MEDP - Earnings call transcript Q4 2019

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Operator

Good day, ladies and gentlemen, and welcome to the Medpace Third [ph] Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this call may be recorded.

I would now like to introduce your host for today's conference call, Kevin Brady, Medpace's Executive Director of Finance. begin. may you Sir,

Kevin Brady

and thank call. joining today Also CEO, our President and Geiger. Operations, XXXX is fourth earnings and CFO and Troendle; conference on August of you morning, Laboratory Medpace's Jesse for quarter our COO Good the call

to forward-looking I forward-looking responses statements Securities meaning unknown the other the should the questions our Form we within and view Accordingly, to assume on of any remarks and changes to begin, involve results update estimates after date with of if you inherent including Litigation forward-looking revenue today's our change. as teleconference filings no standards. assumptions Private the even note like factors the would Before Act in Factor today. during XX-K Reform statements could obligation Risk remind the other the of rely our recognition not this to XXXX. that known that of that important and and These future, These statements to any your include SEC. discussed statements with differ the may current impact Please representing risks, you cause actual materially section from in of we as of are our expectations, factors

available Relations our press available The and with in the in believe superior we this provided today's A reconciliation or but a are results. to most referring also measures. call. earnings website the more earnings measures measures to the in not GAAP comparable release complete be slides measures directly measures gain financial call, Investor a measures, investor.medpace.com. of are to, of non-GAAP we'll These is connection replacement During certain help of non-GAAP non-GAAP GAAP understanding financial at comparable section investors such for, call slides these presentation the

that, like over to I Troendle. call to now the August With would turn

August Troendle

in Full-year note. leading with a XX%. among ending organic globally clinical of awards margin over XXXX what free and we revenue, well up flow growth generated and and performed industry cash EBITDA. investments strong Medpace is ended backlog in day. XXXX, were heavy the EBITDA new in Good over on XXX% believe each business CROs we Despite executed

I out EBITDA back improve to efficiency, by costs recurring that would cost, point integration cost like not program such restructuring to inflated reported real stock-based is or our severance and compensation, adding costs. payments as operating operating

I sequential appeared were based that mentioned On business The bookings in call, basis XXX sequentially a awards down. XXX misleading about basis basis our yet increase somewhat on net and QX were bookings net QX. opposite that happened in XXXX net essentially service earnings our quarter, awards

$XXX.X essentially awards actually net business backlog were QX were basis, on sequentially XX% up a down but XXX XXXX million total, entering awards in service new in or over business new sequentially Net at QX.

Our a QX highest book-to-bill basis achieved was XXX level year. ratio the on on

to stronger. strong Our were bookings exited QX them XXXX very entered and right strong where XXXX wanted drive revenue. we even and We in

turn Jesse now to will call I the over

Jesse Geiger

awards entering business in year increased million from prior a Thank new XX.X% backlog in the everyone. book-to-bill. you, $XXX.X net fourth morning, good resulting and X.XX the August Net quarter to

were XXXX year an awards of full the business XX.X%. $X.X billion new increase For net

quarter was growth XX.X% was from XX XXXX XX.X% increase Revenue as and $X.X organic year-over-year which in from represents basis of represents XXXX, Ending year. prior reported XX.X% or Full $XXX currency XXXX a basis. million constant a constant increase $XXX.X backlog of was of currency on basis. a XX.X% on organic December revenue XX.X% year million, a on fourth an of the which billion the

On compared million to prior X.X% X.X% XXXX. increased Full a in year. to of year basis, XXXX $XXX.X constant compared increased EBITDA compared million XXXX. currency $XX.X quarter and to the X.X% X.X% full the year increased EBITDA EBITDA $XXX.X quarter million in respectively $XX.X of fourth fourth million to

quarter fourth to the the compared for margin was XX.X% period. XX.X% EBITDA in prior year

For to reimbursed XXXX. in EBITDA attributable decrease employee-related out-of-pocket the primarily higher costs was and was full XX% to margin The XX.X% expenses. year compared XXXX,

GAAP In was of to the fourth $XX.X million quarter income the of net year compared $XX.X net period. XXXX GAAP income million in prior

the For increased $XX.X $XX.X of fourth prior the year XXXX. XX.X% XXXX million GAAP was to compared the in net $XXX.X compared to full in quarter income net million income million $XX.X million Adjusted in year.

by expense adjusted costs $XX.X rate, in interest offset expenses. and $XXX.X of million net net out-of-pocket tax compared was partially XX.X% XXXX. income million by revenue driven increased XXXX year reimbursed and to lower effective Full growth, employee-related growth primarily Adjusted income higher

to GAAP net period. compared $X.XX income year in share $X.XX was the the prior for quarter per diluted

full diluted income per fourth was For net quarter GAAP $X.XX adjusted $X.XX. share net quarter compared versus XXXX GAAP per grew $X.XX share net net XXXX to income per the per share XXXX, income in Fourth $X.XX adjusted diluted share year diluted of XX.X% of of XXXX. diluted income

full year diluted net $X.XX XXXX, share $X.XX XXXX. diluted compared share the For was income in adjusted per per to

inflation, top account XXXX total respectively XX represent Regarding customers our our roughly five revenue. and of customer XX% top XX% and

quarter, million. of to negative authorized with a million February We to XXXX, and and negative days In to $XXX.X the operating million from generated we of third cash quarter XX.X in decreased fourth up in activities program $XXX ended our from the net flow sales days. compared of day Board share repurchase $XX.X outstanding XX.X cash the quarter Directors

growth to are $XXX XXXX, to total the revenue our XXXX of we of established full forecasting billion in over million guidance; now of million. total Moving range revenue $XXX XXXX XX.X% year $X.XX the XX.X% to newly representing for

representing range of in XX.X% EBITDA million growth the of compared XX% of to EBITDA is to to expected million XXXX. XXXX $XXX $XXX in Our $XXX.X million

to XXXX our the XX%. be anticipate We XX% to effective tax in range of rate

$XXX.X diluted $X.XX. the of We of and fully XXXX stock guidance. in the assumed to million GAAP $X.XX are XX.X earnings in shares for in to $XXX.X have XXXX per our We there million income range repurchases no and diluted GAAP forecast net range share

will to I back call over questions. we so turn can that your the take the operator, With

Operator

with Thank you. from [Operator Blair. first John of William Kreger question line instructions] Our comes the

Your open. is line

John Kreger

initial August comments about thanks those the year finishing strong. for

of kind you more feel on and is you or active look winning success reflect that If it like market? the market are that does back

August Troendle

I in elevated and service basis. into it's had strong we in real market. it last settled on actually the and did remained market actually Again wanted all bookings QX them over active end right how been strong very we a a a and and think we've has We bit QX where think strong it active, year strength was then year. I be we like the talked and to very year about ago, had replaced just half cancellations a ago there

being substantial with think So I the strong remains and able compatible everything. with refill to very market even cancellations

John Kreger

you one smaller us can thanks. GAAP anything Excellent expect what 'XX, you to it if of thanks? just you or compared Jesse items any in guidance, last realizing larger as unusual year, kind expanding of of unusual be might guidance on for you maybe investment spending would give the terms only giving than you're expect to or so spending sort

Jesse Geiger

with level John. the to upcoming very current item We grew each is the you, growth. the past I around of only out of comfortable thank headcount existing projects. XX% staff support the I headcount point years and Yeah guess two just we're near-term

up of invest experience years projections long-term the the past are projections, and XXXX rate lower caught hiring our couple lower continuing at to than people growth as than are on in effectively sustain revenue but in we So we to a XXXX.

this lease some tend offset costs lift year. office the additional to will this and margin So

John Kreger

a And little Okay. assuming are headcount just sync to slower? or bit in clarify, grows revenue you perhaps the with

Jesse Geiger

Generally just second will progresses million the at as how building a reminder little sake quarter depend about a lease perhaps on $X slower but for and per bit cost in comes the it clip the quarter. on year

that quarter first QX, cost $X does about million quarter. So QX not have QX and incremental a

Operator

you. Thank

Windley question comes next from with David the Jefferies. of line Our

open. is line Your

Dave Windley

any to Has expect there the composition or you I getting change that of and or backlog rate been whether duration your conversion not including your change? backlog average stable kind relatively of stay of am in

August Troendle

to going big know a be change. there don’t I if is

-- stuttering at in did level times well the three we elevated of cancellations had So the last last quarters. we have probably several five

in throws think up slightly. in or it's could our curveball trail particularly don’t rate. So going be but there down going down a to that I not going meaningful would conversion I change of expect it but kind a much,

Jesse Geiger

Yeah about is working think assumption. good I Dave XX% a

Dave Windley

quarterly any segues that give around And into my question which cadence nicely, is to if care specifics. second you us

quarters. also the You those and cancellations We're those or quarter contributing fourth full-year? quarters mentioned flight think the other relative level about in studies of not revenue of in terms growth we impaction some should in near-term yet to the but

Jesse Geiger

a it's impact have that will out. Yeah the I If quarters don’t big a think near-term on quarters. anything an of couple it headwind

giving So any here. stocking the annual to guidance not quarterly commentary. we're of kind We're

cancellations we quarter we there. As feel impact bit the may remains you can a environment of the this a strong, the headwind little second but business in know but be of in not the quarter, of bit quarter half fourth could year, a irregular if much the create to

on the in So picking the will then have in comment cost we that's CapEx I on only of thing phasing cost QX QX. we up have that side the not do revenue and

August Troendle

growth achieve and -- on to we bit think have I a I growth for year and consistent the the if because environment relatively little topline growth consecutive cancellations that over We've year this it the third hedge cancellations. revenue would of wasn't of a remains XX% think

we'll but I new grow of through that's then if just the kind normal, it. to think elevated, have

Dave Windley

XXXX question to margin have charts least the or XXXX Would change at the to smoother through -- that of sequential will the in out last the your some you it same to expect and that margin then me on change -- more slide XXXX factors bar in four dramatic fairly year choppy. with be was grew influenced it EBITDA will steadily XXXX? quarter And quarter stands six focusing in

August Troendle

the of be Those little pretty little is similar a how Wild card those It should quarter. out pocket to quarter other the out bit one. and to expenses of choppy. play -- can a kind bit just be

Dave Windley

you. for Okay. All me. right. all That's Thank

Operator

Thank you.

the comes with question of next Erin Suisse. from Credit Wright Our line

is line Your open.

Erin Wright

evaluating -- front, expanding interest When there curious Just standpoint? focused Thanks. you're what thinking expanding from but understand an been thought out any into on capital opportunities M&A you that or efforts thanks? growth or you’ve areas Great. are your you I lab? potential in there central the historically here, anything how does on other Are organic about largely deployment

August Troendle

not. We're

Jesse Geiger

there We're already We're the growth. doing at do across still but interested we're all expanding look aren’t geographies etcetera. that organic or out that's in organically growing we that organically. doing our We everything nothing that's whether to do in adding we in there's the focused that we're capabilities what's on laboratory market want

August Troendle

and organically opportunities especially just to And growth it's distraction. a plenty it's We've got acquisitions. after a just distraction of go

Erin Wright

Good core sort thought coronavirus. there kind anything to or heading decision-making and XXXX it's hear election also are then that you’ve exposure into your how heading Have thanks? historically biotech of an election there embedded in cycle, of about remind also thinking anticipated Can around into then there, any you is Okay. some going also anomaly of you cycle may fluctuation be about us and seen have and coronavirus you're expectations? your an on customer your we

August Troendle

funding we Yeah of any real in funding haven’t pullback -- environment. or biotech in seen the seen any haven’t sort we slowdown

a the plays keeping a close the the right of we're retracting. strong. year So active and be on towards still anything opportunities and of end moment funding continues wild no health signs new to the seeing is of At out market eye now how but card that of we're funding programs currently the

China been concerned, needs. We've our Mainland Hong far has is sufficient impacted As particularly to it able Kong. operations and operating our clients in capacity the virus to as serve maintain Asia,

negative We it any situation. we we an current on financial guidance within range. continue impact contained, a to it. our not and is stays anticipate economic eye keep covered impact meaningful monitor We'll the If do believe

Jesse Geiger

bigger home It changes Milan now main office are We and the People in cancelled as we in in is by well visits day. office operations although market which our the working Italy Sunday is had shut. laboratory Italy woke been monitoring and from is of and as up we have frustrating. has Italy lot Beijing and a than a China Shanghai, both clinical

material We there lot day. by moving of things be is that change here it the not So parts. will but believe

as we do So particular it's guidance upon hedge is it We specific the will in end predict not anything. kind to based but a have effects think really it difficulty non-material in hard the obviously. any Coronavirus of do be

Operator

Thank you.

Our comes from next Draper line Sandy question with the of SunTrust.

open. is line Your

Sandy Draper

new typically feel repurchase share been a the have in past have the very on very there questions dislocation when my about your is it's a you to how so cadence. thanks? repurchases the of view Thanks any A maybe in but just steady appreciate Jesse you of share not in not buybacks I like you about much. be said asked, said sort lot guidance August philosophy share your think opportunistic of authorization this With there's change you

Jesse Geiger

Yeah Jesse. change said our is I in this no philosophy.

continue to opportunities to just quarter. is that from quarter more authorization as advantage than we will there systematic of they Sandy We so present. are there? you be opportunistic take The

Sandy Draper

Yeah sorry. mute, Jesse. was that I appreciate but Thanks was I only on and question. my

Operator

[Operator you. Donald next Our comes Hooker with line from question the Thank of KeyBanc. instructions]

is open. line Your

Donald Hooker

Great. morning. Good

you facility and location pretty update growth? number some Can working Texas material mentioned us of your broadly as facility through update elsewhere have given Can on in times. I of your are and think more us your well. guys in overseas a you in a you So you’ve expansion as capacity facilities capacity Cincinnati terms you rapid

August Troendle

we do several the relatively that's too we offices count. [ph] I US to In operation. we Cincinnati small have have in Denver have and offices think the Globally Minneapolis world to Dallas, do operations, around numerous compared Blame

Jesse Geiger

capacity the every of regularly on degree number there new are rates a rate. year, on and capacity some moving kind just in location excess that's and and current we of varying outgrowing utilization depending we're is in that from either we're floor around offices a a the of to each and offices of in just or where And in standpoint run expand the jurisdiction those we're and expanding world taking happening location to another growth

for of we're as the around so office of doing capacity happen cadence it reason once campus Cincinnati The much to all bolus the out incremental at expansion is opposed the here called we've only that to us. attention our globe a expansions that at is such regular large

Donald Hooker

of maybe up one Super, and if on alluded to and seven customer acquisition or does is what that specifically of your lift nature guidance a your plan your think X% and to there that of you reading and from clients. of thanks I bit guess in your financially? of this hick being maybe maybe and XX% terms charts acquired for concentrations Pharma what Large then we a you correctly one the whatnot how gave to am is a slide little in your that of in pie there bucket presume the clients I of a is you I

Jesse Geiger

overcome no result is transaction. there a Yeah as hiccup or soft spot to of that

that studies to in a slide of and was year continuing We strong on few customers that the for the have have customer It's that we've X% with We as years. Pharma next noted a the acquired reclassified company extend seven. by about into do the we're with XXXX. and on you perform acquired revenue work small active relationship Large our which

Donald Hooker

I Super for Okay. and me. that's you. Thank guess all

Operator

I the call over now at showing would am further like I this closing Kevin Brady back for to time. remarks. questions you. Thank no turn

Kevin Brady

joining call interest call. on Medpace. and you XXXX your today's in us earnings again forward on with look We to you for speaking first our for Thank quarter

Operator

this Ladies your today's concludes and conference. you participation. Thank gentlemen, for

now You have a Everyone day. may wonderful disconnect.

Medpace (MEDP) 25 Feb 202019 Q4 Earnings call transcript