PARSIPPANY, N.J., March 6, 2013 /PRNewswire/ -- PDI, Inc. (Nasdaq: PDII), today reported financial and operational results for the fourth quarter and year ended December 31, 2012. Summary financial and operating highlights include:
4,337Total current assets
80,360Total current liabilities
53,856Total stockholders' equity
59,523Selected Cash Flow Data (Unaudited)($ in thousands) December 31, 20122011Net loss
(11,914)Non-cash items:Depreciation and amortization
23,7445,530Net change in assets and liabilities
(12,328)3,387Net cash (used in) provided by operations
,985Change in cash and cash equivalents
"The gross margin percentage for the full year of 2012 was essentially flat compared to 2011, but, as we previously discussed, due to intensified competitive pressures, is expected to decline in 2013 as new wins with lower margins are executed. From an operating standpoint, we maintained tight cost controls. For the full year of 2012, excluding asset impairment and facilities realignment charges we reduced ongoing compensation expense and other SG&A by approximately $6.4 million compared to 2011 and the Adjusted Operating Loss, which also excludes these charges, was $1.0 million. We also had positive Adjusted EBITDA of $2.8 million for the full year of 2012. Both of these measures were improvements compared to 2011."
Ms. Lurker continued, "We entered 2013 with a strong backlog of business under contract and expect our core business to generate significantly higher revenues during the year. Because these higher revenues will generate lower overall margins we will continue to maintain tight controls over ongoing operating expenses. In addition to being a year of revenue growth for PDI, 2013 will also be a year of investment. Given the dynamics of our current core businesses we are committed to continuing to differentiate them and to developing more predictable, higher growth and higher margin business.
"To these ends, in 2013 we will: invest in a number of areas that will help differentiate and further strengthen and support our core offerings; aggressively pursue the in-licensing, acquisition or partnering of products that take advantage of and leverage PDI's core commercialization strengths to add more stable and higher margin business; and complete and fund a new Group DCA product offering that will connect health care providers, sales representatives and other promotional channels in a new and unique way. We expect to provide additional detail on these initiatives as the year progresses."
Fourth Quarter Business Reviews - Continuing OperationsRevenue- For the fourth quarter of 2012, revenue of $35.6 million was $2.7 million lower than the fourth quarter of 2011. Overall, revenue in the Sales Services segment increased slightly but was more than offset by decreases from both the Marketing Services and Product Commercialization segments.
Gross Profit- For the fourth quarter of 2012, gross profit of $7.0 million was $1.7 million lower than the fourth quarter of 2011. At the same time, the gross profit percentage decreased to 20% in 2012 from 23% in 2011.
Total Operating Expenses- For the fourth quarter of 2012, total operating expenses were $30.9 million compared to $11.1 million in 2011. Included in fourth quarter 2012 expenses are $23.5 million of asset impairment and $0.7 million of facilities realignment charges and included in 2011 expenses is $2.9 million of Group DCA contingent consideration buyout and related charges. Excluding these items, total operating expenses for the fourth quarter of 2012 were $6.7 million; $1.5 million lower than of 2011. The decrease is a result of the company's continuing focus on cost reduction and right-sizing of the business.
During the fourth quarter of 2012 the company recorded total asset impairments of $23.5 million. The majority of these asset impairment charges, $22.8 million, were associated with the write-down of goodwill and other intangible assets in the Group DCA business unit within our Marketing Services segment. The company continues to believe in the long-term growth of this business and intends to continue to invest to achieve that growth. However, the recent decline in revenue, the decrease in new business generated and changes in pharmaceutical industry spending, at least in the near term, were factors contributing to the impairment charge. In addition, the company recorded a $0.7 million charge in the fourth quarter of 2012 from the write-down of assets related to the fourth quarter 2011 sale of certain assets of the company's discontinued Pharmakon business unit.
During the fourth quarter of 2012 the Marketing Services segment incurred a charge of approximately $0.7 million related to the downsizing of office space related to Group DCA in Parsippany, New Jersey.
We are currently seeking to sublet this unused office space.
Operating Loss- For the fourth quarter of 2012 the operating loss was $23.9 million, compared to an operating loss of $2.4 million in the fourth quarter of 2011. Excluding the effect of the asset impairment and facilities realignment charges in 2012 and the contingent consideration buyout in 2011, Adjusted Operating Income in the fourth quarter of 2012 was $0.3 million compared to $0.5 million in 2011.
Liquidity and Cash Flow- Adjusted EBITDA for the fourth quarter of 2012 was $1.1 million compared to $(1.6) million in the fourth quarter of 2011. Cash and cash equivalents as of December 31, 2012 were $52.8 million, down $11.6 million from December 31, 2011.
As of December 31, 2012, the company's cash equivalents were predominantly invested in U.S. Treasury money market funds and the company had no commercial debt.
Non-GAAP Financial MeasuresIn addition to United States generally accepted accounting principles, or GAAP, results provided throughout this document, PDI has provided certain non-GAAP financial measures to help evaluate the results of its performance. The company believes that these non-GAAP financial measures, when presented in conjunction with comparable GAAP financial measures, are useful to both management and investors in analyzing the company's ongoing business and operating performance. The company believes that providing non-GAAP information to investors, in addition to the GAAP presentation, allows investors to view the company's financial results in the way that management views financial results.
In this document, the company discusses Adjusted Operating Income (Loss), a non-GAAP financial measure. Adjusted Operating Income (Loss) is a metric used by management to measure the profitability of the ongoing business. Adjusted Operating Income (Loss) is defined as operating loss, plus asset impairment, Group DCA contingent consideration buyout, and facilities realignment. The table below includes a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.Adjusted Operating Income (Loss) (Unaudited)($ in thousands)4th Quarter EndedYear EndedDecember 31,December 31,2012201120122011Operating loss$ (23,939)$ (2,437)$ (25,232)$ (4,702)Asset impairment23,517-23,517-Group DCA contingent consideration buyout and related charges-2,889-2,889Facilities realignment706-706-Adjusted operating income (loss)$
(1,009)$ (1,813)In this document, the company also discusses Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA is a metric used by management to measure cash flow of the ongoing business. Adjusted EBITDA is defined as operating loss, plus depreciation and amortization, non-cash stock-based compensation, and other non-cash expenses. The table below includes a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.Adjusted EBITDA (Unaudited)($ in thousands)4th Quarter EndedYear EndedDecember 31,December 31,2012201120122011Operating loss$
(4,702)Depreciation and amortization5445992,0342,665Stock compensation2712531,7911,936Asset impairment23,517-23,517-Facilities realignment706-706-Adjusted EBITDA$
(101)Conference CallAs previously announced, PDI will hold a conference call tomorrow, Thursday, March 7 to discuss financial and operational results for the fourth quarter and year ended December 31, 2012 as follows:
Time: 8:30 AM (ET)
Dial-in numbers: (866) 644-4654 (U.S. and Canada) or (706) 643-1203
Conference ID#: 98411955
Live webcast: www.pdi-inc.com, under "Investor Relations"
The teleconference replay will be available three hours after completion through March 11, 2013 at (800) 585-8367 (U.S. and Canada) or (404) 537-3406. The replay pass code is 98411955. The archived web cast will be available for one year.
About PDI, Inc. PDI is a leading health care commercialization company providing superior insight-driven, integrated multi-channel message delivery to established and emerging health care companies. The company is dedicated to enhancing engagement with health care practitioners and optimizing commercial investments for its clients by providing strategic flexibility, full product commercialization services, innovative multi-channel promotional solutions, and sales and marketing expertise. For more information, please visit the company's website at http://www.pdi-inc.com.
Forward-Looking StatementsThis press release contains forward-looking statements regarding future events and financial performance. These statements are based on current expectations and assumptions involving judgments about, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond PDI's control. These statements also involve known and unknown risks, uncertainties and other factors that may cause PDI's actual results to be materially different from those expressed or implied by any forward-looking statement. For example, with respect to statements regarding projections of future revenues, growth and profitability, actual results may differ materially from those set forth in this release based on the loss, early termination or significant reduction of any of our existing service contracts, the failure to meet performance goals in PDI's incentive-based arrangements with customers, the inability to secure additional business or our inability to develop more predictable, higher margin business through in-licensing or other means. Additionally, all forward-looking statements are subject to the risk factors detailed from time to time in PDI's periodic filings with the Securities and Exchange Commission, including without limitation, PDI's subsequently filed Annual Report on Form 10-K for the year ended December 31, 2012 and current reports on Form 8-K. Because of these and other risks, uncertainties and assumptions, undue reliance should not be placed on these forward-looking statements. In addition, these statements speak only as of the date of this press release and, except as may be required by law, PDI undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
(Tables to Follow)PDI, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)($ in thousands, except per share data)Three Months EndedYears EndedDecember 31,December 31,2012201120122011Revenue, net
$ 35,632$ 38,283$ 126,899$ 157,291Cost of services
3,6884,54416,41419,694Other selling, general and administrative expenses
23,517-23,517-GroupDCA contingent consideration buyout and related charges
706-706-Total operating expenses
(23,939)(2,437)(25,232)(4,702)Other (expense) income, net
(13)119(28)(14)Loss from continuing operations beforeincome tax
(23,952)(2,318)(25,260)(4,716)(Benefit) provision for income tax
(11)(422)208(939)Loss from continuing operations
(23,941)(1,896)(25,468)(3,777)Income (loss) from discontinued operations, net of tax
$ (23,796)$ (10,265)$ (25,527)$ (11,914)Basic and diluted (loss) income per share of common stock:From continuing operations
(0.26)From discontinued operations
0.01(0.58)-(0.57)Net loss per basic and diluted share of common stock
(0.83)Weighted average number of common shares and common share equivalents outstanding:Basic
14,62714,49614,58514,440 Segment Data (Unaudited)($ in thousands)SalesMarketingPCServicesServicesServices*ConsolidatedThree months ended December 31, 2012:Revenue, net
,985Gross profit %
19.4%9.5%29.4%19.6%Three months ended December 31, 2011:Revenue, net
8,701Gross profit %
21.8%27.5%25.2%22.7%Year ended December 31, 2012:Revenue, net
26,860Gross profit %
19.2%28.5%27.9%21.2%Year ended December 31, 2011:Revenue, net
32,471Gross profit %
20.0%25.0%24.3%20.6%* Product Commercialization (P
|SOURCE PDI, Inc.|
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