Labcorp Holdings Inc. · NYSE:LH
Labcorp — Laboratory Corp of America Holdings — Q3 2015 Earnings Presentation
19 slides from Labcorp's earnings presentation, Oct 26, 2015
Slide 1: Third Quarter 2015 Supplemental Financial Information
8-K FILED OCTOBER 26, 2015 THIRD QUARTER 2015 SUPPLEMENTAL FINANCIAL INFORMATION
Slide 2: Forward Looking Statement
1 FORWARD LOOKING STATEMENT This presentation contains forward-looking statements which are subject to change based on various important factors, including without limitation, competitive actions in the marketplace, adverse actions of governmental and other third-party payers and the results from th
Slide 3: Operating Segment Overview
2 LabCorp Diagnostics The LabCorp Diagnostics segment includes historical LabCorp business units, excluding its Clinical Trials operations (which are part of the Covance Drug Development segment), and including the Nutritional Chemistry and Food Safety operations acquired as part of the Covance acqu
Slide 4: Third Quarter Consolidated Results
3 THIRD QUARTER CONSOLIDATED RESULTS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) (1) Adjusted Operating Income and Adjusted EPS exclude amortization, restructuring and special items (2) See Reconciliation of non-GAAP Financial Measures on slides 15 - 18 The following consolidated results include Co
Slide 5: Year-to-Date Consolidated Results
4 YEAR-TO-DATE CONSOLIDATED RESULTS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) (1) Adjusted Operating Income and Adjusted EPS exclude amortization, restructuring and special items (2) See Reconciliation of non-GAAP Financial Measures on slides 15 - 18 (3) Operating cash flow in the first quarter o
Slide 6: Third Quarter Pro Forma Segment Results
5 THIRD QUARTER PRO FORMA SEGMENT RESULTS (DOLLARS IN MILLIONS) (1) Adjusted Operating Income excludes amortization, restructuring and special items (2) See Reconciliation of non-GAAP Financial Measures on slides 15 - 18 Pro forma results assume that the acquisition of Covance closed on January 1, 2
Slide 7: Year-to-Date Pro Forma Segment Results
6 YEAR-TO-DATE PRO FORMA SEGMENT RESULTS (DOLLARS IN MILLIONS) (1) Adjusted Operating Income excludes amortization, restructuring and special items (2) See Reconciliation of non-GAAP Financial Measures on slides 15 - 18 Pro forma results assume that the acquisition of Covance closed on January 1, 20
Slide 8: Select Financial Metrics
7 SELECT FINANCIAL METRICS (DOLLARS IN MILLIONS) 3Q14 4Q14 1Q15 2Q15 3Q15 Total Depreciation $38.9 $40.8 $54.3 $70.5 $72.2 Total Amortization(1) $18.3 $15.4 $32.4 $46.6 $47.1 Total Adjusted EBITDA(2) $314.2 $295.1 $360.1 $463.4 $460.0 Total Debt to Last Twelve Months Adjusted EBITDA(2) (3) 2.5x 2.5x
Slide 9: Covance Drug Development: Select Financial Metrics
8 COVANCE DRUG DEVELOPMENT: SELECT FINANCIAL METRICS(1) (DOLLARS IN MILLIONS) Backlog at 6/30/15 $6,595 Third Quarter 2015 Covance Drug Development Net Revenue (669) Third Quarter 2015 Net Orders 811 Foreign Exchange Impact (84) Backlog at 9/30/15 $6,653 Third Quarter 2015 Net Book-to-Bill 1.21 (1)
Slide 10: Third Quarter 2015 Net Revenue Distribution
9 (1) Revenues recognized in over 30 currencies; the largest foreign currency accounts for less than 5% of total net revenue Segment Distribution LabCorp Diagnostics 70.5% Covance Drug Development 29.5% USA 81.4% Geographic Distribution Rest of World(1) 18.6% THIRD QUARTER 2015 NET REVENUE DISTRIBUT
Slide 11: Third Quarter 2015 Foreign Exchange Impact to Pro Forma Net Revenue
10 THIRD QUARTER 2015 FOREIGN EXCHANGE IMPACT TO PRO FORMA NET REVENUE(1) (DOLLARS IN MILLIONS) Year over Year Dollars % Growth Consolidated Net Revenue, as Reported $2,270 4.2% Foreign Exchange Impact $39 1.8% Net Revenue, Constant Currency $2,309 6.0% LabCorp Diagnostics Net Revenue, as Reported $
Slide 12: Year-to-Date 2015 Foreign Exchange Impact to Pro Forma Net Revenue
11 YEAR-TO-DATE 2015 FOREIGN EXCHANGE IMPACT TO PRO FORMA NET REVENUE(1) (DOLLARS IN MILLIONS) Year over Year Dollars % Growth Consolidated Net Revenue, as Reported $6,597 3.3% Foreign Exchange Impact $116 1.8% Net Revenue, Constant Currency $6,713 5.1% LabCorp Diagnostics Net Revenue, as Reported $
Slide 13: 2015 Financial Guidance
12 2015 FINANCIAL GUIDANCE Excluding the impact of amortization, restructuring and special items, guidance for 2015 is: Prior Guidance (assumes foreign exchange rates effective as of June 30, 2015) Current Guidance (assumes foreign exchange rates effective as of September 30, 2015) Total net revenue
Slide 14: 2014 Pro Forma Segment Net Revenue Reconciliation
13 2014 PRO FORMA SEGMENT NET REVENUE RECONCILIATION (DOLLARS IN MILLIONS) (1) Adjustments include the removal of LabCorp’s legacy clinical trial services business and the addition of Covance’s nutritional chemistry and food safety business. (2) Adjustments include the addition of LabCorp’s legacy c
Slide 15: 2014 Pro Forma Segment Adjusted Operating Income Reconciliation
14 2014 PRO FORMA SEGMENT ADJUSTED OPERATING INCOME RECONCILIATION (DOLLARS IN MILLIONS) (1) Adjustments include the removal of unallocated corporate expenses and LabCorp’s legacy clinical trial services business, as well as the addition of Covance’s nutritional chemistry and food safety business. U
Slide 16: Reconciliation of Non-GAAP Financial Measures
15 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The following consolidated results include Covance as of February 19, 2015; prior to February 19, 2015, all consolidated results exclude Covance Adjusted Operating Income 2015 2014 2015 2014 Operating Income 306.9$ 241.4$ 759.5$ 691.4$ Acquisition-rel
Slide 17: Reconciliation of Non-GAAP Financial Measures
16 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The following consolidated results include Covance as of February 19, 2015; prior to February 19, 2015, all consolidated results exclude Covance Free Cash Flow: 2015 2014 2015 2014 Net cash provided by operating activities 288.0$ 175.6$ 597.8$ 525.3$
Slide 18: Notes on Third Quarter 2015 Special Items
17 1) During the third quarter of 2015, the Company recorded net restructuring and special items of $26.4 million. The charges included $24.4 million in severance and other personnel costs along with $2.3 million in facility-related costs associated with facility closures and general integration ini
Slide 19: Notes on Third Quarter 2014 Special Items
18 2) During the third quarter of 2014, the Company recorded net restructuring and special items of $5.8 million. The charges included $4.6 million in severance and other personnel costs along with $1.6 million in facility-related costs associated with facility closures and general integration initi
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