SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 2, 2000
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PROFESSIONAL DETAILING, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 0-24249 22-2919486
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
10 Mountainview Road,
Upper Saddle River, NJ 07458
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(Address of principal executive (Zip Code)
office)
(201) 258-8450
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Registrant's telephone number, including area code:
N/A
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On February 2, 2000 the Registrant issued the following press release:
"PROFESSIONAL DETAILING, INC. REPORTS FOURTH QUARTER AND
YEAR-END 1999 FINANCIAL RESULTS
Pro forma net income (adjusted to exclude acquisition and related
expenses) up 99% to $2.9 million (Table 1); adjusted diluted earnings per
share excluding acquisition and related expenses up 100% to $0.24 per
share (Table 1).
Upper Saddle River, New Jersey (Wednesday, February 2, 2000) Professional
Detailing, Inc. (Nasdaq: PDII) today announced revenue, net income and net
income per share for the quarter and twelve months ended December 31, 1999 and
1998.
Quarterly Results
Gross revenue for the fourth quarter ended December 31, 1999 was $53.7 million.
Net revenue for the quarter was $50.5 million, an increase of $14.5 million or
40.5% over net revenue of $35.9 million for the quarter ended December 31, 1998.
Net income for the quarter ended December 31, 1999 increased to $2.9 million
from $1.7 million in the prior year period. Diluted net income per share
increased to $0.24 for the fourth quarter of 1999 from $0.14 for the prior year
period. Pro forma net income and pro forma diluted net income per share for the
quarter ended December 31, 1999 (excluding acquisition expense adjustments of
$0.5 million) were $2.9 million and $0.24, respectively. This represented
increases of 99.4% and 100.0%, respectively, over the comparable prior year
period.
Annual Results
Gross revenue for the twelve months ended December 31, 1999 was $183.8 million.
Net revenue for the twelve months was $174.9 million, an increase of $55.5
million or 46.5% over net revenue of $119.4 million for the twelve months ended
December 31, 1998. Net income for the twelve months ended December 31, 1999 was
$10.4 million versus $9.8 million in the prior year period. Diluted net income
per share was $0.86 for the year ended December 31, 1999 versus diluted net
income per share of $0.91 for the prior year period. Pro forma net income and
pro forma diluted net income per share for the year ended December 31, 1999
(adjusted to exclude acquisition and related expenses of $1.2 million) were
$11.5 million and $0.95, respectively. This represented increases of 66.5% and
48.4%, respectively, over the comparable prior year period.
"1999 was highlighted by strong internal growth and the completion of two
strategic acquisitions which expand the scope of quality services we provide to
our pharmaceutical clients", stated Charles T. Saldarini, President and CEO.
"Our results for the quarter and year reaffirm our ability to deliver sales
for our clients and to capitalize on the value proposition inherent in our high
quality contract sales applications. We are quite pleased with our financial
results which I believe offer investors more insight into the growing role we
play in helping clients achieve their own sales and profit goals", Saldarini
added.
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<PAGE>
Change in Accounting Presentation
As a result of our interpretation of recent accounting guidance from the
Securities and Exchange Commission, including Staff Accounting Bulletin No. 101,
the Company reclassified certain of its revenues and program expenses for the
twelve months ended December 31, 1999 and six and nine months ended June 30,
1999 and September 30, 1999, respectively. Accordingly, the Company is
excluding, dollar for dollar, $8.9 million from bothgross revenueand
correspondingprogram expenses for the entire fiscal year. These
reclassifications reflect costs incurred for which direct reimbursement was
received. Corresponding changes were made in the Company's financial statements
for the six and nine months ended June 30, 1999 and September 30, 1999, which
have been reflected in amended filings with the Securities and Exchange
Commission. Because the amounts excluded from net revenue and program expenses
were identical, gross profit, operating income, net income and net income per
share did not change.
The Company does not expect compliance with these guidelines to have any impact
on its earnings in future periods.
As a result of implementing these guidelines, the Company will report gross
revenues, reimbursable expenses and net revenues in its releases of financial
results. Reimbursable expenses are those expenses for which the Company receives
direct reimbursement from its clients. The financial presentation in our filings
with the Securities and Exchange Commission will reflect only the net revenue
line, while Management's Discussion & Analysis will address both the gross and
net revenue items.
Company Background & Services
Professional Detailing, Inc (PDI) is a leading provider of customized sales
solutions to the pharmaceutical industry. The Company has designed and managed
customized product detailing programs for some of the world's largest
pharmaceutical companies, manages some of the largest contract sales efforts in
the world and has long standing relationships with its major clients.
The Company provides several principal services:
o Dedicated Contract Sales Services, in which programs are customized to
client specifications;
o Syndicated Contract Sales Services, provided through the Company's
ProtoCall unit, enabling clients to tap into an existing, large-scale
sales team for specific detail positions and periods;
o Recruitment, in which clients utilize PDI's owned and operated team of
national recruiters to outsource sales force expansions, fill vacancies
and build teams to acquire;
o Medical Education and Communication Services, provided through the
Company's TVG unit, in which clients can access continuing medical
education, Sales Force Tactical Briefings(TM) and peer to peer promotion;
and
o Marketing Research and Consulting Services provided through the Company's
TVG unit, enabling clients to study qualitative and quantitative aspects
of brand performance on a pre-launch, launch and continuing basis.
In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the Company notes that statements in this
release which look forward in time involve risks and uncertainties that
may cause actual results or achievements to materially differ from those
indicated by the forward-looking statements. These forward-looking
statements include any statements relating
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<PAGE>
to, expansion of the Company's business, growth in revenue and the impact
of accounting changes and interpretations on the Company's future results,
as well as any other statements, which are not solely historical. The
Company's plans and objectives are based on assumptions involving
judgments with respect to future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control
of the Company. Therefore, there can be no assurance that the
forward-looking statements will prove to be accurate. The Company's
documents filed with the SEC identify important factors that may cause the
actual results to differ materially from those indicated by the
forward-looking statements.
FINANCIAL TABLES FOLLOW
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<PAGE>
Professional Detailing, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------- -------------------------
1999 1998 1999 1998
---- ---- ---- ----
(in thousands, except per share and statistical data)
<S> <C> <C> <C> <C>
Gross revenue $ 53,702 $ 35,917 $ 183,776 $ 119,421
Reimburseable expenses 3,243 -- 8,874 --
----------- ----------- ----------- -----------
Revenue, net 50,459 35,917 174,902 119,421
Program expenses 37,073 28,298 130,121 87,840
----------- ----------- ----------- -----------
Gross profit 13,386 7,619 44,781 31,581
Compensation expense 5,978 3,890 19,611 15,779
Other general, selling and administrative expenses 3,533 2,165 9,448 6,546
Acquisition and related expenses (495) -- 1,246 --
----------- ----------- ----------- -----------
Total general, selling and administrative expenses 9,016 6,055 30,305 22,325
----------- ----------- ----------- -----------
Operating income 4,370 1,564 14,476 9,256
Other income, net 966 864 3,471 2,273
----------- ----------- ----------- -----------
Income before provision for income taxes 5,336 2,428 17,947 11,529
Provision for income tax 2,477 722 7,539 1,691
----------- ----------- ----------- -----------
Net income $ 2,859 $ 1,706 $ 10,408 $ 9,838
=========== =========== =========== ===========
Basic net income per share $ 0.24 $ 0.14 $ 0.87 $ 0.92
=========== =========== =========== ===========
Diluted net income per share $ 0.24 $ 0.14 $ 0.86 $ 0.91
=========== =========== =========== ===========
Basic weighted average number
of shares outstanding 11,972,112 11,945,031 11,958,196 10,684,264
=========== =========== =========== ===========
Diluted weighted average number
of shares outstanding 12,165,968 12,118,679 12,167,321 10,813,928
=========== =========== =========== ===========
Pro forma data
Income before pro forma provision for income taxes $ 2,428 $ 17,947 $ 11,529
Pro forma provision for income tax (1) 971 7,677 4,611
----------- ----------- -----------
Pro forma net income (1) $ 1,457 $ 10,270 $ 6,918
=========== =========== ===========
Pro forma basic net income per share $ 0.12 $ 0.86 $ 0.65
=========== =========== ===========
Pro forma diluted net income per share $ 0.12 $ 0.84 $ 0.64
=========== =========== ===========
Basic weighted average number
of shares outstanding 11,945,031 11,958,196 10,684,264
=========== =========== ===========
Diluted weighted average number
of shares outstanding 12,118,679 12,167,321 10,813,928
=========== =========== ===========
</TABLE>
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(1) In accordance with SEC regulations pro forma data includes the impact of PDI
& TVG being taxed as if they were C Corporations for the periods presented. PDI
prior to its initial offering in May 1998 was an S Corporation for Federal
income tax purposes. TVG was an S Corporation for Federal income tax purposes
until its acquisition by PDI on May 12, 1999.
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<PAGE>
Professional Detailing, Inc.
Results Excluding Acquisition and Related Expenses
(unaudited)
TABLE 1
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
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1999 1998 1999 1998
---- ---- ---- ----
(in thousands, except per share and statistical data)
<S> <C> <C> <C> <C>
Adjusted for acquisition and related expenses
Income before provision for income taxes $ 5,336 $ 2,428 $ 17,947 $ 11,529
Acquisition and related expenses (495) -- 1,246 --
------------ ------------ ------------ ------------
Adjusted income before provision
for income taxes 4,841 2, 428 19,193 11,529
Adjusted provision for income taxes (1) 1,936 971 7,677 4,611
------------ ------------ ------------ ------------
Adjusted net income $ 2,905 $ 1,457 $ 11,516 $ 6,918
============ ============ ============ ============
Adjusted basic net income per share $ 0.24 $ 0.12 $ 0.96 $ 0.65
============ ============ ============ ============
Adjusted diluted net income per share $ 0.24 $ 0.12 $ 0.95 $ 0.64
============ ============ ============ ============
Basic weighted average number
of shares outstanding 11,972,112 11,945,031 11,958,196 10,684,264
============ ============ ============ ============
Diluted weighted average number
of shares outstanding 12,165,968 12,118,679 12,167,321 10,813,928
============ ============ ============ ============
</TABLE>
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(1) The provision for income taxes assumes that TVG and PDI were taxed as C
Corporations for the periods presented. The Company expects its effective tax
rate to approximate 40% in future periods.
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<PAGE>
PLEASE NOTE:
PDI will be holding a conference call on Thursday, February 3, 2000 at
9:00 AM EST to review results for the fourth quarter and year ended December 31,
1999.
The call number is (800) 742-0826
Refer to conference name: Professional Detailing, Inc.
Conference Leader: Stephen P. Cotugno
Conference ID: #685303
Please call 5 minutes prior to scheduled conference call start time.
A replay of the call is available until midnight February 2, 2000 by
dialing (800) 642-1687. Please refer to Professional Detailing, Inc.,
Conference ID #685303."
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PROFESSIONAL DETAILING, INC.
By: /s/ Charles T. Saldarini
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Charles T. Saldarini
Chief Executive Officer
Date: February 2, 2000
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