PRINCETON, N.J., Jan. 25, 2012/PRNewswire/ -- Covance Inc. (NYSE: CVD) today reported GAAP earnings for its fourth quarter ended December 31, 2011of $0.35per diluted share. Included in fourth quarter results is approximately $0.41per diluted share in charges, approximately $0.10of which relates to the completion of the previously-announced restructuring actions, approximately $0.11of which relates to the termination of a research products inventory supply agreement and inventory write down, and approximately $0.20for the impairment of a related equity investment, partially offset by a gain of approximately $0.03from favorable income tax developments in the quarter. Excluding these items, diluted earnings per share for the fourth quarter ended December 31, 2011was $0.73. For the full year, diluted earnings per share were $2.16inclusive of $0.58per share in charges, partially offset by a gain of approximately $0.04from favorable income tax developments during the year. Excluding these items, diluted earnings per share for the year ended December 31, 2011was $2.70.
"During 2011, Covance increased revenue by 8.8% to $2.1 billion, improved pro forma operating margin by 70 basis points (when excluding charges in both periods), and drove pro forma EPS growth of 26% to $2.70per diluted share. In addition, adjusted net orders for the year were a record $2.53 billion, a year-on-year increase of 13.5%, resulting in a strong adjusted net book-to-bill of 1.21 to 1 for the year," said Joe Herring, Chairman and Chief Executive Officer. "For the fourth quarter, consolidated revenues grew 8.3% and pro forma operating margin expanded by 130 basis points year-on-year and 50 basis points sequentially to 10.9%.
"In Early Development, fourth quarter net revenues grew 6.3% year-on-year, but declined $5.7 millionsequentially due to lower demand in research products and European toxicology services, as well as a $2.3 millionforeign exchange headwind. Early Development pro forma operating margin (when excluding charges in all periods), increased 190 basis points year-on-year to 13.9%, but did not expand sequentially as we had forecasted due primarily to operating losses incurred in research products this quarter. This lower demand for our research products caused us to reassess inventory levels and the fair value of an equity investment in a supplier. In Late-Stage Development, net revenues grew 10.0% year-on-year driven by the continued strong performance in our clinical development services. Pro forma operating margin of 20.0% exceeded our expectations due to increased profitability in our central laboratory, which grew revenues sequentially on a constant currency basis for the second consecutive quarter.
"On the commercial front, adjusted net orders in the fourth quarter were a record $759 million, representing an adjusted book-to-bill of 1.42 to 1. We were particularly pleased to see continued strong orders in clinical development and a further increase in orders in our central laboratory for the second consecutive quarter. The ongoing strength of our service portfolio, as evidenced by our strong 2011 orders, gives us confidence to continue our investments to drive future growth.
"Looking ahead, we are making strategic investments in our information technology infrastructure and applications to increase the productivity of our drug development services, drive operating efficiencies, and arrest the long-term rate of growth of our information technology spending. In addition to the implementation of our central laboratory system, which we previously disclosed as a $10 millionincremental spend, we are funding three additional strategic projects to help us achieve these objectives. In total, these four projects will increase our IT capital expenditures to approximately $90 millionin 2012 (versus approximately $60 millionin 2011), and will lead to a significant increase in operating expense over the next two years. We are also planning to continue expanding our commercial footprint in order to capture an increasing share of the opportunities available in the CRO industry and position us for longer-term growth. In aggregate, we are projecting spending in these areas to be above the growth rate in revenue by approximately $25 million, or $0.32per diluted share in 2012.
"In the first quarter of 2012, we expect a modest increase in net revenues from the fourth quarter level as we forecast a further sequential decline in Early Development net revenue, to be offset by an increase in Late-Stage net revenues. A drop in Early Development earnings due to the expected lower level of revenue, when combined with the increased information technology spending and foreign exchange headwind, is expected to result in diluted earnings per share in the low $0.60range.
"For the full year, we are forecasting mid-single digit year-on-year revenue growth (inclusive of an approximate 200 basis point headwind from the stronger USD) and diluted earnings per share in the range of $2.50 to $2.80. This diluted earnings per share range reflects increased investment in IT and commercial, the estimated impact of anticipated share repurchases that may be made under our Board-approved share repurchase programs ($0.15 to $0.20per share), excludes potential new strategic alliances with clients, and assumes foreign exchange rates remain at year-end 2011 levels."
Consolidated Results
($ in millions except EPS) | 4Q11 | 4Q10 | Change | FY 2011 | FY 2010 | Change | |
Total Revenues | $582.4 | $519.5 | $2,236.4 | $2,038.5 | |||
Less: Reimbursable Out-of-Pockets | $49.9 | $28.0 | $140.5 | $112.9 | |||
Net Revenues | $532.5 | $491.5 | 8.3% | $2,095.9 | $1,925.6 | 8.8% | |
Operating Income | $39.0 | $28.9 | 35.0% | $180.6 | $47.5 | 280.3% | |
Net Income | $21.1 | $28.4 | (25.5%) | $132.2 | $68.3 | 93.7% | |
Earnings Per Share | $0.35 | $0.45 | (23.6%) | $2.16 | $1.06 | 104.3% | |
2011 Charges* | ($31.1) | - | ($46.8) | - | |||
2010 Charges* | - | ($18.4) | - | ($137.6) | |||
Favorable Income Tax items* | $1.8 | $6.9 | $2.5 | $17.3 | |||
Operating Income, excluding items* | $57.9 | $47.2 | 22.6% | $215.3 | $185.1 | 16.3% | |
Operating Margin %, ex items* | 10.9% | 9.6% | 10.3% | 9.6% | |||
Net Income, excluding items* | $44.6 | $35.1 | 26.9% | $165.0 | $138.6 | 19.1% | |
Diluted EPS, excluding items* | $0.73 | $0.56 | 30.4% | $2.70 | $2.15 | 25.7% | |
* See attached pro forma income statements for reconciliation of GAAP to pro forma amounts.
Operating Segment Results
Early Development
($ in millions) | 4Q11 | 4Q10 | Change | FY 2011 | FY 2010 | Change | |
Net Revenues | $234.5 | $220.6 | 6.3% | $930.6 | $840.3 | 10.7% | |
GAAP Operating Income (Loss) | $17.7 | $21.1 | (16.3%) | $105.3 | ($32.0) | - | |
GAAP Operating Margin % | 7.5% | 9.6% | 11.3% | (3.8%) | |||
2011 Charges | ($15.0) | - | ($21.7) | - | |||
2010 Charges | - | ($5.4) | - | ($124.6) | |||
2010 Cost Actions | - | - | - | ($8.0) | |||
Pro Forma Operating Income | $32.6 | $26.6 | 22.8% | $127.0 | $100.7 | 26.1% | |
Pro Forma OM% | 13.9% | 12.0% | 13.7% | 12.0% | |||
The Early Development segment includes preclinical toxicology, analytical chemistry, clinical pharmacology, discovery support, and research products. Net revenues in the fourth quarter of 2011 grew 6.3% year-on-year to $234.5 million, driven by the results from our new Alnwick, UK and Porcheville, Francesites and clinical pharmacology. On a sequential basis, revenues declined $5.7 milliondue to lower demand in research products and European toxicology services, as well as a $2.3 millionforeign exchange headwind. North American toxicology experienced modest year-on-year growth and was flat sequentially.
GAAP operating income for the fourth quarter of 2011 was $17.7 million, and included $4.7 millionin charges relating to our previously announced restructuring activities as well as $10.3 millionin charges associated with lower demand for our research products (costs to terminate a product supply agreement and inventory write-down). Pro forma operating income, excluding charges in all periods, was $32.6 millionin the current quarter, compared to $35.0 millionlast quarter and $26.6 millionin the fourth quarter of last year. The primary driver of the sequential decline in pro forma operating income was the loss we incurred in our research products operation from lower demand, as previously discussed. Pro forma operating margins, excluding charges in all periods, were 13.9% for the fourth quarter, compared to 14.6% last quarter and 12.0% in the fourth quarter of 2010.
Late-Stage Development
($ in millions) | 4Q11 | 4Q10 | Change | FY 2011 | FY 2010 | Change | |
Net Revenues | $298.0 | $270.9 | 10.0% | $1,165.4 | $1,085.3 | 7.4% | |
GAAP Operating Income | $ 58.2 | $47.6 | 22.3% | $226.3 | $225.5 | 0.4% | |
GAAP Operating Margin % | 19.5% | 17.6% | 19.4% | 20.8% | |||
2011 Charges | ($1.3) | - | ($5.0) | - | |||
2010 Charges | - | ($7.1) | - | ($7.1) | |||
2010 Cost Actions | - | - | - | ($0.2) | |||
Pro Forma Operating Income | $59.5 | $ 54.7 | 8.7% | $231.3 | $232.8 | (0.7%) | |
Pro Forma OM% | 20.0% | 20.2% | 19.8% | 21.5% | |||
The Late-Stage Development segment includes central laboratory, Phase II-IV clinical development, and market access services. Net revenues for the fourth quarter of 2011 grew 10.0% year-on-year to $298.0 million, primarily driven by the continued strong performance in clinical development and a 190 basis point tailwind in foreign exchange. On a sequential basis, revenues declined $5.0 milliondue to a $10.1 millionforeign exchange headwind, which more than offset growth across the segment's service offerings, at constant exchange rates.
GAAP operating income for the fourth quarter was $58.2 millionand included $1.3 millionin costs associated with our restructuring actions. Pro forma operating income, excluding these costs, was $59.5 million, compared to $58.4 millionlast quarter and $54.7 millionin the fourth quarter of the prior year. Pro forma operating margins, excluding these costs, were 20.0% for the fourth quarter of 2011 compared to 19.3% last quarter and 20.2% in the fourth quarter of last year. The sequential increase in profitability was primarily due to stronger central laboratory performance.
Corporate Information
The Company's backlog at December 31, 2011was $6.14 billioncompared to $6.08 billionat September 30, 2011and $6.19 billionat December 31, 2010. Foreign exchange negatively impacted sequential backlog growth by $75 million.
Corporate expenses totaled $37.0 millionin the fourth quarter of 2011 (including $2.7 millionin restructuring costs) compared to $38.4 millionlast quarter (including $1.4 millionin restructuring costs) and $39.9 millionin the fourth quarter of last year.
During the fourth quarter, the company recorded a $12.1 millioncharge to recognize an impairment in the carrying value of an equity investment in a supplier of research products. This charge is reflected as a component of other income (expense) in the consolidated statements of income.
Cash and cash equivalents at December 31, 2011were $389 millioncompared to $400 millionat September 30, 2011and $377 millionat December 31, 2010. Covance repaid $60 millionin debt during the quarter and now has $30.0 millionin debt outstanding, originating from borrowings related to the fourth quarter 2010 accelerated share repurchase.
Free cash flow (defined as operating cash flow less capital expenditures) for the fourth quarter of 2011 was $54 million, consisting of operating cash flow of $102 millionless capital expenditures of $48 million. Free cash flow for the full year was $109 million, consisting of operating cash flow of $243 millionless capital expenditures of $135 million. We expect 2012 capital spending to be approximately $180 million.
Net Days Sales Outstanding (DSO) were 38 days at December 31, 2011compared to 38 days at September 30, 2011and 31 days at December 31, 2010.
The Company's investor conference call will be webcast on January 26at 9:00 am ET. Management's commentary and presentation slides will be available through .
Covance, with headquarters in Princeton, New Jersey, is one of the world's largest and most comprehensive drug development services companies with annual revenues greater than $2 billion, global operations in more than 30 countries, and more than 11,000 employees worldwide. Information on Covance's products and services, recent press releases, and SEC.
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 Company's business are based largely on management's 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 Company's ability to continue to attract and retain qualified personnel, the fixed price nature of contracts or the loss or delay of large studies, risks associated with acquisitions and investments, the Company's ability to increase order volume, the pace of translation of orders into revenue in late-stage development services, testing mix and geographic mix of kit receipts in central laboratories, fluctuations in currency exchange rates, the price and rate at which the company executes its share repurchase program, the cost and pace of completion of our information technology projects and the realization of benefits therefrom, and other factors described in the Company's 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 Company's expectations.
Financial Exhibits Follow
COVANCE INC. | ||||||||||
CONSOLIDATED INCOME STATEMENTS | ||||||||||
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2011 AND 2010 | ||||||||||
(Dollars in thousands, except per share data) | ||||||||||
Three Months Ended December 31 | Years Ended December 31 | |||||||||
2011 | 2010 | 2011 | 2010 | |||||||
(UNAUDITED) | ||||||||||
Net revenues | $ 532,478 | $ 491,513 | $ 2,095,938 | $ 1,925,630 | ||||||
Reimbursable out-of-pocket expenses | 49,907 | 27,942 | 140,508 | 112,843 | ||||||
Total revenues | 582,385 | 519,455 | 2,236,446 | 2,038,473 | ||||||
Costs and expenses: | ||||||||||
Cost of revenue | 371,852 | 346,924 | 1,467,051 | 1,348,498 | ||||||
Reimbursable out-of-pocket expenses | 49,907 | 27,942 | 140,508 | 112,843 | ||||||
Selling, general and administrative | 95,752 | 89,810 | 343,044 | 307,386 | ||||||
Depreciation and amortization | 25,923 | 25,919 | 105,214 | 103,024 | ||||||
Asset impairment charges | - | - | - | 119,229 | ||||||
Total costs and expenses | 543,434 | (a) | 490,595 | (d) | 2,055,817 | (c) | 1,990,980 | (e) | ||
Income from operations | 38,951 | (a) | 28,860 | (d) | 180,629 | (c) | 47,493 | (e) | ||
Other expense, net: | ||||||||||
Interest expense, net | 339 | 430 | 1,979 | 52 | ||||||
Foreign exchange transaction loss, net | 356 | 1,054 | 1,248 | 3,649 | ||||||
Impairment of equity investment | 12,119 | - | 12,119 | - | ||||||
Other expense, net | 12,814 | (b) | 1,484 | 15,346 | (b) | 3,701 | ||||
Income before taxes and equity investee earnings | 26,137 | (a),(b) | 27,376 | (d) | 165,283 | (b),(c) | 43,792 | (e) | ||
Tax expense (benefit) | 5,172 | (a),(b) | (1,121) | (d) | 33,574 | (b),(c) | (23,655) | (e) | ||
Equity investee earnings (loss) | 175 | (119) | 480 | 807 | ||||||
Net income | $ 21,140 | (a),(b) | $ 28,378 | (d) | $ 132,189 | (b),(c) | $ 68,254 | (e) | ||
Basic earnings per share | $ 0.35 | (a),(b) | $ 0.46 | (d) | $ 2.22 | (b),(c) | $ 1.08 | (e) | ||
Weighted average shares outstanding - basic | 59,730,270 | 61,390,965 | 59,629,788 | 63,043,561 | ||||||
Diluted earnings per share | $ 0.35 | (a),(b) | $ 0.45 | (d) | $ 2.16 | (b),(c) | $ 1.06 | (e) | ||
Weighted average shares outstanding - diluted | 61,080,387 | 62,703,690 | 61,091,354 | 64,472,326 | ||||||
(a) Includes, as applicable, $8,667 in restructuring costs ($5,961 net of tax), $10,287 in costs associated with the termination of an inventory supply agreement and related inventory write-down ($7,130 net of tax) and favorable income tax items totaling $1,769 during the three months ended December, 2011. | ||||||||||
(b) Includes $12,119 impairment of equity investment ($12,119 net of tax) during the three and twelve months ended December 31, 2011. | ||||||||||
(c) Includes, as applicable, $24,369 in restructuring costs ($16,067 net of tax), $10,287 in costs associated with the termination of an inventory supply agreement and related inventory write-down ($7,130 net of tax) and favorable income tax items totaling $2,469 during the year ended December 31, 2011. | ||||||||||
(d) Includes, as applicable, $18,362 in restructuring costs ($13,688 net of tax) and $6,946 in favorable income tax items during the three months ended December 31, 2010. | ||||||||||
(e) Includes, as applicable, asset impairment charges ($119,229) and restructuring costs ($18,362) totaling $137,591 ($87,610 net of tax) and favorable income tax items totaling $17,298 during the year ended December 31, 2010. | ||||||||||
Excluding the impact of restructuring charges, inventory write-down and related charges, the asset impairment charges, the impairment of equity investment and favorable income tax items: | ||||||||||
Income from operations | $ 57,905 | $ 47,222 | $ 215,285 | $ 185,084 | ||||||
COVANCE INC. | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
DECEMBER 31, 2011 and DECEMBER 31, 2010 | ||||||
(Dollars in thousands) | ||||||
December 31 | December 31 | |||||
2011 | 2010 | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash & cash equivalents | $ 389,103 | $ 377,223 | ||||
Accounts receivable, net | 312,127 | 261,160 | ||||
Unbilled services | 114,095 | 90,729 | ||||
Inventory | 74,698 | 82,924 | ||||
Deferred income taxes | 52,078 | 35,648 | ||||
Prepaid expenses and other current assets | 144,809 | 98,127 | ||||
Total Current Assets | 1,086,910 | 945,811 | ||||
Property and equipment, net | 849,551 | 843,983 | ||||
Goodwill, net | 127,779 | 127,653 | ||||
Other assets | 43,768 | 48,095 | ||||
Total Assets | $ 2,108,008 | $ 1,965,542 | ||||
LIABILITIES and STOCKHOLDERS' EQUITY | ||||||
Current Liabilities: | ||||||
Accounts payable | $ 36,393 | $ 34,079 | ||||
Accrued payroll and benefits | 142,229 | 107,572 | ||||
Accrued expenses and other current liabilities | 119,308 | 97,395 | ||||
Unearned revenue | 202,210 | 186,301 | ||||
Short-term debt and current portion of long-term debt | 30,000 | 45,000 | ||||
Income taxes payable | 6,889 | 28,827 | ||||
Total Current Liabilities | 537,029 | 499,174 | ||||
Long-term debt | - | 87,500 | ||||
Deferred income taxes | 42,295 | 30,531 | ||||
Other liabilities | 70,889 | 68,516 | ||||
Total Liabilities | 650,213 | 685,721 | ||||
Stockholders' Equity: | ||||||
Common stock | 781 | 774 | ||||
Paid-in capital | 689,584 | 639,341 | ||||
Retained earnings | 1,505,894 | 1,373,705 | ||||
Accumulated other comprehensive income | 4,622 | 277 | ||||
Treasury stock | (743,086) | (734,276) | ||||
Total Stockholders' Equity | 1,457,795 | 1,279,821 | ||||
Total Liabilities and Stockholders' Equity | $ 2,108,008 | $ 1,965,542 | ||||
COVANCE INC. | |||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 | |||||
(Dollars in thousands) | |||||
Years Ended December 31 | |||||
2011 | 2010 | ||||
Cash flows from operating activities: | |||||
Net income | $ 132,189 | $ 68,254 | |||
Adjustments to reconcile net income to net cash provided by | |||||
operating activities: | |||||
Depreciation and amortization | 105,214 | 103,024 | |||
Asset impairment charges | - | 119,229 | |||
Non-cash compensation expense associated with employee benefit | |||||
and stock compensation plans | 40,057 | 32,289 | |||
Deferred income tax benefit | (6,128) | (71,661) | |||
Impairment of equity investment | 12,119 | - | |||
Loss on disposal of property and equipment | 1,618 | 1,487 | |||
Equity investee earnings | (480) | (807) | |||
Changes in operating assets and liabilities, net of businesses | |||||
acquired: | |||||
Accounts receivable | (50,754) | 23,959 | |||
Unbilled services | (23,366) | 6,550 | |||
Inventory | 8,226 | (1,998) | |||
Accounts payable | 2,297 | (2,755) | |||
Accrued liabilities | 56,409 | 20,097 | |||
Unearned revenue | 15,909 | 19,411 | |||
Income taxes payable | (21,070) | 14,797 | |||
Other assets and liabilities, net | (28,762) | 2,547 | |||
Net cash provided by operating activities | 243,478 | 334,423 | |||
Cash flows from investing activities: | |||||
Capital expenditures | (134,633) | (126,278) | |||
Acquisition of businesses, net of cash acquired | (411) | (20,994) | |||
Other, net | 192 | 47 | |||
Net cash used in investing activities | (134,852) | (147,225) | |||
Cash flows from financing activities: | |||||
Net (repayments) borrowings under revolving credit facility | (5,000) | 35,000 | |||
Borrowings under long-term debt | - | 100,000 | |||
Repayments under long-term debt | (97,500) | (2,500) | |||
Stock issued under employee stock purchase and option plans | 9,325 | 18,825 | |||
Purchase of treasury stock | (8,810) | (256,351) | |||
Net cash used in financing activities | (101,985) | (105,026) | |||
Effect of exchange rate changes on cash | 5,239 | 5,582 | |||
Net change in cash and cash equivalents | 11,880 | 87,754 | |||
Cash and cash equivalents, beginning of period | 377,223 | 289,469 | |||
Cash and cash equivalents, end of period | $ 389,103 | $ 377,223 | |||
COVANCE INC. | ||||||||||
GAAP to Pro Forma Reconciliation | ||||||||||
Q4 2011 | ||||||||||
(Dollars in thousands, except per share data) | ||||||||||
(UNAUDITED) | ||||||||||
Adjustments | ||||||||||
GAAP | Restructuring | Other | Income Tax | Pro Forma | ||||||
Net revenues | $ 532,478 | $ 532,478 | ||||||||
Reimbursable out-of-pocket expenses | 49,907 | 49,907 | ||||||||
Total revenues | 582,385 | - | - | - | 582,385 | |||||
Costs and expenses: | ||||||||||
Cost of revenue | 371,852 | 371,852 | ||||||||
Reimbursable out-of-pocket expenses | 49,907 | 49,907 | ||||||||
Selling, general and administrative | 95,752 | (8,754) | (10,287) | 76,711 | ||||||
Depreciation and amortization | 25,923 | 87 | 26,010 | |||||||
Total costs and expenses | 543,434 | (8,667) | (10,287) | - | 524,480 | |||||
Income from operations | 38,951 | 8,667 | 10,287 | - | 57,905 | |||||
Other expense (income), net: | ||||||||||
Interest expense (income), net | 339 | 339 | ||||||||
Foreign exchange transaction loss, net | 356 | 356 | ||||||||
Impairment of equity investment | 12,119 | (12,119) | - | |||||||
Other expense (income), net | 12,814 | - | (12,119) | - | 695 | |||||
Income before taxes and equity investee earnings | 26,137 | 8,667 | 22,406 | - | 57,210 | |||||
Tax expense | 5,172 | 2,706 | 3,157 | 1,769 | 12,804 | |||||
Equity investee earnings | 175 | 175 | ||||||||
Net income | $ 21,140 | $ 5,961 | $ 19,249 | $ (1,769) | $ 44,581 | |||||
Basic earnings per share | $ 0.35 | $ 0.10 | $ 0.32 | $ (0.03) | $ 0.75 | |||||
Weighted average shares outstanding - basic | 59,730,270 | 59,730,270 | 59,730,270 | 59,730,270 | 59,730,270 | |||||
Diluted earnings per share | $ 0.35 | $ 0.10 | $ 0.32 | $ (0.03) | $ 0.73 | |||||
COVANCE INC. | ||||||||
GAAP to Pro Forma Reconciliation | ||||||||
Q4 2010 | ||||||||
(Dollars in thousands, except per share data) | ||||||||
(UNAUDITED) | ||||||||
Adjustments | ||||||||
GAAP | Restructuring | Income Tax | Pro Forma | |||||
Net revenues | $ 491,513 | $ 491,513 | ||||||
Reimbursable out-of-pocket expenses | 27,942 | 27,942 | ||||||
Total revenues | 519,455 | - | - | 519,455 | ||||
Costs and expenses: | ||||||||
Cost of revenue | 346,924 | 346,924 | ||||||
Reimbursable out-of-pocket expenses | 27,942 | 27,942 | ||||||
Selling, general and administrative | 89,810 | (18,092) | 71,718 | |||||
Depreciation and amortization | 25,919 | (270) | 25,649 | |||||
Total costs and expenses | 490,595 | (18,362) | - | 472,233 | ||||
Income from operations | 28,860 | 18,362 | - | 47,222 | ||||
Other expense (income), net: | ||||||||
Interest expense (income), net | 430 | 430 | ||||||
Foreign exchange transaction loss, net | 1,054 | 1,054 | ||||||
Other expense (income), net | 1,484 | - | - | 1,484 | ||||
Income before taxes and equity investee earnings | 27,376 | 18,362 | - | 45,738 | ||||
Tax (benefit) expense | (1,121) | 4,674 | 6,946 | 10,499 | ||||
Equity investee (loss) earnings | (119) | (119) | ||||||
Net income | $ 28,378 | $ 13,688 | $ (6,946) | $ 35,120 | ||||
Basic earnings per share | $ 0.46 | $ 0.22 | $ (0.11) | $ 0.57 | ||||
Weighted average shares outstanding - basic | 61,390,965 | 61,390,965 | 61,390,965 | 61,390,965 | ||||
Diluted earnings per share | $ 0.45 | $ 0.22 | $ (0.11) | $ 0.56 | ||||
Weighted average shares outstanding - diluted | 62,703,690 | 62,703,690 | 62,703,690 | 62,703,690 | ||||
(1) Represents costs incurred in connection with capacity rationalization, streamlining operations and other cost reduction actions. | ||||||||
(2) Represents favorable resolutions of income tax matters. | ||||||||
COVANCE INC. | ||||||||||
GAAP to Pro Forma Reconciliation | ||||||||||
For the year ended December 31, 2011 | ||||||||||
(Dollars in thousands, except per share data) | ||||||||||
(UNAUDITED) | ||||||||||
COVANCE INC. | ||||||||
SOURCE Covance Inc.
Paul Surdez, +1-609-452-4807
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