Fortrea Holdings Inc (FTRE) 2023 Q2 法說會逐字稿

Good morning and thank you for standing by. Welcome to the Fortrea second-quarter 2023 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Hima Inguva, Head of Investor Relations and Corporate Development. Please go ahead.

早上好，感謝您的支持。歡迎參加 Fortrea 2023 年第二季度收益電話會議。 （操作員指示）請注意，今天的會議正在錄製中。現在我想將會議交給今天的演講者、投資者關係和企業發展主管 Hima Inguva。請繼續。

Good morning and thank you for joining Fortrea's second-quarter 2023 earnings conference call. I am Hima Inguva, Head of Investor Relations and Corporate Development at Fortrea.

早上好，感謝您參加 Fortrea 2023 年第二季度收益電話會議。我是 Hima Inguva，Fortrea 投資者關係和企業發展主管。

On the call with me today are our CEO, Tom Pike, and our CFO, Jill McConnell. The call is being webcasted, and the slides accompanying today's presentations have been posted to the Investor Relations page of our website, fortrea.com.

今天與我通話的有我們的首席執行官湯姆·派克 (Tom Pike) 和首席財務官吉爾·麥康奈爾 (Jill McConnell)。此次電話會議正在網絡直播，今天演示文稿附帶的幻燈片已發佈到我們網站 fortrea.com 的投資者關係頁面。

During this call, we'll make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to significant risks and uncertainties that could cause actual results to differ materially from our current expectations.

在本次電話會議中，我們將做出1995 年《私人證券訴訟改革法案》含義內的某些前瞻性聲明。這些聲明受到重大風險和不確定性的影響，可能導致實際結果與我們當前的預期存在重大差異。

We strongly encourage you to review the reports we file with the SEC regarding these risks and uncertainties. In particular, those that are described in the cautionary statement concerning forward-looking statements and risk factors in our Form 10 this morning, press release, and presentation that we posted on the website.

我們強烈建議您查看我們向 SEC 提交的有關這些風險和不確定性的報告。特別是今天上午的表格 10、新聞稿和我們在網站上發布的演示文稿中有關前瞻性陳述和風險因素的警告聲明中描述的內容。

Please note that any forward-looking statements represent our views as of today, August 14, 2023, and that we assume no obligation to update the forward-looking statements even if estimates change. During this call, we'll also be referring to certain non-GAAP financial measures.

請注意，任何前瞻性陳述均代表我們截至今天（2023 年 8 月 14 日）的觀點，即使估計發生變化，我們也不承擔更新前瞻性陳述的義務。在本次電話會議中，我們還將提及某些非公認會計準則財務指標。

These non-GAAP measures are not superior to or replacement for the comparable GAAP measures, but we believe these measures help investors gain a more complete understanding of results. A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings press release and earnings call presentation slides provided in connection with today's call.

這些非公認會計準則衡量標準並不優於或替代可比的公認會計準則衡量標準，但我們相信這些衡量標準有助於投資者更全面地了解結果。此類非公認會計原則財務指標與最直接可比的公認會計原則指標的調節可在與今天電話會議相關的收益新聞稿和收益電話會議演示幻燈片中找到。

With that, I'd like to turn it over to our CEO, Tom Pike. Tom?

接下來，我想將其交給我們的首席執行官湯姆·派克 (Tom Pike)。湯姆？

Thank you, Hima. Good morning, everyone. Let's get right down to business. In July of 2022, Labcorp announced at its spin-off its clinical services and patient access services business unit from its global laboratory businesses. Now named Fortrea, this business represented about half of the revenues of Labcorp's previous drug development segment and spans primarily clinical development Phases I through IV.

謝謝你，希瑪。大家，早安。讓我們言歸正傳吧。 2022 年 7 月，Labcorp 宣布從其全球實驗室業務中分拆出臨床服務和患者訪問服務業務部門。該業務現在名為 Fortrea，約佔 Labcorp 之前藥物開發部門收入的一半，主要涵蓋臨床開發 I 期至 IV 期。

Fortrea's capabilities have an impressive heritage that goes back more than 30 years through the CRO pioneer Covance and acquisitions like Chiltern. This business grew at about 15% compound annual growth rate from 2010 through 2022. At the same time, the business was nested in a much larger organization with the central lab and diagnostic labs and has not operated as a stand-alone unit before.

Fortrea 的能力擁有令人印象深刻的傳統，可以追溯到 30 多年前，通過 CRO 先驅 Covance 和 Chiltern 等收購。從 2010 年到 2022 年，該業務的複合年增長率約為 15%。同時，該業務嵌套在一個擁有中央實驗室和診斷實驗室的更大的組織中，之前從未作為獨立單位運營。

Therefore, there was a tremendous effort required to prepare for a successful spin, which was completed quickly in under a year. This fast-paced approach to a spin is often referred to as a lift-and-shift approach, really no substantive business improvements.

因此，為了成功旋轉需要付出巨大的努力，並在不到一年的時間內迅速完成。這種快節奏的旋轉方法通常被稱為提升和轉移方法，實際上沒有實質性的業務改進。

Over the past 12 months, the people here have been navigating what I've come to call this spin year. During this 12-month period, some customers took a wait-and-see approach with us before awarding new business. I think some wanted to see who was staying, who was going, or if there would be some other disruption.

在過去的 12 個月裡，這裡的人們一直在經歷我所說的“旋轉年”。在這 12 個月期間，一些客戶在授予新業務之前對我們採取了觀望態度。我想有些人想看看誰留下來，誰離開，或者是否會有其他干擾。

I'm not aware of the spin costing Fortrea any existing customers. The major issue in the spin year was a slowdown in new RFP opportunities, probably compounded by a softer biotech environment and lack of larger new customers.

我不知道 Fortrea 的現有客戶因此而遭受損失。旋轉年的主要問題是新的 RFP 機會放緩，這可能是由於生物技術環境疲軟和缺乏更大的新客戶而加劇。

We have been referring to the situation as our mix issue publicly. Headline book-to-bill numbers were okay and consistent with industry and prior company practices, but the mix of sales, including new business versus renewals, was not sufficient to meet even average industry growth rates for some quarters.

我們一直公開將這種情況稱為我們的混合問題。總體訂單出貨量數據還不錯，並且與行業和之前的公司慣例一致，但銷售組合（包括新業務與續訂業務）甚至不足以滿足某些季度的行業平均增長率。

Jill, our CFO, is going to walk you through the results of what I hope is the last quarter of the spin year. It's important to note that we are an independent company for only a minute, literally, so this is detailed reporting about a discontinued segment of the prior parent company, including corporate allocations, onetime and new recurring spin costs, and more. Jill, over to you.

我們的首席財務官吉爾將向您介紹我希望是旋轉年最後一個季度的結果。值得注意的是，從字面上看，我們只是一家獨立公司，因此這是有關前母公司已終止業務部門的詳細報告，包括公司分配、一次性和新的經常性分拆成本等。吉爾，交給你了。

Thank you, Tom, and good morning, everyone. Fortrea's second-quarter results continued to include softness related to this spin year, but we are pleased to have completed the spin and become an independent organization. I want to give my personal thanks to everyone who is involved in making it happen.

謝謝你，湯姆，大家早上好。 Fortrea 第二季度的業績繼續包括與本次重組相關的疲軟，但我們很高興完成了重組並成為一個獨立的組織。我想向所有參與實現這一目標的人表示我個人的感謝。

The speed and commitment that they demonstrated to ensure a smooth transition of our services give me confidence as we head into this new chapter for Fortrea. It is great to see signs of improvement in both RFP flow and award volume as we move through the third quarter. This will be key to returning the company to industry growth or above and driving margin expansion over time.

他們為確保我們的服務平穩過渡而表現出的速度和承諾讓我在我們進入 Fortrea 的新篇章時充滿信心。隨著第三季度的到來，我們很高興看到 RFP 流量和獎勵數量都有改善的跡象。這對於使公司恢復行業增長或更高水平並隨著時間的推移推動利潤率擴張至關重要。

Now let's turn to results. Revenues were $793 million in the second quarter, essentially flat versus the same period last year. Clinical services revenues of $726.1 million grew 0.4% year on year, driven by higher pass-through revenues, partially offset by lower service fee revenues. The lower service fee revenues were in part due to a previously disclosed prior year FSP contract loss and a onetime client adjustment, as well as the mix and quantity of new business wins during this past spin year.

現在讓我們轉向結果。第二季度收入為 7.93 億美元，與去年同期基本持平。受轉嫁收入增加的推動，臨床服務收入達到 7.261 億美元，同比增長 0.4%，但部分被服務費收入減少所抵消。服務費收入下降的部分原因是之前披露的上一年 FSP 合同損失和一次性客戶調整，以及過去一年中新業務贏得的組合和數量。

Enabling services revenues decreased 4.2% year on year as patient access revenues were impacted by lower call center activity, partially offset by growth in our Endpoint business. Revenues for the six months ended June 30, 2023, were $1.56 billion, a decrease of 0.9% year on year. Note that currency was not a material impact to our results in the second quarter.

由於患者訪問收入受到呼叫中心活動減少的影響，支持服務收入同比下降 4.2%，但部分被我們的端點業務的增長所抵消。截至2023年6月30日的六個月收入為15.6億美元，同比下降0.9%。請注意，匯率並未對我們第二季度的業績產生重大影響。

Before I move to our cost base, please remember that this quarter is unusual as these expenses are based on our results when we were a division of our former parent company and include a combination of both actual costs as well as former parent company allocations under the carve accounting methodology. Direct costs increased 5.7% year on year primarily due to higher pass-through expenses, partially offset by lower temporary labor and bonus-related expenses along with other cost efficiencies.

在我討論我們的成本基礎之前，請​​記住，本季度是不尋常的，因為這些費用是基於我們作為前母公司的一個部門時的業績，包括實際成本以及前母公司根據雕刻會計方法。直接成本同比增長 5.7%，主要是由於轉嫁費用增加，但部分被臨時工和獎金相關費用減少以及其他成本效率所抵消。

SG&A was higher by 13.5% due to an increase in indirect labor, credit loss provisions, and an unanticipated adjustment to our year-to-date expenses of $5.4 million, partially offset by a decrease in bonus-related compensation expense. Net interest expense for the quarter was $0.7 million. We expect full-year interest expense to total approximately $70 million in 2023, incorporating the change in market expectations for further rate increases in the second half of 2023.

由於間接人工、信用損失撥備的增加以及對我們年初至今支出 540 萬美元的意外調整，SG&A 增長了 13.5%，但部分被獎金相關補償費用的減少所抵消。該季度的淨利息支出為 70 萬美元。我們預計 2023 年全年利息支出總額約為 7000 萬美元，考慮到市場對 2023 年下半年進一步加息的預期變化。

The effective tax rate was 26.9% for the quarter. We expect the full-year 2023 adjusted effective tax rate to be between 27% to 30%, which is higher than our full-year 2022 effective tax rate of 18.6%. The expected increase in the tax rate is due to anticipated reductions in domestic earnings, which in turn lead to increased domestic taxation of our foreign earnings, as well as the loss of certain deductions we received as part of our former parent company.

該季度的有效稅率為 26.9%。我們預計 2023 年全年調整後有效稅率將在 27% 至 30% 之間，高於我們 2022 年全年 18.6% 的有效稅率。稅率的預期增加是由於國內收入的預期減少，這反過來又導致我們的國外收入的國內稅收增加，以及我們作為前母公司的一部分收到的某些扣除額的損失。

Now that we are a stand-alone company, we expect to revisit our tax structure to ensure it is optimized for the future. Adjusted EBITDA for the quarter of $72.5 million decreased 37.1% year over year compared to adjusted EBITDA of $115.3 million in the prior year period. Year-to-date adjusted EBITDA was $129.6 million, which decreased 31.8% year over year compared to adjusted EBITDA of $190.1 million in the prior year-to-date period.

現在我們是一家獨立的公司，我們希望重新審視我們的稅收結構，以確保其針對未來進行優化。本季度調整後 EBITDA 為 7,250 萬美元，同比下降 37.1%，而上年同期調整後 EBITDA 為 1.153 億美元。年初至今調整後 EBITDA 為 1.296 億美元，與上年同期調整後 EBITDA 1.901 億美元相比，同比下降 31.8%。

Adjusted EBITDA margin for the second quarter was 9.1% compared to 14.5% in the prior year period. Adjusted EBITDA margin in the quarter was negatively impacted by the lower service fee revenues as well as higher pass-through revenues. Year-to-date adjusted EBITDA margin was 8.3% compared to 12.1% in the prior year period. In the second quarter of 2023, adjusted net income of $46.3 million decreased 46.2% compared to adjusted net income of $86.1 million in the prior year period.

第二季度調整後 EBITDA 利潤率為 9.1%，上年同期為 14.5%。本季度調整後的 EBITDA 利潤率受到服務費收入下降和轉嫁收入上升的負面影響。年初至今調整後 EBITDA 利潤率為 8.3%，而去年同期為 12.1%。 2023 年第二季度，調整後淨利潤為 4630 萬美元，比上年同期調整後淨利潤 8610 萬美元下降 46.2%。

Adjusted net income for both basic and diluted share for the quarter was $0.52 compared to $0.97 in the prior year period. In the first half of 2023, adjusted net income of $86.6 million decreased 38.3% compared to adjusted net income of $140.3 million in the prior year-to-date period. Adjusted net income for both basic and diluted share for the first half of 2023 was $0.98 compared to $1.58 in the prior year period.

本季度基本股和稀釋股的調整後淨利潤為 0.52 美元，而上年同期為 0.97 美元。 2023 年上半年，調整後淨利潤為 8,660 萬美元，比上年同期調整後淨利潤 1.403 億美元下降 38.3%。 2023 年上半年基本股和稀釋股的調整後淨利潤為 0.98 美元，而上年同期為 1.58 美元。

In terms of our margin efforts, we recognize that our current margins are not consistent with industry norms. It is important to remember that our priority over the last year was to successfully spin at pace and to ensure business continuity.

就我們的利潤率努力而言，我們認識到我們目前的利潤率與行業規範不符。重要的是要記住，我們去年的首要任務是成功地按節奏發展並確保業務連續性。

Now that the spin is complete, we are actively assessing our cost base, both for direct costs as well as SG&A and have begun to form our margin optimization plan. With one month of actual expenses available, we are continuing our SG&A benchmarking and exploring technology productivity initiatives. We are identifying improvements through sourcing and procurement and are finalizing our TSA exit strategies to replace them with more fit-for-purpose infrastructure. We are prioritizing margin improvement efforts and continue to expect to move towards peer margin levels over time.

現在剝離已經完成，我們正在積極評估我們的成本基礎，包括直接成本和銷售管理費用，並已開始製定利潤優化計劃。有了一個月的實際費用，我們將繼續進行 SG&A 基準測試並探索技術生產力計劃。我們正在通過採購來確定改進措施，並最終確定我們的 TSA 退出策略，以用更適合用途的基礎設施來取代它們。我們正在優先考慮提高利潤率的努力，並繼續期望隨著時間的推移，我們將向同行利潤率水平邁進。

Turning to customer concentration. Our top 10 customers represented nearly half of our year-to-date revenue. Next, I'll provide an update on cash and liquidity. In the first half of the year, we generated $154.2 million in cash flow from operating activities. Net accounts receivable was $1.01 billion at June 30, 2023, 0.7% lower than at December 31, 2022. During the quarter, we entered into an accounts receivable purchase program with the ability to sell up to $80 million of our receivables to accelerate cash collection.

轉向客戶集中度。我們的十大客戶占我們今年迄今為止收入的近一半。接下來，我將提供有關現金和流動性的最新情況。上半年，我們的經營活動現金流量為 1.542 億美元。截至2023 年6 月30 日，應收賬款淨額為10.1 億美元，比2022 年12 月31 日下降0.7%。本季度，我們簽訂了應收賬款購買計劃，能夠出售最多8000 萬美元的應收賬款，以加速現金回收。

Prior to the spin, the company sold $17.5 million of accounts receivable, which drove the decrease in accounts receivable between December 31, 2022, and June 30, 2023. Days sales outstanding was 86 days at June 30, 2023. We have initiated projects to improve our DSO profile. Due to the nature of our contracts, which provide services over extended periods of time, there is a lag to seeing changes reflected in our performance.

在分拆之前，該公司出售了1,750 萬美元的應收賬款，這導致2022 年12 月31 日至2023 年6 月30 日期間應收賬款減少。截至2023 年6 月30 日，應收賬款天數為86 天。我們已啟動項目改善我們的 DSO 概況。由於我們合同的性質是在較長時間內提供服務，因此我們的績效中反映的變化存在滯後性。

In addition to these actions, we are focused on other opportunities to reduce this measure over time. For the six months ended June 30, 2023, free cash flow was $128.4 million. The improvement versus the prior year was primarily due to a lower incentive payout this year.

除了這些行動之外，我們還關注其他機會，以隨著時間的推移減少這一措施。截至 2023 年 6 月 30 日的六個月，自由現金流為 1.284 億美元。與上一年相比的改善主要是由於今年的激勵支出較低。

Turning now to our debt. During the quarter, we issued $570 million of senior notes due in 2030, and we entered into a $450 million revolving credit facility, a five-year, $500 million term loan A facility and a seven-year $570 million term loan B facility. Our blended interest rate for debt at June 30, 2023, was 8%.

現在談談我們的債務。本季度，我們發行了2030 年到期的5.7 億美元優先票據，並簽訂了4.5 億美元的循環信貸額度、五年期5 億美元的定期貸款A 額度和七年期5.7 億美元的定期貸款B額度。截至 2023 年 6 月 30 日，我們的債務混合利率為 8%。

We ended the quarter with a net leverage ratio of 4x. As noted previously, our near-term capital allocation priorities are: first, infrastructure investments for timely exit of the transition service agreements; second, targeted therapeutic and technology investments to drive organic growth; and then debt repayment. Longer term, as our net leverage improves, we will consider selective tuck-in acquisitions.

本季度結束時，我們的淨槓桿率為 4 倍。如前所述，我們近期的資本配置重點是：第一，基礎設施投資，以便及時退出過渡服務協議；其次，有針對性的治療和技術投資以推動有機增長；然後償還債務。從長遠來看，隨著我們的淨槓桿率提高，我們將考慮選擇性收購。

Next, I will review our go-forward approach to backlog recognition. As part of becoming a stand-alone company, the company reviewed and modified its backlog composition and recognition policies to facilitate period-to-period reporting going forward. As a result of this review, we have decided to make modifications in the following areas: restating the backlog to remove projects where we no longer have current revenue as well as incorporating all known changes in scope from customers or other uncertainties.

接下來，我將回顧我們積壓識別的前進方法。作為成為獨立公司的一部分，該公司審查並修改了其積壓工作構成和確認政策，以促進未來的定期報告。根據這次審查，我們決定在以下方面進行修改：重申積壓工作以刪除我們不再有當前收入的項目，以及納入來自客戶或其他不確定因素的所有已知範圍變化。

This was partially offset by adding in backlog where revenue is still being earned, but no backlog was represented. We have decided to remove for the enabling services backlog from our calculation, given the different operating profile of these businesses. Going forward, our backlog and book-to-bill reporting will be for our clinical services business only.

這部分被增加積壓訂單所抵消，其中仍在賺取收入，但沒有積壓訂單出現。鑑於這些企業的運營狀況不同，我們決定從計算中刪除支持服務積壓。展望未來，我們的積壓訂單和訂單到賬單報告將僅適用於我們的臨床服務業務。

And finally, we revised our FSP net new business awards recognition policy. For new awards, we will recognize the first two years of the award, and for renewals, we will recognize only the first year of the award at the time of contract signature.

最後，我們修訂了 FSP 網絡新業務獎勵表彰政策。對於新獎項，我們將承認該獎項的前兩年，而對於續簽，我們將在合同簽署時僅承認該獎項的第一年。

This more appropriately reflects the nature of FSP awards, in particular, the phased revenue ramp that comes with the new award. It is important to note that outside of the first adjustment I referenced to remove uncertain positions, the revenue opportunity of the enabling services backlog and our remaining FSP backlog fully exists.

這更恰當地反映了 FSP 獎項的性質，特別是新獎項帶來的階段性收入增長。值得注意的是，除了我提到的消除不確定狀況的第一次調整之外，支持服務積壓和我們剩餘的 FSP 積壓的收入機會完全存在。

With these adjustments, we are effectively aligning the scope of our backlog to provide a view of our pipeline that is more tailored for our stand-alone business. Backlog at the end of the quarter under our new methodology was approximately $7 billion. The total reduction of $1.27 billion year over year was driven by the changes I described.

通過這些調整，我們正在有效地調整積壓的範圍，以提供更適合我們獨立業務的管道視圖。根據我們的新方法，本季度末的積壓訂單約為 70 億美元。我所描述的變化推動了總額同比減少 12.7 億美元。

Starting with this quarter, we will use this new methodology for reporting backlog. Because of these changes, we cannot actually restate the backlog history to incorporate all of the changes noted above, Therefore, we are not disclosing net new business awards or book-to-bill for this quarter.

從本季度開始，我們將使用這種新方法來報告積壓工作。由於這些變化，我們實際上無法重述積壓歷史記錄以納入上述所有變化。因此，我們不會披露本季度的淨新業務獎勵或訂單出貨比。

We will rebuild our trailing book-to-bill metrics from the third quarter onwards. In this final pre-spin quarter, we continue to see some softness in net new awards. So with the spin behind us, we are pleased to see positive momentum in RFP flow and new awards in the third quarter.

從第三季度開始，我們將重建跟踪訂單出貨量指標。在最後一個預旋轉季度，我們繼續看到淨新獎項有些疲軟。因此，隨著我們的發展，我們很高興看到第三季度 RFP 流程和新獎項的積極勢頭。

Moving now to our updated guidance for 2023. We expect full year 2023 total revenue in the range of $3.03 billion to $3.1 billion compared to 2022 total revenue of $3.1 billion. We expect 2023 adjusted EBITDA in the range of $255 million to $285 million compared to adjusted EBITDA of $405.1 million in 2022. Our target for net leverage ratio continues to be 2.5 times to 3 times over the medium term.

現在轉向我們更新的 2023 年指引。我們預計 2023 年全年總收入在 30.3 億美元至 31 億美元之間，而 2022 年總收入為 31 億美元。我們預計 2023 年調整後 EBITDA 在 2.55 億至 2.85 億美元之間，而 2022 年調整後 EBITDA 為 4.051 億美元。我們的淨槓桿率目標在中期仍為 2.5 倍至 3 倍。

Our guidance assumes foreign exchange rates in effect as of June 30, 2023. This guidance assumes a full-year 2023 effective tax rate of 27% to 30% and weighted average shares outstanding for 2023 on both a basic and diluted basis at the current level of shares and does not reflect the potential impact of currency fluctuations.

我們的指引假設外匯匯率截至2023 年6 月30 日有效。本指引假設2023 年全年有效稅率為27% 至30%，並假設2023 年基本和攤薄基礎上的2023 年已發行加權平均股票處於當前水平股並沒有反映貨幣波動的潛在影響。

In terms of the second half phasing, we expect fourth-quarter performance to be slightly better than the third quarter as we begin to see the impact of some of our initial actions on aligning our cost structure to our revenue profile. We will share more details on our near-term and longer-term margin improvement initiatives with our third-quarter earnings announcement in November.

就下半年的階段而言，我們預計第四季度的業績將略好於第三季度，因為我們開始看到一些初步行動對調整成本結構與收入狀況的影響。我們將在 11 月份的第三季度收益公告中分享有關近期和長期利潤率改善計劃的更多細節。

In closing, this was Fortrea's last quarter reporting as a division of its former parent company. We are navigating the impact from the spin related uncertainty and are focused on winning new business to drive future top-line growth. We are excited about being an independent company. the strong momentum we are seeing in RFP flow and the margin expansion opportunities ahead of us give us confidence in our future.

最後，這是 Fortrea 作為其前母公司的一個部門的最後一個季度報告。我們正在應對旋轉相關不確定性的影響，並專注於贏得新業務以推動未來的營收增長。我們對成為一家獨立公司感到興奮。我們在 RFP 流程中看到的強勁勢頭和我們面前的利潤擴張機會讓我們對未來充滿信心。

With a proven management team, innovative clinical development solutions and an unwavering commitment to deliver value to our customers, we are well positioned to unleash our full potential and establish Fortrea as the top choice clinical resource organization for pharmaceutical, biotech, and medical device companies.

憑藉成熟的管理團隊、創新的臨床開發解決方案以及為客戶提供價值的堅定承諾，我們完全有能力釋放我們的全部潛力，並將 Fortrea 打造成製藥、生物技術和醫療器械公司的首選臨床資源組織。

And with that, I will turn it back to Tom for some additional remarks prior to moving to Q&A.

接下來，我將在進行問答之前將其轉回給湯姆，以徵求一些補充意見。

Thanks, Jill. I joined Labcorp in January of 2023 to become Fortrea's CEO and Chairman of the Board when it was spun out. For those of you who don't know me, earlier in my career, I was at McKinsey and then Accenture then more recently at Quintiles Transnational, where I served as the CEO and we took the company public through the merger with IMS Health in late 2016 to create IQVIA.

謝謝，吉爾。我於 2023 年 1 月加入 Labcorp，在 Fortrea 分拆後擔任首席執行官兼董事會主席。對於那些不認識我的人來說，在我職業生涯的早期，我曾在麥肯錫工作，然後是埃森哲，最近在昆泰跨國公司擔任首席執行官，我們通過與 IMS Health 的合併使公司上市。 2016年創建IQVIA。

Since then, I've been working with private equity and venture capital companies working with innovators, and from time to time, looking at other major CROs private equity. I know many CRO investors and analysts, and I feel like I have a personal commitment to both your success and Fortrea's.

從那時起，我一直與私募股權和風險投資公司合作，與創新者合作，並時不時地關注其他主要的 CRO 私募股權。我認識許多 CRO 投資者和分析師，我覺得我對你們和 Fortrea 的成功都有個人承諾。

My job was to hire a management team and a Board for the spin with a target of having that team and board in place by May. We achieved that. Carefully selecting people internally and externally, we have assembled a great management team and Board, both with appropriate qualifications and experience to guide us. We appreciate the positive response to this team since our Investor Day.

我的工作是聘請一個管理團隊和一個董事會來進行重組，目標是在五月份之前讓該團隊和董事會就位。我們做到了。我們在內部和外部精心選拔人才，組建了一支優秀的管理團隊和董事會，他們都具有適當的資格和經驗來指導我們。我們感謝該團隊自投資者日以來的積極回應。

Our management team was revealed in early May and the new members started taking over business and functional areas in the last few weeks of the quarter, some actually at the end of the quarter. For instance, Jill's role became official at the end of Q2, having spent the prior 10 months leading the internal spinout team of the parent and doing double duty during the roadshow. Now she's 100% focused on Fortrea.

我們的管理團隊於五月初揭曉，新成員在本季度的最後幾週開始接管業務和職能領域，有些實際上是在季度末。例如，吉爾的角色在第二季度末正式生效，她在過去 10 個月裡領導母公司的內部分拆團隊，並在路演期間承擔雙重職責。現在她百分百專注於 Fortrea。

Two of our key operating executives have been running similar organizations to what they run today, which kept delivery of services for customers on track. The others -- many of the others are new.

我們的兩位主要運營管理人員一直在運營與他們今天運營的組織類似的組織，這使得為客戶提供的服務保持在正軌上。其他的——很多都是新的。

Let me be plain-spoken here. I and the management team are not satisfied with the second-quarter and first-half results. I'm going to pause here. I don't believe the first-half results represent the potential performance of this organization as an independent company. We are clear-eyed about both opportunities and issues. We have already started on changes in improvements. We will discuss some, but not all of those changes today.

在這裡我就直白的說一下吧。我和管理團隊對第二季度和上半年的業績並不滿意。我要在這裡暫停一下。我不認為上半年的業績代表了該組織作為一家獨立公司的潛在業績。我們對機遇和問題都保持清醒的認識。我們已經開始進行改變和改進。今天我們將討論一些變化，但不是全部。

As leaders, we must place the spin year firmly in the rearview mirror. The new management team and I will transform Fortrea from an operating unit of a larger enterprise into a successful independent clinical services organization accountable for its own future. I've assessed our strengths and weaknesses and worked with the Fortrea leaders to craft a strategy that positions us to compete and win. This strong team, too, have assessed their respective units and are putting new programs in place. We have begun transforming the business.

作為領導者，我們必須牢牢地把旋轉的一年放在後視鏡中。我和新的管理團隊將把 Fortrea 從一家大型企業的運營部門轉變為一家成功的獨立臨床服務組織，對自己的未來負責。我評估了我們的優勢和劣勢，並與 Fortrea 領導人合作制定了一項戰略，使我們能夠競爭並獲勝。這個強大的團隊也評估了各自的部門並正在實施新的計劃。我們已經開始進行業務轉型。

Now here's my assessment. Fortrea today is a capable CRO that has the scale and management to bring innovation and consistent global delivery to an R&D industry that needs and relies on both. Clinical research is complex, and this team is good at it. Fortrea is a Goldilocks-sized organization, not too big, not too small, where customers will find management knowledgeable and readily accessible.

現在這是我的評估。如今，Fortrea 是一家有能力的 CRO，其規模和管理能力足以為需要並依賴這兩者的研發行業帶來創新和一致的全球交付。臨床研究很複雜，而這個團隊擅長於此。 Fortrea 是一家規模適中的組織，不太大也不太小，客戶會發現管理層知識淵博且易於溝通。

We have the scale and skills to grow attractively and importantly, organically from here. There are a lot of positives to this business. Let's remember, the roots of this business are in Covance, one of the longest-tenured successful CROs. We have global reach and 19,000 professionals. There is medical and scientific breadth and depth on par with the best of our industry. We punch above our weight in oncology, the largest therapeutic area for trials. We have a great diversified customer base with long-term relationships, in some cases, more than a decade. We service both large and small biopharma effectively.

我們擁有規模和技能，可以從這裡開始進行有吸引力且重要的有機增長。這項業務有很多積極因素。讓我們記住，這項業務的根源在於科文斯，科文斯是任期最長的成功 CRO 之一。我們的業務遍及全球，擁有 19,000 名專業人員。其醫學和科學的廣度和深度與我們行業中最好的水平不相上下。我們在最大的試驗治療領域——腫瘤學領域取得了超凡的成績。我們擁有龐大的多元化客戶群，並與我們建立了長期的合作關係，在某些情況下，甚至超過十年。我們為大型和小型生物製藥公司提供有效的服務。

There are years of experience, along with technology tools for working with the Labcorp data and we can bring that to the explosion of clinical data sources now available. We have many great executives and a talented workforce throughout the world. Our first order of business has been to reignite our new business engine. We now have weekly sales calls that involve me and our other business presidents to review and target opportunities.

Labcorp 擁有多年的經驗以及處理數據的技術工具，我們可以將這些經驗運用到現有臨床數據源的爆炸式增長中。我們在世界各地擁有許多優秀的管理人員和才華橫溢的員工隊伍。我們的首要任務是重新點燃我們的新業務引擎。現在，我們每週都會舉行銷售電話會議，由我和其他業務總裁參與審查和瞄準機會。

We have increased our executive involvement in the sales process, improving the process, targeting a mix, and making sure we apply the advantages of our size, experience, relationships, and our differentiated offerings. Another positive RFP flow is improving at a level for attractive growth, importantly, with the right mix. Our win rates are improving and our customers large to smaller engaging us conversations as to how we can help them transform and streamline how they do clinical development. We are at the table.

我們增加了高管對銷售流程的參與，改進流程，瞄準組合，並確保我們利用我們的規模、經驗、關係和差異化產品的優勢。另一個積極的 RFP 流程正在改善，以實現有吸引力的增長，重要的是，通過正確的組合。我們的勝率正在提高，我們的大大小小的客戶都與我們進行對話，討論我們如何幫助他們轉變和簡化他們的臨床開發方式。我們在桌邊。

As a result, July 2023 has been the best first month of a quarter for new business wins since 2021. To shape our vision and strategy for the future, I've been meeting with research and development leaders throughout the spring and early summer, listening to what they need in exchanging ideas. We are wrapping our Fortrea strategies around what the industry needs. Customers are excited to work with a company that wants to innovate and improve things. And we have some nice wins as new management has taken over.

因此，2023 年 7 月是自 2021 年以來贏得新業務最好的季度第一個月。為了塑造我們未來的願景和戰略，我在整個春季和初夏與研發領導者會面，聆聽交流想法時他們需要什麼。我們正在圍繞行業需求制定 Fortrea 戰略。客戶很高興與一家想要創新和改進的公司合作。隨著新管理層的接任，我們取得了一些不錯的勝利。

Let me give you a few examples of the many successes we've seen. We're able to break in with a large, important Asia Pacific headquartered sponsor to support them in the global development of one of their key oncology assets. We had a nice Phase III win in psoriatic arthritis with one of our small biotech partners because we had completed enrollment ahead of schedule on their Phase II study.

讓我給大家舉幾個我們所取得的成功的例子。我們能夠與一家大型、重要的總部位於亞太地區的讚助商合作，支持他們關鍵腫瘤資產之一的全球開發。我們與我們的一個小型生物技術合作夥伴在銀屑病關節炎的第三階段取得了不錯的勝利，因為我們提前完成了他們的第二階段研究的註冊。

We also put together a new preferred partnership that resulted in a nice first award with a mid-tier company, metastatic breast cancer. We're also focusing more on CNS, an area where we've been underpenetrated. We won a very interesting and complex early Alzheimer's study with a large pharma company where deep scientific expertise is for requisite.

我們還建立了新的首選合作夥伴關係，最終與一家中型公司（轉移性乳腺癌）獲得了不錯的首獎。我們還更加關注中樞神經系統，這是一個我們尚未滲透的領域。我們與一家大型製藥公司合作，贏得了一項非常有趣且複雜的早期阿爾茨海默病研究，該公司需要深厚的科學專業知識。

Our new team is pushing harder on early engagement, too and it's bearing fruit. We've been awarded multiple clinical studies recently that started with initial regulatory strategies or consulting work. We're also seeing pull-through in later phases. We were awarded several contracts and post-approval patient access this year based on our clinical development work. These contracts spend several therapeutic areas, including oncology and anti-infectives.

我們的新團隊也更加努力地推動早期參與，並且正在取得成果。我們最近獲得了多項從初始監管策略或諮詢工作開始的臨床研究。我們還看到了後期階段的拉動。根據我們的臨床開發工作，我們今年獲得了幾份合同和批准後的患者准入。這些合同涉及多個治療領域，包括腫瘤學和抗感染藥物。

Our medical device and diagnostic business, which is a leader, as a pipeline of RFPs that continues to grow. In Q2, we saw our highest proposal volume in the last 12 months for this unit. And it grew about 40% compared to the first quarter of the year.

我們的醫療設備和診斷業務處於領先地位，作為不斷增長的 RFP 渠道。在第二季度，我們看到了該單元過去 12 個月以來的最高提案量。與今年第一季度相比增長了約40%。

We're also focused on leveraging technology -- instant data analytics, machine learning and AI and will bring that lens to us.

我們還專注於利用技術——即時數據分析、機器學習和人工智能，並將把這些鏡頭帶給我們。

Internally, we have appointed a new leader and created a dedicated data sciences team to update our data strategy and keep in tune with that explosion of EMR, genomic, and other focused clinical data providers. We have a great leader for our industry-leading site augmentation strategies, making rapid progress, and the team is delivering quantifiable acceleration in start-ups for new projects.

在內部，我們任命了一位新的領導者，並創建了一個專門的數據科學團隊來更新我們的數據策略，並與 EMR、基因組和其他重點臨床數據提供商的爆炸式增長保持同步。我們擁有行業領先的站點增強策略的出色領導者，取得了快速進展，並且該團隊正在為新項目的初創企業提供可量化的加速。

We're pursuing investments in enabling services. We're also in the process of hiring more back the talent in therapeutic areas we're underpenetrated in. These anecdotes illustrate the progress we're making to deliver value for customers, which will strengthen our growth and financial performance. I'm proud of the progress we've made in a few short weeks since we've been an independent entity. It's a testament to our people around the world and their drive to create a better experience for customers.

我們正在尋求對支持服務的投資。我們還正在招聘更多尚未滲透的治療領域的人才。這些軼事說明了我們在為客戶創造價值方面所取得的進展，這將加強我們的增長和財務業績。我對我們成為獨立實體以來短短幾週內取得的進展感到自豪。這證明了我們世界各地的員工以及他們為客戶創造更好體驗的努力。

However, we know you would not think of us as good managers if I didn't address the financials specifically. We will get our financial house in order. I have seen other CROs and there's nothing in pricing or operations-wise, that's unusual or concerning here. This is a disciplined operations organization that can deliver programs with quality.

然而，我們知道，如果我沒有專門討論財務問題，您不會認為我們是優秀的管理者。我們會讓我們的金融機構井然有序。我見過其他 CRO，在定價或運營方面沒有什麼不尋常或令人擔憂的地方。這是一個紀律嚴明的運營組織，可以高質量地交付項目。

However, we do need to invest more in supporting technology and the spin and the exit from the parent will allow us to completely revise our software suite. There is also an opportunity for greater productivity while reducing technology costs. We also see procurement facility savings and will align operations cost with revenues more effectively. Regarding SG&A, while our numbers as part of the parent have historically looked good on the surface, frankly, it all depends on how indirect costs are allocated, which is different for different companies.

然而，我們確實需要在支持技術上投入更多資金，母公司的剝離和退出將使我們能夠徹底修改我們的軟件套件。還有機會提高生產率，同時降低技術成本。我們還看到採購設施的節省，並將更有效地調整運營成本與收入。關於SG&A，雖然我們作為母公司的一部分，表面上看數據一直不錯，但坦率地說，這完全取決於間接成本如何分配，而不同的公司是不同的。

As Jill discussed, we see addressing SG&A as well as programmatically exiting the TSAs with the parent on time as key activities that will improve our cost structure and aim to make our margins on par with industry leaders over coming years.

正如Jill 所討論的，我們認為解決SG&A 問題以及有計劃地與母公司按時退出TSA 是關鍵活動，這將改善我們的成本結構，並致力於在未來幾年使我們的利潤率與行業領先者持平。

I want to emphasize the most important thing right now is that this company does great work for customers, and it does, and it will continue to as the highest priority. We have the right team to do this. The new management team is now in charge. We're disciplined about both servicing customers and running a business. We are willing to change. We're hungry. This is a seven-day a week, 24-hour a day job. We will be transparent, keep you informed for our programs and progress. Expect further discussion in detail through the remainder of the year. We have the solutions to create value both for customers and shareholders.

我想強調現在最重要的事情是，這家公司為客戶做了出色的工作，而且確實如此，而且將繼續作為最高優先事項。我們有合適的團隊來做到這一點。現在由新的管理團隊負責。我們在服務客戶和經營業務方面都遵守紀律。我們願意改變。我們餓了。這是每週 7 天、每天 24 小時的工作。我們將保持透明，讓您隨時了解我們的計劃和進展。預計今年剩餘時間將進行進一步的詳細討論。我們擁有為客戶和股東創造價值的解決方案。

In closing, let me say that the R&D landscape is a tremendous place to be. Customers large and small, are innovating, bringing forward advances that will transform millions of lives and save many more. Let me say to the people of Fortrea, I've been impressed by you, and I'm proud to be working with you. We're excited to play our part and driven by our mission of bringing life-changing treatments to patients faster. Thank you.

最後，我要說的是，研發領域是一個巨大的領域。大大小小的客戶都在不斷創新、不斷進步，從而改變數百萬人的生活並拯救更多人的生命。讓我對 Fortrea 的人民說，你們給我留下了深刻的印象，我很自豪能與你們一起工作。我們很高興能夠發揮自己的作用，並以更快地為患者提供改變生活的治療方法為使命。謝謝。

Hima, back to you for question and answer.

Hima，回到你的問題和答案。

Thanks, Tom. With that, we'll now open the call for your questions. Michelle?

謝謝，湯姆。現在，我們將開始電話詢問您的問題。米歇爾？

(Operator Instructions) David Windley, Jefferies.

（操作員說明）David Windley，Jefferies。

Hi. Good morning. Tom, thanks for the transparency in your comments. I wanted to focus on cost structure with kind of a two-part question, and then I'll drop out. So first, just to better understand the costs that are weighing on the business now versus the comparable period -- and maybe part of the answer might be, it's not totally comparable.

你好。早上好。湯姆，感謝您的評論的透明度。我想通過一個由兩部分組成的問題來關注成本結構，然後我就會退出。因此，首先，為了更好地了解現在與可比時期相比對企業造成的成本——也許部分答案可能是，它不完全具有可比性。

But I would like to understand the cost that the business is bearing year over year that are depressing margin. And then in terms of addressing your forward costs, you've commented both at the Investor Day and also this morning, about bonus structure and kind of labor compensation. And I'd like to hear your thoughts on how you navigate that and maintain retention at levels that you need to maintain. Thank you.

但我想了解該業務逐年承受的成本壓低了利潤率。然後，在解決遠期成本方面，您在投資者日和今天早上都對獎金結構和勞動報酬發表了評論。我想听聽您對如何應對這一問題並將保留率保持在您需要維持的水平的想法。謝謝。

Yeah. I will say, Dave -- good morning, by the way, I've learned a lot about carve accounting in the last few weeks, and the difference is here. And Jill, do you want to -- that's a huge question that Dave asked. Do you want to try to give a sense of some of that, and then we'll come back to the retention issue?

是的。我會說，戴夫——早上好，順便說一句，在過去的幾周里，我學到了很多關於雕刻會計的知識，區別就在這裡。吉爾，你想不想——這是戴夫問的一個大問題。您想嘗試說明其中的一些內容，然後我們再回到保留問題嗎？

Yeah, Dave, it's a great question. The first six months -- well, obviously, looking back over the prior year period, that carve methodology is different from the actual allocation. We have one month of actuals now. And as you can imagine, we're still trying to work through and understand what are the ongoing costs versus what are still some of the lingering things related to the spin.

是的，戴夫，這是一個很好的問題。前六個月——很明顯，回顧去年同期，這種分配方法與實際分配不同。我們現在有一個月的實際情況。正如您可以想像的那樣，我們仍在努力解決並了解持續的成本以及與旋轉相關的一些揮之不去的問題。

So we wanted to be very thoughtful as we provided guidance until we've had the opportunity to fully understand and determine with benchmarking and some of the other things we're doing what the needs are. So those spin periods under that carve methodology are not going to be the same as the actuals. Obviously, they come through, but as we go forward with now our own quarters, we'll try to be very clear about calling out the differences between those periods.

因此，我們在提供指導時希望非常周到，直到我們有機會充分理解並確定基準測試以及我們正在做的其他一些事情的需求。因此，該雕刻方法下的那些旋轉週期將與實際情況不同。顯然，它們已經實現了，但當我們現在開始我們自己的季度時，我們將盡力清楚地指出這些時期之間的差異。

I think -- I think what I'd add to that is we do understand now seeing July what our cost structure is and to some degree until you see those costs, you don't understand them. Those of you who've been with us on this journey know that we were -- we wanted to wait and give you guidance until after we saw them. That turns out to have been the right move so that we understand the costs. We understand them now. And as Jill says, we're trying to give you our best sense of where this organization will land in this unusual year after the spin.

我想——我想我要補充的是，我們現在確實了解了 7 月份我們的成本結構是什麼，在某種程度上，直到你看到這些成本，你才理解它們。那些與我們一起踏上這段旅程的人都知道，我們想等待並為您提供指導，直到我們看到他們。事實證明這是正確的舉措，讓我們了解成本。我們現在了解他們了。正如吉爾所說，我們正在努力讓您了解該組織在重組後這個不尋常的一年中將走向何方。

That being said, as we go forward here, I think you asked the second question, Dave, about retention, and we are building into management plan the ability for employees to earn a bonus. So now that management plan is going to be aggressive and we're going to strive hard to outperform, but we are building some of those things into the go-forward plan. So right now, our attrition is at normal rates. People are excited to be here. I think we're going to make this a great place for them to work and we're going to compensate them appropriately.

話雖這麼說，當我們繼續前進時，戴夫，我想你問了第二個問題，關於保留，我們正在將員工賺取獎金的能力納入管理計劃。因此，現在管理計劃將變得積極進取，我們將努力超越，但我們正在將其中一些內容納入前進計劃中。所以現在，我們的人員流失率處於正常水平。人們很高興來到這裡。我認為我們將讓這裡成為他們工作的好地方，並且我們將給予他們適當的補償。

Maybe from there, operator (multiple speakers)

也許從那裡開始，操作員（多個發言者）

Oh great, Dave, you're still on.

哦，太好了，戴夫，你還在。

No, I am. Yeah, but I asked enough so I'll yield. Thank you.

不，我是。是的，但我問得夠多了，所以我會屈服。謝謝。

You sure? Okay. Thanks, Dave.

你確定？好的。謝謝，戴夫。

(Operator Instructions) Elizabeth Anderson, Evercore.

（操作員說明）Elizabeth Anderson，Evercore。

Hi, guys. Thanks so much for the question. I guess it's just related to what David's just asking. So do you feel like you're fully staffed to 100% capacity, particularly in the customer-facing roles and even the back office roles would also be helpful. And then I guess I heard what you said -- and thank you for all the detail around the IT investment and the procurement changes, can you talk to us about how you think of that margin journey? Is this kind of like a three-year margin journey? I assume it's not like a one-year margin. So if you could just kind of lay out how you kind of broadly think about the time spent. Obviously, appreciating what you guys just said about having one month of financials and still digging through all of that. Thanks so much.

嗨，大家好。非常感謝您的提問。我想這只是與大衛剛才問的問題有關。那麼，您是否覺得自己的人員配備達到 100%，尤其是面向客戶的職位，甚至後台職位也會有所幫助。然後我想我聽到了您所說的話 - 感謝您提供有關 IT 投資和採購變更的所有詳細信息，您能否與我們談談您對利潤之旅的看法？這有點像三年的利潤之旅嗎？我認為這不像一年的利潤。所以，如果你能簡單地闡述一下你如何廣泛地思考所花費的時間。顯然，很感謝你們剛才所說的一個月的財務狀況，並且仍在挖掘所有這些內容。非常感謝。

Jill, can I try -- let me go ahead -- Jill, like all CFOs, has 100 numbers in her head here, so she can help me out with this. But we, generally, are operationally staffed to deliver the business that we have. And we've talked in this call that we're going to make sure that we're aligning our cost structure with the revenues that we have and there'll be more information on that in the coming quarter.

Jill，我可以嘗試一下嗎？讓我繼續吧。Jill 和所有 CFO 一樣，腦子裡有 100 個數字，所以她可以幫助我解決這個問題。但總的來說，我們配備了運營人員來交付我們擁有的業務。我們在這次電話會議中談到，我們將確保我們的成本結構與我們擁有的收入保持一致，並將在下個季度提供更多相關信息。

In general, what our goal is here, 2024 is a year that we would like to return to the kind of performance you saw in 2022 by the time we exit the year. And then on top of that, as we exit the TSAs, we'd like to start moving toward those industry benchmarks of our competitors. I think we publicly said there are a couple of competitors who have a business mix, it's a little bit more like ours, and we would go ahead and target those over time.

總的來說，我們的目標是，2024 年我們希望在 2022 年結束時恢復到 2022 年的表現。除此之外，當我們退出 TSA 時，我們希望開始朝著競爭對手的行業基準邁進。我認為我們公開說過有幾個競爭對手擁有業務組合，這與我們的業務組合有點相似，隨著時間的推移，我們將繼續瞄準這些業務組合。

We have a very intense effort coming up over the next six weeks to detail out the programs that we've already started associated with both how we're more successful in the marketplace, but also how we get the cost structure in line over the longer term. That help, Elizabeth?

在接下來的六週內，我們將付出非常大的努力來詳細說明我們已經開始的計劃，這些計劃不僅涉及我們如何在市場上取得更大的成功，還涉及我們如何在較長時間內保持成本結構一致學期。有幫助嗎，伊麗莎白？

Yes. That's very helpful. Thank you so much. Appreciate it.

是的。這非常有幫助。太感謝了。欣賞它。

(Operator Instructions) Casey Woodring, JPMorgan.

（操作員指令）Casey Woodring，摩根大通。

Hi. Thanks for taking my questions. And yeah, I'll give you a two-parter as well. So I think -- going back to the Analyst Day, I think you noted that there were some customers that have been waiting until the spin closed, until they would kind of book business with you. So curious if that's something you're expecting, if that's upside to the guide or not?

你好。感謝您回答我的問題。是的，我也會給你一個兩部分的。所以我想——回到分析師日，我想你注意到有一些客戶一直在等待直到分拆結束，直到他們與你預訂業務。很好奇這是否是您所期待的，這對指南是否有好處？

And then also at the Analyst Day, you kind of spoke about how your smaller scale compared to the other larger CROs is actually a competitive advantage. You spoke to it again today on like the Goldilocks size. Just curious on what your value proposition is against some of those bigger players. You talked about less layers that a customer needs to go through. Can you just elaborate on that? Thank you.

然後還在分析師日上，您談到了與其他較大的 CRO 相比，您較小的規模實際上是一種競爭優勢。你今天又談到了金發姑娘的尺寸。只是好奇你的價值主張與一些更大的參與者相比是什麼。您談到了客戶需要經歷的層數更少。您能詳細說明一下嗎？謝謝。

Yeah. Thank you very much. In all candor, it's not as if we have a queue of opportunities waiting. I think the way this industry works in general, we saw some opportunities during the course of the year and people deferred or went to others because they were a little concerned, they didn't know who leadership was, they didn't know exactly what would happen.

是的。非常感謝。坦率地說，我們並不是有一長串的機會在等待。我認為這個行業的總體運作方式，我們在這一年中看到了一些機會，人們推遲或去找其他人，因為他們有點擔心，他們不知道領導是誰，他們不知道到底是什麼會發生。

And in this industry if there's uncertainty everybody sells against you. So we don't have a queue. I think the interesting thing is this -- this quarter, over the last few months, the organization has worked hard to try to really make sure we're getting exposure to opportunities and really work on how we collaborate as a team and how we bring our differentiation forward in terms of winning business. And we're seeing some success out of that.

在這個行業中，如果存在不確定性，每個人都會向你出售。所以我們不用排隊。我認為有趣的是——本季度，在過去的幾個月裡，該組織一直在努力確保我們能夠獲得機會，並真正致力於如何作為一個團隊進行協作以及我們如何帶來我們在贏得業務方面向前邁進了差異化。我們看到了一些成功。

So, as I mentioned, July was the best first month of a quarter since 2021 and one of the better ones of last several years for sure, even with COVID considered. So we think that, that pipeline is now shaping up with some work on it, it is shaping up for us to achieve attractive growth.

因此，正如我提到的，7 月是 2021 年以來最好的季度第一個月，而且肯定是過去幾年中最好的月份之一，即使考慮到新冠疫情。因此，我們認為，該管道現在正在通過一些工作來形成，它正在為我們實現有吸引力的增長做好準備。

With respect to our Goldilocks size, yeah, I mean the other guys have gotten -- some have gotten pretty big. So our management is accessible. I'd say, if customers are listening, when I -- Mark Morais, who's our COO of Clinical Services, when we get involved with the customer, they get our mobile phone numbers, we get involved in their product. So we're happy to engage as a management team from top to bottom, make sure we own the product with them.

就我們的金發姑娘尺寸而言，是的，我的意思是其他人已經變得——有些已經變得相當大了。所以我們的管理是可以的。我想說，如果客戶在傾聽，當我——馬克·莫萊斯（Mark Morais），我們的臨床服務首席運營官，當我們與客戶接觸時，他們會得到我們的手機號碼，我們會參與他們的產品。因此，我們很高興作為管理團隊從上到下參與其中，確保我們與他們一起擁有產品。

I think we have a great proposition in data sciences. We've actually moved. There's been this explosion of third-party providers. We're going to leverage our experience with the Labcorp data to really be able to do stacks of data providers to bring clinical opportunity -- clinical information to clinical research. We're going to invest in some very strategic technology choices that overlay. We've already got one very interesting tool that's used by our customers to try to understand their projects and we're going to invest behind that further.

我認為我們在數據科學方面有一個很棒的主張。我們實際上已經搬家了。第三方提供商呈爆炸式增長。我們將利用 Labcorp 數據方面的經驗，真正能夠為大量數據提供者帶來臨床機會——將臨床信息引入臨床研究。我們將投資於一些非常具有戰略意義的技術選擇。我們已經有了一個非常有趣的工具，我們的客戶可以使用它來嘗試了解他們的項目，我們將對此進行進一步投資。

We continue to look at process automation and other tools. We have some great talent here. We have over 700 medical doctors in this organization. And it's very much on par with the largest. And so we're going to make sure that that is fully leveraged in coming months. We're changing how we interact and deal with the medical docs. So just without going into the whole sales pitch, I think it's pretty -- our customers are responding really well to the -- essentially the dusty jewels and new jewels that are here to bring to these opportunities.

我們繼續關注流程自動化和其他工具。我們這裡有一些優秀的人才。我們這個組織有 700 多名醫生。它與最大的非常相似。因此，我們將確保在未來幾個月內充分利用這一點。我們正在改變我們與醫療文檔互動和處理的方式。因此，在不涉及整個銷售宣傳的情況下，我認為這很漂亮 - 我們的客戶對這些機會的本質上是塵土飛揚的珠寶和新珠寶的反應非常好。

Great. Thank you very much.

偉大的。非常感謝。

Thank you.

謝謝。

(Operator Instructions) Max Smock, William Blair.

（操作員說明）Max Smock，William Blair。

Hi. Good morning. Thanks for taking our questions. There's a two-parter here for me as well. Just at a higher level, one of the things you talked about at the Analyst Day was your expectation for the CRO market to grow by roughly 3% to 5% in 2024. Just wondering if there's been any change there over the last couple of months and what your thoughts are in terms of the timeline for that market growth stepping back up to 6% to 9%.

你好。早上好。感謝您回答我們的問題。我這裡也有一個兩方。在更高的層面上，您在分析師日談到的一件事是您對 CRO 市場在 2024 年增長約 3% 至 5% 的預期。只是想知道過去幾個月是否有任何變化以及您對市場增長回升至6% 至9% 的時間表有何看法。

And then more near term, I also just wanted to confirm the FSP contract loss. That was a headwind here in the first half of the year. Is there any lingering impact from that contract loss in the second half of 2023? Or is that out of the story here at this point? Thank you.

然後更近期，我也只是想確認 FSP 合同損失。這是今年上半年的逆風。 2023 年下半年的合同損失是否會產生持續影響？或者目前這已經不在故事範圍內了？謝謝。

I'll give Jill little airtime in the FSP in a minute. We see the market the same way. We haven't had any data that contradicts or changes our view that it's basically very much as you described, Max. The CRO market is a little bit slower this year coming probably off the frothiness of COVID. And then we see out somewhere 2024, 2025, that we're expecting a return to normalcy of that higher single-digit growth rate by that combination of outsourcing and R&D growth.

稍後我將在 FSP 中給吉爾一點播出時間。我們以同樣的方式看待市場。我們沒有任何數據與我們的觀點相矛盾或改變，我們的觀點基本上與你所描述的非常相似，麥克斯。今年 CRO 市場的增長速度有點慢，可能是由於新冠肺炎疫情的影響。然後我們預計到 2024 年、2025 年，我們預計通過外包和研發增長的結合，將恢復到較高個位數增長率的正常狀態。

Again, we use third parties for this, though. So the only thing that we do here really with it is we say, is that what it feels like. Luckily for us, because we are medium-sized, 19,000 people being medium-sized CRO, we -- market growth like that is -- it's a big opportunity for us because we don't have to put down the same absolute numbers as our competitors. So we view that kind of market growth as an exceptional opportunity for us. Jill, do you want to talk a little bit about the FSP?

不過，我們再次為此使用第三方。所以我們在這裡真正做的唯一一件事就是我們說，那就是它的感覺。對我們來說幸運的是，因為我們是中型企業，有19,000 名中型CRO，我們——像這樣的市場增長——這對我們來說是一個很大的機會，因為我們不必寫下與我們的相同的絕對數字。競爭對手。因此，我們認為這種市場增長對我們來說是一個難得的機會。 Jill，你想談談 FSP 嗎？

Yeah. So thanks, Max. As we had shared, yes, the predominance of the impact is in the first half, and you can see that continuing in the second quarter. There was a little bit that lingers into the second half, but it's pretty minor or immaterial at this point. The majority of it was in the first half of this year.

是的。所以謝謝，馬克斯。正如我們所分享的，是的，影響主要集中在上半年，你可以看到這種影響在第二季度仍在繼續。下半場還存在一些問題，但在這一點上它是很小的或無關緊要的。其中大部分發生在今年上半年。

Got it. And --

知道了。和 -

Thanks, Max. About that customers, they are now -- have come back to us to potentially propose on other stuff. So it's funny how this world works.

謝謝，馬克斯。關於那些客戶，他們現在已經回到我們這裡，可能會提出其他建議。所以這個世界的運作方式很有趣。

Understood. Thank you. Maybe just a quick follow-up. In terms of what's embedded in the guidance for clinical services versus enabling services. One of the things that maybe stood out in 2022, I think enabling services was down 8%. It stepped down pretty meaningfully here in the first half of the year.

明白了。謝謝。也許只是快速跟進。就臨床服務與支持服務指南中嵌入的內容而言。我認為 2022 年可能最引人注目的事情之一是支持服務下降了 8%。今年上半年，它的下台非常有意義。

Just wondering how we should think about the long-term growth rate for the segment and what you need to do in order to improve your performance there moving forward. Thank you.

只是想知道我們應該如何考慮該細分市場的長期增長率以及您需要做什麼才能提高您未來的業績。謝謝。

Yeah. I'm glad you asked about enabling services because we didn't treat it too much in the prepared remarks. It's interesting. There are two major things in there: one is, patient access services and the other one is, an IRT or randomization tool that we call Endpoint, -- actually branded as Endpoint.

是的。我很高興您詢問有關啟用服務的問題，因為我們在準備好的評論中沒有過多地對待它。這真有趣。其中有兩個主要內容：一個是患者訪問服務，另一個是我們稱為 Endpoint 的 IRT 或隨機化工具，實際上品牌為 Endpoint。

And what we -- as we've been looking at it strategically, the patient access business is actually a very attractive business. It's a $3 billion to $4 billion business. The competitors are -- I would call them vulnerable in that business. Covance was a leader in this business if you went back a decade, and to be perfectly honest with you, it seems to us there's been a little bit of underinvestment associated with our offering there.

我們一直在戰略上看待它，患者訪問業務實際上是一項非常有吸引力的業務。這是一項價值 30 億至 40 億美元的業務。我認為競爭對手在這個行業是脆弱的。如果你回顧十年前，科文斯就是這個行業的領導者，老實說，在我們看來，我們在該領域的產品似乎存在一些投資不足的情況。

So we have a new leader who is taking a fresh look at that business. And we have won some pretty big projects there, but they're in an investment period. So you've got a double effect going on in the patient access side. One side is the call center-related work is a little bit lumpy and has had some falloff, as Jill said in her remarks, but another aspect of that business, other aspects of patient access services that we're building are actually growing and could be significant contributors to revenue next year.

因此，我們有了一位新的領導者，他正在重新審視這項業務。我們在那裡贏得了一些相當大的項目，但它們正處於投資期。因此，在患者訪問方面會產生雙重效應。一方面，正如吉爾在她的講話中所說，與呼叫中心相關的工作有點不穩定，並且出現了一些下滑，但該業務的另一方面，我們正在建立的患者訪問服務的其他方面實際上正在增長，並且可以成為明年收入的重要貢獻者。

But they're in a fairly capital-intensive process right now. So that one, we think it's got very good prospects. It's a little bit above. People don't understand the opportunity in that marketplace to the degree there is an opportunity. And so we are looking at how we can invest in that area and return to Covance's leadership. Endpoint is actually one of the leaders in this randomization tool, and I'm really pleased that our leader of enabling services actually created the leader of the services, which is another CRO a few years ago, he turned it around and created it.

但他們現在正處於一個資本密集型的​​過程中。因此，我們認為它有非常好的前景。就是上面一點點。人們對市場中機會的理解程度不及機會的存在程度。因此，我們正在研究如何投資該領域並恢復科文斯的領導地位。 Endpoint實際上是這個隨機化工具的領導者之一，我真的很高興我們的支持服務領導者實際上創建了服務的領導者，這是幾年前的另一個CRO，他扭轉了局面並創建了它。

And so I have -- I'm very optimistic about the future for Endpoint, too, because we literally have the best guy in the industry running that. So just a little bit on it. I think you'll see it be a bit of a drag through the rest of the year, to be honest with you. And then as we bring more customer products into patient access next year, we'll start seeing that revenue situation turn around.

所以我對 Endpoint 的未來也非常​​樂觀，因為我們確實擁有業內最優秀的人來管理它。所以只是一點點。老實說，我想你會發現今年剩下的時間裡這會有點拖累。然後，隨著明年我們將更多的客戶產品引入患者，我們將開始看到收入狀況出現好轉。

Got it. Thank you, again, for taking our questions.

知道了。再次感謝您回答我們的問題。

Thank you.

謝謝。

(Operator Instructions) Sandy Draper, Guggenheim.

（操作員說明）桑迪·德雷珀，古根海姆。

Thanks so much. The question is probably directed at Jill for the -- just trying to understand the backlog. I think I understood you correctly, Jill, when you said you're now booking FSP work with a two-year. And I'm just curious what it was before. Is it -- I'm assuming the full contract or was it shorter? And then I wasn't clear on the other metrics, there were some changes you said about where you would include backlog if it was not recognized -- I'm just trying to understand an example of maybe some -- how a contract of work where it wouldn't be in backlog, be recognizing revenue or would be the contract-- I just got a little bit confused, so I apologize for maybe a really basic question. But just trying to understand the mechanics of the backlog change. Thanks so much.

非常感謝。這個問題可能是針對吉爾的——只是想了解積壓的情況。吉爾，當你說你現在正在預訂為期兩年的 FSP 工作時，我想我正確地理解了你的意思。我只是好奇之前是什麼。我假設的是完整合同還是較短的合同？然後我不清楚其他指標，你提到了一些變化，如果積壓未被識別，你將在哪裡包括積壓 - 我只是想了解可能的一些例子 - 工作合同如何它不會積壓，確認收入或合同——我只是有點困惑，所以我為一個非常基本的問題道歉。但只是想了解積壓變更的機制。非常感謝。

Sure, Sandy. I'm happy to address that. So in terms of FSP, historically, we took largely the full award at the time of contract signature. And we've decided that going forward, we would take one year on renewal, since they're already in the run rate essentially, and then two years on a new award. And that reflects a bit of the revenue ramp that you would get out of the new awards. So that is the change compared to the previous period.

當然，桑迪。我很高興解決這個問題。所以就FSP而言，從歷史上看，我們在合同簽署時基本上就獲得了全額獎勵。我們決定，展望未來，我們將用一年的時間進行續約，因為它們基本上已經進入運行狀態，然後用兩年的時間獲得新的獎項。這反映了您將從新獎項中獲得的收入增長。這就是與上一時期相比的變化。

In terms of the restating of the backlog, I think there's always -- there are literally hundreds and hundreds, maybe thousands of projects ongoing at any point in time. And so when we went back as we were doing this opportunity to look, we realized that there were some places where we had projects that were giving us current revenue and have revenue to burn where there was no backlog in there.

就積壓工作的重述而言，我認為在任何時間點總是有成百上千個項目正在進行。因此，當我們利用這個機會回顧時，我們意識到有些地方的項目為我們帶來了當前收入，並且在沒有積壓的情況下有收入可以消耗。

And then we had the opposite where some over six or so months, we hadn't seen any revenue. And so we felt like it was appropriate to pull that out. We also took into account any changes in scope that we had from customers that were pending. So it was really just an opportunity to ensure the robustness of everything that was in there.

然後我們遇到了相反的情況，大約六個多月以來，我們沒有看到任何收入。所以我們覺得把它撤掉是合適的。我們還考慮了待處理客戶對范圍的任何變更。所以這實際上只是一個確保其中所有內容穩健性的機會。

It wasn't a material adjustment, but it was part of the overall adjustment. The other two adjustments that I mentioned, pulling now enabling services and this adjustment to the FSP actually pulled out a much bigger percentage of that 1.27%. And that all still remains as valid backlog for the future. It's just we felt like it was better to be more consistent going forward and it will also allow us as we go forward too, kind of better improve backlog burn and have that be more reflective of the nature of the backlog.

這不是重大調整，而是整體調整的一部分。我提到的另外兩項調整，即取消啟用服務，以及對 FSP 的調整，實際上取消了 1.27% 的更大比例。所有這些仍然是未來有效的積壓工作。只是我們覺得未來更加一致會更好，這也將使我們在前進的過程中更好地改善積壓的燃燒，並更能反映積壓的性質。

Okay. Great. That's really helpful. So essentially, the changes were just a way to clean up the backlog now that you're going to be an independent public company to help people analyze the business where when you're part of a larger organization, it could be looked at a little bit differently. So it's really just, hey, we have this opportunity to set the stage and make sure it's as clean as possible.

好的。偉大的。這真的很有幫助。因此，從本質上講，這些變化只是清理積壓的一種方法，因為你將成為一家獨立的上市公司，以幫助人們分析業務，當你是一個更大的組織的一部分時，可以稍微考慮一下有點不同。所以這真的只是，嘿，我們有這個機會搭建舞台並確保它盡可能乾淨。

Exactly, yes.

沒錯，是的。

And now you understand.

現在你明白了。

That's great. Then one -- hey, Tom. Thanks so much. One quick follow-up. I don't know, have you guys said your bookings policy, whether you book on written contract, verbal award, once the truck project starts, how your methodology on taking a bookings event for deferred clinical?

那太棒了。然後是——嘿，湯姆。非常感謝。一項快速跟進。我不知道，你們有沒有說過你們的預訂政策，是否以書面合同預訂，口頭獎勵，一旦卡車項目開始，你們如何採取推遲臨床預訂活動的方法？

Yeah. No, I'm happy to cover that. So we do require a written contract for us to be able to take the award. And we only start to recognize it into backlog that if the revenue is going to start to burn within 12 months, otherwise, we'd hold it until we get within that 12-month window. So that's essentially the approach for how we will recognize.

是的。不，我很高興報導這一點。因此，我們確實需要一份書面合同才能獲獎。我們只是開始在積壓訂單中認識到，如果收入將在 12 個月內開始消耗，否則我們會持有它，直到我們進入 12 個月的窗口。這本質上就是我們識別的方法。

Yeah. And that's conservative policy we adopted from Labcorp. So. --

是的。這是我們從 Labcorp 採取的保守政策。所以。 --

Yeah. That particular (multiple speakers)

是的。那個特定的（多個發言者）

Yeah, I appreciate that. Appreciate the conservatism and, Tom, nice to talk to you again.

是的，我很欣賞這一點。欣賞保守主義，湯姆，很高興再次與你交談。

Nice to see you, Sandy.

很高興見到你，桑迪。

(Operator Instructions) Derik De Bruin, Bank of America.

（操作員指令）Derik De Bruin，美國銀行。

Hi. Good morning, everyone. Thanks for taking my question. I have a couple. I think the first one is just -- I know, Jill, it's a little bit too early to maybe give full color on -- any full color on 2024. But given where the EBITDA numbers are this year and just any color at all you can talk about how you see progression. And do it just -- as I think that your number for this year came in below a lot of expectations, obviously, given the cost or any about that. But just any incremental color on '24.

你好。大家，早安。感謝您提出我的問題。我有一對。我認為第一個是 - 我知道，吉爾，現在可能對 2024 年提供完整的顏色有點太早了 - 任何完整的顏色。但考慮到今年的 EBITDA 數字，而且你可以使用任何顏色可以談談你如何看待進展。就這樣做吧——我認為，考慮到成本或任何相關因素，你今年的數字顯然低於很多預期。但只是 '24 上的任何增量顏色。

Yeah. I mean, Derik, we're not in a position yet to be able to provide that. We understand that it's challenging. And as Tom has said in his remarks, we are attempting to ensure that by the end of next year, we're on a run rate which is consistent with the -- where we -- kind of where we exited '22 on an overall basis. We won't get there for the full year, I don't think.

是的。我的意思是，德里克，我們還無法提供這一點。我們知道這具有挑戰性。正如湯姆在他的講話中所說，我們正在努力確保到明年年底，我們的運行率與我們在 22 年退出時的整體運行率一致。基礎。我認為我們全年都無法實現這一目標。

But in terms of trying to come back and be consistent with those margins to get back to where we were really prior -- around the period of time the spin was announced before the impact of all these challenges in terms of the awards and everything have come through. So we are working on that to the extent that we have more ability with the margin plans to give you detail on that, November, we will. We're just not able at this time to be able to give you that stepwise progression.

但就試圖回來並與這些利潤保持一致以回到我們真正之前的位置而言——大約在所有這些挑戰對獎項的影響之前宣布旋轉的那段時間，一切都已經到來通過。因此，我們正在努力解決這一問題，只要我們有更多能力製定保證金計劃，我們就會在 11 月向您提供相關詳細信息。我們目前無法為您提供逐步進展。

And Derik, you know our business pretty well. And you know that essentially, we -- when we book a sale and so we have new bookings and then that starts burning some time usually in six months, sometimes a little longer, some certainly shorter sometimes. And so there's no question that second half new business is important.

Derik，你非常了解我們的業務。你知道，本質上，當我們預訂銷售時，我們有新的預訂，然後通常在六個月內開始消耗一些時間，有時會長一點，有時肯定會更短。因此，毫無疑問，下半年的新業務很重要。

And we said we feel good about the pipeline. The team has been working hard to fill it. They've been working on how we close, looking at other opportunities. But there's no question that our 2024 will be impacted by what we're able to show you now. Rome isn't built in a day, but the -- but we're optimistic about the remainder of the year, and that will help 2024.

我們說我們對管道感覺良好。團隊一直在努力填補這一空缺。他們一直在研究我們如何關閉，並尋找其他機會。但毫無疑問，我們現在向您展示的內容將影響我們的 2024 年。羅馬不是一天建成的，但我們對今年剩餘時間持樂觀態度，這將有助於 2024 年。

Got it. Thank you. Just -- it's a good -- Tom, just a follow-up on that one. Have you just talked -- going back to the market, any pickup in cancellations that you've seen, any changes in pharma behavior, just given some of the pipeline reprioritizations and just going on with this? And just -- are you getting any sense that once we get a little bit more clarity on the IRA and some other things that that's going to -- that their interest is going to pick up. Just wondering what you sort of think about the market progression. Thank you.

知道了。謝謝。只是——這是一個很好的——湯姆，只是那個的後續。您剛才是否談到過——回到市場，您所看到的任何取消訂單的增加，製藥公司行為的任何變化，只是重新調整了一些管道的優先順序並繼續這樣做？只是——你有沒有感覺到，一旦我們對愛爾蘭共和軍和其他一些事情有了更多的了解——他們的興趣就會增加。只是想知道您對市場發展有何看法。謝謝。

Yeah. Let me start with the market and then Jill can talk specifically about cancellations. We feel like we're essentially past those -- any of the portfolio reprioritization that was taking place. Some of it seemed to be related to just normal activities, some of that might have been IRA. So we feel like based on what we're seeing, we're past that. It's not really much of a discussion item anymore. And Jill, what do you view on --

是的。讓我從市場開始，然後吉爾可以具體談談取消。我們覺得我們基本上已經過去了——任何正在發生的投資組合優先順序調整。其中一些似乎與正常活動有關，其中一些可能與愛爾蘭共和軍有關。因此，根據我們所看到的情況，我們感覺我們已經過去了。這不再是一個真正的討論項目了。吉爾，你怎麼看——

Yeah. On cancellations, our first half average is just really consistent with our historical norms. In fact, the second quarter was slightly lower than the first quarter. So we're not seeing any major issues around cancellations at all. It's very in line with our normal low single-digits for the quarter.

是的。在取消方面，我們上半年的平均水平與我們的歷史標準非常一致。事實上，第二季度略低於第一季度。因此，我們根本沒有看到任何有關取消的重大問題。這與本季度正常的低個位數非常一致。

Thank you.

謝謝。

Thank you, Derik. Do you have the next person?

謝謝你，德里克。你還有下一個人嗎？

I show no further questions at this time. I would now like to turn the call back to Tom Pike for closing remarks.

我目前沒有提出任何進一步的問題。現在我想將電話轉回給湯姆·派克（Tom Pike），讓其致閉幕詞。

Thank you. Well, I just want to thank everyone for joining us today. Let's put this spin year behind us, and you'll see what this management team can do. And you'll see it as we meet with you, talk to you, but I'm really optimistic about the positioning of this company, the industry we're in, and the talent base we have that will make a real contribution to our customers, to patients, and that will produce great financial returns. Thank you.

謝謝。好吧，我只是想感謝大家今天加入我們。讓我們把這一年的旋轉拋在腦後，你就會看到這個管理團隊能做什麼。當我們與您會面、交談時，您會看到這一點，但我對這家公司的定位、我們所處的行業以及我們擁有的人才基礎非常樂觀，這將為我們的業務做出真正的貢獻。客戶、患者，這將產生巨大的財務回報。謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。