RESEARCH TRIANGLE PARK, N.C. - Quintiles Transnational Corp. (Nasdaq: QTRN) today announced financial results for third quarter 2001. Net revenue for the quarter ended Sept. 30, 2001, was $407.1 million, compared to $404.3 million for second quarter 2001. Income from operations, excluding non-recurring transactions, was $11.7 million vs. $9.9 million for the previous quarter. Net income, excluding non-recurring transactions, was $10.4 million vs. comparable net income for the previous quarter of $11.1 million. Earnings per share on a diluted basis, excluding non-recurring transactions, were $0.09, unchanged from the previous quarter.
Including one-time transactions detailed later in this press release, net loss for the quarter was $123.9 million, or $1.03 per share on a diluted basis. Third quarter 2000 net revenue, net income and EPS were $412.3 million, $4.6 million and $0.04, respectively.
"This is the fourth consecutive quarter in which we've increased our income from operations, a key metric of our business plan," said Quintiles Transnational Chief Executive Officer Pam Kirby, Ph.D. "I'm also pleased that we grew net revenue on a sequential basis for the first time in more than a year. The business plan we unveiled last month emphasized Quintiles' commitment to quality, efficiency and innovation. I believe our third quarter results and the recent WebMD settlement agreement are clear evidence of the progress we're making."
About $2 million in revenue and operating profit was lost because of travel restrictions implemented after the Sept. 11 terrorist events and because of e-mail and Internet connectivity precautions relating to the Nimda computer virus. No data were lost or compromised because of the virus.
"Our Clinical Development Services' operations recovered relatively quickly from those two events and have now returned to normal levels," Kirby said.
Last week Quintiles and WebMD jointly announced the settlement of litigation between the companies and the resolution of their disputes. As part of the settlement, WebMD agreed to pay Quintiles $185 million in cash for all 35 million shares of WebMD stock held by Quintiles, realizing a 50% premium to market. Quintiles also will receive an additional payment from WebMD if, on or before June 30, 2004, WebMD is acquired for a price greater than $4.00 per share or its ENVOY subsidiary is acquired for a price greater than $500 million.
Quintiles Transnational Chairman Dennis Gillings, Ph.D., said: "Including the WebMD payment, Quintiles' cash balance now exceeds $600 million. This gives us a great deal of flexibility in continuing to build strategic customer relationships through our PharmaBio Development deals, in securing new, more robust data sources for our Informatics business, and in helping our customers solve corporate challenges in ways our competitors can't. It also will allow us to repurchase Quintiles stock at attractive prices and implement new e-business solutions to help grow our business and add value."
In other third quarter developments, Quintiles Transnational repurchased 420,000 shares of its common stock for an aggregate price of approximately $6.9 million as part of its previously announced stock repurchase program.
The non-recurring transactions that impacted Quintiles' third quarter earnings were previously discussed in the company's conference call and press release last month announcing its operational plan and restructuring. The non-recurring transactions pre-tax amounts were: a $341.9 million write-down of the value of investments held by Quintiles, primarily WebMD stock; a restructuring charge of $52.0 million; and a $20.1 million write-down of goodwill and operating asset impairments related to the restructuring. The fourth non-recurring transaction was an income tax benefit of $142.0 million related to the sale of Envoy. The combined effect of these transactions was a loss of $134.2 million, net of taxes.
Supplemental financial information is available now under "Additional Financials" in the Investors section of Quintiles' Web site, /corporate_info/investors/additional_financials (Access Expired).
Quintiles Transnational's third quarter 2001 financial briefing will be held at 11 a.m. EDT on Thursday, Oct. 18, and will be broadcast live over the Web. Interested parties can access the Webcast at /corporate_info/investors/broadcast_center (Access Expired). Additionally, a replay of the Webcast will be available via the same link about two hours after completion of the call. The replay will be available through 5 p.m. EST, Friday, Nov. 2, 2001.
Quintiles Transnational is the world's leading provider of information, technology and services to help bring new medicines to patients faster and improve healthcare. Headquartered near Research Triangle Park, North Carolina, Quintiles Transnational is a member of the S&P 500 and Fortune 1000. For more information visit the company's Web site at www.quintiles.com.
The schedule attached to this release is 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 the market for our products and services will not grow as we expect, the risk that our PharmaBio transactions will not generate revenues or profit at the rate or levels we anticipate, the risk that our uses of cash will not yield the intended results, our ability to efficiently distribute backlog among therapeutic business units and match demand to resources, actual operating performance, the actual savings and operating improvements resulting from the restructuring, the ability to maintain large client contracts or to enter into new contracts, changes in trends in the pharmaceutical industry, and the ability to operate successfully in new lines of business. Our data products business remains subject to state and federal regulations, and contracts with data vendors, including WebMD. 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.