Reston, Va.-based contract research organization (CRO) PRA International reported fourth quarter revenue jumped 18.6% to $82.4 million.Income from operations in the fourth quarter totaled $6.6 million, a 48.4% decrease from $12.8 million in the year-ago quarter.
Net income was $5.7 million, or $0.23 per diluted share, compared with $7.5 million, or $0.31 per diluted share, in the fourth quarter of 2005. On Feb. 28, PRA’s shares fell 13% to $19.93.
PRA reported relatively flat revenue in 2006 and a decrease in operating income compared with last year. PRA reported 2006 service revenue of $303.2 million, compared with $294.7 in 2005.
Operating income in 2006 totaled $33.2 million compared with $51.2 million. The company’s operating margin for 2006 was 10.9%, compared with 17.4% in 2005.
“This is both an exciting and challenging time for PRA, as we are taking immediate actions aimed at getting PRA back on the path to accelerated growth,” said Terry Bieker, chief executive officer of PRA.
The company stated that it will be restructuring into three service areas: early development, product registration, and scientific & medical affairs. PRA also announced it will close its Eaton, N.J., and Ottawa, Canada, facilities. The company stated it does not expect any reduction in staff, and certain project managers and lead CRAs will be able to work remotely.
The cost of the restructuring is expected to be $9 million, with the anticipated annual savings expected to be approximately $4 million.