RESEARCH TRIANGLE PARK, N.C. - October 16, 2002 - Quintiles Transnational Corp. (Nasdaq: QTRN) today announced financial results for third quarter 2002. Earnings per share for the quarter ended Sept. 30, 2002, were $0.18 on a diluted basis, exceeding analysts' consensus expectations and up from a third quarter 2001 loss of $1.03 per share. On an operating basis, third quarter 2001 EPS was $0.04, excluding non-recurring events. Net revenue and net income for third quarter 2002 were $396.9 million and $21.2 million, respectively, compared to third quarter 2001 net revenue of $399.4 million and a net loss of $123.9 million. Operating basis net income for third quarter 2001, excluding non-recurring events, was $5.1 million. Non-recurring events in 2001 included restructuring charges, write-off of goodwill and other assets, impairment on the investment in WebMD common stock, and gain on disposal of a discontinued operation. Please refer to the attached financial tables for further details.
"Our solid EPS growth was fueled by ongoing increases in efficiency and quality delivery from our Product Development and Commercialization groups," said Quintiles Chief Executive Officer Pam Kirby, Ph.D. "Both our Product Development and Commercialization groups achieved their highest contribution margins in three years."
Quintiles Transnational Chief Financial Officer Jim Bierman said: "We set a record for quarterly cash flow from operations of $77 million, continuing our strong performance in this key area. Through the first three quarters of 2002, we generated $169 million in cash from operations. Our robust cash flow is attributable to our increased profitability and the excellent work of our operations people in reducing days billings outstanding."
In other developments during the quarter, Quintiles announced significant U.S. commercialization agreements with Eli Lilly and Company and Columbia Laboratories, both facilitated by Quintiles' strategic investment group, PharmaBio Development.
Kirby said: "Our agreements to help commercialize Lilly's antidepressant, Cymbalta, and Columbia Laboratories' portfolio of women's healthcare products demonstrate PharmaBio's ability to create mutually beneficial strategic solutions. Through these types of agreements, our customers can increase sales support for product launches and pay for it through royalties on sale of the products. This allows our customers to optimize their resources while offering Quintiles higher reward potential than traditional payment arrangements."
On Monday, Quintiles announced that the Board of Directors had received a non-binding proposal from a newly formed company wholly owned by Dennis Gillings, Ph.D., Quintiles' chairman and founder, to acquire all of the outstanding shares of Quintiles for a cash price of $11.25 per share. In response, the Board of Directors has established a special committee of independent directors to examine the proposal or alternatives.
Supplemental financial information is available under "Additional Financials" in the Investors section of Quintiles' Web site, http://www.quintiles.com/investors/additional_financials (access expired).
Quintiles Transnational's third quarter 2002 financial briefing will be held at 11 a.m. EDT on Thursday, Oct. 17, and will be broadcast live over the Web. Interested parties can access the webcast at http://www.quintiles.com/corporate_info/broadcast_center (access expired). A replay of the webcast will be available via the same link about two hours after completion of the call, and will be archived for on-demand replay through 5 p.m. EST on Friday, November 1, 2002.
Quintiles Transnational 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 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, uncertainties arising in connection with the proposed acquisition transaction, including the possibility that neither the proposed transaction nor any other transaction will be approved or completed, 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 revenues 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 efficiently distribute backlog among project management groups and match demand to resources, actual operating performance, the actual savings and operating improvements resulting from previous restructurings, 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. 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.