LH - Earnings call transcript Q4 2024 | Laboratory Corporation of America Holdings

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

Operator

Good day, and thank you for standing by. Welcome to Labcorp's Fourth Quarter 2024 Conference Call. [Operator Instructions]. Please be advised that today's conference being recorded.

I would now like to hand the conference over to your speaker today, Christian O'Donnell. ahead. go Please

Christin O'Donnell

Good XXXX operator. welcome Labcorp's to Thank Call. morning, Quarter Conference Fourth you, and

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

flows transactions Holdings, of are statements. strategic company the growth. synergies the other future related LaunchPad limited from the the cash global the businesses, These not economic include, from strategies and are respect benefits and and and partnerships, conditions, from reorganization results, but with of statements and/or impact financial on including for completed business operating to, initiative financial savings, market conditions, opportunities expected XXXX future forward-looking we and spin-off Forteo the acquisitions guidance projected and holding estimated and making assumptions, various forward-looking the factors statements Additionally, and Inc. company's to

and is other based SEC. More quarterly is factors, reports Form company's statements various are of and in Form annual most XX-Q filings on forward-looking the recent information our with beyond XX-K many the on upon report our of in to subsequent which subject change control. included Each the

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

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

Adam Schechter

you, performance Good us morning, We appreciate joined this XXXX. everyone. our us President as XXXX share you joined and outlook Wang. also Vice Christin. December. Executive for joining CFO review and Julia Julia I'm past Thank our by as we Today,

following has have and Julia Julie hit very succeeded expertise the running, know, announcement. diagnostics combined strong Glenn Labcorp. experience and in Eisenberg, have you with been his financial ground retirement As already I and pharmaceuticals, valuable to their both Julia's

In science, XXXX, and growth, made our through diagnostics in technology. organic meaningful acquisitions market-leading our innovation businesses transformative and services to commitment continued biopharma strategy and laboratory advances through

we our our advanced signing and meet by neurology strategic medical well XXXX, executed laboratories important And trusted significant systems We position high-growth into new health unmet health, local including diagnostic key tests closing in our oncology, in on priorities. a women's regional markets, furthered XX disease. we transactions. partner or back hospitals Looking introduced role autoimmune to as and We to needs.

testing We Invitae. through in of leadership assets of select acquisition expanded our our genetic solutions

advanced genetic Plasma whole to that across global the Our plasma Invitae's personalized and tumor is an science guide clients We disease now for learning detect a detect testing machine genome in MRD. treatment oncology and solutions rare development edge assay access have types. cutting trials to analysis XX recommendations sequencing proprietary uses patients. and to of detect, several

clinical speed colorectal Global Labcorp for the move in increasing with early U.S. cancer. to launched We laboratory the central sites. Trial investigator with of in XXXX at at program clinical of beginning academic medical solutions use aimed a suite Connect, centers, trials expect We an into experience

in fourth the laboratory XX advancements Diagnostics strong the each of to the compared the now Enterprise points laboratories better impact and customers. basis by biopharma and down billion, expected quarter. our well XX% due underlying XX% quarter our of serve services, by Turning call. earnings our needs Invitae, margins grew financial in of diagnostic were fourth and results. increase demand to $X.X technology biopharma to revenue of the in quarter across we science Revenue performed referenced previous very to in We solutions quarter and was approximately XXXX. an which driven

of up EPS flow year-over-year. X% Free was operations Adjusted cash $X.XX $XXX from million. was continuing

to growth grow a more XXXX implied just moment, As expect we results improving represents both we $XX.XX flow X.X% XXXX, provide revenue XX%. an free to we of of details growth X% our to adjusted We -- look cash midpoint will on Additionally, our and we of Julia our ahead EPS line and rate We In also and to an Diagnostics in across earnings. expect enterprise biopharma. range with expect margins $XX.XX which guidance.

Turning to in the of quarter. highlights enterprise strategy our

acquisition Laboratory manage a end, health spares Inspira announced to strategic for physician Health operations of First, in hospital the services the access Select the we valid November, and laboratories services as to the position choice testing December, leadership we as primary advanced and the broader comprehensive a lab molecular for we works, for the January, with region. completed serve completed In collaboration assets Appalachian acquisition hospitals laboratory of select of of subsequent Alabama. quarter and network. health to systems to laboratories. the In health lab regional testing location and Outreach our of enabling partner Jersey-based systems in In New we local and

forward to diagnostic access XXXX, As ahead expanding supporting to our systems pipeline health we solutions. remains to Labcorp's and strong, and look to more world-class we look

We the and also in advancements innovation science, quarter. made technology several in

monitor chain patients. sclerosis our part disease, GFAP multiple used and light sclerosis on in multiple values As a focus of we autoimmune serum to launched profile monitoring neurofilament

companion birth the for announced patients assay the molecular advanced CDC, announced HX of with diagnostic availability the availability identify of the commercial test. an Working gastric first flu And targeted with people cancer cancer to for stomach. we we of treatment the eligible

including homocystine to vitamin vitamin we for quarter, help the and We heart health A, consumer-initiated and through E. addition, manage health, tests on their demand. vitamin In continue consumers in well-being several launched C Labcorp

Global improves document and into sample earlier requisition, including several management. with visibility electronic Connect, tracking announced chain efficiency enhancements digital Trial samples custody workflows, of We solution and fully a to that

of also Labcorp of continued clinical by physicians. decisions brings health the data, Labcorp and inform result point and their Diagnostic system at We clients EHR Assistant clinical adoption assistant guidelines data together experienced lab care. Diagnostics to

are view. capabilities of vast innovative and like single it Smart results a data trends it client's New and clinical examples support Connect, just lab brings the combine how patient the of technology capabilities, and care. provider, our we're Global with trials all our Labcorp testing information to Diagnostic of regardless X harnessing Assistant Trial from assets and into through integrated patient's Labcorp EHR available ordering

I lives. was mission as strategy, to against XX,XXX health improve continue well XXXX and Labcorp for to strong growth closing, their to a year continued are for In employees execute hard our pursue in and and improve XXXX. we we for thank our dedication work we our want positioned as enterprise

In fact, our list are dedication we and to Magazine's testament our mission. World's their Companies to the Fortune just efforts most made of Admired a team for to XXXX,

Committee. collaborative as have Finally, company successful a Julia. Glenn his remarkable our a to is since remarkable me to thank run to truly I all the Executive ensure enjoyed CFO him of serve and that, as executive. XX-year Glenn a turn I I in having in over the He end of me family, personally joined call join that I through Glenn the want a in April and CEO, his his Glenn wishing XXXX. key member accelerate and our special for CFO. further contributions side-by-side during as transition to to worked and to I'll the remains best smooth, Lab as a positions book Please strategy of retirement. With adviser his

Julia Wang

you, inspired have by and experience be passionate my fundamentals, across day. diagnostics Labcorp you everyone. that new I'm our tremendous strength and broader sharing today. has each patients and development been My helpful started serve I Thank the by the Adam. start business I that employees as health jump want care, our Hello, excited we role. that all drug has every of really to I in impact truly the on very with to including been

of on financials, full of to fourth guidance. and my conclude starting going a I'm our discussion with segment with comments year update performance each results, quarter focus a our an Now our followed on by our review in

have business deck Investor we found can in our our website. that included reference, on supplemental be information For also additional Relations

to Revenue Operating million, basis. and X% for X.X% year, driven on the the of compared organic quarter X.X% is the or XX.X% last was by of X.X%. adjusted of $XXX impact growth quarter of X.X%, was translation revenue, $X.X an billion, of income for appreciation an increase net foreign which from currency

to had the restructuring During items, and and primarily charges of acquisitions million related special quarter, large [indiscernible] initiatives. we $XXX

corresponding the transition the to $XX income. Fortrea, of related have with other income of million for we the addition, recorded In service spin agreements in expense

$XXX the Excluding quarter operating amortization The $XX in revenue or operating adjusted due or by operating of and margin million. of compared last Adjusted in primarily invent. due was was The million year. decline partially in personnel $XXX fixed to XX% to million XX.X% of increase and items income was adjusted offset LaunchPad higher demand savings, basis organic XX income point to costs. revenue

our initiative target to full of savings in per LaunchPad line million with $XXX delivered $XXX year, long-term for million Our the year.

quarter primarily The tax year. the XX.X% geographic compared due adjusted was was adjusted the tax to to rate earnings. last rate of The for higher XX.X% mix

million from year. XXXX XX%. from for for continuing rate adjusted earnings quarter approximately the last X% $XXX diluted up was tax adjusted or quarter, $X.XX our in the per expect $X.XX We to -- share be EPS were operations Net

year due flow earnings. to the quarter was the totaled $XXX $XXX cash in million million a expenditures was quarter. increase The higher Operating flow in million operations cash compared in $XXX cash primarily from Capital continuing to ago.

this year, in and of to consistent line capital expenditures X.X% we expect in with prior the full revenue year, be were XXXX. For

Free the quarter $XXX continuing for operations from million. was cash flow

company of During repurchased in million million and the $XX dividends paid $XX million the invested in quarter, out acquisitions, $XX stock.

year, full operations The company million $XXX invested in continuing was the of dividends $XXX million free out billion. repurchased million $XXX paid in stock. and flow $X.X from acquisitions, For cash

pipeline organic to will meet financial criteria continue a our growth. our and robust application of potential opportunities that We have supplement

program continue our our repurchase share we billion capital has $X.X allocation repurchase part authorization. In addition, that approximately The important strategy. of to of an currently is company believe share

of At X, This debt year-end balances down prefunding $X are higher debt billion. in cash paid was had company billion XXXX, The on to due total of XXXX. debt. that maturing $X.X February million matures we while the $X.X

Our debt net X.Xx months of trailing XX debt leverage adjusted EBITDA. as is to year-end

review quarter beginning and by last was organic increase $X.X base an laboratories. the diagnostics growth Now and Revenue was growth with our to with compared the X.X% The business acquisitions compared last net billion, organic of of X.X%. primarily of XX.X% X.X%. I driven up XX.X% business of to for performance, will segment year, year,

lab an weather. the year. and due for operating we basis last price business year X.X%, Total volume million organic increased offset year business in XXX mix, business year management as to grew million XX.X% benefited lower volume quarter XX.X% increased Base X.X% versus unfavorable points Price/mix was volume growth proposition compared and to compared and increased agreements. Diagnostics as X.X%. year. last margin increase Base was $XXX Base mix of contributed acquisitions, $XXX X.X% adjusted business compared making business to and organic to organic to to or revenue X.X% of Adjusted days tax last acquisitions coating. the partially operating up impact compared to last from was X.X% and while down last the by due or due revenue. of the income

been these items, adjusted approximately XX Excluding have would margin basis operating up points.

of launch pad the by partially organic personnel. and offset higher benefit was savings As demand

-- to growth XXXX, be That in perform slightly to at will line XXXX. accretive and to full be expectations. our expect look revenue Invitae we year approximately we is we annually. XX% anticipate As for with

of the increase quarter an Now the due X.X% I of currency XX.X% the Biopharma in translation a revenue foreign XX%, revenue [indiscernible] year will soft of performance XX%. compared strong in for million, quarter, review Revenue segment to laboratory X.X%. with year-over-year an development of strong organic growth services. was its year $XXX and of and last performance increase the to comparison. prior Central Early demonstrated continued with Lab up revenue growth also

Adjusted income savings, quarter offset operating with $XXX and was year. adjusted higher demand personnel backlog to of the last the for ended billion. income and farmer costs. or due revenue operating of compared to organic While large $XXX increased a We million by or XX% quarter $X partially margins million of XX.X% revenue

revenue of quarter into of approximately the expect to next was months. Book-to-bill billion We with XX $X.X this convert backlog over X.X. trailing a X.XX%, XX-month for the book-to-bill

The December dividends. as XX, exchange currently guidance flow Now allocation, enterprise discuss for our full impact I which from share anticipated full acquisitions, effective free guidance, cash XXXX, of the repurchases utilizing will and assumes capital year. XXXX for the also year foreign rates includes

to approximately Enterprise points. X% grow revenue X.X% a to XXXX. from to This expect headwind XX of currency We basis compared translation foreign includes

X.X% half comes of We the acquisitions to expect This roughly Diagnostics revenue compared revenue XXXX. from comes to guidance growth, to growth be and assumes up half XXXX. from in X.X% completed organic annualization the of

a We XXX points. expect compared basis biopharma X% translation currency includes X% This foreign guidance headwind to grow of revenue to to XXXX. from

We central development expect to currency for mid-single-digit year. both early and growth a grow labs rate at constant the

and with margins line driven expect savings. biopharma We enterprise margins Diagnostics in to XXXX XXXX, LaunchPad up, by in versus be growth top improving both and

$XX.XX the XX%. for to rate midpoint EPS of adjusted range with at guidance is Our growth $XX.XX implied an

year. due And weighted the Our to seasonality, free billion flow towards expect $X.X normal be second to we billion. $X.XX guidance of range cash half it is to

In the our summary, by underlying encouraged are strength of we business.

we drive acquisitions be dividends. supplement and free continued to and generation our to and that strong repurchase through support growth, cash growth share for move profitable flow used cash our As shareholders XXXX, we also program strategy flow while into our that expect returning organic will

the thank industry. to to Glenn have in of I and I been and transition. has resource a position the tremendous quality team, want I market-leading forward look by the really been he company this impactful during our impressed of Lastly, the an extremely advancing as passion

questions. will we Operator, take now

Operator

[Operator Instructions].

Our from with Leerink Michael first question Cherny comes Partners.

Michael Cherny

simple just welcome X if the Julia, ask Maybe to I And straightforward. call. a can

of range, into guidance would thinking upside how on still And ramping in Invitae sense about and the a are we underlying over EPS over the lead to what either guidance guidance? of the year-over-year. the year. the us You the embedded margins Obviously, talked you are -- the Can the up push downside you or you of course have give stepping pull margins about range? what of terms

Adam Schechter

at start very acquisitions start. Sure, by Diagnostics was revenue the of X% Michael, it growth and I'll XX.X% And and look on business, strong by right? Diagnostics, driven was focusing X%. The it I'll grew really If you strong. organic of

at as you look XX.X% the revenue. That's to XX% the year. margins percent you when of look of a were If at revenue margins, compared about AOI last

we things. other The margin about accretive. of not to biopharma was look It the was the when the in be in this X and expect The in dates. is full down one, X be will in year, it just also weather It diagnostics, reason was we at number margins expansion because second of down impact but then due businesses, we than to year, Invitae year, the be it overlap for slightly invite each margin more and confident double will -- as both the acquisition, to half meaning the accretive of Invitae to the will half. be but first slightly dilutive accretive we feel

provided. $X.XX with in we've that weather the potentially into we additional margin. things second if that us built But due in that's is guidance to and the thing no quarter, help other could first built The weather there's

last number days. the then of is the And thing

that with the So we making some us us real will we feel margins tailwinds come as into have help confident. XXXX,

Michael Cherny

then kind And environment the Diagnostics? what question, in it factors -- What rate just growth ending on it. you of of X see the guess, XX% how Got anything one-time there going run the organic that do Is the expected but on mix on the volumes and you a elevated both nature, price a how about versus forward? think I'll side. have in on other into call as implication strong and I you mix Diagnostics year of guidance, would

Adam Schechter

Yes.

the look midpoint growth. X.X% so range X.X%, So is the we put X.X% at of growth that for a to it's if Diagnostics, XXXX you

we've at because seen would XX% and our share. X%, were Now be to if at was X.X% look of some that and bit organic X% than higher you the quarter, was gaining we're price volume think of Historically, fourth the X.X%. I little see growth, volume in do on you add to At up a you market X mix the acquisitions the continues day, what volume XXXX the growth, And growing historically. about end volume was up to X.X%. up

would more I historically. to time, expect would back what volume in over come we've line So seen that with the

Julia Wang

acquisitions add other only be you from I we've half our coming completed our XXXX, business yes. Diagnostics about X.X% in is Mike, XXXX. at that in and growth, look the thing our half would assuming The of coming the already business, when is be will growth guidance of organic will from the

for So sources it's in the terms profile XXXX. a of growth fairly of balanced

Operator

next comes Our Research. with from Meehan Nephron question Jack

Jack Meehan

the start, last industry. a M&A story to has the in big wanted year lab of just Adam, been

Your Can consummated you how an update as Leverage strong. expect is you pretty how on be you to everything last just active pipeline give your deals integrate is times. here X and cash just flow even over you look year? us

Adam Schechter

I Jack. [ laboratories, acquisition year, us. with Invitae, And the we local particularly very of at kind look had the ] acquisitions which from acquisitions. sure, was but of this was hospital, here, had became if What strong of Yes, of you available that XX also one first saying, acquisition to opportunistic those we regional

and potential dividend. I I broadly at more impossible is take overall, first sometimes pipeline, foremost, to X acquisition As X they number way committed look years. And take the good are sometimes at they months, allocation the before know the us, very about feel speaking, about the capital the strong. I it's because our think as to it's But the exact pipeline. I look But we,

criteria then And financial areas that there's anything in X to additional any if in cost as regional look as good first well. partners the being to there's do there? buybacks, of area. Or of we strategic we the do, Then years have X our for return and they're strategic we the can can of we into that appropriate. the laboratory our deals meet hospital that have year, local, we'll wherewithal think look business then the the where they capital add to authority these We assuming specialty buybacks many in if to we integrate see biopharma and accretive

very we mix. So think have I a balanced

pipeline we have good deals. think of a I

now X.X%, our I at expect that Historically, deals. that. it's look actually increased good said we've you about X.X% revenue, of X% the to when to we And revenue guidance, to feel from of come X% have amount would and I longer-term

Julia Wang

I does include our capital The only the is currently utilizing repurchases XXXX other from cash our free impact essentially acquisitions, add dividends. generation guidance would share and anticipated allocation comment for flow

opportunities other about The XX-month of additional you last M&A share trailing terms point throughout of X.Xx a demonstrates clearly is, that with commented, to EBITDA, all as X.X% year. we of have we flexibility should sheet balance year net attractive already end in debt terms the to which ratio leverage emerge to did opportunities repurchase in our pursue

Jack Meehan

And you. Great. one then, for Julia,

your to be going on integration impressions Invitae last this a headliner Just was joining the it'd year, you is great hear since just with topic And like that? feel and of initial how M&A LabCorp.

Julia Wang

Yes.

Adam as in me. earlier, #X commented of for Jack, I is so course, Of last joined this year, last call December

here. so just me to Let I say happy that am be

margin that To generation along growth would I'm what have have single truly this flow adjusted early growth, I outsized to take at profile. I and low me, first In the high digits. tremendous the growth long-term really have top COVID. to of in that say platform expectation cash of opportunity create the expansion, single compelling. potentially growth higher if industry range you're you thought terms believe in the drive line I is mid- I a to for with we of EPS digits this is about top shareholders. high of meaningfully you and to growth returns prior Then my When line last to to double observations, with guidance, our coupled strong free than worked the our rate digits. that look time at all, looking our excited

personal people our U.S. I people our technology and part of ago to we grounded which dedicated like years coming study also back innovation I is the do when and University. this and to perspective, What our focused. country, coming actually to and the science, From first was passionate, State a culture. at where essentially in started

for So in has come ways, super full many me. life

advance is I'm So internal to both excited serve. that impactful really we industry position across working and to that leadership in our the here, to be extremely an extremely to patients continue

Adam Schechter

patient as excited have a in Jack, chance And with people, remarkable. when we team actually integration, was going with it's the And experience about the first today. they to the very Invitae well. I about to time spend in the that I really more excited the had here regard it. is the I'm January. California I it sit the deal science, technology, even announced actually

We remain on track financially.

the revenue full XX%, more accretive being half second We still it dilutive. expect as to be accretive also than XXXX, to year slightly at grow we expect half we year and by first look the of

would that as look the as as business, it's expected. well have I if look integration, I So at I at going

Operator

Our with next from Lisa question JPMorgan. comes Gill

Lisa Gill

talked to again up organic Adam, today growth your really normal growth X% wanted utilization back you you and of of January, were testing go thoughts follow that typical rate you being to to we And we around diagnostics. also see. esoteric together rate. you Xx in about then talked when kind to highlighted the the expect X%. what for Just on

cetera, et X% we that and about Managed as then in volume makeup that So about esoteric? back is that Care, go underlying about think as shifting as there more X% organic. how as coming esoteric as of 'XX? with X.X% far relationship we to your the utilization much your Julia number? as think that far historical to of Is anything How do changing I the think about talked we from to And you, assumption

Adam Schechter

in of areas historical at I women's it the that diagnostics. And see talk the I question, growth business, I the subset health, about a disease. Lisa. those -- Xx Yes. kind at autoimmune esoteric rate of oncology, bit look little X neurology Thank very when It's you for and to

of which growth testing, So to esoteric continue the kind It's test. others. a esoteric big set portion than we entire it's not faster still that is and rates of of subset, see those

when I look then still that we do at I With gaining -- it's it the geographies continue part is CAGR, grow to think about hospital -- some therefore, XXXX, big. that market from are us And to that a to And X%, a enabling do just it to at that growth would the to And share. And rate. market. at faster so market the hospitals, even of is X% said, the with deals, market the goes X% back believe volume historical underlying a they're historically you has range. so I if I think think expect big is if been historical X% the I that's like think to with levels. the these than us surrounding market I the And

of care payers. we managed with to testing, terms work In our continue esoteric

tests a broad different us that a to have we when such we to speak about available mix X,XXX have we them reimbursement. because actually about them. pipeline, good think I talk It we gives can

have the breadth the profile that having think I we So us. test of helps

Lisa Gill

follow-up And if lawsuit a there something guidance. there's obviously May? a has your that test currently on to be be cost into shift organization play, meaningful to trade that coming in could Lab And the Is meaningful? you're win lawsuit. able just one the supposed directed

Adam Schechter

Yes.

approval, do for required New State that's the to lot already test we to and doing our York being a So the with majority of developed what's was. actually regard were where we cost to submit of lab because tests, vast

There of would I ranges that of still So for provided, specifically. incurring be the thing we but it's nothing safety think wrong systems are those the might we some were out other kind I costs to and terms that in that. the within other call track things, industry.

I that new it to market could tests to get slow them. people need important for down think ability the

I around academic some health center, rest caused think an you an medical where disparities of population. the care if have LDT you before might to the it access live

answer. think don't reasons, I those right the For it's

a organization to a move trade with I think the work the it's to to time, way the significant impact administration find needs forward. better us. financial not same At to

Operator

Morgan comes from Stanley. Wright question Next Erin with

Erin Wilson Wright

your an the on backdrop you -- could I the in Could NHP XXXX? are terms market underlying update into you characterize, what if business guess, expectations across biopharma, of And provide now the as right well.

given of a front margin the think the that on about into just business perspective in we supply, some to about quarterly And news the how progression, Just for also from think anything recently. XXXX? that more

Adam Schechter

Thanks, Erin. see Yes. that anticipated had tell you, of I'll the to both it's in segments. nice biopharma we the growth

you in we did look labs. development. biopharma, development central revenue expected, growth see as for So if had our we And XX% grew early growth at Through year-over-year. actually XX%

X%, As X% that significant X% I of that giving a we're exchange at with for realizing that XXXX, we're the providing there's of levels. midpoint look guidance a range to a impact in from foreign

remains it business, that healthy. at look I As

start Labs, from the both XX% with I forecast about leader We in those of I mean, backlog. When Central of segments. are the comes a

forecast about feel have. So we good I I about good that feel we and the backlog the that have,

look cancellations. well our at win look look early dollars as look and in development, I I RFPs I numbers. at then the the at I at at number As of look I as X rate things.

and If dollars the strong, look at you numbers. both remain RFP, in they

now. If you if levels, win our normal look look And consistent. normal it cancellations, back at exactly of end the not rate, it's to at remains you high although at it's

down come it than had much historically. it's better where So been

the So with year I good coming both of feel businesses. those into

And think early business the I expansion volume as development. services Diagnostics. to in laboratory as as as in comes I margins about well the biopharma particularly margins, we As well increased expand think in from expect increased utilization,

supply supplies. good feel about the need we've for that the have our I we we forecast NHPs, as far As provided, that

Julia Wang

color. Maybe I could add a little bit more

this much segment about anticipating to did that the as XXXX versus of will pace negative which it margins drop-through first 'XX. of the impact to XXX As points relates are 'XX, will you the BLS opening as basis that top impact the line, not expansion remarks XXXX, Therefore, you versus margin we share in in all, year. look growth to currency prior be so the BLS when revenue translate in to the the at we of in saw growth for

the not is to a the BLS factor did other XXXX. lab it from it's within going X The business standpoint in lines be sources our as revenue growth heavily of weighted from towards central as

is The is quarter play noting margin the is lowest of other that QX the PP point year. worth

So the take into to want you within that about phasing consideration year. as you think the might quarterly

Erin Wilson Wright

quick Okay. regulatory. helpful. a X just That's And on

we You [indiscernible] broader what administration? -- where the PAMA about just mentioned and environment stand LDTs. But regulatory today the new with

Adam Schechter

Yes.

that we to our PAMA, were trying with to it get what trying if we And way organization to applicable delay be find continue to better actually we doesn't and that has to a they trade legislation time, last as is more the push to here's many, at achieve move And happen, try it happened for in continue just that think in a now, out the been to several work we'll We've year. better years. to with a then frank. place So forward. ways same for

XXXX. at it to PAMA PAMA I that plan time, to option. try even base to better. doesn't And legislative looks happen. does point we then continue looks But my it assuming this is a find coming case, We a better built assume happen, in in So good, if work

Operator

Anderson Elizabeth Our ISI. with from comes next question Evercore

Unknown Analyst

Sorry. go items. back Yes, maybe to onetime

said you I guide. impacting of weather a 'XX you think have $X.XX

to headwind for 'XX? [indiscernible] maybe the is fiscal total 'XX? tailwind what's for day or Payroll weather and day And be So impact going

Adam Schechter

let's $X.XX also January, the provided rest any be with we from the point, we and Yes, comment see to further. happens had guidance $X.XX. a built quarter tailwind XXXX, look into that the before actually we've will payroll that XXXX already what if built about in with we've as this weather, we weather But at you. And And in us. impact at you look of at for we

Julia Wang

only I the thing definitely Joanna, would I with Adam. agree add,

So clearly, is not calendar largely if XXXX look full factor. a you at year

one will because day one expect it However, day. unfavorable be less payroll partially to we by offset less have revenue slightly

into So work the might quarters you consideration the as want that within year. take we to through

Operator

Brackmann William Our comes Andrew with next from Blair. question

Andrew Brackmann

Julia.

X on the ask and working retirement. And best I'm macro in upfront. to forward I'll Looking listening, front, luck with Glenn, you're if just congrats glad Maybe you.

sort Any Sort your assumptions either of of impact worse sort any, thinking spending should better about inflation categories first margins the about underlying in here, How might impact year? can that this or and lot those how of you of get you sort to talk year? noise right a tariff secondly, costs, any front this supply on of XXXX. And for if are then now. maybe

Adam Schechter

you, Andrew. Thank

So X thoughts.

a assumed of part our inflation. of big and X.X% all, inflation, cost is X% underlying of First we've to people, inflation

actually at our it's turnover gotten particularly in than it rate. look we was better prior, XXXX As labor, at

place X.X%. to good So I in X% with pretty a feel like we're

think what tariffs, know scenarios, In it But and terms would would we lot the timing happen, of hard to happen. would what manageable taken a us. look different be that of exactly of it's a at for we've very

Julia Wang

already build To what meet nice on to very A just shared. Adam you. has

line. through As you the to know, million year, we plan through every of improvement have really and this that $XXX initiative launch to savings that bottom drive dropped $XXX process really technology we million about

to increase us in cost. helps the actually labor that really for part, the So most

Operator

comes Chickering Our with from Deutsche next Bank. question Pito

Pito Chickering

So follow-up a question quick ED. on

guess the would mid-single you think what's I said between for volume there sort components digits. and I pricing grow XXXX? that of

Adam Schechter

Thank Pito. Yes. you,

would range to we flat. guidance is didn't little to expected said nothing is grow specific pretty slightly significant ED Price we or services We So there's faster I basically of pressure, within expect. Central X% than more tend business grows. segments what just will Both mean bit but Laboratory that. does a than grow give X%, grow to what X%. for ED.

from So volume. it comes

Pito Chickering

Okay. it. Got

ED for and side. the growth volume from flat pricing So coming

Looking walk some some capital cash on sort of 'XX cash free looks That of pressure working to on versus between EPS you growth? 'XX, through at be your free sort your for flow growth. growth your delta the the versus free cash flow or us conversion can flow earnings growth

Julia Wang

Yes, maybe I can another start question.

exactly free in our half the to in be understand about strongest, fourth regrounding start so with of that the flow particularly saw as second cash of let you may of being quarter majority cash already, how in quarter in So landed XXXX, typically the in the me last and QX, purpose fourth terms with XXXX, we what free of year. flow generation, ourselves generate the was year. we we the aware the

And favorable increase well free capital operations the as which continuing Specifically, driven before. cash over $XXX as was million, by was to was the from the flow XX% working QX year capital versus earnings timing. expenditures up lower cash due primarily higher

driven and billion $X.XX earnings Now already some by certain it very when between the is in a higher strong billion to again, flow relates might free is cash -- capital. [indiscernible] the the $X.XXX our cash and of degree, billion $X.X really have cash $X.X -- midpoint working you growth that a XXXX, you out transition to XXXX to billion to coming seen XXXX of guidance once with flow of for for

serve targeting But for have was you are which key we cash been as and has our is what we pleased a generating, I deployment -- strong that cash I historically, perspective, execution. say with I is continue built in have say overall, XXXX. we from and which which funding serving capital a are what really for as the guidance what around flow been to would also strategy we seen conversion mid higher, the will And would force

Operator

question next Citi. Patrick from comes with Our Donnelly

Patrick Donnelly

kind about front? Maybe pricing for the a what business, business that here. Diagnostics expectations just think can here, the lab core been you I'll you just conversations side, payers, about 'XX of talk couple those When the with have the on package together

much that And it's seeing did obviously, side? And we How 'XX? elevated. then in play the our a the to It as utilization similar guys out continue. vein, conservatism like are in how on it's just way been put going utilization, you you feels work

Adam Schechter

Patrick. you, Thank Yes.

the if mean at for as strong, very I we ended it's And a XXXX. provided our we look it XXXX, look XXXX X%. that and to guidance in the the you as gives I quarter we Diagnostics us for year momentum at come of So midpoint

once So come very strong organically. we underlying X.X% believe showing will again, which demand,

will that we And The from XXXX. completed. come other already deals X.X%

go very discussions well. with payers Our the

They because the business of us the show hospital of we acquiring some them helps help patient, We Labcorp. as and as hospital add. the helps the well that benefit see to the continue value that actually them helps

the very We are now health they're almost see so They deals those to, have high-quality on, think helpful areas system. I think, we are specialty of see that that. that care I payers very tests specialty entire also lab. providers. and many focused are that we see the they and the So a every And one a lower-cost

of in So because discussions. we're we get favor it at our and quality give to very our in lower cost, high a those which works scale, able

XXXX feel are where as move about forward.o I good feel good about we I we environment. So in the

Operator

from UBS. Next question Caliendo comes Kevin with

Kevin Caliendo

labor points. or any think just saw you would -- like In mentioned Invitae, when ex -- and that's wondering to core quarter, quarter, one-timers, margins mentioned days, you guess grown the core about better basis basis to and I different quarter And expect turnover is about expand points grow? so? that's everything the weather, you think quarter, weather Diagnostics would fourth still dynamic in the the in ex third roughly the else, what you margins that core XXXX you LaunchPad. I'm versus have business by fourth in you when XX XX in Is there ex margins ex such that continue

Adam Schechter

see biopharma the businesses. margin it expect businesses, as but and to laboratory in our think business, both So expect see XXXX, we expansion, Diagnostics also in in I to about we

the of half but will Some slightly the Invitae accretive first our the it's accretive the favor, it works year, the Invitae. that a of be particular, the you actually in it that second be in in full year, year, of for tailwind the and will for things that saying half margins mentioned, be will dilutive to

So that that us we've got we expect I very on tailwinds as overall, feel in and some XXXX. help improvement will the margin confident

Julia Wang

I color. add would If more maybe one

foundation Invitae XXs, plus you upon particularly to line the we of like neutralize impact to a we performance. Diagnostics And XXXX, business as we some as unusual weather well operational As and high was XXXX. the acquisition the from was in from you dilution look diagnostic strategic in in actually language from margin, as particular, expand overlap in as which move continue to QX the for that the inviting expect the with to at items to our based, XXXX margin also mid continue build margin our into perspective, and once

Kevin Caliendo

Got it.

That's Okay. one And helpful. just follow-up.

You the or when and clarify about is can color you just of made us you year about around any there as think timing however some we growth cadence cadence the weather want would other -- give for XQ think But about comments that. and Invitae. to we EPS

XQ obviously versus might one-timers there's seasonality. off versus we normal because year As throw think XQ about versus this some that XQ XQ

Adam Schechter

Yes.

first we're else $X.XX quarter, month quarterly not weather. give as if I a January in say, the But that the have through to anything to happens see So to due did guidance. we impact going there's of We'll weather.

moment. the not We anything haven't built in quarter-by-quarter going but at to above we're $X.XX, guidance the give

Julia Wang

impact, And website our earlier, the supplemental well. quarter, first be the but in there included I I day shared in that's right think on will a information as

Operator

Sandler. Westenberg with next comes question from Piper David Our

David Westenberg

question here the plus Invitae on the growth here. some So have integration of I'll acquisition just X

reimbursement? know also -- but Multi on end So about up not actually you first some have you and assay expectations and commercialization. bringing time about reimbursement lines it talk really I'm that Invitae I MRD IP had had talked where did out. or Can that shaking reimbursement, sure it an biopharma eventually then fights

much us already can dependent them a the half the you of and So there. And give just in maybe one place. growth And cost was if this just an you've longer. terms accretion then versus little that really of is year, synergies identified on of How upfront in already because I'll update ask back that have Invitae.

Adam Schechter

Yes.

they points. X -- together. So come both One is and

of we thoughtful the we're a mean, for costs out, are manner, As best. at taking and in doing doing very I best but we're Invitae, look I it accretion

best. MRD we're furthest taking and looking we MRD time ones the They of line, advanced we're So assets. We that along, have were scientifically best assets. were have at from a the most

to of it it's we number continue to say the MRD. With year regard accretion part biopsy, of assets dilution, just look a have including of we is as significant So I liquid timing a later. would at

makes costs So then we've overlapped that part it taken the the we've second it is where of out And year. sense. significant

Operator

Jefferies. Peterson question next with from comes Our Tycho

Tycho Peterson

on just you and there have launch? ahead about behind was this know there. USPSTF year? and put impact the I that injunction. the And I [indiscernible] think, hearing launch the some may case been, last developments, the the at anything month a resources to whether need partnership on the on to are Braidwood of then you later of how thinking timing ask And I end wanted there thoughts of that on

Adam Schechter

Yes.

us, I be are to they think of ready. we'll things. those appropriate, with to of the talk With cases it's when specifics regard prepared where we'll And be litigations actually them it's to of any about and and best type launch. types to

Tycho Peterson

follow-up the And you had just Okay. know on PAMA. is earlier question I then --

comments more it's JPMorgan out your kind pull all of a commented SALSA, on you back to just implying might pull about you're it little pieces had approved. makes logical, and bit but and there sense be out there if what can maybe it Going might Can you at you connected talk parts what of you of. you

Adam Schechter

Yes.

to want pulling or we're we're -- apart I So say didn't legislation. trying again, bills

the what's find path you that Republicans to for appropriate Bureaucrats things needs Senate, out to all legislation, get figure talked to approval to of and working is try you and Congress forward involved. try group that are trade with any best Our addresses with the legislation the and

patent I of continue has current the got path Democrats doesn't we've that way on. make very the we forward a sense. Republicans to been implemented work feel like that it We've So had and supportive

way find it to have most make move just sense. forward does where we the to Now logical

Operator

actual Ladies of call closing Adam the this to question like conclude for remarks. to I'd does and and any gentlemen, the back portion today's call. turn

Adam Schechter

to joining in April. XXXX first and All we on everybody, of forward you We look appreciate today. right. Thank quarter you, us your the for time, updating

Operator

Thank you. presentation. does conclude today's this and Ladies gentlemen,

and disconnect, You wonderful have day. a may now

Laboratory Corporation of America (LH) 6 Feb 252024 Q4 Earnings call transcript