- Net income of $26.9 million
- Cash and cash equivalents of $479 million
RESEARCH TRIANGLE PARK, N.C., Nov. 14 /PRNewswire/ -- Quintiles
Transnational Corp. today announced financial results for the quarter ended
September 30, 2005. Net revenue for third quarter 2005 was $470.3 million, an
increase of 19% from net revenue of $396.5 million for third quarter 2004.
Profit contribution from Quintiles' Product Development and Commercial
Services groups totaled $210.5 million in third quarter 2005, up from $193.1
million for third quarter 2004.
Net income for third quarter 2005 was $26.9 million, after $3.4 million in
charges relating to the company's previously announced restructuring program,
compared to a net income of $34.5 million in third quarter 2004. Quintiles'
effective income tax rate for the third quarter of 2005 was positively
impacted due to a $17.8 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. The net income in third quarter 2004
included an after-tax gain of $53.8 million resulting from Quintiles' sale of
certain assets relating to its Bioglan Pharmaceuticals business to Bradley
Pharmaceuticals, Inc. (NYSE: BDY) for $188 million in cash.
Third quarter 2005 earnings before interest, taxes, depreciation and
amortization (EBITDA) totaled $58.6 million, including income from
discontinued operations net of loss on sale, before income taxes, of $300,000,
and the restructuring charge of $3.4 million. Third quarter 2004 EBITDA was
$103.2 million, including a gain on sale net of a loss from discontinued
operations, before income taxes, of $87.3 million. Excluding these one-time
events, EBITDA for third quarter 2005 and third quarter 2004 was,
respectively, $60.8 million and $11.3 million. See Schedule 3 for a
reconciliation of the above amounts.
"We are continuing to focus on the fundamentals -- providing our customers
high-quality, value-added clinical and commercialization services and
partnering solutions -- while positioning Quintiles to take advantage of the
significant potential we see in emerging markets," said Quintiles Chairman and
Chief Executive Officer Dennis Gillings, CBE. "These strong results are
tangible evidence of the progress we're making."
Quintiles Transnational Executive Vice President and Chief Financial
Officer John Ratliff said: "Our continued improvement in operating profits is
the result of our emphasis throughout Quintiles on driving revenue growth and
managing costs. At the same time, we are enhancing processes to achieve
greater quality and efficiency, and we are investing in areas where we see key
opportunities for market growth and to help our customers succeed."
As of September 30, 2005, Quintiles had cash and cash equivalents of $479
million.
During the third quarter of 2005, Quintiles completed the sale to Aptuit,
Inc., of its Early Development and Packaging business for approximately $124
mmillion.
After third quarter 2005 ended, Quintiles closed a financing transaction,
as previously announced, in which it raised approximately $250 million in cash
by monetizing its rights to receive royalties and certain other payments from
the U.S. sales of Eli Lilly and Company's antidepressant drug Cymbalta(R)
(duloxetine hydrochloride). The royalty rights were part of Quintiles'
agreement with Lilly to help co-promote Cymbalta in the United States for five
years; that co-promotion agreement remains materially unchanged and Quintiles
continues to have a financial interest in the royalty rights. Quintiles
contributed its royalty rights and certain other payment rights under the co-
promotion agreement to an indirect wholly owned subsidiary (Royalty Sub),
which issued $125 million in notes and borrowed $125 million in loans, each
secured primarily by the royalty and other payment rights. Quintiles used a
portion of the proceeds to repay in full its outstanding term loans of $154
million under Quintiles' existing senior secured credit facility; Quintiles
plans to use the remaining cash for other purposes permitted under Quintiles'
other debt arrangements and for general corporate purposes.
Quintiles Transnational's third quarter 2005 financial briefing will be
held at 11:00 a.m. EST on Tuesday, Nov. 15, and will be broadcast live over
the Web. The webcast or replay, which will be available through 5:00 p.m. EST
Friday, Dec. 2, can be accessed at
http://www.quintiles.com/corporate_info/broadcast_center.
Quintiles is the global leader in pharmaceutical services. We improve
healthcare worldwide by providing quality professional expertise, market
intelligence and innovative partnering solutions to the pharmaceutical,
biotechnology and healthcare industries. Quintiles has 16,000 specialized
employees and offices in 50 countries. 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 ability to maintain large customer contracts or to enter into
new contracts, changes in trends in the pharmaceutical industry, 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 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 previous restructurings, the
ability to operate successfully in new lines of business, and the risk that,
even though Royalty Sub's notes and loans are non-recourse to Quintiles,
Quintiles may be required to make payments equal to the outstanding principal
and interest on the notes and loans in certain limited circumstances.
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 Three Nine Nine
months months months months
ended ended ended ended
September September September September
30, 30, 30, 30,
2005 2004 2005 2004
In thousands, except per
share data
Net revenues $470,290 $396,497 $1,413,721 $1,167,020
Add: reimbursed service costs 141,109 91,620 377,371 251,573
Gross revenues 611,399 488,117 1,791,092 1,418,593
Costs, expenses and other:
Costs of revenues 441,497 357,888 1,285,462 1,026,055
Selling, general and
administrative 136,857 147,021 431,557 433,562
Interest expense (income),
net 12,088 14,838 41,702 44,033
Other expense (income),
net (2,240) (247) 423 (3,014)
Restructuring 3,358 - 22,565 -
Impairments - - 6,633 -
Transaction expense, net - - (2,666) -
Gain on sale of portion
of an investment in a
subsidiary - - - (24,688)
Non-operating gain on
change of interest
transaction - - - (10,030)
591,560 519,500 1,785,676 1,465,918
Income (loss) before income
taxes 19,839 (31,383) 5,416 (47,325)
Income tax (benefit) expense
(includes $17,778 and $49,299
of income tax benefit related
to American Jobs Creation Act
of 2004 for the three and
nine months ended September
30, 2005, respectively) (9,489) (15,111) (38,862) 1,729
Income (loss) before minority
interests and equity in
(losses) earnings of
unconsolidated affiliates 29,328 (16,272) 44,278 (49,054)
Equity in (losses) earnings of
unconsolidated affiliates (849) (366) (1,377) (389)
Minority interests (1,154) (702) (3,222) (1,135)
Income (loss) from continuing
operations 27,325 (17,340) 39,679 (50,578)
Income (loss) from
discontinued operations, net
of income taxes 4,233 (2,002) (32,940) 5,401
(Loss) gain from sale of
discontinued operations, net
of income taxes (4,609) 53,802 (4,609) 53,802
Net income $26,949 $34,460 $2,130 $8,625
Consolidated Balance Sheet Data
(Unaudited)
September 30, December 31,
2005 2004
In millions
Cash, cash equivalents and debt
investments $493 $548
Investments in marketable equity
securities 33 24
Investments in non-marketable equity
securities and loans 53 56
Investments in unconsolidated
affiliates 126 121
Working capital 347 491
Total assets 1,808 2,036
Debt including current portion 636 795
Shareholders' equity 543 568
Schedule 2 of 3
Segment Information
(Unaudited)
Three Three Nine Nine
months months months months
ended ended ended ended
September September September September
30, 30, 30, 30,
2005 2004 2005 2004
In thousands
Service revenues:
Product development $279,946 $238,923 $835,777 $691,533
Commercial services 182,680 179,126 560,063 484,972
Eliminations (24,319) (26,703) (75,963) (41,582)
Total net service revenues 438,307 391,346 1,319,877 1,134,923
PharmaBio Development
Commercial rights and
royalties 31,093 7,660 95,795 38,401
Investment 890 (2,509) (1,951) (6,304)
Total PharmaBio Development 31,983 5,151 93,844 32,097
Total net revenues 470,290 396,497 1,413,721 1,167,020
Reimbursed service costs 141,109 91,620 377,371 251,573
Gross revenues $611,399 $488,117 $1,791,092 $1,418,593
Contribution (revenues less
cost of revenues excluding
depreciation and amortization
expense except as noted
below):
Product development $141,971 $121,165 $417,937 $345,530
Commercial services 68,527 71,917 214,285 187,782
PharmaBio Development
(includes amortization
and depreciation expense
noted below) (13,440) (35,099) (49,483) (57,255)
Total contribution $197,058 $157,983 $582,739 $476,057
Depreciation and amortization
expense (excluded from
contribution except as noted
below):
Product development $17,225 $16,709 $49,716 $50,183
Commercial services 8,743 7,857 23,887 23,864
PharmaBio Development
(included in
contribution) 376 1,121 4,609 2,940
Corporate 1,188 3,188 3,506 9,472
Total depreciation and
amortization expense $27,532 $28,875 $81,718 $86,459
Schedule 3 of 3
EBITDA Reconciliation
(Unaudited)
Three Three Nine Nine
months months months months
ended ended ended ended
September September September September
30, 30, 30, 30,
2005 2004 2005 2004
In millions
Net revenues $470.3 $396.5 $1,413.7 $1,167.0
Add: reimbursed service costs 141.1 91.6 377.4 251.6
Gross revenues 611.4 488.1 1,791.1 1,418.6
Costs, expenses and other:
Costs of revenues (441.5) (357.9) (1,285.5) (1,026.1)
Selling, general and
administrative (136.9) (147.0) (431.6) (433.6)
Other (expense) income, net 2.2 0.2 (0.4) 3.0
Impairments 0.0 0.0 (6.6) 0.0
Transaction expense, net 0.0 0.0 2.7 0.0
Depreciation and amortization 27.5 28.9 81.7 86.5
Equity in earnings (losses) of
unconsolidated affiliates (0.8) (0.4) (1.4) (0.4)
Minority interests (1.2) (0.7) (3.2) (1.1)
EBITDA, excluding discontinued
operations, restructuring charges
and Mitsui gains 60.8 11.3 146.8 46.9
Income (loss) from discontinued
operations, net of (loss)
gain on sale 0.3 87.3 (63.5) 92.9
Depreciation and amortization
from discontinued operations 0.8 4.7 8.8 16.2
Restructuring (3.4) 0.0 (22.6) 0.0
Gain on sale of portion of an
investment in a subsidiary 0.0 0.0 0.0 24.7
Non-operating gain on change of
interest transaction 0.0 0.0 0.0 10.0
EBITDA 58.6 103.2 69.5 190.7
Depreciation and amortization (28.3) (33.5) (90.5) (102.7)
Interest expense, net (12.1) (14.8) (41.7) (44.0)
Income tax benefit (expense) 8.8 (20.4) 64.8 (35.4)
Net income $26.9 $34.5 $2.1 $8.6
SOURCE Quintiles Transnational Corp.
 back to top
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
|
