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COVANCE REPORTS $0.22/SHARE FOR 4Q 1999 AND FULL YEAR 1999 EARNINGS OF $0.91/SHARE

PRINCETON, N.J., Jan. 25, 2000 — Covance Inc. (NYSE: CVD) today reported earnings for its fourth quarter ended December 31, 1999 of $0.22/diluted share, which are in line with consensus estimates. For the full year of 1999 the Company reported earnings of $0.91/diluted share, excluding previously reported restructuring and merger related special charges totaling $13.0 million pre-tax ($7.8 million after tax).

"We have completed the restructuring of our clinical operations and are optimistic that we will see continued improvement in our financial results as we progress through 2000. We begin the New Year with a backlog of new business approaching $1 billion and a more focused organization," said Chris Kuebler, Chairman and CEO. "In addition to focusing on stronger financial performance in 2000, we will continue to develop new service offerings including Web - enabled services entirely focused on enhancing the efficiency of drug development."

4Q and Full Year 1999 Financial Results (full year excludes special charges)

Net revenues were $204.4 million for the fourth quarter of 1999 as compared to $198.8 million in 1998, a 2.8% increase. Full year net revenues for 1999 were $829.0 million as compared to $731.6 million for the prior year, a 13.3% increase.

Operating income for the fourth quarter of 1999 was $24.1 million as compared to $23.0 million in 1998, a 4.6% increase. Operating margin for the fourth quarter of 1999 was 11.8% compared to 11.6% for the same period in 1998. Full year 1999 operating income was $99.5 million as compared to $91.9 million in 1998, an 8.3% increase. Operating margin for the full year 1999 was 12.0% compared to 12.6% for the same period in 1998.

Net income for the fourth quarter of 1999 was $12.8 million or $0.22/diluted share, up 4.3% from $12.2 million or $0.21/diluted share for the fourth quarter of 1998. Full year 1999 net income was $53.6 million or $0.91/diluted share, up 10.3% from $48.6 million or $0.83/diluted share for the same period in 1998.

Segment Results
Early Development Segment

($ in millions)	4Q'99	4Q'98	change	FY'99	FY'98	change
Revenues	$70.5	$59.4	18.5%	$273.3	$239.5	14.1%
Costs/Expenses	59.0	52.9	11.5%	230.5	205.2	12.3%
OM%	16.3%	11.0%	15.7%	14.3%

The Company's Early Development segment includes preclinical and Phase I clinical trial services. Revenue for the fourth quarter and full year 1999 reflects consistent growth in all areas of Early Development, particularly in toxicology services. Operating margins for the fourth quarter and full year 1999 continue to be robust and reflect stronger margins from a business acquired in November 1998.

Late-Stage Development Segment

($ in millions)	4Q'99	4Q'98	change	FY'99	FY'98	change
Revenues	$133.9	$139.4	(3.9)%	$555.7	$492.1	12.9%
Costs/Expenses	121.3	122.9	(1.3)%	498.9	434.5	14.8%
OM%	9.4%	11.8%	10.2%	11.7%

The Late-Stage Development segment includes clinical development, clinical support services, biomanufacturing, and commercialization services. Revenues for the fourth quarter and full year 1999 were impacted by previously reported softness in clinical development and central laboratory services.

Savings from the Company's clinical operations restructuring contributed to the decline in Costs and Expenses in the 1999 fourth quarter versus the 1998 fourth quarter. Full year 1999 Costs and Expenses increased 14.8% over the prior year due to excess staffing costs in clinical operations prior to its restructuring and the cost of business expansion in other areas of Late- Stage Development.

The 1999 fourth quarter operating margin of 9.4% improved over the third quarter 1999 operating margin of 8.7%. However, the 1999 fourth quarter and full year operating margins declined from the prior year primarily due to revenue softness in the second half of 1999.

Corporate Information

In September 1999, the Covance Board of Directors authorized the repurchase of up to 5 percent, or approximately three million shares, of the Company's common stock. The Company has repurchased approximately two million shares to date at an average price of $9.81.

The Company recorded backlog at the end of the fourth quarter of approximately $957 million versus $898 million at September 30,1999 and $852 million at December 31, 1998. Backlog for all periods consists of signed contracts (which includes the total amount of signed central laboratory contracts), signed letters of intent and verbal contracts where work has commenced.

Net Days Sales Outstanding for the Company improved to 52 days at December 31, 1999 versus 69 days at September 30, 1999 and 55 days at December 31, 1998.

Covance, with headquarters in Princeton, New Jersey, is one of the world's largest and most comprehensive drug development services companies with 1999 revenues of $829 million, global operations, and approximately 7,500 employees worldwide. Information on Covance's products and services, recent press releases, and SEC filings can be obtained through our website at: www.covance.com.

Statements contained in this press release, which are not historical facts, such as statements about prospective earnings, savings, revenue, 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, the Company's ability to continue to attract and retain qualified personnel, the fixed price nature of contracts or the loss of large contracts, the success of the Company's restructuring, and other factors described in the Company's filings with the Securities and Exchange Commission. No assurance can be given that the Company will be able to realize the net revenues included in backlog. Covance believes that its aggregate backlog is not necessarily a meaningful indicator of future results.


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	Financial Exhibits follow
     
                                 COVANCE INC.
                INCOME STATEMENTS - INCLUDING SPECIAL CHARGES
           THREE MONTHS AND YEARS ENDED DECEMBER 31, 1999 AND 1998
                (Dollars in thousands, except per share data)
     
                                 Three Months Ended          Year Ended
                                     December 31             December 31
                                  1999         1998       1999        1998
     
    Net revenues                $204,368    $198,789    $828,980   $731,574
     
    Costs and expenses:
      Cost of revenue            136,300     132,695     553,283    484,128 
      Selling, general and
       administrative             30,901      32,449     128,003    117,844
      Depreciation and
       amortization               13,112      10,657      48,147     37,723
      Restructuring charge             -           -       7,719          - 
      Merger-related costs             -           -       5,249         --
         Total                   180,313     175,801     742,401    639,695
     
    Income from operations        24,055      22,988      86,579     91,879
     
    Other expense, net:
      Interest expense, net        2,975       2,071      10,062      7,361 
      Other (income) expense          (2)        170          57        373
         Other expense, net        2,973       2,241      10,119      7,734
     
    Income before taxes and
     equity investee results      21,082      20,747      76,460     84,145
     
    Taxes on income                8,326       8,522      30,642     35,099
     
    Equity investee loss               -           -           -        438
     
    Net income                   $12,756     $12,225     $45,818    $48,608
     
    Basic earnings per share       $0.22       $0.21       $0.78      $0.84
     
    Weighted average shares
     outstanding - basic      57,648,352  58,317,177  58,477,199 58,050,114
     
    Diluted earnings per share     $0.22       $0.21       $0.78      $0.83
     
    Weighted average shares
     outstanding - diluted    57,704,825  59,337,859  58,680,794 58,774,334
     
     
                                 COVANCE INC.
                                  PROFORMA*
                INCOME STATEMENTS - EXCLUDING SPECIAL CHARGES
           THREE MONTHS AND YEARS ENDED DECEMBER 31, 1999 AND 1998
                (Dollars in thousands, except per share data)
     
                                 Three Months Ended          Year Ended
                                     December 31             December 31
                                  1999        1998        1999(a)     1998
     
    Net revenues                $204,368    $198,789    $828,980   $731,574
     
    Costs and expenses:
      Cost of revenue            136,300     132,695     553,283    484,128 
      Selling, general &
       administrative expense     30,901      32,449     128,003    117,844
      Depreciation and
       amortization               13,112      10,657      48,147     37,723
         Total                   180,313     175,801     729,433    639,695
     
    Income from operations        24,055      22,988      99,547     91,879
     
    Other expense, net:
      Interest expense, net        2,975       2,071      10,062      7,361 
      Other (income) expense          (2)        170          57        373
         Other expense, net        2,973       2,241      10,119      7,734
     
    Income before taxes and
     equity investee results      21,082      20,747      89,428     84,145
     
    Taxes on income                8,326       8,522      35,829     35,099
     
    Equity investee loss               -           -           -        438
     
    Net income                   $12,756     $12,225     $53,599    $48,608
     
    Basic earnings per share       $0.22       $0.21       $0.91      $0.84
     
    Weighted average shares
     outstanding - basic      57,648,352  58,317,177  58,477,199 58,050,114
     
    Diluted earnings per share     $0.22       $0.21       $0.91      $0.83
     
    Weighted average shares
     outstanding - diluted    57,704,825  59,337,859  58,680,794 58,774,334
     
     
    * Excluding special charges as set forth in note (a) below.
    (a) Income statement for the year ended December 31, 1999 excludes a one-
time charge incurred in Q2 1999 in connection with a terminated merger 
totaling $5,249 ($3,150 after tax) and a restructuring charge incurred in Q3 
totaling $7,719 ($4,631 after tax).
     
     
                                 COVANCE INC.
                         CONDENSED BALANCE SHEET DATA
                          DECEMBER 31, 1999 AND 1998
                            (Dollars in thousands)
     
                                               December 31    December 31
                                                  1999           1998
    CONDENSED BALANCE SHEET DATA
     
    Cash and cash equivalents                    $25,444        $19,263 
    Accounts and unbilled receivables           $192,327       $180,734 
    Total Current Assets                        $302,124       $274,489 
    Total Assets                                $700,314       $593,415
     
     
    Total Current Liabilities                   $199,877       $193,001 
    Long-term debt                              $208,724       $149,909 
    Total Liabilities                           $437,662       $368,400 
    Total Stockholders' Equity                  $262,652       $225,015
     
     
                                 COVANCE INC.
                           CONDENSED CASH FLOW DATA
                FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
                            (Dollars in thousands)
     
                                                     Year Ended December 31
                                                       1999         1998
    CONDENSED CASH FLOW DATA
     
    Cash flows from net earnings adjusted for
     non-cash activity                              $100,236       $98,109
    Changes in operating assets and liabilities      (21,207)      (33,970) 
    Net cash provided by operating activities         79,029        64,139
     
    Capital expenditures                            (111,153)      (74,945)
     
    Contingent purchase price paid in connection
     with prior acquisitions                         (16,830)            -
     
    Acquisition of businesses, net of cash acquired        -       (25,546)
     
    Other, net                                           975           129
     
    Net proceeds from debt                            67,000        20,000
     
    Purchase of treasury stock                       (19,578)            -
     
    Cash provided by stock issued under employee
     benefit plans                                     6,738         7,459
     
    Net change in cash and cash equivalents            6,181        (8,764)
     
    Cash and cash equivalents, beginning of period    19,263        28,027
     
    Cash and cash equivalents, end of period         $25,444       $19,263
     
	SOURCE  Covance Inc.