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Parexel releases quarterly financial results

Wednesday, May 2, 2012

Global CRO Parexel International has released its financial results for the third quarter ended March 31, 2012.

For the three months, Parexel’s consolidated service revenue increased by 18.1% to $356.0 million compared with $301.4 million in the prior year period. Excluding a $3.8 million negative impact from foreign exchange on consolidated service revenue in the current quarter, and excluding $1.5 million of consolidated service revenue in the prior year quarter related to subsequently divested early phase units, revenue increased 20.0% in the quarter.

The company reported operating income under Generally Accepted Accounting Principles (GAAP) of $28.2 million, or 7.9% of consolidated service revenue, in the third quarter of Fiscal Year 2012, versus GAAP operating income of $21.9 million, or 7.3% of consolidated service revenue, in the same quarter of the prior fiscal year. GAAP net income for the quarter ended March 31, 2012, totaled $22.9 million, or $0.38 per diluted share, compared with GAAP net income of $15.7 million, or $0.26 per diluted share, for the quarter ended March 31, 2011. GAAP net income in the quarter increased by 45.3% year-over-year, and earnings per diluted share increased by 46.2%.

Parexel had a current quarter tax benefit which resulted primarily from the resolution of uncertain tax positions including the reversal of interest previously accrued on these items. Approximately $4.2 million of tax benefit recorded in the quarter was due to the favorable conclusion of a tax examination along with the expiration of statutory periods primarily in European jurisdictions.

In fiscal years 2012 and 2011, the financial results for the respective March quarters each included special items, as detailed in the financial charts within this press release. Excluding the impact of these special items, adjusted operating income in the third quarter of FY 2012 was $30.0 million, or 8.4% of consolidated service revenue. Excluding these special items in the prior year period, adjusted operating income was $22.4 million, or 7.4% of consolidated service revenue. On this adjusted basis, operating income in this most recent quarter increased 34.1% year-over-year. Adjusted net income in the current and prior periods (which excludes the special items referenced above) was $19.9 million, or $0.33 per diluted share in the quarter ended March 31, 2012, and was $16.1 million, or $0.27 per diluted share in the quarter ended March 31, 2011. Using adjusted numbers in both periods, net income in the current quarter increased by 23.6% year-over-year, and adjusted earnings per diluted share increased by 22.2%.

On a segment basis, consolidated service revenue for the third quarter of FY 2012 was $263.4 million in clinical research services, $43.3 million in Parexel consulting and medical communications services, and $49.3 million in perceptive informatics.

For the nine months ended March 31, 2012, consolidated service revenue was $1.0 billion versus $901.6 million in the prior year period, an increase of 11.3%. GAAP operating income for the current nine-month period was $63.3 million, or 6.3% of consolidated service revenue, compared with GAAP operating income of $80.1 million, or 8.9% of consolidated service revenue in the prior year period. GAAP net income for the nine months ended March 31, 2012, was $45.4 million, or $0.75 per diluted share, compared with GAAP net income of $50.4 million, or $0.84 per diluted share, in the prior year period. Excluding the impact of special items as detailed in the attached financial charts in both nine-month periods, operating income was $68.9 million or 6.9% of consolidated service revenue for the nine months ended on March 31, 2012, compared with $79.6 million or 8.8% of consolidated service revenue for the nine months ended on March 31, 2011. On an adjusted basis, net income for the nine months ended March 31, 2012 was $45.5 million, or $0.75 per diluted share, compared with $50.8 million or $0.85 per diluted share in the comparable prior year nine-month period.

Backlog at the end of March was approximately $4.224 billion, an increase of 32.5% year-over-year. The reported backlog included gross new business wins in the quarter of $1.057 billion, cancellations of $263.3 million, a positive impact from foreign exchange rates and other small adjustments of $44.3 million. The net book-to-bill ratio was 2.23 in the quarter.

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