Exhibit 99.1
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| | | | Contacts: Dan Darazsdi +1 910 558 7915 daniel.darazsdi@wilm.ppdi.com Luke Heagle +1 910 558 7585 luke.heagle@wilm.ppdi.com |
FOR IMMEDIATE RELEASE
PPD Reports Second Quarter 2009 Financial Results
Second Quarter Highlights:
| • | | Diluted EPS of $0.49, including $0.16 gain on sale of Piedmont Research Center, LLC |
| • | | Continued strong margin delivery |
| • | | Priligy® royalties commence |
WILMINGTON, N.C. (July 21, 2009) - 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 athttp://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:
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| 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 athttp://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 Ended | | Six Months Ended | |
| | | June 30, | | June 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 | |
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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 | |
| | | | | | | | | | | | | |
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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 | |
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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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