FORT WASHINGTON, Pa., May 14 /PRNewswire/ -- ReSearch Pharmaceutical Services, Inc. (“RPS” or the “Company”), a leading provider of integrated clinical development outsourcing solutions to the bio-pharmaceutical industry, announces its results for the quarter ended March 31, 2010. These statements include unaudited comparative results for RPS for the quarter ended March 31, 2009.
In addition, RPS announces that it has today filed a Form 10-Q for the period ended March 31, 2010, as required by the Securities and Exchange Commission (“SEC”). A copy of the Form 10-Q is available on our website (www.rpsweb.com).
The following discussion of financial results for the three months ended March 31, 2010 is qualified by reference to the unaudited financial results included in this press release and the Company’s Form 10-Q, as filed with the SEC.
Financial results for the three months ended March 31, 2010
- Service revenues for the first quarter of 2010 of $58.0 million grew $12.7 million or 28.2% as compared to the same period in 2009.
- Direct costs increased 27.7% to $42.4 million for the first quarter of 2010, but decreased as a percentage of service revenue, from 73.4% to 73.1%, from the first quarter of 2009.
- Selling, general, and administrative expenses increased 23.4% to $12.4 million for the first quarter of 2010 from $10.1 million for the first quarter of 2009.
- EBITDA for the first quarter of 2010 of $3.2 million or 5.5% of service revenues, increased from $2.0 million or 4.4% of service revenues for the first quarter of 2009.
- Net income before provision for income taxes for the first quarter of 2010 of $1.7 million increased $0.6 million from $1.1 million for the first quarter of 2009. Net (loss) income for the first quarter of 2010 decreased to a loss of $73,000, from net income for the first quarter in 2009 of $0.5 million.
A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure are located at the end of this press release.
Background on RPS
Headquartered in Ft. Washington, Pennsylvania, with subsidiary offices across Latin America, Europe and Asia, RPS is a next generation CRO and a leading provider of integrated clinical development and enhanced full-service outsourcing solutions to the bio-pharmaceutical industry. RPS provides services in connection with the design, initiation and management of clinical trials programs that are required to obtain regulatory approval to market bio-pharmaceutical products. Our innovative business model combines the expertise of a traditional CRO with the ability to provide flexible outsourcing solutions that are fully integrated within our clients’ clinical drug development infrastructure. This approach was designed to meet the varied needs of small, medium and large bio-pharmaceutical companies.
Supplemental non-GAAP financial information
EBITDA is defined as net (loss) income before interest expense, income taxes and depreciation and amortization. The Company believes that net income is the most directly comparable GAAP measurement to EBITDA. EBITDA is presented because the Company believes it is useful to investors as widely accepted financial indicators of a company’s ability to service and/or incur indebtedness and because such disclosure provides investors with additional criteria used by the Company to evaluate our operating performance and in part, the performance-based compensation of certain of our employees. EBITDA is not defined under GAAP, should not be considered in isolation or as a substitute for a measure of our liquidity or performance prepared in accordance with GAAP and is not indicative of income from operations as determined under GAAP. EBITDA and other non-GAAP financial measures have limitations which should be considered before using these measures to evaluate the Company’s liquidity or financial performance. EBITDA does not include interest expense, income tax expense or depreciation and amortization expense, which may be necessary in evaluating the Company’s operating results and liquidity requirements or those of businesses we may acquire. The Company’s management compensates for these limitations by using EBITDA as a supplement to GAAP results to provide a more comprehensive understanding of the factors and trends affecting our business or any business we may acquire. Our computation of EBITDA may not be comparable to other similarly titled measures provided by other companies, because not all companies calculate this measure in the same fashion.
The following table and related notes reconciles net income to EBITDA:
(in thousands) | |||
Three months ended | |||
March 31, | |||
2010 | 2009 | ||
Reconciliation of net income to EBITDA: | |||
Net (loss) income | ($73) | $503 | |
Provision for income taxes | 1,789 | 621 | |
Interest (income) and expense, net | 226 | 57 | |
Depreciation and amortization | 1,270 | 796 | |
EBITDA | $3,212 | $1,977 | |
Financial Data ReSearch Pharmaceutical Services, Inc. and Subsidiaries Consolidated Balance Sheets | |||
March 31, | December 31, | ||
2010 | 2009 | ||
Assets | (unaudited) | ||
Current assets: | |||
Cash and cash equivalents | $2,835,460 | $3,468,104 | |
Restricted cash | 4,034,186 | 5,195,841 | |
Accounts receivable, less allowance for doubtful accounts of $463,000 at March 31, 2010 and $398,000 at December 31, 2009, respectively | 55,385,973 | 54,516,875 | |
Deferred tax asset | 485,522 | 473,940 | |
Prepaid expenses and other current assets | 3,520,209 | 4,795,030 | |
Total current assets | $66,261,350 | $68,449,790 | |
Property and equipment, net | 5,787,169 | 6,404,747 | |
Other assets | 1,648,390 | 1,627,453 | |
Intangible assets subject to amortization, net | 2,347,525 | 2,792,481 | |
Goodwill | 15,900,736 | 16,742,614 | |
Deferred tax asset | 247,607 | 243,593 | |
Total assets | $92,192,777 | $96,260,678 | |
Liabilities and stockholders’ equity | |||
Current liabilities: | |||
Accounts payable | $4,090,253 | $3,526,931 | |
Accrued expenses | 12,480,539 | 14,551,527 | |
Customer deposits | 8,534,186 | 9,695,841 | |
Deferred revenue | 8,516,189 | 8,910,551 | |
Line of credit | 10,412,081 | ||
