8-KEarnings & ResultsExhibits & Filings

QUEST DIAGNOSTICS INC 8-K Report, Financial Results (Oct 2, 2013)

Filed October 2, 2013For Securities:DGX

Summary

Quest Diagnostics Incorporated (DGX) announced the completion of the sale of its Enterix colorectal cancer screening test business to Clinical Genomics Technologies Pty Ltd. on September 30, 2013. While the terms of this specific transaction were not disclosed, this divestiture aligns with the Company's broader strategy, initiated in November 2012, to refocus on its core diagnostic information services business, enhance operational efficiency, and drive growth. This marks the latest in a series of non-core asset sales, including OralDNA and HemoCue businesses, as well as Ibrutinib royalty rights, which collectively generated approximately $800 million in gross proceeds. These proceeds provide significant financial flexibility for Quest Diagnostics.

Key Highlights

  • 1Completed sale of Enterix colorectal cancer screening test business to Clinical Genomics Technologies Pty Ltd.
  • 2Divestiture of Enterix aligns with Quest Diagnostics' strategy to focus on core diagnostic information services.
  • 3Previous sales of non-core assets (OralDNA, HemoCue, Ibrutinib royalty rights) have generated approximately $800 million in gross proceeds.
  • 4Company repurchased $467 million in shares in the first half of 2013 and initiated an accelerated share repurchase of $350 million in September 2013.
  • 5Invested in three acquisitions: UMass and Dignity Health lab outreach businesses, and Concentra's toxicology business.
  • 6Expects a preliminary after-tax loss of approximately $25 million ($0.17 per share) on the Enterix sale in Q3 2013.
  • 7Expects a preliminary after-tax gain of approximately $298 million ($1.96 per share) on the sale of Ibrutinib royalty rights in Q3 2013.
  • 8Both the gain and loss on sale will impact income from continuing operations but will be excluded from adjusted earnings.

Frequently Asked Questions

Quest Diagnostics expects to record a preliminary after-tax loss of approximately $25 million, or $0.17 per share, on the sale of its Enterix business during the third quarter of 2013. This will impact income from continuing operations but will be excluded from adjusted earnings.

The sale of Enterix is part of Quest Diagnostics' five-point strategy announced in November 2012, which focuses on divesting non-core assets to concentrate on its core diagnostic information services business, drive operational excellence, restore growth, simplify the organization, and ensure disciplined capital deployment.

Quest Diagnostics has used the approximately $800 million in gross proceeds from its recent asset sales (including Enterix) to provide financial flexibility. This flexibility has been deployed towards significant share repurchases, totaling $467 million in the first half of 2013 and an additional $350 million through an accelerated share repurchase agreement in September 2013. The company has also invested in strategic acquisitions.

Yes, Quest Diagnostics expects to record a significant preliminary after-tax gain of approximately $298 million, or $1.96 per share, from the sale of its Ibrutinib royalty rights in the third quarter of 2013. This gain will also impact income from continuing operations but will be excluded from adjusted earnings.