On February 13, 2020 AMN Healthcare Services, Inc. (NYSE: AMN), the leader and innovator in healthcare total talent solutions, reported its fourth quarter and full year 2019 financial results (Press release, AMN Healthcare Services, FEB 13, 2020, View Source [SID1234554320]). Financial highlights are as follows:

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Dollars in millions, except per share amounts.

* See "Non-GAAP Measures" below for a discussion of our use of non-GAAP items and the table entitled "Non-GAAP Reconciliation Tables" for a reconciliation of non-GAAP items.

2019 & Recent Highlights

Fourth quarter results exceeded expectations, with the Nurse and Allied Solutions segment delivering higher revenue from the support of labor disruption events and rapid response staffing
Nurse and Allied segment recorded 6% year-over-year organic growth in the fourth quarter
Full year operating cash flow was $225 million, reflecting strong performance and a nine-day reduction in days’ sales outstanding
Acquired b4health, an innovative float pool management technology solution and vendor management system, in December
The previously announced acquisition of Stratus Video, the leading provider of healthcare video remote language interpretation services, is expected to close on February 14, 2020
The Stratus acquisition is expected to be immediately margin-accretive and strengthens AMN’s position as healthcare’s leading total talent solutions partner
"Throughout the last year and decade, AMN Healthcare achieved many important milestones and dramatically enhanced our ability to positively impact patient care and our communities," said Susan R. Salka, Chief Executive Officer of AMN. "During 2019, our business reached new highs in revenue and earnings, while also making critical investments in our people, processes and solutions for our healthcare professionals and clients. AMN furthered our ability to serve our clients’ total talent needs with the acquisition of Advanced Medical, Silversheet and b4health, along with the imminent acquisition of Stratus Video.

"As we enter 2020, demand for our services remains strong, and we are excited about the partnerships we are building with clients to address their workforce challenges and ensure they deliver high-quality patient care. Equally critical to our purpose at AMN, we will continue to take an active leadership role in governance and social issues such as diversity, equality and inclusion," Ms. Salka added.

Fourth Quarter 2019 Results

Consolidated revenue for the quarter was $587 million, an 11% increase over prior year and 3% higher than prior quarter. Revenue for the Nurse and Allied Solutions segment was $389 million, up 18% year over year (6% organic) and 7% sequentially. Travel Nurse revenue increased 9% year over year (2% organic). Allied division revenue increased 45% year over year with 7% organic growth.

The Locum Tenens Solutions segment reported revenue of $78 million, down by 5% year over year due to slightly lower volume and a mix shift to specialties with lower bill rates. Volume metrics were on par with prior year in December, which we believe reflects stability and future growth opportunity as we enter the new year. Other Workforce Solutions segment revenue was $120 million reflecting an increase of 2% year over year, driven primarily by growth in our physician permanent placement, interim leadership and VMS businesses, offset partly by a decline in our revenue cycle solutions division.

Gross margin was 33.6%, higher by 100 basis points year over year and higher by 10 basis points sequentially. The year-over-year variance stemmed from an increase in higher-margin labor disruption activities in our Nurse and Allied segment and a favorable mix shift in our Other Workforce Solutions segment.

SG&A expenses were $133 million or 22.7% of revenue, compared with $111 million, or 21.0% of revenue, in the same quarter last year. SG&A was $133 million, or 23.5% of revenue, in the previous quarter. Higher SG&A expenses from our acquired businesses coupled with higher acquisition and integration-related costs caused the year-over-year increase in expense margin.

Income from operations was $47 million, or 8.0% of revenue, compared with $50 million, or 9.5% of revenue, in the same quarter last year. Adjusted EBITDA was $75 million, with a year-over-year increase of 14%. Adjusted EBITDA margin was 12.9%, higher by 30 basis points year over year and an increase of 70 basis points sequentially. The higher-than-expected adjusted EBITDA margin was driven primarily by the higher labor disruption revenue.

Net income was $27 million, or $0.58 per diluted share, compared with $36 million, or $0.74 per diluted share, in the same quarter last year. Adjusted diluted EPS was $0.85.

Full Year 2019 Results

Full year 2019 consolidated revenue was $2,222 million, a 4% increase from prior year. Nurse and Allied Solutions segment revenue was $1,420 million, a year-over-year increase of 9%. The Locum Tenens Solutions segment recorded revenue of $325 million, down by 17% compared with the prior year. Other Workforce Solutions segment revenue was $477 million, 9% higher year over year.

Full year gross margin was 33.5% compared with 32.6% for the prior year. The gross margin for the year was positively impacted by higher-than-average gross margins in our Nurse and Allied Solutions segment and a favorable segment mix shift. These positive factors were partially offset by a lower margin in our Locum Tenens Solutions segment.

Full year SG&A expenses were $508 million, representing 22.9% of revenue as compared to $452 million, representing 21.2% of revenue, for the prior year. The year-over-year increase in SG&A expenses was primarily due to additional expenses from the acquired businesses, a $22 million increase related to acquisition, integration, changes in the fair value of earn-out liabilities from acquisitions and extraordinary legal expenses, and a $5 million increase in share-based compensation expense. The increase was partially offset by a $12 million increase in legal reserves in 2018.

Full year income from operations was $177 million, or 8.0% of revenue, compared with $203 million, or 9.5% of revenue, in the prior year. Adjusted EBITDA was $277 million, a year-over-year increase of 3%. Adjusted EBITDA margin was 12.5%, representing a decrease of 20 basis points year over year.

Full year net income was $114 million, or $2.40 per diluted share, compared with $142 million, or $2.91 per diluted share, in the prior year. Adjusted diluted EPS was $3.18.

At December 31, 2019 cash and cash equivalents totaled $83 million. Cash flow from operations was $79 million for the quarter and $225 million for the full year. Capital expenditures were $10 million in the quarter and $35 million for the year. The Company ended the year with total debt outstanding of $625 million with a leverage ratio of 2.0 to 1 as calculated in accordance with the Company’s credit agreement.

Stratus Video Acquisition

In January 2020, AMN signed a definitive agreement to acquire Stratus Video, the largest healthcare remote video language interpretation company. Qualified healthcare interpretation, which is mandated by federal and many state regulations, is a service that many healthcare organizations do not have the resources to provide for themselves. AMN received regulatory approval for the acquisition, which is expected to close tomorrow. The purchase price for the transaction is $475 million and will be funded with borrowings under our credit facility and cash on hand.

"Stratus Video is a compelling addition to the AMN total talent solutions strategy and a wonderful opportunity to strengthen and diversify our leadership and broader talent team," said Ms. Salka. "Stratus is the clear leader in the fastest-growing segment of the language interpretation market for healthcare. They bring a highly regarded service to a growing and important patient population, and Stratus also brings an attractive financial profile."

First Quarter 2020 Outlook

*Note: Guidance percentage metrics are approximate. For a reconciliation of adjusted EBITDA margin, see the table entitled "Reconciliation of Guidance Operating Margin to Guidance Adjusted EBITDA Margin" below.

Projected year-over-year revenue growth in the first quarter of 2020 is 12-14%. On an organic basis, revenue is projected to increase 2-3%. Nurse and Allied segment revenue is expected to be up by 14-16% compared with prior year, with organic growth of 2-4%. Locum Tenens revenue in the first quarter is expected to be flat to up 1% compared with prior year. Stratus Video revenue is expected to be approximately $15 million reflecting anticipated results from the date of acquisition. Guidance assumes no labor disruption revenue in the quarter.

Conference Call on February 13, 2020

AMN Healthcare Services, Inc. (NYSE: AMN), healthcare’s leader and innovator in total talent solutions, will host a conference call to discuss its fourth quarter and full year 2019 financial results and first quarter 2020 outlook on Thursday, February 13, 2020, at 5:00 p.m. Eastern Time. A live webcast of the call can be accessed through AMN Healthcare’s website at View Source Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software. Interested parties may participate live via telephone by dialing (844) 721-7241 in the U.S. or (409) 207-6955 internationally. Following the conclusion of the call, a replay of the webcast will be available at the Company’s website. Alternatively, a telephonic replay of the call will be available starting at 6:30 p.m. Pacific Time on February 13, 2020, and can be accessed until 11:59 p.m. Eastern Time on February 27, 2020, by calling (866) 207-1041 in the U.S. or (402) 970-0847 internationally, with access code 2857669.

On January 13, 2019 Editas Medicine, Inc. (Nasdaq: EDIT), a leading genome editing company, and Sandhill Therapeutics, Inc., a cellular immuno-oncology company, reported a strategic research collaboration, license, and option agreement to combine their respective genome editing and cell therapy technologies to discover, develop, and manufacture allogeneic engineered natural killer (NK) cells and non-alpha beta T cell medicines for the treatment of cancer (Press release, Editas Medicine, FEB 13, 2020, View Source [SID1234553822]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

This collaboration brings together Editas Medicine’s leading genome editing technology and Sandhill’s BINATE product process, a novel universal donor technology to extract, isolate, and expand NK cells and non-alpha beta T cells, to develop novel medicines for the treatment of solid tumor cancers.

"We are excited to work with Sandhill, combining CRISPR-based genome editing with BINATE cells to accelerate the development of numerous, transformative medicines for people with cancer and improve patient outcomes," said Charles Albright, Ph.D., Executive Vice President and Chief Scientific Officer, Editas Medicine. "We continue to increase our commitment to oncology, and we believe our portfolio of multiple immune system cell types, including T cells, NK cells, and induced pluripotent stem cells (iPSCs), will be effective in making the next generation of allogeneic medicines to fight many common cancers."

"The team at Editas Medicine has one of the most innovative technology platforms, and we look forward to combining our technologies to create new medicines for the treatment of cancer. Together, we are dedicated to transforming cellular immuno-oncology and developing new therapies," said Annemarie Moseley, M.D., Ph.D., Chief Executive Officer, Sandhill Therapeutics, Inc.

Under the terms of the agreement, Editas Medicine obtains an exclusive license to Sandhill’s technology to research, develop and commercialize immuno-oncology engineered cell medicines for solid tumors originating within a given area of the body and an option to expand such license to two additional areas. In return, Sandhill will receive an upfront payment, development and sales-based milestone payments, and royalties on sales of resulting Editas products.

RBC Capital Markets acted as exclusive financial advisor to Sandhill for the transaction.

On February 13, 2020 LabCorp (or the Company) (NYSE: LH) reported results for the fourth quarter and year ended December 31, 2019, and provided 2020 guidance (Press release, LabCorp, FEB 13, 2020, View Source [SID1234554265]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We had a strong finish to 2019, a year where we delivered solid revenue growth, adjusted EPS, and free cash flow," said Adam H. Schechter, president and CEO of LabCorp. "We start 2020 with a clear strategy that leverages our science, technology, and delivery focused on our customers to improve health and improve lives. We are well positioned to drive continued growth and shareholder value in 2020 and beyond."

Consolidated Results

Fourth Quarter Results

Revenue for the quarter was $2.95 billion, an increase of 6.0% over $2.79 billion in the fourth quarter of 2018. The increase in revenue was due to acquisitions of 4.5% and organic growth of 2.3% (which includes the negative impact from lower Medicare and Medicaid pricing as a result of PAMA of 0.9%), partially offset by the disposition of businesses of 0.6% and negative foreign currency translation of 0.2%.

Operating income for the quarter was $336.4 million, or 11.4% of revenue, compared to $307.7 million, or 11.0%, in the fourth quarter of 2018. The increase in operating income and margin was primarily due to acquisitions, organic growth, and LaunchPad savings, partially offset by the negative impact from PAMA and higher personnel costs. The Company recorded restructuring charges, special items, and amortization, which together totaled $85.6 million in the quarter, compared to $87.2 million during the same period in 2018. Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $422.0 million, or 14.3% of revenue, compared to $394.9 million, or 14.2%, in the fourth quarter of 2018. Excluding the negative impact from PAMA, adjusted operating income and margin grew $53.3 million and 90 basis points, respectively, over last year.

Net earnings for the quarter were $227.1 million, compared to $157.9 million in the fourth quarter of 2018. Diluted EPS were $2.32 in the quarter, an increase of 48.7% compared to $1.56 in the same period in 2018. During the fourth quarter of 2019, the Company recorded $19.0 million in net gains on venture fund investments, partially offset by losses of $1.4 million on the disposition of businesses and a cost of $3.1 million related to debt refinancing. In the fourth quarter of 2018, the Company recorded a $24.6 million loss on the disposition of its U.S. forensics laboratory testing business, a non-cash pension settlement charge of $7.5 million, and a loss of $5.2 million on a venture fund investment. Adjusted EPS (excluding amortization, restructuring charges, and special items) were $2.86 in the quarter, an increase of 13.5% over $2.52 in the fourth quarter of 2018.

Operating cash flow for the quarter was $569.8 million, compared to $486.4 million in the fourth quarter of 2018, which was negatively impacted by approximately $105 million from the net tax payment in the fourth quarter of 2018 related to the disposition of businesses. The increase in operating cash flow was primarily due to higher cash earnings, partially offset by increased working capital to support growth. Capital expenditures totaled $128.2 million, compared to $122.2 million a year ago. As a result, free cash flow

(operating cash flow less capital expenditures) was $441.6 million, compared to $364.2 million in the fourth quarter of 2018.

At the end of the quarter, the Company’s cash balance and total debt were $337.5 million and $6.2 billion, respectively. During the quarter, the Company invested $23.1 million in acquisitions, repurchased $50.0 million of stock, representing approximately 0.3 million shares, and paid down $402.7 million of debt. As of December 31, 2019, the Company had $900.0 million of authorization remaining under its share repurchase program.

Full Year Results

Revenue was $11.55 billion, an increase of 2.0% over last year’s $11.33 billion. The increase in revenue was due to growth from acquisitions of 2.3% and organic growth of 1.6% (which includes the negative impact from PAMA of 0.9%), partially offset by the disposition of businesses of 1.4% and negative foreign currency translation of 0.5%.

Operating income was $1,330.2 million, or 11.5% of revenue, compared to $1,325.7 million, or 11.7%, in 2018. The Company recorded restructuring charges, special items, and amortization which together totaled $380.6 million, compared to $397.6 million during the same period in 2018. Adjusted operating income (excluding amortization, restructuring charges, and special items) was $1,710.8 million, or 14.8% of revenue, compared to $1,723.3 million, or 15.2%, in 2018. The decrease in operating income and margin was primarily due to the negative impact from PAMA, higher personnel costs, disposition of businesses, cybersecurity investments, and a favorable one-time legal settlement in 2018, partially offset by organic growth, the Company’s LaunchPad initiatives, and acquisitions. Excluding the negative impact from PAMA, adjusted operating income and margins grew $94.5 million and 40 basis points, respectively, over last year.

Net earnings in 2019 were $823.8 million, or $8.35 per diluted share, compared to $883.7 million, or $8.61 per diluted share, last year. During 2019, the Company recorded net gains of $20.9 million on venture fund investments, partially offset by losses of $13.3 million on the disposition of businesses and a cost of $3.1 million related to debt refinancing. During 2018, the Company recorded a net gain of $184.8 million on the disposition of businesses, partially offset by a charge of $45.0 million due to the implementation of the Tax Cuts and Jobs Act of 2017 (TCJA), a non-cash pension settlement charge of $7.5 million, and a $5.2 million loss on a venture fund investment.

Adjusted EPS (excluding amortization, restructuring, and special items) were $11.32, an increase of 2.7% compared to $11.02 in 2018.

Operating cash flow was $1,444.7 million, compared to $1,305.4 million in 2018, which was negatively impacted by approximately $105 million from the net tax payment in the fourth quarter of 2018 related to the disposition of businesses. The increase in operating cash flow was due to higher cash earnings, partially offset by increased working capital to support growth. Capital expenditures totaled $400.2 million, compared to $379.8 million in 2018. As a result, free cash flow (operating cash flow less capital expenditures) was $1,044.5 million, compared to $925.6 million in 2018.

During the year, the Company invested $876.0 million in acquisitions and repurchased $450.0 million of stock representing approximately 2.9 million shares.

The following segment results exclude amortization, restructuring charges, special items, and unallocated corporate expenses.

Fourth Quarter Segment Results

LabCorp Diagnostics
Revenue for the quarter was $1.76 billion, an increase of 3.7% over $1.69 billion in the fourth quarter of 2018. The 3.7% increase in revenue was due to acquisitions of 3.5% and organic growth of 0.8%, partially offset by the negative impact from the disposition of businesses of 0.5%. The organic revenue increase of 0.8% includes the negative impact from PAMA of 1.5%.

Total volume (measured by requisitions), excluding the disposition of businesses, increased by 2.6%, as acquisition volume contributed 1.8% and organic volume increased by 0.8%. Organic volume includes the negative impact from managed care contract changes and lower consumer genetics demand, which largely offset the benefit of one additional revenue day. Excluding the disposition of businesses, revenue per requisition increased by 1.6% due to acquisitions and favorable mix, partially offset by the negative impact from PAMA and the nonrenewal of the BeaconLBS – UnitedHealthcare contract pertaining to the Florida market.

Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $277.1 million, or 15.8% of revenue, compared to $279.3 million, or 16.5%, in the fourth quarter of 2018. The $2.2 million decline in adjusted operating income and 70 basis point decline in adjusted operating margin were primarily due to the negative impact from PAMA of $26.2 million and 130 basis points, higher personnel costs, and cybersecurity investments, partially offset by LaunchPad savings, organic growth, and acquisitions. The Company remains on track to deliver approximately $200 million of net savings from its three-year Diagnostics LaunchPad initiative by the end of 2021.

Covance Drug Development
Revenue for the quarter was $1.20 billion, an increase of 9.3% over $1.10 billion in the fourth quarter of 2018. The increase in revenue was due to acquisitions of 6.0% and organic growth of 4.6%, partially offset by the disposition of the Covance Research Products business of 0.9% and negative foreign currency translation of 0.4%. Excluding pass-throughs, organic revenue grew mid-to-high single digits.

Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $183.2 million, or 15.2% of revenue, compared to $153.5 million, or 14.0%, in the fourth quarter of 2018. The $29.7 million increase in adjusted operating income and 130 basis point increase in adjusted operating

margin were primarily due to LaunchPad savings, acquisitions, and organic growth, partially offset by higher personnel costs. The Company remains on track to deliver approximately $150 million of net savings from its three-year Drug Development LaunchPad initiative by the end of 2020.

Net orders and net book-to-bill during the trailing twelve months were $5.91 billion and 1.29, respectively. Backlog at the end of the quarter was $11.30 billion, compared to $10.71 billion last quarter, and the Company expects approximately $4.2 billion of its backlog to convert into revenue in the next twelve months.

Outlook for 2020

The following guidance assumes foreign exchange rates effective as of December 31, 2019 for the full year. Enterprise level guidance includes the estimated impact from currently anticipated capital allocation, including acquisitions and share repurchases.

Revenue growth of 4.0% to 6.0% over 2019 revenue of $11.55 billion, which includes the negative impact from the disposition of business of approximately 0.2% as well as the benefit from foreign currency translation of 0.4%.

Revenue growth in LabCorp Diagnostics of 0.5% to 2.5% over 2019 revenue of $7.00 billion, which includes the negative impact from PAMA of approximately 1.3% as well as the benefit from one additional revenue day of 0.4% and foreign currency translation of 0.1%.

Revenue growth in Covance Drug Development of 7.0% to 9.5% over 2019 revenue of $4.58 billion, which includes the negative impact from the disposition of business of approximately 0.5% as well as the benefit from foreign currency translation of 0.7%.

Adjusted EPS of $11.75 to $12.15, an increase of 3.8% to 7.3% over 2019 adjusted EPS of $11.32.

Free cash flow (operating cash flow less capital expenditures) of $950 million to $1.05 billion, compared to $1.04 billion in 2019.

Use of Adjusted Measures
The Company has provided in this press release and accompanying tables "adjusted" financial information that has not been prepared in accordance with GAAP, including adjusted net income, adjusted EPS (or adjusted net income per share), adjusted operating income, adjusted operating margin, free cash flow, and certain segment information. The Company believes these adjusted measures are useful to investors as a supplement to, but not as a substitute for, GAAP measures, in evaluating the Company’s operational performance. The Company further believes that the use of these non-GAAP financial measures provide an additional tool for investors in evaluating operating results and trends, and growth and shareholder returns, as well as in comparing the Company’s financial results with the financial results of other companies. However, the Company notes that these adjusted measures may be different from and not directly comparable to the measures presented by other companies. Reconciliations of these non-GAAP measures to the most comparable GAAP measures and an identification of the components that comprise "special items" used for certain adjusted financial information are included in the tables accompanying this press release.

The Company today is providing an investor relations presentation with additional information on its business and operations, which is available in the investor relations section of the Company’s website at View Source." target="_blank" title="View Source." rel="nofollow">View Source Analysts and investors are directed to the website to review this supplemental information.

A conference call discussing LabCorp’s quarterly results will be held today at 9:00 a.m. EST and is available by dialing 844-634-1444 (615-247-0253 for international callers). The access code is 8663007. A telephone replay of the call will be available through Feb. 27, 2020, and can be heard by dialing 855-859-2056 (404-537-3406 for international callers). The access code for the replay is 8663007. A live online broadcast of LabCorp’s quarterly conference call on Feb. 13, 2020, will be available at View Source or at View Source beginning at 9:00 a.m. EST. This webcast will be archived and accessible through Jan. 29, 2021.

On February 13, 2020 DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage biotechnology company, reported the closing of its previously announced underwritten public offering of an aggregate of 2,125,000 shares of its voting common shares at a public offering price of $4.00 per share (Press release, DiaMedica, FEB 13, 2020, View Source [SID1234554289]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

The gross proceeds of the offering were $8.5 million, before deducting the underwriting discount and other offering expenses.

DiaMedica intends to use the net proceeds from the offering to continue its clinical and product development activities and for other working capital and general corporate purposes.

Craig-Hallum Capital Group LLC acted as the sole managing underwriter for the offering.

The securities described above were offered pursuant to a prospectus supplement and an accompanying base prospectus forming part of a shelf registration statement on Form S-3 (File No. 333-235775), which was declared effective by the U.S. Securities and Exchange Commission (SEC) on January 9, 2020. A final prospectus supplement relating to the offering was filed with the SEC and is available on the SEC’s website located at View Source Copies of the final prospectus supplement and the accompanying base prospectus may be obtained for free by contacting Craig-Hallum Capital Group LLC at 222 South Ninth Street, Suite 350, Minneapolis, Minnesota 55402, Attention: Equity Capital Markets, by telephone at 612-334-6300, or by email at [email protected].

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

On February 13, 2019 West Pharmaceutical Services, Inc. (NYSE: WST) reported its financial results for the fourth-quarter and full-year 2019 and introduced full-year 2020 financial guidance (Press release, West Pharmaceutical Services, FEB 13, 2020, View Source [SID1234554305]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Fourth-Quarter and Full-Year 2019 Summary (comparisons to prior-year period)

Fourth-quarter 2019 net sales of $470.6 million grew 11.4%; organic sales growth was 12.7%; sales from a recent acquisition contributed an additional 30 basis points of growth; currency translation reduced sales by 160 basis points.
Full-year 2019 net sales of $1.840 billion grew 7.1%; organic sales growth was 10.0%; sales from a recent acquisition contributed an additional 10 basis points of growth; currency translation reduced sales by 300 basis points.
Fourth-quarter 2019 reported-diluted EPS of $0.84 increased 22%. Full-year 2019 reported-diluted EPS of $3.21 increased 17%.
Fourth-quarter 2019 adjusted-diluted EPS of $0.82 increased 12%. Full-year 2019 adjusted-diluted EPS of $3.24 increased 15%.
Company is introducing full-year 2020 financial guidance of net sales in a range of $1.95 billion to $1.97 billion and reported-diluted EPS in a range of $3.45 to $3.55.
"Adjusted-diluted EPS" and "organic sales growth" are Non-U.S. GAAP measurements. See discussion under the heading "Non-U.S. GAAP Financial Measures" in this release.

"I am pleased to report strong fourth-quarter 2019 sales and EPS growth, which continues a trend seen throughout the year," said Eric M. Green, President and Chief Executive Officer. "We had double-digit organic sales growth in all three market units of our Proprietary Products segment. High-value products (HVPs) once again fueled sales growth and gross margin expansion, led by Daikyo and Westar components."

Mr. Green continued, "We are introducing full-year 2020 financial guidance that is in line with our long-term financial construct of organic sales growth and operating margin expansion. Our end markets are stable and growing, and we are off to a good start to 2020 with a strong book of committed orders for our high value products, such as NovaPure and Envision components, as well as Daikyo Crystal Zenith containers and our portfolio of self-injection delivery platforms. Our teams across the globe have demonstrated their passion for customers throughout 2019, with new product and services offerings, and are poised to deliver another strong year of sales and profit growth for our business in 2020."

Proprietary Products Segment
In the fourth-quarter 2019, net sales grew 13.3% to $352.7 million. Organic sales growth was 14.7%, with incremental sales from a recent acquisition contributing 40 basis points of Proprietary Products growth and currency translation decreasing sales by 180 basis points. HVPs represented over 60% of segment sales and generated double-digit organic sales growth.

In the fourth-quarter 2019, the Biologics market unit had strong double-digit organic sales growth, led by customer purchases of Daikyo, Westar and Flurotec components. The Generics market unit posted double-digit organic sales growth, led by sales of Westar components and self-injection delivery platforms. The Pharma market unit had double-digit organic sales growth, led by HVPs and a favorable year-over-year comparison due to the fourth-quarter 2018 financial impact from the previously reported voluntary recall of the Vial2Bag product.

In the full-year 2019, net sales grew 6.9% to $1.399 billion. Organic sales growth was 9.9% with incremental sales from a 2019 acquisition contributing 30 basis points of growth and currency translation decreasing sales by 330 basis points. HVPs represented over 60% of segment sales and generated double-digit organic sales growth.

Contract-Manufactured Products Segment
In the fourth-quarter 2019, net sales grew 5.9% to $117.9 million. Organic sales growth was 7.2% with currency translation decreasing sales by 130 basis points. Segment performance was led by sales of healthcare-related injection and diagnostic devices.

For the full-year 2019, net sales grew 7.9% to $441.5 million. Organic sales growth was 10.2% with currency translation decreasing sales by 230 basis points.

Full-Year 2019 Financial Highlights
Operating cash flow was $367.2 million, an increase of 27%. Capital expenditures were $126.4 million, compared to $104.7 million over the same period last year, and represented 6.9% of full-year 2019 net sales. Free cash flow (operating cash flow minus capital expenditures) was $240.8 million, an increase of over 30%.

The Company recorded $4.9 million of restructuring and related charges in 2019 from previously announced actions that have streamlined its manufacturing network. This restructuring plan is now considered complete. Implemented in first-quarter 2018, cumulative expenses over the plan period were approximately $14.0 million. The Company anticipates that the plan will provide annualized savings of approximately $14.0 million.

Full-Year 2020 Financial Guidance

The Company expects full-year 2020 net sales guidance to be in a range of $1.95 billion to $1.97 billion.
Organic sales growth is expected to be in the range of 7% to 8%.
Net sales guidance includes an estimated headwind of $15 million for the full-year 2020 based on current foreign exchange rates.
The Company expects full-year 2020 reported-diluted EPS to be in the range of $3.45 to $3.55.
This includes an estimated headwind of approximately $0.04 based on current foreign currency exchange rates.
This reported-diluted EPS guidance range assumes a full-year 2020 tax rate of 24%, which does not include potential tax benefits from stock-based compensation. As in prior years, we are not including potential 2020 tax benefits from stock-based compensation, as they are out of the Company’s control. Any tax benefits associated with stock-based compensation that we receive in 2020 would provide a positive adjustment to our full-year EPS guidance.
Full-year 2020 capital spending is expected to be approximately 7% of expected full-year 2020 net sales.
Fourth-Quarter and Full-Year 2019 Conference Call
The Company will host a conference call to discuss the results and business expectations at 9:00 a.m. Eastern Time today. To participate on the call, please dial 877-930-8295 (U.S.) or 253-336-8738 (International). The conference ID is 5587337.

A live broadcast of the conference call will be available at the Company’s website, www.westpharma.com, in the "Investors" section. Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, select "Presentations" in the "Investors" section of the Company’s website.

An online archive of the broadcast will be available at the website three hours after the live call and will be available through Thursday, February 20, 2020, by dialing 855-859-2056 (U.S.) or 404-537-3406 (International) and entering conference ID 5587337.