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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 21, 1999
QUINTILES TRANSNATIONAL CORP.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 340-23520 56-1714315
(State or other (Commission File No.) I.R.S. Employer
jurisdiction Identification Number
of incorporation)
4709 CREEKSTONE DRIVE, RIVERBIRCH BUILDING, SUITE 200,
DURHAM, NORTH CAROLINA 27703-8411
(Address of principal executive offices)
(919) 998-2000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On July 21, 1999, Quintiles Transnational Corp. (the "Company") issued
a press release regarding its financial results for the period ended June 30,
1999. A copy of the press release is attached hereto as Exhibit 99.01 and
incorporated by reference herein.
ITEM 7.
(c) EXHIBITS
Exhibit No. Description of Exhibit
----------- ----------------------
99.01 Press release, dated July 21, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
QUINTILES TRANSNATIONAL CORP.
By: /s/ Rachel R. Selisker
----------------------------------
Dated: July 21, 1999 Rachel R. Selisker
Chief Financial Officer and
Executive Vice President Finance
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
----------- ----------------------
99.01 Press release, dated July 21, 1999
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FOR IMMEDIATE RELEASE WWW.QUINTILES.COM
CONTACT: Pat Grebe, Media Relations ([email protected])
Greg Connors, Investor Relations ([email protected])
(919) 998 2000
QUINTILES TRANSNATIONAL REPORTS QUARTERLY NET REVENUE
OF $456 MILLION, UP 34% FROM 1998
o NEW BUSINESS WINS SURGE TO $1 BILLION IN FIRST HALF OF 1999, A 47% INCREASE
o NET INCOME FOR QUARTER $38.6 MILLION, EXCLUDING NON-RECURRING COSTS, UP 49%
FROM 1998
o DILUTED NET INCOME PER SHARE GROWS 42%, EXCLUDING NON-RECURRING COSTS,
TO $0.33
RESEARCH TRIANGLE PARK, N.C. - July 21, 1999 - Quintiles Transnational Corp.
(Nasdaq: QTRN) today reported strong financial results for the second quarter
1999. Net revenue for the quarter was $456.4 million, a 34% increase over net
revenue of $340.4 million for the second quarter 1998.
Net income grew 49% to $38.6 million versus $26.0 million for the 1998 second
quarter, excluding transaction costs incurred in 1998 and 1999, and excluding
amortization of certain acquired intangible asset costs incurred in 1998.
Excluding these costs, diluted net income per share increased 42% to $0.33
versus $0.23 for the same period last year. Including these costs, net income
was $35.2 million versus $20.4 million for the 1998 second quarter, a 72%
increase, and diluted net income per share grew 64% to $0.30 versus $0.18 for
the second quarter of 1998. Second quarter 1998 results were restated for
acquisitions completed during 1999 that were accounted for as poolings of
interests.
"These outstanding results, along with our new business signings, show that we
continue to gain market share and consolidate our position as the leading
strategic outsourcing partner for the pharmaceutical industry," said Dennis
Gillings, Ph.D., Chairman and CEO of Quintiles Transnational Corp. "We achieved
more than $1 billion in new business won during the first six months of 1999, a
47 percent increase from $682 million in new business signings for the same
period last year. Also, I'm especially pleased that, excluding the impact of
foreign currency fluctuations, our net revenue grew 36% from second quarter 1998
to second quarter 1999.
"Our Innovex Commercial Solutions group performed exceptionally well in winning
new business in the first half of this year. Our Quintiles Product Development
group, which operates in the traditional contract research sector, continued to
grow much faster than our major competitors. Increasingly, our revenue derives
from large-scale and other strategic relationships, a trend which dramatically
differentiates us from the rest of the market."
Gillings added: "The second quarter also saw rapid growth in demand for
QUINTERNET(TM) Informatics. Revenue growth for ENVOY, our electronic
transactions processing group, was robust, with significant expansion in claims
processing revenue - both from existing customers
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and new customers.
"And we've seen significant cross-selling with QUINTERNET(TM) Informatics. Our
customers are increasingly realizing the power of QUINTERNET(TM) Informatics'
unique market research and sales information linking databases and enhancing
connections between the pharmaceutical and medical sectors of the U.S.
healthcare market. This information benefits our customers in every phase of
drug development and marketing."
In the second quarter, Quintiles continued to expand or strengthen its
industry-leading outsourcing capabilities to pharmaceutical, biotechnology and
medical device companies. Quintiles acquired Minerva Medical plc, a
Scotland-based clinical research organization with an international reputation
for patient recruitment and management of large primary-care clinical trials
involving chronic diseases.
Customers and consumers also have responded strongly to Quintiles' collaboration
with drkoop.com to recruit clinical trials patients over the Internet. In late
June, Dr. Gillings and former U.S. Surgeon General Dr. C. Everett Koop held a
press conference, broadcast over the Internet, to launch the
Quintiles-drkoop.com Clinical Trials Information Center. A video replay of the
press conference is available at www.quintiles.com.
The Clinical Trials Information Center, which has already enrolled almost 7,000
consumers into its "Interested Party Database" is designed to expand awareness
and availability of clinical trials as a treatment option for consumers while
maintaining the privacy of personal health information, and harness the power of
the Internet to accelerate enrollment of qualified patients, increasing speed
and efficiency of the drug development process. The Center is the first consumer
online service with interactive pre-screening, enrollment tracking features.
In the second quarter, Quintiles announced the acquisition of a centralized
clinical laboratory in South Africa, Medlab Pty Ltd (Niehaus & Botha), further
expanding its globally integrated network of clinical laboratories. Also in the
quarter, Quintiles added new Internet-enabled product capabilities to
QUINTERNET(TM) Informatics with the acquisition of SMG Marketing Group Inc., a
leading healthcare market information company. SMG's industry-leading databases
contain information on more than 200,000 healthcare facilities in the United
States, and its advanced software applications allow customers to access and
analyze healthcare information over the Internet.
In addition to SMG, QUINTERNET(TM) Informatics includes ENVOY and its Synergy
Health Care group and Scott-Levin.
Earlier this month, Quintiles further expanded its commercialization
capabilities with the acquisition of New Jersey-based Medcom, Inc., a leading
provider of physician meeting and educational events to help pharmaceutical
companies raise awareness of their products among healthcare professionals. The
company will operate as Innovex-Medcom Marketing Group and be managed by
Quintiles' Innovex subsidiary, the world's leading provider of commercial
solutions to the pharmaceutical industry.
On Monday, Quintiles announced the acquisition of MediTrain, The Netherlands'
leading multi-
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media pharmaceutical sales representative training company. MediTrain offers
traditional outsourced training services and innovative multimedia and
Internet-based training products, which will be used by Innovex in Europe and
elsewhere to help meet customer needs.
Quintiles Transnational Corp. is the market leader in providing a full range of
integrated product development and commercialization solutions to the
pharmaceutical, biotechnology and medical device industries. Quintiles also is a
leader in electronic transactions processing and informatics for the healthcare
sector and provides healthcare policy consulting to governments and other
organizations worldwide.
Headquartered near Research Triangle Park, North Carolina, Quintiles is a member
of the Forbes Platinum 400, the Fortune 1000, the Business Week Global 1000 and
the Nasdaq-100 Index. With more than 19,000 employees worldwide and offices in
31 countries, Quintiles operates through specialized work groups dedicated to
meeting customers' individual needs. Visit the Quintiles Transnational web site
at www.quintiles.com.
Information in this press release contains "forward-looking statements." These
statements involve risks and uncertainties that could cause actual results to
differ materially, including without limitation, the ability of the recently
combined businesses to be integrated with Quintiles' current operations, actual
operating performance, the ability to operate successfully in new lines of
business, the ability to maintain large client contracts or to enter into new
contracts, and the actual costs of combining the businesses. 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 S-3 and S-4 Registration Statements, its Annual Report on
Form 10-K, its Form 8-Ks, and its other periodic reports, including Form 10-Qs.
NOTE: At 11 a.m. EDT today (July 21, 1999), Quintiles Transnational Corp. CEO
Dennis Gillings and CFO Rachel Selisker will conduct a conference call to
discuss Quintiles' 1999 second quarter earnings results. Interested parties will
find information on accessing the call over the Internet by visiting our
Website, www.quintiles.com. A replay will be available at www.quintiles.com
shortly after conclusion of the conference call.
# # #
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PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME**
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
1999 1998* 1999* 1998*
- ----------------------------------------------------------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
In thousands, except per share data
Net revenue 456,413 340,435 869,727 655,505
Costs and expenses:
Direct 232,166 175,938 444,924 338,491
General and administrative 141,345 106,703 266,492 203,692
Depreciation and amortization 24,015 17,838 45,630 34,841
- ------------------------------------------------------------------------------- -----------------------------------
Total costs and expenses 397,526 300,479 757,046 577,024
- ------------------------------------------------------------------------------- -----------------------------------
Income from operations 58,887 39,956 112,681 78,481
Total other income (expense) 1,245 (266) 1,645 (555)
- ------------------------------------------------------------------------------- -----------------------------------
Income before income taxes 60,132 39,690 114,326 77,926
Income taxes 21,488 13,738 40,984 25,163
- ------------------------------------------------------------------------------- -----------------------------------
Net income $38,644 $25,952 $73,342 $52,763
- ------------------------------------------------------------------------------- -----------------------------------
Basic net income per share $ 0.34 $ 0.25 $ 0.65 $ 0.51
Diluted net income per share $ 0.33 $ 0.23 $ 0.64 $ 0.48
- ------------------------------------------------------------------------------- -----------------------------------
Shares used in computing net income per share
Basic 114,451 104,656 112,004 104,239
Diluted 120,907 111,860 118,559 110,802
</TABLE>
* Restated to include ENVOY, Niehaus & Botha, SMG and Minerva which were
acquired in 1999 in transactions accounted for as poolings of interests
** Excludes transactions costs. Also excludes amortization of certain
acquired intangible assets of $3.7 million and $10.1 million for the six
months ended June 30, 1999 and 1998, respectively. As of March 31, 1999,
these certain acquired intangible assets have been fully amortized.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
1999 1998* 1999* 1998*
- ---------------------------------------------------------------------------------------- -----------------------------
<S> <C> <C> <C> <C>
In thousands, except per share data
Net revenue 456,413 340,435 869,727 655,505
Costs and expenses:
Direct 232,166 175,938 444,924 338,491
General and administrative 141,345 106,703 266,492 203,692
Depreciation and amortization 24,015 22,903 49,351 44,971
- ---------------------------------------------------------------------------------------- -----------------------------
Total costs and expenses 397,526 305,544 760,767 587,154
- ---------------------------------------------------------------------------------------- -----------------------------
Income from operations 58,887 34,891 108,960 68,351
Transaction costs (3,464) (469) (25,827) (1,001)
Other income (expense) 1,245 (266) 1,645 (555)
- ---------------------------------------------------------------------------------------- -----------------------------
Total other income (expense) (2,219) (735) (24,182) (1,556)
- ---------------------------------------------------------------------------------------- -----------------------------
Income before income taxes 56,668 34,156 84,778 66,795
Income taxes 21,488 13,738 40,984 25,163
- ---------------------------------------------------------------------------------------- -----------------------------
Net income $35,180 $20,418 $43,794 $41,632
- ---------------------------------------------------------------------------------------- -----------------------------
Basic net income per share $ 0.31 $ 0.20 $ 0.39 $ 0.40
Diluted net income per share $ 0.30 $ 0.18 $ 0.38 $ 0.38
- ---------------------------------------------------------------------------------------- -----------------------------
Shares used in computing net income per share
Basic 114,451 104,656 112,004 104,239
Diluted 117,433 111,860 115,084 110,802
</TABLE>
* Restated to include ENVOY,Niehaus & Botha, SMG and Minerva which were
acquired in 1999 in transactions accounted for as poolings of interests
