Exhibit 99.1
August 14, 2009
ReSearch Pharmaceutical Services, Inc.
Unaudited Quarterly Report for the period ended June 30, 2009
ReSearch Pharmaceutical Services, Inc. (“RPS” or the “Company”), a leading provider of integrated clinical development outsourcing solutions to the bio-pharmaceutical industry, is pleased to announce its results for the second quarter and six months ended June 30, 2009. These statements include unaudited comparative results for RPS for the quarter and six months ended June 30, 2008.
In addition, RPS announces that it has today filed a Form 10-Q in the U.S., as required by the Securities and Exchange Commission (“SEC”). A copy of the Form 10-Q is available on our website (www.rpsweb.com).
Financial highlights for the three months to June 30, 2009
| | • | | Service revenues for the second quarter of 2009 of $48.4 million grew $8.2 million or 20.3% as compared to the same period in 2008 |
| |
| | • | | EBITDA for the second quarter of 2009 of $2.5 million or 5.1% of service revenues, increased from $2.0 million or 4.4% of service revenues for the first quarter of 2009 |
| |
| | • | | Net income before provision for income taxes for the second quarter of 2009 of $1.4 million |
Financial highlights for the six months to June 30, 2009
| | • | | Service revenues for the six months ended June 30, 2009 of $93.7 million grew $15.4 million or 19.6% as compared to the same period in 2008 |
| |
| | • | | EBITDA for the six months ended June 30, 2009 of $4.5 million or 4.8% of service revenues |
| |
| | • | | Net income before provision for income taxes for the six months ended June 30, 2009 of $2.5 million |
Operational highlights for the six months ended June 30, 2009
| | • | | On March 30, 2009, the Company announced that it had entered into an agreement to acquire a clinical research organization (CRO) in China, providing the Company with expanded capabilities in the Asian market and complementing its current operations in the Americas and Europe. This acquisition was completed on July 8, 2009 |
A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure are located at the end of this press release.
Commenting on the second quarter results, Daniel M. Perlman, Chairman and CEO of RPS, said:
“In the second quarter, RPS continued its expansion in Europe with incorporations completed or in progress in 21 countries. The continued expansion of our services in Europe and Southeast
August 14, 2009
Asia is part of RPS’ ongoing strategy to meet the growing needs of our clients for global drug development capabilities.”
| | | |
For further information please contact: | | +1 215 540 0700 |
ReSearch Pharmaceutical Services, Inc. | | |
| Dan Perlman, Chief Executive Officer | | |
| Steven Bell, Chief Financial Officer | | |
| | | |
Nominated Adviser and UK Broker: | | +44 20 7012 2100 |
Arbuthnot Securities Limited | | |
| James Steel / Edward Burbidge | | |
August 14, 2009
ReSearch Pharmaceutical Services, Inc.
Unaudited Quarterly Report to June 30, 2009
Background on RPS
Headquartered in Ft. Washington, Pennsylvania, with subsidiary offices across Latin America and three recently acquired subsidiaries in Europe, RPS is a next generation CRO and a leading provider of integrated clinical development and enhanced full-service outsourcing solutions to the bio-pharmaceutical industry. RPS provides services in connection with the design, initiation and management of clinical trials programs that are required to obtain regulatory approval to market bio-pharmaceutical products. Our innovative business model combines the expertise of a traditional CRO with the ability to provide flexible outsourcing solutions that are fully integrated within our clients’ clinical drug development infrastructure. This approach was designed to meet the varied needs of small, medium and large bio-pharmaceutical companies. RPS is quoted on the Alternative Investment Market (“AIM”) of the London Stock Exchange.
Operating review of the three months ended June 30, 2009 compared to three months ended June 30, 2008
Revenues. Service revenues increased 20.3% to $48.4 million for the three months ended June 30, 2009 from $40.3 million for the three months ended June 30, 2008 as we generated additional business from existing and new customers. The majority of the increase is related to the continued build from existing contracts with several bio-pharmaceutical companies in our Clinical Master Service Provider (“CMSP”) programs in addition to the revenue generated by the recently acquired companies in Europe. CMSP revenue for the three months ended June 30, 2009 grew 20.1% over the comparable prior period, and accounted for 60.7% of our total service revenue for the three months ended June 30, 2009.
Reimbursement revenues and offsetting reimbursable out-of-pocket costs fluctuate from period to period due primarily to the level of pass-through expenses in a particular period. Reimbursement revenues and reimbursable out-of-pocket costs increased 29.6% to $5.9 million during the three months ended June 30, 2009 from $4.6 million during the three months ended June 30, 2008. The increase is due primarily to an increase in the number of staff incurred expenses on client programs and an increase related to the European Acquisitions.
Direct Costs.Direct costs increased 16.2% to $34.9 million or 72.1% of service revenues for the three months ended June 30, 2009 as compared to $30.1 million or 74.7% of service revenues for the three months ended June 30, 2008. The increase in direct costs is directly correlated with the increase in revenues as described above. The primary costs included in direct costs are operational staff payroll and related taxes and benefits.
Selling, general and administrative expenses. Selling, general and administrative expenses (“SG&A”) increased 42.3% to $11.0 million for the three months ended June 30, 2009 from $7.8 million for the three months ended June 30, 2008 to support the increase in revenues. The primary reason for the increase in SG&A was the additional overhead costs of the
August 14, 2009
European Acquisitions which resulted in increases in employee-related costs such as salaries, health benefits and payroll taxes to $6.4 million for the three months ended June 30, 2009 as compared to $4.8 million for the three months ended June 30, 2008. Additionally, due to our increasing global footprint we saw an increase in rent and travel expense to $1.4 million for the three months ended June 30, 2009 as compared to $0.9 million for the three months ended June 30, 2008.
Depreciation and amortization expense. Depreciation and amortization expense increased 108.7% to $0.9 million for the three months ended June 30, 2009 as compared to $0.4 million for the three months ended June 30, 2008 due primarily to an increase in the depreciable asset base and amortization of intangible assets related to the European Acquisitions.
Income from operations.Income from operations decreased to $1.6 million for the three months ended June 30, 2009 as compared to income from operations of $2.0 million for the three months ended June 30, 2008. The decrease is primarily attributable to an increase in our SG&A as a result of our integration efforts in connection with the European Acquisitions, as described above.
Interest income and expense.Interest income increased to $94,000 during the three months ended June 30, 2009 from $71,000 during the three months ended June 30, 2008 due to the level of investable cash on hand during the second quarter of 2009. Interest expense increased to $323,000 for the three months ended June 30, 2009 from $89,000 during the three months ended June 30, 2008. The increase is due to the interest expense calculated on the outstanding balance on our line of credit.
Provision for income taxes.The provision for income taxes for the three months ended June 30, 2009 of $0.9 million was consistent with the provision for the three months ended June 30, 2008. Although the provision for income taxes remained flat during the three months ended June 30, 2009 as compared to the three months ended June 30, 2008, the effective tax rate increased as we are not recording a tax benefit for net operating losses generated in Germany, France and Spain, as it is more likely than not that we will not realize the tax benefit of these operating losses.
Net income. As a result of the factors discussed above, net income for the three months ended June 30, 2009 decreased to $0.5 million or $0.01 per share, basic and diluted, from net income for the three months ended June 30, 2008 of $1.2 million or $0.04 per basic share and $0.03 per diluted share.
Operating review of the six months ended June 30, 2009 compared to six months ended June 30, 2008
Revenues. Service revenues increased 19.6% to $93.7 million for the six months ended June 30, 2009 from $78.3 million for the six months ended June 30, 2008 as we generated additional business from existing and new customers. The majority of the increase is related to the continued build from existing contracts with several bio-pharmaceutical companies in our CMSP programs. CMSP revenue for the six months ended June 30, 2009 grew 20.2% over the comparable prior period, and accounted for 61.4% of our total service revenue for the six months ended June 30, 2009.
August 14, 2009
Reimbursement revenues and offsetting reimbursable out-of-pocket costs fluctuate from period to period due primarily to the level of pass-through expenses in a particular period. Reimbursement revenues and reimbursable out-of-pocket costs increased 31.0% to $10.9 million during the six months ended June 30, 2009 from $8.3 million during the six months ended June 30, 2008. The increase is due primarily to an increase in the number of staff incurred expenses on client programs.
Direct Costs.Direct costs increased 16.7% to $68.2 million or 72.7% of service revenues for the six months ended June 30, 2009 as compared to $58.4 million or 74.5% of service revenues for the six months ended June 30, 2008. The increase in direct costs is directly correlated with the increase in revenues as described above. The primary costs included in direct costs are operational staff payroll and related taxes and benefits.
Selling, general and administrative expenses. SG&A increased 41.7% to $21.1 million for the six months ended June 30, 2009 from $14.9 million for the six months ended June 30, 2008 to support the increase in revenues. The primary reason for the increase in SG&A was the additional overhead costs of the European Acquisitions which resulted in increases in employee-related costs such as salaries, health benefits and payroll taxes to $12.3 million for the six months ended June 30, 2009 as compared to $9.2 million for the six months ended June 30, 2008. Additionally, due to our increasing global footprint we saw an increase in rent and travel expense to $2.7 million for the six months ended June 30, 2009 as compared to $1.7 million for the six months ended June 30, 2008.
Depreciation and amortization expense. Depreciation and amortization expense increased 113.0% to $1.7 million for the six months ended June 30, 2009 as compared to $0.8 million for the six months ended June 30, 2008 due primarily to an increase in the depreciable asset base and amortization of the intangible assets related to the European Acquisitions.
Income from operations.Income from operations decreased to $2.8 million for the six months ended June 30, 2009 as compared to income from operations of $4.3 million for the six months ended June 30, 2008. The decrease is primarily attributable to an increase in our SG&A as a result of our integration efforts in connection with the European Acquisitions, as described above.
Interest income and expense.Interest income increased to $168,000 during the six months ended June 30, 2009 from $162,000 during the three months ended June 30, 2008 due to the level of investable cash on hand. Interest expense increased to $471,000 for the six months ended June 30, 2009 from $140,000 during the three months ended June 30, 2008. The increase is due to the interest expense calculated on the outstanding balance on our line of credit.
Provision for income taxes.The provision for income taxes for the six months ended June 30, 2009 decreased to $1.5 million versus a provision of $1.8 million for the six months ended June 30, 2008. The decrease is attributed to the decrease in taxable income for the period. Although the provision for income taxes decreased during the six months ended June 30, 2009 as compared to the six months ended June 30, 2008, the effective tax rate increased as we are not
August 14, 2009
recording a tax benefit for net operating losses generated in Germany, France and Spain, as it is more likely than not that we will not realize the tax benefit of these operating losses.
Net income. As a result of the factors discussed above, net income for the six months ended June 30, 2009 decreased to $1.0 million or $0.03 per basic and diluted share, for the six months ended June 30, 2009 from net income of $2.5 million for the six months ended June 30, 2008 or $0.08 per basic share and $0.07 per diluted share.
Balance Sheet and Cash Flow
In the United States, the Company manages its cash function using collection and cash management accounts. Daily collections are swept into its operating account with excess funds invested in high quality money market funds of short duration. Disbursements presented for payment are funded daily out of the money market accounts. Outside of the United States, cash balances are maintained at levels necessary to support operating activities. As in the United States, cash balances for foreign subsidiaries are generally maintained in the functional currency of the applicable subsidiary.
The Company’s expected primary cash needs on both a short and long-term basis are for capital expenditures, expansion of services, possible future acquisitions, global expansion, working capital and other general corporate purposes.
At June 30, 2009 the Company maintained a working capital line of credit with a bank, with a maximum potential borrowing capacity of $15.0 million. At June 30, 2009, there were $12.4 million in outstanding borrowings under this facility. At June 30, 2009, interest on outstanding borrowings under this facility was at the Federal Funds open rate, plus 1% (4.25% at June 30, 2009). The credit facility contains various financial and other covenants, including a prohibition on paying dividends or distributions (other than dividends or distributions payable in our stock). At June 30, 2009, the Company was in compliance with these covenants. The facility is secured by all of the assets of the Company. At June 30, 2009, the Company had available cash and cash equivalent balances of $1.2 million and working capital of $25.3 million, which the Company believes will provide sufficient liquidity for the next twelve months.
In July 2009, the Company amended its line of credit agreement, which provided for an increase in available borrowings to $30 million, an extension of the expiration date to October 31, 2012 and an increase in the interest rate to the Federal Funds open rate, as defined, plus 2%. The credit facility contains various financial and other covenants, including a prohibition on paying dividends or distributions (other than dividends or distributions payable in our stock). The facility continues to be secured by all of the assets of the Company.
During the six months ended June 30, 2009, the Company’s operating activities used cash of $8.8 million, a further use of $10.0 million from the corresponding amount for the six months ended June 30, 2008. The operating activities use of cash during the six month period can be attributed to an increase in both the amount of revenue to be collected, and the time it takes to collect that revenue, as reflected in the accounts receivable. Accounts receivable, net of allowance for doubtful accounts, increased $7.6 million, or 17.6%, to $50.8 million at June 30, 2009 from $43.2 million at December 31, 2008.
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In addition, during the six months ended June 30, 2009, the Company used cash in other operating assets and liabilities of $4.8 million consisting primarily of $1.5 million in accounts payable, $1.7 million in prepaid expenses and other assets and $1.6 million in customer deposits, as well as non cash charges of $0.2 million of deferred taxes. These uses of cash were offset by net income for the six months ended June 30, 2009 of $1.0 million, a $0.4 million decrease in deferred revenue, a $0.5 million decrease in accrued expenses and other liabilities, along with non cash charges of $0.3 million related to stock based compensation and $1.7 million related to depreciation and amortization.
Cash used in investing activities for the six months ended June 30, 2009 totaled $1.2 million, consisting primarily of $1.6 million paid during the year relating to the European Acquisitions and $1.3 million for the purchase of property and equipment, which was offset by the increase in restricted cash of $1.7 million.
Cash provided by financing activities for the six months ended June 30, 2009 totaled $4.5 million, consisting primarily of $4.9 million in net borrowings on the Company’s line of credit which was offset by $0.4 million in principal payments on capital lease obligations.
Dividends
The Company does not currently intend to pay cash dividends on its common stock in the foreseeable future, but rather to reinvest earnings in the business.
Supplemental non-GAAP financial information
EBITDA is defined as net income before interest expense, income taxes and depreciation and amortization. The Company believes that net income is the most directly comparable GAAP measurement to EBITDA. EBITDA is presented because the Company believes it is useful to investors as widely accepted financial indicators of a company’s ability to service and/or incur indebtedness and because such disclosure provides investors with additional criteria used by the Company to evaluate our operating performance and the performance bonuses of certain of our employees. EBITDA is not defined under GAAP, should not be considered in isolation or as a substitute for a measure of our liquidity or performance prepared in accordance with GAAP and is not indicative of income from operations as determined under GAAP. EBITDA and other non-GAAP financial measures have limitations which should be considered before using these measures to evaluate the Company’s liquidity or financial performance. EBITDA does not include interest expense, income tax expense or depreciation and amortization expense, which may be necessary in evaluating the Company’s operating results and liquidity requirements or those of businesses we may acquire. The Company’s management compensates for these limitations by using EBITDA as a supplement to GAAP results to provide a more comprehensive understanding of the factors and trends affecting our business or any business we may acquire. Our computation of EBITDA may not be comparable to other similarly titled measures provided by other companies, because not all companies calculate this measure in the same fashion.
August 14, 2009
The following table and related notes reconciles net income to EBITDA:
| | | | | | | | | | | | | | | | | |
| | | (in thousands) | | | (in thousands) | |
| | | Three months ended | | | Six months ended | |
| | | June 30, | | | June 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | | | | | | | | | | | | | | |
| Reconciliation of net income to EBITDA: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 486 | | | $ | 1,153 | | | $ | 989 | | | $ | 2,476 | |
| Provision for income taxes | | | 871 | | | | 859 | | | | 1,492 | | | | 1,823 | |
| Interest (income) expense, net | | | 229 | | | | 18 | | | | 303 | | | | (22 | ) |
| Depreciation and amortization | | | 874 | | | | 419 | | | | 1,671 | | | | 784 | |
| | | | | | | | | | | | | |
| EBITDA | | $ | 2,460 | | | $ | 2,449 | | | $ | 4,455 | | | $ | 5,061 | |
Daniel M. Perlman, Chairman and CEO
August 14, 2009
August 14, 2009
Financial Data
ReSearch Pharmaceutical Services, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
| | | | | | | | | |
| | | June 30, | | | December 31, | |
| | | 2009 | | | 2008 | |
| | | (unaudited) | | | | |
Assets | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 1,154,989 | | | $ | 6,565,003 | |
| Restricted cash | | | 5,579,733 | | | | 7,247,532 | |
| Accounts receivable, less allowance for doubtful accounts of $807,000 at June 30, 2009 and $654,000 at December 31, 2008, respectively | | | 50,823,742 | | | | 43,225,016 | |
| Current deferred tax asset | | | 970,052 | | | | 970,797 | |
| Prepaid expenses and other current assets | | | 4,095,726 | | | | 2,377,838 | |
| | | | | | | |
| Total current assets | | $ | 62,624,242 | | | $ | 60,386,186 | |
| | | | | | | | | |
| Property and equipment, net | | | 6,028,438 | | | | 5,993,386 | |
| Other assets | | | 1,149,600 | | | | 1,179,018 | |
| Intangible assets subject to amortization, net | | | 3,157,645 | | | | 3,880,000 | |
| Goodwill | | | 15,355,813 | | | | 15,145,585 | |
| Deferred tax asset | | | 504,366 | | | | 504,366 | |
| | | | | | | |
| Total assets | | $ | 88,820,104 | | | $ | 87,088,542 | |
| | | | | | | |
| | | | | | | | | |
Liabilities and stockholders’ equity (deficit) | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 1,991,672 | | | $ | 3,496,309 | |
| Accrued expenses | | | 11,636,832 | | | | 12,069,957 | |
| Customer deposits | | | 5,579,733 | | | | 7,247,532 | |
| Deferred revenue | | | 5,222,676 | | | | 4,781,935 | |
| Line of credit | | | 12,373,471 | | | | 7,500,000 | |
| Current portion of capital lease obligations | | | 490,569 | | | | 682,695 | |
| | | | | | | |
| Total current liabilities | | $ | 37,294,953 | | | $ | 35,778,428 | |
| | | | | | | | | |
| Customer deposits | | | 4,500,000 | | | | 4,500,000 | |
| Deferred tax liability | | | 1,069,626 | | | | 1,331,955 | |
| Other liabilities | | | 2,045,251 | | | | 2,323,794 | |
| Capital lease obligations, less current portion | | | 714,442 | | | | 871,963 | |
| | | | | | | |
| Total liabilities | | $ | 45,624,272 | | | $ | 44,806,140 | |
| | | | | | | | | |
| Stockholders’ equity: | | | | | | | | |
| Common stock, $.0001 par value: | | | | | | | | |
| Authorized shares — 150,000,000 issued and outstanding shares — 36,746,835 and 36,746,291 at June 30, 2009 and December 31, 2008, respectively. | | | 3,675 | | | | 3,675 | |
| Additional paid-in capital | | | 44,392,060 | | | | 44,083,184 | |
| Accumulated other comprehensive (loss) income | | | (228,640 | ) | | | 155,535 | |
| Accumulated deficit | | | (971,263 | ) | | | (1,959,992 | ) |
| | | | | | | |
| Total stockholders’ equity | | $ | 43,195,832 | | | $ | 42,282,402 | |
| | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 88,820,104 | | | $ | 87,088,542 | |
| | | | | | | |
August 14, 2009
ReSearch Pharmaceutical Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | (unaudited) | | | (unaudited) | |
| | | | | | | | | | | | | | | | | |
| Service revenue | | $ | 48,446,362 | | | $ | 40,286,342 | | | $ | 93,705,236 | | | $ | 78,334,195 | |
| Reimbursement revenue | | | 5,905,352 | | | | 4,554,955 | | | | 10,940,328 | | | | 8,349,497 | |
| | | | | | | | | | | | | |
| Total revenue | | | 54,351,714 | | | | 44,841,297 | | | | 104,645,564 | | | | 86,683,692 | |
| | | | | | | | | | | | | | | | | |
| Direct costs | | | 34,940,337 | | | | 30,076,813 | | | | 68,159,696 | | | | 58,392,836 | |
| Reimbursable out-of-pocket costs | | | 5,905,352 | | | | 4,554,955 | | | | 10,940,328 | | | | 8,349,497 | |
| Selling, general, and administrative expenses | | | 11,045,742 | | | | 7,759,741 | | | | 21,091,012 | | | | 14,880,251 | |
| Depreciation and amortization | | | 874,207 | | | | 418,969 | | | | 1,670,629 | | | | 784,265 | |
| | | | | | | | | | | | | |
| Income from operations | | | 1,586,076 | | | | 2,030,819 | | | | 2,783,899 | | | | 4,276,843 | |
| | | | | | | | | | | | | | | | | |
| Interest expense | | | 323,076 | | | | 89,405 | | | | 470,868 | | | | 139,931 | |
| Interest income | | | 93,894 | | | | 71,155 | | | | 167,829 | | | | 162,001 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income before provision for income taxes | | | 1,356,894 | | | | 2,012,569 | | | | 2,480,860 | | | | 4,298,913 | |
| Provision for income taxes | | | 871,117 | | | | 859,485 | | | | 1,492,131 | | | | 1,822,780 | |
| | | | | | | | | | | | | |
| Net income | | $ | 485,777 | | | $ | 1,153,084 | | | $ | 988,729 | | | $ | 2,476,133 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income per common share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.01 | | | $ | 0.04 | | | $ | 0.03 | | | $ | 0.08 | |
| Diluted | | $ | 0.01 | | | $ | 0.03 | | | $ | 0.03 | | | $ | 0.07 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 36,746,835 | | | | 32,545,476 | | | | 36,746,648 | | | | 32,487,641 | |
| Diluted | | | 37,624,649 | | | | 34,133,310 | | | | 37,707,889 | | | | 34,089,090 | |
August 14, 2009
ReSearch Pharmaceutical Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
| | | | | | | | | |
| | | Six Months Ending June 30, | |
| | | 2009 | | | 2008 | |
| | | (unaudited) | |
| Net income | | $ | 988,729 | | | $ | 2,476,133 | |
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | | | | | | | | |
| Depreciation and amortization | | | 1,670,629 | | | | 784,265 | |
| Stock-based compensation | | | 308,675 | | | | 267,253 | |
| Deferred tax benefit | | | (229,418 | ) | | | — | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts receivable | | | (7,620,488 | ) | | | 1,190,235 | |
| Prepaid expenses and other assets | | | (1,717,888 | ) | | | (752,273 | ) |
| Accounts payable | | | (1,496,494 | ) | | | (770,329 | ) |
| Accrued expenses and other liabilities | | | 504,627 | | | | (1,087,909 | ) |
| Customer deposits | | | (1,645,565 | ) | | | 237,827 | |
| Deferred revenue | | | 446,898 | | | | (1,110,636 | ) |
| | | | | | | |
| Net cash used in operating activities | | | (8,790,295 | ) | | | 1,234,566 | |
| | | | | | | | | |
Investing activities | | | | | | | | |
| Change in restricted cash | | | 1,645,565 | | | | (237,827 | ) |
| Business combinations, net of cash acquired | | | (1,573,752 | ) | | | — | |
| Purchase of property and equipment | | | (1,254,484 | ) | | | (765,987 | ) |
| | | | | | | |
| Net cash used in investing activities | | | (1,182,671 | ) | | | (1,003,814 | ) |
| | | | | | | | | |
Financing activities | | | | | | | | |
| Net borrowings on line of credit | | | 4,873,471 | | | | — | |
| Principal payments on capital lease obligations | | | (349,647 | ) | | | (542,331 | ) |
| Proceeds from exercise of options | | | 201 | | | | 8,951 | |
| Merger consideration, net of fees paid | | | — | | | | (17,880 | ) |
| | | | | | | |
| Net cash provided by (used in) financing activities | | | 4,524,025 | | | | (551,260 | ) |
| Effect of exchange rates on cash and cash equivalents | | | 38,927 | | | | (23,895 | ) |
| | | | | | | |
| Net change in cash and cash equivalents | | | (5,410,014 | ) | | | (344,403 | ) |
| Cash and cash equivalents, beginning of period | | | 6,565,003 | | | | 11,060,255 | |
| | | | | | | |
| Cash and cash equivalents, end of period | | $ | 1,154,989 | | | $ | 10,715,852 | |
| | | | | | | |
| | | | | | | | | |
Supplemental disclosures of cash flow information | | | | | | | | |
| Cash paid during the period for: | | | | | | | | |
| Interest | | $ | 470,868 | | | $ | 162,001 | |
| | | | | | | |
| Income taxes | | $ | 4,033,194 | | | $ | 1,792,780 | |
| | | | | | | |
Supplemental disclosures of noncash financing activities | | | | | | | | |
| Acquisition of fixed assets under capital leases | | $ | — | | | $ | 1,022,759 | |
| | | | | | | |
August 14, 2009
NOTES
The functional currency of RPS is US dollars because that is the currency of the primary economic environment in which the company operates. These financial statements are presented in US dollars.
The financial statements are presented in conformity with accounting principles generally accepted in the United States and have been prepared using the same accounting policies as set forth in the financial statements for the year ended December 31, 2008 which will be included in the Company’s Annual Report on Form 10-K to be filed with the SEC.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements” that are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the Company’s current expectations and assumptions regarding its business, financial condition, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict, including those described under the heading “Risk Factors” in the Company’s Form 10-K filed with the SEC on March 31, 2009. The Company’s actual results may differ materially from those contemplated by the forward-looking statements. The Company cautions you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions including: our ability to identify liabilities associated with the Company; our ability to manage pricing and operational risks; our ability to manage foreign operations and integrate new operations into our existing operations; changes in technology; and our ability to acquire or renew contracts. Any forward-looking statement made in this document speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, unless otherwise required to do so by law or regulation.
