DGX - Earnings call transcript Q4 2021 | Quest Diagnostics Incorporated

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Operator

Welcome to the Quest Diagnostics Fourth Quarter and Full Year 2021 Conference Call. At the request of this company, the call is being recorded. The entire contents of the call, including the presentation, and the question-and-answer session that will follow are copyrighted property of Quest Diagnostics, with all rights reserved. Any redistribution, retransmission or rebroadcast of this call in any form without written consent, of Quest Diagnostics is strictly prohibited.

Now I'd like to introduce Shawn Bevec, Vice President of Investor Relations for Quest Diagnostics. please. ahead, Go

Shawn Bevec

Vice good Chairman and Guinan, joined Steve our by Chief Executive and Thank Officer-Elect. Chief morning. Executive our Executive Davis, Jim and Officer Mark General Officer Rusckowski, Diagnostics Financial Chief you and I'm President, and our President;

on impact U.S. and effectiveness drivers governmental beyond driven the continues results, system by the primarily payer pandemic's on health vaccination to U.S. severity are which XX-Q, pandemic, and/or company's we of from forward-looking pandemic earnings of believe scope the be in measures COVID-XX materially this the may efforts, to, X-K. cash projected. We to state care that we'll COVID-XX Form may our impact pandemic measures. responses release. most uncertainties, statements of Form including and reports the future discuss Diagnostics' and the of care Actual for and results the economy, company in including The Form subsequently impact described and tests, the differ to the and GAAP and federal, call, molecular but COVID-XX recent During limited a to health control. reconciliation current comparable and and Risks and timing, future financial will that not reports non-GAAP press and results affect report reimbursement clients provide on quarterly local those governments flows the duration, XX-K of Quest the on knowledge may operating make non-GAAP are annual our its measures include, condition insurer, pandemic rates filed those the the tables impact on

growth, refer to adjusted EPS. volumes reported references total revenue EPS excluding rates. testing, call, the revenue organic growth to outlook growth, our references growth testing. projections, rates to references EPS, earnings diluted performance from adjusted this revenues and growth revenue with Growth long-term Any to or of diluted annual EPS our to associated adjusted business, refer acquisitions, COVID-XX to business, including base and refer For compound are reported

from will base business. our growth be acquisitions measured revenue Finally, rates against

here Now, Rusckowski. is Steve

Steve Rusckowski

and Shawn us joining everyone today. Thanks, for thanks

quest the COVID-XX, past and patients to two and XX,XXX challenge committed our we risen of to the remaining innovating, years, employees have customers persevering, serve. Over the

in While team. also I'm a doing proud base so, we they record our what by XXXX, levels. XX% than business more of achieving accomplished grew have extremely as

can this get So we questions. your I want have a have cover to lot news And so that morning. of we to into

started. let's get So

start we've will on Then our fourth about sharing performance I'll color the for quarter And then on provide leadership our talk financial by detail more finally the results first, Mark the and XXXX. our transition year outlook some XXXX. So morning. full we'll announced and financial of for this review

as Executive well-positioned on that will time, So as is to Quest Board succeed in Officer on company plan, seen, Directors deliver Vice Chairman. succession this under value. serve Quest I we've will X, to to November which Executive is our Diagnostics a you the leadership President Davis, morning, that of have of Diagnostics continue General announcement gradual At Chief begun Jim shareholder become Executive me great a continue implementing XXXX. to

respected years leader. team. has years be growth Vice over Jim Executive CEO, XX transformational drive not built growth, member and gained in widely change, right President. of well consumer its be nearly plans, role growing of new to To built CEO. growing, a more change. part strategy extremely We We the nor through a drive industry and in of excellence. as we our of determined decade a diagnostics, his on drive the with a this to ago, experience. this approached is advanced He To role healthcare Quest, world, knowledge XX and took begin hospital new is systems, I to operational a now has new to Quest accelerate potential. new a the and business managed to Jim the drive I a deep company realizing Quest strategy, a we time relationships and improving that businesses, Jim the will team, As corporate and business strong been that than expanding the testing. large health fast key launched is helm was Davis I When and health focused turn role, leadership that and Board having to qualified

growth we've average addition, aligned last accretive, years. strategically over on In added several about through revenue acquisitions the X%

Invigorate and our customer each Board, We inclusive quality our and excellence, productivity generating while we've operational have made the experience, And has and more increasing year. program consistently ranks. improved amongst driven diversity our by on management X%

to committed many consider just underserved Finally, disparities proud And in front particularly of for established started. among ways, I opportunities Equity together. we States, XXXX, us, the United the what reduce over color. am getting in very of Quest you in if of $XXX communities accomplished healthcare we're million we've Health in

sales has customer which We a strong which services. laboratories, oversight for And strategy, XX% of including He employees. three runs accounts and and quarters for and response. our the that He also if enough, He wasn't program. logistics, pandemic includes also services, lead ESG General He oversees key Quest the Drive provided Excellence have leader development our our marketing, enterprise and our of Diagnostics he's Invigorate team in billing Operational a revenues more as Jim patient operations, transformation. manages of business, than strategy.

through working transition. I closely this to you congratulations. Jim, look with very forward So

James E. Davis

opportunity working Quest the and growth. months, you forward our and It's really next Hey, a the successful succeed the thanks have to tremendous Quest to eight you closely next transition. lead stage over Steve, with I in to and look ensuring into honor very of a

insights. diagnostic better We and have Quest in vision health a very powerful empowering of

has has build future care is system, during understood. to value foundation that health strong the seen and put is And we've the look forward that pandemic. extremely Our to really with the I and management and as Quest's straightforward working never company patients strategy Quest more this team business to And XX,XXX we're well to central we our well for on create serve. to place. and shareholders, employees continue really bright. all in to positioned been all

Steve Rusckowski

Thanks, Jim.

Mark years, the position today. the time to it more eight to Mark same helped at where Now for us is year. retire this strong planning is his than been navigate role in and has

will which role Mark, through your identify will process. your Mark contributions, to many I begun in thank in the have to I We you will new a participate remain CFO, want the working and transition. your Quest's friendship. and the with selection He Jim process closely partnership be for in

member leadership accelerated transformed team key a its You've our and have been Quest we growth. of and

Mark Guinan

an say Dave. minute to of Thanks, appreciate I I've kind makes I'm contribution be being it. company take part to and a the part of to enjoyed that I country, to positive a proud that words. just important want the

it's Jim of me and the process looking retire. to back and step who next growth. to my Quest's support for time I'm Steve phase to can successor in Now forward identify participating in

Steve Rusckowski

earnings closed out and of XXXX with Now year turning we another our to revenue, cash results, from operations. record

we demand testing Our COVID-XX the experienced and year, for base services. business throughout strong recovered

billion. year XXXX reported X% a than $XX.XX, nearly billion, on to versus share by reported $X.XX decrease versus were adjusted a And XX% on full revenues by when both COVID-XX per revenues the approximately the Earnings and $X.XX $XX.XX. surging. basis, Earnings to the more $X.X for operations $X.X increased of Cash per provided total XX% an a and share billion. basis, on fourth down more to an roughly total grew adjusted XX% than volumes for So to were basis year. quarter, $XX.X XXXX, XX% by XX% basis by prior were increased on than more

A role I'd So some battle believe made on lot the the perspective testing to COVID-XX anytime of COVID-XX. has in away share against we of been it isn't soon. forward. progress like going But going

year COVID-XX, testing standard. will important play Our gold that remains peaking Testing continue January. we of believe molecular volumes strong, in began this molecular and the managing to with an part product

COVID We continued throughout maintaining of well or perform days to turnaround testing. less surge, molecular average times for the two

and We throughout to testing they this levels if year will emerge. capacities additional any prepared for continue to surges maintain staffing be appropriate

continue COVID-XX testing expect be and a testing, will we our serology role Ultimately become there flu-like eventually forward. going believe how also for more we bigger going to and portfolio to measure part We forward. COVID-XX of permanent protection a

This to our base continue growth accelerate revenue excellence, Florida. patients business owned in the our turning In assets strategy of is serving South Now service delivered and executing acquired year. last to our Diagnostics, full two from base operational drive North and while laboratory, first we Carolina. make and Georgia independent quarter, by acquisitions a X% on to Carolina, and fourth again regional the growth primarily point in the Quest we South business, laboratory progress physicians we Labtech

We which of XXXX, announced revenue to outreach full finally, strong. acquisition we've over XX% approximately is [ph] Since capabilities. achieved acquisitions, health years, also insurer from average our enhancing of our helps engagement we acquisition healthier deals. business commercial our than completed a target outcomes. plan our Pack growth more of appetite each than greater our M&A patient behaviors on extended and company the In last of this X% improve care then advice Health, adopt access, acquisitions. of the strong country. bolster individuals laboratories, XX took capability four And And XXXX, will base that year laboratories our recently all This advantage remains have in we regional including independent

with and good out reducing of plans leakage. money together and our made progress employees also companies to by denials save We network working help their

plan of to laboratory best our grown than clients testing, XX% levels, than services have revenues health COVID-XX we've strength professional to the also the contract. driven recognize ever grown largely level seen. the our health Our more of compared and we us Hospital with have faster by working system our overall revenues excluding revenues XXXX value

accounted services. XXXX more include test to strong become categories critical XXXX, hospitals versus genetics, building consumer that several pharma and our opportunity versus portfolio, XX% growing Health they and Hospitals pandemic. key our Our productive. Hermann. PLS continued last business the believe year. continuously without the be be in our revenue performance Hackensack Quest a $XXX throughout and our consolidation an from same true. and ongoing exceeded of future Advanced growth XX% we will drivers, is and largest help diagnostics there than Altogether oncology more momentum XXX in to-date, In implement to Post-pandemic the believe two We're in contracts and will Memorial effective nearly faced million of solutions dollars XXXX. these Meridian that challenges We healthcare. hereditary for million annual diagnostics record flexible which afford PLS a are COVID-XX and benefited XXXX advanced pressure

investing aggressively and We're are for value leveraging scale with We potential sales service. grow tests, including differentiation our gen sequencing, to diagnostics bioinformatics, next advanced proposition, future force in areas automatic the customer our fighters portfolio. and one innovations liquid digital expertise patients biopsy, access and areas of greater growing the of to to such pathology. fastest our as give Advanced is diagnostics and important

strategy and us achieve single Our will forward. going high growth to enable area this in revenue investments digit

equally the the Now COVID-XX for $XX base see in nearly driven Revenues testing. vertical. by excited more opportunities and million than to growing about QuestDirect both test XXXX, we're doubled we in services direct-to-consumer business our

up to consumer the our build service improved a experience And enhancements patient ramping growth we're business direct-to-consumer diagnostic at experience also track $XXX this digit million in over several we're to non-COVID to experience in-person XXXX. year. in years. a market on our new by the investing later digital that customer launching expect double centers. We're business, will And investments We next

XXXX. now XX on nearly QuestDirect. building in recently relationships term X MyQuest long million our more in million up laboratory platform quarter. So the stuff walmart.com, a lots through solution We're of And powered by past users, than launching testing with our on the initiated Walmart good consumer by has

These XXXX earnings generated investments excellence. term investments and excited as Invigorate are and beyond our improvement. exceeded productivity about we We XXXX with direct-to-consumer growth to hand. reducing operational on testing increasing shared focused business over made procurement the drive X% years. operation both we of and improving the and last patient as two our in goal longer very We strategy laser the were efficiency our good progress which of collections time in record cash unplanned year made hand to improving remain at of savings the part quality go made in opportunities in two supply the and possible growth accelerate strengthen our point program service. and We past Through pandemic. advanced is our denials, We well diagnostics

Historically, offset wage savings we been have productivity on than from we supply any with inflationary net While side, inflationary Invigorate XXXX, cost our more modest suppliers. any of faced pressure increases in increases. have cost the savings our

continue with and of artificial drive that and use intelligence. Beyond automation platform to we additional improvements consolidation productivity greater

our Now turning and sales in employees our on are -- a improvement to seeing focused and surveys. excuse our market, are of Quest results quality engagement force labor workforce. highly me, still to are retention. now engaged, turning In we based challenging

lot Our team has and more a workplace. to XXXX healthcare. recruit And broadly entering continue in to done do an lab We're strong everything and throughout the within a create position can to industry we we inspiring retain talent. attract,

revenues year we've is Our achieved we're last to accelerate investing base business poised the growth. and off build to record

than last testing albeit demand PAMA good announced cuts outcome years. for continued Medicare last two at beneficiaries. year XXXX levels the for and the of lower see expect was We COVID-XX industry a to delay The services,

However, we PAMA. strategy since in of hard XXth continue the Members Congress remain with to be capital the our shareholders. committed free XXXX. This at goal We our arriving our raised our association to of cash time for morning, XXXX, returning flow to will work dividend fix and to permanent the with majority at a our we employment of of trade

than in this cash expect to more billion share M&A have repurchases. year $X for We and available

but reflects together, in XXXX So in decline business, our putting testing the with balanced momentum it and revenues. base investment our all COVID-XX guidance strong inevitable expected

every of recognize again, of once all and to serve frontlines to who pandemic been really the over of to on thank patients who Mark, have our Quest employees the I'd and day. turning needs the like healthcare continue at Before depend

detail Now Mark our will our performance and guidance. on more XXXX Mark? provide

Mark Guinan

Thanks revenue quarter reflected year. services partially testing for number X.X%. versus prior versus continued the the Steve. $X.XX consolidated prior than Compared X% by Revenues measured XX%. increased excluding revenues year, The fourth by DIS offset X.X% In versus more revenue the to base XXXX and prior decline compared X.X% the billion, X% by up total baseline in volumes our our growth base XXXX, year. was Information were down fourth from acquisitions. of XXXX, base grew contributing Services declined the fourth with fourth quarter to our requisitions low more testing Diagnostic in Volume to approximately X.X% COVID-XX quarter revenue. of quarter, Compared the testing than the increased acquisitions

progress acquisitions, total our have testing and X% our quarter, remained outlook. base approximately the XXXX volumes and testing from Excluding in the fourth base grew throughout versus year. base over prior ramped XXXX benefited made in that consistent The new volumes with business PLS last we've continued contracts

in primarily driven unit by consistent lower than expectations. the acquisition volume. declined compared an approximately roughly quarter across million December basis of quarter. we resulted September, the January, in or impact early quarter Reported you surged XXX,XXX PLS spread adjusted JV year, to moderated headwinds Sonora day, the with per tests including last of COVID-XX base revenues, $XXX In year. many of testing Quest, X.X million the more or nearly variant Modest price prior our approximately of in quarter, per molecular the In fourth Together versus offset QX with and in Revenue the $XXX last month. U.S. were recent As in the operating tests revenues. volumes compared the partners X.X our volumes per of XX.X% the in peak XX.X% acquisition remained know fourth of by of million, molecular per million, our molecular following Sonora $XXX the volumes over fourth in X.X% increases revenue $XXX was COVID-XX XX.X% XX.X% XXX,XXX Delta wave day, but COVID-XX tests. then On revenues revenues with the molecular revenues, early averaged peaking Omicron fourth Quest XXX,XXX the alone million, again middle Serology year. Quest, income and in of our to million tests income was or or as operating resulted

recall, by over shared important testing COVID-XX versus costs to the across that positivity investments. note time, our December come ramping in October lower growing decline eliminated and COVID-XX and of COVID-XX a our volumes spiking higher and from revenue in costs, It's guidance both may expenses XXXX the country was portion which cost. Also lower The XQ. year-over-year molecular and wage non-traditional have margin further headcount strategic quarter. channels, testing testing logistics COVID-XX increased additional you testing tooling COVID-XX later and updated capability, contemplated which year-over-year driven rates adjusted operating a we carry As in increases growth primarily

addition, quarter, provided billion the in EPS share the billion to experienced additional year was quarter, in This $X.XX And the than billion XXXX. higher $XXX we versus we ASR We primarily completed on quarter. was and to balance in fourth in $X.XX was $X.X XXXX, fourth healthcare the year. brings ended ago. operations to XXX Cash related also $X.XX with November, in compared sheet. a by repurchases EPS costs billion In Reported in $X.XX the anticipated year in repurchased prior our that in stock than compared more COVID-XX. the year. last $X.XX total million to employee Adjusted million $X.X $X.XX,

labor Before we've trends comment guidance, seen I'd turning like to our in to recent costs. on

the performance inflation The we've X% reset to Steve expected annual of and wages to expected salaries, this total lower labor be is annual our through increase between been XXXX, below be year. increase our in managing X% and compensation, expected is As challenging including given a benefits while wage overtime. noted, in environment, merit our X% to

our annual all reminder, eligible performance. of are employees a for As

turning Now to guidance.

be to be and to decline results approximately be billion to and $X.X $X million. is expected between of as a and year. million billion, X.X% $X.XX. by year least at revenues versus $XXX expected between to approximately adjusted and be X.X be Revenue revenues to expenditures of business to are reported billion, of XX% $X.XX $XXX to COVID-XX of full expected XX% capital giving XX% EPS XX% $X.XX, operations to $X.X an and testing Cash approximately is X.X range expected prior XXXX billion, expected X%. follows. range provided $X Base between approximately of are decline are to We be in be are a the a and EPS a expected to billion to $X.XX in increase

assumptions I'll concluding, some our guidance. touch on Before embedded in XXXX

said, entering XXXX position. in Steve As strong a we're

Our a guidance the representing assumes XX,XXX for XX,XXX COVID-XX to and day volumes per average full molecular decline between wells, tests tests to to from per January year. QX, in day XX,XXX approximately XX,XXX

COVID-XX the day full serology X,XXX volumes approximately per year. guidance the For tests for assumes

Our COVID guidance not wave. does currently anticipate another

Last We hold standpoint was handle health operational XX the will month, extended steady relatively ready for molecular to remain COVID-XX through April. this days surges. through any public period. an another from assume reimbursement We future emergency to testing again average

could our are in to extensions While business. the to guidance. The not April, in have an opportunity testing afforded get continue investment captured emergency from beyond to additional us public increase health continue renewed our revenues COVID-XX generated

the direct-to-consumer opportunities. investment earlier, continued in particularly As testing Steve and pillars, to noted we growth ramp advanced diagnostics our

XXXX. million planning are in year, versus approximately XXXX in initiatives in an to $XXX which additional our $XX represents We growth invest million investments this

CDC to in to hard $XX We maintain with costs comply supply staffing expenses forecast address business million chain including pandemic, levels. to continue XXXX. guidelines, ongoing currently incur these also challenges the manage and expenses your approximately adequate be We to through

million approximately one As originally XXXX. delayed were cuts XXXX. expected These a year PAMA until of cuts reminder, we $XX in

million XXX ended we approximately outstanding. Finally, diluted shares XXXX with

in will our to and change guidance turn cash equity I count it our XXXX, and in repurchases no flow share programs shareholders. free Our share of offset only to employee our the to to back meet of commitment our enough Steve. assumes majority our now

Steve Rusckowski

[ph] cash our and for had COVID-XX record earnings year another Thanks operations. record critical testing revenues, Mark. Well, providing country Sunrise from delivered and the

you. Quest its We businesses the well incredible commitments. accomplishments versus XX,XXX record positioned I'm our in proud is employees to base the Quest's the we to XXXX team of your our a throughout deliver our prior is never of of And on also year. Quest grew level bright has leadership. XX% begin to finally, questions. been strong, better, pandemic. is business Thank new a take Be happy transition as gradual future to and the

Operator

you. Thank

to We request that the ask up questions company. of one open will it at yourself you question. to the We please now limit

please have queue. fall the Research. If Nephron additional the question coming Meehan, from [Operator back Instructions] you questions, we first that And is you into Jack ask

Your open. is line

Steve Rusckowski

Jack. Hey,

Jack Meehan

Hey, good morning.

But and deserved retirement the know Steve Agreed, congrats the it's Mark feat. congrats I end. isn't on Jim, well you. and very First, on this for earning the big

James E. Davis

you, Jack. Thank

Steve Rusckowski

Jack. Thanks

Mark Guinan

Thanks Jack.

Jack Meehan

personally been very bull anxiety the which lab There's first Quest. the So because for actually been historically, pressures question. a around case find lot that's of interesting, on I industry,

get from So some any it be versus hearing for just would to around labs? up hospitals potential outsourcing. Have your thoughts share gain on of great new these what independent and contracts regional you're you picked

Steve Rusckowski

lot for of hospitals. is There a at Yeah, thanks, the in Jack, our and industry, particularly pressure question.

we interest professional a and more so services working are with big systems business. productive to and That lab their and continued opportunity. them hospital continues be with seeing helping And efficient become are

over remarks last couple of grew saw prepared it You years. in nicely the our

our it business, dollar level. billion a half a a have moves and moves, therefore enterprise that We significant

is one. drive two, continue So and excellence. operational Number are we strong, we that's to number very

Invigorate savings offset As continue net Quest. to my the of our inflationary And that we've our do going to we forward. We remarks, you Invigorate. it said, in the is it's introductory that. included array did all inflationary sales. to number. believe talked about a And pressure this is we new, cost as pressures any year, By I on We we'll in capabilities not and continue cadence institutionalized have. know, We last the done have

by always us savings the more for and saving been any cost getting increases. So than positive offset increases,

jack that, pressures time and laboratories a we're some growth acquisitions. structures. that We going keeping the flap South have so saw despite, see did therefore, up advantage. will that see, tougher with X% we smaller we times, that these forward, do of just And acquisition, because offsetting have we Carolina; a And an are do from current we achieving of we in the some

therefore, this our front to changes than different in the us has us times we advantage going So take we've of seen. positioned nicely believe strategy forward of given ever

you'd that. add to anything to Mark like So

Mark Guinan

think that Yeah, pricing, that's on the sure thing transparency mention, evolving jack didn't your you moves other I it's whether I'm it's surprise in is towards radar billing.

Now, complicated. certainly is

for So and insurance, simple, not your even us, is on. which who so it's depends carrier on depend commercial would

So it's not simple to tell people exactly what their cost is.

However, for it's the labs [ph], absolutely national advantage Quest. an specifically for

by So how kind others. of this. aware one It's of lot a our of of aren't compared value that better those we're encouraged some people secrets is much to

see including with access the as So pick some of up the having that app, those reason knowledge, our we enhance started, the mentioned estimation historic together price, we our return other we're tools rates really pandemic MyQuest before tools, were going the continue to including really the to you really with and another all that things real greater to share things and and our patient and we well value time experience. that beyond that bring

Jack Meehan

maybe a was around on Quest, that weren't Because those trying detection million relative factor as by the versus we referral total, I a wondering you to referral the network disclosures if resulted Quest? think fourth the out to revenue that up just figure versus accrue margin and through people the considering. tests upside profitability the system, network. on by talk $XXX,XXX, and $X.X testing about just follow quarter $X.X resulted Great, Can the

Steve Rusckowski

have Yeah, be Sonora so a except network, to Quest. clear, referral JV we with for

ownership to we doing that sure actually So to people we math around some testing minority make were revenue, we have don't referral record aware volumes that that we're on wanted because that a stake. the

of proportionate our from our earnings minority Quest, with to other earnings. we the as Sonora So a we do do get majority we holdings equity share as holdings, with

this I this transparency. time, Jack, do wanted different a than totally Quest. terms our we lab. is it's that on, effect not to of specifically forth, on during less its things so in comment not it's to the Sonora than profit on volume of X% in and pricing, a ourselves. zero. At So sent won't In referral total out But structure drive just point we that dissimilar, so But

only to what what So to rely labs external non-traditional it's during asking Yes, I and us. did to you we about refer help were channels. surge, a partner Jack, maybe have on that was that's

And actually how work. so we're specimens. the getting not sending It's we're that's where the

work this of leveraging especially that. was So a leverage is to trauma or and Logistics, all most lot were cases providers, where collect people our through we're traditional we we we going we're ACE anyways, the the other partners, centers, channels, hospital Quest to CVS early going actually it where had case, one. the would specimens, in In getting from notable

that to that, logistic do an with incremental we As structure we a runs. have logistics we have incremental Then do pay fee.

to to the getting the engage is there so when not all give a the do results, to of maybe our and specimen, You of costs patient aware the them that collect kind of we're phlebotomy, administrative work think about weren't it people infrastructure. like the but specimen traditional they kind cost of to that

Jack Meehan

for that Thanks up. Great. clearing

Steve Rusckowski

Operator, next question?

Operator

Hynes, coming is Securities. question Mizuho Ann next The from

is line open. Your

Steve Rusckowski

Ann. morning, Good

Ann Hynes

Mark, Steve, to Congratulations and morning. Good Jim.

James E. Davis

you. Thank

Ann Hynes

I you street in underperforming, margins, in stock's pressure peers. know some lot about obviously, expected. the to about incremental profile like, business, to guy's extra I XXXX, And $XX like the costs. because to parts is And you if comment and base think XXXX for we said base not with out year investments. ask prepared you about ex-COVID. your health and you you debate there's down or in be labor really how are In for that'd I think did to of just have saw versus to what $XXX be look worse of extra Quest follow giving is not? your want at repeatable margin talk million do guess just that there's great. than got think with Mark, I that growth moving cost, supply I XXXX. profile remarks, are so People -- again you million, you initiatives will Maybe what many to just your I what on it the these focused and margins, the a on date the just guidance, XXXX. margin view guess growth can on you qX, But up was is, costs,

Steve Rusckowski

for Yeah, question, important thanks one. It's the so Ann.

deviating So our first long off, not term outlook. we're from

a in the putting were and I largely CAGRs shared absolute because are to in March to of quoted change, that XXXX we've stronger that the the carriers the they're deviating going long time, from XXXX. outlook forward, base year because XXXX, And a going term we're not have So numbers fitness. while we're

we base COVID that will At know, assume you tell. business. still point, materially really our that all-round will it's So decline, time

when are happens. business, understand I at can the current looking profitability So people and this of the base how

the of you -- there really can't isolation. that of do two in is One that the really flaws

me next And examples. COVID, be to would driven we've to had expected let employee Because give a across significantly So we year. not performance And, that be relative year we're that's by repeated strong surprisingly paying year, such this a some whole now, right bonus. what higher incentive expected, base. the

inflated So our costs. that, quote,

you a And you against against done, it's COVID accurate. the which so base that the not certain business, assign assume do to through, cost all revenue base when times business, that implicitly and margin then drop of is is back what

incremental COVID significant go away. really will away, COVID, costs to in mentioned The million would other assigned around of business. cost. are more as be the step we I spent to of spend in prepared COVID over bit base to go not overtime expect that pandemic, costs year. those $XX starts in employee historically have expect then XXXX, And had related goes time. And we quite is, by If largely to absences away, costs the And would the well, we COVID we we about that surge, million as thing related those driven was really We later the and in remarks, which back. $XX would the a to

of that And do. big you level so put against I've the business, people that math seen do again, high lot the when implicitly that s a

were XXXX. we way the hundreds guidance, our business the where is of so in from millions base And think of above about obviously are we dollars to

months, full year were that going this at get the And what before pre-pandemic. was pandemic But you We're mid-single we is it of experiencing to even okay, have it the I back business. back profitability to times XXXX. and the access of be after look seems if before to teams growth, growing know, we network a started, expect the we're XXXX, a to two business first in that still be similar growth like to we We of several long digits. the base to the going base mentioned time. XXXX, in the

you. Obviously, that clarify, puts be So the follow hopefully, I anything for there's to take I'd together pieces can a happy up. all

Ann Hynes

view just And follow we for helpful. a $X should growth the as to very XXXX? that's in XXXX. How No, like that up, just million incremental your initiatives,

Steve Rusckowski

Right, where get to investments so some are down, there to. get of we those discrete us will need ramp to because

completely with of analytics expensive. lot state. there, et not So in bill, respond that IT to we'll preferences, marketing work for cetera term who way. the lot consumer in instance, what a building us investment customer to to of understanding and get big it, order do a experience fantastic. A that pay and and were takes more find piece to of is from move marketing appropriate patients their is appropriate where get but want need customers like, near tests we the our Amazon to for to It that of is to And future we for a

XXXX, that variable be $X.XX costs to by business. there some going we are we're with is as some billion, we're up are there a that what going we would to that. adding Now to grown And isn't be costs, growing business. business to to a support It because people said which ongoing get

going those we're we However, grow fast. to grow businesses, as

profitability get so growth accelerate are that the going those of we're of some paid that that in we're And adding then going ongoing some pre for say to forward. would be And costs run resources as we growth. that the to similarly, diagnostics, are rate and calling advanced out today I faster growth, going

costs down double that talked Remember, XXXX. our these And with but invested our of we investments, [ph]. millions startup initiative going in almost the to areas the don't revenue, of portfolio. then in will this on. next talked away of go seeing of I obviously about expenses. several in the versus costs our is our Only great then years. seeing And XXXX. not year So talked pay diagnostics. when XXXX. those these And our for focus for an growth an those my it's [ph]. several ramp our half of opportunity ranges, consistent benefits the considerably. to focus end, the us And year growth accelerated share dollars some that And year, has we margin back highlighted And about We exceptional over exceptional are took results, kind incremental We portfolio. therefore secondly, grown investments is XXX because after strong the that testing growth talked completely, areas $XX in portions that what is with really portfolio those started this about insignificant of of XXX digits consumer the of versus we advantage in as focus portfolio entirely XXXX. in you're we about advanced share you're of year last in we [indiscernible] they growing billion, of are our half business I you what

see And the so we're to therefore, already benefits. starting

some as 'XX than expect certainly any more it We're 'XX. like we with So looks that a business of return. return of getting already. evidences of

'XX, They baseline what we is What to laid of out coming have in into beginning. time you putting a served when on believe that will that. shared consistent we get The got and we we will we so And on That highlighted is, we is in, exactly X%, we're right our were to entirely And that. grow not Day. and the continue Investor track just we 'XX. what to through in 'XX high X% that with and our earnings. 'XX growth, 'XX guidance continue out

and of with we believe do believe what than more program relative -- feel even is prospects delivered accelerate attractive proceeds, before, far, opportunity the what entirely found we we to because we the we've done what the consistent was So are we the so real. was in front us of

Mark Guinan

just one of Yeah, clarification. point

when was could the And to we'd be we the said $X of end we in at do X% upper we XXXX. thought that. $X.XX So X%

than to pick $X.XX can that what dollar since between 'XX. $X, forward lower. still out is turning the guidance, absolute do. your level committed EPS $X on be a numbers higher March, this $X, through to we're point. is number of to the you So we're at XXXX, And 'XX based saying going we and in Obviously, and carry still lot we can But CAGR is said our

Steve Rusckowski

going go hour. we're past I bottom won't the of Operator, want to everyone question. let the to to we next go just the know,

We have your queue. a all lot folks We in get questions. to want to Operator? of

Operator

A.J. is Credit question And the be to next from Suisse. going of Rice

line is open. Your

Steve Rusckowski

Hey, A.J.

Mark Guinan

A.J. morning, Good

A.J. Rice

sort one. on what's that just maybe seeing like? deal? transition Hello, And then opportunity on that any to pipeline. there back wishes and huge Best deal, the pivot everybody. management opportunity suggest in That obviously of the to A, prospects? a you're not ask pivot, all. M&A to what a cause to And you what growth any Health the an a or Pack just finally does pull B, looks with interesting there, Does the update different acquisition? the direction set maybe out on but in organic way was in transition

Steve Rusckowski

thanks. A.J.,

continue continue have that delivered past, believe going in we the We've X% we continue to We believe to that that every that we will growth off deliver forward. to business going can reason our base forward. and

regional take business Davis, that information we business, to advanced in provide diagnostics. build have a continues States earlier, focusing And up looking we we we continue as we And hospitals, good the as look do of diagnostics. was and services continue But addition are that on and piece laboratory the with lens of opportunity for and And that. we we what at with other third to hospitals and I on product well. good we've that our them United that As to a And outreach some them helping risk see Jim health with pieces built generate, Remember, testing build. at done this general on and services, the that picked do then, that those them the mentioned, that to employer the mentioned data rely plans, purchases that the with Labtech on we we at hospitals. work portfolio. look to and as example to I continue acquisitions a services population providing to help on runs that of this health. us manage

way acquisitions So management acquisitions. part are to in that for an funnel that of building the we And direction acquisitions. Pack space slow He's that would years. And been company. what us in we the And with down going some you in done know, executing the highly well. the contrary, say in that of invest do engaged other us I as change management hear participated over part he continue that acquisition, in of eight instrumental all -- Health He's have. our might into businesses all we all always to to we've for your question, been help team the direction fits that Jim's the going forward. will in also you're does about And here and any more

the remarks more any find XX we've done, about team Jim your So to and acquisitions opportunities.

James E. Davis

as And Steve A.J., deals. to We're that I've out to slow continue going focus to going on acquisitions. -- business. smart we're going said, No, part get not applications going it's of XX are to to not niche our out. been willing to our do and to to all be going diagnostics continue to events to We're of to deals, down. going portfolio, help base but to build We're we're ready those of hospital right selective, We're going continue we're outreach do there business. out find those to build

A.J. Rice

Okay, great. much. Thanks so

Steve Rusckowski

A.J. Hey,

Operator

Patrick Donnelly coming Citi. is of from The next question

is open. line Your

Steve Rusckowski

Patrick. Hey,

Patrick Donnelly

payers place, come Hey. a talked a Two with know to Obviously, relative one pressures much chain in guys you pretty able you and inflationary along? on with payers? to the of kind are in you questions. good I negotiations. guys just negotiations have things. does levels. Maybe pass historic that Are lot up payer about How recent that some supply

contracts. through of ability and conversations So price price along those pass and those maybe in just increases talk payer some to

Steve Rusckowski

Patrick. very productivity, in all pressures. finding think for need those it. handled we've on we days manageable we so these there's inflationary Thanks terms lot Well, Yeah. the attention programs, us, of operational it's a excellence offset And and to questions. our We of think

that's piece So the of one equation.

that's clients business, commercial dial below XXX points find typically of just is to what that bringing expectations into if fact, about other you basis business, unit from look is feel or hospital in you're at price might physicians contract. what all we is for around is delivered you regard. volume in you going not our are we and whose it's other insurance And of guiding piece their some The freezing changes and organization at everything changes, And meds, we looking 'XX, this the just client that forward. that with. good businesses, our what our results It's that independent we be, what pricing. for Matter work up, price is our unit

actually, negotiations, shared we actually several price increases. helping So we've We've the our And we're particularly past, the progress we're with plans. past actually discussions encouraged in across healthcare. by us is that on fact, there continue introduced all in to inflationary the that is it having in that. of make And pressure

since them. alone, we're to to a along those based not we're pass of some costs labor therefore, business So

good we value. piece Patrick of that great continue to making this, the And progress. we're is, So say deliver I other

Our competitive a of is membership sure the better, And we had quality to many very to United in a on had for And these that in we labs applied great Healthcare, network. top rely have they and do we better. that, gets to fact, they handful demonstrate believe And case laboratories, their quality. of with in the that. flight already. evidence call of make our growing them price best interest that's of service share, of in gets plans that And we

We have very we're great prices. at service, and doing competitive

looking in some about which will helps We, and network. going more pushing forward. deliver on your start value, many talk at So more cases terms we're us of that When to trend to price going you continue. you in managing are keep going that, eventually to increases

the progress there. to asking good you add? anything Thanks for question. So want Mark,

Mark Guinan

our of to about, talked tenure. people want what just we Yeah, I over remind

we've We program, of And And some top about these it that have the is because it we one We have productivity, priced productivity. around line fact this enhancing. Invigorate [ph]. mentioned of been costs. call all pay has not X% fors them It's stretched. drives

expansion. And has then labor was as One fact that better that talked priced we about inflation. actually been of annual got the place margin them in a with helping we

So enough have fors. we productivity do to than more the pay

a of calls shared payers, physicians the we can cover in that. the pressure, some we're as I we've this over I better shared And erosion hospital that who is Steve Invigorate and We've prices share So inflation. erosion a clients you three look with we when we've also doesn't little as more That value. And really from that to place here, can really from we all in them, payer been for the under was you number quite moved tremendous got we've about have compare now much do I even us, news. addition historically, means that have price But to clientele we we now, in pressure that more a And fortunately are bit, we and can reasons increase. of if say a the last position. I the the inflation, to and the that an so. on are as historically. got have we great the that we plenty And comes talked we for markup, and where at But modest. to Steve that can't in, of conversation think commercial in And of last of and that dramatically so lately. states assure heavily really talked price the to we bring clientele. conversation And And also that that that mentioned, contracts, about well. need Invigorate. that today, national as three is really in where specifically started much where part related that the PAMA, it's value earnings good

Patrick Donnelly

it. out. Maybe That's the and to quick second then sorry. expecting obviously side, A think players extended piece of they is in, follow both continue And volume for for it on of do pricing up about not diagnostic -- years to at appreciate helpful. to revenues COVID. be of the multiple just endemic. How the really PHE lot a about mentioned I COVID Will half the then or PHE? have you baked no in you kind pricing follow least expectation the be volume, you the going And commercial? talked wait are

there. Thank Just curious on your you. take

Steve Rusckowski

Yeah.

it's summer. So of values what first testing in some COVID extension. the just going as surge that that we be to in don't assuming know. as go think the that mentioned, planning ranges not will we it's start we're we're to what getting will is decline Obviously, our the guidance And hopeful higher going throughout the but then be. spring and into will XX you the quarter, did in get we're this current extended, day we down, And

to what volumes know some the emergency case. assuming will in changes, price implied decline of And that down, the But always going do guidance be were get come that. of pricing. of again, we're there some we've we our we order. therefore, not a But the with the that to also kind So again, will, and we're And believe you if some partners. yes, if that in assumption is worst renewal don't

anything to you'd like add? Mark So

Mark Guinan

all that at -- that determined CMS need just that, not you to the rates remind to I Yeah, remind you $XX.

everything And don't we're down. till ramp then our expecting to to-date significantly April, PHE there's guidance beyond pretty in late in a so experienced a we're there, late steep reimbursement that PHE assuming we've post get And the assume is that the lower and while for we volume that so immediately falls than April.

Steve Rusckowski

Next question?

Operator

Goldwasser, from Morgan coming is Stanley. Ricky question next The

is line Your open.

Ricky Goldwasser

all you Quest I'll be Good to Jim morning, and CEO my you. best be of going wishes to working fourth with. are

excited. So very

James E. Davis

you. Thank

Ricky Goldwasser

way to the all days. Freeman's Ken Dating back

sort of what can of of wanted has said the kind bulk investors this are we We're the be to getting questions terms should is. us where year. off in like kind know Since $X.XX a sort baselines response you if to normalized baseline $X.XX expected the from in we're getting of you based that you XXXX one of think I point. to of got for just we the go last give you as to back range, build how somewhere XXXX? maybe that the the I like normalized about that really XXXX can to absolute So a between to is for of questions EPS, on starting right? But $X.X

kind see in off XXXX. should that we're Just as think the and like And are to of we about out if qualitatively maybe we to the modeling tailwinds about just ballpark. think headwinds what then wanted that

Steve Rusckowski

Go ahead Mark.

Mark Guinan

number an I'm was sure so. I face. the give Yeah, you even willing, if Ricky, I understand can't really you EPS on

you and earnings on and tell the revenue to look in the not you pre-pandemic, in if giving guidance, we're thing that best think is, I could do So point the at growth base based is what I you business profitability the dissimilar.

back can't about earlier. kind place I that business reason where might the you directionally be. really what So I can talked And give to of is

about million let's also expense? cost. your the So we COVID where is I base do have And still that you'd the pandemic assign the go if truth business. $XX revenue. have COVID would we say, in of testing okay, But have testing, Arguably, that we didn't

what aspects that's we to to We there, in to it don't have like base and that how tailwinds, is need. make cost others, And across and know, that last. we going It's life in specifically away including the headwinds know absolutely going today, because temporary, I we of it's the sure. is to you long CDC certainly and modeled into and not go some when not about just should sure something things That's then XX talk COVID want to of revenue to So guidelines we other all months, away know, our again things. some it's supply go importantly, business. disruptions. And you go about tied talked business. all would be we expect

laboratories premium right now, to COVID so afford fortunately, And do we do and relative And we are of now. insurance, right also to pre everything pandemics Because they COVID get can that's patient we paying that our insurance, our our have revenue have what to costs really service centers, did we kind in need. which margin.

last organically XXXX. I think in So We've years, the which give We couple is QX shape. really, significant the we we've to over activate best that's business base color PLS done back you I business. were is built the good of in where M&A could the

So beyond the has could all and growth same business, of while higher. that be feel hundreds organic we're [ph]. millions least And the directionally profitability to precisely clinical of may that people dollars profitability at the confident the moved that not

Steve Rusckowski

in we in base was So to XXXX. business remind what 'XX than you, our larger had

it So grown. has

implied for 'XX. our out that. recovered. broke basis we're intentionally has And top we guidance on COVID in And grow assumptions business. it that's to going for So And of from base

my COVID going And remarks, is business. permanent started I be making business. going we kind we They And us or a of you -- do It's about believe part And portfolio. therefore, by entirely away. those I going and that as can So And we're on growth. Mark going confident who in not way, part said that that's the investments in profitability of help investments of our our in very to when keep dissect what's to continue systems. to with base introductory on are we 'XX. of accelerate you part is feel base our reminding the go 'XX, of said,

COVID there's well. assume testing should some in you as 'XX So

to still be that And that going our -- We 'XX But more a And serology bright. the and able related growing you quite with to there's will we and are testing. it for come. together is individuals insight play some we bodies. have to have we're believe our a protection role around to beyond on continue put in PCR role for to provide ability the particularly their to prospects believe

So you. thank

James E. Davis

one pace are routine terms There's still I Mark that's the XXXX other a as for still interject has business clinical going in probably And would demand recovered of headwind. care. Ricky, at add to pent not levels thing. in up stated

year. studies of year we going next care during HIV still there the into lack hepatitis a around the rates, pandemic. look rates, think of C the infection and you at indicates routine this If that some the part headwinds later should data that was clinical infection provide And do

Steve Rusckowski

next Operator, question.

Operator

of question Tanquilut is next from Jefferies. the And Brian coming

line Your is open.

Brian Tanquilut

morning, congratulations good guys. And I follow up that that all Hey, around. answer guess Yeah. I'll last you to gave.

we small today, be most test was more business chunk case? is where that its care, -- of and endemic, this or it if sent then some then as or how the we the the of of And is a -- as more over think probably point becoming to of you what should it's economics big a it guys? thinking about correct about like So flu rather say, COVID of opportunity flu the this than think your part -- something it to of

Steve Rusckowski

and it round start, Yeah. sure. colleagues then will my Well, let me I'm out,

anytime going So away soon. this isn't

'XX. because a I have think you provide going when rest And somebody that living COVID. obviously, test, has continue. like many we're with in that to of us, it is as you're we're going that. PCR out symptoms, know, to COVID you're In testing And the everyday, some cases, and around will that ruling

illness, just it be and or therefore, type respiratory cold respiratory of think but about a common you flu, illness. So another being any it's don't could

the work people on There And changing to be from how immunity. forward. to time. of keep much and natural vaccines there'll highlighting manage increased to from is on to, us for have the role of value that, provide we or risk going continuation physician So we on going insight be also, know, protection And as have that that's that. insight over their with And people want serology.

So we to think that. be there, value there's going in increased

we think of an this But of pandemic. line do a think is about as and we more this to that 'XX, learn part get before into we'll It's hard we as that the of additional portfolio. in right product going believe, permanent we we scale portion now a didn't when our actually 'XX. So be it, to have

So 'XX said, base crossed we're sooner to in decided be entering we value we was business we then think to, [indiscernible]. Jim And helpful actually 'XX, it 'XX growth We continues that shape. the as achieve have. the in of in strong really

continue continue growth Our to we to prospects, there be ones that work.

So that should continue ourselves. to be a good opportunity for

business filling going these we're to more together chips So our XX. investments and well, in fuel us our help is base us and make products to COVID for provide that

returns, investments we're if to Yes, but 'XX focused both costs the the you'll But only we also fact, in we those in returns and on So beyond. see expect we are, make what 'XX. in these get and

you'd So that? to Mark anything like

Mark Guinan

question. certainty what's can't Brian, predict thanks. great to any a with going happen. Yeah, And it's we

be comfortable not be with are, of other I'll unknowns risks very that the importantly, two physicians like going I'd no, the specimen then they'll all lab. where the sample like, just But they'll the in it point test come send rather I'd rather a with to how that office that. forward? and comfortable economics. be And think the the that. handle really one, I'd themselves care with I not that do taking rather maybe maybe will the flu

payers the have of to whether influence this is done. a are on So lot going

lot testing, because off some times. of make point yes, for it do But people they care of turnaround is arguably, Now it. done a of money it faster

a care influence of let on and around of stop to comes of have this on reimbursement that office. it how just comment much how point on what me to the Then payers So large this. Jim much depending work the will and decide in that stays us ask

Steve Rusckowski

to capacity on not we of lot have less are gain you a to going and infection fail But But see going today, that able dropped. epidemic of had and which team and there's and an to share cooling lower year, [ph], our on sure deliver We've as to come do and go we If this, what and focused with challenge at volumes his in because some then be infection rate, start therefore a forward impressive. this look we a could ability rate, back this the entirely our of costs. which more this are Jim we more with is to pandemic, forward. for of what becoming forward marketplace, players will

where get about at the if think run, about optimistic. you not opportunistic Diagnostics, COVID, of there's going part of been you look the of our when as therefore be And we term. long So an the to to are This short we dynamics about think what opportunity you portfolio. you like think the in we share in that. be and permanent also might that up Quest we part to there is players. We're also Jim, term, pushing to short opportunity a some some you making share. around well market, to But have the sure think that add hard, what pick believe you'd

James E. Davis

partners Yeah, to, had during out we the series at volume, work. a And especially decided we handle days for didn't did this during what just gotten surge last peak partners is of work during referred and they default had least those we've out we of business when find rebrand XX of to couldn't capacity. that the XX% want

physical returned So of side out firms on doing, those the of to that work that especially the PCR molecular other while has the physical were some clinical there, kinds capacity, work. there may be capacity

I is, another here. future, surge us advantages in that there think is So if the

Steve Rusckowski

Operator, next question.

Operator

from question Pito And Deutsche is the Chickering next of coming Bank.

open. is line Your

Pito Chickering

taking Steve working the to around it's of Hey, my pleasure good with Jim, promotion. for the morning, a guys. congrats this Mark Thanks thrown questions questions. been years. lot over on space you A and you, business. And

guidance earnings. guide believe limited So $X.XX be that So Is XXXX takeaway, me that within pressures? XXXX are right I inflationary today's this let should different the call without Invigorate with? XXXX in leaving we offsetting that COVID? implying essentially flat seen just with range are way. the Can for a margins, talk I from from margins about XX% versus COVID in general you was range range EPS EBIT an you believe ask

Mark Guinan

growth, or they shareholder correlators value lower creation. capital. margin. margins, creation because so invested we Then Yeah, talked of value believe great we on are don't comment where the target to at specifically can intentionally different margin. return biggest really levels about at But we great a those PLS, it's come come on And two on

understand margin per others we Pito but se, So do. worry don't I about

know, so than a less a a broad pretty And couple top when the points bottom your differential range, there's answer you to line line. CAGR on question, basis XXX with year years obviously, you one and put over multiple

a different So of lot combinations. there's

like at So Day, is, and said, out that your figure at we to than to this point, is can certainly, and flu business, chance it be the the than unreasonable. Investor significantly on not terms what a what that. maybe determined I business could we you based on that mentioned, so. COVID that will counting something would there's or say But a you larger the base And And be this revenue that. we're And then larger next or not of EPS in be over don't we're yeah, months know. number XX year what guiding

we right is what said. give color to strongest I about that's back now, So you can

customer, period top business good or, with at the that we're growth XX% forward. that level. more and earnings if really XX% we're Invigorate. to where growth delivered level, remind it But depending maybe higher where on. much it's line, in the about a It forward, a you're it's QX, we drop from that margin menu, to is know, little an expanding do addition the want going in If brings drops grow and existing to That's new to than confident down or invest that we're expansion, have IT or down in that our XX.X% in to when interfaces. customer, for going everybody so we organically, the a we faster logistics why can base than grow adapt we you I And

Pito Chickering

a Okay, if ask margin question side. not just the so I different just the way, on

to Let sort of me a EBIT to low sort of XXXX 'XX relative -- a be think increase XXXX. in non-COVID numbers, I should modeling just sort EBIT, we XXXX of about cleaner versus teens

Steve Rusckowski

Yes. I you I mean… Yeah, you I the mean, mean, do can math. -- can yeah,

Mark Guinan

speakers] [Multiple earnings about share. per

Steve Rusckowski

Okay, good.

good be business, said business. provided for because is, we like creating we margin after guidance go do and to what we've our opportunity lower So what said we're business, share, have -- we a do have going per mix a value always just we for of [ph] might PLS Mark outlook us, mix some it that our a

in that. way, we as away years. our would as for will said, of against you gain over that margin it is to for now, that business to two deliver share, EPS fuel if COVID has also go to base continue it's 'XX. be quite be will, By for good last there's And some we've And continue our for to us going going guidance gross rebasing it's our not changes So these time, to EPS believe expansion seen the it, right reiterated Mark belief the good. soon. but hard size we And variable to I opportunities

Mark Guinan

other the position provide not Yeah. then to And any I'm thing in in is that, XXXX. guidance

So that's things one the every why of there. we're focusing

think we not dollars at you expect we what got don't we've we're this larger. counting this billion And mention know, cash did a then COVID We when However, a can can -- year. point. be happen, of about

do between specifically to bit a share aren't and or So we'll M&A, of contemplated. those quite opportunity also see, repurchases,

specific like is probably locking So really difficult not and a that's number productive. why down to

that's play out XXXX what you current these might and point would things that I So said we from bring. our differently of if assuming to reasonable what don't investor at day, kind of significantly view

Pito Chickering

guys. much thanks Great, so

Steve Rusckowski

question. next Operator,

Operator

Matt And Larew Blair. the question from next is coming of William

line open. Your is

Matt Larew

less infrastructure, you've good how forward moves of instrumentation And you some endemic here onto Hi, would new X% related are as capacity? what target out going be to separate you curious in the called away the cost morning. been labs second The those built maybe as Invigorate much aided extra consolidated keys think keep extra personnel you've COVID, consolidated the two amino costs COVID. platform. some clearly, volume need then goes I'm and from COVID just perhaps up has to piece an of for into one acid today years gains? curious, you've your recent that both I'm on and to driving

Steve Rusckowski

the operational things. to weigh on been how I'll and it answer. and a and working to excellence we in going a for institutionalized embedded in it platform to is Great, Jim do continue culture, grow. And we're turn for decade, how add to for is, become question. We've the thanks to in has our over company

by the we the cost, labor. So was we from don't comment We And actually become less do helps of efficient some what there's with some more talk of some line, because helps yes, around that your talked lot about around about more input helps materials aspects top some us we less use. actually to Invigorate productivity, getting costs. of a and output

at aggregate, way, our us to be is productive or service make We we able we the looked to an our bullish continue it And this become investments we to So great do be ingredients quality, by when we fuel gets the improve that to more growth. and better. we to on more to oh, and for prospects. is That believe value. the deliver continue

and fits So we we And all Investor when excellence. opportunity to digitize to an enormous about at operational us for see Day. in and together. innovate about continue this, it We talk talked

lab had future Jersey. in latest and New And facility to -- of some have new Clifton, the the opportunity of our through that's facilities tour so our you

new you take brought built down of But of our Boston platforms. We on our forward. Okay, gives some taking up also consolidation team now And Clifton to us in, facility some that the learnings area. we've you'll if come see and of and some we with innovation what the that Sometimes it. out Marlborough there's we done advantages the of opportunity and in terms lot a information to that, about and Jim think far yes, think we move us testing, in But equally and services. are okay, innovation of as next? diagnostic as innovation about there's and for so thinking of our space, what's in

cash. about we So we talk talk investments, about continue to the we use invest. of And

been frankly, lot that As innovation fuel allow which million investments game. you of we've and is notice, budget, productivity our capital about putting to into $XX a us year this a our

Jim? So

James E. Davis

the Steve and many products. of automation, continued three Yeah, I artificial key think digitization touched use on intelligence, themes, of has so

without in there's particular, new laboratories they're blood building and system, one opportunities handling So We've In those other laboratories Greenfield our Clifton our we every fluid and automation But of of urine. as terrific And call you know, handling in of journey. got processing plus Marlborough are that. and network. brand continue examples new area, XX our in laboratories. all what to sites that

mentioned deploying those some see digitization. readout departments the artificial we've just then of We're you're us intelligence examples that pathology, artificial those great in psychology, images. going the of microbiology, And continued to systems today. with side, help On got Steve move intelligence each of the

the rolling like recently where consolidated a a our competition vendors are productivity beyond other your opportunities Plus there platform. immunoassay laboratories. in [indiscernible], over those new it's platform are out likely around We to so going for in generate the that Now next of that lot across And to analysis, all XX we is still platforms year two year. ran laboratories,

healthy have we come as journey. we'll productivity X% And innovate, to third long our labs. innovations vendors that continue party as continue will along that So those to

Steve Rusckowski

week, to cost revolutionized part to the to make diagnose Jim my to we're And cutting which of And to up about productivity. our areas. take do picture look laboratory working more our been mentioned and our Jim continuing at goal. digital So is that to is prospects And we're react it And internship And this and ability going investment productively. [indiscernible] this all some about this this another fuels bullish pathology, always also I is year. treat next where this a on key going drive of This goal. the a cost smarter. of has strategy. as I cutting growth. not a

invest space. lot in have front And us. to going more we're opportunity So a we in of the

So it's exciting.

James E. Davis

just is just the want add Yeah, to not that, in lab. this I remember,

And So there's two a lot logistics. of give specifically, productivity I'll that's driven examples, outside.

ability to logistics, have continue to really efficient incredible and So be we with an improve.

have cases we specimens we all periodic. time. the us customers have that pickups, where where some don't have So give It's some we empty

technology to ability not the have and we empty Now that do pickup.

So that's an efficiency.

pickups, We somebody et where turnaround, requests call for needs staff get something quick what cetera. also we

there most so enhanced efficiently of ability has vehicles our been through And technology. get our one the to

centers. them one other really in draw by burdens move can information, The put phlebotomist, We their getting go our increasingly allow phlebotomy website, insurance do in our people everything. to administrative to to is the off the patient

patient so minutes with And the drive administrative phlebotomy. doing each a productivity doing spends up We couple the our in centers. phlebotomist less draw

a couple our of So the and same do are just everything that examples cost enhance really gains resources else those aren't up laboratory. more the with reductions, productivity ability outside but to quality drive and our

Steve Rusckowski

next question please. Operator

Operator

Peterson The JPMorgan. of next question is from coming Tycho

line open. Your is

Unidentified Analyst

it's and the guys, consumer towards XXXX? You there to avenues COVID in with direct all. of is you MyQuest this or Congratulations talk that you other testing. how testing [ph] whether do are Tycho. initiated different non-traditional Can was you Kapian avenues costs percentage for maybe that of associated Hi, see non-traditional know trending mentioned through that

margin profiles and you difference traditional can quantify maybe non-traditional? the So between

Steve Rusckowski

between consumer COVID, Yeah, $X.X so base what remarks, million our the COVID said in of about revenue. to was and did I million is, the what year, can we $XX business back last share go we prepared

small, in enhancing So the ordering, people enhance that experience to for And and, come consumers continue testing this But again, and still and on. for when so terms said, go point, testing at our it's as awareness driving strengthening. that more there's we consumer website, initiated COVID very I and of was to for people.

up these parking lot competing and operations of you a As in forth, know, we're on which stand people with attention. see draw who so and lots, their so

So that And initiate to mentioned. can enhance and stronger as we going to we through forward doctor and or know our we're this. working sure on to these as business for expect themselves a this we making investments get opposed do they just stronger we hospital overall consumer moving

profile, In different be home. have do not our in come really add the consumer consumer have ways. different to between We not kits collection it's terms that their can they sent all -- there. it done center can patient where draw margin it's can and They and of home the to

materially Operator structure, different a question. So profitability. next in little different not but

Operator

Derrick question Bank of from coming And the is Brown next with America.

Your line is open.

Derik de Bruin

'XX? -- this this, would actually sort we some I'll lobbying actually administration efforts it? and outlook? that chance again me $XX get what back you make resolved, squeezing real the little or mean, I that the I the are just a a this for little bit like you comes gets that million about, talk and of a off there's of thank assume that quick. listen PAMA Can more current So bit more gives in sort a in. does Thanks. pay -- great, what do chances the reversion, bit there's Congress Hey, to that to little and it just willingness given mean happened.

Mark Guinan

Yeah.

remind to We outlook. year. was $XX want everybody happen that our term it just I long that that million into just addresses Steve Before built this assumed would

we it get comparison, in to again, XXXX. it on So long term would that you us, the would know, be year outlets, assumed get although incrementally in year that a was in

it's built already that. So

Steve Rusckowski

as keep Infrastructure to and busy working And business very year. have on Congress was this working active with good but We having know, as And fix this some delayed, XX. to support, in it encouraged We're level because working that it So offset, the that's us this on data collection sampling to keep for time Congress question. one fix. thanks Mark based we bipartisan been of a and on by permanent and testing we up for getting said, We very a indicated the it of Congress. us importance the again, gave of importance on to therefore of be we're were a Bill, we data. postponed other a time with think changed as to it, process, you get was made permanent from year year last thankful us, with We're enough to think we And brought the year, the will both the fortunate market get allows Senate. the and the strong of proposal support, should from what improve House strong, the industry. the the

decision is parallel have Congress, the association. our PAMA that. on still believe to that, and that's some if the has a the with that works wrong lawsuit paid CMS we arguments [ph]. against be of rate. indication but notion And we continue it and we the But judge the CMS well. on get we the as philosophy call support to Hard The continue see We heard commercial to in in should trade that a we'll has

this is going and done now So to industry of fix push laboratory and because the here pandemic awareness of now positioned for year we're to the work before permanent right strong strength appreciation industry better of because what the in for this we've forward. than the And need global our PAMA. pandemic

Steve Rusckowski

question Operator last please.

Operator

And is our last from Eric Baird. question coming of Caldwell

open. Your line is

Eric Coldwell

Hey, clearing Masterful overriding job the on good up you. Thank of some core morning. concerns markets today.

overtime went your staffing thank things COVID of So significantly away. go as down or et through incremental you cost don't that list you. cetera When repeat challenges, go

And was You here. incremental follow-up, list 'XX out, you bonus, in on Thanks. in quantify. in it through number the if a mentioned reimbursement PHE. to in you was normalize, COVID hoping of helpful. the where PCR that the I I'll But 'XX. more came it's you bonuses. could COVID, due testing, you average AWR my didn't could specificity the one And whether How get outs that the I to be relatively it that or bonus upside will hear stow curious get I'm think then us it we XQ way fourth quarter. the think similar I profitability call could just be on said would we if would I in know give 'XX? little

Steve Rusckowski

with pairs. the time questions huge But to was I of previous not all fee contemplated outstanding. time. some Sure, bit little time have did just we quarters. question, it that's when couple at and of did what turnaround came, a the is a a $XX most wasn't in when amount. maybe performance early the that there their Because we comes the you provided the to really, we guidance the hit know, so did we you current AWR in in look with it surge to actually, and obviously, that one. our think and start employees. didn't in with bit, back bonuses, me little get And let a January been the turnaround we of suffered, around our was When bonuses, bonuses, government that XX,XXX -- We our the payers some was similar QX the And absolutely has turnaround really

have So of our about bonuses, year whatever call, to is. Most we the is you for at must members even And higher people wage what think workers. X% budget know, that cost targets. we bonus x be target then management. senior we one other every really, And pay we staff obviously, that

had we do feel on stretch we unpredictability our when performance, we've again, in based But COVID, Xx. have And people And the revenues, of most above in of and where for number significant years reasonable it's in enabled paid XXXX. us XXXX. bonuses, performances, X%. significantly Xx. the So we've not pay below And and surge had we the a historically, employees had to

gone we've as the years if grown And so in at, billion couple look without you that's past, wage getting a too we've the and up specific, last shared the bill, company. of in a $X number

of a then, want kind X%, in can about XXXX, if a floor, we a because bonus, substantially obviously paying higher, a we're you little say So did higher XXXX. that's like bonus as that, than in Xx. people that's And higher

we adjust time even out. as extraordinary. it's expenses. to The XXXX, out did think I earnings, because get not it, we of them the temporal adjusted compensate it a of COVID to doing you In it COVID just out our But employees decided pay once to were $XXX seeing majority for our second other thing your extraordinary, adjusted still is, though payment we we to and

a wage our as So have compensated well. the we payment, employee $XX $XXX lower late million over in year, our and of to some did professionals

go things year a surprising like had another that not we would repeated XXXX of in So be those and couple are away in XXXX had COVID we somehow, like

Eric Coldwell

I'm Xx just could response. incremental $XXX not closer? little million that great increases there. do chance get a X% insignificant That's as frame directionally to smart million, and I'm enough Any sure incremental $XX you we a can plus

Steve Rusckowski

than it's $XXX million. more less $XX million, than but Yeah, substantially say let's

Eric Coldwell

Okay, what that's thought. about I

guys. you everyone. Okay. much, Congrats to Thank very

Steve Rusckowski

been all. for Very with good. thanks, great thanks the again, your Thanks Thank today a and appreciate you Well, all great for the call And you. we support. it's joining questions. session

have guys You a great day.

Operator

Diagnostics online midnight www.quest or on XXXX. available A prepared will may by Thank this for international X at Time for website callers be am will www.questdiagnostics.com. approximately posted replays domestic be Quest February XXX-XXX-XXXX Eastern diagnostics.com/investor our you Time, at at conference the accessed today transcript Goodbye. on Eastern the call. XXXX or XX:XX for callers. year Telephone and X-XXX-XXX-XXXX phone fourth XX February be remarks until in later replay Quest for call of of full A call participating on quarter Diagnostics the

Quest Diagnostics (DGX) 4 Feb 222021 Q4 Earnings call transcript