ICLR ICON PLC

Highlights

• Net business wins of $510 million; net book to bill of 1.21.
• Backlog of business grows 11.8% year on year to $4.25 billion.
• Net revenue increases 6.4% to $420 million in the quarter.
• Income from operations increases 13.7% to 19.3% of revenue before non-recurring charges.
• Earnings per share increases 17% to $1.19 before non-recurring charges.

ICON plc (NASDAQ: ICLR), a global provider of drug development solutions and services to the pharmaceutical, biotechnology and medical device industries, today reported its financial results for the third quarter ended September 30, 2016.

Gross business wins in the third quarter were $572 million and cancellations in the quarter were $62 million, resulting in net business wins of $510 million, a net book to bill of 1.21.

In the third quarter net revenue grew 6.4% year on year to $420.2 million from $394.7 million in the same quarter last year.

Income from operations, before non-recurring charges in the quarter, increased by 13.7% to $81.2 million or 19.3% of revenue, compared to $71.4 million or 18.1% for the same quarter last year.

Net income, before non-recurring charges in the quarter, increased by 9.6% to $67.4 million compared with $61.5 million in the same quarter last year.

Earnings per share, before non-recurring charges, increased to $1.19 per share on a diluted basis, from $1.02 per share for the same quarter last year, an increase of 17%.

Year to date revenue for 2016 increased by 5.1% to $1,231.4 million from $1,171.6 million in 2015.

Year to date income from operations for 2016, before non-recurring charges, increased by 14.1% to $235.2 million or 19.1% of revenue compared with $206.2 million or 17.6% of revenue in the previous year.

Year to date net income for 2016, before non-recurring charges, increased by 10.8% to $195.1 million compared with $176.0 million last year.

Year to date earnings per share before non-recurring charges increased to $3.45 per share on a diluted basis from $2.85 per diluted share last year, an increase of 21%.

Day’s sales outstanding, comprising accounts receivable and unbilled revenue less payments on account, were 50 days at September 30, 2016, compared with 46 days at the end of June 30, 2016 and 46 days at the end of September 2015.

Cash generated from operating activities for the quarter was $52 million. Capital expenditure for the quarter was $9.5 million and the acquisition of Clinical Research Management, Inc. was completed for an initial cash consideration of $52.4 million. As a result, at September 30, 2016, the company had net debt of $98 million, compared to net debt of $97 million at June 30, 2016 and net debt of $31 million at end of September 2015.

During the quarter the company recorded a charge of $4.1 million in relation to restructuring costs. US GAAP income from operations after these items amounted to $77.1 million or 18.4% of revenue. US GAAP net income for the quarter was $63.9 million or $1.13 per diluted share.

CEO Ciaran Murray commented, “Quarter three was a strong quarter for ICON. Net business wins were $510 million, representing a book to bill of 1.21 and our backlog grew by almost 12% over last year to $4.25 billion. As a result revenue grew 6.4% over the same quarter last year to $420 million and earnings per share increased by 17% to $1.19. Our continuing success in winning business, growing our backlog and diversifying our customer base positions us well for future growth.”

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this press release contains certain non-GAAP financial measures, including non-GAAP operating and net income and non-GAAP diluted earnings per share. While non-GAAP financial measures are not superior to or a substitute for the comparable GAAP measures, ICON believes certain non-GAAP information is useful to investors for historical comparison purposes.

ICON will hold its third quarter conference call today, October 20, 2016 at 9:00 EDT [14:00 Ireland & UK]. This call and linked slide presentation can be accessed live from our website at http://investor.iconplc.com. A recording will also be available on the website for 90 days following the call. In addition, a calendar of company events, including upcoming conference presentations, is available on our website, under “Investors”. This calendar will be updated regularly.

This press release contains forward-looking statements. These statements are based on management's current expectations and information currently available, including current economic and industry conditions. These statements are not guarantees of future performance or actual results, and actual results, developments and business decisions may differ from those stated in this press release. The forward-looking statements are subject to future events, risks, uncertainties and other factors that could cause actual results to differ materially from those projected in the statements, including, but not limited to, the ability to enter into new contracts, maintain client relationships, manage the opening of new offices and offering of new services, the integration of new business mergers and acquisitions, as well as economic and global market conditions and other risks and uncertainties detailed from time to time in SEC reports filed by ICON, all of which are difficult to predict and some of which are beyond our control. For these reasons, you should not place undue reliance on these forward-looking statements when making investment decisions. The word "expected" and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are only as of the date they are made and we do not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise. More information about the risks and uncertainties relating to these forward-looking statements may be found in SEC reports filed by ICON, including its Form 20-F, F-1, S-8 and F-3, which are available on the SEC's website at http://www.sec.gov.

ICON plc is a global provider of drug development solutions and services to the pharmaceutical, biotechnology and medical device industries. The company specialises in the strategic development, management and analysis of programs that support clinical development - from compound selection to Phase I-IV clinical studies. With headquarters in Dublin, Ireland, ICON currently, operates from 88 locations in 37 countries and has approximately 12,600 employees. Further information is available at www.iconplc.com.

ICON/ICLR-F

 

ICON plc

Consolidated Income Statements (Unaudited)

(Before restructuring costs)

 

Three and Nine Months ended September 30, 2016 and September 30, 2015

(Dollars, in thousands, except share and per share data)

      Three Months Ended Nine Months Ended September 30,     September 30,   September 30,     September 30,  

2016

2015

2016

2015

Revenue: Gross revenue $622,261 $557,095 $1,754,491 $1,584,559 Reimbursable expenses (202,060)     (162,354)     (523,138)     (412,930)   Net revenue 420,201 394,741 1,231,353 1,171,629   Costs and expenses: Direct costs 243,244 226,555 709,831 679,593 Selling, general and administrative expense 81,235 82,435 242,192 243,310 Depreciation and amortization 14,543     14,366     44,120     42,535   Total costs and expenses 339,022     323,356     996,143     965,438   Income from operations 81,179 71,385 235,210 206,191   Net interest expense (2,765)     (647)     (8,485)     (660)   Income before provision for income taxes 78,414 70,738 226,725 205,531   Provision for income taxes (10,978)     (9,196)     (31,668)     (29,534)   Net income $67,436     $61,542     $195,057     $175,997   Net income per Ordinary Share:   Basic $1.21     $1.05     $3.52     $2.95   Diluted $1.19     $1.02     $3.45     $2.85   Weighted average number of Ordinary Shares outstanding:   Basic 55,734,773     58,659,782     55,355,020     59,728,608   Diluted 56,645,239   60,369,898     56,475,319     61,785,849    

Consolidated Income Statements (Unaudited)

(US GAAP including restructuring costs)

 

Three and Nine Months ended September 30, 2016 and September 30, 2015

(Dollars, in thousands, except share and per share data)

      Three Months Ended Nine Months Ended September 30,     September 30,   September 30,     September 30,  

2016

2015

2016

2015

Revenue: Gross revenue $622,261 $557,095 $1,754,491 $1,584,559 Reimbursable expenses (202,060)     (162,354)     (523,138)     (412,930)   Net revenue 420,201 394,741 1,231,353 1,171,629   Costs and expenses: Direct costs 243,244 226,555 709,831 679,593 Selling, general and administrative expense 81,235 82,435 242,192 243,310 Depreciation and amortization 14,543 14,366 44,120 42,535 Restructuring charge 4,065     -     8,159     -   Total costs and expenses 343,087     323,356     1,004,302     965,438   Income from operations 77,114 71,385 227,051 206,191   Net interest expense (2,765)     (647)     (8,485)     (660)   Income before provision for income taxes 74,349 70,738 218,566 205,531   Provision for income taxes (10,470)     (9,196)     (30,649)     (29,534)   Net income $63,879     $61,542     $187,917     $175,997   Net income per Ordinary Share:   Basic $1.15     $1.05     $3.39     $2.95   Diluted $1.13     $1.02     $3.33     $2.85   Weighted average number of Ordinary Shares outstanding:   Basic 55,734,773   58,659,782     55,355,020     59,728,608   Diluted 56,645,239   60,369,898     56,475,319     61,785,849    

ICON plc

Summary Balance Sheet Data

September 30, 2016 and June 30, 2016

(Dollars, in thousands)

      September 30, June 30, 2016 2016 (Unaudited) (Unaudited)     Cash and short-term investments 303,720 250,951 Debt (401,417) (348,322) Net (debt)/cash (97,697) (97,371)   Accounts receivable 403,667 366,903 Unbilled revenue 196,863 190,025 Payments on account (250,833) (257,514) Total 349,697 299,414   Working Capital 550,789 452,073   Total Assets 1,900,478 1,750,240   Shareholder's Equity 991,860 909,969  

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ICON plcInvestor Relations, 1-888-381-7923orBrendan Brennan, + 353 1 291 2000Chief Financial OfficerorSimon Holmes, +353 1 291 2000EVP IR & Corporate Developmenthttp://www.iconplc.com