1
EXHIBIT 99.01
FOR IMMEDIATE RELEASE www.quintiles.com
CONTACT: Pat Grebe, Media Relations (pat.grebe@quintiles.com)
Greg Connors, Investor Relations (investors.info@quintiles.com)
(919) 998 2000
QUINTILES REPORTS 3RD QUARTER EPS OF 9 CENTS FROM CORE OPERATIONS,
A 52% INCREASE FROM 2ND QUARTER
RESEARCH TRIANGLE PARK, N.C. - October 18, 2000 - Quintiles Transnational Corp.
(Nasdaq: QTRN) today announced financial results for third quarter 2000. Net
revenue for the quarter ended September 30 was $412.3 million. Net income for
the quarter, excluding costs from the company's Internet initiative, was $10.5
million, a 56% increase from second quarter 2000 pro forma net income from
continuing operations of $6.7 million. Third quarter earnings per share,
excluding costs for the company's Internet initiative, was $0.09 on a diluted
basis, a 52% increase from the previous quarter's comparable earnings per share
from continuing operations of $0.06 on a diluted basis.
Net revenue for the nine months ended September 30, 2000, increased 7% to $1.25
billion, from $1.16 billion for the same period in 1999. Net income for the same
nine-month period was $412.3 million or $3.56 per share on a diluted basis,
compared to $75.0 million and $0.65 respectively for the same period in 1999.
Net income for the nine months ended September 30, 2000, reflects a net gain on
the sale of assets, primarily ENVOY, which was reported in second quarter 2000.
"We're pleased to have continued to increase our earnings per share growth
sequentially, excluding costs for our Internet initiative," said Dennis
Gillings, Chairman and Chief Executive Officer, Quintiles Transnational Corp.
"Our improved financial performance is the direct result of our back-to-basics
approach in refining our operating processes and cost structures to increase our
efficiency.
"We've focused on meeting key metrics along service, geographic and customer
lines, and on targeting our sales efforts on must-win projects. We've created a
new customer team structure to be more responsive and customer-centric and put
in place new management systems to enhance project delivery.
"Another area of focus has been our contracting process. We've conducted an
extensive review of contract risks, and have improved our contract turnaround
time and change order process. I'm also pleased with our progress in globally
implementing our shared services strategy by which we're consolidating finance
and human resource functions into `centers of excellence' that can deliver these
services on a more efficient basis, freeing our business lines to focus on sales
and service delivery to our customers."
2
In other third quarter developments, Quintiles Transnational repurchased 410,000
shares of its common stock for an aggregate price of approximately $6.7 million
as part of its previously announced stock repurchase program.
Quintiles Transnational's third quarter 2000 financial briefing will be held at
11 a.m. EDT Thursday, Oct. 19, and will be broadcast live over the Web.
Interested parties can access the Webcast at
http://www.quintiles.com/investors/broadcast_center. Additionally, a replay of
the Webcast will be available via the same link about two hours after completion
of the call.
Quintiles Transnational is the world's leading provider of information,
technology and services to bring new medicines to patients faster and improve
healthcare. Headquartered near Research Triangle Park, North Carolina, Quintiles
employs a global workforce in 38 countries. Quintiles Transnational is a member
of the S&P 500, Fortune 1000 and Nasdaq 100. For more information visit the
company's Web site at 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.
# # #
3
PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME**
(Unaudited)
Three Months Ended September 30 Nine Months Ended September 30
2000 1999 2000 1999*
- ---------------------------------------------------------------------------------------- ----------------------------------
In thousands, except per share data
Net revenue $412,116 $402,497 $ 1,249,498 $1,164,478
Costs and expenses:
Direct 246,498 219,988 752,616 630,581
General and administrative 133,056 132,701 407,690 365,302
Depreciation and amortization 22,926 21,811 68,773 59,626
- ---------------------------------------------------------------------------------------- ----------------------------------
Total costs and expenses 402,480 374,500 1,229,079 1,055,509
- ---------------------------------------------------------------------------------------- ----------------------------------
Income from operations 9,636 27,997 20,419 108,969
Total other income 6,022 766 11,163 2,355
- ---------------------------------------------------------------------------------------- ----------------------------------
Income before income taxes 15,658 28,763 31,582 111,324
Income taxes 5,167 7,982 10,423 36,213
- ---------------------------------------------------------------------------------------- ----------------------------------
Income from continuing operations 10,491 20,781 21,159 75,111
Income from discontinued operation, net of income taxes 0 10,679 16,770 29,691
- ---------------------------------------------------------------------------------------- ----------------------------------
Net income $10,491 $31,460 $37,929 $104,802
- ---------------------------------------------------------------------------------------- ----------------------------------
Basic net income per share:
Income from continuing operations $0.09 $0.18 $0.18 $0.66
Income from discontinued operation $0.00 $0.09 $0.14 $0.26
-------------- -------------- -------------- --------------
Basic net income per share $0.09 $0.27 $0.33 $0.93
============== ============== ============== ==============
Diluted net income per share:
Income from continuing operations $0.09 $0.18 $0.18 $0.65
Income from discontinued operation $0.00 $0.09 $0.14 $0.26
-------------- -------------- -------------- --------------
Diluted net income per share $0.09 $0.27 $0.33 $0.91
- ---------------------------------------------------------------------------------------- ----------------------------------
Shares used in computing net income per share
Basic 115,702 114,907 115,711 112,994
Diluted 118,139 116,764 115,711 115,306
* 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 nine months ended September 30, 1999.
4
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended September 30 Nine Months Ended September 30
2000 1999 2000 1999*
- -------------------------------------------------------------------------------------------- ------------------------------
In thousands, except per share data
Net revenue $412,344 $402,497 $ 1,250,296 $ 1,164,478
Costs and expenses:
Direct 247,577 219,988 755,887 630,581
General and administrative 141,042 132,701 421,768 365,302
Depreciation and amortization 22,934 21,811 68,805 59,626
Non-recurring charges:
Restructuring 0 0 58,592 0
Disposal of business 0 0 17,325 0
- -------------------------------------------------------------------------------------------- -------------------------------
Total costs and expenses 411,553 374,500 1,322,377 1,055,509
- -------------------------------------------------------------------------------------------- -------------------------------
Income (loss) from operations 791 27,997 (72,081) 108,969
Transaction costs 0 (281) 0 (26,108)
Other income (expense) 6,022 766 11,163 2,355
- -------------------------------------------------------------------------------------------- -------------------------------
Total other income (expense) 6,022 485 11,163 (23,753)
- -------------------------------------------------------------------------------------------- -------------------------------
Income (loss) before income taxes 6,813 28,482 (60,918) 85,216
Income taxes (benefit) expense 2,248 7,982 (20,102) 36,213
- -------------------------------------------------------------------------------------------- -------------------------------
Income (loss) from continuing operations 4,565 20,500 (40,816) 49,003
Income from discontinued operation, net of taxes 0 10,679 16,770 25,970
- -------------------------------------------------------------------------------------------- -------------------------------
Income (loss) before extraordinary gain 4,565 31,179 (24,046) 74,973
Extraordinary gain from sale of discontinued operation, net of taxes 0 0 436,327 0
- -------------------------------------------------------------------------------------------- -------------------------------
Net income $4,565 $31,179 $412,281 $74,973
- -------------------------------------------------------------------------------------------- -------------------------------
Basic net income per share:
Income (loss) from continuing operations $0.04 $0.18 ($0.35) $0.43
Income from discontinued operation $0.00 $0.09 $0.14 $0.23
Extraordinary gain from sale of discontinued operation $0.00 $0.00 $3.77 $0.00
---------- ---------- --------- ----------
Basic net income per share $0.04 $0.27 $3.56 $0.66
========== ========== ========= ==========
Diluted net income per share:
Income (loss) from continuing operations $0.04 $0.18 ($0.35) $0.42
Income from discontinued operation $0.00 $0.09 $0.14 $0.23
Extraordinary gain from sale of discontinued operation $0.00 $0.00 $3.77 $0.00
-------- ----------- ---------- ----------
Diluted net income per share $0.04 $0.27 $3.56 $0.65
- -------------------------------------------------------------------------------------------- --------------------------
Shares used in computing net income per share
Basic 115,702 114,907 115,711 112,994
Diluted 118,139 116,764 115,711 115,306
Consolidated Balance Sheet Data
(Unaudited)
September 30, December 31,
2000 1999
- -------------------------------------------------------------------------------
In millions
Cash, cash equivalents and debt investments $410 $301
Investments in marketable equity securities 676 45
Working capital, excluding discontinued operation 308 69
Total assets 2,194 1,611
Debt including current portion 43 185
Shareholders' equity 1,573 992
- -------------------------------------------------------------------------------
* Restated to include SMG and Minerva which were acquired in 1999 in
transactions accounted for as poolings of interests
5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME RECONCILIATION
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
Non-recurring
As Internet charges &
Reported Initiative gain on disposal Proforma
- ---------------------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $412,344 $228 $0 $412,116
Costs and expenses:
Direct 247,577 1,079 0 246,498
General and administrative 141,042 7,986 0 133,056
Depreciation and amortization 22,934 8 0 22,926
Non-recurring charges:
Restructuring 0 0 0 0
Disposal of business 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 411,553 9,073 0 402,480
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations 791 (8,845) 0 9,636
Transaction costs 0 0 0 0
Other income (expense) 6,022 0 0 6,022
- ---------------------------------------------------------------------------------------------------------------------------------
Total other income (expense) 6,022 0 0 6,022
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes 6,813 (8,845) 0 15,658
Income taxes (benefit) expense 2,248 (2,919) 0 5,167
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations 4,565 (5,926) 0 10,491
Income from discontinued operation, net of taxes 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) before extraordinary gain 4,565 (5,926) 0 10,491
Extraordinary gain from sale of discontinued operation, net of taxes 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Net income $4,565 ($5,926) $0 $10,491
- ---------------------------------------------------------------------------------------------------------------------------------
Basic net income per share:
Income(loss) from continuing operations $0.04 $0.09
Income from discontinued operation $0.00 $0.00
Extraordinary gain from sale of discontinued operation $0.00 $0.00
------------- -------------
Basic net income per share $0.04 $0.09
============= =============
Diluted net income per share:
Income(loss) from continuing operations $0.04 $0.09
Income from discontinued operation $0.00 $0.00
Extraordinary gain from sale of discontinued operation $0.00 $0.00
------------- -------------
Diluted net income per share $0.04 $0.09
- --------------------------------------------------------------------------------- -------------
Shares used in computing net income per share
Basic 115,702 115,702
Diluted 118,139 118,139
6
CONDENSED CONSOLIDATED STATEMENTS OF INCOME RECONCILIATION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
Non-recurring
As Internet charges &
Reported Initiative gain on disposal Proforma
- ---------------------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $1,250,296 $798 $0 $1,249,498
Costs and expenses:
Direct 755,887 3,271 0 752,616
General and administrative 421,768 14,078 0 407,690
Depreciation and amortization 68,805 32 0 68,773
Non-recurring charges:
Restructuring 58,592 0 58,592 0
Disposal of business 17,325 0 17,325 0
- ---------------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 1,322,377 17,381 75,917 1,229,079
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations (72,081) (16,583) (75,917) 20,419
Transaction costs 0 0 0 0
Other income (expense) 11,163 0 0 11,163
- ---------------------------------------------------------------------------------------------------------------------------------
Total other income (expense) 11,163 0 0 11,163
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes (60,918) (16,583) (75,917) 31,582
Income taxes (benefit) expense (20,102) (5,473) (25,052) 10,423
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations (40,816) (11,110) (50,865) 21,159
Income from discontinued operation, net of taxes 16,770 0 0 16,770
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) before extraordinary gain (24,046) (11,110) (50,865) 37,929
Extraordinary gain from sale of discontinued operation, net of taxes 436,327 0 436,327 0
- ---------------------------------------------------------------------------------------------------------------------------------
Net income $412,281 ($11,110) $385,462 $37,929
- ---------------------------------------------------------------------------------------------------------------------------------
Basic net income per share:
Income(loss) from continuing operations ($0.35) $0.18
Income from discontinued operation $0.14 $0.14
Extraordinary gain from sale of discontinued operation $3.77 $0.00
------------- -------------
Basic net income per share $3.56 $0.33
============= =============
Diluted net income per share:
Income (loss) from continuing operations ($0.35) $0.18
Income from discontinued operation $0.14 $0.14
Extraordinary gain from sale of discontinued operation $3.77 $0.00
------------- -------------
Diluted net income per share $3.56 $0.33
- --------------------------------------------------------------------------------- -------------
Shares used in computing net income per share
Basic 115,711 115,711
Diluted 115,711 115,711