Labcorp Holdings Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2020 LabCorp conference call. At this time, all participants are in the listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Clarissa Willett, Vice President of Investor Relations. Thank you. Please go ahead, ma'am.

Thank you, Operator. Good morning, and welcome to last quarter's first quarter 2020 conference call. As detailed in today's press release, there will be a replay of this call available via telephone and Internet. With me today are Adam Schechter, President and Chief Executive Officer of and Glenn Eisenberg, Executive Vice President and Chief Financial Officer. This morning, in the investor relations section of our website at labcorp.com, we posted both our press release and an investor relations presentation with additional information on our business and operations, which include a reconciliation of the non-GAAP financial measures to the GAAP financial measures discussed during today's call. Additionally, we are making forward-looking statements, These forward-looking statements include, but are not limited to, statements with respect to expectations for 2020 and the related assumptions, including the projected impact of the COVID-19 pandemic on the company's businesses, operating results, cash flows, and or financial conditions, our responses to and the expected future impacts of the COVID-19 pandemic on our business more generally, as well as on general economic, business, and market conditions. Each of the forward-looking statements is based upon current expectations and is subject to change based upon various factors, many of which are beyond our control that could affect our financial results. Some of these factors are set forth in detail in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and in the company's other filings with the SEC. We have no obligation to provide any updates to these forward-looking statements even if our expectations change. Now, I'll turn the call over to Adam Schechter.

Thank you, Clarissa. Good morning, everyone, and thank you for joining us today. These are certainly unprecedented times in which we've been living and working as a result of the global pandemic. Every country, government, customer, shareholder, and employee has been impacted by these turbulent times, and LabCorp is no exception. Given our unique role across the spectrum of diagnostic testing and drug development, we have risen to the challenge to help combat the virus. We are supporting the protection of both those who are currently or previously infected by the virus, and we are involved in the development of potential treatments and vaccines. Our teams, like many who are directly involved in fighting this pandemic, have been working around the clock, and they remain energized by all that we are doing to minimize the impact in the United States and around the world. I have been incredibly proud and impressed with how quickly and effectively we have mobilized our response. And I am confident that our company's mission to improve health and improve lives by delivering world-class diagnostics, accelerating the availability of innovative medicines and vaccines, and using technology resonates even more in the most difficult of environments. In the first quarter, we delivered solid performance despite the challenges associated with COVID-19, with first quarter revenue of $2.8 billion, adjusted EPS of $2.37, and free cash flow of over $97 million. During the first quarter, both diagnostics and drug development began experiencing the impact of the global pandemic, with clients postponing programs and lower demand for diagnostic testing. The increased testing that performed for COVID-19 did not nearly offset the decline in other testing. Diagnostics revenue declined 1.2 percent compared to a year ago due to lower organic revenue from the impact of COVID-19 and continued price pressures from PAMA. Drug development revenue grew 6.4 percent from a year ago. Margins expanded 30 basis points and trailing 12 months book to bill remains strong at 1.26. The backlog remains unchanged from last quarter at $11.3 billion. Given the significant uncertainty regarding the duration and the severity of the pandemic on a global basis, the company is withdrawing its 2020 financial guidance provided on February 13, 2020. To protect our longer-term prospects and to preserve jobs that we believe will be necessary in the future, we have taken a number of prudent steps to manage expenses as we make our way through these unusual times. Glenn will provide specifics of the expense actions in a moment, but importantly, we are not planning large-scale employment reductions. Looking forward, despite the unpredictability of the pandemic, we believe that we are well-positioned to continue to serve our customers and to drive long-term shareholder value. My belief and what I continue to come back to as I assess our business now and for the future is this. The work we do was important before the crisis, and I believe it will be even more important as we move forward. Just consider how we're making a difference during this time. We were the first commercial lab to launch PCR testing on March 5th, only five days after the FDA loosened rules around emergency use testing. PCR is a technology that LabCorp played a central role in commercializing when it was first introduced nearly 30 years ago. So it is no surprise that we're able to mobilize quickly. Since that time, working in close collaboration with the White House Coronavirus Task Force and with federal and state agencies across the United States, we have continued to apply our science at scale as we develop new methodologies to test more people and to test them faster. To date, we've conducted over 1 million COVID-19 tests, and we're capable of performing more than 60,000 per day, or 1.8 million per month nationwide, and we continue to build additional capacity. In addition, we launched the LabCorp COVID-19 at-home test collection kit on our Pixel by LabCorp platform. This is the first at-home collection kit to receive FDA EUA approval, and is currently available to healthcare workers and first responders who may have been exposed to COVID-19 or have symptoms consistent with the virus. We will roll out this at-home collection more broadly in the coming weeks. We also launched serology testing, which helps to determine if an individual has had an immune response to the virus. Currently, we can perform more than 50,000 serology tests per day, and we expect to perform more than 200,000 tests per day by MidMed. This test will be available in our 2,000 patient service centers, including our 100 LabCorp at Walgreens sites and thousands of doctor offices across the country. At the same time, we've safely kept our routine and specialty diagnostics operations running, and we continue to offer our usual test menu for patients who need diagnostic answers. That includes the critical services provided by our phlebotomists. We even made special hours available for our most vulnerable populations in our patient service centers. Moving now to drug development. Our drug development business has benefited from our diagnostic testing and understanding of the virus, demonstrating once again the power of the combined capabilities. As you know, there are many pharmaceutical and biotechnology companies that are working on potential treatments and vaccines for the virus. Our drug development teams are working around the world on these promising antivirals, other potential treatments, and vaccines. In fact, we have mobilized a dedicated COVID-19 response team to help expedite treatments, enabling us to accelerate development and reach patients faster through a highly coordinated effort across diagnostics and drug development. These teams have been highly successful in identifying and winning business. well above what our market share would imply. One example of how this team is quickly delivering value is through our collaboration with Ridgeback Biotherapeutics to test an antiviral drug. Less than 24 hours after receiving NHRA clearance, the Covins team began screening patients. Three days later, on a public holiday, the first patient received the drug. We continue to use our scientific capabilities to make advancements that will help in the present, the near term, and the future. This includes advances such as launching a patient registry with SIOPs, health, that will enable researchers to better understand and characterize COVID-19 diagnosis and treatments and generate insights that will aid ongoing and future pandemic preparedness and prevention efforts. It also includes working with companies like Adaptive Biotechnologies and Microsoft to focus on immune response to the virus, where we have already recruited our first patient for this trial. And separately, we're working with Pacific Bioscience on unique programs that can shed light on virus characteristics that can support more informed patient treatment decisions. In conclusion, our commitment and our ability to support COVID-19 testing, treatments, and vaccines as well as important scientific advances is unwavering, and it will continue as we go into the future. Beyond our response to the pandemic, we will continue to move forward with our key priorities, which leverage the power of our uniquely combined capabilities across diagnostics and drug development. The priorities remain to win in oncology, integrate data and analytics, AI and digitalization across our business, to put customers at the center of all we do, and to focus on high growth opportunities. We remain committed to beating the virus in the short term and to our long-term strategy, which I'm even more convinced is the right path to grow and for success. Now I'll turn the call over to Glenn to discuss more specifically our financial performance. Thank you, Adam.