IMS HEALTH, INC. 
By IMS Health (NYSE: RX), the world's leading provider of market intelligence to the pharmaceutical and healthcare industries, today announced second-quarter 2007 revenue of $537.5 million, up 11 percent or 8 percent on a constant- dollar basis, compared with revenue of $486.2 million for the second quarter of 2006.
Operating income in the second quarter of 2007 was $118.1 million, up 11 percent or 13 percent constant dollar, compared with $106.3 million in the year-earlier period. Excluding a merger cost of $6.0 million in the 2006 second quarter, on a non-GAAP basis, operating income growth would have been 5 percent or 7 percent constant dollar (See Note c to the financial tables).
"IMS turned in a solid second-quarter performance, driven by strong revenue gains in the U.S., Japan and the emerging markets," said David R. Carlucci, IMS chairman and chief executive officer. "In an increasingly challenging healthcare environment, we remain focused on areas most critical to our clients, who clearly recognize the value and relevance of our capabilities and industry perspective."
Second-quarter 2007 diluted earnings per share on a GAAP basis was $0.36, compared with $0.30 in the prior-year quarter, an increase of 20 percent. Earnings per share for the second quarter of 2006 included foreign exchange hedge gains and losses, a tax provision related to a reorganization and income and expenses related to the terminated merger with The Nielsen Company (formerly VNU, N.V.). When adjusted for these items and the phasing of tax benefits and provisions, on a non-GAAP basis, earnings per share for this year's second quarter would have grown $0.05 year over year to $0.39, a 15 percent increase (See Note c to the financial tables).
Net income on a GAAP basis was $73.4 million, compared with $62.7 million in the year-earlier quarter, an increase of 17 percent. Net income for the second quarter of 2006 included foreign exchange hedge gains and losses, net of taxes, a tax provision and merger-related income and expenses, net of taxes. Adjusted for these items and the phasing of tax benefits and provisions, on a non-GAAP basis, net income for this year's second quarter would have grown $8.0 million (See Note c to the financial tables).
First-Half 2007 Results
For the first half of 2007, revenues were $1,047.8 million, up 12 percent or 9 percent constant dollar, compared with revenue of $932.4 million for the first half of 2006. First-half 2007 operating income was $229.2 million, a 13 percent increase or 14 percent constant dollar, compared with $203.1 million in the year-earlier period.
For the first six months of 2007, diluted earnings per share on a GAAP basis was $0.79, compared with $0.86 in the prior-year period. Earnings per share for the first half of 2007 and 2006 included net tax benefits and foreign exchange hedge gains and losses, while the second quarter of 2006 also included merger-related income and expenses. When adjusted for these items, on a non-GAAP basis, earnings per share for the 2007 first half would have grown $0.09 year over year to $0.74 (See Note c to the financial tables).
Net income on a GAAP basis was $159.0 million, compared with $180.8 million in the first half of 2006. Net income for the first six months of 2007 and 2006 included net tax benefits and foreign exchange hedge gains and losses, net of taxes, while the second quarter of 2006 also included merger-related income and expenses. Adjusted for these items, on a non-GAAP basis, net income for this year's first half would have grown $13.2 million (See Note c to the financial tables).
Balance Sheet Highlights
IMS's cash and cash equivalents as of June 30, 2007 totaled $210.4 million, compared with $157.3 million on December 31, 2006. Total debt as of June 30, 2007 was $1,171.4 million, up from $975.4 million at the end of 2006, due to borrowings in connection with 2007 share repurchases.
Share Repurchase Program, Shares Outstanding
During the second quarter, 5.0 million shares were repurchased at a total cost of $157.6 million, bringing the total shares repurchased in the first half to 11.1 million shares at a total cost of $333.6 million. There remain approximately 5.3 million shares available to repurchase under the current Board of Directors' authorization.
The number of shares outstanding as of June 30, 2007 was approximately 195.0 million, compared with 201.5 million as of June 30, 2006.
About IMS
Operating in more than 100 countries, IMS Health is the world's leading provider of market intelligence to the pharmaceutical and healthcare industries. With $2.0 billion in 2006 revenue and more than 50 years of industry experience, IMS offers leading-edge market intelligence products and services that are integral to clients' day-to-day operations, including portfolio optimization capabilities; launch and brand management solutions; sales force effectiveness innovations; managed care and consumer health offerings; and consulting and services solutions that improve ROI and the delivery of quality healthcare worldwide. Additional information is available at http://www.imshealth.com.
Conference Call and Webcast Details
IMS will host a conference call at 5:00 p.m. Eastern time today to discuss its second-quarter results. To participate, please dial 1-800-709-0219 (U.S. and Canada) and 1-415-537-1964 (outside the U.S. and Canada) approximately 15 minutes before the scheduled start of the call. The conference call also will be accessible live on the Investor Relations section of the IMS Website at www.imshealth.com. Prior to the conference call, a copy of this press release and any other financial or statistical information presented during the call will be made available in the ?Investors? area of IMS's Website.
A replay of the conference call will be available online on the ?Investors? section of the IMS Website and via telephone by dialing 1-800-633-8284 (U.S. and Canada) or 1-402-977-9140 (outside the U.S. and Canada), and entering access code 21343594 beginning at 7:00 p.m. Eastern time today.
Forward-Looking Statements
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although IMS Health believes the expectations contained in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove correct. This information may involve risks and uncertainties that could cause actual results of IMS Health to differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to (i) the risks associated with operating on a global basis, including fluctuations in the value of foreign currencies relative to the U.S. dollar, and the ability to successfully hedge such risks, (ii) regulatory, legislative and enforcement initiatives, particularly in the areas of data access and utilization and tax, (iii) to the extent unforeseen cash needs arise, the ability to obtain financing on favorable terms, (iv) to the extent IMS Health seeks growth through acquisitions and joint ventures, the ability to identify, consummate and integrate acquisitions and joint ventures on satisfactory terms, (v) the ability to develop new or advanced technologies and systems for its businesses on time and on a cost-effective basis, and (vi) deterioration in economic conditions, particularly in the pharmaceutical, healthcare or other industries in which IMS Health's customers operate. Additional information on factors that may affect the business and financial results of the Company can be found in the filings of the company made from time to time with the Securities and Exchange Commission.
Table 1 | |||||||||
IMS Health | |||||||||
GAAP Income Statement | |||||||||
Three Months Ended June 30 | |||||||||
(unaudited, in millions except per share) | |||||||||
2007 |
2006 | % Fav (Unfav) | Non-GAAP Constant $ Growth % | ||||||
| Revenue (a) | |||||||||
| Sales Force Effectiveness | $246.2 | $230.0 | 7 | % | 5 | ||||
| Portfolio Optimization | 157.0 | 138.6 | 13 | 11 | |||||
| Launch, Brand and Other | 134.2 | 117.6 | 14 | 11 | |||||
| Total | 537.5 | 486.2 | 11 | 8 | |||||
Revenue Detail: | |||||||||
| Information & Analytics (?I&A?) Revenue | 422.9 | 393.7 | 7 | 5 | |||||
| Consulting & Services (?C&S?) Revenue | 114.6 | 92.5 | 24 | 21 | |||||
| Total Revenue | 537.5 | 486.2 | 11 | 8 | |||||
| Operating Expenses (b) | |||||||||
| Operating Costs of I&A | (179.8) | (166.0) | (8) | ||||||
| Direct and Incremental Costs of C&S | (54.1) | (46.2) | (17) | ||||||
| Selling and Administrative | (154.2) | (132.9) | (16) | ||||||
| External-use Software Amortization | (12.4) | (11.0) | (13) | ||||||
| Depreciation and Other Amortization | (18.9) | (17.8) | (6) | ||||||
| Merger Costs | 0.0 | (6.0) | NM | ||||||
| Total | (419.3) | (379.9) | (10) | ||||||
| Operating Income (a) | 118.1 | 106.3 | 11 | % | 13 | ||||
| Interest expense, net | (7.7) | (9.0) | 14 | ||||||
| Gains (losses) from investments, net | 2.2 | 0.1 | NM | ||||||
| Other Income (Expense), net | 0.0 | 36.9 | NM | ||||||
| Pretax Income | 112.6 | 134.3 | (16) | ||||||
| Provision for Income Taxes | (39.2) | (71.6) | 45 | ||||||
| Net Income | 73.4 | 62.7 | 17 | ||||||
| Diluted EPS: | |||||||||
| Total Diluted EPS | $ 0.36 | $0.30 | 20% | ||||||
| Shares Outstanding: | |||||||||
| Weighted Average Diluted | 201.1 | 205.8 | |||||||
| End-of-Period Actual | 195.0 | 201.5 | |||||||
| Weighted Average Basic | 196.5 | 200.8 | |||||||
The accompanying notes are an integral part of these financial tables. | |||||||||
Table 2 | ||||||||||||||||||||||||||||||
IMS Health | ||||||||||||||||||||||||||||||
GAAP Income Statement | ||||||||||||||||||||||||||||||
Six Months Ended June 30 | ||||||||||||||||||||||||||||||
(unaudited, in millions except per share) | ||||||||||||||||||||||||||||||
2007 |
2006 | % Fav (Unfav) | Non-GAAP Constant $ Growth % | |||||||||||||||||||||||||||
| Revenue (a) | ||||||||||||||||||||||||||||||
| Sales Force Effectiveness | $479.3 | $444.1 | 8 | % | 6 | |||||||||||||||||||||||||
| Portfolio Optimization | 311.5 | 268.4 | 16 | 13 | ||||||||||||||||||||||||||
| Launch, Brand and Other | 257.1 | 219.9 | 17 | 13 | ||||||||||||||||||||||||||
| Total | 1,047.8 | 932.4 | 12 | 9 | ||||||||||||||||||||||||||
Revenue Detail: | ||||||||||||||||||||||||||||||
| Information & Analytics (?I&A?) Revenue | 834.1 | 770.8 | 8 | 5 | ||||||||||||||||||||||||||
| Consulting & Services (?C&S?) Revenue | 213.8 | 161.5 | 32 | 28 | ||||||||||||||||||||||||||
| Total Revenue | 1,047.8 | 932.4 | 12 | 9 | ||||||||||||||||||||||||||
| Operating Expenses (b) | ||||||||||||||||||||||||||||||
| Operating Costs of I&A | (352.5) | (324.5) | (9) | |||||||||||||||||||||||||||
| Direct and Incremental Costs of C&S | (110.7) | (85.4) | (30) | |||||||||||||||||||||||||||
| Selling and Administrative | (293.8) | (257.3) | (14) | |||||||||||||||||||||||||||
| External-use Software Amortization | (23.6) | (21.3) | (11) | |||||||||||||||||||||||||||
| Depreciation and Other Amortization | (38.1) | (34.8) | (9) | |||||||||||||||||||||||||||
| Merger Costs | 0.0 | (6.0) | NM | |||||||||||||||||||||||||||
| Total | (818.6) | (729.3) | (12) | |||||||||||||||||||||||||||
| Operating Income (a) | 229.2 | 203.1 | 13 | % | 14 | |||||||||||||||||||||||||
| Interest expense, net | (14.4) | (15.9) | 9 | |||||||||||||||||||||||||||
| Gains (losses) from investments, net | 2.0 | 2.7 | (29) | |||||||||||||||||||||||||||
| Other Income (Expense), net | (2.8) | 38.6 | NM | |||||||||||||||||||||||||||
| Pretax Income | 213.9 | 228.6 | (6) | |||||||||||||||||||||||||||
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© Business Wire - 2007
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