Cleveland PR NewswirePress releases from Ohio companies
| Kendle Announces Third Quarter 2009 Results
Improves Sequential Quarter Earnings
CINCINNATI, Nov. 4 /PRNewswire-FirstCall/ -- Kendle (Nasdaq: KNDL), a
leading, global full-service clinical research organization, today reported
solid net income of $8.8 million or $0.59 per diluted share for the third
quarter of 2009, primarily the result of strong execution of its cost
control initiatives, compared with net income of $9.4 million or $0.62 per
diluted share for the third quarter of 2008. On a pro forma basis,
excluding the additional non-cash interest and restructuring charge, net
income per diluted share for the third quarter of 2009 was $0.71 compared
with $0.73 per diluted share for the third quarter of 2008.
Third Quarter 2009 Results
Net revenues for the third quarter ended Sept. 30, 2009, were $104.6
million, down slightly from the second quarter. On a constant currency
basis this is $111.9 million compared with $124.8 million for the same
period of the prior year.
Operating income for the quarter increased from the second quarter of
2009 to $15.5 million or 14.9 percent of net revenues, primarily related to
the Company's cost control initiatives coupled with the resolution of an
insurance claim, previously discussed in connection with its Year End 2008
press release. The insurance recovery resulted in a $5.0 million reduction
of direct costs for the third quarter of 2009. This reduction was partially
offset by $1.6 million of additional expense to adjust a related liability.
The net effect of these two items was to increase operating income by $3.4
million or 3.3 percent of net revenue. On a constant currency basis
operating income was $17.8 million or 15.9 percent of net revenues compared
with $15.9 million or 12.7 percent of net revenues for the third quarter of
2008.
New business awards for the third quarter of 2009 totaled $137.2
million, up from $132 million in the second quarter of 2009. Gross book to
bill for the third quarter was a solid 1.3 to 1.0. Contract cancellations
for the quarter were $53.8 million or 6.1 percent of the Company's backlog
at June 30, 2009 and representing a net book-to-bill of 0.8 to 1.0. Total
business authorizations amounted to $846.0 million at Sept. 30, 2009.
Cash flow from operations for the third quarter of 2009 was $10.6
million. Cash, cash equivalents and marketable securities at Sept. 30, 2009
totaled $57.7 million. Days sales outstanding in accounts receivables
continue to be strong at 33 days compared with 46 days in the third quarter
of 2008. Capital expenditures for the quarter totaled $2.9 million,
composed primarily of investments in IT infrastructure related to the
Company's implementation of an ERP system.
Open Market Repurchase
During the quarter, the Company paid $13.3 million in the open market
to repurchase par value of $15.0 million of its convertible debt.
Year-to-date, the Company has repurchased par value $40.0 million of its
convertible debt for a total cost of $31.6 million. As a result of this
program, the Company expects to reduce interest expense by approximately
$9.8 million over the remaining term of the convertible notes, which
includes approximately $750,000 in the fourth quarter of 2009.
Nine-Month Results
Net revenues for the nine-month period ended Sept. 30, 2009 were $320.0
million. This is $355.4 million on a constant currency basis and compares
with $365.9 million reported for the same period in 2008.
Operating income for the first nine months of 2009 was $30.6 million or
9.6 percent of net service revenues. On a constant currency basis and
excluding the restructuring charge taken in the second quarter of 2009,
operating income is strong at $46.1 million or 13.0 percent of net revenues
compared with $45.9 million or 12.5 percent of net revenues for same period
of the prior year. The previously discussed insurance recovery and related
item had a net positive impact on the year-to-date operating margin of 1.0
percent of net revenues.
Net income was $12.9 million for the first nine months of 2009 compared
with net income of $19.8 million for the same period last year. Net income
per share on a diluted basis for the nine months ended Sept. 30, 2009 was
$0.86 per share compared with $1.32 per diluted share for the first nine
months of 2008. On a pro forma basis, net income per diluted share for the
first nine months of 2009 was $1.61 compared with $1.63 for 2008.
Cash flow from operations for the first nine months of 2009 was strong
at $50.0 million compared with $3.5 million for the same period of the
prior year. Capital expenditures for the nine month period totaled $14.1
million versus $18.1 million for the same period last year.
Third Quarter 2009 Conference Call and Webcast Details
Kendle will host its Third Quarter 2009 conference call on Nov. 5,
2009, at 8:30 a.m. Eastern Time. The call will be broadcast live over the
Internet and can be accessed at http://www.kendle.com. A replay of the Webcast
will be available at http://www.kendle.com shortly after the call for on-demand
replay through 5 p.m. Eastern Time on Dec. 4, 2009.
About Kendle
Kendle International Inc. (Nasdaq: KNDL) is a leading global clinical
research organization providing the full range of early- to late-stage
clinical development services for the world's biopharmaceutical industry.
Our focus is on innovative solutions that reduce cycle times for our
customers and accelerate the delivery of life-enhancing drugs to market for
the benefit of patients worldwide. As one of the world's largest global
providers of Phase I-IV services, we offer experience spanning more than
100 countries, along with industry-leading patient access and retention
capabilities and broad therapeutic expertise, to meet our customers'
clinical development challenges.
Additional information and investor kits are available upon request
from Kendle, 441 Vine Street, Suite 500, Cincinnati, OH 45202 or from the
Company's Web site at http://www.kendle.com.
Use of Non-GAAP Financial Measures
This press release contains adjustments to net service revenues, income
from operations, net income and earnings per share calculated in accordance
with Generally Accepted Accounting Principles ("GAAP") in the United
States. These adjusted or "pro forma" results are and should be read in
connection with the reconciliation provided in this press release. We
believe that investors' understanding of performance is enhanced by
disclosing these non-GAAP financial measures as a reasonable basis for
comparison of our ongoing results of operations. Non-GAAP measures should
not be considered a substitute for GAAP-based measures and results. Our
non-GAAP measures may not be comparable to non-GAAP measures of other
companies.
Forward-Looking Statements
Certain statements and information contained in this press release may
be deemed to be forward-looking statements under federal securities laws
and the provisions of the Private Securities Litigation Reform Act of 1995
and Kendle intends that such forward-looking statements be subject to the
safe-harbor created thereby. All such forward-looking statements, including
the statements contained herein regarding anticipated trends in the
Company's business, are based largely on management's expectations and are
subject to and qualified by risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by such
statements. These risks and uncertainties include, but are not limited to,
(a) competitive factors in the industry, (b) drug-development activity and
outsourcing trends in the biopharmaceutical industry, (c) the Company's
ability to manage growth, including integration of acquired businesses and
implementation of information technology solutions, (d) the Company's
dependence on the skills, experience and efforts of its employees and
management team in the geographic regions and therapeutic areas in which
the Company operates and the risks associated with hiring, managing and
retaining members of this team (e) the fixed-price nature of contracts and
cost overruns, (f) the loss, cancellation or delay of contracts or
amendments thereto, (g) the mix of contracts in the Company's backlog and
the sales cycle for these contracts, (h) the Company's ability to service
its indebtedness and maintain adequate credit facilities and credit lines,
(i) the effects of exchange rate fluctuations, (j) the risks related to the
Company's international operations, (k) the amount of goodwill and other
intangible assets on the Company's balance sheet and the potential for
write-downs of these assets if they become impaired under accounting rules;
(l) changes in regulation of the drug-development process, (m) litigation
that might arise from patient volunteers in the drug development process,
(n) natural disasters, acts of war or other similar events that could have
an adverse effect on the Company's operations, and (o) other risks as
detailed from time to time in Kendle's Annual Report on Form 10-K as well
as periodic reports filed with the SEC. In addition, no assurance can be
given that the Company will be able to realize the net service revenues
included in backlog. The Company believes that its aggregate backlog is not
necessarily a meaningful indicator of future results. All information in
this press release is current as of Nov. 4, 2009. The Company undertakes no
duty to update any forward-looking statement to conform the statement to
actual results or changes in the Company's expectations.
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