Financial Exhibits follow
COVANCE INC.
PROFORMA *
INCOME STATEMENTS - EXCLUDING SPECIAL ITEMS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Dollars in thousands, except per share data)
(UNAUDITED)
Three Months Ended March 31
2001(a) 2000(b)
Net revenues $217,219 $195,916
Costs and expenses:
Cost of revenue 160,918 138,055
Selling, general & administrative 30,943 28,475
Depreciation and amortization 12,939 11,950
Total 204,800 178,480
Income from operations 12,419 17,436
Other expense, net:
Interest expense, net 3006 1586
Other (income) expense (24) (72)
Other expense, net 2,982 1,514
Income before taxes 9,437 15,922
Taxes on income 3,755 6,686
Net income $5,682 $9,236
Basic earnings per share $0.10 $0.16
Weighted average shares outstanding 58,036,599 57,037,201
- basic
Diluted earnings per share $0.10 $0.16
Weighted average shares outstanding 59,096,725 57,199,742
- diluted
* Adjusted to exclude results of Packaging operations in both periods
and the gain on sale of the Packaging business in 2001.
(a) Excludes gain on sale of Packaging of $39,233 ($24,325 net of tax),
the results of Packaging from January 1, 2001 through February 14, 2001,
and reflects reduced interest expense from the application of the net
sales proceeds to outstanding debt (net revenues, income from operations
and net income of $11,439, $3,807 and $1,818, respectively).
(b) Excludes results of Packaging and reflects reduced interest expense
from the application of the net proceeds to outstanding debt for the three
months ended March 31, 2000 (net revenues, income from operations and net
income of $13,711, $2,488 and $1,125, respectively).
COVANCE INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2001 AND DECEMBER 31, 2000
(Dollars in thousands)
(UNAUDITED)
March 31 2001 December 31 2000
Cash and cash equivalents $25,034 $7,191
Accounts receivable, net $155,653 $168,006
Unbilled services 64,367 66,135
Inventory 30,546 30,963
Deferred income taxes 33,318 32,696
Prepaid expenses and other current assets 42,612 48,021
Total Current Assets $ 351,530 $ 353,012
Property and equipment, net 280,628 331,689
Goodwill, net 56,933 81,327
Other assets 7,178 5,063
Total Assets $696,269 $771,091
LIABILITIES and STOCKHOLDERS' EQUITY
Accounts payable $26,871 $28,312
Accrued payroll and benefits 33,502 44,167
Accrued expenses and other liabilities 45,905 45,720
Unearned revenue 105,496 96,085
Current portion of long-term debt - 1,499
Short-term debt 130,000 234,000
Income taxes payable 17,666 1,939
Total Current Liabilities 359,440 451,722
Long-term debt - 17,224
Deferred income taxes 20,046 20,943
Other liabilities 15,691 15,451
Total Liabilities 395,177 505,340
Common stock 601 598
Paid-in capital 95,663 92,572
Retained earnings 239,251 207,426
Cumulative translation adjustment (14,430) (14,938)
Treasury stock (19,993) (19,907)
Total Stockholders' Equity 301,092 265,751
Total Liabilities and Stockholders' Equity $696,269 $771,091
COVANCE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Dollars in thousands)
(UNAUDITED)
Three Months Ended March 31
2001 2000 (a)
Cash flows from operating activities:
Net income $31,825 $10,361
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of business (39,233) -
Depreciation and amortization 13,619 13,356
Stock issued under employee benefit
and stock compensation plans 2,295 130
Deferred income tax provision (1,731) (1,052)
Other 872 48
Changes in operating assets and liabilities, net of business sold:
Accounts receivable (3,122) (15,178)
Unbilled services 1,768 (2,849)
Inventory (1,325) (2,202)
Accounts payable 164 7,606
Accrued liabilities (12,861) (11,199)
Unearned revenue 10,167 (3,079)
Income taxes payable 18,083 1,551
Other assets and liabilities, net (3,879) (2,812)
Net cash provided by (used in) operating activities 16,642 (5,319)
Cash flows from investing activities:
Proceeds from sale of business 137,500 -
Capital expenditures (14,296) (22,141)
Other, net 7 9
Net cash provided by (used in) investing activities 123,211 (22,132)
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facility (104,000) 15,000
Repayments of long-term debt (18,723) (225)
Purchase of treasury stock (86) (329)
Stock issued under employee stock purchase and option plans 799 1,022
Net cash (used in) provided by financing activities (122,010) 15,468
Net change in cash and cash equivalents 17,843 (11,983)
Cash and cash equivalents, beginning of period 7,191 25,444
Cash and cash equivalents, end of period $25,034 $13,461
(a) Adjusted to reflect reduction in interest income of $455 ($278 after tax).
COVANCE INC.
INCOME STATEMENTS - INCLUDING SPECIAL ITEMS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Dollars in thousands, except per share data)
(UNAUDITED)
Three Months Ended March 31
2001 2000 (a)
Net revenues $228,658 $209,627
Costs and expenses:
Cost of revenue 166,516 145,924
Selling, general and administrative 32,297 30,423
Depreciation and amortization 13,619 13,356
Total 212,432 189,703
Income from operations 16,226 19,924
Other (income) expense, net:
Interest expense, net 4,215 3,347
Other income (6) (381)
Gain on sale of business (39,233) -
Other (income) expense, net (35,024) 2,966
Income before taxes 51,250 16,958
Taxes on income 19,425 6,597
Net income $31,825 $10,361
Basic earnings per share $0.55 $0.18
Weighted average shares outstanding 58,036,599 57,037,201
- basic
Diluted earnings per share $0.54 $0.18
Weighted average shares outstanding 59,096,725 57,199,742
- diluted
(a) First quarter 2000 results adjusted to reflect reduction to
interest income of $455 ($278 after tax).
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