SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) :
January 25, 2000
PAREXEL INTERNATIONAL CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Massachusetts 0-27058 04-2776269
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
195 West Street, Waltham, Massachusetts 02451
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (781) 487-9900
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On January 25, 2000, the Company issued a press release, a copy of
which is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 7. Financial Statements and Exhibits.
Exhibit No. Exhibit
99.1 Press release of the Company dated January 25, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PAREXEL International Corporation
Dated: January 25, 2000 by: /s/William T. Sobo, Jr.
William T. Sobo, Jr.
Senior Vice President, Chief
Financial Officer, Treasurer
and Clerk
EXHIBIT INDEX
Exhibit No. Description
99.1 Press release of the Company dated January 25, 2000.
EXHIBIT 99.1
FOR IMMEDIATE RELEASE www.PAREXEL.com
CONTACTS: Bill Sobo, Senior Vice President, Chief Financial Officer
Jill Baker, Director of Investor Relations
(781) 434-4118
PAREXEL REPORTS SECOND QUARTER FINANCIAL RESULTS
Boston, MA, January 25, 2000 - PAREXEL International Corporation (Nasdaq: PRXL)
today announced its financial results for the second quarter ended December 31,
1999.
For the three months ended December 31, 1999, PAREXEL's consolidated net revenue
increased 11.5% to $98.0 million, from $87.9 million in the prior-year quarter.
Income from operations was $6.3 million, a 13.1% decrease from $7.3 million in
the prior-year quarter. Net income for the quarter was $5.1 million, or $0.20
per diluted share, compared with net income of $5.1 million, or $0.21 per
diluted share for the quarter ended December 31, 1998. On a proforma basis,
excluding non-recurring other income of $630,000 from the sale of a minority
investment in a company, diluted earnings per share were $0.19 in the current
quarter.
For the six months ended December 31, 1999, consolidated net revenue of $189.7
million grew 11.2% over the prior year period net revenue of $170.7 million.
Income from operations for the six months ended December 31, 1999, was $12.4
million which represents a year over year decrease of 17.0%. Net income for the
six months was $9.5 million which was a decrease of 10.7% over the prior year
period.
On a segment basis, revenues for the second quarter were $69.5 million in
Clinical Research Services, $16.9 million in the Consulting Group, and $11.6
million in Medical Marketing Services.
Highlights of the quarter ended December 31, 1999, included:
o The launch of ParXnetTM, a portfolio of web-based tools, which facilitates
clinical trial management and communications, as well as training,
e-commerce, product launch, and knowledge management.
o The signing of a collaborative agreement with Pediatric Clinical Trials
International, Inc. (PCTI), a wholly-owned corporation of Columbus
Children's Hospital, to offer pediatric clinical research services to
pharmaceutical and biotechnology companies worldwide.
o Operating cash flow of $20.0 million.
o Sequential improvement in days sales outstanding (DSOs) which decreased
from 62 days in the September quarter to 45 in the December quarter.
o Improvement in the operating income margin, which increased sequentially by
200 basis points.
o Progress with the Company's share repurchase program, resulting in a total
of 360,000 shares repurchased to date at a total
expenditure of $3.7 million.
In closing, Mr. von Rickenbach stated, "Over the past few months, we have put
into place the foundation which is helping us to regain our momentum, and I am
pleased to see results in line with expectations this quarter."
This release may contain "forward-looking" statements regarding future results
and events, including statements regarding expected future growth and customer
demand. The Company's actual future results may differ significantly from the
results discussed in the forward-looking statements contained in this release.
Factors that might cause such a difference include, but are not limited to,
risks associated with: the loss or delay of large contracts; the Company's
dependence on certain industries and clients; the Company's ability to manage
growth and its ability to attract and retain employees; the Company's ability to
complete additional acquisitions and to integrate newly acquired businesses;
government regulation of certain industries and clients; competition and
consolidation within the industry; the potential for significant liability to
clients and third parties; the potential adverse impact of health care reform;
and the effects of exchange rate fluctuations. These factors and others are
discussed more fully in the section entitled "Risk Factors" of the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.
PAREXEL is one of the largest contract pharmaceutical outsourcing organizations
in the world, providing a broad range of knowledge-based contract research,
medical marketing and consulting services to the worldwide pharmaceutical,
biotechnology and medical device industries. With a commitment to providing
solutions that accelerate time-to-market and peak market penetration, PAREXEL
has developed significant expertise in clinical trials management, data
management, biostatistical analysis, medical marketing, clinical pharmacology,
regulatory and medical consulting, industry training and publishing and other
drug development consulting services. The Company's integrated services,
therapeutic area depth and sophisticated information technology, along with its
experience in global drug development and product launch services, represent key
competitive strengths. Headquartered near Boston, MA, PAREXEL operates in 44
locations throughout 29 countries around the world, and has approximately 4,580
employees.
PAREXEL International Corporation
Consolidated Condensed Statement of Operations
(In thousands, except per share data)
(Unaudited) (Unaudited)
Three months ended Six months ended
December 31, December 31,
1999 1998 1999 1998
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Net revenue $97,957 $87,855 $189,725 $170,690
Cost and expenses:
Direct costs 66,790 58,890 128,923 112,627
Selling, general and administrative 19,684 17,215 38,449 34,394
Depreciation and amortization 5,156 4,473 10,251 8,715
Facilities benefit -- -- (312) --
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Income from operations 6,327 7,277 12,414 14,954
Other income, net 1,848 627 2,622 1,340
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Income before income taxes $8,175 $7,904 $15,036 $16,294
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Net income $5,064 $5,141 $9,503 $10,646
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Earnings per common share
Basic $0.20 $0.21 $0.38 $0.43
Diluted $0.20 $0.21 $0.38 $0.42
Shares used in computing earnings per common share:
Basic 25,070 24,787 25,112 24,732
Diluted 25,216 25,077 25,261 25,084
Consolidated Balance Sheet Information
(In thousands)
(Unaudited)
December 31, September 30,
1999 1999
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Working capital $139,065 $135,511
Total assets $371,507 365,636
Stockholder's equity $198,197 198,602
PAREXEL International Corporation
Segment Information
($ in thousands)
(Unaudited) (Unaudited)
Three months ended Six months ended
December 31, December 31,
1999 1998 1999 1998
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Clinical Research Services (CRS)
Net revenue $69,470 $58,127 $134,563 $113,902
% of total net revenue 71% 66% 71% 67%
Gross profit $23,893 $20,648 $47,339 $41,735
Gross margin 34% 36% 35% 37%
The PAREXEL Consulting Group (PCG)
Net revenue $16,864 $14,385 $32,199 $27,634
% of total net revenue 17% 16% 17% 16%
Gross profit $4,056 $4,338 $7,199 $8,493
Gross margin 24% 30% 22% 31%
Medical Marketing Services (MMS)
Net revenue $11,623 $15,343 $22,963 $29,154
% of total net revenue 12% 18% 12% 17%
Gross profit $3,218 $3,979 $6,264 $7,835
Gross margin 28% 26% 27% 27%
Total net revenue $97,957 $87,855 $189,725 $170,690
Total gross profit $31,167 $28,965 $60,802 $58,063
Gross margin 32% 33% 32% 34%