Quintiles Reports 2nd Quarter Net Revenue of $426 Million
Research Triangle Park, North Carolina (ots/PRNewswire)
- Strong net new business growth, up 31% for first half of 2004
- Fourth consecutive half-year increase in total net new business wins
Quintiles Transnational Corp. today announced financial results for the quarter ended June 30, 2004. Net revenue for second quarter 2004 was US$425.8 million versus US$408.4 million for the same period in 2003. Net loss for second quarter 2004 was US$10.1 million, reflecting increased costs and expenses from project startups.
For the first half of 2004, net new business totaled an estimated US$954.5 million, a 31% increase from the US$727.3 million in net new business reported for the same period in 2003. Total backlog as of June 30, 2004, was approximately US$2.2 billion.
"We continue to perform strongly in winning new business -- almost a billion dollars in the first six months of the year," said Quintiles Transnational Chairman and Chief Executive Officer Dennis Gillings, Ph.D. "This is our fourth consecutive half-year increase in net new business and further evidence of the high-quality work we do for customers and our increased business development efforts."
Quintiles Transnational Executive Vice President and Chief Financial Officer John Ratliff said: "In addition to new business wins, we are pleased with our sequential quarterly growth in service revenue. Our plans now are to build on these strengths while focusing on increasing margins."
During second quarter 2004, Quintiles and Mitsui & Co. completed a previously announced transaction whereby Mitsui become a 20% shareholder in Quintiles Transnational Japan K.K. Quintiles and Quintiles Japan received a total of approximately 8.7 billion yen (approximately US$79.9 million) in cash from Mitsui in the transaction, with Quintiles having the ability to receive up to an additional 2.0 billion yen (approximately US$18.5 million) based on Quintiles Japan's future financial performance. As a result of the Mitsui transaction, Quintiles recognized a pre-tax gain of US$34.7 million during the quarter.
Earlier this week, Quintiles and Bradley Pharmaceuticals, Inc. (NYSE: BDY) completed the previously announced sale of certain assets relating to its Bioglan Pharmaceuticals subsidiary to Bradley for US$188.3 million in cash, including approximately US$5.4 million of direct costs for transferred inventory. During the quarter, Bioglan was classified as a discontinued operation.
"The closings of the Mitsui and Bioglan transactions further bolster our already strong cash position," Ratliff said. As of June 30, 2004, prior to the closing of the Bioglan transaction, Quintiles had cash, cash equivalents, marketable securities and debt investments valued at US$421.2 million.
Quintiles Transnational's second quarter 2004 financial briefing will be held at 9:00 a.m. EDT on Monday, Aug. 16, and will be broadcast live over the Web. The webcast or replay, which will be available through 5:00 p.m. EDT Aug. 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 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.
All figures in US$
Condensed Consolidated Statements of Income
(Unaudited)
Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
Successor Predecessor Successor Predecessor
In thousands
Net revenues $425,766 $408,398 $848,960 $811,952
Add: reimbursed service costs 82,306 96,797 164,765 191,138
Gross revenues 508,072 505,195 1,013,725 1,003,090
Costs, expenses and other:
Costs of revenues 372,062 337,493 728,664 669,600
General and administrative 158,984 137,232 314,602 268,236
Interest expense (income),
net 14,576 (4,360) 29,195 (8,128)
Other (income) expense, net 1,199 (8,267) (1,992) (5,425)
Transaction 0 2,231 0 3,887
Gain on sale of portion of
an investment in a
subsidiary (24,688) 0 (24,688) 0
Non-operating gain on
change of interest
transaction (10,030) 0 (10,030) 0
512,103 464,329 1,035,751 928,170 (Loss) income before income
taxes (4,031) 40,866 (22,026) 74,920
Income tax expense 14,133 14,531 13,408 27,020
(Loss) income before equity in
earnings of unconsolidated
affiliates and other (18,164) 26,335 (35,434) 47,900
Equity in losses of
unconsolidated affiliates and
other (201) 20 (456) 16
(Loss) income from continuing
operations (18,365) 26,355 (35,890) 47,916
Income from discontinued
operation 8,280 3,242 10,141 6,837
Net (loss) income $(10,085) $29,597 $(25,749) $54,753 Consolidated Balance Sheet Data
(Unaudited)
June 30, December 31,
2004 2003
In millions Successor Successor
Cash, cash equivalents and debt
investments $387 $385
Investments in marketable equity
securities 34 58
Investments in non-marketable equity
securities and loans 53 49
Investments in unconsolidated
affiliates 121 121
Working capital 285 213
Total assets 1,990 1,993
Debt including current portion 793 794
Shareholders' equity 510 535 Segment Information
(Unaudited)
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
Successor Predecessor Successor Predecessor
In thousands
Service revenues:
Product development $268,363 $251,374 $531,047 $501,410
Commercial services 158,859 138,852 305,846 265,567
Informatics 0 0 0 0
Eliminations (8,596) (10,893) (14,879) (18,988)
Total net service revenues 418,626 379,333 822,014 747,989
PharmaBio Development
Commercial rights and
royalties 15,155 17,753 30,741 34,704
Investment (8,015) 11,312 (3,795) 29,259
Total PharmaBio Development 7,140 29,065 26,946 63,963
Total net revenues 425,766 408,398 848,960 811,952
Reimbursed service costs 82,306 96,797 164,765 191,138
Gross revenues $508,072 $505,195 $1,013,725 $1,003,090 Contribution (revenues less
cost of revenues excluding
depreciation and amortization
expense except as noted
below):
Product development $128,353 $128,080 $256,414 $254,394
Commercial services 61,310 50,713 115,865 95,623
PharmaBio Development
(includes amortization
and depreciation expense
noted below) (21,497) 9,415 (22,156) 24,126
Informatics 0 0 0 0
Total contribution $168,166 $188,208 $350,123 $374,143
Depreciation and amortization
expense (excluded from
contribution except as noted
below):
Product development $21,182 $14,427 $42,772 $29,374
Commercial services 7,823 5,875 16,007 10,866
PharmaBio Development
(included in
contribution) 1,015 771 1,819 1,531
Informatics 0 0 0 0
Corporate 3,151 203 6,284 413
Total depreciation and
amortization expense $33,171 $21,276 $66,882 $42,184Web site: http://www.quintiles.com/corporate_info/broadcast_center http://www.quintiles.com
Contact:
Jay Johnson, Media Relations, media.info@quintiles.com, or Greg
Connors, Investor Relations, invest@quintiles.com, both of Quintiles
Transnational Corp., +1-919-998-2000