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)
Quintiles Transnational Corp.
CONTACT: Pat Grebe, Media Relations, media.info@quintiles.com , or GregConnors, Investor Relations, invest@quintiles.com , of Quintiles TransnationalCorp., +1-919-998-2000
