The Association of Christian Financial Advisers has welcomed the Government’s decision to investigate payday loans.
The Office of Fair Trading is to investigate payday lenders amid claims that they are taking advantage of people in financial difficulty and providing loans without checking that borrowers can afford to repay them.
The ACFA is calling for legislation to cap interest rates.
The group outlined its concerns in a letter to Chancellor George Osborne last December in which it expressed “increasing dismay” over the manner in which payday loan companies were allowed to trade.
The letter criticised the “unfair and unreasonable” interest rates charged by lenders.
According to the Independent, the typical APR charged by a payday lender is 4,000%.
“These rates of interest are not dissimilar to those of a back street loan shark, but dressed up with a fancy website and slick paced advertising,” the ACFA stated in its letter.
“Many consumers are now using this easy access to credit as a form of roll-over credit, month by month, thereby racking up unaffordable debt at extortionate rates of interest.”
The ACFA is calling upon the Chancellor to introduce legislation to cap interest rates for all personal lending, including unauthorised bank overdrafts.
It wants to see APR capped at a maximum percentage above base rate and interest limited to a rate similar to that imposed on credit unions – currently 12 per cent.
The ACFA has asked the Government to urgently introduce a measure to limit interest rates in the forthcoming budget.
“We’re delighted the government has announced this review of so-called Payday loans,” said Chairman Aidan Vaughan.
“There should be no place for the extortion of the desperate and vulnerable.”
http://tourism9.com/ http://vkins.com/
2012年2月13日星期一
UpTech Announces Judges for Start-Ups in Business Accelerator Contest
HIGHLAND HEIGHTS, Ky.–(BUSINESS WIRE)–
UpTech, a super business accelerator committed to funding 50 of the best and brightest early-stage informatics companies from the United States and abroad, announced today that it has selected the Judges who will decide which companies will be accepted into the program.
UpTech will invest up to $100,000 into each winning startup company and provide six months of business development and applied intellectual property (IP) research support, free premium office space, and professional mentoring.
The judges who will review the applications from the start-up companies are informatics, technology, business, and investment experts from CBS, Cisco, Dell, Procter & Gamble, Queen City Angels, Scripps, SUMMUS, and the North Carolina Biotechnology Center. The judges are:
• Frank Muehlman, Vice President and General Manager of the Public Business Group of Dell, Inc., for the North American region. He is responsible for all sales, marketing, and customer service in this region.
• Jim Fortner, Vice President of Information Technology Architecture, Development, and Operations for the Global Business Services division of Procter & Gamble. He manages key relationships with IT vendors at P&G.
• Marc LeShay, Vice President of Enterprise Architecture for the CBS Corporation. He has lectured around the world on topics ranging from penetrating the U.S. market, early-stage financing, IT strategy, and building strategic organizations.
• Robin Davis, Vice President for Strategic Planning and Development for The E.W. Scripps Company. She previously served as Vice President of Finance and Administration for the newspaper division of the company.
• Russ Smoak, Director and General Manager of Security Research and Operations at Cisco Systems. He is responsible for multiple security programs focused on product vulnerability disclosure, intrusion prevention, and security vulnerability.
• Wai Wong, President and Chief Executive Officer of SUMMUS Software, a global provider of IT solutions. Before founding SUMMUS, Wong served in management positions at Amdocs, BEA Systems, and Computer Associates (CA Technologies).
• Dr. Leslie Alexandre, a healthcare and biosciences consultant and former president and CEO of the North Carolina Biotechnology Center. She is an internationally respected leader in biotechnology economic development.
• Tony Shipley, is Chairman of Queen City Angels, a Cincinnati based group of angel investors, and Chairman of Transactiv, an Internet company supported by Queen City Angels.
“The quality of the judging panel clearly indicates the level of excitement that is being generated by UpTech,” said Adam Caswell, an UpTech co-founder. “These judges – like many others interested in this business accelerator — are drawn to the big idea of linking equity investment to new information-driven businesses, which are supported by the applied research capabilities of NKU’s College of Informatics and the local business community.”
The judges will examine seed-level ideas that support five sectors of informatics: health information technology, cloud computing virtualization, business analytics, digital media, and cyber security. UpTech has been accepting applications for participation in the program since Feb. 2 and it will close this first round of applications on March 9, 2012. The screening and judging process will be completed during the month of March and the winners will be announced on March 30, 2012.
UpTech is one of the most robust business accelerators in the world. In addition to an equity investment of up to $100,000, each winning business will also receive six months of free, premium riverfront office on the Ohio River with a view of downtown Cincinnati skyline and support from financial, law, accounting, and marketing/public relations firms. The winners also will receive applied IP research support from faculty, staff and graduate assistants and two student interns from Northern Kentucky University’s College of Informatics for each company along with on-campus informatics labs and facilities for collaboration, events, and seminars.
More information about UpTech can be found at http://www.uptechideas.org.
About UpTech
A partnership of Vision 2015, Campbell County Economic Progress Authority (CCEPA), Tri-County Economic Development Corporation (Tri-ED), and Northern Kentucky University, UpTech, LLC, is a super business accelerator program designed to attract startup companies to the area to support regional growth. The goal of the program is to attract and support 50 national and international early-stage informatics companies and provide them with financial and developmental assistance. UpTech, LLC is funded by independent investors. For more information, please visit http://www.uptechideas.org.
Follow UpTech on social media at:
Facebook at UpTech – Accelerate Big Ideas
Twitter at @UpTechIdeas
http://tourism9.cm/ http://vkins.com/
UpTech, a super business accelerator committed to funding 50 of the best and brightest early-stage informatics companies from the United States and abroad, announced today that it has selected the Judges who will decide which companies will be accepted into the program.
UpTech will invest up to $100,000 into each winning startup company and provide six months of business development and applied intellectual property (IP) research support, free premium office space, and professional mentoring.
The judges who will review the applications from the start-up companies are informatics, technology, business, and investment experts from CBS, Cisco, Dell, Procter & Gamble, Queen City Angels, Scripps, SUMMUS, and the North Carolina Biotechnology Center. The judges are:
• Frank Muehlman, Vice President and General Manager of the Public Business Group of Dell, Inc., for the North American region. He is responsible for all sales, marketing, and customer service in this region.
• Jim Fortner, Vice President of Information Technology Architecture, Development, and Operations for the Global Business Services division of Procter & Gamble. He manages key relationships with IT vendors at P&G.
• Marc LeShay, Vice President of Enterprise Architecture for the CBS Corporation. He has lectured around the world on topics ranging from penetrating the U.S. market, early-stage financing, IT strategy, and building strategic organizations.
• Robin Davis, Vice President for Strategic Planning and Development for The E.W. Scripps Company. She previously served as Vice President of Finance and Administration for the newspaper division of the company.
• Russ Smoak, Director and General Manager of Security Research and Operations at Cisco Systems. He is responsible for multiple security programs focused on product vulnerability disclosure, intrusion prevention, and security vulnerability.
• Wai Wong, President and Chief Executive Officer of SUMMUS Software, a global provider of IT solutions. Before founding SUMMUS, Wong served in management positions at Amdocs, BEA Systems, and Computer Associates (CA Technologies).
• Dr. Leslie Alexandre, a healthcare and biosciences consultant and former president and CEO of the North Carolina Biotechnology Center. She is an internationally respected leader in biotechnology economic development.
• Tony Shipley, is Chairman of Queen City Angels, a Cincinnati based group of angel investors, and Chairman of Transactiv, an Internet company supported by Queen City Angels.
“The quality of the judging panel clearly indicates the level of excitement that is being generated by UpTech,” said Adam Caswell, an UpTech co-founder. “These judges – like many others interested in this business accelerator — are drawn to the big idea of linking equity investment to new information-driven businesses, which are supported by the applied research capabilities of NKU’s College of Informatics and the local business community.”
The judges will examine seed-level ideas that support five sectors of informatics: health information technology, cloud computing virtualization, business analytics, digital media, and cyber security. UpTech has been accepting applications for participation in the program since Feb. 2 and it will close this first round of applications on March 9, 2012. The screening and judging process will be completed during the month of March and the winners will be announced on March 30, 2012.
UpTech is one of the most robust business accelerators in the world. In addition to an equity investment of up to $100,000, each winning business will also receive six months of free, premium riverfront office on the Ohio River with a view of downtown Cincinnati skyline and support from financial, law, accounting, and marketing/public relations firms. The winners also will receive applied IP research support from faculty, staff and graduate assistants and two student interns from Northern Kentucky University’s College of Informatics for each company along with on-campus informatics labs and facilities for collaboration, events, and seminars.
More information about UpTech can be found at http://www.uptechideas.org.
About UpTech
A partnership of Vision 2015, Campbell County Economic Progress Authority (CCEPA), Tri-County Economic Development Corporation (Tri-ED), and Northern Kentucky University, UpTech, LLC, is a super business accelerator program designed to attract startup companies to the area to support regional growth. The goal of the program is to attract and support 50 national and international early-stage informatics companies and provide them with financial and developmental assistance. UpTech, LLC is funded by independent investors. For more information, please visit http://www.uptechideas.org.
Follow UpTech on social media at:
Facebook at UpTech – Accelerate Big Ideas
Twitter at @UpTechIdeas
http://tourism9.cm/ http://vkins.com/
2012年2月8日星期三
OSC launches new insider trading probe; high-profile mining exec named
TORONTO – The Ontario Securities Commission has launched an insider trading probe involving a former employee of venerable Canadian investment bank GMP Securities.
The probe, alleging illegal profits totalling some $962,000, centres on Eda Marie Agueci, a former executive assistant at GMP who is accused of tipping others about pending transactions for which her firm acted as an adviser, and of trading in the stocks of those companies herself.
Among those named in the statement of allegations by the OSC staff is well-known mining industry executive Ian Telfer, chairman of Goldcorp Inc. (TSX:G).
Telfer is not accused of participating in insider trading himself, but the OSC staff alleges he helped facilitate the alleged illegal conduct of Agueci and her brother-in-law, Santo Iacono, a partner in S.I.R. Investment Inc., a food services distribution company, during the relevant period.
The allegations have not been proven and Telfer has issued a statement describing them as “completely without merit” and saying he plans to vigorously defend against them.
“The allegation is that I acted contrary to the public interest by agreeing to include a family member of a business associate in a private financing,” Telfer said in a statement after the allegations were made public.
“There is no allegation that I breached any securities law or that I was involved in any insider trading scheme,” Telfer said, adding that he was “very disappointed that the OSC is trying to stretch its jurisdiction to suggest that there is something wrong with agreeing to include someone’s relative in a private placement.”
Agueci, as an executive assistant to the chairman and to the mining group of the investment banking department of GMP Securities L.P., is alleged to have acquired through her employment or from others material non-public facts concerning pending corporate transactions, which she would communicate to other respondents.
“In doing so, she repeatedly engaged in unlawful tipping, contrary to subsection 76(2) of the Securities Act,” it said.
The OSC said respondents who received such information from Agueci would then trade in securities of the reporting issuers “with knowledge of material facts . . . that had not generally been disclosed, thereby engaging in illegal insider trading.”
In some cases, the respondents are accused of informing others of such material facts and recommending investing to them or of having made “payments to Agueci in relation to their illicit trading.”
“The illegal tipping and insider trading scheme involved trading in the securities of six reporting issuers and yielded trading profits of approximately $962,000,” it said.
In addition, Agueci is alleged to have received direct and indirect payments totalling $25,000 from Dennis Wing who, during the relevant period, was president and chief executive officer of registered investment dealer Fort House Inc..
In order to conceal the unlawful trading activity, certain respondents are alleged to have used deceptive techniques, including avoiding the use of stock symbols in correspondence in order to avoid detection by GMP’s compliance department, the OSC said.http://tourism9.com/ http://vkins.com/
2012年1月31日星期二
Peter O'Malley teams with South Korea investor in bid for Dodgers
Peter O’Malley’s bid to buy back the Dodgers is supported by financing from the South Korean conglomerate E-Land, two people familiar with the Dodgers’ sale process said Monday.
If the O’Malley bid is successful, E-Land Chairman Song Soo Park will become a major investor in the Dodgers, one of the people said.
The ownership group also would have investors from Los Angeles. O’Malley has had discussions with Tony Ressler, a minority owner of the Milwaukee Brewers and co-founder of Los Angeles-based Ares Capital, according to a person familiar with the talks.
O’Malley would be the Dodgers’ chief executive. Foreign investment is not necessarily an obstacle to MLB ownership; the Seattle Mariners’ ownership group includes a significant Japanese presence.
An E-Land spokesman confirmed Tuesday the company is involved in the Dodgers bidding but would not elaborate. O’Malley declined to comment.
On Tuesday, as South Koreans woke up to the news that local investors might own one of America’s most storied baseball teams, the Korean Baseball Organization — the top professional league in South Korea — had no comment.
Among the baseball fans in chat rooms and on bulletin boards, the reaction leaned negative.
Rather than being proud of owning a foreign franchise as a way to extend Korean cultural and economic influence abroad, many fans here wondered why their moneyed elite didn’t invest their millions in Korean clubs. And, despite the experience of the Mariners, the fans expressed skepticism that foreign-backed ownership would be permitted.
“If an outsider could purchase a Major League Baseball team, then Chinese companies would’ve gotten their hands on it already,” wrote one bulletin board contributor.
Wrote another: “Why won’t they invest in finding a new Korean Baseball team instead?”
The people who liked the idea said it would pave the way for more Korean talent to make its way to the major leagues.
“Having a hand in the Dodgers will allow Korean players to more easily make the jump. It’s good marketing,” wrote one fan.
O’Malley is one of at least eight prospective owners to make last Friday’s first cut.
The others include East Coast investment baron Steven Cohen, St. Louis Rams owner Stan Kroenke, and groups led by Magic Johnson, Beverly Hills developer Alan Casden, Los Angeles developer Rick Caruso and former Dodgers manager Joe Torre, investor and civic leader Stanley Gold and the family of the late Roy Disney, and New York media investor Leo Hindery and investor Tom Barrack of Santa Monica-based Colony Capital.
Frank McCourt, the Dodgers’ departing owner, expects the team to sell for at least $1.5 billion. That would be almost double the previous record price for a major league club, set when the Ricketts family bought the Chicago Cubs for $845 million in 2009.
Under O’Malley, the Dodgers were pioneers in international baseball, particularly in Asia. In 1994, three years before O’Malley sold the team to News Corp., Dodgers pitcher Chan Ho Park became the first Korean player to appear in a major league game.
In November, O’Malley joined Park and former Dodgers pitcher Hideo Nomo — the second Japanese player to appear in the majors — in an investment partnership to own and operate the Dodgers’ old spring home in Vero Beach, Fla. Park and Nomo agreed to use their homeland connections to help lure teams, camps and clinics to Vero Beach.
E-Land, a dominant fashion retailer in South Korea, has expanded its business interests into such areas as hotels and resorts, restaurants and construction, according to the company website. The company is family-run and privately held.
According to the E-Land website, the company opened its first U.S. retail store in 2007 at a mall in Stamford, Conn., under the brand name “Who A.U.” The slogan for the brand: California Dream.
bill.shaikin@latimes.com
twitter.com/BillShaikin
Shaikin reported from Los Angeles and Glionna reported from Seoul.
http://tourism9.com/ http://vkins.com/
If the O’Malley bid is successful, E-Land Chairman Song Soo Park will become a major investor in the Dodgers, one of the people said.
The ownership group also would have investors from Los Angeles. O’Malley has had discussions with Tony Ressler, a minority owner of the Milwaukee Brewers and co-founder of Los Angeles-based Ares Capital, according to a person familiar with the talks.
O’Malley would be the Dodgers’ chief executive. Foreign investment is not necessarily an obstacle to MLB ownership; the Seattle Mariners’ ownership group includes a significant Japanese presence.
An E-Land spokesman confirmed Tuesday the company is involved in the Dodgers bidding but would not elaborate. O’Malley declined to comment.
On Tuesday, as South Koreans woke up to the news that local investors might own one of America’s most storied baseball teams, the Korean Baseball Organization — the top professional league in South Korea — had no comment.
Among the baseball fans in chat rooms and on bulletin boards, the reaction leaned negative.
Rather than being proud of owning a foreign franchise as a way to extend Korean cultural and economic influence abroad, many fans here wondered why their moneyed elite didn’t invest their millions in Korean clubs. And, despite the experience of the Mariners, the fans expressed skepticism that foreign-backed ownership would be permitted.
“If an outsider could purchase a Major League Baseball team, then Chinese companies would’ve gotten their hands on it already,” wrote one bulletin board contributor.
Wrote another: “Why won’t they invest in finding a new Korean Baseball team instead?”
The people who liked the idea said it would pave the way for more Korean talent to make its way to the major leagues.
“Having a hand in the Dodgers will allow Korean players to more easily make the jump. It’s good marketing,” wrote one fan.
O’Malley is one of at least eight prospective owners to make last Friday’s first cut.
The others include East Coast investment baron Steven Cohen, St. Louis Rams owner Stan Kroenke, and groups led by Magic Johnson, Beverly Hills developer Alan Casden, Los Angeles developer Rick Caruso and former Dodgers manager Joe Torre, investor and civic leader Stanley Gold and the family of the late Roy Disney, and New York media investor Leo Hindery and investor Tom Barrack of Santa Monica-based Colony Capital.
Frank McCourt, the Dodgers’ departing owner, expects the team to sell for at least $1.5 billion. That would be almost double the previous record price for a major league club, set when the Ricketts family bought the Chicago Cubs for $845 million in 2009.
Under O’Malley, the Dodgers were pioneers in international baseball, particularly in Asia. In 1994, three years before O’Malley sold the team to News Corp., Dodgers pitcher Chan Ho Park became the first Korean player to appear in a major league game.
In November, O’Malley joined Park and former Dodgers pitcher Hideo Nomo — the second Japanese player to appear in the majors — in an investment partnership to own and operate the Dodgers’ old spring home in Vero Beach, Fla. Park and Nomo agreed to use their homeland connections to help lure teams, camps and clinics to Vero Beach.
E-Land, a dominant fashion retailer in South Korea, has expanded its business interests into such areas as hotels and resorts, restaurants and construction, according to the company website. The company is family-run and privately held.
According to the E-Land website, the company opened its first U.S. retail store in 2007 at a mall in Stamford, Conn., under the brand name “Who A.U.” The slogan for the brand: California Dream.
bill.shaikin@latimes.com
twitter.com/BillShaikin
Shaikin reported from Los Angeles and Glionna reported from Seoul.
http://tourism9.com/ http://vkins.com/
2012年1月27日星期五
AK BARS Bank: AK BARS Bank Murabaha Islamic Financing Facility has been awarded the Europe Deal of the Year by the …
AK BARS Bank: AK BARS Bank Murabaha Islamic Financing Facility has been awarded the Europe Deal of the Year by the Islamic Finance news Awards
EquityStory.RS, LLC-News: AK BARS Bank / Key word(s): Miscellaneous AK BARS Bank: AK BARS Bank Murabaha Islamic Financing Facility has been awarded the Europe Deal of the Year by the Islamic Finance news Awards
27.01.2012 / 12:06
AK BARS Bank has successfully allocated funds raised under its Syndicated Murabaha Islamic financing deal, in the amount of 60 million USD. The Master Agreement was signed in September 2011 for the period of 1 year, and is the first public international Shariah-compliant deal in Russia. Citi and the Islamic Corporation for the Development of the Private Sector (ICD), a member of the Islamic Development Bank Group, acted as exclusive Joint Lead Arrangers of and Bookrunners for the deal. The Eurasian Development Bank acted as Mandated Lead Arranger. Citi Islamic Investment Bank E.C. acted as Documentation Agent, and Citibank International Plc as Investment Agent. The funds raised have been used to finance a priority service and transport infrastructure development project in the Republic of Tatarstan, in preparation for Universiade (the World University Games) 2013, which will be hosted by the city of Kazan. These investments aimed to develop the interregional air travel system and stimulate the domestic tourism and business activity of the city. In January AK BARS BANK’s Islamic deal was awarded the title of «Deal of the Year 2011 in Europe» by the Islamic Finance News, the leading specialized online journal for the Islamic finance market. The innovative character and the uniqueness of the transaction were the main criteria for the award of the title «Deal of the Year 2011 in Europe». The deal was the first of its type in the CIS, and opened the doors to the Islamic finance market for Russia. This award proves that «AK BARS» BANK is the leader and pioneer in the development and implementation of alternative funding sources both in the Russian market and across the CIS. – «In spite of the severe market situation and tight time schedule, AK BARS BANK managed to close the deal on beneficial terms» – noted Robert Minnegaliev, the Chairman of the Board of Ak Bars Bank. – This Shariah-compliant deal created a real opportunity for the diversification of fund sourcing. This sets a new benchmark in the CIS and a significant precedent for Russian banks.» The «Deal of the Year» Award is granted annually for successful results in the area of Islamic finance. The Awards Ceremony will be held in Dubai in February 2012.
AK BARS Bank (open joint-stock company) was registered in the Central Bank of Russia and successfully operates on the financial market of Russia since 1993. AK BARS Bank is a universal bank and develops corporate, retail and investment businesses.
End of Corporate News
27.01.2012 Dissemination of a Corporate News, transmitted by EquityStory.RS, LLC – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement.
EquityStory.RS, LLC’s Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de
154264 27.01.2012
EquityStory.RS, LLC-News: AK BARS Bank / Key word(s): Miscellaneous AK BARS Bank: AK BARS Bank Murabaha Islamic Financing Facility has been awarded the Europe Deal of the Year by the Islamic Finance news Awards
27.01.2012 / 12:06
AK BARS Bank has successfully allocated funds raised under its Syndicated Murabaha Islamic financing deal, in the amount of 60 million USD. The Master Agreement was signed in September 2011 for the period of 1 year, and is the first public international Shariah-compliant deal in Russia. Citi and the Islamic Corporation for the Development of the Private Sector (ICD), a member of the Islamic Development Bank Group, acted as exclusive Joint Lead Arrangers of and Bookrunners for the deal. The Eurasian Development Bank acted as Mandated Lead Arranger. Citi Islamic Investment Bank E.C. acted as Documentation Agent, and Citibank International Plc as Investment Agent. The funds raised have been used to finance a priority service and transport infrastructure development project in the Republic of Tatarstan, in preparation for Universiade (the World University Games) 2013, which will be hosted by the city of Kazan. These investments aimed to develop the interregional air travel system and stimulate the domestic tourism and business activity of the city. In January AK BARS BANK’s Islamic deal was awarded the title of «Deal of the Year 2011 in Europe» by the Islamic Finance News, the leading specialized online journal for the Islamic finance market. The innovative character and the uniqueness of the transaction were the main criteria for the award of the title «Deal of the Year 2011 in Europe». The deal was the first of its type in the CIS, and opened the doors to the Islamic finance market for Russia. This award proves that «AK BARS» BANK is the leader and pioneer in the development and implementation of alternative funding sources both in the Russian market and across the CIS. – «In spite of the severe market situation and tight time schedule, AK BARS BANK managed to close the deal on beneficial terms» – noted Robert Minnegaliev, the Chairman of the Board of Ak Bars Bank. – This Shariah-compliant deal created a real opportunity for the diversification of fund sourcing. This sets a new benchmark in the CIS and a significant precedent for Russian banks.» The «Deal of the Year» Award is granted annually for successful results in the area of Islamic finance. The Awards Ceremony will be held in Dubai in February 2012.
AK BARS Bank (open joint-stock company) was registered in the Central Bank of Russia and successfully operates on the financial market of Russia since 1993. AK BARS Bank is a universal bank and develops corporate, retail and investment businesses.
End of Corporate News
27.01.2012 Dissemination of a Corporate News, transmitted by EquityStory.RS, LLC – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement.
EquityStory.RS, LLC’s Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de
154264 27.01.2012
AXC0086 2012-01-27/12:06
Covance Reports Fourth Quarter Revenue of $532M, GAAP EPS of $0.35, Pro Forma EPS of $0.73, and Adjusted Net Orders of …
PRINCETON, N.J., Jan. 25, 2012 /PRNewswire/ — Covance Inc. (NYSE: CVD – News) today reported GAAP earnings for its fourth quarter ended December 31, 2011 of $0.35 per diluted share. Included in fourth quarter results is approximately $0.41 per diluted share in charges, approximately $0.10 of which relates to the completion of the previously-announced restructuring actions, approximately $0.11 of which relates to the termination of a research products inventory supply agreement and inventory write down, and approximately $0.20 for the impairment of a related equity investment, partially offset by a gain of approximately $0.03 from favorable income tax developments in the quarter. Excluding these items, diluted earnings per share for the fourth quarter ended December 31, 2011 was $0.73. For the full year, diluted earnings per share were $2.16 inclusive of $0.58 per share in charges, partially offset by a gain of approximately $0.04 from favorable income tax developments during the year. Excluding these items, diluted earnings per share for the year ended December 31, 2011 was $2.70.
“During 2011, Covance increased revenue by 8.8% to $2.1 billion, improved pro forma operating margin by 70 basis points (when excluding charges in both periods), and drove pro forma EPS growth of 26% to $2.70 per diluted share. In addition, adjusted net orders for the year were a record $2.53 billion, a year-on-year increase of 13.5%, resulting in a strong adjusted net book-to-bill of 1.21 to 1 for the year,” said Joe Herring, Chairman and Chief Executive Officer. ”For the fourth quarter, consolidated revenues grew 8.3% and pro forma operating margin expanded by 130 basis points year-on-year and 50 basis points sequentially to 10.9%.
“In Early Development, fourth quarter net revenues grew 6.3% year-on-year, but declined $5.7 million sequentially due to lower demand in research products and European toxicology services, as well as a $2.3 million foreign exchange headwind. Early Development pro forma operating margin (when excluding charges in all periods), increased 190 basis points year-on-year to 13.9%, but did not expand sequentially as we had forecasted due primarily to operating losses incurred in research products this quarter. This lower demand for our research products caused us to reassess inventory levels and the fair value of an equity investment in a supplier. In Late-Stage Development, net revenues grew 10.0% year-on-year driven by the continued strong performance in our clinical development services. Pro forma operating margin of 20.0% exceeded our expectations due to increased profitability in our central laboratory, which grew revenues sequentially on a constant currency basis for the second consecutive quarter.
“On the commercial front, adjusted net orders in the fourth quarter were a record $759 million, representing an adjusted book-to-bill of 1.42 to 1. We were particularly pleased to see continued strong orders in clinical development and a further increase in orders in our central laboratory for the second consecutive quarter. The ongoing strength of our service portfolio, as evidenced by our strong 2011 orders, gives us confidence to continue our investments to drive future growth.
“Looking ahead, we are making strategic investments in our information technology infrastructure and applications to increase the productivity of our drug development services, drive operating efficiencies, and arrest the long-term rate of growth of our information technology spending. In addition to the implementation of our central laboratory system, which we previously disclosed as a $10 million incremental spend, we are funding three additional strategic projects to help us achieve these objectives. In total, these four projects will increase our IT capital expenditures to approximately $90 million in 2012 (versus approximately $60 million in 2011), and will lead to a significant increase in operating expense over the next two years. We are also planning to continue expanding our commercial footprint in order to capture an increasing share of the opportunities available in the CRO industry and position us for longer-term growth. In aggregate, we are projecting spending in these areas to be above the growth rate in revenue by approximately $25 million, or $0.32 per diluted share in 2012.
“In the first quarter of 2012, we expect a modest increase in net revenues from the fourth quarter level as we forecast a further sequential decline in Early Development net revenue, to be offset by an increase in Late-Stage net revenues. A drop in Early Development earnings due to the expected lower level of revenue, when combined with the increased information technology spending and foreign exchange headwind, is expected to result in diluted earnings per share in the low $0.60 range.
“For the full year, we are forecasting mid-single digit year-on-year revenue growth (inclusive of an approximate 200 basis point headwind from the stronger USD) and diluted earnings per share in the range of $2.50 to $2.80. This diluted earnings per share range reflects increased investment in IT and commercial, the estimated impact of anticipated share repurchases that may be made under our Board-approved share repurchase programs ($0.15 to $0.20 per share), excludes potential new strategic alliances with clients, and assumes foreign exchange rates remain at year-end 2011 levels.”
Consolidated Results
* See attached pro forma income statements for reconciliation of GAAP to pro forma amounts.
Operating Segment Results
Early Development
The Early Development segment includes preclinical toxicology, analytical chemistry, clinical pharmacology, discovery support, and research products. Net revenues in the fourth quarter of 2011 grew 6.3% year-on-year to $234.5 million, driven by the results from our new Alnwick, UK and Porcheville, France sites and clinical pharmacology. On a sequential basis, revenues declined $5.7 million due to lower demand in research products and European toxicology services, as well as a $2.3 million foreign exchange headwind. North American toxicology experienced modest year-on-year growth and was flat sequentially.
GAAP operating income for the fourth quarter of 2011 was $17.7 million, and included $4.7 million in charges relating to our previously announced restructuring activities as well as $10.3 million in charges associated with lower demand for our research products (costs to terminate a product supply agreement and inventory write-down). Pro forma operating income, excluding charges in all periods, was $32.6 million in the current quarter, compared to $35.0 million last quarter and $26.6 million in the fourth quarter of last year. The primary driver of the sequential decline in pro forma operating income was the loss we incurred in our research products operation from lower demand, as previously discussed. Pro forma operating margins, excluding charges in all periods, were 13.9% for the fourth quarter, compared to 14.6% last quarter and 12.0% in the fourth quarter of 2010.
Late-Stage Development
The Late-Stage Development segment includes central laboratory, Phase II-IV clinical development, and market access services. Net revenues for the fourth quarter of 2011 grew 10.0% year-on-year to $298.0 million, primarily driven by the continued strong performance in clinical development and a 190 basis point tailwind in foreign exchange. On a sequential basis, revenues declined $5.0 million due to a $10.1 million foreign exchange headwind, which more than offset growth across the segment’s service offerings, at constant exchange rates.
GAAP operating income for the fourth quarter was $58.2 million and included $1.3 million in costs associated with our restructuring actions. Pro forma operating income, excluding these costs, was $59.5 million, compared to $58.4 million last quarter and $54.7 million in the fourth quarter of the prior year. Pro forma operating margins, excluding these costs, were 20.0% for the fourth quarter of 2011 compared to 19.3% last quarter and 20.2% in the fourth quarter of last year. The sequential increase in profitability was primarily due to stronger central laboratory performance.
Corporate Information
The Company’s backlog at December 31, 2011 was $6.14 billion compared to $6.08 billion at September 30, 2011 and $6.19 billion at December 31, 2010. Foreign exchange negatively impacted sequential backlog growth by $75 million.
Corporate expenses totaled $37.0 million in the fourth quarter of 2011 (including $2.7 million in restructuring costs) compared to $38.4 million last quarter (including $1.4 million in restructuring costs) and $39.9 million in the fourth quarter of last year.
During the fourth quarter, the company recorded a $12.1 million charge to recognize an impairment in the carrying value of an equity investment in a supplier of research products. This charge is reflected as a component of other income (expense) in the consolidated statements of income.
Cash and cash equivalents at December 31, 2011 were $389 million compared to $400 million at September 30, 2011 and $377 million at December 31, 2010. Covance repaid $60 million in debt during the quarter and now has $30.0 million in debt outstanding, originating from borrowings related to the fourth quarter 2010 accelerated share repurchase.
Free cash flow (defined as operating cash flow less capital expenditures) for the fourth quarter of 2011 was $54 million, consisting of operating cash flow of $102 million less capital expenditures of $48 million. Free cash flow for the full year was $109 million, consisting of operating cash flow of $243 million less capital expenditures of $135 million. We expect 2012 capital spending to be approximately $180 million.
Net Days Sales Outstanding (DSO) were 38 days at December 31, 2011 compared to 38 days at September 30, 2011 and 31 days at December 31, 2010.
The Company’s investor conference call will be webcast on January 26 at 9:00 am ET. Management’s commentary and presentation slides will be available through 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 $2 billion, global operations in more than 30 countries, and more than 11,000 employees worldwide. Information on Covance’s products and services, recent press releases, and SEC filings can be obtained through its website at 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 or delay of large studies, 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, testing mix and geographic mix of kit receipts in central laboratories, fluctuations in currency exchange rates, the price and rate at which the company executes its share repurchase program, the cost and pace of completion of our information technology projects and the realization of benefits therefrom, 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
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“During 2011, Covance increased revenue by 8.8% to $2.1 billion, improved pro forma operating margin by 70 basis points (when excluding charges in both periods), and drove pro forma EPS growth of 26% to $2.70 per diluted share. In addition, adjusted net orders for the year were a record $2.53 billion, a year-on-year increase of 13.5%, resulting in a strong adjusted net book-to-bill of 1.21 to 1 for the year,” said Joe Herring, Chairman and Chief Executive Officer. ”For the fourth quarter, consolidated revenues grew 8.3% and pro forma operating margin expanded by 130 basis points year-on-year and 50 basis points sequentially to 10.9%.
“In Early Development, fourth quarter net revenues grew 6.3% year-on-year, but declined $5.7 million sequentially due to lower demand in research products and European toxicology services, as well as a $2.3 million foreign exchange headwind. Early Development pro forma operating margin (when excluding charges in all periods), increased 190 basis points year-on-year to 13.9%, but did not expand sequentially as we had forecasted due primarily to operating losses incurred in research products this quarter. This lower demand for our research products caused us to reassess inventory levels and the fair value of an equity investment in a supplier. In Late-Stage Development, net revenues grew 10.0% year-on-year driven by the continued strong performance in our clinical development services. Pro forma operating margin of 20.0% exceeded our expectations due to increased profitability in our central laboratory, which grew revenues sequentially on a constant currency basis for the second consecutive quarter.
“On the commercial front, adjusted net orders in the fourth quarter were a record $759 million, representing an adjusted book-to-bill of 1.42 to 1. We were particularly pleased to see continued strong orders in clinical development and a further increase in orders in our central laboratory for the second consecutive quarter. The ongoing strength of our service portfolio, as evidenced by our strong 2011 orders, gives us confidence to continue our investments to drive future growth.
“Looking ahead, we are making strategic investments in our information technology infrastructure and applications to increase the productivity of our drug development services, drive operating efficiencies, and arrest the long-term rate of growth of our information technology spending. In addition to the implementation of our central laboratory system, which we previously disclosed as a $10 million incremental spend, we are funding three additional strategic projects to help us achieve these objectives. In total, these four projects will increase our IT capital expenditures to approximately $90 million in 2012 (versus approximately $60 million in 2011), and will lead to a significant increase in operating expense over the next two years. We are also planning to continue expanding our commercial footprint in order to capture an increasing share of the opportunities available in the CRO industry and position us for longer-term growth. In aggregate, we are projecting spending in these areas to be above the growth rate in revenue by approximately $25 million, or $0.32 per diluted share in 2012.
“In the first quarter of 2012, we expect a modest increase in net revenues from the fourth quarter level as we forecast a further sequential decline in Early Development net revenue, to be offset by an increase in Late-Stage net revenues. A drop in Early Development earnings due to the expected lower level of revenue, when combined with the increased information technology spending and foreign exchange headwind, is expected to result in diluted earnings per share in the low $0.60 range.
“For the full year, we are forecasting mid-single digit year-on-year revenue growth (inclusive of an approximate 200 basis point headwind from the stronger USD) and diluted earnings per share in the range of $2.50 to $2.80. This diluted earnings per share range reflects increased investment in IT and commercial, the estimated impact of anticipated share repurchases that may be made under our Board-approved share repurchase programs ($0.15 to $0.20 per share), excludes potential new strategic alliances with clients, and assumes foreign exchange rates remain at year-end 2011 levels.”
Consolidated Results
| ($ in millions except EPS) | 4Q11 | 4Q10 | Change | FY 2011 | FY 2010 | Change | |
| Total Revenues | $582.4 | $519.5 | $2,236.4 | $2,038.5 | |||
| Less: Reimbursable Out-of-Pockets | $49.9 | $28.0 | $140.5 | $112.9 | |||
| Net Revenues | $532.5 | $491.5 | 8.3% | $2,095.9 | $1,925.6 | 8.8% | |
| Operating Income | $39.0 | $28.9 | 35.0% | $180.6 | $47.5 | 280.3% | |
| Net Income | $21.1 | $28.4 | (25.5%) | $132.2 | $68.3 | 93.7% | |
| Earnings Per Share | $0.35 | $0.45 | (23.6%) | $2.16 | $1.06 | 104.3% | |
| 2011 Charges* | ($31.1) | - | ($46.8) | - | |||
| 2010 Charges* | - | ($18.4) | - | ($137.6) | |||
| Favorable Income Tax items* | $1.8 | $6.9 | $2.5 | $17.3 | |||
| Operating Income, excluding items* | $57.9 | $47.2 | 22.6% | $215.3 | $185.1 | 16.3% | |
| Operating Margin %, ex items* | 10.9% | 9.6% | 10.3% | 9.6% | |||
| Net Income, excluding items* | $44.6 | $35.1 | 26.9% | $165.0 | $138.6 | 19.1% | |
| Diluted EPS, excluding items* | $0.73 | $0.56 | 30.4% | $2.70 | $2.15 | 25.7% | |
Operating Segment Results
Early Development
| ($ in millions) | 4Q11 | 4Q10 | Change | FY 2011 | FY 2010 | Change | |
| Net Revenues | $234.5 | $220.6 | 6.3% | $930.6 | $840.3 | 10.7% | |
| GAAP Operating Income (Loss) | $17.7 | $21.1 | (16.3%) | $105.3 | ($32.0) | - | |
| GAAP Operating Margin % | 7.5% | 9.6% | 11.3% | (3.8%) | |||
| 2011 Charges | ($15.0) | - | ($21.7) | - | |||
| 2010 Charges | - | ($5.4) | - | ($124.6) | |||
| 2010 Cost Actions | - | - | - | ($8.0) | |||
| Pro Forma Operating Income | $32.6 | $26.6 | 22.8% | $127.0 | $100.7 | 26.1% | |
| Pro Forma OM% | 13.9% | 12.0% | 13.7% | 12.0% | |||
GAAP operating income for the fourth quarter of 2011 was $17.7 million, and included $4.7 million in charges relating to our previously announced restructuring activities as well as $10.3 million in charges associated with lower demand for our research products (costs to terminate a product supply agreement and inventory write-down). Pro forma operating income, excluding charges in all periods, was $32.6 million in the current quarter, compared to $35.0 million last quarter and $26.6 million in the fourth quarter of last year. The primary driver of the sequential decline in pro forma operating income was the loss we incurred in our research products operation from lower demand, as previously discussed. Pro forma operating margins, excluding charges in all periods, were 13.9% for the fourth quarter, compared to 14.6% last quarter and 12.0% in the fourth quarter of 2010.
Late-Stage Development
| ($ in millions) | 4Q11 | 4Q10 | Change | FY 2011 | FY 2010 | Change | |
| Net Revenues | $298.0 | $270.9 | 10.0% | $1,165.4 | $1,085.3 | 7.4% | |
| GAAP Operating Income | $ 58.2 | $47.6 | 22.3% | $226.3 | $225.5 | 0.4% | |
| GAAP Operating Margin % | 19.5% | 17.6% | 19.4% | 20.8% | |||
| 2011 Charges | ($1.3) | - | ($5.0) | - | |||
| 2010 Charges | - | ($7.1) | - | ($7.1) | |||
| 2010 Cost Actions | - | - | - | ($0.2) | |||
| Pro Forma Operating Income | $59.5 | $ 54.7 | 8.7% | $231.3 | $232.8 | (0.7%) | |
| Pro Forma OM% | 20.0% | 20.2% | 19.8% | 21.5% | |||
GAAP operating income for the fourth quarter was $58.2 million and included $1.3 million in costs associated with our restructuring actions. Pro forma operating income, excluding these costs, was $59.5 million, compared to $58.4 million last quarter and $54.7 million in the fourth quarter of the prior year. Pro forma operating margins, excluding these costs, were 20.0% for the fourth quarter of 2011 compared to 19.3% last quarter and 20.2% in the fourth quarter of last year. The sequential increase in profitability was primarily due to stronger central laboratory performance.
Corporate Information
The Company’s backlog at December 31, 2011 was $6.14 billion compared to $6.08 billion at September 30, 2011 and $6.19 billion at December 31, 2010. Foreign exchange negatively impacted sequential backlog growth by $75 million.
Corporate expenses totaled $37.0 million in the fourth quarter of 2011 (including $2.7 million in restructuring costs) compared to $38.4 million last quarter (including $1.4 million in restructuring costs) and $39.9 million in the fourth quarter of last year.
During the fourth quarter, the company recorded a $12.1 million charge to recognize an impairment in the carrying value of an equity investment in a supplier of research products. This charge is reflected as a component of other income (expense) in the consolidated statements of income.
Cash and cash equivalents at December 31, 2011 were $389 million compared to $400 million at September 30, 2011 and $377 million at December 31, 2010. Covance repaid $60 million in debt during the quarter and now has $30.0 million in debt outstanding, originating from borrowings related to the fourth quarter 2010 accelerated share repurchase.
Free cash flow (defined as operating cash flow less capital expenditures) for the fourth quarter of 2011 was $54 million, consisting of operating cash flow of $102 million less capital expenditures of $48 million. Free cash flow for the full year was $109 million, consisting of operating cash flow of $243 million less capital expenditures of $135 million. We expect 2012 capital spending to be approximately $180 million.
Net Days Sales Outstanding (DSO) were 38 days at December 31, 2011 compared to 38 days at September 30, 2011 and 31 days at December 31, 2010.
The Company’s investor conference call will be webcast on January 26 at 9:00 am ET. Management’s commentary and presentation slides will be available through 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 $2 billion, global operations in more than 30 countries, and more than 11,000 employees worldwide. Information on Covance’s products and services, recent press releases, and SEC filings can be obtained through its website at 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 or delay of large studies, 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, testing mix and geographic mix of kit receipts in central laboratories, fluctuations in currency exchange rates, the price and rate at which the company executes its share repurchase program, the cost and pace of completion of our information technology projects and the realization of benefits therefrom, 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 MONTHS AND YEARS ENDED DECEMBER 31, 2011 AND 2010 | ||||||||||
| (Dollars in thousands, except per share data) | ||||||||||
| Three Months Ended December 31 | Years Ended December 31 | |||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||
| (UNAUDITED) | ||||||||||
| Net revenues | $ 532,478 | $ 491,513 | $ 2,095,938 | $ 1,925,630 | ||||||
| Reimbursable out-of-pocket expenses | 49,907 | 27,942 | 140,508 | 112,843 | ||||||
| Total revenues | 582,385 | 519,455 | 2,236,446 | 2,038,473 | ||||||
| Costs and expenses: | ||||||||||
| Cost of revenue | 371,852 | 346,924 | 1,467,051 | 1,348,498 | ||||||
| Reimbursable out-of-pocket expenses | 49,907 | 27,942 | 140,508 | 112,843 | ||||||
| Selling, general and administrative | 95,752 | 89,810 | 343,044 | 307,386 | ||||||
| Depreciation and amortization | 25,923 | 25,919 | 105,214 | 103,024 | ||||||
| Asset impairment charges | - | - | - | 119,229 | ||||||
| Total costs and expenses | 543,434 | (a) | 490,595 | (d) | 2,055,817 | (c) | 1,990,980 | (e) | ||
| Income from operations | 38,951 | (a) | 28,860 | (d) | 180,629 | (c) | 47,493 | (e) | ||
| Other expense, net: | ||||||||||
| Interest expense, net | 339 | 430 | 1,979 | 52 | ||||||
| Foreign exchange transaction loss, net | 356 | 1,054 | 1,248 | 3,649 | ||||||
| Impairment of equity investment | 12,119 | - | 12,119 | - | ||||||
| Other expense, net | 12,814 | (b) | 1,484 | 15,346 | (b) | 3,701 | ||||
| Income before taxes and equity investee earnings | 26,137 | (a),(b) | 27,376 | (d) | 165,283 | (b),(c) | 43,792 | (e) | ||
| Tax expense (benefit) | 5,172 | (a),(b) | (1,121) | (d) | 33,574 | (b),(c) | (23,655) | (e) | ||
| Equity investee earnings (loss) | 175 | (119) | 480 | 807 | ||||||
| Net income | $ 21,140 | (a),(b) | $ 28,378 | (d) | $ 132,189 | (b),(c) | $ 68,254 | (e) | ||
| Basic earnings per share | $ 0.35 | (a),(b) | $ 0.46 | (d) | $ 2.22 | (b),(c) | $ 1.08 | (e) | ||
| Weighted average shares outstanding – basic | 59,730,270 | 61,390,965 | 59,629,788 | 63,043,561 | ||||||
| Diluted earnings per share | $ 0.35 | (a),(b) | $ 0.45 | (d) | $ 2.16 | (b),(c) | $ 1.06 | (e) | ||
| Weighted average shares outstanding – diluted | 61,080,387 | 62,703,690 | 61,091,354 | 64,472,326 | ||||||
| (a) Includes, as applicable, $8,667 in restructuring costs ($5,961 net of tax), $10,287 in costs associated with the termination of an inventory supply agreement and related inventory write-down ($7,130 net of tax) and favorable income tax items totaling $1,769 during the three months ended December, 2011. | ||||||||||
| (b) Includes $12,119 impairment of equity investment ($12,119 net of tax) during the three and twelve months ended December 31, 2011. | ||||||||||
| (c) Includes, as applicable, $24,369 in restructuring costs ($16,067 net of tax), $10,287 in costs associated with the termination of an inventory supply agreement and related inventory write-down ($7,130 net of tax) and favorable income tax items totaling $2,469 during the year ended December 31, 2011. | ||||||||||
| (d) Includes, as applicable, $18,362 in restructuring costs ($13,688 net of tax) and $6,946 in favorable income tax items during the three months ended December 31, 2010. | ||||||||||
| (e) Includes, as applicable, asset impairment charges ($119,229) and restructuring costs ($18,362) totaling $137,591 ($87,610 net of tax) and favorable income tax items totaling $17,298 during the year ended December 31, 2010. | ||||||||||
| Excluding the impact of restructuring charges, inventory write-down and related charges, the asset impairment charges, the impairment of equity investment and favorable income tax items: | ||||||||||
| Income from operations | $ 57,905 | $ 47,222 | $ 215,285 | $ 185,084 | ||||||
| Taxes on income | $ 12,804 | $ 10,499 | $ 47,502 | $ 43,624 | ||||||
| Net income | $ 44,581 | $ 35,120 | $ 165,036 | $ 138,566 | ||||||
| Basic earnings per share | $ 0.75 | $ 0.57 | $ 2.77 | $ 2.20 | ||||||
| Diluted earnings per share | $ 0.73 | $ 0.56 | $ 2.70 | $ 2.15 | ||||||
| COVANCE INC. | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| DECEMBER 31, 2011 and DECEMBER 31, 2010 | ||||||
| (Dollars in thousands) | ||||||
| December 31 | December 31 | |||||
| 2011 | 2010 | |||||
| ASSETS | ||||||
| Current Assets: | ||||||
| Cash & cash equivalents | $ 389,103 | $ 377,223 | ||||
| Accounts receivable, net | 312,127 | 261,160 | ||||
| Unbilled services | 114,095 | 90,729 | ||||
| Inventory | 74,698 | 82,924 | ||||
| Deferred income taxes | 52,078 | 35,648 | ||||
| Prepaid expenses and other current assets | 144,809 | 98,127 | ||||
| Total Current Assets | 1,086,910 | 945,811 | ||||
| Property and equipment, net | 849,551 | 843,983 | ||||
| Goodwill, net | 127,779 | 127,653 | ||||
| Other assets | 43,768 | 48,095 | ||||
| Total Assets | $ 2,108,008 | $ 1,965,542 | ||||
| LIABILITIES and STOCKHOLDERS’ EQUITY | ||||||
| Current Liabilities: | ||||||
| Accounts payable | $ 36,393 | $ 34,079 | ||||
| Accrued payroll and benefits | 142,229 | 107,572 | ||||
| Accrued expenses and other current liabilities | 119,308 | 97,395 | ||||
| Unearned revenue | 202,210 | 186,301 | ||||
| Short-term debt and current portion of long-term debt | 30,000 | 45,000 | ||||
| Income taxes payable | 6,889 | 28,827 | ||||
| Total Current Liabilities | 537,029 | 499,174 | ||||
| Long-term debt | - | 87,500 | ||||
| Deferred income taxes | 42,295 | 30,531 | ||||
| Other liabilities | 70,889 | 68,516 | ||||
| Total Liabilities | 650,213 | 685,721 | ||||
| Stockholders’ Equity: | ||||||
| Common stock | 781 | 774 | ||||
| Paid-in capital | 689,584 | 639,341 | ||||
| Retained earnings | 1,505,894 | 1,373,705 | ||||
| Accumulated other comprehensive income | 4,622 | 277 | ||||
| Treasury stock | (743,086) | (734,276) | ||||
| Total Stockholders’ Equity | 1,457,795 | 1,279,821 | ||||
| Total Liabilities and Stockholders’ Equity | $ 2,108,008 | $ 1,965,542 | ||||
| COVANCE INC. | |||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
| FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 | |||||
| (Dollars in thousands) | |||||
| Years Ended December 31 | |||||
| 2011 | 2010 | ||||
| Cash flows from operating activities: | |||||
| Net income | $ 132,189 | $ 68,254 | |||
| Adjustments to reconcile net income to net cash provided by | |||||
| operating activities: | |||||
| Depreciation and amortization | 105,214 | 103,024 | |||
| Asset impairment charges | - | 119,229 | |||
| Non-cash compensation expense associated with employee benefit | |||||
| and stock compensation plans | 40,057 | 32,289 | |||
| Deferred income tax benefit | (6,128) | (71,661) | |||
| Impairment of equity investment | 12,119 | - | |||
| Loss on disposal of property and equipment | 1,618 | 1,487 | |||
| Equity investee earnings | (480) | (807) | |||
| Changes in operating assets and liabilities, net of businesses | |||||
| acquired: | |||||
| Accounts receivable | (50,754) | 23,959 | |||
| Unbilled services | (23,366) | 6,550 | |||
| Inventory | 8,226 | (1,998) | |||
| Accounts payable | 2,297 | (2,755) | |||
| Accrued liabilities | 56,409 | 20,097 | |||
| Unearned revenue | 15,909 | 19,411 | |||
| Income taxes payable | (21,070) | 14,797 | |||
| Other assets and liabilities, net | (28,762) | 2,547 | |||
| Net cash provided by operating activities | 243,478 | 334,423 | |||
| Cash flows from investing activities: | |||||
| Capital expenditures | (134,633) | (126,278) | |||
| Acquisition of businesses, net of cash acquired | (411) | (20,994) | |||
| Other, net | 192 | 47 | |||
| Net cash used in investing activities | (134,852) | (147,225) | |||
| Cash flows from financing activities: | |||||
| Net (repayments) borrowings under revolving credit facility | (5,000) | 35,000 | |||
| Borrowings under long-term debt | - | 100,000 | |||
| Repayments under long-term debt | (97,500) | (2,500) | |||
| Stock issued under employee stock purchase and option plans | 9,325 | 18,825 | |||
| Purchase of treasury stock | (8,810) | (256,351) | |||
| Net cash used in financing activities | (101,985) | (105,026) | |||
| Effect of exchange rate changes on cash | 5,239 | 5,582 | |||
| Net change in cash and cash equivalents | 11,880 | 87,754 | |||
| Cash and cash equivalents, beginning of period | 377,223 | 289,469 | |||
| Cash and cash equivalents, end of period | $ 389,103 | $ 377,223 | |||
| COVANCE INC. | ||||||||||
| GAAP to Pro Forma Reconciliation | ||||||||||
| Q4 2011 | ||||||||||
| (Dollars in thousands, except per share data) | ||||||||||
| (UNAUDITED) | ||||||||||
| Adjustments | ||||||||||
| GAAP | Restructuring Activities (1) | Other Charges (2) | Income Tax Items (3) | Pro Forma | ||||||
| Net revenues | $ 532,478 | $ 532,478 | ||||||||
| Reimbursable out-of-pocket expenses | 49,907 | 49,907 | ||||||||
| Total revenues | 582,385 | - | - | - | 582,385 | |||||
| Costs and expenses: | ||||||||||
| Cost of revenue | 371,852 | 371,852 | ||||||||
| Reimbursable out-of-pocket expenses | 49,907 | 49,907 | ||||||||
| Selling, general and administrative | 95,752 | (8,754) | (10,287) | 76,711 | ||||||
| Depreciation and amortization | 25,923 | 87 | 26,010 | |||||||
| Total costs and expenses | 543,434 | (8,667) | (10,287) | - | 524,480 | |||||
| Income from operations | 38,951 | 8,667 | 10,287 | - | 57,905 | |||||
| Other expense (income), net: | ||||||||||
| Interest expense (income), net | 339 | 339 | ||||||||
| Foreign exchange transaction loss, net | 356 | 356 | ||||||||
| Impairment of equity investment | 12,119 | (12,119) | - | |||||||
| Other expense (income), net | 12,814 | - | (12,119) | - | 695 | |||||
| Income before taxes and equity investee earnings | 26,137 | 8,667 | 22,406 | - | 57,210 | |||||
| Tax expense | 5,172 | 2,706 | 3,157 | 1,769 | 12,804 | |||||
| Equity investee earnings | 175 | 175 | ||||||||
| Net income | $ 21,140 | $ 5,961 | $ 19,249 | $ (1,769) | $ 44,581 | |||||
| Basic earnings per share | $ 0.35 | $ 0.10 | $ 0.32 | $ (0.03) | $ 0.75 | |||||
| Weighted average shares outstanding – basic | 59,730,270 | 59,730,270 | 59,730,270 | 59,730,270 | 59,730,270 | |||||
| Diluted earnings per share | $ 0.35 | $ 0.10 | $ 0.32 | $ (0.03) | $ 0.73 | |||||
| Weighted average shares outstanding – diluted | 61,080,387 | 61,080,387 | 61,080,387 | 61,080,387 | 61,080,387 | |||||
| (1) Represents costs incurred in connection with capacity rationalization, streamlining operations and other cost reduction actions. | ||||||||||
| (2) Represents costs incurred in connection with termination of an inventory supply agreement and related inventory write-down and an impairment of a related equity investment. | ||||||||||
| (3) Represents favorable resolutions of income tax matters. | ||||||||||
| COVANCE INC. | ||||||||
| GAAP to Pro Forma Reconciliation | ||||||||
| Q4 2010 | ||||||||
| (Dollars in thousands, except per share data) | ||||||||
| (UNAUDITED) | ||||||||
| Adjustments | ||||||||
| GAAP | Restructuring Activities (1) | Income Tax Items (2) | Pro Forma | |||||
| Net revenues | $ 491,513 | $ 491,513 | ||||||
| Reimbursable out-of-pocket expenses | 27,942 | 27,942 | ||||||
| Total revenues | 519,455 | - | - | 519,455 | ||||
| Costs and expenses: | ||||||||
| Cost of revenue | 346,924 | 346,924 | ||||||
| Reimbursable out-of-pocket expenses | 27,942 | 27,942 | ||||||
| Selling, general and administrative | 89,810 | (18,092) | 71,718 | |||||
| Depreciation and amortization | 25,919 | (270) | 25,649 | |||||
| Total costs and expenses | 490,595 | (18,362) | - | 472,233 | ||||
| Income from operations | 28,860 | 18,362 | - | 47,222 | ||||
| Other expense (income), net: | ||||||||
| Interest expense (income), net | 430 | 430 | ||||||
| Foreign exchange transaction loss, net | 1,054 | 1,054 | ||||||
| Other expense (income), net | 1,484 | - | - | 1,484 | ||||
| Income before taxes and equity investee earnings | 27,376 | 18,362 | - | 45,738 | ||||
| Tax (benefit) expense | (1,121) | 4,674 | 6,946 | 10,499 | ||||
| Equity investee (loss) earnings | (119) | (119) | ||||||
| Net income | $ 28,378 | $ 13,688 | $ (6,946) | $ 35,120 | ||||
| Basic earnings per share | $ 0.46 | $ 0.22 | $ (0.11) | $ 0.57 | ||||
| Weighted average shares outstanding – basic | 61,390,965 | 61,390,965 | 61,390,965 | 61,390,965 | ||||
| Diluted earnings per share | $ 0.45 | $ 0.22 | $ (0.11) | $ 0.56 | ||||
| Weighted average shares outstanding – diluted | 62,703,690 | 62,703,690 | 62,703,690 | 62,703,690 | ||||
| (1) Represents costs incurred in connection with capacity rationalization, streamlining operations and other cost reduction actions. | ||||||||
| (2) Represents favorable resolutions of income tax matters. | ||||||||
| COVANCE INC. | ||||||||||
| GAAP to Pro Forma Reconciliation | ||||||||||
| For the year ended December 31, 2011 | ||||||||||
| (Dollars in thousands, except per share data) | ||||||||||
| (UNAUDITED) | ||||||||||
| Adjustments | ||||||||||
| GAAP | Restructuring Activities (1) | Other Charges (2) | Income Tax Items (3) | Pro Forma | ||||||
| Net revenues | $ 2,095,938 | $ 2,095,938 | ||||||||
| Reimbursable out-of-pocket expenses | 140,508 | 140,508 | ||||||||
| Total revenues | 2,236,446 | - | - | - | 2,236,446 | |||||
| Costs and expenses: | ||||||||||
| Cost of revenue | 1,467,051 | 1,467,051 | ||||||||
| Reimbursable out-of-pocket expenses | 140,508 | 140,508 | ||||||||
| Selling, general and administrative | 343,044 | (22,592) | (10,287) | 310,165 | ||||||
| Depreciation and amortization | 105,214 | (1,777) | 103,437 | |||||||
| Total costs and expenses | 2,055,817 | (24,369) | (10,287) | - | 2,021,161 | |||||
| Income from operations | 180,629 | 24,369 | 10,287 | - | 215,285 | |||||
| Other expense (income), net: | ||||||||||
| Interest expense (income), net | 1,979 | 1,979 | ||||||||
| Foreign exchange transaction loss, net | 1,248 | 1,248 | ||||||||
| Impairment of equity investment | 12,119 | (12,119) | - | |||||||
| Other expense (income), net | 15,346 | - | (12,119) | - | 3,227 | |||||
| Income before taxes and equity investee earnings | 165,283 | 24,369 | 22,406 | - | 212,058 | |||||
| Tax expense | 33,574 | 8,302 | 3,157 | 2,469 | 47,502 | |||||
| Equity investee earnings | 480 | 480 | ||||||||
| Net income | $ 132,189 | $ 16,067 | $ 19,249 | $ (2,469) | $ 165,036 | |||||
| Basic earnings per share | $ 2.22 | $ 0.27 | $ 0.32 | $ (0.04) | $ 2.77 | |||||
| Weighted average shares outstanding – basic | 59,629,788 | 59,629,788 | 59,629,788 | 59,629,788 | 59,629,788 | |||||
| Diluted earnings per share | $ 2.16 | $ 0.26 | $ 0.32 | $ (0.04) | $ 2.70 | |||||
| Weighted average shares outstanding – diluted | 61,091,354 | 61,091,354 | 61,091,354 | 61,091,354 | 61,091,354 | |||||
| (1) Represents costs incurred in connection with capacity rationalization, streamlining operations and other cost reduction actions. | ||||||||||
| (2) Represents costs incurred in connection with termination of an inventory supply agreement and related inventory write-down and an impairment of a related equity investment. | ||||||||||
| (3) Represents favorable resolutions of income tax matters. | ||||||||||
| COVANCE INC. | ||||||||
| GAAP to Pro Forma Reconciliation | ||||||||
| For the year ended December 31, 2010 | ||||||||
| (Dollars in thousands, except per share data) | ||||||||
| (UNAUDITED) | ||||||||
| Adjustments | ||||||||
| GAAP | Asset Impairment and Restructuring Activities (1) | Income Tax Items (2) | Pro Forma | |||||
| Net revenues | $ 1,925,630 | $ 1,925,630 | ||||||
| Reimbursable out-of-pocket expenses | 112,843 | 112,843 | ||||||
| Total revenues | 2,038,473 | - | - | 2,038,473 | ||||
| Costs and expenses: | ||||||||
| Cost of revenue | 1,348,498 | 1,348,498 | ||||||
| Reimbursable out-of-pocket expenses | 112,843 | 112,843 | ||||||
| Selling, general and administrative | 307,386 | (18,092) | 289,294 | |||||
| Depreciation and amortization | 103,024 | (270) | 102,754 | |||||
| Asset impairment charges | 119,229 | (119,229) | - | |||||
| Total costs and expenses | 1,990,980 | (137,591) | - | 1,853,389 | ||||
| Income from operations | 47,493 | 137,591 | - | 185,084 | ||||
| Other expense (income), net: | ||||||||
| Interest expense (income), net | 52 | 52 | ||||||
| Foreign exchange transaction loss, net | 3,649 | 3,649 | ||||||
| Other expense (income), net | 3,701 | - | - | 3,701 | ||||
| Income before taxes and equity investee earnings | 43,792 | 137,591 | - | 181,383 | ||||
| Tax (benefit) expense | (23,655) | 49,981 | 17,298 | 43,624 | ||||
| Equity investee earnings | 807 | 807 | ||||||
| Net income | $ 68,254 | $ 87,610 | $ (17,298) | $ 138,566 | ||||
| Basic earnings per share | $ 1.08 | $ 1.39 | $ (0.27) | $ 2.20 | ||||
| Weighted average shares outstanding – basic | 63,043,561 | 63,043,561 | 63,043,561 | 63,043,561 | ||||
| Diluted earnings per share | $ 1.06 | $ 1.36 | $ (0.27) | $ 2.15 | ||||
| Weighted average shares outstanding – diluted | 64,472,326 | 64,472,326 | 64,472,326 | 64,472,326 | ||||
| (1) Represents asset impairment charges totaling $119,229 and restructuring costs totaling $18,362 incurred in connection with capacity rationalization, streamlining operations and other cost reduction actions. | ||||||||
| (2) Represents favorable resolutions of income tax matters. | ||||||||
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