WAYNE, Pa., April 19 /PRNewswire-FirstCall/ -- Encorium Group, Inc. , a full service multinational clinical research organization (CRO) conducting studies in over 30 countries for many of the world’s leading pharmaceutical and biotechnology companies, today announced its financial results for the fourth quarter and year ended December 31, 2009.
2009 Fourth Quarter Financial Results
Net revenue for the fourth quarter of 2009 was $4.4 million, a decrease of 21.4% from $5.6 million for the fourth quarter of 2008. The decrease in net revenues was primarily attributable to overall reductions in clinical trial activity, approximately $491 thousand of revenue recognized on contracts that completed in 2008 off set by favorable foreign currency fluctuations of $480 thousand for the three months ended December 31, 2009. The Company had a consolidated backlog at December 31, 2009 from continuing operations of $17.1 million which included approximately $12.3 million of new business wins in 2009 compared to a backlog of $23.8 million at December 31, 2008.
Selling, general, and administrative expenses (SG&A) was $1.7 million, or 38.5% of net revenue, for the three months ended December 31, 2009, compared to $2.2 million, or 39.2% of net revenue, for the three months ended December 31, 2008.
2009 Full Year Financial Results
Net revenue for the twelve months ended December 31, 2009 decreased to $17.9 million as compared to $22.3 million for the twelve months ended December 31, 2008. The decrease in revenue was primarily due to a decrease in the number of contracts and related contract values of active clinical studies along with $1.1 million of unfavorable currency fluctuations.
Depreciation and amortization expense for 2009 declined to $380 thousand compared to $1.3 million for 2008, primarily as a result of intangibles related to the Encorium OY acquisition becoming fully amortized.
Financial Position, Going Concern and Potential Delisting
Encorium’s balance sheet at December 31, 2009 reflected cash and cash equivalents of $197 thousand and stockholders’ equity of $2.3 million. Our net cash used in operations for the year ended December 31, 2009 was approximately $8.0 million. The Company’s latest financials have been prepared on a going concern basis. The report of Encorium’s independent registered public accounting firm, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 19, 2010, contains a paragraph that indicates that, while the Company’s financial statements have been prepared on a going concern basis, there is substantial doubt about its ability to continue as a going concern, and that no adjustments have been made to the financial statements that might result from the outcome of this uncertainty.
Encorium currently fails to meet NASDAQ’s $2.5 million minimum stockholders’ equity requirement for continued listing and may not be able to meet the other listing requirements in the future. The Company anticipates that a delisting action will be brought against it for failure to comply with the requirement. If a delisting action is brought, the Company may request a hearing before the NASDAQ Listing Qualifications Panel. Such request would stay any delisting determination by the NASDAQ Listing Qualifications Staff and the Company’s common stock would remain listed on NASDAQ pending a formal determination by the Panel. However, there can be no assurances that the Panel will grant such request.
About Encorium Group, Inc.
Encorium Group, Inc. is a global clinical research organization specializing in the design and management of complex clinical trials and Patient Registries for the pharmaceutical, biotechnology and medical device industries. The Company’s mission is to provide its clients with high quality, full-service support for their biopharmaceutical and medical device development programs. Encorium offers therapeutic expertise, experienced team management and advanced technologies. The Company has drug and biologics development as well as clinical trial experience across a wide variety of therapeutic areas such as infectious diseases, cardiovascular, vaccines, oncology, diabetes endocrinology/metabolism, gene therapy, immunology, neurology, gastroenterology, dermatology, hepatology, women’s health and respiratory medicine. Encorium believes that its expertise in the design of complex clinical trials, its therapeutic experience and commitment to excellence, and its application of innovative technologies, offer its clients a means to more quickly and cost effectively move products through the clinical development process.
CONTACT: Philip L. Calamia, Chief Financial Officer, Encorium Group, Inc.,
+1-484-588-5400, www.encorium.com
Web site: http://www.encorium.com/
