PDI, Inc. Reports 2015 Second Quarter And Six Months Financial Results

PARSIPPANY, N.J., Aug. 13, 2015/PRNewswire/ -- PDI, Inc. (NASDAQ: PDII) today reported financial and operational results for the second quarter and six months ended June 30, 2015.

Net revenue for the second quarter of 2015 was $36.3 million, an increase of 17.2% over $31.0 million in the second quarter of 2014. Net revenue from Commercial Services was $34.1 million for the second quarter of 2015, an increase of approximately 10% from the second quarter of 2014. Interpace Diagnostics net revenue was $2.3 million for the second quarter of 2015, up slightly from the first quarter. Interpace net revenue included a limited contribution from thyroid tests due to the anticipated lag in collections from these newly launched tests. Gross profit for the second quarter of 2015 was $6.1 million, or 16.8% of net revenue, as compared to $5.2 million, or 16.7% of net revenue in 2014, reflecting a positive impact from our diagnostics revenues.  Total operating expenses for the period were $12.0 million as compared to $6.3 million for the same period in 2014 due primarily to investment spending related to the company's molecular diagnostic strategic initiative.  The loss from continuing operations before income tax for the second quarter of 2015 was $6.9 million versus $1.1 million for the second quarter of 2014.

"Our results in the second quarter demonstrate that our commercialization services business is capitalizing on the momentum built in the first quarter.  Our Commercial Services team delivered as we signed multiple new contracts with a total value of approximately $45 million.  These contracts were signed with healthcare clients in a variety of fields including pharmaceuticals and medical devices. With these wins along with our strong performance in the first half of the year, the RFP pipeline remains active," commented Nancy Lurker, president and chief executive officer of PDI, Inc.  "At the same time we are executing our molecular diagnostic product strategy.  We saw combined test volumes for PancraGen and ThyGenX increase 19% sequentially.  We also recently received additional, favorable coverage policies from three managed care providers, one in the top ten, and gained coverage from Aetna in the second quarter, bringing our total covered lives for all tests combined to over 100 million patients.

"We continue to see strong clinical data supporting our three commercialized molecular diagnostics tests with published results in several well regarded, peer reviewed journals," Ms. Lurker continued.  "Additionally, we remain on track to introduce our fourth test this year with our multistage launch of BarreGen for Barrett's Esophagus, our second gastrointestinal diagnostic.  We are expecting to initiate the introduction to a group of select doctors during the third quarter, with a full commercial launch of BarreGen in 2016."

Recent Operational Highlights

Progress Report

• Commercialization Services RFP pipeline remains strong at approximately $275 million at the close of the second quarter.
• Year to date, the Company has signed multiple commercial services contracts valued at approximately $45 million.
• The combined molecular diagnostic tests ordered during the second quarter were approximately 2,000, an increase of 19% over the 2015 first quarter.
• Commercial launch of the Company's third molecular diagnostic assay, ThyraMIR, in April. The test is the first and only mircoRNA gene expression classifier "rule out" test for cancer risk assessment of thyroid nodules.
• Interpace Diagnostics' Thyroid Mutation Panel, ThyGenX, was approved by Aetna for assessing fine needle aspiration (FNA) samples from indeterminate thyroid nodules. The Company was also awarded three additional managed care contracts for both its GI and Thyroid tests. The number of covered lives for Interpace Diagnostics products is now 100 million for all tests combined.

Publications and Presentations

• Manuscript published in the American Journal of Gastroenterology entitled "Genetic mutations at key loci predict progression to high-grade dysplasia or esophageal adenocarcinoma in Barrett's esophagus". Assessments for genomic instability at key genomic loci can predict progression to esophageal adenocarcinoma approximately four years prior to any visible signs of cancer.
• Study published in the Journal of Clinical Endocrinology and Metabolism entitled "Molecular Testing for miRNA, mRNA, and DNA on Fine-Needle Aspiration Improves the Preoperative Diagnosis of Thyroid Nodules With Indeterminate Cytology". A multiplatform mutation and miRNA test (MPT) could provide substantial improvements to thyroid cancer patient management and cost saving opportunities by accurately classifying benign and malignant thyroid nodules that are indeterminate by cytopathology.
• Manuscript highlighting the positive economic benefits of the PancraGen entitled "Managing Incidental Pancreatic Cystic Neoplasms with Integrated Mutational Profiling is a Cost-Effective Strategy" published in the June issue of Endoscopy International Open. Use of integrated molecular pathology to determine risk of malignancy in patients with pancreatic cystic lesions can reduce health care costs and improve patient quality of life.

 2015 Financial Guidance

• The Company reaffirmed total net revenue of $136 million to $140 million. The Company now expects Commercial Services net revenue to range between $125 million and $128 million; previous guidance was between $123 million to $126 million. Interpace Diagnostics net revenue guidance for the year has been adjusted to $11 million to $12 million; previous guidance was $13 million to $14 million. The adjustment in the Interpace Diagnostics revenue is due to expanded collection timeframes for some historic billings.
• Company-wide gross margin of approximately 18%, up from 15.5% in 2014.
• Adjusted operating loss (as defined below) is now expected to be $16 million to $18 million as compared with the previous forecast of $17 million to $19 million.

2015 Six Month Results

Net revenue for the six months ended June 30, 2015 was $74.7 million, an increase of 19% over $62.8 million in the first six months of 2014. Net revenue from Commercial Services was $70.3 million for the six months ended June 30, 2015, an increase of approximately 12% from the six months ended June 30 2014, and Interpace Diagnostics net revenue was $4.4 million for the first six months of 2015. Gross profit for the six months of 2015 was $13.7 million, or 18.4% of net revenue, as compared to $10.3 million, or 16.4% of net revenue in same six month period of 2014. Total operating expenses for the six month period ended June 30, 2015 were $22.6 million as compared to $11.8 million for the same period in 2014 due primarily to investment spending related to the company's molecular diagnostic strategic initiative. The loss from continuing operations before income tax for the first six months of 2015 was $10.7 million versus $1.5 million for the same period in 2014.

Conference Call

PDI management will host a conference call today, Thursday, August 13, 2015 at 4:30 p.m. ET to discuss financial and operational results for the second quarter ended June 30, 2015.  The dial-in number for the conference call is 877-407-8037 (U.S. and Canada callers), and 201-689-8037 for international participants.

Investors can also access a webcast of the live conference call by linking through the investor relations section of the PDI-Inc. website, at www.pdi-inc.com. The teleconference replay will be available two hours after completion through August 20, 2015 at 877-660-6853 (U.S. and Canada) or 201-612-7415. The replay passcode is 13616590. The archived web cast will be available for one year on the company's web site, at www.pdi-inc.com, under "Investor Relations."

Non-GAAP Financial Measures

In addition to the United States generally accepted accounting principles (GAAP) results, we disclose certain non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's historical or future financial performance, financial position or cash flows that excludes (or includes) amounts, or is subject to adjustments that have the effect of excluding (or including) amounts, that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in a company's financial statements.  Management does not intend the presentation of non-GAAP financial measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Management believes that these non-GAAP financial measures, when presented in conjunction with comparable GAAP financial measures, are useful to both management and investors in analyzing our ongoing business and operating performance.

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