8-KRegulation FDExhibits & Filings

QUEST DIAGNOSTICS INC 8-K Report, Regulation FD Disclosure (Nov 5, 2014)

Filed November 5, 2014For Securities:DGX

Summary

Quest Diagnostics (DGX) held an Investor Day on November 5, 2014, where management outlined key strategic initiatives and financial outlook designed to drive shareholder value. A significant focus was placed on the 'Invigorate' initiative, with the company now expecting to achieve an additional $600 million in run-rate savings by the end of 2017, bringing the total expected run-rate savings from this program to $1.3 billion. This represents an increase from prior guidance, which projected $700 million in savings by the end of 2014. Furthermore, the company provided a positive outlook, announcing expected annual growth in both revenues and earnings per share (EPS) for the three-year period ending December 31, 2017. To enhance transparency and comparability in its reporting, Quest Diagnostics will begin reporting financial results and providing guidance on an "adjusted diluted EPS" basis starting in 2015, excluding amortization charges, which are estimated at approximately $0.40 per diluted share for full-year 2014. The company also reaffirmed its 2014 guidance for continuing operations before special items.

Key Highlights

  • 1Increased savings target: Quest Diagnostics now expects to achieve an additional $600 million in run-rate savings from the 'Invigorate' initiative by year-end 2017, for a total of $1.3 billion.
  • 2Projected revenue and EPS growth: The company announced expectations for annual growth in both revenues and earnings per share over the three-year period ending December 31, 2017.
  • 3New EPS reporting standard: Beginning in 2015, financial results and guidance will be provided on an 'adjusted diluted EPS' basis, excluding amortization charges.
  • 4Amortization impact: Full-year 2014 amortization charges are estimated to be approximately $0.40 per diluted share.
  • 5Reaffirmed 2014 outlook: The company reiterated its previously issued guidance for 2014 results from continuing operations before special items.
  • 6Investor Day presentations: Management presented detailed views on industry trends, company strategy, operational excellence, clinical franchises, commercial acceleration, innovation, IT platform, and capital allocation plans.

Frequently Asked Questions

The 'Invigorate' initiative is a company program aimed at driving operational efficiency and cost savings. Quest Diagnostics announced on November 5, 2014, that they now expect to generate an additional $600 million in run-rate savings from this initiative during the three-year period ending December 31, 2017. This brings the total expected run-rate savings from the Invigorate initiative to $1.3 billion by the end of 2017.

The company announced that it expects to achieve annual growth in both revenues and earnings per share (EPS) during the three-year period ending December 31, 2017.

Beginning in 2015, Quest Diagnostics intends to report its financial results and provide guidance on an 'adjusted diluted EPS' basis. This adjusted measure will exclude the impact of amortization charges, which are estimated to be approximately $0.40 per diluted share for the full year 2014.

During the Investor Day on November 5, 2014, Quest Diagnostics management presented on various aspects of the company's strategy and future plans, including industry views, the 'Invigorate' initiative, operational excellence, growth strategies for clinical franchises and commercial operations, innovation in cancer genetics and professional lab services, the IT platform for growth, and the capital plan for delivering and returning value to shareholders.