RESEARCH TRIANGLE PARK, N.C. – May 13, 2005 – Quintiles Transnational Corp. today announced financial results for the quarter ended March 31, 2005. Net revenue for first quarter 2005 was $492.4 million, an increase of 16% from net revenue of $423.2 million for the same quarter in 2004. Contribution for Quintiles' Product Development and Commercial Services groups totaled $217.2 million in first quarter 2005 versus $182.6 million for the same quarter in 2004. Net income for first quarter 2005 was $19.3 million, compared with a loss of $15.7 million for first quarter 2004.
Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $33.2 million in first quarter of 2005, including the loss of $21 million, as expected, in Quintiles' PharmaBio Development group – which had a breakeven first quarter 2004 – and $9.4 million of restructuring and impairment charges, versus $31.9 million for the same quarter in 2004. Thus the increase in Quintiles' EBITDA comes from Quintiles' Product Development and Commercial Services groups. A reconciliation of EBITDA to net income is presented in the schedules attached to this release and also in the company's form 10-Q on file with the Securities and Exchange Commission.
Quintiles' effective income tax rate for the first quarter of 2005 was positively impacted due to a $31.5 million income tax benefit recognized as a result of the company's adoption of its domestic reinvestment plan related to the American Jobs Creation Act of 2004.
Quintiles Transnational Chief Financial Officer John Ratliff said: "We achieved solid year-over-year revenue growth during the quarter and saw a significant increase in contribution from our Product Development and Commercial Services groups. In addition, we saw progress in reducing overhead costs, one of our key areas of focus.
"We began 2005 with record backlog of $2.6 billion. Overall, we have continued to see positive business conditions and demand for Quintiles' services."
As of March 31, 2005, Quintiles had cash and cash equivalents of $339 million. As previously announced, during the quarter Quintiles paid down $150 million of the approximately $306.1 million outstanding under a term loan taken in September 2003; the company also amended the term loan and obtained generally better terms.
Ratliff said: "Since the original credit agreement was signed in 2003, when Quintiles went private, market conditions have improved and we are financially stronger. The better rates and better general terms that we obtained reflect both the market conditions and the progress we've made as a company in the intervening period."
Quintiles Transnational's first quarter 2005 financial briefing will be held at 11:00 a.m. EDT on Monday, May 16, and will be broadcast live over the Web. The webcast or replay, which will be available through 5:00 p.m. EDT on Friday, May 27, 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.