EXHIBIT 99.1
[[Image Removed: [pressrelease991001.jpg]]]
For Immediate Release
Contact: Anne-Marie Hess
Date: February 28, 2008
Phone: (609) 951-6842
E-mail: ahess@pharmanet.com
PHARMANET DEVELOPMENT GROUP REPORTS FINANCIAL RESULTS
FOR THE FOURTH QUARTER AND FULL YEAR 2007 AND
PROVIDES GUIDANCE FOR 2008
Princeton, NJ - February 28, 2008 - PharmaNet Development Group, Inc. (the
"Company") (NASDAQ: PDGI), a leading provider of global drug development
services to branded pharmaceutical, biotechnology, generic drug and medical
device companies, today reported GAAP net earnings from continuing operations
for the fourth quarter ended December 31, 2007, of $3.8 million, or $0.20 per
diluted share, compared to GAAP net earnings from continuing operations of
$3.5 million, or $0.19 per diluted share, in the fourth quarter 2006.
Adjusted (non-GAAP) net earnings (see basis of presentation below) from
continuing operations for the fourth quarter 2007 were $6.3 million, or $0.33
per diluted share, compared to $6.8 million, or $0.36 per diluted share, in the
fourth quarter 2006 primarily due to higher direct costs and selling, general
and administrative (SG&A) expenses.
GAAP net earnings from continuing operations for the year ended December 31,
2007, increased 99.6% to $12.1 million, or $0.63 per diluted share, compared to
GAAP net earnings from continuing operations of $6.1 million, or $0.33 per
diluted share, in 2006. The Company's backlog increased 29.7% to $457.4 million
at December 31, 2007, compared to $352.7 million at December 31, 2006. Cash,
cash equivalents and investments in marketable securities increased 49.2% to
$80.2 million at December 31, 2007 compared to $53.8 million at December 31,
2006.
Adjusted (non-GAAP) net earnings (see basis of presentation below) from
continuing operations for 2007 increased 53% to $26.7 million, or $1.40 per
diluted share, compared to $17.4 million, or $0.94 per diluted share, in 2006
primarily due to increased direct revenues, the favorable impact of recognizing
certain deferred tax assets and continued improvements in operations.
"We are pleased with our 2007 financial results, having made significant
progress over the past year," commented Jeffrey P. McMullen, president and chief
executive officer. "In 2008, we look forward to continued growth and market
expansion, while optimizing our operations, increasing resource utilization and
reducing costs."
Basis of presentation
Due to the Company's decision to discontinue certain operations in 2006, all
financial results for the periods presented reflect the Company's continuing
operations only, unless otherwise stated.
To better reflect ongoing operations to investors for the periods presented,
adjusted (non-GAAP) results are used throughout this press release and the
accompanying tables. For both the fourth quarters of 2007 and 2006, adjusted
financial results exclude $0.7 million for the amortization of intangible assets
and $0.2 million non-cash share-based compensation expense related to the
adoption of Statement of Financial Accounting Standards No. 123R Share-Based
Payment (SFAS 123R).
For 2007, adjusted financial results exclude a $10.4 million provision for the
settlement of the class action lawsuit and other related litigation,
$2.8 million for the amortization of intangible assets and $0.9 million non-cash
share-based compensation expense related to the adoption of SFAS 123R. For
comparative purposes, 2006 adjusted
financial results exclude $7.9 million goodwill impairment related to
Specialized Pharmaceutical Services, Inc. (SPS), $3.0 million for amortization
of intangible assets, $1.2 million for a non-recurring charge related to
financing and $1.1 million non-cash share-based compensation expense related to
the adoption of SFAS 123R.
In addition, on January 1, 2007, the Company began reporting the financial
results for SPS in the late stage segment rather than the early stage segment.
Prior year financial results have been adjusted accordingly for comparative
purposes.
A reconciliation of GAAP results to adjusted (non-GAAP) results can be found in
the unaudited financial tables included in this press release. A further
explanation of the reasoning behind the use of non-GAAP financial results can be
found at the end of this press release.
Fourth Quarter 2007 Financial Summary
§
Direct revenue in the fourth quarter 2007, excluding reimbursed out-of-pocket
expenses, increased 16.7% to $92.3 million compared to $79.1 million in the
fourth quarter 2006 due to growth in both the early and late stage segments.
§
GAAP corporate SG&A expenses increased to $7.9 million in the fourth quarter
2007, compared to $4.6 million in the fourth quarter 2006, primarily due to
$0.9 million of executive severance and higher professional fees and facilities
expense. Legal fees related to the SEC investigation were $0.6 million in the
fourth quarter 2007 compared to $0.2 million in the fourth quarter 2006.
§
GAAP operating margin decreased to 3.2% in the fourth quarter 2007 compared to
9.4% in the fourth quarter 2006. Adjusted operating margin for the fourth
quarter 2007 decreased to 4.2% from 10.5% in the fourth quarter 2006 primarily
due to higher direct costs related to headcount and higher SG&A.
§
Fourth quarter 2007 net earnings from continuing operations include a
$4.6 million ($0.24 per diluted share) net tax benefit resulting from an
increase in the Company's deferred tax assets primarily related
to additional Canadian tax credits, expected to more likely than not, be
utilized in the carry forward period.
§
The Company's backlog decreased to $457.4 million at December 31, 2007, compared
to $472.5 million at September 30, 2007, primarily due to cancellations of
certain projects in the early and late stage segments. Backlog consists of
anticipated direct revenue from written awards, letters of intent and contracts
that either have not started or are anticipated to begin in the near future.
Verbal awards are not included in the reported backlog.
§
The quarter-to-date book-to-bill ratio was 0.8x at December 31, 2007, compared
to 1.3x at September 30, 2007 reflecting the aforementioned cancellations.
Book-to-bill is calculated by taking the change in backlog between periods plus
direct revenues divided by direct revenues.
§
Early stage book-to-bill was 1.1x at December 31, 2007.
§
Late stage book-to-bill was 0.6x at December 31, 2007.
§
Cash, cash equivalents and investments in marketable securities were
$80.2 million at December 31, 2007, compared to $66.5 million at September 30,
2007.
§
Net cash provided by continuing operations was $15.7 million in the fourth
quarter 2007.
§
Capital expenditures decreased to $3.5 million in the fourth quarter 2007
compared to $9.6 million in the fourth quarter 2006 primarily due to the
completion of the early stage clinic and laboratory expansions which occurred
early in 2007.
§
Depreciation expense was $3.7 million and amortization of intangibles was
$0.7 million in the fourth quarter 2007, compared to depreciation expense of
$2.8 million and amortization expense of $0.7 million in the fourth quarter
2006.
§
Net days sales outstanding (DSO) was 36 days at December 31, 2007, compared to
38 days at September 30, 2007.
§
The Company's effective tax rate was a benefit of 37.1% in the fourth quarter
2007, compared to an effective tax rate of 38.7% in the fourth quarter 2006
primarily due to the aforementioned tax benefit related to the Canadian tax
credits.
2007 Financial Summary
§
Direct revenue in 2007, excluding reimbursed out-of-pocket expenses, increased
19.9% to $362.5 million from $302.4 million in 2006 due to growth in both the
early and late stage segments.
§
The early stage segment contributed 38% and the late stage segment contributed
62% to direct revenues in 2007.
§
The geographic mix of direct revenue was comprised of 45.7% from the US and
54.3% from outside the US.
§
GAAP corporate SG&A expenses increased to $34.9 million in 2007, compared to
$21.0 million in 2006 primarily due to the $10.4 million provision for the
settlement of the class action and other related litigation, $0.9 million for
executive severance, and higher professional fees, facilities expense and
compensation expense. Legal fees related to the SEC investigation were
$1.9 million for 2007, compared to $2.5 million in 2006.
§
GAAP operating margin increased to 5.9% in 2007, compared to 4.3% in 2006.
Adjusted operating margin for 2007 increased to 9.8%, compared to 8.3% in 2006.
§
The year-to-date 2007 book to bill ratio was 1.3x at December 31, 2007.
§
Early stage book-to-bill was 1.2x at December 31, 2007, and
§
Late stage book-to-bill was 1.4x at December 31, 2007.
§
Capital expenditures decreased to $15.0 million in 2007, compared to
$26.9 million in 2006 primarily due to the completion of the clinic and
laboratory expansions in the early stage segment.
§
Depreciation expense was $12.7 million and amortization of intangibles was
$2.8 million in 2007, compared to depreciation expense of $11.4 million and
amortization expense of $3.0 million in 2006.
§
The Company's effective tax rate was 15.3% in 2007 compared to a benefit of
111.7% in 2006.
For the segment financial results for the fourth quarter 2007 provided below,
the Company has excluded an allocation of corporate expenses related to certain
adjusted SG&A expenses.
Early Stage
The Company's early stage segment primarily includes the areas of Phase I and
bioequivalency clinical trials, bioanalytical services and support services.
For the early stage segment, GAAP direct revenue, excluding reimbursed
out-of-pocket expenses, increased 32.7% to $39.8 million in the fourth quarter
2007, compared to $30.0 million in the fourth quarter 2006, primarily due to
higher direct revenue in the laboratories and clinics.
Early stage segment GAAP operating margins decreased to 12.0% in the fourth
quarter 2007, compared to 19.0% in the fourth quarter 2006. Early stage segment
adjusted operating margins decreased to 12.3% in the fourth quarter 2007,
compared to 19.5% in the fourth quarter 2006 primarily due to higher expenses
related to the new Quebec City and Toronto facilities. In addition, a number of
clinical studies were rescheduled, postponed or cancelled during the latter part
of the fourth quarter which resulted in lower resource utilization in our
clinics.
Backlog for the early stage segment increased to $69.5 at December 31, 2007,
compared to $65.8 million at September 30, 2007.
Late Stage
The Company's late stage segment primarily conducts Phase II through IV clinical
trials, data management and biostatistics, medical and scientific affairs,
regulatory affairs and submissions, and provides software tools and services for
use in clinical trials.
For the late stage segment, GAAP direct revenue, excluding reimbursed
out-of-pocket expenses, increased 6.9% to $52.5 million in the fourth quarter
2007, compared to $49.1 million in the fourth quarter 2006.
Late stage segment GAAP operating margins were 11.5% in the fourth quarter 2007,
compared to 12.9% in the fourth quarter 2006. Late stage segment adjusted
operating margins were 12.6% in the fourth quarter 2007 compared to 14.0% in the
fourth quarter 2006 primarily due to higher facility costs and professional
fees.
Backlog for the late stage segment decreased to $387.9 million at December 31,
2007, compared to $406.7 million at September 30, 2007 primarily due to
cancellations in the quarter.
Guidance
For full year 2008, the Company expects:
Metric Guidance
Direct Revenue $401 to $409 million
Operating margin (%) 10.1% to 10.3%
Corporate Expenses $23.6 million to $24.1 million
Diluted earnings per share $1.42 to $1.57
Capital expenditures $14 million to $16 million
Depreciation $13.5 million to $15 million
Amortization $2.8 million
Tax rate 12% to 15%
Conference Call and Webcast
The Company will host a conference call to discuss the fourth quarter and full
year 2007 financial results on Thursday, February 28, 2008 at 8:30 a.m. eastern
time.
Dial-in:
(866) 831-6234 for U.S.
(617) 213-8854 for International
Pass code: 42666104
Dial-in Replay:
(888) 286-8010 for U.S.
(617) 801-6888 for International
Pass code: 34306320
The replay will be available approximately two hours after the call through
Thursday, March 6, 2008.
Webcast:
Please visit www.pharmanet.com and select the investor tab to access the webcast
or link directly at
http://ir.pharmanet.com/phoenix.zhtml?p=irol-eventDetails&c=124176&eventID=1745094.
The archived webcast will be available for approximately 30 days following the
conference call.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures, which exclude,
among other items, the charge associated with the securities class action
settlement and other related litigation, amortization of intangible assets and
non-cash share-based compensation expense. Share-based compensation is an
important part of our employees' compensation and impacts their performance. The
Company considers these non-GAAP financial measures to be useful metrics because
management and investors can compare the Company's recurring operating results
and make more meaningful comparisons between the Company's recurring operating
results and those of other companies. In addition, management can use this
important tool for financial and operational decision-making and for evaluating
recurring operating results over different periods of time.
There are a number of limitations related to the use of non-GAAP operating
income versus operating income calculated in accordance with GAAP. Non-GAAP
operating income excludes certain costs, including share-based compensation and
amortization of intangible assets related to acquisitions that are recurring and
have been and will continue to be for the foreseeable future a significant
expense in the Company's business.
The components of the costs that we exclude from our calculation of non-GAAP
operating income may differ from the components that our peer companies exclude
when they report their results of operations. The Company compensates for these
limitations by providing specific information regarding the GAAP amounts
excluded from non-GAAP operating income and evaluating non-GAAP operating income
together with operating income calculated in accordance with GAAP. Non-GAAP
results also allow investors to compare the reported GAAP results and the
non-GAAP consensus estimate and to compare the Company's operations against the
financial results of other companies in the industry. The non-GAAP financial
measures included in this press release should not be considered superior to or
a substitute for results of operations prepared in accordance with GAAP.
Reconciliations of the non-GAAP financial measures used in this press release to
the most directly comparable GAAP financial measures are set forth in the text
of, and the accompanying tables to, this press release, and can also be found on
the Company's website.
About PharmaNet Development Group, Inc.
PharmaNet Development Group, Inc., a global drug development services company,
provides a comprehensive range of services to the pharmaceutical, biotechnology,
generic drug, and medical device industries. The Company offers
clinical-development solutions including early and late stage consulting
services, Phase I clinical studies and bioanalytical analyses, and Phase II, III
and IV clinical development programs. With approximately 2,600 employees and
more than 42 facilities throughout the world, PharmaNet is a recognized leader
in outsourced clinical development. For more information, please visit our
website at www.pharmanet.com.
Forward-Looking Statements
Certain statements made in this press release are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995 (the
"Act"). Additionally, words such as "seek," "intend," "believe," "plan,"
"estimate," "expect," "anticipate" and other similar expressions are
forward-looking statements within the meaning of the Act. Some or all of the
results anticipated by these forward-looking statements may not occur. Factors
that could cause or contribute to such differences include, but are not limited
to, industry trends and information; whether the Company will achieve its
estimated value relating to discontinued operations; developments with respect
to the SEC's inquiry and securities class action lawsuits and derivative
lawsuits (Due to the inherent uncertainties of litigation, the reserve for the
litigation is only an estimate. Management may need to adjust the reserve in the
future as outcomes of the securities class action and other related litigation
becomes more predictable); the Company's ability to successfully achieve and
manage the technical requirements of specialized clinical trial services, while
complying with applicable rules and regulations; regulatory changes; changes
affecting the clinical research industry; a reduction of outsourcing by
pharmaceutical and biotechnology companies; the Company's ability to compete
internationally in attracting clients in order to develop additional business;
the Company's evaluation of its backlog and the potential cancellation of
contracts; the Company's ability to retain and recruit new employees; the
Company's clients' ability to provide the drugs and medical devices used in its
clinical trials; the Company's future stock price; the Company's assessment of
its effective tax rate and tax allowance; the Company's financial guidance; the
Company's future effective tax rate; the Company's anticipated capital
expenditures; the impact on the Company of foreign currency transaction costs
and the effectiveness of any hedging strategies it implements; and the national
and international economic climate as it affects drug development operations.
Further information can be found in the Company's risk factors contained in its
Annual Report on Form 10-K for the year ended December 31, 2006 and its most
recent Quarterly Report on Form 10-Q. The Company does not undertake to update
the disclosures made herein, and you are urged to read our filings with the
Securities and Exchange Commission.
PharmaNet Development Group, Inc. and Subsidiaries
Statements of Operations
For the Three Months Ended December 31, 2007 and 2006
Amounts are shown in $000's
% of Direct % of Direct
2007 Revenues 2006 Revenues
REVENUE
Direct revenue $ 92,285 100.0% $ 79,104 100.0%
Reimbursed out-of-pockets 36,835 39.9% 24,452 30.9%
TOTAL REVENUE 129,120 139.9% 103,556 130.9%
COSTS AND EXPENSES
Direct costs 55,920 60.6% 46,023 58.2%
Reimbursable out-of-pocket expenses 36,835 39.9% 24,452 30.9%
Selling, general and administrative
expenses 33,442 36.2% 25,658 32.4%
TOTAL COSTS AND EXPENSES 126,197 136.7% 96,133 121.5%
EARNINGS FROM CONTINUING OPERATIONS 2,923 3.2% 7,423 9.4%
OTHER INCOME (EXPENSE)
Interest income 593 0.6% 586 0.7%
Interest expense (1,385 ) 1.5% (1,682 ) 2.1%
Foreign exchange transaction gain (loss),
net 1,202 (1.3% ) (340 ) 0.4%
Other expense (294 ) 0.3% - -
TOTAL OTHER INCOME (EXPENSE) 116 (0.1% ) (1,436 ) 1.8%
EARNINGS FROM CONTINUING OPERATIONS
BEFORE INCOME TAX 3,039 3.3% 5,987 7.6%
Income tax (benefit) expense (1,126 ) (1.2% ) 2,317 2.9%
EARNINGS FROM CONTINUING OPERATIONS
BEFORE MINORITY INTEREST IN JOINT VENTURE 4,165 4.5% 3,670 4.6%
Minority interest in joint venture 364 0.4% 174 0.2%
NET EARNINGS FROM CONTINUING OPERATIONS 3,801 4.1% 3,496 4.4%
Earnings (loss) from discontinued
operations, net of tax 209 (0.2% ) (15,409 ) 19.5%
NET EARNINGS (LOSS) $ 4,010 4.3% $ (11,913 ) 15.1%
BASIC EARNINGS (LOSS) PER SHARE:
Continuing operations $ 0.20 $ 0.19
Discontinued operations $ 0.01 $ (0.84 )
Net earnings (loss) $ 0.21 $ (0.65 )
DILUTED EARNINGS (LOSS) PER SHARE:
Continuing operations $ 0.20 $ 0.19
Discontinued operations $ 0.01 $ (0.83 )
Net earnings (loss) $ 0.21 $ (0.64 )
SHARES USED IN COMPUTING EPS:
Basic 18,926 18,439
Diluted 19,222 18,653
|
PharmaNet Development Group, Inc. and Subsidiaries
Statements of Operations
For the Twelve Months Ended December 31, 2007 and 2006
Amounts are shown in $000's
% of Direct % of Direct
2007 Revenues 2006 Revenues
REVENUE
Direct revenue $ 362,471 100.0% $ 302,385 100.0%
Reimbursed out-of-pockets 107,786 29.7% 104,571 34.6%
TOTAL REVENUE 470,257 129.7% 406,956 134.6%
COSTS AND EXPENSES
Direct costs 216,173 59.6% 182,679 60.4%
Reimbursable out-of-pocket expenses 107,786 29.7% 104,571 34.6%
Selling, general and administrative
expenses 114,411 31.6% 98,827 32.7%
Provision for settlement of litigation 10,400 2.9% - -
Impairment of goodwill - - 7,873 2.6%
TOTAL COSTS AND EXPENSES 448,770 123.8% 393,950 130.3%
EARNINGS FROM CONTINUING OPERATIONS 21,487 5.9% 13,006 4.3%
OTHER INCOME (EXPENSE)
Interest income 2,128 0.6% 1,636 0.5%
Interest expense (6,332 ) 1.7% (8,115 ) 2.7%
Foreign exchange transaction loss, net (2,138 ) 0.6% (3,342 ) 1.1%
Other income 178 0.0% - -
TOTAL OTHER INCOME (EXPENSE) (6,164 ) 1.7% (9,821 ) 3.2%
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS
BEFORE INCOME TAX (BENEFIT) 15,323 4.2% 3,185 -1.1%
Income tax expense (benefit) 2,340 0.6% (3,558 ) 1.2%
EARNINGS FROM CONTINUING OPERATIONS
BEFORE MINORITY INTEREST IN JOINT
VENTURE 12,983 3.6% 6,743 2.2%
Minority interest in joint venture 905 0.2% 691 0.2%
NET EARNINGS FROM CONTINUING OPERATIONS 12,078 3.3% 6,052 2.0%
Earnings (loss) from discontinued
operations, net of tax 838 0.2% (42,077 ) 13.9%
NET EARNINGS (LOSS) $ 12,916 3.6% $ (36,025 ) 11.9%
BASIC EARNINGS (LOSS) PER SHARE:
Continuing operations $ 0.64 $ 0.33
Discontinued operations $ 0.05 $ (2.31 )
Net earnings (loss) $ 0.69 $ (1.98 )
DILUTED EARNINGS (LOSS) PER SHARE:
Continuing operations $ 0.63 $ 0.33
Discontinued operations $ 0.05 $ (2.28 )
Net earnings (loss) $ 0.68 $ (1.95 )
SHARES USED IN COMPUTING EPS:
Basic 18,790 18,221
Diluted 19,048 18,447
|
PHARMANET DEVELOPMENT GROUP, INC. AND SUBSIDIARIES
Reconciliation of GAAP Operating Margin from Continuing Operations to Non GAAP
Operating Margins for Continuing Operations
For the Three and Twelve Months Ended December 31, 2007 and 2006
Amounts are shown in $000's
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
DIRECT REVENUE $ 92,285 $ 79,104 $ 362,471 $ 302,385
EARNINGS FROM CONTINUING OPERATIONS GAAP 2,923 7,423 21,487 13,006
OPERATING MARGIN GAAP 3.2% 9.4% 5.9% 4.3%
ADD BACK:
SFAS 123R expense 241 149 857 1,108
Amortization of intangible assets 689 709 2,755 2,983
Provision for settlement of litigation - - 10,400 -
Impairment of goodwill - - - 7,873
NON GAAP OPERATING EARNINGS $ 3,853 $ 8,281 $ 35,499 $ 24,970
NON GAAP OPERATING MARGIN 4.2% 10.5% 9.8% 8.3%
PHARMANET DEVELOPMENT GROUP, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Earnings from Continuing Operations to Non GAAP
Net Earnings for Continuing Operations
For the Three and Twelve Months Ended December 31, 2007 and 2006
Amounts are shown in $000's
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
Net earnings from continuing operations
GAAP $ 3,801 $ 3,496 $ 12,078 $ 6,052
Add: Non-cash SFAS 123R expense 241 149 857 1,108
Add: Provision for settlement of
litigation - - 10,400 -
Add: Non-cash intangible assets
amortization 689 709 2,755 2,983
Add: Non-cash goodwill Impairment - - - 7,873
Add: Non-recurring charge related to
financing - - - 1,214
Subtotal $ 4,731 $ 4,354 $ 26,090 $ 19,230
Less: Tax effect of non-GAAP adjustments (1,566 ) (2,408 ) (580 ) 1,799
Non-GAAP net earnings from continuing
operations $ 6,297 $ 6,762 $ 26,670 $ 17,431
Diluted non-GAAP net earnings per share $ 0.33 $ 0.36 $ 1.40 $ 0.94
Number of shares used in computing diluted
non-GAAP earnings per share 19,222 18,653 19,048 18,447
PHARMANET DEVELOPMENT GROUP, INC. AND SUBSIDIARIES
Summary of Operations of Early and Late Stage Clinical Development Segments
For the Three and Twelve Months Ended December 31, 2007 and 2006
Amounts are shown in $000's
Three Months Ended Twelve Months Ended
EARLY STAGE DEVELOPMENT 2007 2006 % variation 2007 2006 % variation
Direct revenue $ 39,758 $ 29,955 32.7% $ 137,818 $ 103,274 33.4%
GAAP operating earnings 4,769 5,693 (16.2% ) 22,260 12,116 83.7%
Amortization of intangibles 134 134 0.0% 535 684 (21.8% )
Non-GAAP operating earnings $ 4,903 $ 5,827 (15.9% ) $ 22,795 $ 12,800 78.1%
GAAP operating Margin 12.0% 19.0% 16.2% 11.7%
Non-GAAP operating margin 12.3% 19.5% 16.5% 12.4%
LATE STAGE DEVELOPMENT 2007 2006 % variation 2007 2006 % variation
Direct revenue $ 52,527 $ 49,149 6.9% $ 224,653 $ 199,111 12.8%
GAAP operating earnings 6,059 6,316 (4.1% ) 34,092 21,934 55.4%
Amortization of intangibles 555 575 (3.5% ) 2,220 2,299 (3.4% )
Impairment of goodwill (1) - - - - 7,873 -
Non-GAAP operating earnings $ 6,614 $ 6,891 (4.0% ) $ 36,312 $ 32,106 13.1%
GAAP operating Margin 11.5% 12.9% 15.2% 11.0%
Non-GAAP operating margin 12.6% 14.0% 16.2% 16.1%
|
(1) Represents impairment of goodwill at SPS
PHARMANET DEVELOPMENT GROUP, INC. AND SUBSIDIAIRIES
Consolidated Balance Sheets
December 31, 2007 and 2006
Amounts are shown in $000's
December 31, December 31,
2007 2006
ASSETS
Current assets
Cash and cash equivalents $ 77,548 $ 45,331
Investment in marketable securities 2,650 8,423
Accounts receivable, net 132,550 109,188
Income tax receivable 1,855 776
Deferred income taxes 267 4,205
Prepaid expenses and other current assets 11,863 9,050
Construction in progress and land expected to be sold in
sale-leaseback transaction - 15,851
Assets from discontinued operations 5,199 7,176
Total current assets 231,932 200,000
Property and equipment, net 67,506 52,235
Goodwill, net 266,973 266,973
Other intangibles, net 26,442 29,197
Deferred income tax 5,593 -
Other assets, net 7,840 8,371
Total assets $ 606,286 $ 556,776
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 13,843 $ 10,312
Accrued liabilities 47,978 26,427
Client advances, current portion 79,312 67,857
Capital lease payable and notes payable, current portion 3,562 3,036
Other Current Liabilities 154 -
Liabilities associated with assets held for sale - 15,851
Liabilities from discontinued operations 1,770 4,196
Total current liabilities 146,619 127,679
Client advances 2,602 2,786
Deferred income taxes - 2,202
Line of Credit - 9,400
Capital lease obligation and notes payable 5,634 2,816
2.25% Convertible senior notes payable, due 2024 143,750 143,750
Other non-current liabilities 15,590 8,504
Minority interest in joint venture 2,722 1,560
Commitments and contingencies
Stockholders' equity
Preferred stock. $0.10 par value, 5,000 shares
authorized, none issued - -
Common stock, $0.001 par value, 40,000 shares authorized,
19,017 shares and
18,546 shares issued and outstanding as of December 31,
2007 and 2006 19 19
Additional paid-in capital 246,075 236,540
Retained earnings 22,616 12,636
Accumulated other comprehensive earnings 20,659 8,884
Total stockholders' equity $ 289,369 $ 258,079
Total liabilities and stockholders' equity $ 606,286 $ 556,776
|
PHARMANET DEVELOPMENT GROUP, INC. AND SUBSIDIAIRIES
Consolidated Statement of Cash Flows
For the Twelve Months Ended December 31, 2007 and 2006
Amounts are shown in $000's
Twelve Months Ended December 31,
2007 2006
Cash flows from operating activities:
Net earnings (loss) $ 12,916 $ (36,025 )
(Earnings) loss from discontinued operations (838 ) 42,077
Adjustments to reconcile net earnings to net cash provided
by
operating activities:
Depreciation and amortization 15,477 14,415
Amortization of deferred debt issuance costs 1,578 2,827
Impairment of goodwill - 7,873
Provision for settlement of litigation 10,400 -
Loss on disposal of property and equipment 381 160
Minority interest 904 690
Provision for doubtful accounts - 2,279
Non cash compensation - reduction of note receivable - 200
Share-based compensation expense 5,119 4,275
Changes in assets and liabilities:
Accounts receivable (15,339 ) (20,020 )
Income taxes receivable (1,141 ) 6,688
Prepaid expenses and other current assets (1,085 ) 2,777
Other assets (749 ) (733 )
Accounts payable (3,555 ) 3,240
Accrued liabilities 9,986 8,802
Other current liabilities 154 -
Client advances 9,812 (597 )
Deferred income taxes (2,453 ) (8,717 )
Other long term liabilities 2,963 -
Total adjustments 32,452 24,159
Net cash provided by operating activities - continuing
operations 44,530 30,211
Net cash (used in) provided by operating activities -
discontinued operations (792 ) 1,737
Net cash provided by operating activities 43,738 31,948
Cash flows from investing activities:
Additional purchase price consideration paid related to
acquisitions - (2,000 )
Purchase of property and equipment (15,014 ) (13,529 )
Purchase of property and equipment related to assets held
for sale - (7,272 )
Proceeds from the disposal of property and equipment 28 13
Net sales (purchases) of investments in marketable
securities 7,378 (257 )
Net cash used in investing activities - continuing
operations (7,608 ) (23,045 )
Net cash provided by investing activities - discontinued
operations 1,182 233
Net cash used in investing activities (6,426 ) (22,812 )
Cash flows from financing activities:
Borrowings on lines of credit 10,000 8,000
Payments on lines of credit (19,400 ) (15,600 )
Change in capital lease obligations and notes payable (4,063 ) (2,712 )
Proceeds from sale-leaseback transaction - 9,800
Debt issue costs attributable to financing instruments - (421 )
Proceeds from stock issued under employee stock purchase
and option plans 4,416 5,238
Net cash (used in) provided by financing activities (9,047 ) 4,305
Net effect of exchange rate changes on cash 3,952 1,222
Net increase in cash and cash equivalents 32,217 14,663
Cash and cash equivalents at beginning of period 45,331 30,668
Cash and cash equivalents at end of period $ 77,548 $ 45,331
|
###
|