RESEARCH TRIANGLE PARK, N.C. – March 7, 2005 – Quintiles Transnational Corp. today announced financial results for the year and quarter ended Dec. 31, 2004. Net revenue for 2004 was $1.78 billion versus $1.63 billion in 2003. Contribution for Quintiles' Product Development and Commercial Services groups totaled $808.1 million for 2004 versus $713.7 million for 2003. Net income for 2004 was $1.0 million, compared with $29.7 million for 2003.
Net revenue for fourth quarter 2004 was $493.2 million, an increase of 20% from net revenue of $412.4 million for the same period in 2003. Contribution for Quintiles' Product Development and Commercial Services groups totaled $224.6 million in fourth quarter 2004 versus $187.0 million for the same quarter in 2003. Net loss for fourth quarter 2004 was $7.6 million, compared with a loss of $8.2 million for fourth quarter 2003.
Net new business in the second half of 2004 was $1.38 billion versus $841 million for the second half of 2003. Net new business for 2004 and 2003 was $2.3 billion and $1.6 billion, respectively, a 44% increase. Net new business for 2004 included $388 million of net wins of internal service contracts. Backlog was $2.6 billion on Dec. 31, 2004, versus $1.9 billion on the same date in 2003.
"Exceeding $2 billion in new business signings in 2004 and achieving a record $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 $535.7 million; on the same date in 2003, cash and cash equivalents totaled $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 $80 million in cash to become a 20% shareholder in Quintiles Japan, and Bradley Pharmaceutical's purchase of our Bioglan Pharmaceuticals subsidiary for about $188 million."
During 2004, Quintiles recognized a pre-tax gain of $34.7 million from the Mitsui transaction ($18.1 million after-tax gain) and an after-tax gain of $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 www.quintiles.com/Corporate_Info/Broadcast_Center (Access expired).
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 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.