RALEIGH, N.C., Feb. 18, 2015 (GLOBE NEWSWIRE) -- PRA Health Sciences, Inc. (“PRA” or the “Company”) (Nasdaq:PRAH) today reported its financial results for the fourth quarter ended December 31, 2014.
For the three months ended December 31, 2014, the Company’s service revenues were $323.8 million, which represents growth of 8%, or $25.0 million, compared to the fourth quarter of 2013 at actual foreign exchange rates. On a constant currency basis, service revenue grew $29.7 million, representing growth of 10% compared to the fourth quarter of 2013. The increase in service revenue is due largely to the increase in our opening backlog, the type of service we are providing on our active studies and the growth in new business awards as a result of higher demand for our services.
Net new business for the quarter ended December 31, 2014 was $388.4 million representing a book-to-bill ratio of 1.2 in the period. This net new business contributed to an ending backlog of $2.1 billion at December 31, 2014.
“I am very pleased with the progress made on our financial performance. We have delivered strong revenue growth and bottom line results in line with our expectations, as well as, continued strength in net new business awards,” said Colin Shannon, PRA’s Chief Executive Officer. “Following our initial public offering in November 2014, we have continued to maintain our momentum, which demonstrates the confidence our clients have in our ability to provide high quality project-based, embedded and functional outsourcing services.
“We remain focused on areas that will differentiate our services to our clients by continuing to strengthen our therapeutic expertise and enhance our medical informatics, as well as developing new capabilities that will allow us to provide broad and flexible services to our clients.”
Direct costs were $214.9 million during the three months ended December 31, 2014 compared to $205.1 million for the fourth quarter of 2013. Direct costs were 66.4% of service revenue during the fourth quarter of 2014 compared to 68.6% of service revenue during the fourth quarter of 2013. The decrease in direct costs as a percentage of service revenue is primarily related to our ability to leverage our billable staff and the successful integration of our acquisitions.
Selling, general and administrative expenses were $73.7 million during the three months ended December 31, 2014 compared to $65.1 million for the fourth quarter of 2013. Selling, general and administrative costs were 22.8% of service revenue during the fourth quarter of 2014 compared to 21.8% of service revenue during the fourth quarter of 2013. The increase in selling, general and administrative expenses is primarily related to one-time IPO-related expenses. These payments were partially offset by a decrease in expenses as we realize synergies from our acquisitions and continue to leverage our selling and administrative functions.
Reported EBITDA on a GAAP basis was $17.4 million, representing a decrease of 17.2% compared to the fourth quarter of 2013. The primary drivers of the decrease in reported EBITDA on a GAAP basis were $11.9 million of expenses related to our IPO and a $23.7 million loss from the extinguishment of a portion of our long-term debt attributable to a prepayment penalty incurred on our senior notes and the write-off of previously recorded unamortized debt issuance costs related to our first lien term loan and senior notes. Adjusted EBITDA was $50.6 million for the three months ended December 31, 2014, representing growth of 43.6% compared to the fourth quarter of 2013.
Reported GAAP net loss was $22.8 million and reported GAAP diluted loss per share was $0.45 for the three months ended December 31, 2014, increases of 143% and 88%, respectively, when compared to the fourth quarter of 2013. The increase in our GAAP net loss and our reported GAAP diluted loss per share were primarily driven by expenses related to our IPO discussed previously.
Adjusted Net Income was $18.6 million for the three months ended December 31, 2014, representing growth of 80.0% compared to the fourth quarter of 2013. Adjusted Net Income per share was $0.35 for the three months ended December 31, 2014, representing growth of 35% compared to the fourth quarter of 2013.
Foreign currency gains (losses) were a gain of $9.0 million for the three months ended December 31, 2014 compared to a loss of $4.7 million for the fourth quarter of 2013. Foreign exchange gains and losses are due to fluctuations in the U.S. dollar and the settling and revaluation of inter-company accounts.
Reconciliations of our non-GAAP measures, including Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per share to the corresponding GAAP measures are attached to this press release.
Fiscal Year 2014
For the twelve months ended December 31, 2014, the Company’s service revenues were $1,266.6 million, which represents growth of 52%, or $433.7 million as compared to 2013 at actual foreign exchange rates. On a constant currency basis, service revenue grew $435.5 million, also representing growth of 52% compared to 2013. Reported GAAP income from operations was $56.8 million, reported GAAP net loss was $35.7 million and reported GAAP diluted loss per share was $0.83 for the twelve months ended December 31, 2014. Adjusted Net Income was $55.7 million for the twelve months ended December 31, 2014, representing growth of 119% compared to 2013. Adjusted Net Income per share was $1.26 for the twelve months ended December 31, 2014, representing growth of 107% compared to 2013.
Other
In November 2014, the Company completed its successful IPO of 19,523,255 shares of common stock for cash consideration of $18 per share. The common stock is listed on the Nasdaq Global Select Market under the symbol “PRAH.”
2015 Guidance
For 2015, the Company expects to achieve service revenues between $1.35 billion and $1.4 billion, diluted GAAP earnings per share between $0.60 and $0.65 per share, diluted Adjusted Net Income per share of $1.35 to $1.45 per share, and annual effective income tax rate estimates at approximately 30%. This financial guidance assumes the first of January foreign currency exchange rates.
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