Core Viewpoint - Fortrea has initiated a debt tender offer to purchase up to $75,744,000 in outstanding 7.500% Senior Secured Notes due 2030, primarily to comply with indenture provisions following a divestiture [1][2]. Group 1: Tender Offer Details - The tender offer is subject to the satisfaction or waiver of specific terms outlined in the Offer to Purchase dated October 20, 2025 [2]. - The tender offer will expire at 5:00 p.m. New York City time on November 18, 2025, unless extended or terminated [3]. - Each $1,000 principal amount of the Notes validly tendered will receive $1,000 in cash, plus accrued and unpaid interest from the last interest payment date to the settlement date [3][5]. Group 2: Conditions and Procedures - The tender offer is contingent upon the satisfaction or waiver of conditions described in the Offer to Purchase [6]. - Notes must be transferred to the Tender Agent through DTC's Automated Tender Offer Program for holders wishing to tender [4]. - If the total purchase price of validly tendered Notes exceeds the Maximum Amount, proration may occur [5]. Group 3: Company Overview - Fortrea is a leading global provider of clinical development solutions, partnering with biopharmaceutical, biotechnology, and medical device companies [9]. - The company offers services across various phases of clinical trials and has extensive experience in over 20 therapeutic areas [9][10].

Core Insights - Fortrea, a leading global contract research organization (CRO), will release its third quarter 2025 financial results on November 5, 2025, before market opens [1] - A conference call will be held at 8:00 am ET on the same day to discuss the financial results and conduct a Q&A session [1] Company Overview - Fortrea is a prominent provider of clinical development solutions to the life sciences industry, partnering with biopharmaceutical, biotechnology, medical device, and diagnostic companies [3] - The company offers phase I-IV clinical trial management, clinical pharmacology, and consulting services, leveraging over three decades of experience across more than 20 therapeutic areas [3] - Fortrea operates in approximately 100 countries, delivering focused and agile solutions to its global customers [3]

Core Insights - Fortrea Holdings Inc. is identified as a cheap stock with potential for growth over the next five years, with Barclays raising its price target to $8 from $6 while maintaining an Underweight rating [1][3] Financial Performance - In Q2, Fortrea reported quarterly revenue of $710.3 million, reflecting a year-over-year increase of 7.23% [1][2] - The company achieved an Adjusted EBITDA of $54.9 million and an adjusted net income per diluted share of $0.19, prompting management to raise its full-year 2025 revenue guidance to a range of $2.6 to $2.7 billion [2] - Despite revenue growth, Fortrea recorded a GAAP net loss of $374.9 million, or $4.14 per diluted share, primarily due to a non-cash goodwill impairment charge of $309.1 million [3] Business Overview - Fortrea Holdings Inc. operates as a contract research organization, providing biopharmaceutical product and medical device development solutions to pharmaceutical, biotechnology, and medical device customers [4] - The company's backlog stood at $7.547 billion, indicating a strong pipeline of future business [3] - Fortrea affirmed that its cost-saving initiatives are on track, which may enhance future profitability [3]

Core Viewpoint - Fortrea has appointed William Sharbaugh to its Board of Directors, bringing over three decades of experience in the pharmaceutical industry, which will enhance the company's leadership and strategic direction [2][3][4]. Company Overview - Fortrea (Nasdaq: FTRE) is a leading global contract research organization (CRO) that provides clinical development solutions to the life sciences industry, partnering with biopharmaceutical, biotechnology, medical device, and diagnostic companies [5]. - The company offers phase I-IV clinical trial management, clinical pharmacology, and consulting services, leveraging over 30 years of experience across more than 20 therapeutic areas [5]. Leadership Appointment - William Sharbaugh's extensive background includes roles as chairman of the board of Ora LLC and board member of Launch Therapeutics, Inc., along with previous positions at PPD, Inc. and Bristol-Myers Squibb [4]. - Sharbaugh's experience in both CRO and pharmaceutical companies is expected to provide practical insights to Fortrea's Board, aligning with the company's mission to deliver life-changing treatments to patients [3][4]. Strategic Focus - The appointment of Sharbaugh is seen as a strategic move to enhance Fortrea's capabilities in drug development and to strengthen its position as a trusted partner to clients [3][4].

Company Overview - Fortrea Holdings Inc. (NASDAQ:FTRE) is a contract research organization that provides biopharmaceutical product and medical device development solutions to pharmaceutical, biotechnology, and medical device customers worldwide [4] Financial Performance - For Q2 2025, Fortrea reported revenue of $710.3 million, an increase from $662.4 million in Q2 2024 [2] - The company experienced a GAAP net loss of $374.9 million, which included a non-cash goodwill impairment charge of $309.1 million, resulting in a GAAP loss of $4.14 per diluted share [2] - Despite the loss, Fortrea achieved a positive adjusted net income of $17.6 million, or $0.19 per diluted share, a turnaround from an adjusted net loss of $2.3 million in Q2 2024 [3] - Fortrea is increasing its 2025 revenue guidance to a range of $2,600 to $2,700 million and affirming its adjusted EBITDA guidance for the full year in the range of $170 million to $200 million [3] Market Sentiment - Jefferies raised the price target on Fortrea to $9.50 from $7 while maintaining a Hold rating, driven by stronger biotech funding in the last three months and improved bookings across the contract research organization industry [1][3]

Accessibility StatementSkip Navigation NEW YORK, Sept. 9, 2025 /PRNewswire/ -- Kuehn Law, PLLC, a shareholder litigation law firm, is investigating whether certain officers and directors of Fortrea Holdings, Inc. (NASDAQ: FTRE) breached their fiduciary duties to shareholders. According to a federal securities lawsuit, Insiders at Fortrea caused the company to misrepresent or fail to disclose that (i) Fortrea overestimated the amount of revenue the Pre-Spin Projects were likely to contribute to the Company ...

Group 1 - A lawsuit is pending against Fortrea Holdings Inc. for alleged violations of securities laws, specifically concerning the company's financial disclosures and projections [1][2] - The lawsuit claims that Fortrea Holdings Inc. overstated revenue contributions from Pre-Spin Projects and inflated EBITDA targets for 2025, leading to misleading public statements about the company's financial health [2] - Investors who purchased shares of Fortrea Holdings Inc. prior to July 2023 are encouraged to contact the Shareholders Foundation for potential options [1][3] Group 2 - The Shareholders Foundation, Inc. provides services related to shareholder issues, including legal monitoring and information on securities class actions [3] - The organization is not a law firm and does not initiate legal actions, but serves as a public service to inform investors [3]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for Fortrea Holdings Inc for the periods ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a significant decrease in total assets and equity, primarily driven by a large reduction in goodwill Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$2,835.1** | **$3,579.2** | | Goodwill, net | $965.2 | $1,710.4 | | Total current assets | $960.0 | $948.2 | | **Total Liabilities** | **$2,245.9** | **$2,216.8** | | Long-term debt, less current portion | $1,100.9 | $1,049.7 | | **Total Equity** | **$589.2** | **$1,362.4** | | Accumulated deficit | $(1,334.8) | $(397.0) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenues increased slightly, but a substantial goodwill impairment charge drove a significant net loss for the first half of 2025 Statement of Operations Summary (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $710.3 | $662.4 | $1,361.6 | $1,324.5 | | Goodwill and other asset impairments | $309.1 | $— | $797.9 | $— | | Operating loss | $(330.3) | $(50.9) | $(850.4) | $(88.3) | | Net loss | $(374.9) | $(138.4) | $(937.8) | $(239.4) | | Basic and diluted EPS | $(4.14) | $(1.55) | $(10.37) | $(2.69) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company experienced a significant negative shift in operating cash flow, moving from a source of cash to a use of cash year-over-year Cash Flow Summary (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used for) provided by operating activities | $(102.4) | $248.1 | | Net cash provided by investing activities | $8.6 | $256.2 | | Net cash provided by (used for) financing activities | $49.4 | $(482.7) | | Net change in cash and cash equivalents | $(37.3) | $17.6 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include the sale of a business segment, a significant goodwill impairment, debt structure details, and a new stockholder rights plan - The company operates as a **single reportable segment**, Clinical Services, after selling its Enabling Services Segment in Q2 2024, with results now classified as discontinued operations[20](index=20&type=chunk)[21](index=21&type=chunk)[23](index=23&type=chunk) - The company recorded **goodwill impairment charges of $797.9 million** for the first six months of 2025, triggered by sustained declines in its share price and macroeconomic uncertainties[53](index=53&type=chunk)[54](index=54&type=chunk)[57](index=57&type=chunk) - On June 11, 2025, the company adopted a limited duration **stockholder rights plan** (a "poison pill") that is triggered if a person or group acquires 10% or more of outstanding common shares[76](index=76&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - The company entered into a three-year, **$300.0 million accounts receivable securitization program** on May 6, 2024, and had sold $300.0 million of receivables under this facility as of June 30, 2025[43](index=43&type=chunk)[44](index=44&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 revenue growth, the severe impact of goodwill impairment on profitability, and changes in liquidity and capital resources [Results of Continuing Operations](index=28&type=section&id=Results%20of%20Continuing%20Operations) Q2 2025 revenues grew 7.2%, but a $309.1 million goodwill impairment led to a significant operating loss for the quarter Revenue Growth (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $710.3M | $662.4M | +7.2% | - Revenue growth was primarily driven by a **6.6% increase in organic revenues**, mainly from the clinical pharmacology business, while clinical development revenue was relatively flat[103](index=103&type=chunk) - Direct costs as a percentage of revenue increased from **79.3% to 81.2%** in Q2 2025, primarily due to higher pass-through costs and stock compensation[105](index=105&type=chunk)[106](index=106&type=chunk) - The company recorded **goodwill impairment charges of $309.1 million** for Q2 2025 and $797.9 million for the six months ended June 30, 2025, specific to the Clinical Development reporting unit[113](index=113&type=chunk) [Liquidity, Capital Resources and Financial Position](index=31&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Financial%20Position) Operating cash flow turned negative in H1 2025, with the company utilizing credit and receivables securitization facilities for liquidity Cash Flow Summary (Six Months Ended June 30) | Metric (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $(102.4) | $248.1 | | Net cash from investing activities | $8.6 | $256.2 | | Net cash from financing activities | $49.4 | $(482.7) | - The company entered into a three-year **$300.0 million accounts receivable securitization program** in May 2024 and had sold $300.0 million of receivables as of June 30, 2025[122](index=122&type=chunk) - As of June 30, 2025, the company had **$50.0 million outstanding** on its revolving credit facility, with **$400.0 million available** for borrowing[121](index=121&type=chunk) [Critical Accounting Policies and Estimates - Goodwill](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates%20-%20Goodwill) Declining share price and macroeconomic factors triggered interim goodwill impairment tests, resulting in significant charges in Q1 and Q2 2025 - **Sustained declines in share price** and macroeconomic uncertainties were identified as impairment indicators, triggering interim goodwill impairment tests in Q1 and Q2 2025[134](index=134&type=chunk) - Quantitative assessments led to **goodwill impairment charges of $488.8 million** as of March 31, 2025, and **$309.1 million** as of June 30, 2025, for the Clinical Development reporting unit[135](index=135&type=chunk) - Management warns that **further sustained declines in share price** or other impairment indicators could result in additional impairment charges in future periods[138](index=138&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency exchange rates and interest rates on its variable-rate debt - A hypothetical **10% change in average foreign exchange rates** would have impacted operating loss by approximately **$0.8 million** for the six months ended June 30, 2025[141](index=141&type=chunk) - The company has **$622.0 million in outstanding variable-rate debt** as of June 30, 2025; a hypothetical 1% increase in interest rates would increase annual interest expense by **$6.2 million**[144](index=144&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's **disclosure controls and procedures were effective**[146](index=146&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[147](index=147&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is facing a shareholder class action lawsuit alleging securities law violations, which it intends to defend vigorously - A **shareholder class action complaint**, Lucas Deslande v. Fortrea Holdings Inc., et al., was filed on June 2, 2025, in the U.S. District Court for the Southern District of New York[70](index=70&type=chunk) - The lawsuit alleges omissions and misrepresentations to investors; the company is currently **unable to estimate the possible loss** or range of loss[70](index=70&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors include potential impacts from trade policies and the anti-takeover effects of the new stockholder rights plan - The company identifies risks from changes in U.S. and foreign government policies, including **tariffs, sanctions, and trade restrictions**, which could increase costs and disrupt supply chains[151](index=151&type=chunk)[152](index=152&type=chunk) - The **stockholder rights plan** adopted in June 2025 is identified as a risk factor that could make a takeover more difficult and potentially reduce the market value of the common stock[155](index=155&type=chunk)[156](index=156&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) This section details the employment inducement awards granted to the incoming CEO and notes no new Rule 10b5-1 plans by insiders - The company granted **inducement awards to incoming CEO Anshul Thakral**, consisting of **1,250,000 restricted stock units (RSUs)** and **1,250,000 performance share units (PSUs)**[158](index=158&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements, compensation plans, and required certifications

Financial Data and Key Metrics Changes - Fortria reported revenue of $710.3 million for Q2 2025, representing a 7.2% increase year-over-year, driven primarily by growth in the clinical pharmacology unit [7][23] - Adjusted EBITDA for the quarter was $54.9 million, relatively flat compared to $55.2 million in the prior year period [27] - The net loss for Q2 2025 was $374.9 million, compared to a net loss of $99.3 million in the prior year, primarily due to a noncash goodwill impairment charge of $309.1 million [28] - Adjusted net income was $17.6 million, compared to an adjusted net loss of $2.3 million in the prior year [28] Business Line Data and Key Metrics Changes - Clinical pharmacology revenue saw significant growth, while clinical development revenue remained relatively flat due to offsetting factors [23] - The backlog as of June 30, 2025, stood at $7.5 billion, with a book-to-bill ratio of 0.79x for the quarter [8] - The company achieved a 20.1% reduction in SG&A expenses year-over-year, primarily due to lower TSA and IT-related costs [24] Market Data and Key Metrics Changes - The volume of RFP opportunities remained high, although there was customer hesitancy primarily among new biotech clients during the CEO transition [8][9] - Win rates for existing large pharma and biotech customers remained consistent, but declined for new biotech customers [9][62] Company Strategy and Development Direction - Fortria is focusing on margin optimization initiatives, with a target of $150 million in gross savings for 2025, of which one-third has been achieved in the first half [10][38] - The company plans to enhance its commercial coverage of biotech and is launching a dedicated sales team for FSP work [35][36] - The leadership transition is expected to stabilize customer relationships and improve win rates in the biotech sector [44][115] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the demand environment in pharma and biotech, noting an upward trend in pipelines [53] - The company anticipates continued positive cash flow for the remainder of 2025, driven by lower cash outlays for restructuring and improved working capital [32] - Management reaffirmed its revenue guidance for 2025, increasing the target range to $2.6 billion to $2.7 billion while maintaining the adjusted EBITDA outlook [38] Other Important Information - The effective tax rate for continuing operations was negative 1.1%, impacted by a goodwill impairment and other factors [27] - The company has ample liquidity with $400 million available on its revolver and over $80 million in cash on hand [32] Q&A Session Summary Question: Inquiry about hesitant biotech clients - Management indicated that some new biotech clients chose to go in a different direction due to leadership uncertainty, but they expect this to be a short transition period [44][45] Question: Demand environment in pharma and biotech - Management is cautiously optimistic, noting an upward trend in RFPs and pipelines, with a strong biotech pipeline being a positive factor [53][54] Question: Cancellations and win rates - Cancellations remained in line with historical trends, and win rates for existing large pharma customers were consistent, though new biotech customer win rates declined [61][62] Question: Pricing environment and margin outlook - The pricing environment is competitive, but management believes they are handling it well and expects to see benefits from cost-saving initiatives in the future [65][66] Question: Guidance for the second half of the year - Management expects revenue to moderate in the second half, aligning more with Q1 levels, but with improved margins due to ongoing cost-saving measures [80][81]

Core Viewpoint - Fortrea Holdings Inc. reported quarterly earnings of $0.19 per share, significantly exceeding the Zacks Consensus Estimate of $0.06 per share, and showing a turnaround from a loss of $0.03 per share a year ago, indicating strong performance in the latest quarter [1][2] Financial Performance - The company achieved revenues of $710.3 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 12.60% and reflecting an increase from $662.4 million in the same quarter last year [2] - Over the last four quarters, Fortrea has exceeded consensus EPS estimates two times and topped revenue estimates three times [2] Stock Performance - Fortrea Holdings Inc. shares have declined approximately 64.8% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $607.87 million, while for the current fiscal year, the estimate is $0.42 on revenues of $2.5 billion [7] - The outlook for the Medical - Biomedical and Genetics industry, where Fortrea operates, is currently in the bottom 42% of over 250 Zacks industries, which may impact stock performance [8]