EX-99.1 2 b69787piexv99w1.htm EX-99.1 PRESS RELEASE DATED APRIL 23, 2008 exv99w1
 

Exhibit 99.1
(PAREXEL LOGO)
FOR IMMEDIATE RELEASE
CONTACTS:   James Winschel, Senior Vice-President and Chief Financial Officer
Jill Baker, Vice President of Investor Relations
+1-781-434-4118
PAREXEL REPORTS THIRD QUARTER FISCAL YEAR 2008 FINANCIAL RESULTS
  •   Consolidated service revenue of $245.3 million grows 28% year-over-year
 
  •   Diluted earnings per share in the quarter were $0.25
 
  •   Backlog increases approximately 37% year-over-year to $1.9 billion; net quarterly book-to-burn ratio equates to 1.52
Boston, MA, April 23, 2008 — PAREXEL International Corporation (NASDAQ: PRXL) today announced its financial results for the third quarter and nine months ended March 31, 2008. The past and current period results reflect a two-for-one stock split which occurred on March 3, 2008.
For the three months ended March 31, 2008, PAREXEL’s consolidated service revenue increased 28.3% to a record $245.3 million, compared with $191.2 million in the prior year period. The Company reported operating income of $22.7 million, or 9.3% of consolidated service revenue, in the third quarter of Fiscal Year 2008, versus operating income of $15.5 million, or 8.1% of consolidated service revenue, in the comparable quarter of the prior year. This represented a year-over-year increase of 46.8%. Included in these results was a favorable pre-tax restructuring benefit of $860,000 in the third quarter of Fiscal Year 2008, as noted in the financial charts contained within this press release. Net income for the quarter totaled $14.2 million, or $0.25 per diluted share, compared with net income of $10.8 million, or $0.19 per diluted share for the quarter ended March 31, 2007, an increase of 31.6%.
On a segment basis, consolidated service revenue for the third quarter of Fiscal Year 2008 consisted of $191.5 million in Clinical Research Services (CRS), $33.5 million in PAREXEL Consulting and Medical Communications (PCMS), and $20.3 million in Perceptive Informatics, Inc.
For the nine months ended March 31, 2008, consolidated service revenue was $692.1 million, versus $536.7 million in the prior year period, an increase of 29.0%. Operating income for the current nine-month period was $59.7 million, or 8.6% of consolidated service revenue, compared with operating income of $40.7 million, or 7.6% of consolidated service revenue in the comparable prior year period. Net income for the nine months ended March 31, 2008 was $39.6 million or $0.69 per diluted share, compared with net income of $26.9 million, or $0.48 per diluted share in the prior year period.
PAREXEL’s backlog increased approximately 37% year-over-year, and 7% sequentially from the December 31, 2007 quarter, to $1.9 billion at the end of the March quarter. As of December 31, 2007, PAREXEL’s backlog totaled $1.778 billion. Adding the March quarter’s gross new business wins of $423.5 million to that amount, and subtracting $245.3 million in current quarter service revenue and $49.5 million in cancellations, resulted in a record backlog of $1.91 billion as of March 31, 2008. These results equate to a net book-to-burn ratio of 1.52.

 

 

Mr. Josef H. von Rickenbach, PAREXEL’s Chairman and Chief Executive Officer stated, “The Company’s financial results marked another quarter of significant growth in revenue, operating income, and earnings per share. From our perspective, industry dynamics remain positive. Our backlog is within reach of the $2 billion mark, with healthy levels of new business wins from all three of our business segments contributing to this quarter’s results. The new business proposal pipeline is robust, and the strength of our competitive position gives us confidence that we will continue to win significant levels of new business, helping us to achieve the goals that we have established for the remainder of Fiscal Year 2008 and beyond.”
The Company issued forward-looking guidance for the fourth quarter of Fiscal Year 2008 (ending June 30, 2008), for Fiscal Year 2008, and for Calendar Year 2008, using recent exchange rates. For the fourth quarter, the Company anticipates reporting consolidated service revenue in the range of $255 to $265 million and earnings per diluted share in the range of $0.25 to $0.26. For Fiscal Year 2008, consolidated service revenue is expected to be in the range of $947 to $957 million and earnings per diluted share are projected to be in the range of $0.94 to $0.96. (Previously issued guidance for Fiscal Year 2008 included service revenue of between $935 and $955 million and earnings per diluted share of $0.89 to $0.92). For Calendar Year 2008, expectations are for consolidated service revenue to be in the range of $1.02 to $1.05 billion, and earnings per diluted share to be in the range of $0.98 to $1.02. (Previously issued Calendar Year 2008 guidance projected service revenue of $1.0 billion to $1.04 billion and earnings per diluted share in the range of $0.92 to $0.97).
The Company believes that presenting the proforma information 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. 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 third quarter earnings, business, and financial outlook will begin at 10:00 a.m. ET on Thursday, April 24th 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) 234-9960 and ask to join the PAREXEL quarterly conference call.
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 Boston, Massachusetts, PAREXEL operates in 63 locations throughout 52 countries around the world, and has over 7,680 employees. For more information about PAREXEL International visit www.PAREXEL.com.
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 fourth quarter of Fiscal Year 2008, Fiscal Year 2008, and Calendar Year 2008. 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; 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 December 31, 2007 as filed with the SEC on February 7, 2008, 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 Income
(In thousands, except per share data)
                 
    Unaudited  
    For the three months ended March 31,  
    2008     2007  
Service revenue
   $ 245,336     $ 191,215  
Reimbursement revenue
     49,387       49,404  
 
            
Total revenue
     294,723       240,619  
 
                
Costs and expenses:
                
Direct costs
     161,263       124,288  (a)
Reimbursable out-of-pocket expenses
     49,387       49,404  
Selling, general and administrative
     52,819       43,277  (a)
Depreciation
     8,162       6,702  
Amortization
     1,231       1,473  
Restructuring benefit
     (860 )     —  
 
            
Total costs and expenses
     272,002       225,144  
 
                
Income from operations
     22,721       15,475  
 
                
Other income
     352       292  
 
            
 
                
Income before income taxes
     23,073       15,767  
 
                
Provision for income taxes
     8,586       5,071  
Effective tax rate
     37.2 %     32.2 %
 
                
Minority interest expense (benefit)
     301       (101 )
 
            
 
                
Net income
   $ 14,186     $ 10,797  
 
            
 
                
Earnings per common share:
                
Basic
   $ 0.25     $ 0.20  
Diluted
   $ 0.25     $ 0.19  
 
                
Shares used in computing earnings per common share:
                
Basic
     56,108       54,865  
Diluted
     57,765       56,220  
                         
    Preliminary              
    Mar 31,     Dec 31,     June 30,  
Balance Sheet Information   2008     2007     2007  
Billed accounts receivable, net
   $ 216,060     $ 221,476     $ 189,843  
Unbilled accounts receivable, net
     197,627       163,251       135,178  
Deferred revenue
     (199,121 )     (200,093 )     (170,718 )
 
                  
Net receivables
   $ 214,566     $ 184,634     $ 154,303  
 
                  
 
                        
Cash and marketable securities
   $ 53,313     $ 62,926     $ 96,677  
Working capital
   $ 165,437     $ 108,877     $ 118,746  
Total assets
   $ 859,638     $ 809,549     $ 680,013  
Short-term borrowings
   $ 13,656     $ 60,453     $ 30,463  
Long-term debt
   $ 38,443     $ 231     $ 277  
Stockholders’ equity
   $ 397,267     $ 363,403     $ 316,616  
 
(a)   FY 2007 numbers have been adjusted to reflect FY 2008 presentation. Certain direct costs have been moved to selling, general and administrative to ensure consistency among all business segments.

 

 

PAREXEL International Corporation
Consolidated Condensed Statement of Income
(In thousands, except per share data)
                 
    Unaudited  
    For the nine months ended March 31,  
    2008     2007  
Service revenue
   $ 692,114     $ 536,746  
Reimbursement revenue
     138,929       127,376  
 
            
Total revenue
     831,043       664,122  
 
                
Costs and expenses:
                
Direct costs
     454,316       352,406  (a)
Reimbursable out-of-pocket expenses
     138,929       127,376  
Selling, general and administrative
     151,365       121,425  (a)
Depreciation
     24,050       19,453  
Amortization
     3,512       2,873  
Restructuring benefit
     (860 )     (74 )
 
            
Total costs and expenses
     771,312       623,459  
 
                
Income from operations
     59,731       40,663  
 
                
Other income (expense)
     (403 )     1,598  
 
            
 
                
Income before income taxes
     59,328       42,261  
 
                
Provision for income taxes
     19,149       15,369  
Effective tax rate
     32.3 %     36.4 %
 
                
Minority interest expense
     577       38  
 
            
 
                
Net income
   $ 39,602     $ 26,854  
 
            
 
                
Earnings per common share:
                
Basic
   $ 0.71     $ 0.49  
Diluted
   $ 0.69     $ 0.48  
 
                
Shares used in computing earnings per common share:
                
Basic
     55,662       54,484  
Diluted
     57,380       56,004  
 
(a)   FY 2007 numbers have been adjusted to reflect FY 2008 presentation. Certain direct costs have been moved to selling, general and administrative to ensure consistency among all business segments.

 

 

PAREXEL International Corporation
Segment Information
($ in thousands)
                 
    Three months ended  
    March 31,  
    2008     2007 (a)  
Clinical Research Services (CRS)
                
 
                
Service revenue
   $ 191,572     $ 143,461  
% of total service revenue
     78.1 %     75.0 %
Gross profit
   $ 65,007     $ 50,204  
Gross margin % of service revenue
     33.9 %     35.0 %
 
                
PAREXEL Consulting & Medical Communications Services (PCMS)
                
 
                
Service revenue
   $ 33,484     $ 29,707  
% of total service revenue
     13.6 %     15.5 %
Gross profit
   $ 11,328     $ 8,916  
Gross margin % of service revenue
     33.8 %     30.0 %
 
                
Perceptive Informatics, Inc. (PII)
                
 
                
Service revenue
   $ 20,280     $ 18,047  
% of total service revenue
     8.3 %     9.5 %
Gross profit
   $ 7,738     $ 7,807  
Gross margin % of service revenue
     38.2 %     43.3 %
 
                
Total service revenue
   $ 245,336     $ 191,215  
Total gross profit
   $ 84,073     $ 66,927  
Gross margin % of service revenue
     34.3 %     35.0 %
 
                
Revenue by Geography
                
 
                
The Americas
   $ 99,735     $ 76,682  
Europe, Middle East & Africa
     129,105       104,025  
Asia/Pacific
     16,496       10,508  
 
            
Total service revenue
   $ 245,336     $ 191,215  
 
            
 
                
Quarterly Supplemental Financial Data
                
 
                
Total revenue
   $ 294,723     $ 240,619  
Investigator fees
     38,496       29,214  
 
            
Gross revenue
   $ 333,219     $ 269,833  
 
            
 
                
DSO
     59       43  
 
                
Capital expenditures
   $ 18,794     $ 9,530  
 
(a)   FY 2007 numbers have been adjusted to reflect FY 2008 presentation. Certain direct costs have been moved to selling, general and administrative to ensure consistency among all business segments.

 

 

PAREXEL International Corporation
Segment Information
($ in thousands)
                 
    Nine months ended  
    March 31,  
    2008     2007 (a)  
Clinical Research Services (CRS)
                
 
                
Service revenue
   $ 533,606     $ 396,161  
% of total service revenue
     77.1 %     73.8 %
Gross profit
   $ 180,232     $ 135,641  
Gross margin % of service revenue
     33.8 %     34.2 %
 
                
PAREXEL Consulting & Medical Communications Services (PCMS)
                
 
                
Service revenue
   $ 96,541     $ 87,326  
% of total service revenue
     13.9 %     16.3 %
Gross profit
   $ 32,051     $ 25,627  
Gross margin % of service revenue
     33.2 %     29.3 %
 
                
Perceptive Informatics, Inc. (PII)
                
 
                
Service revenue
   $ 61,967     $ 53,259  
% of total service revenue
     9.0 %     9.9 %
Gross profit
   $ 25,515     $ 23,072  
Gross margin % of service revenue
     41.2 %     43.3 %
 
                
Total service revenue
   $ 692,114     $ 536,746  
Total gross profit
   $ 237,798     $ 184,340  
Gross margin % of service revenue
     34.4 %     34.3 %
 
                
Revenue by Geography
                
 
                
The Americas
   $ 272,659     $ 212,301  
Europe, Middle East & Africa
     369,992       297,335  
Asia/Pacific
     49,463       27,110  
 
            
Total service revenue
   $ 692,114     $ 536,746  
 
            
 
(a)   FY 2007 numbers have been adjusted to reflect FY 2008 presentation. Certain direct costs have been moved to selling, general and administrative to ensure consistency among all business segments.