EX-99.1 2 e19616ex99_1.htm PRESS RELEASE

Exhibit 99.1

PDI Reports Third Quarter 2004 Financial Results

Operating Income up 38% over third quarter of 2003

Diluted EPS in third quarter of $0.37 up 28% over third quarter of 2003

Raising 2004 EPS estimates: $1.40 to $1.45 from $1.25 to $1.35

        SADDLE RIVER, N.J., Nov. 3 /PRNewswire-FirstCall/ -- PDI, Inc. (Nasdaq: PDII) a healthcare sales and marketing company, today announced its third quarter 2004 financial results.

        Third Quarter Results

        Revenue for the quarter ended September 30, 2004 was $92.5 million, 2.1% lower than revenue of $94.6 million for the quarter ended September 30, 2003. Operating income was $9.0 million for the quarter ended September 30, 2004, an increase of 38.1% compared to operating income of $6.5 million for the quarter ended September 30, 2003. Net income was $5.5 million for the quarter ended September 30, 2004, compared to net income of $4.2 million in the quarter ended September 30, 2003. Diluted net income per share for the quarter ended September 30, 2004 was $0.37 versus diluted net income per share of $0.29 for the quarter ended September 30, 2003.

        Year-to-Date Results

        Total revenue for the nine months ended September 30, 2004 was $276.6 million, 12.8% higher than total revenue of $245.3 million for the nine months ended September 30, 2003. Operating income was $27.1 million for the nine months ended September 30, 2004 an increase of 122.9% compared to operating income of $12.1 million for the nine months ended September 30, 2003. Net income was $16.5 million for the nine months ended September 30, 2004 versus net income of $7.8 million for the nine months ended September 30, 2003. Diluted net income per share was $1.11 for the nine months ended September 30, 2004 compared to diluted net income per share of $0.54 for the nine months ended September 30, 2003.

        The Company raised its 2004 EPS estimates to $1.40 to $1.45 from $1.25 to $1.35.

        Charles T. Saldarini, Vice Chairman and CEO, said, “I am pleased with the way PDI is performing. The steps we have taken to focus on our sales and marketing services and to maintain cost controls have enhanced our performance and brought consistency to our financial results. Our Sales and Marketing Services Group in particular performed well as its revenue in the first nine months of 2004 is up 30.8% versus the first nine months of 2003. We believe that the pharmaceutical industry is looking for ways to be more efficient and flexible. Outsourcing more of their sales and marketing efforts is one way to do that. As an industry leader with a proven track record of results, PDI is structured to provide services to pharmaceutical manufacturers that help them to meet the challenges they face today.”

        Regarding the 2005 outlook, Mr. Saldarini continued, “We are finalizing our 2005 forecast and will be providing 2005 EPS estimates early in December.”

        Webcast Conference Call

        PDI will conduct a live webcast of its Earnings Release Briefing at 9:00 AM EDT on Thursday, November 4, 2004. The live webcast of the event will be accessible through PDI’s website, http://www.pdi-inc.com and will be archived on the website for future on-demand replay. For those without internet access, the call can be accessed by dialing 1-877-423-4030 within the US and 1-706-634-1929 internationally and asking for the PDI Earnings Release Conference Call. The call will be archived for two weeks and can be accessed by calling 1-800-642-1687 or 1-706-645-9291 and entering the conference ID number 1462871.

        About PDI

        PDI, Inc. (Nasdaq: PDII) is a leading provider of outsourced sales and marketing services to the biopharmaceutical and medical device and diagnostics industries. PDI’s comprehensive set of next-generation solutions is designed to increase its clients’ strategic flexibility and enhance their efficiency and profitability. Headquartered in Saddle River, NJ, PDI also has offices in Pennsylvania and Illinois.

        PDI’s sales and marketing services include dedicated, shared, clinical and combination sales teams; marketing research and consulting; medical education and communications; talent recruitment; and integrated commercial solutions from pre-launch through patent-expiration. The company’s experience extends across multiple therapeutic categories and includes office and hospital-based initiatives. PDI’s global presence is maintained through a strategic partnership with In2Focus, a leading U.K. provider of outsourced sales services.

        PDI’s commitment is to deliver innovative solutions, excellent execution and superior results to its clients. Through strategic partnership and client-driven innovation, PDI maintains some of the longest sales and marketing relationships in the industry. Recognized as an industry pioneer, PDI continues to innovate today as a thought-starter for the outsourcing of sales and marketing services.

        For more information, visit the Company’s website at http://www.pdi-inc.com.

        Forward-Looking Statement

        This press release contains forward-looking statements regarding future events and financial performance. These statements involve a number of risks and uncertainties and are based on numerous assumptions involving judgments with respect to future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond PDI’s control. Some of the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements are general economic conditions, changes in our operating expenses, adverse patent rulings, FDA, legal or accounting developments, competitive pressures, failure to meet performance benchmarks in significant contracts, changes in customer and market requirements and standards, and the risk factors detailed from time to time in PDI’s periodic filings with the Securities and Exchange Commission, including without limitation, PDI’s Annual Report on Form 10-K/A for the year ended December 31, 2003, and PDI’s periodic reports on Forms 10-Q/A, 10-Q and 8-K filed with the Securities and Exchange Commission since January 1, 2004. The forward looking-statements in this press release are based upon management’s reasonable belief as of the date hereof. PDI undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

PDI, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)

ASSETS September 30,
2004
December 31
2003
Current assets:      
 Cash and cash equivalents   $  77,284   $113,288  
 Short-term investments   29,032   1,344  
 Inventory, net     43  
 Accounts receivable, net of allowance for  
  doubtful accounts of $349 and $749 as of  
   September 30, 2004 and December 31, 2003,  
    respectively   22,932   40,885  
 Unbilled costs and accrued profits on  
  contracts in progress   2,442   4,041  
 Deferred training and other program costs   1,656   1,643  
 Other current assets   10,836   8,847  
 Deferred tax asset   3,900   11,053  
Total current assets   148,082   181,144  
Net property and equipment   18,369   14,494  
Deferred tax asset   6,797   7,304  
Goodwill   21,759   11,132  
Other intangible assets   20,021   1,648  
Other long-term assets   3,833   3,901  
Total assets   $218,861   $219,623  

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:      
 Accounts payable   $     3,394   $     8,689  
 Accrued returns   4,602   22,811  
 Accrued incentives   17,149   20,486  
 Accrued salaries and wages   8,897   9,031  
 Unearned contract revenue   9,809   3,604  
 Restructuring accruals   321   744  
 Income taxes and other accrued expenses   15,422   15,770  
Total current liabilities   59,594   81,135  
Total long-term liabilities      
Total liabilities   59,594   81,135  
Stockholders’ equity:  
Preferred stock, $.01 par value, 5,000,000  
 shares authorized, no shares issued and  
  outstanding      
Common stock, $.01 par value, 100,000,000 shares  
 authorized: shares issued and outstanding, September 30, 2004- 14,625,537,  
  and December 31, 2003 - 14,387,126; 161,115 and 136,178 restricted shares  
  issued and outstanding at September 30, 2004 and December 31, 2003,  
  respectively   148   145  
Additional paid-in capital   115,492   109,531  
Retained earnings   45,990   29,505  
Accumulated other comprehensive income   47   25  
Unamortized compensation costs   (2,300 ) (608 )
Treasury stock, at cost: 5,000 shares   (110 ) (110 )
Total stockholders’ equity   159,267   138,488  
Total liabilities & stockholders’ equity   $ 218,861   $ 219,623  

PDI, Inc.
Consolidated Statements Of Operations
(in thousands, except per share data)
(unaudited)

  Three Months Ended
September 30,
Nine Months Ended
September 30,
  2004 2003 2004 2003
  (restated) (restated)
Revenue          
 Service   $ 92,525   $94,470   $ 277,666   $ 245,111  
Product, net   (3 ) 81   (1,034 ) 197  
   Total revenue   92,522   94,551   276,632   245,308  
Cost of goods and  
 services  
  Program expenses  
 (including related  
  party amounts of  
  $0 and $653 for  
  the quarters  
  ended September 30,  
  2004 and 2003,  
  respectively and  
  $180 and $1,287  
  for the nine  
  months ended  
  September 30,  
  2004 and 2003,  
  respectively)   68,127   70,085   203,670   182,227  
 Cost of goods sold   10   952   244   1,097  
  Total cost of  
   goods and  
    services   68,137   71,037   203,914   183,324  
Gross profit   24,385   23,514   72,718   61,984  
Compensation  
 expense   8,409   9,297   26,549   27,294  
Other selling,  
 general and  
  administrative  
   expenses   6,941   7,676   19,089   20,714  
Restructuring and  
 other related  
  expenses         (270 )
Litigation settlement         2,100  
  Total operating  
   expenses   15,350   16,973   45,638   49,838  
Operating income   9,035   6,541   27,080   12,146  
Other income, net   231   246   860   741  
Income before  
 provision for  
  taxes   9,266   6,787   27,940   12,887  
Provision for  
 income taxes   3,799   2,605   11,455   5,115  
Net income   $   5,467   $  4,182   $   16,485   $     7,772  
Basic net income  
 per share   $     0.37   $    0.29   $       1.13   $       0.55  
Diluted net income  
 per share   $     0.37   $    0.29   $       1.11   $       0.54  
Basic weighted  
 average number of  
  shares  
   outstanding   14,621   14,252   14,538   14,202  
Diluted weighted  
 average number of  
  shares  
   outstanding   14,933   14,543   14,873   14,349  

SOURCE PDI, Inc.

-0-                                   11/03/2004

    /CONTACT: Stephen P. Cotugno, Executive Vice President-Corporate
Development of PDI, Inc., +1-201-574-8617/

    /Web site: http://www.pdi-inc.com/ (PDII)

CO: PDI, Inc.
ST: New Jersey
IN: FIN MTC HEA
SU: ERN CCA