UNITED STATES
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 Earliest Event reported):
July 27, 2015
PRA Health Sciences, Inc.
(Exact name of registrant as specified in its charter)
Delaware |
|
001-36732 |
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46-3640387 |
(State or other jurisdiction of incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification No.) |
4130 ParkLake Avenue
Suite 400
Raleigh, NC 27612
(919) 786-8200
(Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c))
Item 2.02 Results of Operations and Financial Conditions.
On July 27, 2015, PRA Health Sciences, Inc. (the Company) issued a press release announcing the results of the Companys operations for the quarter ended June 30, 2015, and the availability of the Companys second quarter financial supplement on the Companys web site. The press release and the financial supplement are furnished as Exhibits 99.1 and 99.2 to this Report and are hereby incorporated by reference in this Item 2.02.
As provided in General Instruction B.2 of Form 8-K, the information and exhibits contained in this Form 8-K shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
See the Exhibit Index immediately following the signature page hereto, which is incorporated herein by reference.
2
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned hereunto duly authorized.
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PRA Health Sciences, Inc. |
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|
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Date: July 27, 2015 |
By: |
/s/ Linda Baddour |
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Name: |
Linda Baddour |
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Title: |
Executive Vice President and Chief Financial Officer |
3
EXHIBIT INDEX
99.1 |
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Press Release, dated July 27, 2015, reporting results of operations (This exhibit is furnished and not filed.) |
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99.2 |
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Second Quarter 2015 Financial Supplement of PRA Health Sciences, Inc. (This exhibit is furnished and not filed.) |
4
Exhibit 99.1
FOR IMMEDIATE RELEASE
PRA Health Sciences, Inc. Reports Second Quarter 2015 Results and Provides Updated Guidance for 2015
· $336.5 million of service revenue in the second quarter; 12% constant currency growth compared to the second quarter of 2014
· $61.3 million of Adjusted EBITDA in the second quarter; 35% growth compared to the second quarter of 2014
· Second quarter Adjusted Net Income per share increased 37% to $0.47 per share and Adjusted Net Income increased 112% to $29.7 million compared to the second quarter of 2014
· Second quarter GAAP Net Income was $12.4 million or $0.20 per diluted share
· Guidance for 2015 diluted Adjusted Net Income per share raised to $1.75-$1.85 from $1.62-$1.72
RALEIGH, N.C., July 27, 2015 PRA Health Sciences, Inc. (PRA or the Company) (NASDAQ: PRAH) today reported financial results for the quarter ended June 30, 2015.
For the three months ended June 30, 2015, service revenue was $336.5 million, which represents growth of 8%, or $25.1 million, compared to the second quarter of 2014 at actual foreign exchange rates. On a constant currency basis, service revenue grew $38.7 million, an increase of 12% compared to the second quarter of 2014. Net new business for the quarter ended June 30, 2015 was $407.8 million, representing a book-to-bill ratio of 1.21 for the period. This net new business contributed to an ending backlog of $2.3 billion at June 30, 2015.
I am pleased that we have been able to deliver another strong quarter, said Colin Shannon, PRAs Chief Executive Officer. We have expanded our operating margin, achieved significant growth in our earnings, generated solid cash flow from operations, which has allowed us to reduce our debt levels, and also delivered strong new business wins. Following on from our award last quarter as International Clinical Company of the Year, we were also recognized by Pharma Times as the Best North American Clinical Company of the Year. This is great external recognition of the quality within our organization, and I would like to thank our employees for displaying their skills and representing the Company so successfully.
Second Quarter 2015 Financial Highlights
Direct costs were $219.9 million during the three months ended June 30, 2015 compared to $213.4 million for the second quarter of 2014. Direct costs were 65.3% of service revenue during the second quarter of 2015 compared to 68.5% of service revenue during the second quarter of 2014. The decrease in direct costs as a percentage of service revenue is primarily related to the favorable impact from foreign currency exchange rate fluctuations.
Selling, general and administrative expenses were $58.9 million during the three months ended June 30, 2015 compared to $56.0 million for the second quarter of 2014. Selling, general and administrative costs were 17.5% of service revenue during the second quarter of 2015 compared to 18.0% of service revenue during the second quarter of 2014. The decrease in selling, general and administrative expenses is primarily related to our continued ability to effectively manage our sales and administrative functions.
Reported EBITDA on a GAAP basis was $52.7 million, representing an increase of 46% compared to the second quarter of 2014. Adjusted EBITDA was $61.3 million for the three months ended June 30, 2015, representing growth of 35% compared to the second quarter of 2014.
Reported GAAP net income was $12.4 million for the three months ended June 30, 2015, or $0.20 per share on a diluted basis, increases of 406% and 300%, respectively, compared to the second quarter of 2014.
Adjusted Net Income was $29.7 million for the three months ended June 30, 2015, representing growth of 112% compared to the second quarter of 2014. Adjusted Net Income per share was $0.47 for the three months ended June 30, 2015, an increase of 37% compared to the second quarter of 2014.
Reconciliations of our non-GAAP measures, including Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per share, to the corresponding GAAP measures are attached to this press release.
First Half 2015 Financial Highlights
For the six months ended June 30, 2015, service revenue was $668.5 million, which represents growth of 7%, or $45.7 million, as compared to the six months ended June 30, 2014 at actual foreign exchange rates. On a constant currency basis, service revenue grew $69.3 million, representing growth of 11% compared to the six months ended June 30, 2014.
Reported GAAP income from operations was $71.3 million, reported GAAP net income was $29.6 million and reported GAAP diluted net income per share was $0.47 for the six months ended June 30, 2015.
Adjusted Net Income was $55.5 million for the six months ended June 30, 2015, an improvement of 143% compared to the same period in 2014. Adjusted Net Income per share was $0.88 for the six months ended June 30, 2015, up 57% compared to the same period in 2014.
Revised 2015 Guidance
For 2015, the Company is updating its guidance given strength in the underlying business and the movement in current foreign exchange rates. As a result, the Company is maintaining its guidance for service revenue of between $1.34 billion and $1.39 billion and its estimated effective income tax rate of approximately 30%. The Company has increased its guidance for diluted GAAP net income per share to between $0.80 and $0.90 per share, compared to $0.70 to $0.80 per share previously. In addition, management has increased its guidance for Adjusted Net Income per share to between $1.75 and $1.85 per share compared to previous guidance of $1.62 to $1.72 per share. This guidance assumes foreign exchange rates as of July 2015.
Webcast & Conference Call Details
PRA will host a conference call at 8:00 a.m. EDT tomorrow to discuss the contents of this release and other relevant topics. To participate, please dial (877) 930-8062 or (253) 336-7647 outside the United States approximately 10 minutes before the scheduled start of the call. The conference ID for the call is 87115091. The conference call will also be accessible, live via webcast, on the Investors section of the PRA website at www.prahs.com/investors. A replay of the conference call will be available online at www.prahs.com/investors. In addition, an audio replay will be available for one week and can be accessed by dialing (855) 859-2056 within the United States or (404) 537-3406 outside the United States. The replay ID is 87115091.
About PRA Health Sciences
PRA (NASDAQ: PRAH) is one of the worlds leading global contract research organizations, or CROs, by revenue, providing outsourced clinical development services to the biotechnology and pharmaceutical industries. PRAs global clinical development platform includes more than 70 offices across North America, Europe, Asia, Latin America, South Africa, Australia and the Middle East and approximately 11,000 employees worldwide. Since 2000, PRA has performed approximately 2,300 clinical trials worldwide and has worked on more than 100 marketed drugs across several therapeutic areas. In addition, PRA has participated in the pivotal or supportive trials that led to U.S. Food and Drug Administration or international regulatory approval of more than 50 drugs.
PRA has therapeutic expertise in areas that are among the largest in pharmaceutical development, including oncology, central nervous system, inflammation and infectious diseases. PRA believes that it provides its clients with one of the most flexible clinical development service offerings, which includes both traditional, project-based Phase I through Phase IV services, as well as embedded and functional outsourcing services. The Company has invested in medical informatics and clinical technologies designed to enhance efficiencies, improve study predictability and provide better transparency to clients throughout their clinical development processes. To learn more about PRA, please visit www.prahs.com.
Internet Posting of Information: The Company routinely posts information that may be important to investors in the Investors section of the Companys website at www.prahs.com. The Company encourages investors and potential investors to consult the Companys website regularly for important information about the Company.
Contacts:
Linda Baddour
Chief Financial Officer
Mike Bonello
Corporate Controller
919.786.8270
InvestorRelations@PRAHS.com
Westwicke Partners
Robert H. Uhl
Managing Director
858.356.5932
robert.uhl@westwicke.com
Forward-Looking Statements
This press release contains forward-looking statements that reflect, among other things, the Companys current expectations and anticipated results of operations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, market trends or industry results to differ materially from those expressed or implied by such forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may constitute forward-looking statements. Without limiting the foregoing, words such as anticipates, believes, estimates, expects, guidance, intends, may, plans, projects, should, targets, will and the negative thereof and similar words and expressions are intended to identify forward-looking statements. Actual results may differ materially from the Companys expectations due to a number of factors, including that most of the Companys contracts may be terminated on short notice and that the Company may be unable to maintain large customer contracts or to enter into new contracts; the historical indications of the relationship of backlog to revenues may not be indicative of their future relationship; the market for the Companys services may not grow as the Company expects; the Company may under price contracts or overrun its cost estimates, and if the Company is unable to achieve operating efficiencies or grow revenues faster than expenses, operating margins will be adversely affected; the Company may be unable to maintain information systems or effectively update them; customer or therapeutic concentration could harm the Companys business; the Companys business is subject to risks associated with international operations, including economic, political and other risks; government regulators or customers may limit the scope of prescription or withdraw products from the market, and
government regulators may impose new regulations affecting the Companys business; the Company may be unable to successfully develop and market new services or enter new markets; the Companys failure to perform services in accordance with contractual requirements, regulatory standards and ethical considerations may subject it to significant costs or liability, damage its reputation and cause it to lose existing business or not receive new business; the Companys services are related to treatment of human patients, and it could face liability if a patient is harmed; the Company has substantial indebtedness and may incur additional indebtedness in the future, which could adversely affect the Companys financial condition; and other factors that are set forth in the Companys filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K filed with the SEC on March 3, 2015. The Company undertakes no obligation to update any forward-looking statement after the date of this release, whether as a result of new information, future developments or otherwise, except as may be required by applicable law.
Use of Non-GAAP Financial Measures
This press release includes Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per share, each of which are financial measures not prepared in accordance with accounting principles generally accepted in the United States (GAAP). Management believes that these measures are more indicative of our operating results as they exclude certain items whose fluctuation from period-to-period do not necessarily correspond to changes in the operating results of our business. As a result, management and our board of directors regularly use EBITDA and Adjusted EBITDA as a tool in evaluating our operating and financial performance and in establishing discretionary annual bonuses. Adjusted EBITDA is also the basis for covenant compliance EBITDA, which is used in certain covenants in the credit agreement governing our senior secured credit facilities and the indenture governing the senior notes. In addition, management believes that EBITDA, Adjusted EBITDA and Adjusted Net Income (including diluted adjusted net income per share) facilitate comparisons of our operating results with those of other companies by backing out of GAAP net income items relating to variations in capital structures (affecting interest expense), taxation, and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. We believe that EBITDA, Adjusted EBITDA and Adjusted Net Income (including diluted adjusted net income per share) are frequently used by securities analysts, investors, and other interested parties in the evaluation of issuers, many of which also present EBITDA, Adjusted EBITDA and Adjusted Net Income (including diluted adjusted net income per share) when reporting their results in an effort to facilitate an understanding of their operating results.
These non-GAAP financial measures have limitations as analytical tools, and you should not consider these measures in isolation, or as a substitute for analysis of our results as reported under GAAP. Additionally, because not all companies use identical calculations, these presentations of EBITDA, Adjusted EBITDA and Adjusted Net Income (including diluted adjusted net income per share) may not be comparable to similarly titled measures of other companies.
EBITDA represents net income (loss) before interest, taxes, depreciation and amortization. Adjusted EBITDA and Adjusted Net Income (including diluted adjusted net income per share) represent EBITDA and net income (including diluted net income per share), respectively, adjusted to exclude management fees, stock-based compensation expense, loss on disposal of fixed assets, loss on modification or extinguishment of debt, foreign currency losses and gains, other (expense) income, equity in losses of unconsolidated joint ventures, transaction and acquisition related costs, relocation costs, severance costs and restructuring charges, non-cash rent adjustments and other one-time charges. Adjusted Net Income is also adjusted to exclude amortization of intangible assets and amortization of deferred financing costs. EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income (loss) or other performance measures derived in accordance with GAAP or as alternatives to cash flow from operating activities as measures of our liquidity. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP. Some of these limitations are:
· EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
· EBITDA and Adjusted EBITDA do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;
· EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes;
· EBITDA and Adjusted EBITDA do not reflect historical capital expenditures or future requirements for capital expenditures or contractual commitments;
· although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and
· other companies in our industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative measures.
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as a measure of cash that will be available to us to meet our obligations.
PRA HEALTH SCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2015 |
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2014 |
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2015 |
|
2014 |
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|
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(unaudited) |
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(unaudited) |
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Revenue: |
|
|
|
|
|
|
|
|
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Service revenue |
|
$ |
336,518 |
|
$ |
311,422 |
|
$ |
668,486 |
|
$ |
622,774 |
|
Reimbursement revenue |
|
56,330 |
|
46,123 |
|
112,940 |
|
89,511 |
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
392,848 |
|
357,545 |
|
781,426 |
|
712,285 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Direct costs |
|
219,877 |
|
213,378 |
|
438,838 |
|
428,529 |
|
Reimbursable out-of-pocket costs |
|
56,330 |
|
46,123 |
|
112,940 |
|
89,511 |
|
Selling, general and administrative |
|
58,905 |
|
56,010 |
|
119,740 |
|
116,849 |
|
Depreciation and amortization |
|
19,220 |
|
24,598 |
|
38,455 |
|
49,236 |
|
Loss on disposal of fixed assets |
|
195 |
|
|
|
195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
38,321 |
|
17,436 |
|
71,258 |
|
28,160 |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(15,416 |
) |
(20,818 |
) |
(30,809 |
) |
(42,584 |
) |
Loss on modification of debt |
|
|
|
|
|
|
|
(1,384 |
) |
Foreign currency (losses) gains, net |
|
(3,966 |
) |
(5,387 |
) |
5,100 |
|
(9,099 |
) |
Other expense, net |
|
(96 |
) |
(116 |
) |
(560 |
) |
(175 |
) |
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes and equity in losses of unconsolidated joint ventures |
|
18,843 |
|
(8,885 |
) |
44,989 |
|
(25,082 |
) |
Provision for (benefit from) income taxes |
|
5,623 |
|
(5,186 |
) |
13,645 |
|
(11,519 |
) |
|
|
|
|
|
|
|
|
|
|
Income (loss) before equity in losses of unconsolidated joint ventures |
|
13,220 |
|
(3,699 |
) |
31,344 |
|
(13,563 |
) |
Equity in losses of unconsolidated joint ventures, net of tax |
|
(805 |
) |
(357 |
) |
(1,742 |
) |
(534 |
) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
12,415 |
|
$ |
(4,056 |
) |
$ |
29,602 |
|
$ |
(14,097 |
) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
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Basic |
|
$ |
0.21 |
|
$ |
(0.10 |
) |
$ |
0.49 |
|
$ |
(0.35 |
) |
Diluted |
|
$ |
0.20 |
|
$ |
(0.10 |
) |
$ |
0.47 |
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$ |
(0.35 |
) |
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|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
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|
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|
|
|
|
|
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Basic |
|
59,871 |
|
40,268 |
|
59,843 |
|
40,268 |
|
Diluted |
|
62,951 |
|
40,268 |
|
62,864 |
|
40,268 |
|
PRA HEALTH SCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands, except share amounts)
|
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June 30, |
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December 31, |
|
|
|
2015 |
|
2014 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
ASSETS |
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
61,148 |
|
$ |
85,192 |
|
Restricted cash |
|
6,051 |
|
6,337 |
|
Accounts receivable and unbilled services, net |
|
396,627 |
|
338,781 |
|
Other current assets |
|
65,389 |
|
58,413 |
|
|
|
|
|
|
|
Total current assets |
|
529,215 |
|
488,723 |
|
|
|
|
|
|
|
Fixed assets, net |
|
76,250 |
|
72,933 |
|
Goodwill |
|
1,033,772 |
|
1,033,999 |
|
Intangible assets, net |
|
573,265 |
|
600,910 |
|
Other assets |
|
39,111 |
|
42,012 |
|
|
|
|
|
|
|
Total assets |
|
$ |
2,251,613 |
|
$ |
2,238,577 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
55,506 |
|
$ |
39,100 |
|
Accrued expenses and other current liabilities |
|
132,879 |
|
131,135 |
|
Advance billings |
|
297,671 |
|
296,121 |
|
|
|
|
|
|
|
Total current liabilities |
|
486,056 |
|
466,356 |
|
|
|
|
|
|
|
Long-term debt, net |
|
919,156 |
|
948,537 |
|
Other long-term liabilities |
|
150,877 |
|
146,869 |
|
|
|
|
|
|
|
Total liabilities |
|
1,556,089 |
|
1,561,762 |
|
|
|
|
|
|
|
Stockholders equity: |
|
|
|
|
|
Common stock, $0.01 par value, 1,000,000,000 authorized shares at June 30, 2015 and December 31, 2014; 60,158,455 and 59,814,444 issued and outstanding at June 30, 2015 and December 31, 2014, respectively |
|
602 |
|
598 |
|
Additional paid-in-capital |
|
825,037 |
|
821,411 |
|
Accumulated other comprehensive loss |
|
(84,032 |
) |
(69,509 |
) |
Accumulated deficit |
|
(46,083 |
) |
(75,685 |
) |
|
|
|
|
|
|
Total stockholders equity |
|
695,524 |
|
676,815 |
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
2,251,613 |
|
$ |
2,238,577 |
|
PRA HEALTH SCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
|
Six Months Ended June 30, |
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
Net income (loss) |
|
$ |
29,602 |
|
$ |
(14,097 |
) |
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
38,455 |
|
49,236 |
|
Amortization of debt issuance costs |
|
3,286 |
|
2,893 |
|
Stock-based compensation |
|
2,020 |
|
1,760 |
|
Unrealized foreign currency (gains) losses |
|
(8,079 |
) |
5,808 |
|
Loss on modification of debt |
|
|
|
1,384 |
|
Deferred income taxes |
|
(2,395 |
) |
(20,897 |
) |
Other reconciling items |
|
3,143 |
|
826 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable, unbilled services and advanced billings |
|
(65,550 |
) |
(50,547 |
) |
Other operating assets and liabilities |
|
29,475 |
|
20,374 |
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
29,957 |
|
(3,260 |
) |
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Purchase of fixed assets |
|
(17,066 |
) |
(11,876 |
) |
Investment in unconsolidated joint venture |
|
(3,000 |
) |
|
|
Acquisition of Value Health Solutions Inc. |
|
(543 |
) |
|
|
Proceeds from RPS working capital settlement |
|
|
|
15,000 |
|
Proceeds from CRI working capital settlement |
|
|
|
851 |
|
Payment of amounts held in escrow |
|
|
|
(787 |
) |
|
|
|
|
|
|
Net cash (used in) provided by investing activities |
|
(20,609 |
) |
3,188 |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
Repayment of long-term debt |
|
(30,000 |
) |
(4,450 |
) |
Borrowings on line of credit |
|
15,000 |
|
45,000 |
|
Repayments on line of credit |
|
(15,000 |
) |
(55,000 |
) |
Proceeds from stock option exercises |
|
27 |
|
33 |
|
Payment of acquisition-related contingent consideration |
|
(2,000 |
) |
|
|
Payments for common stock issuance costs |
|
(525 |
) |
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
(32,498 |
) |
(14,417 |
) |
|
|
|
|
|
|
Effects of foreign exchange changes on cash and cash equivalents |
|
(894 |
) |
(20 |
) |
|
|
|
|
|
|
Change in cash and cash equivalents |
|
(24,044 |
) |
(14,509 |
) |
Cash and cash equivalents, beginning of period |
|
85,192 |
|
72,155 |
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
61,148 |
|
$ |
57,646 |
|
PRA HEALTH SCIENCES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share data)
(unaudited)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
12,415 |
|
$ |
(4,056 |
) |
$ |
29,602 |
|
$ |
(14,097 |
) |
Depreciation and amortization |
|
19,220 |
|
24,598 |
|
38,455 |
|
49,236 |
|
Interest expense, net |
|
15,416 |
|
20,818 |
|
30,809 |
|
42,584 |
|
Provision for (benefit from) income taxes |
|
5,623 |
|
(5,186 |
) |
13,645 |
|
(11,519 |
) |
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
52,674 |
|
36,174 |
|
112,511 |
|
66,204 |
|
Management fees (a) |
|
|
|
525 |
|
|
|
1,050 |
|
Stock-based compensation expense (b) |
|
1,245 |
|
868 |
|
2,020 |
|
1,760 |
|
Loss on disposal of fixed assets, net (c) |
|
195 |
|
|
|
195 |
|
|
|
Loss on modification of debt (d) |
|
|
|
|
|
|
|
1,384 |
|
Foreign currency losses (gains), net (e) |
|
3,966 |
|
5,387 |
|
(5,100 |
) |
9,099 |
|
Other expense, net (f) |
|
96 |
|
116 |
|
560 |
|
175 |
|
Equity in losses of unconsolidated joint ventures |
|
805 |
|
357 |
|
1,742 |
|
534 |
|
Transaction and acquisition related costs (g) |
|
134 |
|
1,601 |
|
217 |
|
2,171 |
|
Lease termination expense (h) |
|
568 |
|
|
|
2,598 |
|
|
|
Severance and restructuring charges (i) |
|
154 |
|
48 |
|
154 |
|
1,988 |
|
Non-cash rent adjustment (j) |
|
922 |
|
318 |
|
1,568 |
|
801 |
|
Other one-time charges (k) |
|
560 |
|
78 |
|
596 |
|
28 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
61,319 |
|
$ |
45,472 |
|
$ |
117,061 |
|
$ |
85,194 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
12,415 |
|
$ |
(4,056 |
) |
$ |
29,602 |
|
$ |
(14,097 |
) |
Amortization of intangible assets |
|
14,135 |
|
19,688 |
|
28,242 |
|
38,431 |
|
Amortization of deferred financing costs |
|
1,637 |
|
1,459 |
|
3,286 |
|
2,893 |
|
Management fees (a) |
|
|
|
525 |
|
|
|
1,050 |
|
Stock-based compensation expense (b) |
|
1,245 |
|
868 |
|
2,020 |
|
1,760 |
|
Loss on disposal of fixed assets, net (c) |
|
195 |
|
|
|
195 |
|
|
|
Loss on modification of debt (d) |
|
|
|
|
|
|
|
1,384 |
|
Foreign currency losses (gains), net (e) |
|
3,966 |
|
5,387 |
|
(5,100 |
) |
9,099 |
|
Other expense, net (f) |
|
96 |
|
116 |
|
560 |
|
175 |
|
Equity in losses of unconsolidated joint ventures |
|
805 |
|
357 |
|
1,742 |
|
534 |
|
Transaction and acquisition related costs (g) |
|
134 |
|
1,601 |
|
217 |
|
2,171 |
|
Lease termination expense (h) |
|
568 |
|
|
|
2,598 |
|
|
|
Severance and restructuring charges (i) |
|
154 |
|
48 |
|
154 |
|
1,988 |
|
Non-cash rent adjustment (j) |
|
922 |
|
318 |
|
1,568 |
|
801 |
|
Other one-time charges (k) |
|
560 |
|
78 |
|
596 |
|
28 |
|
|
|
|
|
|
|
|
|
|
|
Total adjustments |
|
24,417 |
|
30,445 |
|
36,078 |
|
60,314 |
|
Tax effect of total adjustments (l) |
|
(7,114 |
) |
(12,395 |
) |
(10,153 |
) |
(23,316 |
) |
|
|
|
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
29,718 |
|
$ |
13,994 |
|
$ |
55,527 |
|
$ |
22,901 |
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares outstanding |
|
62,951 |
|
40,692 |
|
62,864 |
|
40,658 |
|
Adjusted net income per diluted share |
|
$ |
0.47 |
|
$ |
0.34 |
|
$ |
0.88 |
|
$ |
0.56 |
|
PRA HEALTH SCIENCES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES, CONTINUED
(in thousands, except per share data)
(unaudited)
|
|
Three |
|
|
|
Three |
|
Six |
|
|
|
Six |
|
|
|
Months |
|
|
|
Months |
|
Months |
|
|
|
Months |
|
|
|
Ended |
|
|
|
Ended |
|
Ended |
|
|
|
Ended |
|
|
|
June 30, |
|
|
|
June 30, |
|
June 30, |
|
|
|
June 30, |
|
|
|
2015 |
|
|
|
2015 |
|
2015 |
|
|
|
2015 |
|
|
|
As Reported |
|
Adjustments |
|
As Adjusted |
|
As Reported |
|
Adjustments |
|
As Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue |
|
$ |
336,518 |
|
$ |
|
|
$ |
336,518 |
|
$ |
668,486 |
|
$ |
|
|
$ |
668,486 |
|
Reimbursement revenue |
|
56,330 |
|
|
|
56,330 |
|
112,940 |
|
|
|
112,940 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
392,848 |
|
|
|
392,848 |
|
781,426 |
|
|
|
781,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct costs |
|
219,877 |
|
(251 |
) |
219,626 |
|
438,838 |
|
(426 |
) |
438,412 |
|
Reimbursable out-of-pocket costs |
|
56,330 |
|
|
|
56,330 |
|
112,940 |
|
|
|
112,940 |
|
Selling, general and administrative |
|
58,905 |
|
(3,332 |
) |
55,573 |
|
119,740 |
|
(6,727 |
) |
113,013 |
|
Depreciation and amortization |
|
19,220 |
|
(14,135 |
) |
5,085 |
|
38,455 |
|
(28,242 |
) |
10,213 |
|
Loss on disposal of fixed assets |
|
195 |
|
(195 |
) |
|
|
195 |
|
(195 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
38,321 |
|
17,913 |
|
56,234 |
|
71,258 |
|
35,590 |
|
106,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(15,416 |
) |
1,637 |
|
(13,779 |
) |
(30,809 |
) |
3,286 |
|
(27,523 |
) |
Foreign currency (losses) gains, net |
|
(3,966 |
) |
3,966 |
|
|
|
5,100 |
|
(5,100 |
) |
|
|
Other expense, net |
|
(96 |
) |
96 |
|
|
|
(560 |
) |
560 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes and equity in losses of unconsolidated joint ventures |
|
18,843 |
|
23,612 |
|
42,455 |
|
44,989 |
|
34,336 |
|
79,325 |
|
Provision for income taxes |
|
5,623 |
|
7,114 |
|
12,737 |
|
13,645 |
|
10,153 |
|
23,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before equity in losses of unconsolidated joint ventures |
|
13,220 |
|
16,498 |
|
29,718 |
|
31,344 |
|
24,183 |
|
55,527 |
|
Equity in losses of unconsolidated joint ventures, net of tax |
|
(805 |
) |
805 |
|
|
|
(1,742 |
) |
1,742 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
12,415 |
|
$ |
17,303 |
|
$ |
29,718 |
|
$ |
29,602 |
|
$ |
25,925 |
|
$ |
55,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.20 |
|
|
|
$ |
0.47 |
|
$ |
0.47 |
|
|
|
$ |
0.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
62,951 |
|
|
|
62,951 |
|
62,864 |
|
|
|
62,864 |
|
(a) We have historically paid management fees to affiliates of our investors. These fees terminated upon completion of the IPO.
(b) Stock-based compensation expense represents the amount of non-cash expense related to the Companys equity compensation programs.
(c) Loss on disposal of fixed assets represents the costs incurred in connection with the sale or disposition of fixed assets, primarily IT equipment and furniture and fixtures. We exclude these losses from Adjusted EBITDA and Adjusted Net Income because they result from investing decisions rather than from decisions made related to our ongoing operations.
(d) Loss on modification of debt relates to costs incurred in connection with changes to our debt. We exclude these losses from Adjusted EBITDA and Adjusted Net Income because they result from financing decisions rather than from decisions made related to our ongoing operations.
(e) Foreign currency (losses) gains, net primarily relates to gains or losses that arise in connection with the revaluation of short-term inter-company balances between our domestic and international subsidiaries. In addition, this amount includes gains or losses from foreign currency transactions, such as those resulting from the settlement of third-party accounts receivable and payables denominated in a currency other than the local currency of the entity making the payment. We exclude these gains and losses from Adjusted EBITDA and Adjusted Net Income because they result from financing decisions rather than from decisions made related to our ongoing operations and because fluctuations from period-to-period do not necessarily correspond to changes in our operating results.
(f) Other (expense) income, net represents income and expense that are non-operating and whose fluctuations from period-to-period do not necessarily correspond to changes in our operating results.
(g) Transaction and acquisition related costs primarily relate to costs incurred in connection with due diligence performed in connection with contemplated acquisitions; the closing of the acquisition of PRA by KKR (KKR Transaction), the PRA acquisition of RPS Parent Holding Corp. (RPS), the PRA acquisition of CRI Holding Company, LLC (CRI LifeTree) and the PRA acquisition of ClinStar, LLC (ClinStar); and the integration of ClinStar, RPS and CRI LifeTree acquisitions. The integration costs primarily consist of professional fees, rebranding costs, the elimination of redundant facilities and any other costs incurred directly related to the integration of these acquisitions.
(h) Lease termination expenses represent charges incurred in connection with the termination of leases at locations that are no longer being used by the Company.
(i) Severance and restructuring charges represent amounts incurred in connection with the elimination of redundant positions within the organization, including positions eliminated in connection with the KKR Transaction and the acquisitions of ClinStar, RPS and CRI Lifetree.
(j) We have escalating leases that require the amortization of rent expense on a straight-line basis over the life of the lease. The non-cash rent adjustment represents the difference between rent expense recorded in the consolidated statement of operations and the amount of cash actually paid.
(k) Represents charges incurred that are not considered part of our core operating results.
(l) Represents the tax effect of the total adjustments at our estimated effective tax rate.
###
Exhibit 99.2
|
Q2 2015 Earnings July 27, 2015 |
|
Forward Looking Statements and Use of Non-GAAP Financial Measures This presentation contains forward-looking statements that reflect, among other things, the Companys current expectations and anticipated results of operations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, market trends or industry results to differ materially from those expressed or implied by such forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may constitute forward-looking statements. Without limiting the foregoing, words such as anticipates, believes, estimates, expects, guidance, intends, may, plans, projects, should, targets, will and the negative thereof and similar words and expressions are intended to identify forward-looking statements. Actual results may differ materially from the Companys expectations due to a number of factors, including that most of the Companys contracts may be terminated on short notice, and that the Company may be unable to maintain large customer contracts or to enter into new contracts; the historical indications of the relationship of backlog to revenues may not be indicative of their future relationship; the market for the Companys services may not grow as the Company expects; the Company may under price contracts or overrun its cost estimates, and if the Company is unable to achieve operating efficiencies or grow revenues faster than expenses, operating margins will be adversely affected; the Company may be unable to maintain information systems or effectively update them; customer or therapeutic concentration could harm the Companys business; the Companys business is subject to risks associated with international operations, including economic, political and other risks; government regulators or customers may limit the scope of prescription or withdraw products from the market, and government regulators may impose new regulations affecting the Companys business; the Company may be unable to successfully develop and market new services or enter new markets; the Companys failure to perform services in accordance with contractual requirements, regulatory standards and ethical considerations may subject it to significant costs or liability, damage its reputation and cause it to lose existing business or not receive new business; the Companys services are related to treatment of human patients, and it could face liability if a patient is harmed; the Company has substantial indebtedness and may incur additional indebtedness in the future, which could adversely affect the Companys financial condition; and other factors that are set forth in the Company's filings with the Securities and Exchange Commission (SEC), including our most recent Annual Report on Form 10-K filed with the SEC on March 3, 2015. The Company undertakes no obligation to update any forward-looking statement after the date of this release, whether as a result of new information, future developments or otherwise, except as may be required by applicable law. This presentation also includes Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per share, each of which are financial measures not prepared in accordance with accounting principles generally accepted in the United States (GAAP). Management believes that these measures are more indicative of our operating results as they exclude certain items whose fluctuation from period-to-period do not necessarily correspond to changes in the operating results of our business. As a result, management and our board of directors regularly use EBITDA and Adjusted EBITDA as a tool in evaluating our operating and financial performance and in establishing discretionary annual bonuses. Adjusted EBITDA is also the basis for covenant compliance EBITDA, which is used in certain covenants in the credit agreement governing our Senior Secured Credit Facilities and the indenture governing the Senior Notes. In addition, management believes that EBITDA, Adjusted EBITDA and Adjusted Net Income (including diluted adjusted net income per share) facilitate comparisons of our operating results with those of other companies by backing out of GAAP net income items relating to variations in capital structures (affecting interest expense), taxation, and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. We believe that EBITDA, Adjusted EBITDA and Adjusted Net Income (including diluted adjusted net income per share) are frequently used by securities analysts, investors, and other interested parties in the evaluation of issuers, many of which also present EBITDA, Adjusted EBITDA and Adjusted net income (including diluted adjusted net income per share) when reporting their results in an effort to facilitate an understanding of their operating results. These non-GAAP financial measures have limitations as analytical tools, and you should not consider these measures in isolation, or as a substitute for analysis of our results as reported under GAAP. Additionally, because not all companies use identical calculations, these presentations of EBITDA, Adjusted EBITDA and Adjusted Net Income (including diluted adjusted net income per share) may not be comparable to similarly titled measures of other companies. |
|
Q2 2015 Highlights ($ in millions) $337 million of service revenue; 12% constant currency growth $61 million of Adjusted EBITDA; 35% growth compared to prior year Adjusted Net Income per share of $0.47; 37% growth compared to prior year Q2 2015 Q2 2014 % Change Service Revenue $336.5 $311.4 8.1% EBITDA $52.7 $36.2 45.6% Adjusted EBITDA $61.3 $45.5 34.9% Adjusted EBITDA Margin 18.2% 14.6% Operating Income $38.3 $17.4 119.8% Adjusted Operating Income $56.2 $40.6 38.6% Adjusted Operating Income Margin 16.7% 13.0% Net Income (Loss) $12.4 ($4.1) 406.1% Adjusted Net Income $29.7 $14.0 112.3% Diluted Income (Loss) per Share $0.20 ($0.10) 300.0% Adjusted Net Income per Share $0.47 $0.34 37.1% |
|
Trailing Quarterly Performance Gross Profit ($M) Adjusted EBITDA Margin (%) Service Revenue ($M) Adjusted EBITDA ($M) $94.0 $96.3 $98.2 $104.5 $109.1 $113.2 $116.9 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 11.8% 12.7% 14.6% 14.7% 15.6% 16.8% 18.2% 11% 12% 13% 14% 15% 16% 17% 18% 19% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $298.8 $311.4 $311.3 $320.1 $323.8 $332.0 $336.5 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $35.3 $39.7 $45.5 $47.0 $50.6 $55.7 $61.3 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 |
|
Backlog and New Business Awards Ending Backlog ($M) Backlog Conversion % Net Book-to-Bill Net New Business Awards ($M) 1.12 1.13 1.19 1.19 1.20 1.20 1.21 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $201.9 $351.3 $371.9 $382.1 $388.4 $398.0 $407.8 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $1,939.7 $1,987.3 $2,044.8 $2,091.5 $2,141.1 $2,185.3 $2,262.4 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 20.4% 16.1% 15.7% 15.7% 15.5% 15.5% 15.4% 15% 16% 17% 18% 19% 20% 21% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 |
|
Debt Structure Weighted Average ($ in millions) June 30, September 30, December 31, March 31, June 30, Interest Maturity 2014 2014 2014 2015 2015 Rate Date Senior debt: First Lien 883.3 $ 881.1 $ 729.0 $ 714.0 $ 699.0 $ 4.50% September 23, 2020 Senior Notes 375.0 375.0 225.0 225.0 225.0 9.50% October 1, 2023 Total 1,258.3 $ 1,256.1 $ 954.0 $ 939.0 $ 924.0 $ Revolving credit: Swingline - $ - $ - $ - $ - $ 5.25% September 23, 2018 Revolver - - - - - 3.20% September 23, 2018 Total - $ - $ - $ - $ - $ Total outstanding debt 1,258.3 $ 1,256.1 $ 954.0 $ 939.0 $ 924.0 $ Less cash on hand (57.6) (49.3) (85.2) (64.0) (61.1) Net debt 1,200.7 $ 1,206.8 $ 868.8 $ 875.0 $ 862.9 $ Net Debt/ LTM Covenant Compliance EBITDA 6.6x 6.5x 4.5x 4.1x 3.8x |
|
Full Year 2015 Guidance Previous Guidance Revised Guidance Expected Service Revenue $1.34B - $1.39B $1.34B - $1.39B Diluted GAAP Net Income per Share $0.70 - $0.80 $0.80 - $0.90 Diluted Adjusted Net Income per Share $1.62 $1.72 $1.75 - $1.85 Annual Effective Income Tax Rate 30% 30% Revised guidance assumes foreign currency rates as of July 2015 |
|
Appendix |
|
Q2 and YTD 2015 Financial Results ($ in millions) 2015 2014 % Change 2015 2014 % Change Service Revenue 336.5 $ 311.4 $ 8.1% 668.5 $ 622.8 $ 7.3% EBITDA 52.7 $ 36.2 $ 45.6% 112.5 $ 66.2 $ 69.9% Adjusted EBITDA 61.3 $ 45.5 $ 34.9% 117.1 $ 85.2 $ 37.4% Adjusted EBITDA Margin 18.2% 14.6% 17.5% 13.7% Operating Income 38.3 $ 17.4 $ 119.8% 71.3 $ 28.2 $ 153.0% Adjusted Operating Income 56.2 $ 40.6 $ 38.6% 106.8 $ 74.4 $ 43.7% Adjusted Operating Income Margin 16.7% 13.0% 16.0% 11.9% Net Income (Loss) 12.4 $ (4.1) $ 406.1% 29.6 $ (14.1) $ 310.0% Adjusted Net Income 29.7 $ 14.0 $ 112.3% 55.5 $ 22.9 $ 142.5% Diluted Income (Loss) per Share 0.20 $ (0.10) $ 300.0% 0.47 $ (0.35) $ 234.3% Adjusted Net Income per Share 0.47 $ 0.34 $ 37.1% 0.88 $ 0.56 $ 57.1% Three Months Ended June 30, Six Months Ended June 30, |
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Trailing Quarterly Performance Q2 15 v ($ in millions) Q2 14 % Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Change Service revenue 166.5 $ 179.5 $ 188.1 $ 298.8 $ 832.9 $ 311.4 $ 311.3 $ 320.1 $ 323.8 $ 1,266.6 $ 332.0 $ 336.5 $ 8.1% % growth Y-o-Y 13.0% 22.2% 27.9% 91.7% 39.5% 87.0% 73.4% 70.2% 8.4% 52.1% 6.6% 8.1% % growth Y-o-Y (constant currency) 12.9% 21.8% 27.1% 90.6% 38.9% 86.3% 72.7% 70.0% 9.9% 52.3% 9.8% 12.4% Gross Profit 66.7 $ 73.4 $ 73.3 $ 94.0 $ 307.4 $ 96.3 $ 98.2 $ 104.5 $ 109.1 $ 408.1 $ 113.2 $ 116.9 $ % of Net Revenue 40.1% 40.9% 39.0% 31.5% 36.9% 30.9% 31.5% 32.6% 33.7% 32.2% 34.1% 34.7% Total SG&A Costs 37.4 $ 40.4 $ 40.3 $ 58.7 $ 176.8 $ 56.6 $ 52.7 $ 57.5 $ 58.5 $ 225.3 $ 57.5 $ 55.6 $ % of Net Revenue 22.5% 22.5% 21.4% 19.6% 21.2% 18.2% 16.9% 18.0% 18.1% 17.8% 17.3% 16.5% Adjusted EBITDA 29.3 $ 33.0 $ 33.0 $ 35.3 $ 130.6 $ 39.7 $ 45.5 $ 47.0 $ 50.6 $ 182.8 $ 55.7 $ 61.3 $ 34.9% % of Net Revenue 17.6% 18.4% 17.5% 11.8% 15.7% 12.7% 14.6% 14.7% 15.6% 14.4% 16.8% 18.2% 2013 2014 2015 |
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Backlog and New Business Awards Q2 15 v ($ in millions) Q2 14 % Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Change Beginning Backlog 1,382.8 $ 1,421.2 $ 1,444.2 $ 1,465.6 $ 1,382.8 $ 1,939.7 $ 1,987.3 $ 2,044.8 $ 2,091.5 $ 1,939.7 $ 2,141.1 $ 2,185.3 $ Ending Backlog 1,421.2 $ 1,444.2 $ 1,465.6 $ 1,939.7 $ 1,939.7 $ 1,987.3 $ 2,044.8 $ 2,091.5 $ 2,141.1 $ 2,141.1 $ 2,185.3 $ 2,262.4 $ 10.6% Backlog Conversion % 12.0% 12.6% 13.0% 20.4% 16.1% 15.7% 15.7% 15.5% 15.5% 15.4% Gross New Business Awards 237.4 $ 250.8 $ 239.8 $ 269.7 $ 997.7 $ 422.8 $ 423.8 $ 442.0 $ 456.8 $ 1,745.4 $ 444.3 $ 462.4 $ 9.1% Cancellations 54.1 $ 51.5 $ 50.0 $ 67.8 $ 223.4 $ 71.5 $ 51.9 $ 59.9 $ 68.4 $ 251.7 $ 46.3 $ 54.6 $ 5.2% % of Beginning Backlog 3.9% 3.6% 3.5% 4.6% 3.7% 2.6% 2.9% 3.3% 2.2% 2.5% Net New Business Awards 183.3 $ 199.3 $ 189.8 $ 201.9 $ 774.3 $ 351.3 $ 371.9 $ 382.1 $ 388.4 $ 1,493.7 $ 398.0 $ 407.8 $ 9.7% Net Book to Bill 1.11 1.13 1.08 1.12 1.11 1.13 1.19 1.19 1.20 1.18 1.20 1.21 2013 2014 2015 |
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Reconciliation of GAAP EBITDA to Adjusted EBITDA For further information regarding the reconciliation of non-GAAP measures to their corresponding GAAP equivalent please see our press release ($ in millions) 2015 2014 2015 2014 Net income (loss) 12.4 $ (4.1) $ 29.6 $ (14.1) $ Depreciation and amortization 19.2 24.6 38.5 49.2 Interest expense, net 15.4 20.8 30.8 42.6 Provision for (benefit from) income taxes 5.6 (5.2) 13.6 (11.5) EBITDA 52.6 36.2 112.5 66.2 Management fees - 0.5 - 1.1 Stock-based compensation expense 1.2 0.9 2.0 1.8 Loss on disposal of fixed assets 0.2 - 0.2 - Loss on modification of debt - - - 1.4 Foreign currency (gains) losses, net 4.0 5.4 (5.1) 9.1 Other expense, net 0.1 0.1 0.6 0.2 Equity in losses of unconsolidated joint ventures 0.8 0.4 1.7 0.5 Transaction and acquisition related costs 0.1 1.6 0.2 2.2 Lease termination expense 0.6 - 2.6 - Severance and restructuring charges 0.2 - 0.2 2.0 Non-cash rent adjustment 0.9 0.3 1.6 0.7 Other one-time charges 0.6 0.1 0.6 - Adjusted EBITDA 61.3 $ 45.5 $ 117.1 $ 85.2 $ Three Months Ended June 30, Six Months Ended June 30, |
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Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income For further information regarding the reconciliation of non-GAAP measures to their corresponding GAAP equivalent please see our press release ($ in millions, except per share data) 2015 2014 2015 2014 Net income (loss) 12.4 $ (4.1) $ 29.6 $ (14.1) $ Amortization of intangible assets 14.1 19.7 28.2 38.4 Amortization of deferred financing costs 1.6 1.5 3.3 2.9 Management fees - 0.5 - 1.1 Stock-based compensation expense 1.2 0.9 2.0 1.8 Loss on disposal of fixed assets 0.2 - 0.2 - Loss on modification of debt - - - 1.4 Foreign currency (gains) losses, net 4.0 5.4 (5.1) 9.1 Other expense, net 0.1 0.1 0.6 0.2 Equity in losses of unconsolidated joint ventures 0.8 0.4 1.7 0.5 Transaction and acquisition related costs 0.1 1.6 0.2 2.2 Lease termination expense 0.6 - 2.6 - Severance and restructuring charges 0.2 - 0.2 2.0 Non-cash rent adjustment 0.9 0.3 1.6 0.7 Other one-time charges 0.6 0.1 0.6 - Total adjustments 24.4 30.5 36.1 60.3 Tax effect of total adjustments (7.1) (12.4) (10.2) (23.3) Adjusted net income 29.7 $ 14.0 $ 55.5 $ 22.9 $ Diluted weighted average common shares outstanding 63 41 63 41 Adjusted net income per diluted share 0.47 $ 0.34 $ 0.88 $ 0.56 $ Three Months Ended June 30, Six Months Ended June 30, |
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Reconciliation of GAAP Income from Operations to Adjusted Income from Operations For further information regarding the reconciliation of non-GAAP measures to their corresponding GAAP equivalent please see our press release ($ in millions) 2015 2014 2015 2014 Income from operations 38.3 $ 17.4 $ 71.3 $ 28.2 $ Amortization of intangible assets 14.1 19.7 28.2 38.4 Management fees - 0.5 - 1.1 Stock-based compensation expense 1.2 0.9 2.0 1.8 Loss on disposal of fixed assets 0.2 - 0.2 - Transaction and acquisition related costs 0.1 1.6 0.2 2.2 Lease termination expense 0.6 - 2.6 - Severance and restructuring charges 0.2 - 0.2 2.0 Non-cash rent adjustment 0.9 0.3 1.6 0.7 Other one-time charges 0.6 0.1 0.5 - Adjusted income from operations 56.2 $ 40.5 $ 106.8 $ 74.4 $ Three Months Ended June 30, Six Months Ended June 30, |
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Geographic Breakdown Region YTD 2015 YTD 2014 US/Canada 407,725 368,239 Europe/Africa 200,173 202,863 Latin America 27,269 26,368 Asia/Pacific 33,318 25,304 Grand Total 668,486 622,774 Region Q2 2015 Q2 2014 US/Canada 205,758 186,142 Europe/Africa 99,163 99,792 Latin America 13,823 12,465 Asia/Pacific 17,775 13,023 Grand Total 336,518 311,422 |
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Days Sales Outstanding ($ in millions) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Accounts Receivable, net 136.9 $ 157.4 $ 141.2 $ 232.6 $ 246.0 $ 241.9 $ 236.1 $ 233.3 $ 239.6 $ 281.4 $ Unbilled Services 63.1 56.2 58.3 62.3 102.3 98.0 113.2 105.5 132.8 115.2 Total Accounts Receivable and Unbilled Services 200.0 213.6 199.5 294.9 348.3 339.9 349.3 338.8 372.4 396.6 Advance Billings (222.1) (236.1) (230.2) (295.9) (289.9) (299.4) (275.8) (296.1) (291.2) (297.7) Net (22.1) $ (22.5) $ (30.7) $ (1.0) $ 58.4 $ 40.5 $ 73.5 $ 42.7 $ 81.2 $ 98.9 $ Accounts Receivable, net 51 52 45 54 55 54 49 51 49 58 Unbilled Services 24 18 19 14 23 22 24 23 27 24 Total Accounts Receivable and Unbilled Services 75 70 64 68 78 76 73 74 76 82 Advance Billings (83) (78) (73) (69) (65) (67) (58) (65) (59) (61) Net (8) (8) (9) (1) 13 9 15 9 17 21 2013 2014 2015 |
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