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PAREXEL Reports Fourth Quarter and Fiscal Year 2008 Financial Results
Date:8/6/2008

- Record quarterly and Fiscal Year service revenue grows approximately 33%

and 30%, respectively

- Operating margin of 9.9% for the quarter - Record backlog of over $2 billion; net book-to-burn ratio of 1.56 for the

quarter

BOSTON, Aug. 6 /PRNewswire-FirstCall/ -- PAREXEL International Corporation (Nasdaq: PRXL) today announced its financial results for the fourth quarter and Fiscal Year ended June 30, 2008.

For the three months ended June 30, 2008, PAREXEL's consolidated service revenue increased 32.6% to a record $272.2 million compared with $205.2 million in the prior year period. The Company reported operating income of $26.9 million, or 9.9% of consolidated service revenue, in the fourth quarter of Fiscal Year 2008, versus operating income of $16.9 million, or 8.2% of consolidated service revenue, in the comparable quarter of the prior year. Including the positive net impact from certain tax items, net income for the quarter totaled $25.0 million, or $0.43 per diluted share, compared with net income of $10.4 million, or $0.18 per diluted share, for the quarter ended June 30, 2007.

On an adjusted basis, excluding the favorable impact of $8.7 million in net tax adjustments related, in part, to the reversal of certain U.S. tax valuation reserves, fourth quarter Fiscal Year 2008 net income would have been $16.3 million (up 56.5% from the quarter ended June 30, 2007) and diluted earnings per share would have been $0.28 (up 55.6% from the quarter ended June 30, 2007).

On a segment basis, consolidated service revenue for the fourth quarter of Fiscal Year 2008 was $212.0 million in Clinical Research Services (CRS), $33.3 million in PAngs $31,474 $13,656 $30,463

Long-term debt $38,465 $38,443 $277

Stockholders' equity $428,091 $397,266 $316,616

(a) Fiscal Year 2007 numbers have been adjusted to reflect Fiscal Year

2008 presentation. Certain direct costs have been moved to selling,

general and administrative to ensure consistency among all business

segments.

(b) Represents an $11.1 million reversal of certain U.S. tax valuation

reserves, which were offset by $2.4 million in adjustments to the

Netherlands tax reserves.

PAREXEL International Corporation

Consolidated Condensed Statement of Income

(In thousands, except per share data)

Unaudited

Twelve Months Ended

June 30, 2008 June 30, 2007

As As

Reported Adjustments Adjusted Reported(a)

Service revenue $964,283 $964,283 $741,955

Reimbursement revenue 198,687 198,687 176,149

Total revenue 1,162,970 1,162,970 918,104

Costs and expenses:

Direct costs 629,399 629,399 483,887

Reimbursable out-of-

pocket expenses 198,687 198,687 176,149

Selling, general and

administrative 211,392 211,392 169,681

Depreciation 33,005 33,005 26,546

Amortization 4,681 4,681 4,309

Restructuring benefit (860) 860 (b) - (34)

Total costs and expenses 1,076,304 860 1,077,164 860,538

Income from operations 86,666 (860) 85,806 57,566

Other income (expense) (1,129) (1,129) 1,968

Income before income taxes 85,537 (860) 84,677 59,534

Provision for income taxes 20,026 12,383 ( c ) 32,409 22,277

Effective tax rate 23.4% 38.3% 37.4%

Minority interest expense

(benefit) 871 871 (32)

Net income $64,640 $(13,243) $51,397 $37,289

Earnings per common share:

Basic $1.16 $0.92 $0.68

Diluted $1.12 $0.89 $0.66

Shares used in computing

earnings per common share:

Basic 55,896 55,896 54,633

Diluted 57,461 57,461 56,216

(a) Fiscal Year 2007 numbers have been adjusted to reflect Fiscal Year

2008 presentation. Certain direct costs have been moved to selling,

general and administrative to ensure consistency among all business

segments.

(b) Represents a change in assumptions in restructuring reserves mainly

related to facilities in the U.K.

( c ) Represents a non-U.S. net tax benefit of $4 million, related in part

to a reduction in German tax rates, and an $11.1 million reversal of

certain U.S. tax valuation reserves, which were offset by $2.4

million in adjustments to the Netherlands tax reserves, and a $0.3

million tax adjustment related to the restructuring benefit.

PAREXEL International Corporation

Segment Information

($ in thousands)

Three months ended

June 30,

2008 2007 (a)

Clinical Research Services (CRS)

Service revenue $212,035 $152,677

% of total service revenue 77.9% 74.4%

Gross profit $71,530 $54,642

Gross margin % of service revenue 33.7% 35.8%

PAREXEL Consulting & Medical Communications

Services (PCMS)

Service revenue $33,263 $33,310

% of total service revenue 12.2% 16.2%

Gross profit $11,823 $10,534

Gross margin % of service revenue 35.5% 31.6%

Perceptive Informatics, Inc. (PII)

Service revenue $26,871 $19,222

% of total service revenue 9.9% 9.4%

Gross profit $13,733 $8,552

Gross margin % of service revenue 51.1% 44.5%

Total service revenue $272,169 $205,209

Total gross profit $97,086 $73,728

Gross margin % of service revenue 35.7% 35.9%

Revenue by Geography

The Americas $105,198 $78,350

Europe, Middle East & Africa 145,453 114,148

Asia/Pacific 21,518 12,711

Total service revenue $272,169 $205,209

Quarterly Supplemental Financial Data

Total revenue $331,927 $253,982

Investigator fees 48,180 32,689

Gross revenue $380,107 $286,671

DSO 63 49

Capital expenditures $21,955 $14,014

(a) Fiscal Year 2007 numbers have been adjusted to reflect Fiscal Year

2008 presentation. Certain direct costs have been moved to selling,

general and administrative to ensure consistency among all business

segments.

PAREXEL International Corporation

Segment Information

($ in thousands)

Twelve months ended

June 30,

2008 2007 (a)

Clinical Research Services (CRS)

Service revenue $745,641 $548,838

% of total service revenue 77.3% 74.0%

Gross profit $251,762 $190,283

Gross margin % of service revenue 33.8% 34.7%

PAREXEL Consulting & Medical Communications

Services (PCMS)

Service revenue $129,804 $120,636

% of total service revenue 13.5% 16.3%

Gross profit $43,874 $36,161

Gross margin % of service revenue 33.8% 30.0%

Perceptive Informatics, Inc. (PII)

Service revenue $88,838 $72,481

% of total service revenue 9.2% 9.8%

Gross profit $39,248 $31,624

Gross margin % of service revenue 44.2% 43.6%

Total service revenue $964,283 $741,955

Total gross profit $334,884 $258,068

Gross margin % of service revenue 34.7% 34.8%

Revenue by Geography

The Americas $377,857 $290,651

Europe, Middle East & Africa 515,445 411,483

Asia/Pacific 70,981 39,821

Total service revenue $964,283 $741,955

(a) Fiscal Year 2007 numbers have been adjusted to reflect Fiscal Year

2008 presentation. Certain direct costs have been moved to selling,

general and administrative to ensure consistency among all business

segments.

CONTACTS: James Winschel, Senior Vice President and Chief Financial

Officer

Jill Baker, Vice President of Investor Relations

+1-781-434-4118

REXEL Consulting and Medical Communications Services (PCMS), and $26.9 million in Perceptive Informatics, Inc.

For the full fiscal year ended June 30, 2008, consolidated service revenue was $964.3 million versus $742.0 million in the prior year, a year-over-year increase of 30.0%. For Fiscal Year 2008, operating income was $86.7 million, or 9.0% of consolidated service revenue, compared with operating income of $57.6 million in Fiscal Year 2007, or 7.8% of consolidated service revenue. Net income for Fiscal Year 2008 was $64.6 million, or $1.12 per diluted share, compared with net income of $37.3 million, or $0.66 per diluted share, in Fiscal Year 2007.

On an adjusted basis, excluding a Q1 Fiscal Year 2008 non-U.S. net tax benefit of $4.0 million, related in part to a reduction in German tax rates; a Q3 Fiscal Year 2008 favorable pre-tax restructuring benefit of $860,000; and the Q4 Fiscal Year 2008 net tax adjustments described above of $8.7 million, operating income for the full Fiscal Year would have been $85.8 million, or 8.9% of consolidated service revenue (up 49.1% compared to the prior year), pretax income would have been $84.7 million, income taxes would have been $32.4 million (or 38.3% of pretax income), net income would have been $51.4 million (up 37.8% from one year ago), and diluted earnings per share would have been $0.89 (up 34.8% from the prior year). The Company has posted a spreadsheet of quarterly and full Fiscal Year 2008 results detailing these adjustments in the "Additional Financials" portion of the Investor Relations section at http://www.PAREXEL.com.

On a segment basis, consolidated service revenue for Fiscal Year 2008 was $745.7 million in CRS, $129.8 million in PCMS, and $88.8 million in Perceptive Informatics, Inc.

New business wins and backlog growth were strong in the fourth quarter. The Company reported a Fiscal Year 2008 ending backlog of $2.059 billion, an increase of 36.6% over the ending backlog reported for Fiscal Year 2007. Backlog at the beginning of the fourth quarter was $1.907 billion. Adding the June quarter's record gross new business wins of $545.0 million to that amount, and then subtracting $272.2 million in current quarter service revenue and $120.7 million in cancellations, resulted in a backlog of $2.059 billion as of June 30, 2008. The foreign exchange impact on backlog was insignificant in the quarter. The net book-to-burn ratio was 1.56 for the quarter, and was 1.57 for Fiscal Year 2008.

Mr. Josef H. von Rickenbach, PAREXEL's Chairman and Chief Executive Officer stated, "The fourth quarter's financial results capped a strong fiscal year for PAREXEL. We posted record service revenue in the fourth quarter, and achieved full year service revenue growth of 30.0%, or approximately 19% on a same-store constant currency adjusted basis. All business segments contributed to the positive full-year results. We also delivered on our commitment to improve profitability, increasing operating margin to 9.9% in the quarter, and by 120 basis points to 9% for the full fiscal year, while concurrently making strategic investments to help meet our longer term goals. Notable improvements in the Perceptive Informatics and Medical Communications businesses, as well as significant leveraging of SG&A as a result of very strong service revenue growth in CRS, were the primary contributors to solid operating margin expansion during the Fiscal Year."

Mr. von Rickenbach continued, "We have clearly benefited from the successful execution of our strategy to become a leading global provider of complex clinical development services and technologies. Demand has been driven by both large and small clients, an improving industry pipeline in late stage development, and an increase in outsourcing penetration rates. We move into the new fiscal year with good momentum, a strong and diversified backlog, and a healthy business development pipeline. Our priorities for Fiscal Year 2009 include solid revenue growth, as well as improved operating profitability and increased earnings per share. We expect to achieve these objectives while also making investments in our businesses in an effort to continuously improve the products and services that we offer to our clients, positioning us for sustained growth."

The Company issued forward-looking guidance for the first quarter of Fiscal Year 2009 (ending September 30, 2008), and updated guidance for Fiscal Year 2009, using recent exchange rates. Without taking into account the impact from the anticipated acquisition of ClinPhone (as announced on June 13, 2008), the Company expects to report consolidated service revenue for the first quarter in the range of $260 to $270 million, and earnings per diluted share in the range of $0.23 to $0.25. For Fiscal Year 2009, consolidated service revenue is expected to be in the range of $1.125 to $1.155 billion and earnings per diluted share are projected to be in the range of $1.15 to $1.25 (versus previously issued revenue guidance for Fiscal Year 2009 of $1.110 to $1.140 billion, and earnings per diluted share of $1.10 to $1.20).

The Company currently anticipates that the acquisition of ClinPhone will be completed in the course of the first quarter of Fiscal Year 2009. When taking into account the impact from the anticipated acquisition, the Company expects that there will be a dilutive impact to earnings per share in Fiscal Year 2009 in the range of $0.04 to $0.06, including the amortization of intangibles and other costs. Upon closing of the transaction, PAREXEL will also be taking a one-time charge to write off costs associated with unamortized loan fees in connection with its existing line of credit and costs related to unwinding of interest rate hedges. The Company anticipates these costs will have a dilutive impact to earnings per share in Fiscal Year 2009 of approximately $0.02. Due to U.K. regulations, the Company cannot provide more specific revenue or earnings per share guidance at this time. The Company expects to update guidance in more detail after the completion of the transaction.

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures, including operating income, pretax income, income taxes, net income, and diluted earnings per share. The Company believes that presenting the non-GAAP financial measures contained in the financial tables and in this press release assists investors and others in gaining a better understanding of its core operating results and future prospects, especially when comparing such results to previous periods or forecasted guidance, because they exclude items that are outside of the Company's normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. Management uses non-GAAP financial measures, 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 for the same reasons stated above. Such measures are also used by management in its financial and operating decision-making. Non-GAAP financial measures are 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 GAAP results with non-GAAP financial measures may be found in the attached financial tables.

A conference call to discuss PAREXEL's fourth quarter and year-end earnings, business, and financial outlook will begin at 10:00 a.m. EDT Thursday, August 7, 2008 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) 332-0228 and ask to join the PAREXEL quarterly conference call.

About the Company

PAREXEL International Corporation is a leading global bio/pharmaceutical services organization, providing a broad range of knowledge-based contract research, medical communications and consulting services to the worldwide pharmaceutical, biotechnology and medical device industries. Committed to providing solutions that expedite time-to-market and peak-market penetration, PAREXEL has developed significant expertise across the development and commercialization continuum, from drug development and regulatory consulting to clinical pharmacology, clinical trials management, medical education and reimbursement. Perceptive Informatics, Inc., a subsidiary of PAREXEL, provides advanced technology solutions, including medical imaging, to facilitate the clinical development process. Headquartered near Boston, Massachusetts, PAREXEL operates in 63 locations throughout 52 countries around the world, and has over 8,050 employees. For more information about PAREXEL International visit http://www.PAREXEL.com.

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 2009 and Fiscal Year 2009. 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," "targets," and similar expressions are also intended to identify forward-looking statements. The forward-looking statements in this release 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 which would, among other things, adversely impact the Company's recognition of revenue included in backlog; the Company's dependence on certain industries and clients; the Company's ability to win new business, manage growth and costs, 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, including, but not limited to, the successful completion, business integration and anticipated synergy achievements in connection with the ClinPhone acquisition; the impact on the Company's business of government regulation of the drug, medical device and biotechnology industry; consolidation within the pharmaceutical industry and 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 period ended March 31, 2008 as filed with the SEC on May 9, 2008, 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 Income

(In thousands, except per share data)

Unaudited

Three Months Ended

June 30, 2008 June 30, 2007

As As

Reported Adjustments Adjusted Reported(a)

Service revenue $272,169 $272,169 $205,209

Reimbursement revenue 59,758 59,758 48,773

Total revenue 331,927 331,927 253,982

Costs and expenses:

Direct costs 175,083 175,083 131,481

Reimbursable out-of-

pocket expenses 59,758 59,758 48,773

Selling, general and

administrative 60,027 60,027 48,256

Depreciation 8,955 8,955 7,093

Amortization 1,169 1,169 1,436

Restructuring benefit - - 40

Total costs and expenses 304,992 304,992 237,079

Income from operations 26,935 26,935 16,903

Other income (expense) (726) (726) 370

Income before income taxes 26,209 26,209 17,273

Provision for income taxes 877 8,706 (b) 9,583 6,908

Effective tax rate 3.3% 36.6% 40.0%

Minority interest expense

(benefit) 294 294 (70)

Net income $25,038 $(8,706) $16,332 $10,435

Earnings per common share:

Basic $0.44 $0.29 $0.19

Diluted $0.43 $0.28 $0.18

Shares used in computing

earnings per common share:

Basic 56,602 56,602 55,081

Diluted 57,711 57,711 56,851

Balance Sheet Information Preliminary

June 30, March 31, June 30,

2008 2008 2007

Billed accounts receivable, net $253,256 $216,060 $189,843

Unbilled accounts receivable, net 222,560 197,627 135,178

Deferred revenue (213,126) (199,121) (170,718)

Net receivables $262,690 $214,566 $154,303

Cash and marketable securities $51,918 $53,313 $96,677

Working capital $172,315 $165,437 $118,746

Total assets $941,757 $859,638 $680,013

Short-term borrowi
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SOURCE PAREXEL International Corporation
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