CINCINNATI, Oct. 27 /PRNewswire-FirstCall/ -- Kendle , a leading, global full-service clinical research organization, today reported third quarter 2005 financial results.
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Net service revenues for third quarter 2005 were $51.6 million, an increase of 20 percent over net service revenues of $42.9 million for third quarter 2004. Earnings per diluted share of $0.24 for the third quarter of 2005 represents a substantial increase over the $0.04 per share reported for the third quarter 2004.
Net service revenues by geographic region for the third quarter were 58 percent in North America, 39 percent in Europe and 3 percent in the Asia- Pacific region. The top five customers based on net service revenues accounted for 34 percent of net service revenues for third quarter 2005 compared to 39 percent of net service revenues for third quarter 2004.
Reimbursable out-of-pocket revenues and expenses were $12.9 million for third quarter 2005 compared to $8.8 million in the same quarter a year ago.
Income from operations for third quarter 2005 was approximately $5.5 million, or 10.7 percent of net service revenues, compared to income from operations of $1.9 million in third quarter 2004. Net income for the quarter was approximately $3.4 million, or $0.24 per diluted share, compared to net income of approximately $600,000, or $0.04 per diluted share, in third quarter 2004.
New business awards were a record $85 million for third quarter 2005. Contract cancellations for the quarter were $6 million. Total business authorizations, which consist of signed backlog and verbally awarded business, totaled an all-time Company high of $300 million at Sept. 30, 2005, up 33 percent from $225 million at Sept. 30, 2004.
“Kendle’s continued strong performance and return to double-digit operating margins in the third quarter demonstrate the growing global strength and improved operational efficiency of our organization,” said Candace Kendle, PharmD, Chairman and CEO. “We will continue to drive future operating margin improvement through our Working Smarter process improvement initiative, and believe that we are strongly positioned to meet our strategic business and financial objectives.”
Cash flow from operations for the quarter was a positive $3.9 million. Cash and marketable securities totaled $36.3 million, including $213,000 of restricted cash, and bank borrowings totaled $4.6 million at Sept. 30, 2005. Days sales outstanding in accounts receivable were 49 and capital expenditures for third quarter 2005 totaled $1.1 million.
Net service revenues for the nine months ended Sept. 30, 2005, were $149.2 million compared to net service revenues of $124.9 million for the nine months ended Sept. 30, 2004. Net service revenues by geographic region were 57 percent in North America, 40 percent in Europe and 3 percent in the Asia- Pacific region. The top five customers based on net service revenues accounted for 35 percent of net service revenues for the nine months ended Sept. 30, 2005.
Reimbursable out-of-pocket revenues and expenses were $34.9 million for the nine months ended Sept. 30, 2005, compared to $31.8 million in the same period a year ago.
Income from operations for the nine months ended Sept. 30, 2005, was approximately $12.0 million, or 8 percent of net service revenues, compared to $2.9 million or 2 percent of net service revenues, in the nine months ended Sept. 30, 2004. Net income for the first nine months of 2005 was approximately $7.0 million, or $0.50 per diluted share, compared to net income of $1.5 million or $0.11 per diluted share, in the first nine months of 2004.
Cash flow from operations for the nine months ended Sept. 30, 2005, was a positive $11.2 million. Capital expenditures for the nine-month period in 2005 totaled $3.7 million.
Kendle will host its third quarter 2005 conference call Oct. 27, 2005, at 8:30 a.m. Eastern Time. The call will be broadcast live over the Internet and can be accessed at www.kendle.com. A replay of the Webcast will be available at www.kendle.com shortly after the call for on-demand replay through 5 p.m. Eastern Time on Nov. 25, 2005.
About Kendle
Kendle International Inc. is among the world’s leading global clinical research organizations. We deliver innovative and robust clinical development solutions - from first-in-human studies through market launch and surveillance - to help the world’s biopharmaceutical companies maximize product life cycles and grow market share. With the expertise of our more than 1,800 associates worldwide, Kendle has conducted clinical trials or provided regulatory, pharmacovigilance and validation services in 70 countries. Additional information and investor kits are available upon request from Kendle, 1200 Carew Tower, 441 Vine Street, Cincinnati, OH 45202 or from the Company’s Web site at www.kendle.com.
Information provided herein, which is not historical information, such as statements about prospective earnings, revenue and earnings growth, are forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements, including the statements contained herein regarding anticipated trends in the Company’s business, are based largely on management’s expectations and are subject to and qualified by risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, without limitation, competitive factors and industry consolidation, outsourcing trends in the pharmaceutical and biotechnology industries, the Company’s ability to manage growth and to continue to attract and retain qualified personnel, the Company’s ability to complete additional acquisitions and to integrate newly acquired businesses, the Company’s ability to penetrate new markets, the fixed price nature of contracts or the loss of large contracts, cancellation or delay of contracts, the progress of ongoing contracts, the ability to maintain existing customer relationships or enter into new ones, cost overruns, the Company’s sales cycle, the effects of exchange rate fluctuations, and other factors described in the Company’s filings with the Securities and Exchange Commission including Quarterly Reports on Form 10-Q and the Annual Report on Form 10-K. No assurance can be given that the Company will be able to realize the net service revenues included in backlog and verbal awards. Kendle believes that its aggregate backlog and verbal awards are not necessarily a meaningful indicator of future results. All information in this release is current as of Oct. 27, 2005. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.
Kendle International Inc. Condensed Consolidated Statement of Income (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 Net service revenues $51,581 $42,920 $149,233 $124,923 Reimbursable out-of-pocket revenues 12,865 8,776 34,936 31,774 Total revenues 64,446 51,696 184,169 156,697 Costs and expenses: Direct costs 27,451 23,794 80,329 71,276 Reimbursable out-of-pocket costs 12,865 8,776 34,936 31,774 Selling, general and administrative expenses 16,738 14,973 50,634 43,640 Depreciation and amortization 1,851 2,237 6,228 6,806 Severance and office consolidation costs - - - 302 Total costs and expenses 58,905 49,780 172,127 153,798 Income from operations 5,541 1,916 12,042 2,899 Other income (expense): Interest expense (92) (158) (380) (573) Interest income 234 101 674 265 Other (370) (509) (77) (224) Gain on debt extinguishment - - 300 597 Income before income taxes 5,313 1,350 12,559 2,964 Income taxes 1,919 750 5,578 1,480 Net income $3,394 $600 $6,981 $1,484 Income per share data: Basic: Net income per share $0.25 $0.05 $0.52 $0.11 Weighted average shares outstanding 13,633 13,231 13,413 13,141 Diluted: Net income per share $0.24 $0.04 $0.50 $0.11 Weighted average shares outstanding 14,258 13,413 13,926 13,373 Kendle International Inc. Selected Balance Sheet Information (In thousands) (Unaudited) September 30, 2005 December 31, 2004 Cash, cash equivalents and marketable securities (including restricted cash) $36,344 $28,907 Net Receivables 35,411 31,100 Total assets 164,720 162,680 Bank borrowings 4,553 7,203 Shareholders’ equity 115,885 102,775
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CONTACT: Investors, Patty Frank, +1-513-763-1992, or Media, Lori Dorer,+1-513-345-1685, both of Kendle International Inc.
Web site: http://www.kendle.com//
