LH - Earnings call transcript Q3 2021 | Laboratory Corporation of America Holdings

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Operator

Good day. And welcome to Labcorp's Q3 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. to Relations. call like Cook, to now Investor VP, would turn over the Chas I begin. Please

Chas Cook

you, Thank morning conference Good operator. call. quarter Labcorp's XXXX third and welcome to

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

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

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

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

over I'll to the turn call Adam. Now

Adam Schechter

we've we serve a Labcorp, to we Thank of you, our trusted world. as We health and information around results. At helps on the billion, strategy innovation, Thanks Revenue medical the and technology was health strong free through and us flow as guide world time, that Chas. focused joining remained $X.XX, leverage to care same In the million. to improve customers continue helping reached lives work advance improve pandemic. we cash the science morning, and totaled $X.X $XXX third everyone. quarter, today. EPS for health adjusted accelerate Good delivered decisions. At source the

across broad The prior for year-over-year and increasing for XX% a Drug businesses. for to XX In outlook, than net we're full versus geographic decentralized minutes. year quarter. As saw in The detail portfolio. book-to-bill and demonstrated Drug continues few and also EPS Development testing month recover recovery the Business improved XX% recovery for and cover experienced our free Development testing nearly more Business respectively. a by in growth strong year. guidance strong sites well will open. our trials solid now revenue, saw our business Development routine Drug more of Diagnostics result remains with of with growth, performed flow. across cash in our both performance we and Glenn XX% consistent both adjusted those Base and The raising We Esoteric X.XX. Base trailing Diagnostics, XX% at

time. day in second development testing declining per our fight XXX,XXX greater-than-anticipated ongoing from one September, in days, capabilities. remains volumes average period way the that quarter, against an in response. to Time volume continues test in COVID our tests the role XX,XXX like averaged support and to pandemic up below the in were XX,XXX quarter. same with diagnostic turn averaged volumes the our available to testing both results of through last results pandemic per I'd with although COVID possible experienced to day. one levels typically day Labcorp day within Now for to two PCR week-over-week We per We since quarter, every year. the the in the drug

break We Base and forecast. out from will continue to COVID Business it testing to revenue remains volume difficult as

capacity scenarios. to prepared We to for maintain will potential future levels high be also continue

had innovations to Use received a collection quarter new market. clinical available way flu-at-home and successful adults over the upfront for COVID viruses. us, and kit. offering for flu who Emergency of no also Notably, We bringing guidelines. recently and convenient both With upon a new another offers test season ages and those for two combined for we Authorization to This children will meet cost be kit

to its of that I, at-risk to treatment COVID start their capabilities clinical mild a strategy, extend oral long-acting III portfolio statistically of in addition, now our supported COVID I'll antibody and II with significant death the mild moderate is treatment or its Phase in earlier medicine we COVID, pan-cancer new OmniSeq treatment this the treatments. the through we for in going Merck in new FDA Authorization symptomatic on solutions In trial, in combination. prevention In leading and discuss integration collaborated filed oncology. moderate adults, as the and preventing with area. both diagnostic development COVID benefit a antibody in and antiviral promising trials. I'll The trial investigational investigational Phase demonstrated Emergency Phase on COVID AstraZeneca of for milestones this reducing of month, with progress our planned, Use and outpatients Also severe combination for

only Additionally, test we launched for residual clonoSEQ, the blood monitoring first cancer. FDA-cleared and

we address disparities. Community began issues, efforts the health we impacts our and sequencing cancer specialty oncology partnered our to Network As to Pillar also social work recently part Biosciences enhance equity next-generation assay. to of with - plan recently economic Oncology a equity Research offer assess and with Clinical care healthy And to of

as health our our position a of our diagnostic, commitment intensifying and family platform expertise business. genetic through to trusted a parenting technology by Health, During and leading for focus source customer deep pregnancy in specialty throughout we go-to and for Ovia women's Health millions quarter, advanced embedding acquired testing. We the and our Ovia women our planning, data support. extends digital insights

incorporate enhance Additionally, to a technology care. directly with lab lastly, the and opportunities we safety Home several with net a patients. comprehensive Labcorp collaboration to vaccine the with partnered also Medical Medicaid are of high-growth of and low-income into records improve with Network begin using which are And deploying lab delivers results individuals for testing health clinical offers. Diagnostic to biomarkers point potential to we trialing through organizations We drug, insights with to digital clinical device remains working utilizing focus. trials Assistant, families. Pursuing and results our long-term, decentralized Medidata, We're

and growth markets. We're Vectra our progress position joined key OmniSeq, including we acquisitions, rheumatoid Ovia on recent in advance Our team Myriad's test Health integrations, new and making who our Labcorp. members arthritis for welcome

remains M&A Our robust. pipeline

for of fourth the of first into We XXXX. expect on continued front quarter quarter the activity balance and this

Importantly, Labcorp be for significant continues to recognized do. we the work

the XXXX. Just Forbes were employers as one of this world's in best named by we month,

In addition, possible Research Pharma of diverse Informa to the and a Year. talented workforce, finalist our our Contract at Labcorp recognitions is as Intelligence are which for innovate. selected only to Best the thanks Organization These of ability core

shareholder fight ensuring brief the while ongoing while allocation Lastly, and We third and you Drug update committed capital on unlock our will COVID, Labcorp the the against to best to conclusions quarter support structure previously and Development is Base a I'd remain of our mission. on to company's by quarter provide of Board our the on strategy expect had significant value summarize, the take progress strategy. for in positioned you both With with customers through like and is Diagnostics assessment our strong our management I'm capital continued details delivering remain And To our team's and We assessing as we've for and and out shared, quarter. third Glenn to carrying closely Working this success. Business allocation and on come our we to made made to that they've structure. the our that, all in patients update both offering we ahead. dedicated a lies expect. results. well-positioned have what excited advisers, progress

Glenn Eisenberg

by third increase acquisitions organic revenue was the of in quarter favorable X.X% foreign an on X.X% my driven business revenue. of last a discussion in of results, Revenue $XXX partially due is year followed X.X% for was and organic testing. review XX.X% our quarter X.X% of Thank to billion, X.X%, of income and translation growth currency you, for increase guidance. increase going Operating with full a The comments quarter each points. start update Adam. in an of a million offset with XX.X% over decrease basis of to year I'm organic a conclude COVID by Base XX in or by $X.X our our the segment performance company's the

special and of the we and million $XX During of charges amortization million quarter, $XX restructuring had items.

earnings. items, the to the $XXX operating XX.X% Partially adjusted of to headwinds tight quarter due The and as margin reduction from for organic LaunchPad Base was growth a or invest demand compared billion in primarily tax market to $X.X restructuring geographic income Excluding to adjusted to personnel lower Base increased well continues the million savings. was company and was charges, rate the XX.X% higher rate, items year. in Business Business these compared excluding as XX.X% offsetting in special due operating was was income its amortization, year. costs a of in mix last adjusted tax The or the testing The these adjusted last XX.X% and XX.X%. revenue workforce. COVID and The resulting were decrease from quarter labor benefit as rate

expect ago. totaled quarter million in cash year. was flow down quarter be million lower last charges million per $XXX last tax EPS, which quarter, in Capital the X.X% X% the to our earnings or or million to to were year from in diluted $X.XX of partially or items, million a compared by compared continue were XX%. working capital. operating the special full earnings restructuring of $XXX to amortization, $XXX rate due exclude $X.XX favorable adjusted Operating Adjusted Net decrease The revenue flow $XXX year. share. and revenue $XX We expenditures to for cash cash year approximately $X.XX was offset

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

we million of During and million our invested on the share for used repurchase acquisitions. $XXX $XXX flow quarter, cash program our

compound due and translation X.X%, beginning to basis due our performance, revenue for from a I'll of Base reduction decreased volume X.X% year Diagnostics. organic in X.X%. rate The X.X% to annual a X.X% was growth. partially third decrease over of the points. favorable to a X.X% Business. with revenue The currency offset to by billion, partially of and testing by organic organic was decrease growth year being in increase volume X.X% X.X% $X.X X.X%, foreign primarily compared COVID last partially contributed due in Business. revenue Business in quarter segment a to of quarter Relative by down COVID testing, X.X% Revenue offset increased Base decrease XX volume offset was in XXXX, organic Now due as the review organic the decrease the for X.X% the last to acquisition was volume a acquisitions by Base Total increase

or due we of Base mix the higher Business partially and mix, costs reduction acquisitions was of volume million of X.X% year. hospital price billion income $X growth savings. added year testing to which management session. revenue a on to offset testing LaunchPad include last compared and Base Relative partially offset to organic operating slightly lower impact volume quarter to approximately have and As our Business by versus to remains for which coming adjusted to X.X% do year. million an COVID growth by lab from of was due deliver $XXX approximately its growth. of margin in XXXX, Base decrease compared Price the X Business LaunchPad track savings operating currency from was test Base due XX.X% and quarter coming with last of to of volume, last and by X.X% Business would margins X.X% The Diagnostics organic reminder, income year, X.X% or primarily decreased Diagnostics revenue down adjusted of primarily year Diagnostics not increase from due in XX.X% per COVID was agreements X.X% net Business in a to personnel this our the Base end third organic initiative negative to X.X%. PAMA. were $XXX X% the

of of income quarter primarily annual or and income lower savings adjusted was COVID for revenue the Base testing. LaunchPad operating quarter growth was for to the driven review XX.X% I'll compared XXXX, Now growth higher of Revenue billion, last increase organic COVID performed of across in was testing growth. decline vaccine third Base the Drug of XXX revenue of acquisitions primarily by divestitures or due an X.X% performance basis the for costs. COVID translation of to The rate was Business segment by offset $XXX lower of Development. was Drug to Business operating of points. Development's organic favorable adjusted increase growth COVID to Business and work. currency XX.X%, year and organic compound Base by growth XX.X% was last The compared foreign $X.X the testing offset to year. lower from margin Relative partially its million and and XX.X% personnel Base broad-based all $XXX businesses, operating through partially therapeutic in X.X% Adjusted benefited central This including lab Business business million due XX.X% X.X%. to due

COVID compared to Excluding year. been the have impact would up margins from testing, last operating

For enterprise related million bonus, in is of Drug earnings its peers, unallocated of the to included which to comparability $XX exclude Development corporate component expense. expense

We full were which over up to year expect margins XXXX. up over XXXX, be

billion remained For and strong respectively. at $X.X the net months, trailing and net XX X.XX, orders book-to-bill

book-to-bill. million XX.X% were the During negatively which compared of was year. increase change, impacted significant the a last billion, by end $XX.X due quarter, to approximately scope an of to at $XXX quarter the the decreased orders Backlog

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

year. September effective guidance, XXXX, remainder discuss foreign the the year our assumes as full I'll of of exchange Now XXXX for which rates XX,

our remainder to reflect the raising company's guidance full the improved the quarter and year. year outlook of performance third are for strong We

is from of the the while to grow will XX currency XX.X%, be Business to We guidance includes grow XX% to that points. to benefit COVID expect foreign down range of X%. expectation enterprise basis guidance prior to revenue to XX% down expected from also testing includes XX.X% translation This X.X% XX% This Base X%. the

for expectation that by XX% X% COVID to be Base our minus XX.X% expectations growth guidance We to guidance revenue from will XX% raising Diagnostics X%. also expected grow in This the to Drug to expectations XX%, XX% down are to grow of in X%. for of to plus testing raising prior includes X% prior while down to from our revenue to to the range We're revenue XX% Development XX%. is guidance Business XX.X%

range basis the foreign Business includes to includes Base XXX benefit grow expectation guidance that currency the of current Our from XX.X% will the translation XX.X%. points. guidance This also

$XX Given $XX.X cash our to of to the of $X.X billion from billion between expected are improved billion, top up be to $X.XX line guidance now growth expectations, flow we $X.XX $XX, prior raising $XX. Free adjusted prior EPS up billion. guidance to is guidance $X.XX to to from

on summary, guidance performance. a Business. Relations in performing response our purposes, comparison the view In also also results deck additional focused to we've results. website had XXXX the third company a while pandemic, of role remain our included of growing the Investor full in quarter and year Base For strong supplemental We global quarter to on another XXXX compared critical

We to the remainder growth are our profitable in while continued year. COVID through expected volumes expect to testing Business, drive the decline of Base

We our programs. will that expect capital while our questions. continue generation shareholders for flow now to share cash our through organic free we repurchase also supplement to acquisitions take returning use Operator, to growth

Operator

Mizuho. with from [Operator Hynes Instructions] Ann question first comes Our

open. is line Your

Ann Hynes

Hi, good morning.

Adam Schechter

Good morning, Ann.

Ann Hynes

any provide into So some we not and address pressures year? we're for providing Thanks. should guidance, context, in you modelling? business but high-level inflation I And headwinds that each consider XXXX tailwinds could that labor know you're next on maybe thoughts maybe while going

Adam Schechter

as XXXX, this think again, I things seen XXXX. are as but you've providing kind Sure. that can I you for that said, at think guidance Good Ann, you start there look XXXX, of not, quarter we're morning. to about

in is all, where were couple the rebounding Drug September. even weeks if of Diagnostics And for both rebounded Business you we the October, Base for first from look First Development even well. of of and that

So we at I'm we've for with that One same that higher have could kept headcount at the to to whatever scenario COVID. we Business to time, comes typically by level we're the the our we did to we said glad occur Base is actually before, several would than would ensure prepared that it way, cost. that. when we're At we a And things continue improve. expect looking is

tests came have had you tests when day XXX,XXX tests. turnaround gone was that. averaged of back If going We there majority where And then reason in still time month tests, because would reduce or second we we didn't to so should to do one say September, the headcount for per saw of a the the to we the quarter XX,XXX PCR good we down. day

rebound. seeing to hard train, the materials through in impacts the what it's from people-related we So that's based for the of think upon labor will but keep business costs of a And open, said keep labor any we're Development. XX% number seeing back. costs, I Drug Development to Separate continuing and to I to are different chain and same any thing. our because people now Diagnostics come but ensure and to tight and people that, to means going retain, scenario. market. headcount sites that these open. and are we're a not hard continue we our that than continues supply are both We're seeing. don't are certain prepared that are for of Drug to bit we're also very that higher peers they're constraints Everybody believe seeing still XX% distinct sites is

we're and So to to look we're to operational continuity, reduce maintaining continue ways on going our focused expenses. for

increased to we wherever efficiencies and but expenses, and we're us labor it to going take costs takes material to find reduce costs offset to costs, - can time quickly, find to the continue Now things. those ways, if very the out increased you

have I we're out we the to and XXXX guidance that would with be believe like guidance, opportunities factor, you break happens then and as then also of are of pipeline the the we can do COVID about to when our working the COVID we that to biggest a I'm a the for testing we would possibilities, going COVID we say again, the this next so continuing I think excited Base year. significant And and what continue we what also give M&A, year we is range going pipeline And M&A appropriate. do give on Business. we'll of that are thing repos did capital into and and allocation to is - provide where range we testing. very for doing we have, go we'll last you share

that context year. hopefully, kind thinking of So we're gives how of you some about next

I the think we we as into good have that go year. momentum

Ann Hynes

Thanks. great. Okay,

Adam Schechter

Sure.

Operator

question next Jack Our from with Meehan comes Research. Nephron

line is Your open.

Jack Meehan

Thank morning, you. Good guys.

Adam Schechter

Jack. morning, Good

Jack Meehan

procedural on way better the you're going businesses or one find of peers you're And your I now, disclosing form where another, get one to On the then be months of just evaluated? strategic this items the you'll to the which type of way for to you're business point. confidence the there and humor going conclude value what's quarter. this to And Any if to level trade? around nine results? choose to structure expect are comment think, related at that review, Are a your into what for me, significant being the credit review versus point still able

Adam Schechter

Yeah.

And appreciate Jack. question, context. So I give the some you let me additional

that. as to we Board So first that's Directors with to we're And our advisers, evaluate our and that to yet value is know. with working there in of our Labcorp structure want several that also I we And all, have start saying them. closely and believe intrinsic you off believe allocation of realized, capital working outside be we of we're by

can are the updates and We it very significant the in find alternatives, we giving that not I complete, and a assess the a expect are fully And position very of once all analysis. the we're assess on lap of all quarter. any is ensure looking the tell to conclusions best we to additional to forward still to Jack, we thorough today, progress review making and we takes just time a thoughtful are Though to that [ph] we Labcorp share continue shareholder you, happen performing way value. to alternatives. this

I communicate on we'll haven't it then We direct to a - want the basis. very conclusions, figure and exactly we reach broad, out how

the about communicate reach we'll broadly we to think as then how our So best decisions. conclusions,

Jack Meehan

Great. Then one the quarter. on the in business

XX-month would bookings wanted talk math but Just good, awards to year-over-year. were in trailing my about metrics the The Drug Development. quarterly suggest back-of-the-envelope down look

win curious out, just feeling flow Anything negative? you're about would would look you and call quarter year-over-year rates. which in RFP how make the the So comparison

Adam Schechter

context. and then I'll give to provide additional ask I'll you Yeah. Glenn context, some

a single we So X.X it said to and single gets still we've or high book-to-bill, strong have a - growth. X.XX, was always you digit mid above that high

understanding I've a I you could is and So lumpy. better with it much too months it think, anything time time again, said over trailing above gives a one look very And at because be strong X.X, into we the And a read book-to-bill, time. wouldn't book-to-bill. quarter. I XX

fall So this and out quarter one into a you in could next year. different year versus fall quarter

look which we very I continue very strong, conclusions RFPs. and So through carefully, try to RFPs, another. the go the to to quarterly, as the What many I do but wouldn't quarter be is well we from one draw at too obviously, we versus continue watch

at So were if year-over-year. backlog, That look they quarter, XX% and was trailing million at you by $XXX second look if net billion. it $X.X year-over-year. the was up XX the They up month billion. you orders, And $XX.X the over in XX% that increased were

above of think strength about talk know, there don't want there's is the I trailing want I you think that to quarter some month the on can focus be. fluctuations. and if Glenn, But XX you So X.X you where again, see. still I I to

Glenn Eisenberg

negatively And we that talked scope change this impacted in the Jack, quarter. that remarks, we in our obviously Yes. million had that about $XXX was

it point, of out, the XX have backlog, strong months, said, gets still perspective levels you rounded So you of orders. will. when levels we To if put as including of kind of XX% the strong your our year-on-year, have it for X%. We quarter, trailing in Adam the have down slightly, around on change been up been around XX orders a while would the trailing would down scope

is ago. the order However, we quarter what's that interesting in year the received actually a third of

has a really effect. it double of kind So

it If change XX% that year now of third excluding it, out have actually quarter it the this, take of orders, around would third out and we received you back you the been from the the up in quarter, of it would for the quarter.

still why get reinforces, sense our trailing frankly, focus it with the of even on you So from volatility, because perspective, future and XX we of growth the business. really true the a the really potential the

Jack Meehan

That you. will sense. make Thank

Operator

Kevin UBS. Caliendo Our from next question comes with

Your line is open.

Kevin Caliendo

And the about for my bit pipeline. want a taking M&A talk thanks I call. to Thanks. little

diagnostics, looks or now - excited on sort about market we it. focus we the ago? more than the technologies talking you opportunities or talking it how in are about diagnostics Take be a are And what focused it like about are the we Can lie. clinical? ago obviously in different pipeline year of share? color You two side Are years and more any more me through what on was where might

Adam Schechter

Good Kevin. Yeah. morning. Sure,

sometimes a know we those, year. the of hospital, ability we return see good pipeline. typically. of I'm They have very news pipeline all, platform very we about quickly, we're the a done we health. how first a can you do can decentralized we into women's continue have regional look to see really acquisitions, like regard and share laboratories, potential the that we've with kind that. we us like where that market and like local, lot SnapIOT I of digital areas we longer technology and need have in we and look of for said, it we year where would those that Ovia, to those to that important something be doing acquisitions. and is to were enhances also more gives high interesting of capital it's that strong we're but in And our next accretive sense. through in going and I this strong a makes that a to where trials things capabilities significant and some year, go those going remain take cost we First in before, in drug growth have. capabilities as types that as things their confident digitalization, Then I've acquire strategic They're it's very before, but mentioned that then to excited, XX% And the technology that that said or we're to more higher And at in the expect, very for integrate strategic GlobalCare, clinical than development. capabilities continue you year-over-year,

got multiple things looking both So drug for development, acquisition we've kind buckets. different it separate I diagnostics of that we're each those three into The strategic opportunities for and of at diagnostic areas. laboratory opportunities, in then and the

Kevin Caliendo

are changed the buy, in materially or of seller's your Is from in the diagnostics, algorithm? tougher anything - their are hospital environment perspective, the Has aggressive? anything like? terms you the acquisitions more Has and around changed being the sell opinion, they

Adam Schechter

Yeah.

had look their surgical tough. do environments that day, better were they towards And of what suite might COVID, their they be probably laboratory not it running something lot would do if a their or their laboratory think in They another do think if I a realized like every machinery had with and capital. put equipment. they've operating they they using at money that to they core the their to realized versus updating to take update that I also they a do are want to in had how COVID order hospital. they to testing

have that the margins local and we is as often can well the and running laboratories, through for order the and diagnostics the to type take have that So that that extraordinarily to right more output of run have systems to equipment; best machinery, machinery them. with you in I hospitals get and we do it more does and think discussions capital, realization hospital

having a us of than more what I seen past. all things I've in So to X robust led think pipeline now those the have

Kevin Caliendo

any both pipeline Is or - can to quick last those you M&A Is follow-up your of they separately? that. versa? there Meaning, the strategic vice way run impact intertwined? there one just review that on any Or are any has

Adam Schechter

Yeah.

our you at doing continuing do marketplace we're hopefully, very execute we and sure forward, doing review. And strategy we're continuing we for Diagnostics Ovia, in we're Development. and of way the both our strategic execute that the bought and we the same business to OmniSeq. making to executing you getting it's review. we today, that, to move as us progress course, thoughtful We're from both as M&A our run And numbers when arthritis with what not showed But extraordinarily successful, Drug we're to consider making need but thorough of So a and at on in Myriad what we on do what drug, the is rheumatoid the time, see strategic in today. look well we're be

Kevin Caliendo

Okay, thanks so much.\

Operator

Our Morgan comes Ricky Stanley. next Goldwasser question from with

is open. line Your

Ricky Goldwasser

Yeah, hi. morning. Good

this COVID could you next to to to year should year? be - Adam, swing long-term this goals? Is can I next point strategic targets there the what's earnings for you and of about some think unveiling I we year. think about impact sort us what's know be the -- provided haven't for right kind how clearly, if exclude for the Will the then give review? time factor, year? of is part next of your the also biggest earning maybe So for COVID start sort growth us, going base you of be of baseline to easiest we also, strategic going think long-term now. right But the And

Adam Schechter

you, morning. Ricky. Thank Good Yeah.

think to I at look been what baseline, growth I XXXX I pre-pandemic. about XXXX grow careful was would Business as we kind how different. how have XXXX if normalized. very everything the into all, COVID to Business be And that's and testing Base the then of recovering, the versus tend first look go at of comparing future. So because was I'd Base as the was just the move And or

less COVID than Business testing August. we in It significantly September. we an as the slightly Base saw example, impact grow in saw on was For September,

in to the October. seen Business COVID the Base we less where Now of We've tested now it see flat nearly first couple weeks for of XXXX. was

So using careful next options then we for perspective and of to as regard thoughtful at we get year. at and from where XXXX with discussing things. you communicate we through use baseline how those well to looking we're figure with should I'd guidance, go I be normalized structure all we're long-term a that. the have And the kind strategic to look everything XXXX, out and capital allocation review, as we as as say as XXXX, really

on we conclusion it. can reached of we are you, So I Ricky, considering a that, haven't but tell all

Ricky Goldwasser

the between that Okay. of about you one And then XXXX, just when on almost follow-up, the year sort are What sort XXXX full is rate XXXX. I that different Business the And regions? is just variability Base we basis? think mentioned exit versus or think flat the a geographic of the run

Glenn Eisenberg

Yes. Ricky, Glenn. it's

at rate 'XX. it you businesses' kind As or are we've both it can seen to the compared historical end at revenues a full look of can year, even use for the currently, of as high line top levels run you so

business, it the we're effectively, to really because that price/mix the a to doing same minus our levels feel I we What's question through performance. current been bit of relatively interesting to think we're revenues growth unique, is 'XX, keeping level our at good plus of have levels volume or 'XX. your about within and Diagnostics compared the So and flat little but

tick kind we Adam's So tests different. and to driven mix, been have to how businesses in session decline, expect 'XX levels, corresponding up or it, is both visits. tests per levels as been we pre-pandemic forward, will, you above but to little as has that by tracking getting can price you have mix overall, go people had given we see continue to normal obviously, which would to comment, a look a obviously, go But volume fewer are of than of the there higher argue, albeit, we're bit if well

Ricky Goldwasser

you. Thank

Operator

Bank. Deutsche with Bowers Justin from comes question next Our

Your is open. line

Justin Bowers

backlog everyone. you just morning, or kind orders for an mix of Drug of Development? give Can vaccine-related the Good us update Hi. on or COVID

Adam Schechter

morning, Good Justin. Sure.

is of that they thing trials on and think get And market significant book-to-bill lot as those discussed and because first third we a were COVID. the we fourth say and last of I'd can year, XX% we had those they last amount, therapeutics happened to The between important the to year, and of results that's studies everybody of as a get you enroll because quarter in trials, quickly about the the vaccines very so could as was fast working that fast. the XX%, as

would. you So burning than typically you're those studies through faster

is have that much the less If X%, frankly, are, total where backlog. the currently COVID now. look of we less the for It's at mix than right we you

before. So it it's was significantly less than

work. just them. COVID third year still significant to start had to you are comparisons, you But some again, future think and of in fourth studies doing as last quarter about We have remember,

Justin Bowers

in terms trials order can can some just Maybe or DCTs, percentage new Got subjects any you bookings of of that? it. DCT way just of kind for frame have help -- component? then you us the what or of kind And of magnitude

Adam Schechter

mentioned about greater I seen. the than XX% that's of the look have look I'd DCT trials a current the and the you we of year that was at quarter, less if it's do, new if type that say awards of sure. it's that at trials third Yes, increase type still significantly But component, more than have we've have XX% total component. you it than been that ago. total of that would some a

of believe up. are the or acquisitions to forward, knew we obviously get and like and ahead the We to capabilities that we GlobalCare that's just going move end to those why important. last year, going more where having shows the were it And that skills So market important. be was able were SnapIOT, market as so we made

Justin Bowers

much. so Thanks it. Got

Adam Schechter

you. Thank

Operator

with comes next Tycho JPMorgan. Our question from Peterson

Your is line open.

Q –Unidentified Analyst

Tycho. Casey is to just on volume. going COVID This guys. back Hi, for Maybe

peaking to So framework the then was at kind rates. term at any guide Thanks. we end baseline seeing maybe is step-down use you XXX,XXX high assumed sort for given currently? quarter infection what of then day, near And the are the give XQ? understand per XQ's XX,XXX in you're you XXXX and exited can your you our And low and that where then of models? for of the average an idea here Just mid-September. of us want Can what end

Adam Schechter

And you give a little to just bit history. sure. Yeah, additional

third in second XX,XXX the But the if we of at averaged were the through October, per day. in at first XXX,XXX quarter, you September. look down. to the quarter, see we we month we just in averaging So couple day. we look of averaged September, of per went of that XX,XXX actually you And was number But September, going going tests we if COVID saw that as weeks continue the down. And number it

XX,XXX I are quarter to somewhere will you and think range If XX,XXX look within. we pretty and the as between good we at and that's we of work per fourth look kind a at be currently, our for day guidance, it think you where

Q –Unidentified Analyst

then And just more you. on Got costs. one inflation

savings? about week inflationary competitor customers costs talked largest Or via have pressures some you same? through doing of through it the its to of cost Your potentially more last passing sort guys potentially those on Do managing you pricing. about any comments is

Adam Schechter

Yeah.

I've more increases. for there we be areas other may XX to And take quality cost enable reduction and you need, to have cost. that I look that you years, retain that. health to initiatives hard at it's course, to to are you those something that your think able cost very In you that health continually your But in involved to believe the case, have continue our you in an do base of where you also it certain we'll have base find continually case. opportunities. price have, care, but out just that So should organization, pass have work on think it opportunities, I the to, would and that efficiently. business don't put base, to continue you on has your I In people care been to as you that's pressure within ways can be if do how And we

our So to really to as we're find cost going go continue ways reduce to forward, base. we

Operator

Ralph question Our with from comes Citi. next Giacobbe

Your line is open.

Ralph Giacobbe

to I morning. to good question, back that just Thanks, Adam. go last want

COVID purposely You sort any that, XX,XXX talk there guys think about imagine -- than a XXXX baseline testing? But lower about mentioned would you still the day. a be doing the still are guys and year, maybe of we're XXXX. on I'd of You sort or answered this for didn't lows are of year sort at-least floor second the And that floor that then about you figure think care care sure you about a more first offerings. you about some of lot if And sort as more virtual COVID talking have but I'm just per baseline PHE? and day? the not and or next broadly, companies then primary for of -- what question managed reimbursement is

tele developed, us of of you? sort that that impacts give how think health your And providers. As Thanks. of relationship just you a with sense do some the

Adam Schechter

Good sure, Ralph. Yeah, morning.

first. So I'll question start with the second

we most a have be with records. we with vast they the with majority where technologically, tele of their health them We in directly us medical fact, working electronic of them. relationship And great through the have can providers. And work

I to think there to that order they get Will the believe if I see day per also give season between vaccines? XX,XXX and and high And to it's of to get have because if to get where ensure as at continue in sense. we'll telemedicine, antibody in end that potential. do. can. look COVID, this kit, year to have testing flu an With booster can not physicians testing, that and through year, XX,XXX I It those, we provide get year. we probably smoothly. both We you a testing. comes this if appropriate of a with COVID come and tests see you'll that more know testing for see COVID variant season, have they to we at-home work a flu current prescribe test focused have work but I want want So we diagnostic is we things. telemedicine. down And I that not people our those a good. can embrace team Because guidance next the want want will they're how is this regard Will get range, future? that to will when to relationships numbers good We we the gave up, next is couple be people it to and of if also diagnostic So quickly different year somebody work and for more become through important need where and a really Will they a be or to the also don't as flu sure makes another going want we time as they to as answer collection should is I get And turnaround see to ensuring health manageable care out. plays it you have on that it a vaccines? and us range and the think to year. very

So plays let's out. year how see this

the give And with happens what for next you flu an season. then we guidance appropriate range. we'll see year, when Let's give

Glenn Eisenberg

our in we experienced the two went think to guess, year be. I one the about other too, reimbursement that we when Ralph, to just we had you through, we this I variables. then and going the as demand thing, really and would add, volatility kind that kind obviously, It's public the pricing was emergency is the to expand, health kept to held the out. even see And changing of the of what as going continuing be was what guidance

can. Adam So tighten testing as as the range, we feel with as especially said, a as you if that we we best range fourth quarter, will, we the of have

hold. a Here's we with that range think pricing an happen but will that will assumption

As again, wait is, our to starting out the the the we volume going so impact you and to and Business but see you and range we'll can see from again, time, go we'll assume And 'XX, to see it's you're think fairly with think the fair you both at wide again, to I give COVID Base guess testing which we'll year because back point continue to it, and uncertainty that to a both. about pricing. that out Adam's update earlier, break of regard separate best

Ralph Giacobbe

Thanks very much. it. got Okay,

Operator

Brian comes from next question Jefferies. with Our Tanquilut

open. is line Your

Brian Tanquilut

maybe the 'XX, point going right? price longer-term morning, obviously But drivers to made normalized being up, in to COVID Glenn, key I on I And post this, view noisy that req? guess, your post is at way here, on on XXXX think one the the guys. follow I mix background. as Is earlier look the revenue, Hey. of the think as So guess, Good to and that about broader the because revenue per it's want trends the then just good given guidance about about to a think at you be showing basis, on Business. X.XX% of XXXX? to base, Base what's your you're right I versus utilization I CAGR a way

Glenn Eisenberg

-- in X% and Yeah. from which a assume by relatively always No, revenue was said, as X% X% growth organic would pricing, driven Base overall mix coming about be, from volume Adam to X% because, X% with, pricing, mostly we've historically, Brian, talked that that price/mix, I'd it, call for Business it, unit stable. then growth is say the call to level

Obviously, the add to view just where Base that expect term, trends, new skew that's would we'll we that Obviously, tests would innovative would organic to. that. mix the But hopefully that be would could upwards. skew add continue the we long Business gravitate upward. acquisitions it to see to you it So

than of level we call 'XX So tracking to expect higher standpoint, price a right revenues from slightly normal see, it wasn't in still environment. surprising an that just a now compared high our what at normally seeing is we're it, to revenue or but would mix unusually

Brian Tanquilut

you. Got it. Thank

Operator

comes Derik with De Bank Our next question of from Bruin America.

is Your open. line

Unidentified Analyst

dig This the any testing as feel Any surveillance some there surveillance John testing. I like schools from wanted Derik. for in on to of terms Florida updates pool related announcements looking into well pricing the volume. is and as do I is in back-to-school to Hi. been Texas some for there?

Adam Schechter

John. morning, Yeah. Good

of are testing, the not rapid it. that there of a that kind lot of surveillance that testing. the we the have on-site. think And the doing types being they're I much marketplace. tests the for ability to is is that But surveillance to of COVID. you doing done testing pool A that our done surveillance. of there can symptoms, typically, We're of It's lot do being have places using test people although either exposed other a by less lot the are work do most of in have out been

to Labcorp service testing ready with of to there, the we Employer we the serve we'll look opportunities amount available. help those, to We group continue the we comes today. that we out make if not when as in But more a of are do do those So but it Diagnostics next through of Services to significant that surveillance. course, our business than it's Labcorp there and through year, do core are

Unidentified Analyst

could you. then I ask question. And more if Got just one

on esoteric testing, the ask test wanted could volume In the you uptake terms is if oncology testing trending the for of the launched. to you provide oncology color how OmniSeq, your any I and

Adam Schechter

Yeah.

So with we at if you and seeing feel testing that in testing pre-pandemic. our it's of the that, like although it's recovered at if levels uptake look general, getting look esoteric good it's are not the OmniSeq, part significant oncology overall recovered, we other back a moment. And you tests at to

Unidentified Analyst

you. Thank you. Got

Adam Schechter

you. Thank Okay.

Operator

further for no Adam are There to Schechter over I'd to remarks. any the back questions. closing call turn like

Adam Schechter

you. Thank

pandemic. it improve achieve see increase relentlessly So going first but quarter, joining mission More thanks through our can us to full you progress, employees to are everybody we're and and lives, led to all, the hope to again. encouraged the also to today. guidance to of year world than strong to continue I our XX,XXX And led by save and our work to us it for continuing another help

the to for grateful around my their world colleagues I'm dedication So and focus.

been eligible, as be holiday and season. vaccinated and yet vaccinated, not the approach fully and soon. Thanks, touch stay please are you've we'll careful be get if Lastly, in safe, please we

Operator

concludes This program. the

a You Everyone, day. have disconnect. may great now

Laboratory Corporation of America (LH) 28 Oct 212021 Q3 Earnings call transcript