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Covance's CEO Discusses Q4 2011 Results - Earnings Call Transcript

In addition to the press release, 24 slides corresponding to the commentary you are about to hear are available on our website at www.covance.com.

Before we begin the commentary, I'd like to remind you that statements made during today's conference call and webcast, which are not historical facts, might be considered forward-looking statements. Such statements may include comments regarding future financial results and are subject to a number of risks and uncertainties, certain of which are beyond Covance's control. Actual results could differ materially from such statements due to a variety of facts, including the ones outlined in our SEC filings.

Certain financial measures we will discuss on this call are non-GAAP measures, which exclude the effects of events we consider to be outside of our normal operations, such as costs associated with restructuring or special charges, as well as the impact of the resolution of certain income tax matters. We believe that providing these measures helps investors gain a more complete understanding of our results and is consistent with how management views our financial results. For a reconciliation of GAAP to pro forma results, please refer to the supplemental schedules included in our press release issued last night.

Now I will turn it over to Bill for a review of our financial performance, which begins on Page 4 of the slide show.

William E. Klitgaard

Thank you, Paul, and good morning, everyone. Before I get into the detailed results, let me talk about 3 special items which impacted the fourth quarter. Included in the fourth quarter results is approximately $31 million or $0.41 per share in diluted -- in charges that hit the EPS. Approximately $8.7 million or $0.10 per share relates to the completion of the previously announced restructuring action where we've been incurring costs all year. The remaining $22.4 million or $0.31 per share has 2 components. The first relates to the termination of the inventory supply agreement and related rationalization of research product inventory levels, which resulted in a charge of $10.3 million or $0.11 per share.

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