BOSTON, Aug. 3 /PRNewswire-FirstCall/ -- PAREXEL International Corporation today announced its financial results for the fourth quarter and fiscal year ended June 30, 2004.
For the three months ended June 30, 2004, PAREXEL’s consolidated service revenue grew 0.1% to $141.1 million compared with $140.9 million in the prior year period. Operating income was $10.2 million, or 7.3% of consolidated service revenue in the fourth quarter versus operating income of $3.6 million, or 2.5% in the comparable quarter of the prior year. Net income for the quarter was $6.5 million, or $0.24 per diluted share, compared with net income of $2.9 million, or $0.11 per diluted share for the quarter ended June 30, 2003.
For the fiscal year ended June 30, 2004, consolidated service revenue was $547.2 million versus $522.3 million in the prior year period, an increase of 4.8%. Operating income for Fiscal 2004 was $24.6 million, or 4.5% of consolidated service revenue, compared with $20.6 million, or 3.9% in the prior year. Net income for Fiscal 2004 was $13.8 million or $0.52 per diluted share, compared with net income of $10.7 million or $0.42 per diluted share for the fiscal year ended June 30, 2003.
On a proforma basis, excluding $11.6 million in restructuring and one-time charges taken in the third quarter of Fiscal 2004, operating income for Fiscal 2004 was $36.2 million or 6.6% of consolidated service revenue, net income was $21.9 million, and earnings per diluted share were $0.82.
On a segment basis, service revenue for the fourth quarter was $74.4 million in Clinical Research Services, $32.9 million in the PAREXEL Consulting Group, $23.8 million in Medical Marketing Services, and $10.0 million in Perceptive Informatics, Inc. (Perceptive). For the fiscal year, service revenue was $309.3 million in Clinical Research Services, $113.1 million in the PAREXEL Consulting Group, $88.8 million in Medical Marketing Services, and $36.0 million in Perceptive.
For the six-month period from January to June 2004, PAREXEL reported net new business (gross new business less cancellations) of $358.5 million. Net new business for this period increased 33.1% when compared with the six-month period from January to June of 2003, and increased 19.0% from the six-month period ended on December 31, 2003. Net new business for the full fiscal year was $659.8 million, an increase of 16.0% from Fiscal 2003. Backlog at June 30, 2004 was $699.2 million, an increase of 12.5% from the December 31, 2003 backlog, which was $621.7 million, and an increase of 19.2% over the backlog reported at June 30, 2003, which was $586.6 million.
Mr. Josef H. von Rickenbach, PAREXEL’s Chairman and Chief Executive Officer stated, “During the fourth quarter, we continued to make progress in improving the Company’s overall operating margin despite the negative impact on revenue of fourth quarter signature delays. As we move into the new fiscal year, we will be primarily focused on re-accelerating revenue growth, and the continuing drive to expand operating margins. We are encouraged by our current backlog coverage and are confident that we will grow revenue in each of our businesses. The impact of ongoing productivity and quality programs, the continued progress of Perceptive Informatics, and better leverage from SG&A spending will also contribute significantly to improved operating results.”
The Company issued forward-looking guidance regarding revenue and earnings per share for the first quarter of Fiscal 2005 (ending September 30, 2004) and reconfirmed previously issued guidance for Fiscal 2005. For the first quarter of Fiscal 2005, the Company anticipates reporting consolidated service revenue in the range of $138 to $143 million and earnings per diluted share in the range of $0.20 to $0.21. For Fiscal 2005, the Company anticipates reporting consolidated service revenue in the range of $610 to $630 million and earnings per diluted share in the range of $0.98 to $1.08.
The Company believes that presenting the proforma information contained in this press release assists investors and others to gain a better understanding of its core operating results and future prospects, especially when comparing such results to previous periods or forecasts. Management uses this proforma information, in addition to the GAAP information, as the basis for measuring the Company’s core operating performance and comparing such performance to that of prior periods and to the performance of its competitors. Such measures are also used by management in its financial and operating decision- making. Proforma information is not meant to be considered superior to or a substitute for the Company’s results of operations prepared in accordance with GAAP. A reconciliation of Generally Accepted Accounting Principles (GAAP) results with proforma results may be found in the attached financial tables.
PAREXEL’s Fourth Quarter and Fiscal 2004 Earnings Conference Call will begin at 10 a.m. ET on Tuesday, August 3rd and will be broadcast live over the internet via webcast. The webcast may be accessed in the “Webcasts” portion of the Investor Relations section of the Company’s website at http://www.parexel.com/. Users should follow the instructions provided to assure that the necessary audio applications are downloaded and installed. A replay of this webcast will be archived on the website approximately two hours after the call and will continue to be accessible for approximately one year following the live event. To participate via telephone, dial (612) 332-0637 and ask to join the PAREXEL quarterly conference call.
PAREXEL is one of the largest biopharmaceutical outsourcing organizations in the world, providing a broad range of knowledge-based contract research, medical marketing and consulting services to the worldwide pharmaceutical, biotechnology and medical device industries. With a commitment to providing solutions that expedite time-to-market and peak market penetration, PAREXEL has developed significant expertise in clinical trials management, data management, biostatistical analysis, medical marketing, clinical pharmacology, regulatory and medical consulting, industry training and publishing and other drug development consulting services. Its information technology subsidiary, Perceptive Informatics, Inc., develops and offers a portfolio of innovative technology-based products and services that facilitate clinical drug development and are designed to decrease time to peak sales. The technology portfolio includes web-based portal solutions and tracking tools, Interactive Voice Response Systems (IVRS), Clinical Trial Management Systems (CTMS), electronic diary and investigator database solutions. Perceptive also offers advanced medical diagnostics services to assess rapidly and objectively the safety and efficacy of new drugs, biologics, and medical devices in clinical trials. PAREXEL’s integrated services, therapeutic area depth and sophisticated information technology, along with its experience in global drug development and product launch services, represent key competitive strengths. Headquartered near Boston, MA, PAREXEL operates in 51 locations throughout 35 countries around the world, and has 4,875 employees.
This release contains “forward-looking” statements regarding future results and events, including, without limitation, statements regarding expected financial results, future growth and customer demand, such as the guidance provided by the Company with respect to the first quarter of Fiscal Year 2005 and Fiscal Year 2005. For this purpose, any statements contained herein that are not statements of historical fact may be deemed forward- looking statements. Without limiting the foregoing, the words “believes”, “anticipates”, “plans”, “expects”, “intends”, “appears”, “estimates”, “projects” and similar expressions are intended to identify forward-looking statements. These statements involve a number of risks and uncertainties. The Company’s actual future results may differ significantly from the results discussed in the forward-looking statements contained in this release. Important factors that might cause such a difference include, but are not limited to, risks associated with: actual operating performance; actual expense savings and other operating improvements resulting from recent restructurings; the loss, modification, or delay of contracts; the Company’s dependence on certain industries and clients; the Company’s ability to win new business, manage growth, and attract and retain employees; the Company’s ability to complete additional acquisitions and to integrate newly acquired businesses or enter into new lines of business; government regulation of the drug, medical device and biotechnology industry; consolidation within the pharmaceutical industry; competition within the biopharmaceutical services industry; the potential for significant liability to clients and third parties; the potential adverse impact of health care reform; and the effects of exchange rate fluctuations and other international economic, political, and other risks. Such factors and others are discussed more fully in the section entitled “Risk Factors” of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 as filed with the SEC on May 13, 2004, which “Risk Factors” discussion is incorporated by reference in this press release. The forward-looking statements included in this press release represent the Company’s estimates as of the date of this release. The Company specifically disclaims any obligation to update these forward-looking statements in the future. These forward-looking statements should not be relied upon as representing the Company’s estimates or views as of any date subsequent to the date of this press release.
PAREXEL is a registered trademark of PAREXEL International Corporation, and Perceptive Informatics is a trademark of Perceptive Informatics, Inc. All other names or marks may be registered trademarks or trademarks of their respective business and are hereby acknowledged.
PAREXEL International Corporation Consolidated Condensed Statement of Operations (In thousands, except per share data) (Unaudited) For the three months ended June 30, 2004 2003 Restated As As Restated Reported Reported Adjustments Pro-Forma Service revenue $141,106 $140,949 (a) $140,949 Reimbursement revenue 34,194 23,509 (a) 23,509 Total revenue 175,300 164,458 164,458 Costs and expenses: Direct costs 89,746 93,823 (a) 93,823 Reimbursable out-of-pocket expenses 34,194 23,509 (a) 23,509 Selling, general and administrative 34,143 34,549 34,549 Depreciation and amortization 6,971 5,501 5,501 Restructuring expense - 3,488 (3,488)(b) - Income from operations 10,246 3,588 3,488 7,076 Other income 310 1,004 1,004 Income before income taxes 10,556 4,592 3,488 8,080 Provision for income taxes 4,014 1,654 1,256 2,910 Minority interest expense 41 56 56 Net income $6,501 $2,882 $2,232 $5,114 Earnings per common share: Basic $0.25 $0.11 $0.09 $0.20 Diluted $0.24 $0.11 $0.09 $0.20 Shares used in computing earnings per common share: Basic 26,039 25,695 25,695 25,695 Diluted 26,925 26,157 26,157 26,157 Balance Sheet Information (Preliminary) June 30, March 31, June 30, 2004 2004 2003 Billed accounts receivable, net $127,494 $124,504 $143,978 Unbilled accounts receivable, net 94,463 98,323 78,748 Deferred revenue (145,409) (147,581) (130,650) Net receivables $76,548 $75,246 $92,076 Cash and marketable securities $95,607 $83,977 $82,724 Working capital $145,409 $136,114 $134,346 Total assets $501,162 $486,935 $464,237 Stockholders’ equity $246,760 $241,766 $227,100 Quarterly Supplemental Financial Data Total revenue $175,300 $168,249 $164,458 Investigator fees 18,224 16,750 21,218 Gross revenue $193,524 $184,999 $185,676 DSO 36 37 45 (a) Includes an accounting reclassification in the PAREXEL Consulting Group as discussed during the third quarter of FY 2004. The reclassification had no impact on Total Revenue, Costs and Expenses, Income from Operations, Net Income, or to the Balance Sheet. (b) Represents facilities-related restructuring charges resulting from changes in estimates with regard to certain previously abandoned leased facilities. PAREXEL International Corporation Consolidated Condensed Statement of Operations (In thousands, except per share data) (Unaudited) For the year ended June 30, 2004 2003 Adjust- Restated Restated As Reported (d) ments Pro-Forma As Reported Adjustments Pro- Forma Service revenue $547,216(d) $547,216 $522,313(d) $522,313 Reimbursement revenue 111,387(d) 111,387 96,902(d) 96,902 Total revenue 658,603 658,603 619,215 619,215 Costs and expenses: Direct costs 356,063(d) 356,063 347,176(d) 347,176 Reimbursable out-of-pocket expenses 111,387(d) 111,387 96,902(d) 96,902 Selling, general and administrative 129,989 (69)(a) 129,920 124,502 124,502 Depreciation and amortization 25,762 (740)(b) 25,022 20,656 20,656 Restructuring expense 10,796 (10,796)(c) - 9,374 (9,374)(e) - Income from operations 24,606 11,605 36,211 20,605 9,374 29,979 Other income (loss) (1,163) 388(a) (775) (2,118) (2,118) Income before income taxes 23,443 11,993 35,436 18,487 9,374 27,861 Provision for income taxes 9,313 3,907 13,220 7,250 3,375 10,625 Minority interest 339 339 575 575 Net income $13,791 $8,086 $21,877 $10,662 $5,999 $16,661 Earnings per common share: Basic $0.53 $0.31 $0.84 $0.42 $0.24 $0.66 Diluted $0.52 $0.30 $0.82 $0.42 $0.23 $0.65 Shares used in computing earnings per common share: Basic 26,010 26,010 26,010 25,371 25,371 25,371 Diluted 26,795 26,795 26,795 25,683 25,683 25,683 (a) Represents $388 thousand of one-time charges associated with certain disputes and a $69 thousand loss on the disposition of certain obsolete assets. (b) Represents $740 thousand of impairment charges associated with abandoned leased facilities and other fixed assets. (c) Represents a restructuring charge of $10.8 million ($3.9 million for severance expense associated with the elimination of 157 managerial and staff positions, $5.6 million related to seven newly-abandoned leased facilities, and $1.3 million related to changes in assumptions for previously abandoned leased facilities). (d) Includes an accounting reclassification in the PAREXEL Consulting Group as discussed during the third quarter of FY 2004. The reclassification had no impact on Total Revenue, Costs and Expenses, Income from Operations, Net Income, or to the Balance Sheet. (e) Represents facilities-related restructuring charges resulting from changes in estimates with regard to certain previously abandoned leased facilities. PAREXEL International Corporation Segment Information ($ in thousands) Three months ended For the year ended June 30, June 30, Restated Restated 2004 2003 2004 2003 Clinical Research Services (CRS) Service revenue $74,438 $84,305 $309,341 $312,847 % of total service revenue 52.8% 59.8% 56.5% 59.9% Gross profit $29,874 $32,134 $122,633 $116,879 Gross margin % of service revenue 40.1% 38.1% 39.6% 37.4% The PAREXEL Consulting Group (PCG) Service revenue (a) $32,864 $24,516 $113,117 $100,813 % of total service revenue 23.3% 17.4% 20.7% 19.3% Gross profit $8,628 $2,974 $27,645 $20,502 Gross margin % of service revenue 26.3% 12.1% 24.4% 20.3% Medical Marketing Services (MMS) Service revenue $23,757 $24,290 $88,785 $83,853 % of total service revenue 16.8% 17.2% 16.2% 16.1% Gross profit $8,035 $8,348 $23,872 $28,112 Gross margin % of service revenue 33.8% 34.4% 26.9% 33.5% Perceptive Informatics, Inc. (PII) Service revenue $10,047 $7,838 $35,973 $24,800 % of total service revenue 7.1% 5.6% 6.6% 4.7% Gross profit $4,823 $3,670 $17,003 $9,644 Gross margin % of service revenue 48.0% 46.8% 47.3% 38.9% Total service revenue $141,106 $140,949 $547,216 $522,313 Total gross profit $51,360 $47,126 $191,153 $175,137 Gross margin % of service revenue 36.4% 33.4% 34.9% 33.5% (a) Includes an accounting reclassification in the PAREXEL Consulting Group as discussed during the third quarter of FY 2004. The reclassification had no impact on Total Revenue, Costs and Expenses, Income from Operations, Net Income, or to the Balance Sheet. CONTACTS: James Winschel, Senior Vice-President and Chief Financial Officer Jill Baker, Vice President of Investor Relations (781) 434-4118
PAREXEL International Corporation
CONTACT: James Winschel, Senior Vice-President and Chief FinancialOfficer, or Jill Baker, Vice President of Investor Relations of PAREXEL,+1-781-434-4118
Web site: http://www.parexel.com/
