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]

Q1 2025 Earnings Presentation FORWARD-LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES Forward-Looking Statements Disclosure. Certain information in this presentation contains "forward-looking" statements. You should not place undue reliance on these statements. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as "believe", "expect", "approximately", "an ...

Exhibit 99.1 For the three months ended March 31, 2025, from continuing operations: DURHAM, N.C., May 12, 2025— Fortrea (Nasdaq: FTRE) (the "Company"), a leading global contract research organization (CRO), today reported financial results for the first quarter ended March 31, 2025. "Fortrea's first quarter performance represents a solid start to 2025," said Tom Pike, Chairman and CEO of Fortrea. "We are focused on the disciplined execution of our strategy, strengthening our business model to improve our ef ...

Peter M. Neupert, Fortrea’s Lead Independent Director, will serve as Interim CEO as Thomas Pike steps downDURHAM, N.C., May 12, 2025 (GLOBE NEWSWIRE) -- Fortrea (Nasdaq: FTRE) (the “Company”), a leading global contract research organization (CRO), today announced that Thomas Pike is stepping down from his role as Fortrea’s Chief Executive Officer and as Chairman of its Board. Fortrea’s Lead Independent Director, Peter M. Neupert, will serve as Interim Chief Executive Officer and Board Chair, beginning May 1 ...

Company Overview - Fortrea Holdings Inc. (FTRE) is expected to report a year-over-year decline in earnings, with a projected loss of $0.08 per share, indicating a -100% change compared to the previous year [3] - Revenues for the upcoming quarter are anticipated to be $610.37 million, reflecting a decrease of 7.8% from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has been revised down by 28.64% over the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for Fortrea Holdings is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +113.10% [10][11] Historical Performance - Fortrea Holdings has not been able to beat consensus EPS estimates in any of the last four quarters, with a notable surprise of -50% in the last reported quarter [12][13] Market Sentiment - The stock may experience upward movement if the actual results exceed expectations in the upcoming earnings report scheduled for May 12 [2] - Conversely, if the results fall short, the stock may decline [2] Industry Comparison - In the Zacks Medical - Biomedical and Genetics industry, Acadia Pharmaceuticals (ACAD) is expected to post earnings of $0.06 per share, representing a -40% year-over-year change, with revenues projected at $241.74 million, up 17.5% from the previous year [17] - Acadia's consensus EPS estimate has been revised down by 0.8% over the last 30 days, but it has a positive Earnings ESP of 17.37%, suggesting a likelihood of beating the consensus EPS estimate [18]