Full Press Release Details
Reports 2nd Quarter 2014 Results
consolidated service revenue growth - Integrated Healthcare Services
segment grew service revenues by 15.6% compared to the second quarter
net new business growth compared to the second quarter 2013
representing a book-to-bill ratio of 1.19
quarter diluted adjusted EPS increased 30% to $0.65 per share compared
to the second quarter of 2013
quarter GAAP reported diluted EPS increased 113% to $0.64 per share
compared to the second quarter of 2013
full year 2014 service revenue guidance to $4.20 billion - $4.24
billion and increased diluted adjusted EPS guidance to $2.57 - $2.67
per share, representing diluted adjusted EPS growth of 22.4% to 27.1%
compared to full year 2013
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--July 31, 2014--Quintiles
Transnational Holdings Inc. ("Quintiles" or the "Company") (NYSE: Q)
today reported its financial results for the second quarter ended June
For the three months ended June 30, 2014, the Company's service revenues
increased 9.7%, or $91.2 million compared to the same period last year
at actual foreign exchange rates. The Company's growth in service
revenues, excluding the impact of foreign currency fluctuations
("constant currency"), was 8.6% with 6.7% growth in the Product
Development segment and 15.1% growth in the Integrated Healthcare
Adjusted income from operations was $141.9 million in the second quarter
of 2014, representing growth of 14.4% compared to the same period last
year. The adjusted income from operations margin was 13.7%, representing
60 basis points of expansion compared to the same period last year,
comprised of 20 basis points from operational productivity improvements
and 40 basis points from positive foreign exchange impacts. Adjusted net
income was $85.7 million in the second quarter of 2014, representing
growth of 36.2% compared to the same period last year. Diluted adjusted
earnings per share was $0.65 in the quarter ended June 30, 2014,
representing growth of 30.0% compared to the same period last year.
Reported GAAP income from operations was $141.0 million, reported GAAP
net income was $85.1 million and reported GAAP diluted earnings per
share was $0.64 for the three months ended June 30, 2014.
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 21.2% compared to the same period last year to
$1.23 billion representing a book-to-bill ratio of 1.19 in the quarter
ended June 30, 2014. This net new business contributed to an ending
backlog of $10.26 billion at June 30, 2014.
"I am pleased with our continued strong performance this quarter. Our
IHS segment generated revenue growth of 15.6% in the second quarter and
10.8% during the first half of the year compared to the same periods
last year. We believe our service revenue growth of 9.7% and our
improved operating margin reflects Quintiles' progress as the industry
leader," said Chief Executive Officer Tom Pike.
"In June we marked a major milestone for the organization as Quintiles
was named to the Fortune 500," Pike continued. "Also this July, we
completed the acquisition of Encore Health Resources. This acquisition
extends Quintiles' capabilities and enhances our electronic health
records (EHR) advisory expertise, an area that continues to grow in
importance as payers, providers and biopharmaceutical customers increase
their focus on real-world evidence."
The Product Development segment net new business totaled $867 million in
the quarter ended June 30, 2014 which translates to a book-to-bill ratio
of 1.11. The net new business and book-to bill ratio were negatively
impacted by higher than average historical dollar value of cancellations
in the quarter. Product Development's service revenues grew 7.9%
compared to the same period last year to $781.2 million at actual
foreign exchange rates. At constant currency exchange rates, Product
Development's service revenue grew 6.7%, or $48.0 million during the
second quarter of 2014 compared to the same period last year. The
service revenue growth resulted from volume-related increases in
clinical solutions and global labs and from the Novella acquisition in
2013, partially offset by the conclusion of a large clinical solutions
project which was delivered throughout 2013. Product Development's
income from operations margin was 20.3% for the second quarter,
representing an improvement of 150 basis points compared to the same
period last year, with 80 basis points attributed to operations and
productivity improvements in clinical services and 70 basis points from
favorable currency fluctuations.
The Integrated Healthcare Services segment net new business totaled $361
million which translates to a book-to-bill ratio of 1.42 for the quarter
ended June 30, 2014. At actual foreign exchange rates, Integrated
Healthcare Services' service revenues increased 15.6%, or $34.3 million,
during the second quarter of 2014 compared to the same period last year
to $254.3 million including a $1.2 million favorable foreign currency
impact. On a constant currency basis, Integrated Healthcare Services'
service revenues increased 15.1% during the second quarter of 2014
compared to the same period last year, primarily due to increases in
commercial solutions in Japan and North America as well as growth in
real-world and late phase research services partially offset by a
decline in commercial solutions in Europe. Integrated Healthcare
Services' income from operations margin was 4.6% for the second quarter,
negatively impacted by 50 basis points of unfavorable currency
General corporate and unallocated expenses were $28.2 million during the
quarter ended June 30, 2014 compared to $50.9 million for the same
period last year. General corporate and unallocated expenses were lower
compared to the same period of 2013 primarily due to $26.5 million in
fees paid in the second quarter of 2013 in connection with the
termination or amendment of agreements with certain shareholders and
Interest expense was $24.8 million during the quarter ended June 30,
2014 compared to $31.9 million for the same period last year. Interest
expense was lower than the same period in 2013 due to a decrease in the
average debt outstanding and lower interest rates.
The GAAP effective income tax rate was 28.4% for the quarter ended June
30, 2014 compared to 18.9% for the same period in 2013. The effective
income tax rate for the three months ended June 30, 2013 was positively