EXHIBIT 99.01
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 TRANSNATIONAL REPORTS 2nd QUARTER EPS OF $0.25
Net income up 44% from previous year's quarter; net new business wins climb 25%
for first half of 2003 vs. same period in 2002
RESEARCH TRIANGLE PARK, N.C. - August 12, 2003 - Quintiles Transnational Corp.
(Nasdaq: QTRN) today announced financial results for the quarter ended June 30,
2003. Earnings per share for second quarter 2003 were $0.25 on a diluted basis,
a 47% increase from second quarter 2002 EPS of $0.17 and exceeding analysts'
consensus expectation of $0.14 as reported by First Call. Net income for second
quarter 2003 was $29.6 million, a 44% increase from second quarter 2002 net
income of $20.6 million. Total gross revenues and net revenues for second
quarter 2003 were $520 million and $423 million, respectively, compared to $498
million and $390 million for second quarter 2002.
For the first half of 2003, net new business totaled an estimated $727 million,
a 25% increase versus the same period in 2002, resulting in a backlog on June
30, 2003, of approximately $1.7 billion, including $63 million in internal
backlog generated by Quintiles' strategic investment group, PharmaBio
Development.
"Our performance reflects Quintiles' efficiency improvements and our intensive
business development efforts," said Quintiles Transnational Chairman Dennis
Gillings, Ph.D. "We believe pharma and biotech companies increasingly are
recognizing Quintiles' ability to add value to their products, which is a
powerful differentiator in today's marketplace."
On April 10, 2003, Quintiles Transnational and Pharma Services Holding, Inc.
announced that they had signed a merger agreement for Quintiles' public
shareholders to receive $14.50 per share in cash. The transaction is subject to
Pharma Services' completion of its committed financing and customary conditions,
including regulatory and Quintiles' shareholder approvals. As previously
announced, Quintiles anticipates that a special meeting of shareholders to vote
on the proposed merger will be held in the third quarter of 2003.
Quintiles Transnational's second quarter 2003 financial briefing will be held at
11 a.m. EDT on Wednesday, August 13, and will be broadcast live over the Web.
Interested parties can access the webcast at
www.quintiles.com/corporate_info/broadcast_center. Additionally, a replay of the
webcast will be available via the same link about two hours after the call, and
will be archived for on-demand replay through 5 p.m. EDT, Friday, August 29.
Supplemental financial information, including the Company's Form 10-Q for second
quarter 2003, is available under "Additional Financials" in the Investors
section of Quintiles' Web site
www.quintiles.com/investors/additional_financials.
Quintiles Transnational helps improve healthcare worldwide by providing a broad
range of professional services, information and partnering solutions to the
pharmaceutical, biotechnology and healthcare industries. Headquartered near
Research Triangle Park, North Carolina, Quintiles 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 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,
uncertainties arising in connection with the proposed merger with a subsidiary
of Pharma Services Holding, Inc., including the possibility that regulatory
authorities and shareholders might not approve the merger, the necessary
financing may not be obtained, or that other conditions to closing under the
merger agreement may not be satisfied or waived, the risk that the market for
our products and services will not grow as we expect, the risk that our
PharmaBio transactions will not generate revenue or profit at the rate or levels
we anticipate or that royalty revenues under the PharmaBio agreements may not be
adequate to offset Quintiles' upfront and ongoing expenses in providing sales
and marketing services or in making milestone and marketing payments, our
ability to efficiently distribute backlog among project management groups and
match demand to resources, actual operating performance, variation in the actual
savings and operating improvements resulting from previous restructurings, 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. 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 2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended June 30 Six Months Ended June 30
2003 2002 2003 2002
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In thousands, except per share data
Gross revenues $ 520,033 $498,233 $1,031,640 $ 991,529
Costs, expenses and other:
Costs of revenues 348,409 347,898 690,160 690,392
General and administrative 137,232 125,895 268,236 253,128
Interest (income) expense, net (4,360) (3,436) (8,128) (6,698)
Other (income) expense, net (6,062) (2,198) (1,563) (1,129)
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475,219 468,159 948,705 935,693
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Income before income taxes 44,814 30,074 82,935 55,836
Income tax expense 15,237 9,925 28,198 18,426
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Income before equity in earnings of
unconsolidated affiliates and other 29,577 20,149 54,737 37,410
Equity in earnings of unconsolidated affiliates and other 20 477 16 477
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Income from continuing operations 29,597 20,626 54,753 37,887
Cumulative effect on prior years (to December 31, 2001)
of changing to a different method of recognizing
deferred income taxes 0 0 0 45,659
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Net income $29,597 $20,626 $54,753 $83,546
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Basic net income per share:
Income from continuing operations $ 0.25 $ 0.17 $ 0.46 $ 0.32
Cumulative effect of change in accounting principle - - - 0.39
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Basic net income per share $ 0.25 $ 0.17 $ 0.46 $ 0.70
===================== ============================
Diluted net income per share:
Income from continuing operations $ 0.25 $ 0.17 $ 0.46 $0.32
Cumulative effect of change in accounting principle - - - 0.38
--------------------- ----------------------------
Diluted net income per share $ 0.25 $ 0.17 $ 0.46 $ 0.70
===================== ============================
Shares used in computing net income per share:
Basic 118,420 118,352 118,261 118,518
Diluted 119,393 118,944 118,871 119,553
CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
June 30, December 31,
2003 2002
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In millions
Cash, cash equivalents and debt investments $765 $681
Investments in marketable equity securities 53 65
Investments in non-marketable equity securities and loans 48 46
Investments in unconsolidated affiliates 121 121
Working capital 669 568
Total assets 2,227 2,152
Debt including current portion 35 41
Shareholders' equity 1,680 1,598
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SCHEDULE 2 OF 2
SEGMENT INFORMATION
(Unaudited)
Three Months Ended June 30 Six Months Ended June 30
2003 2002 2003 2002
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In thousands
Service revenues:
Product development $ 251,374 $ 231,231 $ 501,410 $ 461,688
Commercial services 138,852 134,434 265,567 281,666
Informatics 0 7,657 0 20,347
Eliminations (10,893) (12,342) (18,988) (23,554)
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Total net service revenues 379,333 360,980 747,989 740,147
PharmaBio Development
Commercial rights and royalties 32,596 23,001 63,254 37,195
Investment 11,307 6,333 29,259 11,115
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Total PharmaBio Development 43,903 29,334 92,513 48,310
Total net revenues 423,236 390,314 840,502 788,457
Reimbursed service costs 96,797 107,919 191,138 203,072
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Gross revenues $ 520,033 $ 498,233 $1,031,640 $ 991,529
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Contribution (revenues less cost of revenues excluding
depreciation and amortization expense except as noted below):
Product development $ 128,080 $ 115,699 $ 254,394 $ 228,112
Commercial services 50,713 49,617 95,623 100,385
PharmaBio Development (includes amortization
and depreciation expense noted below) 13,336 2,743 32,116 7,283
Informatics 0 3,554 0 8,024
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Total contribution $ 192,129 $ 171,613 $ 382,133 $ 343,804
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Depreciation and amortization expense (excluded from
contribution except as noted below):
Product development $ 14,427 $ 14,692 $ 29,374 $ 29,114
Commercial services 5,875 5,298 10,866 10,514
PharmaBio Development (included in contribution) 2,595 716 5,090 1,119
Informatics 0 1,038 0 2,559
Corporate 203 250 413 480
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Total depreciation and amortization expense $ 23,100 $ 21,994 $ 45,743 $ 43,786
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