Covance Reports Record Revenue and Earnings

$432 Million in Net Orders Drive Backlog Growth of 31.8% - 15.6% Net Revenue Growth; EPS Growth of 23.6%

[ClickPress, Tue Nov 21 2006] Covance Inc. (NYSE: CVD) today reported earnings for its third quarter ended September 30, 2006 of $0.59 per diluted share, including a $0.04 per diluted share gain from the favorable resolution of several income tax matters during the third quarter. Excluding the income tax gain, earnings were $0.55 per diluted share, representing year-over-year EPS growth of 23.6%, with both periods including stock-based compensation expense.

"In the third quarter, Covance achieved strong results, reaching new highs in EPS, net revenues, operating income, free cash flow, and backlog. We are particularly pleased to report an increase in net revenue growth to 15.6%, a sequential 40 basis point increase in operating margin, and robust net orders of $432 million," said Joe Herring, Chairman and Chief Executive Officer. "In Early Development, net revenue growth accelerated to 19.1% and operating margins were a healthy 24.1%. In Late-Stage Development, revenue grew 12.4% and operating margins increased 160 basis points sequentially to 17.5%. On the commercial front, net orders of $432 million, which represents a book-to- bill of 1.27:1, drove backlog up 31.8% year-on-year to $2.07 billion. Robust net orders in our central laboratory and clinical development service offerings drove our Late-Stage Development book-to-bill ratio in excess of 1.5:1.

"We continue to deliver service solutions that help our clients accelerate the development of new products. An example is our Program Management capability, which provides integrated IND-enabling services. We currently manage 128 molecules for 72 different clients, representing growth of approximately 50% over this time last year. We also see increasing demand for integrated service solutions across Late-Stage Development where Covance is well-positioned to deliver differentiated and valuable services for our clients.

"Looking forward to 2007, based upon our strong performance again this quarter and our expanding backlog, we are targeting revenue growth in the low- to mid-teens range and earnings per share growth of 20% over our 2006 target of at least $2.19 per diluted share (excluding the third quarter income tax gain)."
To read more, please visit Covance at http://ir.covance.com/phoenix.zhtml?c=105891&p=irol-newsArticle&ID=921453&highlight.

Ron Lee
210 Carnegie Center
Princeton
08540
netpr@covance.com
800-268-2623

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