Kendle Delivers Record Sales and Backlog and Strong Growth in Operating Margin for Third Qu...(p Cash flow from operations for the qu...),Health

Cash flow from operations for the quarter was a positive $13.7 million. Cash and marketable securities totaled $29.1 million, including $1.2 million of restricted cash. Days sales outstanding in accounts receivable were 40 and capital expenditures for third quarter 2007 totaled $3.4 million.

On July 16, 2007, the Company issued $200.0 million in principal amount of 3.375% Convertible Senior Notes due 2012 ("Notes"). The notes pay interest semiannually. Approximately $174 million of the net proceeds of the Notes offering was used to pay down the Company's term loan.

Nine-Month Results

Net service revenues for the nine months ended Sept. 30, 2007, were $293.3 million, an increase of 49 percent over net service revenues of $197.1 million for the nine months ended Sept. 30, 2006. Net income per diluted share of $0.83 for the nine months ended Sept. 30, 2007, includes a charge for amortization of acquired intangibles related to the August 2006 acquisition of CRLCS as well as a charge for the write-off of deferred financing costs related to the Company's term debt, which was paid off in the third quarter of 2007. Excluding these items, which are detailed in the Condensed Consolidated Statements of Income, EPS for the nine months ended Sept. 30, 2007, was $1.14 per diluted share. Interest expense in the nine months ended Sept. 30, 2007, was approximately $12.0 million, primarily related to debt incurred to finance the CRLCS acquisition, compared to interest expense of $2.4 million in the first nine months of 2006. EPS for the nine months ended Sept. 30, 2006, was $0.89 per diluted share. Excluding the amortization of acquired intangibles, EPS for the first nine months of 2006 was $0.92 per diluted share.

The Company's year-to-date effective tax rate was approximately 32 percent, reflecting the effect of the FIN 48 adjustment in the third quarter.

Income from operations for the nine months ended Sept. 30, 2007, was approximately $37.6 mill
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