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): January 24, 2006

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.)

200 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 obligations for 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))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
Ex-99.1 Press release dated January 24, 2006

Item 2.02. Results of Operations and Financial Condition.

     On January 24, 2006, PAREXEL International Corporation announced its financial results for the fiscal quarter ended December 31, 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 January 24, 2006.

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: January 24, 2006	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 January 24, 2006.

EX-99.1

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

PAREXEL REPORTS SECOND QUARTER FISCAL 2006 FINANCIAL RESULTS

- Achieves record quarterly service revenue and backlog -

Boston, MA, January 24, 2006 — PAREXEL International Corporation (Nasdaq: PRXL) today announced its financial results for the second quarter of Fiscal 2006 ended December 31, 2005.

For the three months ended December 31, 2005, PAREXEL’s consolidated service revenue increased 10.3% to $149.8 million compared with $135.8 million in the prior year period. The Company reported operating income of $10.6 million, versus operating income of $7.5 million in the comparable quarter of the prior year. The operating margin in the quarter ended December 31, 2005 was 7.1%, compared to 5.5% in the December quarter one year ago. Net income for the quarter was $5.0 million, or earnings of $0.19 per diluted share, compared with net income of $6.1 million, or $0.23 per diluted share, for the quarter ended December 31, 2004.

On a segment basis, consolidated service revenue for the second quarter of Fiscal 2006 was $108.9 million in Clinical Research Services, $27.2 million in PAREXEL Consulting and Marketing Services, and $13.7 million in Perceptive Informatics, Inc.

For the six months ended December 31, 2005, consolidated service revenue was $288.1 million versus $266.2 million in the prior year period, an increase of 8.2%. Operating income for the current six-month period was $15.6 million compared with operating income of $16.0 million in the prior year period. On a proforma basis, excluding the net effect of $0.9 million in first quarter of Fiscal 2006 special charges and restructuring reserve adjustments, which are detailed in the attached financial tables, operating income for the current six-month period was $16.5 million. Net income for the six months ended December 31, 2005 was $8.4 million or $0.31 per diluted share, compared with net income of $11.7 million, or $0.44 per diluted share in the prior year period. On a proforma basis, excluding the first quarter of Fiscal 2006 charges and adjustments, net income for the current six-month period was $9.2 million or $0.34 per diluted share.

New business and backlog were strong in the quarter. The backlog increased sequentially by 8.1% from the September 30, 2005 backlog to $844.7 million, a year-over-year increase of 17.2% from the backlog reported at December 31, 2004, which was $721.0 million. Adding the December quarter’s gross new business wins of $230.4 million to the September 30, 2005 ending backlog of $781.5 million, then subtracting $149.8 million in current quarter service revenue and $17.4 million in cancellations, resulted in record backlog of $844.7 million as of December 31, 2005.

Mr. Josef H. von Rickenbach, PAREXEL’s Chairman and Chief Executive Officer stated, “We believe that the improvements we have made to the Company’s sales functions, including new leadership, are beginning to bear fruit. We are pleased with our strong new business wins and the

significant increase in backlog. Important factors contributing to this quarter’s new business success included strong demand from small and emerging biopharmaceutical companies, an improved win rate on proposals, and low cancellations. The overall market for our services appears to be healthy. We are encouraged by the improvements in our operating performance, and will continue to seek out and capitalize on opportunities to further expand our business and improve profitability.”

The Company issued forward-looking guidance for the third quarter of Fiscal 2006 (ending March 31, 2006), for Fiscal 2006, and for Calendar 2006. For the third quarter, the Company anticipates reporting consolidated service revenue in the range of $151 to $156 million and GAAP earnings per diluted share in the range of $0.21 to $0.24. For Fiscal 2006, consolidated service revenue is expected to be in the range of $600 to $610 million (at current exchange rates), GAAP earnings per diluted share are projected to be in the range of $0.79 to $0.87, and proforma earnings per diluted share are projected to be in the range of $0.82 to $0.90, excluding the $0.9 million in charges and $0.1 million in associated tax benefits recorded in the first quarter of Fiscal 2006, or $0.03 per diluted share. Previously issued guidance for Fiscal 2006 included revenue of between $590 to $610 million, GAAP earnings per diluted share of $0.77 to $0.87, and proforma earnings per diluted share of $0.80 to $0.90 (proforma information excludes the first quarter items noted above). For Calendar 2006, consolidated service revenue is expected to be in the range of $620 to $640 million (at current exchange rates). GAAP earnings per diluted share are projected to be in the range of $0.93 to $1.08. The earnings per share estimates include the impact of recording stock-based compensation expense under the new accounting standards for equity grants, which is currently estimated to be $0.04 per diluted share for the third quarter of Fiscal 2006, $0.12 per diluted share for Fiscal 2006, and $0.16 per diluted share for Calendar 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 conference call to discuss PAREXEL’s second quarter earnings, business, and financial outlook will begin at 10 a.m. ET Wednesday, January 25^th 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 612-332-0819 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 39 countries around the world, and has 5,360 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 third quarter, Fiscal 2006, and Calendar 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; the loss, modification, or delay of contracts which would, among other things, adversely impact the Company’s recognition of revenue included in backlog; the amendment or interpretation of Financial Accounting Standards Board Statement No. 123 (revised 2004), Share-Based Payment (“Statement 123R”), which could change the Company’s current assessment of the effects of the adoption of Statement 123R on the acceleration of equity grants, the assumptions inherent in equity pricing models under Statement 123R and the final results of the closing of the Company’s books for future financial periods; 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; 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 September 30, 2005 as filed with the SEC on November 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 December 31,
	2005			2004
	As Reported			As Reported			June 30, 0000
Service revenue	$	149,762		$	135,759
Reimbursement revenue		33,749			33,821
Total revenue		183,511			169,580
Costs and expenses:
Direct costs		98,536			88,848
Reimbursable out-of-pocket expenses		33,749			33,821
Selling, general and administrative		34,254			32,619
Depreciation and amortization		6,393			6,781
Income from operations		10,579			7,511
Other income		641			1,789
Income before income taxes		11,220			9,300
Provision for income taxes		6,299			3,199
Effective tax rate		56.1	%		34.4	%
Minority interest (benefit) expense		(123	)		35
Net income	$	5,044		$	6,066
Earnings per common share:
Basic	$	0.19		$	0.23
Diluted	$	0.19		$	0.23
Shares used in computing earnings per common share:
Basic		26,441			26,059
Diluted		26,788			26,606

Balance Sheet Information	(Preliminary)
	Dec 31,			Sept 30,			June 30,
	2005			2005			2005
Billed accounts receivable, net	$	117,565		$	130,117		$	123,779
Unbilled accounts receivable, net		90,417			89,953			94,108
Deferred revenue		(138,052	)		(134,745	)		(132,241	)
Net receivables	$	69,930		$	85,325		$	85,646
Cash and marketable securities	$	111,958		$	87,973		$	88,622
Working capital	$	120,219		$	121,413		$	120,301
Total assets	$	489,217		$	478,717		$	475,736
Stockholders’ equity	$	214,102		$	211,174		$	205,571
Quarterly Supplemental Financial Data
Total revenue	$	183,511		$	169,568		$	178,116
Investigator fees		21,848			16,980			19,877
Gross revenue	$	205,359		$	186,548		$	197,993
DSO		31			42			39

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

	Unaudited
	For the six months ended December 31,
	2005									2004
	As Reported			Adjustments			Proforma			As Reported
Service revenue	$	288,142					$	288,142		$	266,181
Reimbursement revenue		64,937						64,937			60,996
Total revenue		353,079			—			353,079			327,177
Costs and expenses:
Direct costs		192,159			(519	)(a)		191,640			172,537
Reimbursable out-of-pocket expenses		64,937						64,937			60,996
Selling, general and administrative		68,305			(1,081	)(a)		67,224			64,461
Depreciation and amortization		12,763						12,763			13,191
Restructuring expense		(679	)		679	(b)		—			—
Income from operations		15,594			921			16,515			15,992
Other income		1,678						1,678			2,442
Income before income taxes		17,272			921			18,193			18,434
Provision for income taxes		9,377			107			9,484			6,734
Effective tax rate		54.3	%					52.1	%		36.5	%
Minority interest benefit		(467	)					(467	)		(22	)
Net income	$	8,362		$	814		$	9,176		$	11,722
Earnings per common share:
Basic	$	0.32					$	0.35		$	0.45
Diluted	$	0.31					$	0.34		$	0.44
Shares used in computing earnings per common share:
Basic		26,401						26,401			26,034
Diluted		26,651						26,651			26,581

(a)	Represents a special charge for compensation expense in conjunction with the acquisition of the Perceptive minority interest.
(b)	Represents a $1.2 million reduction to the existing restructuring reserve as a result of changes in assumptions related to the June 2005 restructuring charge, which was partially offset by $0.5 million in new severance-related restructuring activity.

PAREXEL International Corporation
Segment Information
($ in thousands)

	For the three months ended
	December 31,
	2005			2004
Clinical Research Services (CRS)
Service revenue	$	108,866		$	94,284	(a)
% of total service revenue		72.7	%		69.4	%
Gross profit	$	38,411		$	33,071	(a)
Gross margin % of service revenue		35.3	%		35.1	%
PAREXEL Consulting & Marketing Services (PCMS)
Service revenue	$	27,196		$	30,758	(a)
% of total service revenue		18.2	%		22.7	%
Gross profit	$	7,253		$	9,018	(a)
Gross margin % of service revenue		26.7	%		29.3	%
Perceptive Informatics, Inc. (PII)
Service revenue	$	13,700		$	10,717
% of total service revenue		9.1	%		7.9	%
Gross profit	$	5,562		$	4,822
Gross margin % of service revenue		40.6	%		45.0	%
Total service revenue	$	149,762		$	135,759
Total gross profit	$	51,226		$	46,911
Gross margin % of service revenue		34.2	%		34.6	%

(a) Fiscal 2005 numbers have been adjusted to reflect Fiscal 2006 presentation. Certain components of the PCMS business were moved to CRS retroactive to July 1, 2004.

PAREXEL International Corporation
Segment Information
($ in thousands)

	For the six months ended
	December 31,
	2005									2004
	As Reported			Adjustments			Proforma			As Reported
Clinical Research Services (CRS)
Service revenue	$	208,214					$	208,214		$	183,862	(b)
% of total service revenue		72.3	%					72.3	%		69.1	%
Gross profit	$	70,637					$	70,637		$	64,610	(b)
Gross margin % of service revenue		33.9	%					33.9	%		35.1	%
PAREXEL Consulting & Marketing Services (PCMS)
Service revenue	$	53,941					$	53,941		$	62,373	(b)
% of total service revenue		18.7	%					18.7	%		23.4	%
Gross profit	$	15,232					$	15,232		$	20,069	(b)
Gross margin % of service revenue		28.2	%					28.2	%		32.2	%
Perceptive Informatics, Inc. (PII)
Service revenue	$	25,987					$	25,987		$	19,946
% of total service revenue		9.0	%					9.0	%		7.5	%
Gross profit	$	10,114		$	519	(a)	$	10,633		$	8,965
Gross margin % of service revenue		38.9	%					40.9	%		44.9	%
Total service revenue	$	288,142					$	288,142		$	266,181
Total gross profit	$	95,983		$	519		$	96,502		$	93,644
Gross margin % of service revenue		33.3	%					33.5	%		35.2	%

(a)	Represents a special charge for compensation expense in conjunction with the acquisition of the Perceptive minority interest.
(b)	Fiscal 2005 numbers have been adjusted to reflect Fiscal 2006 presentation. Certain components of the PCMS business were moved to CRS retroactive to July 1, 2004.