PAREXEL REPORTS FOURTH QUARTER AND FISCAL 2000 FINANCIAL RESULTS
BOSTON, MA, August 30, 2000 — PAREXEL International Corporation (Nasdaq: PRXL) today announced its financial results for the fourth quarter and fiscal year ended June 30, 2000.
The following financial results exclude the effect of restructuring charges, accelerated depreciation expense, and special charges in both the current and prior periods. For the three months ended June 30, 2000, PAREXEL’s consolidated net revenue was $91.2 million versus net revenue of $91.3 million in the prior year quarter. Income from operations was $846,000 versus $6.1 million in the prior year quarter. Net income for the quarter was $1.7 million, or $0.07 per diluted share, compared with net income of $4.6 million, or $0.18 per diluted share for the quarter ended June 30, 1999.
During the June 2000 quarter, the Company recorded accelerated depreciation expense of $502,000. The expense was related to restructuring and other charges which were taken in the March quarter and which subsequently changed the estimated useful lives of leasehold improvements on abandoned leased facilities in the fourth quarter.
For the year ended June 30, 2000, consolidated net revenue of $378.2 million grew 7.4% over net revenue of $352.0 million in the prior year. Net of the impact of foreign exchange, the Company’s revenue growth was 10.2%. Income from operations for the year ended June 30, 2000, was $17.7 million versus income from operations of $28.7 million in the prior year. Net income for the year was $15.2 million, or $0.60 per diluted share compared with net income of $20.9 million, or $0.83 per diluted share in the prior year.
On a segment basis, consolidated net revenues for the fourth quarter were $60.4 million in Clinical Research Services (CRS), $16.8 million in the PAREXEL Consulting Group (PCG), and $14.0 million in Medical Marketing Services (MMS). For the fiscal year, revenues were $262.7 million in CRS, $66.5 million in PCG, and $49.0 million in MMS.
For the six-month period from January to June 2000, PAREXEL reported net new business authorizations (gross new business less cancellations) of $162.6 million. Backlog at June 30, 2000 was $385.1 million, an increase of 8.2% over June 30, 1999.
“Fiscal 2000 was a challenging year for the Company due to the significant increase in project cancellations and delays by our clients, which we believe resulted primarily from the significant changes that have occurred in the pharmaceutical industry over the past twelve months”, stated Mr. Josef von Rickenbach, PAREXEL’s Chairman and Chief Executive Officer. “However, we continue to believe that the recent period of turbulence in the pharmaceutical industry will come to an end, and we plan to capitalize on the renewed demand for outsourced clinical trials when it does. I firmly believe that our clinical development, consulting and marketing expertise remains unrivaled, and we are a valued partner to many of the world’s leading pharmaceutical companies. In fact, we recently reviewed the world’s top-selling prescription drugs of 1999 and found that PAREXEL International had participated in the development of 19 out of the top 20.”
“We also made progress toward our goal of adding depth to our senior management team, and effectively managed transition in several key roles”, Mr. von Rickenbach continued. “The addition of James Winschel as Chief Financial Officer, and Andrew Smith as President of Medical Marketing Services adds significant depth and corporate experience to these senior leadership positions. I am also pleased to announce that we recently promoted Barry Philpott, formerly head of our Consulting Group, to the position of President of the Clinical Research Services division. Barry joined PAREXEL in 1993, and had a broad range of experience in the operations of global businesses prior to coming to the Company. His extensive knowledge of our clients and systems made him an ideal fit for the position. We have appointed Andrew Morffew, formerly Vice President of PAREXEL’s Consulting Group, to the position of President of PCG, replacing Barry. Andy has been with the Company since 1997, and prior to joining PAREXEL, started and led IBM's Pharmaceutical Consulting Practice. I am completely confident that the expertise that all of these individuals bring will help us to achieve the goals we have set for fiscal 2001.”
“In the September quarter, we will be breaking out the results of our Advanced Technology and Informatics (ATI) business for the first time”, Mr. von Rickenbach added. “Through ATI we have already introduced a number of new products, including ParXnet, a comprehensive web portal that brings enterprise-wide information to the desktop. The tools contained within ParXnet are specifically designed to accelerate and enhance the clinical development and launch processes for PAREXEL’s pharmaceutical and biotechnology clients. The initial acceptance of these products in the marketplace has been very positive, and bodes well for the future of the business.”
The Company issued forward-looking guidance regarding revenues and pro forma earnings per share (not taking into account any extraordinary charges) for Fiscal 2001. For the first quarter the Company anticipates reporting revenues in the range of $85 to $90 million and to be breakeven on an earnings per diluted share basis. For Fiscal 2001 PAREXEL anticipates revenues to be in the range of $370 to $380 million, and earnings per share to be in the range of $0.30 to $0.40 per diluted share.
PAREXEL is one of the largest contract pharmaceutical outsourcing organizations in the world, providing a broad range of knowledge-based contract research, medical marketing and consulting services to the worldwide pharmaceutical, biotechnology and medical device industries. With a commitment to providing solutions that accelerate time-to-market and peak market penetration, PAREXEL has developed significant expertise in clinical trials management, data management, biostatistical analysis, medical marketing, clinical pharmacology, regulatory and medical consulting, industry training and publishing and other drug development consulting services. The Company’s integrated services, therapeutic area depth and sophisticated information technology, along with its experience in global drug development and product launch services, represent key competitive strengths. Headquartered near Boston, MA, PAREXEL operates in 43 locations throughout 29 countries around the world, and has approximately 4,200 employees.
This release may contain "forward-looking" statements regarding future results and events, including statements regarding expected financial results, future growth and customer demand that involve a number of risks and uncertainties. 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”, and similar expressions are intended to identify forward-looking statements. 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: the cancellation, revision, or delay of contracts, including those contracts in backlog; the Company's dependence on certain industries and clients; the Company's ability to manage growth and its ability to 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; government regulation of certain industries and clients; competition and consolidation within the pharmaceutical 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. These 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 March 31, 2000.