FOR IMMEDIATE RELEASE www.quintiles.com
CONTACT: Pat Grebe, Media Relations (media.info@quintiles.com)
Greg Connors, Investor Relations (invest@quintiles.com)
(919) 998 2000
QUINTILES REPORTS 4TH QUARTER EPS OF $0.14 BEFORE ONE-TIME GAINS,
UP 56% FROM PREVIOUS QUARTER
Achieves fifth consecutive quarter of higher operating income
RESEARCH TRIANGLE PARK, N.C. - January 23, 2002 - Quintiles Transnational Corp.
(Nasdaq: QTRN) today announced financial results for the quarter and year ended
Dec. 31, 2001. Earnings per share for fourth quarter 2001 were $0.14 on a
diluted basis, a 56% increase from the previous quarter's reported earnings per
share of $0.09, excluding non-recurring events. First Call's consensus estimate
for fourth quarter 2001 earnings per share was $0.11. Income from operations,
excluding non-recurring events, was $18.6 million vs. $11.7 million for the
previous quarter, a 59% increase. Net income for the quarter was $17 million, a
64% increase from the previous quarter's net income of $10.4 million, excluding
non-recurring events. Net revenue for the quarter was $404 million, compared to
$407 million for third quarter 2001. Non-recurring events included restructuring
charges, write-off of goodwill and other assets, disposal of business and
WebMD-related transactions. Please refer to the attached financial tables for
further details.
On a generally accepted accounting principles basis, earnings per share, on a
diluted basis, for fourth quarter 2001 were $0.60 compared to $0.06 for the same
quarter in the prior year. Income from operations was $94.8 million compared to
$3.9 million for fourth quarter 2000. Net income was $72.6 million compared to
$6.6 million for the same quarter in the prior year.
For the year, on a generally accepted accounting principles basis, income from
operations for 2001 was $48.2 million vs. a loss from operations of $68.2
million for 2000. Net income for 2001 was a loss of $33.8 million or $0.29 per
share compared to net income of $418.9 million or $3.61 per share for 2000.
"I'm extremely pleased to have exceeded analysts' consensus expectations for EPS
for the quarter and to have achieved our fifth straight quarter of increasing
income from operations before non-recurring events," said Quintiles
Transnational Chief Executive Officer Pam Kirby, Ph.D. "Our sequential growth in
EPS and year-over-year growth in income from operations show that our efforts to
increase efficiency are proving successful. At our annual Investor Conference
last month, I discussed our corporate-wide focus on three key areas - quality,
efficiency and innovation. I believe these results reflect our ability to
deliver high-quality services to customers with greater efficiency, and our
unique capabilities to help customers solve major corporate challenges.
"I am also pleased that we have achieved a record-breaking quarter of $145
million in cash provided by operations. Our balance sheet continues to be strong
with $602 million in cash and investments and only $38 million of debt. This
positions us well to continue to implement our strategy of innovative partnering
led by our PharmaBio group."
Quintiles' strategic investment group, PharmaBio Development, continued to
facilitate commercialization and product development agreements during the
fourth quarter, including a U.S. sales and marketing alliance with Discovery
Laboratories to commercialize Discovery's Surfaxin(R) product, now in Phase III
clinical trials for the treatment of respiratory ailments in newborns. PharmaBio
Development also acquired the North America license to market and sell
Solaraze(R), a topical gel approved by the U.S. Food and Drug Administration for
the treatment of actinic keratosis, a pre-cancerous skin condition linked to
over-exposure to the sun. Solaraze is being launched across the United States
this month.
Net new business in the second half of 2001 was $903.2 million, of which $32.2
million was internal backlog for services. Net new business in the second half
of 2001 increased 37% compared with the six-month period ending Dec. 31, 2000,
resulting in a backlog at Dec. 31, 2001, of approximately $2 billion. New
business backlog does not include future revenues related to commercial rights
from Quintiles' partnering relationships. In other fourth quarter developments,
Quintiles Transnational repurchased 1.18 million shares of its common stock for
an aggregate price of approximately $18.9 million as part of its previously
announced stock repurchase program.
Supplemental financial information is available now under "Additional
Financials" in the Investors section of Quintiles' Web site,
http://www.quintiles.com/corporate_info/investors/additional_financials.
Quintiles Transnational's fourth quarter and full year 2001 financial briefing
will be held at 11 a.m. EST on Thursday, Jan. 24, and will be broadcast live
over the Web. Interested parties can access the webcast at
http://www.quintiles.com/corporate_info/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. EST, Friday,
Feb. 8, 2002.
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 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, the risk that our uses of cash will not yield the intended
results, our ability to efficiently distribute backlog among project management
groups and match demand to resources, actual operating performance, the actual
savings and operating improvements resulting from the restructuring, the ability
to maintain large customer 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 the data
contract with WebMD, which terminates Feb. 28, 2002. 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.
# # #
SCHEDULE 1 OF 6
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended December 31 Twelve Months Ended December 31
2001 2000 2001 2000
- -------------------------------------------------------------------------------------------------- -------------------------------
In thousands, except per share data
Net revenue $403,999 $409,614 $1,619,872 $1,659,910
Costs and expenses:
Direct 231,889 237,908 956,748 993,795
General and administrative 128,545 144,033 520,753 565,801
Depreciation and amortization 24,960 23,762 96,103 92,567
Restructuring 0 0 54,169 58,592
Write-off of goodwill and other assets 7,002 0 27,122 0
Disposal of business 0 0 0 17,325
Settlement of litigation (83,200) 0 (83,200) 0
- -------------------------------------------------------------------------------------------------- -------------------------------
Total costs and expenses 309,196 405,703 1,571,695 1,728,080
- -------------------------------------------------------------------------------------------------- -------------------------------
Income (loss) from operations 94,803 3,911 48,177 (68,170)
Impairment of investments (2,967) (5,466) (348,015) (5,466)
Gain on investments, net 16,865 4,658 21,159 6,045
Other income, net 1,342 6,810 16,183 16,586
- -------------------------------------------------------------------------------------------------- -------------------------------
Total other income (expense) 15,240 6,002 (310,673) 17,165
- -------------------------------------------------------------------------------------------------- -------------------------------
Income (loss) before income taxes 110,043 9,913 (262,496) (51,005)
Income taxes expense (benefit) 37,470 3,271 (86,623) (16,831)
- -------------------------------------------------------------------------------------------------- -------------------------------
Income (loss) from continuing operations 72,573 6,642 (175,873) (34,174)
Income from discontinued operation, net of taxes 0 0 0 16,770
Extraordinary gain from sale of discontinued operation, net of taxes 0 0 142,030 436,327
- -------------------------------------------------------------------------------------------------- -------------------------------
Net income (loss) $72,573 $6,642 ($33,843) $418,923
- -------------------------------------------------------------------------------------------------- -------------------------------
Basic net income (loss) per share:
Income (loss) from continuing operations $0.61 $0.06 ($1.49) ($0.29)
Income from discontinued operation $0.00 $0.00 $0.00 $0.14
Extraordinary gain from sale of discontinued operation $0.00 $0.00 $1.20 $3.76
------------------------------ -------------------------------
Basic net income (loss) per share $0.61 $0.06 ($0.29) $3.61
============================== ===============================
Diluted net income (loss) per share:
Income (loss) from continuing operations $0.60 $0.06 ($1.49) ($0.29)
Income from discontinued operation $0.00 $0.00 $0.00 $0.14
Extraordinary gain from sale of discontinued operation $0.00 $0.00 $1.20 $3.76
------------------------------ -------------------------------
Diluted net income (loss) per share $0.60 $0.06 ($0.29) $3.61
- -------------------------------------------------------------------------------------------------- -------------------------------
Shares used in computing net income (loss) per share:
Basic 119,500 115,507 118,223 115,968
Diluted 120,964 118,248 118,223 115,968
Consolidated Balance Sheet Data
(Unaudited)
December 31, December 31,
2001 2000
- --------------------------------------------------------------------------------------------------
In millions
Cash, cash equivalents and debt investments $602 $438
Investments in marketable equity securities 78 384
Working capital 615 309
Total assets 1,948 1,962
Debt including current portion 38 39
Shareholders' equity 1,455 1,405
- --------------------------------------------------------------------------------------------------
SCHEDULE 2 OF 6
Proforma Condensed Consolidated Statements of Income*
(Unaudited)
Three Months Ended December 31 Twelve Months Ended December 31
2001 2000 2001 2000
- -------------------------------------------------------------------------------------------------- -------------------------------
In thousands, except per share data
Net revenue $403,999 $409,614 $1,619,872 $1,659,910
Costs and expenses:
Direct 231,889 237,908 956,748 993,795
General and administrative 128,545 144,033 520,753 565,801
Depreciation and amortization 24,960 23,762 96,103 92,567
- -------------------------------------------------------------------------------------------------- -------------------------------
Total costs and expenses 385,394 405,703 1,573,604 1,652,163
- -------------------------------------------------------------------------------------------------- --------------------------------
Income (loss) from operations 18,605 3,911 46,268 7,747
Impairment of investments (2,967) (5,466) (13,992) (5,466)
Gain on investments, net 8,395 4,658 12,689 6,045
Other income, net 1,342 6,810 16,183 16,586
- -------------------------------------------------------------------------------------------------- -------------------------------
Total other income (expense) 6,770 6,002 14,880 17,165
- -------------------------------------------------------------------------------------------------- -------------------------------
Income (loss) before income taxes 25,375 9,913 61,148 24,912
Income taxes expense (benefit) 8,385 3,271 20,189 8,220
- -------------------------------------------------------------------------------------------------- -------------------------------
Income (loss) from continuing operations 16,990 6,642 40,959 16,692
Income from discontinued operation, net of income taxes 0 0 0 16,770
- -------------------------------------------------------------------------------------------------- -------------------------------
Net income $16,990 $6,642 $40,959 $33,462
- -------------------------------------------------------------------------------------------------- -------------------------------
Basic net income per share:
Income from continuing operations $0.14 $0.06 $0.35 $0.14
Income from discontinued operation $0.00 $0.00 $0.00 $0.14
------------- -------------- ------------- -------------
Basic net income per share $0.14 $0.06 $0.35 $0.29
============= ============== ============= =============
Diluted net income per share:
Income from continuing operations $0.14 $0.06 $0.35 $0.14
Income from discontinued operation $0.00 $0.00 $0.00 $0.14
------------- -------------- ------------- -------------
Diluted net income per share $0.14 $0.06 $0.35 $0.29
- -------------------------------------------------------------------------------------------------- -------------------------------
Shares used in computing net income per share:
Basic 119,500 115,507 118,223 115,968
Diluted 120,964 118,248 118,223 115,968
* Proforma results exclude restructuring charges, write-off of goodwill and
other assets, disposal of business and WebMD Corporation related
transactions which include: gain from settlement of litigation including
sale of WebMD common stock, impairment of investment in WebMD common stock
and gain on sale of discontinued operation.
SCHEDULE 3 OF 6
Condensed Consolidated Statements of Income Reconciliation
For the three months ended December 31, 2001
(Unaudited)
As
Reported Adjustments Proforma*
- -----------------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $403,999 $0 $403,999
Costs and expenses:
Direct 231,889 0 231,889
General and administrative 128,545 0 128,545
Depreciation and amortization 24,960 0 24,960
Restructuring 0 0 0
Write-off of goodwill and other assets 7,002 7,002 0
Disposal of business 0 0 0
Settlement of litigation (83,200) (83,200) 0
- -----------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 309,196 (76,198) 385,394
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations 94,803 76,198 18,605
Impairment of investments (2,967) 0 (2,967)
Gain on investments, net 16,865 8,470 8,395
Other income, net 1,342 0 1,342
- -----------------------------------------------------------------------------------------------------------------------------
Total other income (expense) 15,240 8,470 6,770
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes 110,043 84,668 25,375
Income taxes expense (benefit) 37,470 29,085 8,385
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations 72,573 55,583 16,990
Income from discontinued operation, net of taxes 0 0 0
Extraordinary gain from sale of discontinued operation, net of taxes 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------
Net income (loss) $72,573 $55,583 $16,990
- -----------------------------------------------------------------------------------------------------------------------------
Basic net income (loss) per share:
Income (loss) from continuing operations $0.61 $0.14
Income from discontinued operation $0.00 $0.00
Extraordinary gain from sale of discontinued operation $0.00 $0.00
-------------- --------------
Basic net income (loss) per share $0.61 $0.14
============== ==============
Diluted net income (loss) per share:
Income (loss) from continuing operations $0.60 $0.14
Income from discontinued operation $0.00 $0.00
Extraordinary gain from sale of discontinued operation $0.00 $0.00
-------------- --------------
Diluted net income (loss) per share $0.60 $0.14
- ---------------------------------------------------------------------------------- --------------
Shares used in computing net income (loss) per share:
Basic 119,500 119,500
Diluted 120,964 120,964
* Proforma results exclude restructuring charges, write-off of goodwill and
other assets, disposal of business and WebMD Corporation related
transactions which include: gain from settlement of litigation including
sale of WebMD common stock, impairment of investment in WebMD common stock
and gain on sale of discontinued operation.
SCHEDULE 4 OF 6
Condensed Consolidated Statements of Income Reconciliation
For the twelve months ended December 31, 2001
(Unaudited)
As
Reported Adjustments Proforma*
- ----------------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $1,619,872 $0 $1,619,872
Costs and expenses:
Direct 956,748 0 956,748
General and administrative 520,753 0 520,753
Depreciation and amortization 96,103 0 96,103
Restructuring 54,169 54,169 0
Write-off of goodwill and other assets 27,122 27,122 0
Disposal of business 0 0 0
Settlement of litigation (83,200) (83,200) 0
- ----------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 1,571,695 (1,909) 1,573,604
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations 48,177 1,909 46,268
Impairment of investments (348,015) (334,023) (13,992)
Gain on investments, net 21,159 8,470 12,689
Other income, net 16,183 0 16,183
- ----------------------------------------------------------------------------------------------------------------------------
Total other income (expense) (310,673) (325,553) 14,880
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes (262,496) (323,644) 61,148
Income taxes expense (benefit) (86,623) (106,812) 20,189
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations (175,873) (216,832) 40,959
Income from discontinued operation, net of taxes 0 0 0
Extraordinary gain from sale of discontinued operation, net of taxes 142,030 142,030 0
- ----------------------------------------------------------------------------------------------------------------------------
Net income (loss) ($33,843) ($74,802) $40,959
- ----------------------------------------------------------------------------------------------------------------------------
Basic net income (loss) per share:
Income (loss) from continuing operations ($1.49) $0.35
Income from discontinued operation $0.00 $0.00
Extraordinary gain from sale of discontinued operation $1.20 $0.00
-------------- ---------------
Basic net income (loss) per share ($0.29) $0.35
============== ===============
Diluted net income (loss) per share:
Income (loss) from continuing operations ($1.49) $0.35
Income from discontinued operation $0.00 $0.00
Extraordinary gain from sale of discontinued operation $1.20 $0.00
-------------- ---------------
Diluted net income (loss) per share ($0.29) $0.35
- ---------------------------------------------------------------------------------- ---------------
Shares used in computing net income (loss) per share:
Basic 118,223 118,223
Diluted 118,223 118,223
</Table>
* Proforma results exclude restructuring charges, write-off of goodwill and
other assets, disposal of business and WebMD Corporation related
transactions which include: gain from settlement of litigation including
sale of WebMD common stock, impairment of investment in WebMD common stock
and gain on sale of discontinued operation.
SCHEDULE 5 OF 6
Condensed Consolidated Statements of Income Reconciliation
For the three months ended December 31, 2000
(Unaudited)
As
Reported Adjustments Proforma*
- ----------------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $409,614 $0 $409,614
Costs and expenses:
Direct 237,908 0 237,908
General and administrative 144,033 0 144,033
Depreciation and amortization 23,762 0 23,762
Restructuring 0 0 0
Write-off of goodwill and other assets 0 0 0
Disposal of business 0 0 0
Settlement of litigation 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 405,703 0 405,703
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations 3,911 0 3,911
Impairment of investments (5,466) 0 (5,466)
Gain on investments, net 4,658 0 4,658
Other income, net 6,810 0 6,810
- ----------------------------------------------------------------------------------------------------------------------------
Total other income (expense) 6,002 0 6,002
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes 9,913 0 9,913
Income taxes expense (benefit) 3,271 0 3,271
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations 6,642 0 6,642
Income from discontinued operation, net of taxes 0 0 0
Extraordinary gain from sale of discontinued operation, net of taxes 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------
Net income (loss) $6,642 $0 $6,642
- ----------------------------------------------------------------------------------------------------------------------------
Basic net income (loss) per share:
Income (loss) from continuing operations $0.06 $0.06
Income from discontinued operation $0.00 $0.00
Extraordinary gain from sale of discontinued operation $0.00 $0.00
-------------- ---------------
Basic net income (loss) per share $0.06 $0.06
============== ===============
Diluted net income (loss) per share:
Income (loss) from continuing operations $0.06 $0.06
Income from discontinued operation $0.00 $0.00
Extraordinary gain from sale of discontinued operation $0.00 $0.00
-------------- ---------------
Diluted net income (loss) per share $0.06 $0.06
- ---------------------------------------------------------------------------------- ---------------
Shares used in computing net income (loss) per share:
Basic 115,507 115,507
Diluted 118,248 118,248
* Proforma results exclude restructuring charges, write-off of goodwill and
other assets, disposal of business and WebMD Corporation related
transactions which include: gain from settlement of litigation including
sale of WebMD common stock, impairment of investment in WebMD common stock
and gain on sale of discontinued operation.
SCHEDULE 6 OF 6
Condensed Consolidated Statements of Income Reconciliation
For the twelve months ended December 31, 2000
(Unaudited)
As
Reported Adjustments Proforma*
- ----------------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
Net revenue $1,659,910 $0 $1,659,910
Costs and expenses:
Direct 993,795 0 993,795
General and administrative 565,801 0 565,801
Depreciation and amortization 92,567 0 92,567
Restructuring 58,592 58,592 0
Write-off of goodwill and other assets 0 0 0
Disposal of business 17,325 17,325 0
Settlement of litigation 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 1,728,080 75,917 1,652,163
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations (68,170) (75,917) 7,747
Impairment of investments (5,466) 0 (5,466)
Gain on investments, net 6,045 0 6,045
Other income, net 16,586 0 16,586
- ----------------------------------------------------------------------------------------------------------------------------
Total other income (expense) 17,165 0 17,165
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes (51,005) (75,917) 24,912
Income taxes expense (benefit) (16,831) (25,051) 8,220
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations (34,174) (50,866) 16,692
Income from discontinued operation, net of taxes 16,770 0 16,770
Extraordinary gain from sale of discontinued operation, net of taxes 436,327 436,327 0
- ----------------------------------------------------------------------------------------------------------------------------
Net income (loss) $418,923 $385,461 $33,462
- ----------------------------------------------------------------------------------------------------------------------------
Basic net income (loss) per share:
Income (loss) from continuing operations ($0.29) $0.14
Income from discontinued operation $0.14 $0.14
Extraordinary gain from sale of discontinued operation $3.76 $0.00
-------------- ---------------
Basic net income (loss) per share $3.61 $0.29
============== ===============
Diluted net income (loss) per share:
Income (loss) from continuing operations ($0.29) $0.14
Income from discontinued operation $0.14 $0.14
Extraordinary gain from sale of discontinued operation $3.76 $0.00
-------------- ---------------
Diluted net income (loss) per share $3.61 $0.29
- ---------------------------------------------------------------------------------- ---------------
Shares used in computing net income (loss) per share:
Basic 115,968 115,968
Diluted 115,968 115,968
* Proforma results exclude restructuring charges, write-off of goodwill and
other assets, disposal of business and WebMD Corporation related
transactions which include: gain from settlement of litigation including
sale of WebMD common stock, impairment of investment in WebMD common stock
and gain on sale of discontinued operation.