26 Oct. 2010
- Gross authorizations of $664 million
- Net revenue growth of 7 percent over Q3 2009
- Significant sequential operating margin expansion
- Continued strong cash flow delivery
WILMINGTON, N.C. (October 26, 2010) - PPD, Inc. (Nasdaq: PPDI) today reported its financial and operating results for the third quarter ended September 30, 2010.
PPD recorded net revenue of $365.4 million for the third quarter of 2010, an increase of 7.3 percent over net revenue of $340.4 million for the third quarter of 2009. Third quarter 2010 operating income was $56.8 million, an increase of 10.1 percent compared to income from operations of $51.6 million for the same period in 2009. Diluted earnings per share for the third quarter of 2010 were $0.32, compared to $0.32 for the third quarter of 2009.
"We were pleased to deliver on our commitment to our shareholders during the third quarter," said David Grange, chief executive officer of PPD. "Gross authorizations continued to be strong, and operating margin expanded significantly on a sequential basis due to improved performance in emerging markets and our focus on overall company spending. Our strong performance demonstrates our organizational focus and drive aimed at achieving our 2010 objectives and creating long-term value for our shareholders."
As described in more detail below, beginning with the third quarter of 2010, PPD will report its financial and operating results in two segments: Clinical Development Services and Laboratory Services. These two business segments comprise what had previously been the company's Development segment. A slide presentation related to these new business segments will be available on the Presentations and Events page in the Investors section of the PPD web site at www.ppdi.com.
Clinical Development Services
PPD's Clinical Development Services segment includes global Phase II-IV clinical trial management services. Clinical Development Services segment net revenue for the third quarter of 2010 was $260.3 million, compared to $250.0 million for the third quarter of 2009. Third quarter 2010 income from operations for this segment was $43.7 million, compared to $39.2 million for the third quarter of 2009.
PPD's Laboratory Services segment includes Phase I clinic, cGMP, bioanalytical, central laboratory, vaccines and biologics, and BioDuro/discovery services. Laboratory Services segment net revenue for the third quarter of 2010 was $79.0 million, compared to $65.9 million for the third quarter of 2009. Third quarter 2010 income from operations for this segment was $13.2 million, compared to $12.8 million for the third quarter of 2009.
Other Financial Information
Gross authorizations for the third quarter of 2010 totaled $663.8 million. Backlog at September 30, 2010, was $3.4 billion. Contract cancellations and adjustments for the quarter were $220.9 million, including two large project cancellations that together totaled $92.8 million.
Cash flow from operations for the third quarter of 2010 was $47.9 million, benefiting from continued strong working capital management. At September 30, 2010, PPD had $613.0 million in cash and investments, after giving effect to the payment of the company's third quarter dividend. The effective tax rate for continuing operations in the third quarter of 2010 was 28.5 percent.
"We continued to make great strides in positioning PPD for long-term growth, and we are pleased with our operational and sales execution during the third quarter," said Fred Eshelman, executive chairman of PPD. "We believe the demand for PPD's clinical development and laboratory services continues to be strong, and we will continue to focus on best-in-class quality and performance to create sustained shareholder value."
PPD will conduct a live conference call and webcast tomorrow, October 27, 2010, at 9:00 a.m. ET to discuss its third quarter 2010 results. A Q&A session will follow. All interested parties can access the webcast through the Presentations & Events link in the Investors section of the PPD web site at www.ppdi.com. The webcast will be archived shortly after the call for on-demand replay. The conference call will be broadcast live over the internet, and the live call may be accessed via the following direct dial numbers:
||+1 877 644 0692 (U.S./Canada)
+1 973 200 3387 (International)