CINCINNATI, May 2 /PRNewswire-FirstCall/ -- Kendle , a leading, global full-service clinical research organization, today reported financial results for first quarter 2007.
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Net service revenues for first quarter 2007 were $95.4 million, an increase of 60 percent over net service revenues of $59.8 million for first quarter 2006. Net income per diluted share of $0.28 for first quarter 2007 includes a charge for amortization of acquired intangibles related to the August acquisition of the Phase II-IV clinical services business of Charles River Laboratories International, Inc. Excluding this amount, which is detailed in the Condensed Consolidated Statements of Income, earnings per share (EPS) for first quarter 2007 was $0.33 per diluted share. Interest expense in the first quarter was approximately $4.3 million (or about $0.19 per share), primarily related to debt incurred to finance the Charles River Clinical Services acquisition, compared to interest expense of $63,000 in first quarter 2006. EPS for first quarter 2006 was $0.33 per diluted share.
Income from operations for first quarter 2007 was approximately $12.5 million. Excluding the amortization charge referenced above, proforma income from operations was approximately $13.5 million, or 14.2 percent of net service revenues, compared to income from operations of approximately $7.3 million in first quarter 2006. Net income for the quarter was approximately $4.2 million compared to net income of $4.9 million in first quarter 2006. Net service revenues by geographic region for the fourth quarter were 50 percent in North America, 43 percent in Europe, 4 percent in Latin America and 3 percent in the Asia/Pacific region. The top five customers based on net service revenues accounted for 26 percent of net service revenues for first quarter 2007 compared to 31 percent of net service revenues for first quarter 2006.
New business awards were $150 million for first quarter 2007, which represents a 65 percent increase over the same quarter last year. Contract cancellations for the quarter were approximately $14 million. Total business authorizations, which consist of signed backlog and verbally-awarded business, totaled $700 million at March 31, 2007, up 105 percent from first quarter last year and 6 percent from year-end 2006.
"During the quarter we saw strong sales, record revenues and solid improvement in operating margin," said Candace Kendle, PharmD, Chairman and Chief Executive Officer. "As we move forward we will continue to focus on our global growth strategy and to drive efficiencies in our business that will deliver improved value for our customers and shareholders."
Reimbursable out-of-pocket revenues and expenses were $37.1 million for first quarter 2007 compared to $17.4 million in the same quarter a year ago.
Cash flow from operations for the quarter was a positive $14.4 million. Cash and marketable securities totaled $35.3 million, including $1.2 million of restricted cash. Days sales outstanding in accounts receivable were 41 and capital expenditures for first quarter 2007 totaled $3.1 million.
Kendle will host its First Quarter conference call May 2, 2007, 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 June 1, 2007.
About Kendle
Kendle International Inc. is among the world's leading global clinical research organizations and is the fourth-largest provider of Phase II-IV clinical development services worldwide. 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.
Our global clinical development business is focused on five regions -- North America, Europe, Asia/Pacific, Latin America and Africa -- to meet customer needs. With the expertise of our more than 3,000 associates worldwide, Kendle has conducted clinical trials and provided regulatory and pharmacovigilance services in more than 80 countries. The company was named "Best Contract Research Organization" in November 2006 by an independent panel for Scrip World Pharmaceutical News.
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 and cost overruns, the loss, cancellation or delay of contracts or amendments thereto, the ability to maintain existing customer relationships or enter into new ones, the Company's sales cycle, the effects of exchange rate fluctuations, risks related to non-U.S. operations 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 May 2, 2007. 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 March 31, 2007 2006 Net service revenues $95,439 $59,753 Reimbursable out-of-pocket revenues 37,114 17,442 Total revenues 132,553 77,195 Costs and expenses: Direct costs 49,399 30,824 Reimbursable out-of-pocket costs 37,114 17,442 Selling, general and administrative expenses 29,993 19,885 Depreciation and amortization 3,558 1,766 Total costs and expenses 120,064 69,917 Income from operations 12,489 7,278 Other income (expense): Interest expense (4,344) (63) Interest income 310 551 Other (1,888) (228) Income before income taxes 6,567 7,538 Income taxes 2,364 2,639 Net income $4,203 $4,899 Income per share data: Basic: Net income per share $0.29 $0.35 Weighted average shares outstanding 14,438 14,171 Diluted: Net income per share $0.28 $0.33 Weighted average shares outstanding 14,842 14,657 Reconciliation of pro forma income from operations: Income from operations 12,489 7,278 Amortization of acquired intangibles 1,043 - Adjusted income from operations (1) 13,532 7,278 Reconciliation of pro forma net income: Net income 4,203 4,899 Amortization of acquired intangibles 662 - Adjusted net income (1) 4,865 4,899 Pro forma net income per share (1) Basic $0.34 $0.35 Diluted $0.33 $0.33 (1) Each of the "pro forma income from operations," "pro forma net income," and "pro forma net income per share" (i) are measures of performance that are not required by, or presented in accordance with, GAAP; (ii) should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP; and (iii) should not be considered in isolation or as a substitute for analysis of GAAP results. Kendle International Inc. Selected Balance Sheet Information (In thousands) (Unaudited) March 31, 2007 December 31, 2006 Cash, cash equivalents and marketable securities (including restricted cash) $35,309 $22,312 Net Receivables 60,711 60,253 Bank borrowings 199,000 199,500
Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20030429/KNDLLOGOAP Archive: http://photoarchive.ap.orgPRN Photo Desk, photodesk@prnewswire.comKendle International Inc.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/
