EX-99.01 3 g73907ex99-01.txt PRESS RELEASE DATED JANUARY 23, 2002 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
* 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.