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FOR IMMEDIATE RELEASE www.quintiles.com
CONTACT: Pat Grebe, Media Relations (pat.grebe@quintiles.com)
Greg Connors, Investor Relations (invest@quintiles.com)
(919) 998 2000
QUINTILES REPORTS NET REVENUE OF $415 MILLION FOR 1ST QUARTER 2000,
A 15% INCREASE FROM 1999
RESEARCH TRIANGLE PARK, N.C. - April 19, 2000 - Quintiles Transnational Corp.
(Nasdaq: QTRN) today announced financial results for first quarter 2000. Net
revenue for the quarter ended March 31, 2000, increased 15% to $414.8 million,
from $359.7 million for the first quarter 1999. Pro forma net income was $14.5
million, or $0.13 per share on a diluted basis, for the first quarter 2000,
compared to pro forma net income of $34.7 million, or $0.31 per share on a
diluted basis, for the 1999 first quarter. Pro forma net income excludes
restructuring charges, expenses related to the company's Internet initiative,
transaction costs and amortization of certain acquired intangible asset costs
incurred in 1999.
"As expected and as discussed in our March 8th press release, our first quarter
results reflect the challenging market conditions that we've experienced over
the past months and continue to experience," said Dennis Gillings, Ph.D.,
Chairman and Chief Executive Officer of Quintiles Transnational Corp. "Also as
stated in our March release, we anticipated lower than expected revenue and
significantly lower than expected core operating earnings per share for the
first half of the year compared to the analysts' expectations at that time. That
continues to be our view."
On January 24, Quintiles announced a definitive agreement to sell its ENVOY
subsidiary to Healtheon/WebMD for $400 million cash and 35 million shares of
Healtheon/WebMD stock, as well as agreements regarding development of
Internet-enabled products for the pharmaceutical industry and Quintiles'
ownership of data rights. The sale of ENVOY to Healtheon/WebMD is expected to be
completed in second quarter of this year. ENVOY's results are shown as "Income
from discontinued operation, net of taxes."
"We are pleased with our revenue growth but disappointed in this drop in
earnings," Gillings said. "Our restructuring, Internet initiative and healthcare
informatics launch undertaken in this quarter are strong steps that we believe
will allow us to perform on a new level."
As part of its restructuring, Quintiles recorded a restructuring charge of
approximately $59 million in first quarter 2000. The restructuring charge
consists primarily of severance and lease termination costs related to the
consolidation of offices. This restructuring is targeted to result in annualized
cost savings of $40 million to $50 million. After giving effect to the
restructuring charge and including expenses related to the company's Internet
initiative, the company incurred a net loss of $26.6 million, or $0.23 per
share, in the first quarter 2000.
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In the first quarter, Quintiles initiated its previously announced $200 million
stock repurchase program. As part of the program, the company repurchased
478,000 shares during the quarter for an aggregated price of approximately $8.5
million.
Commenting further, Gillings said: "In addition to achieving new efficiencies,
we are now rolling out new Internet-based products to the healthcare industry.
Just last week I attended the commercial launch event for our breakthrough
Web-based healthcare informatics tool, Rx Market Monitor(TM), and saw first-hand
the enthusiastic reception it received from several dozen potential customers,
including many pharmaceutical and biotechnology company executives."
Quintiles Transnational Corp. improves healthcare by bringing new medicines to
patients faster and providing knowledge-rich medical and drug data to advance
the quality and cost effectiveness of healthcare. Quintiles is the global market
leader in helping pharmaceutical, biotechnology and medical device companies
market and sell their products; and the company provides insightful market
research solutions and strategic analyses to support healthcare decisions.
Headquartered near Research Triangle Park, North Carolina, Quintiles employs a
global workforce operating from offices in 31 countries. Quintiles Transnational
is a member of the S&P 500, Fortune 1000 and Nasdaq 100. For more information
visit www.quintiles.com.
Schedules attached to this release are an integral part of this release.
Information in this press release contains "forward-looking statements" about
Quintiles' expectations for the second quarter and the remainder of the year,
the benefits of the restructuring and the company's Internet initiative, and the
anticipated completion of the sale of ENVOY. These statements involve risks and
uncertainties that could cause actual results to differ materially, including
without limitation, our ability to efficiently distribute backlog among
therapeutic business units and match demand to resources, actual operating
performance, the actual savings and operating improvements resulting from the
restructuring, the ability to maintain large client contracts or to enter into
new contracts, changes in trends in the pharmaceutical industry, the ability to
create data products from data licensed to us, the ability to operate
successfully in new lines of business, the ability of the recently combined
businesses to be integrated with Quintiles' current operations and, with respect
to our proposed transaction with Healtheon/WebMD, actual completion of the
transaction, including obtaining the requisite regulatory approval, and risks
associated with Healtheon/WebMD's business as set forth in its filings with the
Securities and Exchange Commission. Additional factors that could cause actual
results to differ materially are discussed in the company's recent filings with
the Securities and Exchange Commission, including but not limited to its S-3 and
S-4 Registration Statements, its Annual Report on Form 10-K, its Form 8-Ks, and
its other periodic reports, including Form 10-Qs.
# # #
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended March 31
2000 1999*
- ---------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $ 414,845 $ 359,705
Costs and expenses:
Direct 252,409 193,906
General and administrative 138,129 109,482
Depreciation and amortization 23,122 17,800
Restructuring charges 58,592 0
- ---------------------------------------------------------------------------------------
Total costs and expenses 472,252 321,188
- ---------------------------------------------------------------------------------------
(Loss) income from operations (57,407) 38,517
Transaction costs 0 (22,363)
Other income (expense) 1,948 432
- ---------------------------------------------------------------------------------------
Total other income (expense) 1,948 (21,931)
- ---------------------------------------------------------------------------------------
(Loss) income before income taxes (55,459) 16,586
Income taxes (benefit) expense (18,300) 13,222
- ---------------------------------------------------------------------------------------
(Loss) income from continuing operations (37,159) 3,364
Income from discontinued operation, net of taxes 10,594 5,250
- ---------------------------------------------------------------------------------------
Net (loss) income ($ 26,565) $ 8,614
- ---------------------------------------------------------------------------------------
Basic net (loss) income per share:
(Loss) income from continuing operations ($ 0.32) $ 0.03
Income from discontinued operation $ 0.09 $ 0.05
------------- -------------
Basic net (loss) income per share ($ 0.23) $ 0.08
============= =============
Diluted net (loss) income per share:
(Loss) income from continuing operations ($ 0.32) $ 0.03
Income from discontinued operation $ 0.09 $ 0.05
------------- -------------
Diluted net (loss) income per share ($ 0.23) $ 0.08
- ---------------------------------------------------------------------------------------
Shares used in computing net (loss) income per share
Basic 115,392 109,341
Diluted 115,392 112,043
* Restated to include SMG and Minerva which were acquired in 1999 in
transactions accounted for as poolings of interests
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PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME**
(Unaudited)
Three Months Ended March 31
2000 1999*
- ----------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $414,400 $359,705
Costs and expenses:
Direct 251,469 193,906
General and administrative 135,891 109,482
Depreciation and amortization 23,111 17,800
- ---------------------------------------------------------------------------------------
Total costs and expenses 410,471 321,188
- ---------------------------------------------------------------------------------------
Income from operations 3,929 38,517
Total other income 1,948 432
- ---------------------------------------------------------------------------------------
Income before income taxes 5,877 38,949
Income taxes 1,941 13,222
- ---------------------------------------------------------------------------------------
Income from continuing operations 3,936 25,727
Income from discontinued operation, net of income taxes 10,594 8,971
- ---------------------------------------------------------------------------------------
Net income $ 14,530 $ 34,698
- ---------------------------------------------------------------------------------------
Basic net income per share:
Income from continuing operations $ 0.03 $ 0.24
Income from discontinued operation $ 0.09 $ 0.08
------------ -------------
Basic net income per share $ 0.13 $ 0.32
============ =============
Diluted net income per share:
income from continuing operations $ 0.03 $ 0.23
Income from discontinued operation $ 0.09 $ 0.08
------------ -------------
Diluted net income per share $ 0.13 $ 0.31
- ---------------------------------------------------------------------------------------
Shares used in computing net income per share
Basic 115,392 109,341
Diluted 115,392 112,043
* Restated to include SMG and Minerva which were acquired in 1999 in
transactions accounted for as poolings of interests
** Proforma results excludes net revenue and expenses relating to the
Company's Internet initiative, restructuring charges and transactions
costs. Also excludes $3.7 million of amortization of certain acquired
intangible assets in the income from discontinued operation.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME RECONCILIATION
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Unaudited)
As Internet Restructuring
Reported Initiative Charge Proforma
- -----------------------------------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $ 414,845 $ 445 $ 0 $414,400
Costs and expenses:
Direct 252,409 940 0 251,469
General and administrative 138,129 2,238 0 135,891
Depreciation and amortization 23,122 11 0 23,111
Restructuring charges 58,592 0 58,592 0
- -----------------------------------------------------------------------------------------------------------------
Total costs and expenses 472,252 3,189 58,592 410,471
- -----------------------------------------------------------------------------------------------------------------
(Loss) income from operations (57,407) (2,744) (58,592) 3,929
Transaction costs 0 0 0 0
Other income (expense) 1,948 0 0 1,948
- -----------------------------------------------------------------------------------------------------------------
Total other income (expense) 1,948 0 0 1,948
- -----------------------------------------------------------------------------------------------------------------
(Loss) income before income taxes (55,459) (2,744) (58,592) 5,877
Income taxes (benefit) expense (18,300) (906) (19,335) 1,941
- -----------------------------------------------------------------------------------------------------------------
(Loss) income from continuing operations (37,159) (1,838) (39,257) 3,936
Income from discontinued operation, net of taxes 10,594 0 0 10,594
- -----------------------------------------------------------------------------------------------------------------
Net (loss) income ($ 26,565) ($ 1,838) ($ 39,257) $ 14,530
- -----------------------------------------------------------------------------------------------------------------
Basic net (loss) income per share:
(Loss) income from continuing operations ($ 0.32) $ 0.03
Income from discontinued operation $ 0.09 $ 0.09
------------ ------------
Basic net (loss) income per share ($ 0.23) $ 0.13
============ ============
Diluted net (loss) income per share:
(Loss) income from continuing operations ($ 0.32) $ 0.03
Income from discontinued operation $ 0.09 $ 0.09
------------ -------------
Diluted net (loss) income per share ($ 0.23) $ 0.13
==================================================================== =============
Shares used in computing net (loss) income per share
Basic 115,392 115,392
Diluted 115,392 115,392
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME RECONCILIATION
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(Unaudited)
Amortization of
certain acquired
intangible assets
As and transaction
Reported costs Proforma
- ------------------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $ 359,705 $ 0 $359,705
Costs and expenses:
Direct 193,906 0 193,906
General and administrative 109,482 0 109,482
Depreciation and amortization 17,800 0 17,800
Restructuring charges 0 0 0
- ------------------------------------------------------------------------------------------------
Total costs and expenses 321,188 0 321,188
- ------------------------------------------------------------------------------------------------
(Loss) income from operations 38,517 0 38,517
Transaction costs (22,363) 22,363 0
Other income (expense) 432 0 432
- ------------------------------------------------------------------------------------------------
Total other income (expense) (21,931) 22,363 432
- ------------------------------------------------------------------------------------------------
(Loss) income before income taxes 16,586 22,363 38,949
Income taxes (benefit) expense 13,222 0 13,222
- ------------------------------------------------------------------------------------------------
(Loss) income from continuing operations 3,364 22,363 25,727
Income from discontinued operation, net of taxes 5,250 3,721 8,971
- ------------------------------------------------------------------------------------------------
Net (loss) income $ 8,614 $ 26,084 $ 34,698
- ------------------------------------------------------------------------------------------------
Basic net (loss) income per share:
(Loss) income from continuing operations $ 0.03 $ 0.24
Income from discontinued operation $ 0.05 $ 0.08
------------ ------------
Basic net (loss) income per share $ 0.08 $ 0.32
============ ============
Diluted net (loss) income per share:
(Loss) income from continuing operations $ 0.03 $ 0.23
Income from discontinued operation $ 0.05 $ 0.08
------------ ------------
Diluted net (loss) income per share $ 0.08 $ 0.31
- ------------------------------------------------------------------- ------------
Shares used in computing net (loss) income per share
Basic 109,341 109,341
Diluted 112,043 112,043