RESEARCH TRIANGLE PARK, N.C. - January 23, 2002 - Quintiles Transnational Corp. (Nasdaq: QTRN) today announced financial results for the quarter and year ended Dec. 31, 2001. Earnings per share for fourth quarter 2001 were $0.14 on a diluted basis, a 56% increase from the previous quarter's reported earnings per share of $0.09, excluding non-recurring events. First Call's consensus estimate for fourth quarter 2001 earnings per share was $0.11. Income from operations, excluding non-recurring events, was $18.6 million vs. $11.7 million for the previous quarter, a 59% increase. Net income for the quarter was $17 million, a 64% increase from the previous quarter's net income of $10.4 million, excluding non-recurring events. Net revenue for the quarter was $404 million, compared to $407 million for third quarter 2001. Non-recurring events included restructuring charges, write-off of goodwill and other assets, disposal of business and WebMD-related transactions. Please refer to the attached financial tables for further details.
On a generally accepted accounting principles basis, earnings per share, on a diluted basis, for fourth quarter 2001 were $0.60 compared to $0.06 for the same quarter in the prior year. Income from operations was $94.8 million compared to $3.9 million for fourth quarter 2000. Net income was $72.6 million compared to $6.6 million for the same quarter in the prior year.
For the year, on a generally accepted accounting principles basis, income from operations for 2001 was $48.2 million vs. a loss from operations of $68.2 million for 2000. Net income for 2001 was a loss of $33.8 million or $0.29 per share compared to net income of $418.9 million or $3.61 per share for 2000.
"I'm extremely pleased to have exceeded analysts' consensus expectations for EPS for the quarter and to have achieved our fifth straight quarter of increasing income from operations before non-recurring events," said Quintiles Transnational Chief Executive Officer Pam Kirby, Ph.D. "Our sequential growth in EPS and year-over-year growth in income from operations show that our efforts to increase efficiency are proving successful. At our annual Investor Conference last month, I discussed our corporate-wide focus on three key areas - quality, efficiency and innovation. I believe these results reflect our ability to deliver high-quality services to customers with greater efficiency, and our unique capabilities to help customers solve major corporate challenges.
"I am also pleased that we have achieved a record-breaking quarter of $145 million in cash provided by operations. Our balance sheet continues to be strong with $602 million in cash and investments and only $38 million of debt. This positions us well to continue to implement our strategy of innovative partnering led by our PharmaBio group."
Quintiles' strategic investment group, PharmaBio Development, continued to facilitate commercialization and product development agreements during the fourth quarter, including a U.S. sales and marketing alliance with Discovery Laboratories to commercialize Discovery's Surfaxin® product, now in Phase III clinical trials for the treatment of respiratory ailments in newborns. PharmaBio Development also acquired the North America license to market and sell Solaraze®, a topical gel approved by the U.S. Food and Drug Administration for the treatment of actinic keratosis, a pre-cancerous skin condition linked to over-exposure to the sun. Solaraze is being launched across the United States this month.
Net new business in the second half of 2001 was $903.2 million, of which $32.2 million was internal backlog for services. Net new business in the second half of 2001 increased 37% compared with the six-month period ending Dec. 31, 2000, resulting in a backlog at Dec. 31, 2001, of approximately $2 billion. New business backlog does not include future revenues related to commercial rights from Quintiles' partnering relationships.
In other fourth quarter developments, Quintiles Transnational repurchased 1.18 million shares of its common stock for an aggregate price of approximately $18.9 million as part of its previously announced stock repurchase program.
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 fourth quarter and full year 2001 financial briefing will be held at 11 a.m. EST on Thursday, Jan. 24, and will be broadcast live over the Web. Interested parties can access the webcast at /corporate_info/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, Feb. 8, 2002.
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 project management groups and match demand to resources, actual operating performance, the actual savings and operating improvements resulting from the restructuring, the ability to maintain large customer 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 the data contract with WebMD, which terminates Feb. 28, 2002. 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.