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8-K - FORM 8-K - RESEARCH PHARMACEUTICAL SERVICES, INC. | c98112e8vk.htm |
Exhibit 99.1
March 24, 2010
ReSearch Pharmaceutical Services, Inc.
Announces Earnings for the Fourth Quarter and Year Ended December 31, 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 fourth quarter and year ended December 31, 2009.
In addition, RPS announces that it has today filed a Form 10-K for the period ended December 31,
2009, as required by the Securities and Exchange Commission (SEC). A copy of the Form 10-K is
available on our website (www.rpsweb.com).
Financial highlights for the three months ended December 31, 2009
| Service revenues for the fourth quarter of 2009 of $55.1 million grew $15.6 million or
39.4% as compared to the same period in 2008. |
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| Direct costs increased 34.0% to $39.9 million for the fourth quarter of 2009, but
decreased as a percentage of service revenue, from 75.3% to 72.3%, from the fourth quarter
of 2008. |
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| Selling, general, and administrative expenses increased 45.1% to $12.4 million for the
fourth quarter of 2009 from $8.6 million for the fourth quarter of 2008. |
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| EBITDA for the fourth quarter of 2009 of $2.6 million or 4.7% of service revenues,
increased from $1.2 million or 3.0% of service revenues for the fourth quarter of 2008. |
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| Net income before provision for income taxes for the fourth quarter of 2009 of $1.5
million increased $0.8 million from $0.7 million for the fourth quarter of 2008. Net income
for the fourth quarter of 2009 increased to $0.6 million, from net income for the fourth
quarter in 2008 of $0.5 million. |
Financial highlights for the year ended December 31, 2009
| Service revenues for the year ended December 31, 2009 of $200.5 million grew $43.5
million or 27.7% as compared to the same period in 2008. |
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| Direct costs increased 23.4% to $145.2 million for the year ended ending December 31,
2009, but decreased as a percentage of service revenue, from 75.0% to 72.4%, from the year
ended December 31, 2008. |
||
| Selling, general, and administrative expenses increased 43.2% to $44.8 million for the
year ended December 31, 2009 from $31.3 million for the year ended December 31, 2008. |
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| EBITDA for the year ended December 31, 2009 of $10.0 million or 5.0% of service
revenues, increased from $8.0 million or 5.1% of service revenues for the year ended
December 31, 2008. |
March 24, 2010
| Net income before provision for income taxes for the year ended December 31, 2009 of
$6.2 million decreased $0.1 million from $6.3 million for the year ended December 31, 2008.
Net income for the year ended December 31, 2009 decreased to $2.6 million, from net income
for the year ended December 31, 2008 of $3.7 million. |
Operational highlights for the year ended December 31, 2009
|
In 2009, the Company acquired a clinical research organization (CRO) in China, providing
the Company with expanded capabilities in the Asia Pacific region and complementing its current operations in the Americas
and Europe. |
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| Throughout 2009, the Company continued to expand its global operations across the
European and Asia-Pacific regions in support of its growing customer base. As of the close
of the year, RPS presence spans 44 countries across six continents. |
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 fourth quarter and year end results, Daniel M. Perlman, Chairman and CEO of RPS,
said:
In 2009, RPS expanded it operations in Europe and the Asia-Pacific regions in support of the
growing needs of our clients for global drug development services. Our expanding capabilities and
global reach have fueled revenue growth in the fourth quarter and for the year that exceeds
industry averages in a challenging global environment. In 2010, we plan to continue to expand our
capabilities in support of our strategy to deliver innovative, integrated, cost-effective clinical
development solutions for our global clients.
For further information please contact:
ReSearch Pharmaceutical Services, Inc.
|
+1 215 540 0700 | |
Dan Perlman, Chief Executive Officer |
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Steven Bell, Chief Financial Officer |
Background on RPS
Headquartered in Ft. Washington, Pennsylvania, with subsidiaries across Latin America, Europe,
Africa, Australia, and Asia, 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.
March 24, 2010
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 a widely accepted financial indicator of a companys 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-based compensation 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 Companys 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 Companys operating results and liquidity requirements or those of businesses we may
acquire. The Companys 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.
The following table and related notes reconciles net income to EBITDA:
(in thousands) | (in thousands) | |||||||||||||||
Three months ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Reconciliation of net income
to EBITDA: |
||||||||||||||||
Net income |
$ | 638 | $ | 518 | $ | 2,620 | $ | 3,743 | ||||||||
Provision for income taxes |
905 | 178 | 3,559 | 2,518 | ||||||||||||
Interest (income) expense, net |
(90 | ) | 9 | 110 | (66 | ) | ||||||||||
Depreciation and amortization |
1,168 | 517 | 3,723 | 1,750 | ||||||||||||
EBITDA |
$ | 2,621 | $ | 1,222 | $ | 10,012 | $ | 7,945 |
March 24, 2010
Financial Data
ReSearch Pharmaceutical Services, Inc. and Subsidiaries
Consolidated Balance Sheets
Consolidated Balance Sheets
December 31, | ||||||||
2009 | 2008 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 3,468,104 | $ | 6,565,003 | ||||
Restricted cash |
5,195,841 | 7,247,532 | ||||||
Accounts receivable, less allowance for
doubtful accounts of $398,000 at December
31, 2009 and $654,000 at December 31, 2008,
respectively |
54,516,875 | 43,225,016 | ||||||
Current deferred tax asset |
473,940 | 970,797 | ||||||
Prepaid expenses and other current assets |
4,795,030 | 2,377,838 | ||||||
Total current assets |
$ | 68,449,790 | $ | 60,386,186 | ||||
Property and equipment, net |
6,404,747 | 5,993,387 | ||||||
Other assets |
1,627,453 | 1,179,018 | ||||||
Intangible assets subject to amortization, net |
2,792,481 | 3,880,000 | ||||||
Goodwill |
16,742,614 | 15,145,585 | ||||||
Deferred tax asset |
243,593 | 504,366 | ||||||
Total assets |
$ | 96,260,678 | $ | 87,088,542 | ||||
Liabilities and stockholders equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 3,526,931 | $ | 3,496,309 | ||||
Accrued expenses |
14,551,527 | 12,069,957 | ||||||
Customer deposits |
9,695,841 | 7,247,532 | ||||||
Deferred revenue |
8,910,551 | 4,781,935 | ||||||
Line of credit |
9,565,808 | 7,500,000 | ||||||
Current deferred tax liability |
44,267 | | ||||||
Current portion of capital lease obligations |
553,689 | 682,695 | ||||||
Total current liabilities |
$ | 46,848,614 | $ | 35,778,428 | ||||
Customer deposits |
| 4,500,000 | ||||||
Deferred tax liability |
345,121 | 1,331,955 | ||||||
Other liabilities |
2,510,351 | 2,323,794 | ||||||
Capital lease obligations, less current portion |
250,576 | 871,963 | ||||||
Total liabilities |
$ | 49,954,662 | $ | 44,806,140 | ||||
Stockholders equity: |
||||||||
Common stock, $.0001 par value: |
||||||||
Authorized shares 150,000,000; issued
and outstanding shares 37,277,808 and
36,746,291 at December 31, 2009 and
December 31, 2008, respectively. |
3,728 | 3,675 | ||||||
Additional paid-in capital |
45,601,325 | 44,083,184 | ||||||
Accumulated other comprehensive income |
40,507 | 155,535 | ||||||
Retained earnings (accumulated deficit) |
660,456 | (1,959,992 | ) | |||||
Total stockholders equity |
$ | 46,306,016 | $ | 42,282,402 | ||||
Total liabilities and stockholders equity |
$ | 96,260,678 | $ | 87,088,542 | ||||
March 24, 2010
ReSearch Pharmaceutical Services, Inc. and Subsidiaries
Consolidated Statements of Operations
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(unaudited) | ||||||||||||||||
Service revenue |
$ | 55,097,345 | $ | 39,519,096 | $ | 200,471,816 | $ | 156,966,558 | ||||||||
Reimbursement revenue |
7,167,686 | 4,835,639 | 23,696,162 | 18,085,514 | ||||||||||||
Total revenue |
62,265,031 | 44,354,735 | 224,167,978 | 175,052,072 | ||||||||||||
Direct costs |
39,881,508 | 29,759,017 | 145,208,645 | 117,707,287 | ||||||||||||
Reimbursable out-of-pocket costs |
7,167,686 | 4,835,639 | 23,696,162 | 18,085,514 | ||||||||||||
Selling, general, and administrative expenses |
12,427,112 | 8,563,777 | 44,797,903 | 31,289,566 | ||||||||||||
Depreciation and amortization |
1,168,101 | 516,801 | 3,722,907 | 1,750,252 | ||||||||||||
Income from operations |
1,620,624 | 679,501 | 6,742,361 | 6,219,453 | ||||||||||||
Interest expense |
(175,924 | ) | (45,363 | ) | (649,878 | ) | (226,911 | ) | ||||||||
Interest income |
266,431 | 36,866 | 539,424 | 293,056 | ||||||||||||
Other income (expense) |
(168,422 | ) | 25,037 | (452,138 | ) | (24,435 | ) | |||||||||
Net income before provision for income taxes |
1,542,709 | 696,041 | 6,179,769 | 6,261,163 | ||||||||||||
Provision for income taxes |
905,023 | 177,629 | 3,559,321 | 2,518,379 | ||||||||||||
Net income |
$ | 637,686 | $ | 518,412 | $ | 2,620,448 | $ | 3,742,784 | ||||||||
Accretion of preferred stock |
| | | | ||||||||||||
Net income (loss) applicable to common shares: |
$ | 637,686 | $ | 518,412 | $ | 2,620,448 | $ | 3,742,784 | ||||||||
Net income per common share: |
||||||||||||||||
Basic |
$ | 0.02 | $ | 0.02 | $ | 0.07 | $ | 0.11 | ||||||||
Diluted |
$ | 0.02 | $ | 0.02 | $ | 0.07 | $ | 0.11 | ||||||||
Weighted average number of common shares
outstanding: |
||||||||||||||||
Basic |
37,277,808 | 32,941,885 | 37,002,773 | 32,616,846 | ||||||||||||
Diluted |
38,403,366 | 34,229,646 | 38,071,113 | 34,103,258 |
March 24, 2010
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, 2009 which are included in the Companys
Annual Report on Form 10-K as 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 Companys 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 Companys Form 10-K
filed with the SEC on March 24, 2010. The Companys 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 Companys 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.