Core Viewpoint - A class action lawsuit has been filed against Fortrea Holdings Inc. for allegedly misleading investors regarding its financial performance and business prospects following its spin-off from Labcorp Holdings Inc. [1][5] Group 1: Company Background - Fortrea Holdings Inc. was spun off from Labcorp Holdings Inc. in June 2023, becoming a standalone publicly traded company [3] - Following the spin-off, Fortrea entered into transition services agreements with Labcorp for various support services [3] Group 2: Financial Performance - On March 3, 2025, Fortrea announced that its revenue and adjusted EBITDA expectations for 2025 were not aligned with prior forecasts, leading to a significant stock price drop of $3.47 per share, or 25.05%, closing at $10.38 [4] - The company indicated that its Pre-Spin projects were underperforming and that post-spin work was not progressing quickly enough to compensate for the older projects' economic impact [4] Group 3: Allegations in the Lawsuit - The lawsuit claims that Fortrea overestimated revenue contributions from Pre-Spin projects and overstated potential cost savings from exiting transition services agreements [5] - It is alleged that the company's previously announced EBITDA targets for 2025 were inflated, misrepresenting the viability of its post-spin business model and financial prospects [5]

Core Viewpoint - Fortrea Holdings Inc. is facing a class action lawsuit for alleged violations of the Securities Exchange Act of 1934, with claims that the company and its executives made misleading statements regarding its financial performance and business model following its spin-off from Labcorp Holdings Inc. [1][3] Group 1: Class Action Lawsuit Details - The class action lawsuit is titled Deslande v. Fortrea Holdings Inc., and it includes purchasers of Fortrea securities from July 3, 2023, to February 28, 2025, with a deadline of August 1, 2025, to seek lead plaintiff status [1][2] - The lawsuit alleges that Fortrea overestimated revenue contributions from ongoing projects and overstated cost savings from exiting transition services agreements (TSAs), leading to inflated EBITDA targets for 2025 [3][4] Group 2: Financial Performance and Analyst Reports - On September 25, 2024, Jefferies downgraded Fortrea from buy to hold, citing weaknesses in its business model and stating that expected cost savings from exiting TSAs were not as significant as anticipated, resulting in a stock price drop of over 12% [4] - Following the cancellation of two scheduled conferences, Baird Equity Research downgraded Fortrea to neutral from outperform on December 6, 2024, leading to an additional stock price decline of more than 8% [5] - On March 3, 2025, Fortrea announced that its revenue and adjusted EBITDA projections for 2025 were not aligned with prior expectations, revealing that pre-spin projects were underperforming, which caused the stock price to fall over 25% [6] Group 3: Company Background - Fortrea is a global clinical research organization (CRO) that provides development solutions for biopharmaceutical products and medical devices, having been spun off from Labcorp in June 2023 [2][3]

Core Viewpoint - A shareholder has filed a securities class action lawsuit against Fortrea Holdings Inc. for alleged misrepresentations regarding the Company's EBITDA targets for 2025, affecting investors who acquired securities between July 3, 2023, and February 28, 2025 [1][2]. Group 1 - The lawsuit is on behalf of investors who purchased or acquired Fortrea's securities during the specified period [1]. - Defendants are accused of making misrepresentations concerning the Company's financial targets, specifically the EBITDA targets for 2025 [2]. - Investors wishing to serve as lead plaintiff must file papers by August 1, 2025, and can remain absent class members if they choose not to take action [3]. Group 2 - Bernstein Liebhard LLP has a history of recovering over $3.5 billion for clients and has represented both individual investors and large pension funds [4]. - The firm has been recognized for its success in litigating class actions, being named to The National Law Journal's "Plaintiffs' Hot List" thirteen times and listed in The Legal 500 for sixteen consecutive years [4].

Core Points - A shareholder class action lawsuit has been filed against Fortrea Holdings, Inc. alleging that the company made materially false and misleading statements regarding its business and financial prospects [1] - The lawsuit claims that Fortrea overestimated revenue contributions from Pre-Spin Projects and overstated cost savings from exiting transition services agreements [1] - As a result of these allegations, Fortrea's previously announced EBITDA targets for 2025 are said to be inflated, raising concerns about the viability of its post-Spin-Off business model [1] Legal Context - Shareholders who purchased Fortrea shares between July 3, 2023, and February 28, 2025, and suffered significant losses are encouraged to discuss their legal rights [2] - The deadline for shareholders to request to be appointed as lead plaintiff in the case is August 1, 2025 [3] - Holzer & Holzer, LLC is representing shareholders in this litigation and has a history of recovering significant amounts for investors affected by corporate misconduct [3]

Core Viewpoint - A securities class action lawsuit has been filed against Fortrea Holdings, Inc. for allegedly making false and misleading statements regarding its financial performance and business prospects during the class period from July 3, 2023, to February 28, 2025 [1]. Group 1: Allegations - The complaint claims that Fortrea overestimated the revenue contributions from its Pre-Spin Projects for 2025 earnings [2]. - It is alleged that Fortrea overstated the cost savings expected from exiting the TSAs [2]. - The company's previously announced EBITDA targets for 2025 were reportedly inflated due to these misrepresentations [2]. - The viability of Fortrea's post-Spin-Off business model and its financial prospects were also claimed to be overstated [2]. - Consequently, the public statements made by Fortrea were materially false and misleading throughout the relevant period [2]. Group 2: Investor Information - Investors who purchased shares of Fortrea are encouraged to contact the law firm before the lead plaintiff motion deadline on August 1, 2025 [3]. - A lead plaintiff will act on behalf of other class members in directing the litigation [3].

Core Viewpoint - A class action lawsuit has been filed against Fortrea Holdings, Inc. for allegedly misleading investors regarding the progress and financial expectations of its Pre-Spin projects [1][2][4]. Company Overview - Fortrea Holdings, Inc. is a global contract research organization (CRO) that provides development solutions for biopharmaceutical products and medical devices [1]. - The company was spun off from Labcorp Holdings Inc. in June 2023 and operates as a standalone publicly traded entity [2]. Financial Performance - On March 3, 2025, Fortrea announced that its revenue and adjusted EBITDA projections for 2025 were not meeting prior expectations, indicating that its Pre-Spin projects were underperforming [3]. - The company reported that its Pre-Spin projects were "late in their life cycle" and had lower revenue and profitability than anticipated for 2025 [3]. - Fortrea's stock price dropped by $3.47 per share, or 25.05%, closing at $10.38 per share following the announcement of disappointing financial results [3]. Allegations and Misstatements - The lawsuit claims that Fortrea overestimated the revenue contributions from its Pre-Spin projects and overstated potential cost savings from exiting transition services agreements (TSAs) [4]. - It is alleged that the company's previously announced EBITDA targets for 2025 were inflated, leading to an overstatement of its post-Spin-Off business model viability and financial prospects [4].

Financial Performance - Fortrea's revenues for Q1 2025 were $651.3 million, a decrease of 1.6% from $662.1 million in Q1 2024, attributed to a 1.1% decline in organic revenues and a 0.5% unfavorable foreign currency translation[97]. - Direct costs for Q1 2025 were $534.8 million, down 3.5% from $554.2 million in Q1 2024, with direct costs as a percentage of revenues decreasing to 82.1% from 83.7%[98][99]. - Selling, general and administrative expenses increased by 1.4% to $121.8 million in Q1 2025, primarily due to higher personnel costs and professional fees[100][101]. - Goodwill impairment for Q1 2025 was $488.8 million, with no impairments reported in Q1 2024[104]. - Interest expense decreased by 35.0% to $22.3 million in Q1 2025, primarily due to the pay down of $70.2 million on term loan A and $412.5 million on term loan B[105]. - Foreign exchange loss for Q1 2025 was $(5.6) million, compared to $(5.3) million in Q1 2024, primarily due to fluctuations in the U.S. Dollar against the British Pound and Euro[106]. - For the three months ended March 31, 2025, the effective tax rate was (2.7)%, an improvement from (5.4)% in 2024, primarily due to goodwill impairment with no tax benefit[107]. - A goodwill impairment of $488.8 million was recorded for the Clinical Development reporting unit due to a decline in share price and macroeconomic uncertainties[121]. Operational Metrics - The company's backlog was $7.7 billion as of March 31, 2025, reflecting anticipated future revenue from business awards[94]. - The company has approximately 15,000 employees operating in around 100 countries, providing comprehensive clinical trial management and consulting services[92]. - Restructuring and other charges increased by 97.0% to $6.5 million in Q1 2025, driven by actions to streamline operations and eliminate redundant positions[104]. Cash Flow and Indebtedness - Cash and cash equivalents increased to $101.6 million as of March 31, 2025, compared to $92.8 million in 2024[112]. - Net cash used for operating activities was $(124.2) million for the three months ended March 31, 2025, compared to $(25.6) million in 2024, reflecting a $98.6 million increase in cash used[113]. - Net cash provided by investing activities was $16.1 million for the three months ended March 31, 2025, a $25.3 million increase from $(9.2) million in 2024, primarily due to a milestone payment related to the sale of the Enabling Services Segment[114]. - Net cash provided by financing activities was $88.4 million for the three months ended March 31, 2025, compared to $21.3 million in 2024, mainly from net proceeds of the revolving credit facility[115]. - The company incurred total indebtedness of $1,640.0 million, with $89.0 million outstanding on the revolving credit facility as of March 31, 2025, and $361.0 million available for borrowing[108]. Capital Expenditures and Interest Rate Sensitivity - Capital expenditures for the three months ended March 31, 2025, were $2.9 million, representing 0.4% of revenues, aimed at supporting growth in core businesses[114]. - A hypothetical 1% increase in interest rates would result in increased interest expenses of $6.6 million, given the $661.0 million outstanding related to variable rate debt[129]. - Approximately 15.9% of revenues for the three months ended March 31, 2025, were denominated in currencies other than the U.S. dollar, with the Euro being the most significant exposure[126].

Financial Data and Key Metrics Changes - For the first quarter, revenues were $651.3 million, a decline of 1.6% year on year, primarily due to varying late-stage clinical service fee wins and a slowing backlog burn rate [34][35] - Adjusted EBITDA for the quarter was $30.3 million, compared to $27.1 million in the prior year period, indicating year-over-year growth in adjusted EBITDA and adjusted EPS for the first time since the spin [34][39] - The net loss for the first quarter was $562.9 million, compared to a net loss of $79.8 million in the prior year, primarily due to a goodwill impairment charge of $488.8 million [40] Business Line Data and Key Metrics Changes - The clinical pharmacology business saw increased service fee and pass-through revenues, although bookings were slightly softer in the first quarter [36][70] - The backlog grew by 4% over the past twelve months, reaching over $7.7 billion, with a book-to-bill ratio of 1.02 for the quarter and 1.14 for the trailing twelve months [39][46] Market Data and Key Metrics Changes - The market environment remains competitive but stable, with larger customers maintaining consistent opportunities and spending [11][48] - Biotech sentiment is mixed, with some companies being cautious due to regulatory confirmations and funding challenges, while others report timely regulatory meetings [12][76] Company Strategy and Development Direction - The company is focused on improving gross margins and reducing SG&A costs, targeting gross cost reductions of $150 million in 2025 [51] - There is a strategic emphasis on enhancing customer relationships and incorporating AI to improve efficiency and quality in proposals and contracts [17][28] - The company aims to achieve a 1.2 times book-to-bill ratio over time, although current economic uncertainties make it difficult to predict new business wins [48] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the biotech funding environment, noting that while there are delays in decision-making, the pipeline remains solid [92] - The company reaffirms its guidance for 2025, targeting revenues between $2.45 billion and $2.55 billion and adjusted EBITDA between $170 million and $200 million [46][45] Other Important Information - The company has exited all major transition services agreements and is now operating independently, which has contributed to a reduction in one-time spin-related costs [34] - The company has initiated transformation programs to reduce personnel costs and optimize its operational footprint [51] Q&A Session Summary Question: Revenue cadence and margin improvement - The first quarter revenue was better than expected, but guidance suggests revenue may be flat to down for the rest of the year, with margin expansion expected to be gradual [60][66] Question: Clinical pharmacology RFP volume and win rates - The clinical pharmacology business remains strong, with a return of the pipeline, and efforts are being made to convert pass-through work into revenue [69][71] Question: Bookings backdrop and pricing environment - The biotech pipeline is growing, but there is increased caution regarding funding, leading to slower decision-making [75][92] Question: SG&A expectations and margin perspective - Marginal improvement in SG&A is expected in the second quarter, with more significant improvements anticipated in the latter half of the year [82][84] Question: Cash flow improvement and DSOs - DSOs are expected to improve over the year, targeting low to mid-40s by year-end, with cash flow expected to be positive in Q3 and Q4 [88][89]

Financial Data and Key Metrics Changes - For the first quarter of 2025, revenues were $651.3 million, a decline of 1.6% year-over-year, primarily due to varying late-stage clinical service fee wins and a slowing backlog burn rate [32][33] - Adjusted EBITDA for the quarter was $30.3 million, compared to $27.1 million in the prior year period, indicating year-over-year growth [32][37] - The net loss for the first quarter was $562.9 million, significantly higher than the net loss of $79.8 million in the prior year, mainly due to a goodwill impairment charge of $488.8 million [38][39] - The book-to-bill ratio for the quarter was 1.02 times, with a trailing twelve-month ratio of 1.14 times [6][37] - The backlog grew by 4% over the past twelve months, totaling over $7.7 billion [37] Business Line Data and Key Metrics Changes - The clinical pharmacology business saw increases in service fee and pass-through revenues, contributing positively to overall performance [33][37] - The company is experiencing a shift towards biotech, with a solid pipeline of opportunities, although some biotech customers are being more cautious due to funding concerns [10][11][46] - The full-service outsourcing business has shown success, with notable achievements such as completing recruitment for a renal product ahead of schedule and accelerating timelines for cancer studies [19][45] Market Data and Key Metrics Changes - The market environment remains competitive but stable, with larger customers maintaining consistent opportunities and spending [10][46] - There is a noted increase in caution among biotech customers regarding funding and regulatory confirmations, which is impacting decision-making timelines [11][90] - The pricing environment is competitive, but there is no notable lack of discipline around pricing [76] Company Strategy and Development Direction - The company is focused on improving customer relationships and enhancing its commercial strategy, including the incorporation of AI to increase efficiency [15][26] - A transformation year is anticipated for 2025, with goals to improve gross margins and reduce SG&A costs [16][48] - The company aims to achieve a 1.2 times book-to-bill ratio over time, although current economic uncertainties make it difficult to predict new business wins [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to navigate challenges, emphasizing the importance of innovation in drug development [12][51] - The company is targeting operating cash flow to be positive for the remainder of 2025, driven by improving DSO and adjusted EBITDA [41][86] - There is an expectation for SG&A improvements to be more pronounced in the latter half of the year as efficiency programs take effect [80] Other Important Information - The company has reduced its permanent headcount by over 8% in the past year to align costs with revenue [34][48] - A significant goodwill impairment charge was recorded due to uncertain macroeconomic conditions and a decline in share price [38] - The company has initiated transformation programs to reduce personnel costs and optimize operational expenditures [48][50] Q&A Session Summary Question: Revenue expectations and cadence - The first quarter revenue was better than expected, but guidance suggests revenue may be flat to down for the rest of the year, with margin expansion expected to be gradual [58][64] Question: Clinical pharmacology RFP volume and win rates - The clinical pharmacology business remains strong, with a return of the pipeline, and efforts are being made to convert pass-through work into revenue [67][68] Question: Bookings backdrop and competition - The biotech pipeline is growing, but there is increased caution regarding funding and decision-making timelines, with competition remaining disciplined in pricing [70][76] Question: SG&A expectations - Marginal improvement in SG&A is expected in the second quarter, with more significant improvements anticipated in the latter half of the year [78][80] Question: Cash flow improvement and DSO expectations - DSOs are expected to improve over the year, targeting low to mid-40s by year-end, with cash flow expected to be positive in Q3 and Q4 [85][86] Question: Biotech funding concerns - There is caution among biotech customers regarding funding, leading to slower decision-making, but the pipeline remains strong [90][92]

分组1 - Fortrea Holdings Inc. reported quarterly earnings of $0.02 per share, exceeding the Zacks Consensus Estimate of a loss of $0.07 per share, and showing improvement from a loss of $0.04 per share a year ago, resulting in an earnings surprise of 128.57% [1] - The company posted revenues of $651.3 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.79%, although this represents a decline from year-ago revenues of $662.1 million [2] - Fortrea Holdings Inc. has underperformed the market, with shares losing about 67% since the beginning of the year compared to the S&P 500's decline of -3.8% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $0.03 on revenues of $610.26 million, and for the current fiscal year, it is $0.39 on revenues of $2.47 billion [7] - The Zacks Industry Rank for Medical - Biomedical and Genetics is in the top 34% of over 250 Zacks industries, indicating that the industry outlook can significantly impact stock performance [8]