PPD Issues 2011 Financial Guidance

19 Jan. 2011



  • Net revenue projected to grow over 10% in 2011
  • Diluted EPS of $1.53 to $1.69 expected in 2011
  • Resuming stock repurchase program

WILMINGTON, N.C., (January 19, 2011) - PPD, Inc. (Nasdaq: PPDI) today reported its projected 2011 financial guidance.

PPD anticipates that net revenue, excluding reimbursed out-of-pocket expenses, for the full year 2011 will be in the range of $1.48 to $1.58 billion. The company expects diluted earnings per share for the full year 2011 to be in the range of $1.53 to $1.69. The quarterly 2011 diluted earnings per share are projected to be in the following ranges: Q1 - $0.30 to $0.34; Q2 - $0.36 to $0.40; Q3 - $0.41 to $0.45; and Q4 - $0.46 to $0.50.

"We remain confident in the market fundamentals for CRO services, and believe we are positioned well to deliver solid financial results in 2011," said David Grange, chief executive officer of PPD. "In the year ahead, we intend to maintain our strong client focus while continuing to improve our global productivity and control costs. We are committed to achieving our operational and financial objectives to meet the evolving needs of our clients and create sustained value for our shareholders."

PPD expects cash flow from operations for the full year 2011 to be in the range of $200 to $250 million. Projected capital expenditures for the full year 2011 are projected to be in the range of $85 to $95 million. These expenditures will be primarily for investments in information technology, new laboratory equipment, and facility expansions and improvements. The effective tax rate for the full year 2011 is expected to be in the range of 29 to 31 percent.

PPD also announced that it intends to resume purchasing its common stock pursuant to its previously announced $350 million stock repurchase program. As of December 31, 2010, there was approximately $260 million remaining available for stock repurchases under the program. PPD expects to repurchase approximately $200 million of its common stock beginning as early as the first quarter of 2011. PPD intends to finance its stock repurchases with existing cash and future cash flow from operations.

"In 2010, we made steady progress in recovering from a very challenging year in 2009," said Fred Eshelman, executive chairman of PPD. "Our strategic initiatives for 2011 are aimed at differentiating our global service offerings, restoring top line growth, and further improving our financial and operating performance to drive shareholder value."

Net revenue is the most directly comparable GAAP financial measure to net revenue excluding reimbursed out-of-pocket expenses. Although net revenue excluding reimbursed out-of-pocket expenses is not superior to or a substitute for GAAP net revenue, PPD excludes reimbursed out-of-pocket expenses from its forecasted net revenue because they are difficult to accurately predict and they do not affect operating income, net income or earnings per share. PPD further believes this non-GAAP financial information is useful to investors because it more accurately reflects the net revenue that will be generated by PPD's services, and because it provides information for period-to-period comparisons.

PPD will conduct a live conference call and audio webcast tomorrow, January 20, 2011, at 9 a.m. ET to discuss its 2011 financial guidance and some of the underlying bases and assumptions for that guidance. 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 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:

Participant dial-in: +1 877 644 0692 (U.S./Canada)
+1 973 200 3387 (International)
Conference ID: 31272460

Except for historical information, all of the statements, expectations and assumptions contained in this news release, including the projections of net revenue, earnings, cash flow and capital spending for 2011, are forward-looking statements that involve a number of risks and uncertainties. Although PPD attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors which could cause actual results to differ materially include the following: economic conditions and outsourcing trends in the pharmaceutical, biotechnology and medical device industries and academic and government-sponsored research sectors; overall global economic conditions; success in sales growth; loss of and delay in large contracts; higher-than-expected cancellation rates; competition within the outsourcing industry; our ability to implement and risks associated with stock repurchases; rapid technological advances that make our products and services less competitive; risks associated with acquisitions and investments, such as integration and impairments, including PPD's investment in Celtic Therapeutics; risks associated with and dependence on collaborative relationships; the ability to attract, integrate and retain key personnel; and the other risk factors set forth from time to time in the SEC filings for PPD, copies of which are available free of charge upon request from the PPD investor relations department.

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