Quintiles Reports 2004 Net Revenue of US$1.78 Billion
Research Triangle Park, North Carolina (ots/PRNewswire)
- Fourth quarter 2004 net revenue of US$493.2 million, up 20% from same quarter in 2003
- Record backlog of US$2.6 billion as of Dec. 31, 2004
Quintiles Transnational Corp. today announced financial results for the year and quarter ended Dec. 31, 2004. Net revenue for 2004 was US$1.78 billion versus US$1.63 billion in 2003. Contribution for Quintiles' Product Development and Commercial Services groups totaled US$808.1 million for 2004 Versus US$713.7 million for 2003. Net income for 2004 was US$1.0 million, compared with US$29.7 million for 2003.
Net revenue for fourth quarter 2004 was US$493.2 million, an increase of 20% from net revenue of US$412.4 million for the same period in 2003. Contribution for Quintiles' Product Development and Commercial Services groups totaled US$224.6 million in fourth quarter 2004 versus US$187.0 million for the same quarter in 2003. Net loss for fourth quarter 2004 was US$7.6 million, compared with a loss of US$8.2 million for fourth quarter 2003.
Net new business in the second half of 2004 was US$1.38 billion versus US$841 million for the second half of 2003. Net new business for 2004 and 2003 was US$2.3 billion and US$1.6 billion, respectively, a 44% increase. Net new business for 2004 included US$388 million of net wins of internal service contracts. Backlog was US$2.6 billion on Dec. 31, 2004, versus US$1.9 billion on the same date in 2003.
"Exceeding US$2 billion in new business signings in 2004 and achieving a record US$2.6 billion in backlog are significant accomplishments," said Quintiles Transnational Chairman and Chief Executive Officer Dennis Gillings, Ph.D., CBE. "The second half of 2004 was our fifth consecutive half-year increase in net new business.
"These robust new business wins are driving revenue growth. Our Product Development group's new business wins increased 27% in 2004 from the previous year. Revenue for this group grew in excess of 20% for the quarter compared to fourth quarter 2003 as a result of this success in winning new business."
As of Dec. 31, 2004, Quintiles had cash and cash equivalents of US$535.7 million; on the same date in 2003, cash and cash equivalents totaled US$373.6 million.
Quintiles Transnational Chief Financial Officer John Ratliff said: "We bolstered our already strong cash position in 2004 primarily through two previously announced transactions - Mitsui's payment of approximately US$80 million in cash to become a 20% shareholder in Quintiles Japan, and Bradley Pharmaceutical's purchase of our Bioglan Pharmaceuticals subsidiary for about US$188 million."
During 2004, Quintiles recognized a pre-tax gain of US$34.7 million from the Mitsui transaction (US$18.1 million after-tax gain) and an after-tax gain of US$54.4 million from the Bioglan transaction. Ratliff continued: "In addition to strengthening our cash position, we also made significant progress in 2004 toward creating a refined organizational structure to achieve sustained, profitable growth. We are hiring worldwide, adding staff to carry out the projects we've signed with customers. At the same time we have identified areas, as previously announced, where we need to reduce staff in order to become more efficient.
"I anticipate that by the end of 2005 our global work force -- now about 17,000 -- will have grown substantially, with more individuals focused on delivering on customer projects."
In order to facilitate an understanding of the 2004 results in comparison to the 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 fourth quarter 2004 financial briefing will be held at 11:00 a.m. EST on Wednesday, March 9, and will be broadcast live over the Web. The webcast or replay, which will be available through 5:00 p.m. EST March 25, 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)
All figures in USD.
Three Three Twelve
months months months Sept. 26 Jan. 1
ended ended ended through through
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Sept. 25,
2004 2003 2004 2003 2003
Successor Successor Successor Successor Predecessor
In thousands
Net revenues $493,223 $412,379 $1,782,254 $431,626 $1,196,247
Add: reimbursed
service costs 103,874 92,790 364,080 96,255 268,683
Gross revenues 597,097 505,169 2,146,334 527,881 1,464,930
Costs, expenses and
other:
Costs of revenues 426,996 347,304 1,547,444 362,012 969,474
Selling, general
and administrative 162,612 148,717 637,115 154,688 397,318
Interest (income)
expense, net 14,545 14,857 58,578 15,890 (10,374)
Other expense
(income), net (1,630) (2,095) (1,079) (2,403) (5,391)
Transaction and
restructuring 6,577 - 6,577 - 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) - -
609,100 508,783 2,213,917 530,187 1,405,175
(Loss) income before
income taxes (12,003) (3,614) (67,583) (2,306) 59,755
Income tax (benefit)
expense (4,292) 9,339 (6,599) 9,810 27,224
(Loss) income before
equity in (losses)
earnings of
unconsolidated
affiliates and
minority interests (7,711) (12,953) (60,984) (12,116) 32,531
Equity in earnings
(losses) of
unconsolidated
affiliates 240 (10) (149) 13 (8)
Minority interests (731) (122) (1,866) (123) 12
(Loss) income from
continuing
operations (8,202) (13,085) (62,999) (12,226) 32,535
Income from
discontinued
operation - 4,839 9,620 4,799 4,626
Gain from sale of
discontinued
operation, net of
income taxes 620 - 54,422 - -
Net (loss) income $(7,582) $(8,246) $1,043 $(7,427) 37,161 Consolidated Balance Sheet Data
(Unaudited)
December 31, December 31,
2004 2003
In millions Successor Successor
Cash, cash equivalents and debt
investments $548 $385
Investments in marketable equity
securities 24 58
Investments in non-marketable equity
securities and loans 56 49
Investments in unconsolidated
affiliates 121 121
Working capital, excluding discontinued
operation 316 131
Total assets 2,048 1,993
Debt including current portion 795 794
Shareholders' equity 568 535
Schedule 2 of 3
Segment Information
(Unaudited)
Three Three Twelve
months months months Sept. 26 Jan. 1
ended ended ended through through
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Sept. 25,
2004 2003 2004 2003 2003
Successor Successor Successor Successor Predecessor
In thousands
Service revenues:
Product
development $313,143 $258,363 $1,126,687 $270,247 $734,729
Commercial
services 183,385 134,597 668,357 141,163 392,050
Eliminations (24,105) (9,940) (65,687) (10,458) (29,777)
Total net
service revenues 472,423 383,020 1,729,357 400,952 1,097,002
PharmaBio
Development
Commercial
rights and
royalties 24,116 26,812 62,517 27,914 71,072
Investment (3,316) 2,547 (9,620) 2,760 28,173
Total PharmaBio
Development 20,800 29,359 52,897 30,674 99,245
Total net revenues 493,223 412,379 1,782,254 431,626 1,196,247
Reimbursed service
costs 103,874 92,790 364,080 96,255 268,683
Gross revenues $597,097 $505,169 $2,146,334 $527,881 $1,464,930
Contribution (revenues
less cost of revenues
excluding depreciation
and amortization expense
except as noted below):
Product
development $158,668 $134,445 $554,405 $141,046 $375,125
Commercial
services 65,930 52,530 253,712 55,353 142,144
PharmaBio
Development
(includes
amortization
and depreciation
expense noted
below) (27,067) 3,892 (84,322) 4,040 37,455
Total contribution $197,531 $190,867 $723,795 $200,439 $554,724
Depreciation and
amortization expense
(excluded from contribution
except as noted below):
Product
development $19,332 $21,328 $83,471 $22,406 $43,143
Commercial
services 6,895 8,792 30,759 9,177 15,521
PharmaBio
Development
(included in
contribution) 514 927 3,454 962 2,210
Corporate 1,203 2,882 10,675 2,987 604
Total depreciation
and amortization
expense $27,944 $33,929 $128,359 $35,532 $61,478 Schedule 3 of 3
Reconciliation
(Unaudited)
Sept. 26 Jan. 1 Twelve months
through through ended
Dec. 31, Sept. 25, Dec. 31,
2003 2003 2003
Successor Predecessor Combined
In thousands
Net revenues $431,626 $1,196,247 $1,627,873
Add: reimbursed service costs 96,255 268,683 364,938
Gross revenues 527,881 1,464,930 1,992,811
Costs, expenses and other:
Costs of revenues 362,012 969,474 1,331,486
Selling, general and
administrative 154,688 397,318 552,006
Interest (income) expense, net 15,890 (10,374) 5,516
Other expense (income), net (2,403) (5,391) (7,794)
Transaction and restructuring - 54,148 54,148
530,187 1,405,175 1,935,362
(Loss) income before income taxes (2,306) 59,755 57,449
Income tax (benefit) expense 9,810 27,224 37,034
(Loss) income before equity in
(losses) earnings of unconsolidated
affiliates and minority interests (12,116) 32,531 20,415
Equity in earnings (losses) of
unconsolidated affiliates 13 (8) 5
Minority interests (123) 12 (111)
(Loss) income from continuing
operations (12,226) 32,535 20,309
Income from discontinued operation 4,799 4,626 9,425
Net (loss) income $(7,427) 37,161 $29,734
Service revenues:
Product development $270,247 $734,729 $1,004,976
Commercial services 141,163 392,050 533,213
Eliminations (10,458) (29,777) (40,235)
Total net service revenues 400,952 1,097,002 1,497,954
PharmaBio Development
Commercial rights and royalties 27,914 71,072 98,986
Investment 2,760 28,173 30,933
Total PharmaBio Development 30,674 99,245 129,919
Total net revenues 431,626 1,196,247 1,627,873
Reimbursed service costs 96,255 268,683 364,938
Gross revenues $527,881 $1,464,930 $1,992,811
Contribution (revenues less cost of
revenues excluding depreciation and
amortization expense except as noted
below):
Product development $141,046 $375,125 $516,171
Commercial services 55,353 142,144 197,497
PharmaBio Development (includes
amortization and depreciation
expense noted below) 4,040 37,455 41,495
Total contribution $200,439 $554,724 $755,163
Depreciation and amortization expense
(excluded from contribution except
as noted below):
Product development $22,406 $43,143 $65,549
Commercial services 9,177 15,521 24,698
PharmaBio Development (included
in contribution) 962 2,210 3,172
Corporate 2,987 604 3,591
Total depreciation and
amortization expense $35,532 $61,478 $97,010
Web site: http://www.quintiles.com
http://www.quintiles.com/Corporate_Info/Broadcast_CenterContact:
Media Relations, Pat Grebe, media.info@quintiles.com , or Investor
Relations, Greg Connors, invest@quintiles.com , both of Quintiles
Transnational Corp., +1-919-998-2000