MADISON, N.J., April 21, 2016 /PRNewswire/ -- Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic information services, announced today that for the first quarter ended March 31, 2016, adjusted net income was $147 million, compared to $141 million in 2015. Adjusted diluted EPS excluding amortization was $1.12 in the quarter, compared to $1.05 in 2015.
Reported net income was $102 million, or $0.70 per diluted share, compared to $61 million, or $0.42 per diluted share, in 2015. In the first quarter of 2016, reported net income was reduced by charges of $45 million after tax, or $0.32 per diluted share, of which $30 million is related to the early retirement of debt in March, 2016, with restructuring and integration costs accounting for the remainder. In the first quarter of 2015, reported net income was reduced by charges of $80 million after tax, or $0.54 per diluted share, principally associated with the early retirement of debt in 2015.
First quarter 2016 revenues were $1.86 billion. Revenues grew 3.6% versus the prior year on an equivalent basis, which excludes the first quarter 2015 revenues of the company’s clinical trials testing business that was contributed to the Q2 Solutions joint venture in July 2015. On a reported basis, revenues grew by 1.3% compared to a year ago. Diagnostic Information Services revenues grew by 3.8% compared to a year ago. Volume, measured by the number of requisitions, grew by 2.6% versus the prior year and revenue per requisition grew by 1.1%.
“We’re off to a good start in 2016 with a solid performance in the first quarter. We grew adjusted EPS nearly 7% and Diagnostic Information Services revenues by nearly 4%,” said Steve Rusckowski, President and CEO. “With the planned divestiture of our remaining products assets, our strategy to refocus on our Diagnostic Information Services business in line with our five-point strategy is largely complete. We are encouraged by the progress we’re making and are on track to meet our commitments for the remainder of the year.”
For the first quarter of 2016, adjusted operating income was $281 million, or 15.1% of revenues, compared to $269 million, or 14.6% of revenues, in 2015. Reported operating income was $257 million, or 13.8% of revenues, compared to $228 million, or 12.4% of revenues, in 2015.
Adjusted cash provided by operations was $190 million during the first quarter of 2016 and $130 million in 2015. Reported cash provided by operations was $143 million in the first quarter of 2016, compared to $52 million in 2015. Reported cash provided by operations was reduced by pre-tax cash charges associated with the early retirement of debt of $47 million in 2016 and $78 million in 2015.
Outlook for Full-Year 2016
The company’s full year 2016 outlook, before special items, remains unchanged, as follows:
- Revenues to be between $7.52 billion and $7.59 billion, an increase of 1.5% to 2.5% over 2015 revenues on an equivalent basis.
- As part of the company’s strategy to refocus on Diagnostic Information Services, the company contributed its clinical trials testing business to the Q2 Solutions joint venture in July 2015. Revenues on an equivalent basis for full year 2015 are $7.41 billion and represent the reported revenues excluding 2015 clinical trials revenue totaling $85 million.
- Adjusted diluted EPS excluding amortization to be between $5.02 and 5.17.
- Adjusted cash provided by operations to approximate $1 billion.
- Capital expenditures to be between $250 million and $300 million.
The company will provide an update on its revenue outlook after the close of the Focus Products divestiture, which is expected in the second quarter of 2016.
Note on Non-GAAP Financial Measures
As used in this press release: (i) for the purpose of income measures the term “adjusted” refers to operating performance measures that exclude special items such as the retirement of debt and related refinancing charges, restructuring and integration charges, and other items; (ii) the term “adjusted diluted EPS excluding amortization expense” represents the company’s results before the impact of special items and amortization expense; (iii) “adjusted cash provided by operations” represents cash provided by operations before the cash impact of charges on retirement of debt; and (iv) reference to “revenues on an equivalent basis” when comparing 2016 results to 2015 represents 2015 reported revenues excluding clinical trials revenues. Adjusted measures are presented because management believes those measures are useful adjuncts to reported results under accounting principles generally accepted in the United States. Adjusted measures should not be considered as an alternative to the corresponding measures determined under accounting principles generally accepted in the United States.
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