exv99w1
Exhibit 99.1
FOR IMMEDIATE RELEASE
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CONTACTS:
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James Winschel, Senior Vice President and Chief Financial Officer |
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Jill Baker, Corporate Vice President, Investor Relations |
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+1-781-434-4118 |
PAREXEL REPORTS FIRST QUARTER FISCAL YEAR 2012 FINANCIAL RESULTS
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Consolidated service revenue of $314.7 million grew 6.4% year-over-year |
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GAAP diluted earnings per share of $0.16, adjusted earnings per share of $0.20
excluding special items |
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New business wins generated a net book-to-bill ratio of 1.77 |
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Backlog at approximately $3.61 billion, up 23% from the September quarter one
year ago |
Boston, MA, October 31, 2011 PAREXEL International Corporation (NASDAQ: PRXL) today announced
its financial results for the first quarter ended September 30, 2011.
For the three months ended September 30, 2011, PAREXELs consolidated service revenue increased by
6.4% to $314.7 million, compared with $295.8 million in the prior year period. Excluding the
positive impact from foreign exchange movements of $7.2 million, revenue increased 3.9%. The
Company reported operating income, as reported under Generally Accepted Accounting Principles
(GAAP) of $12.5 million, or 4.0% of consolidated service revenue, in the first quarter of Fiscal
Year 2012, versus GAAP operating income of $30 million, or 10.1% of consolidated service revenue,
in the comparable quarter of the prior fiscal year. GAAP net income for the quarter ended
September 30, 2011 totaled $9.6 million, or $0.16 per diluted share, compared with GAAP net income
of $17.8 million, or $0.30 per diluted share, for the quarter ended September 30, 2010. GAAP net
income in the quarter decreased by 46.3% year-over-year, and earnings per diluted share decreased
by 46.7%.
The financial results of the September quarters in Fiscal Year 2012 and Fiscal Year 2011 each
included special items related to restructuring activities, as detailed in the financial charts
within this press release. Excluding the impact of these special items, adjusted operating income
in the first quarter of Fiscal Year 2012 was $15.2 million, or 4.8% of consolidated service
revenue. Excluding these special items in the prior year period, adjusted operating income was
$29.6 million, or 10.0% of consolidated service revenue, in the first quarter of Fiscal Year 2011.
On this adjusted basis, operating income in the quarter ended September 30, 2011 declined 48.8%
year-over-year. Adjusted net income in the current and prior periods (which excludes the special
items referenced above) was $11.7 million, or $0.20 per diluted share in the quarter ended
September 30, 2011, and was $17.5 million, or $0.29 per diluted share in the quarter ended
September 30, 2010. Using adjusted numbers in both periods, adjusted net income in the current
quarter declined by 33.0% year-over-year, and adjusted earnings per diluted share declined by
31.0%.
On a segment basis, consolidated service revenue for the first quarter of Fiscal Year 2012 was
$235.4 million in Clinical Research Services (CRS), $35.6 million in PAREXEL Consulting and Medical
Communications Services (PCMS), and $43.7 million in Perceptive Informatics, Inc.
Backlog at the end of September was approximately $3.61 billion, an increase of 23% year-over-year.
The reported backlog included gross new business wins in the quarter of $694.0 million,
cancellations of $138.2 million, a negative impact from foreign exchange rates of $72.6 million,
and a negative adjustment related to the disposition of a business of $5.1 million. The net
book-to-bill ratio was 1.77 in the quarter.
Mr. Josef H. von Rickenbach, PAREXELs Chairman and Chief Executive Officer stated, During the
first quarter, we continued to make progress toward achieving our operational and financial goals,
as evidenced by sequential revenue growth and improved operating margins, helped by effective cost
controls. We also had another quarter of healthy new business wins. We are pleased with our
progress with respect to strategic partnerships, which are continuing to mature according to plan.
We have accelerated hiring to meet the current and future requirements of our clients.
With regard to the future outlook for the Company, Mr. von Rickenbach commented, We have built a
solid foundation for the Company to support future growth. Our employees are adapting to the
rapidly evolving environment in which we operate. I believe that we are well-positioned to further
improve our performance by capturing additional market share, leveraging the strength of our global
processes and systems, and executing efficiently on projects. Going forward, we expect to
continue the first quarters momentum, and anticipate that the remaining quarters of Fiscal Year
2012 will show sequential growth in revenue and improvement in margin.
The Company issued forward-looking guidance for the second quarter of Fiscal Year 2012 (ending
December 31, 2011), and for Fiscal Year 2012. The Company expects to report consolidated service
revenue for the second quarter (ending December 31, 2011) in the range of $330 to $340 million,
GAAP earnings per diluted share in the range of $0.17 to $0.21, and adjusted earnings per diluted
share in the range of $0.21 to $0.25. For Fiscal Year 2012, consolidated service revenue is
expected to be in the range of $1.355 to $1.385 billion, GAAP earnings per diluted share in the
range of $0.99 to $1.14, and adjusted earnings per diluted share in the range of $1.07 to $1.22.
(Previously issued guidance for Fiscal Year 2012 was for service revenue of $1.355 to $1.395
billion, GAAP earnings per diluted share of $0.95 $1.14, and adjusted earnings per diluted share
of $1.05 to $1.24 (which exclude the impact of restructuring and related charges)).
The Company notes that Fiscal Year 2011 numbers have been reclassified to conform to the current
years presentation. A slide depicting the reclassified numbers for Fiscal Year 2011, in addition
to other trended financial information, may be found in the Investor Relations section of the
Companys website under the Additional Financials section.
In addition to the financial measures prepared in accordance with generally accepted accounting
principles (GAAP), the Company uses certain non-GAAP financial measures. The Company believes that
presenting the non-GAAP financial measures contained in this press release assists
investors and
others in gaining a better understanding of its core operating results and future prospects,
especially when comparing such results to previous periods or forecasted guidance, because such
measures exclude items that are outside of the Companys normal operations
and/or, in certain cases, are difficult to forecast accurately for future periods. Management uses
non-GAAP financial measures, in addition to the measures prepared in accordance with GAAP, as the
basis for measuring the Companys core operating performance and comparing such performance to that
of prior periods and to the performance of its competitors for the same reasons stated above. Such
measures are also used by management in its financial and operating decision-making. Non-GAAP
financial measures are not meant to be considered superior to or a substitute for the Companys
results of operations prepared in accordance with GAAP.
A conference call to discuss PAREXELs first quarter earnings, business, and financial outlook will
begin at 10:00 a.m. ET on Tuesday, November 1, 2011 and will be broadcast live over the internet
via webcast. The webcast may be accessed in the Upcoming Events portion of the main page of the
Investor Relations section of the Companys website at www.PAREXEL.com. Users should follow the
instructions provided to assure that the necessary audio applications are downloaded and installed.
A replay of this webcast will be archived on the website approximately two hours after the call
and will continue to be accessible for approximately one year following the live event. To
participate via telephone, dial +1 408-940-3886 and ask to join the PAREXEL quarterly conference
call.
Certain trended financial information may be found in the Investor Relations section of the
Companys website under the Additional Financials section.
About the Company
PAREXEL International Corporation is a leading global bio/pharmaceutical services organization,
providing a broad range of knowledge-based contract research, consulting, and medical
communications services to the worldwide pharmaceutical, biotechnology and medical device
industries. Committed to providing solutions that expedite time-to-market and peak-market
penetration, PAREXEL has developed significant expertise across the development and
commercialization continuum, from drug development and regulatory consulting to clinical
pharmacology, clinical trials management, medical education and reimbursement. Perceptive
Informatics, Inc., a subsidiary of PAREXEL, provides advanced technology solutions, including
medical imaging, to facilitate the clinical development process. Headquartered near Boston,
Massachusetts, PAREXEL operates in 67 locations throughout 52 countries around the world, and has
approximately 10,850 employees. For more information about PAREXEL International visit
www.PAREXEL.com.
PAREXEL is a registered trademark of PAREXEL International Corporation, and Perceptive Informatics
is a trademark of Perceptive Informatics, Inc. All other names or marks may be registered
trademarks or trademarks of PAREXEL International Corporation, Perceptive Informatics, Inc. or
their respective owners and are hereby acknowledged.
This release contains forward-looking statements regarding future results and events, including,
without limitation, statements regarding expected financial results, future growth and customer
demand. For this purpose, any statements contained herein that are not statements of historical
fact may be deemed forward-looking statements. Without limiting the foregoing, the words
believes, anticipates, plans, expects, intends, appears, estimates,
projects,
will, would, could, should, targets, and similar expressions are also intended to
identify forward-looking statements. The forward-looking statements in this release involve a
number of risks and uncertainties. The Companys actual future results may differ
significantly from the results discussed in the forward-looking statements contained in this
release. Important factors that might cause such a difference include, but are not limited to,
risks associated with: actual operating performance; actual expense savings and other operating
improvements resulting from recent and anticipated restructurings, including the anticipated
additional restructuring charges of approximately $4 million in the second quarter of Fiscal Year
2012; the loss, modification, or delay of contracts which would, among other things, adversely
impact the Companys recognition of revenue included in backlog; the Companys dependence on
certain industries and clients; the Companys ability to win new business, manage growth and costs,
and attract and retain employees; the Companys ability to complete additional acquisitions and to
integrate newly acquired businesses or enter into new lines of business; the impact on the
Companys business of government regulation of the drug, medical device and biotechnology
industry; consolidation within the pharmaceutical industry and competition within the
biopharmaceutical services industry; the potential for significant liability to clients and third
parties; the potential adverse impact of health care reform; and the effects of exchange rate
fluctuations and other international economic, political, and other risks. Such factors and
others are discussed more fully in the section entitled Risk Factors of the Companys Annual
Report on Form 10-K for the fiscal year ended June 30, 2011 as filed with the SEC on August 26,
2011, which Risk Factors discussion is incorporated by reference in this press release. The
Company specifically disclaims any obligation to update these forward-looking statements in the
future. These forward-looking statements should not be relied upon as representing the Companys
estimates or views as of any date subsequent to the date of this press release.
PAREXEL International Corporation
Consolidated Condensed Statement of Operations
Unaudited
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Three Months Ended |
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Three Months Ended |
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September 30, 2011 |
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September 30, 2010 |
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(in thousands, except per share data) |
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As Reported |
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Adjustments |
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Non-GAAP |
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As Reported |
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Adjustments |
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Non-GAAP |
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Service revenue |
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$ |
314,735 |
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$ |
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$ |
314,735 |
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$ |
295,820 |
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$ |
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$ |
295,820 |
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Reimbursement revenue |
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45,914 |
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45,914 |
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46,437 |
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46,437 |
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Total revenue |
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360,649 |
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360,649 |
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342,257 |
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342,257 |
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Costs and expenses: |
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Direct costs |
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222,174 |
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222,174 |
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189,644 |
(a) |
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189,644 |
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Reimbursable out-of-pocket expenses |
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45,914 |
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45,914 |
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46,437 |
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46,437 |
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Selling, general and administrative |
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60,989 |
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60,989 |
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60,858 |
(a) |
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\ |
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60,858 |
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Depreciation |
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14,281 |
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14,281 |
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13,251 |
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13,251 |
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Amortization |
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2,141 |
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2,141 |
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2,457 |
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2,457 |
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Restructuring charge (benefit) |
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2,700 |
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(2,700) |
(b) |
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(390 |
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390 |
(c) |
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Total costs and expenses |
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348,199 |
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(2,700 |
) |
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345,499 |
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312,257 |
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390 |
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312,647 |
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Income from operations |
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12,450 |
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2,700 |
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15,150 |
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30,000 |
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(390 |
) |
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29,610 |
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Other (expense) income |
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1,624 |
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1,624 |
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(7,315 |
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(7,315 |
) |
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Income before income taxes |
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14,074 |
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2,700 |
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16,774 |
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22,685 |
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(390 |
) |
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22,295 |
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Provision for income tax expense |
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4,513 |
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533 |
(d) |
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5,046 |
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4,894 |
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(110) |
(d) |
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4,784 |
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Effective tax rate |
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32.1 |
% |
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30.1 |
% |
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21.6 |
% |
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21.5 |
% |
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Net income |
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$ |
9,561 |
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$ |
2,167 |
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$ |
11,728 |
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$ |
17,791 |
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$ |
(280 |
) |
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$ |
17,511 |
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Earnings
per common share: |
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Basic |
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$ |
0.16 |
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$ |
0.20 |
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$ |
0.30 |
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$ |
0.30 |
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Diluted |
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$ |
0.16 |
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$ |
0.20 |
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$ |
0.30 |
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$ |
0.29 |
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Shares
used in computing earnings per common share: |
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Basic |
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59,044 |
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59,044 |
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58,450 |
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58,450 |
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Diluted |
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60,079 |
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60,079 |
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59,660 |
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59,660 |
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(a) |
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Prior year numbers have been reclassified to conform with the current year presentation. |
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(b) |
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Restructuring charges pursuant to plans previously announced include $1.7 million in severance
costs and $1.0 million of facility-related costs. |
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(c) |
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Adjustments to restructuring reserves pursuant to plans implemented in FY10. |
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(d) |
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Tax associated with items (b) and (c). |
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Preliminary |
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September 30, |
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September 30, |
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June 30, |
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Balance Sheet Information |
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2011 |
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2010 |
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2011 |
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Billed accounts receivable, net |
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$ |
324,763 |
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$ |
303,985 |
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$ |
341,279 |
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Unbilled accounts receivable, net |
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|
326,725 |
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|
296,335 |
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|
308,364 |
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Deferred revenue |
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(352,284 |
) |
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(257,186 |
) |
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(332,662 |
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Net receivables |
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$ |
299,204 |
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$ |
343,134 |
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$ |
316,981 |
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Cash and marketable securities |
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$ |
132,488 |
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$ |
70,901 |
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$ |
89,056 |
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Working capital |
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$ |
337,270 |
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$ |
199,881 |
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$ |
317,297 |
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Total assets |
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$ |
1,456,121 |
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$ |
1,341,846 |
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$ |
1,429,483 |
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Short-term borrowings |
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$ |
5,573 |
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$ |
108,957 |
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$ |
5,867 |
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Long-term debt |
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$ |
263,752 |
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$ |
175,451 |
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$ |
240,102 |
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Stockholders equity |
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$ |
544,950 |
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$ |
496,100 |
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$ |
566,004 |
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PAREXEL International Corporation
Segment Information
Unaudited
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Three Months Ended |
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Three Months Ended |
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(in thousands) |
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September 30, 2011 |
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September 30, 2010(a) |
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Clinical Research Services (CRS) |
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Service revenue |
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$ |
235,409 |
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$ |
231,639 |
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% of total service revenue |
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74.8 |
% |
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|
78.3 |
% |
Gross profit |
|
$ |
62,659 |
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$ |
80,656 |
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Gross margin % of service revenue |
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26.6 |
% |
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34.8 |
% |
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PAREXEL Consulting & Medical Communications
Services (PCMS) |
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Service revenue |
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$ |
35,648 |
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$ |
28,335 |
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% of total service revenue |
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|
11.3 |
% |
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|
9.6 |
% |
Gross profit |
|
$ |
14,670 |
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|
$ |
11,113 |
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Gross margin % of service revenue |
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|
41.2 |
% |
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|
39.2 |
% |
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Perceptive Informatics, Inc. (PII) |
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Service revenue |
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$ |
43,678 |
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|
$ |
35,846 |
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% of total service revenue |
|
|
13.9 |
% |
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|
12.1 |
% |
Gross profit |
|
$ |
15,232 |
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|
$ |
14,407 |
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Gross margin % of service revenue |
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34.9 |
% |
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|
40.2 |
% |
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Total service revenue |
|
$ |
314,735 |
|
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$ |
295,820 |
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Total gross profit |
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$ |
92,561 |
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$ |
106,176 |
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Gross margin % of service revenue |
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|
29.4 |
% |
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|
35.9 |
% |
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Revenue by Geography |
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The Americas |
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$ |
135,656 |
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$ |
132,891 |
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Europe, Middle East & Africa |
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|
122,411 |
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|
125,529 |
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Asia/Pacific |
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56,668 |
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|
37,400 |
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|
Total service revenue |
|
$ |
314,735 |
|
|
$ |
295,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Supplemental Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
$ |
360,649 |
|
|
$ |
342,257 |
|
Investigator fees |
|
|
49,152 |
|
|
|
44,818 |
|
|
|
|
|
|
|
|
Gross revenue |
|
$ |
409,801 |
|
|
$ |
387,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days sales outstanding |
|
|
67 |
|
|
|
82 |
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
$ |
11,620 |
|
|
$ |
11,641 |
|
|
|
|
(a) |
|
Prior year numbers have been reclassified to conform with the current year presentation. |