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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 $423 MILLION AND
EARNINGS PER SHARE OF $3.76 FOR 2ND QUARTER 2000
RESEARCH TRIANGLE PARK, N.C. - July 19, 2000 - Quintiles Transnational Corp.
(Nasdaq: QTRN) today announced financial results for second quarter 2000. Net
revenue for the second quarter ended June 30 increased 5% to $423.1 million,
from $402.3 million for the second quarter 1999. Net income for the quarter was
$434.3 million or $3.76 per share on a diluted basis compared to $35.2 million
and $0.30 respectively for 1999 second quarter. Net income for the second
quarter of 2000 reflects a net gain on the sale of assets, primarily ENVOY.
Pro forma net income from continuing operations was $0.06 per share on a diluted
basis for second quarter 2000. This excludes non-recurring items, costs related
to the company's Internet initiative and the income from discontinued ENVOY
operations. A reconciliation of pro forma net income from continuing operations
to net income is shown in an attached table. At June 30, backlog was $2.09
billion as a result of $736 million in net new business wins for the first half
of 2000.
"Business conditions improved this quarter, and results from our continuing
operations were in line with analysts' consensus expectations," said Dennis
Gillings, Chairman and Chief Executive Officer, Quintiles Transnational Corp.
On May 30, 2000, Quintiles completed the sale of its ENVOY subsidiary to
Healtheon/WebMD (Nasdaq: HLTH) for $400 million cash and 35 million shares of
Healtheon/WebMD stock. "Our goal of transforming the pharma technology platform
with our Healtheon/WebMD partner is now firmly in place and progressing,"
Gillings said. "We plan to begin beta testing of version 1.0 of our e-health
technology in the first half of 2001."
In other business developments during the second quarter, Quintiles:
o Agreed to sell its Ledbury, Herefordshire, U.K. toxicology business,
signaling a shift from general toxicology to advanced technologies such as
pharmacogenomics.
o Launched Rx Market Monitor(TM), which already has six customers. Because of
high demand, an enhanced version will be issued with six new therapeutic
classes -- gastrointestinal, HIV/AIDS, hepatitis, influenza, allergy and
antifungals.
o Opened Quintiles Academy, near Tokyo, designed to meet the demand for
training skilled employees in the large Japanese pharma market.
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In addition, as part of its previously announced stock repurchase program,
Quintiles repurchased 100,000 shares during the quarter for an aggregate price
of approximately $1.4 million.
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. 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 and the ability to operate successfully in new lines of business.
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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PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME**
(Unaudited)
Three Months Ended June 30 Six Months Ended June 30
2000 1999 2000 1999*
- ---------------------------------------------------------------------------------------- ------------------------------
In thousands, except per share data
Net revenue $422,982 $402,276 $837,382 $761,981
Costs and expenses:
Direct 254,649 216,687 506,118 410,593
General and administrative 138,743 123,119 274,634 232,601
Depreciation and amortization 22,736 20,015 45,847 37,815
- ---------------------------------------------------------------------------------------- ------------------------------
Total costs and expenses 416,128 359,821 826,599 681,009
- ---------------------------------------------------------------------------------------- ------------------------------
Income from operations 6,854 42,455 10,783 80,972
Total other income 3,193 1,157 5,141 1,589
- ---------------------------------------------------------------------------------------- ------------------------------
Income before income taxes 10,047 43,612 15,924 82,561
Income taxes 3,315 15,009 5,256 28,231
- ---------------------------------------------------------------------------------------- ------------------------------
Income from continuing operations 6,732 28,603 10,668 54,330
Income from discontinued operation, net of income taxes 6,176 10,041 16,770 19,012
- ---------------------------------------------------------------------------------------- ------------------------------
Net income $12,908 $38,644 $27,438 $73,342
- ---------------------------------------------------------------------------------------- ------------------------------
Basic net income per share:
Income from continuing operations $0.06 $0.25 $0.09 $0.49
Income from discontinued operation $0.05 $0.09 $0.15 $0.17
------------ ------------ ------------ ------------
Basic net income per share $0.11 $0.34 $0.24 $0.65
============ ============ ============ ============
Diluted net income per share:
Income from continuing operations $0.06 $0.24 $0.09 $0.47
Income from discontinued operation $0.05 $0.09 $0.15 $0.17
------------ ------------ ------------ ------------
Diluted net income per share $0.11 $0.33 $0.24 $0.64
- ---------------------------------------------------------------------------------------- ------------------------------
Shares used in computing net income per share
Basic 115,394 114,451 115,417 112,004
Diluted 115,394 117,433 115,417 115,084
* Restated to include SMG and Minerva which were acquired in 1999 in
transactions accounted for as poolings of interests
** Proforma results exclude net revenue and expenses relating to the
Company's Internet initiative, non-recurring charges, transactions costs
and gain on disposal of discontinued operation. Also excludes $3.7 million
of amortization of certain acquired intangible assets in the income from
discontinued operation for the six months ended June 30, 1999.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended June 30 Six Months Ended June 30
2000 1999 2000 1999*
- ---------------------------------------------------------------------------- ------------------------
In thousands, except per share data
Net revenue $423,107 $402,276 $837,952 $761,981
Costs and expenses:
Direct 255,901 216,687 508,310 410,593
General and administrative 142,597 123,119 280,726 232,601
Depreciation and amortization 22,749 20,015 45,871 37,815
Non-recurring charges:
Restructuring 0 0 58,592 0
Disposal of business 17,325 0 17,325 0
- --------------------------------------------------------------------------- -------------------------
Total costs and expenses 438,572 359,821 910,824 681,009
- --------------------------------------------------------------------------- -------------------------
(Loss) income from operations (15,465) 42,455 (72,872) 80,972
Transaction costs 0 (3,464) 0 (25,827)
Other income (expense) 3,193 1,157 5,141 1,589
- --------------------------------------------------------------------------- -------------------------
Total other income (expense) 3,193 (2,307) 5,141 (24,238)
- --------------------------------------------------------------------------- -------------------------
(Loss) income before income taxes (12,272) 40,148 (67,731) 56,734
Income taxes (benefit) expense (4,050) 15,009 (22,350) 28,231
- --------------------------------------------------------------------------- -------------------------
(Loss) income from continuing operations (8,222) 25,139 (45,381) 28,503
Income from discontinued operation, net of taxes 6,176 10,041 16,770 15,291
Extraordinary gain from sale of discontinued
operation net of taxes 436,327 0 436,327 0
- --------------------------------------------------------------------------- -------------------------
Net income $434,281 $35,180 $407,716 $43,794
- --------------------------------------------------------------------------- -------------------------
Basic net income per share:
(Loss) income from continuing operations ($0.07) $0.22 ($0.39) $0.25
Income from discontinued operation $0.05 $0.09 $0.15 $0.14
Extraordinary gain from sale of discontinued
operation $3.78 $0.00 $3.78 $0.00
---------- ----------- ---------- -----------
Basic net income per share $3.76 $0.31 $3.53 $0.39
========== =========== ========== ===========
Diluted net income per share:
(Loss) income from continuing operations ($0.07) $0.21 ($0.39) $0.25
Income from discontinued operation $0.05 $0.09 $0.15 $0.13
Extraordinary gain from sale of discontinued
operation $3.78 $0.00 $3.78 $0.00
---------- ----------- ---------- -----------
Diluted net income per share $3.76 $0.30 $3.53 $0.38
- --------------------------------------------------------------------------- -------------------------
Shares used in computing net income per share
Basic 115,394 114,451 115,417 112,004
Diluted 115,394 117,433 115,417 115,084
* Restated to include SMG and Minerva which were acquired in 1999 in
transactions accounted for as poolings of interests
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME RECONCILIATION
FOR THE THREE MONTHS ENDED JUNE 30, 2000
(Unaudited)
Non-recurring
As Internet charges &
Reported Initiative gain on disposal Proforma
- ------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $423,107 $125 $0 $422,982
Costs and expenses:
Direct 255,901 1,252 0 254,649
General and administrative 142,597 3,854 0 138,743
Depreciation and amortization 22,749 13 0 22,736
Non-recurring charges:
Restructuring 0 0 0 0
Disposal of business 17,325 0 17,325 0
- ------------------------------------------------------------------------------------------------------------------
Total costs and expenses 438,572 5,119 17,325 416,128
- ------------------------------------------------------------------------------------------------------------------
(Loss) income from operations (15,465) (4,994) (17,325) 6,854
Transaction costs 0 0 0 0
Other income (expense) 3,193 0 0 3,193
- ------------------------------------------------------------------------------------------------------------------
Total other income (expense) 3,193 0 0 3,193
- ------------------------------------------------------------------------------------------------------------------
(Loss) income before income taxes (12,272) (4,994) (17,325) 10,047
Income taxes (benefit) expense (4,050) (1,648) (5,717) 3,315
- ------------------------------------------------------------------------------------------------------------------
(Loss) income from continuing operations (8,222) (3,346) (11,608) 6,732
Income from discontinued operation, net of taxes 6,176 0 0 6,176
Extraordinary gain from sale of discontinued
operation, net of taxes 436,327 0 436,327 0
- ------------------------------------------------------------------------------------------------------------------
Net income $434,281 ($3,346) $424,719 $12,908
- ------------------------------------------------------------------------------------------------------------------
Basic net income per share:
(Loss) income from continuing operations ($0.07) $0.06
Income from discontinued operation $0.05 $0.05
Extraordinary gain from sale of discontinued
operation $3.78 $0.00
----------- ------------
Basic net income per share $3.76 $0.11
=========== ============
Diluted net income per share:
(Loss) income from continuing operations ($0.07) $0.06
Income from discontinued operation $0.05 $0.05
Extraordinary gain from sale of discontinued
operation $3.78 $0.00
----------- ------------
Diluted net income per share $3.76 $0.11
- -------------------------------------------------- =========== ============
Shares used in computing net income per share
Basic 115,394 115,394
Diluted 115,394 115,394
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME RECONCILIATION
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(Unaudited)
Non-recurring
As Internet charges &
Reported Initiative gain on disposal Proforma
- -------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $837,952 $570 $0 $837,382
Costs and expenses:
Direct 508,310 2,192 0 506,118
General and administrative 280,726 6,092 0 274,634
Depreciation and amortization 45,871 24 0 45,847
Non-recurring charges:
Restructuring 58,592 0 58,592 0
Disposal of business 17,325 0 17,325 0
- -------------------------------------------------------------------------------------------------------------------
Total costs and expenses 910,824 8,308 75,917 826,599
- -------------------------------------------------------------------------------------------------------------------
(Loss) income from operations (72,872) (7,738) (75,917) 10,783
Transaction costs 0 0 0 0
Other income (expense) 5,141 0 0 5,141
- -------------------------------------------------------------------------------------------------------------------
Total other income (expense) 5,141 0 0 5,141
- -------------------------------------------------------------------------------------------------------------------
(Loss) income before income taxes (67,731) (7,738) (75,917) 15,924
Income taxes (benefit) expense (22,350) (2,554) (25,052) 5,256
- -------------------------------------------------------------------------------------------------------------------
(Loss) income from continuing operations (45,381) (5,184) (50,865) 10,668
Income from discontinued operation, net of taxes 16,770 0 0 16,770
Extraordinary gain from sale of discontinued
operation, net of taxes 436,327 0 436,327 0
- -------------------------------------------------------------------------------------------------------------------
Net income $407,716 ($5,184) $385,462 $27,438
- -------------------------------------------------------------------------------------------------------------------
Basic net income per share:
(Loss) income from continuing operations ($0.39) $0.09
Income from discontinued operation $0.15 $0.15
Extraordinary gain from sale of discontinued
operation $3.78 $0.00
----------- -----------
Basic net income per share $3.53 $0.24
=========== ===========
Diluted net income per share:
(Loss) income from continuing operations ($0.39) $0.09
Income from discontinued operation $0.15 $0.15
Extraordinary gain from sale of discontinued
operation $3.78 $0.00
----------- -----------
Diluted net income per share $3.53 $0.24
- -------------------------------------------------- =========== ===========
Shares used in computing net income per share
Basic 115,417 115,417
Diluted 115,417 115,417