Exhibit 1 Kendle International Inc.

Financial Data

(in thousands)

INCOME STATEMENTS
Net revenues

1992

Years Ended December 31,

1993
1994
1995

1996

1st Qtr
3/31/97

$2,468

$2,555

$4,431

$6,118

$12,959

$5,962

1,689
1,158
81

1,548
603
111

2,760
1,067
127

3,564
1,776
168

8,176
3,278
316

3,375
1,893
150

2,928

2,262

3,954

5,507

11,770

5,418

(460)

293

477

610

1,189

543

(72)
37
$(495)

(61)
20
$252

24
(43)
$458

6
(69)
$547

15
(65)
(4)
$1,134

12
(31)
5
$529

Memorandum Items:
Capital contribution by shareholders

n.a.

n.a.

366

Distributions to shareholders

n.a.

n.a.

(304)

(379)

(535)

(216)

EBITDA

$(379)

$404

$604

$778

$1,505

$693

BALANCE SHEET DATA

Working capital (deficit)
Total assets
Total debt
Total shareholders' equity (deficit)

$(972)
832
278
$(827)

$(492)
2,181
173
$(343)

$(208)
1,874
139
$177

$(139)
2,432
151
$345

$(294)
8,623
761
$944

(294)
9,847
1,155
1,257

Cost and expenses:

Direct costs
Selling, general and administrative
Depreciation and amortization
Total costs and expenses
Income (loss) from operations
Other income (expense):
Interest income
Interest expense
Other
Net income

Source: Kendle company documents

Note: Since Kendle was a subchapter S corporation, it paid no corporate income taxes. As a C corporation, state and federal taxes
would have been about 40%.

ata
1st Qtr
3/31/97
$5,962
3,375
1,893
150
5,418
543
12
(31)
5
$529

(216)
$693

(294)
9,847
1,155
1,257

Exhibit 2 Kendle International Inc. Balance Sheets

(in
thousands)
ASSETS

Current assets:
Cash and cash equivalents
Accounts receivable
Unreimbursed investigator and project costs
Other current assets
Total current assets
Property and equipment
Furnishings, equipment and other
Equipment under capital leases
Less: accumulated depreciation
Net property and equipment
Other assets
Total assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable and bank overdraft
Current portion of capital lease obligations
Trade payables
Dividends payable
Advance billings and advances against projects
Accrued compensation and related taxes
Other accrued liabilities
Total current liabilities
Obligations under capital leases, less current
Deferred rent
Total liabilities
Shareholders' equity:
Common stock
Additional paid-in capital
Retained earnings
Total shareholders' equity
Total liabilities and shareholders' equity
Source: Kendle company documents

December 31,
1995
1996

1st Qtr
3/31/97

$15
1,655
88
38

$2,047
3,583
981
13

$14
4,379
2,610
137

1,797

6,624

7,140

770
472
(617)
625
10

1,177
1,588
(931)
1,835
164

1,447
2,072
(1,078)
2,441
266

$2,432

$8,623

$9,847

$320
129
254
1,120
79
33

360
913
250
5,080
251
63

1,164
342
1,923
3,535
405
64

1,935

6,918

7,434

112
39

761
-

1,155
-

2,086

7,679

8,590

75
270

75
270
599
944
$8,623

75
270
912
1,257
$9,847

345
$2,432

-138

346

Exhibit 3 Kendle vs. CRO Industry Sales and Net Income Data
(in thousands)

NET SALES
Quintiles
Covance
PPD
Parexel
ClinTrials
Premier
Total
Kendle

1993

1994

$61,704
289,697
20,835
65,294
35,284
10,245
$483,059

1995

CAGR %

1996

$195,900
$337,006
$601,126
319,501
409,174
494,828
192,105
209,778
197,796
69,646
79,928
125,053
42,874
57,846
94,719
12,910
12,064
15,283
$832,936 $1,105,796 $1,528,805

113.6
19.5
111.7
24.2
39.0
14.3
46.8

$2,555

$4,431

$6,118

$12,959

71.8

$3,842
16,811
3,572
(2,157)
1,041
(177)
$22,932

$9,047
19,645
8,257
2,423
2,153
580
$42,105

$16,068
24,226
(17,150)
(10,630)
3,601
341
$16,456

$9,664
12,716
(3,507)
6,655
6,425
1,070
$33,023

36.0
(8.9)
(199.4)
n.a.
83.4
n.a.
12.9

Kendle

$151

$275

$328

$680

39.1

NET INCOME MARGINS (%)

Quintiles
Covance
PPD
Parexel
ClinTrials
Premier
Average

6.2
5.8
17.1
(3.3)
3.0
(1.7)
4.7

4.6
6.1
4.3
3.5
5.0
4.5
5.1

4.8
5.9
(8.2)
(13.3)
6.2
2.8
1.5

1.6
2.6
(1.8)
5.3
6.8
7.0
2.2

5.9

6.2

5.4

5.3

NET INCOME
Quintiles
Covance
PPD
Parexel
ClinTrials
Premier
Total
a

Kendle
Source: Discloste, Kendle company documents
a

Kendle net income is adjusted for 40% tax rate on corporate income.

Exhibit 6 U-Gene Summary Financial Statements

(in thousands)

INCOME STATEMENTS
Net revenues
Costs and expenses

Years Ended
1995
1996

1st Qtr
3/31/97

$9,115
8,234

$12,508
11,211

$3,273
2,863

Income from operations

Interest income

881
6

1,297
7

410
11

Income before tax

Tax on income

887
303

1,304
465

422
148

$584
$(285)

$838
$(276)

$273
-

300

563

Memo Item: EBITDA

$1,159

$1,617

$495

BALANCE SHEETS
Assets
Current assets
Deferred tax asset
Net property and equipment

$4,058
24
728

$5,327
93
1,118

$4,805
73
1,073

Total assets

$4,810

$6,538

$5,951

Liabilities and Shareholders' Equity

Current liabilities
Pension liabilities

$3,831
96

$5,013
171

$4,253
175

3,927

5,184

4,428

883

1,355

1,522

$4.810

$6,538

$5,951

Net Income
Distributions to Shareholders
Earnings Retained

Total liabilities
Shareholders' equity
Total liabilities and shareholders' equity

Source: Kendle company documents

Note: For U.S. dollar reporting purposes, assets and liabilities have been translated from Dutch guilders to U.S.
dollars at year-end rates and revenues, costs and dividends have been translated at average rates for the year.
Gains and losses resulting from this translation are accumulated in shareholders' equity.

Exhibit 7 gmi Summary Financial Statements

(in thousands)

INCOME STATEMENTS
Costs and expenses

1st Qtr
Years Ended
1995
1996
3/31/1997
$5,294
$6,996
$1,995
4,092
5,596
1,124

Income from operations

Interest and other income

1,202
25

1,400
45

871
5

Income before taxes

Income taxes
Net income

1,228
623
$604

1,445
658
$786

876
412
$464

Distributions to shareholders
Earnings retained

$(279)
325

$(399)
387

Memo. Item: EBITDA

$1,346

$1,505

$891

BALANCE SHEETS
Assets
Current assets
Net equipment

$2,872
160

$3,497
170

$4,248
149

Total assets

$3,032

$3,667

$4,397

Liabilities and Shareholders' Equity

Current liabilities
Deferred tax liability

$2,067
239

$2,623

$2,969

2,306

2,623

2,969

727

1.044

1,428

$3,032

$3,667

$4,397

Total liabilities
Shareholders' equity
Total liabilities and shareholders' equity

Source: Kendle company documents

Note: For U.S. dollar reporting purposes, assets and liabilities have been translated from Deutsche
mark to U.S. dollars at year-end rates and revenues, costs and dividends have been translated at
average rates for the year. Gains and losses resulting from this translation are accumulated In
shareholders' equity.

Exhibit 8 Valuation of Proposed Kendle International Acquisitions

Data on Comparable CRO Acquisitions
Date
Apr-95
Apr-95
Apr-95
Aug-95
Aug-95
Sep-95
Jan-96
Apr-96
Apr-96
Averages

Acquiror
IBRD
Quintiles
Quintiles
PPD
APBI
Quintiles
Collaborative
Clintrials
Quintiles

Target
MCRC (UK)
Benefit (France)
SDCRA (US)
Gabbay (UK)
LC RC (UK)
GDRU (UK)
GFI Pharm. (US)
Bio-Res. (Can)
Lewin Health (US)

Proposed Kendle International Acquisitions

May-97 Kendle
U-Gene (NL)
Jul-97
Kendle
gmi (Germany)
97 ??
Kendle

Payment (%)
Stock Cash
100
73
27
100
100
100
100
33
67
100
100

23

100
77

Value
($m)
$11.1
16.0
3.4
0.5
4.2
9.2
6.8
59.5
$30.0
$15.6

Ratio of Deal Value to

Sales
1.2
3.2
0.7
0.5
1.2
1.2
1.1
2.4
1.3
1.4

$12,959
$15.6
1.2
$12.3
1.8
18142.6

Source: Technomark Consulting Services Ltd. (for comparable acquisition); Kendle company documents, casewriter calculations
(for proposed Kendle acquisitions).

osed Kendle International Acquisitions

Acquisitions
Ratio of Deal Value to
EBITDA
EBIT
17.8
27.9
n.a.
n.a.
n.a.
n.a.
5.6
8.6
4.6
6.0
9.6
13.9
15.2
22.8
20.4
28.5
n.a.
n.a.
12.2
18.0

$1,505 1189
9.8
12.0
8.2
8.8
18361 21402

Services Ltd. (for comparable acquisition); Kendle company documents, casewriter calculations
ns).

Exhibit 9 Kendle Pro Forma Income Statements after Acquisitions and IPO

(in thousands, except EPS)

Net revenues
Costs and expenses:
Direct costs
Selling, general and administrative
Depreciation and amortization
Total costs and expenses

For the Year Ended December 31, 1996

1st Qtr
Actual
Actual
Actual
Pro Forma
Consolidated 3/31/97
Kendle U-Gene
Adjustments Pro
Pro Forma Pro Forma
gmi
$12,959 $12,508
$6,996
$32,463
$11,230
8,176
3,278
316
11,770

8,108
2,783
320
11,211

4,894
597
105
5,596

965
965

21,178
6,658
1,706
29,542

6,437
2,714
496
9,647

Income from operations

Interest expense
Other income

1,189
(65)
10

1,297
7

1,400
45

(965)
-

2,921
(65)
62

1,583
(31)
33

Income before income taxes

Income taxes

1,134

1,304
465

1,445
658

(965)
210

2,918
1,333

1,585
686

Net income
Shares outstanding
EPS

$1,134
3,653
-

$839
-

$787
-

$(1,175)
3,803
-

$1,585
7,457
$0.21

$899
7,481
$0.12

Memorandum Item
EBITDA

$1,505

$1,617

$1,505

$4,627

$2,079

Source: Kendle a company documents, casewriter estimates

Note: The pro forma income statements assume that U-Gene and gmi were acquired on January 1, 1996.

In the pro forma adjustments, amortization was increased by $965 to reflect the 30-year, straight-line amortization of goodwill from the
two acquisitions.
Income taxes were increased to reflect the shift of Kendle to a taxable C Corporation.
Shares and share-equivalents outstanding were Increased to reflect:
3,000 new shares issued in the IPO;
218 shares issued to sellers of gmi;
154 warrants issued to NationsBank as part of the acquisition financing and
432 options exercised at the time of the offering.

Exhibit 10 Kendle Pro Forma Balance Sheets after Acquisitions and IPO
As at March 31, 1997
Actual
Kendle

(in thousands)

ASSETS
Current assets:
Cash and cash equivalents (overdrafts) (a)
Receivables - trade
Unreimbursed project costs
Other current assets
Total current assets

Actual
U-Gene

Actual
gmi

Pro Forma
Adjustments

Consolidated
Pro Forma

$(1,150)
4,379
2,610
137
5,976

$879
3,540
386
4,805

$2,560
1,597
91
4,248

Net property and equipment

Other assets
Goodwill

2,441
266
-

1,073
73
-

149
-

Total assets

8,683

$5,951

$4,397

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Capital lease obligations (current portion)
Trade payables
Dividends payable
Income taxes payable
Accrued liabilities
Billings in excess of costs and advances
Total current liabilities

$342
1,923
471
3,535
6,271

1,508
140
1,051
1,555
4,254

831
1,160
796
182
2,969

(400)
(400)

$342
4,262
140
760
2,318
5,272
13,094

1,155
7,426

175
4,429

2,969

1,560
25
1,185

1,155
175
1,560
25
16,009

1,257

1,522

1,428

34,554

38,761

$8,683

5,951

4,397

35,739

$54,770

Capital lease obligations, less current

Pension obligation
Note payable to U-Gene owners
Deferred taxes
Total liabilities
Shareholders' equity (b)
Total liabilities and shareholders' equity

$10,379
10,379

$12,668
9,516
2,610
614
25,408

400
24,960

3,663
739
24,960

$35,739

$54,770

Source: Kendle company documents.

Note: The pro forma consolidated balance sheet as of March 31, 1997 assumes that U-gene and gmi were acquired on that date.
Explanation of Significant Pro Forma Adjustments (in thousands)
(a) Cash and Cash Equivalents:

(b) Total Shareholders' Equity:

Net proceeds from IPO

$35,000 Net proceeds from IPO

Cash component of U-Gene acquisition

(14,040) Shares issued to gmi owners

Cash component of gmi acquisition

Costs of temporary debt financing
S Corporation distribution to Kendle owners

(9,483) Exercise of warrants

(398) Purchase of U-Gene equity
(700) Purchase of gmi equity
$10,379 Write-off of unamortized debt discount
S Corporation distribution
Deferred tax from shift to C Corporation

$35,000
2,827
1,502
(1,522)
(1,428)
(1,100)
(700)
(25)
$34,554

Exhibit 11 Market Valuation of CRO Industry

(millions except
per share and ratios)

Quintiles Covance

PPD

ClinTrials Parexel

Premier

Income Statement Items: 1996

Sales
EBITDA
Net Income
Common Shares Outstanding
EPS

$537.6
77.4
$5.2
66.3
$0.08

$494.8
90.5
$12.7
57.1
$0.22

$197.8
25.4
$(3.5)
21.6
$(0.16)

$93.5
12.7
$6.8
17.9
$0.38

$88.0
8.8
$4.6
15.6
$0.29

$15.3
2.2
$1.1
4.4
$0.24

Balance Sheet Items: Dec 31, 1996

Cash
Total Assets
Total Liabilities
Total Long Term Debt
Total Stockholders' Equity
Liabilities/Stockholders' Equity
LT Debtlfotal Capitalization

$99.7
518.0
373.7
168.7
$144.3
2.59
0.54

$25.4
451.0
340.3
163.0
$110.7
3.07
0.60

$36.0
181.5
66.2
1.4
$115.3
0.57
0.01

$38.1
157.0
31.6
$125.4
0.25
-

$46.4
102.4
41.2
0.4
$61.2
0.67
0.01

$1.5
5.7
3.2
$2.5
1.28
-

$25.44
$1,686.5
1.04

$14.75
$841.7
n.a.

$16.75
$362.2
n.a.

$7.75
$138.4
1.16

$28.00
$437.5
1.32

$9.63
$42.4
n.a.

323.6
3.1
21.8

66.2
1.7
9.3

(103.3)
1.8
14.3

20.3
1.5
10.9

95.1
5.0
49.5

39.6
2.8
19.1

Market Data: April 30, 1997 (a)

Stock Price
Market Value
Stock Price Beta (b)
Valuation Multiples:
Value/1996 Net Income
Value/1996 Sales
Value/1996 EBITDA

Source: Standard & Poor's Compustat. Bloomberg, casevaiter calculations

Notes:
(a) U.S. Treasury interest rates: 1-year = 6.0% 10-year = 6.9%; and, 30-year = 7.1%.
(b) The stock price beta is based on monthly data from the date of the company's IPO through February 2000.