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):
October 26, 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)
Item 5. Other Events
On October 26, 1999, the Company issued two press releases, copies of which are
attached as Exhibit 99.1 and 99.2 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 October 26, 1999.
99.2 Press release of the Company dated October 26, 1999.
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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, thereunto duly authorized, on this 8th day of November, 1999.
PAREXEL INTERNATIONAL CORPORATION
Dated November 8, 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 October 26, 1999
99.2 Press release of the Company dated October 26, 1999
<PAGE>
EXHIBIT 99.1
<PAGE>
FOR IMMEDIATE RELEASE
www.PAREXEL.com
CONTACT: Ethel Shepard, Public Relations
(781) 434-4709
[email protected]
PAREXEL ANNOUNCES CLIENT-BASED ORGANIZATION
-- Client Research Units Formed With Global Client Accountability --
Boston, MA, October 26, 1999 - PAREXEL International Corporation (Nasdaq: PRXL)
announced today the realignment of its Contract Research Services (CRS) business
into discrete operating units. These units, known as Client Research Units
(CRUs), focus on the needs of specific client segments, with full operational
capability tailored to the differing requirements of each segment. Each CRU, led
by a general manager responsible for all CRU activity worldwide, encompasses
personnel for client-focused project management, clinical monitoring and data
management.
"The CRU structure is an evolution of our existing client service model, which
has been very effective in providing PAREXEL customers with the highest level of
customized service and worldwide development expertise," stated Josef H. von
Rickenbach, Chairman and Chief Executive Officer of PAREXEL. "As we continue to
innovate and build on the excellence of our core clinical research activities,
this organization allows us to optimize our global resources to meet the
expanding needs of our clients and positions us for client-focused growth. In
addition, it positions PAREXEL to better leverage our significant scientific
resources and more rapidly implement new technologies."
The realignment also includes the creation of two additional operating units
designed to provide drug development and therapeutic expertise, advanced
technologies and clinical trial optimization services to CRUs. The Scientific
and Medical Services (SMS) Unit, led by Warren Stern, Ph.D., integrates
PAREXEL's scientific and medical expertise into a single operating unit. The
Advanced Technology & Informatics (ATI) Group, led by Mark A. Goldberg, M.D.,
focuses on applying new technologies to accelerate the clinical development
process.
The SMS Unit will incorporate Medical Affairs, Medical Writing, Biostatistics,
Pediatric Drug Development, Therapeutic Area Groups and the Company's Academic
Alliances. An important function of this unit is to support the CRUs in
designing and implementing full development programs for new compounds.
PAREXEL's ATI Group leads technology development, implementation and innovation
for the CRUs. It includes a comprehensive array of technology-based services for
clinical development, trial management and communications, and data management.
A key component of ATI is the newly-formed e-Services group, which integrates
PAREXEL's web-based offerings including electronic data capture, patient
randomization, knowledge management tools, electronic diaries, and customized
trial management and communications tools. Other services within the ATI Group
include medical diagnostics services, (including medical imaging and ECG),
interactive voice response systems (IVRS), site services, data capture and
advanced data management tools. The group is also responsible for information
technology supporting clinical research applications.
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 Company's ability to execute the realignment of the CRS
business; client acceptance of the Company's realignment of the CRS business;
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 Annual Report on Form 10-K for the year
ended June 30, 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
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 operates in 46
locations throughout 29 countries around the world, and has approximately 4,400
employees.
<PAGE>
EXHIBIT 99.2
<PAGE>
FOR IMMEDIATE RELEASE www.PAREXEL.com
CONTACTS: Bill Sobo, Senior Vice President, Chief Financial Officer
Jill Baker, Director of Investor Relations
(781) 434-4118
PAREXEL REPORTS FIRST QUARTER FINANCIAL RESULTS
Boston, MA, October 26, 1999 - PAREXEL International Corporation (Nasdaq: PRXL)
today announced its financial results for the first quarter ended September 30,
1999.
For the three months ended September 30, 1999, PAREXEL's consolidated net
revenue increased 11% to $91.8 million, from $82.8 million in the prior-year
quarter. Income from operations was $6.1 million, a 20.7% decrease over
operating income of $7.7 million in the prior-year quarter. Net income for the
quarter was $4.4 million, or $0.18 per diluted share, compared with net income
of $5.5 million, or $0.22 per diluted share for the quarter ended September 30,
1998.
On a segment basis, revenues for the first quarter were $65.1 million in
Contract Research Services, $15.3 million in the Consulting Group, and $11.3
million in Medical Marketing Services.
"I am pleased that PAREXEL delivered results in line with analysts' consensus
estimates in the first fiscal quarter. During the quarter, we focused on
redefining our strategy and realigning our core business, Contract Research
Services, to more efficiently and effectively meet the needs of our clients. We
believe that the actions we are taking in this key business unit will improve
both operational execution and client satisfaction," said Josef von Rickenbach,
Chairman and Chief Executive Officer of PAREXEL.
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
Annual Report on Form 10-K for the fiscal year ended June 30, 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
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 operates in 46
locations throughout 29 countries around the world, and has approximately 4,400
employees.
<TABLE>
PAREXEL International Corporation
Consolidated Condensed Statement of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended
September 30,
1999 1998
---------------- -----------------
<CAPTION>
<S> <C> <C>
Net revenue $91,768 $82,835
---------------- -----------------
Costs and expenses:
Direct costs 62,133 53,737
Selling, general and administrative 18,765 17,179
Depreciation and amortization 5,095 4,242
Facilities charge (benefit) (a) (312) -
---------------- -----------------
Income from operations 6,087 7,677
Other income, net 774 713
---------------- -----------------
Income before income taxes $6,861 $8,390
================ =================
Net income $4,439 $5,505
================ =================
Earnings per common share:
Basic $0.18 $0.22
Diluted $0.18 $0.22
Shares used in computing earnings per common share:
Basic 25,153 24,677
Diluted 25,285 25,097
Consolidated Balance Sheet Information
(In thousands) (Unaudited)
September 30, June 30,
1999 1999
---------------- -----------------
Working capital $135,511 $132,757
Total assets 365,636 333,565
Stockholders' equity 198,602 192,032
</TABLE>
(a) Adjustment to the $2.8 million leasehold abandonment charge
recorded in the June 1999 quarter, to reflect the favorable impact
of a lease buyout agreement.
<TABLE>
PAREXEL International Corporation
Segment Information
($ in thousands)
(Unaudited)
Three months ended
September 30,
1999 1998
---------------- -----------------
<CAPTION>
Contract Research Services
------------------------------------
<S> <C> <C>
Net revenue $65,093 $55,775
% of Total net revenue 71% 67%
Gross profit $23,446 $21,086
Gross margin 36% 38%
Consulting Group
------------------------------------
Net revenue $15,335 $13,249
% of Total net revenue 17% 16%
Gross profit $3,143 $4,156
Gross margin 20% 31%
Medical Marketing Services
------------------------------------
Net revenue $11,340 $13,811
% of Total net revenue 12% 17%
Gross profit $3,046 $3,856
Gross margin 27% 28%
Total net revenue $91,768 $82,835
Total gross profit $29,635 $29,098
Gross margin 32% 35%
</TABLE>
