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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): October 20, 1999
QUINTILES TRANSNATIONAL CORP.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 340-23520 56-1714315
(State or other jurisdiction (Commission File No.) I.R.S. Employer
of incorporation) Identification Number
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 October 20, 1999, Quintiles Transnational Corp. (the "Company")
issued a press release regarding its financial results for the period ended
September 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
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99.01 Press release, dated October 20, 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: October 20, 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 October 20, 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 $458 MILLION, ACHIEVES PRE-ANNOUNCED ESTIMATE OF $0.27 PER SHARE
RESEARCH TRIANGLE PARK, N.C. - October 20, 1999 - Quintiles Transnational Corp.
(Nasdaq: QTRN) today announced third quarter 1999 net revenue of $457.8 million,
a 26.5% increase over net revenue of $362 million for third quarter 1998.
Net income increased 11.6% to $31.5 million versus $28.2 million for the 1998
third 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 6.2% to
$0.27 versus $0.25 for the same period last year. Including these costs, net
income was $31.2 million versus $22.0 million for the 1998 third quarter, a
41.8% increase, and diluted net income per share increased 34.9% to $0.27 versus
$0.20 for the third quarter of 1998. Third quarter 1998 results were restated
for acquisitions completed during 1999 that were accounted for as poolings of
interests.
Net revenue for the nine months ended Sept. 30, 1999, increased 30.5% to $1.3
billion versus $1.0 billion for the same period in 1998. Net income for the nine
months ended Sept. 30, 1999, increased 29.5% to $104.8 million versus $81.0
million for the same period 1998, excluding transaction and amortization of
certain acquired intangible asset costs incurred in 1998 and 1999. Excluding
these costs, diluted net income per share increased 24.2% to $0.91 versus $0.73
for the same period last year. Including these costs, net income for the nine
months ended Sept. 30, 1999, was $75.0 million versus $63.6 million for the nine
months ended Sept. 30, 1998, a 17.9% increase, and diluted net income per share
increased 13.1% to $0.65 versus $0.57 for the same period in 1998. The 1998
results were restated for acquisitions completed during 1999 that were accounted
for as poolings of interests.
"While we are disappointed about the break in our record of 22 consecutive
quarters of meeting or exceeding analysts' consensus expectations, we are
confident in our future growth opportunities," said Dennis Gillings, Ph.D.,
Chairman and Chief Executive Officer of Quintiles Transnational Corp. "This
quarter we are especially pleased with the strong performance of our
Commercialization group, particularly in North America."
In the third quarter, Quintiles continued to enlarge its worldwide outsourcing
capabilities to pharmaceutical and biotechnology companies. Quintiles in July
announced the acquisitions of New Jersey-based Medcom Inc., a leading provider
of physician meetings and educational events to help pharmaceutical companies
raise awareness of their products; and MediTrain, the
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Netherlands' leading multimedia pharmaceutical sales representative training
company. Both Medcom and MediTrain are now a part of Quintiles' Innovex
subsidiary, the world's leading provider of outsourced pharmaceutical
commercialization services.
In addition, Quintiles also announced significant expansion and strengthening of
its Internet-enabled services in both electronic transactions processing and
healthcare informatics. Quintiles' subsidiary ENVOY Corporation, the leading
provider of electronic healthcare transactions processing in the United States,
announced significant expansions of its ENVOYnet(TM) system to conduct
healthcare transactions over the Internet.
The third quarter also saw the launch and initial sales of Web MCO InSite(TM),
an Internet-based managed care data and account management product for customers
marketing to the managed care industry. Web MCO InSite(TM) is one of the new
Web-based healthcare market information tools of SMG Marketing Group, a part of
Quintiles Informatics.
Earlier this month, Quintiles announced the acquisition of Medicines Control
Consultants Pty Ltd. (MCC), the leading South African pharmaceutical regulatory
consulting group. The addition of MCC further strengthens Quintiles' full range
of product development and commercialization services in South Africa.
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 Fortune 1000 and the Nasdaq-100 Index. With more than 20,000 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" about
future results and operations. These statements involve risks and uncertainties
that could cause actual results to differ materially, including without
limitation, our ability to efficiently distribute backlog among therapeutic
business units and match demand to resources, 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, the ability to
operate successfully in new lines of business, the ability of the recently
combined businesses to be integrated with Quintiles' current operations, 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.
# # #
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PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME**
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
1999 1998* 1999* 1998*
- ------------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
<S> <C> <C> <C> <C>
Net revenue 457,827 362,035 1,327,554 1,017,540
Costs and expenses:
Direct 239,448 186,432 684,372 524,923
General and administrative 147,867 112,822 414,359 316,514
Depreciation and amortization 25,726 18,361 71,356 53,202
- ----------------------------------------------------------------------------------- ----------------------------------
Total costs and expenses 413,041 317,615 1,170,087 894,639
- ----------------------------------------------------------------------------------- ----------------------------------
Income from operations 44,786 44,420 157,467 122,901
Total other income (expense) 806 (168) 2,451 (723)
- ----------------------------------------------------------------------------------- ----------------------------------
Income before income taxes 45,592 44,252 159,918 122,178
Income taxes 14,132 16,057 55,116 41,220
- ----------------------------------------------------------------------------------- ----------------------------------
Net income $31,460 $28,195 $104,802 $80,958
- ----------------------------------------------------------------------------------- ----------------------------------
Basic net income per share $0.27 $0.27 $0.93 $0.77
Diluted net income per share $0.27 $0.25 $0.91 $0.73
- ----------------------------------------------------------------------------------- ----------------------------------
Shares used in computing net income per share
Basic 114,907 105,071 112,994 104,510
Diluted 116,764 111,117 115,306 110,663
</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 $15.2 million for the nine months
ended September 30, 1999 and 1998, respectively. As of March 31, 1999,
these certain acquired intangible assets were fully amortized.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
1999 1998* 1999* 1998*
- ------------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
<S> <C> <C> <C> <C>
Net revenue 457,827 362,035 1,327,554 1,017,540
Costs and expenses:
Direct 239,448 186,432 684,372 524,923
General and administrative 147,867 112,822 414,359 316,514
Depreciation and amortization 25,726 23,426 75,077 68,397
- ---------------------------------------------------------------------------------- ---------------------------------
Total costs and expenses 413,041 322,680 1,173,808 909,834
- ---------------------------------------------------------------------------------- ---------------------------------
Income from operations 44,786 39,355 153,746 107,706
Transaction costs (281) (1,145) (26,108) (2,146)
Other income (expense) 806 (168) 2,451 (723)
- ---------------------------------------------------------------------------------- ---------------------------------
Total other income (expense) 525 (1,313) (23,657) (2,869)
- ---------------------------------------------------------------------------------- ---------------------------------
Income before income taxes 45,311 38,042 130,089 104,837
Income taxes 14,132 16,057 55,116 41,220
- ---------------------------------------------------------------------------------- ---------------------------------
Net income $31,179 $21,985 $74,973 $63,617
- ---------------------------------------------------------------------------------- ---------------------------------
Basic net income per share $0.27 $0.21 $0.66 $0.61
Diluted net income per share $0.27 $0.20 $0.65 $0.57
- ---------------------------------------------------------------------------------- ---------------------------------
Shares used in computing net income per share
Basic 114,907 105,071 112,994 104,510
Diluted 116,764 111,117 115,306 110,663
</TABLE>
* Restated to include ENVOY,Niehaus & Botha, SMG and Minerva which were
acquired in 1999 in transactions accounted for as poolings of interests
