Highlights
- Record net business wins* in the
quarter of $607 million, a book to bill of 1.25. Full year net
business wins* of $2.4 billion, a net book to bill of 1.27.
- Record closing backlog* of $5.4
billion, an increase of 9.7% year on year.
- Quarter 4 reported revenue of $679.0
million. Full year reported revenue of $2,596 million. This
represents a 6.5% increase year on year for Quarter 4* and a full
year revenue increase of 7.9%*.
- Quarter 4 reported income from
operations was $101.8 million, or 15.0% of revenue. Full year
reported income from operations before non-recurring charges was
$385.8 million or 14.9% of revenue. This represents an increase*
for the quarter and full year of 14.2% and 12.7% respectively.
- Quarter 4 reported earnings per share
of $1.62. Full year reported earnings per share before
non-recurring charges of $6.09. This represents an increase* for
the quarter and full year of 13.8% and 14.2% respectively.
- In January 2019, ICON signed an
agreement to acquire MolecularMD, a specialist laboratory, which
expands our current lab capabilities into molecular testing,
immunohistochemistry and companion diagnostics for precision
medicine research.
- The extension of ICON’s master services
agreement with Pfizer Inc. (NYSE:PFE).
- 2019 outlook reaffirmed with revenue
guidance in the range of $2,735 - $2,835 million and earnings per
share guidance in the range of $6.69 – $6.89 a year over year
increase of 9.9% - 13.1%.*Excluding the impact of ASC 606
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 fourth quarter and full year ended
December 31, 2018.
CEO Dr. Steve Cutler commented, “During 2018, ICON’s operational
excellence and market leading service offerings resulted in net
business bookings of over $2.4 billion and the expansion of our
backlog by 10% to $5.4 billion. Our revenues grew by 8% year over
year and our continued focus on pro-active cost saving efficiencies
enabled us to grow EPS by over 14% to $6.16.
Today we are delighted to announce the acquisition of
MolecularMD. MolecularMD enhances our laboratory offering in
molecular diagnostic testing, a key area in oncology research, and
also brings to ICON expanded testing platforms, including next
generation sequencing and immunohistochemistry. MolecularMD’s
services also include companion diagnostic development which will
further enhance the competitiveness of our overall lab
offering.
We are also delighted to announce the extension of ICON’s master
services agreement with Pfizer. The extension of the agreement
reflects our strong working relationship with Pfizer and we look
forward to continuing to help Pfizer advance its development
pipeline rapidly and efficiently.
As we look forward, we expect 2019 to be another year of robust
revenue and earnings growth and we reaffirm our outlook with
revenue guidance in the range of $2,735 - $2,835 million and
earnings per share guidance in the range of $6.69 - $6.89, a year
over year increase of 10% - 13%.”
Fourth Quarter 2018 Results
Excluding the impact of ASC 606, gross business wins in the
fourth quarter were $722 million and cancellations were $115
million. This resulted in net business wins of $607 million, a book
to bill of 1.25.
Reported revenue for quarter 4 was $679.0 million. Excluding the
impact of ASC 606, quarter 4 revenue increased to $484.7 million
from $455.1 million in the same quarter last year, an increase of
6.5%.
Reported income from operations in the quarter was $101.8
million or 15.0% of revenue. Excluding the impact of ASC 606,
income from operations increased by 14.2% to $102.4 million, or
21.1% of revenue, compared to $89.7 million or 19.7% for the same
quarter last year.
Reported net income for the quarter was $88.2 million or 13.0%
of revenue. Excluding the impact of ASC 606, net income increased
by 13.0% to $88.7 million, compared with $78.5 million in the same
quarter last year.
Reported earnings per share on a diluted basis was $1.62.
Excluding the impact of ASC 606, diluted earnings per share
increased by 13.8% to $1.63, compared to $1.43 per share for the
same quarter last year.
Days sales outstanding on a 605 basis, comprising accounts
receivable and unbilled revenue less payments on account, were 57
days at December 31, 2018, compared with 49 days at the end of
December 2017.
Cash generated from operating activities for the quarter was
$60.9 million. During the quarter, capital expenditure was $20.0
million and $72 million worth of stock was repurchased at an
average price of $137.66. As a result, at December 31, 2018, the
company had net cash of $106.5 million, compared to net cash of
$142.3 million at September 30, 2018 and net cash of $11.6 million
at the end of December 2017.
Full Year 2018 Results
Excluding the impact of ASC 606, full year gross business wins
were $2,860 million and cancellations were $459 million. This
resulted in net business wins of $2,401 million, a book to bill of
1.27.
Full year reported revenue was $2,595.8 million. Excluding the
impact of ASC 606, full year revenue increased to $1,897.6 million
from $1,758.4 million in 2017, an increase of 7.9%.
Full year reported income from operations before non-recurring
charges was $385.8 million or 14.9% of revenue. Excluding the
impact of ASC 606, income from operations before non-recurring
charges increased by 12.7% to $390.0 million, or 20.6% of revenue,
compared to $346.1 million or 19.7% of revenue in the previous
year.
Full year reported net income before non-recurring charges was
$333.7 million or 12.9% of revenue. Excluding the impact of ASC
606, net income before non-recurring charges increased by 14.1% to
$337.4 million, compared with $295.7 million last year.
Full year reported earnings per share on a diluted basis before
non-recurring charges was $6.09. Excluding the impact of ASC 606,
diluted earnings per share before non-recurring charges increased
by 14.2% to $6.16, compared to $5.39 per share last year.
Pfizer Master Services Agreement extension
The extension extends the term of the agreement signed in June
2016 from a 3 year term with Pfizer having the right to extend the
term by a further 2 years, to a term of 4 years with Pfizer
retaining the right to extend the term by a further 2 years.
Other Information
The new revenue recognition standard (ASU No. 2014-09) ‘Revenue
from Contracts with Customers’ was effective for ICON plc from
January 1, 2018. ICON has elected to adopt the new standard under
the cumulative effect transition method. Under this transition
method, the new standard is applied from January 1, 2018 without
restatement of comparative period amounts. The cumulative effect of
initially applying the new standard is reflected as an adjustment
to opening equity at the date of application. Results for the three
and twelve months ended December 2017 are therefore presented under
the previous revenue recognition accounting principles.
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 fourth quarter conference call tomorrow,
February 21st, 2019 at 09:00 EST [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 employed
approximately 13,670 employees in 89 locations in 37 countries as
at December 31, 2018. Further information is available at
www.iconplc.com.
ICON plc
Condensed Consolidated Statements of
Operations
(Before restructuring and other
items)
Three and Twelve Months ended December 31,
2018 and December 31, 2017
(Dollars, in thousands, except share and per
share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December December
December
December 31, 2018
31, 2017 31, 2018
31, 2017 Revenue:
Revenue 679,025 636,305 2,595,777 2,402,321 Reimbursable expenses
(181,166) (643,882)
455,139 1,758,439
Costs and expenses: Direct
costs (479,206) (267,135) (1,818,220) (1,027,310) Selling, general
and administrative expense (83,124) (82,086) (325,794) (323,741)
Depreciation and amortization (14,910) (16,174)
(65,916) (61,297)
Total costs and
expenses (577,240) (365,395) (2,209,930)
(1,412,348)
Income from operations 101,785
89,744 385,847 346,091 Net interest expense (1,599)
(2,512) (8,743) (10,281)
Income
before provision for income taxes 100,186 87,232 377,104
335,810 Provision for income taxes (12,023)
(8,724) (43,411) (40,137)
Net income
88,163 78,508 333,693 295,673 Net income per
Ordinary Share: Basic $1.63 $1.45 $6.17
$5.46 Diluted $1.62 $1.43 $6.09
$5.39 Weighted average number of Ordinary Shares
outstanding: Basic 54,071,137 54,187,688
54,118,764 54,129,439 Diluted
54,475,302 54,844,232 54,790,663 54,849,046
ICON plc
Condensed Consolidated Statements of
Operations
(US GAAP)
Three and Twelve Months ended December 31,
2018 and December 31, 2017
(Dollars, in thousands, except share and per
share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December December
December
December 31, 2018
31, 2017 31, 2018
31, 2017 Revenue:
Revenue 679,025 636,305 2,595,777 2,402,321 Reimbursable expenses
(181,166) (643,882)
455,139 1,758,439
Costs and expenses: Direct
costs (479,206) (267,135) (1,818,220) (1,027,310) Selling, general
and administrative expense (83,124) (82,086) (325,794) (323,741)
Depreciation and amortization (14,910) (16,174) (65,916) (61,297)
Restructuring costs - - (12,490)
(7,753)
Total costs and expenses (577,240)
(365,395) (2,222,420) (1,420,101)
Income from operations 101,785 89,744 373,357 338,338
Net interest expense (1,599) (2,512) (8,743)
(10,281)
Income before provision for income
taxes 100,186 87,232 364,614 328,057 Provision for
income taxes (12,023) (16,124) (41,958)
(46,569)
Net income 88,163 71,108
322,656 281,488 Net income per Ordinary Share:
Basic $1.63 $1.31 $5.96 $5.20
Diluted $1.62 $1.30 $5.89 $5.13
Weighted average number of Ordinary Shares outstanding:
Basic 54,071,137 54,187,688 54,118,764
54,129,439 Diluted 54,475,302
54,844,232 54,790,663 54,849,046
ICON plc
Impact of the adoption of ASC 606 on
revenue
Three and Twelve Months ended December 31,
2018 and December 31, 2017
(Dollars, in thousands)
(Unaudited)
Three Months Ended December 31, 2018
Three Months, Ended December 31,
2017
As Reported ASC 606 Adjustments
Balances without adoption of ASC 606
As Reported
Revenue: Revenue 679,025 790 679,815 636,305
Reimbursable expenses (195,105)
(195,105) (181,166)
679,025 (194,315)
484,710 455,139
Twelve Months Ended December 31, 2018
Twelve Months, Ended December 31,
2017
As Reported ASC 606 Adjustments
Balances without adoption of ASC 606
As Reported
Revenue: Revenue 2,595,777 4,657 2,600,434
2,402,321 Reimbursable expenses (702,812)
(702,812) (643,882)
2,595,777
(698,155) 1,897,622 1,758,439
ICON plc
Summary Balance Sheet Data
December 31, 2018 and December 31,
2017
(Dollars, in thousands)
December 31, December 31, 2018
2017 (Unaudited) (Audited) Cash
and short-term investments 455,761 360,448 Debt (349,264) (348,888)
Net cash/(debt) 106,497 11,560 Net Accounts Receivable
503,249 349,018 Working Capital 719,560 534,960 Total
Assets 2,354,255 2,146,618 Shareholder's Equity 1,354,281
1,191,000
ICON plc
Contact: Investor Relations +1 888 381 7923 or
Brendan Brennan Chief Financial Officer +353 1 291 2000
Jonathan Curtain Vice President Corporate Finance & Investor
Relations +1 215 616 3000
http://www.iconplc.com
ICON/ICLR-F
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version on businesswire.com: https://www.businesswire.com/news/home/20190220005851/en/
ICON plcInvestor Relations+1 888 381 7923orBrendan BrennanChief
Financial Officer+353 1 291 2000orJonathan CurtainVice President
Corporate Finance & Investor Relations+1 215 616
3000http://www.iconplc.com
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