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EXHIBIT 99.03
FOR IMMEDIATE RELEASE www.quintiles.com
CONTACT: Pat Grebe, Media Relations (pgrebe@quintiles.com)
Greg Connors, Investor Relations (invest@quintiles.com)
(919) 941-2000
QUINTILES REPORTS RECORD NET REVENUE OF $1.19 BILLION FOR 1998,
BACKLOG GROWTH OF 77% AND 50% INCREASE IN NET INCOME FOR YEAR
RESEARCH TRIANGLE PARK, N.C. - January 26, 1999 - Quintiles Transnational Corp.
(Nasdaq: QTRN) today announced record financial results for the quarter and year
ended Dec. 31, 1998. Net revenue for the year was $1.19 billion, a 39% increase
over net revenue of $853 million for 1997. Net income grew 50% to $84 million
over $56 million for 1997. Diluted earnings per share grew 43% to $1.06 compared
to $0.74 for 1997.
Net revenue for the fourth quarter 1998 increased 33% to $326 million, from $244
million for the fourth quarter 1997. Net income grew 37% to $23 million versus
$17 million for the 1997 fourth quarter. Diluted earnings per share grew 31% to
$0.29 compared to $0.22 for the fourth quarter of 1997.
The 1997 financial results for Quintiles have been restated for several
strategic acquisitions completed during 1998 that were accounted for as poolings
of interests. When compared to the 1997 results as originally reported, net
revenues grew 46% in 1998 and net income grew 51%. For the fourth quarter of
1998, net revenues increased 40% and fourth quarter net income increased 37% as
compared to the fourth quarter of 1997 without restatements.
The company signed $1.33 billion of new business in the second half of 1998,
almost twice the new business signed in the first half, resulting in a backlog
at year-end of $1.88 billion in contract services to be performed in the future.
This represents a 77% increase in backlog from $1.06 billion at the end of 1997.
"Surpassing the $1 billion milestone in revenues and $2 billion in new business
signings in the same year is a tremendous achievement," said Dennis Gillings,
Ph.D., Chairman and Chief Executive Officer. "This shows very strong growth and
points to the fact that we are gaining market share."
In an agreement effective Jan. 1, 1999, Quintiles has assumed management of
Hoechst Marion Roussel's drug development facility in Kansas City, Mo., and now
employs about 500 of its staff, substantially expanding Quintiles' resources and
expertise in pre-clinical and clinical drug development. The agreement also
includes the industry's largest-ever service contract, with Quintiles to receive
revenues of between $436 million and $580 million over five years for continued
support and completion of ongoing Hoechst Marion Roussel drug development
projects.
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In December, Quintiles also announced the signings of definitive agreements to
acquire two leading U.S. companies, Pharmaceutical Marketing Services Inc. (and
its core operating company, Scott-Levin) and ENVOY Corp., to form the core of a
new healthcare informatics service group. Scott-Levin is a leading provider of
pharmaceutical market information and research services in the U.S. and ENVOY
Corp. is a leading provider of healthcare electronic data interchange and data
mining services.
"The additions of Scott-Levin and ENVOY Corp., when completed, will give our
customers access to information to improve the quality and effectiveness of
healthcare as we enter a new millennium," Dr. Gillings said. "Envoy and its
Synergy subsidiary have the ability to perform statistically sophisticated
analyses on a nationally representative U.S. database of patient-level
pharmaceutical and medical transactions, without disclosing patient identity or
other confidential information. We believe this capacity, coupled with
Quintiles' long-standing expertise in healthcare data interpretation and our
drug development and marketing skills, provides Quintiles the opportunity to
deliver new value-added products and services to our customers. Envoy also
brings the opportunity for development of additional products and services to
serve Envoy's unique customer base, including insurers, pharmacies and medical
providers."
Dr. Gillings continued: "Scott-Levin is a leader in collecting and interpreting
data based on surveys, audits and other related methods. Quintiles believes
that, upon completion of the acquisitions, the combined capacity of Scott-Levin
and Envoy to provide complete solutions based on both survey methodology and
statistical analysis of large healthcare databases will give Quintiles a
formidable opportunity to develop the next generation of health informatics."
Quintiles Transnational Corp. is the market leader in providing a full range of
integrated product development and marketing services to the pharmaceutical,
biotechnology and medical device industries. Quintiles also provides healthcare
policy consulting and health information management services to healthcare and
governmental organizations worldwide. Quintiles is headquartered near Research
Triangle Park, North Carolina. Quintiles operates through specialized work
groups dedicated to meeting customers' individual needs and has more than 15,000
employees worldwide and offices in 30 countries.
Information in this press release contains "forward-looking statements." These
statements involve risks and uncertainties that could cause actual results to
differ materially, including without limitation, the ability of the recently
combined businesses to be integrated with Quintiles' current operations, actual
operating performance, the ability to maintain large client contracts or to
enter into new contracts, and the actual costs of combining the businesses.
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.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended December 31 Twelve Months Ended December 31
1998 1997** 1998* 1997**
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In thousands, except per share data
Net revenue 326,083 244,464 1,188,012 852,900
Costs and expenses:
Direct 171,615 127,544 623,301 448,920
General and administrative 105,103 80,316 383,323 277,238
Depreciation and amortization 14,866 11,179 55,526 37,930
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Total costs and expenses 291,584 219,039 1,062,150 764,088
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Income from operations 34,499 25,425 125,862 88,812
Other income (expense) (1,393) (277) (3,324) (2,277)
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Income before income taxes 33,106 25,148 122,538 86,535
Income taxes 10,149 8,327 38,859 30,852
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Net income available to common shareholders $22,957 $16,821 $83,679 $55,683
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Basic net income per share $0.29 $0.22 $1.08 $0.76
Diluted net income per share $0.29 $0.22 $1.06 $0.74
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Shares used in computing net income per share
Basic 77,899 75,002 77,520 73,738
Diluted 79,349 76,259 79,015 75,275
* Reflects all 1998 transactions accounted for as poolings of interests.
** Restated to include certain 1998 pooling of interests transactions.
Financial information prior to January 1, 1998 has not been restated for
five pooling of interests transactions because the effect of such would be
immaterial.