-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IptBtH1wMbnsvV4Vo1dZWcZt7n+ROoOW4w4jDwOl/JJIzPBZvGZ0tTO/IcGt5my5 ft1CFa0opdXdmXQCGN+S8g== 0000950144-97-000369.txt : 19970117 0000950144-97-000369.hdr.sgml : 19970117 ACCESSION NUMBER: 0000950144-97-000369 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961122 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970116 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUINTILES TRANSNATIONAL CORP CENTRAL INDEX KEY: 0000919623 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 561714315 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-23520 FILM NUMBER: 97506992 BUSINESS ADDRESS: STREET 1: 4709 CREEKSTONE DR STREET 2: STE 300 CITY: DURHAM STATE: NC ZIP: 27703-8411 BUSINESS PHONE: 9199412000 MAIL ADDRESS: STREET 1: 4709 CREEKSTONE DR STREET 2: STE 300 CITY: DURHAM STATE: NC ZIP: 27703-8411 8-K/A 1 QUINTILES TRANSNATIONAL CORP. FORM 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 22, 1996 QUINTILES TRANSNATIONAL CORP. (Exact name of registrant as specified in its charter) NORTH CAROLINA 340-23520 56-1714315 (State or other jurisdiction (Commission File No.) (I.R.S. Employer of incorporation) Identification Number) 4709 CREEKSTONE DRIVE, RIVERBIRCH BUILDING, SUITE 300, DURHAM, NORTH CAROLINA 27703-8411 (Address of principal executive offices) (919) 941-2000 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report) 2 Item 7 is hereby replaced as follows: ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Businesses Acquired. Innovex Limited The financial statements of Innovex Limited as at March 31, 1995 and 1996, and for the periods ended March 31, 1994, 1995 and 1996, and the Notes thereto, were previously filed, within the meaning of Rule 12b-2 promulgated under the Exchange Act, in the Company's Current Report on Form 8-K, dated October 6, 1996, filed with the Commission. Unaudited Interim Condensed Consolidated Financial Statements Unaudited Condensed Consolidated Balance Sheet as of September 30, 1996 4 Unaudited Condensed Consolidated Income Statements for the six months ended September 30, 1995 and 1996 5 Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 1995 and 1996 6 Notes to Unaudited Condensed Consolidated Financial Statements 7 BRI International, Inc. The financial statements of BRI International, Inc. as of and for the periods ended May 31, 1996, November 30, 1993, 1994, and 1995, and the Notes thereto, were previously filed, within the meaning of Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in the Company's Registration Statement on Form S-4 (File No. 333-12573) as filed with the Commission on September 24, 1996 and amended on October 15, 1996. Unaudited Interim Condensed Consolidated Financial Statements Unaudited Condensed Consolidated Balance Sheet as of August 31, 1996 9 Unaudited Condensed Consolidated Statement of Operations for the three months ended August 31, 1995 and 1996 10 Unaudited Condensed Consolidated Statement of Cash Flows for the three months ended August 31, 1995 and 1996 11 Notes to Unaudited Condensed Consolidated Financial Statements 12 (b) Unaudited Pro Forma Financial Information. The unaudited pro forma combined condensed income statements of Quintiles, Innovex Limited and BRI International, Inc. for the years ended December 31, 1993, 1994 and 1995 were previously filed, within the meaning of Rule 12b-2 promulgated under the Exchange Act, in the Company's Current Report on Form 8-K, dated October 6, 1996, as filed with the Commission. Unaudited Pro Forma Combined Condensed Financial Information of Quintiles, Innovex Limited and BRI International, Inc. Introduction to Unaudited Pro Forma Financial Information 13 Unaudited Pro Forma Combined Condensed Balance Sheet as of September 30, 1996 14 Notes to Unaudited Pro Forma Combined Condensed Balance Sheet 15 Unaudited Pro Forma Combined Condensed Statement of Income for the nine months ended September 30, 1996 16 Unaudited Pro Forma Combined Condensed Statement of Income for the nine months ended September 30, 1995 17
2 3 (c) Exhibits.
Exhibit No. Description of Exhibit - ----------- ---------------------- 2.01(1) Merger Agreement dated as of September 16, 1996 by and among Quintiles Transnational Corp., BRI Acquisition Corp. and BRI International, Inc. (the "Merger Agreement") 2.02* List of Exhibits and Schedules omitted from the Merger Agreement 2.03(2) Share Exchange Agreement dated as of October 4, 1996 among Innovex Limited, Quintiles Transnational Corp. and the shareholders of Innovex Limited (the "Share Exchange Agreement") 2.04* List of Exhibits and Schedules omitted from the Share Exchange Agreement 99.01* Registration Rights Agreement, dated as of November 29, 1996, by and among Quintiles Transnational Corp. and the shareholders of Innovex Limited listed therein
- ---------------------- (1) Exhibit to the Company's Registration Statement on Form S-4 (Registration No. 333-12573) initially filed with the Commission on September 24, 1996, as amended, and incorporated herein by reference. (2) Exhibit to the Company's current report on Form 8-K dated October 6, 1996 filed with the Commission and incorporated herein by reference. * Previously filed. 3 4 INNOVEX LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET September 30, 1996 (In thousands) ASSETS Current assets: Cash and cash equivalents $ 11,646 Accounts receivable 50,882 Finished goods and goods for resale 439 -------- Total current assets 62,967 Intangible assets 20,376 Property, plant and equipment, net 33,227 -------- Total assets $116,570 ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short term borrowings and current portion of long term obligations $ 14,368 Accounts payable and accrued expenses 30,180 Advanced payments received 27,686 Income taxes and other current liabilities 9,432 -------- Total current liabilities 81,666 Long term obligations 35,883 Provisions for liabilities and charges 3,415 Other provisions and deferred tax 4,986 -------- 44,284 -------- Total liabilities 125,950 Shareholders' equity: Ordinary shares 112 Preferred ordinary shares 66 Preference shares 171 -------- 349 Premiums in excess of par value 17,010 Accumulated deficit (26,739) -------- Total shareholders' equity (9,380) -------- Total liabilities and shareholders' equity $116,570 ========
The accompanying notes are an integral part of these consolidated financial statements. 4 5 INNOVEX LIMITED UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS Six months ended September 30, 1995 and 1996 (In thousands)
1995 1996 -------- -------- Net sales $ 51,684 $106,717 Costs and expenses Cost of finished goods sold (1,524) (958) Personnel costs (29,869) (66,620) Depreciation and amortization (5,140) (8,940) Other operating expenses (13,164) (22,070) -------- -------- Operating income 1,987 8,129 Other income and (expenses) (1,508) (2,472) -------- -------- Income before income taxes 479 5,657 Income taxes (165) (2,077) -------- -------- Net income before non-equity interest dividends 314 3,580 Non-equity interest dividends - (637) -------- -------- Net income $ 314 $ 2,943 ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 5 6 INNOVEX LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended September 30, 1995 and 1996 (In thousands)
1995 1996 -------- -------- Operating activities $ 70,001 $130,844 Sales ledger receipts 82 534 Other miscellaneous payments (28,351) (62,008) Less: Payroll (28,118) (54,216) Trading payments (301) (609) VAT (4,645) (7,753) -------- -------- Net cash provided by operating activities(1) 8,668 6,792 Exceptional items (6) (2,422) Capital expenditure Purchase of assets (2,278) (3,760) Vehicle leasing payments (3,102) (5,253) Less: Sale of assets 1,273 786 -------- -------- Net capital outflow (4,107) (8,227) Taxation paid (168) (2,432) -------- -------- Net cash generated/(absorbed) by operations 4,387 (6,289) Other payments Deferred compensation (5,036) -- Investment in subsidiary -- (793) Interest payments (482) -- -------- -------- Decrease in cash and cash equivalents (1,131) (7,082) Exchange adjustments (135) 18 Cash and cash equivalents at beginning of period 5,779 18,710 -------- -------- Cash and cash equivalents at end of period $ 4,513 $ 11,646 ======== ========
- ------------ (1) The net cash provided by operating activities for the six months ended September 30, 1996 include the special pension contribution of $2.3 million paid to the pension fund of Barrie S. Haigh and non-recurring costs of $0.6 million relating to the April Reorganization (see Note 2 to Unaudited Condensed Consolidated Financial Statements). The accompanying notes are an integral part of these consolidated financial statements. 6 7 INNOVEX LIMITED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 1996 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements present the financial position and results of operations of Innovex Limited, (hereafter referred to as "Innovex") and have been prepared in accordance with generally accepted accounting principles in the United Kingdom ("U.K. GAAP") which differ in certain significant respects from those applicable in the United States ("U.S. GAAP"). See Note 3 for a discussion of the principal differences between U.K. GAAP and U.S. GAAP affecting Innovex. The interim financial information included in these condensed consolidated financial statements is unaudited but reflects all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. Assets and liabilities recorded in foreign currencies on Innovex's books are translated at the exchange rate on the balance sheet date. Gains and losses on foreign currency transactions are included in other income and expenses. Translation adjustments resulting from this process are charged or credited to equity. Net sales, costs and expenses are translated at average rates of exchange prevailing during the periods presented. The provision for income taxes is based upon management's best estimate of the effective tax rate to be applicable for the entire year and taking into account the anticipated impact of foreign tax rates, available tax loss carry forwards and other relevant tax issues in the jurisdictions in which Innovex operates. 2. Reorganization On April 3, 1996, Innovex PLC and the former holding company of the Innovex group, Innovex Holdings Limited completed a series of transactions designed to establish Innovex PLC as the holding company of the Innovex Group. The Company and Innovex Holdings Limited entered into an Exchange Agreement, dated April 3, 1996, pursuant to which Innovex PLC, the entire outstanding share capital of which consisted of two thousand ordinary shares owned by Mr. Haigh and Dr. Knott, agreed to acquire the entire issued share capital of Innovex Holdings Limited in exchange for 72,631,305 newly issued ordinary shares of 0.1p each, 14,285,720 cumulative participating preferred ordinary shares of 0.1p each (the "preferred shares"), pound sterling 16,980,000 of 6.03125% vendor guaranteed loan notes, due on or about October 3, 1996, of Innovex PLC, and pound sterling 1,620,000 of cash. Innovex PLC's performance of its obligations under the loan notes was guaranteed by Lloyds Bank pursuant to a Facilities Agreement, dated April 3, 1996, which provides for a pound sterling 15,000,000 secured guarantee and term-loan facility and a pound sterling 2,000,000 cash-backed guarantee facility. In connection with these transactions, Innovex PLC also entered into a pound sterling 3,000,000 overdraft facility, dated April 3, 1996, with Lloyds Bank. Pursuant to an Investment Agreement, dated April 3, 1996, Innovex PLC issued 28,533,345 additional preferred shares and created and issued 11,000,000 7.5% cumulative redeemable preference shares of 1.0p each ("the preference shares"), ranking senior to the preferred shares, and pound sterling 6,900,000 aggregate principal amount of 8.70% loan stock. The loan stock issued had a nominal value of pound sterling 10,200,000 and an effective interest rate of 14.85%. The preferred shares rank for a cumulative participating net dividend in respect of the year ending March 31, 2000 and subsequent years. The amount of the dividend will be equal to a percentage of profit after tax, where the percentage equals one third of the number of preferred shares outstanding during the relevant year as a percent of the total number of ordinary shares and preferred shares outstanding during such years. The preference shares are redeemable by Innovex PLC on or before March 31, 2004. 7 8 INNOVEX LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) These transactions are considered as having no effect on the basis of accounting for assets and liabilities and are viewed as having occurred among members of a commonly controlled group in connection with a proposed capital-raising transaction after which the controlling shareholder retained control. 3. Summary of Differences Between U.K. GAAP and U.S. GAAP Innovex's condensed consolidated financial statements are prepared in accordance with U.K. GAAP, which differs in certain respects from U.S. GAAP. The net differences between U.K. GAAP and U.S. GAAP are immaterial to net income for the six months ended September 30, 1996 and 1995 and to shareholders' equity as of September 30, 1996 except for the redeemable preference shares which are included as a component of shareholders' equity under U.K. GAAP on the September 30, 1996 unaudited condensed consolidated balance sheet and would be reclassified from shareholders' equity and presented as a separate classification between debt and shareholders' equity under U.S. GAAP. Innovex must redeem all preference shares in issue by March 31, 2004. Under U.S. GAAP, redeemable preference shares whose redemption is outside the control of the company, including mandatory redemption, are presented in a separate classification between debt and shareholders' equity. 4. Non-Equity Dividends Non-equity dividends in respect of preference share dividends are at the rate of 7.5% on the paid up amount. 5. Long-Term Obligations Long-term obligations less current portion at September 30, 1996 consisted of the following (in thousands): Loan stock................................................. $11,256 Loan facility.............................................. 21,106 Capital leases............................................. 3,521 ------- $35,883 =======
6. Subsequent Events On November 29, 1996, Quintiles Transnational Corp. acquired 100% of Innovex's stock in exchange for approximately 9.2 million shares of Quintiles common stock and options to purchase approximately 800,000 shares of Quintiles common stock in a transaction accounted for as a pooling-of-interests. In connection with the transaction approximately $60 million of Innovex's existing obligations were retired by Quintiles. 8 9 BRI INTERNATIONAL, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET August 31, 1996 ASSETS Current assets: Cash $ 1,692,315 Accounts receivable 14,605,828 Note receivable - related party 250,000 Prepaid expenses 506,442 Deferred income taxes 363,726 ----------- Total current assets 17,418,311 Property and equipment: Equipment, furniture and fixtures 7,165,408 Leasehold improvements 653,173 Less accumulated depreciation and amortization (4,408,043) ----------- Net property and equipment 3,410,538 Other assets: Excess of purchase price over net assets of acquired business 1,091,963 Non-compete agreements 489,213 Deferred income taxes 341,388 Other 1,005,027 ----------- Total other assets 2,927,591 ----------- Total assets $23,756,440 =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Line of credit and current portion of debt $ 1,897,431 Accounts payable and accrued liabilities 5,108,398 Advance billings to clients 7,057,793 Client deposits 677,056 Income taxes payable 249,287 Liability under stock option plan 74,720 Liability under non-compete agreements, current portion 156,882 ----------- Total current liabilities 15,221,567 Long-term debt, less current portion 1,593,752 Liability under non-compete agreements, less current portion 156,597 Deferred rent 820,892 ----------- 2,571,241 ----------- Total liabilities 17,792,808 Commitments and contingencies Stockholders' equity: Common stock, $.10 par value, 500,000 shares authorized, 374,994 shares issued and outstanding 37,499 Additional paid-in capital 2,217,093 Retained earnings 4,503,886 Cumulative foreign currency translation adjustment 22,237 Unearned shares of common stock held by ESOP (817,083) ----------- Total stockholders' equity 5,963,632 ----------- Total liabilities and stockholders' equity $23,756,440 ===========
The accompanying notes are an integral part of these consolidated financial statements. 9 10 BRI INTERNATIONAL, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS Three months ended August 31, 1995 and 1996
1995 1996 ------------ ------------ Revenue: Professional fees $ 11,349,686 $ 16,285,301 Less reimbursed costs (983,150) (1,945,428) ------------ ------------ Net revenue 10,366,536 14,339,873 Operating costs and expenses: Direct costs 8,681,310 9,451,509 Selling, general and administrative expenses 1,015,355 3,423,326 Merger expenses - 37,473 ------------ ------------ Income from operations 669,871 1,427,565 Other expense/(income): Interest expense 94,433 104,815 Other (14,577) 97,342 ------------ ------------ Income before provision for income taxes 590,015 1,225,408 Provision for income taxes 198,813 487,434 ------------ ------------ Net income $ 391,202 $ 737,974 ============ ============
The accompanying notes are an integral part of these consolidated financial statements. 10 11 BRI INTERNATIONAL, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Three months ended August 31, 1995 and 1996
1995 1996 ---------- ---------- Operating activities: Net income $ 391,202 $ 737,974 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 206,216 415,617 Compensation expense under stock option plan 120,000 - Allowance for doubtful accounts 51,811 30,000 Deferred income taxes (147,924) (1,382) Increase (decrease) in cash due to changes in operating assets and liabilities: Accounts receivable 59,474 140,974 Note receivable - related party - (140,000) Prepaid expenses (107,260) (132,173) Other assets 42,053 (340,570) Income taxes payable (66,539) 222,964 Accounts payable and accrued liabilities 355,412 (318,918) Deferred rent 5,757 13,957 Advance billings to clients (376,589) 1,617,082 Client deposits (87,725) 219,276 ---------- ---------- Net cash provided by operating activities 445,888 2,464,801 Investing activities: Purchases of property and equipment (73,102) (633,373) ---------- ---------- Net cash used by investing activities (73,102) (633,373) Financing activities: Borrowings on line of credit, net 94,925 (520,198) Cash overdraft - 384,725 Payments on notes payable (65) (219,399) Payments under non-compete agreements (175,622) (68,356) Proceeds from issuance of common stock - 10,737 Cash paid in settlement of stock options (80,916) - ---------- ---------- Net cash used by financing activities (161,678) (412,491) Effect of exchange rate changes on cash 9,283 6,102 ---------- ---------- Net increase in cash 220,391 1,425,039 Cash at beginning of period 820,044 267,276 ---------- ---------- Cash at end of period $1,040,435 $1,692,315 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. 11 12 BRI INTERNATIONAL, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS August 31, 1996 1. The Company BRI International, Inc., formerly known as Biometric Research Institute, Inc. ("BRI") is a full service contract research organization specializing, on a global basis, in the design and evaluation of preclinical and clinical research for the pharmaceutical, biotechnology and medical device industries. 2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. 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 month period ended August 31, 1996 are not necessarily indicative of the results that may be expected for the year ended November 30, 1996. For further information, refer to the consolidated financial statements and notes thereto included in the BRI audited financial statements for the six month period ended May 31, 1996. On February 28, 1996, BRI issued 49,400 shares of common stock in exchange for all of the outstanding common stock of Medical Technology Consultants Europe Limited ("MTCE"). The acquisition has been accounted for as a pooling-of-interests, and as such, all condensed consolidated financial data for periods subsequent to December 1, 1995 have been restated to include the results of the pooled company. Due to the fact that the financial data of the pooled company prior to December 1, 1995 would have no material impact on the condensed consolidated financial data previously reported by BRI, the condensed consolidated financial data presented for periods prior to December 1, 1995 have not been restated. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from these estimates. 3. Subsequent Events On November 22, 1996, BRI merged with and into a wholly-owned subsidiary of Quintiles Transnational Corp. in a transaction accounted for as a pooling-of-interests. Quintiles issued approximately 1,615,000 shares of its common stock in the transaction to the former shareholders of BRI and assumed options exercisable for 338,693 shares of Quintiles' common stock. 12 13 Item 7(b) UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION OF QUINTILES, INNOVEX LIMITED AND BRI INTERNATIONAL, INC. The following unaudited pro forma combined condensed financial information is presented assuming the combinations of Quintiles and BRI and Quintiles and Innovex had occurred at the beginning of each period presented on a pooling of interests basis. The unaudited pro forma combined condensed balance sheet reflects the combined historical balance sheets of Quintiles and Innovex at September 30, 1996 and BRI at August 31, 1996. The unaudited pro forma combined condensed statements of operations for the nine months ended September 30, 1996 and 1995 reflect historical operating results of Quintiles and Innovex for such periods combined with historical operating results of BRI for the nine months ended August 31, 1996 and 1995, respectively. For all applicable periods presented in the pro forma combined condensed statements of operations, shares used in the computation of earnings per common and common equivalent shares give effect to the appropriate exchange ratios. The Innovex financial statements have been prepared on a basis of generally accepted accounting principles (GAAP) in the U.K., except for the redeemable preference shares which have been reclassified from shareholders' equity and are presented as a separate classification between debt and shareholders' equity on the September 30, 1996 unaudited pro forma combined condensed balance sheet. The remaining net differences between U.K. and U.S. GAAP are immaterial to the pro forma combined net income and shareholders' equity for all periods presented. The pro forma financial information is not necessarily indicative of the results that would have been obtained had the combinations occurred on the dates indicated. The pro forma financial information should be read in conjunction with the related historical financial statements and notes thereto of Quintiles, BRI and Innovex previously reported or included herein. 13 14 QUINTILES, BRI AND INNOVEX UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET September 30, 1996 (In thousands)
HISTORICAL ------------------------ HISTORICAL PRO FORMA PRO FORMA ---------- PRO FORMA QUINTILES BRI(1) ADJUSTMENTS SUBTOTAL INNOVEX(2) ADJUSTMENT PRO FORMA --------- ------ ----------- --------- ---------- ---------- --------- ASSETS Current assets: Cash and cash equivalents $ 60,289 $ 1,692 $ - $ 61,981 $ 11,646 $(67,432)(7) $ 6,195 Accounts receivable and unbilled services 95,810 14,856 - 110,666 50,882 - 161,548 Investments 59,986 - - 59,986 - - 59,986 Other current assets 7,324 870 - 8,194 439 - 8,633 -------- ------- ------- -------- -------- -------- -------- Total current assets 223,409 17,418 - 240,827 62,967 (67,432) 236,362 Property and equipment 95,318 7,819 - 103,137 50,256 - 153,393 Less accumulated depreciation 25,948 4,408 - 30,356 17,029 - 47,385 -------- ------- ------- -------- -------- -------- -------- 69,370 3,411 - 72,781 33,227 - 106,008 Non-current assets: Investments 55,205 - - 55,205 - - 55,205 Intangible and other assets 52,133 2,927 - 55,060 20,376 - 75,436 -------- ------- ------- -------- -------- -------- -------- Total non-current assets 107,338 2,927 - 110,265 20,376 - 130,641 -------- ------- ------- -------- -------- -------- -------- Total assets $400,117 $23,756 $ - $423,873 $116,570 $(67,432) $473,011 ======== ======= ======= ======== ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 29,101 $ 5,108 $ 4,800 (3) $ 39,009 $ 30,180 $ 23,000 (5) $ 92,189 Line of credit and current portion of debt 1,722 1,897 - 3,619 14,368 (14,368)(7) 3,619 Unearned income 23,971 7,058 - 31,029 27,686 - 58,715 Income taxes and other current liabilities 8,126 1,158 - 9,284 9,432 - 18,716 -------- ------- ------- -------- -------- -------- -------- Total current liabilities 62,920 15,221 4,800 82,941 81,666 8,632 173,239 Long-term liabilities: Long-term debt, less current portion 140,634 1,594 - 142,228 35,883 (35,883)(7) 142,228 Long-term obligation 19,543 977 - 20,520 3,415 - 23,935 Deferred income taxes 2,628 - - 2,628 4,986 - 7,614 -------- ------- ------- -------- -------- -------- -------- 162,805 2,571 - 165,376 44,284 (35,883) 173,777 -------- ------- ------- -------- -------- -------- -------- Total liabilities 225,725 17,792 4,800 248,317 125,950 (27,251) 347,016 Redeemable preference shares - - - - 171 (171)(7) - Shareholders' equity: Preferred Stock - - - - 66 (66)(6) - Common Stock 218 38 (22)(4) 234 112 (19)(6) 327 Additional paid-in-capital and other shareholders' equity 130,196 1,422 22 (4) 131,640 17,010 85 (6) (17,010)(7) 131,725 Retained earnings (accumulated deficit) 43,978 4,504 (4,800)(3) 43,682 (26,739) (23,000)(5) (6,057) -------- ------- ------- -------- -------- -------- -------- Total shareholders' equity 174,392 5,964 (4,800) 175,556 ( 9,551) (40,010) 125,995 -------- ------- ------- -------- -------- -------- -------- Total liabilities and shareholders' equity $400,117 $23,756 $ - $423,873 $116,570 $(67,432) $473,011 ======== ======= ======= ======== ======== ======== ========
See accompanying Notes 14 15 Notes to Unaudited Pro Forma Combined Condensed Balance Sheet. - ------------ (1) BRI's balance sheet is as of August 31, 1996. (2) Innovex's financial statements have been prepared on a basis of generally accepted accounting principles (GAAP) in the U.K., except for the redeemable preference shares which have been reclassified from shareholders' equity and are presented as a separate classification between debt and shareholders' equity. The remaining net differences between U.K. and U.S. GAAP are immaterial to the pro forma combined net income and shareholders' equity for all periods presented. (3) To reduce pro forma retained earnings for non-recurring costs (as currently estimated by management) directly associated with the acquisition of BRI, estimated at $2.5 million and the reorganization of BRI, estimated at $2.3 million. (4) To reflect the issuance of 1,614,915 shares of Quintiles common stock, $0.01 par value, in exchange for the 375,448 shares of BRI common stock, $0.10 par value, using the agreed upon exchange ratio of 4.3013. (5) To reduce pro forma retained earnings for non-recurring costs (as currently estimated by management) directly associated with the acquisition of Innovex, estimated at $14.5 million and the reorganization of Innovex, estimated at $8.5 million. (6) To reflect the issuance of 9,214,253 shares of Quintiles common stock, $0.01 par value, in exchange for the outstanding Innovex ordinary and preferred ordinary shares. (7) In connection with the transaction, Quintiles will satisfy in full and retire approximately $60 million of Innovex's outstanding long-term credit facility, which was approximately $50.3 million as of September 30, 1996. The redeemable preference shares will also be redeemed in connection with the transaction. 15 16 UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME Nine months ended September 30, 1996 (In thousands, except per share data)
HISTORICAL HISTORICAL --------------------- PRO FORMA PRO FORMA ---------- PRO FORMA QUINTILES BRI(1) ADJUSTMENTS SUBTOTAL INNOVEX(2) ADJUSTMENTS PRO FORMA --------- -------- ----------- --------- ---------- ----------- --------- Professional fee income $234,711 $42,986 $ - $277,697 $150,350 $ - $428,047 Less reimbursed costs: Investigator payments 31,860 4,680 - 36,540 - - 36,540 Travel and other 16,609 - - 16,609 - - 16,609 -------- ------- ----- -------- -------- -------- -------- Net revenue 186,242 38,306 - 224,548 150,350 - 374,898 Costs and expenses: Direct costs 87,992 13,817 - 101,809 1,704 - 103,513 General and administrative expense 69,645 20,152 - 89,797 124,019 - 213,816 Depreciation and amortization 8,794 1,167 - 9,961 11,533 - 21,494 Non-recurring costs relating to reorganization - - - - 2,334 - 2,334 Special pension contribution - - - - 2,291 - 2,291 -------- ------- ----- -------- -------- -------- -------- 166,431 35,136 - 201,567 141,881 - 343,448 -------- ------- ----- -------- -------- -------- -------- Income from operations 19,811 3,170 - 22,981 8,469 - 31,450 Other income/(expense), net 1,566 (392) - 1,174 (3,130) - (1,956) -------- ------- ----- -------- -------- -------- -------- Income before income taxes 21,377 2,778 - 24,155 5,339 - 29,494 Income taxes 6,735 1,069 - 7,804 2,133 - 9,937 -------- ------- ----- -------- -------- -------- -------- Net income 14,642 1,709 - 16,351 3,206 - 19,557 Redeemable preferred stock dividends paid - - - - (633) - (633) -------- ------- ----- -------- -------- -------- -------- Net income applicable to common shareholders $ 14,642 $ 1,709 $ - $ 16,351 $ 2,573 $ - $ 18,924 ======== ======= ===== ======== ======== ======== ======== Weighted average shares outstanding 22,279 24,006 33,220 ======== ======== ======== Net income per common share $ 0.66 $ 0.68 $ 0.57(3) ======== ======== ========
- ------------ (1) BRI's income statement is for the nine month period ended August 31, 1996. (2) Innovex's financial statements have been prepared on a basis of generally accepted accounting principles (GAAP) in the U.K. The net differences between U.K. and U.S. GAAP are immaterial to the pro forma combined net income for the nine months ended September 30, 1996. (3) Pro forma net income per share would have been $0.68 per share for the nine months ended September 30, 1996 if Innovex had not incurred the $2.3 million of non-recurring costs relating to its reorganization and the $2.3 million of special pension contributions. 16 17 UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME Nine months ended September 30, 1995 (In thousands, except per share data)
HISTORICAL HISTORICAL --------------------- PRO FORMA PRO FORMA ---------- PRO FORMA QUINTILES BRI(1) ADJUSTMENTS SUBTOTAL INNOVEX(2) ADJUSTMENTS PRO FORMA --------- -------- ----------- --------- ---------- ----------- --------- Professional fee income $164,287 $29,948 $ - $194,235 $76,269 $ - $270,504 Less reimbursed costs: Investigator payments 38,577 1,546 - 40,123 - - 40,123 Travel and other 15,310 - - 15,310 - - 15,310 -------- ------- ----- -------- ------- -------- -------- Net revenue 110,400 28,402 - 138,802 76,269 - 215,071 Costs and expenses: Direct costs 51,673 13,006 - 64,679 2,021 - 66,700 General and administrative expense 42,786 12,765 - 55,551 62,862 - 118,413 Depreciation and amortization 5,253 950 - 6,203 6,538 - 12,741 -------- ------- ----- -------- ------- -------- -------- 99,712 26,721 - 126,433 71,421 - 197,854 -------- ------- ----- -------- ------- -------- -------- Income from operations 10,688 1,681 - 12,369 4,848 - 17,217 Other income/(expense), net 891 (274) - 617 (1,844) - (1,227) -------- ------- ----- -------- ------- -------- -------- Income before income taxes 11,579 1,407 - 12,986 3,004 - 15,990 Income taxes 4,106 631 - 4,737 891 - 5,628 -------- ------- ----- -------- ------- -------- -------- Net income $ 7,473 $ 776 $ - $ 8,249 $ 2,113 $ - $ 10,362 ======== ======= ===== ======== ======= ======== ======== Weighted average shares outstanding 19,316 20,793 29,976 ======== ======== ======== Net income per common share $ 0.39 $ 0.40 $ 0.35 ======== ======== ========
- ------------ (1) BRI's income statement is for the nine month period ended August 31, 1995. (2) Innovex's financial statements have been prepared on a basis of generally accepted accounting principles (GAAP) in the U.K. The net differences between U.K. and U.S. GAAP are immaterial to the pro forma combined net income for the nine months ended September 30, 1995. 17 18 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 hereunto duly authorized. QUINTILES TRANSNATIONAL CORP. By: /s/ Rachel R. Selisker ----------------------------- Dated: January 16, 1997 Rachel R. Selisker Chief Financial Officer 18 19 EXHIBIT INDEX
Exhibit No. Description of Exhibit ----------- --------------------- 2.01(1) Merger Agreement dated as of September 16, 1996 by and among Quintiles Transnational Corp., BRI Acquisition Corp. and BRI International, Inc. the "Merger Agreement") 2.02* List of Exhibits and Schedules omitted from the Merger Agreement 2.03(2) Share Exchange Agreement dated as of October 4, 1996 among Innovex Limited, Quintiles Transnational Corp. and the shareholders of Innovex Limited (the "Share Exchange Agreement") 2.04* List of Exhibits and Schedules omitted from the Share Exchange Agreement 99.01* Registration Rights Agreement, dated as of November 29, 1996, by and among Quintiles Transnational Corp. and the shareholders of Innovex Limited listed therein
- ---------------------- (1) Exhibit to the Company's Registration Statement on Form S-4 (Registration No. 333-12573) initially filed with the Commission on September 24, 1996, as amended, and incorporated herein by reference. (2) Exhibit to the Company's current report on Form 8-K dated October 6, 1996 filed with the Commission and incorporated herein by reference. * Previously filed. 19 -----END PRIVACY-ENHANCED MESSAGE-----