LH Laboratory Corp. Of America

Adam Schechter President, Chief Executive Officer
Glenn Eisenberg Executive Vice President, Chief Financial Officer
Clarissa Willett Vice President of Investor Relations
Lisa Gill JPMorgan
Ralph Giacobbe Citi
Kevin Caliendo UBS
Dan Leonard Wells Fargo
Derik De Bruin BOA
Erin Wright Crédit Suisse
Ricky Goldwasser Morgan Stanley
Stephen Baxter Wolfe Research
Dan Lawler William Blair
Michael Polark Baird
Call transcript
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Ladies and gentlemen, thank you for standing, and welcome to the Q1, 2020 LabCorp conference call. At this time all participants are in a listen-only mode. [Operator Instructions]. Please be advised that today's conference is being recorded. [Operator Instructions].

to Willett, conference Relations. Vice like speaker to now Clarissa today, President would hand over the your I of Investor you. Thank Please go ahead, ma'am.

Clarissa Willett

Quarter Good to Operator. and XXXX First you, Conference Thank Call. morning LabCorp's welcome

this today's in internet. will replay telephone release, As call detailed via press available be there a of and

Executive and With Officer. Chief me Chief today Eisenberg, Glenn Schechter, Adam and are Financial Executive and President Officer; Vice President

investor website a press operations, in morning the an presentation This measures release today's, our measures posted both which the discussed section information our Investor additional call. financial financial we at of and and the on reconciliation relations with business GAAP to during non-GAAP Relations our of includes

to statements to respect future on operating for cash economics, our flows are related including and and the our expectations making assumptions, with on as the market statements. more XXXX we on COVID-XX business projected COVID-XX pandemic statements conditions, pandemic forward-looking financial the limited impact include, the company’s general and expected of conditions. the forward-looking and responses our to as well Additionally, not These of businesses, but the generally, business results, are impact

change upon many control the is of statements subject various affect our expectations could of that upon based forward-looking is and to which Each are our based factors, current beyond financial results.

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

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

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

Adam Schechter

employee today. and and in no been unprecedented pandemic. impacted these is a everyone, of working times which country, the shareholders Clarissa. us turbulent by we've Good Thank thank certainly you and LabCorp living customer, morning, times government, for Every and result exception. has global as been are you, These joining

to we Given the have of our virus. development, drug testing diagnostic challenge risen help spectrum unique combat the to and role the across

supporting and are the those protection vaccines. of who the or both, involved virus are the we're and of development currently by treatments We in previously infected potential

Our pandemic, have the impact working that to the United remain minimize States teams fighting they energized clock, like involved are in we around world. all and in by who the directly many this doing are been the and around

I and how incredibly technology, response, have our and class resonates confident the availability we and that lives using mobilized even world delivering been of the impressed our improve I vaccines am proud to and mission difficult and with diagnostic, quickly company's health accelerating innovative more medicines have in and by of environments. improve effectively most

million. quarter associated $XX first with company solid billion, over the first free adjusted quarter EPS cash the of and flow challenges performance the of In despite revenue across $X.X $X.XX With COVID-XX. delivered of we

began the During did and the for first programs The other in drug and COVID-XX quarter, development decline nearly diagnostic for of impact both demand lower the with testing. experiencing increased global pandemic diagnostics we performed the postponing testing offset not testing. clients

at quarter impact the ago at XX X.X% points a revenue pressures organic and basis development XX PAMA. last from from continued remains to from from Drug compared revenue X.X% declined year trailing year COVID-XX of lower remains book-to-bill Diagnostics revenue to expanded Margins The a and $XX.X months ago. due price backlog unchanged strong grew X.XX. billion.

these make manage way expenses that as our jobs will on longer preserve be regarding steps through is on to To of unusual term February we company basis, the future; duration the necessary pandemic global and withdrawing the guidance number the our we uncertainty a Given of and protect XX, prudent its provided believe financial XXXX in have a we times. the the prospects taken XXXX. to significant severity

we are large importantly of specifics the scale provide reductions. employment Glenn will not actions moment, planning but expense a in

forward, to positioned and shareholder well our long to Looking of to value. customers term continue the we unpredictability serve are pandemic, drive we the that believe despite

My for the belief I forward. is the I and to we future was it as The this. believe we more as our work before do and be what now continue important back I business important even crisis asses to and will move come

Just loosened March consider the the making this only rules emergency lab during first X, how around after testing to PCR a time. commercial testing. FDA days we're difference of We were launch five on

commercializing played it ago. LabCorp years first in was PCR nearly an essential is a XX introduced when technology, but role

we’re task no the agencies So surprise States. close with and working the able House it across is federal we're collaboration that time with state United Coronavirus Since force, White in that quickly. mobilize to and

continue to We than XX,XXX per capacity. have to day test methodologies test continued to performing over more To-date X we’ve COVID-XX our we of new tests them develop as people are additional and X.X and more nationwide, we and science-at-scale faster. per million build we capable month to million conducted apply or

approval COVID-XX currently Pixel first the is on been exposed have have may healthcare we receive who LabCorp In symptoms first to the the LabCorp collection responders by is FDA, and test launched with available to or This kit EUA and at-home platform. Kit addition, our Collection consistent virus. to at-home COVID-XX workers

Collection At-home the We will in roll broadly weeks. out more this coming

XXX X,XXX test more perform an if expect can service tests mid-May. available This offices including XXX,XXX sties immune per serology our Currently doctor more be by our tests and to testing, patient serology individual and centers, determine to the perform thousands in has we of at than to Walgreens will day LabCorp which per response country. XX,XXX across than the virus. launched also had day We an helps we

and includes same phlebotomists. safely who special offer to for patients our populations we time vulnerable usual We in menu Diagnostics test That centers. our routine hours provided made for critical most we operations patient continue our Specialty available Diagnostic even kept the running need answers. the our services At by and the service

from power the again capabilities. combined benefited development is our to out diagnostic and virus, once Drug the Moving of business testing of the drug understanding development, demonstrating our

you know, treatment biotechnology there virus. many pharmaceutical are vaccines and are and the working companies for on that As potential

promising on other and working these Our the development treatments around antivirals, drug teams world potential are vaccines.

fact, we COVID-XX and faster winning across development. dedicated patients expedite to share drug our teams well market enabling treatments, been development highly business coordinated help diagnostic us through have and have reach a in efforts about and These In response to highly our would imply. mobilized accelerate what identifying successful team

to patient the the is received MHRA Three on a Less screening value of days example after antiviral how collaboration patients. clearance, though this team drug. is delivering One Biotherapeutics than an began Ridgeback XX team receiving drug. later, with hours COVID a test the first public holiday, quickly

our that to and advancements near registry the Health generate insights will future. scientific term make to treatment We such our enable help use capabilities advances the future will continue that in and researchers pandemic Ciox COVID-XX as the efforts. better and ongoing launching and that prevention includes which diagnosis understand will to characterize present, patient This and aid and the preparedness

important includes virus also we Bioscience decisions. Biotechnologies with virus, that focus treatment already to to like separately, can companies Microsoft for on characteristics Pacific unique response first trial. working the on Adaptive and programs And light more where It patient this patient are immune working with can have recruited support on that our shed we

as our continue into wavering advances as and as ability testing, important future. commitment is scientific and the we’ll our conclusion, to COVID-XX we go support treatments In on well and vaccines,

pandemic, uniquely to response priorities we our the key and power digitalization and move priorities of AI oncology, continue our with which win Beyond The our capabilities across we and do, will our data across to in to development. growth center diagnostics the leverage forward analytics, combine put to high integrate and remain opportunities. focus the to on customers at of all business, drug

long strategy is and the the grow which I’m the virus We path towards our to success. remain right term convinced even to committed beating to in short-term more

Now, our I’ll discuss over call specifically the performance. to Glenn more to turn financial

Glenn Eisenberg

the results. going COVID-XX I'm to quarter that the first by my and details business, comments some Adam. you, start on discussing our our on had then provide pandemic Thank impact

our providing remainder commentary the assumptions guidance for and we're provide expectations year, today specific some I'll the While XXXX. of not for on current

of development uniquely combat and global as combined well enables diagnostics to our detection treatments. testing, as noted, us pandemic, development virus diagnostic Adam COVID-XX drug the the the As the by of supporting offering help through

a to an role critical magnitude the has in different and both continue of adverse of performance in combating play had impact our this ways. at different pandemic, COVID-XX on we While albeit businesses,

impacted our diagnostics a quarter, testing of weighted volume In degree end lesser a at testing of to to XX% company's esoteric sensitive broadly, heavily It the and time demand we results. normal the the tests, the but demand with these impacted critical in also This a business, test in experienced towards reduction routine for versus more but to daily levels. due XX% nature procedures. reductions

the up our new COVID-XX ramped has of volume experiencing volume lower we’ve with we're capacity marginally only while In addition, test impact the offset tests, offering. the for broader

we focused mid-May, with also offering. quarter, on day the our capacity over impacting the are by not increasing tests COVID-XX capacity test antibody kit per increasing new COVID-XX serology along XXX,XXX of at-home of While of

COVID-XX segment nature due more drug than diagnostic the global our to business In our development earlier started impact the of in business. the

impacted and interruptions impact customer limitations severe, trail initiated the business to has sites has delays, chain. been trial to supply while in the by been excess However, less certain the

was the will the In up Now quarter. breaking in to that the given quarter performance. impact review our our be we COVID-XX, discussion impact first from biggest late

break to the that we in out future is be impact able not expectation quarters. Our will

quarter impacted for financial segment. increased of Revenue X.X%. as pandemic. year, over by by million which X.X%, COVID-XX of the difficulties an increase negatively rising X.X% the receivable revenue partially our wake the company and its reserves or by in lower of unemployment driven million faced of in of result the billion, offset organic acquisitions, benefit diagnostic of COVID-XX $X.X revenue increased approximately was of by a net reserves $XXX of includes was $XX customers the accounts Organic our X.X%, of The last divestitures

a million the million quarter of $XXX Operating income $XXX last net to loss was year. compared for

During and was market in the other and assets primarily intangible totaling company's recorded quarter, our goodwill Drug a the unit of reporting related to of one million business. as goodwill we’ve COVID-XX to ongoing The and lower X.X% total the pandemic impairments or impairment asset. $XXX valuations, development result

In Launchpad $XX and COVID-XX initiative items, to restructuring charges primarily addition, we charges. related special related of have and million

items XX.X% and restructuring million, million last special was As operating income of year. revenue, impairments XX.X% $XXX well a million $XXX or or result, which as compared of excludes adjusted to $XX charges, amortization as

adjusted from margin COVID-XX of million. to impact due The the was operating $XX decrease negative and in income

impact and by additional increase higher payroll the from million respectively. personnel day. grew points other line COVID-XX benefited margins This operating income growth, basis Excluding offset partially Launchpad from one and PAMA top including XX and adjusted approximately and costs, savings $XX

charges, jurisdictions. impairments for last was amortization compared year. company's The a was coming tax adjusted lower to The tax rate higher was quarter percentage special XX.X% rate and year. XX% lower last of the adjusted tax to XX.X% rate compared excluding XX.X% from the The due tax to rate earnings, primarily negative

Net below quarter or to loss the year from were for share. of a earnings of the in Adjusted approximately million $X.XX EPS the negative COVID-XX quarter net or were diluted $X.XX per a in $X.XX. impact $XXX loss due of $X.XX last

year COVID-XX. in was cash in million quarter, to a a favorable flow as increase ago. The cash $XXX earnings lower operating result Operating compared cash partially of offset the due to working capital, by flow $XXX was million

totaled $XX $XXX compared X.X% to last of or revenue year. expenditures or Capital X.X% million million

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

stock; company repurchased program we however, share as financial flexibility. the $XXX uncertainty million COVID-XX and quarter liquidity the we of pandemic its the have the our repurchase focus since of as well on in given suspended Early

the cash gross end million, was Total XX last end to $XXX was billion our million debt our end of balance $X.X at months down was from X.Xx quarter and EBITDA. at At XXXX. leverage quarter debt $XXX

review I’ll performance LabCorp segment Diagnostics. beginning Now our with

of million quarter, was revenue receivable the organic $XX year. X.X%. a in due offset COVID-XX X.X%, the accounts of for partially a benefit Revenue X.X% lower of The compared decrease reserves of as the the result increase to decrease adjusting $X.X acquisition of billion, pandemic was by out last to

of positive $XX $XX million, revenue revenue an of impact Excluding grew impact of $XX X%. from the PAMA approximately one-half organic negative the data million, million and COVID-XX of additional

BeaconLBS the benefit addition, largely of by offset weather. contract the In the the was impact from non-renewal of UnitedHealthcare

of volume volume volume X.X%, organic to while compared other X.X%. in demand year, to X.X%. by COVID-XX contributed decline Total reduction decreased last X.X%, in acquisitions a by decreased as growth The volume due net offset organic of organic was X.X% partially from

year day reduction The from and demand an the favorable versus was impacted demand the was revenue of volume routine offset but prior in impact consumer towards X.X%. heavily the weather testing essentially procedures. broadly, benefit one-half weighted negative additional from lower genetics by Also

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

was mix, organic of Revenue of of by consumer per PAMA of increase increased impact The X.X% X.X%. X.X%, contract offset acquisition of the favorable non-renewal to by COVID-XX due growth X.X%. which X.X%, from X.X% genetics includes of other and BeaconLBS the the partially

growth. LabCorp million $XX in offset XX.X% Launchpad million for costs, million, or to Diagnostics organic higher from of compared and impact quarter The adjusted the adjusted other last due income million XX% $XXX was of $XX operating was primarily margin PAMA to of COVID-XX decline partially and or by operating income savings $XXX the year. revenue negative personnel and

million and track diagnostics net deliver basis and impact the COVID-XX by savings from income end proximally of million of We negative XXXX remain on PAMA, from the margins initiative. and Launchpad operating $XX $XXX our respectively. points to XX adjusted Excluding grew

review billion, of X.X%, quarter Revenue partially currency XX X.X% year to increase performance points. of Covance of growth by X.X% the due divestitures organic of for $X.X I’ll last and offset basis benefit compared was Now, Development. of translation Drug of acquisitions, foreign to net of an the the

the approximately impact revenue COVID-XX from million, approximately grew negative of $XX Excluding organic X.X%.

the partially personnel Adjusted Launchpad operating of to adjusted net higher from or compared or impact to year. XX.X% million. and revenue increase million costs by last segment due margin and was operating was demand, $XX $XXX divestitures income COVID-XX the negative of and million primarily in organic income $XXX for acquisitions, of savings, The offset XX.X%

net and Excluding income the points grew by the end basis proximally Launchpad of margins impact savings on and XXX We remain this COVID-XX, adjusted $XX to track operating from $XXX initiative. from million of drug respectively. deliver year, developments million

at of XX For end Backlog was $X.X strong and and the months, billion. the X.XX book-to-bill orders net quarter at remains $XX.X respectively. trailing billion net the

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

Now I’ll remainder provide XXXX. some of commentary for the

we in announced have year the our the impact this unpredictability and XXXX our guidance. to regarding earnings morning the As duration and withdrawn we pandemic release, press the of due full COVID-XX

business strategic, times development the power as diagnostic and Especially our drug like is and combined a both well of during these, financial as evident, strength standpoint. from

best the employees and Given environment, current investing our manage outcome to achieve we long our operations to term the continue still company adjust for in to costs, customers, the while shareholders.

to are be earnings and in While we both free revenues down generate and expect solid cash earnings XXXX, expected still to flow.

of taking the demand limiting of Some temporary include plan reducing in and suspension contributions. soft, of workers actions or where adjustments contract we're our to is help mitigate furloughs, XXX(k) hours and impact merit services COVID-XX the hiring, delay for

related increased upcoming and support ramping capacity payroll to in government we the flow the include addition, the million, year which address the from the the for of help company's which pandemic. payments, testing tax related spending cash such received actions CARES will expected Act In to deferral of is benefit COVID-XX the $XX as sequestration from suspension the up

we capital even test increased and to after and will investments for term expect capital growth tests, year. and year allocation serology to the expand last the profitability; continue to less make than COVID-XX standpoint however, From molecular support capacity internal we to spend a our long this spend be develop

as opportunities, but focus liquidity. on we’ll evaluate acquisition continue with threshold a we Similarly, heightened to

earlier, program share have we mentioned repurchase I as addition the foreseeable for future. In suspended our

us a this challenging times, of strong on generate flow has cash philosophy served expect these grade to free investment the we Our standpoint well top liquidity from in year.

$XXX XXXX. that credit million our $XXX in matures available had for we facility of cash-on-hand XX March billion and $X million of on revolving credit As

in of using cash notes to maturing down this only we due free expect year The that we pay flow. is $XXX have November, million debt

to these opt may notes bond we needs. public depending However, in refinance the market our upon

was mentioned Xx earlier, X.Xx end covenant. to I quarter debt EBITDA, the leverage last within our at our XX As of months gross debt the

with have a related our While year, the be this COVID-XX. had given we we uncertainty add future discussions flexibility covenant to within to currently our covenant the throughout to banks to expect

evolving continue COVID-XX we’ll monitor updates We to appropriate. actively as the provide and pandemic

we’ll take Operator? remarks formal And and now questions. this concludes our


[Operator Thank Instructions]. you, sir.

Our first from Please from question Lisa JPMorgan. Gill ahead. go comes

Lisa Gill

morning of thank just team to the your things. of want for Good front much. couple just understand you all very these lines really Adam, thanks and on times. difficult that a doing I is

both the as As around volume first we think expectations you the well for about COVID-XX testing Serology, as can talk reimbursement? about

tests that anticipation do And volume year, traditional think you can tests and then is of do secondly, you you’ve as you today, you I but be that how expected some volumes? know an of $XXX,XXX far on the that Serology to what said expect I but – number testing offset help molecular the anticipation the seeing guidance, you potentially get many pulled with this to there down this you're could know as side,

like lastly, back what are get fourth around year, the just volumes when the of lot of in about that's potentially we kind you that we about quarter? by more just think the the of then or I questions to your happen know time normalization? And volumes. kind how third think these going into Will understand back to getting but expectations half wanted to of I one, a

Adam Schechter

the and really a morning about so Good you are and up limits, involved an just line lot of the organization. a the the seen people you probably working such organization – in that building have you of with so pleasure for much to heart The just know work an And phlebotomists, and as six very and and their work to just I'm me Lisa outstanding, is LabCorp can the people. are know the and be when hard you the LabCorp doing get care I'm now just about I – way, just the and people is learn years to it's so I've a to that CEO and Yes sure. with carriers. been remarkable I'm workers, the began organization I'll able with in think front soul pushed been with, capacity scientists, amazing what great the impressed for see and work people I've November,

to background to we going. you and me of I things see give where testing, where regard some let With are try

can XX to a do to capacity. day. So PCR testing. in Serology to a began to we're tests We're just a XX,XXX first. days we Right about ago able testing moment, was thousand and that that about get it I’ll now I’m do day. several talking build continue we tests going

I don't need able know get build how per and additional fast, the over XXX,XXX like day you into to is would exact these know you we’ll as possible. The to you quickly be as tests number RNA as can orders build imagine quickly test as back that the you that tests run lots to there's issue going of try machines and lot and but to a can. XXX,XXX and we doing over get to to But PCR we're to equipment. takes I of

short not the of doing interesting our a have back additional today, some at we're and back We we have orders thousands thing day time using longer a orders all The in for right now. per of so we're no any capacity did XX,XXX when we capacity, is several period fact some for have weeks.

future, that as at can. be that's and the trying and as capacity back as think very we states to just we're build short think I up is which why I running we term capacity become business, full I to will and near quickly more more and think in

capacity quite be that for testing the So I time. will believe some running at PCR

it's early serology, easy regard very to still it's With to and predict. not

the go able by debate to of a frankly which do how day can now go still the utilize test way I day, well in serology. a to some month. marketplace next on be middle serology and XX,XXX over tests but think the over in using about serology Right there's to we the we'll XXX,XXX

us them of there's were some take that I all use in that think One in will how some saying to reasons are particularly coming of order tests a for is, they I scale, as don't day about need. the them don't them why. capacity to know work, though serology talking large back per several companies companies, it and large long while see doing are and

and ways the that, are will to to I addition tests In marketplace. they going know believe be point-of-care as there how I in such other be don't serology used

quickly expectation the is of just to be capacity the up, that summer the ramp we we'll utilize serology our how fall most I move of testing I we'll the but ways be we months to probably use get serology will find summer. and that to as able through into and My think as able most forward into don't know

about still that time million to small those to serology our a PCR, do regard tests XXX today tests so XXX,XXX in we very across you maybe of though, over XXX,XXX think or With a numbers, the when over that all and year number compared it's tests ago for testing.

weeks So these unless we the tests start it come that what at to up will make difference to hard last we've be March. back, for for see seen in of the

decline this the I back they end did of COVID-XX to towards good And back a the see of bit country starting of we assuming of over important additional of come towards and what would and from as up before I fact of expect is we the the would a back we fall see start expect as lot with the the go a was the impact to volume no year will impact news virus, always that to that summer. as for less the and month, end come get the less in gets another that a Now the this running, we'll decline little health. year are there's we

lot Lisa. you. had not I outside the Thank will right diagnostic now to I’ve your testing they need. that home, people need Hopefully in getting that their the for answered again back to of go they are Once they they believe what questions I comfortable like start past. go testing am of worried a feel diagnostic

Lisa Gill

thank you. Yes,


you. Thank

Giacobbe ahead. Citi. next Please Our from Ralph comes from go question

Ralph Giacobbe

to is on expectation you to continue rate? those test. Thanks. going timing testing. and Thanks. the and insurers at then, going it want pricing any rates commercial to come when up serology is I have molecular serology mirror expectation do And a mean of are for of your match have this point I and CMS just that the $XXX release

Adam Schechter

me with the testing. let molecular so start Yes,

So rate molecular and we’re all the charging – looking is we reimbursed in pandemic charge that’s market consistency we're to Medicare $XXX. a $XXX, place. by test, about and across of and is the We're time need, for trying customers, what this a consistent pricing

We testing, the we don't we're at than saying would done will that testing. have price a sure certainty I'll days, Medicare very, not and customers, the pandemic price the hopefully serology not in you way but this for which what closely. that next all we at with we be that in looking to be that week something I'm yet to we know want I very PCR for make in I our that's everything should we've seeing certainly if that something charge help that so expect. more and doing a every I Again, can can, or think look


see from from Please go I you. question Thank our comes Caliendo Kevin ahead. UBS. next

Kevin Caliendo

demand about performing segments you. by as down you how up in The talk and activity anything a get any back any seen to are the some disruption level you you year to yet break that, continue, the a from maybe little like Have can the CRO. can standpoint. three the morning! of Thank that CRO visibility ramping segments cancellation sort I bit three and Good work progresses. expect of and when it around you

Adam Schechter

morning, Good Sure. Kevin.

So of a things couple here.

see about the First quarter. saw would we cancellations same of quarter to in one, in that with regard we any to number first cancellations, expect the

acceleration see an we of cancellations. So didn't

a With the the we overall quarter, continue we China dental business end up started significant we regard business impact to in pick to to March, postponing people end than towards see trials. The has to have little China the begun have up. you COVID-XX laboratory know start States bit that started in seen a in actually earlier quarter to was because our and the China. as to earlier United business, of impact than but of the CRO the Interestingly impacted business of there be open a obviously growth first we've do despite

look is them than now would whether I look you COVID-XX coming the and it timing are winning what that trials, be what's vaccines, if more the I antiviral, back, because than or right whether will we share for central marketplace early development laboratory mentioned for back, happening and segments they in at predict. it work be at But the of be our stage would come it more the

In fact, almost expected twice of share. the a the have amount what you on studies would as percent that

think of I that's truly combined. power the demonstrates the

marketplace help understand drug what to are the teams with are into we our drug studies When teams, see drug and both doing our our and diagnostic is coming starting underway, in our diagnostic joining even diagnostics significant what teams that and are the done to in I advantage development of watch are teams discussions are having being and business. the the really our development development team conversations diagnostic clients, with

trials vaccines the fair our above market II win there Even of continue Phase wanted to are Phase share we’re winning what that more of most share and would to but or and III, than is Phase our say I to I. going we what Now those pre-clinical that market, antivirals those suggest.

prospects excited certain. So for long combined. term about seeing I'm I'm power the the

for world up, particularly today world trials. that future. extent are optimistic happening How quickly Phase markets needed and our most capabilities quickly comes be the are even global trials, we the some did what in the certainly with But that what's before say would open to so in I the how we for around clinical going III more COVID-XX, back clinical I think to is the needed this trials business of as determined because the those are

Kevin Caliendo

you. Thank


Thank you.

from Dan comes question go Please Fargo. ahead. Leonard next from Our Wells

Dan Leonard

Thank you.

the trying quarter access any on annualized the Thank So quarter disparity your your competitor or you to and lingering large organic your the this and there care managed headwinds in were volume competitor. understand business any point? the has all lab expanded growth from maybe in share that Can in for in comment you. dynamics trend versus the at

Adam Schechter

of wants and Yeah, I’ll ask weeks to several say we've and actually couple the a our last between end I’ll towards and March, Glenn terms in. decline of saw of the the kind give we've context in XX% jump to seen of of it he quarter volume that in to of off, little seen the back last you level begin bit. come in just weeks know XX% if some basically But you I'd

saw fast bit as that's a forth. testing and in is not of because overall esoteric more the and that as little price a our diseases That's did testing stronger severe of bit a regular diagnostic little increase the typically esoteric an in the than the you bit surprise, saw in it’s a typical mix We the average held change as decline not testing esoteric because did well quarter, for why so business. business a

would we that back esoteric tests both the the to work begins the up and businesses begin we as But we the summer, to assuming pick we to go to come the in and impact as would expect to both country forward of to through back other somewhat diagnostic and as fall get to the expect season, normal end year. additional no come there's I get

Glenn Eisenberg

around was guess at the where been, with volume, I’ll I when our will. out you level it normalized too. X.X% When unusuals you look at of consistent Dan roughly if you organic Yeah. pretty take we've just add

two around other out COVID, the obviously which Adam a we kind we as three impact positive. X.X% So said, of impact, discrete that was said items, were of had then backing

our and to and effectively at was benefited But we around genetics consumer half X.X% favorable then volume revenue ago day a growth was that year weather from demand of to compared X.X%. around the benefits we So lower had by of offset that X.X%.

and the competitor. management volume we have a but been which fees, our mentioned effectively you treat basis them points. So improved would we do and expect would We know for do talk lab around added differently of treatment our XX kind about fourth it for track us X.X% Obviously of the over where kind track where to it. of I has we quarter,

feel pretty business really good that volume consistent. the standpoint, we it's a from So standpoint, a been base demand

even that you and impact about, overall we've the also our say here relatively pleased on the pricing would really was we more very is What while mix our side price really is nice. impacts been flat, revenues know

while we had kind pricing in at a headwinds of X.X% we around tailwinds. a simply similar again organic increase, of show vein, So couple a and

helped at COVID PAMA X.X% our at lower Beacon know we helped You consumer price impacted talked Similarly from we the up. a esoteric have the mixes it already then with from tests, X.X%. lower so generics this at from percentage demand, headwind That us consumer have as said where about and the lower mix that's we around and Adam – as around point, benefited the demand each X.X%.

north continue quarters price which again So to would we've we to us year, price where around in know it the higher actually of getting mix. you of but get been a last a line, tracked mix the we’ve couple to past favorable of normalized what see X.X%, two, than done price is with over call

So strong from we revenue quarter. excluding standpoint, very we COVID, actually had thought a a again

Dan Leonard

you. thank Yeah,


you. Thank

from comes Bruin Our Please De from next go Derik BOA. ahead. question

Derik De Bruin

Hi, the good morning. Thank for taking question. you

just wanted I back on the So for COVID. testing site to go

what and is? that of be need curious one, think that anywhere testing of a you ultimate where question into you're part and share This can terms XXX,XXX from seen the long expectations the and how and it, capacity, one. question that. have on ultimate so you estimates of we need you're about what for of I'm sort first planning get that sort on test from just you need up the sort will and expectations of for duration how or So goes molecular looking is sort in think your days for of about, of the

there than And mean many are the there's in on clearly follow-up sort Thank on be the market can molecular, that that going one something so more evolving players and sort to just serology serology. I capacity lot is a testing? curious of similar there more for for you. is U.S. going I'm you serology just how getting that see do of forward, demand

Adam Schechter

A Yeah, of hi couple Derik. thoughts.

at month do over or tests that the now number could tests look we is you the X.X today that a tell the just that’s is per First try right get been million has alone look shedding capacity a all, significant. if done X.X tests, day, know which I actively a exact said it's million virus, to if what's would PCR greater do to of person we going if across month. States. can we to virus, the testing pretty X say million for overall at I could you and we're actually the impossible that XXX,XXX needed increase if testing, to need you United

in the would medical labs, the commercial then local labs, And add the the state you other labs, all academic centers.

what going that there's get White force and of stage significant to think get to Coronavirus one capacity running. at be we'll a people the Task amount least House of states recommending through up is I very

vaccine, to to because see virus. capacity, At until to to I think do who a And is a continue ability there's up have that all will time, going there testing the the continue we're when even we're to have there's same going until build have continue I to vaccine. to treatment type think a the of testing

scientifically on serology Separate and way tell to the the the the of frankly that of the in virus who lot which still is appropriate past, to been distinct a to there exposed what's serology, most discussion from and use is has testing.

to long surveillance, be for a For it's think I going used time.

a in tests wasn't a they for tests to are that parts as somebody going large the for been and meaning running, need exposed believe and to positive. validate that to second up probably past, but a of believe virus population had positive I the get they if false test order also serology businesses in I serology, that test

often months, who's the get every at if becomes Is recommendation then, And time. tested? to that it question three known think how this and every negative serology any there's don't I somebody months, six

our and news capacity and test good as to it’s is going we we same run a much anyway. us of on tests time. machines but blood can, we're tests be to blood as blood how those run We serology we know a for test, capacity a as run we the for much of all The typical build as on run we’ll can, the lot time blood utilize will that the that at

you for matter think out, out, see you a may science build much plays whatever us how marketplace as can, see and it's the I So plays how just of volume the need. as for be prepared

Derik de Bruin

Thank you.

Adam Schechter



question from Erin next Our Crédit Wright comes Suisse. Please go from ahead.

Erin Wright

you have you inaccessible work would I what virtual, I or remote what that convert guess percentage Thanks. Covance. to offline now? a the right monitoring? of Do trial anticipate sites you consider And questions Great! percentage on of do more of or couple – clinical will at-home

be part Thank. how second that a contribution trials actually and those trial? trials do COVID-XX many you these have then to be, Others industry guess from I perspective? downside a financial you And would have won anticipate of this to in from COVID material the

Adam Schechter

Yeah, okay first, I’m your the start other going question and to one. last answer I’ll with

you or are a Biotherapeutics, first you COVID-XX like PacBio things all, early company be if antivirals the they doing or be of the with smaller know of trials, So trials. Ridgeback that look they at whether them for stage, most we're

small win, are us still stage, than Phase I winning, to they are I. or times. expect said are twice our market share They preclinical relatively we So but early more would

expect they and share more I capability. capability Phase in drug of it II I demonstrating that are progress, Phase combined power meaningful then win a III with dollars. in terms having diagnostic really and would Right the they would is than fair we development believe those now of As our because much meaningful more become

XX% same hybrid distinct are regard and – and not time from there even the clinical sites significant virtual and the the virtual it's at advances and sites greater that up clinical we to think trials. At that Separate will as trials. for are working hard, up and we with I trails for about back, things running XX% come to trials, because like be of we and running, hybrid moment think utilization in have made

their So them running colleagues as pharmaceutical we'll with to quickly as trials possible. our to and and help get biotechnology work up continue

Erin Wright

Thank you.


Instructions]. [Operator

comes Ricky Morgan from Please Our next question go Stanley. ahead. Goldwasser from

Ricky Goldwasser

and to Do price metric? III. what all Yeah hi! those the details. levels of see $XX to A CMS guidance we thank PCR. are on $XXX. thoughts and you that is II to up or volumes the going Phase anticipate for Obviously Phase question are to the reimbursement changes But testing your and as stay to relaxed is Good you shift as pick morning, testing the going we at the and expense raised reimbursements were reimbursement

Glenn Eisenberg

to therefore change, through a all take $XXX Right price, And price. pricing, is price to a been reason our the that's spend price we customers time, at So philosophy lot believe is of I of price use and thank you is they for what the charged question appropriate. lot I upon that Medicare to Medicare which Ricky. which think effort and the now that our no anything have know based would have today. that on

out who others for but I it actually has continue it get the think patients to find that testing don't makes importance will cost so very isolate the and it, the to the grow, them, disease. and of test PCR effective then And disease

way you very it’s you do everything order cost can. in think I to that effective a So insure

time doing same the not and simple. and the is I difficulty is extraction the of pretty PCR steps. would PCR expense has capital testing mean the that RNA an high, multiple it's At say I that

today I at like So good feel is a reimbursement the rate. is where it

Ricky Goldwasser

you. Thank


Thank you.

comes question Stephen next Baxter go ahead. Our Wolfe with from Please Research.

Stephen Baxter

was the morning, the and mention in stated to copays collect and see remarks. anything a you business? actually ability the to into lab today. during on guys you provided good of Have insight your of to little yet deductibles increase for color Hey, prepared in allowance more in the terms thanks that guys all get accounts the you side I hoping receivable

the how And QX you range wider expecting is this this some know item to an charge thinking, you what you continue just then of from year. time. of of are days covering in to the play to Thank service, the year? out this balance know kind of actually you. represent, terms And is that And earnings be balance this the are of exclude you you of for going throughout

Glenn Eisenberg

you receivables, at if reserves big as it's for rates, look on unemployment you know looked with I’d recessions know occurred our is say customers high obviously events we that this the at and prior having we USSA you our that impact Yeah, in the will. back the Glenn.

relative currently a already charge that we've that and conducted, kind have we one-time or full Our we’ve receivables business reserve outstanding, of taken still the have build as to expectation is and to assessed for that's that that. feel one-time that amount it's obviously go we level reserve experiences receivables. to look based those historical them, appropriate but We’ll an upon collect on

normal a our process reserves. of have we forward, the adequacy quarter. standard every go we as all So We assess of

So changes we expectation adequate then if that we is we're to fully we’ll adjusted but this and that, the what based would operating say our that the we're in on reserves anything that future, we believe point in. with at reserved are deal the environment established

Stephen Baxter

you. thank Okay,


you. Thank

Our next ahead. question from Matt go Please William comes Blair. from Larew

Dan Lawler

for or your This Lawler at-home the morning. could be my and for Thanks initial Hi, the term? for Thanks. that is wanted good whether think taking Dan you COVID question. about ramp-up for Larew. you're seeing long Pixel ask Matt a to on I over you COVID-XX demand not tests catalyst

Adam Schechter

launch at-home focused demand you be and for pretty outside trying our the tests by have only LabCorp responders website, but now a and not are reach right week see it'll ago, to to workers subgroups. our the out message. symptoms. first that know Pixel for thanks of additional that we of other And on are of we're to is and the seen when broadly we've in available frontline Dan, you about healthcare And hi COVID-XX Yeah, people those that going people people significant know terms more announced

may to do the continues go I into over Pixel that reason this future. So as time that we a be believe grow

will groups that much XXX,XXX look know time other next of expect additional basis. on to the you plan a right now make launch we would and that over continue I do to future through At every into Pixel as get weeks to the have people the to we kits out same week available we we as weekly

Dan Lawler



Please I Baird. Michael our from question next comes go show you. from Polark ahead. Thank

Michael Polark

drug little impairment. I relates a Hey, thanks question. development. wanted What goodwill the to predominantly the bit more one the get Covance and to I of on taking units think the it business detail morning, Glenn, for of good piece mentioned reporting impairment you are topic a on took the why charge transitory a the to of I helpful. permanent more this would a impairment viewing I guess see COVID influence? disruption color surprised context was a companies taken. and lot Any be around as

Glenn Eisenberg

exercise It is Michael. of in point interesting time. are kind given that these an Sure

was the So as outside all our firm you reporting relatively we as for that our we it time. to reporting units, you units upon within recall on in that that report that our our year. based know it of do value XX-K, when and one kind bring upon we But the commented of point book September we close, in performed that a based have of XX valuations, does drug it’s did value, was development we versus fair and the

it is look the happened valuations move others, as as impacted March they DCFs lot we we interesting what's of and so well COVID that's based forward valuations. by where And obviously been business or market look has again, at at a now done now we've the just upon and but XX valuations, to

point in look market value valuations through XX% the we from business CRO XX, you March one at they of XX%, down the when interestingly down half September multiples, so so And saying at the XX effectively the of are are and is that time.

have on today, increased. volatility was number, you it rate were to be accounting you that the very in market, then do we but a Frankly you also discount if date know do that the different and it says it given would the

So value on the the you charge non-cash caused of particular day, took on which know quarter. the decline the that we during business from the a exercise their at

Michael Polark

else Would Envigo early or or by spread that specifically related you was across say Chiltern lab this out. call it’s anything equally predominantly could clinical or you

Glenn Eisenberg

but reporting our effectively out Sure, a have the lot to clinical business. units, unit that's here relates broken one reporting of primarily we different

an know of the unit, it's you say when to and company. as valuation And it, you break acquisition up it reporting doesn't the even total pieces at necessarily that's look a So the you separate. reflective of

business that a point in paid as that time, to as for It's you business market say so the ago goodwill acquired that well at time. broken you year and specific unit point that's your allocated to that that out, just specific that the reporting business could at within the multiple a and you

a convention. correction, value could now Now And but sudden market it back that’s business at a would months what it's be you multiple, see write all later theoretically less. to it that worth that up, that say you goes XX% day, back of you is that and the up, the you XX% back-up just bought accounting then don't valuation just six you same

of confluence the valuations impacting you impairment well know companies, the market as a just all results events So the charge. in of COVID-XX as with earnings, resulted

Adam Schechter

add was having diagnostic is would is my particularly and development we're mind we a more day, doubt more evidence with strategically as And pandemic, the only the great I there seeing move. thing every in and drug COVID-XX go through strategic no the business together the business

did in And through based today going than what virus. I of we're upon importance the not if I even the the much combined before more and we're seeing believe as what

Michael Polark

near could you will I in reporting payments expected one disbursements then sneak carve in of received out second Act? receive? April, the appreciate know CARES If additional as and that presume else more item, the in CARES was there on here Anything expect I million a for round you I Act, color. a $XX that under to the of earnings might you anticipate the adjusted all future the very housekeeping any you term. do I

Glenn Eisenberg

know as say report. the we’ll you for obviously determine we’ll through how account we I’d quarterly and it Yeah, go

is will you ramp-up by separately or being other well. as least impacted impact say, now to COVID, fair think But I that. some at to spend well order that it's of extent it we’re if out making and in to given either call we capital will our that performance from anything recoup spend the we’re clearly, even explaining benefited done we've as that as the a negative the testing unusual,

too potentially tell have other what early stage that just are this more to that, clarity in, at included we be CARES we’ll to the could Act would be obviously it’s convey tranches that. there on and be of that once while And we able

Adam Schechter


customers, local first thank of world. has so to XX,XXX our patients, am So up for every help have around say, joining I the and way is been the LabCorp medicine I world. and serve mobilized deeply of to have all way you I’m everybody needs in communities the innovators company our proud to our today, which and in address country in stepped to science global grateful employees and the us

I but believe matters, believe What did in we it past, from more past. is mattered challenge the than do far and The matters over, a in the I it the lot it future and move in this I previously, we have also to improve can LabCorp will improve and as health to doubt I our mission and beat we no as that virus lives that forward. said committed remain

for the thank call today. so joining So, you much


Thank Ladies participating. and gentlemen, this today's for concludes call. conference you

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