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Quintiles Transnational Reports 2nd Quarter EPS of $0.25
TO BUSINESS AND MEDICAL EDITORS:
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., Aug. 12 /PRNewswire-FirstCall/ -- 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 Six Months Ended
June 30 June 30
2003 2002 2003 2002
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)
475,219 468,159 948,705 935,693
Income before income taxes 44,814 30,074 82,935 55,836
Income tax expense 15,237 9,925 28,198 18,426
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
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
Net income $ 29,597 $ 20,626 $ 54,753 $ 83,546
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
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
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
Schedule 2 of 2
Segment Information
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2003 2002 2003 2002
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)
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
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
Gross revenues $ 520,033 $ 498,233 $ 1,031,640 $ 991,529
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
Total contribution $ 192,129 $ 171,613 $ 382,133 $ 343,804
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
Total depreciation and
amortization expense $ 23,100 $ 21,994 $ 45,743 $ 43,786
SOURCE Quintiles Transnational Corp.
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