Labcorp Holdings Inc. · NYSE:LH
Labcorp — Laboratory Corp of America Holdings — Q4 2015 Earnings Presentation
22 slides from Labcorp's earnings presentation, Feb 18, 2016
Slide 1: Fourth Quarter 2015 Supplemental Financial Information
8-K FILED FEBRUARY 18, 2016 FOURTH 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: Fourth Quarter Consolidated Results
3 FOURTH 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 18 - 21 The following consolidated results include C
Slide 5: 2015 Consolidated Results
4 2015 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 18 - 21 (3) Operating cash flow is negatively impacted by appr
Slide 6: Fourth Quarter Pro Forma Segment Results
5 FOURTH 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 18 - 21 Pro forma results assume that the acquisition of Covance closed on January 1,
Slide 7: 2015 Pro Forma Segment Results
6 2015 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 18 - 21 Pro forma results assume that the acquisition of Covance closed on January 1, 2014 Twelv
Slide 8: Select Financial Metrics
7 SELECT FINANCIAL METRICS (DOLLARS IN MILLIONS) 4Q14 1Q15 2Q15 3Q15 4Q15 Total Depreciation $40.8 $54.3 $70.5 $72.2 $72.7 Total Amortization(1) $15.4 $32.4 $46.6 $47.1 $38.3 Total Adjusted EBITDA(2) $295.1 $360.1 $463.4 $460.0 $443.6 Total Debt to Last Twelve Months Adjusted EBITDA(2) (3) 2.5x 4.2x
Slide 9: Covance Drug Development: Select Financial Metrics
8 COVANCE DRUG DEVELOPMENT: SELECT FINANCIAL METRICS(1) (DOLLARS IN MILLIONS) Backlog at 9/30/15 $6,653 Fourth Quarter 2015 Covance Drug Development Net Revenue (693) Fourth Quarter 2015 Net Orders 816 Foreign Exchange Impact (38) Backlog at 12/31/15 $6,738 Fourth Quarter 2015 Net Book-to-Bill 1.18
Slide 10: Fourth Quarter 2015 Net Revenue Distribution
9 (1) Revenues recognized in over 30 currencies; the largest foreign currency accounts for less than 10% of total net revenue Segment Distribution LabCorp Diagnostics 69.2% Covance Drug Development 30.8% USA 80.8% Geographic Distribution Rest of World(1) 19.2% FOURTH QUARTER 2015 NET REVENUE DISTRIB
Slide 11: 2015 Pro Forma Net Revenue Distribution
10 (1) Revenues recognized in over 30 currencies; the largest foreign currency accounts for less than 10% of total net revenue Segment Distribution LabCorp Diagnostics 70.3% Covance Drug Development 29.7% USA 80.9% Geographic Distribution Rest of World(1) 19.1% 2015 PRO FORMA NET REVENUE DISTRIBUTIO
Slide 12: Fourth Quarter 2015 Foreign Exchange Impact to Pro Forma Net Revenue
11 FOURTH QUARTER 2015 FOREIGN EXCHANGE IMPACT TO PRO FORMA NET REVENUE(1) (DOLLARS IN MILLIONS) Year over Year Dollars % Growth Consolidated Net Revenue, as Reported $2,243 4.5% Foreign Exchange Impact $27 1.3% Net Revenue, Constant Currency $2,270 5.8% LabCorp Diagnostics Net Revenue, as Reported
Slide 13: 2015 Foreign Exchange Impact to Pro Forma Net Revenue
12 2015 FOREIGN EXCHANGE IMPACT TO PRO FORMA NET REVENUE(1) (DOLLARS IN MILLIONS) Year over Year Dollars % Growth Consolidated Net Revenue, as Reported $8,839 3.6% Foreign Exchange Impact $143 1.7% Net Revenue, Constant Currency $8,982 5.3% LabCorp Diagnostics Net Revenue, as Reported $6,211 4.9% Fo
Slide 14: 2016 Financial Guidance
13 2016 FINANCIAL GUIDANCE Excluding the impact of amortization, restructuring and special items, guidance for 2016 is: Current Guidance (assumes foreign exchange rates effective as of January 31, 2016) Total net revenue growth: 7.5% – 9.5%(1) LabCorp Diagnostics net revenue growth: 3.5% – 5.5%(2) C
Slide 15: 2014 Pro Forma Segment Net Revenue Reconciliation
14 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 16: 2014 Pro Forma Segment Reconciliation
15 2014 PRO FORMA SEGMENT RECONCILIATION (DOLLARS IN MILLIONS) (1) During the fourth quarter of 2015, the Company refined its methodology for the calculation of unallocated corporate expenses, which impacts LabCorp Diagnostics Adjusted Segment Operating Income. The Company believes that this new all
Slide 17: 2015 Pro Forma Segment Reconciliation
16 2015 PRO FORMA SEGMENT RECONCILIATION (DOLLARS IN MILLIONS) (1) During the fourth quarter of 2015, the Company refined its methodology for the calculation of unallocated corporate expenses, which impacts LabCorp Diagnostics Adjusted Segment Operating Income. The Company believes that this new all
Slide 18: 2014 Pro Forma Segment Adjusted Operating Income Reconciliation
17 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 19: Reconciliation of Non-GAAP Financial Measures
18 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 243.5$ 219.0$ 1,002.9$ 910.4$ Acquisition-r
Slide 20: Reconciliation of Non-GAAP Financial Measures: Free Cash Flow
19 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 384.6$ 213.7$ 982.4$ 739.0$
Slide 21: Restructuring and Special Items Fourth Quarter 2015
20 1) During the fourth quarter of 2015, the Company recorded net restructuring and special items of $54.0 million. The charges included $25.3 million in severance and other personnel costs along with $17.0 million in facility-related costs associated with facility closures and general integration i
Slide 22: Restructuring and Special Items Fourth Quarter 2014
21 2) During the fourth quarter of 2014, the Company recorded net restructuring and special items of $2.4 million. The charges included $0.7 million in severance and other personnel costs along with $1.7 million in facility-related costs associated with facility closures and general integration init
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