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PAREXEL Reports Second Quarter Fiscal Year 2009 Financial Results
Date:1/26/2009

- Record service revenue of $275.8 million, up 15.6% year-over-year

- Gross new business wins of $459.0 million, up 32% from the September quarter

- Net book-to-bill ratio of 1.23

BOSTON, Jan. 26 /PRNewswire-FirstCall/ -- PAREXEL International Corporation (Nasdaq: PRXL) today announced its financial results for the second quarter ended December 31, 2008.

For the three months ended December 31, 2008, PAREXEL's consolidated service revenue increased 15.6% to a record $275.8 million compared with $238.7 million in the prior year period. Excluding the negative impact of foreign exchange of $25.9 million dollars in the quarter, revenue increased 26.4%. Under Generally Accepted Accounting Principles (GAAP), the Company reported operating income of $7.7 million, or 2.8% of consolidated service revenue, in the second quarter of Fiscal Year 2009, versus operating income of $20.5 million, or 8.6% of consolidated service revenue, in the comparable quarter of the prior year. Net income for the quarter totaled $5.2 million, or $0.09 per diluted share, compared with net income of $11.5 million, or $0.20 per diluted share, for the quarter ended December 31, 2007.

As previously reported, the Company was notified by a small biopharma client of its inability to make further payments due to PAREXEL in connection with an on-going service contract for a large late stage clinical trial. The client subsequently filed for bankruptcy protection. As a result of this event, the Company terminated the contract with the client, and recorded $15 million in pre-tax reserves in the second quarter for anticipated wind-down costs and bad debt expense related to impaired accounts receivable (for service fees, pass-through costs, and investigator fees). We have conducted a thorough review of the projects that we are currently managing for small biopharma clients, and do not believe that we have any further material exposure of a similar nature at this time.

Excluding the impact from the contract termination, second quarter operating income was $22.7 million, or 8.2% of consolidated service revenue, net income was $13.1 million, and earnings per diluted share were $0.23, representing earnings per share growth of 15% compared with the prior year period.

On a segment basis, consolidated service revenue for the second quarter of Fiscal Year 2009 was $200.9 million in Clinical Research Services (CRS), $31.9 million in PAREXEL Consulting and Medical Communications Services (PCMS), and $43.0 million in Perceptive Informatics, Inc.

For the six months ended December 31, 2008, consolidated service revenue was $538.9 million versus $446.8 million in the prior year period, an increase of 20.6%. Operating income for the current six-month period was $29.7 million, or 5.5% of service revenue, compared with operating income of $37.0 million, or 8.3% of service revenue in the prior year period. On an adjusted basis, excluding the impact from the contract termination previously mentioned, operating income for the six-month period ending December 31, 2008 was $44.7 million, equating to an operating margin of 8.3% of service revenue. Net income on a GAAP basis for the six months ended December 31, 2008 was $18.8 million, or $0.32 per diluted share, compared with net income of $25.4 million, or $0.44 per diluted share, in the prior year period. On an adjusted basis, excluding both the impact from the Q2 Fiscal Year 2009 contract termination, and a $4 million net tax benefit in Q1 of Fiscal Year 2008, net income for the six months ended December 31, 2008 was $26.7 million, or $0.46 per diluted share, compared with net income of $21.4 million, or $0.37 per diluted share, in the prior year period.

PAREXEL's backlog was approximately $2.0 billion at the end of the December quarter, an increase of approximately 13% year-over-year. The reported backlog included gross new business wins of $459.0 million, cancellations of $121.0 million (including $44 million from the previously mentioned client contract termination), and a negative impact from foreign exchange rates of $116.5 million. The net book-to-bill ratio was 1.23 in the quarter (defined as gross new business less cancellations divided by service revenue). Excluding the client contract termination, the net book-to-bill ratio was approximately 1.39.

Mr. Josef H. von Rickenbach, PAREXEL's Chairman and Chief Executive Officer stated, "During the second quarter, I was pleased with the Company's new business performance in a challenging market. We also made good progress with the integration of ClinPhone, which enabled us to drive significant sequential improvement in Perceptive's gross margin."

Mr. von Rickenbach continued, "With regard to our outlook for the current calendar year, I remain cautiously optimistic. While we may experience a slow-down in the small biopharma client segment due to the current condition of the financial markets, I believe that this impact may be offset by an increase in outsourcing levels from larger clients. In this regard, many large pharma companies are approaching clinical trials outsourcing more strategically, and look to benefit from our depth of expertise in the drug development process. Notwithstanding the current uncertain environment, we continue to believe that our strategy and position in the industry are sound, and feel that we are poised to take advantage of the many opportunities that continue to exist in the marketplace."

The Company issued forward-looking guidance for the third quarter of Fiscal Year 2009 (ending March 31, 2009), for Fiscal Year 2009 and for Calendar 2009 using recent exchange rates. For the third quarter, the Company anticipates reporting consolidated service revenue in the range of $273 to $283 million and earnings per diluted share in the range of $0.23 to $0.25. On a GAAP basis, for Fiscal Year 2009, consolidated service revenue is expected to be in the range of $1.095 to $1.115 billion, and earnings per diluted share to be in the range of $0.80 to $0.84 (previously issued revenue guidance was service revenue of $1.080 to $1.110 billion, and diluted earnings per share of $0.75 to $0.82). Excluding the impact of the second quarter contract termination as previously described, the Company expects to achieve diluted earnings per share of $0.94 to $0.98 for Fiscal Year 2009. For Calendar Year 2009, consolidated service revenue is expected to be in the range of $1.135 to $1.175 billion, and earnings per diluted share are projected to be in the range 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 second quarter earnings, business, and financial outlook will begin at 10:00 a.m. ET on Tuesday, January 27, 2009 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 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) 332-0720 and ask to join the PAREXEL quarterly conference call.

Certain trended financial information may be found in the Investor Relations 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 71 locations throughout 51 countries around the world, and has over 9,250 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 third quarter of Fiscal Year 2009, Fiscal Year 2009 and Calendar 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 September 30, 2008 as filed with the SEC on November 7, 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.

    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
                                        ------------------
                                                             December 31,
                                  December 31, 2008             2007
                                  -----------------           ---------
                             As                                  As
                          Reported  Adjustments    Adjusted   Reported
                          --------  -----------    --------   --------

    Service revenue       $275,846                 $275,846   $238,653
    Reimbursement
     revenue                48,155                   48,155     45,635
      Total revenue        324,001                  324,001    284,288

    Costs and expenses:
        Direct costs       192,295    (15,000)(a)   177,295    156,991
        Reimbursable
         out-of-pocket
         expenses           48,155                   48,155     45,635
        Selling, general
         and
         administrative     62,062                   62,062     51,406
        Depreciation        11,305                   11,305      8,392
        Amortization         2,474                    2,474      1,382

      Total costs and
       expenses            316,291    (15,000)      301,291    263,806

    Income from operations   7,710     15,000        22,710     20,482

    Other income (expense)   3,188                    3,188       (329)

    Income before
     income taxes           10,898     15,000        25,898     20,153

    Provision for
     income taxes            5,144      7,080(a)     12,224      8,326
    Effective tax rate        47.2%                    47.2%      41.3%

    Minority interest
     expense                   546                      546        296

    Net income              $5,208     $7,920       $13,128    $11,531

    Earnings per common
     share:
    -------------------
      Basic                  $0.09                    $0.23      $0.21
      Diluted                $0.09                    $0.23      $0.20

    Shares used in
    computing earnings
    per common share:
    ------------------
      Basic                 57,634                   57,634     55,641
      Diluted               57,634                   57,634     57,297

    Balance Sheet
     Information       Preliminary
                       December 31,   June 30,  December 31,
                              2008       2008          2007
                              ----       ----          ----
    Billed accounts
     receivable, net      $259,065   $253,256      $221,476
    Unbilled accounts
     receivable, net       202,019    222,560       163,251
    Deferred revenue      (238,370)  (213,126)     (200,093)

    Net receivables       $222,714   $262,690      $184,634

    Cash and marketable
     securities            $63,678    $51,918       $62,926
    Working capital       $143,788   $146,535      $108,877
    Total assets        $1,123,131   $948,071      $810,535
    Short-term
     borrowings            $50,424    $66,474       $60,453
    Long-term debt        $226,871     $3,465          $231
    Stockholders' equity  $373,546   $428,091      $363,403

    (a) Represents $15 million in reserves for wind-down costs and bad
        debt expense related to a large late stage trial, and a
        related $7.1 million tax benefit.



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

                                        Unaudited
                                     Six Months Ended
                                     ----------------
                                     December 31, 2008
                                     -----------------
                              As
                           Reported    Adjustments    Adjusted
                           --------    -----------    --------

    Service revenue        $538,892                   $538,892
    Reimbursement revenue   104,661                    104,661
      Total revenue         643,553                    643,553

    Costs and expenses:
        Direct costs        363,659      (15,000)(a)   348,659
        Reimbursable
         out-of-pocket
         expenses           104,661                    104,661
        Selling, general
         and administrative 119,787                    119,787
        Depreciation         21,234                     21,234
        Amortization          4,509                      4,509
      Total costs and
       expenses             613,850      (15,000)      598,850

    Income from operations   29,703       15,000        44,703

    Other income (expense)    2,965                      2,965

    Income before income
     taxes                   32,668       15,000        47,668

    Provision for income
     taxes                   12,840        7,080(a)     19,920
    Effective tax rate         39.3%                      41.8%

    Minority interest
     expense                  1,001                      1,001

    Net income              $18,827       $7,920       $26,747

    Earnings per common
    share:
    -------------------
      Basic                   $0.33                      $0.46
      Diluted                 $0.32                      $0.46

    Shares used in
    computing earnings
    per common share:
    -------------------
      Basic                  57,552                     57,552
      Diluted                58,171                     58,171




                                        Unaudited
                                     Six Months Ended
                                     ----------------
                                    December 31, 2007
                                    -----------------
                              As
                           Reported    Adjustments    Adjusted
                           --------    -----------    --------

    Service revenue        $446,778                   $446,778
    Reimbursement revenue    89,542                     89,542
      Total revenue         536,320                    536,320

    Costs and expenses:
        Direct costs        293,053                    293,053
        Reimbursable
         out-of-pocket
         expenses            89,542                     89,542
        Selling, general
         and administrative  98,546                     98,546
        Depreciation         15,888                     15,888
        Amortization          2,281                      2,281
      Total costs and
       expenses             499,310            -       499,310

    Income from operations   37,010            -        37,010

    Other income (expense)     (755)                      (755)

    Income before income
     taxes                   36,255            -        36,255

    Provision for income
     taxes                   10,563        3,997(b)     14,560
    Effective tax rate         29.1%                      40.2%

    Minority interest
     expense                    276                        276

    Net income              $25,416      $(3,997)      $21,419

    Earnings per
    common share:
    -------------
      Basic                   $0.46                      $0.39
      Diluted                 $0.44                      $0.37

    Shares used in
    computing earnings
    per common share:
    -------------------
      Basic                  55,441                     55,441
      Diluted                57,189                     57,189

    (a) Represents $15 million in reserves for wind-down costs
        and bad debt expense related to a large late stage trial,
        and a related $7.1 million tax benefit.
    (b) 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
                                       ------------------
                                                           December 31,
                                December 31, 2008               2007
                                -----------------          -------------
                          As                                    As
                       Reported    Adjustments   Adjusted     Reported
                       --------    -----------   --------     --------
    Clinical Research
    Services (CRS)

    Service revenue    $200,934                  $200,934     $182,705
    % of total
     service revenue       72.8%                     72.8%        76.6%
    Gross profit        $55,207      $15,000(a)   $70,207      $60,063
    Gross margin % of
     service revenue       27.5%                     34.9%        32.9%

    PAREXEL Consulting
     & Medical
     Communications
     Services (PCMS)

    Service revenue     $31,931                   $31,931      $32,537
    % of total
     service revenue       11.6%                     11.6%        13.6%
    Gross profit        $11,164                   $11,164      $11,142
    Gross margin % of
     service revenue       35.0%                     35.0%        34.2%


    Perceptive Informatics,
    Inc. (PII)

    Service revenue     $42,981                   $42,981      $23,411
    % of total
     service revenue       15.6%                     15.6%         9.8%
    Gross profit        $17,180                   $17,180      $10,457
    Gross margin % of
     service revenue       40.0%                     40.0%        44.7%


    Total service
     revenue           $275,846                  $275,846     $238,653
    Total gross profit  $83,551                   $98,551      $81,662
    Gross margin % of
     service revenue       30.3%                     35.7%        34.2%


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

    The Americas       $121,560                                $92,925
    Europe, Middle
    East & Africa       131,533                                128,044
    Asia/Pacific         22,753                                 17,684

    Total service
     revenue           $275,846                               $238,653


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

    Total revenue      $324,001                               $284,288
    Investigator fees    48,739                                 41,198

    Gross revenue      $372,740                               $325,486

    Days Sales
     Outstanding             55                                     52

    Capital
     expenditures       $21,388                                $13,283

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



                       PAREXEL International Corporation
                              Segment Information
                               ($ in thousands)

                                              Unaudited
                                           Six Months Ended
                                           ----------------
                                                               December 31,
                                    December 31, 2008              2007
                                    -----------------          ------------
                               As                                  As
                            Reported    Adjustments   Adjusted   Reported
                            --------    -----------   --------   --------
    Clinical Research
     Services (CRS)

    Service revenue         $403,757                  $403,757   $342,034
    % of total service
     revenue                    74.9%                     74.9%      76.6%
    Gross profit            $126,128      $15,000(a)  $141,128   $115,225
    Gross margin % of
     service revenue            31.2%                     35.0%      33.7%

    PAREXEL Consulting &
     Medical Communications
     Services (PCMS)

    Service revenue          $62,042                   $62,042    $63,057
    % of total service
     revenue                    11.5%                     11.5%      14.1%
    Gross profit             $21,112                   $21,112    $20,723
    Gross margin % of
     service revenue            34.0%                     34.0%      32.9%


    Perceptive Informatics,
     Inc. (PII)

    Service revenue          $73,093                   $73,093    $41,687
    % of total service
     revenue                    13.6%                     13.6%       9.3%
    Gross profit             $27,993                   $27,993    $17,777
    Gross margin % of
     service revenue            38.3%                     38.3%      42.6%


    Total service revenue   $538,892                  $538,892   $446,778
    Total gross profit      $175,233                  $190,233   $153,725
    Gross margin % of
    service revenue             32.5%                     35.3%      34.4%


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

    The Americas            $223,891                             $172,924
    Europe, Middle
    East & Africa            271,920                              240,887
    Asia/Pacific              43,081                               32,967

    Total service revenue   $538,892                             $446,778


    (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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