ICLR ICON PLC

ICON (NASDAQ:ICLR), a global provider of outsourced development services to the pharmaceutical, biotechnology and medical device industries, today reported its financial results for the third quarter ended September 30, 2006. As a consequence of the change of financial year, the comparative quarter mentioned in this press release will be the quarter ended August 31, 2005. ICON recently completed its bonus issue of shares (effectively a share spilt), the number of weighted average shares in this press release reflects the share split in both the current and comparative figures. Net revenues for the quarter were $120.7 million, representing a 40% increase over net revenues of $85.9 million for the comparative quarter last year. Income from operations, on a US GAAP basis, was $12.6 million and net income was $10.1 million or 35 cents per share, on a diluted basis. Adjusting for $1.0 million in relation to the expensing of stock compensation in accordance with SFAS No.123(R), income from operations was $13.6 million, compared to $8.4 million last year and net income was $11.1 million or a diluted 38 cents per share, compared with $6.4 million or 23 cents per share last year. Adjusted operating margin was 11.3%, compared with 9.7% for last year. Year to date, net revenues were $326.6 million, a 28% increase over the comparative period last year. Income from operations was $34.0 million and net income was $26.9 million or 94 cents per share, on a diluted basis. Adjusting these figures to exclude $3.0 million in relation to the expensing of stock compensation in the current year and the one-time charge of $11.3 million, relating primarily to the impairment of goodwill in the prior year, income from operations for the period ended September 30, 2006 was $37.0 million, an increase of 70% from $21.8 million last year and operating margin was 11.3%, compared with 8.5% for last year. Adjusted net income was $29.9 million or a diluted 103 cents share, compared with $17.4 million, or 61 cents per share last year. Days sales outstanding, comprising accounts receivable and unbilled revenue less payments on account, were 57 days at September 30, 2006, a decrease from 65 days at December 31, 2005. For the quarter ending September 30, 2006, cash in-flows from operating activities were $2.6 million, $6.5 million was invested in acquisitions and capital expenditures were $8.4 million, of which $2.3 million related to the extension of our Dublin facility. Year-to-date, cash in-flows from operating activities were $33.0 million and capital expenditure was $19.3 million. As a result, the company�s cash and short-term investments, net of debt, was $90.7 million at September 30, 2006, compared to $101.0 million at June 30, 2006 and $77.5 million at December 31, 2005. �Q3 was another excellent quarter for ICON�, commented Chairman Dr. John Climax. �Our clinical business continues to grow very strongly and our central laboratory made further solid progress. New business wins in the quarter were very satisfactory and we have had a good start to the fourth quarter. Market conditions remain positive and we continue to be confident in the outlook for the year� ICON has invited tenders for the sale and leaseback of the company�s Dublin facility which is currently undergoing expansion. The estimated total cost of construction of the expansion will be in the region of $60 million, which will be funded from cashflow. Of this, $11 million has been spent to-date. The first phase of the expansion project will be completed and ready for occupancy in mid 2007. The remainder will be completed in mid 2008. The company will hold its third quarter conference call today, October 27, 2006 at 09:00 EST [14:00 Ireland & UK]. This call and linked slide presentation can be accessed live from our website at http://www.iconclinical.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 �shareholders services�. This calendar will be updated regularly. The statements made in this Press Release may contain forward-looking statements that involve a number of risks and uncertainties. In addition to the matters described in this Press Release, the ability to maintain large client contracts or enter into new contracts, maintain client relationships and the ability to manage the opening of new offices, the integration of new business mergers and acquisitions, as well as other risks and uncertainties detailed from time to time in SEC reports filed by ICON, including its Form 20-F, F-1, S-8 and F-3, may affect the actual results achieved by ICON. ICON disclaims any intent or obligation to update these forward-looking statements. The financial information presented herein has been prepared in accordance with U.S. GAAP. ICON plc is a global provider of outsourced development services to the pharmaceutical, biotechnology and medical device industries. The Company specializes in the strategic development, management and analysis of programs that support clinical development - from compound selection to Phase I-IV clinical studies. ICON teams have successfully conducted over 1,900 development projects and over 2,300 consultancy engagements across all major therapeutic areas. ICON currently has over 4,000 employees, operating from 48 locations in 30 countries. Further information is available at www.iconclinical.com. � ICON plc � Consolidated Income Statements (Unaudited) � Three and Nine Months ended September 30, 2006 and August 31, 2005 (Dollars, in thousands, except share and per share data) � � Three Months Ended Nine Months Ended September 30, August 31, September 30, August 31, 2006� 2005� 2006� 2005� � Gross Revenue 171,109� 115,352� 465,497� 350,672� � Subcontractor costs 50,395� 29,431� 138,852� 95,927� � � � � Net Revenue 120,714� 85,921� 326,645� 254,745� � Costs and expenses Direct costs 68,428� 47,310� 183,146� 140,847� Selling, general and administrative 35,800� 26,809� 98,477� 81,734� Depreciation and amortization 3,875� 3,434� 11,009� 10,407� One-time charges -� -� -� 11,275� � � � � Total costs and expenses 108,103� 77,553� 292,632� 244,263� � Income from operations 12,611� 8,368� 34,013� 10,482� � Interest income (net) 951� 415� 2,536� 1051� � � � � Income before provision of income taxes 13,562� 8,783� 36,549� 11,533� � Provision for income taxes 3,423� 2,459� 9,496� 4,679� Minority Interest 45� (59) 121� 50� � Net income 10,094� 6,383� 26,932� 6,804� � Net income per ordinary share Basic $0.36� $0.23� $0.95� $0.24� � Diluted $0.35� $0.23� $0.94� $0.24� � Weighted average number of ordinary shares Basic 28,351,525� 27,839,212� 28,333,823� 27,782,555� � Diluted 29,085,080� 28,300,424� 28,709,932� 28,218,814� ICON plc � Adjusted Consolidated Income Statements (a) (Unaudited) � Three and Nine Months ended September 30, 2006 and August 31, 2005 (Dollars, in thousands, except share and per share data) � Three Months Ended Nine Months Ended September 30, August 31, September 30, August 31, 2006� 2005� 2006� 2005� � Gross Revenue 171,109� 115,352� 465,497� 350,672� � Subcontractor costs 50,395� 29,431� 138,852� 95,927� � � � � Net Revenue 120,714� 85,921� 326,645� 254,745� � Costs and expenses Direct costs 67,863� 47,310� 181,497� 140,847� Selling, general and administrative 35,340� 26,809� 97,133� 81,734� Depreciation and amortization 3,875� 3,434� 11,009� 10,407� � � � � Total costs and expenses 107,078� 77,553� 289,639� 232,988� � Income from operations (a) 13,636� 8,368� (a) 37,006� (b) 21,757� � Interest income (net) 951� 415� 2,536� 1051� � � � � Income before provision of income taxes 14,587� 8,783� 39,542� 22,808� � Provision for income taxes 3,423� 2,459� 9,496� 5,404� Minority Interest 45� (59) 121� 50� � Net income 11,119� 6,383� 29,925� 17,354� � Net income per ordinary share Basic $0.39� $0.23� $1.06� $0.62� � Diluted $0.38� $0.23� $1.03� $0.61� � Weighted average number of ordinary shares Basic 28,351,525� 27,839,212� 28,333,823� 27,782,554� � Diluted 29,514,059� 28,300,424� 29,161,310� 28,218,814� (a) Excluded from the quarter to September 30, 2006, is the non-cash stock compensation expense of $1.025 million ($2.993 million for the nine months to September 30, 2006) relating to stock options expensed in accordance with SFAS No. 123(R). Also excluded from this quarter, is the adjustment of 428,979 shares (and 451,378 shares for the nine months ended September 30, 2006) on the diluted share number which is a consequence of the adoption of the standard. (b) The nine month period ended August 31, 2005, excludes a one-time charge of $11.3 million, relating to the recognition in the quarter to February 28, 2005, of an impairment of the goodwill associated with the Central Laboratory business, certain assets, lease termination costs and exit costs, net of the tax deduction thereon. � ICON plc � Summary Balance Sheet Data � � September 30, 2006 and December 31, 2005 (Dollars, in thousands) � September 30, December 31, 2006� 2005� (unaudited) (audited) Cash and short-term investments 94,710� 82,318� Short-term debt 4,000� 4,856� Net cash 90,710� 77,462� � Accounts receivable 101,124� 71,450� Unbilled revenue 76,826� 62,270� Payments on account (71,156) (50,211) Total 106,794� 83,509� � Working Capital 153,532� 132,312� � Total assets 431,137� 349,067� � Shareholder's equity 284,326� 241,558� ICON (NASDAQ:ICLR), a global provider of outsourced development services to the pharmaceutical, biotechnology and medical device industries, today reported its financial results for the third quarter ended September 30, 2006. As a consequence of the change of financial year, the comparative quarter mentioned in this press release will be the quarter ended August 31, 2005. ICON recently completed its bonus issue of shares (effectively a share spilt), the number of weighted average shares in this press release reflects the share split in both the current and comparative figures. Net revenues for the quarter were $120.7 million, representing a 40% increase over net revenues of $85.9 million for the comparative quarter last year. Income from operations, on a US GAAP basis, was $12.6 million and net income was $10.1 million or 35 cents per share, on a diluted basis. Adjusting for $1.0 million in relation to the expensing of stock compensation in accordance with SFAS No.123(R), income from operations was $13.6 million, compared to $8.4 million last year and net income was $11.1 million or a diluted 38 cents per share, compared with $6.4 million or 23 cents per share last year. Adjusted operating margin was 11.3%, compared with 9.7% for last year. Year to date, net revenues were $326.6 million, a 28% increase over the comparative period last year. Income from operations was $34.0 million and net income was $26.9 million or 94 cents per share, on a diluted basis. Adjusting these figures to exclude $3.0 million in relation to the expensing of stock compensation in the current year and the one-time charge of $11.3 million, relating primarily to the impairment of goodwill in the prior year, income from operations for the period ended September 30, 2006 was $37.0 million, an increase of 70% from $21.8 million last year and operating margin was 11.3%, compared with 8.5% for last year. Adjusted net income was $29.9 million or a diluted 103 cents share, compared with $17.4 million, or 61 cents per share last year. Days sales outstanding, comprising accounts receivable and unbilled revenue less payments on account, were 57 days at September 30, 2006, a decrease from 65 days at December 31, 2005. For the quarter ending September 30, 2006, cash in-flows from operating activities were $2.6 million, $6.5 million was invested in acquisitions and capital expenditures were $8.4 million, of which $2.3 million related to the extension of our Dublin facility. Year-to-date, cash in-flows from operating activities were $33.0 million and capital expenditure was $19.3 million. As a result, the company's cash and short-term investments, net of debt, was $90.7 million at September 30, 2006, compared to $101.0 million at June 30, 2006 and $77.5 million at December 31, 2005. "Q3 was another excellent quarter for ICON", commented Chairman Dr. John Climax. "Our clinical business continues to grow very strongly and our central laboratory made further solid progress. New business wins in the quarter were very satisfactory and we have had a good start to the fourth quarter. Market conditions remain positive and we continue to be confident in the outlook for the year" ICON has invited tenders for the sale and leaseback of the company's Dublin facility which is currently undergoing expansion. The estimated total cost of construction of the expansion will be in the region of $60 million, which will be funded from cashflow. Of this, $11 million has been spent to-date. The first phase of the expansion project will be completed and ready for occupancy in mid 2007. The remainder will be completed in mid 2008. The company will hold its third quarter conference call today, October 27, 2006 at 09:00 EST (14:00 Ireland & UK). This call and linked slide presentation can be accessed live from our website at http://www.iconclinical.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 "shareholders services". This calendar will be updated regularly. The statements made in this Press Release may contain forward-looking statements that involve a number of risks and uncertainties. In addition to the matters described in this Press Release, the ability to maintain large client contracts or enter into new contracts, maintain client relationships and the ability to manage the opening of new offices, the integration of new business mergers and acquisitions, as well as other risks and uncertainties detailed from time to time in SEC reports filed by ICON, including its Form 20-F, F-1, S-8 and F-3, may affect the actual results achieved by ICON. ICON disclaims any intent or obligation to update these forward-looking statements. The financial information presented herein has been prepared in accordance with U.S. GAAP. ICON plc is a global provider of outsourced development services to the pharmaceutical, biotechnology and medical device industries. The Company specializes in the strategic development, management and analysis of programs that support clinical development - from compound selection to Phase I-IV clinical studies. ICON teams have successfully conducted over 1,900 development projects and over 2,300 consultancy engagements across all major therapeutic areas. ICON currently has over 4,000 employees, operating from 48 locations in 30 countries. Further information is available at www.iconclinical.com. -0- *T ICON plc Consolidated Income Statements (Unaudited) Three and Nine Months ended September 30, 2006 and August 31, 2005 (Dollars, in thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, August 31, September 30, August 31, 2006 2005 2006 2005 Gross Revenue 171,109 115,352 465,497 350,672 Subcontractor costs 50,395 29,431 138,852 95,927 ------------- ----------- ------------- ----------- Net Revenue 120,714 85,921 326,645 254,745 Costs and expenses Direct costs 68,428 47,310 183,146 140,847 Selling, general and administrative 35,800 26,809 98,477 81,734 Depreciation and amortization 3,875 3,434 11,009 10,407 One-time charges - - - 11,275 ------------- ----------- ------------- ----------- Total costs and expenses 108,103 77,553 292,632 244,263 Income from operations 12,611 8,368 34,013 10,482 Interest income (net) 951 415 2,536 1051 ------------- ----------- ------------- ----------- Income before provision of income taxes 13,562 8,783 36,549 11,533 Provision for income taxes 3,423 2,459 9,496 4,679 Minority Interest 45 (59) 121 50 ------------- ----------- ------------- ----------- Net income 10,094 6,383 26,932 6,804 ============= =========== ============= =========== Net income per ordinary share Basic $0.36 $0.23 $0.95 $0.24 ------------- ----------- ------------- ----------- Diluted $0.35 $0.23 $0.94 $0.24 ------------- ----------- ------------- ----------- Weighted average number of ordinary shares Basic 28,351,525 27,839,212 28,333,823 27,782,555 Diluted 29,085,080 28,300,424 28,709,932 28,218,814 *T -0- *T ICON plc Adjusted Consolidated Income Statements (a) (Unaudited) Three and Nine Months ended September 30, 2006 and August 31, 2005 (Dollars, in thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, August 31, September 30, August 31, 2006 2005 2006 2005 Gross Revenue 171,109 115,352 465,497 350,672 Subcontractor costs 50,395 29,431 138,852 95,927 ------------- ----------- ------------- ----------- Net Revenue 120,714 85,921 326,645 254,745 Costs and expenses Direct costs 67,863 47,310 181,497 140,847 Selling, general and administrative 35,340 26,809 97,133 81,734 Depreciation and amortization 3,875 3,434 11,009 10,407 ------------- ----------- ------------- ----------- Total costs and expenses 107,078 77,553 289,639 232,988 Income from operations (a) 13,636 8,368 (a) 37,006 (b) 21,757 Interest income (net) 951 415 2,536 1051 ------------- ----------- ------------- ----------- Income before provision of income taxes 14,587 8,783 39,542 22,808 Provision for income taxes 3,423 2,459 9,496 5,404 Minority Interest 45 (59) 121 50 ------------- ----------- ------------- ----------- Net income 11,119 6,383 29,925 17,354 ============= =========== ============= =========== Net income per ordinary share Basic $0.39 $0.23 $1.06 $0.62 ------------- ----------- ------------- ----------- Diluted $0.38 $0.23 $1.03 $0.61 ------------- ----------- ------------- ----------- Weighted average number of ordinary shares Basic 28,351,525 27,839,212 28,333,823 27,782,554 Diluted 29,514,059 28,300,424 29,161,310 28,218,814 *T (a) Excluded from the quarter to September 30, 2006, is the non-cash stock compensation expense of $1.025 million ($2.993 million for the nine months to September 30, 2006) relating to stock options expensed in accordance with SFAS No. 123(R). Also excluded from this quarter, is the adjustment of 428,979 shares (and 451,378 shares for the nine months ended September 30, 2006) on the diluted share number which is a consequence of the adoption of the standard. (b) The nine month period ended August 31, 2005, excludes a one-time charge of $11.3 million, relating to the recognition in the quarter to February 28, 2005, of an impairment of the goodwill associated with the Central Laboratory business, certain assets, lease termination costs and exit costs, net of the tax deduction thereon. -0- *T ICON plc Summary Balance Sheet Data September 30, 2006 and December 31, 2005 (Dollars, in thousands) September 30, December 31, 2006 2005 (unaudited) (audited) Cash and short-term investments 94,710 82,318 Short-term debt 4,000 4,856 Net cash 90,710 77,462 Accounts receivable 101,124 71,450 Unbilled revenue 76,826 62,270 Payments on account (71,156) (50,211) Total 106,794 83,509 Working Capital 153,532 132,312 Total assets 431,137 349,067 Shareholder's equity 284,326 241,558 *T