PAREXEL Reports Third Quarter Financial Results

- Quarterly Revenue Hits Record High -



Apr 26, 2001, 01:00 ET from PAREXEL International Corporation

    BOSTON, April 26 /PRNewswire/ --
 PAREXEL International Corporation (Nasdaq:   PRXL) today announced its financial
 results for the third quarter ended March 31, 2001.
     For the three months ended March 31, 2001, PAREXEL reported consolidated
 net revenue of $98.3 million, a record high for the Company, compared with net
 revenue of $97.2 million in the prior year period.  Operating income was
 $0.7 million versus pro forma restated operating income of $4.8 million in the
 prior year quarter.  Net income for the quarter was $1.9 million or $0.08 per
 diluted share, compared with pro forma restated net income of $3.5 million, or
 $0.14 per diluted share for the quarter ended March 31, 2000.  Excluding the
 negative impact of the Perceptive Informatics business unit, earnings for the
 third quarter would have been $0.12 per share.
     For the nine months ended March 31, 2001, PAREXEL's consolidated net
 revenue was $280.9 million compared with net revenue of $286.9 million in the
 prior year nine-month period.  The pro forma restated operating loss for the
 nine months ended March 31, 2001 was $0.3 million versus pro forma restated
 operating income of $16.5 million in the comparable prior year period.  Pro
 forma restated net income for the nine months ended March 31, 2001 was
 $2.7 million or $0.11 per diluted share, compared with pro forma restated net
 income of $12.1 million, or $0.48 per diluted share for the nine months ended
 March 31, 2000.  Excluding the negative impact of Perceptive Informatics, pro
 forma restated earnings for the nine months ended March 31, 2001 would have
 been $0.21 per share.
     On a segment basis, net revenue for the third quarter grew sequentially in
 each of the Company's strategic business units.  Net revenue was $60.5 million
 in Clinical Research Services (representing the second consecutive quarter of
 revenue growth in the Company's largest business segment), $21.2 million in
 the PAREXEL Consulting Group, $13.4 million in Medical Marketing Services, and
 $3.2 million in Perceptive Informatics, Inc.
     The Company also stated that it would take a restructuring charge during
 the fourth quarter as part of its on-going effort to reduce its cost
 structure.  Although details have not yet been finalized, the charge is
 expected to be in the range of $2 to 4 million.
     Mr. Josef von Rickenbach, PAREXEL's Chairman and Chief Executive Officer
 stated, "In recent months, our focus has been on restoring the Company's
 growth momentum, and the current quarter's record level of revenue
 demonstrates that we are on track in this respect.  We believe that this
 top-line growth, coupled with reduced levels of cancellations, is a strong
 indicator that revenue will continue to increase in the coming quarters.  Our
 greatest challenge now is to improve the profitability of the company, and to
 find ways to better leverage our global franchise and broad-based
 infrastructure.  A significant factor in helping us to achieve our goals is
 the addition of Carl Spalding as our new President and Chief Operating
 Officer, adding depth to our senior management team."
     The Company issued forward-looking guidance regarding revenue and pro
 forma earnings per share (not taking into account any unusual charges) for the
 remainder of Fiscal 2001 (ending June 30, 2001), and for calendar 2001.  For
 the fourth quarter of FY 2001 the Company anticipates reporting net revenue in
 the range of $99 to $102 million and earnings per diluted share of $0.11 to
 $0.12.  For calendar 2001, expectations are for revenues in the range of
 $400 to $415 million and earnings per diluted share of $0.40 to $0.50.
 
     PAREXEL is one of the largest contract pharmaceutical outsourcing
 organizations in the world, providing a broad range of knowledge-based
 contract research, medical marketing and consulting services to the worldwide
 pharmaceutical, biotechnology and medical device industries.  With a
 commitment to providing solutions that expedite time-to-market and peak market
 penetration, PAREXEL has developed significant expertise in clinical trials
 management, data management, biostatistical analysis, medical marketing,
 clinical pharmacology, regulatory and medical consulting, industry training
 and publishing and other drug development consulting services.  Its newest
 subsidiary, Perceptive Informatics, Inc., provides a variety of technology
 products and services, including web-based portal solutions and voice and data
 systems, which are designed to accelerate and enhance the clinical development
 and launch processes.  The Company's integrated services, therapeutic area
 depth and sophisticated information technology, along with its experience in
 global drug development and product launch services, represent key competitive
 strengths.  Headquartered near Boston, MA, PAREXEL operates in 51 locations
 throughout 29 countries around the world, and has approximately
 4,550 employees.
 
     This release may contain "forward-looking" statements regarding future
 results and events, including statements regarding expected financial results,
 future growth and customer demand that involve a number of risks and
 uncertainties.  For this purpose, any statements contained herein that are not
 statements of historical fact may be deemed forward-looking statements.
 Without limiting the foregoing, the words "believes", "anticipates", "plans",
 "expects", "intends", "appears" and similar expressions are intended to
 identify forward-looking statements.  The Company's actual future results may
 differ significantly from the results discussed in the forward-looking
 statements contained in this release.  Important factors that might cause such
 a difference include, but are not limited to, risks associated with:  actual
 operating performance; actual expense savings and other operating improvements
 resulting from recent restructurings; the cancellation, revision, or delay of
 contracts, including those contracts in backlog; the Company's dependence on
 certain industries and clients; the Company's ability to manage growth and its
 ability to attract and retain employees; the Company's ability to complete
 additional acquisitions and to integrate newly acquired businesses or enter
 into new lines of business; government regulation of certain industries and
 clients; competition and consolidation within the pharmaceutical industry; the
 potential for significant liability to clients and third parties; the
 potential adverse impact of health care reform; and the effects of exchange
 rate fluctuations.  Such factors and others are discussed more fully in the
 section entitled "Risk Factors" of the Company's Form 10-Q for the period
 ended December 31, 2000, as filed with the Securities and Exchange Commission.
 
 
                       PAREXEL International Corporation
            Unaudited Consolidated Condensed Statement of Operations
                     (In thousands, except per share data)
 
                             Three Months Ended         Nine Months Ended
                                  March 31,                 March 31,
 
                             2001        2000(a)      2001(b)       2000(a)
                                        Pro Forma    Pro Forma     Pro Forma
                                        (Restated)   (Restated)    (Restated)
 
     Net revenue            $98,322       $97,253     $280,861     $ 286,978
 
     Costs and expenses:
       Direct costs          72,602        67,110      204,314       196,033
       Selling, general and
        administrative       20,106        20,117       61,415        58,994
       Depreciation           4,676         4,988       14,937        14,654
       Amortization             254           238          454           823
 
     Income (loss) from
      operations                684         4,800         (259)       16,474
 
     Other income, net        2,455         1,114        5,335         3,362
 
     Income before
      income taxes            3,139         5,914        5,076        19,836
 
     Provision for
      income taxes            1,240         2,435        2,335         7,734
 
     Net income             $ 1,899       $ 3,479     $  2,741      $ 12,102
 
     Earnings per common share:
 
       Basic                $  0.08       $  0.14     $   0.11      $   0.48
       Diluted              $  0.08       $  0.14     $   0.11      $   0.48
 
     Shares used in computing earnings per common share:
 
       Basic                 24,610        24,883       24,709        24,977
       Diluted               25,247        24,883       24,990        25,081
 
     a. The pro forma Statement of Operations for the three and nine months
        ended March 31, 2000 excludes Q3 FY 2000 restructuring charges of
        $13,400 consisting primarily of severance and lease termination costs
        and $529 related to increased depreciation expense due to changes in
        the estimated useful lives of leasehold improvements on abandoned
        leased facilities.
 
     b. The pro forma Statement of Operations for the nine months ended
        March 31, 2001 excludes $411 of direct costs for a one time write-down
        of aged receivables which management deemed uncollectible, $333 of
        accelerated depreciation expense associated with the write-off of
        assets located at some abandoned leased facilities, and a $1,540
        restructuring benefit caused by a change in estimate related to the Q3
        FY 2000 restructuring accrual.  The $1,540 benefit was offset by
        $772 of new restructuring accruals for exiting a business location in
        the United States.
 
 
     Consolidated Balance Sheet Information
 
                                          June 30,
                           March 31,         2000
                               2001     (Restated)
 
     Working capital       $125,253     $ 123,679
     Total assets           375,008       351,940
     Stockholders' equity   182,967       186,132
 
 
                       PAREXEL International Corporation
                         Unaudited Segment Information
                                ($ in thousands)
 
                               Three months ended          Nine months ended
                                    March 31,                  March 31,
                               2001          2000          2001         2000
 
     Clinical Research Services (CRS)
 
     Net Revenue             60,524        67,766      174,510       202,329
     % of total net revenue     62%           70%          62%           71%
     Gross profit            18,467        22,478       54,827        69,817
     Gross margin               31%           33%          31%           35%
 
     The PAREXEL Consulting Group (PCG)
 
     Net Revenue             21,225        17,477       57,589        49,676
     % of total net revenue     21%           18%          21%           17%
     Gross profit             4,355         4,173       11,044        11,372
     Gross margin               21%           24%          19%           23%
 
     Medical Marketing Services (MMS)
 
     Net Revenue             13,396        12,010       40,512        34,973
     % of total net revenue     14%           12%          14%           12%
     Gross profit             4,113         3,492       13,025         9,756
     Gross margin               31%           29%          32%           28%
 
     Perceptive Informatics, Inc. (PII)
 
     Net Revenue              3,177           N/A        8,250           N/A
     % of total net revenue      3%           N/A           3%           N/A
     Gross profit (loss)     (1,215)          N/A       (2,760)          N/A
     Gross margin              -38%           N/A         -33%           N/A
 
 
     Total Net Revenue       98,322        97,253      280,861       286,978
     Total Gross Profit      25,720        30,143       76,136        90,945
     Gross Margin               26%           31%          27%           32%
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE PAREXEL International Corporation
    BOSTON, April 26 /PRNewswire/ --
 PAREXEL International Corporation (Nasdaq:   PRXL) today announced its financial
 results for the third quarter ended March 31, 2001.
     For the three months ended March 31, 2001, PAREXEL reported consolidated
 net revenue of $98.3 million, a record high for the Company, compared with net
 revenue of $97.2 million in the prior year period.  Operating income was
 $0.7 million versus pro forma restated operating income of $4.8 million in the
 prior year quarter.  Net income for the quarter was $1.9 million or $0.08 per
 diluted share, compared with pro forma restated net income of $3.5 million, or
 $0.14 per diluted share for the quarter ended March 31, 2000.  Excluding the
 negative impact of the Perceptive Informatics business unit, earnings for the
 third quarter would have been $0.12 per share.
     For the nine months ended March 31, 2001, PAREXEL's consolidated net
 revenue was $280.9 million compared with net revenue of $286.9 million in the
 prior year nine-month period.  The pro forma restated operating loss for the
 nine months ended March 31, 2001 was $0.3 million versus pro forma restated
 operating income of $16.5 million in the comparable prior year period.  Pro
 forma restated net income for the nine months ended March 31, 2001 was
 $2.7 million or $0.11 per diluted share, compared with pro forma restated net
 income of $12.1 million, or $0.48 per diluted share for the nine months ended
 March 31, 2000.  Excluding the negative impact of Perceptive Informatics, pro
 forma restated earnings for the nine months ended March 31, 2001 would have
 been $0.21 per share.
     On a segment basis, net revenue for the third quarter grew sequentially in
 each of the Company's strategic business units.  Net revenue was $60.5 million
 in Clinical Research Services (representing the second consecutive quarter of
 revenue growth in the Company's largest business segment), $21.2 million in
 the PAREXEL Consulting Group, $13.4 million in Medical Marketing Services, and
 $3.2 million in Perceptive Informatics, Inc.
     The Company also stated that it would take a restructuring charge during
 the fourth quarter as part of its on-going effort to reduce its cost
 structure.  Although details have not yet been finalized, the charge is
 expected to be in the range of $2 to 4 million.
     Mr. Josef von Rickenbach, PAREXEL's Chairman and Chief Executive Officer
 stated, "In recent months, our focus has been on restoring the Company's
 growth momentum, and the current quarter's record level of revenue
 demonstrates that we are on track in this respect.  We believe that this
 top-line growth, coupled with reduced levels of cancellations, is a strong
 indicator that revenue will continue to increase in the coming quarters.  Our
 greatest challenge now is to improve the profitability of the company, and to
 find ways to better leverage our global franchise and broad-based
 infrastructure.  A significant factor in helping us to achieve our goals is
 the addition of Carl Spalding as our new President and Chief Operating
 Officer, adding depth to our senior management team."
     The Company issued forward-looking guidance regarding revenue and pro
 forma earnings per share (not taking into account any unusual charges) for the
 remainder of Fiscal 2001 (ending June 30, 2001), and for calendar 2001.  For
 the fourth quarter of FY 2001 the Company anticipates reporting net revenue in
 the range of $99 to $102 million and earnings per diluted share of $0.11 to
 $0.12.  For calendar 2001, expectations are for revenues in the range of
 $400 to $415 million and earnings per diluted share of $0.40 to $0.50.
 
     PAREXEL is one of the largest contract pharmaceutical outsourcing
 organizations in the world, providing a broad range of knowledge-based
 contract research, medical marketing and consulting services to the worldwide
 pharmaceutical, biotechnology and medical device industries.  With a
 commitment to providing solutions that expedite time-to-market and peak market
 penetration, PAREXEL has developed significant expertise in clinical trials
 management, data management, biostatistical analysis, medical marketing,
 clinical pharmacology, regulatory and medical consulting, industry training
 and publishing and other drug development consulting services.  Its newest
 subsidiary, Perceptive Informatics, Inc., provides a variety of technology
 products and services, including web-based portal solutions and voice and data
 systems, which are designed to accelerate and enhance the clinical development
 and launch processes.  The Company's integrated services, therapeutic area
 depth and sophisticated information technology, along with its experience in
 global drug development and product launch services, represent key competitive
 strengths.  Headquartered near Boston, MA, PAREXEL operates in 51 locations
 throughout 29 countries around the world, and has approximately
 4,550 employees.
 
     This release may contain "forward-looking" statements regarding future
 results and events, including statements regarding expected financial results,
 future growth and customer demand that involve a number of risks and
 uncertainties.  For this purpose, any statements contained herein that are not
 statements of historical fact may be deemed forward-looking statements.
 Without limiting the foregoing, the words "believes", "anticipates", "plans",
 "expects", "intends", "appears" and similar expressions are intended to
 identify forward-looking statements.  The Company's actual future results may
 differ significantly from the results discussed in the forward-looking
 statements contained in this release.  Important factors that might cause such
 a difference include, but are not limited to, risks associated with:  actual
 operating performance; actual expense savings and other operating improvements
 resulting from recent restructurings; the cancellation, revision, or delay of
 contracts, including those contracts in backlog; the Company's dependence on
 certain industries and clients; the Company's ability to manage growth and its
 ability to attract and retain employees; the Company's ability to complete
 additional acquisitions and to integrate newly acquired businesses or enter
 into new lines of business; government regulation of certain industries and
 clients; competition and consolidation within the pharmaceutical industry; the
 potential for significant liability to clients and third parties; the
 potential adverse impact of health care reform; and the effects of exchange
 rate fluctuations.  Such factors and others are discussed more fully in the
 section entitled "Risk Factors" of the Company's Form 10-Q for the period
 ended December 31, 2000, as filed with the Securities and Exchange Commission.
 
 
                       PAREXEL International Corporation
            Unaudited Consolidated Condensed Statement of Operations
                     (In thousands, except per share data)
 
                             Three Months Ended         Nine Months Ended
                                  March 31,                 March 31,
 
                             2001        2000(a)      2001(b)       2000(a)
                                        Pro Forma    Pro Forma     Pro Forma
                                        (Restated)   (Restated)    (Restated)
 
     Net revenue            $98,322       $97,253     $280,861     $ 286,978
 
     Costs and expenses:
       Direct costs          72,602        67,110      204,314       196,033
       Selling, general and
        administrative       20,106        20,117       61,415        58,994
       Depreciation           4,676         4,988       14,937        14,654
       Amortization             254           238          454           823
 
     Income (loss) from
      operations                684         4,800         (259)       16,474
 
     Other income, net        2,455         1,114        5,335         3,362
 
     Income before
      income taxes            3,139         5,914        5,076        19,836
 
     Provision for
      income taxes            1,240         2,435        2,335         7,734
 
     Net income             $ 1,899       $ 3,479     $  2,741      $ 12,102
 
     Earnings per common share:
 
       Basic                $  0.08       $  0.14     $   0.11      $   0.48
       Diluted              $  0.08       $  0.14     $   0.11      $   0.48
 
     Shares used in computing earnings per common share:
 
       Basic                 24,610        24,883       24,709        24,977
       Diluted               25,247        24,883       24,990        25,081
 
     a. The pro forma Statement of Operations for the three and nine months
        ended March 31, 2000 excludes Q3 FY 2000 restructuring charges of
        $13,400 consisting primarily of severance and lease termination costs
        and $529 related to increased depreciation expense due to changes in
        the estimated useful lives of leasehold improvements on abandoned
        leased facilities.
 
     b. The pro forma Statement of Operations for the nine months ended
        March 31, 2001 excludes $411 of direct costs for a one time write-down
        of aged receivables which management deemed uncollectible, $333 of
        accelerated depreciation expense associated with the write-off of
        assets located at some abandoned leased facilities, and a $1,540
        restructuring benefit caused by a change in estimate related to the Q3
        FY 2000 restructuring accrual.  The $1,540 benefit was offset by
        $772 of new restructuring accruals for exiting a business location in
        the United States.
 
 
     Consolidated Balance Sheet Information
 
                                          June 30,
                           March 31,         2000
                               2001     (Restated)
 
     Working capital       $125,253     $ 123,679
     Total assets           375,008       351,940
     Stockholders' equity   182,967       186,132
 
 
                       PAREXEL International Corporation
                         Unaudited Segment Information
                                ($ in thousands)
 
                               Three months ended          Nine months ended
                                    March 31,                  March 31,
                               2001          2000          2001         2000
 
     Clinical Research Services (CRS)
 
     Net Revenue             60,524        67,766      174,510       202,329
     % of total net revenue     62%           70%          62%           71%
     Gross profit            18,467        22,478       54,827        69,817
     Gross margin               31%           33%          31%           35%
 
     The PAREXEL Consulting Group (PCG)
 
     Net Revenue             21,225        17,477       57,589        49,676
     % of total net revenue     21%           18%          21%           17%
     Gross profit             4,355         4,173       11,044        11,372
     Gross margin               21%           24%          19%           23%
 
     Medical Marketing Services (MMS)
 
     Net Revenue             13,396        12,010       40,512        34,973
     % of total net revenue     14%           12%          14%           12%
     Gross profit             4,113         3,492       13,025         9,756
     Gross margin               31%           29%          32%           28%
 
     Perceptive Informatics, Inc. (PII)
 
     Net Revenue              3,177           N/A        8,250           N/A
     % of total net revenue      3%           N/A           3%           N/A
     Gross profit (loss)     (1,215)          N/A       (2,760)          N/A
     Gross margin              -38%           N/A         -33%           N/A
 
 
     Total Net Revenue       98,322        97,253      280,861       286,978
     Total Gross Profit      25,720        30,143       76,136        90,945
     Gross Margin               26%           31%          27%           32%
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X04757648
 
 SOURCE  PAREXEL International Corporation

RELATED LINKS

http://www.parexel.com