8/10/2010 8:26:05 AM
FORT WASHINGTON, Pa., Aug. 6 /PRNewswire-FirstCall/ -- ReSearch Pharmaceutical Services, Inc. ("RPS" or the "Company"), a leading provider of integrated clinical development outsourcing solutions to the biopharmaceutical industry, announces its results for the three and six months ended June 30, 2010. These statements include unaudited comparative results for RPS for the three and six months ended June 30, 2009.
In addition, RPS announces that it has today filed a Form 10-Q for the period ended June 30, 2010, as required by the Securities and Exchange Commission ("SEC"). A copy of the Form 10-Q is available on our website (www.rpsweb.com).
The following discussion of financial results for the three and six months ended June 30, 2010 is qualified by reference to the unaudited financial results included in this press release and the Company's Form 10-Q, as filed with the SEC.
Financial results for the three months ended June 30, 2010
- Service revenues for the second quarter of 2010 of $64.4 million grew $16.0 million or 32.9% as compared to the same period in 2009.
- Direct costs increased 32.5% to $46.3 million for the second quarter of 2010, but decreased as a percentage of service revenue, to 71.9% from 72.1%, in the second quarter of 2009.
- Selling, general, and administrative expenses increased 20.2% to $13.3 million for the second quarter of 2010 from $11.0 million for the second quarter of 200, but decreased as a percentage of service revenue to 20.6% from 22.8% between those periods.
- EBITDA for the second quarter of 2010 of $4.8 million or 7.5% of service revenues, increased from $2.3 million or 4.8% of service revenues for the second quarter of 2009.
- Income before provision for income taxes for the second quarter of 2010 of $3.7 million increased $2.3 million from $1.4 million for the second quarter of 2009. Net income for the second quarter of 2010 increased to $1.5 million, from net income for the second quarter in 2009 of $486,000.
Financial results for the six months ended June 30, 2010
- Service revenues for the six months ended June 30, 2010 of $122.4 million grew $28.7 million or 30.6% as compared to the same period in 2009.
- Direct costs increased 30.2% to $88.7 million for the six months ended June 30, 2010, but decreased as a percentage of service revenue, to 72.5% from 72.7%, in the six months ended June 30, 2009.
- Selling, general, and administrative expenses increased 21.7% to $25.7 million for the six months ended June 30, 2010 from $21.1 million for the six months ended June 30, 2009, but decreased as a percentage of service revenue to 21.0% from 22.5% between those periods.
- EBITDA for the six months ended June 30, 2010 of $8.0 million or 6.6% of service revenues, increased from $4.3 million or 4.6% of service revenues for the six months ended June 30, 2009.
- Income before provision for income taxes for the six months ended June 30, 2010 of $5.4 million increased $2.9 million from $2.5 million for the six months ended June 30, 2009. Net income for the six months ended June 30, 2010 increased $0.5 million to $1.5 million, from net income for the six months ended June 30, 2009 of $1.0 million.
A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure are located at the end of this press release.
Background on RPS
Headquartered in Ft. Washington, Pennsylvania, with subsidiary offices across Latin America, Europe and Asia, RPS is a next generation CRO and a leading provider of integrated clinical development and enhanced full-service outsourcing solutions to the bio-pharmaceutical industry. RPS provides services in connection with the design, initiation and management of clinical trials programs that are required to obtain regulatory approval to market bio-pharmaceutical products. Our innovative business model combines the expertise of a traditional CRO with the ability to provide flexible outsourcing solutions that are fully integrated within our clients' clinical drug development infrastructure. This approach was designed to meet the varied needs of small, medium and large bio-pharmaceutical companies.
Supplemental non-GAAP financial information
EBITDA is defined as net (loss) income before interest expense, income taxes and depreciation and amortization. The Company believes that net income is the most directly comparable GAAP measurement to EBITDA. EBITDA is presented because the Company believes it is useful to investors as widely accepted financial indicators of a company's ability to service and/or incur indebtedness and because such disclosure provides investors with additional criteria used by the Company to evaluate our operating performance and in part, the performance-based compensation of certain of our employees. EBITDA is not defined under GAAP, should not be considered in isolation or as a substitute for a measure of our liquidity or performance prepared in accordance with GAAP and is not indicative of income from operations as determined under GAAP. EBITDA and other non-GAAP financial measures have limitations which should be considered before using these measures to evaluate the Company's liquidity or financial performance. EBITDA does not include interest expense, income tax expense or depreciation and amortization expense, which may be necessary in evaluating the Company's operating results and liquidity requirements or those of businesses we may acquire. The Company's management compensates for these limitations by using EBITDA as a supplement to GAAP results to provide a more comprehensive understanding of the factors and trends affecting our business or any business we may acquire. Our computation of EBITDA may not be comparable to other similarly titled measures provided by other companies, because not all companies calculate this measure in the same fashion.
The following table and related notes reconciles net income to EBITDA:
Three months ended
Six months ended
Reconciliation of net income to EBITDA:
Provision for income taxes
Interest (income) expense, net
Depreciation and amortization
ReSearch Pharmaceutical Services, Inc. and Subsidiaries
Consolidated Balance Sheets
Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of $535,000 at
June 30, 2010 and $398,000 at December 31, 2009, respectively
Deferred tax asset
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Intangible assets subject to amortization, net
Deferred tax asset
Liabilities and stockholders' equity
Line of credit
Current deferred tax liability
Current portion of capital lease obligations
Total current liabilities
Deferred tax liability
Capital lease obligations, less current portion