On July 21, 2022 Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic information services, reported financial results for the second quarter ended June 30, 2022 (Press release, Quest Diagnostics, JUL 21, 2022, View Source [SID1234616839]).
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Quest Diagnostics Incorporated logo. (PRNewsFoto/Quest Diagnostics Incorporated)
"In the second quarter our base business revenues grew year over year while we increased our share of COVID-19 molecular testing thanks largely to our expanded retail relationships," said Jim Davis, CEO-elect. "Our base business performed well despite softer utilization trends which we believe impacted us and the rest of the health care industry. We also continued to ramp our investments to accelerate growth in the base business, particularly in the areas of advanced diagnostics and direct to consumer testing."
Steve Rusckowski, Chairman, CEO and President said: "We have raised our full year guidance based on our performance in the quarter and our expectations for the remainder of 2022.
"Finally, we appreciate the bipartisan efforts of the members of Congress who introduced the Saving Access to Laboratory Services Act (SALSA). If enacted, SALSA would fix PAMA and put the Medicare Clinical Laboratory Fee Schedule back on a sustainable path. The COVID-19 pandemic has demonstrated the clear need for patient access to timely, accurate and reliable clinical laboratory testing for the diagnosis, monitoring, and screening for all diseases. The excessive cuts under the flawed implementation of PAMA could make it far more challenging for the clinical laboratory community to invest in testing capacity and infrastructure to meet the health care needs of the country, especially in medically underserved communities and during a time when many patients are resuming routine care."
Excludes COVID-19 testing
For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of netg.
revenues, net income attributable to Quest Diagnostics, and diluted EPS, see note 2 of the financial tables attached below.
The sum of reported and adjusted diluted EPS for the first two quarters of 2021 did not equal the totals for the six months ended June 30, 2021 due to both quarterly fluctuations in the company’s earnings and in the weighted average common shares outstanding throughout the period as a result of the impact of accelerated share repurchase agreements ("ASRs") that the company entered into during April 2021.
Updated Guidance for Full Year 2022
Note on Non-GAAP Financial Measures
As used in this press release the term "reported" refers to measures under accounting principles generally accepted in the United States ("GAAP"). The term "adjusted" refers to non-GAAP operating performance measures that exclude special items such as restructuring and integration charges, certain financial impacts resulting from the COVID-19 pandemic, amortization expense, excess tax benefits ("ETB") associated with stock-based compensation, costs associated with donations, contributions, and other financial support through Quest for Health Equity (our initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities), gains and losses associated with changes in the carrying value of our strategic investments, a gain on sale of an ownership interest in a joint venture, and other items.
Non-GAAP adjusted measures are presented because management believes those measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should not be considered as an alternative to the corresponding measures determined under GAAP. Management may use these non-GAAP measures to evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe that these non-GAAP measures are useful to investors and analysts to evaluate our performance period over period and relative to competitors, as well as to analyze the underlying trends in our business and to assess our performance. The additional tables attached below include reconciliations of non-GAAP adjusted measures to GAAP measures.
Conference Call Information
Quest Diagnostics will hold its quarterly conference call to discuss financial results beginning at 8:30 a.m. Eastern Time today. The conference call can be accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally, passcode: 7895081; or via live webcast on our website at www.QuestDiagnostics.com/investor. We suggest participants dial in approximately 10 minutes before the call.
A replay of the call may be accessed online at www.QuestDiagnostics.com/investor or, from approximately 10:30 a.m. Eastern Time on July 21, 2022 until midnight Eastern Time on August 4, 2022, by phone at 888-566-0439 for domestic callers or 203-369-3045 for international callers. Anyone listening to the call is encouraged to read our periodic reports, on file with the Securities and Exchange Commission, including the discussion of risk factors and historical results of operations and financial condition in those reports.