,16x
- EBITDA ajustado del Q4 de 56,0 millones de dólares; EBITDA ajustado anual de 202,5 millones de dólares
- Cartera de pedidos de 7.699 millones de dólares al 31 de diciembre de 2024
- Posición de efectivo de 118,5 millones de dólares con deuda bruta de 1.142,0 millones de dólares
Para 2025, Fortrea proyecta ingresos entre 2.450-2.550 millones de dólares y un EBITDA ajustado de 170-200 millones de dólares. La compañía también ha asegurado una enmienda al acuerdo de crédito que proporciona flexibilidad adicional en los convenios financieros hasta el Q4 de 2026.
Fortrea (FTRE)는 2024년 4분기 및 연간 재무 결과를 발표하며 4분기 수익이 6억 9700만 달러이고 연간 수익이 26억 9640만 달러라고 보고했습니다. 회사는 4분기 GAAP 기준 순손실이 $(7390만) 달러, 연간 순손실이 $(2억 7150만) 달러로 나타났습니다.
주요 하이라이트는 다음과 같습니다:
- 4분기 수주-청구 비율이 1.35배, 최근 12개월 비율이 1.16배
- 4분기 조정 EBITDA가 5천600만 달러; 연간 조정 EBITDA가 2억 2500만 달러
- 2024년 12월 31일 기준 백로그가 76억 9900만 달러
- 현금 보유액이 1억 1850만 달러, 총 부채가 11억 4200만 달러
2025년을 위해 Fortrea는 수익을 24억 5000만-25억 5000만 달러로, 조정 EBITDA를 1억 7000만-2억 달러로 예상합니다. 회사는 또한 2026년 4분기까지 추가 재무 약정 유연성을 제공하는 신용 계약 수정안을 확보했습니다.
Fortrea (FTRE) a publié ses résultats financiers du quatrième trimestre et de l'année complète 2024, annonçant un chiffre d'affaires du Q4 de 697,0 millions de dollars et un chiffre d'affaires annuel de 2.696,4 millions de dollars. L'entreprise a enregistré une perte nette GAAP de $(73,9) millions au Q4 et une perte nette annuelle de $(271,5) millions.
Les points clés comprennent:
- Ratio book-to-bill du Q4 de 1,35x, avec un ratio des douze derniers mois de 1,16x
- EBITDA ajusté du Q4 de 56,0 millions de dollars; EBITDA ajusté annuel de 202,5 millions de dollars
- Portefeuille de commandes de 7.699 millions de dollars au 31 décembre 2024
- Position de liquidités de 118,5 millions de dollars avec une dette brute de 1.142,0 millions de dollars
Pour 2025, Fortrea prévoit un chiffre d'affaires compris entre 2.450-2.550 millions de dollars et un EBITDA ajusté de 170-200 millions de dollars. L'entreprise a également sécurisé un amendement à l'accord de crédit qui offre une flexibilité financière supplémentaire jusqu'au Q4 2026.
Fortrea (FTRE) hat seine Finanzresultate für das vierte Quartal und das gesamte Jahr 2024 veröffentlicht, mit einem Umsatz von 697,0 Millionen Dollar im Q4 und einem Gesamtjahresumsatz von 2.696,4 Millionen Dollar. Das Unternehmen verzeichnete einen GAAP-Nettoverlust von $(73,9) Millionen im Q4 und einen Nettoverlust von $(271,5) Millionen für das gesamte Jahr.
Wichtige Highlights sind:
- Q4 Buch-zu-Rechnung-Verhältnis von 1,35x, mit einem Verhältnis der letzten zwölf Monate von 1,16x
- Q4 bereinigtes EBITDA von 56,0 Millionen Dollar; bereinigtes EBITDA für das gesamte Jahr von 202,5 Millionen Dollar
- Auftragsbestand von 7.699 Millionen Dollar zum 31. Dezember 2024
- Liquiditätsposition von 118,5 Millionen Dollar bei einer Bruttoverschuldung von 1.142,0 Millionen Dollar
Für 2025 prognostiziert Fortrea einen Umsatz zwischen 2.450-2.550 Millionen Dollar und ein bereinigtes EBITDA von 170-200 Millionen Dollar. Das Unternehmen hat auch eine Änderung des Kreditvertrags gesichert, die zusätzliche finanzielle Flexibilität bis zum Q4 2026 bietet.
- Strong Q4 book-to-bill ratio of 1.35x
- Substantial backlog of $7.7B
- Positive operating cash flow of $262.8M
- Successfully exited Transition Services Agreement with former parent company
- Q4 revenue declined 1.8% YoY to $697.0M
- Full-year revenue decreased 5.1% to $2,696.4M
- Q4 net loss widened to $73.9M from $48.6M YoY
- Full-year 2025 guidance suggests continued revenue decline
- Full-year adjusted EBITDA fell 17.6% to $202.5M
Insights
Fortrea's Q4 and FY2024 results paint a picture of a company in transition working to stabilize operations post-spinoff while facing financial challenges. The Q4 revenue of $697.0 million represents a
Most concerning is the widening GAAP net loss of $(73.9) million for Q4 and $(271.5) million for the full year, significantly worse than 2023 losses. The company's adjusted EBITDA of $56.0 million for Q4 and $202.5 million for the full year both show downward trends.
However, positive signals emerge in operational metrics. The Q4 book-to-bill ratio of 1.35x indicates robust future revenue potential, with the trailing twelve-month ratio at 1.16x suggesting consistent demand improvement. The $7,699 million backlog provides substantial revenue visibility.
The company's balance sheet shows $118.5 million cash against $1,142.0 million gross debt, creating a leveraged position that prompted a recent amendment to financial covenants through Q4 2026. This suggests potential debt covenant pressure requiring negotiated flexibility.
Fortrea's 2025 guidance projects revenue between $2,450-2,550 million, representing a potential
Fortrea's results reveal the complex dynamics of a recently spun-off CRO establishing independent operations. The most significant positive indicator is the 1.35x book-to-bill ratio for Q4 and 1.2x average since the spinoff, demonstrating improving commercial momentum despite financial pressures.
The completion of their Transition Services Agreement (TSA) exit marks a important operational milestone. Migrating 27,000+ computers, phones, applications and servers represents substantial progress in establishing independent infrastructure. This transition positions Fortrea to shift from resource-intensive separation activities toward strategic growth initiatives.
CEO Tom Pike's emphasis on customer experience appears to be yielding results, with improving quality metrics and customer satisfaction scores mentioned alongside stronger demand. These leading indicators typically precede financial improvements in service businesses.
The $7,699 million backlog provides substantial revenue visibility, yet the softer 2025 revenue guidance of $2,450-2,550 million suggests potential challenges in backlog conversion or prudent management of investor expectations. The strategic shift from "transition to transformation" signals a company that believes its foundational separation work is largely complete.
The financial covenant amendment is particularly telling - indicating both proactive management of debt obligations and acknowledgment of ongoing profitability challenges through 2026. This extended timeline reveals that Fortrea's leadership anticipates a multi-year journey to optimize operations and achieve sustainable profitability following the separation.
For the three months and full-year ended December 31, 2024, from continuing operations:
- Revenues of
$697.0 million for the fourth quarter,$2,696.4 million for the full year - GAAP net loss of
$(73.9) million for the fourth quarter,$(271.5) million for the full year - Adjusted EBITDA of
$56.0 million for the fourth quarter,$202.5 million for the full year - Fourth-quarter book-to-bill ratio of 1.35x
DURHAM, N.C., March 03, 2025 (GLOBE NEWSWIRE) -- Fortrea (Nasdaq: FTRE) (the “Company”), a leading global contract research organization (“CRO”), today reported financial results for the fourth quarter and full year ended December 31, 2024.
“Our intense focus on our customers’ success and creating a better customer experience has resulted in the stronger demand that is reflected in this quarter’s book-to-bill,” said Tom Pike, chairman and CEO of Fortrea. “Since we spun, our average book-to-bill has been 1.2x. Our positive progress is also reflected in our improving quality metrics and increasing customer satisfaction scores. We largely exited our Transition Services Agreement with our former parent company, including the migration of more than 27,000 computers, mobile phones, applications and servers. We are ready for the next phase in our journey, moving from transition to transformation, creating value for our customers, shareholders, employees and the patients we ultimately serve.”
All commentary in this press release relates to continuing operations unless otherwise noted.
Fourth Quarter 2024 Financial Results
Revenue for the fourth quarter was
Fourth quarter GAAP net loss was
Fortrea’s book-to-bill ratio was 1.35x for the fourth quarter of 2024.
Full Year 2024 Financial Results
Revenue for the full year was
Full year GAAP net loss was
Fortrea’s trailing twelve-month book-to-bill ratio was 1.16x and backlog as of December 31, 2024, was
The Company’s cash and cash equivalents were
2025 Financial Guidance
For the full year 2025, the Company targets revenues in the range of
The guidance assumes foreign currency exchange rates as of December 31, 2024, remain in effect for the forecast period.
The Company’s 2025 financial guidance will be discussed during the Earnings Call at 9:00 am ET on March 3, 2025.
Earnings Call and Replay
Fortrea will host a conference call at 9:00 am ET on March 3, 2025, to review its financial results and conduct a question-and-answer session. To participate in the earnings call, participants should register online at the Fortrea Investor Relations website. To avoid potential delays, please join at least 10 minutes prior to the start of the call. The conference call can also be accessed through the following earnings webcast link. A replay of the live conference call will be available shortly after the conclusion of the event and accessible on the events and presentations section of the Fortrea website. A supplemental slide presentation will also be available on the Investor Relations website prior to the start of the call.
About Fortrea
Fortrea (Nasdaq: FTRE) is a leading global provider of clinical development solutions to the life sciences industry. We partner with emerging and large biopharmaceutical, biotechnology, medical device and diagnostic companies to drive healthcare innovation that accelerates life changing therapies to patients. Fortrea provides phase I-IV clinical trial management, clinical pharmacology and consulting services. Fortrea’s solutions leverage three decades of experience spanning more than 20 therapeutic areas, a passion for scientific rigor, exceptional insights and a strong investigator site network. Our talented and diverse team working in about 100 countries is scaled to deliver focused and agile solutions to customers globally. Learn more about how Fortrea is becoming a transformative force from pipeline to patient at Fortrea.com and follow us on LinkedIn and X (formerly Twitter).
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, the Company’s 2025 financial guidance. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “guidance,” “expect,” “assume,” “anticipate,” “intend,” “plan,” “forecast,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words that are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from the Company’s expectations due to a number of factors, including, but not limited to, the following: the Company’s ability to successfully implement the Company’s business strategies and execute the Company’s long-term value creation strategy; risks and expenses associated with the Company’s international operations and currency fluctuations; the Company’s customer or therapeutic area concentrations; any further deterioration in the macroeconomic environment, which could lead to defaults or cancellations by the Company’s customers; the risk that the Company’s backlog and net new business may not be indicative of the Company’s future revenues and that the Company might not realize all of the anticipated future revenue reflected in the Company’s backlog; the Company’s ability to generate sufficient net new business awards, or if net new business awards are delayed, terminated, reduced in scope, or fail to go to contract; if the Company underprices its contracts, overruns its cost estimates, or fails to receive approval for, or experiences delays in documentation of change orders; the Company’s ability to realize the full benefits from the divestiture of Endpoint Clinical and Fortrea Patient Access businesses; and other factors described from time to time in documents that the Company files with the SEC. For a further discussion of the risks relating to the Company’s business, see the “Risk Factors” Section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (the "SEC"), as such factors may be amended or updated from time to time in the Company’s subsequent periodic and other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company’s filings with the SEC. Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data. All forward-looking statements are made only as of the date of this release and the Company does not undertake any obligation, other than as may be required by law, to update or revise any forward-looking statements to reflect future events or developments.
Note on Non-GAAP Financial Measures
This release includes information based on financial measures that are not recognized under generally accepted accounting principles in the United States ("GAAP"), such as Adjusted EBITDA, Adjusted Net Income, Adjusted Basic and Diluted EPS, and Free Cash Flow. Non-GAAP financial measures are presented only as a supplement to the Company’s financial statements based on GAAP. Non-GAAP financial information is provided to enhance understanding of the Company’s financial performance, but none of these non-GAAP financial measures are recognized terms under GAAP, and non-GAAP measures should not be considered in isolation from, or as a substitute analysis for, the Company’s results of operations as determined in accordance with GAAP.
The Company uses non-GAAP measures in its operational and financial decision making and believes that it is useful to exclude certain items in order to focus on what it regards to be a more meaningful indicator of the underlying operating performance of the business. For example, in calculating Adjusted EBITDA, the Company excludes all the amortization of intangible assets associated with acquired customer relationships and backlog, databases, non-compete agreements and trademarks, trade names and other from non-GAAP expense and income measures as such amounts can be significantly impacted by the timing and size of acquisitions. Although the Company excludes amortization of acquired intangible assets from the Company’s non-GAAP expenses, the Company believes that it is important for investors to understand that revenue generated from such intangibles is included within revenue in determining net income attributable to the Company. As a result, internal management reports feature non-GAAP measures which are also used to prepare strategic plans and annual budgets and review management compensation. The Company also believes that investors may find non-GAAP financial measures useful for the same reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures.
The non-GAAP financial measures are not presented in accordance with GAAP. Please refer to the schedules attached to this release for relevant definitions and reconciliations of non-GAAP financial measures contained herein to the most directly comparable GAAP measures. The Company’s full-year 2025 guidance measures (other than revenue) are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measure because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include, but are not limited to, acquisition-related expenses, restructuring and related expenses, stock-based compensation and other items not reflective of the Company's ongoing operations.
Non-GAAP measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies comparable to the Company, many of which present non-GAAP measures when reporting their results. Non-GAAP measures have limitations as an analytical tool. They are not presentations made in accordance with GAAP, are not measures of financial condition or liquidity and should not be considered as an alternative to profit or loss for the period determined in accordance with GAAP or operating cash flows determined in accordance with GAAP. Non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies. As a result, you should not consider such performance measures in isolation from, or as a substitute analysis for, the Company’s results of operations as determined in accordance with GAAP.
Fortrea Contacts
Hima Inguva (Investors) – 877-495-0816, hima.inguva@fortrea.com
Sue Zaranek (Media) – 919-943-5422, media@fortrea.com
Kate Dillon (Media) – 646-818-9115, kdillon@prosek.com
| FORTREA HOLDINGS INC. CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues | $ | 697.0 | $ | 709.7 | $ | 2,696.4 | $ | 2,842.5 | |||||||
| Costs and expenses: | |||||||||||||||
| Direct costs, exclusive of depreciation and amortization (including costs incurred from related parties of | 556.1 | 577.9 | 2,162.2 | 2,251.9 | |||||||||||
| Selling, general and administrative expenses, exclusive of depreciation and amortization | 148.1 | 126.7 | 560.7 | 448.1 | |||||||||||
| Depreciation and amortization | 20.8 | 22.2 | 85.3 | 89.3 | |||||||||||
| Restructuring and other charges | 27.6 | 6.9 | 50.1 | 21.2 | |||||||||||
| Total costs and expenses | 752.6 | 733.7 | 2,858.3 | 2,810.5 | |||||||||||
| Operating income (loss) | (55.6 | ) | (24.0 | ) | (161.9 | ) | 32.0 | ||||||||
| Other income (expense): | |||||||||||||||
| Interest expense | (21.9 | ) | (34.5 | ) | (123.8 | ) | (69.7 | ) | |||||||
| Foreign exchange gain (loss) | (3.6 | ) | 1.5 | (10.6 | ) | 0.3 | |||||||||
| Other, net | 6.2 | 2.3 | 21.3 | 6.9 | |||||||||||
| Income (loss) from continuing operations before income taxes | (74.9 | ) | (54.7 | ) | (275.0 | ) | (30.5 | ) | |||||||
| Income tax (benefit) expense | (1.0 | ) | (6.1 | ) | (3.5 | ) | 1.2 | ||||||||
| Income (loss) from continuing operations | (73.9 | ) | (48.6 | ) | (271.5 | ) | (31.7 | ) | |||||||
| Income (loss) from discontinued operations, net of tax | 12.7 | (5.9 | ) | (57.0 | ) | 6.5 | |||||||||
| Net income (loss) | $ | (61.2 | ) | $ | (54.5 | ) | $ | (328.5 | ) | $ | (25.2 | ) | |||
| Earnings (loss) per common share | |||||||||||||||
| Basic and diluted earnings (loss) per share from continuing operations | $ | (0.82 | ) | $ | (0.55 | ) | $ | (3.03 | ) | $ | (0.36 | ) | |||
| Basic and diluted earnings (loss) per share from discontinued operations | 0.14 | (0.07 | ) | (0.64 | ) | 0.07 | |||||||||
| Basic and diluted earnings (loss) per share | $ | (0.68 | ) | $ | (0.62 | ) | $ | (3.67 | ) | $ | (0.29 | ) | |||
| FORTREA HOLDINGS INC. CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) | |||||||
| December 31, 2024 | December 31, 2023 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 118.5 | $ | 108.6 | |||
| Accounts receivable and unbilled services, net | 659.5 | 988.5 | |||||
| Prepaid expenses and other | 170.2 | 84.6 | |||||
| Current assets of discontinued operations | — | 69.1 | |||||
| Total current assets | 948.2 | 1,250.8 | |||||
| Property, plant and equipment, net | 156.3 | 172.6 | |||||
| Goodwill, net | 1,710.4 | 1,739.4 | |||||
| Intangible assets, net | 655.7 | 728.1 | |||||
| Deferred income taxes | 5.2 | 3.2 | |||||
| Other assets, net | 103.4 | 69.7 | |||||
| Long-term assets of discontinued operations | — | 368.8 | |||||
| Total assets | $ | 3,579.2 | $ | 4,332.6 | |||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 138.2 | $ | 132.9 | |||
| Accrued expenses and other current liabilities | 369.8 | 335.5 | |||||
| Unearned revenue | 353.3 | 214.2 | |||||
| Current portion of long-term debt | 74.8 | 26.1 | |||||
| Short-term operating lease liabilities | 13.4 | 17.2 | |||||
| Current liabilities of discontinued operations | — | 52.5 | |||||
| Total current liabilities | 949.5 | 778.4 | |||||
| Long-term debt, less current portion | 1,049.7 | 1,565.9 | |||||
| Operating lease liabilities | 60.6 | 62.8 | |||||
| Deferred income taxes and other tax liabilities | 121.7 | 147.7 | |||||
| Other liabilities | 35.3 | 32.1 | |||||
| Long-term liabilities of discontinued operations | — | 31.6 | |||||
| Total liabilities | 2,216.8 | 2,618.5 | |||||
| Commitments and contingent liabilities | |||||||
| Equity: | |||||||
| Common stock, 89.7 and 88.8 shares outstanding at December 31, 2024 and December 31, 2023, respectively | 0.1 | 0.1 | |||||
| Additional paid-in capital | 2,042.2 | 1,998.0 | |||||
| Accumulated deficit | (397.0 | ) | (68.5 | ) | |||
| Accumulated other comprehensive loss | (282.9 | ) | (215.5 | ) | |||
| Total equity | 1,362.4 | 1,714.1 | |||||
| Total liabilities and equity | $ | 3,579.2 | $ | 4,332.6 | |||
| FORTREA HOLDINGS INC. CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (in millions) (unaudited) | |||||||
| Twelve Months Ended December 31, | |||||||
| 2024 | 2023 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income (loss) | $ | (328.5 | ) | $ | (25.2 | ) | |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 86.9 | 98.0 | |||||
| Stock compensation | 58.4 | 42.7 | |||||
| Credit loss expense | 22.2 | 27.8 | |||||
| Operating lease right-of-use asset expense | 14.0 | 27.4 | |||||
| Operating lease right-of-use asset impairment | 4.8 | — | |||||
| Goodwill and other asset impairments | 24.0 | 13.4 | |||||
| Deferred income taxes | (24.6 | ) | (41.6 | ) | |||
| Loss on sale of business | 19.6 | — | |||||
| Write-off of debt issuance costs | 12.2 | — | |||||
| Other, net | 9.3 | (1.0 | ) | ||||
| Change in assets and liabilities: | |||||||
| Decrease (increase) in accounts receivable and unbilled services, net | 309.9 | (53.4 | ) | ||||
| (Increase) in prepaid expenses and other | (78.1 | ) | (3.4 | ) | |||
| Increase in accounts payable | 7.2 | 55.3 | |||||
| Increase (decrease) in deferred revenue | 140.0 | (2.2 | ) | ||||
| (Decrease) increase in accrued expenses and other | (14.5 | ) | 30.6 | ||||
| Net cash provided by operating activities | 262.8 | 168.4 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Capital expenditures | (25.5 | ) | (40.3 | ) | |||
| Proceeds from sale of business, net | 276.6 | — | |||||
| Proceeds from sale of assets | 0.5 | 8.5 | |||||
| Net cash provided by (used for) investing activities | 251.6 | (31.8 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Proceeds from revolving credit facilities | 826.5 | 164.0 | |||||
| Payments on revolving credit facilities | (826.5 | ) | (164.0 | ) | |||
| Proceeds from term loans | — | 1,061.4 | |||||
| Proceeds from issuance of senior notes | — | 570.0 | |||||
| Debt issuance costs | (0.7 | ) | (26.4 | ) | |||
| Principal payments on long-term debt | (482.7 | ) | (15.4 | ) | |||
| Payments for taxes related to net share settlement of stock awards | (14.4 | ) | — | ||||
| Special payment to Former Parent | — | (1,595.0 | ) | ||||
| Net transfers to Former Parent | — | (135.4 | ) | ||||
| Net cash used for financing activities | (497.8 | ) | (140.8 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | (6.7 | ) | 2.4 | ||||
| Net change in cash and cash equivalents | 9.9 | (1.8 | ) | ||||
| Cash and cash equivalents at beginning of period | 108.6 | 110.4 | |||||
| Cash and cash equivalents at end of period | $ | 118.5 | $ | 108.6 | |||
The cash flows related to discontinued operations have not been segregated and are included in the consolidated and combined statements of cash flows.
| RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||
| FORTREA HOLDINGS INC. NET INCOME TO ADJUSTED EBITDA RECONCILIATION (in millions) (unaudited) | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Adjusted EBITDA from continuing operations: | ||||||||||||||||
| Net income (loss) from continuing operations | $ | (73.9 | ) | $ | (48.6 | ) | $ | (271.5 | ) | $ | (31.7 | ) | ||||
| Income tax (benefit) expense | (1.0 | ) | (6.1 | ) | (3.5 | ) | 1.2 | |||||||||
| Interest expense, net | 21.9 | 34.5 | 123.8 | 69.7 | ||||||||||||
| Foreign exchange (gain) loss | 3.6 | (1.5 | ) | 10.6 | (0.3 | ) | ||||||||||
| Depreciation and amortization (a) | 20.8 | 22.2 | 85.3 | 89.3 | ||||||||||||
| Restructuring and other charges (b) | 27.9 | 6.9 | 51.2 | 23.8 | ||||||||||||
| Stock based compensation | 15.3 | 14.8 | 57.2 | 40.4 | ||||||||||||
| Disposition-related costs (c) | 6.1 | — | 13.4 | — | ||||||||||||
| One-time spin related costs (d) | 32.1 | 25.2 | 130.0 | 31.3 | ||||||||||||
| Customer matter (e) | 0.8 | 8.7 | 6.0 | 8.7 | ||||||||||||
| Enabling Services Segment costs (f) | — | 5.1 | 7.3 | 19.2 | ||||||||||||
| Other (g) | 2.4 | (2.3 | ) | (7.3 | ) | (5.8 | ) | |||||||||
| Adjusted EBITDA from continuing operations | $ | 56.0 | $ | 58.9 | $ | 202.5 | $ | 245.8 | ||||||||
(a) Includes 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 to reduce overcapacity, align resources and facilities, and restructure certain operations. Approximately
(c) Disposition-related costs are short-term incremental costs to support the transition services agreement associated with the sale of the Enabling Services Segment.
(d) Represents one-time or incremental costs required to implement capabilities to exit the Transition Services Agreement with former parent.
(e) As part of working with a customer, the Company has agreed to make concessions and provide discounts and other consideration to the customer as part of a multi-party solution.
(f) These adjustments remove the impact of certain Enabling Services costs not included in discontinued operations. The Enabling Services Segment was sold in the second quarter of 2024.
(g) Includes the recognition of contingent consideration on a sale of a facility, income related to services provided under Transition Services Agreements, settlements related to litigation initiated prior to the Spin, Founders share awards, and the yield expense incurred on amounts received under the Company’s Receivables Securitization Program.
| FORTREA HOLDINGS INC. NET INCOME TO ADJUSTED NET INCOME RECONCILIATION (in millions, except per share data) (unaudited) | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Adjusted net income (loss) from continuing operations: | ||||||||||||||||
| Net income (loss) from continuing operations | $ | (73.9 | ) | $ | (48.6 | ) | $ | (271.5 | ) | $ | (31.7 | ) | ||||
| Foreign exchange loss | 3.6 | (1.5 | ) | 10.6 | (0.3 | ) | ||||||||||
| Amortization (a) | 15.2 | 15.0 | 60.8 | 60.7 | ||||||||||||
| Restructuring and other charges (b) | 27.9 | 6.9 | 51.2 | 23.8 | ||||||||||||
| Stock based compensation | 15.3 | 14.8 | 57.2 | 40.4 | ||||||||||||
| Disposition-related costs (c) | 6.1 | — | 13.4 | — | ||||||||||||
| One-time spin related costs (d) | 32.1 | 25.2 | 130.0 | 31.3 | ||||||||||||
| Customer matter (e) | 0.8 | 8.7 | 6.0 | 8.7 | ||||||||||||
| Enabling Services Segment costs (f) | — | 5.1 | 7.3 | 19.2 | ||||||||||||
| Other (g) | 2.4 | (2.3 | ) | (7.3 | ) | (5.8 | ) | |||||||||
| Income tax impact of adjustments (h) | (12.9 | ) | (10.6 | ) | (27.6 | ) | (34.4 | ) | ||||||||
| Adjusted net income (loss) from continuing operations | $ | 16.6 | $ | 12.7 | $ | 30.1 | $ | 111.9 | ||||||||
| Basic shares | 89.7 | 88.8 | 89.5 | 88.8 | ||||||||||||
| Diluted shares | 90.2 | 89.7 | 90.3 | 89.0 | ||||||||||||
| Adjusted basic EPS from continuing operations | $ | 0.18 | $ | 0.14 | $ | 0.34 | $ | 1.26 | ||||||||
| Adjusted diluted EPS from continuing operations | $ | 0.18 | $ | 0.14 | $ | 0.33 | $ | 1.26 | ||||||||
(a) Includes 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 to reduce overcapacity, align resources and facilities, and restructure certain operations. Approximately
(c) Disposition-related costs are short-term incremental costs to support the transition services agreement associated with the sale of the Enabling Services Segment.
(d) Represents one-time or incremental costs required to implement capabilities to exit the Transition Services Agreement with former parent.
(e) As part of working with a customer, the Company has agreed to make concessions and provide discounts and other consideration to the customer as part of a multi-party solution.
(f) These adjustments remove the impact of certain Enabling Services costs not included in discontinued operations. The Enabling Services Segment was sold in the second quarter of 2024.
(g) Includes the recognition of contingent consideration on a sale of a facility, income related to services provided under Transition Services Agreements, settlements; related to litigation initiated prior to the Spin, Founders share awards, and the yield expense incurred on amounts received under the Company’s Receivables Securitization Program.
(h) Income tax impact of adjustments calculated based on the tax rate applicable to each item.
| FORTREA HOLDINGS INC. | ||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW RECONCILIATION (in millions) (unaudited) | ||||
| Twelve Months Ended December 31, 2024 | ||||
| Net cash provided by operating activities | $ | 262.8 | ||
| Capital expenditures | (25.5 | ) | ||
| Free cash flow | $ | 237.3 | ||
The cash flows related to discontinued operations have not been segregated and are included in the consolidated and combined statements of cash flows.
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