- Net new business of $587.3 million in the fourth quarter; Net book-to-bill of 1.42
- $413.6 million of service revenue in the fourth quarter; 14.2% growth at actual foreign exchange rates and 14.6% constant currency growth compared to the fourth quarter of 2015
- Fourth quarter GAAP Net Income per diluted share was $0.22 and GAAP Net Income was $14.0 million
- Fourth quarter Adjusted Net Income per diluted share was $0.71 per share and Adjusted Net Income was $45.9 million
RALEIGH, N.C., Feb. 22, 2017 (GLOBE NEWSWIRE) -- PRA Health Sciences, Inc. (“PRA” or the “Company”) (NASDAQ:PRAH) today reported financial results for the quarter ended December 31, 2016.
For the three months ended December 31, 2016, service revenue was $413.6 million, which represents growth of 14.2%, or $51.3 million, compared to the fourth quarter of 2015 at actual foreign exchange rates. On a constant currency basis, service revenue grew $52.9 million, an increase of 14.6% compared to the fourth quarter of 2015.
Net new business for the quarter ended December 31, 2016 was $587.3 million, representing a net book-to-bill ratio of 1.42 for the period. This net new business contributed to an ending backlog of $2.9 billion at December 31, 2016.
“We are pleased to have delivered another quarter with double-digit revenue, earnings and net new business growth year-over-year,” said Colin Shannon, PRA’s Chief Executive Officer. “We are well-positioned to deliver at least mid-teens growth during the coming year, as evidenced by our record level of new business awards and backlog. We continue to stay focused on our key strategic objectives, our client deliverables and developing our people, and we look forward to delivering strong results in 2017.”
Direct costs were $274.4 million during the three months ended December 31, 2016 compared to $234.9 million for the fourth quarter of 2015. Direct costs were 66.3% of service revenue during the fourth quarter of 2016 compared to 64.8% of service revenue during the fourth quarter of 2015. The increase in direct costs as a percentage of service revenue is due to the continued hiring of billable staff to support our current projects and the hiring of additional staff to ensure appropriate staffing levels to support our future growth.
Selling, general and administrative expenses were $70.2 million during the three months ended December 31, 2016 compared to $63.6 million for the fourth quarter of 2015. Selling, general and administrative costs were 17.0% of service revenue during the fourth quarter of 2016 compared to 17.6% of service revenue during the fourth quarter of 2015. The decrease in selling, general and administrative expenses as a percentage of revenue is attributable to our ability to continue to effectively manage our sales and administrative functions as the Company continues to grow.
For the three months ended December 31, 2016, we incurred transaction-related expenses of $13.0 million. The costs consist of $12.7 million of one-time stock-based compensation expense related to the release of transfer restrictions on vested options and the vesting of certain performance-based stock options in connection with the November secondary offering. In addition, we incurred $0.3 million of third-party fees associated with the secondary offering.
During the fourth quarter of 2016, we also incurred a loss on extinguishment of debt of $16.7 million. This loss is associated with our refinancing on our first lien term debt, which included the write-off of $15.8 million of unamortized debt issuance costs and $0.9 million of other costs associated with the transaction.
GAAP net income was $14.0 million for the three months ended December 31, 2016, or $0.22 per share on a diluted basis, compared to GAAP net income of $28.5 million for the three months ended December 31, 2015, or $0.45 per share on a diluted basis. Our GAAP net income for the three months ended December 31, 2016 included transaction-related expenses and the loss on extinguishment discussed above.
