On February 4, 2021 Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic information services, reported financial results for the fourth quarter and full year ended December 31, 2020 (Press release, Quest Diagnostics, FEB 4, 2021, View Source [SID1234574669]).
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"In a year dominated by the pandemic, Quest brought critical COVID-19 testing to our country, and delivered record revenues, earnings and cash from operations for the fourth quarter and full year 2020," said Steve Rusckowski, Chairman, CEO and President. "Declines in our base business recovered rapidly throughout the summer and fall; however the recovery stalled at the end of November and into December due to the surge in COVID-19 infections across the country. Continued high demand for COVID-19 testing drove our performance through the second half of the year.
"In light of the company’s strong financial position, we have increased our dividend and our share repurchase authorization while maintaining flexibility to pursue our M&A strategy," Mr. Rusckowski continued. "Given the ongoing uncertainty regarding the trajectory of the virus and its impact on COVID-19 testing trends as well as further recovery of our base business, we are providing an outlook for the first six months of 2021. We expect to provide additional updates as the year progresses."
Mr. Rusckowski continued: "The pandemic has tested our nearly 50,000 employees and they have responded as heroes, by developing COVID-19 tests, building test capacity, innovating new testing models with our retail partners, transporting specimens, delivering results and of course, supporting our customers. I’m proud of what we have achieved and optimistic about what we can accomplish in 2021."
For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net revenues, income from continuing operations 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 four quarters of 2020 did not equal the total for the year ended December 31, 2020 due to quarterly fluctuations in the company’s earnings and weighted average common shares outstanding throughout the year as a result of the impact of COVID-19 and the temporary suspension of repurchases under the company’s share repurchase program.
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, a gain on remeasurement of an equity interest, costs associated with donations, contributions and other financial support through Quest for Health Equity, the company’s recently announced initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities, the gain on the sale and leaseback of a property, 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 the company’s website at www.QuestDiagnostics.com/investor. The company suggests participants dial in approximately 10 minutes before the call.
A replay of the call may be accessed online at www.QuestDiagnostics.com/investor or by phone at 866-461-2735 for domestic callers or 203-369-1352 for international callers. No passcode is required. Telephone replays will be available from approximately 10:30 a.m. Eastern Time on February 4, 2021 until midnight Eastern Time on February 18, 2021. Anyone listening to the call is encouraged to read the company’s 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.