MEDP - Earnings call transcript Q4 2020

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Operator

Good day, ladies and gentlemen, and welcome to the Medpace Fourth Quarter and Full Year 2020 Earnings Conference Call. [Operator Instructions].

As a reminder, this call may be recorded. I would now like to introduce the host for today's conference, Kevin Brady, Medpace's Executive Director of Finance.

You may begin.

Kevin Brady

for Fourth thank Conference XXXX and Call. morning, joining Quarter Medpace's Earnings Good call President Operations, is Troendle; on today Also the our CFO COO and and and of Geiger. Laboratory Jesse our August CEO,

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

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

Jesse Geiger

Good Thank you, morning, everyone. Kevin.

prior business $XXX.X fourth backlog resulting a net the in in to year awards from book-to-bill. XX.X% Our million, the net new entering quarter increased X.XX

the full $X.X fourth represents XX% XX.X%, from full or quarter constant the increase basis. an a XXXX X.X% awards compared XXXX. quarter XX.X% $XX.X of prior year currency in On on $XXX.X XX.X% was in XXXX and million represents increase on $XXX.X currency increased a fourth to basis, For and a increase of basis, currency of a billion, increased of period. XX the XX.X% compared XX.X% XXXX, XX.X% year the XXXX. year compared organic basis. $XXX.X new fourth $XXX.X a $X.X prior million, of fourth $XX.X ending EBITDA million were million quarter million from an year. billion, backlog year. the December EBITDA XXXX. Revenue increase XX.X% constant in which organic respectively, to of This business quarter was and a EBITDA prior compared X.X% EBITDA year the XXXX the of to margin year-over-year XX.X% increased million to and to Full for on revenue Full as in was constant reported year X.X% net was

year XXXX. of $XX.X was and employee-related The full revenue. expenses as XX.X% EBITDA the XXXX the period. XX.X% income XXXX net out-of-pocket million attributable reimbursed percentage net to of compared $XX.X quarter, to was to million fourth prior For In year, compared was the margin in lower in higher-margin expenses income primarily a

prior compared lower EBITDA rate diluted year income net was quarter as period. million was for XXXX, year effective share per compared in million to full to well tax Net interest $X.XX the by was income the $XXX.X amortization, $X.XX as expense. driven primarily in the XXXX. growth Net and $XXX.X higher For income

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

customers and top net our $XXX.X concentration, fourth and roughly million XX.X to operating represented customer days and flow quarter the decreased XX% from X XX.X to we from XX%, activities, in respectively XXXX top negative days. cash sales quarter, our Regarding compared the negative generated XX outstanding revenue. of In days third our

the During our $XXX.XX we with and remaining fourth the price total outstanding million current of cash, $XXX.X quarter, We at undrawn an no of credit. share on million of line debt a $XX.X and our revolving we repurchased repurchase approximately $XXX.X capacity million under million, average XXX,XXX shares have authorization. for of ended $XX of quarter

XXXX. our now Moving guidance for to

XX.X% to are forecasting range of million. the $XXX.X full for to of revenue growth the XX.X% We XXXX, over revenue $X.XXX total XXXX now billion in of year total billion representing $X.XXX

income and so and XXXX share of can there per Our take million, $XXX.X to We over in million XXXX, XX%, in guidance. earnings repurchases net our in are $XXX.X of diluted turn shares the we call EBITDA million we have back the the growth XX% the is to to million range that, range of the XXXX tax in XX.X% range your anticipate will of $XXX $X.XX. no $X.XX expected the be compared range XXXX assumed our fully to rate representing in million diluted to to in I of effective XX.X questions. forecast share operator to With for X.X% $XXX.X of million to EBITDA $XXX We XXXX.

Operator

of [Operator Instructions]. the of line And Windley from first Jefferies. your Dave is question

David Windley

portion -- to kind a better in wanted backlog a bit has cadence progresses or XX months. your over But the the of convert the little your 'XX, of backlog gave slide I the conversion. recovered in from are us understand thinking bit impact also help around just And as little XQ with conversion through about your revenue 'XX? next COVID as at backlog looking the you of the rate of deck you it know I how it expect Jesse, maybe you conversion? of expectations, to that percentage the

August Troendle

Jesse. ahead, Go

Jesse Geiger

Yes. Thanks, Dave.

to are As it through cadence, the anticipating revenue we move as year. relates to revenue increase we

can a be in revenue So of number expect weighted, year. half the second do know, quarter-to-quarter as half slightly different first back-end versus revenue. some to volatility cause quarter-to-quarter, you of things the But potentially

a So factor that's there. always

rate, On for the fourth the burn think average I up quarter. XX.X%. The was XXXX did it in tick in

through to four burn So continues really quarter, think rate the depends is it kind strength range environment, how I next business XX% but that on reasonable the a of the a of expectation. XX%

David Windley

percentage the I your to that if lower the of it first little burn first XX% right kind what quarter said quarter thinking I'm bit drop little that half interpret comes you're than or if sequentially within Does rate year? range you in that a how So bit more is couple just a up a down maybe that scale from in the of range. points then end of over that's about first that? of Is course the the and lower. back the mean, or the

Jesse Geiger

above necessarily. to yes, be through think But sequence. it necessarily QX or the not of next I size quarters. Not It any really would mean, awards, couple necessarily. the levels revenue think up I as on in stay we depends down or to go it relative could I sequentially any expect at the I these quarter-to-quarter -- obviously, of

David Windley

call level I growth your past more on cost about than thinking of in side, relative direct pass-through terms XXXX level comfortable follow-up or growth in higher service in the But I'm staffing and growth. the there's of top guiding wasn't that August, know your in versus line now in if that. noted X%. of Wondering fee, being you we the ability levels for your I was talked upper there. And a but meet Medpace, about anything I voice should that not. sure XX% if there Okay. to then hear about the kind on headcount you've of a bound obviously were

slower your So for growth XXXX. than revenue

the you you it could stand done. headcount get maybe currently projects those to where talk billable to So as about relates

August Troendle

Yes.

happen. Dave, growth I we're think think we're we're growth, didn't That a of so staff in with in XXXX for -- because went pretty hoping expecting shape. actually XXXX. good We XX% excess above amount in into considerable I

staff. didn't all we that need So

And need anybody didn't, we XXXX. really ramp later in probably in revenues to didn't so despite the in year. in fact, hire We the

I hiring starting were the kind to fourth and of now we So we but until think slack using you headcount, we are -- add saw are quarter, now in are as then. we always ahead capacity

a faster will the bit the potentially pass-throughs investigative be as revenue site direct than payments little bit growth right, skewed during little You're towards ramp a year. costs increase

is of that So part it.

more lot people. of XX% continued that along target, we But strong revenue And basis. now. all scaling is a the year difficult through with grow this I to anticipated and of did good be of will say it it's not on remember, future. And kind requires growth that So multiple year a into scaled a a is revenue than

matter a we've that year, given of keeping going it, bit slack it's quite any capacity course, a up into over of time. Of with up built and

So now. do think at revenue, this good out direct we're hiring gain But how we'll I things or growth in we pan line anticipate with see XXXX. much We'll over pretty least towards in shape be revenue year.

Operator

is line from question Donald the next KeyBanc. Your of of Hooker

Donald Hooker

chose believe, you consulting to affairs just there announced press partner Health, to hear said. what wanted that as firm instead build recently kind love guess, just I that yourself to you your I regulatory or hear I X maybe guys a didn't it of have gives kind partnership Greenleaf as release I a You already would way? why Medpace And maybe of the with, called consulting traditionally and firm of Medpace ago. -- a collaboration to week

August Troendle

they they're important of Yes. individuals those I think recent a our ex-FDA, group, That's very how regulatory we that have bring really and have as evolving. I regulations do view -- have ex-FDA a hire we're going a unique kind to They partnership of strong the And staff never and that think there. of individuals. because number scale senior we relatively

I think located area near where located. the in are they D.C. like -- that the Washington, and is FDA --

do think I at who we trends and said, into experience as don't going there do. regulatory And generally et FDA, recent and by -- I We and offer to generally do we generally, protocols, real for We consulting insight want you're trial we individuals cetera. capabilities se, consulting good that. that so don't consulting. do they have per And opportunity regulatory stand-alone, do to evolving itself. a us have execution developing as tap for But that's don't we unique don't individuals don't

benefit their expertise. So terms of affairs. expectations us of help top in the that bring can of we clients can they fields in be our game is regulatory from partnership evolving them And can knowing

I and have it's, really partnership, on good a us think, I benefits and a strong real think will both opportunity So for sides.

Donald Hooker

Sure.

evolving case of your maybe to regulatory the lot in you If maybe as going Or but examples area. studies? trends particular you what help follow-up bit there sort to sorry. better to kind case. area, the comments referenced going for is I particular just just a in a are you are don't this obviously, There trends little evolving there, give. they're of for to concretize mind, that or ahead, regulatory grow a assume time over Go guys of us, it

August Troendle

but that's the access changes towards Sure. focus viewed. bit No, whole trials acceptability a trials for technologies and a across a of was endpoints think and spectrum, for limiting as of patient how little virtualization of of I us and and it's new their kind sort

overall. some And industry pandemic so and that have pushed, off of played of better kind it's been the changes the by evolving I in trends accelerated think the of

places, was a kind regulatory that they really of affairs. have the starting So of of expertise one breadth but across

Donald Hooker

one Maybe flow year flow to other get we cash maybe number get -- free know going you think let to or be to done of I CapEx of don't next to guys just free in I'll our you working directionality a just follow-up, had free think other get you should around around and so some would flow? sort cash and next working around some be, thoughts build-outs good And some I The and year can -- the cash capital flow we commented jump people mentioned clarity free ask some kind don't kind cash what headquarters. of on. just into helpful. I'll can Sure. I thinking CapEx if get and that. capital

August Troendle

Jesse? Yes.

Jesse Geiger

Don. Thanks, Yes.

see. Let's

anticipating us. favorable we're $XX of in expenditures XXXX be and capital DSOs have CapEx, to for So million continued for around then

free a standpoint, conversion quarter. in we EBITDA. of pretty conversion the fourth cash so XXX% And It's high had from flow

For lower, the was XXX%. year, was full it it

be cash we out that about less free high of certainly than model environment XXXX, not kind As would we cash think to going about XXX% into conversion. tend conversion. when gives the to get of percent have like it but flow our modeling, flow as But something or we we that EBITDA question internal do us XXs to think to

Operator

Wright Suisse. the of question is with Erin from Your line next Crédit

Erin Wright

wanted start flow are course of normalizing? normalize, just fundamentals year? the market things accessibility as what RFP an site underlying ups? things stands anticipating the it's over this how I or it kind kind Are generally seeing now, are update you trending hopefully on whether you're And as of what or study potentially today and across of

August Troendle

Erin. Sure,

think perspective site kind the operational think materially from and a of of I since challenges September. changed don't I anything's pandemic,

X improvement So into our up. past I in and think opened in a the use on monitoring QX, pretty months. place all Things remote terms back not I or QX tools early have access, the see don't trend consistent X we've towards the and are things even in of of in put pandemic.

think of about somewhat normal back the year, think to and in I do later that ahead us. we will hopefully by is closer get certainly I So still to midyear.

put them as some as the But well do continue had tools I did. back in think with faced we challenges still place we dealing think I indefinitely. of potentially with we've will same the and September we're in

friction changed generally that around think more challenges progressing effectively challenges. programs the think, forward the moving well. I companies worked And I has pretty and despite think are is, But I those we've more and what there.

think more a I are So lot moving clients forward.

how the it, is think and question, of rest that your flow as So RFP doing all well. is I

been strong I the I X the fourth changes and I don't through last months, quarter been think -- it's there's think continuing. again, think in

We continue of moving bit quite programs forward. see a and to opportunities

Erin Wright

I you environment, curious you clearly at but And do well Great. need point? And investments up make in then you adapted around I'm to step a need there? do following hybrid-virtual do trials. this world, that you've stepped sort things in up How are Okay. arena? on that shifting to this competitive around mean, post-COVID investments your how of you up that about decentralized positioning think think do arena

August Troendle

we Yes. I in our financial for always data are don't perspective. think review, from they'd cetera. think I et investments be material investing wearables technologies But remote, technologies,

of we So do, trials competitive. I we are kind and think hybrid

in area invest the as will I as past. the to we think evolves continue in have it we

future the where trials sightless things in I see think as the marketplace that, that like operate. and part we I virtual and truly don't trials meaningful foreseeable of a for

So we're not really investing significantly there.

Operator

the of from Securities. is line question next Draper your And of Sandy Truist

Alexander Draper

to just follow-up think don't that. when about on got is back August, little that so a a this late, last get I I looking, and repeat apologize question. not bit whenever And I you to the of whatever change? pretty when for to But we you one maybe expect back do I goes side changes? maybe, expenses the mean, do think perspective, because have think, opening operational so to both changes? financial both maybe trying what people we start to get made then planes and lot back see from the and a perspective. travel But changes I your back the on from everything a answer up, obvious and from financial -- adaptations, operational when Jesse, guess, to really to is. question, and darn But and a well. But that the you've guys Obviously, -- of do is you what about new that to normal lot And an a what industry is, what adapting lift. normal go is

August Troendle

virtual I would access I prefer. Sure, to still currently trials. that sites is most we Sandy. the Yes, designed in think seeing And we think are efficient more than

that on And does direct cause having site inefficiencies. limitations so we are some access still

has be backlog -- of are but is of around a not on review things it, cases managing to some in some site. done We of that somewhat there would but I

will that kind I X et do think burst so a travel in be needs And of a of there sites, cetera.

I thing. that's one think

And more think clients, teams the happen our normal, general to think also the company. will costs get back be say, in to groups business, within we some collaboration I again. of and visit as as there you travel of internal will I among

value routine integrated pandemic better -- been will opportunity an that electronically provided with to other that And And our think that's I into continue. think through I clients. means. the of see think I interaction has team collaboration the

not think things they the back will think to I snap be going were. to So level way I are don't the --

to of work, will access recruitment to number a better cetera, side. get a back I certainly, big look, which increase in sites. I site. continue going But think is patient more see. we And in bit is of efficiently drive to also hopefully, to come the think et course, needs costs think, with will that additional will I many come I that people on areas, going those be again And rate, is traveling therapeutic to an on change and the

Operator

And Brady remarks. does conclude you. Q&A that over Thank to call Kevin I'll the back for turn any the closing session.

August Troendle

your today's look forward good to you you for on in us have Thank Thanks, a XXXX joining interest We for quarter day. speaking and earnings call again and call. first the with in Medpace.

Operator

does That today's call. conference conclude you. Thank

now may You disconnect.

Medpace (MEDP) 16 Feb 212020 Q4 Earnings call transcript