Labcorp Announces 2024 Second Quarter Results
Labcorp (NYSE: LH) announced strong Q2 2024 results and updated full-year guidance. Revenue increased 6.2% to $3.22 billion, driven by organic growth and acquisitions. Diluted EPS from continuing operations rose to $2.43, while adjusted EPS reached $3.94. The company updated its 2024 guidance, projecting revenue growth of 6.4% to 7.5% and adjusted EPS of $14.30 to $14.90.
Labcorp expanded its leadership in key therapeutic areas and strengthened its position through acquisitions and innovative solutions. Notable developments include FDA approval for a companion diagnostic, introduction of new tests, and expansion of strategic service offerings. The company also increased its share repurchase authorization by $1.0 billion to $1.4 billion.
Labcorp (NYSE: LH) ha annunciato risultati forti per il secondo trimestre del 2024 e ha aggiornato le previsioni per l'intero anno. I ricavi sono aumentati del 6,2% raggiungendo i 3,22 miliardi di dollari, grazie alla crescita organica e alle acquisizioni. Il reddito netto diluito proveniente dalle operazioni continuative è salito a $2,43, mentre l'utile per azione rettificato ha raggiunto $3,94. L'azienda ha aggiornato le sue previsioni per il 2024, prevedendo una crescita dei ricavi compresa tra 6,4% e 7,5% e un utile per azione rettificato compreso tra $14,30 e $14,90.
Labcorp ha ampliato la sua leadership in aree terapeutiche chiave e consolidato la sua posizione attraverso acquisizioni e soluzioni innovative. Sviluppi significativi includono l'approvazione della FDA per un test diagnostico complementare, l'introduzione di nuovi test e l'espansione delle offerte di servizi strategici. L'azienda ha anche aumentato l'autorizzazione per il riacquisto di azioni di $1,0 miliardi a $1,4 miliardi.
Labcorp (NYSE: LH) anunció resultados sólidos para el segundo trimestre de 2024 y actualizó la guía para todo el año. Los ingresos aumentaron un 6.2% alcanzando los $3.22 mil millones, impulsados por el crecimiento orgánico y las adquisiciones. El EPS diluido de las operaciones continuas subió a $2.43, mientras que el EPS ajustado alcanzó $3.94. La empresa actualizó su guía para 2024, proyectando un crecimiento de ingresos del 6.4% al 7.5% y un EPS ajustado de $14.30 a $14.90.
Labcorp amplió su liderazgo en áreas terapéuticas clave y fortaleció su posición a través de adquisiciones y soluciones innovadoras. Los desarrollos notables incluyen la aprobación de la FDA para un diagnóstico complementario, la introducción de nuevas pruebas y la expansión de la oferta de servicios estratégicos. La empresa también aumentó su autorización de recompra de acciones de $1.0 mil millones a $1.4 mil millones.
랩코프 (NYSE: LH)는 2024년 2분기 강력한 실적을 발표하고 연간 가이드를 업데이트했습니다. 수익은 6.2% 증가하여 32억 2천만 달러에 도달했습니다, 이는 유기적인 성장과 인수에 의해 촉진되었습니다. 지속적인 운영에서의 희석 EPS는 $2.43로 상승했습니다, 반면 조정된 EPS는 $3.94에 도달했습니다. 회사는 2024년 가이드를 업데이트하여 6.4%에서 7.5%의 수익 성장과 $14.30에서 $14.90의 조정 EPS를 예측했습니다.
랩코프는 주요 치료 분야에서 리더십을 확대하고 인수 및 혁신적인 솔루션을 통해 입지를 강화했습니다. 주목할 만한 개발 사항으로는 동반 진단에 대한 FDA 승인, 새로운 테스트의 도입, 전략적 서비스 제공의 확장이 있습니다. 회사는 또한 자사주 매입 승인 금액을 10억 달러에서 14억 달러로 증가시켰습니다.
Labcorp (NYSE: LH) a annoncé de solides résultats pour le deuxième trimestre de 2024 et a mis à jour ses prévisions pour l'année entière. Les revenus ont augmenté de 6,2% pour atteindre 3,22 milliards de dollars, grâce à la croissance organique et aux acquisitions. Le BPA dilué des opérations continues a augmenté à 2,43 $, tandis que le BPA ajusté a atteint 3,94 $. L'entreprise a mis à jour ses prévisions pour 2024, prévoyant une croissance des revenus de 6,4 % à 7,5 % et un BPA ajusté de 14,30 $ à 14,90 $.
Labcorp a élargi son leadership dans des domaines thérapeutiques clés et renforcé sa position grâce à des acquisitions et des solutions innovantes. Parmi les développements notables, on trouve l'approbation de la FDA pour un test de diagnostic compagnon, l'introduction de nouveaux tests et l'expansion des offres de services stratégiques. L'entreprise a également augmenté son autorisation de rachat d'actions de 1,0 milliard de dollars à 1,4 milliard de dollars.
Labcorp (NYSE: LH) hat starke Ergebnisse für das zweite Quartal 2024 bekannt gegeben und die Jahresprognose aktualisiert. Der Umsatz stieg um 6,2 % auf 3,22 Milliarden US-Dollar, angetrieben durch organisches Wachstum und Übernahmen. Der verwässerte Gewinn pro Aktie aus fortgeführten Betrieben stieg auf 2,43 USD, während der bereinigte Gewinn pro Aktie 3,94 USD erreichte. Das Unternehmen aktualisierte seine Prognose für 2024 und erwartet ein Umsatzwachstum von 6,4 % bis 7,5 % sowie einen bereinigten Gewinn pro Aktie zwischen 14,30 USD und 14,90 USD.
Labcorp hat seine Führungsposition in wichtigen therapeutischen Bereichen ausgebaut und seine Position durch Übernahmen und innovative Lösungen gestärkt. Zu den bemerkenswerten Entwicklungen gehören die FDA-Zulassung für einen begleitenden Diagnosetest, die Einführung neuer Tests und die Erweiterung strategischer Dienstleistungsangebote. Das Unternehmen hat auch die Genehmigung zum Aktienrückkauf um 1,0 Milliarden USD auf 1,4 Milliarden USD erhöht.
- Revenue increased 6.2% to $3.22 billion in Q2 2024
- Diluted EPS from continuing operations rose to $2.43, with adjusted EPS reaching $3.94
- Free cash flow from continuing operations improved to $432.9 million
- Updated 2024 guidance projects revenue growth of 6.4% to 7.5%
- Share repurchase authorization increased by $1.0 billion to $1.4 billion
- Expanded leadership in key therapeutic areas through acquisitions and new offerings
- Received FDA approval for companion diagnostic for hemophilia B gene therapy
- COVID-19 PCR testing revenue decreased by 0.7%
- Biopharma Laboratory Services backlog decreased by 0.6% compared to last year
Labcorp's Q2 2024 results demonstrate robust financial performance and strategic growth. Revenue increased by
Notably, adjusted EPS rose to
The updated full-year guidance, including the Invitae acquisition impact, projects continued growth. The revenue growth forecast of
However, investors should note the slight margin pressure, with adjusted operating margin only increasing by
The
Overall, Labcorp's Q2 results and outlook paint a picture of a company successfully executing its growth strategy while navigating industry challenges.
Labcorp's Q2 results highlight significant advancements in its medical and scientific capabilities, positioning the company at the forefront of several critical healthcare areas.
The FDA approval of Labcorp's companion diagnostic for Pfizer's hemophilia B gene therapy is a major milestone. This achievement not only demonstrates Labcorp's expertise in precision medicine but also opens up new revenue streams in the rapidly growing field of gene therapy diagnostics.
The introduction of the first trimester preeclampsia screening test is another game-changer. As the only test of its kind available in the U.S., it gives Labcorp a significant competitive advantage in the prenatal care market. The ability to detect preeclampsia risk across all trimesters positions Labcorp as a leader in comprehensive maternal health diagnostics.
The expansion of Labcorp's precision oncology portfolio, including the Labcorp® Tissue Complete and OmniSeq INSIGHT circulating tumor DNA services, strengthens its position in the lucrative oncology diagnostics market. This move aligns with the growing trend towards personalized cancer treatments and could drive substantial growth in Labcorp's biopharma services segment.
The launch of Labcorp Global Trial Connect is a strategic move to capitalize on the increasing demand for efficient clinical trial solutions. By offering a suite of central laboratory solutions aimed at accelerating clinical trials, Labcorp is positioning itself as an indispensable partner for pharmaceutical companies looking to bring new drugs to market faster.
These scientific and technological advancements, coupled with strategic acquisitions like Invitae, demonstrate Labcorp's commitment to innovation and its ability to stay ahead in the rapidly evolving healthcare diagnostics landscape.
Labcorp's Q2 2024 results and strategic moves reveal a company adeptly navigating market trends and positioning itself for future growth in key areas of the healthcare industry.
The acquisition of select assets from Invitae is a shrewd move that aligns with the growing importance of genetic insights in personalized medicine. This acquisition not only expands Labcorp's capabilities in oncology and rare diseases but also positions the company to capitalize on the burgeoning market for genetic testing and precision medicine.
The comprehensive strategic collaboration with Naples Comprehensive Healthcare (NCH) in Southwest Florida exemplifies Labcorp's strategy of forging partnerships with health systems. This approach not only secures a steady stream of testing volume but also enhances Labcorp's presence in local healthcare ecosystems, potentially leading to more such partnerships in the future.
The expansion of Labcorp OnDemand with new tests, including drug, testosterone, HIV and Heart Health screenings, taps into the growing consumer demand for convenient, direct-to-consumer health testing. This move could help Labcorp capture a larger share of the rapidly expanding at-home testing market.
In the biopharma services segment, while the current book-to-bill ratio of 1.00 and slight decrease in backlog might raise some concerns, management's expectation of improvement in the second half of the year suggests potential upcoming contract wins or market share gains.
The company's focus on expanding its laboratory and testing solutions, coupled with its emphasis on leveraging science and technology, positions Labcorp well to benefit from the ongoing trends of personalized medicine, increased health awareness and the growing role of diagnostics in healthcare decision-making.
However, investors should monitor the slight margin pressures and the integration of acquisitions, as these could impact profitability in the short term. Overall, Labcorp's market positioning and strategic initiatives suggest a company well-prepared to capitalize on key healthcare industry trends.
Updates Full-Year Guidance
- Results from Continuing Operations for second quarter 2024 versus last year:
- Revenue:
$3.22 billion $3.03 billion - Diluted EPS:
$2.43 $1.74 - Adjusted EPS:
$3.94 $3.42 - Free Cash Flow:
$432.9 million $58.2 million
- Revenue:
- Updated Full-Year 2024 Guidance:
- Revenue range of
6.4% to7.5% , includes Invitae impact of ~1.0% - Adjusted EPS range of
$14.30 $14.90 ~ $0.40 - Free Cash Flow of
$0.85 billion $1.00 billion ~ $150 million
- Revenue range of
- Share repurchase authorization increased by
$1.0 billion $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
"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 andShanghai 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
Consolidated Results
Second Quarter Results
Revenue for the quarter was
Operating income for the quarter was
Net earnings from continuing operations for the quarter were
Operating cash flow from continuing operations for the quarter was
At the end of the quarter, the company's cash balance was
Year-To-Date Results
Revenue was
Operating income was
Net earnings from continuing operations were
Operating cash flow from continuing operations was
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
Total volume (measured by requisitions) increased by
Adjusted operating income for the quarter was
Biopharma Laboratory Services
Revenue for the quarter was
Adjusted operating income for the quarter was
Net orders and net book-to-bill during the trailing twelve months were
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) | 4.8 % | 6.4 % | 6.4 % | 7.5 % | 1.0 % | |||||
Diagnostics Laboratories | 4.8 % | 6.0 % | 6.9 % | 7.9 % | 1.3 % | |||||
Biopharma Laboratory Services (3) | 3.7 % | 5.7 % | 3.7 % | 5.0 % | ||||||
Adjusted EPS | ( | |||||||||
Free Cash Flow from Cont. Ops(4) | ( | |||||||||
(1) 2024 Guidance includes an impact from foreign currency translation of | ||||||||||
(2) Enterprise level revenue is presented net of intersegment transaction eliminations. | ||||||||||
(3) 2024 Guidance includes an impact from foreign currency translation of | ||||||||||
(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
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
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 | ||||||||
Three Months Ended | Six Months Ended | |||||||
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 | |||
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, | 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 | |||||||
Three Months Ended | Six Months Ended | ||||||
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 | $ 265.1 | |||||
LABCORP HOLDINGS INC. | |||||||
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. | ||||||||
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. |
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SOURCE Labcorp Holdings Inc
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