SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
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):
August 11, 1998
PAREXEL International Corporation
(Exact Name of Registrant as Specified in Charter)
Massachusetts 0-27058 04-2776269
(State or Other (Commission (IRS
Jurisdiction of File Number) Employer
Incorporation) Identification No.)
195 West Street, Waltham, Massachusetts 02451
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (781) 487-9900
Not Applicable
(Former Name or Former Address, if Changed Since Last
Report).
Item 5. Other Events.
On August 11, 1998, the Company issued a press release, a
copy of which is attached as Exhibit 99.1 to this Current Report
on Form 8-K.
Item 7. Financial Statements and Exhibits.
Exhibit No. Exhibit
99.1 Press release of the Company dated
August 11, 1998
SIGNATURES
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.
PAREXEL International Corporation
Dated: August 11, 1998 By:/s/William T. Sobo, Jr.
William T. Sobo, Jr., Senior
Vice President, Chief Financial
Officer, Treasurer and Clerk
EXHIBIT INDEX
Exhibit No. Description
99.1 Press release of the Company dated August 11, 1998
EXHIBIT 99.1
FOR IMMEDIATE RELEASE www.PAREXEL.com
CONTACTS: Bill Sobo, Senior Vice President, Chief Financial
Officer
Virginia Lacke, Investor Relations
(781) 487-9904, ext. 4118
PAREXEL REPORTS FOURTH QUARTER AND
FISCAL 1998 FINANCIAL RESULTS
Boston, MA, August 11, 1998 -- PAREXEL International Corporation
(Nasdaq: PRXL), one of the world's largest contract research and
medical marketing services organizations, today announced its
financial results for the fourth quarter and fiscal year ended
June 30, 1998.
For the three months ended June 30, 1998, net revenue was $81.4
million versus $59.7 million in the prior year after restating
for acquisitions. When compared to $47.2 million as originally
reported for the quarter ended June 30, 1997, total revenue
growth was 72%, of which 39% represents internal growth, with the
remainder attributable to businesses acquired during the year.
Income from operations for the quarter grew 39% to $7.5 million,
or 9.3% of net revenue, from $5.4 million, or 9.1% of net
revenue, in the prior-year period. Net income increased 33% to
$5.4 million, or $0.22 diluted earnings per share, versus $4.1
million, or $0.17 per share, last year.
PAREXEL reported record-level new business awards of
approximately $110 million for the June 1998 quarter, which
represents a 41% sequential increase over March quarter levels,
and backlog exceeded $285 million at June 30, 1998.
"It is extremely satisfying to conclude this strong fiscal year
on such a high note for PAREXEL in terms of new business wins and
solid quarterly performance, reflecting the vigor of the
pharmaceutical outsourcing sector, the success of our business
development team, and certainly, a powerful vote of trust and
confidence in PAREXEL from our clients," offered Josef von
Rickenbach, Chairman and Chief Executive Officer of PAREXEL.
"Clearly, it has been an active year for the Company, with
efforts devoted towards balancing key priorities, including
operational execution, integrating newly acquired businesses,
maintaining worldwide quality and operating standards, building
for future growth and, most importantly, demonstrating to our
clients a true `passion for their products'. After recently
visiting our most significant customers, I am personally
convinced that PAREXEL's reputation for flexible, customized
service and overall client commitment distinguishes us in the
marketplace and has yielded a satisfied, loyal client base--
which, I believe, is the best indicator of long-term success in
this business."
For the twelve months ended June 30, 1998, net revenue was $285.4
million, a 40% increase over restated net revenue of $203.7
million in fiscal 1997. Excluding acquisition-related and other
special charges, pro forma income from operations for 1998 grew
57% to $26.9 million, or 9.4% of net revenue, from $17.1 million,
or 8.4% of net revenue, in the prior year. Pro forma net income
increased 52% from $12.8 million in fiscal 1997 to $19.5 million
in 1998. This resulted in fiscal 1998 pro forma diluted earnings
per share of $0.79, a 40% increase over $0.56 per share last
year.
-more-
Consistent with the Company's growth strategy, PAREXEL completed
a number of targeted acquisitions during fiscal 1998, including:
The PPS Group (PPS), which broadens PAREXEL's service portfolio
and geographic reach within the medical marketing services
sector; Kemper-Masterson, Inc. (KMI), a leader in providing FDA
compliance, GMP consulting, and computer systems validation
services to the pharmaceutical and medical device industries;
MIRAI B.V., a full-service, pan-European contract research
organization with a particularly strong foothold in Central and
Eastern Europe; and LOGOS GmbH, a regulatory affairs consulting
firm in Freiburg, Germany that specializes in marketing approval
submissions.
These transactions have been treated as poolings of interests for
financial accounting purposes, and accordingly, the Company's
historical financial results have been restated to combine the
results of significant acquired businesses. As reported in
previous quarters, the Company recorded pretax acquisition-
related and other special charges during fiscal 1998 of $13.6
million, resulting in net income of $9.3 million, or $0.38
diluted earnings per share, for the twelve months ended June 30,
1998.
PAREXEL is one of the largest contract pharmaceutical outsourcing
organizations in the world, providing a broad range of knowledge-
based contract research and medical marketing services to the
worldwide pharmaceutical, biotechnology and medical device
industries. With a commitment to providing clients with value-
added services and solutions that accelerate time-to-market and
peak market penetration, PAREXEL has developed significant
expertise in clinical trials management, data management,
biostatistical analysis, medical marketing, clinical
pharmacology, regulatory and medical consulting, industry
training and publishing, and other drug development consulting
services. The Company's integrated services, therapeutic area
depth, and sophisticated information technology, along with its
experience in global drug development and product launch
services, represent key competitive strengths. Headquartered
near Boston, MA, PAREXEL has more than 40 offices and 3,700
employees throughout 25 countries around the world.
This release contains statements that may be "forward-looking"
statements under federal law. The Company's actual results may
differ significantly from the results discussed in the forward-
looking statements. Factors that might cause such a difference
include, but are not limited to: risks associated with the loss
or delay of large contracts; the Company's dependence on certain
industries and clients; management of growth and the ability to
attract and retain employees; acquisitions; integration of newly
acquired businesses; government regulation of certain industries
and clients; and competition or consolidation within the
industry. These factors and others are discussed more fully in
the section entitled "Risk Factors" of the Company's recently
filed Registration Statement on Form S-3 (file number: 333-6005).
PAREXEL International Corporation
Consolidated Condensed Statement of Operations
(In thousands, except per share data)
Three months ended Twelve months ended
June 30, June 30,
1998 1997(a) 1998 1998 1998 1997(a)
Pro Adjustments As
Forma(b) s Reported
Net Revenue 81,393 59,703 285,442 - 285,442 203,676
Costs and
Expenses
Direct Costs 52,793 39,338 185,718 - 185,718 135,048
Selling, 16,982 12,381 59,426 -1,610(c) 61,036 43,799
general and
admin.
Depreciation 4,076 2,566 13,430 -1,684(d) 15,114 7,710
and
amortization
Accquisition- -- -- -- -10,273(e) 10,273 --
related
charges
Income from 7,542 5,418 26,868 -13,567 13,301 17,119
operations
Other income, 754 1,342 3,698 - 3,698 4,003
net
Income before 8,296 6,760 30,566 -13,567 16,999 21,122
income taxes
Net income 5,443 4,106 19,497 -10,178(f) 9,319 12,803
Earnings per
common share:
Basic 0.22 0.18 0.81 0.39 0.59
Diluted 0.22 0.17 0.79 0.38 0.56
Shares used
in computing
earnings per
common share:
Basic 24,218 23,352 23,939 23,939 21,628
Diluted 24,969 24,339 24,825 24,825 22,822
Consolidated
Balance Sheet
Information
(In thousands)
June
30,
1998 1997
(a)
Working 118,936 113,997
Capital
Total Assets 260,892 240,544
Stockholders' 168,380 147,448
Equity
(a) The twelve and three months ended June 30, 1997 have been restated
to include the results of operations for businesses acquired during
fiscal 1998 and accounted for using the pooling of interests method.
Certain of these businesses historically reported results of
operations under a different fiscal year than PAREXEL.
Consequently, the consolidated results of operations for the
respective periods ended June 30, 1997 include the historical
results of operations for PPS and MIRAI B.V. for the respective
periods ended December 31 ,1997. The consolidated balance
sheet information as of June 30,1997 has been similarly restated.
(b) 1998 pro forma amounts exclude acquisition and other special
charges of $13.6 million, as discussed further below.
(c) Selling, general and administrative expenses for the twelve
months ended June 30, l998 include a noncash charge of $1.6
million to adjust accounts receivable reserves of recently
acquired businesses in conformity with the Company's practices.
(d) Depreciation and amortization for the twelve months ended
June 30, 1998 include a noncash charge of $1.7 million to
reflect the reduced useful lives of certain computer
equipment resulting from the integration of acquired
businesses and the Company's program to upgrade and
standardize its information technology platform.
(e) Acquisition-related charges for the twelve months ended June
30, 1998 consist primarily of legal, accounting, and
transaction fees pertaining to acquisitions during
the fiscal year, as well as compensation charges
related to employee stock options previously granted
by the acquired companies and an accelerated compensation
payment to a PPS employee pursuant to a pre-existing
employment agreement.
(f) Reflects the effect of adjustments to the provision for
income taxes.
