Full Press Release Details
3rd Quarter 2015 Results
constant currency service revenue growth compared to the third quarter
increase in diluted adjusted EPS to $0.94 per share compared to the
third quarter of 2014, third quarter GAAP reported diluted EPS of $0.89
business of $1.16 billion, increasing backlog to $11.75 billion as of
full year 2015 constant currency service revenue growth guidance to a
range of 8.6% - 9.2% compared to full year 2014 and increasing diluted
adjusted EPS guidance to $3.27 - $3.33 per share, representing diluted
adjusted EPS growth of 21.1% - 23.3% compared to full year 2014
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--October 28,
2015--Quintiles Transnational Holdings Inc. ("Quintiles" or the
"Company") (NYSE: Q) today reported its financial results for the
quarter ended September 30, 2015.
For the three months ended September 30, 2015, the Company's growth in
service revenues, excluding the impact of foreign currency fluctuations
("constant currency"), was 8.3% with 9.4% growth in the Product
Development segment and 5.5% growth in the Integrated Healthcare
Services segment. The Company's service revenues were $1.09 billion
which at actual rates represents growth of 3.1%, or $32.5 million,
including an unfavorable foreign currency impact of $55.6 million
compared to the same period last year.
Adjusted income from operations was $179.0 million in the third quarter
of 2015, representing growth of 18.6% at actual rates compared to the
same period last year. The adjusted income from operations margin was
16.4%, representing 220 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 $117.6 million and diluted
adjusted earnings per share was $0.94 in the quarter ended September 30,
2015. Equity in earnings of unconsolidated affiliates contributed $0.03
to diluted adjusted earnings per share in the current quarter.
Reported GAAP income from operations was $167.0 million, reported GAAP
net income was $111.3 million and reported GAAP diluted earnings per
share was $0.89 for the three months ended September 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 of $1.16 billion was recorded for the third quarter,
representing a book-to-bill ratio of 1.06, with a Product Development
book-to-bill ratio of 1.20 and Integrated Healthcare Services
book-to-bill ratio of 0.68 for the quarter. This net new business
contributed to an ending backlog of $11.75 billion on September 30, 2015.
"Our disciplined operational and management processes enabled us to
deliver strong growth in diluted adjusted EPS at $0.94 per share, an
increase of 44.6%," said Chief Executive Officer Tom Pike. "We are
seeing continued success in our Product Development segment, with now
five consecutive quarters with a 1.20 or greater book-to-bill ratio, and
we remain focused on delivering our industry-leading $11.75 billion
"Quintiles' industry leadership position was recently illustrated in a
recent report from Industry Standard Reports (ISR), who named us the
leader in Phase IV clinical services. We were awarded the SCRS Eagle
Award for our work with clinical research sites and were named Asia
Pacific CRO Company of the Year by Frost & Sullivan," Pike continued.
"This recognition reflects our commitment to the highest standards of
The Product Development segment net new business totaled $971 million in
the quarter ended September 30, 2015 which translates to a book-to-bill
ratio of 1.20. Product Development's constant currency service revenues
grew 9.4%, or $72.4 million, during the third quarter of 2015 compared
to the same period last year. At actual foreign exchange rates, Product
Development service revenues were $810.1 million, negatively impacted by
$33.7 million of unfavorable foreign currency exchange, resulting in
service revenue growth of 5.0% compared to the same period last year.
The constant currency revenue growth resulted from Q2
Solutions and volume-related increases in core clinical services,
clinical solutions and services provided on a functional resourcing
basis and clinical trial support services, offset by the negative impact
of cancellations from 2014. Product Development's income from operations
margin was 22.4% for the third quarter, representing an improvement of
190 basis points compared to the same period last year, including 220
basis points of positive foreign exchange benefits, offset by an
increase in billable headcount due to the ramp-up of new projects and
our investment in the growth of our Global Delivery Network.
The Integrated Healthcare Services segment net new business totaled $193
million in the quarter ended September 30, 2015, which translates to a
book-to-bill ratio of 0.68, which was negatively impacted by a large
cancellation for commercial services in North America and lower net new
business for commercial services in Japan and in real-world and late
phase research services. Integrated Healthcare Services' constant
currency service revenues grew 5.5%, or $15.7 million, during the third
quarter of 2015 compared to the same period last year. At actual foreign
exchange rates, Integrated Healthcare Services' service revenues
declined 2.1% to $283.4 million, negatively impacted by $21.9 million
from unfavorable foreign currency exchange. The constant currency
revenue growth resulted from increases in real-world and late phase
research services, 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 8.5% at actual rates including a 20 basis
point impact from unfavorable currency fluctuations. The income from
operations margin at constant currency improved 180 basis points
compared to the same period last year.
General corporate and unallocated expenses were $26.5 million during the
quarter ended September 30, 2015 compared to $27.1 million for the same
period last year. Interest expense was $25.4 million during the quarter
ended September 30, 2015 compared to $25.0 million for the same period
Other income, net was $0.9 million during the quarter ended September
30, 2015 compared to $7.8 million for the same period last year. The
third quarter of 2014 primarily consisted of $8.8 million in income