| COVANCE REPORTS STRONG FOURTH QUARTER AND FULL YEAR EARNINGS — IN LINE WITH EXPECTATIONS |
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Fourth Quarter Highlights:
- Operating results for the fourth quarter and full year in line with expectations.
- Covance delivers another quarter of strong, balanced, diversified growth.
- For the quarter, net income up 34.8%, operating income up 18.3%, and revenues up 15.0%.
- For the full year 1997, net income up 22.5%, operating income up 19.0%, and revenues up 19.4%.
- Created Central Nervous System (CNS) development group to complement already strong therapeutic expertise in this area.
- Covance Marketing function centralized and strengthened.
Princeton, NJ, January 27, 1998 — Covance Inc. (NYSE: CVD), one of the world's largest and most comprehensive drug development companies, today reported financial results for its fourth quarter ended December 31, 1997. These results reflect the fourth quarter of operations for Covance as an independent publicly traded company since it was spun off from Corning Incorporated (Corning) on December 31, 1996.
Net income for the fourth quarter of 1997 was $9.7 million or $0.17/share, up 34.8% compared to $7.2 million or $0.13/share for the fourth quarter of 1996. The year-over-year increase of 34.8% was higher than the growth in operating income primarily due to lower interest costs, lower foreign exchange transaction losses and a lower effective tax rate. For the full year 1997, net income was $39.8 million or $0.69/share, up 22.5% compared to $32.4 million or $0.57/share for the full year 1996. Fourth quarter and full year 1996 exclude the impact of $27.4 million in pre-tax spin related costs ($19.7 million after-tax).
Net revenues for the fourth quarter of 1997 were $158.1 million, up 15.0%, in line with expectations and compared to $137.4 million for the fourth quarter of 1996. The year-over-year increase of 15.0% was lower than prior year-over-year quarterly comparisons primarily due to very strong revenues in the fourth quarter of 1996. For full year 1997, net revenues were $590.7 million, up 19.4% compared to $494.8 million for the same period in 1996.
Commenting on the fourth quarter and full year results, Chris Kuebler, Chairman and CEO of Covance noted, "we are pleased that in our first year as a public company we met our goal of growing net earnings by 20%. Covance with its comprehensive, global and integrated services is uniquely positioned to lead advancements in drug development through superior science, the highest level of service and the ability to shape solutions for our customers. We've made good progress in our first year and plan to continue to deliver strong, balanced and diversified growth to our investors over the long term."
Covance, with headquarters in Princeton, NJ, is one of the world's largest and most comprehensive drug development companies, with 1997 revenues of approximately $590 million, operations currently in 17 countries, and approximately 6,000 employees worldwide. Covance combines superior development experience, expertise and global presence to provide preclinical, health economics, central laboratory, biomanufacturing, clinical packaging, and clinical and periapproval services to the world's pharmaceutical, biotechnology and medical device companies.
Statements contained in this press release which are not historical facts may be considered forward-looking statements as that term is defined in the Private Litigation Reform Act of 1995. Such forward-looking statements including the statements contained herein regarding anticipated trends in the Company's business are based largely on Covance's expectations and are subject to a number of risks and uncertainties, certain of which are beyond Covance's control. Actual results could differ materially from these forward-looking statements as a result of a variety of factors including the risk factors described in Covance's filings with the Securities and Exchange Commission such as (i) Covance has not previously operated as a separate independent company and will no longer have access to Corning's combined assets and credit, (ii) changes in regulations governing the drug development process, and (iii) the fixed price nature of contracts or the loss of large contracts. In light of these risks and uncertainties, there can be no assurance that any forward-looking information contained in this press release will in fact transpire.
Links to Financial Exhibits Follow:
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