Covance
Covance Reports Third Quarter Financial Results and Takes Actions to Strengthen Future Performance


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PRINCETON, N.J., Nov. 3, 2010 /PRNewswire via COMTEX/ -- 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 Company's 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 Company's 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 Company's investor conference call will be webcast on November 4 at 9:00 am EDT. Management's commentary and presentation slides will be available through http://www.covance.com/.

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 $1.8 billion, global operations in more than 30 countries, and more than 10,000 employees worldwide. Information on Covance's products and services, recent press releases, and SEC filings can be obtained through its website at http://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 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 of large contracts, 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, fluctuations in currency exchange rates, 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 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
Impairment


Income Tax
Items


Inclusion of
Common Stock
Equivalents in
Diluted EPS
Computation (1)


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
Items


Gain on sale of
IVRS


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
Impairment


Income Tax
Items


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 Items


Gain on Sale of
Businesses (1)


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).

SOURCE Covance Inc.