1
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1998
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Commission file number 340-23520
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QUINTILES TRANSNATIONAL CORP.
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(Exact name of registrant as specified in its charter)
North Carolina 56-1714315
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4709 Creekstone Dr., Suite 200
Durham, NC 27703-8411
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(Address of principal executive offices) (Zip Code)
(919) 941-2000
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes No [ ]
The number of shares of Common Stock, $.01 par value, outstanding as of October
30, 1998 was 77,837,048.
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Quintiles Transnational Corp. and Subsidiaries
Index
Page
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Part I. Financial Information
Item 1. Financial Statements (unaudited)
Condensed consolidated balance sheets -
September 30, 1998 and December 31, 1997 3
Condensed consolidated statements of
income - Three months ended
September 30, 1998 and 1997; nine months ended
September 30, 1998 and 1997 4
Condensed consolidated statements of
cash flows - Nine months ended
September 30, 1998 and 1997 5
Notes to condensed consolidated financial
statements - September 30, 1998 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosure about
Market Risk 14
Part II. Other Information 14
Signatures 16
Exhibit Index 17
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Quintiles Transnational Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
September 30 December 31
1998 1997
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(unaudited) (Note 1)
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 88,499 $ 78,007
Accounts receivable and unbilled services 295,425 210,444
Investments 44,448 44,372
Prepaid expenses 26,931 22,261
Other current assets 10,738 22,596
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Total current assets 466,041 377,680
Property and equipment 353,095 265,851
Less accumulated depreciation 113,939 80,479
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239,156 185,372
Intangibles and other assets:
Intangibles 71,369 71,976
Investments 59,514 69,089
Deferred income taxes 68,683 68,651
Deposits and other assets 33,189 26,130
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232,755 235,846
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Total assets $ 937,952 $ 798,898
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Lines of credit $ 366 $ 10,335
Accounts payable and accrued expenses 118,819 96,059
Credit arrangements, current 13,519 14,867
Unearned income 120,827 85,327
Income taxes and other current liabilities 14,843 6,234
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Total current liabilities 268,374 212,822
Long-term liabilities:
Credit arrangements, less current portion 153,879 149,379
Long-term obligations 24,172 20,985
Deferred income taxes and other liabilities 26,580 28,607
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204,631 198,971
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Total liabilities 473,005 411,793
Shareholders' equity:
Common stock and additional paid-in capital,
76,765,856 and 73,853,867 shares issued and
outstanding at September 30, 1998 and
December 31,1997, respectively 356,059 335,312
Retained earnings 112,379 60,008
Other equity (3,491) (8,215)
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Total shareholders' equity 464,947 387,105
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Total liabilities and shareholders' equity $ 937,952 $ 798,898
========= =========
See accompanying notes.
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Quintiles Transnational Corp. and Subsidiaries
Condensed Consolidated Statements of Income
(unaudited)
Three Months Nine Months
Ended September 30 Ended September 30
1998 1997 1998 1997
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(In thousands, except per share data)
Net revenue $ 303,474 $ 206,697 $ 848,379 $ 580,762
Costs and expenses:
Direct 159,284 109,174 444,369 301,863
General and administrative 98,298 65,471 274,925 189,954
Depreciation and amortization 14,166 9,558 40,431 26,409
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271,748 184,203 759,725 518,226
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Income from operations 31,726 22,494 88,654 62,536
Other expense, net (989) (829) (1,917) (1,885)
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Income before income taxes 30,737 21,665 86,737 60,651
Income taxes 9,825 7,458 27,823 22,102
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Net income $ 20,912 $ 14,207 $ 58,914 $ 38,549
========= ========= ========= =========
Basic net income per share $ 0.27 $ 0.19 $ 0.77 $ 0.54
========= ========= ========= =========
Diluted net income per share $ 0.27 $ 0.19 $ 0.76 $ 0.52
========= ========= ========= =========
See accompanying notes.
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Quintiles Transnational Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited)
Nine Months Ended September 30
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1998 1997
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(In thousands)
Operating activities
Net income $ 58,914 $ 38,549
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 40,431 26,409
Provision for deferred income tax expense (1,484) --
Change in operating assets and liabilities (23,767) (30,855)
Other 241 (374)
Change in fiscal year of pooled entity -- (581)
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Net cash provided by operating activities 74,335 33,148
Investing activities
Proceeds from disposition of property and equipment 4,505 2,659
Acquisition of property and equipment (72,296) (59,320)
Acquisition of intangible assets, net of cash acquired 4,307 (3,445)
Payment of non-recurring transaction costs -- (5,648)
Payment of dividend (866) --
Security investments, net 9,722 (31,000)
Change in fiscal year of pooled entity -- (17)
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Net cash used in investing activities (54,628) (96,771)
Financing activities
(Decrease) increase in lines of credit, net (9,015) 6,021
Principal payments on credit arrangements (13,256) (28,493)
Issuance of common stock, net 12,212 95,689
Dividend paid by pooled entity -- (1,633)
Change in fiscal year of pooled entity -- 57
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Net cash (used in) provided by financing activities (10,059) 71,641
Effect of foreign currency exchange rate changes on cash 844 (1,562)
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Increase in cash and cash equivalents 10,492 6,456
Cash and cash equivalents at beginning of period 78,007 68,730
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Cash and cash equivalents at end of period $ 88,499 $ 75,186
======== ========
See accompanying notes.
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Quintiles Transnational Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
September 30, 1998
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine month periods ended
September 30, 1998 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1998. For further information, refer to
the Consolidated Financial Statements and Notes thereto included in the Annual
Report on Form 10-K for the year ended December 31, 1997 of Quintiles
Transnational Corp. (the "Company").
The balance sheet at December 31, 1997 has been derived from the audited
financial statements of the Company. The balance sheet does not include all of
the information and notes required by generally accepted accounting principles
for complete financial statements.
2. Mergers and Acquisitions
The Company acquired the following companies in the nine months ended September
30, 1998 in transactions that were accounted for as poolings of interests.
Acquired Companies Date Acquired Shares Issued*
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Pharma Networks, N.V. February 2, 1998 132,000 shares
Technology Assessment Group February 4, 1998 460,366 shares
T2A S.A. February 26, 1998 311,899 shares
More Biomedical Contract Research Organization Ltd. February 27, 1998 16,600 shares
Crossbox Limited t/a Cardiac Alert May 31, 1998 70,743 shares
ClinData International Pty Ltd. May 31, 1998 123,879 shares
The Royce Consultancy, Limited August 24, 1998 664,194 shares
Data Analysis Systems, Inc. September 9, 1998 358,897 shares
* The Company's Common Stock was issued in exchange for all the outstanding
shares of each of the acquired companies.
All consolidated financial data for periods subsequent to January 1, 1998 have
been restated to include the results of the pooled companies. The financial data
of the pooled companies prior to January 1, 1998 were not materially different
from that previously reported by the Company, and thus have not been restated.
The results from operations of the pooled companies for the periods from January
1, 1998 through the date of each acquisition are not material.
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Quintiles Transnational Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited) -- Continued
3. Long Term Obligation
On May 31, 1998, the Company acquired a clinical trial production and warehouse
facility in Livingston, Scotland. The 58,000-square-foot facility in Livingston,
Scotland, will be integrated with Quintiles' two other nearby facilities, one
(at Bathgate) specializing in clinical trial packaging and distribution and the
other (at Edinburgh) providing services in all aspects of preclinical and
pharmaceutical drug development.
The Company has made a purchase commitment valued at approximately (pound)1.75
million ($2.9 million) with payment due in May, 2001.
4. Net Income Per Share
The following table sets forth the computation of basic and diluted net income
per share (in thousands, except per share data):
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
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Net income $20,912 $14,207 $58,914 $38,549
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Weighted average shares:
Basic weighted average shares 76,724 73,011 76,476 71,948
Effect of dilutive securities - Stock options 1,384 1,675 1,511 1,684
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Diluted weighted average shares 78,108 74,686 77,987 73,632
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Basic net income per share $ 0.27 $ 0.19 $ 0.77 $ 0.54
Diluted net income per share $ 0.27 $ 0.19 $ 0.76 $ 0.52
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Quintiles Transnational Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited) -- Continued
5. Comprehensive Income
The Company adopted Financial Accounting Standard Board Statement No. 130,
"Reporting Comprehensive Income" in the first quarter of 1998. The adoption of
Statement No. 130 did not have an impact on the Company's financial position or
results from operations.
The following table represents the Company's comprehensive income for the three
and nine months ended September 30, 1998 and 1997 (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
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Net income $20,912 $ 14,207 $58,914 $ 38,549
Other comprehensive income:
Unrealized gain(loss) on marketable
securities, net of tax 165 (142) 197 17
Foreign currency adjustment 6,110 (2,474) 4,437 (8,568)
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Comprehensive income $27,187 $ 11,591 $63,548 $ 29,998
======= ======== ======= ========
6. Subsequent Events
On October 8, 1998, the Company acquired Simirex Inc. and Simirex International
Ltd. ("Simirex"), a New Jersey-based provider of clinical packaging services for
the U.S. pharmaceutical industry. The acquisition of Simirex will be accounted
for as a pooling of interests.
On October 12, 1998, the Company acquired Groupe H2V SA ("Serval"), a
Paris-based French contract sales and marketing company. The acquisition of
Serval will be accounted for as a purchase.
On October 12, 1998, the Company acquired Q.E.D. International, Inc. ("Q.E.D."),
a New York-based provider of integrated product marketing and communication
services for pharmaceutical companies in the U.S. market. The acquisition of
Q.E.D. will be accounted for as a pooling of interests.
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Quintiles Transnational Corp. and Subsidiaries
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Three Months Ended September 30, 1998 and 1997
Net revenue for the third quarter of 1998 was $303.5 million, an increase of
$96.8 million or 46.8% over third quarter of 1997 net revenue of $206.7 million.
Growth occurred across each of the Company's three geographic regions with
particularly strong growth in the Americas contract research services. Factors
contributing to the growth included an increase of contract service offerings,
the provision of increased services rendered under existing contracts and the
initiation of services under contracts awarded subsequent to the third quarter
of 1997.
Direct costs, which include compensation and related fringe benefits for
billable employees and other expenses directly related to contracts, were $159.3
million or 52.5% of net revenue for the third quarter of 1998 versus $109.2
million or 52.8% of net revenue for the third quarter of 1997.
General and administrative expenses, which include compensation and fringe
benefits for administrative employees, non-billable travel, professional
services, advertising, computer and facility expenses, were $98.3 million or
32.4% of net revenue for the third quarter of 1998 versus $65.5 million or 31.7%
of net revenue for the third quarter of 1997. The $32.8 million increase in
general and administrative expenses was primarily due to an increase in
personnel, facilities and locations and outside services resulting from the
Company's growth. Also included in the increase is approximately $1.2 million of
incremental costs related to the Company's Year 2000 Program.
Depreciation and amortization were $14.2 million or 4.7% of net revenue for the
third quarter of 1998 versus $9.6 million or 4.6% of net revenue for the third
quarter of 1997.
Income from operations was $31.7 million or 10.5% of net revenue for the third
quarter of 1998 versus $22.5 million or 10.9% of net revenue for the third
quarter of 1997.
The effective tax rate for the third quarter of 1998 was 32.0% versus a 34.4%
effective tax rate for the third quarter of 1997. The effective tax rate
reduction resulted from utilization of foreign net operating losses. Since the
Company conducts operations on a global basis, its effective tax rate may vary.
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Quintiles Transnational Corp. and Subsidiaries
Results of Operations -- Continued
Nine Months Ended September 30, 1998 and 1997
Net revenue for the nine months ended September 30, 1998 was $848.4 million, an
increase of $267.6 million or 46.1% over net revenue of $580.8 million for the
nine months ended September 30, 1997. Growth occurred across each of the
Company's three geographic regions. Factors contributing to the growth included
an increase of contract service offerings, the provision of increased services
rendered under existing contracts and the initiation of services under contracts
awarded subsequent to the nine months ended September 30, 1997.
Direct costs, which include compensation and related fringe benefits for
billable employees and other expenses directly related to contracts, were $444.4
million or 52.4% of net revenue for the nine months ended September 30, 1998
versus $301.9 million or 52.0% of net revenue for the nine months ended
September 30, 1997.
General and administrative expenses, which include compensation and fringe
benefits for administrative employees, non-billable travel, professional
services, advertising, computer and facility expenses, were $274.9 million or
32.4% of net revenue for the nine months ended September 30, 1998 versus $190.0
million or 32.7% of net revenue for the nine months ended September 30, 1997.
The $84.9 million increase in general and administrative expenses was primarily
due to an increase in personnel, facilities and locations and outside services
resulting from the Company's growth. Also included in the increase is
approximately $1.2 million of incremental costs related to the Company's Year
2000 Program.
Depreciation and amortization were $40.4 million or 4.8% of net revenue for the
nine months ended September 30, 1998 versus $26.4 million or 4.5% of net revenue
for the nine months ended September 30, 1997.
Income from operations was $88.7 million or 10.4% of net revenue for the nine
months ended September 30, 1998 versus $62.5 million or 10.8% of net revenue for
the nine months ended September 30, 1997.
The effective tax rate for the nine months ended September 30, 1998 was 32.1%
versus a 36.4% effective tax rate for the nine months ended September 30, 1997.
The effective tax rate reduction resulted from utilization of foreign net
operating losses. Since the Company conducts operations on a global basis, its
effective tax rate may vary.
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Quintiles Transnational Corp. and Subsidiaries
Liquidity and Capital Resources
Cash inflows from operations were $74.3 million for the nine months ended
September 30, 1998 versus cash inflows of $33.1 million for the comparable
period of 1997. Investing activities, for the nine months ended September 30,
1998, consisted primarily of capital asset purchases and investment security
purchases and maturities. Capital asset purchases required an outlay of cash of
$72.3 million for the nine months ended September 30, 1998 compared to an outlay
of $59.3 million for the same period in 1997.
As of September 30, 1998, total working capital was $197.7 million versus $164.9
million as of December 31, 1997. Net receivables from clients (accounts
receivable and unbilled services, net of unearned income) were $174.6 million at
September 30, 1998 as compared to $125.1 million at the end of 1997.
The Company has a (pound)15.0 million (approximately $25.4 million) unsecured
line of credit with a U.K. bank and a (pound)5.0 million (approximately $8.5
million) unsecured line of credit with a second U.K. bank. At September 30,
1998, the Company had (pound)19.8 million (approximately $33.6 million)
available under these arrangements.
On August 7, 1998, the Company entered into a $150 million senior unsecured
credit facility ("$150.0 million facility") with a U.S. bank. At September 30,
1998, the Company had the full $150 million available under this credit
facility. Based upon its current financing plan, the Company believes the $150.0
million facility would be available to retire its long-term credit arrangements
and obligations, if necessary.
Based on its current operating plan, the Company believes that its available
cash and cash equivalents and investments in marketable securities, together
with future cash flows from operations and borrowings under its line of credit
agreements will be sufficient to meet its foreseeable cash needs in connection
with its operations. As part of its business strategy, the Company reviews many
acquisition candidates in the ordinary course of business, and in addition to
acquisitions already made, the Company is continually evaluating new acquisition
and expansion possibilities. The Company may from time to time seek to obtain
debt or equity financing in its ordinary course of business or to facilitate
possible acquisitions or expansion.
Impact of Year 2000
The Company has established a Year 2000 Program to address the Year 2000 issue.
The Year 2000 issue could cause disruptions of the Company's operations,
including, among other things, a temporary inability to process information,
receive information, services or products from third parties, interface with
customers in the performance of contracts, or operate or communicate in some or
all of the regions in which it does business. The Company's computing
infrastructure is based on industry standard systems. The Company does not
depend on large legacy systems and does not use mainframes. Rather, the scope of
its Year 2000 Program includes unique software systems and
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Quintiles Transnational Corp. and Subsidiaries
Impact of Year 2000 -- Continued
tools in each of its service groups, especially its contract research service
group, embedded systems in its laboratory and manufacturing operations,
facilities such as elevators and fire alarms in over 70 offices (which also
involve embedded technology) and numerous supplier and other business
relationships. The Company has identified critical systems within each service
group and is devoting its resources to address these items first.
The framework for the Company's Year 2000 Program prescribes broad inventory,
assessment and planning phases. The Company is in the process of assessing those
systems, facilities and business relationships which it believes may be
vulnerable to the Year 2000 issue and which it believes could impact the
Company's operations. Although the Company cannot control whether and how third
parties will address the Year 2000 issue, its assessment also will include a
limited evaluation of certain services on which the Company is substantially
dependent, and the Company plans to develop contingency plans for possible
deficiencies in those services. The Company anticipates completing the
assessment for all business critical systems during 1998. As the Company
completes the assessment of its systems, the Company is developing plans to
renovate, replace or retire them, as appropriate, if they are affected by the
Year 2000 issue. Individual projects generally include launch, analysis,
remediation testing and deployment phases. The Company expects to address most
systems relating to its healthcare consulting services in 1998, with completion
expected in the first half of 1999. The Company also expects to address most of
its contract sales systems in 1998, and complete deployment in the first half of
1999. The Company's contract research services utilize numerous systems, which
the Company must address independently on disparate schedules, depending on the
magnitude and complexity of the individual system. The Company anticipates that
critical deployment of these systems (or migration to replacement systems where
necessary) will occur primarily in 1999. The Company expects to complete the
core components of its Year 2000 Program before there is a significant risk that
internal Year 2000 problems will have a material impact on its operations. Until
the Company has completed its remediation, testing and deployment plans, the
Company believes it is premature to develop contingency plans to address what
would happen if its execution of these plans were to fail to address the Year
2000 issue.
The Company faces both internal and external risks from the Year 2000 issue. If
realized, these risks could have a material adverse effect on the Company's
business, results of operations or financial condition. The Company's primary
internal risk is that its systems will not be Year 2000 compliant on time. The
magnitude of this risk depends on the Company's ability to achieve compliance of
both internally and externally developed systems or to migrate to alternate
systems in a timely fashion. The decentralized nature of the Company's business
may compound this risk if the Company is unable to coordinate efforts across its
global operations on a timely basis. The Company believes that its Year 2000
Program will successfully address these risks, however, the Company cannot
guarantee that this program will be completed in a timely manner.
Notwithstanding the Company's Year 2000 Program, the Company also faces external
risks that may be beyond its control. The Company's international operations and
its relationships with foreign third parties create additional risks for the
Company, as many countries outside the United States
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Quintiles Transnational Corp. and Subsidiaries
Impact of Year 2000 -- Continued
have been less attuned to the Year 2000 issue. These risks include the
possibility that infrastructural systems, such as electricity, water, natural
gas or telephony, will fail in some or all of the regions in which the Company
operates, as well as the danger that the internal systems of its foreign
suppliers, service providers and customers will fail. The Company's business
also requires considerable travel, and the Company's ability to perform services
under its customer contracts could be negatively affected if air travel is
disrupted by the Year 2000 issue.
In addition, the Company's business depends heavily on the healthcare industry,
particularly on third party physician investigators. The healthcare industry,
and physicians' groups in particular, to date may not have focused on the Year
2000 issue to the same degreee as some other industries, especially outside of
major metropolitan centers. As a result, the Company faces increased risk that
its physician investigators will be unable to provide the Company with the data
that it needs to perform under its contracts on time. Thus, the clinical study
involved could be slowed or brought to a halt. Also, the failure of the
Company's customers to address the Year 2000 issue could negatively impact their
ability to utilize the Company's services. While the Company intends to develop
contingency plans to address certain of these risks, there can be no assurance
that any developed plans will sufficiently insulate the Company from the effects
of these risks. Any disruptions resulting from the realization of these risks
would affect the Company's ability to perform its services. If the Company is
unable to receive or process information, or if third parties are unable to
provide information or services to it, the Company may not be able to meet
milestones or obligations under its customer contracts, which could have a
material adverse effect on the Company's business and financial results.
The Company estimates that the aggregate costs of its Year 2000 Program will be
approximately $14 million, including costs already incurred. A significant
portion of these costs, approximately $6 million are not likely to be
incremental costs, but rather will represent the redeployment of existing
resources. This reallocation of resources is not expected to have a significant
impact on the day-to-day operations of the Company. Total Year 2000 Program
costs of approximately $1.6 million were incurred by the Company through
September 30, 1998, of which approximately $1.2 million represented incremental
expense. The Company's estimates regarding the cost, timing and impact of
addressing the Year 2000 issue are based on numerous assumptions of future
events, including the continued availability of certain resources, the ability
of the Company to meet its deadlines and the cooperation of third parties.
However, there can be no guarantee that the assumptions will be correct and that
these estimates will be achieved. Actual results could differ materially from
those expected by the Company.
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Quintiles Transnational Corp. and Subsidiaries
Cautionary Statement for Forward-Looking Information
Information set forth in this Form 10-Q, including Management's Discussion and
Analysis of Financial Condition and Results of Operations, contains various
"forward looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Act of 1934, which statements
represent the Company's judgement concerning the future and are subject to risks
and uncertainties that could cause the Company's actual operating results and
financial position to differ materially. Such forward looking statements can be
identified by the use of forward looking terminology such as "may," "will,"
"expect," "anticipate," "estimate," "believe," or "continue," or the negative
thereof or other variations thereof or comparable terminology.
The Company cautions that any such forward looking statements are further
qualified by important factors that could cause the Company's actual operating
results to differ materially from those in the forward looking statements,
including without limitation, the ability of the Company to integrate acquired
businesses with the Company's historical operations, The costs and impact of the
year 2000 issue, the actual costs of the combining of the acquired businesses,
actual operating performance, the ability to maintain large client contracts or
to enter into new contracts and the level of demand for services. See Exhibit
99.01 for additional factors that could cause the Company's actual results to
differ.
Item 3. Quantitative and Qualitative Disclosure About Market Risk --
Not Applicable
Part II. Other Information
Item 1. Legal Proceedings -- Not applicable
Item 2. Changes in Securities
On August 24, 1998, the Company completed the acquisition of
The Royce Consultancy Limited ("Royce"), a leading
pharmaceutical sales representative recruitment and contract
sales organization in the U.K. The Company issued 664,194
shares of its Common Stock, par value $0.01 per share, in
connection with the acquisition, which shares were received
by the holders of all of the outstanding share capital of
Royce in exchange for such interests. The shares were issued
in reliance on a claim of exemption pursuant to section 4(2)
of the Securities Act of 1933, as amended, based on
representations made by the recipients in the share
acquisition agreement.
On September 9, 1998, the Company completed the acquisition
of Data Analysis Systems, Inc.("DAS"), a leader in sales
force planning and territory optimization systems for the
pharmaceutical industry. The Company issued 358,897 shares
of its Common Stock, par value $0.01 per share, in
connection with the acquisition, which shares were received
by the holders of all of the outstanding share capital of
DAS in exchange for such interests.
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Quintiles Transnational Corp. and Subsidiaries
Part II. Other Information -- Continued
The shares were issued in reliance on a claim of exemption
pursuant to Rule 506 of Regulation D and section 4(2) of the
Securities Act of 1933, as amended, based on representations
made by the recipients in the merger agreement.
On March 10, 1998, the Company completed an acquisition in
which the consideration paid to the acquired company's two
stockholders included 16,740 shares of the Company's Common
Stock, par value $0.01 per share. The shares were issued in
reliance on a claim of exemption pursuant to section 4(2) of
the Securities Act of 1933, as amended, based on
representations made by the recipients in the merger
agreement.
During the three months ended September 30, 1998, options to
purchase 3,200 shares of Common Stock were exercised at an
average exercise price of $4.3175 per share in reliance on
Rule 701 under the Securities Act of 1933. Such options were
issued by the Company prior to becoming subject to the
requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, pursuant to its
Non-qualified Employee Incentive Stock Option Plan.
Item 3. Defaults upon Senior Securities -- Not applicable
Item 4. Submission of Matters to a Vote of Security Holders -- Not
applicable
Item 5. Other Information -- Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Description
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10.01 Credit Agreement dated as of
August 7, 1998.
27.01 Financial Data Schedule
99.01 Risk Factors
(b) During the three months ended September 30, 1998,
the Company filed one report on Form 8-K, dated
July 22, 1998, including its press release
announcing the Company's fiscal second quarter
1998 earnings information. No other reports on
Form 8-K were filed during the three months ended
September 30, 1998. Subsequently, the Company
filed one report on Form 8-K dated October 21,
1998, including its press release announcing the
Company's fiscal third quarter 1998 earnings
information.
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Quintiles Transnational Corp. and Subsidiaries
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Quintiles Transnational Corp.
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Registrant
Date November 12, 1998 /s/ Dennis B. Gillings
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Dennis B. Gillings, Chief Executive Officer
Date November 12, 1998 /s/ Rachel R. Selisker
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Rachel R. Selisker, Chief Financial Officer
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Quintiles Transnational Corp. and Subsidiaries
EXHIBIT INDEX
Exhibit Description
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10.01 Credit Agreement dated as of August 7, 1998.
27.01 Financial Data Schedule
99.01 Risk Factors
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