(Source: Business Wire)
PPD, Inc. (Nasdaq: PPDI) today reported its financial and operating results for the second quarter ended June 30, 2009. As previously disclosed, PPD sold the business of its wholly-owned subsidiary, Piedmont Research Center, which was part of the company's discovery sciences segment. Therefore, the company is reporting current and historical financial results for this business in discontinued operations.
PPD recorded net revenue of $355.2 million for the second quarter of 2009, compared to $403.1 million for the second quarter of 2008. Second quarter 2009 income from operations was $53.4 million, compared to $69.9 million for the same period in 2008. Second quarter 2009 diluted earnings per share were $0.49, compared to $0.41 for the same period last year. Second quarter 2009 diluted earnings per share included the after-tax gain on the sale of Piedmont Research Center of $19.4 million, or $0.16 per share.
Segment Performance
Development segment net revenue for the second quarter of 2009 was $330.2 million, compared to $370.6 million for the second quarter of 2008. Development segment income from operations for the second quarter of 2009 was $59.1 million, compared to $72.7 million for the second quarter of 2008.
Discovery sciences segment net revenue for the second quarter of 2009 was $0.8 million, compared to $0.4 million for the second quarter of 2008. Discovery sciences segment net revenue for the second quarter of 2009 included royalties from the sale of Priligy in Europe, which marks the first quarter for receipt of royalties from the company's compound partnering business. Discovery sciences segment loss from operations for the second quarter of 2009 was $5.7 million, compared to a loss from operations of $2.8 million for the same period in 2008. The loss for the second quarter of 2009 was higher than the prior year loss due primarily to an increase in research and development expenditures from the company's dermatology business that it acquired early in the second quarter of 2009.
Other Financial Information
New business authorizations for the second quarter of 2009 totaled $465.9 million. Contract cancellations and adjustments for the quarter were $212.9 million. Backlog at June 30, 2009, was $3.2 billion.
Year-to-date days sales outstanding at June 30, 2009, were 32.0 days, compared to 42.2 days at December 31, 2008. Cash flow from operations for the second quarter of 2009 was $14.5 million. At June 30, 2009, PPD had $669.2 million in cash and investments. The effective tax rate for continuing operations in the second quarter of 2009 was 29.0 percent.
"Even though we continued to face challenging market conditions, PPD delivered strong earnings for the quarter," said David Grange, chief executive officer of PPD. "We remain very optimistic about the long-term prospects for the CRO industry as a whole, continue to believe we are particularly well positioned for the long term and are firmly committed to pursuing our strategic initiatives to maximize value for all our stakeholders."
Commenting on compound partnering, Fred Eshelman, executive chairman of PPD, said, "With the start of Priligy royalties and the advancement of the development programs for alogliptin and our dermatology portfolio, we remain confident that our compound partnering efforts will generate long-term, sustainable growth."
PPD will conduct a live conference call and audio webcast tomorrow, July 22, 2009, at 9 a.m. ET to discuss its second quarter 2009 results. A Q&A session will follow. All interested parties can access the webcast through the Presentations & Events link in the Investors section of the PPD Web site at http://www.ppdi.com. The webcast will be archived shortly after the call for on-demand replay. The conference call will be broadcast live over the Internet, and the live call may be accessed via the following direct dial numbers:
Participant dial-in: +1 877 644 0692 (U.S./Canada) +1 973 200 3387 (International) Conference ID: 89018262 -------------------------------------------------------------------------------
PPD is a leading global contract research organization providing discovery, development and post-approval services as well as compound partnering programs. Our clients and partners include pharmaceutical, biotechnology, medical device, academic and government organizations. With offices in 38 countries and more than 10,000 professionals worldwide, PPD applies innovative technologies, therapeutic expertise and a commitment to quality to help its clients and partners maximize returns on their R&D investments and accelerate the delivery of safe and effective therapeutics to patients. For more information, visit our Web site at http://www.ppdi.com.
Except for historical information, all of the statements, expectations and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties. Although PPD attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors which could cause actual results to differ materially include the following: success in sales growth; loss of and delay in large contracts; higher-than-expected cancellation rates; competition within the outsourcing industry; reliance on economic conditions and outsourcing trends in the pharmaceutical, biotechnology and medical device industries and academic and government-sponsored research sectors; overall global economic conditions; costs and risks associated with the development and commercialization of drugs, including uncertainties regarding regulatory submissions and approvals, and successful sales and marketing thereafter, for alogliptin and Priligy; rapid technological advances that make our products and services less competitive; risks associated with acquisitions and investments, such as impairments; risks associated with and dependence on collaborative relationships; the ability to attract, integrate and retain key personnel; and the other risk factors set forth from time to time in the SEC filings for PPD, copies of which are available free of charge upon request from the PPD investor relations department.
PPD, Inc.Statement of Operations Data(in thousands, except per share amounts)(unaudited) Three Months EndedJune 30, Six Months EndedJune 30, 2009 2008 2009 2008 Net revenue: Development $ 330,179 $ 370,648 $ 665,533 $ 718,446 Discovery Sciences 768 385 6,444 16,363 Reimbursed out-of-pockets 24,271 32,110 48,133 60,791 Total net revenue 355,218 403,143 720,110 795,600 Direct costs: Development 158,486 183,546 322,655 360,736 Discovery Sciences 502 289 1,118 746 Reimbursable out-of-pocket expenses 24,271 32,110 48,133 60,791 Total direct costs 183,259 215,945 371,906 422,273 Research and development 4,701 1,895 6,227 6,198 Selling, general and administrative 97,782 100,560 192,019 198,963 Depreciation and amortization 16,094 14,847 31,327 29,594 Impairment of intangible asset - - - 1,607 Income from operations 53,382 69,896 118,631 136,965 Impairment of investments - 2,976 - (13,343 ) Other income, net 1,075 2,555 857 8,272 Income from continuing operations before income taxes 54,457 75,427 119,488 131,894 Provision for income taxes 15,793 26,887 36,527 43,740 Income from continuing operations 38,664 48,540 82,961 88,154 Discontinued operations, net of taxes 19,397 466 19,668 981 Net income $ 58,061 $ 49,006 $ 102,629 $ 89,135 Income per share from continuing operations: Basic $ 0.33 $ 0.41 $ 0.70 $ 0.74 Diluted $ 0.33 $ 0.40 $ 0.70 $ 0.73 Income per share from discontinued operations: Basic $ 0.16 $ 0.00 $ 0.17 $ 0.01 Diluted $ 0.16 $ 0.00 $ 0.17 $ 0.01 Net income per share: Basic $ 0.49 $ 0.41 $ 0.87 $ 0.75 Diluted $ 0.49 $ 0.41 $ 0.87 $ 0.74 Dividends declared per common share $ 0.15 $ 0.10 $ 0.275 $ 0.20 Weighted average number of shares outstanding: Basic 117,893 119,195 117,860 119,285 Diluted 118,339 120,707 118,444 120,840 -------------------------------------------------------------------------------
PPD, Inc. Balance Sheet Data (in thousands) (unaudited) June 30,2009 December 31,2008 Cash, cash equivalents, short-term and long-term investments $ 669,194 $ 608,437 Accounts receivable and unbilled services, net 423,090 401,303 Total assets 1,879,598 1,754,428 Unearned income 248,196 246,649 Shareholders' equity 1,303,311 1,180,996 Additional information (in thousands) (unaudited) Cash, cash equivalents, short-term and long-term investments categories June 30,2009 December 31,2008 Cash and cash equivalents $ 559,840 $ 491,755 Auction rate securities 96,276 89,618 Other municipal debt securities 13,078 27,064 $ 669,194 $ 608,437 -------------------------------------------------------------------------------
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