LH - Earnings call transcript Q2 2020 | Laboratory Corporation of America Holdings

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the LabCorp of America Q2 2020 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Clarissa Willett, Vice President of Investor Relations. you. Thank ma’am. ahead, go Please

Clarissa Willett

you, operator. quarter to second and Good conference call. morning XXXX welcome LabCorp’s Thank

additional As today’s telephone posted non-GAAP the morning of investor and Vice reconciliation section this me detailed Relations President of with a are Chief on Investor conference be call. in today Financial Glenn call press Executive relations our release, an and financial release and of to at and we Officer; available our business today’s Eisenberg, GAAP Schechter, press both, labcorp.com, a Chief in presentation discussed via Adam and operations, and financial With will internet. information our Chairman there Executive includes replay during measures This the website Officer. which measures the

These the making the economic, XXXX future the expectations of impact conditions. to our affect various forward-looking and pandemic financial impact expectations current of include, are generally, could our business with subject based many change, to financial the and/or and including factors, but for COVID-XX responses Each which limited results, on we results. Company’s is forward-looking to conditions, assumptions, expected forward-looking upon business the are statements projected market our of statements that and related on statements businesses, not control Additionally, as operating is the on as well upon beyond cash more to respect COVID-XX general our flows based pandemic are of and the statements.

the other subsequent XX-Q, report SEC. forth recent quarterly filings on and with in XX-K these detail Company’s of the in in annual set Form Some reports and on most are Form factors our

any update our forward-looking obligation no even to if these have We to expectations change. statements, provide

I’ll the Adam call over turn Schechter. Now, to

Adam Schechter

morning, everyone. us Good today. Clarissa. joining for Thanks you, Thank

XX LabCorp led technology. For through science, and more than has innovation years,

impressed before And with leadership to XX,XXX and us that have teams I how front been to this be time. rallied pandemic, challenge want and thank needed quickly difficult has confront has most. them. when put continue I the efforts current our world their to our during been the each have During heroic as center, employees every

During across to as $X.X the both pandemic. adjusted $X.XX in Company, see and of EPS recovery people delivered revenue the despite Business. clinical Base activity and solid to the year-over-year. the impact Business those performance quarter in the are the delivered COVID-XX-related the we for steady June, second We We diagnostics of starting million. free during the drug flow billion, encouraged were and trials quarter, of doctors to development, a including our related More Base of testing in $XXX were volumes diagnostic offset is of month research. that X.X% testing are resuming, for revenue decline return ago, for COVID-XX than year although to cash their declined compared more up specifically,

scientific drug our apply committed development by solid and principles. trailing billion of the steadfast vaccines. aspects our outset, book-to-bill We three testing, to $XX.X and approach We’ll Our $XX.X backlog compared virus. of expertise testing treatment this guided bringing full our combined quarter. last to and to XX-month grew of X.XX, business remain billion, power a delivered against the been across capabilities development our drug has ingenuity and diagnostics all From

move. as platforms many as build we across possible, as First, capacity as much possible as fast as just can,

tests the guidance to patients would we Medicare charge will should in based upon exception ability not patients. upfront one to cost, We for for or one received. advantaged PCR response pay. out price everyone. use and over of pocket no should Second, the be prioritized disadvantaged be the prioritized are And no only has as Tests anyone else. will performed they finally, hospitalized be been The

with identified HHS first pace. commercial the with additional the an have the for us all priorities capacity future. These being and in March, of Since them our rapidly tests astonishing we lab testing We will work launch at kept and have to accessibility focused. decisions continue expanded both, the have the to or guided principles if PCR CDC, in

tests Indianapolis, performed processed capacity have more XX business. We of testing Molecular our our and combined power including example Development per labs, X.X than great of Central Drug day million tests is with Lab molecular current growing. now of the XXX,XXX in Covance in a

people significantly PCR underserved as expanded reach communities. in have possible, We those of to testing including many accessibility as

tests hospitals, healthcare first through by our to providers, recently, at-home We PCR the through a help platform, offer to at-home testing collection order patients LabCorp lab sample seamless retail and digital were authorized for chains, are for doctors service Pixel COVID-XX and Our the appropriate. collection a other to website. sites, sample to available pharmacy electronically first doctors, drive-through as our

the capacity rising further building the COVID-XX our rapid had outpaced sample With in In of fast increased to to four challenge. and a time the spread on capacity as just weeks, days deliver remains U.S., a in acceleration and recent possible average. results volumes priority as over

to even turnaround are with time faster. a two average to now three-day back on We hospital inpatients

pool we efforts a supplies that continued volume, capacity last can. received constraints To for of an have testing grow underway, just and multiple week. as across continue to testing EUA platforms despite fast we help We equipment for breadth to as achieve

began that blood PCR have capacity day. with finger testing per testing. antibody large tested, it antibody XXX,XXX for virus. our groups than to employers antibodies and to offering easier million the options, April, more we launched performed to We tests make To test also detects a tests in offer stick be testing X for addition and we In

return to economy hundreds As returning provides which for Employer also solutions of guide decisions. to and with guide are strategies and reopened, We Services, customized to work employers. helping to launched to places we’re we the connected LabCorp universities,

access, greater and LabCorp and important new vaccine Beyond critical. a And an is ultimately treatments thereto. are testing capacity playing role

client new requests assist to the volume response development of significant vaccines. of enterprise-wide treatments COVID team feel Our and continues in to COVID-XX

supporting patient to assess clients, and the many with segments opportunities a in across working the significant test of anybody antibodies may early launched evaluation scientific business coming are of These number which and LabCorp, both depth of We all capability of actively diagnostics a clearly and or innovations vaccines. hallmarks stages. neutralizing the delivery the of our demonstrate phases plasma, capacity of development with from most development that help accelerate are technological to We in businesses. drug achievements

we a strategic the against our AI, addition putting critical on of priorities data focus you at which innovations combined business, our integrating to do our we of to continue ways. high these and advance advance opportunities. capabilities; I Leveraging our Many digitalization maximizing to growth customers across in the meaningful power In and analytics, fight in shared the with the priorities, include following: oncology, leading work COVID-XX, just all helped of in center have

Importantly, oncology continues to be an of focus. area

non-small available to During the lung non-small test care cancer. for the This with guide help through decisions. patients cell quarter, mutations It’s designed lung biopsy liquid in cancer blood actionable LabCorp. test is exclusively cell patient genes launched we to detect

recognized priorities, and easier will collaborating several also outcomes oncology business performance advanced cost expanded trial and completing on services. complements achieve provide They an our therapeutic and our are compare development to and data to services trial acquisition capabilities We’re of points activities. our GlobalCare XX oncologists making that HealthEC key by assess with expertise savings decentralized than and We the leader the countries. clinicians Clinical operational will Their in clinical we virtual metrics. Also traditional industry help Trials. by and to ability clinical in support capabilities for a provides hybrid it and that decentralized more study our of care expand trials patient improve development module

future, entered acquired full leader the autoimmune is complex range rheumatologic important more June, And Our autoimmune business confidence fully hospitals, and of our We strengthening systems to our with LabCorp’s future, and rapidly which rheumatologists, laboratory RDL Though one in of pioneer have than into health Testing. lastly, Business cannot a to drive Base want optimistic to Health the customers shareholder Reference largest testing relationship of acquired to years services testing to our serve for we well-positioned I and that biopharma are continue long-term the we value. we impact Franciscan services the in and a and XX COVID-XX about Missionaries Louisiana very-significant we also serving in continue health I predict scale have syndromes, Mississippi. comprehensive companies. reaffirm to Lady ability System, testing, Laboratory a ambulatory for and in am systems and and for to

against we to Testing is it that will a way. effective masks, absolutely can and good can continue we the of fight tracking and that need a and inclusive all win and globally available. of done wearing We society’s holistic to vaccine crucial. hygiene practices adoption new and social and until lead tracing widely approach, COVID-XX, I’m confident very are distancing treatments be the that is will science important, do

Now, over more I’ll Glenn performance. give turn call specifics on the our to to financial

Glenn Eisenberg

you, of Thank start of expectations regarding a commentary performance our in XXXX. my conclude results comments second with with going segment review our I’m each discussion our the for some to Adam. followed of by quarter current the and remainder

COVID-XX able As the quarter. the impact in was impact quarter, results, to given we a estimate on were late first the of that reminder, in the our

that be commented forward. we would not However, we able going do to that

Base the COVID-XX you tests, quantified the can associated serology results, quarter in with the have see that Business. second For change we the revenue molecular so and

partially per being our capital compared Operating caused partially offset $XX from The points. was earnings mix restructuring $XXX the working decline of quarter reimbursement. to of last an our basis charges due in or primarily in was down of decline special year. was was due costs, rate, Business to and million rate the Adjusted cash and result Now, which partially Base driven by million year, Operating the XX% was of Base basis or initiatives, $X.XX charges investments money million deferrals, XX or income I’ll which million adjusted from The of compared in partially the the items, to flow foreign the for a million, was $XXX in to by Base year CARES X% restructuring by the costs special $X.XX in by was in XX.X%, and quarter to decrease or was The COVID-XX to Business $XX margin revenue, XX.X% million totaled million compared offset benefited offset quarter the due excluding personnel quarter, or $XXX Act compared geographic quarter increase by of revenue, insurance the charges supplies $XX were performance. to in XX last last decline in impact benefit special million second million XX.X% of the million which to income to Capital adjusted XX.X% to charges, rate million The decline revenue. well XX.X%, lower of the working LaunchPad of tax organic tax of as was higher capacity. per was due tax quarter primarily higher year. excludes were was last for offset items, operating $XXX income, amortization, which Act pandemic, acquisitions and of includes amortization and COVID-XX organic COVID-XX share. and receivables. year. ago. Testing year. operating COVID-XX-related $X.X as as Business, XX.X% to million was X.X% and which $XX diluted by capital. quarter savings. increase adjusted which was due and for by $XXX of the We Testing includes in The items, LaunchPad tax pandemic and while last was offset special billion, CARES due of Testing $XX primarily of The and $XXX cash COVID-XX-related review which million higher PAMA X.X% the the organic $X.XX to Act exclude divestitures decrease Net or translation currency Revenue the and or X.X%. $XX The negative partially primarily and in operating a in amortization from due adding compared had to for points, revenue XX.X%. a restructuring X.X% of lower our increase the from Cash flow earnings earnings cash earnings. expenditures to capital or $XX CARES XX%. was EPS, other The quarter, the of the share, Adjusted compared the revenue

last million to flow year. $XXX in As a result, million $XXX the was quarter, cash compared free

quarter, tuck-in we for $XX cash our in diagnostics July, Adam the quarter-end, additional each segment. was balance During $XXX mentioned, invested closed acquisitions million And acquisition. At one from and as at we the a times up of was in was debt debt $XXX end end our total the million, quarter months leverage X.X XX quarter, to million last first at and gross EBITDA. $X.X billion two

PAMA X.X%. of driven the well the partially to the and was The X.X% our caused for to Revenue decline - decline of which by COVID-XX offset XX.X%. negative was review favorable due to mix translation X.X% billion, compared was by by foreign segment comprised Business organic quarter, Base as the COVID-XX of a the I’ll last the offset which organic by Included to X.X%. X.X%. to performance, revenue of basis offset pandemic, our of Throughout of by XX.X% X.X% volume from XX.X%. drove non-renewal Now, which was with quarter the our to Base and improve. due year, partially acquisition by a was decline Base by decline impact decrease COVID-XX declining volumes X.X%, due in organic pandemic, the partially organic currency $X.X from last which was both Testing in volume The The XX.X%, was XX.X%, revenue the by volume UnitedHealthcare continued decline XX.X%. the of to as decline Business Base of volumes increased acquisitions in Testing Diagnostics. Testing price XX.X%, Business total Business XX.X%, was points, benefit partially contributing offset beginning in decline LabCorp of XX year of of revenue volume of in organic of decline decline BeaconLBS partially of The a

by the was For year X% in XX% increased more Testing June, Business decline of XX%. day and offset of prior over organic volume COVID-XX approximately the the approximately per Base than

agreements a have volume, reminder, to not we the As in would do our growth. lab X.X% quarter’s include management approximately which hospital added

million and Base well Business, COVID-XX income by due to to offset our operating of result by includes was pandemic, higher While XX.X% Base volume a adjusted partially of XX.X%. Business net in COVID-XX end the mix Testing track total XX The in down was currency of in The price LaunchPad the by of business Diagnostics Business driven offset acquisitions. merit million of decline deliver primarily points. was impact the and increased as basis X.X%, mix by XX.X%, of the change increase the $XXX non-renewal $XXX decrease LaunchPad The impact of last the of Base negative Testing contract increases, initiative. the income the PAMA of due or from PAMA remain operating the was or or XX.X% includes X.X%. savings. on XXXX XX.X% $XX margin as the revenue decline The BeaconLBS as negative partially from X.X% and personnel of compared for million the adjusted Diagnostics quarter costs and by to million LabCorp of of to year. We $XXX from savings the and

the Drug the in last was Development. compared COVID-XX basis a points, for added The partially Covance revenue quarter XX performance translation our foreign currency Base to which of partially divestitures decline to a pandemic, of revenue. revenue offset X.X% billion, and benefit acquisitions $X.X negatively decrease I’ll by by X.X% review organic of the net Testing, of of due year, Business, of Revenue due organic Now, to offset X.X% decline the impacted of was X.X%. which to

for operating mid to Development end revenue COVID-XX and initiative. was year grown of digits, adjusted primarily savings. The compared of higher targeted or $XXX to by LaunchPad margin estimate our single in would income pandemic We the and due XX.X% the operating Excluding last performance. LaunchPad this income XX.X% $XXX to negative personnel on line remain impact in Adjusted or have Drug by million the and million COVID-XX, was costs, savings segment the of decline track high million year. impact offset from our of from of organic deliver net Testing $XXX in the the to best revenue with partially

and months, $XXX of remain at book-to-bill XX orders net the trailing end net billion, and increase at $XX.X of strong million last from respectively. $X.X the quarter billion approximately the quarter. Backlog was X.XX, an For

of into to next backlog We billion $X over XX expect convert approximately the this revenue months.

current provide for some to our the our and Now, regarding continues commentary Despite impact the there the regarding of expectations I’ll of remainder pandemic. XXXX. improved be outlook, uncertainty duration future

guidance. continue XXXX we result, a As provide to not

full by year increased demand. expect However, for the cash driven compared year, see revenue, we Testing flow last earnings to to COVID-XX do and

in drug both, such our crisis, tests can subject of addition, and has to the demand. have doing This COVID-XX of XXX,XXX diagnostics we pandemic, as on perform Base very increasing our assumes as current availability. per as we the address supplier capacity, the to quickly development continue irrespective And to of From helped Business possible, everything beginning position In focused capacity outlook approximately us been improvement the we add to Testing COVID-XX molecular businesses. day.

and that we withheld as During of reduced our first the the well as the as commented and quarter, hours business, furloughs, result the actions outlook, took such a contributions. we increases as decline XXX(k) uncertainty merit pandemic, in given in our

Operator? Now continue proceeding fit meet reinstate expect from employees adjustments, have furloughs, across threshold This brought returns. are outlook, our suspension to we’ll concludes with back formal current do employees. strategic the that and retroactively heightened share both From questions. with of we our of our remarks, but improved a of tuck-in contributions, standpoint, financial our program, now that our and we acquisitions will repurchase and is take demand businesses and the XXX(k) an we recognizing allocation merit we significant capital increased will contributions outlook

Operator

Eric line Coldwell question Baird. Instructions] Our first comes from from [Operator of the

now is line open. Your

Eric Coldwell

A how as curious how give to of question Covance. those individually maybe for details. be you us quick three could central And that, nature related development, a the very played if work. early strong lab us might the clinical, the segments, could give the Thanks all COVID-specific follow-on performance the the out I’m Thanks much. on any if very details to particularly much of on sense you during some much just bookings, on quarter? and

Adam Schechter

Good morning. Eric. Hi,

good the and So, continues it to a diagnostics quarter. together. drug very And show had having I Covance development power of think both,

enterprise-only participating team together pretty vaccine a on people every for diagnostics from together put that of we’ve scientists our been business as said, had diagnostics from we both, with And our I those look, you my trials script, response people almost scientists drug still in and And early stage. discussions With team. treatment are from If and includes COVID-XX. almost and most every mentioned that in development.

So quarter, significant contribute didn’t very dollars. a they for amount of necessarily the

forward, it believe revenue. As I of we will be move in important that our increasingly terms

increase Asia. and do to work sites, that includes laboratories, business, you fast. our continue began and we’ve central have that’s gone that opened the example, if, If Early we quicker three have China, capacity and we lab of fill that central mentioned And seen continue come central just to development have, up the than we clinical as increase the in a quickly. up, look the we of Clinical, capacity early fairly our opened driven in back countries I significantly, early And COVID-XX. very as particularly some we accessibility of an have those for pretty by for at development, work. seen saw laboratories where the the parts because China to well with we that’s markets

are and Asia, Asia the most the sites are many U.S. Although in in there’s not accessible. as as of now Europe, in sites there

of think take there’s stage global However, Phase still later before trials, accessibility I time. to are going many starting particularly some that’s some companies and still until those X waiting

coming two. So longer back that has than business taken the other

Eric Coldwell

call that share peers have experience? between of your you even us, and COVID talked it, Could total with about to-date, Adam, have Yes. reported your comprising awards high-teens bookings. mid-twenties somewhere

Adam Schechter

Yes.

X book-to-bill, to dependent But to and it’s makes not through am Phase on a and can upon we’re not at Phase going moment. percent, you COVID-XX the as exact I it based moves it that you forth. So, X give so the imagine, because trials what

compare can COVID. numbers our but I So, their not to numbers, dependent are upon as

Eric Coldwell

it. very much. Got Thanks

Adam Schechter

Sure.

Operator

Thank you.

of comes question from Nephron line from Our the Jack Meehan next Research.

Your is open. line now

Jack Meehan

do approach? evolve to method? think morning. move perspective perspectives of pool Thank testing is for into going What any remain Adam, as you. the is to great. testing would fall. I be portion And head testing think you your we think to as molecular COVID-XX hoping Do just the get you to to on was antigen Good going to going you how good a is to

Adam Schechter

Absolutely. Good morning, Jack.

we first and March And the astonishing. to I how we’re X,XXX remarkable per tests week. So, mean, thing end doing do I we XXX,XXX would per say, of been the are that’s PCR were early to it’s X,XXX PCR tests day. pretty July able just in here in

have in bring. And fall as people we’ve you understand testing But, gold low somebody any PCR don’t don’t we’re don’t low you do it’s the because For the what with season prevalence, do testing for back-to-work particularly do believe more or to face significant is to fast like that telling the what than things think to continue and feet remain for same the if be We the to the capacity. can issues open we we and and continue open in time, that build to standard fruition, to to testing then I going that past have that as I will testing. can PCR some need think And run that need do of would supplies build the comes I that the play terms blood is different of of At certain tests, know in disease. will and type all going retesting. capacity. prevalence, back-to-school businesses we think you amount the you believe continue completely doing. therefore, a equipment flu had currently the schools role. will of we as to overcome I we’re machinery. tests, significant as it’s testing to helpful and with to as I Pool going areas testing fall pool that up up, most has to for build

the that PCR. fact, we give have believe think testing for will PCR think I pool In our additional testing, in the of a most add fall antigen by standard capacity But, do significant I the capabilities. far like that also. us role do testing that testing the will to and remain Things I the

test you to get So test group. with antigen then would if for example, point-of-care, if wanted that in a positives. today see I has that I comfortable large group don’t been them feel that can testing, there’s retest. you any are, to with some The and antigen is would probably of PCR people If testing answers, testing. issue there’s could If positive have pretty you go large back the none, people I quick miss with there

But the test if want that be you tested population, test positive, you somebody negative. a for would have a it’s you anomaly to negative. to falsely make sure people if it statistical everybody So, pretty

would if So that see go them I PCR. back with in retest one you and population, positive

to So, the to fall, can to and it. for big, flu doing assuming can I be get that the we could best the the capacity season think going prepare we’re all all through get we we’re need

Jack Meehan

that COVID stacking portion testing Base that, off And building reinvesting versus just maybe incremental the the up your half, on And you. the of philosophy on expectations Thank back the into of the some second how what’s around in testing margins given business? the Business? are Great.

Adam Schechter

Yes.

as more a can, that’s we broad fall where frankly, get with been continue So, day our got capabilities. It good have statement. we in. we I’ll have along give machines help philosophy I’ll number we need and many albeit we’re day, as to to going suppliers. much But, be some today. a we samples from scientists as our of we’re per than to that’s what you Glenn to as The been our And of to us us build XXX,XXX get We the continue give get ask to Buy if testing just to beginning. can. are not irrespective equipment to build we going what will cost, get capacity extraordinary And LabCorp’s the you capacity And scientific and for, want from easy. that that’s strive it’s I to be that. to going specifics.

a hours the machines to week in are try more of so forth. and more get to margins, working We reagents, you Glenn days let seven terms some I’ll XX a But, specifics. day, give

Glenn Eisenberg

around we’ve Jack, when we call business, past -- incremental commented of it new in for the nature cost dropdown the testing, the given fixed Sure. diagnostics the that obviously XX%. was

that been what’s used we’ve So, example there’s when weather and happened.

So, the what you of testing. we the will, other falls experienced COVID our testing within ballpark, clearly have if would with

leverage, improved you So, doing. obviously, the to additional contribute with helping will, if the testing we’re that

Operator

Our next question comes from Research. the line of Wolf Stephen Baxter from

open. now is line Your

Stephen Baxter

on I pooling molecular for wanted to the up testing. follow

will what’s your daily testing you the expect then, today you when capacity? initially your your other Thank this much through do the runs see I onto that was effect occur? And of what my pooling on And do LTD. that process you. follow-up, guess, get just multiplier doing for the on be you’ll is expanding you So, volume And that think how understanding then, platforms? as to a LTD?

Adam Schechter

Stephen. Yes. Thank you,

I’d first able test to the The remarkable, by laboratory that back amount thing we’ve been do it’s say our launched with that been scientists. And that’s a LDT. in volume is of LabCorp’s and we through that LDT, March developed

running we us the through our have LDT, to upon number changes. to have But Of to scientists the exact say with I help XXX,XXX. labs our get extraordinary and to the going LDT get today. have we to It changes you based an because need still did XXX,XXX the other equipment. up to that different course, the give other companies not have tests, job suppliers I’m labs LDT to XX different that labs

two even platforms, successfully. of it right turnaround make our At and through that. a can. through volume, now, to best is the would of pool what significant day, we’re three to we distribute our I amount, we’ve end much capacity them. EUAs give real says to is we to get the at we think and that say move on, I to a network, are, as appropriate. that the we’ll at use inpatient and samples what that try much the for To is it. that so want have to which significant Instead, run think found we deem can time, pooling to same optimize to it that depends expect would amount for as now, as around going the we hospital as can run to go use way don’t patients tests regards that of So, LDT, if we to would our I forward. we our a our But do that do file on tests, go LDT turn analysis it’s the pooled be need where other faster a we certain we the with do what percent possible sure days will we and And With the

Operator

Thank you.

the line of Gill Our JP next question from Lisa comes from Morgan.

open. Your line is now

Lisa Gill

country where thus as COVID we core us I much. testing. curious guide to reimbursement areas Can your resurgence, first volume. to Good not have in expectation very in know you’re guidance, giving what continued seen give secondly, on you And seen some question. go would around far the of but for any July, just my level I the Adam, the be want you’ve especially of morning. back color to Thanks then,

Adam Schechter

know of an of the Lisa. by first when there take come be And, was it didn’t March, been it Good in you, fast XX% extended I’ve Sure. we because period And quarter, volumes saw morning, how concern the in surprised back. To the how it up month interesting at that back. fast time. Frank has could with come it a would was we

As testing have states come we’ve seen opened, back more the significantly.

faster. core example, Texas we come saw and and back up Georgia For as first, Florida opened testing the

As testing to states bit, the slow and down. you down see modulate begin a slow little

was it would don’t COVID guidance if it’s breakout? it’s how the fast we’re and time reason for total our the testing. the not impossible is, will early, say, have how and in like? between Base prior So, there’s for first how to giving additional in will continued have What little down above year. back. definitely for they a testing because that we that look rest of fast year we know July, will move, What as What a is come we states was the the they In to slowdown the bit, but and watching how I Base Business states the another correlation make far the still to COVID our be The it fall the want do day. strength slow see So, Business? Will data that able I best continue since we Base be opened frankly, almost far Businesses forecast June, the to it, the to happen? that we’re has that. say saw testing how we every can mean, including But, to could seeing all we sure month, base have we fast

in what reimbursement be HHS have United terms they see another then emergency extension. will Typically, emergency go days. the that we XX reimbursement, In just did the to of strong We extended that announce, to the we assume we’ll after X-day that they that continue happens go through as as lasts for and States. situation, the

Lisa Gill

Thank you.

Operator

Thank you.

the question Leonard Our from line Fargo. next Dan comes from Wells

is line now open. Your

Dan Leonard

you. Thank

better I’d Adam, could quantify to return-to-work the magnitude you’re in understand from hundreds you seeing connected front. you’re able further what or elaborate to you mentioned, some on demand love hoping with of employers. be the that So, fashion. But,

Adam Schechter

Yes. Sure, morning. Good Dan.

of I or going to and universities, spend to and lot is that ways about back-to-school, back talking they and we say presidents approaches. time The a I different can to think about understand universities of talking try CEOs, first help thinking companies to work them other thing would that, different are

And the that is work clean, into keeping come the out of ensuring in and what elevator we and school sometimes low it’s area work factory are discussion go in flow it before importance air all checks buildings a prevalence, lot have, social in a having the they of a people workers, depends they critical. of elevators distancing, they into is appropriate. cleaning talked workforce if multi-variant the are they’re bottoms, ensuring masks, good In that thing Prevention work, type the or their that’s about if very healthcare hotspot, first sick, on wearing do of the they’re an discussion. So, general, workers? and temperature things have of place hygiene, questionnaires,

two able that and thing come is three to back. want what they them The you second the quickly school the PCR their or over and get why make type as if is be you that, tracing be them. they’ll important in place that once sense for a to it you season, want what wait you turnaround with them tracking having track with isolate results them, the university as do want time, might into fall flu somebody so And to to tracing. to have to get and anybody been does workplace to to And have has for COVID-XX. capabilities want we a work tracking as symptoms, so that’s trace we is and you’re then, vaccinations test when for to possible, flu any that’s ultimately, And and and days have to workforce, to a flu while versus then, around of particularly

once to is, I do everybody them the that. lot what think doing them these can time people trying a week? talking So, about I that why testing What of August, because said is is we’re say entire of how work they of my on of as have spent timeframe. don’t lot I to companies makes types be into across testing test go can with sense don’t thinking they a the the upfront a September

fine. But if spread necessarily a that’ll you and done it, test that’s one to think, next time. somebody surveillance, won’t to in you the lot. to everybody And want sick have try a give I point once to they is week do day, if starts

of was on and testing money. You’ve lot that money time best probably your spent a use not the of

understand use I trying a it is logically, lot talking them to time my team honest spend best to trying a about to and time folks. time I of my these of appropriate. testing of spending of I’m And lot you, make can with be So, is you, to lot how my help and them a time to think it’s lot and where spending a tell

Dan Leonard

pretty my then, differential you also Adam, of comment what I appreciate customer to-date? biotech raising that earlier you’re trends the large And maybe the pharma emerging about by all seeing crowd at color. has Covance you business. follow-up, for money between that commented by out pharma, of and midsize successful been segment Can line

Adam Schechter

mentioned more earlier would increases as central come don’t seeing ex-U.S. large, pharma, customers business, I I segmentation see we’re seeing think we’re say business seeing faster the the development, that I clinical Yes. all time in U.S., and within we’re of the area. differentiation we But, there’s like and biopharma, to you it’s in across small, across will business the But, laboratories, early back over and those in segments. a lines

seeing RFPs frankly, and strength all. We’re across them

Operator

you. Thank

of comes next Our KeyBanc. from question from Donald the line Hooker

now line is Your open.

Donald Hooker

in guys area for played more maybe you your last given And potential -- to cash Can that. there? reserve, I unemployment. I obviously Good in know mitigate as curious, out? collection you the morning. invested was experience how a has think you quarter, well that took that receivable a have issues, lot technologies with Great. How on elaborate I guys

Glenn Eisenberg

It’s Don. Yes. Hi, Glenn.

first times impacted significant and seeing we As financial it disruption we’re and of the quarter, given pandemic established looking our a reserve mentioned, you the where base, coming $XX other client back at million. how

least an experience, increase that and we in was have established time. we the reserves debt at feel are We very bad that this that nothing unexpected, seen adequate going but at our have forward

Donald Hooker

you pricing maybe Okay. there, various question particularly lines the business disruptions, for have early of Super. the just the development? given business, in are seeing then, across And in all me last you Covance any change

Adam Schechter

seeing in general, we’re significant any No, not changes.

Donald Hooker

That helpful. much. so Okay. Thank is you

Operator

Thank you.

Our next from line question Chickering of DB. the Pito comes from

Your now line open. is

Justin Bowers

Hi. for Pito. Bowers the questions. Good Justin on morning. This for is And thanks

be to Just out And to respect math is with plan are quick then, XX we all the do modality. sites? the some XXX,XXX on that roll pooling you going theoretical on But, of your the secondarily, to to a arrive, comments, multiplier primary when capacity. effect, test like molecular -- is say based XXX,XXX we earlier to let’s it the like, sounds just

can us help what the there. of So, And capacity with about you think ramp I’ll kind then, there to is pooling? stop the or

Adam Schechter

primary technical Yes. we our at we of to the piece but going if it’s And Thanks what look Justin. in piece. pooling will PCR will the labs, to an be question, for testing important primary do. continue the piece, is where It to out you not, the my opinion And lot rolling and hold be takes a be analytics to our labs. you all of not a samples. work is you samples pooling the the do need some it. equipment lot from It the of analysis, capabilities specialized of test

all have to sure laboratories, laboratories. in we’ll multiple we population. make we certainly in So, it across it the And but right not patient have then, use

start to patients. going broadly to we’re pool not So, trying just

the to now, for going where go is, to And makes per we parts can theoretical right organizations right right to look the capacity. believe places prevalence What example, I sense. day. tests or and that right do avoid country we would the of We’re the will pooling the be trying for such XXX,XXX

would day, but turnaround, do it XXX,XXX we take and I We know tests times can. a to full you two capacity. to and want X figure don’t not to have we XXX,XXX, maintain at to want two-day by capacity. Because XXX,XXX done try run out in can But, three-day a if you to and one or you

You want to that. be below

best can as ensure So, the do we’re manage going we many to as tests want time as continue turnaround that we we to as but well. can, to we

our it PCR drive will financial but how But capacity the test, which that’s So, that. to me, overall build not it. I pooling based of testing model. theoretical will build the utilization part of, is upon be practical I just a of

Justin Bowers

follow-up. I appreciate And quick it. a just

let’s Business, country to get in of now, not it the And Base a the when and in trying around areas sense severe the the earlier because it’s pandemic? think would just as was some swings, like I April. say magnitudes as Base at of hotspots Business the of look the you trending the is the of how versus terms In where like some

Adam Schechter

Yes.

time, have actually volume as in pretty plus that open base you back June, if year. for the up, seen testing above significantly. increased. base bounced And was we’ve And testing our what it’s to So, begun we had the COVID-XX is, testing at states has our look first the

So, that just back well. pretty gives that you the Business came a sense Base

Justin Bowers

you. Thank Okay.

Operator

Thank you.

line question Citi. comes from the Our of from Ralph next Giacobbe

Your line open. is now

Ralph Giacobbe

Adam, Thanks. flu the and call. talked during mentioned Good morning. the you a times

testing flu are season, do Just there? your for to of both the just you current a whether just again sense and little could of uptick speaking, the backdrop us for to how expecting hoping and it what sense big how And what you flu in a there capabilities plays of bit out, think get you’re an sort you is give is practically then of testing one shot. given

Adam Schechter

can that if Yes. for capacity look to the we circumstance us as And want come that it’s people hope of flu be are Thank flu this been as fast vaccinations. thing flu predictable say been you, years fall to that probably do for that Ralph. one that season, you that look fact do at get what appropriate the we and the much for is, Good you get is to many season. it. it morning. we vaccinations think I able would those this build pandemic, we comes people highest will at has When at the the it’s only can unpredictable. what And as any is as And

Services It’s the Employer businesses helping how flu for the for strain, actually employees. vaccinations their effective are. LabCorp season, going those get are on vaccines Our depend to flu

know, efficacy flu the you there’s vaccine. As a of every year different

strains. more So, think where problematic are out, plays together going today. we all we’ll season see to than the upon the with I based that is COVID-XX under that be how But circumstances, flu

Flu and with going to to multiple somebody back to somebody think it comes flu of they’re still get want combined to a or the probably good COVID-XX. and back it in the false in negative rapid validate are PCR past. test. comes driver is case test. been If positive tests in and get point-of-care But, flu to of symptoms, ailments, us I in office, would continue very to COVID-XX, flu a significant it’s If test respiratory going is be a We feel like PCR positive but COVID-XX? not physician’s things has saw it that, it I for office want revenue know a was developing does including I important they the and the about for flu it

prepared that’s build and flu we’ve capacity to So I we why be the believe under circumstance, can to got everything do every almost much season. as for

Ralph Giacobbe

ex-COVID, number to what’s all want factors? that quick think Beacon. have? the I Is And to And just acuity as ex-PAMA just pricing up a to almost so follow-up. then, we more and just maybe sustainable was the the I X% driven, go base, or think we’re going what are number

Glenn Eisenberg

That’s and right. The Base BeaconLBS. mix the impact PAMA between on the X% was negatively but impacted Business up X.X%,

and revenues. used you’ll notice volume so help we’ve around it define in our the time, change to mix this revenues, get mix the that call to So, price to price Again, X%.

our, you to for past, business. have our the in using you per to will or was the you per as changed And our proxy, a interesting volume, X.X. pricing X.X% in you the if call reduction minus explain have within requisition, mix past this that what We revenue, took we’re trying quarter and get it, was would is change revenue given seen our would in change, if the requisition our always that revenue methodology, good

just first that due volumes is a that’s experienced. really this So in quarter we’ve the decline that change, dramatic and there’s the to been

So will number, within if been around rec would have XX.X%. the the you base

Base stable. the being unit it talk price pricing about relatively is a overall that from always Business, So, within we the

we is well. payer normally could favorable just So normally mix. mix see acquisition-related, in per of the It be as of it some change or where it’s but off session, be driven most potentially test test could mix

Operator

you. Thank

Our Stanley. next question from comes Goldwasser from the Morgan Ricky line of

Your now line open. is

Ricky Goldwasser

Hi. Good morning.

first the one serology. a Just here, couple questions on of

you is Adam, like guidelines serology do vaccine your What think you thoughts. share the So, testing maybe when could available? look can

Adam Schechter

Hey. Good Ricky. morning,

XXX,XXX to that do the say And would very We up still can that serology a significant what a built can really I running. IgA. IgM, to degree. need antibodies. IgG, at There’s get and total antibodies the we do capacity We We science first we’ve job The thing understand in look can good that that and those we’ve I really to is information day. tests mean. done think a

an cells need If virus want science time, So, and understand would antibodies, to response? it. what for have as T any start mean. will if how and have that over before So, minimum, wane out that the we you we would I a have there’s to needs are had they immune, you But you’re last? you’re your know again, to to exposed that If immune if kick immune? you at definitive more in I say be COVID-XX answer if you to past, does long to I beat give they because I I can want know the to there a in that still antibodies,

So, convalescence the if an can blood think going from treatment, the plasma collecting and plasma, in we that that, you’re want many as have a works to that in as people possible. antibodies, I two, I past that, to start have I so plasma to beat that and I you get plasma as would Number COVID-XX as know had antibodies it. about if people know the

have. going test have anybodies say going Ultimately, be think anybody I a testing as that. be I would a level qualitative as need of important. quantitative you to antibody well And for to important test. think testing is And think to quantitative anybody that’s going I antibody that you’re what we

immune on day, more give antibodies, we the but cells of So, the to the more research T and the still definitive answers. at understanding need science of and we’re responses, on forefront at end us other science

Ricky Goldwasser

PCR on mean, practical I below but the XXX,XXX is utilization your that. have point, we Okay. And capacity you side. then, to said,

when days be? demand to that achieve you need does capacity to think ideal levels, to So, two one about current where turnaround,

Adam Schechter

Yes.

we answer building have you that’s as you as reagents. that’s going into capacity the no buying constraints as is And that, I why go the So, a be. fall, buying can. and question. what much on the to are know And machines we Ricky, don’t I big fast as because can’t tell demand we to

at are then get regard just the who half With what we terrific to working a have three-day for build than today good we our with been would needed. said, hospitalized about day, if suppliers whatever right two already day we we to to fall already, and have it need. We’re a more capacity with work now, And turnaround. through as to at else, we’re we XXX,XXX, where we and for -- patients, we’re And everybody a a we’re turnaround. at speak day be

to got well is build terms as the can. what So, in we’re we until build to doing volume keep be and turnaround. But fall. the build won’t we building And and really we of don’t we rest as in going know we’ve because much

Ricky Goldwasser

When the And are the about volumes, just rest COVID follow-up. volumes of one percent side? versus hospitals you the what on think the

Adam Schechter

smaller. Yes. The will hospital is small it over volume and time get

use will hospitals think there we much in those tests as hospital cartridges try that more the the it’s tests as I to point-of-care do which available as As point-of-care some our tests is more TSAs, we as are labs point-of-care possible, for available, manage. so

critical. So now, hospital for great point-of-care inpatients Right turnaround. is we me, have

even a but an and even fast hospital was as we as for doing We’re I that can want faster. them, if I can I running answer get it faster,

So, future. smaller towards as percent the a go it’ll be we

Ricky Goldwasser

Thank you.

Operator

Thank you.

Bruin de line America. Our Derik of Bank next of the from question from comes

is now open. line Your

Derik de Bruin

Hi. morning. Good

a lab. So, of on couple I’ve got the questions

from And Is of that next basically on competitor that that a hearing slowdown they’re molecular scenario way something could at possible? put payers capacity? as even remotely I’m what a that’s a some out your potentially testing. guidance implied fourth that terms then, commentary of increasing have finally, quarter that in So, how generation wondering just you consider? sequencing you you’re thoughts of reimbursing? end Is of on then sort commercial you. their And the something looked low in your happening. Thank

Adam Schechter

the Will as if that So, testing. what It’s we do. provided back the need way, remain are COVID-XX that there’s Right with aren’t year. still the can. into we half as to unknowns Base because as well. build us going has as And And Business possibly just significant we in Business. many why now, testing there many would can It’s reason to we’re quickly COVID-XX vaccine it particularly the have come very that guidance say with I that also to know. another second go believe unknowns of Base to capacity so PCR not the have the they’re we fall? we is a I the going until hard do that’s impact as is

some type I of know that of throughout see or scenario, there’s a So, except don’t technology say today us lot I don’t don’t year. need of if that testing that a a would vaccine going impact PCR we this would

is a In it next will scientific think I can other versus price kind commercial and of a very would because PCR third, reasonable quick they for tests, accurate I a to it test which terms look are we’re real going reason do your there’s of And cost, absolutely, and to an sequencing, look get the generation do unless payers that at question, testing. point be cost at what everything. otherwise. if what put turnaround second to how going The leads accurate to that question versus at

yes, at looked we’ve I available. talked tell said, they I one, scientists scientists them, every it. send you, our what about can are we’ve I already see one, looking or I to at to it So, read already our Every time technology and

and to going we’re to so we of do Adaptive we we today, are If it’s and as capacity. to part done that’s I something already sense, on why so the PCR look sit that PacBio So go we’ve to trying forth. testing we’ll like critical. makes and science forefront be fall and to of it But, think be just can at I And things here build is technology be going into a focused as we’re everything with it, the at here. going like

Operator

you. Thank

line Our next Blair. from the William from Lawler question Dan comes of

open. is line Your now

Dan Lawler

or ask wanted a how share This back-to-school have return-to-work Thanks I Thanks. been COVID demand might of Hi. for the on and for is be platform. meaningful about Pixel sense taking question. Good your tests my through from the Matt Can Pixel what morning. tests Larew. the you Dan us COVID then to Lawler give self-collection a perspective? platform for for

Adam Schechter

Yes.

and to the And So, that I an do less for that. we use to Pixel believe to volume go but not get we But, collection have we see we mailings we do testing. to for for kits collection Pixel, volume, people our important. like also many will both, that that will increasing. employers. at-home than significant, outside it’s Pixel back school be as back more things have of It more important at-home PCR continues have XX% one the offerings of part other is meaning of than not people why or become And kits Pixel and work, that’s a

more there’ll future. a the become important of piece mix. a will it believe our do lot into them Even I moving go though So, we’re of as today, be more we

Dan Lawler

Thanks. Great.

Adam Schechter

You’re welcome.

Okay.

Operator

Thank you.

Adam Schechter

Yes.

The to strengthen stay been and has urgency fight move continue scientific importance are ability lives we of will do important clear. the ability the more against we our at the So, only in it COVID-XX. and to demands improve never that And and of health close, forefront improve we what as we to the future. advances our into our unwavering. support And mission

safe. crisis, good for day. Have employees, Stay and the to I plasma. customers, donate mask this want all we’re So, their and Wear everyone our as including suppliers, navigate thank in support together. a we our your especially

Operator

concludes Ladies participating. call. and today’s gentlemen, Thanks for this conference

may now disconnect. You

Laboratory Corporation of America (LH) 28 Jul 202020 Q2 Earnings call transcript