Kendle International Q4 Profit Beats; to Cut Jobs in Q1

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CINCINNATI, Feb. 24 /PRNewswire-FirstCall/ -- Kendle , a leading, global full-service clinical research organization, today reported its results for the fourth quarter and full-year 2009. Net income for the fourth quarter of 2009 was $2.3 million or $0.16 per diluted share. On a non-GAAP basis, net income for the fourth quarter of 2009 was $6.5 million or $0.44 per diluted share, compared with $5.1 million or $0.34 per diluted share for the fourth quarter of 2008, an increase in EPS of 29.4 percent.

Net revenues for the fourth quarter ended Dec. 31, 2009, were $96.6 million, compared with $109.2 million for the same period of the prior year.

New business awards for the fourth quarter of 2009 totaled $134.7 million versus $137.2 million in the third quarter of 2009. Gross book-to-bill for the quarter improved sequentially over the third quarter of 2009 to 1.4 to 1.0. As a result of contract cancellations and adjustments arising outside of the control of the Company during the quarter, the net book-to-bill is 0.8 to 1.0. Gross new business awards for the full-year 2009 totaled $486.0 million. Total business authorizations amounted to $829.5 million at Dec. 31, 2009.

During the fourth quarter of 2009, the Company repurchased $5.5 million par value of its convertible notes in the open market for a total cost of $4.9 million. For the full-year 2009, the Company repurchased $45.5 million par value of its convertible notes for a total cost of $36.5 million. As a result of this repurchase program, interest expense will be reduced by $11.0 million over the remaining term of the convertible notes, with $1.5 million realized in the Company's 2009 results. The convertible notes mature in July 2012.

Cash, cash equivalents and marketable securities at Dec. 31, 2009, totaled $53.2 million compared with $36.1 million at Dec. 31, 2008. Days sales outstanding in accounts receivables were 34 days compared with 35 days at Dec. 31, 2008. Capital expenditures for the quarter totaled $4.8 million and for the year totaled $19.0 million. Capital expenditures for both the quarter and the full year primarily include investments in IT infrastructure related to the Company's implementation of a global ERP system.

In an effort to balance staffing levels with customer demand and sales, the Company is reducing its staffing levels in the first quarter of 2010. As a result of this initiative, the Company is taking a severance charge in the fourth quarter of 2009 of approximately $3.8 million. Once fully implemented, we anticipate this initiative will deliver cost reductions in the range of $16 million to $18 million in 2010 or between $21 million and $23 million on an annualized basis.

For the full-year 2009, net revenues were $416.7 million, compared with $475.1 million for the full-year 2008. Operating income for the 12-month period ended Dec. 31, 2009 was $35.6 million or 8.5 percent of net revenues. On a non-GAAP basis, excluding the restructuring charges taken in 2009, operating income for the full year 2009 was $45.7 million or 11.0 percent compared with $56.8 million or 12.0 percent for the full-year 2008.

On a non-GAAP basis, net income for the full-year 2009, as adjusted, was $31.1 million or $2.07 per diluted share compared with $29.8 million or $1.99 per diluted share for the full-year 2008.

Given the continued volatility in the CRO market, particularly with regard to late stage project cancellations and delays, the Company will not be reinstating guidance at this time. The Company continues to review its guidance policy on an ongoing basis.

Kendle will host its Fourth Quarter 2009 conference call on Feb. 25, 2010, at 8 a.m. Eastern Time. The call will be broadcast live over the Internet and can be accessed at www.kendle.com. A replay of the Webcast will be available at www.kendle.com shortly after the call for on-demand replay through 5 p.m. Eastern Time on March 25, 2010.

This press release contains adjustments to net service revenues, income from operations, net income and earnings per share calculated in accordance with generally accepted accounting principles ("GAAP") in the United States. The non-GAAP reconciliation can be found on page 7 of this press release. These adjusted or "pro forma" results are and should be read in connection with the reconciliation provided in this press release. We believe that investors' understanding of performance is enhanced by disclosing these non-GAAP financial measures as a reasonable basis for comparison of our ongoing results of operations. Non-GAAP measures should not be considered a substitute for GAAP-based measures and results. Our non-GAAP measures may not be comparable to non-GAAP measures of other companies.

Kendle International Inc. is a leading global clinical research organization providing the full range of early- to late-stage clinical development services for the world's biopharmaceutical industry. Our focus is on innovative solutions that reduce cycle times for our customers and accelerate the delivery of life-enhancing drugs to market for the benefit of patients worldwide. As one of the world's largest global providers of Phase I-IV services, we offer experience spanning more than 100 countries, along with industry-leading patient access and retention capabilities and broad therapeutic expertise, to meet our customers' clinical development challenges.

Forward-Looking Statements

CONTACT: Michael Lawson, Investors, +1-513-763-1992, Lori Dorer, Media,
+1-513-345-1685

Web site: http://www.kendle.com/

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