PAREXEL International Reports Fourth Quarter And Fiscal Year 2015 Results; Confirms Previous Revenue And Adjusted EPS Guidance For Fiscal Year 2016

BOSTON, Aug. 5, 2015 /PRNewswire/ --

Fourth Quarter Fiscal Year 2015 Results (compared to Fourth Quarter Fiscal Year 2014)

• Adjusted earnings per share of $0.79, up 21.5%; GAAP diluted earnings per share of $0.61
• Gross new business wins of $818 million, up 11%; net book-to-bill of 1.19; backlog at $5.3 billion
• Service revenue of $523 million, up 2.4%; constant currency revenue growth of 5.4%
• SG&A as a percent of service revenue decreased by 470 basis points
• Restructuring charge of $20 million in fourth quarter 2015 related to Margin Acceleration Program
• Adjusted operating margin of 10.8%; GAAP operating margin of 7.5%

Fiscal Year 2015 Results (compared to Fiscal Year 2014)

• Adjusted earnings per share of $2.79, up 28.6%; GAAP diluted earnings per share of $2.65
• Gross new business wins of $3.35 billion; net book-to-bill of 1.23; backlog up 6.5%
• Service revenue of $2.0 billion, up 4%; constant currency revenue growth of 5.9%
• Adjusted operating margin of 10.7%, up 40 basis points; GAAP operating margin of 9.9%

PAREXEL International Corporation (NASDAQ: PRXL) today reported financial results for the fourth quarter and Fiscal Year 2015, which ended on June 30, 2015. 

In commenting on PAREXEL's results for the quarter and Fiscal Year, Mr. Josef H. von Rickenbach, Chairman and Chief Executive Officer, stated, "PAREXEL delivered double-digit adjusted EPS growth and achieved solid new business wins in the fourth quarter. Clinical Research Services (CRS) continued to make progress in line with our expectations, and the integration of QSI, which we acquired in the quarter, is on track. On the back of solid momentum in biopharmaceutical R&D, we finished the fourth quarter with a strong backlog and business development pipeline."

Mr. von Rickenbach continued, "We are committed to building on this positive momentum in the industry in Fiscal Year 2016, and we believe we have laid the foundation for strong performance. PAREXEL has the expertise and broad range of services to address the increased complexity of drug development and client requirements. Successful implementation of our Margin Acceleration Program will enable us to execute more profitably. In addition, we expect CRS to enter a more favorable operating cycle as more projects move out of the start-up stage. We believe this paves the way for stronger backlog conversion as the Fiscal Year unfolds. Leveraging these positive dynamics, we expect to deliver accelerated profitable growth, especially in the second half of the Fiscal Year."

Fourth Quarter Fiscal Year 2015 Results
For the three months ended June 30, 2015 PAREXEL's service revenue increased 2.4% to $523.0 million, compared with $510.6 million in the prior-year period. The negative impact from foreign currency exchange rate movements on revenue in the quarter was $15.2 million.  The acquisition of Quantum Solutions India (QSI), a leading provider of specialized pharmacovigilance services, closed in April 2015 and contributed $6.0 million to revenue in the fourth quarter. On a comparable basis, revenue growth was 4.2% year-over-year.  A restructuring charge of $20.0 million was recorded in the fourth quarter related to PAREXEL's ongoing Margin Acceleration Program. Operating income as reported under Generally Accepted Accounting Principles (GAAP) totaled $39.3 million, or 7.5% of service revenue, in the fourth quarter of Fiscal Year 2015, as compared with $58.8 million, or 11.5% of service revenue, in the comparable quarter of the prior year.  GAAP net income for the quarter totaled $34.2 million, or $0.61 per diluted share, compared with GAAP net income of $40.1 million, or $0.70 per diluted share, for the quarter ended June 30, 2014.  GAAP diluted earnings per share declined 12.9% year-over-year.

The financial results of the June quarter in the current and prior-year period each included items outside of the Company's normal operations, as detailed in the financial tables within this press release.  Adjusted operating income in the fourth quarter of Fiscal Year 2015 was $56.5 million, or 10.8% of service revenue.  Adjusted operating income in the fourth quarter of Fiscal Year 2014 was $57.2 million, or 11.2% of service revenue.  Adjusted net income was $44.3 million, or $0.79 per diluted share, in the quarter ended June 30, 2015, and was $37.5 million, or $0.65 per diluted share, in the quarter ended June 30, 2014.  Adjusted earnings per share grew 21.5% year-over-year.

On a segment basis, service revenue for the fourth quarter of Fiscal Year 2015 was $403.3 million in CRS, $53.5 million in PAREXEL Consulting (PC), and $66.2 million in PAREXEL Informatics (PI).

Fiscal Year 2015 Results
On a GAAP basis for the full Fiscal Year ended June 30, 2015, service revenue was $2.016 billion versus $1.939 billion in the prior year, a year-over-year increase of 4%.  Excluding the negative impact from foreign currency exchange rate movements of approximately $37.0 million in Fiscal Year 2015, and $6.0 million of revenue from the QSI acquisition, revenue growth was 5.5% year-over-year.  After recording a net restructuring charge of $19.8 million in Fiscal Year 2015, GAAP operating income was $199.9 million, or 9.9% of service revenue, compared with GAAP Fiscal Year 2014 operating income of $199.5 million, or 10.3% of service revenue. Net income on a GAAP basis for Fiscal Year 2015 was $147.8 million, or $2.65 per diluted share, compared with GAAP net income of $129.1 million, or $2.25 per diluted share, in Fiscal Year 2014.  On a GAAP basis, net income in the current year increased 14.5%, and earnings per diluted share increased 17.8% year-over-year. 

The financial results of the Fiscal Year in the current and prior year period each included items outside of the Company's normal operations, as detailed in the financial tables within this press release.  Adjusted operating income was $216.4 million, or 10.7% of service revenue in Fiscal Year 2015, compared with adjusted operating income of $200.1 million, or 10.3% of service revenue, in Fiscal Year 2014.  On this basis, adjusted operating income in Fiscal Year 2015 increased 8.1% year-over-year.  Adjusted net income in Fiscal Year 2015 was $155.9 million, or $2.79 per diluted share, compared with adjusted net income of $124.8 million, or $2.17 per diluted share, in Fiscal Year 2014.  Adjusted net income in the current fiscal year increased 24.9% and adjusted earnings per diluted share increased 28.6% year-over-year. 

On a segment basis, service revenue for Fiscal Year 2015 was $1.535 billion in CRS, $216.0 million in PC, and $264.7 million in PI.

New Business and Backlog
Backlog at the end of June 2015 was $5.3 billion, an increase of 6.5% year-over-year.  The reported backlog included gross new business wins in the fourth quarter of $817.5 million, cancellations of $193.1 million, and a positive impact from foreign currency exchange rates of $26.5 million. The net book-to-bill ratio was 1.19 in the quarter. 

Forward-looking Guidance
The Company issued forward-looking guidance for the first quarter of Fiscal Year 2016 (ending September 30, 2015) and confirmed its prior revenue and EPS guidance for Fiscal Year 2016 as detailed in the chart below.  The guidance takes into account a number of factors, including recent foreign currency exchange rates, tax rates, and the Company's updated overall outlook.

The Company's guidance is:

*Adjusted diluted EPS guidance for FY 2016 excludes anticipated charges related to the Company's on-going restructuring program, known as the Margin Acceleration Program, as detailed in a table contained within this release.

Additional Information
In addition to the financial measures prepared in accordance with GAAP, the Company uses certain non-GAAP financial measures.  The Company believes that presenting the non-GAAP financial measures 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, because such measures exclude items that are outside of the Company's normal operations and/or, in certain cases, are difficult to forecast accurately for future periods.  Management uses non-GAAP financial measures, in addition to the measures prepared in accordance with GAAP, 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 for the same reasons stated above.  Such measures are also used by management in its financial and operating decision-making.  Non-GAAP financial measures are 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 Fourth Quarter and Fiscal Year 2015 earnings, business, and financial outlook will begin at 10:00 a.m. ET on Thursday, August 6, 2015 and will be broadcast live over the internet via webcast.  The webcast may be accessed in the "IR Calendar" portion of the main page of the Investors section of the Company's website at www.PAREXEL.com.  

To read full press release, please click here.

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