Fourth Quarter 2014 Results (Compared to Fourth Quarter 2013)
- Net new business awards of $316.3 million, representing growth of 10.9% and a book-to-bill ratio of 1.5x
- Net service revenue of $213.7 million, representing growth of 22.6%
- GAAP loss per share of $(0.92) and adjusted diluted earnings per share of $0.26
Full-Year 2014 Results (Compared to Full-Year 2013)
- Net new business awards of $949.8 million, representing growth of 16.7% and a book-to-bill ratio of 1.2x
- Net service revenue of $809.7 million and adjusted net service revenue of $800.7 million, representing adjusted net service revenue growth of 22.7%. Net service revenue has been adjusted to exclude $9.0 million of higher-than-normal change order activity.
- GAAP loss per share of $(0.51) and adjusted diluted earnings per share of $0.83. Adjusted diluted earnings per share for 2014 has been reduced by approximately $0.10 per share to remove the impact of the higher-than-normal change order activity.
RALEIGH, N.C., Feb. 24, 2015 (GLOBE NEWSWIRE) -- INC Research Holdings, Inc. (“INC Research” or “the Company”) (Nasdaq:INCR), a leading, global Phase I to IV contract research organization, today reported its financial results for the fourth quarter and full year ended December 31, 2014.
“2014 was a year of significant accomplishments for INC Research culminating in the completion of our initial public offering,” said Jamie Macdonald, Chief Executive Officer. “We delivered double-digit net service revenue growth, grew our customer base while driving a high rate of repeat business awards with existing customers and continued our global expansion in key regions for clinical development. In particular, we believe our therapeutic alignment, commitment to operational excellence and continued focus on Phase I to IV clinical development were significant contributors to our success and position us well to deliver strong results for our shareholders moving forward. I’d like to thank our 5,600 employees worldwide who consistently deliver the best-in-class services that make INC Research an industry-leading global CRO.”
Fourth Quarter 2014 Results
For the three months ended December 31, 2014, net service revenue increased by 22.6% to $213.7 million, compared to $174.4 million in the three months ended December 31, 2013. Net service revenue growth resulted primarily from the increase in new business awards in the past 18 months and a lower cancellation rate during 2014. Net service revenue during the three months ended December 31, 2014 was negatively impacted by $4.7 million due to fluctuations in foreign exchange rates compared to the same period in the prior year.
Income from operations for the three months ended December 31, 2014 increased 63.6% to $18.5 million, compared to $11.3 million for the three months ended December 31, 2013. Operating margin was 8.6% in the three months ended December 31, 2014 compared to 6.5% in the same period in the prior year. The Company’s income from operations includes certain expenses and transactions that the Company believes are not representative of its core operations. Excluding these items, adjusted income from operations was $35.3 million for the three months ended December 31, 2014, compared to $24.6 million for the same period in the prior year, representing growth of 43.7%. Adjusted operating margin for the three months ended December 31, 2014 was 16.5% compared to 14.1% for the same period in the prior year.
The Company reported a net loss for the three months ended December 31, 2014 of $49.8 million, resulting in a loss of $(0.92) per diluted share, compared to a net loss of $13.0 million, resulting in a loss of $(0.25) per diluted share, for the three months ended December 31, 2013. Adjusted net income for the three months ended December 31, 2014 was $15.2 million, or $0.26 per diluted share, compared to $5.3 million, or $0.10 per diluted share, for the same period in the prior year.
Adjusted EBITDA for the three months ended December 31, 2014 increased 35.2% to $40.3 million from $29.8 million for the three months ended December 31, 2013.
Important disclosures about and reconciliations of non-GAAP measures, including adjusted income from operations, adjusted operating margin, adjusted net income and adjusted diluted earnings per share, EBITDA and adjusted EBITDA, to the corresponding GAAP measures, are below and attached to this press release.
Full-Year 2014 Results
For the full year ended December 31, 2014, net service revenue was $809.7 million. Adjusted net service revenue increased by 22.7% to $800.7 million for 2014 compared to $652.4 million for 2013. Adjusted net service revenue for 2014 excludes an estimated $9.0 million in net service revenue from higher-than-normal contract change order activity in the second and third quarters of 2014 that the Company believes is not representative of ongoing operations. Net service revenue for 2014 was negatively impacted by $2.2 million due to fluctuations in foreign exchange rates compared to the prior year. Net service revenue growth resulted primarily from an increase in new business awards in the past 18 months and a lower cancellation rate during 2014. The growth in our revenue in 2014 was particularly strong in the CNS, Oncology and other complex therapeutic areas and with a strategic Functional Service Provider, or FSP, customer.
Income from operations for 2014 increased 102.3% to $63.6 million, compared to $31.5 million for 2013. Operating margin was 7.9% compared to 4.8% for the same period in the prior year. Adjusted income from operations was $123.7 million for 2014, compared to $86.3 million for the same period in the prior year, representing growth of 43.2%. Adjusted operating margin for 2014 was 15.4% compared to 13.2% for the same period in the prior year.
The Company reported a net loss for 2014 of $23.5 million, resulting in a loss of $(0.51) per diluted share, compared to a net loss of $41.5 million, resulting in a loss of $(0.81) per diluted share, for 2013. Adjusted net income for 2014 was $44.6 million, or $0.83 per diluted share, compared to $16.3 million, or $0.31 per diluted share, for the same period in the prior year.
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