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8-K - FORM 8-K - RESEARCH PHARMACEUTICAL SERVICES, INC. | c07789e8vk.htm |
Exhibit 99.1
November 5, 2010
ReSearch Pharmaceutical Services, Inc.
Unaudited Quarterly Report for the period(s) ended September 30, 2010
Unaudited Quarterly Report for the period(s) ended September 30, 2010
ReSearch Pharmaceutical Services, Inc. (RPS or the Company), a leading provider of integrated
clinical development outsourcing solutions to the biopharmaceutical industry, announces its results
for the three and nine months ended September 30, 2010. These statements include unaudited
comparative results for RPS for the three and nine months ended September 30, 2009.
In addition, RPS announces that it has today filed a Form 10-Q for the period ended September 30,
2010, as required by the Securities and Exchange Commission (SEC). A copy of the Form 10-Q is
available on our website (www.rpsweb.com).
The following discussion of financial results for the three and nine months ended September 30,
2010 is qualified by reference to the unaudited financial results included in this press release
and the Companys Form 10-Q, as filed with the SEC.
Financial results for the three months ended September 30, 2010
| Service revenues for the third quarter of 2010 of $68.5 million grew $16.8 million or
32.5% as compared to the same period in 2009. |
||
| Direct costs increased 31.4%
to $48.8 million for the third quarter of 2010 from
$37.1 million for the third quarter of 2009, but
decreased as a percentage of service revenue to 71.2% from 71.8%
between those periods. |
||
| Selling, general, and administrative expenses increased 23.5% to $13.9 million for the
third quarter of 2010 from $11.3 million for the third quarter of 2009, but decreased as a
percentage of service revenue to 20.3% from 21.8% between those periods. |
||
| EBITDA for the third quarter
of 2010 of $5.6 million, or 8.2% of service revenues,
increased from $3.2 million, or 6.1% of service revenues, for the third quarter of 2009. |
||
| Income before provision for income taxes for the third quarter of 2010 of $4.4 million
increased $2.2 million from $2.2 million for the third quarter of 2009. Net income for the
third quarter of 2010 increased to $2.0 million, from net income for the third quarter in
2009 of $994,000. |
Financial results for the nine months ended September 30, 2010
| Service revenues for the nine months ended September 30, 2010 of $190.9 million grew
$45.5 million or 31.3% as compared to the same period in 2009. |
||
| Direct costs increased 30.6% to $137.4 million for the nine months ended September 30,
2010 from $105.2 million for the same period in 2009, but
decreased as a percentage of service revenue to 72.0% from 72.4%
between those periods. |
||
| Selling, general, and administrative expenses increased 22.3% to $39.6 million for the
nine months ended September 30, 2010 from $32.4 million for the nine months ended September
30, 2009, but decreased as a percentage of service revenue to 20.7% from 22.3% between
those periods. |
November 5, 2010
| EBITDA for the nine months
ended September 30, 2010 of $13.7 million, or 7.2% of service
revenues, increased from $7.5 million, or 5.2% of service
revenues, for the nine months ended
September 30, 2009. |
||
| Income before provision for income taxes for the nine months ended September 30, 2010 of
$9.8 million increased $5.2 million from $4.6 million for the nine months ended September
30, 2009. Net income for the nine months ended September 30, 2010 increased $1.5 million to
$3.5 million, from net income for the nine months ended September 30, 2009 of $2.0 million. |
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.
For further information please contact:
ReSearch Pharmaceutical Services, Inc. |
+1 215 540 0700 | |
Dan Perlman, Chief Executive Officer |
||
Steven Bell, Chief Financial Officer |
Background on RPS
Headquartered in Ft. Washington, Pennsylvania, with subsidiary offices across Latin America, Europe
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.
Supplemental non-GAAP financial information
EBITDA is defined as net (loss) 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 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 in part, 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
November 5, 2010
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 | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Reconciliation of net income to
EBITDA: |
||||||||||||||||
Net income |
$ | 2,018 | $ | 994 | $ | 3,474 | $ | 1,983 | ||||||||
Provision for income taxes |
2,384 | 1,162 | 6,336 | 2,654 | ||||||||||||
Interest expense, net |
163 | 120 | 596 | 329 | ||||||||||||
Depreciation and amortization |
1,077 | 884 | 3,279 | 2,555 | ||||||||||||
EBITDA |
$ | 5,642 | $ | 3,160 | $ | 13,685 | $ | 7,521 |
November 5, 2010
Financial Data
ReSearch Pharmaceutical Services, Inc. and Subsidiaries
Consolidated Balance Sheets
Consolidated Balance Sheets
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
(unaudited) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 6,714,464 | $ | 3,468,104 | ||||
Restricted cash |
8,604,235 | 5,195,841 | ||||||
Accounts receivable, less allowance for
doubtful accounts of $616,000 at September
30, 2010 and $398,000 at December 31, 2009,
respectively |
67,898,655 | 54,516,875 | ||||||
Deferred tax asset |
485,522 | 473,940 | ||||||
Prepaid expenses and other current assets |
6,052,619 | 4,795,030 | ||||||
Total current assets |
$ | 89,755,495 | $ | 68,449,790 | ||||
Property and equipment, net |
6,074,599 | 6,404,747 | ||||||
Other assets |
2,097,002 | 1,627,453 | ||||||
Intangible assets subject to amortization, net |
1,769,304 | 2,792,481 | ||||||
Goodwill |
15,801,828 | 16,742,614 | ||||||
Deferred tax asset |
247,607 | 243,593 | ||||||
Total assets |
$ | 115,745,835 | $ | 96,260,678 | ||||
Liabilities and stockholders equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 4,644,897 | $ | 3,526,931 | ||||
Accrued expenses |
13,148,937 | 14,551,527 | ||||||
Customer deposits |
12,931,605 | 9,695,841 | ||||||
Deferred revenue |
13,405,766 | 8,910,551 | ||||||
Line of credit |
20,866,845 | 9,565,808 | ||||||
Deferred tax liability |
44,267 | 44,267 | ||||||
Current portion of capital lease obligations |
424,733 | 553,689 | ||||||
Total current liabilities |
$ | 65,467,050 | $ | 46,848,614 | ||||
Deferred tax liability |
316,133 | 345,121 | ||||||
Other liabilities |
2,450,807 | 2,510,351 | ||||||
Capital lease obligations, less current portion |
92,695 | 250,576 | ||||||
Total liabilities |
$ | 68,326,685 | $ | 49,954,662 | ||||
Stockholders equity: |
||||||||
Common stock, $.0001 par value: |
||||||||
Authorized shares 150,000,000 at
September 30, 2010 and December 31, 2009,
issued and outstanding shares 37,264,215
and 37,277,808 at September 30, 2010 and
December 31, 2009, respectively. |
3,726 | 3,728 | ||||||
Additional paid-in capital |
46,058,825 | 45,601,325 | ||||||
Accumulated other comprehensive (loss) income |
(2,777,467 | ) | 40,507 | |||||
Retained earnings |
4,134,066 | 660,456 | ||||||
Total stockholders equity |
$ | 47,419,150 | $ | 46,306,016 | ||||
Total liabilities and stockholders equity |
$ | 115,745,835 | $ | 96,260,678 | ||||
November 5, 2010
ReSearch Pharmaceutical Services, Inc. and Subsidiaries
Consolidated Statements of Income
Consolidated Statements of Income
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Service revenue |
$ | 68,452,843 | $ | 51,669,235 | $ | 190,862,040 | $ | 145,374,471 | ||||||||
Reimbursement revenue |
7,891,037 | 5,588,148 | 23,391,018 | 16,528,476 | ||||||||||||
Total revenue |
76,343,880 | 57,257,383 | 214,253,058 | 161,902,947 | ||||||||||||
Direct costs |
48,764,108 | 37,112,160 | 137,410,803 | 105,199,316 | ||||||||||||
Reimbursable out-of-pocket costs |
7,891,037 | 5,588,148 | 23,391,018 | 16,528,476 | ||||||||||||
Selling, general, and administrative expenses |
13,926,625 | 11,279,779 | 39,597,805 | 32,370,791 | ||||||||||||
Depreciation and amortization |
1,076,869 | 884,177 | 3,278,637 | 2,554,806 | ||||||||||||
Income from operations |
4,685,241 | 2,393,119 | 10,574,795 | 5,249,558 | ||||||||||||
Interest expense |
(168,748 | ) | (170,179 | ) | (602,935 | ) | (473,945 | ) | ||||||||
Interest income |
5,727 | 49,883 | 6,728 | 145,172 | ||||||||||||
Other income (expense), net |
(120,997 | ) | (116,623 | ) | (168,760 | ) | (283,725 | ) | ||||||||
Income before provision for income taxes |
4,401,223 | 2,156,200 | 9,809,828 | 4,637,060 | ||||||||||||
Provision for income taxes |
2,383,609 | 1,162,167 | 6,336,218 | 2,654,298 | ||||||||||||
Net income |
$ | 2,017,614 | $ | 994,033 | $ | 3,473,610 | $ | 1,982,762 | ||||||||
Net income per common share: |
||||||||||||||||
Basic |
$ | 0.05 | $ | 0.03 | $ | 0.09 | $ | 0.05 | ||||||||
Diluted |
$ | 0.05 | $ | 0.03 | $ | 0.09 | $ | 0.05 | ||||||||
Weighted average number of common shares
outstanding: |
||||||||||||||||
Basic |
37,221,109 | 37,231,635 | 37,254,628 | 36,910,087 | ||||||||||||
Diluted |
38,645,276 | 38,141,116 | 38,445,792 | 37,955,539 |
November 5, 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 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, and the first quarter Form 10Q as filed on May 14 2010, the
second quarter Form 10Q as filed on August 6, 2010, and the third quarter Form 10Q as filed on
November 5, 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.