RESEARCH TRIANGLE PARK, N.C., Nov. 12 /PRNewswire/ -- Quintiles Transnational Corp. today announced financial results for the quarter ended Sept. 30, 2004. Net revenue for third quarter 2004 was $440.1 million, an increase of 9% from net revenue of $403.5 million for the same period in 2003. Net income for third quarter 2004 was $34.5 million versus a loss of $16.8 million for third quarter 2003.
"Our strong performance in winning new business -- which began more than two years ago and is continuing -- is driving revenue growth as more projects get under way," said Quintiles Transnational Chief Financial Officer John Ratliff. "The volume of work we are winning and performing illustrates customer confidence in Quintiles' ability to add value to their products. We also are pleased with our very strong cash position, which exceeds a half- billion dollars."
As of Sept. 30, 2004, Quintiles had cash, cash equivalents, marketable securities and debt investments valued at $588 million, of which $549 million was cash and cash equivalents.
During third quarter 2004, Quintiles and Bradley Pharmaceuticals, Inc. completed the previously announced sale of certain assets relating to its Bioglan Pharmaceuticals business to Bradley for $188.3 million in cash, which resulted in an after-tax gain for Quintiles of $53.8 million.
Also during the quarter, Eli Lilly and Company and Quintiles began co- promoting Lilly's new treatment for depression, Cymbalta, which received U.S. regulatory approval in August. Through its contract sales organization, Innovex, Quintiles is providing more than 500 sales representatives to help Lilly's substantial sales force promote Cymbalta in the United States for five years. In exchange, Quintiles will receive royalties from net sales of Cymbalta for depression and other neuroscience indications for eight years.
In order to facilitate an understanding of the third quarter 2004 results in comparison to the third quarter 2003 results, Quintiles' Predecessor and Successor results are discussed on a combined basis in this press release. The table attached to this press release presents a reconciliation of the Predecessor and Successor results to the combined results.
Quintiles Transnational's third quarter 2004 financial briefing will be held at 3:00 p.m. EST on Friday, Nov. 12, and will be broadcast live over the Web. The webcast or replay, which will be available through 5:00 p.m. EST Nov. 26, 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 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, and the ability to operate successfully in new lines of business. 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 2 Condensed Consolidated Statements of Income (Unaudited) September July Three months 26, 2003 1, 2003 Three months ended through through ended September September September September 30, 2004 30, 2003 25, 2003 30, 2003 Successor Successor Predecessor Combined In thousands Net revenues $440,071 $19,247 $384,295 $403,542 Add: reimbursed service costs 95,441 3,465 77,545 81,010 Gross revenues 535,512 22,712 461,840 484,552 Costs, expenses and other: Costs of revenues 391,784 14,708 299,874 314,582 General and administrative 159,815 5,971 129,082 135,053 Interest expense (income), net 14,838 1,033 (2,246) (1,213) Other expense (income), net 2,543 (308) 34 (274) Transaction and restructuring - - 50,261 50,261 Gain on sale of portion of an investment in a subsidiary - - - - Non-operating gain on change of interest transaction - - - - 568,980 21,404 477,005 498,409 (Loss) income before income taxes (33,468) 1,308 (15,165) (13,857) Income tax (benefit) expense (15,715) 471 204 675 (Loss) income before minority interests and equity in (losses) earnings of unconsolidated affiliates (17,753) 837 (15,369) (14,532) Minority interests and equity in (losses) earnings of unconsolidated affiliates (1,068) 22 (12) 10 (Loss) income from continuing operations (18,821) 859 (15,381) (14,522) (Loss) income from discontinued operation (521) (40) (2,211) (2,251) Gain from sale of discontinued operation, net of income taxes 53,802 - - - Net income (loss) $34,460 $819 $(17,592) $(16,773) September January Nine months 26, 2003 1, 2003 Nine months ended through through ended September September September September 30, 2004 30, 2003 25, 2003 30, 2003 Successor Successor Predecessor Combined Net revenues $1,289,031 $19,247 $1,196,247 $1,215,494 Add: reimbursed service costs 260,206 3,465 268,683 272,148 Gross revenues 1,549,237 22,712 1,464,930 1,487,642 Costs, expenses and other: Costs of revenues 1,120,448 14,708 969,474 984,182 General and administrative 474,503 5,971 397,318 403,289 Interest expense (income), net 44,033 1,033 (10,374) (9,341) Other expense (income), net 551 (308) (5,391) (5,699) Transaction and restructuring - - 54,148 54,148 Gain on sale of portion of an investment in a subsidiary (24,688) - - - Non-operating gain on change of interest transaction (10,030) - - - 1,604,817 21,404 1,405,175 1,426,579 (Loss) income before income taxes (55,580) 1,308 59,755 61,063 Income tax (benefit) expense (2,307) 471 27,224 27,695 (Loss) income before minority interests and equity in (losses) earnings of unconsolidated affiliates (53,273) 837 32,531 33,368 Minority interests and equity in (losses) earnings of unconsolidated affiliates (1,524) 22 4 26 (Loss) income from continuing operations (54,797) 859 32,535 33,394 (Loss) income from discontinued operation 9,620 (40) 4,626 4,586 Gain from sale of discontinued operation, net of income taxes 53,802 - - - Net income (loss) $8,625 $819 $37,161 $37,980 Consolidated Balance Sheet Data (Unaudited) September 30, December 31, 2004 2003 In millions Successor Successor Cash, cash equivalents and debt investments $560 $385 Investments in marketable equity securities 27 58 Investments in non-marketable equity securities and loans 56 49 Investments in unconsolidated affiliates 121 121 Working capital 310 213 Total assets 2,060 1,993 Debt including current portion 792 794 Shareholders' equity 539 535 Schedule 2 of 2 Segment Information (Unaudited) September July Three months 26, 2003 1, 2003 Three months ended through through ended September September September September 30, 2004 30, 2003 25, 2003 30, 2003 Successor Successor Predecessor Combined In thousands Service revenues: Product development $282,497 $11,884 $233,319 $245,203 Commercial services 179,126 6,566 126,483 133,049 Eliminations (26,703) (518) (10,789) (11,307) Total net service revenues 434,920 17,932 349,013 366,945 PharmaBio Development Commercial rights and royalties 7,660 1,102 36,368 37,470 Investment (2,509) 213 (1,086) (873) Total PharmaBio Development 5,151 1,315 35,282 36,597 Total net revenues 440,071 19,247 384,295 403,542 Reimbursed service costs 95,441 3,465 77,545 81,010 Gross revenues $535,512 $22,712 $461,840 $484,552 Contribution (revenues less cost of revenues excluding depreciation and amortization expense except as noted below): Product development $139,322 $6,601 $120,731 $127,332 Commercial services 71,917 2,823 46,521 49,344 PharmaBio Development (includes amortization and depreciation expense noted below) (35,099) 148 13,329 13,477 Informatics 0 0 0 0 Total contribution $176,140 $9,572 $180,581 $190,153 Depreciation and amortization expense (excluded from contribution except as noted below): Product development $21,367 $1,078 $13,768 $14,846 Commercial services 7,857 385 4,654 5,039 PharmaBio Development (included in contribution) 1,121 36 679 715 Corporate 3,188 105 194 299 Total depreciation and amortization expense $33,533 $1,604 $19,295 $20,899 September January Nine months 26, 2003 1, 2003 Nine months ended through through ended September September September September 30, 2004 30, 2003 25, 2003 30, 2003 Successor Successor Predecessor Combined In thousands Service revenues: Product development $813,544 $11,884 $734,729 $746,613 Commercial services 484,972 6,566 392,050 398,616 Eliminations (41,582) (518) (29,777) (30,295) Total net service revenues 1,256,934 17,932 1,097,002 1,114,934 PharmaBio Development Commercial rights and royalties 38,401 1,102 71,072 72,174 Investment (6,304) 213 28,173 28,386 Total PharmaBio Development 32,097 1,315 99,245 100,560 Total net revenues 1,289,031 19,247 1,196,247 1,215,494 Reimbursed service costs 260,206 3,465 268,683 272,148 Gross revenues $1,549,237 $22,712 $1,464,930 $1,487,642 Contribution (revenues less cost of revenues excluding depreciation and amortization expense except as noted below): Product development $395,737 $6,601 $375,125 $381,726 Commercial services 187,782 2,823 142,144 144,967 PharmaBio Development (includes amortization and depreciation expense noted below) (57,255) 148 37,455 37,603 Informatics 0 0 0 0 Total contribution $526,264 $9,572 $554,724 $564,296 Depreciation and amortization expense (excluded from contribution except as noted below): Product development $64,139 $1,078 $43,142 $44,220 Commercial services 23,864 385 15,520 15,905 PharmaBio Development (included in contribution) 2,940 36 2,210 2,246 Corporate 9,472 105 607 712 Total depreciation and amortization expense $100,415 $1,604 $61,479 $63,083
Quintiles Transnational Corp.CONTACT: Pat Grebe, Media Relations, media.info@quintiles.com , or GregConnors, Investor Relations, invest@quintiles.com , +1-919-998-2000, both ofQuintiles Transnational Corp.
Web site: http://www.quintiles.com/
