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PAREXEL Reports Third Quarter Fiscal Year 2009 Financial Results
Date:4/27/2009

- Consolidated service revenue of $264.5 million grows 7.8% year-over-year

- Operating margin of 10.0%

- Diluted earnings per share of $0.25

- Net quarterly book-to-bill ratio equates to 1.25

BOSTON, April 27 /PRNewswire-FirstCall/ -- PAREXEL International Corporation (Nasdaq: PRXL) today announced its financial results for the third quarter ended March 31, 2009.

For the three months ended March 31, 2009, PAREXEL's consolidated service revenue increased 7.8% to $264.5 million, compared with $245.3 million in the prior year period. Foreign exchange negatively impacted the quarter by $35.7 million dollars. Excluding the negative impact of foreign exchange and the net positive impact of acquisitions and divestitures of $17.0 million from the third quarter of Fiscal Year 2009, and $0.9 million in divestitures from the third quarter of Fiscal Year 2008, revenue grew 15.8% year-over-year. The Company reported operating income of $26.4 million, or 10.0% of consolidated service revenue, in the third quarter of Fiscal Year 2009, versus operating income of $22.7 million, or 9.3% of consolidated service revenue, in the comparable quarter of the prior year. This represented a year-over-year increase of 16.3%. Net income for the quarter totaled $14.2 million, or $0.25 per diluted share, compared with net income of $14.2 million, or $0.25 per diluted share for the quarter ended March 31, 2008.

On a segment basis, consolidated service revenue for the third quarter of Fiscal Year 2009 consisted of $199.7 million in Clinical Research Services (CRS), $29.2 million in PAREXEL Consulting and Medical Communications Services (PCMS), and $35.6 million in Perceptive Informatics, Inc.

For the nine months ended March 31, 2009, PAREXEL's consolidated service revenue increased 16.1% to $803.3 million compared with $692.1 million in the prior nine-month period. Operating income for the current nine-month period was $56.1 million, or 7.0% of consolidated service revenue, versus operating income of $59.7 million, or 8.6% of consolidated service revenue, in the comparable period of the prior year. Net income for the nine months ended March 31, 2009 totaled approximately $33.0 million, or $0.57 per diluted share, compared with net income of $39.6 million, or $0.69 per diluted share, for the nine months ended March 31, 2008.

The nine month results ended March 31, 2009 included a $15.0 million reserve for wind-down costs and bad debt expense and an associated $7.1 million tax benefit related to a client's default on a contract. The nine month results ended March 31, 2008 included a favorable non-U.S. net tax benefit of approximately $4.0 million. Excluding the aforementioned items, growth in operating income, net income and diluted earnings per share would have been up 19.1%, 15.0% and 14.5% respectively, for the nine month period, as compared with the prior year nine month period.

PAREXEL's backlog was $2.036 billion at the end of the March quarter, an increase of approximately 6.8% year-over-year. The reported backlog included gross new business wins of $427.3 million, cancellations of $95.8 million and a negative impact from foreign exchange rates of $37.4 million. The net book-to-bill ratio was 1.25 in the quarter (defined as gross new business less cancellations divided by service revenue).

Mr. Josef H. von Rickenbach, PAREXEL's Chairman and Chief Executive Officer stated, "The Company's positive quarterly results were a clear reflection of the determined focus by our employees to control costs and achieve both our financial and operational targets. I am proud of our staff's ability to grow service revenue and expand operating margins in today's challenging environment. In addition, we were able to generate a very respectable level of new business wins in the quarter, despite some market headwinds."

Mr. von Rickenbach continued, "I remain confident regarding PAREXEL's prospects for the future, and believe that our global footprint, and a diverse service offering have positioned us well for the current environment. Revenue growth has been quite healthy, especially on a same-store, constant currency basis. The steps that we have taken over the past year to better leverage our global presence in managing our own costs have been paying off, and we still have a number of initiatives underway which we expect will continue to drive revenue growth and profitability in the coming quarters. On a final note, the integration of ClinPhone is tracking well, and we expect further progress as we go forward."

The Company issued forward-looking guidance for the fourth quarter of Fiscal Year 2009 (ending June 30, 2009), for Fiscal Year 2009, and for Calendar Year 2009, using recent exchange rates. For the fourth quarter, the Company anticipates reporting consolidated service revenue in the range of $271 to $277 million and earnings per diluted share in the range of $0.26 to $0.28. For Fiscal Year 2009, consolidated service revenue is expected to be in the range of $1.075 to $1.080 billion, and GAAP earnings per diluted share are projected to be in the range of $0.83 to $0.85. Adjusted earnings per share for Fiscal Year 2009, excluding a negative impact of $15 million and an associated tax benefit of $7.1 million related to a client's default on a contract in the second quarter, are projected to be in the range of $0.97 to $0.99. (Previously issued FY2009 revenue guidance was for service revenue of $1.095 to $1.115 billion, GAAP earnings per diluted share of $0.80 to $0.84, and adjusted earnings per diluted share of $0.94 to $0.98). For Calendar Year 2009, expectations are for consolidated service revenue to be in the range of $1.080 to $1.100 billion, and earnings per diluted share to be in the range of $0.95 to $1.01. (Previously issued Calendar Year guidance was for service revenue of $1.135 to $1.175 billion, and earnings per diluted share of $0.96 to $1.04).

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures. The Company believes that presenting the non-GAAP financial measures contained 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 such measures 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 measures prepared in accordance with GAAP, 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 conference call to discuss PAREXEL's third quarter earnings, business, and financial outlook will begin at 10:00 a.m. EDT on Tuesday, April 28, 2009 and will be broadcast live over the internet via webcast. The webcast may be accessed in the "Webcasts" portion of the Investors section of the Company's website at 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 +1-706-679-6476 and ask to join PAREXEL's Third Quarter Fiscal Year 2009 Earnings Conference Call.

Certain trended financial information may be found in the Investors section of the Company's website under the "Additional Financials" section.

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 69 locations throughout 52 countries around the world, and has over 9,400 employees. For more information about PAREXEL International visit 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 fourth quarter of Fiscal Year 2009, Fiscal Year 2009 and Calendar 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 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 December 31, 2008 as filed with the SEC on February 9, 2009 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.

    CONTACTS:
    James Winschel, Senior Vice President and Chief Financial Officer
    Jill Baker, Vice President of Investor Relations
    +1-781-434-4118

             PAREXEL International Corporation
         Consolidated Condensed Statement of Income
           (In thousands, except per share data)

                                       Unaudited
                                  Three Months Ended
                                  ------------------
                              March 31, 2009 March 31, 2008
                              -------------- --------------

    Service revenue                $264,457  $245,336
    Reimbursement revenue            46,504    49,387
                                     ------    ------
      Total revenue                 310,961   294,723

    Costs and expenses:
        Direct costs                165,781   161,263
        Reimbursable out-of-pocket
         expenses                    46,504    49,387
        Selling, general and
         administrative              58,998    52,819
        Depreciation                 10,531     8,162
        Amortization                  2,728     1,231
        Restructuring benefit             -      (860)*
                                       ----      ----
      Total costs and expenses      284,542   272,002

    Income from operations           26,419    22,721

    Other income (expense)           (4,716)      352
                                     ------    ------

    Income before income taxes       21,703    23,073

    Provision for income taxes        7,400     8,586
    Effective tax rate                 34.1%     37.2%

    Minority interest expense            99       301
                                        ---       ---

    Net income                      $14,204   $14,186
                                    =======   =======

    Earnings per common share:
    --------------------------
      Basic                           $0.25     $0.25
      Diluted                         $0.25     $0.25

    Shares used in computing
     earnings per common share:
    ---------------------------
      Basic                          57,556    56,108
      Diluted                        57,556    57,765

    *Represents a change in assumptions in restructuring reserves
     mainly related to facilities in the U.K.




    Balance Sheet Information   Preliminary
    -------------------------    March 31,   June 30,   March 31,
                                    2009       2008        2008
                                    ----       ----        ----
    Billed accounts
     receivable, net               $214,664  $253,256    $216,060
    Unbilled accounts
     receivable, net                215,729   222,560     197,627
    Deferred revenue               (244,262) (213,126)   (199,121)
                                   --------  --------    --------
    Net receivables                $186,131  $262,690    $214,566
                                   ========  ========    ========

    Cash and marketable
     securities                     $99,512   $51,918     $53,313
    Working capital                $141,331  $146,535    $165,437
    Total assets                 $1,105,560  $948,071    $859,638
    Short-term borrowings           $57,100   $66,474     $13,656
    Long-term debt                 $229,360    $3,465     $38,443
    Stockholders' equity           $360,210  $428,091    $397,266



                         PAREXEL International Corporation
                     Consolidated Condensed Statement of Income
                       (In thousands, except per share data)

                                                  Unaudited
                                              Nine Months Ended
                                ------------------------------------------
                                                March 31, 2009
                                ------------------------------------------
                                As Reported      Adjustments      Adjusted
                                -----------      -----------      --------

    Service revenue                $803,349                       $803,349
    Reimbursement revenue           151,165                        151,165
                                    -------                        -------
      Total revenue                 954,514                        954,514

    Costs and expenses:
        Direct costs                514,440                        514,440
        Reimbursable out-of-pocket
         expenses                   151,165                        151,165
        Selling, general and
         administrative             178,785                        178,785
        Depreciation                 31,765                         31,765
        Amortization                  7,237                          7,237
        Special charge               15,000          (15,000)(a)         -
        Restructuring benefit             -                              -
                                    -------          -------       -------
      Total costs and expenses      898,392          (15,000)      883,392

    Income from operations           56,122           15,000        71,122

    Other expense                    (1,751)                        (1,751)
                                     ------           ------        ------

    Income before income taxes       54,371           15,000        69,371

    Provision for income taxes       20,240            7,080(a)     27,320
    Effective tax rate                 37.2%                          39.4%

    Minority interest expense         1,100                          1,100
                                      -----            -----         -----

    Net income                      $33,031           $7,920       $40,951
                                    =======           ======       =======

    Earnings per common share:
    --------------------------
      Basic                           $0.57                          $0.71
      Diluted                         $0.57                          $0.71

    Shares used in computing
     earnings per common share:
    ---------------------------
      Basic                          57,449                         57,449
      Diluted                        57,861                         57,861



                                                   Unaudited
                                               Nine Months Ended
                                -----------------------------------------
                                                 March 31, 2008
                                -----------------------------------------
                                As Reported      Adjustments     Adjusted
                                -----------      -----------     --------

    Service revenue                $692,114                      $692,114
    Reimbursement revenue           138,929                       138,929
                                    -------                       -------
      Total revenue                 831,043                       831,043

    Costs and expenses:
        Direct costs                454,316                       454,316
        Reimbursable out-of-pocket
         expenses                   138,929                       138,929
        Selling, general and
         administrative             151,365                       151,365
        Depreciation                 24,050                        24,050
        Amortization                  3,512                         3,512
        Special charge                    -                             -
        Restructuring benefit          (860)(b)                      (860)(b)
                                       ----             ----         ----
      Total costs and expenses      771,312                       771,312

    Income from operations           59,731                        59,731

    Other expense                      (403)                         (403)
                                       ----             ----         ----

    Income before income taxes       59,328                        59,328

    Provision for income taxes       19,149            3,997(c)    23,146
    Effective tax rate                 32.3%                         39.0%

    Minority interest expense           577                           577
                                        ---              ---          ---

    Net income                      $39,602          $(3,997)     $35,605
                                    =======          =======      =======

    Earnings per common share:
    --------------------------
      Basic                           $0.71                         $0.64
      Diluted                         $0.69                         $0.62

    Shares used in computing
     earnings per common share:
    ---------------------------
      Basic                          55,662                        55,662
      Diluted                        57,380                        57,380

    (a) Represents $15 million in reserves for wind-down costs and bad debt
        expense related to client's default on a contract and an associated
        $7.1 million tax benefit.
    (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.



                PAREXEL International Corporation
                       Segment Information
                         ($ in thousands)

                                            Unaudited
                                       Three Months Ended
                                       ------------------
                                  March 31, 2009 March 31, 2008
                                  -------------- --------------
    Clinical Research Services (CRS)

    Service revenue                 $199,662        $191,572
    % of total service revenue          75.5%           78.1%
    Gross profit                     $71,800         $65,007
    Gross margin % of service
     revenue                            36.0%           33.9%

    PAREXEL Consulting &
     Medical Communications
     Services (PCMS)

    Service revenue                  $29,176         $33,484
    % of total service revenue          11.0%           13.6%
    Gross profit                     $11,336         $11,328
    Gross margin % of service
     revenue                            38.9%           33.8%


    Perceptive Informatics, Inc.
     (PII)

    Service revenue                  $35,619         $20,280
    % of total service revenue          13.5%            8.3%
    Gross profit                     $15,540          $7,738
    Gross margin % of service
     revenue                            43.6%           38.2%


    Total service revenue           $264,457        $245,336
    Total gross profit               $98,676         $84,073
    Gross margin % of service
     revenue                            37.3%           34.3%


    Revenue by Geography
    --------------------

    The Americas                    $113,551         $99,735
    Europe, Middle East & Africa     126,666         129,105
    Asia/Pacific                      24,240          16,496
                                      ------          ------
    Total service revenue           $264,457        $245,336
                                    ========        ========


    Quarterly Supplemental Financial Data
    -------------------------------------

    Total revenue                   $310,961        $294,723
    Investigator fees                 44,781          38,496
                                      ------          ------
    Gross revenue                   $355,742        $333,219
                                    ========        ========

    Days Sales Outstanding                47              59

    Capital expenditures             $16,651         $18,794



                       PAREXEL International Corporation
                              Segment Information
                               ($ in thousands)

                                              Unaudited
                                          Nine Months Ended
                                          -----------------
                                    March 31, 2009            March 31, 2008
                                    --------------            --------------
                               As                                   As
                            Reported  Adjustments    Adjusted    Reported
                            --------  -----------    --------    --------
    Clinical Research
     Services (CRS)

    Service revenue         $603,419                  $603,419   $533,606
    % of total service
     revenue                    75.1%                     75.1%      77.1%
    Gross profit            $212,928      $15,000(a)  $227,928   $180,232
    Gross margin % of
     service revenue            35.3%                     37.8%      33.8%

    PAREXEL Consulting &
     Medical Communications
     Services (PCMS)


    Service revenue          $91,218                   $91,218    $96,541
    % of total service
     revenue                    11.4%                     11.4%      13.9%
    Gross profit             $32,448                   $32,448    $32,051
    Gross margin % of
     service revenue            35.6%                     35.6%      33.2%


    Perceptive Informatics,
     Inc. (PII)

    Service revenue         $108,712                  $108,712    $61,967
    % of total service
     revenue                    13.5%                     13.5%       9.0%
    Gross profit             $43,533                   $43,533    $25,515
    Gross margin % of
     service revenue            40.0%                     40.0%      41.2%


    Total service revenue   $803,349                  $803,349   $692,114
    Total gross profit      $288,909      $15,000(a)  $303,909   $237,798
    Gross margin % of
     service revenue            36.0%                     37.8%      34.4%


    Revenue by Geography
    --------------------

    The Americas            $337,442                             $272,659
    Europe, Middle East &
     Africa                  398,586                              369,992
    Asia/Pacific              67,321                               49,463
                              ------                               ------
    Total service revenue   $803,349                             $692,114
                            ========                             ========


    (a) Represents $15 million in reserves for wind-down costs and bad debt
        expense related to a large late stage trial.


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SOURCE PAREXEL International Corporation
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