Labcorp Holdings Inc. · NYSE:LH

Labcorp — Laboratory Corp of America Holdings — Q2 2018 Earnings Presentation

21 slides from Labcorp's earnings presentation, Jul 25, 2018

  1. Slide 1: Second Quarter 2018 Supplemental Financial Information

    SECOND QUARTER 2018 SUPPLEMENTAL FINANCIAL INFORMATION 8-K FURNISHED JULY 25, 2018

  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 2018 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: Second Quarter Consolidated Results

    SECOND QUARTER CONSOLIDATED RESULTS(1) (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) Restated for ASC 606 and ASU 2017-17 2Q18 2Q17 % Change Revenue $2,866.3 $2,528.2 13.4% (5) Adjusted Operating Income(2) (3) $463.5 $431.1 7.5% Adjusted Operating Margin 16.2% 17.1% (90 bps) Adjusted EPS(2) (3) $2.98

  5. Slide 5: Year-to-Date Consolidated Results

    YEAR-TO-DATE CONSOLIDATED RESULTS(1) (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) Restated for ASC 606 and ASU 2017-17 Six Months Six Months Ended 6/30/18 Ended 6/30/17 % Change Revenue $5,714.6 $4,941.9 15.6% (5) Adjusted Operating Income(2) (3) $899.3 $807.8 11.3% Adjusted Operating Margin 15.7% 1

  6. Slide 6: Second Quarter Pro Forma Segment Results

    SECOND QUARTER PRO FORMA SEGMENT RESULTS(1) (DOLLARS IN MILLIONS) Restated for ASC 606 and ASU 2017-17 2Q18 2Q17 % Change Revenue LabCorp Diagnostics $1,814.0 $1,721.1 5.4% Covance Drug Development(2) $1,054.2 $807.5 30.5% Total Revenue $2,866.3 $2,528.2 13.4% Adjusted Operating Income(3) (4) LabCor

  7. Slide 7: Year-to-Date Pro Forma Segment Results

    YEAR-TO-DATE PRO FORMA SEGMENT RESULTS(1) (DOLLARS IN MILLIONS) Restated for ASC 606 and ASU 2017-17 Six Months Six Months Ended 6/30/18 Ended 6/30/17 % Change Revenue LabCorp Diagnostics $3,584.2 $3,360.8 6.6% Covance Drug Development(2) $2,132.6 $1,581.7 34.8% Total Revenue $5,714.6 $4,941.9 15.6%

  8. Slide 8: Select Financial Metrics

    SELECT FINANCIAL METRICS (DOLLARS IN MILLIONS) Restated for ASC 606 and ASU 2017-17 2Q17 3Q17 4Q17 1Q18 2Q18 Total Depreciation $73.5 $76.4 $78.5 $78.3 $77.3 Total Amortization(1) $51.4 $54.6 $62.9 $62.3 $58.5 Total Adjusted EBITDA(2) $509.6 $511.8 $512.7 $517.2 $543.9 Total Debt to Last Twelve Mont

  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 Net Orders Net Book-to-Bill TTM Ending June 30, 2018(2) $4.9 billion 1.22x TTM Ending March 31, 2018(2) $4.8 billion 1.29x TTM Ending December 31, 2017(2) $4.6 billion 1.34x Estimated revenue expe

  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 Net Orders Net Book-to-Bill TTM Ending June 30, 2018(2) $4.2 billion 1.24x TTM Ending March 31, 2018(2) $4.3 billion 1.34x TTM Ending December 31, 2017(2) $4.1 billion 1.36x TTM Ending September 3

  11. Slide 11: Second Quarter 2018 Revenue Distribution

    SECOND QUARTER 2018 REVENUE DISTRIBUTION Segment Distribution Covance Drug Development 36.8% Geographic Distribution Rest of World(1) 24.3% LabCorp Diagnostics 63.2% USA 75.7% (1) Revenues recognized in over 30 currencies; the largest foreign currency accounts for less than 10% of total revenue. 10

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

    SECOND QUARTER 2018 FOREIGN EXCHANGE IMPACT TO REVENUE(1) (DOLLARS IN MILLIONS) Year over Year Dollars % Growth Consolidated Revenue, as Reported $2,866 13.4% Foreign Exchange Impact ($19) (0.8%) Revenue, Constant Currency $2,847 12.6% LabCorp Diagnostics Revenue, as Reported $1,814 5.4% Foreign Exc

  13. Slide 13: Year-to-Date 2018 Foreign Exchange Impact to Revenue

    YEAR-TO-DATE 2018 FOREIGN EXCHANGE IMPACT TO REVENUE(1) (DOLLARS IN MILLIONS) Year over Year Dollars % Growth Consolidated Revenue, as Reported $5,715 15.6% Foreign Exchange Impact ($55) (1.1%) Revenue, Constant Currency $5,660 14.5% LabCorp Diagnostics Revenue, as Reported $3,584 6.6% Foreign Excha

  14. Slide 14: 2017 Quarterly Segment Financial Results Restated

    2017 QUARTERLY SEGMENT FINANCIAL RESULTS RESTATED FOR ASC 606 AND ASU 2017-17(1) Three Months Ended Three Months Ended Three Months Ended Three Months Ended Twelve Months Ended (Dollars in millions, except per share data) March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 December 31,

  15. Slide 15: 2017 Quarterly Financial Results – GAAP Basis Restated

    2017 QUARTERLY FINANCIAL RESULTS – GAAP BASIS RESTATED FOR ASC 606 AND ASU 2017-17 LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS -RESTATED FOR ASC 606 AND ASU 2017-17 (Dollars in Millions, except per share data) Quarter Ended Quarter Ended Quarter

  16. Slide 16: 2018 Financial Guidance

    2018 FINANCIAL GUIDANCE Prior Guidance Current Guidance (assumes foreign exchange (assumes foreign exchange rates effective as of rates effective as of March 31, 2018) June 30, 2018) Total revenue growth(1): 10.0% – 12.0%(3) 10.5% – 11.5%(4) LabCorp Diagnostics revenue growth(1): 3.5% – 5.5%(5) 3.0%

  17. Slide 17: 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 2Q17 3Q17 4Q17 1Q18 2Q18 LabCorp Operating Income $329.8 $326.7 $330.6 $305.4 $369.2 Add: Restructuring and other special charges $39.1 $21.6 $6.3 $14.3 $12.2 Other special char

  18. Slide 18: 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 Six Months Ended June 30, June 30, Adjusted Operating Income 2018 2017 2018 2017 Operating income $ 3

  19. Slide 19: Reconciliation of Non-GAAP Financial Measures – Free Cash Flow

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES LABORATORY CORPORATION OF AMERICA HOLDINGS Reconciliation of Non-GAAP Financial Measures (Dollars in millions) Three Months Ended Six Months Ended June 30, June 30, Free Cash Flow: 2018 2017 2018 2017 Net cash provided by operating activities (1) $ 367.2

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

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - FOOTNOTES 1) During the second quarter of 2018, the Company recorded net restructuring and other special charges of $12.2 million. The charges included $11.8 million in severance and other personnel costs along with $1.3 million in costs associated wit

  21. Slide 21: Reconciliation of Non-GAAP Financial Measures – Footnotes

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - FOOTNOTES 2) During the second quarter of 2017, the Company recorded net restructuring and other special charges of $39.1 million. The charges included $19.9 million in severance and other personnel costs along with $4.2 million in costs associated wit

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