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 17, 1999
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PAREXEL International Corporation
(Exact name of Registrant as specified in its charter)
Massachusetts 0-27058 04-2776269
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
195 West Street, Waltham, Massachusetts 02451
(Address of principal executive offices) (Zip Code)
(781) 487-9900
(Registrant's telephone number
including area code)
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Item 5. Other Events
On August 17, 1999, 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 17, 1999.
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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, thereunto duly authorized, on this 17th day of August, 1999.
PAREXEL INTERNATIONAL CORPORATION
Dated August 17, 1999 By: /s/ William T. Sobo, Jr.
William T. Sobo, Jr.
Senior Vice President
Chief Financial Officer
Treasurer and Clerk
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EXHIBIT INDEX
Exhibit No. Description
99.1 Press release of the Company dated August 17, 1999
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Exhibit 99.1
FOR IMMEDIATE RELEASE www.PAREXEL.com
CONTACTS: Bill Sobo, Senior Vice President, Chief Financial Officer
Jill Baker, Director of Investor Relations
(781) 487-9904 extension 4118
PAREXEL REPORTS FOURTH QUARTER AND
FISCAL 1999 FINANCIAL RESULTS
Boston, MA, August 17, 1999 - 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, 1999.
On a pro forma basis, taking into effect the items discussed in the paragraph
below, PAREXEL's consolidated pro forma net revenue for the three months ended
June 30, 1999 was $91.3 million, which reflected growth of 12% over net revenue
of $81.4 million in the prior-year period. For the quarter ended June 30, 1999
pro forma income from operations was $6.1 million, a 20% decrease over operating
income of $7.5 million in the prior year quarter. Pro forma earnings per share
of $0.18 for the quarter ended June 30, 1999 declined 17% over the same period
one year ago.
During the June 1999 quarter, the Company recorded $4.65 million of
merger-related and facilities charges, which consists of $1.85 million of costs
related to the terminated merger agreement with Covance Inc. and $2.8 million
related to leasehold abandonment charges resulting primarily from the
centralization of certain facilities in North America and Europe. In addition,
the Company booked a $3.5 million charge to reduce revenue resulting from
lowering the estimated contract value related to a contract payment
renegotiation, which is anticipated to be resolved prior to the calendar year
end. Reflecting the charges above, the Company reported net revenue of $87.8
million, loss from operations of $2.1 million, and net loss per share of $.03
for the quarter ended June 30, 1999.
PAREXEL reported new business authorizations of $127 million for the June 1999
quarter, up 15% over the prior-year period, and backlog at June 30, 1999 was
$356 million, up 25% over June 30, 1998.
"Fiscal 1999 was an eventful year for PAREXEL, and we believe that during the
June quarter we have taken important steps to positively position the company
for the future. We are focusing on our core business, the second largest
clinical drug development organization in the world, and have commenced
reorganization efforts in that business to further emphasize our client focus
and to generate improved operational execution." said Josef von Rickenbach,
Chairman and Chief Executive Officer of PAREXEL.
For the year ended June 30, 1999, net revenue of $348.5 million grew 22% over
the prior year's net revenue of $285.4 million. Before giving effect to
merger-related and facilities charges of $4.65 million and $10.3 million in
fiscal 1999 and 1998, respectively, income from operations was $25.2 million and
$23.6 million, reflecting year over year growth of 7%, and earnings per share
were $0.74 and $0.70 reflecting fiscal 1999 growth of 6% over fiscal 1998.
This release contains "forward-looking" statements regarding future results and
events, including statements regarding expected future growth and customer
demand. The Company's actual future results may differ significantly from the
results discussed in the forward-looking statements contained in this release.
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; the Company's ability to manage
growth and its ability to attract and retain employees; the Company's ability to
complete additional acquisitions and to integrate newly acquired businesses;
government regulation of certain industries and clients; competition and
consolidation within the industry; the potential for significant liability to
clients and third parties; the potential adverse impact of health care reform;
and the effects of exchange rate fluctuations. These 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, 1999.
PAREXEL is one of the largest contract pharmaceutical outsourcing organizations
in the world, providing a broad range of knowledge-based contract research,
medical marketing and consulting services to the worldwide pharmaceutical,
biotechnology and medical device industries. With a commitment to providing
clients 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 manages more than
45 locations and has approximately 4,200 employees throughout 29 countries
around the world.
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<TABLE>
PAREXEL International Corporation
Consolidated Condensed Statement of Operations
(In thousands, except per share data)
<CAPTION>
Three months ended Year ended
June 30, June 30,
1999 (a) 1998 1999 (a) 1998 (b)
------------- ------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net revenue $87,764 $81,393 $348,486 $285,442
------------- ------------- --------------- ---------------
Costs and expenses:
Direct costs 61,599 52,793 233,650 185,718
Selling, general and administrative 18,898 16,982 71,690 61,036
Depreciation and amortization 4,710 4,076 17,932 15,114
Merger-related and facilities charges 4,650 - 4,650 10,273
------------- ------------- --------------- ---------------
Income (loss) from operations (2,093) 7,542 20,564 13,301
Other income, net 1,003 754 3,387 3,698
------------- ------------- --------------- ---------------
Income (loss) before income taxes $(1,090) $ 8,296 $ 23,951 $ 16,999
============= ============= =============== ===============
Net income (loss) $ (709) $ 5,443 $ 15,622 $ 9,319
============= ============= =============== ===============
Earnings (loss) per common share:
Basic $ (0.03) $ 0.22 $ 0.63 $ 0.39
Diluted $ (0.03) $ 0.22 $ 0.62 $ 0.38
Shares used in computing earnings (loss) per common share:
Basic 25,097 24,218 24,848 23,939
Diluted 25,097 24,969 25,128 24,825
Consolidated Balance Sheet Information
(In thousands)
June 30, June 30,
1999 1998
------------- -------------
Working capital $132,757 $118,937
Total assets 333,564 261,758
Stockholders' equity 192,034 168,380
</TABLE>
(a) During the three months and year ended June 30, 1999, the Company recorded a
$3.5 million charge to reduce revenues resulting from lowering the estimated
contract value related to a contract payment renegotiation. In addition, during
the same periods, the Company recorded $1.85 million in costs related to the
terminated merger agreement with Covance Inc. and $2.8 million in leasehold
abandonment charges resulting primarily from the centralization of certain
facilities in North America and Europe.
(b) During the year ended June 30, 1998, the Company incurred $10.3 million in
merger-related costs in connection with several acquisitions accounted for under
the pooling of interests method. In addition, income from operations for the
same period includes a noncash charge of $1.6 million to selling, general and
administrative costs to adjust the receivable reserves of acquired businesses
and a noncash charge of $1.7 million to depreciation and amortization to reflect
the reduced useful lives of certain computer equipment.
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<TABLE>
PAREXEL International Corporation
Pro Forma Consolidated Condensed Statement of Operations
(In thousands, except per share data)
<CAPTION>
For the three months ended June 30,
--------------------------------------------------------------------------------
1998 1999
---------------- ---------------------------------------------------------
Pro forma Adjustments As reported
<S> <C> <C> <C> <C> <C>
Net revenue $ 81,393 $ 91,264 $ (3,500) (a) $ 87,764
---------------- -------------- ---------------- ---------------
Costs and expenses:
Direct costs 52,793 61,599 61,599
Selling, general and administrative 16,982 18,898 18,898
Depreciation and amortization 4,076 4,710 4,710
Merger-related and facilities charges - - 4,650 (b) 4,650
---------------- -------------- ---------------- ---------------
Income (loss) from operations 7,542 6,057 (8,150) (2,093)
Other income, net 754 1,003 1,003
---------------- -------------- ---------------- ---------------
Income (loss) before income taxes $ 8,296 $ 7,060 $ (8,150) $ (1,090)
================ ============== ================ ===============
Net income (loss) $ 5,443 $ 4,588 $ (5,297) $ (709)
================ ============== ================ ===============
Earnings (loss) per common share:
Basic $ 0.22 $ 0.18 $ (0.03)
Diluted $ 0.22 $ 0.18 $ (0.03)
Shares used in computing earnings (loss) per common share:
Basic 24,218 25,097 25,097
Diluted 24,969 25,258 25,097
</TABLE>
(a) Reduction in revenue resulting from lowering the estimated contract value
related to a contract payment renegotiation.
(b) Merger-related and facilities charges include $1.85 million of costs related
to the terminated merger agreement with Covance Inc. and $2.8 million in
leasehold abandonment charges resulting primarily from the centralization of
certain facilities in North America and Europe.
