Full Press Release Details
2nd Quarter 2015 Results
constant currency service revenue growth compared to the second
increase in diluted adjusted EPS to $0.78 per share compared to the
second quarter of 2014, second quarter GAAP reported diluted EPS of
net new business growth compared to the second quarter of 2014
representing a 1.23 book-to-bill ratio
billion debt refinancing and a $250 million share repurchase
full year 2015 service revenue constant currency growth guidance to
8.5% - 9.5% compared to full year 2014 and increasing diluted adjusted
EPS guidance to $3.09 - $3.19 per share, representing diluted adjusted
EPS growth of 14.4% - 18.1% compared to full year 2014
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--July 29, 2015--Quintiles
Transnational Holdings Inc. ("Quintiles" or the "Company") (NYSE: Q)
today reported its financial results for the quarter ended June 30, 2015.
For the three months ended June 30, 2015, the Company's growth in
service revenues, excluding the impact of foreign currency fluctuations
("constant currency"), was 9.8% with 22.9% growth in the Integrated
Healthcare Services segment and 5.5% growth in the Product Development
segment. The Company's service revenues were $1.07 billion which at
actual rates represents growth of 3.8%, or $38.9 million, including an
unfavorable foreign currency impact of $62.2 million compared to the
same period last year.
Adjusted income from operations was $164.6 million in the second quarter
of 2015, representing growth of 16.0% at actual rates compared to the
same period last year. The adjusted income from operations margin was
15.3%, representing 160 basis points of margin expansion compared to the
same period last year. The margin expansion resulted from a constant
currency improvement in Integrated Healthcare Services operating margin
and the benefit of 160 basis points from favorable currency fluctuations
across the company. Adjusted net income was $98.7 million and diluted
adjusted earnings per share was $0.78 in the quarter ended June 30,
2015, including a $0.06 per share contribution from foreign research and
development credits that were expected later in the year.
Reported GAAP income from operations was $158.4 million, reported GAAP
net income was $85.0 million and reported GAAP diluted earnings per
share was $0.67 for the three months ended June 30, 2015, respectively.
Reconciliations of the non-GAAP measures, including adjusted income from
operations, adjusted net income and diluted adjusted earnings per share
to the corresponding GAAP measures are attached to this press release.
Net new business grew 7.6% compared to the same period last year to
$1.32 billion, representing a book-to-bill ratio of 1.23 in the quarter
ended June 30, 2014. Second quarter net new business contributed to an
ending backlog of $11.37 billion at June 30, 2015.
"Our industry-leading position and advantages delivered a strong
book-to-bill of 1.23 this quarter and $2.7 billion of new business in
the first half of the year," said Chief Executive Officer Tom Pike.
"Strong IHS service revenue growth at 22.9% at constant currency,
coupled with a strong quarter from Product Development, delivered solid
diluted adjusted earnings per share of $0.78."
"We are pleased to again be named to the FORTUNE 500 and to be
recognized as the leader of our industry."
The Product Development segment net new business increased 11.5% for the
quarter ended June 30, 2015 to $968 million which translates to a
book-to-bill ratio of 1.23. Product Development's service revenues at
constant currency grew 5.5%, or $42.6 million, during the second quarter
of 2015 compared to the same period last year. At actual foreign
exchange rates, Product Development service revenues were $786.4
million, negatively impacted by $37.4 million of unfavorable foreign
currency exchange, resulting in service revenue growth of 0.7% compared
to the same period last year. The constant currency revenue growth
resulted from volume-related increases in clinical solutions and
services provided on a functional resourcing basis, clinical trial
support services, and core clinical services in Asia and Japan, offset
by the negative impact of cancellations from 2014. The Company also
recognized $16.9 million of revenue and a nearly equivalent amount of
cost as a result of the release of deferred revenue upon early closeout
of a customer arrangement. Product Development's income from operations
margin was 22.4% for the second quarter, representing an improvement of
210 basis points compared to the same period last year, including 220
basis points of positive foreign exchange benefits, and a $7.6 million
increase in foreign research and development credits that were expected
later in the year, offset by a change in service revenue mix compared to
the same period in 2014 and an increase in billable headcount due to the
ramp-up of new projects resulting from recent net new business wins.
The Integrated Healthcare Services segment net new business decreased
1.9% in the quarter ended June 30, 2015 to $354 million which translates
to a book-to-bill ratio of 1.23. Integrated Healthcare Services' service
revenues at constant currency grew 22.9%, or $58.5 million, during the
second quarter of 2015 compared to the same period last year, including
$24.4 million from the Encore acquisition. At actual foreign exchange
rates, Integrated Healthcare Services' service revenues increased 13.2%
to $288.0 million inclusive of the negative impact of $24.8 million from
unfavorable foreign currency exchange. The constant currency revenue
growth resulted from increases in commercial services in North America,
along with growth in real-world and late phase research services. This
growth was partially offset by a decline in commercial services in
Europe due primarily to the conclusion of an agreement to distribute
pharmaceutical products in Italy. Integrated Healthcare Services' income
from operations margin was 6.5% at actual rates including a 10 basis
point impact from unfavorable currency fluctuations. The income from
operations margin at constant currency improved 200 basis points
compared to the same period last year.
General corporate and unallocated expenses were $30.3 million during the
quarter ended June 30, 2015 compared to $28.2 million for the same
period last year, primarily due to an increase in share-based
compensation expense and costs related to the recently-closed clinical
trials laboratories joint venture.
Interest expense was $25.5 million during the quarter ended June 30,
2015 compared to $24.8 million for the same period last year. Interest
expense was higher than the same period in 2014 due to an increase in