Welcome!

News Feed Item

PAREXEL International Reports Second Quarter Fiscal Year 2014 Results

-- Increases midpoints of previous revenue and adjusted EPS guidance for FY 2014

BOSTON, Jan. 29, 2014 /PRNewswire/ -- PAREXEL International Corporation (NASDAQ: PRXL) today reported financial results for the second quarter of Fiscal Year 2014, which ended on December 31, 2013. 

In commenting on the results of the quarter, Mr. Josef H. von Rickenbach, PAREXEL's Chairman and Chief Executive Officer, stated, "In the second quarter we met our goals and made progress on our key initiatives.  We delivered strong revenue growth, healthy operating margin expansion, and solid cash flow from operations.  We were also particularly pleased with our new business performance.  Wins were broad-based across our businesses, and came from a variety of client segments."

Mr. von Rickenbach continued, "I believe the market for our products and services continues to be strong.  We remain focused on successfully competing in the marketplace, executing projects with high quality, and driving efficiency initiatives throughout our businesses.  We expect these activities to propel profitable growth and increase shareholder value.  Our financial and operational performance in the second quarter, together with solid demand for our services, gives us the confidence that we will achieve our financial goals for Fiscal Year 2014."

For the three months ended December 31, 2013 consolidated service revenue increased by 15.4% to $487.1 million compared with $422.1 million in the prior year period.   The impact from foreign exchange movements in the quarter was nominal.  Recent acquisitions contributed approximately $14 million to revenue in the quarter.  On a constant currency, same store basis, revenue growth was 12.2% year-over-year.  Operating income as reported under Generally Accepted Accounting Principles (GAAP) totaled $46.7 million, or 9.6% of service revenue, in the second quarter of Fiscal Year 2014, as compared with $31.4 million, or 7.4% of service revenue, in the comparable quarter of the prior year.  GAAP net income for the quarter totaled $28.3 million, or $0.49 per diluted share, compared with GAAP net income of $21.3 million, or $0.36 per diluted share for the quarter ended December 31, 2012.  GAAP diluted earnings per share grew 36.1% year-over-year.

The financial results of the December quarter in the current and prior year period each included special items, as detailed in the financial charts within this press release.  Excluding the impact of special items, adjusted operating income in the second quarter of Fiscal Year 2014 was $47.7 million, or 9.8% of service revenue.  Excluding the impact of special items, adjusted operating income in the second quarter of Fiscal Year 2013 was $32.1 million, or 7.6% of service revenue.  Excluding the impact of special items, adjusted net income was $29.1 million, or $0.51 per diluted share in the quarter ended December 31, 2013, and was $24.5 million, or $0.41 per diluted share in the quarter ended December 31, 2012.  Adjusted earnings per share grew 24.4% year-over-year.

On a segment basis, service revenue for the second quarter of Fiscal Year 2014 was $363.9 million in Clinical Research Services (CRS), $55.5 million in PAREXEL Consulting and Medical Communications Services (PCMS), and $67.7 million in Perceptive Informatics, Inc.

For the six months ended December 31, 2013, consolidated service revenue was $936.4 million versus $816.8 million in the prior year period, an increase of 14.6%.  GAAP operating income for the current six-month period was $88.5 million, or 9.5% of service revenue, compared with GAAP operating income of $61.2 million, or 7.5% of service revenue in the prior year period.  GAAP net income for the six months ended December 31, 2013 was $54.3 million, or $0.95 per diluted share, compared with GAAP net income of $36.4 million, or $0.60 per diluted share, in the prior year period.  Excluding the impact of special items as detailed in the attached financial charts in both six month periods, operating income was $89.7 million or 9.6% of consolidated service revenue for the six months ended on December 31, 2013, compared with $61.9 million or 7.6% of consolidated service revenue for the six months ended on December 31, 2012.  On an adjusted basis, net income for the six months ended December 31, 2013 was $55.0 million, or $0.96 per diluted share, compared with $42.0 million or $0.69 per diluted share in the comparable prior year six month period.

Backlog at the end of December 2013 was $4.81 billion, an increase of 5.9% year-over-year.  The reported backlog included gross new business wins in the quarter of $836.1 million, cancellations of $181.4 million, and a positive impact from foreign exchange rates of $11.1 million. The net book-to-bill ratio was 1.34 in the quarter. 

The Company issued forward-looking guidance for the third quarter of Fiscal Year 2014 (ending March 31, 2014) and updated guidance for Fiscal Year 2014 as described in the text and chart below.  The guidance takes into account a number of factors, including recent exchange rates, tax rates, and the Company's updated overall outlook.  

The Company's guidance is:





Guidance Issued 1/29/14

Guidance Issued 1/13/14

Q3 FY 2014 Revenue

$490 - $495 million

N/A

Q3 FY 2014 GAAP EPS     

$0.52 - $0.54

N/A


FY 2014 Revenue

$1.920 - $1.930 billion

$1.895 - $1.925 billion

FY 2014 GAAP EPS

$1.99 - $2.09

$1.97 - $2.11

FY 2014 Non-GAAP EPS

$2.01 - $2.11

$1.97 - $2.11




In addition to the financial measures prepared in accordance with 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 Fiscal Year 2014 earnings, business, and financial outlook will begin at 10:00 a.m. ET on Thursday, January 30, 2014 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 (408) 940-3886 and ask to join the PAREXEL International Second Quarter Fiscal Year 2014 earnings conference call.

The company has enhanced the supplemental financial information that it provides on its website in conjunction with earnings.  A presentation of Second Quarter Fiscal Year 2014 results, as well as certain trended financial information, may be found in the Investor Relations section of the Company's website under the "Additional Financials" section.   

About PAREXEL International

PAREXEL International Corporation is a leading global biopharmaceutical services organization, providing a broad range of knowledge-based contract research, consulting, medical communications, and technology solutions and 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 76 locations in 50 countries around the world, and has approximately 15,100 employees.  For more information about PAREXEL International visit www.PAREXEL.com.

PAREXEL, Perceptive Informatics, LIQUENT, and HERON are registered trademarks of PAREXEL International Corporation or its affiliates.

This release contains "forward-looking" statements regarding future results and events, including, without limitation, statements regarding expected financial results, future growth and customer demand.   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," "should,"  "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 including the recent acquisitions of LIQUENT, Inc. and HERON, Inc., 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-Q for the quarter ended September 30, 2013 as filed with the SEC on November 4, 2013, 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 Corporation

 Consolidated Condensed Statement of Operations

(Unaudited)
























Three Months Ended


Six Months Ended

(in thousands, except per share data)


December 31, 2013


December 31, 2012


December 31, 2013


December 31, 2012











Service revenue



$                  487,145


$                  422,068


$                  936,390


$                  816,821

Reimbursement revenue



87,091


61,069


166,910


128,836

  Total revenue



574,236


483,137


1,103,300


945,657











Costs and expenses:










Direct costs



324,507


301,325


627,701


580,729

Reimbursable out-of-pocket expenses


87,091


61,069


166,910


128,836

Selling, general and administrative 


95,528


71,909


180,440


141,937

Depreciation



16,584


15,462


32,046


30,257

Amortization



3,862


2,043


7,658


3,127

Restructuring benefit



-


(108)


-


(418)

 Total costs and expenses



527,572


451,700


1,014,755


884,468











Income from operations



46,664


31,437


88,545


61,189











Other expense, net



(3,707)


(209)


(6,672)


(2,597)











Income before income taxes



42,957


31,228


81,873


58,592











Provision for income taxes



14,628


9,885


27,590


22,185

Effective tax rate



34.1%


31.7%


33.7%


37.9%











Net income



$                     28,329


$                     21,343


$                     54,283


$                     36,407











Earnings per common share:










  Basic



$0.50


$0.36


$0.96


$0.61

  Diluted



$0.49


$0.36


$0.95


$0.60











Shares used in computing earnings per common share:







  Basic



56,517


58,671


56,386


59,391

  Diluted



57,395


59,639


57,395


60,412





















Balance Sheet Information



Preliminary










December 31, 2013


December 31, 2012


June 30, 2013



Billed accounts receivable, net



$                  503,578


$                  411,310


$                  457,155



Unbilled accounts receivable, net



234,740


234,483


248,219



Deferred revenue



(461,029)


(390,705)


(408,336)



Net receivables



$                  277,289


$                  255,088


$                  297,038













Cash and marketable securities



$                  314,294


$                  296,545


$                  274,164



Working capital



$                  433,461


$                  325,685


$                  403,229



Total assets



$               1,877,789


$               1,697,650


$               1,779,624



Short-term borrowings



$                    13,968


$                  107,403


$                    20,399



Long-term debt



$                  372,500


$                  277,600


$                  427,500



Stockholders' equity



$                  627,874


$                  580,750


$                  538,946













 















PAREXEL International Corporation

  Reconciliation of Non-GAAP Measures

Certain Line Items

(Unaudited)
































Three Months Ended


Three Months Ended

(in thousands, except per share data)

December 31, 2013


December 31, 2012




GAAP

Measure


Adjustments


Non-GAAP

Measure


GAAP

Measure


Adjustments


Non-GAAP

Measure















Selling, general and administrative 



$           95,528


$       (1,071)

(a)

$        94,457


$        71,909


$            (807)

(c)

$        71,102















Restructuring benefit



$                     -


$                 -


$                  -


$            (108)


$              108

(d)

$                  -















Income from operations



$           46,664


$         1,071


$        47,735


$        31,437


$              699


$         32,136















Other expense, net



$           (3,707)


$                 -


$         (3,707)


$            (209)


$                   -


$            (209)















Income before income taxes



$           42,957


$         1,071


$         44,028


$        31,228


$              699


$        31,927















Provision for income taxes



$           14,628


$            270

(b)

$        14,898


$          9,885


$         (2,458)

(e)

$          7,427















Net income



$           28,329


$            801


$        29,130


$        21,343


$          3,157


$        24,500















Diluted earnings per common share


$               0.49


$           0.02


$            0.51


$            0.36


$            0.05


$            0.41















Effective tax rate



34.1%




33.8%


31.7%




23.3%





























(a) Adjustment includes $1.1 million of legal settlements and acquisition & integration related charges





(b) Tax associated with item (a)














(c) Adjustment includes $0.8 million of legal settlements and acquisition & integration related charges

(d) Adjustment to facility-related charges of $0.1 million related to restructuring plans

(e) Tax associated with items (c) and (d), and a net $2.7 million expense due to changes in interest, penalties and a valuation allowance in a foreign jurisdiction






 















PAREXEL International Corporation

  Reconciliation of Non-GAAP Measures

Certain Line Items

(Unaudited)
































Six Months Ended


Six Months Ended

(in thousands, except per share data)

December 31, 2013


December 31, 2012




GAAP

Measure


Adjustments


Non-GAAP

Measure


GAAP

Measure


Adjustments


Non-GAAP

Measure















Selling, general and administrative 



$   180,440


$       (1,151)

(a)

$      179,289


$      141,937


$         (1,157)

(c)

$      140,780















Restructuring benefit



$               -


$                 -


$                 -


$           (418)


$              418

(d)

$                  -















Income from operations



$     88,545


$         1,151


$        89,696


$        61,189


$              739


$        61,928















Other expense, net



$      (6,672)


$                 -


$         (6,672)


$         (2,597)


$            (395)

(e)

$         (2,992)















Income before income taxes



$     81,873


$         1,151


$        83,024


$        58,592


$              344


$        58,936















Provision for income taxes



$     27,590


$            474

(b)

$        28,064


$        22,185


$         (5,232)

(f)

$        16,953















Net income



$     54,283


$            677


$        54,960


$        36,407


$          5,576


$        41,983















Diluted earnings per common share


$         0.95


$           0.01


$            0.96


$            0.60


$            0.09


$            0.69















Effective tax rate



33.7%




33.8%


37.9%




28.8%











































(a) Adjustments include $1.5 million of legal settlements and acquisition & integration related charges, partially offset by $0.3 million gain related to the revaluation of HERON earn-out contingent consideration liability

(b) Tax associated with item (a)

(c)  Adjustment includes $1.2 million of legal settlements and acquisition & integration related charges

(d) Adjustment to facility-related charges of $0.4 million related to restructuring plans

(e)  Gain on facility sale previously impaired

(f) Tax associated with items (c) through (e), a tax expense for one-time adjustments to deferred tax assets in Q1 FY13, and a net $2.7 million expense due to changes in interest, penalties and a valuation allowance in a foreign jurisdiction in Q2 FY13






 






PAREXEL International Corporation

Segment Information

(Unaudited)













Three Months Ended


Three Months Ended

(in thousands)


December 31, 2013


December 31, 2012






Clinical Research Services (CRS)










Service revenue 


$                           363,867


$                           320,580

% of total service revenue


74.7%


76.0%

Gross profit


$                           108,636


$                             78,165

Gross margin % of service revenue


29.9%


24.4%






PAREXEL Consulting & Medical Communications





  Services (PCMS)










Service revenue


$                             55,532


$                             49,274

% of total service revenue


11.4%


11.7%

Gross profit


$                             22,309


$                             20,820

Gross margin % of service revenue


40.2%


42.3%











Perceptive Informatics (PI)










Service revenue


$                             67,746


$                             52,214

% of total service revenue


13.9%


12.3%

Gross profit


$                             31,693


$                             21,758

Gross margin % of service revenue


46.8%


41.7%











Total service revenue


$                           487,145


$                           422,068

Total gross profit


$                           162,638


$                           120,743

Gross margin % of service revenue


33.4%


28.6%











Revenue by Geography










The Americas


$                           240,888


$                           210,065

Europe, Middle East & Africa


180,705


150,109

Asia/Pacific


65,552


61,894

Total service revenue


$                           487,145


$                           422,068











Quarterly Supplemental Financial Data










Service revenue


$                           487,145


$                           422,068

Reimbursement revenue


87,091


61,069

Investigator fees


133,212


96,307

Gross revenue


$                           707,448


$                           579,444






Days sales outstanding


36


41






Capital expenditures


$                             19,828


$                             19,849






 






PAREXEL International Corporation

Segment Information

(Unaudited)









Six Months Ended


Six Months Ended

(in thousands)


December 31, 2013


December 31, 2012






Clinical Research Services (CRS)










Service revenue 


$                           696,459


$                           617,747

% of total service revenue


74.4%


75.6%

Gross profit


$                           203,040


$                           155,166

Gross margin % of service revenue


29.2%


25.1%






PAREXEL Consulting & Medical Communications





  Services (PCMS)










Service revenue


$                           109,069


$                             97,625

% of total service revenue


11.6%


12.0%

Gross profit


$                             44,580


$                             39,486

Gross margin % of service revenue


40.9%


40.4%











Perceptive Informatics (PI)










Service revenue


$                           130,862


$                           101,449

% of total service revenue


14.0%


12.4%

Gross profit


$                             61,069


$                             41,440

Gross margin % of service revenue


46.7%


40.8%











Total service revenue


$                           936,390


$                           816,821

Total gross profit


$                           308,689


$                           236,092

Gross margin % of service revenue


33.0%


28.9%











Revenue by Geography










The Americas


$                           465,298


$                           407,479

Europe, Middle East & Africa


339,219


288,378

Asia/Pacific


131,873


120,964

Total service revenue


$                           936,390


$                           816,821






 



CONTACTS:

Ingo Bank, Senior Vice President and Chief Financial Officer


Jill Baker, Corporate Vice President of Investor Relations


+1-781-434-4118



SOURCE PAREXEL International Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus intern...
Most DevOps journeys involve several phases of maturity. Research shows that the inflection point where organizations begin to see maximum value is when they implement tight integration deploying their code to their infrastructure. Success at this level is the last barrier to at-will deployment. Storage, for instance, is more capable than where we read and write data. In his session at @DevOpsSummit at 20th Cloud Expo, Josh Atwell, a Developer Advocate for NetApp, will discuss the role and valu...
SYS-CON Events announced today that Twistlock, the leading provider of cloud container security solutions, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Twistlock is the industry's first enterprise security suite for container security. Twistlock's technology addresses risks on the host and within the application of the container, enabling enterprises to consistently enforce security policies, monitor...
This talk centers around how to automate best practices in a multi-/hybrid-cloud world based on our work with customers like GE, Discovery Communications and Fannie Mae. Today’s enterprises are reaping the benefits of cloud computing, but also discovering many risks and challenges. In the age of DevOps and the decentralization of IT, it’s easy to over-provision resources, forget that instances are running, or unintentionally expose vulnerabilities.
Everywhere we turn in our industry we can find strong opinions about the direction, type and nature of cloud’s impact on computing and business. Another word that is used in every context in our industry is “hybrid.” In his session at 20th Cloud Expo, Alvaro Gonzalez, Director of Technical, Partner and Field Marketing at Peak 10, will use a combination of a few conceptual props and some research recently commissioned by Peak 10 to offer a real-world consideration of how the various categories of...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
Detecting internal user threats in the Big Data eco-system is challenging and cumbersome. Many organizations monitor internal usage of the Big Data eco-system using a set of alerts. This is not a scalable process given the increase in the number of alerts with the accelerating growth in data volume and user base. Organizations are increasingly leveraging machine learning to monitor only those data elements that are sensitive and critical, autonomously establish monitoring policies, and to detect...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
The 21st International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
Multiple data types are pouring into IoT deployments. Data is coming in small packages as well as enormous files and data streams of many sizes. Widespread use of mobile devices adds to the total. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the tools and environments that are being put to use in IoT deployments, as well as the team skills a modern enterprise IT shop needs to keep things running, get a handle on all this data, and deli...
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single threaded, you can effectively identify hot spots in your serverless code. In his session at 20th Cloud Expo, David Martin, Principal Product Owner at CA Technologies, will give a live demonstration and code walkthrough, showing how to ov...
SYS-CON Events announced today that Systena America will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Systena Group has been in business for various software development and verification in Japan, US, ASEAN, and China by utilizing the knowledge we gained from all types of device development for various industries including smartphones (Android/iOS), wireless communication, security technology and IoT serv...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.