Full Press Release Details
Reports Second Quarter 2013 Results and Full Year 2013 Guidance
business wins of $1.0 billion, up 13% compared to second quarter 2012;
Backlog of $9.0 billion at the end of second quarter 2013
quarter diluted adjusted EPS of $0.50 and adjusted net income of $62.9
million, up 6.4% and 12.6%, respectively, compared to second quarter
quarter GAAP reported diluted EPS of $0.30 and GAAP reported net
income of $38.5 million, declined 25.0% and 18.4%, respectively,
compared to second quarter 2012
year 2013 adjusted diluted EPS guidance of $1.95 - $2.05
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--August 1, 2013--Quintiles
Transnational Holdings Inc. ("Quintiles" or the "Company") (NYSE: Q)
today reported its financial results for the quarter ended June 30, 2013.
For the three months ended June 30, 2013, the growth in service revenues
excluding the impact of foreign currency fluctuations ("constant
currency revenue growth") was 2.2%, or $21.1 million compared to the
same period last year. At actual foreign exchange rates, service
revenues of $944.2 million were nearly unchanged compared to the same
period last year due to an unfavorable foreign currency impact of 2.3%,
or $21.8 million. Constant currency revenue growth was primarily from
volume related increases in the Product Development segment compared to
the same period in 2012.
Adjusted income from operations was $124.1 million in the second quarter
of 2013 representing growth of 8.4% and 100 basis points of margin
expansion compared to the same period last year. Adjusted net income was
$62.9 million in the second quarter of 2013 representing growth of 12.6%
compared to the same period last year. Diluted adjusted earnings per
share was $0.50 in the quarter ended June 30, 2013 representing growth
of 6.4% compared to the same period last year. Reported GAAP income from
operations was $94.9 million, reported GAAP net income was $38.5 million
and reported GAAP diluted earnings per share was $0.30 for the three
months ended June 30, 2013. Reconciliations of the non-GAAP measures
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 13% and 16% in the three and six months ended June
30, 2013 to $1.0 billion and $2.3 billion, respectively compared to the
same periods last year. The second quarter of 2013 was the fourth
sequential quarter of $1.0 billion or more in net new business which has
contributed to an ending backlog at June 30, 2013 of $9.0 billion. The
book-to-bill ratio, which represents net new business divided by service
revenues during the respective period, was 1.07 for the second quarter
and 1.21 for the six month period ending June 30, 2013.
"Quintiles delivered solid results overall with continued strength in
new business wins," said Tom Pike, Quintiles' chief executive officer.
"We have maintained the momentum following our initial public offering
in May, which we believe demonstrates the confidence our customers have
in us as well as the depth and diversity of our customer base. I am also
pleased to report double-digit adjusted net income growth and improved
margins on a year-to-date basis despite the negative impact on revenues
that resulted from unfavorable foreign exchange rates."
"We continue to focus on growth areas that further differentiate us by
deepening our scientific, therapeutic and data expertise as well as
developing new capabilities. In doing so, we believe that we can improve
the probability of development and commercial success for customers
ultimately leading to shareholder success."
Product Development's constant currency revenue growth was 5.8%, or
$40.4 million during the second quarter of 2013 compared to the same
period last year. At actual foreign exchange rates, Product
Development's service revenues grew 4.6% compared to the same period
last year to $724.2 million. The constant currency revenue growth
resulted from a volume related increase in clinical services partially
offset by a decline in consulting services. Product Development's income
from operations margin was 18.8% for the second quarter representing an
expansion of 160 basis points compared to the same period last year of
which 100 basis points was from contribution margin expansion and 60
basis points from a reduction in selling general and administrative
expenses as a percentage of service revenues.
On a constant currency basis, Integrated Healthcare Services' service
revenues declined 7.6%, or $19.3 million during the second quarter of
2013 compared to the same period last year primarily due to lower net
new business, negative scope modifications and cancellations, and the
impact of the conclusion of a major contract during 2012. At actual
foreign exchange rates, Integrated Healthcare Services' service revenues
declined 13.0%, or $32.8 million, compared to the same period last year
to $220.0 million of which $13.5 million or 5.3% was due to unfavorable
foreign currency fluctuations. Integrated Healthcare Services' income
from operations margin was 5.7% for the second quarter, 230 basis points
less than the same period last year, but 290 basis points higher than
the first quarter of 2013.
General corporate and unallocated expenses were $50.9 million during the
second quarter compared to $26.2 million for the same period last year.
This increase was primarily due to $26.5 million of fees paid in
connection with the termination or amendment of agreements with certain
The GAAP effective income tax rate was 18.9% for the second quarter of
2013 compared to 37.1% for the same period in 2012. The effective income
tax rates for the three and six month periods ended June 30, 2013 were
positively impacted by the Company asserting in the second quarter of
2013 that the undistributed earnings of most of the Company's foreign
subsidiaries are indefinitely reinvested outside of the United States.
For the six months ended June 30, 2013, the Company's constant currency
service revenue growth was 4.2%, or $77.2 million as compared to the
same period in 2012. At actual foreign exchange rates, the Company's
service revenues of $1.9 billion grew 2.1% compared to the same period
in 2012 which included an unfavorable foreign currency impact of 2.1% or
$38.4 million. Adjusted income from operations for the six months ended
June 30, 2013 was $242.5 million representing growth of 9.8% and 90
basis points of margin expansion compared to the same period last year.
Adjusted net income was $120.5 million for the six months ended June 30,
2013 representing growth of 11.6% compared to the same period last year.
Diluted adjusted earnings per share was $0.98 for the six months ended