Full Press Release Details
2nd Quarter 2016 Results
service revenue growth, 7.9% at constant currency, compared to the
second quarter of 2015
diluted adjusted EPS representing 19.2% growth compared to the second
quarter of 2015, with $0.71 diluted GAAP EPS representing 6.0% growth
billion of net new business in the second quarter of 2016 up 24.4%
compared to the second quarter of 2015, representing a 1.41
book-to-bill ratio and resulting in backlog of $12.5 billion as of
million of share repurchases during the second quarter of 2016
full year 2016 service revenue constant currency growth guidance to
6.0% to 7.0% compared to full year 2015, reaffirming full year 2016
Product Development service revenue constant currency growth guidance
of approximately 10% compared to full year 2015, and updating
Integrated Healthcare Services service revenue constant currency
guidance to a 3.0% to 6.0% decline compared to full year 2015.
diluted adjusted EPS guidance to $3.78 to $3.88 per share,
representing growth of 13.5% to 16.5% compared to full year 2015, with
diluted GAAP EPS of $3.26 to $3.41 per share, representing growth of
5.7% to 10.6% compared to full year 2015.
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--July 27, 2016--Quintiles
Transnational Holdings Inc. ("Quintiles" or the "Company") (NYSE: Q)
today reported its financial results for the quarter ended June 30, 2016.
For the three months ended June 30, 2016, the Company's service revenues
were $1.17 billion which represents growth of 8.6%, or $92.7 million,
including a favorable foreign currency impact of $7.0 million compared
to the same period last year. The Company's growth in service revenues,
excluding the impact of foreign currency fluctuations ("constant
currency"), was 7.9% with 13.1% growth in the Product Development
segment and a decline of 5.9% in the Integrated Healthcare Services
Reported GAAP income from operations was $150.7 million in the second
quarter of 2016, representing a decline of 4.8% compared to the same
period last year, and adjusted income from operations was $184.8
million, representing growth of 12.3% compared to the same period last
year. The income from operations margin was 12.9%, representing a
decrease of 180 basis points compared to the same period last year, and
the adjusted income from operations margin was 15.8%, representing 50
basis points of expansion compared to the same period last year. The
adjusted income from operations margin included the benefit of 130 basis
points of favorable currency fluctuations, offset by lower Product
Development margins compared to the same period last year.
Reported GAAP net income attributable to Quintiles was $86.8 million in
the second quarter of 2016, representing growth of 2.1% compared to the
same period last year, and adjusted net income was $112.5 million,
representing growth of 14.0% compared to the same period last year.
Reported GAAP diluted earnings per share was $0.71 for the three months
ended June 30, 2016, representing growth of 6.0% compared to the same
period last year, and diluted adjusted earnings per share was $0.93,
representing growth of 19.2% compared to the same period last year.
Reconciliations of the non-GAAP measures to the corresponding GAAP
measures, including adjusted income from operations, adjusted net
income, and diluted adjusted earnings per share, are attached to this
Net new business grew 24.4% compared to the same period last year to
$1.64 billion, representing a book-to-bill ratio of 1.41 in the quarter
ended June 30, 2016. Second quarter net new business contributed to an
ending backlog of $12.5 billion at June 30, 2016.
"Our team executed well in the second quarter, and we are very pleased
with our diluted adjusted EPS growth of 19.2%, service revenue growth of
8.6%, and our 1.41 book-to-bill ratio," said Quintiles Chief Executive
Officer Tom Pike. "Our Product Development segment delivered a strong
net new business performance with a 1.56 book-to-bill ratio, bringing
Product Development's book-to-bill ratio to 1.26 for the first half of
2016, and we believe our $12.5 billion backlog provides a strong
foundation moving forward."
The Product Development segment net new business totaled $1.39 billion
in the quarter ended June 30, 2016, which represents growth of 43.2% and
translates to a book-to-bill ratio of 1.56. Product Development's
service revenues at constant currency grew 13.1%, or $102.7 million,
during the second quarter of 2016 compared to the same period last year.
At actual foreign exchange rates, Product Development service revenues
were $890.1 million, positively impacted by $1.0 million of favorable
foreign currency fluctuations, resulting in service revenue growth of
13.2% compared to the same period last year. The constant currency
revenue growth resulted from Q2 Solutions and volume-related
increases in core clinical services and clinical trial support services,
offset by a decline in advisory services. Product Development's income
from operations margin was 21.0% for the first quarter, representing a
decline of 140 basis points compared to the same period last year, net
of a benefit of 150 basis points from favorable currency fluctuations.
The Product Development income from operations margin in the second
quarter of 2016 includes an increase in compensation and related
expenses relative to the prior year, our planned investment to expand
our Global Delivery Network, as well as $4.2 million of bad debt expense
and a $10.1 million reserve for certain potentially non-reimbursable
The Integrated Healthcare Services segment net new business totaled
$259.8 million in the quarter ended June 30, 2016, which translates to a
book-to-bill ratio of 0.94. On a constant currency basis, Integrated
Healthcare Services' service revenues declined 5.9%, or $17.0 million,
during the second quarter of 2016 compared to the same period last year.
At actual foreign exchange rates, Integrated Healthcare Services'
service revenues declined 3.8% to $277.0 million, positively impacted by
$6.0 million from favorable foreign currency fluctuations. The constant
currency revenue decline resulted from decreases in North America
commercial services due to cancellations from 2015, and earlier this
year, and a decrease in Encore Health revenues, partially offset by
growth in real-world and late phase research services and an increase in
Europe Commercial services. Commercial services in Europe benefitted by
$8.9 million from the acceleration of revenue related to the
modification of a royalty-based sales force arrangement. Integrated
Healthcare Services' income from operations margin was 9.3% for the
second quarter, representing an increase of 280 basis points compared to