"On a consolidated basis, second quarter net revenues grew 6.7% year-on-year (13.1% excluding the impact of foreign exchange), operating margin expanded sequentially to 12.9%, and EPS of $0.66 exceeded our second quarter expectation," said Joe Herring, Chairman and Chief Executive Officer. "In Early Development, revenues grew 3.8% from the first quarter and operating margins were 13.6%, despite toxicology results declining sequentially as we previously forecasted. Toxicology results are on track for sequential improvement in the third quarter, based upon scheduled backlog. In Late-Stage Development, very strong demand led to accelerated revenue growth of 19.0% in the quarter (26.4% excluding the impact of foreign exchange) and operating margin of 24.6%, a 200 basis point increase above last quarter's record high.

"On the commercial front, adjusted net orders in the second quarter were $516 million, representing an adjusted book-to-bill ratio of 1.11 to 1. On a trailing twelve month basis, our Late-Stage Development adjusted book-to-bill was 1.5 to 1. Consolidated backlog grew 55% year on year to $4.66 billion. The $145 million minimum contract commitment associated with the pending acquisition of Merck's genomics laboratory is included in backlog, but is excluded from adjusted net orders.

"To reflect the weakening of the US dollar and a slightly lower tax rate, we are upwardly adjusting our 2009 revenue growth target to the mid- to upper-single digits and our earnings per share target to a range of $2.60 to $2.80 per share (excluding gains on the sales of our centralized ECG and IVRS service lines and using June 30 exchange rates), versus our previous targets of single-digit revenue growth and earnings of $2.50 to $2.70 per share."

   Consolidated Results     ($in millions except EPS) 2Q09    2Q08   Change   1H09    1H08    Change                             ----    ----   ------   ----    ----    ------   Total Revenues          $489.2   $461.8          $957.7  $895.9   Less: Reimbursable    Out-of-Pockets          $23.2    $24.9           $50.4   $46.5   Net Revenues            $466.0   $436.9     6.7% $907.3  $849.4     6.8%   Operating Income         $60.0    $67.5  (11.1)% $115.9  $130.2   (10.9)%    Operating Margin %       12.9%    15.4%           12.8%   15.3%   Net Income               $43.0    $50.9  (15.5)%  $83.3  $100.0   (16.7)%   Diluted EPS              $0.67    $0.80  (16.0)%  $1.30   $1.56   (16.7)%                            -----    -----  ------   -----   -----   ------   Gain on Sale, net of    tax                      $0.4     $0.6            $0.4    $2.6   Net Income Excluding    Gain on Sale            $42.6    $50.3  (15.3)%  $82.9   $97.4   (14.9)%   Diluted EPS Excluding    Gain on Sale            $0.66    $0.79  (15.9)%  $1.29   $1.52   (14.9)%                            -----    -----  ------   -----   -----   ------    Operating Segment Results    Early Development     ($in millions)         2Q09    2Q08  Change    1H09   1H08    Change                           ----    ----  ------    ----   ----    ------   Net Revenues          $199.8  $213.1    (6.3)% $392.3  $415.2    (5.5)%   Operating Income       $27.1   $54.2   (50.0)%  $54.2  $104.8   (48.2)%   Margin %                13.6%   25.4%            13.8%   25.2%                           ----    ----             ----    ----   

The Company's Early Development segment includes preclinical toxicology, analytical chemistry, clinical pharmacology services, and research products. Early Development net revenues for the second quarter of 2009 were $199.8 million compared to $213.1 million in the second quarter of 2008 and $192.5 million in the first quarter of 2009. Lower demand in toxicology drove the year-on-year decline in revenue. Sequential growth was driven by a rebound in demand for clinical pharmacology, analytical chemistry, and research products. In the quarter, foreign exchange negatively impacted year-on-year revenue growth by 540 basis points.

Operating income for the second quarter of 2009 declined 50.0% year-over-year to $27.1 million, compared to $54.2 million in the second quarter of last year. Operating margins for the second quarter of 2009 were 13.6% compared to 25.4% in the second quarter of 2008 and 14.1% last quarter. Second quarter operating margins were impacted by a lower level of study activity, costs related to the staffing and validating of the new preclinical drug development facility in Chandler, and severance related to the retirement of a building on the Vienna, Virginia campus. In addition, the company continued to maintain staffing levels above current needs at our five other preclinical campuses to support expected increases in revenue generation in the second half of the year.

   Late-Stage Development    ($in millions)        2Q09    2Q08  Change    1H09   1H08     Change                         ----    ----  ------    ----   ----     ------   Net Revenues        $266.3  $223.8    19.0%  $515.0  $434.2    18.6%   Operating Income     $65.5   $43.0    52.4%  $121.8   $81.9    48.8%   Margin %              24.6%   19.2%            23.7%   18.9%                         ----    ----             ----    ----   

The Late-Stage Development segment includes central laboratory, Phase II-III clinical development, and commercialization services (periapproval services and market access services). Late-Stage Development net revenues for the second quarter of 2009 grew 19.0% to $266.3 million compared to $223.8 million in the second quarter of 2008. Sequentially, revenues grew $17.6 million, or 7.1% from last quarter. The sequential and year-on-year growth was led by the continued exceptional performance of our central laboratory as well as strong performances in our Clinical Development and Commercialization services. Foreign exchange negatively impacted year-on-year revenue growth in the quarter by 740 basis points.

Operating income for the second quarter of 2009 increased 52.4% to $65.5 million compared to $43.0 million in the second quarter of the prior year. Record profitability in central laboratory and clinical development services led to exceptional operating margins of 24.6% for the second quarter of 2009 compared to 19.2% in the second quarter of last year and 22.6% last quarter. Operating margin in Late-Stage Development is expected to moderate closer to first quarter 2009 levels in the back half of the year.

Corporate Information

The Company's backlog at June 30, 2009 grew 54.7% year-over-year to $4.66 billion compared to $3.01 billion at June 30, 2008 and $4.42 billion at March 31, 2009. Foreign exchange positively impacted sequential backlog growth by $85 million. Adjusted net orders (net orders adjusted for dedicated capacity contracts) were $516 million in the second quarter of 2009.

Corporate expenses totaled $32.6 million in the second quarter of 2009 compared to $27.5 million last quarter and $29.8 million in the second quarter of last year.