PAREXEL REPORTS FOURTH QUARTER AND FISCAL 2004 FINANCIAL RESULTS
BOSTON, MA, August 3, 2004 — PAREXEL International Corporation (Nasdaq: PRXL) today announced its financial results for the fourth quarter and fiscal year ended June 30, 2004.
For the three months ended June 30, 2004, PAREXEL’s consolidated service revenue grew 0.1% to $141.1 million compared with $140.9 million in the prior year period. Operating income was $10.2 million, or 7.3% of consolidated service revenue in the fourth quarter versus operating income of $3.6 million, or 2.5% in the comparable quarter of the prior year. Net income for the quarter was $6.5 million, or $0.24 per diluted share, compared with net income of $2.9 million, or $0.11 per diluted share for the quarter ended June 30, 2003.
For the fiscal year ended June 30, 2004, consolidated service revenue was $547.2 million versus $522.3 million in the prior year period, an increase of 4.8%. Operating income for Fiscal 2004 was $24.6 million, or 4.5% of consolidated service revenue, compared with $20.6 million, or 3.9% in the prior year. Net income for Fiscal 2004 was $13.8 million or $0.52 per diluted share, compared with net income of $10.7 million or $0.42 per diluted share for the fiscal year ended June 30, 2003.
On a proforma basis, excluding $11.6 million in restructuring and one-time charges taken in the third quarter of Fiscal 2004, operating income for Fiscal 2004 was $36.2 million or 6.6% of consolidated service revenue, net income was $21.9 million, and earnings per diluted share were $0.82.
On a segment basis, service revenue for the fourth quarter was $74.4 million in Clinical Research Services, $32.9 million in the PAREXEL Consulting Group, $23.8 million in Medical Marketing Services, and $10.0 million in Perceptive Informatics, Inc. (Perceptive). For the fiscal year, service revenue was $309.3 million in Clinical Research Services, $113.1 million in the PAREXEL Consulting Group, $88.8 million in Medical Marketing Services, and $36.0 million in Perceptive.
For the six-month period from January to June 2004, PAREXEL reported net new business (gross new business less cancellations) of $358.5 million. Net new business for this period increased 33.1% when compared with the six-month period from January to June of 2003, and increased 19.0% from the six-month period ended on December 31, 2003. Net new business for the full fiscal year was $659.8 million, an increase of 16.0% from Fiscal 2003. Backlog at June 30, 2004 was $699.2 million, an increase of 12.5% from the December 31, 2003 backlog, which was $621.7 million, and an increase of 19.2% over the backlog reported at June 30, 2003, which was $586.6 million.
Mr. Josef H. von Rickenbach, PAREXEL’s Chairman and Chief Executive Officer stated, “During the fourth quarter, we continued to make progress in improving the Company’s overall operating margin despite the negative impact on revenue of fourth quarter signature delays. As we move into the new fiscal year, we will be primarily focused on re-accelerating revenue growth, and the continuing drive to expand operating margins. We are encouraged by our current backlog coverage and are confident that we will grow revenue in each of our businesses. The impact of ongoing productivity and quality programs, the continued progress of Perceptive Informatics, and better leverage from SG&A spending will also contribute significantly to improved operating results.”
The Company issued forward-looking guidance regarding revenue and earnings per share for the first quarter of Fiscal 2005 (ending September 30, 2004) and reconfirmed previously issued guidance for Fiscal 2005. For the first quarter of Fiscal 2005, the Company anticipates reporting consolidated service revenue in the range of $138 to $143 million and earnings per diluted share in the range of $0.20 to $0.21. For Fiscal 2005, the Company anticipates reporting consolidated service revenue in the range of $610 to $630 million and earnings per diluted share in the range of $0.98 to $1.08.
The Company believes that presenting the proforma information contained in this press release assists investors and others to gain a better understanding of its core operating results and future prospects, especially when comparing such results to previous periods or forecasts. Management uses this proforma information, in addition to the GAAP information, 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. Such measures are also used by management in its financial and operating decision-making. Proforma information is not meant to be considered superior to or a substitute for the Company’s results of operations prepared in accordance with GAAP. A reconciliation of Generally Accepted Accounting Principles (GAAP) results with proforma results may be found in the attached financial tables.
PAREXEL’s Fourth Quarter and Fiscal 2004 Earnings Conference Call will begin at 10 a.m. ET on Tuesday, August 3rd 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 http://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) 332-0637 and ask to join the PAREXEL quarterly conference call.
PAREXEL is one of the largest biopharmaceutical 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 expedite 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. Its information technology subsidiary, Perceptive Informatics, Inc., develops and offers a portfolio of innovative technology-based products and services that facilitate clinical drug development and are designed to decrease time to peak sales. The technology portfolio includes web-based portal solutions and tracking tools, Interactive Voice Response Systems (IVRS), Clinical Trial Management Systems (CTMS), electronic diary and investigator database solutions. Perceptive also offers advanced medical diagnostics services to assess rapidly and objectively the safety and efficacy of new drugs, biologics, and medical devices in clinical trials. PAREXEL’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 51 locations throughout 35 countries around the world, and has 4,875 employees.
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 first quarter of Fiscal Year 2005 and Fiscal Year 2005. 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” and similar expressions are intended to identify forward-looking statements. These statements 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; the Company's dependence on certain industries and clients; the Company's ability to win new business, manage growth, 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; government regulation of the drug, medical device and biotechnology industry; consolidation within the pharmaceutical industry; 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 March 31, 2004 as filed with the SEC on May 13, 2004, 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.