Highlights
- Net business wins in the quarter of $867 million; a book to
bill of 1.21.
- Record closing backlog of $8.7 billion, an increase of 10.4%
year on year.
- Quarter 1 reported revenue of $715.1 million representing a
6.0% year on year increase or 6.5% on a constant currency
basis.
- Adjusted earnings per share attributable to the Group for the
quarter of $1.70, an increase of 4.3% over Quarter 1 2019.
- $175.0 million worth of stock repurchased at an average price
of $141.68.
- COVID-19 expected to negatively impact operational and
financial performance during FY20.
- FY20 financial guidance withdrawn due to the level of current
uncertainty. Further details regarding ICON’s Q2 financial outlook
will be provided on its first quarter conference call.
- Cost containment plan being actively implemented across the
Group.
- Strong balance sheet and liquidity position remains with net
cash of $134.4 million.
ICON plc (NASDAQ: ICLR), a global provider
of outsourced drug and device development and commercialisation
services to pharmaceutical, biotechnology, medical device and
government and public health organisations, today reported its
financial results for the first quarter ended March 31, 2020.
CEO Dr. Steve Cutler commented, “Despite the operational
challenges presented by COVID -19 during Quarter 1 I’m very pleased
with our achievements and ICON’s solid start to 2020. We achieved a
net book to bill of 1.21, increased revenue on a constant currency
basis by 6.5% year on year, grew earnings per share by 4.3% and
completed the repurchase of over 1.2 million shares during the
quarter. In addition in early April we announced the renewal of our
strategic agreement with our top customer, demonstrating our
industry leading capabilities and expertise under our partnership
model.
Since March we have seen the escalation of COVID-19 into a true
global pandemic impacting our operations. Accordingly, we are
withdrawing our FY20 financial guidance due to the current level of
uncertainty. While all efforts are being made to mitigate the
impact, the welfare and safety of ICON’s employees, customers and
patients remains the Company’s highest priority.”
First Quarter 2020 Results
Gross business wins in the first quarter were $1.03 billion and
cancellations were $160 million. This resulted in net business wins
of $867 million and a book to bill of 1.21.
Reported revenue for Quarter 1 was $715.1 million. This
represents a year on year increase of 6.0% or 6.5% on a constant
currency basis.
Reported income from operations in the quarter was $106.3
million or 14.9% of revenue compared to $101.9 million or 15.1% of
revenue for Quarter 1 2019. This represents a year on year increase
of 4.3%.
Reported net income attributable to the Group for the quarter
was $91.7 million or 12.8% of revenue compared with $88.3 million
or 13.1% of revenue in Quarter 1 2019. This represents year on year
growth of 3.8%.
Adjusted earnings per share attributable to the Group on a
diluted basis was $1.70, compared to $1.63 per share for Quarter 1
2019. This represents a year on year increase of 4.3%. GAAP
earnings per share attributable to the Group on a diluted basis was
$1.62, compared to $1.63 per share for Quarter 1 2019. This
represents a year on year decrease of 0.8%.
On a comparative basis, non-GAAP days sales outstanding were 55
days at March 31, 2020, compared with 54 days at the end of
December 2019 and 59 Days at the end of March 2019.
Cash generated from operating activities for the quarter was
$142.8 million. During the quarter, the Group made a payment in
respect of the MedPass International acquisition of $36.8 million
(net of cash acquired), capital expenditure was $11.3 million and
$175.0 million worth of stock was repurchased at an average price
of $141.68. As a result, at March 31, 2020, the Group had net cash
of $134.4 million, compared to net cash of $220.3 million at
December 31, 2019 and net cash of $128.6 million at the end of
March 2019.
COVID-19 Update
ICON has been closely monitoring and assessing the rapidly
evolving COVID-19 situation. The welfare and safety of ICON’s
employees, customers and patients remains the Company’s highest
priority. ICON is taking guidance from global health authorities,
such as World Health Organisation (WHO) and Centers for Disease
Control and Prevention (CDC), as well as regional health
authorities and governments to ensure that ICON protects the safety
and welfare of our employees and abides by government directives in
various jurisdictions.
Starting with our Chinese operations in February we have since
experienced the growing impact of COVID-19 on our global business.
This is particularly prevalent in our clinical business with
approximately 65% of our global sites impacted in some way by the
pandemic. Furthermore, we are seeing Site ID & enrollment
delays due to site closures and movement restrictions on patients.
We are proactively reviewing and agreeing to alternative approaches
with customers on a study-by-study basis, including remote and risk
based monitoring and ‘at home’ services delivered through our
Symphony Clinical Research group. In addition, since mid-March, we
are seeing conditions gradually improving in China with sites
re-opening and monitoring activities recommencing.
Cost Containment Plan
As the situation is unprecedented and rapidly evolving, it is
not possible to accurately predict the impact on our business
beyond the short term. To protect our business we are actively
working through a number of measures we can take during this
period. These initiatives include the following: temporary senior
leadership and employee salary reductions, a recruitment freeze in
certain business units, reducing contractor costs and the reduction
of non-labour variable expenditure. Measures will continue to adapt
as the situation evolves.
Balance Sheet
ICON is well positioned given its current financial profile and
maintains an industry leading balance sheet, has robust cash
generation and good access to liquidity. As of 31st March 2020,
ICON has a net cash position of $134.4 million.
Financial Outlook
Given the current uncertainty presented by the COVID-19
pandemic, ICON is withdrawing its financial guidance for FY20,
which was announced in January 2020. Further details regarding
ICON’s Q2 financial outlook will be provided on its first quarter
conference call tomorrow, April 23rd, 2020 at 9:00 EDT [14:00
Ireland & UK].
Other Information
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), this press
release contains certain non-GAAP financial measures, including
non-GAAP operating and net income and non-GAAP diluted earnings per
share. While non-GAAP financial measures are not superior to or a
substitute for the comparable GAAP measures, ICON believes certain
non-GAAP information is useful to investors for historical
comparison purposes.
Adjusted earnings per share attributable to the Group (Non-GAAP)
has been computed by dividing net income attributable to the Group
by the weighted average number of shares outstanding. GAAP earnings
per share attributable to the Group has been computed by dividing
net income attributable to the Group plus a GAAP charge associated
with non-controlling interest in MeDiNova Research (“MeDiNova”) by
the weighted average number of shares outstanding. ICON purchased a
majority shareholding in MeDiNova on 23 May 2019 and has a right to
acquire the remaining share in the company during 2020. The vendors
also have a right to sell the remaining shares exclusively to ICON
during 2020.
ICON will hold its first quarter conference call tomorrow, April
23rd, 2020 at 9:00 EDT [14:00 Ireland & UK]. This call and
linked slide presentation can be accessed live from our website at
http://investor.iconplc.com. A recording will also be available on
the website for 90 days following the call. In addition, a calendar
of company events, including upcoming conference presentations, is
available on our website, under “Investors”. This calendar will be
updated regularly.
This press release contains forward-looking statements. These
statements are based on management's current expectations and
information currently available, including current economic and
industry conditions. These statements are not guarantees of future
performance or actual results, and actual results, developments and
business decisions may differ from those stated in this press
release. The forward-looking statements are subject to future
events, risks, uncertainties and other factors that could cause
actual results to differ materially from those projected in the
statements, including, but not limited to, the ability to enter
into new contracts, maintain client relationships, manage the
opening of new offices and offering of new services, the
integration of new business mergers and acquisitions, the impact of
COVID-19 on our business, as well as other economic and global
market conditions and other risks and uncertainties detailed from
time to time in SEC reports filed by ICON, all of which are
difficult to predict and some of which are beyond our control. For
these reasons, you should not place undue reliance on these
forward-looking statements when making investment decisions. The
word "expected" and variations of such words and similar
expressions are intended to identify forward-looking statements.
Forward-looking statements are only as of the date they are made
and we do not undertake any obligation to update publicly any
forward-looking statement, either as a result of new information,
future events or otherwise. More information about the risks and
uncertainties relating to these forward-looking statements may be
found in SEC reports filed by ICON, including its Form 20-F, F-1,
S-8 and F-3, which are available on the SEC's website at
http://www.sec.gov.
ICON plc is a global provider of outsourced drug and device
development and commercialisation services to pharmaceutical,
biotechnology, medical device and government and public health
organisations. The Company specialises in the strategic
development, management and analysis of programs that support
clinical development - from compound selection to Phase I-IV
clinical studies. With headquarters in Dublin, Ireland, ICON
employed approximately 15,100 employees in 98 locations in 40
countries as at March 31, 2020. Further information is available at
www.iconplc.com.
Source: ICON plc Contact: Investor Relations +1888 381 7923 or
Brendan Brennan Chief Financial Officer +353 1 291 2000 Jonathan
Curtain Vice President Corporate Finance and Investor Relations
+353 1 291 2000 All at ICON.
ICON plc Condensed Consolidated Statements
of Operations (Non-GAAP) Three Months ended March 31, 2020 and
March 31, 2019 (Dollars, in thousands, except share and per share
data) (Unaudited)
Three Months Ended
March
March
31, 2020
31, 2019
Revenue
715,102
674,852
Costs and expenses:
Direct costs
(505,293)
(475,497)
Selling, general and administrative
expense
(87,196)
(81,912)
Depreciation and amortization
(16,322)
(15,497)
Total costs and expenses
(608,811)
(572,906)
Income from operations
106,291
101,946
Net interest expense
(1,372)
(1,609)
Income before provision for income
taxes
104,919
100,337
Provision for income taxes
(12,590)
(12,040)
Net income
92,329
88,297
Net income attributable to non-controlling
interest
(633)
-
Net income attributable to the
Group
91,696
88,297
Adjusted net income per Ordinary Share
attributable to the Group:
Adjusted basic (non-GAAP)
$1.72
$1.64
Adjusted diluted (non-GAAP)
$1.70
$1.63
Weighted average number of Ordinary Shares
outstanding:
Basic
53,348,355
53,845,407
Diluted
53,905,022
54,142,510
ICON plc Condensed Consolidated Statements
of Operations (US GAAP) Three Months ended March 31, 2020 and March
31, 2019 (Dollars, in thousands, except share and per share data)
(Unaudited)
Three Months Ended
March
March
31, 2020
31, 2019
Revenue
715,102
674,852
Costs and expenses:
Direct costs
(505,293)
(475,497)
Selling, general and administrative
expense
(87,196)
(81,912)
Depreciation and amortization
(16,322)
(15,497)
Total costs and expenses
(608,811)
(572,906)
Income from operations
106,291
101,946
Net interest expense
(1,372)
(1,609)
Income before provision for income
taxes
104,919
100,337
Provision for income taxes
(12,590)
(12,040)
Net income
92,329
88,297
Net income attributable to non-controlling
interest
(633)
-
Net income attributable to the
Group
91,696
88,297
Net income per Ordinary Share attributable
to the Group:
Basic
$1.63
$1.64
Diluted
$1.62
$1.63
Weighted average number of Ordinary Shares
outstanding:
Basic
53,348,355
53,845,407
Diluted
53,905,022
54,142,510
ICON plc Summary Consolidated Balance Sheet
Data March 31, 2020 and December 31, 2019 (Dollars, in
thousands)
March 31,
December 31,
2020
2019
(Unaudited)
(Audited)
Cash and short-term investments
484,099
569,937
Debt
(349,734)
(349,640)
Net cash/(debt)
134,365
220,297
Net Accounts Receivable
585,865
583,489
Working Capital
346,326
493,728
Total Assets
2,841,332
2,907,512
Shareholder's Equity
1,513,852
1,618,055
ICON/ICLR-F
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200422005956/en/
ICON plc Investor Relations +1 888 381 7923 or Brendan Brennan
Chief Financial Officer +353 1 291 2000 Jonathan Curtain Vice
President Corporate Finance & Investor Relations +353 1 291
2000 http://www.iconplc.com
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