BOSTON, June 23, 2015 /PRNewswire/ -- In conjunction with
its Investor Day being held tomorrow, PAREXEL International
Corporation (Nasdaq: PRXL) has updated its forward-looking guidance
for the fourth quarter of Fiscal Year 2015 (ending June 30, 2015) and for the full Fiscal Year
2015. It has also provided guidance for Fiscal Year 2016 for
the first time. In addition, the Company announced the
initiation of a Margin Acceleration Program as described in further
detail below.
Mr. Josef H. von Rickenbach,
PAREXEL's Chairman and Chief Executive Officer, stated, "As we
finish Fiscal Year 2015 and look ahead to Fiscal Year 2016, we
believe that we have good momentum, a strong and diversified
backlog, and a healthy business development pipeline. Our
priorities for the new year include solid revenue growth, as well
as improved operating profitability and double-digit growth in
earnings per share. In conjunction with our new guidance we
are also raising our long-term adjusted operating margin target
from 12%-14% of service revenue to 13%-15% of service
revenue. We are accelerating a number of our ongoing
improvement plans, and as a result of these efforts, plan to
restructure certain activities. We believe that this will
strengthen the Company by increasing our competitiveness in the
marketplace, and will help us to deliver long-term sustainable
growth in revenue and margins."
Margin Acceleration Program
The Company plans to record pre-tax charges in the range of
$35 to $45 million in conjunction
with restructuring activities it is undertaking. The
restructuring activities are company-wide, and are designed to
improve the productivity and efficiency of the Company, to simplify
the organization, and to streamline decision-making, thereby
enhancing client engagement. PAREXEL expects to record a
pre-tax charge in the fourth quarter in the range of $20 to $30 million, with the remainder of the
charge to be incurred over the course of Fiscal Year 2016.
The Company anticipates completing restructuring activities by
June 30, 2016.
The charge will include approximately $30
to $40 million in employee separation benefits related to
the elimination of up to 850 positions, with the remainder of the
charge related to other one-time costs. The Company
expects that approximately $33 to $43
million of these charges will result in future cash
expenditures. The impact of the restructuring charge on Q4
and full year FY 2015 guidance is expected to be approximately
$0.27 per diluted share when taking
the mid-point of the range. The Company expects to achieve
annual pre-tax savings as a result of this charge of between
$20 to $30 million over the course of
Fiscal Year 2016 (which equates to an estimated benefit of between
$0.25 to $0.37 per diluted share),
and expects to achieve annual pre-tax savings of approximately
$50 to $60 million once the Program
is fully completed.
In addition to the estimated impact of the Margin Acceleration
Program, the Company's guidance takes into account a number of
other factors, including the expected results of the fourth
quarter, recent foreign currency exchange rates, anticipated tax
rates, recent acquisitions, and the Company's updated overall
outlook. The Company's guidance is:
|
Guidance Issued
6/23/15
|
Guidance Issued
4/29/15
|
Q4 FY 2015
Revenue
|
$517 - $533
million
|
$520 - $540
million
|
Q4 FY 2015 GAAP
EPS
|
$0.50 -
$0.58
|
$0.65 -
$0.81
|
Q4 FY 2015 Non-GAAP
EPS*
|
$0.70 -
$0.78
|
N/A
|
|
|
|
FY 2015
Revenue
|
$2.010 - $2.026
billion
|
$2.012 - $2.032
billion
|
FY 2015 GAAP
EPS
|
$2.54 -
$2.62
|
$2.68 -
$2.86
|
FY 2015 Non-GAAP
EPS*
|
$2.70 -
$2.78
|
$2.65 -
$2.83
|
|
|
|
FY 2016
Revenue
|
$2.160 - $2.210
billion
|
N/A
|
FY 2016 GAAP
EPS
|
$2.97 -
$3.33
|
N/A
|
FY 2016 Non-GAAP
EPS**
|
$3.02 -
$3.38
|
N/A
|
*Adjusted diluted EPS guidance for Q4 FY 2015 excludes the
aforementioned expected Q4 FY 2015 restructuring charges. In
addition, adjusted diluted EPS guidance for Fiscal Year 2015 in its
entirety excludes the impact of certain items that were recorded in
the first nine months of Fiscal Year 2015, as detailed in a chart
contained within this release.
**Adjusted diluted EPS guidance for FY 2016 excludes charges
related to the aforementioned restructuring program, as detailed in
a chart contained within this release.
Those who wish to listen to the Company's Investor Day
presentations on June 24, 2015 and to
view the accompanying slides should log onto the Company's website
at www.PAREXEL.com and click on the PAREXEL International 2015
Investor Day link under the "Upcoming Events" section at the bottom
of the Investors homepage at least 15 minutes prior to the event's
broadcast which will start at 9:00 a.m.
ET. Users should follow the instructions provided to
assure that the necessary audio applications are downloaded and
installed. In addition, an archived version of the event's
presentations may be found in the Investor Relations section of
PAREXEL's website.
In addition to the financial measures prepared in accordance
with GAAP, the Company uses certain non-GAAP financial
measures. The Company believes that presenting the non-GAAP
financial measures contained in this press release assists
investors and others in gaining a better understanding of its core
operating results and future prospects, especially when comparing
such results to previous periods or forecasted guidance, because
such measures exclude items that are outside of the Company's
normal operations and/or, in certain cases, are difficult to
forecast accurately for future periods. Management uses
non-GAAP financial measures, in addition to the measures prepared
in accordance with GAAP, as the basis for measuring the Company's
core operating performance and comparing such performance to that
of prior periods and to the performance of its competitors for the
same reasons stated above. Such measures are also used by
management in its financial and operating decision-making.
Non-GAAP financial measures should not be considered superior to
nor a substitute for the Company's results of operations prepared
in accordance with GAAP.
About PAREXEL International
PAREXEL International Corporation is a leading global
biopharmaceutical services organization, providing a broad range of
expertise-based contract research, consulting, medical
communications, and technology solutions and services to the
worldwide pharmaceutical, biotechnology and medical device
industries. Committed to providing solutions that expedite
time-to-market and peak-market penetration, PAREXEL has developed
significant expertise across the development and commercialization
continuum, from drug development and regulatory consulting to
clinical pharmacology, clinical trials management, medical
education and reimbursement. PAREXEL Informatics, Inc. provides
advanced technology solutions, including medical imaging, to
facilitate the clinical development process. Headquartered near
Boston, Massachusetts, PAREXEL
operates in 80 locations in 51 countries around the world, and had
approximately 17,440 employees in the third quarter. For more
information about PAREXEL International visit www.PAREXEL.com.
PAREXEL and PAREXEL Informatics are trademarks or registered
trademarks of PAREXEL International Corporation or its
affiliates.
This release contains "forward-looking" statements regarding
future results and events, including, without limitation,
statements regarding expected financial results, future growth and
customer demand. 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," "estimates," "projects," "will," "would,"
"could," "should," "targets," and similar expressions are
also intended to identify forward-looking statements. The
forward-looking statements in this release involve a number of
risks and uncertainties. The Company's actual future results
may differ materially 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 restructurings, including the
restructuring activities referenced in this release; the loss,
modification, or delay of contracts which would, among other
things, adversely impact the Company's recognition of revenue
included in backlog; the Company's dependence on certain industries
and clients; the Company's ability to win new business, manage
growth and costs, and attract and retain employees; the Company's
ability to complete additional acquisitions, and to integrate newly
acquired businesses including the acquisitions of ClinIntel Limited
and Quantum Solutions India, or enter into new lines of business;
the impact on the Company's business of government regulation of
the drug, medical device and biotechnology industry;
consolidation within the pharmaceutical industry and competition
within the biopharmaceutical services industry; the potential for
significant liability to clients and third parties; the potential
adverse impact of health care reform; and the effects of foreign
currency exchange rate fluctuations and other international
economic, political, and other risks. Such factors and
others are discussed more fully in the section entitled "Risk
Factors" of the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2015 as filed
with the Securities and Exchange Commission on May 1, 2015, which "Risk Factors" discussion is
incorporated by reference in this press release. The Company
specifically disclaims any obligation to update these
forward-looking statements in the future. These
forward-looking statements should not be relied upon as
representing the Company's estimates or views as of any date
subsequent to the date of this press release.
PAREXEL
International Corporation
|
|
Reconciliation of Non-GAAP Measures
|
|
Certain Line
Items
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance for the
Three Months Ended
|
|
|
(in thousands,
except per share data)
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
|
|
$ (2,490)
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
expense
|
|
|
|
|
$ 25,000
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
|
|
$ 22,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
|
|
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
|
|
$ 22,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
$ 11,232
|
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$ 11,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
|
|
$0.50 -
$0.58
|
|
$
0.20
|
|
$0.70 -
$0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance for the
Twelve Months Ended
|
|
|
(in thousands,
except per share data)
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
|
|
$ (2,974)
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
expense
|
|
|
|
|
$ 24,835
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
|
|
$ 21,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
|
|
|
|
$
137
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
|
|
$ 21,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
$ 12,789
|
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$ 9,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
|
|
2.54-2.62
|
|
$
0.16
|
|
2.70-2.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: The sum of the
quarterly Diluted EPS amounts do not equal year-to-date Diluted EPS
amounts due to rounding
|
(a) Impact of net
adjustments for legal settlements and acquisition and integration
related charges, including the revaluation of earn-out contingent
consideration liability associated with certain
acquisitions.
|
|
(b) Charges
related to restructuring program.
|
|
(c) Accelerated
amortization of deferred financing fees related to credit facility
modification
|
|
(d) Release of
reserves related to tax positions and tax effect on non-GAAP
adjustments
|
|
|
PAREXEL
International Corporation
|
Reconciliation of Non-GAAP Measures
|
Certain Line
Items
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance for the
Twelve Months Ended
|
|
(in thousands,
except per share data)
|
|
June 30,
2016
|
|
|
|
|
GAAP
Measure
|
|
Adjustments
|
|
Non-GAAP
Measure
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
expense
|
|
|
|
|
$ 15,000
|
(a)
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
|
|
$ 15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
|
|
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
|
|
$ 15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
$ 12,400
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$ 2,600
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
|
|
2.97-3.33
|
|
$
0.05
|
|
3.02-3.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Charges
related to restructuring program.
|
|
(b) Release of
reserves related to tax positions and tax effect on non-GAAP
adjustments
|
|
|
CONTACTS:
Ingo Bank, Senior Vice President
and Chief Financial Officer
Jill Baker, Corporate Vice President
of Investor Relations
+1-781-434-4118
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/parexel-international-issues-earnings-guidance-in-conjunction-with-investor-day-300103498.html
SOURCE PAREXEL International Corporation