Financial Exhibits follow
COVANCE INC.
INCOME STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Dollars in thousands, except per share data)
(UNAUDITED)
Three Months Ended June 30 Six Months Ended June 30
2003 2002 2003 2002
Net revenues $ 233,838 $ 219,206 $ 467,234 $ 427,788
Reimbursable out-of-pockets 8,507 10,623 18,160 20,323
Total revenues $ 242,345 $ 229,829 $ 485,394 $ 448,111
Costs and expenses:
Cost of revenue 157,708 152,297 318,728 300,356
Reimbursed out-of-pocket expenses 8,507 10,623 18,160 20,323
Selling, general and administrative 36,522 34,215 70,142 65,480
Depreciation and amortization 11,452 10,205 22,611 20,311
Total 214,189 207,340 429,641 406,470
Income from operations 28,156 22,489 55,753 41,641
Other (income) expense, net:
Interest expense, net 152 167 184 485
Foreign exchange transaction (41) 1,522 21 1,378
(gain) loss, net
Other (income) expense, net 111 1,689 205 1,863
Income before taxes 28,045 20,800 55,548 39,778
Taxes on income 9,861 7,698 19,623 14,898
Equity investee earnings 70 - 247 -
Net income $ 18,254 $ 13,102 $ 36,172 $ 24,880
Basic earnings per share $ 0.30 $ 0.22 $ 0.59 $ 0.41
Weighted average shares outstanding 61,445,088 60,527,636 61,515,200 60,403,936
- basic
Diluted earnings per share $ 0.29 $ 0.21 $ 0.58 $ 0.40
Weighted average shares outstanding 62,267,702 61,940,577 62,769,974 61,826,881
- diluted
COVANCE INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2003 and DECEMBER 31, 2002
(Dollars in thousands)
June 31 December 31
2003 2002
(UNAUDITED)
ASSETS
Cash & cash equivalents $ 78,840 $ 75,913
Accounts receivable, net 148,982 159,368
Unbilled services 49,783 39,073
Inventory 39,565 40,472
Deferred income taxes 375 1,839
Prepaid expenses and other current assets 36,486 28,721
Total Current Assets 354,031 345,386
Property and equipment, net 260,190 258,407
Goodwill, net 56,876 56,805
Other assets 16,229 16,405
Total Assets $ 687,326 $ 677,003
LIABILITIES and STOCKHOLDERS' EQUITY
Accounts payable $ 19,083 $ 24,123
Accrued payroll and benefits 43,175 57,803
Accrued expenses and other 31,877 40,828
current liabilities
Unearned revenue 68,338 91,681
Total Current Liabilities 162,473 214,435
Deferred income taxes 19,074 16,432
Other liabilities 15,574 14,469
Total Liabilities 197,121 245,336
Common stock 652 637
Paid-in capital 177,425 147,745
Retained earnings 355,281 319,109
Cumulative translation adjustment 8,316 1,714
Treasury stock (51,469) (37,538)
Total Stockholders' Equity 490,205 431,667
Total Liabilities and $ 687,326 $ 677,003
Stockholders' Equity
COVANCE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Dollars in thousands)
(UNAUDITED)
Six Months Ended June 30
2003 2002
Cash flows from operating activities:
Net income $ 36,172 $ 24,880
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 22,611 20,311
Stock issued under employee benefit 6,572 5,074
and stock compensation plans
Deferred income tax benefit 4,106 2,376
Other 280 371
Changes in operating assets and liabilities:
Accounts receivable 10,386 4,458
Unbilled services (10,710) (6,656)
Inventory 907 61
Accounts payable (5,040) (21)
Accrued liabilities (23,579) 2,550
Unearned revenue (23,343) (14,859)
Income taxes payable - 7,764
Other assets and liabilities, net 3,981 1,044
Net cash provided by operating activities 22,343 47,353
Cash flows from investing activities:
Capital expenditures (20,358) (19,273)
Other, net (46) (6)
Net cash used in investing activities (20,404) (19,279)
Cash flows from financing activities:
Net repayments under revolving credit facilities - (15,000)
Stock issued under employee stock purchase 14,919 3,382
and option plans
Purchase of treasury stock (13,931) (165)
Net cash provided by (used in) financing activities 988 (11,783)
Net change in cash and cash equivalents 2,927 16,291
Cash and cash equivalents, beginning of period 75,913 35,404
Cash and cash equivalents, end of period $ 78,840 $ 51,695
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