FORT WASHINGTON, Pa., Nov. 13 /PRNewswire/ -- 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 third quarter and nine months ended September 30, 2009. These statements include unaudited comparative results for RPS for the quarter and nine months ended September 30, 2008.

In addition, RPS announces that it has today filed a Form 10-Q for the period ended September 30, 2009, 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 and operational highlights for the three and nine month periods ended September 30, 2009 is qualified by reference to the unaudited financial results included in this press release and the Company's Form 10-Q, as filed with the SEC.

Financial highlights for the three months ended September 30, 2009

• Service revenues for the third quarter of 2009 of $51.7 million grew $12.6 million or 32.1% as compared to the same period in 2008.
• Direct costs increased 25.8% to $37.2 million for the third quarter of 2009, but decreased as a percentage of service revenue, from 75.6% to 71.9%, from the third quarter of 2008.
• Selling, general, and administrative expenses increased 43.8% to $11.3 million for the third quarter of 2009 from $7.8 million for the third quarter of 2008.
• EBITDA for the third quarter of 2009 of $3.2 million or 6.2% of service revenues, increased from $1.7 million or 4.4% of service revenues for the third quarter of 2008.
• Net income before provision for income taxes for the third quarter of 2009 of $2.2 million increased $0.9 million from $1.3 million for the third quarter of 2008. Net income for the third quarter of 2009 increased to $1.0 million, from net income for the third quarter in 2008 of $0.7 million.
  

Financial highlights for the nine months ended September 30, 2009

• Service revenues for the nine months ended September 30, 2009 of $145.4 million grew $27.9 million or 23.8% as compared to the same period in 2008.
• Direct costs increased 19.8% to $105.3 million for the nine months ending September 30, 2009, but decreased as a percentage of service revenue, from 74.9% to 72.5%, from the nine months ended September 30, 2008.
• Selling, general, and administrative expenses increased 42.4% to $32.4 million for the nine months ended September 30, 2009 from $22.7 million for the nine months ended September 30, 2009.
• EBITDA for the nine months ended September 30, 2009 of $7.7 million or 5.3% of service revenues, increased from $6.8 million or 5.8% of service revenues for the nine months ended September 30, 2008.
• Net income before provision for income taxes for the nine months ended September 30, 2009 of $4.6 million decreased $1.0 million from $5.6 million for the nine months ended September 30, 2008. Net income for the nine months ended September 30, 2009 decreased to $2.0 million, from net income for the nine months ended September 30, 2008 of $3.2 million.
  

Operational highlights for the nine months ended September 30, 2009

• In early 2009, the Company announced that it had entered into an agreement to acquire a clinical research organization (CRO) in China, providing the Company with expanded capabilities in the Asian market and complementing its current operations in the Americas and Europe. This acquisition was completed on July 7, 2009
  

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 third quarter results, Daniel M. Perlman, Chairman and CEO of RPS, said:

"In the third quarter, RPS continued the implementation of its global expansion strategy with the acquisition of the China-based CRO, Paramax. We believe this acquisition will serve as the platform for our growing operations in the Asia-Pacific region and complements our existing operations in the Americas, Europe and Africa. RPS intends to continue to expand its global capabilities in response to the growing needs of our clients for global drug development services."

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 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 company's 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 Company's 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 Company's operating results and liquidity requirements or those of businesses we may acquire. The Company's 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,
                                  2009          2008      2009      2008
                                  ----          ----      ----      ----

     Reconciliation of net
      income to EBITDA:

    Net income                    $994          $748    $1,983    $3,224
    Provision for income taxes   1,162           518     2,654     2,341
    Interest (income) expense,
     net                           182            (3)      485       (25)
    Depreciation and
     amortization                  884           449     2,555     1,233
                                 -----         -----     -----     -----
    EBITDA                      $3,222        $1,712    $7,677    $6,773

Financial Data

         ReSearch Pharmaceutical Services, Inc. and Subsidiaries
                 Condensed Consolidated Balance Sheets

                                                  September 30,  December 31,
                                                        2009         2008
                                                        ----         ----
    Assets                                          (unaudited)
    Current assets:
     Cash and cash equivalents                      $6,193,010   $6,565,003
     Restricted cash                                 4,911,223    7,247,532
     Accounts receivable, less allowance for
      doubtful accounts of $806,000 at September
      30, 2009 and $654,000 at December 31, 2008,
      respectively                                  50,774,249   43,225,016
     Current deferred tax asset                        989,433      970,797
     Prepaid expenses and other current assets       1,893,342    2,377,838
                                                    ----------   ----------
    Total current assets                           $64,761,257  $60,386,186

    Property and equipment, net                      6,043,407    5,993,386
    Other assets                                     1,351,173    1,179,018
    Intangible assets subject to amortization, net   3,145,737    3,880,000
    Goodwill                                        17,323,504   15,145,585
    Deferred tax asset                                 504,366      504,366
                                                   -----------  -----------
    Total assets                                   $93,129,444  $87,088,542
                                                   ===========  ===========

    Liabilities and stockholders' equity (deficit)
    Current liabilities:
     Accounts payable                               $2,995,639   $3,496,309
     Accrued expenses                               12,654,901   12,069,957
     Customer deposits                               9,411,043    7,247,532
     Deferred revenue                                6,605,575    4,781,935
     Line of credit                                 12,003,517    7,500,000
     Current portion of capital lease obligations      421,984      682,695
                                                    ----------   ----------
    Total current liabilities                      $44,092,659  $35,778,428

    Customer deposits                                        -    4,500,000
    Deferred tax liability                           1,005,222    1,331,955
    Other liabilities                                2,009,897    2,323,794
    Capital lease obligations, less current portion    548,573      871,963
                                                    ----------   ----------
    Total liabilities                              $47,656,351  $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 September 30, 2009 and
      December 31, 2008, respectively.                   3,728        3,675
     Additional paid-in capital                     45,457,670   44,083,184
     Accumulated other comprehensive (loss) income     (11,075)     155,535
     Retained earnings (accumulated deficit)            22,770   (1,959,992)
                                                   -----------  -----------
    Total stockholders' equity                     $45,473,093  $42,282,402
                                                   -----------  -----------
    Total liabilities and stockholders' equity     $93,129,444  $87,088,542
                                                   ===========  ===========

         ReSearch Pharmaceutical Services, Inc. and Subsidiaries
            Condensed Consolidated Statements of Operations

                                Three Months Ended         Nine Months Ended
                                    September 30,             September 30,
                                 ------------------        -----------------
                                 2009         2008         2009          2008
                                 ----         ----         ----          ----
                                    (unaudited)                (unaudited)

    Service revenue       $51,669,235  $39,113,267 $145,374,471  $117,447,462
    Reimbursement revenue   5,588,148    4,900,378   16,528,476    13,249,875
                           ----------   ----------  -----------   -----------
          Total revenue    57,257,383   44,013,645  161,902,947   130,697,337

    Direct costs           37,167,441   29,555,433  105,327,137    87,948,270
    Reimbursable out-of-
     pocket costs           5,588,148    4,900,378   16,528,476    13,249,875
    Selling, general, and
     administrative
     expenses              11,279,779    7,845,537   32,370,791    22,725,789
    Depreciation and
     amortization             884,177      449,187    2,554,806     1,233,451
                            ---------    ---------    ---------     ---------
          Income from
           operations       2,337,838    1,263,110    5,121,737     5,539,952

    Interest expense          286,802       91,089      757,670       231,020
    Interest income           105,164       94,189      272,993       256,190
                              -------       ------      -------       -------
    Net income before
     provision for income
     taxes                  2,156,200    1,266,210    4,637,060     5,565,122
    Provision for income
     taxes                  1,162,167      517,971    2,654,298     2,340,750
                            ---------     --------   ----------    ----------
    Net income               $994,033     $748,239   $1,982,762    $3,224,372
                            ---------     --------   ----------    ----------

    Net income per common
     share:
         Basic                  $0.03        $0.02        $0.05         $0.10
         Diluted                $0.03        $0.02        $0.05         $0.09

    Weighted average
     number of common
     shares outstanding:
     Basic                 37,231,635   32,547,406   36,910,087    32,507,708
     Diluted               38,141,116   34,049,551   37,955,539    34,069,060

         ReSearch Pharmaceutical Services, Inc. and Subsidiaries
             Condensed Consolidated Statements of Cash Flows

                                                       Nine Months Ending
                                                         September 30,
                                                      2009           2008
                                                      ----           ----
                                                          (unaudited)
    Net income                                  $1,982,762     $3,224,372
    Adjustments to reconcile net income to
      net cash (used in) provided by operating
     activities:
     Depreciation and amortization               2,554,806      1,233,451
     Stock-based compensation                      453,630        413,771
     Deferred tax benefit                         (317,115)             -
     Changes in operating assets and
      liabilities:
     Accounts receivable                        (7,298,979)    (1,897,447)
     Prepaid expenses and other assets             383,865       (968,379)
     Accounts payable                             (582,190)        17,973
     Accrued expenses and other liabilities      1,849,424       (518,930)
     Customer deposits                          (2,559,107)      (307,155)
     Deferred revenue                            1,761,991     (1,640,451)
                                                 ---------     ----------
     Net cash used in operating activities      (1,770,913)      (442,795)

    Investing activities
     Change in restricted cash                   2,558,927        307,155
     Business combinations, net of cash
      acquired                                  (3,092,758)             -
     Purchase of property and equipment         (1,574,894)    (1,128,412)
                                                ----------     ----------
     Net cash used in investing activities      (2,108,725)      (821,257)

    Financing activities
     Net borrowings on line of credit            4,503,517              -
     Principal payments on capital lease
      obligations                                 (584,101)      (496,172)
     Proceeds from exercise of options                 254          8,951
     Cross Shore merger consideration, net of
      fees paid                                          -        (17,880)
                                                ----------     ----------
     Net cash provided by (used in) financing
      activities                                 3,919,670       (505,101)
     Effect of exchange rates on cash and cash
      equivalents                                 (412,025)        26,915
                                                ----------     ----------
     Net change in cash and cash equivalents      (371,993)    (1,742,238)
     Cash and cash equivalents, beginning of
      period                                     6,565,003     11,060,255
                                                ----------     ----------
     Cash and cash equivalents, end of period   $6,193,010     $9,318,017
                                                ==========     ==========

    Supplemental disclosures of cash flow
     information
     Cash paid during the period for:
     Interest                                     $757,670       $231,020
                                                  --------       --------
     Income taxes                               $4,531,026     $2,924,777
    Supplemental disclosures of noncash
     financing activities
     Issuance of shares in connection with
      business combinations                       $918,583             $-
                                                  --------     ----------
     Acquisition of fixed assets under capital
      leases                                            $-     $1,211,158
                                                  --------     ----------

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, 2008 which will be included in the Company's Annual Report on Form 10-K to be 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 Company's 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 Company's Form 10-K filed with the SEC on March 31, 2009 and Forms 10-Q for the first, second, and third quarters of 2009. The Company's 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 Company's 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.

SOURCE ReSearch Pharmaceutical Services, Inc.

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