Laboratory Corporation of America Holdings (NYSE:LH) Q2 2023 Earnings Call Transcript

Glenn Eisenberg: Yes. No, the only thing I’d add is that when you think about, again what’s changed in our outlook a little bit, part of that is the benefit of Ascension. As Adam said, we’re clearly towards the upper or at the upper end of the expectations we had, so improved on the volume side. And then in addition from a margin standpoint, while we’re initially expecting, call it that low-to-mid-single digits we’re tracking well there as we get that additional volume coming through with momentum taking us into the rest of the year.

Patrick Donnelly: Okay. That’s helpful. Thank you, guys.

Operator: Thank you. [Operator Instructions] [Technical Difficulty] Pito, your line is now open.

Adam Schechter: Good morning, Pito.

Kieran Ryan: Hi there. Hi there. You’ve got Kieran Ryan on for Pito. Thanks for taking the question. Just wanted to go back to the biopharma book-to-bill real quick; it sounds like you’re happy with where that metric is. I know the quarterly number came in at 1.06, so up a little bit sequentially, still down versus kind of historical. But it sounds like from the commentary you gave that maybe we shouldn’t expect much like a huge rebound in that metric in the back half even as early development starts to accelerate?

Adam Schechter: Yes. So if you look at our trend in 12 months, it’s 1.23; and that’s a very healthy book-to-bill, particularly for the businesses that we have. Early development typically would have a lower book-to-bill because the studies burn much faster and you can actually have studies that start and finish within a given year. So anything between a 1.1 and a 1.2, we consider to be healthy. And as we look forward, we continue to feel that there’s plenty of opportunities, the RFPs continue to look good, so we’re optimistic about where we’re seeing the book to-go.

Kieran Ryan: Thank you.

Operator: Thank you. [Operator Instructions] And our final question comes from the line of Tim Daley with Wells Fargo Securities. Your line is now open.

Adam Schechter: Good morning, Tim.

Tim Daley: Hey, thank you. Hi, everybody. Just wanted to get a bit more detail on the capital deployment strategy, specifically related to international. So highlighted the Biopharma Lab services expansion in Japan and China, adding footprint on central lab and early development there. I think just using some of the previous disclosures, I know it’s tough to get to, but it does seem like a lot of the Asia exposure went with the clinical business. Is this a pointed strategy that try to gain some footprint back in Asia? Is this longer term, where – what do you – how do you think about the international footprint of the Bio segment; where you want to be capability-wise and scale?

Adam Schechter: Yes. Thank you, Tim. And the things that we announced today, obviously we had those underway for quite some time to plan and prepare for, so that’s irrespective of the clinical business or not. At the end of the day when you think about China, Japan, that’s the second and third largest market in the world for pharma. So you need to have a very strong presence to have the capability to meet the needs of the pharmaceutical clients and the biotechnology clients. So it’s just our way for us to continue to meet those customer needs. And we’ve done a lot in the past in terms of ensuring that we have a global presence, and I feel good about the global presence that we have today. We are significantly further ahead, particularly with our central laboratory business than we were before.

Tim Daley: All right. Got it. And then just a kind of housekeeping one here. Now that we’ve got the new structure for the segments, how should we be thinking about communication guidance for the two thinking about growth, sub-segments, margins, any – any color kind of regular KPIs for us going forward?