Company Provides 2024 Guidance
- Results from Continuing Operations for the fourth quarter and
full year versus last year:
- Revenue: Q4 of $3.03 billion vs
$2.93 billion; Full year of
$12.16 billion vs $11.86 billion
- Diluted EPS: Q4 of $(1.95) vs
$0.42 ; Full year of $4.33 vs $10.94
- Adjusted EPS: Q4 of $3.30 vs
$3.05 ; Full year of $13.56 vs $16.66
- Free Cash Flow: Q4 of $414.2
million vs $508.1 million;
Full year of $748.7 million vs
$1.34 billion
- Announced six new laboratory partnerships and launched new
innovative tests in our focused specialty areas across the business
in 2023
- Full Year 2024 Guidance: Adjusted EPS of $14.30 to $15.40
and Free Cash Flow of $1.00 billion
to $1.15 billion
BURLINGTON,
N.C., Feb. 15, 2024 /PRNewswire/
-- Labcorp (NYSE: LH), a global leader of innovative and
comprehensive laboratory services, today announced results for the
fourth quarter and year ending Dec. 31,
2023, and full year 2024 guidance.
"We made significant progress on our strategy in
2023 and delivered strong results," said Adam Schechter, chairman and CEO. "Our teams
developed and brought important diagnostic testing advancements to
market and supported our biopharma clients as they advanced their
new drug pipelines and treatments. With the successful integration
of several hospital partnerships including Ascension, and the spin
of Fortrea, we enter 2024 with a strong foundation and momentum. We
remain focused on advancing science, technology and innovation to
fuel our growth and fulfill our mission to improve health and
improve lives."
In the fourth quarter and throughout the year, Labcorp executed
on its enterprise strategy. The company closed its previously
announced transaction with Legacy Health to acquire select assets
of Legacy's outreach laboratory business. Labcorp now manages
Legacy's inpatient hospital laboratories, serving patients
throughout Oregon and Southwest Washington state.
In November, Ovia Health by Labcorp announced that it will offer
a first-of-its-kind Fertility and Family Building Benefit, allowing
employers and health plans to offer customizable solutions to
employees and health plan members to support their family-building
needs. Additionally, the company also became the first lab to
launch a new, FDA-cleared blood test for risk assessment and
clinical management of severe preeclampsia.
Last month, the company announced a strategic collaboration with
Hawthorne Effect, Inc. to create new service offerings that support
decentralized clinical trials and aim to improve the patient
experience, accessibility, and efficiency.
On January 12, 2024, the company
announced a quarterly cash dividend of $0.72 per share of common stock, payable on
March 13, 2024, to stockholders of
record at the close of business on February
27, 2024.
Consolidated Results
Fourth Quarter
Results
Revenue for the quarter was $3.03 billion, an increase of 3.5% from
$2.93 billion in the fourth quarter
of 2022. The increase was due to organic revenue of 1.5%,
acquisitions, net of divestitures of 1.4%, and foreign currency
translation of 0.7%. The 1.5% increase in organic revenue was
driven by a 5.0% increase in the company's organic Base Business,
partially offset by a (3.5%) decrease in COVID-19 PCR and antibody
testing (COVID-19 Testing). Compared to the Base Business last
year, Base Business revenue grew 7.4%. Base Business includes
Labcorp's operations except for COVID-19 Testing.
Operating loss for the quarter was ($122.8) million, or (4.0)% of revenue, compared
to operating income of $28.5 million,
or 1.0%, in the fourth quarter of 2022. The company recorded
impairment charges, amortization, restructuring charges, and
special items, which together totaled $517.6
million in the quarter, compared to $384.0 million during the same period in 2022.
Included in these numbers are goodwill and other asset impairment
charges of $333.8 million compared to
$260.5 million in the fourth quarter
2022, which are primarily related to the Early Development
business. Adjusted operating income (excluding impairment charges,
amortization, restructuring charges, and special items) for the
quarter was $394.9 million, or 13.0%
of revenue, compared to $412.6
million, or 14.1%, in the fourth quarter of 2022. The
decrease in adjusted operating income was due to a reduction in
COVID-19 Testing.
Net losses from continuing operations for the
quarter were $(166.8) million
compared to net earnings of $37.1
million in the fourth quarter of 2022. Diluted EPS from
continuing operations were $(1.95) in
the quarter compared to $0.42 during
the same period in 2022. Adjusted EPS (excluding impairment
charges, amortization, restructuring charges, and special items)
were $3.30 in the quarter compared to
$3.05 in the fourth quarter of
2022.
Operating cash flow from continuing operations
for the quarter was $579.6 million
compared to $607.2 million in the
fourth quarter of 2022. The decrease in operating cash flow was due
to lower COVID-19 Testing. Capital expenditures totaled
$165.4 million compared to
$99.1 million a year ago. The
increase in capital expenditures was primarily timing related. As a
result, free cash flow from continuing operations (operating cash
flow less capital expenditures) was $414.2
million compared to $508.1
million in the fourth quarter of 2022.
At the end of the quarter, the company's cash
balance and total debt were $0.54
billion and $5.05 billion,
respectively. During the quarter, the company invested $154.8 million on acquisitions, paid out
$61.1 million in dividends, and
settled its accelerated share repurchase program,
receiving approximately 1.1 million additional shares. At
the end of the quarter, the company had $530.4 million of share repurchase authorization
remaining.
Full Year Results
Revenue was $12.16
billion, an increase of 2.5% from $11.86 billion in 2022. The increase was due to
acquisitions, net of divestitures of 1.7%, organic revenue of 0.6%,
and favorable foreign currency translation of 0.2%. The 0.6%
increase in organic revenue was due to an 8.7% increase in the
Company's organic Base Business, partially offset by an (8.1%)
decrease in COVID-19 Testing.
Operating income was $725.6 million, or 6.0% of revenue, compared to
$1,436.5 million, or 12.1%, in 2022.
The company recorded impairment charges, amortization,
restructuring charges, and special items, which together totaled
$989.3 million compared to
$736.0 million during 2022. Adjusted
operating income (excluding impairment charges, amortization,
restructuring charges, and special items) was $1.71 billion, or 14.1% of revenue, compared to
$2.17 billion, or 18.3%, in 2022. The
decrease in adjusted operating income was due to lower COVID-19
Testing.
Net earnings from continuing operations were
$380.4 million compared to
$1,003.5 million in 2022. Diluted EPS
were $4.33 compared to $10.94 in 2022. Adjusted EPS (excluding
impairment charges, amortization, restructuring charges, and
special items) were $13.56 compared
to $16.66 in 2022.
Operating cash flow from continuing operations
was $1.20 billion compared to
$1.76 billion in 2022. The decrease
in operating cash flow was primarily due to lower COVID-19 Testing
and items related to the Fortrea spin-off. Capital expenditures
totaled $453.6 million compared to
$429.3 million in 2022. As a result,
free cash flow from continuing operations (operating cash flow less
capital expenditures) was $748.7
million compared to $1,335.5
million in 2022.
During the year the company repurchased
$1.00 billion of stock representing
approximately 4.8 million shares and invested $0.67 billion on acquisitions.
Fourth Quarter Segment
Results
The following segment results exclude impairment
charges, amortization, restructuring charges, special items, and
unallocated corporate expenses.
Diagnostics Laboratories
Revenue for the quarter was $2.35 billion, an increase of 2.6% from
$2.29 billion in the fourth quarter
of 2022. The increase was primarily due to acquisitions of 1.8% and
organic revenue of 0.8%. The 0.8% increase in organic revenue was
due to a 5.3% increase in the Base Business, partially offset by a
(4.5%) decrease in COVID-19 Testing. Total Base Business growth
compared to the Base Business in the prior year was 7.6%.
Total volume (measured by requisitions) increased
by 2.4% as organic volume increased by 0.3% and acquisition volume
contributed 2.1%. Organic volume was impacted by a (2.6%) decrease
in COVID-19 Testing, partially offset by a 3.0% increase in Base
Business. Price/mix increased by 0.2% due to organic base business
growth of 2.4%, partially offset by COVID-19 Testing of (1.9%), and
acquisitions of (0.3%). Base Business volume increased 5.2%
compared to the Base Business last year. Price/mix was up 2.4% in
the Base Business compared to the Base Business last year.
Adjusted operating income for the quarter was
$353.7 million, or 15.1% of revenue,
compared to $387.0 million, or 16.9%,
in the fourth quarter of 2022. The decrease in adjusted operating
income was due to a reduction in COVID-19 Testing. The benefit of
higher organic demand, acquisitions, and launchpad savings was
partially offset by higher personnel costs. The decrease in
adjusted operating income margin was due to the reduction in
COVID-19 Testing and the mix impact from recently closed hospital
partnerships.
Biopharma Laboratory Services
Revenue for the quarter was $694.8 million, an increase of 7.1% from
$648.8 million in the fourth quarter
of 2022. The increase was primarily due to organic revenue of 4.0%,
and foreign currency translation of 3.1%.
Adjusted operating income for the quarter was
$109.0 million, or 15.7% of revenue,
compared to $95.2 million, or 14.7%,
in the fourth quarter of 2022. Adjusted operating income and margin
increased due to organic growth and LaunchPad savings, partially
offset by higher personnel and stranded costs.
Net orders and net book-to-bill during the
trailing twelve months were $2.89
billion and 1.04, respectively. Backlog at the end of the
quarter was $8.25 billion, an
increase of 4.9% compared to last year. The company expects
approximately $2.47 billion of its
backlog to convert into revenue in the next twelve months.
2024 Guidance
The following guidance assumes foreign exchange
rates effective as of Dec. 31, 2023,
for the full 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)
|
|
|
|
|
|
Results
|
|
2024
Guidance
|
|
|
|
|
|
|
2023
|
|
Low
|
High
|
Revenue
|
|
|
|
|
Labcorp Enterprise
(1)(2)
|
$12.2
|
|
4.7 %
|
6.5 %
|
Diagnostics
Laboratories (3)
|
$9.4
|
|
3.2 %
|
4.8 %
|
Biopharma Laboratory
Services (4)
|
$2.8
|
|
5.5 %
|
7.5 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EPS
|
$13.56
|
|
$14.30
|
$15.40
|
|
|
|
|
|
Free Cash Flow from
Cont. Ops(5)
|
$0.89
|
|
$1.00
|
$1.15
|
|
(1) 2024 Guidance
includes an impact from foreign currency translation of
0.6%.
|
(2) Enterprise level
revenue is presented net of intersegment transaction
eliminations
|
(3) 2024 Guidance
includes an impact from foreign currency translation of
0.1%
|
(4) 2024 Guidance
includes an impact from foreign currency translation of
2.2%
|
(5) 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 Feb. 15, 2024, will be
available at Labcorp Investor Relations website beginning at
9:00 a.m. ET. This webcast will be
archived and accessible through Feb. 2,
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 over 100 countries, worked on over 84% of the new drugs
approved by the FDA in 2023 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 recently completed 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 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,
benefits and synergies from the LaunchPad initiative and from
acquisitions and other strategic transactions and partnerships, and
(vii) opportunities for future growth.
Each of the forward-looking statements is
subject to change based on various important factors, many of which
are beyond the company's control, including without limitation, (i)
the failure to receive tax-free treatment with respect to the
spin-off for U.S. federal income purposes; (ii) potential
difficulties with employee retention; (iii) the trading price of
the company's stock, competitive actions and other unforeseen
changes and general uncertainties in the marketplace; (iv) changes
in government regulations, including healthcare reform; (v)
customer purchasing decisions, including changes in payer
regulations or policies; (vi) other adverse actions of governmental
and third-party payers; (vii) changes in testing guidelines or
recommendations; (viii) federal, state, and local government
responses to the COVID-19 pandemic; (ix) the impact of global
geopolitical events; (x) the effect of public opinion on the
company's reputation; (xi) adverse results in material litigation
matters; (xii) the impact of changes in laws and regulations
applicable to the company; (xiii) failure to maintain or develop
customer relationships; (xiv) the company's ability to develop or
acquire new products and adapt to technological changes; (xv)
failure in information technology, systems, or data security; (xvi)
the impact of potential losses under repurchase agreements; (xvii)
adverse weather conditions; (xviii) the number of revenue days in a
financial period; (xix) employee relations; (xx) personnel costs;
(xxi) inflation; (xxii) increased competition; and (xxiii) 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".
- End of Text -
- Tables to Follow -
LABORATORY
CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Dollars in Millions,
except per share data)
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues
|
|
$
3,033.3
|
|
$
2,929.8
|
|
$
12,161.6
|
|
$
11,863.9
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
2,211.9
|
|
2,131.7
|
|
8,796.7
|
|
8,155.0
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
821.4
|
|
798.1
|
|
3,364.9
|
|
3,708.9
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
532.9
|
|
455.4
|
|
2,021.4
|
|
1,763.1
|
Amortization of
intangibles and other assets
|
|
59.2
|
|
44.7
|
|
219.8
|
|
193.6
|
Goodwill and other
asset impairments
|
|
333.8
|
|
260.5
|
|
349.0
|
|
261.7
|
Restructuring and
other charges
|
|
18.3
|
|
9.0
|
|
49.1
|
|
54.0
|
Operating
income
|
|
(122.8)
|
|
28.5
|
|
725.6
|
|
1,436.5
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(48.8)
|
|
(49.1)
|
|
(199.6)
|
|
(179.8)
|
Investment income
|
|
6.2
|
|
1.3
|
|
28.8
|
|
7.5
|
Equity
method income, net
|
|
0.1
|
|
(1.1)
|
|
(1.4)
|
|
5.4
|
Other,
net
|
|
18.2
|
|
30.6
|
|
15.5
|
|
(32.2)
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations before income taxes
|
|
(147.1)
|
|
10.2
|
|
568.9
|
|
1,237.4
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
19.7
|
|
(26.9)
|
|
188.5
|
|
233.9
|
|
|
|
|
|
|
|
|
|
Earnings from
continued operations
|
|
(166.8)
|
|
37.1
|
|
380.4
|
|
1,003.5
|
Earnings from
discontinued operations, net of tax
|
|
—
|
|
39.3
|
|
38.8
|
|
277.1
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
(166.8)
|
|
76.4
|
|
419.2
|
|
1,280.6
|
Less: Net earnings
attributable to the noncontrolling interest
|
|
(0.3)
|
|
(0.3)
|
|
(1.2)
|
|
(1.5)
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Laboratory Corporation of America
Holdings
|
|
$
(167.1)
|
|
$ 76.1
|
|
$ 418.0
|
|
$
1,279.1
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share:
|
|
|
|
|
|
|
|
|
Basic earnings per
common share continuing operations
|
|
$ (1.97)
|
|
$ 0.42
|
|
$
4.35
|
|
$ 11.00
|
Basic earnings per
common share discontinued operations
|
|
$
—
|
|
$ 0.44
|
|
$
0.45
|
|
$
3.04
|
Basic earnings per
common share
|
|
$ (1.97)
|
|
$ 0.86
|
|
$
4.80
|
|
$ 14.05
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share:
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share continuing operations
|
|
$ (1.95)
|
|
$ 0.42
|
|
$
4.33
|
|
$ 10.94
|
Diluted earnings per
common share discontinued operations
|
|
$
—
|
|
$ 0.44
|
|
$
0.44
|
|
$
3.03
|
Diluted earnings per
common share
|
|
$ (1.95)
|
|
$ 0.86
|
|
$
4.77
|
|
$ 13.97
|
|
|
|
|
|
|
|
|
|
Weighted average
basic shares outstanding
|
|
84.9
|
|
88.5
|
|
87.1
|
|
91.1
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
85.5
|
|
89.0
|
|
87.6
|
|
91.6
|
LABORATORY
CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(Dollars in
Millions)
|
|
|
December
31,
2023
|
|
December
31,
2022
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
536.8
|
|
$
320.6
|
Accounts receivable,
net
|
1,913.3
|
|
1,785.5
|
Unbilled
services
|
185.4
|
|
211.8
|
Supplies
inventory
|
474.6
|
|
470.6
|
Prepaid expenses and
other
|
655.3
|
|
610.4
|
Current assets of
discontinued operations
|
—
|
|
1,226.1
|
Total current
assets
|
3,765.4
|
|
4,625.0
|
|
|
|
|
Property, plant and
equipment, net
|
2,911.8
|
|
2,794.1
|
Goodwill,
net
|
6,142.5
|
|
6,123.7
|
Intangible assets,
net
|
3,342.0
|
|
3,123.6
|
Joint venture
partnerships and equity method investments
|
26.9
|
|
65.7
|
Deferred income
taxes
|
—
|
|
6.4
|
Other assets,
net
|
536.5
|
|
378.4
|
Long-term assets of
discontinued operations
|
—
|
|
3,038.2
|
Total assets
|
$
16,725.1
|
|
$
20,155.1
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
827.5
|
|
$
852.2
|
Accrued expenses and
other
|
804.0
|
|
787.0
|
Unearned
revenue
|
421.7
|
|
310.6
|
Short-term operating
lease liabilities
|
165.8
|
|
163.8
|
Short-term finance
lease liabilities
|
6.4
|
|
6.0
|
Short-term borrowings
and current portion of long-term debt
|
999.8
|
|
301.3
|
Current liabilities of
discontinued operations
|
—
|
|
657.6
|
Total current
liabilities
|
3,225.2
|
|
3,078.5
|
|
|
|
|
Long-term debt, less
current portion
|
4,054.7
|
|
5,038.8
|
Operating lease
liabilities
|
648.9
|
|
652.9
|
Financing lease
liabilities
|
78.6
|
|
83.6
|
Deferred income taxes
and other tax liabilities
|
417.9
|
|
543.4
|
Other
liabilities
|
409.3
|
|
401.1
|
Long-term liabilities
of discontinued operations
|
—
|
|
241.3
|
Total
liabilities
|
8,834.6
|
|
10,039.6
|
|
|
|
|
Commitments and
contingent liabilities
|
|
|
|
Noncontrolling
interest
|
15.5
|
|
18.9
|
|
|
|
|
Shareholders'
equity
|
|
|
|
Common stock, 83.9 and
88.2 shares outstanding at December 31, 2023 and 2022,
respectively
|
7.7
|
|
8.1
|
Additional paid-in
capital
|
38.4
|
|
—
|
Retained
earnings
|
7,888.2
|
|
10,581.7
|
Accumulated other
comprehensive loss
|
(59.3)
|
|
(493.2)
|
Total shareholders'
equity
|
7,875.0
|
|
10,096.6
|
Total liabilities and
shareholders' equity
|
$
16,725.1
|
|
$
20,155.1
|
LABORATORY
CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Dollars in
Millions)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net
earnings
|
$
(166.8)
|
|
$ 76.4
|
|
$
419.2
|
|
$ 1,280.6
|
Earnings from
discontinued operations, net of tax
|
—
|
|
(39.3)
|
|
(38.8)
|
|
(277.1)
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
146.4
|
|
130.4
|
|
577.3
|
|
537.2
|
Stock
compensation
|
27.0
|
|
23.6
|
|
128.7
|
|
116.8
|
Operating lease
right-of-use asset expense
|
39.5
|
|
43.5
|
|
168.0
|
|
172.5
|
Goodwill and other
asset impairments
|
333.8
|
|
260.5
|
|
349.0
|
|
261.7
|
Deferred income
taxes
|
(59.9)
|
|
71.1
|
|
(78.1)
|
|
26.3
|
Other, net
|
35.0
|
|
23.0
|
|
38.9
|
|
23.0
|
Change in assets and
liabilities (net of effects of acquisitions and
divestitures):
|
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable
|
69.8
|
|
(13.3)
|
|
(103.8)
|
|
46.5
|
(Increase) decrease in unbilled services
|
(74.9)
|
|
41.2
|
|
28.5
|
|
(23.4)
|
(Increase) decrease in inventory
|
(10.4)
|
|
2.0
|
|
(0.7)
|
|
(45.5)
|
(Increase) decrease in prepaid expenses and other
|
49.1
|
|
(191.4)
|
|
(25.8)
|
|
(244.1)
|
Increase
(decrease) in accounts payable
|
146.2
|
|
172.8
|
|
(42.4)
|
|
285.4
|
Increase
(decrease) in deferred revenue
|
54.8
|
|
40.2
|
|
105.5
|
|
67.8
|
Increase
(decrease) in accrued expenses and other
|
(10.0)
|
|
(33.5)
|
|
(323.2)
|
|
(462.9)
|
Net cash provided by
continuing operating activities
|
579.6
|
|
607.2
|
|
1,202.3
|
|
1,764.8
|
Net cash provided by
discontinued operating activities
|
—
|
|
46.4
|
|
125.4
|
|
191.1
|
Net cash provided by
operating activities
|
579.6
|
|
653.6
|
|
1,327.7
|
|
1,955.9
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(165.4)
|
|
(99.1)
|
|
(453.6)
|
|
(429.3)
|
Proceeds from sale of
assets
|
0.3
|
|
0.2
|
|
0.6
|
|
1.4
|
Proceeds from sale or
distribution of investments
|
—
|
|
4.5
|
|
6.7
|
|
5.2
|
Proceeds from exit
from swaps
|
—
|
|
—
|
|
—
|
|
2.9
|
Proceeds from sale of
business
|
—
|
|
1.6
|
|
—
|
|
1.6
|
Investments in equity
affiliates
|
(8.9)
|
|
(11.3)
|
|
(29.0)
|
|
(17.4)
|
Acquisition of
businesses, net of cash acquired
|
(154.8)
|
|
(150.4)
|
|
(671.5)
|
|
(1,164.0)
|
Net cash used in
continuing investing activities
|
(328.8)
|
|
(254.5)
|
|
(1,146.8)
|
|
(1,599.6)
|
Net cash used in
discontinued investing activities
|
—
|
|
(18.8)
|
|
(24.7)
|
|
(52.6)
|
Net cash used for
investing activities
|
(330.6)
|
|
(273.3)
|
|
(1,171.5)
|
|
(1,652.2)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Payments on senior
notes
|
(300.0)
|
|
—
|
|
(300.0)
|
|
—
|
Proceeds from
revolving credit facilities
|
519.7
|
|
787.4
|
|
2,488.2
|
|
787.4
|
Payments on revolving
credit facilities
|
(609.3)
|
|
(787.4)
|
|
(2,488.2)
|
|
(787.4)
|
Net share settlement
tax payments from issuance of stock to employees
|
(0.2)
|
|
(6.0)
|
|
(39.8)
|
|
(50.6)
|
Net proceeds from
issuance of stock to employees
|
—
|
|
—
|
|
54.4
|
|
50.6
|
Dividends
paid
|
(61.1)
|
|
(63.6)
|
|
(254.0)
|
|
(195.2)
|
Purchase of common
stock
|
9.0
|
|
(300.0)
|
|
(1,000.0)
|
|
(1,100.0)
|
Other
|
(4.6)
|
|
(3.0)
|
|
(19.6)
|
|
(27.0)
|
Net cash used in
continuing financing activities
|
(446.5)
|
|
(372.6)
|
|
(1,559.0)
|
|
(1,322.2)
|
Net cash provided by
discontinued financing activities
|
—
|
|
—
|
|
1,499.7
|
|
—
|
Net cash used for
financing activities
|
(446.5)
|
|
(372.6)
|
|
(59.3)
|
|
(1,322.2)
|
Effect of exchange
rate changes on cash and cash equivalents
|
6.4
|
|
12.4
|
|
9.9
|
|
(24.2)
|
Net increase
(decrease) in cash and cash equivalents
|
(191.1)
|
|
20.1
|
|
106.8
|
|
(1,042.7)
|
Cash and cash
equivalents at beginning of period
|
727.9
|
|
409.9
|
|
430.0
|
|
1,472.7
|
Less cash and cash
equivalents of discontinued operations at the end of the
period
|
—
|
|
109.4
|
|
—
|
|
109.4
|
Cash and cash
equivalents at end of period
|
$
536.8
|
|
$
320.6
|
|
$
536.8
|
|
$
320.6
|
LABORATORY
CORPORATION OF AMERICA HOLDINGS
|
Condensed Combined
Non-GAAP Adjusted Segment Information
|
(Dollars in
Millions)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Diagnostics
Laboratories
|
|
|
|
|
|
|
|
Revenues
|
$
2,346.9
|
|
$
2,286.4
|
|
$
9,415.1
|
|
$
9,203.5
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income
|
$
353.7
|
|
$
387.0
|
|
$
1,591.3
|
|
$
2,025.5
|
Adjusted
Operating Margin
|
15.1 %
|
|
16.9 %
|
|
16.9 %
|
|
22.0 %
|
|
|
|
|
|
|
|
|
Biopharma Laboratory
Services
|
|
|
|
|
|
|
|
Revenues
|
$
694.8
|
|
$
648.8
|
|
$
2,774.2
|
|
$
2,697.3
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income
|
$
109.0
|
|
$
95.2
|
|
$
396.3
|
|
$
389.1
|
Adjusted
Operating Margin
|
15.7 %
|
|
14.7 %
|
|
14.3 %
|
|
14.4 %
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
Revenues
|
$
3,033.3
|
|
$
2,929.8
|
|
$ 12,161.6
|
|
$ 11,863.9
|
|
|
|
|
|
|
|
|
Adjusted Segment
Operating Income
|
$
462.7
|
|
$
482.2
|
|
$
1,987.6
|
|
$
2,414.6
|
Unallocated corporate
expense
|
$
(67.8)
|
|
$
(69.6)
|
|
$
(272.7)
|
|
$
(242.0)
|
Consolidated Adjusted Operating Income
|
$
394.9
|
|
$
412.6
|
|
$
1,714.9
|
|
$
2,172.6
|
Adjusted
Operating Margin
|
13.0 %
|
|
14.1 %
|
|
14.1 %
|
|
18.3 %
|
The consolidated revenue and adjusted segment
operating income are presented net of intersegment
transaction eliminations. Adjusted operating income and
adjusted operating margin are non-GAAP measures. See the subsequent
reconciliation of non-GAAP financial measures.
LABORATORY
CORPORATION OF AMERICA HOLDINGS
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in millions,
except per share data)
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
$
(122.8)
|
|
$ 28.5
|
|
$ 725.6
|
|
$
1,436.5
|
Amortization of
intangibles and other assets (a)
|
|
59.2
|
|
44.7
|
|
219.8
|
|
193.6
|
Restructuring and other
charges (b)
|
|
18.3
|
|
9.0
|
|
49.1
|
|
54.0
|
Asset impairments
(c)
|
|
333.8
|
|
260.5
|
|
349.0
|
|
261.7
|
Acquisition and
disposition-related costs (d)
|
|
16.5
|
|
31.8
|
|
56.0
|
|
63.7
|
Spin off transaction
costs (e)
|
|
22.6
|
|
3.5
|
|
94.1
|
|
6.5
|
COVID-19 related costs
(f)
|
|
20.7
|
|
9.9
|
|
59.6
|
|
27.1
|
Other
(g)
|
|
23.2
|
|
1.6
|
|
46.1
|
|
36.6
|
TSA reimbursement
(h)
|
|
23.4
|
|
—
|
|
46.1
|
|
—
|
CDCS not included in
discontinued operations (i)
|
|
—
|
|
23.1
|
|
69.5
|
|
92.9
|
Adjusted operating
income
|
|
$ 394.9
|
|
$ 412.6
|
|
$
1,714.9
|
|
$
2,172.6
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
(167.1)
|
|
$ 76.1
|
|
$ 418.0
|
|
$
1,279.1
|
Impact of adjustments
to operating income
|
|
517.7
|
|
361.0
|
|
919.8
|
|
643.2
|
(Gains) / losses on
venture fund investments, net (j)
|
|
3.4
|
|
0.7
|
|
4.8
|
|
12.0
|
TSA reimbursement
(h)
|
|
(23.4)
|
|
—
|
|
(46.1)
|
|
—
|
Pension settlement
(k)
|
|
—
|
|
(0.9)
|
|
10.8
|
|
3.1
|
Other
|
|
—
|
|
(1.8)
|
|
0.5
|
|
(2.1)
|
Income tax impact of
adjustments (l)
|
|
(48.5)
|
|
(119.5)
|
|
(155.7)
|
|
(233.3)
|
Earnings from
discontinued operations, net of tax (i)
|
|
—
|
|
(39.3)
|
|
(38.8)
|
|
(277.1)
|
CDCS not included in
discontinued operations (i)
|
|
—
|
|
(4.8)
|
|
74.4
|
|
100.7
|
Adjusted net
income
|
|
$ 282.1
|
|
$ 271.5
|
|
$
1,187.7
|
|
$
1,525.6
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
85.5
|
|
89.0
|
|
87.6
|
|
91.6
|
|
|
|
|
|
|
|
|
|
Adjusted net income per
share
|
|
$ 3.30
|
|
$ 3.05
|
|
$ 13.56
|
|
$ 16.66
|
|
|
(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
Fortrea spin, and acquisitions or dispositions of businesses by the
company.
|
(c)
|
Asset impairments
relate primarily to goodwill within the early development reporting
unit and other intangible assets deemed to be
realizable.
|
(d)
|
Acquisition and
disposition-related costs include due-diligence legal and advisory
fees, retention bonuses, and other integration or disposition
related activities.
|
(e)
|
The company incurred
various costs to prepare for the spin-off of Fortrea and
reorganization of the remaining Labcorp business.
|
(f)
|
Costs of incremental
operating expenses incurred as a result of the COVID-19
pandemic.
|
(g)
|
Represents various
non-operational items including litigation, launchpad system
implementation costs and other miscellaneous
adjustments.
|
(h)
|
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.
|
(i)
|
These adjustments
remove the impact of the CDCS business that was distributed to
Labcorp shareholders as part of a tax-free spin on June 30,
2023.
|
(j)
|
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.
|
(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-2023-fourth-quarter-and-full-year-results-302063007.html
SOURCE Laboratory Corporation of America Holdings