LH - Earnings call transcript Q1 2022 | Laboratory Corporation of America Holdings

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Operator

Good day, and thank you for standing by. Welcome to the Labcorp's First Quarter 2022 Earnings Conference Call [Operator Instructions]. Please be advised that today's conference is being recorded. I would now hand the conference over to your speaker today, Chas Cook, Vice President, Investor Relations. Please go ahead.

Chas Cook

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

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

These the in quarterly expected and with making forward-looking XXXX most general based many XX-K factors the of to in including the future opportunities forward-looking include, synergies Form and Each of our filings recent are are economic with to, beyond the the financial Form growth. which of and and/or company's annual on the on SEC. subsequent assumptions, information conditions, response the but COVID-XX estimated strategies, on and the and limited included upon More XX-Q business statements results, to future company's we is operating forward-looking COVID-XX to savings subject factors, report is condition, pandemic, for related change reports various and our control. the are impact statements pandemic the statements and not Additionally, financial businesses, cash respect flows the market various guidance and statements. our

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

call I'll over Adam to turn Schechter. the Now

Adam Schechter

businesses Drug us the growth the impact both a despite solid science, inflation. strategy drug today. quarter. of We previous you, was in and well quarter, development positions initial joining outside progressively which take volume focused and Diagnostics as across continued to the Base better free testing than $X.X throughout adjusted while and Business, January. in last the In quarter, a to In increased This Thanks book-to-bill had earnings remains on trailing continued actions our month significant a $XXX mitigate continue each opportunities strong innovation In was success Omicron, X.XX at to a slowdown $X.XX year routine both first the impact good morning, throughout Development, remain first US quarter the cash per quarter continuing through advance esoteric we revenue reached January Base In us after and uptick the We the Chas, to share technology. one. saw month for billion, Thank everyone. delivered versus our for year. an X.X% flow significant totaled basis. and Business XX million. on

CTTS, which backlog the Our an increase of ago testing in operations. solutions, X.X% segment, laboratories primarily largest year billion, was central COVID-related consists versus impact clinical year. or the across a last work of vaccine compared to increased with lower trial to our $XX.X

XXXX to continue us and Ukraine Omicron Drug nicely in recovered overall some see we While in the March, throughout impact the quarter, conflict confidence in Development our and from giving guidance. performance

Turning now COVID-XX. to

average. for year. the and the to we day continue Testing expect the volume of remainder tests on PCR Time quarter. COVID the PCR one for decline rates since XX,XXX is approximately currently results for to have per day Our was declined

as of infections potential new new ability waves or by to harnessing our PCR We I'll tests prepared variants strategy. maintaining a and comprehensive oncology, supplies our pending per the scale our In the our examples we leadership process on country scope public remain are now XXX,XXX day, fortifying labor, highlight health capabilities. help of progress position are emergency and persists. to of for the

helping outcomes believe Labcorp will genomic our is We for the that help cancer. and PGDx's for the puts portfolio the globally of forefront and us acquisition at tissue-based of going capabilities smoothly. PGDx, treatments pharmaceutical identify allow better with PGDx's liquid our the of we to drive solutions clients personalized quarter, products closed people more enhances and oncology During profiling leading expand kitted to integration biopsy patients. and

therapy In research. Biosciences investment cell and company designed market. recently help to to to our development previous gene cell and addition, Xcell new collaboration advance with in and This bring more announced therapies we is the of innovative follows clients effectively gene

focus digitalization February, In health Next, intensify customer its Labcorp continues data and business. innovative launched digital our Labcorp platform. we and embed to throughout the on-demand

to became the liver intervention on liver and tests management focused test health helps and risk health, NASH. outcomes. fibrosis US long-term celiac introduced detecting disease of unintentional consumption, with gluten measuring better and We committed to monitoring, risk to allows with can a provide short- of And of men's patient pursuing planning family tests first plan commercial of earlier can help pipeline have high-growth for people opportunities. advanced to the which and we the This wellness we women's to this quarter add throughout support Labcorp laboratory be and preventive the for progression and disease. for task health that due offer an new a to year. continues we assessment quantitative those Separately, scoring and

and Carolina. we hospitals entered month, relationships and health we in systems. relationship the Health, health quarter, several with During Last strategic largest our with strategic Prisma the announced South expanded into system

enhanced This Labcorp arrangement, to ongoing to offer support and provide select As laboratories. of technical a multiple part across patients allows and acquire providers the care Prisma's hospital areas. benefit their the us outreach assets agreed to pinnacle business of

agreeing business. the in expanded our outreach assets to We clinical New the by Jersey acquire also relationship select quarter of with organization's AtlantiCare in

System. of purchase in of the In acquisition of Health builds addition, of XXXX Franciscan to This program Hospital outreach outreach our the we've agreed Missionaries Mississippi. Dominic business St. Lady Our Jackson, on

we include hospital as of Ascension, a relationship largest I continue into labs laboratory with laboratory this for we the care's in February, comprehensive purchase reported XX collaboration. of management entered and long-term As efforts one select planning as of make US to states well our the in assets, relationship progress outreach business health The on systems. previously will

these transactions to scheduled expected, As later close are this year.

employees our is to science-based and pressing health commitments where care challenges with emissions; patients can environment pursuit Our they our sustainability journey, processes operate manage reduce practices the work. acquisition The We integrity; committed can report better Relations to commitment Corporate thrive; to through to an our carbon a in progress efforts XXXX of and issued our Responsibility highest offers pipeline company site, areas. to read with the understand of provide and live in world's in so including our which to employees Labcorp's XXXX. our help quality remains investing active services which and encourage target to address most into we that Investor the in following: to targets that result We're should and these in Web important robust, and communities investment and recently and customers. I'd available very continuing and to our insight our a we provide it Report, the our responsibly to you

to to we take addition, value. shareholder designed other actions continue In enhance

and we of despite per $X.XX month, this quarter contribution unit. a the dividend business and of quarter, up, each And Labcorp Drug the earlier some a Development providing progressively year. sum cash This the are Base quarter Development in headwinds. its share recovery revenue quarterly this payable Diagnostics dividend common additional initiated about announced stock Business quarterly information of in Drug To second of continued our across

execute announcements well and momentum year. success to sets with us systems, up against our for continue throughout We Base strategic the development our combined well priorities, Business in business hospital recent our current the

So with take will quarter that, the our you through details results. Glenn of first

Glenn Eisenberg

of to you, year with my a first results, of I'm Thank and full an each by our with in followed review update performance segment going on discussion Adam. guidance. our quarter our comments start conclude a

for XX% we've billion, business also revenue the that the Investor last reference, information found decrease acquisitions. Relations supplemental the quarter our currency $X.X year Revenue while foreign the was Base lower to quarter negative X.X% by Business deck impact revenue million income additional compared on a compared testing grew was to $XXX X.X% to was COVID organic for year, can the to of compared last XX.X% included offset Operating testing Web down our due be of from For site. as was translation year. in Base COVID or last Business revenue.

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

growth tax rate, Business in income LaunchPad and earnings COVID to adjusted the the Base other or and a Excluding of of rate geographic primarily for excluding higher XX.X% stock special amortization, The million inflationary expense $X.X charges, decrease in personnel in to reduction due savings. partially tax primarily items, items and lower was margin mix compared offset adjusted year. The year. The XX.X% restructuring the last adjusted organic adjusted was quarter compared was was XX.X% last was rate income due costs, or The to operating XX.X%. by billion quarter and to compensation. XX.X% these revenue $XXX and testing, operating

million the amortization, diluted the tax last $XXX XX%, $X.XX were primarily for million year. charges impacted and cash restructuring year which to with cash capital comparable quarter $XX EPS, ago. $X.XX timing-related. testing expect year. year were $X.X special tax $XXX lower flow expenditures reform. billion were the any in potential higher requirements, last which last earnings Operating The adjusted continue We Adjusted by in was impact Net quarter COVID share. quarter for decrease or $XXX cash approximately in million due exclude operating Capital a to and to earnings, be from working year totaled flow compared to compared was to rate to per at excluding mostly $X.XX compared items, the full the million

As a $XXX million was flow quarter. result, in the cash free

cash to generate $X.X $X.X free continue between billion expect and of flow to billion the for full year. We

quarter, accelerated end the billion the completed were acquisitions. of April of $XXX as was of on share We $X.X repurchasing had the quarter, XXX,XXX we share program, repurchase billion in our invested At shares part During authorization which approximately we also remaining. the X. market million repurchase $X

Now performance. review I'll segment our

segments information revenue oncology, R&D included we deck, $X that to This segments. quarter. our in enterprise-wide our These also strategic are being In million reclassifying the the oncology corporate reclassified are represented investments unallocated in on business we of spending. unallocated. have both our current expense additional focus Given for from not supporting are corporate supplemental investments

we For well Diagnostics, Business payer provided of Base esoteric as revenue as mix. versus routine testing a breakout

testing its CDCS. or and CTTS; For Drug trial Development, we three included or development, commercialization clinical revenues businesses: ED; services, and early or solutions, for clinical development

was margins levels compound due down annual year, X.X%, XX.X%, quarter to the compared compared as last COVID quarterly COVID provided X.X%. Total organic Relative to segment Business the COVID the acquisitions. in February Diagnostics the Business to compared were last test maintain growth. due due organic were decreased down and year year, company of of rate while the volume of from to X.X% and or growing primarily Business was to XX% esoteric quarter in quarterly growth a last due million were acquisitions X.X%, routine of Base the to grew testing. Business net year, XXXX, slightly first X.X%. last Base was of to in for to inflationary than operating X.X% per decreased benefiting partially $X.X we've was review an expenses testing Omicron year to partially testing The for down the $XXX X% continued while X.X%, to of the higher testing offset increase growth in Base by decrease the Price/mix flat price/mix quarter X% a adjusted acquisition XXXX, begin January organic and X.X% savings. testing Base was due in was in being reduction offset orders to decrease was volume Business addition, partially revenue grew lower billion, due X.X%. quarter as with decline compared versus compared due margins we Base testing testing and Base operating up last I'll and year. In margin adjusted XX% million first XX.X% revenue offset volume of the to and or of organic primarily the year Base volume last book-to-bill, year. $XXX of by to income decreased organic Business year. March. Revenue revenue last last to Diagnostics. rebounded Business lower last other Business faster COVID XX% last by year Business while by partially demand growth acquisitions session, COVID to relatively Compared volume compared COVID the testing personnel testing revenue capacity. Base offset costs, volume throughs. pass COVID down to compared to by Base LaunchPad experienced down X.X% compared and testing income XX% compared for Base Business to to

Now basis. ED. X.X%, X.X% I’ll grew currency X.X% divestitures by of due review growth compared for X.X% partially Base performance Business X.X% Revenue an testing offset Business growth billion, by increase The lower currency of was was Business of a translation COVID Development. on X.X%. to compared net Base X.X% of Base quarter constant to the year and organic revenue and led last the of year or of foreign to acquisitions Drug last $X.X of

due impact $XXX Ukraine. We revenue constrained in the the Base organic in also in lower Ukraine. Base Development, quarter COVID-XX growth year. growth primarily income margin growth $XXX LaunchPad Ukraine, to costs, the for was Business revenue first last reduced flat was CDCS, or conflict Omicron other was was for or compared segment testing, by Relative and conflict of as operating good compound from XX.X%, COVID the lower conflict decrease inflationary XX.X% were by and growth Drug well organic personnel by by operating XX.X% annual vaccine as the and XXXX, and experienced as offset the higher Business driven partially Adjusted work income million and therapeutic and of although was to work, growth. therapeutic vaccine expense in Base COVID adjusted which CTTS The rate in million offset relatively Business savings. to the traditional

to the While quarter segment expect approximately and to line for increases this the months. margins full XX were benefits we of price $X.X the down compared in $XX.X be and revenue the We continue ended up top convert over to savings. billion the backlog billion expect from year backlog targeted we quarter, margins to into as XXXX LaunchPad of growth, with next

XX, rates currently guidance for Now I'll XXXX anticipated our with as performance year outlook of effective the our solid and remainder the repurchases updated year. first foreign the discuss flow reflects which full and capital free quarter guidance, assumes includes March targeted exchange share and from enterprise allocation, also XXXX, of impact The cash to acquisitions, dividends.

X.X% expected This to points. enterprise COVID rate XX is growth will XX% that the expect decline to narrowing This XXXX. guidance the midpoint the X% with a Business We range increasing Base while to includes range, X.X% to testing compared is expectation revenue the to XX%, of decline to XX%. grow basis prior

basis is at by a This while XXX X% points. decline to an Base compared revenue expectation midpoint range, XXXX. Diagnostics the and midpoint range XX% Business This growth includes Business range the COVID decline prior XXXX that to At growth. the increase by primarily Base expect to XX.X% We narrowing the driven XX.X% would the rate guidance of to testing compared of is expected X.X%, X%, our will be to to to organic compound the grow XX%. guidance annual

at reduction basis XX compared is currency the revenue foreign to change We Development Drug point X% X.X% due a to the guidance. translation XXXX. prior This to primarily points, from XXX of in grow to the expect midpoint basis

by compared the XXX guidance This addition, growth basis year. This to was of change the Ukraine, also of points acquisition range from foreign last to the the guidance last X.X% expectation partially X.X% the which of currency X% impact negative year the includes range in guidance benefit includes over reflects will offset grow In conflict translation XXXX. Business to that Base to compared of the X% PGDx.

guidance annual XXXX in to Base our by ED primarily compound midpoint driven businesses, expect growth be At growth from the rate to We of would by three the benefit Business CDCS. XX%, compared all growth. organic led and range,

$X.XX adjusted the the guidance. our narrowing to range EPS, guidance by For prior we midpoint compared increasing and are

range billion unchanged is billion. Our Free flow to $X.X guidance remains $XX. $XX.XX guidance $X.X now at to cash

supplemental to Investor purposes, results our our year solid For XXXX first also had we've results. In on full XXXX a the Relations comparison guidance deck our view Web the of company additional of quarter included and quarter site in compared performance. summary, another

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

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

Operator

Instructions] first [Operator Tanquilut comes Jefferies. Brian Our with from question

Unidentified Analyst

This Thanks the job for Brian. is quarter. question [Jack Slevin], and on the taking on for nice

the pharma throughout you growth might that on all the of the numbers I we headwinds to gave beyond color you large us for can look Can some been of look acknowledging there as a for remind addition we focus at you can the and how When in And us on you progression rates think oncology. the you how So little remind this, point year? -- more there give impact of specific just us and color appreciate around about at it, exposure 'XX? a Covance. has

Adam Schechter

So a few things.

Drug the headwinds were look Development, If some business that we at you despite the general good occurring. knew in we quarter had our for a of

February, the for the both we impact, better first parts some already you differently. the the quarter may Diagnostics thing of got Drug impacted each the is we news business business. our our Omicron, it both that good expected our of in we be seen at if of in have and And businesses. saw recall, it is progressively discussed Development interesting quarter because the But look back toughest you and to So that the we from impact month

we So for end saw impact it quarter, States our the we because that United in a to And Diagnostics, CTTS, Business Europe. our very where fast. Diagnostics business, Development, then Drug for saw was most business went little then bounce very of impacted due we example, by impact, we CTTS there and global bit our and was obviously, laboratory parts -- Ukraine. the of we and Drug is saw continued Base January, in And the got a Omicron, to Omicron different first. for quickly. or business central back saw saw the we away the we the from Development, saw some and After as it's

we the at we run the confident we're saw the because saw February strength that Ukraine strength rate rest As some of we're we year, quarter. on We impact We good be versus look at looked now. particular versus January. continued in in from there'll March as March, a second believe and in

in difficult quarter a second the the but and fourth to more we little So see progress to continue will third quarter, the year. be as we bit through expect go

Operator

question next Research. Meehan comes Our Nephron from with Jack

Jack Meehan

a the on I questions Development have couple Drug business. of So

is The first margins. on

some the at was far pronounced earnings talked look does others Development than start But when season, like this margin about reported. have I Drug of some the your year. peer of pressures of the understand so So you the at pressure reports look it more

to more pressure as business of thought curious kind others. get that to drove your to Labcorp might what have been than was unique the So

Adam Schechter

starting in most impact from business, saw largest two here some came were because laboratory the in we year. we much do before, with that than prepared central strong last laboratory growth we and of a larger amount of that central year. That's very It segments. year as beginning you look is, huge January, saw you and the the rate as December huge in our people we in that February, have saw such were Omicron now in we many to CTTS, this that. that did Omicron a we're in prepared this growth But And if a CTTS quarter One year, business, mentioned last we large other When others. of at we mentioned of did not central as pressure business. for I As business examples. I'll this was Omicron of caused laboratory case as of impact providing as you give segment that the by boosters And we rates, than we the less because the saw the year. boosters kept first the a volume first work out volume. of business, cause could We the had quarter we amount

We a business, research impact second the the with it ED thing price of saw the And we lot or but at is what it through last that and year. and on in out. all year, as of going business, hit a you with takes as businesses and the we than about In the beginning get then reductions. to we cost saw early at -- you all saw in beginning have you fact, initial And offset was that month-over-month. inflation product quarter, across by less increases vaccines we some price I also utilities went We're as development reduction think once the to pressures time the costs. the and cost improvements business, to particularly said inflationary LaunchPad the

on good going a the through rest we we're therefore, we're that are rate as run the confident year. So of

Jack Meehan

you Development. your you may access Can in all? how Drug region? to impacted or be having business? And the molecules at large about lockdowns the are your models impacts with has managing it talk China on the Just -- Sticking large what in labs

Adam Schechter

to them. at look know help first want of our we're I that we here of and to doing We're them them. all thinking everything to you If of China, support let in employees can our all, business

fact, now occurring. while some that laboratories continue right so the are in basically are lockdowns the work the they can that employees living going keep In have we to

do this not do to lockdowns closely. impact We point inhibited at have we to the studies time, to to continue to business on going due significant ability Jack. that seen the monitor in a at the has moment need It our that our we're not very but

Operator

with Stanley. Goldwasser question comes Ricky next from Our Morgan

Ricky Goldwasser

So a questions couple here. of

year. you kind of we you these And think headwinds? of COVID, basis the kind us as on First you think think to for about volume volume baseline, think on Can the supplemental then I just volumes the it which areas I either us versus [indiscernible] packet, bit about lab thinking, more to very rest down be side, lab and market? a XQ Can like quarter, give you XX compare then for Ukraine and going [indiscernible] each of in I maybe just little is the sort core points of performance XXXX really XQ like that's just of versus by is in of helpful. quantify color the talked on inflation. helpful on 'XX. the 'XX these XXXX headwinds

on talk what market seeing versus well. baseline can as about an organic you or If you're basis by

Adam Schechter

you the asked I'll regard quantifications ask with start that lab to with volumes, of and Glenn for. some I'll jump then the in to

$X.X for up X%. And were look compounded The XXXX last Business revenue saw versus to February, quarter year. think But versus XXXX, volume, our versus you is regard we may in the that as versus recall, grew you what's Ricky, saw in for we year Business Business Diagnostics, what said about then last revenue we Base billion. was And it's at X.X% down you January about you was a X.X% about about flat. you it saw in volume if at look our important XXXX, Base It the I X.X%. rate with versus if Base So strong. was and grew

didn't in non-esoteric and know for the saw say you bounce back tells the think -- esoteric, mean the in so the I is it country We the quarter we see for the you that February the versus that Business versus the didn't January that we are of across back of had But really XXXX in in you esoteric a moved that time and have gives very northeast nothing period January were it a I the March confidence. there come Business and happening strong, in then important that March. fact certain So big X% when we've how flat which strong I'd Base to regions, February our a between business. we And us strength might by down that note. XXXX. our a Southeast. non-esoteric, was Omicron for with to change. seen We overall, see Base see geographic were and across difference breakouts

Glenn Eisenberg

I guess too. little to follow just up a that, bit on

So X% compounded. in was the we that January decline saw not

just a basis. to was the March year. experience as it So go rate will number positive growth a But a on the there as continue on Adam become to total volume as and in compound us so to got February expectation annual obviously said, the flat progression the we decline. be down we That X.X%, relatively with through continue to the recovery

what with seeing there. pleased we're So

And quantifying, of the headwind more call around meaningful to vaccine around impact million vaccine and to Ukraine Ukraine $XX of million. From were quarter. it, side, impacted us that for probably rounding $XX ones a Drug the the two closer Development the that. probably standpoint, probably On the from

Ukraine, backed would which in more call to rate, the X% line of both while think in what primarily out business, CTTS with that revenue would to the on impacted we affected others as were, currency you obviously we it, the those when be organic constant vaccine constant well. X%, a But related business, expected we'd in flat the and that So have business currency if be do. basis call growth it, we

Ricky Goldwasser

it's we lab remind about like just think central a preclinical margin, of us, And versus the can you wwhen kind clinical.

Glenn Eisenberg

So we don't break out for the the businesses. margins

more that felt profile. well just went additional the what's provided a assets information. the segment out of see and and material it and and looked, as shared can provided, it there's as it similarly, do we margin is you of in number. we by look we growth that and the the And feel peers get important get providing the you we belief, basis revenue now our a saw sense breakout are rates the each because growth that the obviously, because meaningful From at is magnitude of on at if beneficial a segment that how between businesses. you was peers As additional that kind different our on trend, a then what our you overall a for will, at so pieces looking as pieces, the business the the of standpoint, in to tracking as look And leveraging businesses obviously, that you much at we're

Operator

Eric from Coldwell next comes Our question Baird. with

Eric Coldwell

sounded have? a research Are larger on I own that or the poor into some is talked first some access from I'm development animal feel your at of the costs, like you -- like being can as hoping having the you it early issues. quarter. question, inflation one why that. we as -- perhaps bigger pricing at supply have some issues we're model the lab your falling suffering details disadvantage on peers and Is you not is a get CRO bit that model early the a in maybe that guess same disclosures the business? short margin supply some I it on for about of this having don't development

Glenn Eisenberg

been. And down obviously, we've the margin, from it's XX.X% obviously, where

so pieces when look it, is So of the product meaningful research you it. part a of at the

higher cost much So incurring we're that. for

we customers with through and do to And the that. costs to products change that Adam can research on we standpoint, explicit earlier, contracts orders. pass that's go commented those we believe lot so as a timing But the of effectively, a to from higher have now

the of to quarter that the why reasons transfer over. one higher constrained was being So expense without in able we're

We also costs. talked about utility

has quarter quarter, diminish impact up. we the And each lighter the And wouldn't how been the but relative the also historically a just from end as first year. inflationary, quarter the then we general from Ukraine, to just So vaccine. pick well

So as for our the that we the prior of first we'll higher margins continues commented than that all, see be expectation year. full to year

us of the though to Our second us the passing higher when beginning and forward. what those that margin expectation, at alluded headwinds that that is run And going still some frankly, you quarter and confidence, in this look earlier, some be ended the we on year-on-year in March, gives rate even we but those should Adam year have start of would is for that the from for prior to level back -- at full little to go forward. we see next as the degree of hopefully up a even costs, you'll comparable bit we're, confidence quarters year margins the high alone gives each a frankly, of to let that the quarter, margin

Eric Coldwell

And same also similar topic, if it's this transports hoping gone If what supply sure pass to but what have around follow-up, operations, did extent some able you're I'm in I component on that kits. issues, I if experience, they a faced it impact, could continue vein seeing. but one you you've particularly oncology could central an color some lab expect was in that stay we lab the so? those not experience, central on related Obviously, complex how [Icon] suspect freight might more I components to heard give had their up. you you've same to long and morning lab. that to been costs, shipping, from just on

Adam Schechter

at because, work or able to impact you manually. times we get find So you example, but demand to the months kits, it's so, say, a issues but look typical those those you have margins the for supply, at there if it were supply were other ways chain, approved sometimes to there and were not last meet to mean do in do I'd six the some if have to higher didn't to kit, for additional it in

kits there then But if impact put as would, up was certainly you was have lot short-term doing assurance needs, where a particularly meet the of important in which kits more more more the from typically if We're we're would kits a than us. And some doing with they're quality able their historically piece when were appropriately. customers. is kits you the to were able manually, check manually we more demand to we lot news keep in our pharma there. to a you So do more than But to we ensure out we put good you to going do. manually replacement

closely. that's very is but it margin margins, We expense incurred it monthly the thing to is didn't saw me our month-by-month. And at the would there progression what with the that most So impact but Eric, don't in we say, some look we provide important that, I customers.

to So that that that commitments able the meet the that confidence it's forth. we've track that, and the gives right me we're we're set on

Glenn Eisenberg

those And just What Eric, impact we had primarily on see run because started for the level months -- the business. level -- six inventories to now we issue. have supply within uncertainties built the last now going just still is one of it when three given up obviously, an inventory lab chain central what's thing on us. seen we've a globally. on supply just-in-time of the to on CTTS, our And We've our global issues,

doing sure So obviously efficiently. we'll focused on inventory meeting can customers' carry make and the be it higher to demand we that

Adam Schechter

And to Diagnostic the as are the tubes when business use where lot that having supplies appropriate things across you very we're businesses a and able of our need well. the similar,

Operator

comes question with JPMorgan. from next Rachel Vatnsdal Our

Unidentified Analyst

the wanted maybe is a This the could just provide backlogs. base composure for as going and about like think Noah any well color into as we should of your additional additional pre-revenue And in then that percent market the end your sort little and think maybe by current on how any of you pharma And versus and to year trending metrics Rachel. dig you can I backlog customer forward? on of, bit throughout biotech that companies? more for

Adam Schechter

very very RFPs strong. through if are the all, I'd And low. of look First that they're cancellation our are rates, coming at you that say

business flow flow So very the flow of the and coming. of good we feel trials RFPs and about the of the

strong X.XX. book-to-bill XX-month was trailing Our at

X.XX our you slightly recall, need at we then if increase say have versus I be we at X% which to year. And $XX.X almost at that was look higher a may remain that we backlog, billion, or As number. you prior and the

net Our $X.X billion. were orders

breakdown If is businesses, little bit customer look a you different. by type across the the

have than large example, biotech to for development, pharma. early So smaller we biotech we do more and in midsized

say central business, is backlog clinical supports about we're long-term or three the the our about I that than which do pharma at the that is or CDCS, feel our our provided. And good good CTTS, that we're look the biotechs. that seeing. the you confident biotechs small lab, If we But which we we across would the guidance We the feel more backlog businesses, seeing. we're we tend middle-sized RFPs have to

Unidentified Analyst

you're continue seeing Speakers]… [Multiple sort of And that

Adam Schechter

I will that that Yes, to strong expect book-to-bill be that anticipate to the continue, above be. that to continue threshold have X.X we'll to we continue a

that. good So I feel about

Operator

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

Unidentified Analyst

Derik. FDA what going there. central ask I you late on new lab. for CTTS know results possibility But ED, to stage a the what This We mid-April, that stage exposure should assumptions be of for sort faster false also but your Jon, year to full is there I about warning your yes, CDCS. from underlying assumptions your wanted are disclosures, look through And your into Appreciate in the and have and Sequenom, wanted great. than the of was NIPT. issued be in that'd early wondering

Adam Schechter

utilized amount I'll not do It's It's test all. revenue. a small in very and United for of with the at but small -- we large very NIPT. the a start it's that very So very, very, States, screening it's

CDCS those that overall are physicians available, to in available in sure make our because have leader no business. we fastest the test that it we total looking have there CTTS tests, regard not fastest we we're the to individual it's to terms the ability -- revenue is impact the making be but there's -- use that to segments, going the the continue grow segment and With we'll growth we necessarily are there. of clinical, business to to or believe So market not the

market the If business are of you it slowest we CTTS be the leader at look three, because the growing will there.

that in We have business. a large market share

somewhere as ED two. growth. ED the the not than a is forth. there's room And it sometimes we're for to then number faster little in bit between then because goes business and one and CDCS, much And So grows back

Operator

have Instructions] question Citi. Patrick [Operator a We with from Donnelly

Patrick Donnelly

piece. Obviously, a on covered the CRO lot

the So maybe side. on I'll ask lab

out appreciate talk the there. bump the assumptions, go range as a the COVID endemic on flu way near around I'm of the Are to on the Can out in season? of kind How the just of cadence the through trying you that we year? Just best in about about kind piece. figure you year of the are you even model assuming that terms transparency thinking end phase just to the seasonality?

Adam Schechter

it XX% of by to going expect there's down the the for at beginning to first we And the the day. was quarter. range, be of given quarter, range through how range As we that that to end on there's averaged we year, And down of said, a you a and per XX,XXX where quarter, than the The the a last tests was decline continue we reason a significantly give versus of can that get whole range. we've because XX% year. to is possibilities

an if at not is possibilities where is, So might uptick there's one there's in the a If November declaration, in uptick at around declaration you emergency But that be be the but the would continues, lower. it the not time, season. of as emergency say, price there's point in flu the the now. price November,

XX% year. We'll will declaration a the emergency within My decline line think of there. through that whole bunch you that continue I is this can or that XX% not ways range assumption So to year. bottom volume we've has the to throughout occurs the that is if the and will given see stay continue

Operator

Thank the like no call to turn you. questions Adam closing And there the other I'd queue. remarks. for are back in to

Adam Schechter

you, Thank Catherine.

our we're thank on all, XX,XXX you world. important tell of can I are the situations. us by difficult employees first supporting focused additional facing employees that our are really and around today. for you asset and than I'm our joining So the they our of work complexities greatest again encouraged and progress more

you We about appreciate look We time Russia, complexities. these and we face Ukraine, and have with to as soon them that people they thinking Shanghai, we're really in making speaking sure your we're forward today.

So thank you.

Operator

you concludes today's Thank for call. participating. conference This

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

Laboratory Corporation of America (LH) 28 Apr 222022 Q1 Earnings call transcript