-
8.3% constant currency service revenue growth compared to the third
quarter of 2014
-
44.6% 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
-
Net new business of $1.16 billion, increasing backlog to $11.75
billion as of September 30, 2015
-
Updating 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)--
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
backlog.”
“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 quality.”
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
last year.
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
related to the change in fair value of contingent consideration from an
acquisition, primarily offset by $0.9 million of foreign currency net
losses.
The GAAP effective income tax rate was 28.0% for the third quarter of
2015 compared to 31.1% for the same period in 2014.
Equity in earnings of unconsolidated affiliates was $5.4 million during
the third quarter of 2015 compared to equity in earnings of
unconsolidated affiliates of $1.5 million for the same period last year.
The increase was primarily due to gains from our NovaQuest Pharma
Opportunities Fund investment.
Net loss attributable to noncontrolling interests was $2.4 million
during the quarter ended September 30, 2015 compared to income of $0.1
million for the same period in 2014. The net loss attributable to
noncontrolling interests included a portion of the restructuring charges
and was primarily due to the minority interest partner’s share in Q2
Solutions.
For the nine months ended September 30, 2015, the Company’s constant
currency service revenue growth was 8.8%, or $272.8 million, as compared
to the same period in 2014. At actual foreign exchange rates, the
Company’s service revenues of $3.2 billion for the nine months ended
September 30, 2015 grew 3.1% compared to the same period in 2014, which
included a negative foreign currency impact of $176.8 million. Adjusted
income from operations for the nine months ended September 30, 2015 was
$492.2 million representing growth of 13.1% compared to the same period
in 2014. Adjusted income from operations margin was 15.4% representing
140 basis points of margin expansion compared to the same period last
year, including 130 basis points from favorable currency fluctuations
and a constant currency increase in the Integrated Healthcare Services
operating income margin. Adjusted net income was $307.5 million for the
nine months ended September 30, 2015 representing growth of 17.6%
compared to the same period last year. Diluted adjusted earnings per
share was $2.43 for the nine months ended September 30, 2015
representing growth of 22.7% compared to the same period last year.
Reported GAAP income from operations was $468.6 million, reported GAAP
net income was $282.6 million, and reported GAAP diluted earnings per
share was $2.24 for the nine months ended September 30, 2015.
Financial Guidance
The Company is updating its full year 2015 constant currency service
revenue growth guidance to a range of 8.6% - 9.2% compared to full year
2014. The Company is also increasing its diluted adjusted earnings per
share guidance range to $3.27 - $3.33 per share, representing growth of
21.1% - 23.3%, with diluted GAAP earnings per share between $3.02 -
$3.11 per share. The annual effective income tax rate is projected to be
approximately 29.5%. This financial guidance is based on the end of
September foreign currency exchange rates and does not reflect the
potential impact of any future equity repurchases.
Webcast & Conference Call Details
Quintiles will host a conference call at 8:00 a.m. EDT today to discuss
its third quarter 2015 financial results. To participate, please dial +1
(855) 710-5091 or +1 (706) 902-0591 outside the United States
approximately 15 minutes before the scheduled start of the call. The
conference call will also be accessible live via webcast on the
Investors section of the Quintiles website at www.quintiles.com/investors.
An archived replay of the conference call will be available online at www.quintiles.com/investors
after 1:00 p.m. EDT today.
About Quintiles
Quintiles (NYSE: Q) helps biopharma and other healthcare companies
improve their probability of success by connecting insights from our
deep scientific, therapeutic and analytics expertise with superior
delivery for better outcomes. From advisory through operations,
Quintiles is the world’s largest provider of product development and
integrated healthcare services, including commercial and observational
solutions. Conducting operations in approximately 100 countries,
Quintiles is a member of the FORTUNE 500 and has been named to FORTUNE’s
list of the “World’s Most Admired Companies.” To learn more, visit www.quintiles.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements reflect, among other things, the Company’s
current expectations and anticipated results of operations, all of which
are subject to known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements, market
trends or industry results to differ materially from those expressed or
implied by such forward-looking statements. Therefore, any statements
contained herein that are not statements of historical fact may be
forward-looking statements and should be evaluated as such. Without
limiting the foregoing, the words “anticipates,” “believes,”
“estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “should,”
“guidance,” “targets,” “will” and the negative thereof and similar words
and expressions are intended to identify forward-looking statements.
Actual results may differ materially from the Company’s expectations due
to a number of factors, including, but not limited to, that most of the
Company’s contracts may be terminated on short notice, and that the
Company may be unable to maintain large customer contracts or to enter
into new contracts; the Company may under-price its contracts, overrun
its cost estimates, or fail to receive approval for or experience delays
in documenting change orders; the historical indications of the
relationship of backlog to revenues may not be indicative of their
future relationship; the Company may be unable to maintain information
systems or effectively update them; customer or therapeutic
concentration could harm the Company’s business; the Company’s business
is subject to risks associated with international operations, including
economic, political and other risks such as compliance with a myriad of
laws and regulations, complications from conducting clinical trials in
multiple countries simultaneously and changes in exchange rates; the
Company may be unable to successfully identify, acquire and integrate
businesses, services and technologies; the Company’s effective income
tax rate may fluctuate, which may adversely affect our operations,
earnings, and earnings per share; the Company relies on exemptions for
“controlled companies” from certain corporate governance requirements
during a one year transition period; certain of the Company’s corporate
governance documents could make an acquisition of the Company more
difficult; and the Company has substantial indebtedness and may incur
additional indebtedness in the future, which could adversely affect the
Company’s financial condition. For a further discussion of the risks
relating to the Company’s business, see the “Risk Factors” in Quintiles’
annual report on Form 10-K for the fiscal year ended December 31, 2014,
filed with the SEC, as such factors may be amended or updated from time
to time in Quintiles’ subsequent periodic filings with the SEC, which
are accessible on the SEC's website at www.sec.gov.
These factors should not be construed as exhaustive and should be read
in conjunction with the other cautionary statements that are included in
this release and in Quintiles’ filings with the SEC. The Company assumes
no obligation to update any such forward-looking statement after the
date of this release, whether as a result of new information, future
developments or otherwise.
Use of Non-GAAP Financial Measures
This press release includes adjusted EBITDA, adjusted income from
operations, adjusted income from operations margin, adjusted net income
and diluted adjusted earnings per share, each of which is a financial
measure not prepared in accordance with accounting principles generally
accepted in the United States (“GAAP”). Management believes that these
non-GAAP measures provide useful supplemental information to management
and investors regarding the underlying performance of the Company’s
business operations and are more indicative of core operating results as
they exclude certain items whose fluctuations from period-to-period do
not necessarily correspond to changes in the core operations of the
business. These non-GAAP measures are performance measures only and are
not measures of the Company’s cash flows or liquidity, nor are they
alternatives for measures of financial performance prepared in
accordance with GAAP and may be different from similarly titled non-GAAP
measures used by other companies. Investors and potential investors are
encouraged to review the reconciliations of the non-GAAP financial
measures to their most directly comparable GAAP measures attached to
this press release.
Internet Posting of Information: The Company routinely posts information
that may be important to investors in the 'Investors' section of the
Company’s website at www.quintiles.com.
The Company encourages investors and potential investors to consult the
Company’s website regularly for important information about the Company.
Click here
to subscribe to Mobile Alerts for Quintiles.
|
QUINTILES TRANSNATIONAL HOLDINGS INC. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
$
|
1,093,480
|
|
|
$
|
1,061,013
|
|
|
$
|
3,197,820
|
|
|
$
|
3,101,777
|
|
|
Reimbursed expenses
|
|
|
331,289
|
|
|
|
339,021
|
|
|
|
1,018,069
|
|
|
|
947,133
|
|
|
Total revenues
|
|
|
1,424,769
|
|
|
|
1,400,034
|
|
|
|
4,215,889
|
|
|
|
4,048,910
|
|
|
Costs of revenue, service costs
|
|
|
683,058
|
|
|
|
691,051
|
|
|
|
2,028,730
|
|
|
|
2,009,287
|
|
|
Costs of revenue, reimbursed expenses
|
|
|
331,289
|
|
|
|
339,021
|
|
|
|
1,018,069
|
|
|
|
947,133
|
|
|
Selling, general and administrative
|
|
|
231,415
|
|
|
|
219,027
|
|
|
|
676,919
|
|
|
|
657,283
|
|
|
Restructuring costs
|
|
|
11,984
|
|
|
|
1,793
|
|
|
|
23,542
|
|
|
|
3,749
|
|
|
Income from operations
|
|
|
167,023
|
|
|
|
149,142
|
|
|
|
468,629
|
|
|
|
431,458
|
|
|
Interest income
|
|
|
(1,141
|
)
|
|
|
(602
|
)
|
|
|
(3,470
|
)
|
|
|
(2,851
|
)
|
|
Interest expense
|
|
|
25,429
|
|
|
|
25,050
|
|
|
|
76,256
|
|
|
|
74,552
|
|
|
Loss on extinguishment of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
7,780
|
|
|
|
—
|
|
|
Other (income) expense, net
|
|
|
(934
|
)
|
|
|
(7,776
|
)
|
|
|
7,864
|
|
|
|
(9,564
|
)
|
|
Income before income taxes and equity in
|
|
|
|
|
|
|
|
|
|
earnings of unconsolidated affiliates
|
|
|
143,669
|
|
|
|
132,470
|
|
|
|
380,199
|
|
|
|
369,321
|
|
|
Income tax expense
|
|
|
40,192
|
|
|
|
41,260
|
|
|
|
107,980
|
|
|
|
111,049
|
|
|
Income before equity in earnings
|
|
|
|
|
|
|
|
|
|
of unconsolidated affiliates
|
|
|
103,477
|
|
|
|
91,210
|
|
|
|
272,219
|
|
|
|
258,272
|
|
|
Equity in earnings of unconsolidated affiliates
|
|
|
5,362
|
|
|
|
1,523
|
|
|
|
7,998
|
|
|
|
9,785
|
|
|
Net income
|
|
|
108,839
|
|
|
|
92,733
|
|
|
|
280,217
|
|
|
|
268,057
|
|
|
Net loss (income) attributable to noncontrolling interests
|
|
|
2,447
|
|
|
|
(79
|
)
|
|
|
2,418
|
|
|
|
(100
|
)
|
|
Net income attributable to Quintiles
|
|
|
|
|
|
|
|
|
|
Transnational Holdings Inc.
|
|
$
|
111,286
|
|
|
$
|
92,654
|
|
|
$
|
282,635
|
|
|
$
|
267,957
|
|
|
Earnings per share attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.91
|
|
|
$
|
0.73
|
|
|
$
|
2.28
|
|
|
$
|
2.08
|
|
|
Diluted
|
|
$
|
0.89
|
|
|
$
|
0.71
|
|
|
$
|
2.24
|
|
|
$
|
2.03
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
122,848
|
|
|
|
127,462
|
|
|
|
123,728
|
|
|
|
128,780
|
|
|
Diluted
|
|
|
125,339
|
|
|
|
130,626
|
|
|
|
126,443
|
|
|
|
131,903
|
|
|
|
|
|
|
|
|
|
|
|
|
QUINTILES TRANSNATIONAL HOLDINGS INC. AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
|
1,081,804
|
|
|
$
|
867,358
|
|
|
Restricted cash
|
|
|
|
|
|
|
2,610
|
|
|
|
2,882
|
|
|
Trade accounts receivable and unbilled services, net
|
|
|
|
|
|
|
1,128,899
|
|
|
|
975,255
|
|
|
Prepaid expenses
|
|
|
|
|
|
|
51,470
|
|
|
|
44,628
|
|
|
Deferred income taxes
|
|
|
|
|
|
|
111,847
|
|
|
|
118,515
|
|
|
Income taxes receivable
|
|
|
|
|
|
|
56,184
|
|
|
|
45,357
|
|
|
Other current assets and receivables
|
|
|
|
|
|
|
87,365
|
|
|
|
92,088
|
|
|
Total current assets
|
|
|
|
|
|
|
2,520,179
|
|
|
|
2,146,083
|
|
|
Property and equipment, net
|
|
|
|
|
|
|
194,744
|
|
|
|
190,297
|
|
|
Investments in debt, equity and other securities
|
|
|
|
|
|
|
33,149
|
|
|
|
34,503
|
|
|
Investments in and advances to unconsolidated affiliates
|
|
|
|
|
|
|
44,038
|
|
|
|
31,508
|
|
|
Goodwill
|
|
|
|
|
|
|
724,014
|
|
|
|
464,434
|
|
|
Other identifiable intangibles, net
|
|
|
|
|
|
|
374,419
|
|
|
|
280,243
|
|
|
Deferred income taxes
|
|
|
|
|
|
|
34,516
|
|
|
|
35,972
|
|
|
Deposits and other assets
|
|
|
|
|
|
|
108,677
|
|
|
|
112,913
|
|
|
Total assets
|
|
|
|
|
|
$
|
4,033,736
|
|
|
$
|
3,295,953
|
|
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
|
$
|
871,206
|
|
|
$
|
842,387
|
|
|
Unearned income
|
|
|
|
|
|
|
558,826
|
|
|
|
543,305
|
|
|
Income taxes payable
|
|
|
|
|
|
|
25,974
|
|
|
|
55,694
|
|
|
Current portion of long-term debt and obligations
|
|
|
|
|
|
|
|
|
|
held under capital leases
|
|
|
|
|
|
|
48,505
|
|
|
|
826
|
|
|
Other current liabilities
|
|
|
|
|
|
|
19,464
|
|
|
|
29,688
|
|
|
Total current liabilities
|
|
|
|
|
|
|
1,523,975
|
|
|
|
1,471,900
|
|
|
Long-term debt and obligations held under
|
|
|
|
|
|
|
|
|
|
capital leases, less current portion
|
|
|
|
|
|
|
2,430,034
|
|
|
|
2,282,612
|
|
|
Deferred income taxes
|
|
|
|
|
|
|
89,556
|
|
|
|
61,797
|
|
|
Other liabilities
|
|
|
|
|
|
|
170,097
|
|
|
|
183,656
|
|
|
Total liabilities
|
|
|
|
|
|
|
4,213,662
|
|
|
|
3,999,965
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders’ deficit:
|
|
|
|
|
|
|
|
|
|
Common stock and additional paid-in capital,
|
|
|
|
|
|
|
|
|
|
300,000 shares authorized, $0.01 par value,
|
|
|
|
|
|
|
|
|
|
123,078 and 124,129 shares issued and outstanding at
|
|
|
|
|
|
|
|
|
|
September 30, 2015 and December 31, 2014, respectively
|
|
|
|
|
|
|
239,588
|
|
|
|
143,828
|
|
|
Accumulated deficit
|
|
|
|
|
|
|
(550,148
|
)
|
|
|
(788,798
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
|
|
|
(95,461
|
)
|
|
|
(59,091
|
)
|
|
Deficit attributable to Quintiles Transnational
|
|
|
|
|
|
|
|
|
|
Holdings Inc.’s shareholders
|
|
|
|
|
|
|
(406,021
|
)
|
|
|
(704,061
|
)
|
|
Noncontrolling interests
|
|
|
|
|
|
|
226,095
|
|
|
|
49
|
|
|
Total shareholders’ deficit
|
|
|
|
|
|
|
(179,926
|
)
|
|
|
(704,012
|
)
|
|
Total liabilities and shareholders’ deficit
|
|
|
|
|
|
$
|
4,033,736
|
|
|
$
|
3,295,953
|
|
|
|
|
|
|
|
|
|
|
|
|
QUINTILES TRANSNATIONAL HOLDINGS INC. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
$
|
280,217
|
|
|
$
|
268,057
|
|
|
Adjustments to reconcile net income to cash
|
|
|
|
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
93,224
|
|
|
|
89,113
|
|
|
Amortization of debt issuance costs and discount
|
|
|
|
|
|
|
7,485
|
|
|
|
4,787
|
|
|
Amortization of accumulated other comprehensive
|
|
|
|
|
|
|
|
|
|
loss on terminated interest rate swaps
|
|
|
|
|
|
|
4,781
|
|
|
|
—
|
|
|
Share-based compensation
|
|
|
|
|
|
|
28,702
|
|
|
|
22,388
|
|
|
Earnings from unconsolidated affiliates
|
|
|
|
|
|
|
(7,965
|
)
|
|
|
(9,763
|
)
|
|
Loss (gain) on investments, net
|
|
|
|
|
|
|
1,074
|
|
|
|
(4,806
|
)
|
|
Provision for (benefit from) deferred income taxes
|
|
|
|
|
|
|
23,252
|
|
|
|
(11,529
|
)
|
|
Excess income tax benefits from share-based award activities
|
|
|
|
|
|
|
(35,144
|
)
|
|
|
(12,802
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Change in accounts receivable, unbilled services
|
|
|
|
|
|
|
|
|
|
and unearned income
|
|
|
|
|
|
|
(170,279
|
)
|
|
|
(118,721
|
)
|
|
Change in other operating assets and liabilities
|
|
|
|
|
|
|
44,029
|
|
|
|
(50,927
|
)
|
|
Net cash provided by operating activities
|
|
|
|
|
|
|
269,376
|
|
|
|
175,797
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
Acquisition of property, equipment and software
|
|
|
|
|
|
|
(56,692
|
)
|
|
|
(57,782
|
)
|
|
Acquisition of businesses, net of cash acquired
|
|
|
|
|
|
|
31,001
|
|
|
|
(92,201
|
)
|
|
Proceeds from sale of equity securities
|
|
|
|
|
|
|
—
|
|
|
|
5,861
|
|
|
Investments in and advances to unconsolidated
|
|
|
|
|
|
|
|
|
|
affiliates, net of payments received
|
|
|
|
|
|
|
(4,840
|
)
|
|
|
(2,137
|
)
|
|
Termination of interest rate swaps
|
|
|
|
|
|
|
(10,981
|
)
|
|
|
—
|
|
|
Other
|
|
|
|
|
|
|
2,111
|
|
|
|
332
|
|
|
Net cash used in investing activities
|
|
|
|
|
|
|
(39,401
|
)
|
|
|
(145,927
|
)
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of debt
|
|
|
|
|
|
|
2,248,500
|
|
|
|
—
|
|
|
Payment of debt issuance costs
|
|
|
|
|
|
|
(22,028
|
)
|
|
|
—
|
|
|
Repayment of debt and principal payments
|
|
|
|
|
|
|
|
|
|
on capital lease obligations
|
|
|
|
|
|
|
(2,048,211
|
)
|
|
|
(6,729
|
)
|
|
Issuance of common stock, net of costs
|
|
|
|
|
|
|
—
|
|
|
|
(105
|
)
|
|
Stock issued under employee stock purchase and option plans
|
|
|
|
|
|
|
58,323
|
|
|
|
23,201
|
|
|
Repurchase of common stock
|
|
|
|
|
|
|
(250,000
|
)
|
|
|
(165,131
|
)
|
|
Payroll taxes remitted on repurchase of stock options
|
|
|
|
|
|
|
—
|
|
|
|
(8,415
|
)
|
|
Excess income tax benefits from share-based award activities
|
|
|
|
|
|
|
35,144
|
|
|
|
12,802
|
|
|
Net cash provided by (used in) financing activities
|
|
|
|
|
|
|
21,728
|
|
|
|
(144,377
|
)
|
|
Effect of foreign currency exchange rate changes on cash
|
|
|
|
|
|
|
(37,257
|
)
|
|
|
(18,602
|
)
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
|
|
|
|
214,446
|
|
|
|
(133,109
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
|
|
867,358
|
|
|
|
778,143
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
|
$
|
1,081,804
|
|
|
$
|
645,034
|
|
|
|
|
|
|
|
|
|
|
|
|
QUINTILES TRANSNATIONAL HOLDINGS INC. AND SUBSIDIARIES
|
|
CONSOLIDATED SEGMENT OPERATIONS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
|
|
|
|
|
|
|
Product Development
|
|
$
|
810,045
|
|
|
$
|
771,361
|
|
|
$
|
2,345,971
|
|
|
$
|
2,323,376
|
|
|
Integrated Healthcare Services
|
|
|
283,435
|
|
|
|
289,652
|
|
|
|
851,849
|
|
|
|
778,401
|
|
|
Total service revenues
|
|
|
1,093,480
|
|
|
|
1,061,013
|
|
|
|
3,197,820
|
|
|
|
3,101,777
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of revenue, service costs
|
|
|
|
|
|
|
|
|
|
Product Development
|
|
|
461,858
|
|
|
|
458,731
|
|
|
|
1,352,730
|
|
|
|
1,374,492
|
|
|
Integrated Healthcare Services
|
|
|
221,200
|
|
|
|
232,320
|
|
|
|
676,000
|
|
|
|
634,795
|
|
|
Total costs of revenue, service costs
|
|
|
683,058
|
|
|
|
691,051
|
|
|
|
2,028,730
|
|
|
|
2,009,287
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
|
|
|
|
|
Product Development
|
|
|
166,758
|
|
|
|
154,460
|
|
|
|
478,643
|
|
|
|
471,697
|
|
|
Integrated Healthcare Services
|
|
|
38,186
|
|
|
|
37,447
|
|
|
|
114,953
|
|
|
|
103,069
|
|
|
General corporate and unallocated
|
|
|
26,471
|
|
|
|
27,120
|
|
|
|
83,323
|
|
|
|
82,517
|
|
|
Total selling, general and administrative
|
|
|
231,415
|
|
|
|
219,027
|
|
|
|
676,919
|
|
|
|
657,283
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
|
|
|
|
|
|
Product Development
|
|
|
181,429
|
|
|
|
158,170
|
|
|
|
514,598
|
|
|
|
477,187
|
|
|
Integrated Healthcare Services
|
|
|
24,049
|
|
|
|
19,885
|
|
|
|
60,896
|
|
|
|
40,537
|
|
|
General corporate and unallocated
|
|
|
(26,471
|
)
|
|
|
(27,120
|
)
|
|
|
(83,323
|
)
|
|
|
(82,517
|
)
|
|
Restructuring costs
|
|
|
(11,984
|
)
|
|
|
(1,793
|
)
|
|
|
(23,542
|
)
|
|
|
(3,749
|
)
|
|
Total income from operations
|
|
$
|
167,023
|
|
|
$
|
149,142
|
|
|
$
|
468,629
|
|
|
$
|
431,458
|
|
|
|
|
|
|
|
|
|
|
|
|
QUINTILES TRANSNATIONAL HOLDINGS INC. AND SUBSIDIARIES
|
|
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
Net income attributable to Quintiles Transnational Holdings Inc.
|
|
$
|
111,286
|
|
|
$
|
92,654
|
|
|
$
|
282,635
|
|
|
$
|
267,957
|
|
|
Interest expense, net
|
|
|
24,288
|
|
|
|
24,448
|
|
|
|
72,786
|
|
|
|
71,701
|
|
|
Income tax expense
|
|
|
40,192
|
|
|
|
41,260
|
|
|
|
107,980
|
|
|
|
111,049
|
|
|
Depreciation and amortization
|
|
|
32,884
|
|
|
|
30,180
|
|
|
|
93,224
|
|
|
|
89,113
|
|
|
Restructuring costs
|
|
|
11,984
|
|
|
|
1,793
|
|
|
|
23,542
|
|
|
|
3,749
|
|
|
Loss on extinguishment of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
7,780
|
|
|
|
—
|
|
|
Adjustment to estimated contingent consideration
|
|
|
116
|
|
|
|
(8,757
|
)
|
|
|
6,002
|
|
|
|
(8,839
|
)
|
|
Adjusted EBITDA
|
|
$
|
220,750
|
|
|
$
|
181,578
|
|
|
$
|
593,949
|
|
|
$
|
534,730
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Income from Operations
|
|
|
|
|
|
|
|
|
|
Income from operations, as reported
|
|
$
|
167,023
|
|
|
$
|
149,142
|
|
|
$
|
468,629
|
|
|
$
|
431,458
|
|
|
Restructuring costs
|
|
|
11,984
|
|
|
|
1,793
|
|
|
|
23,542
|
|
|
|
3,749
|
|
|
Adjusted income from operations
|
|
$
|
179,007
|
|
|
$
|
150,935
|
|
|
$
|
492,171
|
|
|
$
|
435,207
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
|
|
|
|
|
|
|
|
|
|
Net income attributable to Quintiles Transnational Holdings Inc.
|
|
$
|
111,286
|
|
|
$
|
92,654
|
|
|
$
|
282,635
|
|
|
$
|
267,957
|
|
|
Restructuring costs
|
|
|
11,984
|
|
|
|
1,793
|
|
|
|
23,542
|
|
|
|
3,749
|
|
|
Noncontrolling interests effect of non-GAAP adjustments (1)
|
|
|
(2,306
|
)
|
|
|
—
|
|
|
|
(2,306
|
)
|
|
|
—
|
|
|
Loss on extinguishment of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
7,780
|
|
|
|
—
|
|
|
Adjustment to estimated contingent consideration
|
|
|
116
|
|
|
|
(8,757
|
)
|
|
|
6,002
|
|
|
|
(8,839
|
)
|
|
Tax effect of adjustments (2)
|
|
|
(3,500
|
)
|
|
|
(705
|
)
|
|
|
(10,131
|
)
|
|
|
(1,298
|
)
|
|
Adjusted net income
|
|
$
|
117,580
|
|
|
$
|
84,985
|
|
|
$
|
307,522
|
|
|
$
|
261,569
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares outstanding
|
|
|
125,339
|
|
|
|
130,626
|
|
|
|
126,443
|
|
|
|
131,903
|
|
|
Diluted adjusted earnings per share
|
|
$
|
0.94
|
|
|
$
|
0.65
|
|
|
$
|
2.43
|
|
|
$
|
1.98
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects the portion of Q2 Solutions’ after-tax
non-GAAP adjustments attributable to the minority interest partner.
|
|
|
|
|
|
|
|
|
|
|
|
(2) The tax effect of adjustments was based on the income tax rate
of the respective transactions, which was 38.5%, with the exception
of (i) restructuring costs which were tax effected at 29.2% and
39.3% during the three months ended September 30, 2015 and 2014,
respectively, and 30.3% and 34.6% during the nine months ended
September 30, 2015 and 2014, respectively and (ii) contingent
consideration which is not tax effected as it represents a permanent
difference between book and tax income.
|
|
|
|
|
|
|
|
|
|
|
|
QUINTILES TRANSNATIONAL HOLDINGS INC. AND SUBSIDIARIES
|
|
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (Continued)
|
|
(in millions, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Full Year 2015 Guidance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Adjusted
|
|
|
|
Adjusted Net Income
|
|
Earnings Per Share
|
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Net income attributable to Quintiles and diluted earnings per share
|
$
|
382
|
|
|
$
|
392
|
|
|
$
|
3.02
|
|
|
$
|
3.11
|
|
|
Restructuring costs
|
|
|
32
|
|
|
|
28
|
|
|
|
0.25
|
|
|
|
0.22
|
|
|
Loss on extinguishment of debt
|
|
|
8
|
|
|
|
8
|
|
|
|
0.06
|
|
|
|
0.06
|
|
|
Adjustment to estimated contingent consideration
|
|
|
6
|
|
|
|
6
|
|
|
|
0.05
|
|
|
|
0.05
|
|
|
Noncontrolling interests effect of non-GAAP adjustments (1)
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(0.02
|
)
|
|
|
(0.02
|
)
|
|
Tax effect of adjustments (2)
|
|
|
(13
|
)
|
|
|
(11
|
)
|
|
|
(0.10
|
)
|
|
|
(0.09
|
)
|
|
Adjusted net income and diluted adjusted earnings per share
|
|
$
|
413
|
|
|
$
|
420
|
|
|
$
|
3.27
|
|
|
$
|
3.33
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects the portion of Q2 Solutions’ after-tax
non-GAAP adjustments attributable to the minority interest partner.
|
|
|
|
|
|
|
|
|
|
|
|
(2) The tax effect of adjustments was based on the income tax rate
of the respective transactions, which was 30% for Restructuring
Costs and 38.5% for Loss on Extinguishment of Debt. Adjustment to
Estimated Contingent Consideration is not tax effected as it
represents a permanent difference between book and tax income.
Noncontrolling Interest Effect of Non-GAAP Adjustments is presented
net of tax.
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding.
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151028005192/en/
Source: Quintiles Transnational Holdings Inc.