BOSTON, Nov. 1, 2010 /PRNewswire-FirstCall/ -- PAREXEL International Corporation (Nasdaq: PRXL) today announced its financial results for the first quarter ended September 30, 2010.
For the three months ended September 30, 2010, PAREXEL's consolidated service revenue increased by 13.9% to $295.8 million, compared with $259.8 million in the prior year period. Excluding the negative impact from foreign exchange movements of $7.7 million, revenue increased 16.8%. The Company reported operating income of $30.0 million, or 10.1% of consolidated service revenue, in the first quarter of Fiscal Year 2011, versus operating income of $18.5 million, or 7.1% of consolidated service revenue, in the comparable quarter of the prior year. Net income for the current quarter totaled $17.8 million, or $0.30 per diluted share, compared with net income of $12.4 million, or $0.21 per diluted share, for the quarter ended September 30, 2009. On a segment basis, consolidated service revenue for the first quarter of Fiscal Year 2011 was $231.6 million in Clinical Research Services (CRS), $28.3 million in PAREXEL Consulting and Medical Communications Services (PCMS), and $35.9 million in Perceptive Informatics, Inc.
Backlog at the end of September was approximately $2.9 billion, an increase of 35.7% year-over-year. The reported backlog included gross new business wins in the quarter of $586.6 million, cancellations of $149.2 million, and a positive impact from foreign exchange rates of $105.4 million. The net book-to-bill ratio was 1.48 in the quarter.
Mr. Josef H. von Rickenbach, PAREXEL's Chairman and Chief Executive Officer stated, "The results of the first quarter were strong. We exceeded our earnings per share target as a result of a continued focus on cost control and a lower tax rate, despite the fact that certain project delays and cancellations resulted in lower than anticipated revenue. New business wins in the quarter were healthy, and we are pleased with the ongoing development of our strategic partnerships, and the sustained success of our product and service offering. A notable highlight was our continued growth in the Asia/Pacific region, where we remain a market leader."
Mr. von Rickenbach continued, "A number of leading biopharmaceutical companies have made a fundamental shift in the way they work with us, and now more than ever, PAREXEL plays an important role in their success. However, one of the characteristics of this new strategic partnership model appears to be that revenue runs off more slowly than has been typical with projects. Additionally, in the first quarter we experienced an elevated level of project delays and cancellations, including two large projects which were cancelled by clients near the end of the quarter. These factors have caused us to update our forward-looking financial guidance. Given our recent new business wins, existing backlog, current proposal pipeline and prospects for additional partnership opportunities, however, we believe our outlook for the future remains very bright. I feel that the foundation of our Company has never been stronger, and that we continue to be very well positioned to achieve future revenue and earnings per share growth in Fiscal Year 2011 and beyond."
During the first quarter of Fiscal Year 2011, the Company implemented a new project accounting and billing system, which caused delays in client billing. As a consequence, the first quarter's days sales outstanding (DSO) increased to 82 days. The issues with the new billing system have now been largely resolved, and the Company anticipates that DSO will be in the range of 55 days to 65 days at the end of December, with further decreases expected thereafter.
The Company issued forward-looking guidance for the second quarter of Fiscal Year 2011 (ending December 31, 2010), and provided updated guidance for Fiscal Year 2011, using recent exchange rates. For the second quarter, the Company anticipates reporting consolidated service revenue in the range of $300 to $305 million, and diluted earnings per share in the range of $0.27 to $0.29. For Fiscal Year 2011, consolidated service revenue is expected to be in the range of $1.250 to $1.270 billion using recent exchange rates (previously issued revenue guidance was $1.265 to $1.310 billion). Earnings per diluted share for Fiscal Year 2011 are projected to be in the range of $1.23 and $1.31 (previously issued earnings per diluted share guidance was $1.22 to $1.32). While forward-looking service revenue guidance reflects the benefit of strong Q1 new business and a weakened dollar, those positive developments have been more than offset by cancellations, client-driven project delays, and the slow ramp-up of revenue in certain strategic partnerships. The Company has been able to essentially maintain earnings per share guidance through effective cost controls and a lower tax rate.
The Company notes that Fiscal Year 2010 numbers have been reclassified to conform to the current year's presentation. A slide depicting the reclassified numbers for Fiscal Year 2010, in addition to other trended financial information, may be found in the Investor Relations section of the Company's website under the "Additional Financials" section.
A conference call to discuss PAREXEL's first quarter earnings, business, and financial outlook will begin at 10:00 a.m. ET on Tuesday, November 2, 2010 and will be broadcast live over the internet via webcast. The webcast may be accessed in the "Upcoming Events" portion of the main page 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 +1 706-758-4950 and ask to join the PAREXEL quarterly conference call.
About the CompanyPAREXEL International Corporation is a leading global bio/pharmaceutical services organization, providing a broad range of knowledge-based contract research, consulting, and medical communications 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 54 countries around the world, and has approximately 10,170 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 for the second quarter of Fiscal Year 2011 and Fiscal Year 2011. 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," "will," "would," "could," "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 and anticipated 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; 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-K for the quarter ended June 30, 2010 as filed with the SEC on August 27, 2010 which "Risk Factors" discussion is incorporated by reference in this press 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 International CorporationConsolidated Condensed Statement of OperationsUnauditedThree Months EndedThree Months Ended(in thousands, except per share data)September 30, 2010September 30, 2009Service revenue$
259,763Reimbursement revenue46,43747,775 Total revenue342,257307,538Costs and expenses:Direct costs186,982170,988
(1)Reimbursable out-of-pocket expenses46,43747,775Selling, general and administrative 63,52056,194
(1)Depreciation13,25111,569Amortization2,4572,536Restructuring benefit(390)- Total costs and expenses312,257289,062Income from operations30,00018,476Other expense(7,315)(780)Income before income taxes22,68517,696Provision for income taxes4,8945,255Effective tax rate21.6%29.7%Net income$
2,441Earnings per common share: Basic$
.21Shares used in computing earnings per common share: Basic58,45057,815 Diluted59,66058,135(1) Prior year numbers have been reclassified to conform with the current year presentation.Balance Sheet InformationPreliminarySept 30,June 30,Sept 30,201020102009Billed accounts receivable, net
255,662Unbilled accounts receivable, net
221,096Cash and marketable securities
437,384PAREXEL International CorporationSegment InformationUnauditedThree Months EndedThree Months Ended(in thousands)
September 30, 2010September 30, 2009 (1)Clinical Research Services (CRS)Service revenue
202,324% of total service revenue
9,227Gross margin % of service revenue
34.2%PAREXEL Consulting & Medical Communications Services (PCMS)Service revenue
28,821% of total service revenue
,217Gross margin % of service revenue
35.4%Perceptive Informatics, Inc. (PII)Service revenue
28,618% of total service revenue
9,331Gross margin % of service revenue
32.6%Total service revenue$
259,763Total gross profit$
88,775Gross margin % of service revenue36.8%
34.2%Revenue by GeographyThe Americas
,601Europe, Middle East & Africa
28,622Total service revenue
259,763Quarterly Supplemental Financial DataTotal revenue
352,213Days sales outstanding
15,445(1) Prior year numbers have been reclassified to conform with the current year presentation.CONTACTS:
James Winschel, Senior Vice President and Chief Financial OfficerJill Baker, Corporate Vice President, Investor Relations+1-781-434-4118
|SOURCE PAREXEL International Corporation|
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