1
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 EXCEEDS CONSENSUS EXPECTATIONS FOR 2ND QUARTER EPS;
PRODUCT DEVELOPMENT GROUP ACHIEVES RECORD QUARTERLY REVENUE
o 37% SEQUENTIAL INCREASE IN NEW BUSINESS WINS
o FIFTH CONSECUTIVE QUARTER OF INCREASES IN OPERATING MARGINS AND NET
INCOME PER SHARE FROM CONTINUING OPERATIONS
RESEARCH TRIANGLE PARK, N.C. - July 18, 2001 - Quintiles Transnational Corp.
(Nasdaq: QTRN) today announced financial results for second quarter 2001. Net
income for the quarter ended June 30, 2001, was $9.7 million compared to a loss
from continuing operations of $8.2 million for second quarter 2000. Second
quarter 2001 earnings per share were $0.08 on a diluted basis compared to a loss
of $0.07 per share for second quarter 2000. Including income from a discontinued
operation and one-time gain on the sale of assets, both related to ENVOY, second
quarter 2000 diluted earnings per share were $3.76. Net revenue for the second
quarter 2001 was $404.3 million compared to $423.1 million for second quarter
2000.
On a sequential quarterly basis, second quarter 2001 net income of $9.7 million
and EPS of $0.08 compared to net income of $7.8 million and EPS of $0.06 for
first quarter 2001. Second quarter 2001 net revenue of $404.3 million compared
to $404.5 million for first quarter 2001.
Net new business in the first half of 2001 was $904 million, a 37% increase
compared with the six-month period ending Dec. 31, 2000, and a 23% increase from
the first half of 2000, resulting in a backlog at June 30, 2001, of $1.9
billion.
"We're pleased to have recorded our fifth consecutive quarter of increasing
operating margins and net income from continuing operations, and to have
exceeded analysts' consensus expectations for EPS. Our new business signings
during the first half were strong," said Quintiles Chief Executive Officer Pam
Kirby, Ph.D.
"I'm particularly pleased by the financial performance of our Product
Development group, which achieved record quarterly revenue of $224.6 million. In
that group, in addition to revenue growth, we're seeing improved margins because
of increased efficiencies and better structuring of contracts. We continue to
focus on building strategic relationships with our customers, as illustrated by
today's announcement of a five-year agreement with Solvay Pharmaceuticals, which
calls for Quintiles to provide at least 40% of Solvay's outsourced projects in
the first year and at least 50% in the four years to follow. Our global
resources, therapeutic expertise and high-quality execution have made Quintiles
the industry leader in delivering these types of creative corporate solutions
for our customers."
2
Quintiles Chairman Dennis Gillings, Ph.D., said: "Our corporate ventures group,
PharmaBio Development, had a very active second quarter in signing seven
agreements to help our customers develop or commercialize their products.
PharmaBio financing was key in reaching agreements with ArgoMed and Pilot
Therapeutics to help commercialize their products to treat prostate disease and
asthma, respectively, and in our preferred provider alliance with Innapharma to
develop its treatments for central nervous system disorders.
"Our strategic alliance with Care Capital, the life-sciences investment fund
founded by former SmithKline Beecham CEO Jan Leschly, already has yielded
results, and I'm excited by the capabilities this alliance offers pharma and
biotech companies."
Supplemental financial information is available now under "Additional
Financials" in the Investors section of Quintiles' Web site,
www.quintiles.com/investors/additional_financials.
Quintiles Transnational's second quarter 2001 financial briefing will be held at
11 a.m. EDT on Thursday, July 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. The replay will be available through 5 p.m., Friday, August 3,
2001.
Quintiles Transnational is the world's leading provider of information,
technology and services to help bring new medicines to patients faster and
improve healthcare. Headquartered near Research Triangle Park, North Carolina,
Quintiles employs a global workforce of 18,000 in 39 countries. Quintiles
Transnational is a member of the S&P 500 and Fortune 1000. For more information
visit the company's Web site at www.quintiles.com.
The schedule attached to this release is 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, the risk the
market for our products and services will not grow as we expect, the risk that
our PharmaBio transactions will not generate revenues or profit at the rate or
levels we anticipate, 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, and the ability
to operate successfully in new lines of business. Our data products business
remains subject to state and federal regulations, and contracts with data
vendors, including WebMD. 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 Annual
Report on Form 10-K, its Form 8-Ks, and its other periodic reports, including
Form 10-Qs.
# # #
3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended June 30 Six Months Ended June 30
2001 2000 2001 2000
- ------------------------------------------------------------------------------------------------------ -------------------------
In thousands, except per share data
Net revenue $404,300 $423,107 $808,770 $837,952
Costs and expenses:
Direct 241,108 255,901 482,114 508,310
General and administrative 129,402 142,597 264,119 280,726
Depreciation and amortization 23,893 22,749 46,546 45,871
Non-recurring charges:
Restructuring 2,146 0 2,146 58,592
Disposal of business 0 17,325 0 17,325
- --------------------------------------------------------------------------------------------------- -------------------------
Total costs and expenses 396,549 438,572 794,925 910,824
- --------------------------------------------------------------------------------------------------- -------------------------
Income (loss) from operations 7,751 (15,465) 13,845 (72,872)
Total other income (expense) 6,687 3,193 12,221 5,141
- --------------------------------------------------------------------------------------------------- -------------------------
Income (loss) before income taxes 14,438 (12,272) 26,066 (67,731)
Income taxes expense (benefit) 4,764 (4,050) 8,601 (22,350)
- --------------------------------------------------------------------------------------------------- -------------------------
Income (loss) from continuing operations 9,674 (8,222) 17,465 (45,381)
Income from discontinued operation, net of taxes 0 6,176 0 16,770
Extraordinary gain from sale of discontinued operation, net of taxes 0 436,327 0 436,327
- --------------------------------------------------------------------------------------------------- -------------------------
Net income $9,674 $434,281 $17,465 $407,716
=================================================================================================== =========================
Basic net income per share:
Income (loss) from continuing operations $0.08 ($0.07) $0.15 ($0.39)
Income from discontinued operation $0.00 $0.05 $0.00 $0.15
Extraordinary gain from sale of discontinued operation $0.00 $3.78 $0.00 $3.78
-------------- -------------- ---------- -----------
Basic net income per share $0.08 $3.76 $0.15 $3.53
============== ============== ========== ===========
Diluted net income per share:
Income (loss) from continuing operations $0.08 ($0.07) $0.14 ($0.39)
Income from discontinued operation $0.00 $0.05 $0.00 $0.15
Extraordinary gain from sale of discontinued operation $0.00 $3.78 $0.00 $3.78
-------------- -------------- ---------- -----------
Diluted net income per share $0.08 $3.76 $0.14 $3.53
=================================================================================================== =========================
Shares used in computing net income per share:
Basic 117,149 115,394 116,746 115,417
Diluted 120,847 115,394 120,500 115,417
Consolidated Balance Sheet Data
(Unaudited)
June 30, December 31,
2001 2000
- ---------------------------------------------------------------------------------------------------
In millions
Cash, cash equivalents and debt investments $449 $438
Investments in marketable equity securities 347 384
Working capital 437 309
Total assets 1,980 1,962
Debt including current portion 33 39
Shareholders' equity 1,412 1,405
===================================================================================================