8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2005

PAREXEL International Corporation

(Exact name of registrant as specified in charter)

Massachusetts 000-21244 04-2776269

(State or other juris-
diction of incorporation (Commission
File Number) (IRS Employer
Identification No.)

195 West Street, Waltham, Massachusetts 02451

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (781) 487-9900

Not applicable.

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

     On August 1, 2005, PAREXEL International Corporation announced its financial results for the fiscal year and quarter ended June 30, 2005. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K. The information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

Exhibit No.	Description
99.1	Press release dated August 1, 2005.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 2, 2005	PAREXEL International Corporation
	By:	/s/ James F. Winschel, Jr.
		James F. Winschel, Jr.
		Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated August 1, 2005.

EX-99.1

Exhibit 99.1

CONTACTS: James Winschel, Senior Vice-President and Chief Financial Officer
Jill Baker, Vice President of Investor Relations
(781) 434-4118

PAREXEL REPORTS FOURTH QUARTER AND FISCAL 2005 FINANCIAL RESULTS

Boston, MA, August 1, 2005 — PAREXEL International Corporation (Nasdaq: PRXL) today announced its financial results for the fourth quarter and fiscal year ended June 30, 2005.

For the three months ended June 30, 2005, PAREXEL’s consolidated service revenue increased 3.1% to $143.6 million compared with $139.3 million in the prior year period. The Company reported an operating loss of $23.7 million, versus operating income of $8.4 million in the comparable quarter of the prior year and a net loss for the quarter of $51.5 million, or $1.98 per diluted share, compared with net income of $6.5 million, or $0.24 per diluted share, for the quarter ended June 30, 2004. The Company recorded $29.8 million in restructuring and special charges during the quarter. As previously announced, these charges were related to the abandonment of certain property leases, employee separation benefits, and other special costs. The Company also incurred a $25.5 million one-time non-cash tax charge to record tax valuation reserves on a portion of the Company’s net deferred tax assets resulting from the loss position of certain PAREXEL subsidiaries, mainly in the United States.

On a proforma basis, excluding the effect of $29.8 million of restructuring and special charges, and the $25.5 million non-cash tax charge discussed above, operating income for the fourth quarter of Fiscal 2005 was $3.8 million, net income was $2.3 million, and earnings per diluted share were $0.09 (within the earnings per share guidance range issued on June 30, 2005).

The current period and the corresponding historical financial results contained within this press release include a reclassification between Service Revenue and Other Income related to a change in the accounting treatment with respect to the impact of foreign exchange rates on certain contracts. The reclassification had no impact on the Company’s expenses, net income, or earnings per share, but did impact gross margin and operating income. Please refer to footnote (a) in the attached financial charts for additional detail.

On a segment basis, consolidated service revenue for the fourth quarter of Fiscal 2005 was $99.3 million in Clinical Research Services, $32.9 million in PAREXEL Consulting and Marketing Services, and $11.4 million in Perceptive Informatics, Inc.

For the fiscal year ended June 30, 2005, consolidated service revenue was $544.7 million versus $541.0 million in the prior year period. For Fiscal 2005 there was an operating loss of $276,000 compared with operating income of $18.4 million, or 3.4% of consolidated service revenue in the prior year period. The net loss for Fiscal 2005 was $35.2 million or $1.35 per diluted share, compared with net income of $13.8 million, or $0.51 per diluted share in the prior year period. On a proforma basis, excluding the effect of $29.8 million of restructuring and special charges and a $25.5 million non-cash tax charge recorded in the fourth quarter, operating income for the fiscal year was $27.2 million, net income was $18.6 million, and earnings per diluted share were $0.70.

On a segment basis, consolidated service revenue for Fiscal 2005 was $375.3 million in Clinical Research Services, $126.6 million in PAREXEL Consulting and Marketing Services, and $42.8 million in Perceptive Informatics, Inc.

As of March 31, 2005, PAREXEL’s backlog totaled $747 million. Adding the June quarter’s gross new business wins of $207.8 million to that amount, then subtracting $143.6 million in current quarter service revenue, $42 million in cancellations, and approximately $37 million for the negative impact of foreign exchange left the Company with a backlog of $732.2 million as of June 30, 2005. Excluding the foreign exchange impact of approximately $37 million, backlog would have been $769.2 million, a sequential increase of 3% from the March 31, 2005 backlog.

Mr. Josef H. von Rickenbach, PAREXEL’s Chairman and Chief Executive Officer stated, “Obviously, we have been disappointed with our recent financial performance. However, we believe that the future annual savings from the recent restructuring and special charges, and the quarter’s solid gross new business wins, will go a long way toward helping us achieve our long-term profitability goals. Going forward, we plan to intensely focus on driving revenue growth while continuing to tightly control costs and improve operational performance.”

The Company issued forward-looking guidance for the first quarter of Fiscal 2006 (ending September 30, 2005), and for Fiscal 2006. For the first quarter, the Company anticipates reporting consolidated service revenue in the range of $135 to $140 million and earnings per diluted share in the range of $0.14 to $0.18. For Fiscal 2006, consolidated service revenue is expected to be in the range of $590 to $615 million (using current exchange rates) and earnings per diluted share are projected to be in the range of $0.78 and $0.92 (versus previously issued revenue guidance of $595 to $620 million, and earnings per diluted share of $0.78 to $0.94). The changes to previous revenue guidance are due to the strengthening of the dollar, the reclassification of revenue previously mentioned in this press release, and the impact of the QdotPharma acquisition. The earnings per share estimates include the impact of recording stock-based compensation expense under new accounting standards for currently unvested options, which is estimated to be $0.04 per share for Fiscal 2006.

The Company believes that presenting the proforma information contained in the financial tables and 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. Management uses this proforma information, in addition to the GAAP information, 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. Such measures are also used by management in its financial and operating decision-making. Proforma information is not meant to be considered superior to or a substitute for the Company’s results of operations prepared in accordance with GAAP. A reconciliation of Generally Accepted Accounting Principles (GAAP) results with proforma results may be found in the attached financial tables.

A conference call to discuss PAREXEL’s fourth quarter and year-end earnings, business, and financial outlook will begin at 10 a.m. ET Tuesday, August 2nd and will be broadcast live over the internet via webcast. The webcast may be accessed in the “Webcasts” portion of the Investor Relations section of the Company’s website at http://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 612-332-0932 and ask to join the PAREXEL quarterly conference call.

PAREXEL is one of the largest biopharmaceutical outsourcing organizations in the world, providing a broad range of knowledge-based contract research, medical marketing and consulting services to the worldwide pharmaceutical, biotechnology and medical device industries. With a commitment to providing solutions that expedite time-to-market and peak market penetration, PAREXEL has developed significant expertise in clinical trials management, data management, biostatistical analysis, medical marketing, clinical pharmacology, regulatory and medical consulting, industry training and publishing and other drug development consulting services. Its information technology subsidiary, Perceptive Informatics, Inc., develops and offers a portfolio of innovative technology-based products and services that facilitate clinical drug development and are designed to decrease time to peak sales. The technology portfolio includes web-based portal solutions and tracking tools, Interactive Voice Response Systems (IVRS), Clinical Trial Management Systems (CTMS), electronic diary and investigator database solutions. Perceptive also offers advanced medical diagnostics services to assess rapidly and objectively the safety and efficacy of new drugs, biologics, and medical devices in clinical trials. PAREXEL’s integrated services, therapeutic area depth and sophisticated information technology, along with its experience in global drug development and product launch services, represent key competitive strengths. Headquartered near Boston, MA, PAREXEL operates in 51 locations throughout 37 countries around the world, and has 5,140 employees.

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 first quarter and Fiscal Year 2006. 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, including the fourth quarter fiscal 2005 restructuring referenced in this release; 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; government regulation of the drug, medical device and biotechnology industry; consolidation within the pharmaceutical industry; 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 Quarter ended March 31, 2005 as filed with the SEC on May 9, 2005, which “Risk Factors” discussion is incorporated by reference in this press release. The forward-looking statements included in this press release represent the Company’s estimates as of the date of this 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 Company’s estimates or views as of any date subsequent to the date of this press release.

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.

PAREXEL International Corporation
Consolidated Condensed Statement of Operations
(In thousands, except per share data)

				(Unaudited)
				For the three months ended June 30,
	2005								2004
	2005			Adjustments			Proforma		As Reported
Service revenue	$	143,640	(a)				$	143,640	$	139,289	(a)
Reimbursement revenue		34,476						34,476		34,194
Total revenue		178,116			—			178,116		173,483
Costs and expenses:
Direct costs		97,808						97,808		89,747
Reimbursable out-of-pocket expenses		34,476						34,476		34,194
Selling, general and administrative		35,865			(497	)(b)		35,368		34,142
Depreciation and amortization		9,393			(2,705	)(c)		6,688		6,971
Restructuring expense		24,315			(24,315	)(d)		—
Income (loss) from operations		(23,741	)		27,517			3,776		8,429
Other (loss) income		(1,794	)(a)		2,302	(e)		508		2,127	(a)
Income (loss) before income taxes		(25,535	)		29,819			4,284		10,556
Provision (benefit) for income taxes		25,683			(23,959	)(f)		1,724		4,014
Minority interest expense		300						300		41
Net income (loss)	$	(51,518	)	$	53,778		$	2,260	$	6,501
Earnings (loss) per common share:
Basic	$	(1.98	)				$	0.09	$	0.25
Diluted	$	(1.98	)				$	0.09	$	0.24
Shares used in computing earnings per common share:
Basic		26,055						26,055		26,039
Diluted		26,055						26,523		26,925

Balance Sheet Information	(Preliminary)
	June 30,			March 31,			June 30,
	2005			2005			2004
Billed accounts receivable, net	$	123,779		$	107,959		$	127,494
Unbilled accounts receivable, net		94,108			89,432			94,462
Deferred revenue		(132,241	)		(131,418	)		(145,409	)
Net receivables	$	85,646		$	65,973		$	76,547
Cash and marketable securities	$	88,622		$	107,622		$	95,607
Working capital	$	119,831		$	153,414		$	145,408
Total assets	$	473,533		$	501,370		$	502,996
Stockholders’ equity	$	205,571		$	266,403		$	246,760
Quarterly Supplemental Financial Data
Total revenue	$	178,116		$	166,243		$	173,483
Investigator fees		19,877			15,205			18,224
Gross revenue	$	197,993		$	181,448		$	191,707
DSO		39			33			36

(a)	An accounting reclassification in the amount of $1.5 million and $1.8 million for the three months ended June 30, 2005 and 2004, respectively has been made between Service Revenue and Other (Loss)/Income to reflect a change in the accounting treatment with respect to the impact of foreign exchange rates on certain contracts. The change had no impact to expenses, net income, or earnings per share, but does impact gross margin and operating income.
(b)	Represents $329 thousand of special charges associated with old client disputes and $168 thousand in other non-recurring expenses.
(c)	Represents $2.7 million of impairment charges associated with abandoned leased facilities and other fixed assets.
(d)	Represents a restructuring charge of $24.3 million ($4.2 million for severance expense associated with the elimination of 123 managerial and staff positions, $20.0 million related to abandoned leased facilities, and $0.1 million related to other costs).
(e)	Represents $1.2 million in impairment of long term assets, $0.9 million in a loss associated with unwinding of foreign exchange option agreements, and $0.2 million for other disputes.
(f)	Includes a $25.5 million one-time non-cash tax charge to record tax valuation reserves on a portion of the Company’s net deferred tax assets resulting from the loss position of certain PAREXEL subsidiaries, mainly in the United States.

PAREXEL International Corporation
Consolidated Condensed Statement of Operations
(In thousands, except per share data)
Unaudited

	For the year ended June 30,									For the year ended June 30,
	2005									2004
	2005			Adjustments			Proforma			As Reported			Adjustments			Proforma
Service revenue	$	544,726	(a)				$	544,726	(a)	$	540,983	(a)				$	540,983	(a)
Reimbursement revenue		126,811						126,811			111,387						111,387
Total revenue		671,537			—			671,537			652,370			—			652,370
Costs and expenses:
Direct costs		360,044						360,044			356,062						356,062
Reimbursable out-of-pocket expenses		126,811						126,811			111,387						111,387
Selling, general and administrative		131,024			(497	)(b)		130,527			129,990			(69	)(g)		129,921
Depreciation and amortization		29,619			(2,705	)(c)		26,914			25,762			(740	)(h)		25,022
Restructuring expense		24,315			(24,315	)(d)		—			10,796			(10,796	)(i)		—
Income (loss) from operations		(276	)		27,517			27,241			18,373			11,605			29,978
Other income (loss)		1,016	(a)		2,302	(e)		3,318	(a)		5,070	(a)		388	(g)		5,458	(a)
Income before income taxes		740			29,819			30,559			23,443			11,993			35,436
Provision (benefit) for income taxes		35,566			(23,959	)(f)		11,607			9,313			3,907			13,220
Minority interest expense		351						351			339						339
Net income (loss)	$	(35,177	)	$	53,778		$	18,601		$	13,791		$	8,086		$	21,877
Earnings (loss) per common share:
Basic	$	(1.35	)				$	0.71		$	0.53					$	0.84
Diluted	$	(1.35	)				$	0.70		$	0.51					$	0.82
Shares used in computing earnings per common share:
Basic		26,065						26,065			26,010						26,010
Diluted		26,065						26,623			26,795						26,795

(a)	An accounting reclassification in the amount of $7.0 million and $6.2 million for the year ended June 30, 2005 and 2004, respectively has been made between Service Revenue and Other (Loss)/Income to reflect a change in the accounting treatment with respect to the impact of foreign exchange rates on certain contracts. The change had no impact to expenses net income, or earnings per share, but does impact gross margin and operating income.
(b)	Represents $329 thousand of special charges associated with old client disputes and $168 thousand in other expenses.
(c)	Represents $2.7 million of impairment charges associated with abandoned leased facilities and other fixed assets.
(d)	Represents a restructuring charge of $24.3 million ($4.2 million for severance expense associated with the elimination of 123 managerial and staff position, $20.0 million related to abandoned leased facilities, and $0.1 million related to other costs).
(e)	Represents $1.2 million for impairment of long term investments, $0.9 million in a loss associated with unwinding of foreign exchange option agreements, and $0.2 million for other disputes.
(f)	Includes a $25.5 million one-time non-cash tax charge to record tax valuation reserves on a portion of the Company’s net deferred tax assets resulting from the loss position of certain PAREXEL subsidiaries, mainly in the United States.
(g)	Represents $388 thousand of one-time charges associated with certain disputes and a $69 thousand loss on the disposition of certain obsolete assets.
(h)	Represents $740 thousand of impairment charges associated with abandoned leased facilities and other fixed assets.
(i)	Represents a restructuring charge of $10.8 million ($3.9 million for severance expense associated with the elimination of 157 managerial and staff positions, $5.6 million related to seven newly-abandoned leased facilities, and $1.3 million related to changes in assumptions for previously abandoned leased facilities).

PAREXEL International Corporation
Segment Information
($ in thousands)

	Three months ended						For the year ended
	June 30,						June 30,
	2005			2004			2005			2004
Clinical Research Services (CRS)
Service revenue *	$	99,281		$	96,036		$	375,327		$	375,219
% of total service revenue		69.1	%		69.0	%		69.0	%		69.4	%
Gross profit	$	32,426		$	34,144		$	127,800		$	132,965
Gross margin % of service revenue		32.7	%		35.6	%		34.1	%		35.4	%
PAREXEL Consulting & Marketing Services (PCMS)
Service revenue	$	32,921		$	33,206		$	126,552		$	129,791
% of total service revenue		22.9	%		23.8	%		23.2	%		24.0	%
Gross profit	$	8,584		$	10,440		$	37,577		$	34,089
Gross margin % of service revenue		26.1	%		31.4	%		29.7	%		26.3	%
Perceptive Informatics, Inc. (PII)
Service revenue	$	11,438		$	10,047		$	42,847		$	35,973
% of total service revenue		8.0	%		7.2	%		7.8	%		6.6	%
Gross profit	$	4,822		$	4,958		$	19,305		$	17,867
Gross margin % of service revenue		42.2	%		49.3	%		45.1	%		49.7	%
Total service revenue*	$	143,640		$	139,289		$	544,726		$	540,983
Total gross profit — a)	$	45,832		$	49,542		$	184,682		$	184,921
Gross margin % of service revenue — a)		31.9	%		35.6	%		33.9	%		34.2	%

*	Please refer to footnote (a) on the previous financial charts.
a)	- The reclassification between Revenue and Other Income also impacted gross margin amounts and related percentages for each of the business segments in Fiscal Years 2004 and 2005.