Covance Reports First Quarter Revenue of $441M and EPS of $0.63; Updates Full Year Financi...(-Stage backlog would continue to convert...)

Date:4/29/2009

-Stage backlog would continue to convert to revenue at historical rates, and demand for early development services would remain flat coming into the year and would begin to pick up between the second and third quarters of 2009. Relative to these assumptions, the dollar has remained close to our budget assumption and first quarter Late-Stage Development performance exceeded our expectations. However, first quarter results in Early Development were well below our expectations and, while we believe a bottoming of demand is underway, we expect growth to return later and slower than originally projected and from a lower base of revenue. As a result, we are now lowering our 2009 revenue growth rate expectation to the single-digit range and our earnings per share target to $2.50 to $2.70."

Consolidated Results

    ($in millions except EPS)                  1Q09        1Q08      Change
    Total Revenues                            $468.4      $434.0
    Less: Reimbursable Out-of-Pockets          $27.2       $21.6
    Net Revenues                              $441.2      $412.4       7.0%
    Operating Income                           $55.9       $62.7     (10.8%)
      Operating Margin %                       12.7%       15.2%
    Net Income                                 $40.3       $49.1     (17.9%)
    Diluted EPS                                $0.63       $0.76     (17.4%)
    Gain on Sale, net of tax                       -        $1.9
    Net Income Excluding Gain on Sale          $40.3       $47.2     (14.6%)
    Diluted EPS Excluding Gain on Sale         $0.63       $0.73     (14.1%)

Operating Segment Results

Early Development

    ($in millions)                         1Q09           1Q08       Change
    Net Revenues                          $192.5         $202.0       (4.7%)
    Operating Income          
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SOURCE  Covance Inc.
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