Attached files
file | filename |
---|---|
8-K - 8-K - COVANCE INC | a10-20520_28k.htm |
Exhibit 99.1
|
|
|
PRESS RELEASE |
FOR IMMEDIATE RELEASE |
|
|
Contact: |
Paul Surdez |
|
|
|
|
(609) 452-4807 |
|
|
|
|
www.covance.com |
COVANCE REPORTS THIRD
QUARTER FINANCIAL RESULTS AND
TAKES ACTIONS TO STRENGTHEN FUTURE PERFORMANCE
Princeton, New Jersey, November 3, 2010 Covance Inc. (NYSE: CVD) today reported results for its third quarter ended September 30, 2010, which included a GAAP loss of $0.49 per diluted share. Included in results is a $1.16 per diluted share non-cash impairment charge related to a write-down of preclinical assets, partially offset by a gain of $0.16 per diluted share from favorable income tax resolutions in the quarter. Excluding these items, earnings per diluted share were $0.50.
Despite a tougher environment for our toxicology services, we achieved our consolidated revenue and earnings expectations in the third quarter. In addition, as evidence of the success of our long-term business strategy, we were selected by sanofi-aventis as its R&D partner, executing a 10-year alliance which we expect to generate revenues ranging from a minimum commitment of $1.2 billion to at least $2.2 billion when including the sole-source components. This alliance drove year-on-year backlog growth of 26% to more than $6 billion, said Joe Herring, Chairman and Chief Executive Officer.
In order to address softer market conditions across much of our portfolio, we are taking decisive actions to reduce capacity and significantly lower our cost structure while maintaining service quality. These actions will enable us to enter 2011 as a leaner, more competitive company. First, the weakening in the market for outsourced toxicology services in the third quarter drove us to reassess our toxicology service offering. This has resulted in a decision to consolidate our North American toxicology services by closing our toxicology facility in Vienna, Virginia. In addition, we have taken an asset impairment charge in the third quarter totaling $119 million reflecting the excess of the carrying value of our Chandler, Arizona and Manassas, Virginia assets over their estimated fair market value. We will also be reducing spending across the company, including corporate overhead; realizing savings from process improvements and automation investments; and restructuring the executive management team. The future cost of these actions is expected to total approximately $35 million to $40 million, with more than half of the cost being incurred in the fourth quarter of 2010 and the remainder in 2011. We expect savings, net of costs, to generate incremental operating income of at least $25 million in 2011.
Looking ahead to the fourth quarter of 2010, we expect consolidated revenue, excluding the sanofi-aventis alliance, to be roughly flat sequentially, reflecting market conditions in toxicology and, in Late-Stage Development, the slower start-up, delays, and cancellations of clinical trials. These factors are expected to result in earnings per share in the range of $0.50 to $0.55, including earnings from the sanofi-aventis alliance and excluding the site closure and other costs associated with the restructuring actions.
Consolidated Results
($ in millions except EPS) |
|
3Q10 |
|
3Q09 |
|
Change |
|
2010YTD |
|
2009YTD |
|
Change |
|
||||
Total Revenues |
|
$ |
513.3 |
|
$ |
497.6 |
|
|
|
$ |
1,519.0 |
|
$ |
1,455.3 |
|
|
|
Less: Reimbursable Out-of-Pockets |
|
$ |
36.3 |
|
$ |
22.3 |
|
|
|
$ |
84.9 |
|
$ |
72.7 |
|
|
|
Net Revenues |
|
$ |
477.0 |
|
$ |
475.3 |
|
0.4% |
|
$ |
1,434.1 |
|
$ |
1,382.6 |
|
3.7% |
|
Operating Income (Loss) |
|
$ |
(76.7 |
) |
$ |
57.8 |
|
(232.8)% |
|
$ |
18.6 |
|
$ |
173.7 |
|
(89.3)% |
|
Net Income (Loss) |
|
$ |
(30.9 |
) |
$ |
51.1 |
|
(160.6)% |
|
$ |
39.9 |
|
$ |
134.3 |
|
(70.3)% |
|
Earnings (Loss) Per Share |
|
$ |
(0.49 |
) |
$ |
0.79 |
|
(161.2)% |
|
$ |
0.61 |
|
$ |
2.09 |
|
(70.7)% |
|
Impairment charge* |
|
$ |
(119.2 |
) |
|
|
|
|
$ |
(119.2 |
) |
|
|
|
|
||
Favorable Income Tax Items* |
|
$ |
10.4 |
|
$ |
2.1 |
|
|
|
$ |
10.4 |
|
$ |
2.1 |
|
|
|
Gain on Sale, net of tax* |
|
|
|
$ |
5.9 |
|
|
|
|
|
$ |
6.3 |
|
|
|
||
Operating Income, excluding items* |
|
$ |
42.5 |
|
$ |
57.8 |
|
(26.5)% |
|
$ |
137.9 |
|
$ |
173.7 |
|
(20.6)% |
|
Operating Margin %, ex items* |
|
8.9 |
% |
12.2 |
% |
|
|
9.6 |
% |
12.6 |
% |
|
|
||||
Net Income, excluding items* |
|
$ |
32.6 |
|
$ |
43.1 |
|
(24.3)% |
|
$ |
103.4 |
|
$ |
126.0 |
|
(17.9)% |
|
Diluted EPS, excluding items* |
|
$ |
0.50 |
|
$ |
0.67 |
|
(25.0)% |
|
$ |
1.59 |
|
$ |
1.96 |
|
(18.9)% |
|
* See attached pro forma income statements for reconciliation of GAAP to Pro Forma amounts.
Operating Segment Results
Early Development
($ in millions) |
|
3Q10 |
|
3Q09 |
|
Change |
|
2010 YTD |
|
2009 YTD |
|
Change |
|
||||
Net Revenues |
|
$ |
206.5 |
|
$ |
196.4 |
|
5.1% |
|
$ |
619.7 |
|
$ |
588.7 |
|
5.3% |
|
Operating Income (Loss) |
|
$ |
(98.5 |
) |
$ |
22.4 |
|
(539.1)% |
|
$ |
(53.1 |
) |
$ |
76.7 |
|
(169.3)% |
|
Impairment charge |
|
$ |
(119.2 |
) |
|
|
|
|
$ |
(119.2 |
) |
|
|
|
|
||
2Q10 Cost Actions |
|
$ |
(1.3 |
) |
|
|
|
|
$ |
(8.0 |
) |
|
|
|
|
||
Operating Income, excluding items |
|
$ |
22.0 |
|
$ |
22.4 |
|
(1.8)% |
|
$ |
74.1 |
|
$ |
76.7 |
|
(3.3)% |
|
Margin % ex items |
|
10.7 |
% |
11.4 |
% |
|
|
12.0 |
% |
13.0 |
% |
|
|
The Companys Early Development segment includes preclinical toxicology, analytical chemistry, clinical pharmacology services, and research products. Early Development net revenues for the third quarter of 2010 grew 5.1% to $206.5 million compared to $196.4 million in the third quarter of 2009. Year-on-year growth was led by chemistry services. Revenues declined sequentially in toxicology which more than offset growth in chemistry and clinical pharmacology. In the quarter, foreign exchange negatively impacted year-on-year revenue growth by 190 basis points.
Operating loss for the third quarter was $98.5 million and included an asset impairment charge of $119.2 million and continuing costs of $1.3 million from our second quarter actions. Operating income, excluding these items, was $22.0 million, compared to $22.4 million in the third quarter of last year. Operating margins for the third quarter, excluding the impairment charge and second quarter cost actions, were 10.7% compared to 11.4% in the third quarter of 2009 and 14.0% last quarter. Year-over-year and sequentially, operating margins were impacted by a lower level of new orders, delays of scheduled study starts, and the mix of pricing in toxicology.
Late-Stage Development
($ in millions) |
|
3Q10 |
|
3Q09 |
|
Change |
|
2010 YTD |
|
2009 YTD |
|
Change |
|
||||
Net Revenues |
|
$ |
270.5 |
|
$ |
278.9 |
|
(3.0)% |
|
$ |
814.4 |
|
$ |
793.9 |
|
2.6% |
|
Operating Income |
|
$ |
55.2 |
|
$ |
68.9 |
|
(19.9)% |
|
$ |
177.9 |
|
$ |
190.7 |
|
(6.7)% |
|
Margin % |
|
20.4 |
% |
24.7 |
% |
|
|
21.8 |
% |
24.0 |
% |
|
|
The Late-Stage Development segment includes central laboratory, Phase II-III clinical development, and commercialization services (periapproval and market access services). Late-Stage Development net revenues for the third quarter of 2010 declined 3.0% year-on-year to $270.5 million compared to $278.9 million in the third quarter of 2009. Foreign exchange positively impacted year-on-year revenue growth in the quarter by 30 basis points. While the previously-announced delayed clinical trials are performing largely as we forecasted in July, several factors lead us to moderate our near-term expectations. These factors include a longer duration between the time a project is awarded and revenue generation begins, a higher level of project scope reductions and other project cancellations, and a shifting mix of central lab tests performed and kits returned.
Operating income for the third quarter of 2010 decreased 19.9% to $55.2 million compared to $68.9 million in the third quarter of the prior year. Operating margins were 20.4% for the third quarter of 2010 compared to 24.7% in the third quarter of last year and 21.2% last quarter. Late-stage margins were impacted by the longer time period between project award and commencement of revenue and, in addition, central laboratory margins continue to be impacted by testing mix and geographic mix of kit receipts.
Corporate Information
The Companys backlog at September 30, 2010 grew 25.6% year-over-year to $6.02 billion compared to $4.79 billion at September 30, 2009 and $4.83 billion at June 30, 2010. Foreign exchange positively impacted sequential backlog growth by $125 million. Adjusted net orders (orders adjusted for dedicated capacity contracts such as the $1.2 billion order from sanofi-aventis) were $549 million in the third quarter of 2010, representing an adjusted book-to-bill ratio of 1.15 to 1. On a trailing twelve month basis, our Late-Stage Development adjusted book-to-bill was approximately 1.2 to 1.
Corporate expenses totaled $33.4 million in the third quarter (or 7.0% of revenue), compared to $36.5 million (or 7.7% of revenue) last quarter. We expect corporate expenses as a percent of revenue, excluding severance and other restructuring costs, to continue to trend lower.
Cash and cash equivalents at September 30, 2010 were $389 million compared to $291 million at June 30, 2010 and $266 million at September 30, 2009. The company remains debt free.
Free cash flow (defined as operating cash flow less capital expenditures) for the third quarter of 2010 was $75 million, consisting of operating cash flow of $108 million less capital expenditures of $33 million. Free cash flow year to date was $89 million, consisting of operating cash flow of $189 million less capital expenditures of $100 million. In 2010, we now expect free cash flow to be approximately $115 million, consisting of operating cash flow of approximately $250 million less capital expenditures of approximately $135 million. The free cash flow target for 2010 assumes net Days Sales Outstanding (DSO) at 43 days.
Net Days Sales Outstanding (DSO) were 45 days at September 30, 2010 compared to 47 days at June 30, 2010 and 42 days at September 30, 2009.
Taxes in the third quarter included a benefit of $10.4 million, primarily as a result of the favorable resolution of an income tax inquiry. The tax rate for the quarter excluding this benefit and the tax benefit associated with the impairment charge was 23.0%. We expect the tax rate for the company to be approximately 23% in the fourth quarter, reflecting the prospective impact of the favorable income tax resolution and continued favorable trends in the mix of earnings relative to various tax jurisdictions.
The Companys investor conference call will be webcast on November 4 at 9:00 am EDT. Managements commentary and presentation slides will be available through www.covance.com.
Covance, with headquarters in Princeton, New Jersey, is one of the worlds largest and most comprehensive drug development services companies with annual revenues greater than $1.8 billion, global operations in more than 30 countries, and more than 10,000 employees worldwide. Information on Covances products and services, recent press releases, and SEC filings can be obtained through its website at www.covance.com.
Statements contained in this press release, which are not historical facts, such as statements about prospective earnings, savings, revenue, operations, revenue and earnings growth and other financial results are forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements including the statements contained herein regarding anticipated trends in the Companys business are based largely on managements expectations and are subject to and qualified by risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, without limitation, competitive factors, outsourcing trends in the pharmaceutical industry, levels of industry research and development spending, the Companys ability to continue to attract and retain qualified personnel, the fixed price nature of contracts or the loss of large contracts, risks associated with acquisitions and investments, the Companys ability to increase order volume, the pace of translation of orders into revenue in late-stage development services, fluctuations in currency exchange rates, and other factors described in the Companys filings with the Securities and Exchange Commission including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The Company undertakes no duty to update any forward looking statement to conform the statement to actual results or changes in the Companys expectations.
Financial Exhibits Follow
COVANCE INC.
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009
(Dollars in thousands, except per share data)
(UNAUDITED)
|
|
Three Months Ended September 30 |
|
Nine Months Ended September 30 |
|
||||||||
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net revenues |
|
$ |
477,022 |
|
$ |
475,284 |
|
$ |
1,434,117 |
|
$ |
1,382,569 |
|
Reimbursable out-of-pocket expenses |
|
36,258 |
|
22,282 |
|
84,901 |
|
72,729 |
|
||||
Total revenues |
|
513,280 |
|
497,566 |
|
1,519,018 |
|
1,455,298 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
337,698 |
|
324,311 |
|
1,001,574 |
|
939,246 |
|
||||
Reimbursable out-of-pocket expenses |
|
36,258 |
|
22,282 |
|
84,901 |
|
72,729 |
|
||||
Selling, general and administrative |
|
70,731 |
|
69,526 |
|
217,576 |
|
203,049 |
|
||||
Depreciation and amortization |
|
26,105 |
|
23,649 |
|
77,105 |
|
66,536 |
|
||||
Asset impairment charges |
|
119,229 |
|
|
|
119,229 |
|
|
|
||||
Total costs and expenses |
|
590,021 |
(a) |
439,768 |
|
1,500,385 |
(a) |
1,281,560 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income from operations |
|
(76,741 |
)(a) |
57,798 |
|
18,633 |
(a) |
173,738 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Other expense (income), net: |
|
|
|
|
|
|
|
|
|
||||
Interest (income) expense, net |
|
(236 |
) |
181 |
|
(378 |
) |
258 |
|
||||
Foreign exchange transaction loss (gain), net |
|
681 |
|
(903 |
) |
2,595 |
|
(108 |
) |
||||
Gain on sale of businesses |
|
|
|
(9,026 |
) |
|
|
(9,681 |
) |
||||
Other expense (income), net |
|
445 |
|
(9,748 |
)(b) |
2,217 |
|
(9,531 |
)(c) |
||||
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income before taxes and equity investee earnings |
|
(77,186 |
)(a) |
67,546 |
(b) |
16,416 |
(a) |
183,269 |
(c) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Tax (benefit) expense |
|
(46,003 |
)(a) |
16,650 |
(b) |
(22,534 |
)(a) |
49,050 |
(c) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Equity investee earnings |
|
253 |
|
166 |
|
926 |
|
128 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income |
|
$ |
(30,930 |
)(a) |
$ |
51,062 |
(b) |
$ |
39,876 |
(a) |
$ |
134,347 |
(c) |
|
|
|
|
|
|
|
|
|
|
||||
Basic (loss) earnings per share |
|
$ |
(0.49 |
)(a) |
$ |
0.80 |
(b) |
$ |
0.63 |
(a) |
$ |
2.11 |
(c) |
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - basic |
|
63,739,910 |
|
63,895,975 |
|
63,601,302 |
|
63,768,728 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Diluted (loss) earnings per share |
|
$ |
(0.49 |
)(a) |
$ |
0.79 |
(b) |
$ |
0.61 |
(a) |
$ |
2.09 |
(c) |
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - diluted |
|
63,739,910 |
|
64,472,572 |
|
65,069,901 |
|
64,235,983 |
|
(a) Includes the impact of $119,229 in asset impairment charges ($73,922 net of tax) and favorable income tax items totaling $10,352 during the three and nine months ended September 30, 2010.
(b) Includes the impact of a $9,026 gain on sale of Interactive Voice & Web Response Services ($5,867 net of tax) and favorable income tax items totaling $2,072 during the three months ended September 30, 2009.
(c) Includes the impact of a $9,026 gain on sale of Interactive Voice & Web Response Services ($5,867 net of tax) and a $655 gain on sale of Cardiac Safety Services ($426 net of tax) and favorable income tax items totaling $2,072 during the nine months ended September 30, 2009.
Excluding the impact of the asset impairment charges, favorable income tax items and gain on sale of businesses: |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||
Income before taxes and equity investee earnings |
|
$ |
42,043 |
|
$ |
58,520 |
|
$ |
135,645 |
|
$ |
173,588 |
|
|
|
|
|
|
|
|
|
|
|
||||
Taxes on income |
|
$ |
9,656 |
|
$ |
15,563 |
|
$ |
33,125 |
|
$ |
47,734 |
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
32,640 |
|
$ |
43,123 |
|
$ |
103,446 |
|
$ |
125,982 |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share |
|
$ |
0.51 |
|
$ |
0.67 |
|
$ |
1.63 |
|
$ |
1.98 |
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings per share |
|
$ |
0.50 |
|
$ |
0.67 |
|
$ |
1.59 |
|
$ |
1.96 |
|
COVANCE INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2010 and DECEMBER 31, 2009
(Dollars in thousands)
|
|
September 30 |
|
December 31 |
|
||
|
|
2010 |
|
2009 |
|
||
|
|
(UNAUDITED) |
|
|
|
||
ASSETS |
|
|
|
|
|
||
Current Assets: |
|
|
|
|
|
||
Cash & cash equivalents |
|
$ |
389,024 |
|
$ |
289,469 |
|
Accounts receivable, net |
|
281,677 |
|
285,119 |
|
||
Unbilled services |
|
103,660 |
|
97,279 |
|
||
Inventory |
|
82,314 |
|
80,926 |
|
||
Deferred income taxes |
|
41,951 |
|
31,512 |
|
||
Prepaid expenses and other current assets |
|
93,058 |
|
93,367 |
|
||
Total Current Assets |
|
991,684 |
|
877,672 |
|
||
|
|
|
|
|
|
||
Property and equipment, net |
|
817,956 |
|
921,995 |
|
||
Goodwill, net |
|
127,653 |
|
127,653 |
|
||
Other assets |
|
45,468 |
|
47,624 |
|
||
Total Assets |
|
$ |
1,982,761 |
|
$ |
1,974,944 |
|
|
|
|
|
|
|
||
LIABILITIES and STOCKHOLDERS EQUITY |
|
|
|
|
|
||
Current Liabilities: |
|
|
|
|
|
||
Accounts payable |
|
$ |
35,395 |
|
$ |
36,834 |
|
Accrued payroll and benefits |
|
100,797 |
|
111,365 |
|
||
Accrued expenses and other current liabilities |
|
80,374 |
|
73,383 |
|
||
Unearned revenue |
|
149,496 |
|
166,890 |
|
||
Income taxes payable |
|
13,867 |
|
14,272 |
|
||
Total Current Liabilities |
|
379,929 |
|
402,744 |
|
||
|
|
|
|
|
|
||
Deferred income taxes |
|
55,530 |
|
98,945 |
|
||
Other liabilities |
|
57,965 |
|
62,251 |
|
||
Total Liabilities |
|
493,424 |
|
563,940 |
|
||
|
|
|
|
|
|
||
Stockholders Equity: |
|
|
|
|
|
||
Common stock |
|
772 |
|
764 |
|
||
Paid-in capital |
|
626,209 |
|
587,995 |
|
||
Retained earnings |
|
1,345,327 |
|
1,305,451 |
|
||
Accumulated other comprehensive income (loss) |
|
555 |
|
(5,281 |
) |
||
Treasury stock |
|
(483,526 |
) |
(477,925 |
) |
||
Total Stockholders Equity |
|
1,489,337 |
|
1,411,004 |
|
||
Total Liabilities and Stockholders Equity |
|
$ |
1,982,761 |
|
$ |
1,974,944 |
|
COVANCE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009
(Dollars in thousands)
(UNAUDITED)
|
|
Nine Months Ended September 30 |
|
||||
|
|
2010 |
|
2009 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
||
Net income |
|
$ |
39,876 |
|
$ |
134,347 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
77,105 |
|
66,536 |
|
||
Asset impairment charges |
|
119,229 |
|
|
|
||
Non-cash compensation expense associated with employee benefit and stock compensation plans |
|
24,815 |
|
20,295 |
|
||
Deferred income tax benefit |
|
(53,185 |
) |
(2,981 |
) |
||
Gain on sale of businesses |
|
|
|
(9,681 |
) |
||
Loss on sale of property and equipment |
|
961 |
|
838 |
|
||
Equity investee earnings |
|
(926 |
) |
(128 |
) |
||
Changes in operating assets and liabilities, net of businesses acquired and sold: |
|
|
|
|
|
||
Accounts receivable |
|
3,442 |
|
(61,341 |
) |
||
Unbilled services |
|
(6,381 |
) |
1,342 |
|
||
Inventory |
|
(1,388 |
) |
(11,070 |
) |
||
Accounts payable |
|
(1,439 |
) |
(5,426 |
) |
||
Accrued liabilities |
|
(3,577 |
) |
(12,518 |
) |
||
Unearned revenue |
|
(17,394 |
) |
18,770 |
|
||
Income taxes payable |
|
362 |
|
31,494 |
|
||
Other assets and liabilities, net |
|
7,658 |
|
3,658 |
|
||
Net cash provided by operating activities |
|
189,158 |
|
174,135 |
|
||
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
||
Capital expenditures |
|
(100,488 |
) |
(98,020 |
) |
||
Acquisition of businesses, net of cash acquired |
|
|
|
(28,370 |
) |
||
Proceeds from sale of businesses |
|
|
|
10,373 |
|
||
Other, net |
|
73 |
|
26 |
|
||
Net cash used in investing activities |
|
(100,415 |
) |
(115,991 |
) |
||
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
||
Stock issued under employee stock purchase and option plans |
|
12,640 |
|
7,251 |
|
||
Purchase of treasury stock |
|
(5,601 |
) |
(2,509 |
) |
||
Net repayments under revolving credit facility |
|
|
|
(25,000 |
) |
||
Payment of debt assumed upon acquisition of business |
|
|
|
(5,431 |
) |
||
Net cash provided by (used in) financing activities |
|
7,039 |
|
(25,689 |
) |
||
|
|
|
|
|
|
||
Effect of exchange rate changes on cash |
|
3,773 |
|
12,459 |
|
||
|
|
|
|
|
|
||
Net change in cash and cash equivalents |
|
99,555 |
|
44,914 |
|
||
|
|
|
|
|
|
||
Cash and cash equivalents, beginning of period |
|
289,469 |
|
221,334 |
|
||
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
389,024 |
|
$ |
266,248 |
|
COVANCE INC.
GAAP to Pro Forma Reconciliation
Q3 2010
(Dollars in thousands, except per share data)
(UNAUDITED)
|
|
|
|
Adjustments |
|
|
|
|||||||||
|
|
GAAP |
|
Asset |
|
Income Tax |
|
Inclusion of |
|
Pro Forma |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net revenues |
|
$ |
477,022 |
|
|
|
|
|
|
|
$ |
477,022 |
|
|||
Reimbursable out-of-pocket expenses |
|
36,258 |
|
|
|
|
|
|
|
36,258 |
|
|||||
Total revenues |
|
513,280 |
|
|
|
|
|
|
|
513,280 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of revenue |
|
337,698 |
|
|
|
|
|
|
|
337,698 |
|
|||||
Reimbursable out-of-pocket expenses |
|
36,258 |
|
|
|
|
|
|
|
36,258 |
|
|||||
Selling, general and administrative |
|
70,731 |
|
|
|
|
|
|
|
70,731 |
|
|||||
Depreciation and amortization |
|
26,105 |
|
|
|
|
|
|
|
26,105 |
|
|||||
Asset impairment charges |
|
119,229 |
|
(119,229 |
) |
|
|
|
|
|
|
|||||
Total costs and expenses |
|
590,021 |
|
(119,229 |
) |
|
|
|
|
470,792 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(Loss) income from operations |
|
(76,741 |
) |
119,229 |
|
|
|
|
|
42,488 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other expense (income), net: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest (income) expense, net |
|
(236 |
) |
|
|
|
|
|
|
(236 |
) |
|||||
Foreign exchange transaction loss (gain), net |
|
681 |
|
|
|
|
|
|
|
681 |
|
|||||
Gain on sale of businesses |
|
|
|
|
|
|
|
|
|
|
|
|||||
Other expense (income), net |
|
445 |
|
|
|
|
|
|
|
445 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(Loss) income before taxes and equity investee earnings |
|
(77,186 |
) |
119,229 |
|
|
|
|
|
42,043 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tax (benefit) expense |
|
(46,003 |
) |
45,307 |
|
10,352 |
|
|
|
9,656 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity investee earnings |
|
253 |
|
|
|
|
|
|
|
253 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net (loss) income |
|
$ |
(30,930 |
) |
$ |
73,922 |
|
$ |
(10,352 |
) |
$ |
|
|
$ |
32,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic (loss) earnings per share |
|
$ |
(0.49 |
) |
$ |
1.16 |
|
$ |
(0.16 |
) |
|
|
$ |
0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weighted average shares outstanding - basic |
|
63,739,910 |
|
63,739,910 |
|
63,739,910 |
|
|
|
63,739,910 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted (loss) earnings per share |
|
$ |
(0.49 |
) |
$ |
1.16 |
|
$ |
(0.16 |
) |
$ |
(0.01 |
) |
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weighted average shares outstanding - diluted |
|
63,739,910 |
|
63,739,910 |
|
63,739,910 |
|
1,270,798 |
(1) |
65,010,708 |
(1) |
(1) Reflects inclusion of impact of common stock equivalents in computation of diluted earnings per share as GAAP loss transitions to Pro Forma income.
COVANCE INC.
GAAP to Pro Forma Reconciliation
Q3 2009
(Dollars in thousands, except per share data)
(UNAUDITED)
|
|
|
|
Adjustments |
|
|
|
||||||
|
|
GAAP |
|
Income Tax |
|
Gain on sale |
|
Pro Forma |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net revenues |
|
$ |
475,284 |
|
|
|
|
|
$ |
475,284 |
|
||
Reimbursable out-of-pocket expenses |
|
22,282 |
|
|
|
|
|
22,282 |
|
||||
Total revenues |
|
497,566 |
|
|
|
|
|
497,566 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
324,311 |
|
|
|
|
|
324,311 |
|
||||
Reimbursable out-of-pocket expenses |
|
22,282 |
|
|
|
|
|
22,282 |
|
||||
Selling, general and administrative |
|
69,526 |
|
|
|
|
|
69,526 |
|
||||
Depreciation and amortization |
|
23,649 |
|
|
|
|
|
23,649 |
|
||||
Asset impairment charges |
|
|
|
|
|
|
|
|
|
||||
Total costs and expenses |
|
439,768 |
|
|
|
|
|
439,768 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income from operations |
|
57,798 |
|
|
|
|
|
57,798 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Other expense (income), net: |
|
|
|
|
|
|
|
|
|
||||
Interest (income) expense, net |
|
181 |
|
|
|
|
|
181 |
|
||||
Foreign exchange transaction loss (gain), net |
|
(903 |
) |
|
|
|
|
(903 |
) |
||||
Gain on sale of businesses |
|
(9,026 |
) |
|
|
9,026 |
|
|
|
||||
Other expense (income), net |
|
(9,748 |
) |
|
|
9,026 |
|
(722 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income before taxes and equity investee earnings |
|
67,546 |
|
|
|
(9,026 |
) |
58,520 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Tax (benefit) expense |
|
16,650 |
|
2,072 |
|
(3,159 |
) |
15,563 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Equity investee earnings |
|
166 |
|
|
|
|
|
166 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income |
|
$ |
51,062 |
|
$ |
(2,072 |
) |
$ |
(5,867 |
) |
$ |
43,123 |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic (loss) earnings per share |
|
$ |
0.80 |
|
$ |
(0.03 |
) |
$ |
(0.09 |
) |
$ |
0.67 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - basic |
|
63,895,975 |
|
63,895,975 |
|
63,895,975 |
|
63,895,975 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Diluted (loss) earnings per share |
|
$ |
0.79 |
|
$ |
(0.03 |
) |
$ |
(0.09 |
) |
$ |
0.67 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - diluted |
|
64,472,572 |
|
64,472,572 |
|
64,472,572 |
|
64,472,572 |
|
COVANCE INC.
GAAP to Pro Forma Reconciliation
YTD Q3 2010
(Dollars in thousands, except per share data)
(UNAUDITED)
|
|
|
|
Adjustments |
|
|
|
||||||
|
|
GAAP |
|
Asset |
|
Income Tax |
|
Pro Forma |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net revenues |
|
$ |
1,434,117 |
|
|
|
|
|
$ |
1,434,117 |
|
||
Reimbursable out-of-pocket expenses |
|
84,901 |
|
|
|
|
|
84,901 |
|
||||
Total revenues |
|
1,519,018 |
|
|
|
|
|
1,519,018 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
1,001,574 |
|
|
|
|
|
1,001,574 |
|
||||
Reimbursable out-of-pocket expenses |
|
84,901 |
|
|
|
|
|
84,901 |
|
||||
Selling, general and administrative |
|
217,576 |
|
|
|
|
|
217,576 |
|
||||
Depreciation and amortization |
|
77,105 |
|
|
|
|
|
77,105 |
|
||||
Asset impairment charges |
|
119,229 |
|
(119,229 |
) |
|
|
|
|
||||
Total costs and expenses |
|
1,500,385 |
|
(119,229 |
) |
|
|
1,381,156 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income from operations |
|
18,633 |
|
119,229 |
|
|
|
137,862 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Other expense (income), net: |
|
|
|
|
|
|
|
|
|
||||
Interest (income) expense, net |
|
(378 |
) |
|
|
|
|
(378 |
) |
||||
Foreign exchange transaction loss (gain), net |
|
2,595 |
|
|
|
|
|
2,595 |
|
||||
Gain on sale of businesses |
|
|
|
|
|
|
|
|
|
||||
Other expense (income), net |
|
2,217 |
|
|
|
|
|
2,217 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income before taxes and equity investee earnings |
|
16,416 |
|
119,229 |
|
|
|
135,645 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Tax (benefit) expense |
|
(22,534 |
) |
45,307 |
|
10,352 |
|
33,125 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Equity investee earnings |
|
926 |
|
|
|
|
|
926 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income |
|
$ |
39,876 |
|
$ |
73,922 |
|
$ |
(10,352 |
) |
$ |
103,446 |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic (loss) earnings per share |
|
$ |
0.63 |
|
$ |
1.16 |
|
$ |
(0.16 |
) |
$ |
1.63 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - basic |
|
63,601,302 |
|
63,601,302 |
|
63,601,302 |
|
63,601,302 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Diluted (loss) earnings per share |
|
$ |
0.61 |
|
$ |
1.14 |
|
$ |
(0.16 |
) |
$ |
1.59 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - diluted |
|
65,069,901 |
|
65,069,901 |
|
65,069,901 |
|
65,069,901 |
|
COVANCE INC.
GAAP to Pro Forma Reconciliation
YTD Q3 2009
(Dollars in thousands, except per share data)
(UNAUDITED)
|
|
|
|
Adjustments |
|
|
|
||||||
|
|
GAAP |
|
Income Tax |
|
Gain on Sale of |
|
Pro Forma |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net revenues |
|
$ |
1,382,569 |
|
|
|
|
|
$ |
1,382,569 |
|
||
Reimbursable out-of-pocket expenses |
|
72,729 |
|
|
|
|
|
72,729 |
|
||||
Total revenues |
|
1,455,298 |
|
|
|
|
|
1,455,298 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
939,246 |
|
|
|
|
|
939,246 |
|
||||
Reimbursable out-of-pocket expenses |
|
72,729 |
|
|
|
|
|
72,729 |
|
||||
Selling, general and administrative |
|
203,049 |
|
|
|
|
|
203,049 |
|
||||
Depreciation and amortization |
|
66,536 |
|
|
|
|
|
66,536 |
|
||||
Asset impairment charges |
|
|
|
|
|
|
|
|
|
||||
Total costs and expenses |
|
1,281,560 |
|
|
|
|
|
1,281,560 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income from operations |
|
173,738 |
|
|
|
|
|
173,738 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Other expense (income), net: |
|
|
|
|
|
|
|
|
|
||||
Interest (income) expense, net |
|
258 |
|
|
|
|
|
258 |
|
||||
Foreign exchange transaction loss (gain), net |
|
(108 |
) |
|
|
|
|
(108 |
) |
||||
Gain on sale of businesses |
|
(9,681 |
) |
|
|
9,681 |
|
|
|
||||
Other expense (income), net |
|
(9,531 |
) |
|
|
9,681 |
|
150 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income before taxes and equity investee earnings |
|
183,269 |
|
|
|
(9,681 |
) |
173,588 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Tax (benefit) expense |
|
49,050 |
|
2,072 |
|
(3,388 |
) |
47,734 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Equity investee earnings |
|
128 |
|
|
|
|
|
128 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income |
|
$ |
134,347 |
|
$ |
(2,072 |
) |
$ |
(6,293 |
) |
$ |
125,982 |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic (loss) earnings per share |
|
$ |
2.11 |
|
$ |
(0.03 |
) |
$ |
(0.10 |
) |
$ |
1.98 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - basic |
|
63,768,728 |
|
63,768,728 |
|
63,768,728 |
|
63,768,728 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Diluted (loss) earnings per share |
|
$ |
2.09 |
|
$ |
(0.03 |
) |
$ |
(0.10 |
) |
$ |
1.96 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - diluted |
|
64,235,983 |
|
64,235,983 |
|
64,235,983 |
|
64,235,983 |
|
(1) Includes the impact of a $9,026 gain on sale of Interactive Voice & Web Response Services ($5,867 net of tax) and a $655 gain on sale of Cardiac Safety Services ($426 net of tax).