PAREXEL INTERNATIONAL CORPORATION 
By - Record service revenue of
- Gross new business wins of
- Net book-to-bill ratio of 1.23
For the three months ended
As previously reported, the Company was notified by a small biopharma client of its inability to make further payments due to PAREXEL in connection with an on-going service contract for a large late stage clinical trial. The client subsequently filed for bankruptcy protection. As a result of this event, the Company terminated the contract with the client, and recorded
Excluding the impact from the contract termination, second quarter operating income was
On a segment basis, consolidated service revenue for the second quarter of Fiscal Year 2009 was
For the six months ended
PAREXEL's backlog was approximately
Mr.
Mr.
The Company issued forward-looking guidance for the third quarter of Fiscal Year 2009 (ending
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 Company's 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 Company's 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 Company's results of operations prepared in accordance with GAAP.
A conference call to discuss PAREXEL's second quarter earnings, business, and financial outlook will begin at
Certain trended financial information may be found in the Investor Relations section of the Company's 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, medical communications and consulting 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
This release contains "forward-looking" statements regarding future results and events, including, without limitation, statements regarding expected financial results, future growth and customer demand, such as the guidance provided by the Company with respect to the third quarter of Fiscal Year 2009, Fiscal Year 2009 and Calendar 2009. 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," "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 Company's 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 restructurings; the loss, modification, or delay of contracts which would, among other things, adversely impact the Company's recognition of revenue included in backlog; the Company's dependence on certain industries and clients; the Company's ability to win new business, manage growth and costs, and attract and retain employees; the Company's ability to complete additional acquisitions and to integrate newly acquired businesses or enter into new lines of business, including, but not limited to, the successful business integration and anticipated synergy achievements in connection with the ClinPhone acquisition; the impact on the Company's 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 Company's Quarterly Report on Form 10-Q for the period ended
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 their respective business and are hereby acknowledged.
CONTACTS: James Winschel, Senior Vice President and
Chief Financial Officer
Jill Baker, Vice President of Investor Relations
+1-781-434-4118
PAREXEL International Corporation
Consolidated Condensed Statement of Income
(In thousands, except per share data)
Unaudited
Three Months Ended
------------------
December 31,
December 31, 2008 2007
----------------- ---------
As As
Reported Adjustments Adjusted Reported
-------- ----------- -------- --------
Service revenue $275,846 $275,846 $238,653
Reimbursement
revenue 48,155 48,155 45,635
Total revenue 324,001 324,001 284,288
Costs and expenses:
Direct costs 192,295 (15,000)(a) 177,295 156,991
Reimbursable
out-of-pocket
expenses 48,155 48,155 45,635
Selling, general
and
administrative 62,062 62,062 51,406
Depreciation 11,305 11,305 8,392
Amortization 2,474 2,474 1,382
Total costs and
expenses 316,291 (15,000) 301,291 263,806
Income from operations 7,710 15,000 22,710 20,482
Other income (expense) 3,188 3,188 (329)
Income before
income taxes 10,898 15,000 25,898 20,153
Provision for
income taxes 5,144 7,080(a) 12,224 8,326
Effective tax rate 47.2% 47.2% 41.3%
Minority interest
expense 546 546 296
Net income $5,208 $7,920 $13,128 $11,531
Earnings per common
share:
-------------------
Basic $0.09 $0.23 $0.21
Diluted $0.09 $0.23 $0.20
Shares used in
computing earnings
per common share:
------------------
Basic 57,634 57,634 55,641
Diluted 57,634 57,634 57,297
Balance Sheet
Information Preliminary
December 31, June 30, December 31,
2008 2008 2007
---- ---- ----
Billed accounts
receivable, net $259,065 $253,256 $221,476
Unbilled accounts
receivable, net 202,019 222,560 163,251
Deferred revenue (238,370) (213,126) (200,093)
Net receivables $222,714 $262,690 $184,634
Cash and marketable
securities $63,678 $51,918 $62,926
Working capital $143,788 $146,535 $108,877
Total assets $1,123,131 $948,071 $810,535
Short-term
borrowings $50,424 $66,474 $60,453
Long-term debt $226,871 $3,465 $231
Stockholders' equity $373,546 $428,091 $363,403
(a) Represents $15 million in reserves for wind-down costs and bad
debt expense related to a large late stage trial, and a
related $7.1 million tax benefit.
PAREXEL International Corporation
Consolidated Condensed Statement of Income
(In thousands, except per share data)
Unaudited
Six Months Ended
----------------
December 31, 2008
-----------------
As
Reported Adjustments Adjusted
-------- ----------- --------
Service revenue $538,892 $538,892
Reimbursement revenue 104,661 104,661
Total revenue 643,553 643,553
Costs and expenses:
Direct costs 363,659 (15,000)(a) 348,659
Reimbursable
out-of-pocket
expenses 104,661 104,661
Selling, general
and administrative 119,787 119,787
Depreciation 21,234 21,234
Amortization 4,509 4,509
Total costs and
expenses 613,850 (15,000) 598,850
Income from operations 29,703 15,000 44,703
Other income (expense) 2,965 2,965
Income before income
taxes 32,668 15,000 47,668
Provision for income
taxes 12,840 7,080(a) 19,920
Effective tax rate 39.3% 41.8%
Minority interest
expense 1,001 1,001
Net income $18,827 $7,920 $26,747
Earnings per common
share:
-------------------
Basic $0.33 $0.46
Diluted $0.32 $0.46
Shares used in
computing earnings
per common share:
-------------------
Basic 57,552 57,552
Diluted 58,171 58,171
Unaudited
Six Months Ended
----------------
December 31, 2007
-----------------
As
Reported Adjustments Adjusted
-------- ----------- --------
Service revenue $446,778 $446,778
Reimbursement revenue 89,542 89,542
Total revenue 536,320 536,320
Costs and expenses:
Direct costs 293,053 293,053
Reimbursable
out-of-pocket
expenses 89,542 89,542
Selling, general
and administrative 98,546 98,546
Depreciation 15,888 15,888
Amortization 2,281 2,281
Total costs and
expenses 499,310 - 499,310
Income from operations 37,010 - 37,010
Other income (expense) (755) (755)
Income before income
taxes 36,255 - 36,255
Provision for income
taxes 10,563 3,997(b) 14,560
Effective tax rate 29.1% 40.2%
Minority interest
expense 276 276
Net income $25,416 $(3,997) $21,419
Earnings per
common share:
-------------
Basic $0.46 $0.39
Diluted $0.44 $0.37
Shares used in
computing earnings
per common share:
-------------------
Basic 55,441 55,441
Diluted 57,189 57,189
(a) Represents $15 million in reserves for wind-down costs
and bad debt expense related to a large late stage trial,
and a related $7.1 million tax benefit.
(b) Represents a non-U.S. net tax benefit of $4 million,
related in part to a reduction in German tax rates.
PAREXEL International Corporation
Segment Information
($ in thousands)
Unaudited
Three Months Ended
------------------
December 31,
December 31, 2008 2007
----------------- -------------
As As
Reported Adjustments Adjusted Reported
-------- ----------- -------- --------
Clinical Research
Services (CRS)
Service revenue $200,934 $200,934 $182,705
% of total
service revenue 72.8% 72.8% 76.6%
Gross profit $55,207 $15,000(a) $70,207 $60,063
Gross margin % of
service revenue 27.5% 34.9% 32.9%
PAREXEL Consulting
& Medical
Communications
Services (PCMS)
Service revenue $31,931 $31,931 $32,537
% of total
service revenue 11.6% 11.6% 13.6%
Gross profit $11,164 $11,164 $11,142
Gross margin % of
service revenue 35.0% 35.0% 34.2%
Perceptive Informatics,
Inc. (PII)
Service revenue $42,981 $42,981 $23,411
% of total
service revenue 15.6% 15.6% 9.8%
Gross profit $17,180 $17,180 $10,457
Gross margin % of
service revenue 40.0% 40.0% 44.7%
Total service
revenue $275,846 $275,846 $238,653
Total gross profit $83,551 $98,551 $81,662
Gross margin % of
service revenue 30.3% 35.7% 34.2%
Revenue by
Geography
----------
The Americas $121,560 $92,925
Europe, Middle
East & Africa 131,533 128,044
Asia/Pacific 22,753 17,684
Total service
revenue $275,846 $238,653
Quarterly
Supplemental
Financial Data
---------------
Total revenue $324,001 $284,288
Investigator fees 48,739 41,198
Gross revenue $372,740 $325,486
Days Sales
Outstanding 55 52
Capital
expenditures $21,388 $13,283
(a) Represents $15 million in reserves for wind-down costs and bad
debt expense related to a large late stage trial.
PAREXEL International Corporation
Segment Information
($ in thousands)
Unaudited
Six Months Ended
----------------
December 31,
December 31, 2008 2007
----------------- ------------
As As
Reported Adjustments Adjusted Reported
-------- ----------- -------- --------
Clinical Research
Services (CRS)
Service revenue $403,757 $403,757 $342,034
% of total service
revenue 74.9% 74.9% 76.6%
Gross profit $126,128 $15,000(a) $141,128 $115,225
Gross margin % of
service revenue 31.2% 35.0% 33.7%
PAREXEL Consulting &
Medical Communications
Services (PCMS)
Service revenue $62,042 $62,042 $63,057
% of total service
revenue 11.5% 11.5% 14.1%
Gross profit $21,112 $21,112 $20,723
Gross margin % of
service revenue 34.0% 34.0% 32.9%
Perceptive Informatics,
Inc. (PII)
Service revenue $73,093 $73,093 $41,687
% of total service
revenue 13.6% 13.6% 9.3%
Gross profit $27,993 $27,993 $17,777
Gross margin % of
service revenue 38.3% 38.3% 42.6%
Total service revenue $538,892 $538,892 $446,778
Total gross profit $175,233 $190,233 $153,725
Gross margin % of
service revenue 32.5% 35.3% 34.4%
Revenue by Geography
--------------------
The Americas $223,891 $172,924
Europe, Middle
East & Africa 271,920 240,887
Asia/Pacific 43,081 32,967
Total service revenue $538,892 $446,778
(a) Represents $15 million in reserves for wind-down costs and bad
debt expense related to a large late stage trial.
SOURCE PAREXEL International Corporation
