Highlights
- Record net business wins of $563
million; net book to bill of 1.31. Backlog of business grew 10%
year on year to $4.44 billion.
- Net revenue increased 5.0% to $431
million compared to the same quarter last year, 6.0% on a constant
currency basis.
- Top customer revenue concentration
reduced from 28% of revenue in Q2 2016 to 19.9% in Q2 2017.
- Income from operations, before
non-recurring charges, increased 10% to 19.9% of revenue compared
to the same quarter last year.
- Earnings per share, before
non-recurring charges, increased 15% to $1.31 year on year.
- Guidance increased to reflect the
acquisition of Mapi Group and revised tax rate for the second half
of 2017. Earnings guidance increased from a range of $5.06 - $5.26
to $5.18 - $5.38. Revenue guidance increased from a range of $1.70
- $1.75 billion to $1.74 - $1.77 billion.
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 second quarter ended June 30, 2017.
Gross business wins in the second quarter were $649 million and
cancellations in the quarter were $86 million, resulting in net
business wins of $563 million, a net book to bill of 1.31.
In the second quarter net revenue grew 5.0% year on year to
$431.0 million from $410.6 million in the same quarter last year.
This represented 6.0% constant currency growth and 2.6% constant
dollar organic growth year on year. Revenue outside of ICON's top
customer grew 17% year over year.
Income from operations, before non-recurring charges, in the
quarter increased by 9.9% to $85.8 million, or 19.9% of revenue,
compared to $78.0 million or 19.0% for the same quarter last
year.
The effective tax rate in quarter 2 was 14% and the company now
expects the full year 2017 effective tax rate to be 12%.
Net income, before non-recurring charges, in the quarter
increased by 10.7% to $71.6 million compared with $64.7 million in
the same quarter last year.
Earnings per share, before non-recurring charges, increased to
$1.31 per share on a diluted basis, from $1.14 per share for the
same quarter last year, an increase of 14.9%.
Day’s sales outstanding, comprising accounts receivable and
unbilled revenue less payments on account, were 53 days at June 30,
2017, compared with 47 days at the end of March 31, 2017 and 46
days at the end of June 2016.
Cash generated from operating activities for the quarter was
$9.1 million. Capital expenditure for the quarter was $6.9 million.
Additionally, as part of ICON’s share buy-back program, $11.7
million was spent on share repurchases in quarter two. As a result,
at June 30, 2017, the company had net debt of $34 million, compared
to net debt of $30 million at March 31, 2017 and net debt of $97
million at end of June 2016.
During the quarter the company recorded a charge of $7.8 million
in relation to restructuring costs. US GAAP income from operations
after these items amounted to $78.0 million or 18.1% of revenue. US
GAAP net income for the quarter was $64.8 million or $1.19 per
diluted share.
CEO Dr. Steve Cutler commented, “During the quarter we delivered
a record $563 million of new business, representing a book to bill
of 1.31. Supported by a strong trailing twelve month book to bill
excluding our top customer of 1.42x, our backlog grew to over $4.4
billion, an increase of 10% year over year. In Quarter 2 revenues
grew 5% over the same period in 2016, with our top customer
concentration reducing to less than 20% from 28% last year and
revenue growth excluding this customer increasing by nearly 17%. In
addition, we expanded our market leading service offering in the
fast growing late phase market by completing the acquisition of
Mapi Group. This acquisition, along with our revised tax rate,
means we are increasing both our full year EPS guidance to a range
of $5.18 - $5.38 and our revenue guidance to a range of $1.740
billion - $1.770 billion.”
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 second quarter conference call today, July
27, 2017 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 84 locations in 38 countries and has approximately
12,300 employees. Further information is available at
www.iconplc.com.
ICON plcConsolidated Income
Statements (Unaudited)(Before restructuring and other
items)Three Months ended June 30, 2017 and June 30,
2016(Dollars, in thousands, except share and per share
data)
Three Months Ended Six Months Ended
June
30,
June
30,
June
30,
June
30,
2017
2016
2017
2016
Revenue: Gross revenue 591,781 589,647 1,169,847 1,132,230
Reimbursable expenses (160,758) (179,017)
(306,870) (321,078)
Net revenue 431,023
410,630 862,977 811,152
Costs and expenses: Direct
costs 250,044 237,984 500,503 466,587 Selling, general and
administrative expense 80,833 80,168 162,222 160,957 Depreciation
and amortization 14,395 14,457 28,843
29,577
Total costs and expenses 345,272
332,609 691,568 657,121
Income from
operations 85,751 78,021 171,409 154,031 Net interest
expense (2,600) (2,839) (5,224) (5,720)
Income before provision for income taxes 83,151
75,182 166,185 148,311 Provision for income taxes
(11,550) (10,525) (23,175) (20,690)
Net income 71,601 64,657 143,010
127,621 Net income per Ordinary Share: Basic
$1.33 $1.17 $2.64 $2.31 Diluted
$1.31 $1.14 $2.60 $2.26 Weighted
average number of Ordinary Shares outstanding: Basic
53,846,544 55,318,923 54,109,800 55,164,971
Diluted 54,530,805 56,580,799
54,923,019 56,427,516
Consolidated Income Statements
(Unaudited)(US GAAP)Three Months ended June 30, 2017
and June 30, 2016(Dollars, in thousands, except share and
per share data)
Three Months Ended Six Months Ended
June
30,
June
30,
June
30,
June
30,
2017
2016
2017
2016
Revenue: Gross revenue 591,781 589,647 1,169,847 1,132,230
Reimbursable expenses (160,758) (179,017)
(306,870) (321,078)
Net revenue 431,023
410,630 862,977 811,152
Costs and expenses: Direct
costs 250,044 237,984 500,503 466,587 Selling, general and
administrative expense 80,833 80,168 162,222 160,957 Depreciation
and amortization 14,395 14,457 28,843 29,577 Restructuring costs
7,753 4,094 7,753 4,094
Total
costs and expenses 353,025 336,703 699,321
661,215
Income from operations 77,998 73,927
163,656 149,937 Net interest expense (2,600)
(2,839) (5,224) (5,720)
Income before
provision for income taxes 75,398 71,088 158,432 144,217
Provision for income taxes
(10,581)
(10,014)
(22,206)
(20,179)
Net income 64,817 61,074 136,226
124,038 Net income per Ordinary Share: Basic
$1.20 $1.10 $2.52 $2.25 Diluted
$1.19 $1.08 $2.48 $2.20 Weighted
average number of Ordinary Shares outstanding: Basic
53,846,544 55,318,923 54,109,800 55,164,971
Diluted 54,530,805 56,580,799
54,923,019 56,427,516
ICON plcSummary Balance Sheet
DataJune 30, 2017 and March 31, 2017(Dollars, in
thousands)
June 30, March 31, 2017
2017 (Unaudited) (Unaudited)
Cash and short-term investments 314,918 318,966 Debt (348,698)
(348,604) Net (debt)/cash (33,780) (29,638) Accounts
receivable 359,899 340,540 Unbilled revenue 249,234 226,152
Payments on account (261,484) (266,704) Total 347,649 299,988
Working Capital 538,473 466,662 Total Assets
1,904,310 1,855,215 Shareholder's Equity 1,029,592 944,509
ICON/ICLR-F
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version on businesswire.com: http://www.businesswire.com/news/home/20170727005560/en/
ICON plcInvestor Relations, 1-888-381-7923orBrendan Brennan, +
353 1 291 2000Chief Financial OfficerorJonathan Curtain,
+1-215-616-3000Vice President Corporate Finance & Investor
Relationshttp://www.iconplc.com
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