- Net income of $19.3 million for quarter
- Contribution increases 17% for Product Development, 24% for
Commercialization
RESEARCH TRIANGLE PARK, N.C., May 13 /PRNewswire/ -- Quintiles
Transnational Corp. today announced financial results for the quarter ended
March 31, 2005. Net revenue for first quarter 2005 was $492.4 million, an
increase of 16% from net revenue of $423.2 million for the same quarter in
2004. Contribution for Quintiles' Product Development and Commercial Services
groups totaled $217.2 million in first quarter 2005 versus $182.6 million for
the same quarter in 2004. Net income for first quarter 2005 was
$19.3 million, compared with a loss of $15.7 million for first quarter 2004.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
totaled $33.2 million in first quarter of 2005, including the loss of
$21 million, as expected, in Quintiles' PharmaBio Development group -- which
had a breakeven first quarter 2004 -- and $9.4 million of restructuring and
impairment charges, versus $31.9 million for the same quarter in 2004. Thus
the increase in Quintiles' EBITDA comes from Quintiles' Product Development
and Commercial Services groups. A reconciliation of EBITDA to net income is
presented in the schedules attached to this release and also in the company's
form 10-Q on file with the Securities and Exchange Commission.
Quintiles' effective income tax rate for the first quarter of 2005 was
positively impacted due to a $31.5 million income tax benefit recognized as a
result of the company's adoption of its domestic reinvestment plan related to
the American Jobs Creation Act of 2004.
Quintiles Transnational Chief Financial Officer John Ratliff said: "We
achieved solid year-over-year revenue growth during the quarter and saw a
significant increase in contribution from our Product Development and
Commercial Services groups. In addition, we saw progress in reducing overhead
costs, one of our key areas of focus.
"We began 2005 with record backlog of $2.6 billion. Overall, we have
continued to see positive business conditions and demand for Quintiles'
services."
As of March 31, 2005, Quintiles had cash and cash equivalents of
$339 million. As previously announced, during the quarter Quintiles paid down
$150 million of the approximately $306.1 million outstanding under a term loan
taken in September 2003; the company also amended the term loan and obtained
generally better terms.
Ratliff said: "Since the original credit agreement was signed in 2003,
when Quintiles went private, market conditions have improved and we are
financially stronger. The better rates and better general terms that we
obtained reflect both the market conditions and the progress we've made as a
company in the intervening period."
Quintiles Transnational's first quarter 2005 financial briefing will be
held at 11:00 a.m. EDT on Monday, May 16, and will be broadcast live over the
Web. The webcast or replay, which will be available through 5:00 p.m. EDT on
Friday, May 27, can be accessed
at http://www.quintiles.com/Corporate_Info/Broadcast_Center .
Quintiles 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 has offices in 50 countries
and is the world's leading pharmaceutical services organization. For more
information visit the company's Web site at http://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, 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 fulfill our obligations under
our financing arrangements and the potential impact on our operations, 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 our restructurings
and risks which affect our industry generally, including trends in
pharmaceutical outsourcing, delays in drug development and maintenance of
large contracts. 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 3
Condensed Consolidated Statements of Income
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
2005 2004
In thousands
Net revenues $492,356 $423,194
Add: reimbursed service costs 110,685 82,459
Gross revenues 603,041 505,653
Costs, expenses and other:
Costs of revenues 436,633 356,602
Selling, general and
administrative 154,478 155,661
Interest (income) expense, net 17,439 14,619
Other expense (income), net 124 (3,191)
Restructuring and impairments 9,437 0
Transaction expense, net (2,666) 0
615,445 523,691
Loss before income taxes (12,404) (18,038)
Income tax benefit (includes $31,521
of income tax benefit related to the
American Jobs Creation Act of 2004
for the three months ended March 31,
2005) (33,020) (725)
Income (loss) before minority
interests and equity in (losses)
earnings of unconsolidated
affiliates 20,616 (17,313)
Equity in (losses) earnings of
unconsolidated affiliates (199) (68)
Minority interests (1,073) (187)
Income (loss) from continuing
operations 19,344 (17,568)
Income from discontinued operation - 1,861
Net income (loss) $19,344 $(15,707)
Consolidated Balance Sheet Data
(Unaudited)
March 31, December 31,
2005 2004
In millions
Cash, cash equivalents and debt
investments $351 $548
Investments in marketable equity
securities 23 24
Investments in non-marketable equity
securities and loans 53 56
Investments in unconsolidated
affiliates 121 121
Working capital 155 316
Total assets 1,863 2,048
Debt including current portion 639 795
Shareholders' equity 570 568
Schedule 2 of 3
Segment Information
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
2005 2004
In thousands
Service revenues:
Product development $310,278 $262,684
Commercial services 184,103 146,987
Eliminations (26,311) (6,283)
Total net service revenues 468,070 403,388
PharmaBio Development
Commercial rights and royalties 26,244 15,586
Investment (1,958) 4,220
Total PharmaBio Development 24,286 19,806
Total net revenues 492,356 423,194
Reimbursed service costs 110,685 82,459
Gross revenues $603,041 $505,653
Contribution (revenues less cost of
revenues excluding depreciation and
amortization expense except as noted
below):
Product development $149,646 $128,062
Commercial services 67,600 54,555
PharmaBio Development (includes
amortization and depreciation
expense noted below) (22,089) (659)
Total contribution $195,157 $181,958
Depreciation and amortization expense
(excluded from contribution except
as noted below):
Product development $20,071 $21,590
Commercial services 7,533 8,184
PharmaBio Development (included
in contribution) 677 804
Corporate 1,145 3,133
Total depreciation and amortization
expense $29,426 $33,711
Schedule 3 of 3
EBITDA Reconciliation
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
2005 2004
In millions
Net revenues $492.4 $423.2
Reimbursed service costs 110.7 82.5
Gross revenues 603.0 505.7
Costs of revenues (436.6) (356.6)
Selling, general and administrative (154.5) (155.7)
Other (expense) income, net (0.1) 3.2
Restructuring and impairments (9.4) -
Transaction expense, net 2.7 -
Depreciation and amortization 29.4 33.7
Equity in (losses) earnings of
unconsolidated affiliates (0.2) (0.1)
Minority interests (1.1) (0.2)
Income from discontinued operation - 1.9
EBITDA $33.2 $31.9
Depreciation and amortization (29.4) (33.7)
Interest expense, net (17.4) (14.6)
Income tax benefit 33.0 0.7
Net income (loss) $19.3 $(15.7)
SOURCE Quintiles Transnational Corp.
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Related links:
http://www.quintiles.com
http://www.quintiles.com/Corporate_Info/Broadcast_Center
CONTACT:
Pat Grebe, Media Relations,
media.info@quintiles.com , or Greg Connors, Investor Relations,
invest@quintiles.com , of Quintiles Transnational Corp.,
+1-919-998-2000
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