Labcorp Holdings Inc. · NYSE:LH

Labcorp — Laboratory Corp of America Holdings — Q4 2018 Earnings Presentation

20 slides from Labcorp's earnings presentation, Feb 7, 2019

  1. Slide 1: Fourth Quarter 2018 Supplemental Financial Information

    FOURTH QUARTER 2018 SUPPLEMENTAL FINANCIAL INFORMATION 8-K FURNISHED FEBRUARY 7, 2019

  2. Slide 2: Forward Looking Statement

    FORWARD LOOKING STATEMENT This presentation contains forward-looking statements including but not limited to statements with respect to estimated 2019 guidance and the related assumptions, the impact of various factors on operating and financial results, expected savings and synergies (including fro

  3. Slide 3: Use of Adjusted Measures and Adoption of ASC 606

    USE OF ADJUSTED MEASURES AND ADOPTION OF ASC 606 The Company has provided in this presentation “adjusted” financial information that has not been prepared in accordance with GAAP, including Adjusted EPS, Adjusted Operating Income, Adjusted EBITDA, Free Cash Flow, and certain segment information. The

  4. Slide 4: Fourth Quarter Consolidated Results

    FOURTH QUARTER CONSOLIDATED RESULTS(1) (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) Restated for ASC 606 and ASU 2017-17 4Q18 4Q17 % Change (5) Revenue $2,787.5 $2,744.7 1.6% Adjusted Operating Income(2) (3) $394.9 $432.7 (8.7%) Adjusted Operating Margin 14.2% 15.8% (160 bps) Adjusted EPS(2) (3) $2.

  5. Slide 5: Full Year Consolidated Results

    FULL YEAR CONSOLIDATED RESULTS(1) (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) Restated for ASC 606 and ASU 2017-17 Twelve Months Twelve Months Ended 12/31/18 Ended 12/31/17 % Change Revenue $11,333.4 $10,308.0 9.9% Adjusted Operating Income(2) (3) $1,723.3 $1,672.4 3.0% (6) Adjusted Operating Margi

  6. Slide 6: Fourth Quarter Pro Forma Segment Results

    FOURTH QUARTER PRO FORMA SEGMENT RESULTS(1) (DOLLARS IN MILLIONS) Restated for ASC 606 and ASU 2017-17 4Q18 4Q17 % Change Revenue LabCorp Diagnostics $1,694.4 $1,742.7 (2.8%) Covance Drug Development $1,099.0 $1,002.8 9.6% Total Revenue $2,787.5 $2,744.7 1.6% Adjusted Operating Income(2) (3) LabCorp

  7. Slide 7: Full Year Pro Forma Segment Results

    FULL YEAR PRO FORMA SEGMENT RESULTS(1) (DOLLARS IN MILLIONS) Restated for ASC 606 and ASU 2017-17 Twelve Months Twelve Months Ended 12/31/18 Ended 12/31/17 % Change Revenue LabCorp Diagnostics $7,030.7 $6,858.2 2.5% Covance Drug Development $4,313.1 $3,451.6 25.0% Total Revenue $11,333.4 $10,308.0 9

  8. Slide 8: Select Financial Metrics

    SELECT FINANCIAL METRICS (DOLLARS IN MILLIONS) Restated for ASC 606 and ASU 2017-17 (3) (3) (3) 4Q17 (3) 1Q18 2Q18 3Q18 4Q18 Total Depreciation $78.5 $78.3 $77.3 $76.3 $79.5 Total Amortization(1) $62.9 $62.3 $58.5 $54.7 $56.2 Total Adjusted EBITDA(2) $512.7 $517.2 $543.9 $508.9 $477.9 Total Debt to

  9. Slide 9: Covance Drug Development: Select Financial Metrics Under ASC 606

    COVANCE DRUG DEVELOPMENT: SELECT FINANCIAL METRICS UNDER ASC 606(1) Trailing Twelve Month (TTM) Results(2) Net Orders Net Book-to-Bill TTM Ending December 31, 2018 $5.4 billion 1.26x TTM Ending September 30, 2018 $5.3 billion 1.25x TTM Ending June 30, 2018 $4.9 billion 1.22x TTM Ending March 31, 201

  10. Slide 10: Covance Drug Development: Select Financial Metrics Under ASC 605

    COVANCE DRUG DEVELOPMENT: SELECT FINANCIAL METRICS UNDER ASC 605(1) Trailing Twelve Month (TTM) Results(2) Net Orders Net Book-to-Bill TTM Ending December 31, 2018 $4.6 billion 1.29x TTM Ending September 30, 2018 $4.4 billion 1.25x TTM Ending June 30, 2018 $4.2 billion 1.24x TTM Ending March 31, 201

  11. Slide 11: Full Year 2018 Revenue Distribution

    FULL YEAR 2018 REVENUE DISTRIBUTION Segment Distribution Covance Drug Development 38.0% Geographic Distribution Rest of World(1) 22.0% LabCorp Diagnostics 62.0% USA 78.0% (1) Revenues recognized in over 30 currencies; the largest foreign currency accounts for less than 10% of total revenue. 10

  12. Slide 12: Fourth Quarter 2018 Foreign Exchange Impact to Revenue

    FOURTH QUARTER 2018 FOREIGN EXCHANGE IMPACT TO REVENUE(1) (DOLLARS IN MILLIONS) Year over Year Dollars % Growth Consolidated Revenue, as Reported $2,787 1.6% Foreign Exchange Impact $12 0.4% Revenue, Constant Currency $2,799 2.0% LabCorp Diagnostics Revenue, as Reported $1,694 (2.8%) Foreign Exchang

  13. Slide 13: Full Year 2018 Foreign Exchange Impact to Revenue

    FULL YEAR 2018 FOREIGN EXCHANGE IMPACT TO REVENUE(1) (DOLLARS IN MILLIONS) Year over Year Dollars % Growth Consolidated Revenue, as Reported $11,333 9.9% Foreign Exchange Impact ($35) (0.3%) Revenue, Constant Currency $11,298 9.6% LabCorp Diagnostics Revenue, as Reported $7,031 2.5% Foreign Exchange

  14. Slide 14: 2019 Financial Guidance

    2019 FINANCIAL GUIDANCE Current Guidance (assumes foreign exchange rates effective as of December 31, 2018) Total revenue growth: 0.5% – 2.5%(2) LabCorp Diagnostics revenue growth: (4.0%) – (2.0%)(3) Covance Drug Development revenue growth: 5.0% – 9.0%(4) Adjusted EPS(1): $11.00 – $11.40 Free cash f

  15. Slide 15: Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – ADJUSTED EBITDA (DOLLARS IN MILLIONS) Restated for ASC 606 and ASU 2017-17 4Q17 1Q18 2Q18 3Q18 4Q18 LabCorp Operating Income $330.6 $305.4 $369.2 $343.4 $307.7 Add: Restructuring and other special charges $6.3 $14.3 $12.2 $10.0 $11.6 Other special char

  16. Slide 16: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES LABORATORY CORPORATION OF AMERICA HOLDINGS Reconciliation of Non-GAAP Financial Measures (Dollars in millions, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, Adjusted Operating Income 2018 2017 2018 2017 Operating

  17. Slide 17: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES LABORATORY CORPORATION OF AMERICA HOLDINGS Reconciliation of Non-GAAP Financial Measures (Dollars in millions) Three Months Ended Twelve Months Ended December 31, December 31, Free Cash Flow: 2018 2017 2018 2017 Net cash provided by operating activities

  18. Slide 18: Reconciliation of Non-GAAP Financial Measures - Footnotes

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - FOOTNOTES 1) During the fourth quarter of 2018, the Company recorded net restructuring and other special charges of $11.6 million. The charges included $9.8 million in severance and other personnel costs along with $3.0 million in costs associated with

  19. Slide 19: Reconciliation of Non-GAAP Financial Measures - Footnotes

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - FOOTNOTES 3) During the fourth quarter of 2018, one of the Company’s venture fund investments ceased operations. As a result, the Company wrote-off its $5.2 million investment, recorded in Other, net in Other income (expense). The after-tax impact of t

  20. Slide 20: Reconciliation of Non-GAAP Financial Measures - Footnotes

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - FOOTNOTES During the first three quarters of 2017, the Company recorded net restructuring and other special charges of $64.6 million. The charges included $27.2 million in severance and other personnel costs along with $17.9 million in costs associated

Laboratory Corp of America Holdings — Q4 2018 Earnings Presentation on 6ix