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):
April 27, 1998
PAREXEL International Corporation
(Exact Name of Registrant as Specified in Charter)
Massachusetts 0-27058 04-2776269
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
incorporation)
195 West Street, Waltham, Massachusetts 02154
(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 April 27, 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 April 27, 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: April 27, 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 April 27, 1998
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS: Bill Sobo, Senior Vice President, Chief Financial
Officer
Virginia Lacke, Investor Relations
(781) 487-9904, ext. 4118
PAREXEL REPORTS FINANCIAL RESULTS FOR
THREE MONTHS ENDED MARCH 31, 1998
Boston, MA, April 27, 1998 -- PAREXEL International Corporation
(Nasdaq: PRXL) today reported consolidated net revenue of $73.1
million, pro forma income from operations (before acquisition-
related and other charges) of $7.0 million, or 9.6% of net
revenue, and pro forma diluted earnings per share of $0.21 for
the three months ended March 31, 1998.
As previously announced on March 2, 1998, PAREXEL acquired
several European-based companies during
the quarter, significantly expanding its critical mass, presence
and capabilities across Europe. The acquired companies include:
The PPS Group (PPS), which broadens PAREXEL's service portfolio
and geographic reach in the contract marketing services sector;
MIRAI B.V., a full-service, pan-European contract research
organization formerly part of the VERUM alliance; 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 discussed below, the Company recorded
charges of $7.8 million during the quarter in connection with
these acquisitions, and a non-cash charge of $1.7 million related
to the write-down of certain fixed assets.
For the three months ended March 31, 1998, PAREXEL's consolidated
net revenue was $73.1 million, representing a 41% increase over
the prior year calculated on a pro forma restated basis (see
below). Pro forma income from operations for the quarter ended
March 31, 1998 increased 70% to $7.0 million, or 9.6%
of net revenue, compared to pro forma income from operations of
$4.1 million, or 8.0% of net revenue, last year. Pro forma net
income was $5.1 million, or $0.21 diluted earnings per share, for
the current quarter versus pro forma net income of $3.5 million,
or $0.15 per share, in the prior year. This represents a 48%
increase in pro forma net income and a 37% increase in pro forma
earnings per share.
In accordance with Generally Accepted Accounting Principles
(GAAP) governing the consolidation of companies with differing
audited fiscal years, the Company's actual restated amounts for
the quarter ended March 31, 1997 (third fiscal quarter) include
the financial results of the acquired businesses for the quarter
ended September 30, 1997 (third fiscal quarter of businesses
acquired). Net revenue growth was 36% for the quarter based on
these restated prior-year results. Pro forma restated amounts
for the quarter ended March 31, 1997 are presented to directly
align the time periods of companies consolidated, and therefore,
include the financial results of the acquired businesses for the
quarter ended March 31, 1997.
"PAREXEL has delivered another quarter of solid growth in
revenues, operating margins, and earnings, indicative of the
healthy environment for drug development and PAREXEL's favorable
competitive position as one of the premier, global providers of
integrated contract research and contract marketing services,"
emphasized Josef H. von Rickenbach, Chairman and Chief Executive
Officer of PAREXEL. "Executing an aggressive selling strategy
across North America, Europe and Asia, PAREXEL remains committed
to gaining market share, increasing backlog, and building our
quality franchise through internal growth and targeted
acquisitions. I am proud of our recent acquisitions and quite
pleased that the integration of these businesses is progressing
ahead of plan."
During the March 1998 quarter, the Company recorded $7.8 million
of acquisition-related charges, which consist primarily of legal,
accounting and transaction fees pertaining to the aforementioned
acquisitions; compensation charges for employee stock options
previously issued by PPS and an accelerated payment to a PPS
employee pursuant to a pre-existing employment agreement; and non-
cash adjustments to accounts receivable reserves of the acquired
businesses to comply with Company practices. Of these charges,
$1.6 million has been recorded in selling, general and
administrative expenses. In addition, as part of its
integration of acquired businesses and current program to
standardize its information technology platform,
the Company elected to upgrade certain computer equipment
throughout the organization. This resulted in a charge of $1.7
million in the March 1998 quarter to reflect the reduced useful
lives of the fixed assets identified for replacement. Including
the impact of these charges aggregating $9.5 million, PAREXEL
reported a net loss of $2.4 million, or $0.10 diluted loss per
share, for the three months ended March 31,
1998.
For the nine months ended March 31, 1998, PAREXEL's reported net
revenue was $204.0 million, representing a 42% increase over the
prior year. After acquisition-related and other charges, income
from operations was $5.8 million in 1998 compared to $11.7
million in 1997. Net income after charges was $3.9 million, or
$0.16 diluted earnings per share, for the nine-month period ended
March 31, 1998 versus $8.7 million, or $0.40 per share, last
year.
PAREXEL is a leading contract research and contract marketing
services organization providing a broad range of knowledge-based
outsourcing services to the worldwide pharmaceutical,
biotechnology and medical device industries. Over the past
fifteen years, PAREXEL has developed significant expertise in
clinical trials management, data management, biostatistical
analysis, contract 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 41 offices and 3,500 employees throughout 24 countries around
the world.
This release may contain 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" in
the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1997.
