Highlights
- Record net business wins in the quarter of $2,426 million; a
net book to bill of 1.28.
- Closing backlog of $19.6 billion, an increase of 2.7% on Q4
2021 or an increase of 9.8% year over year on a Combined Company
basis.
- Quarter 1 revenue of $1,902 million representing a year on year
increase of 121.6%. On a Combined Company basis, Quarter 1 revenue
increased 6.1% year over year and 7.8% on a constant dollar
basis.
- Adjusted EBITDA of $340.6 million or 17.9% of revenue, a year
on year increase of 124.5%.
- Adjusted net income attributable to the Group was $228.0
million or $2.76 per diluted share.
- GAAP net income attributable to the Group for Quarter 1 of
$112.0 million.
- Days sales outstanding reduced to 35 days from 49 days at March
31, 2021 on a comparable basis.
- $300 million early repayment made on Term Loan B debt. Net debt
balance of $4.58 billion with Net Debt to Adjusted EBITDA of
3.3x.
- $100 million worth of stock repurchased at an average price of
$237.76.
- Full year 2022 revenue guidance reaffirmed in the range of
$7,770 - $8,050 million, representing a year over year increase of
41.8% to 46.9%. Full year 2022 adjusted earnings per share guidance
reaffirmed in the range of $11.55 - $11.95. Adjusted earnings per
share to exclude amortization, stock compensation, foreign exchange
and transaction-related / integration-related adjustments.
ICON plc (NASDAQ: ICLR), a world-leading
healthcare intelligence and clinical research organisation, today
reported its financial results for the first quarter ended March
31, 2022.
CEO Dr. Steve Cutler commented, “ICON had a strong start to the
year in the first quarter. We saw solid demand across customer
segments, resulting in another quarter of record net business wins,
and a book to bill of 1.28x. Financial performance was driven by
constant currency revenue growth of 8% and adjusted EBITDA growth
of 19% year over year on a combined company basis, resulting in an
impressive 27% growth in earnings per share from quarter one 2021.
In addition, further progress was made on our debt pay down with a
$300 million early repayment on the Term Loan B facility, bringing
our Net Debt to adjusted EBITDA ratio down further to 3.3x.”
Dr. Cutler added, “Given the positive demand environment in
clinical development and backlog growth realized in quarter one, we
are reaffirming our revenue guidance of $7,770 - $8,050 million,
and adjusted earnings per share guidance of $11.55 – $11.95 for the
full year 2022.”
First Quarter 2022 Results
Gross business wins in the first quarter were $2,783 million and
cancellations were $357 million. This resulted in net business wins
of $2,426 million and a book to bill of 1.28.
Revenue for Quarter 1 was $1,901.8 million. This represents a
year on year increase of 121.6% or 125.0% on a constant currency
basis.
GAAP net income attributable to the Group was $112.0 million.
Adjusted net income attributable to the Group for the quarter was
$228.0 million resulting in an adjusted diluted earnings per share
of $2.76 compared to $2.17 per share for Quarter 1 2021.
Adjusted EBITDA for Quarter 1 was $340.6 million or 17.9% of
revenue, a year on year increase of 124.5%.
Cash generated from operating activities for the quarter was
$226.9 million. During the quarter, $19.6 million was spent on
capital expenditure. At March 31, 2022, the Group had cash and cash
equivalents of $559.1 million, compared to cash and cash
equivalents of $752.2 million at December 31, 2021 and $942.5
million at March 31, 2021. During the quarter, a $300 million Term
Loan B payment was made resulting in a net indebtedness balance of
$4.58 billion at year end. Additionally, during the quarter $100
million worth of stock repurchased at an average price of
$237.76.
Other Information
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
adjusted EBITDA, adjusted net income attributable to the Group and
adjusted diluted earnings per share attributable to the Group.
Adjusted EBITDA, adjusted net income and adjusted diluted earnings
per share exclude amortization, stock compensation, foreign
exchange gains and losses and transaction-related /
integration-related adjustments. 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.
To assist investors and analysts with year-over-year
comparability for the merged business, we have included Combined
Company information. These measures include financial information
that combines the stand-alone ICON plc and PRA Health Sciences,
Inc. information for revenue and Adjusted EBITDA, and other metrics
as if the merger had taken place on January 1, 2020, with
conforming adjustments to the current year presentation.
Specifically, these financials represent the simple addition of the
historical adjusted financials of each company. These combined
financials are not intended to represent pro forma financial
statements prepared in accordance with GAAP or Regulation S-X.
ICON will hold a conference call tomorrow, April 28th, 2022 at
08:00 EDT [13:00 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, the impact of
COVID-19 on our business, as well as other 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,
F-4, S-8, F-3 and certain other reports, which are available on the
SEC's website at http://www.sec.gov.
Our full-year 2022 guidance measures (other than revenue) are
provided on a non-GAAP basis without a reconciliation to the most
directly comparable GAAP measure because the company is unable to
predict with a reasonable degree of certainty certain items
contained in the GAAP measures without unreasonable efforts. Such
items include, but are not limited to, transaction-related /
integration-related expenses, restructuring and related expenses,
and other items not reflective of the company's ongoing
operations.
ICON plc is a world-leading healthcare intelligence and clinical
research organisation. From molecule to medicine, we advance
clinical research providing outsourced services to pharmaceutical,
biotechnology, medical device and government and public health
organisations. We develop new innovations, drive emerging therapies
forward and improve patient lives. With headquarters in Dublin,
Ireland, ICON employed approximately 39,300 employees in 138
locations in 53 countries as at March 31, 2022. For further
information about ICON, visit: www.iconplc.com.
ICON/ICLR-F
ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
AND MARCH 31, 2021
(UNAUDITED)
Three Months Ended
March 31, 2022
March 31, 2021
(in thousands except share and
per share data)
Revenue
$ 1,901,764
$ 858,198
Costs and expenses:
Direct costs (excluding depreciation and
amortization)
1,378,467
626,244
Selling, general and administrative
expense
195,261
86,034
Depreciation and amortization
141,405
17,405
Transaction and integration-related
expenses
12,085
12,501
Restructuring
4,207
—
Total costs and expenses
1,731,425
742,184
Income from operations
170,339
116,014
Interest income
127
257
Interest expense
(44,425)
(2,727)
Income before provision for income
taxes
126,041
113,544
Provision for income taxes
(13,286)
(16,148)
Income before share of earnings from
equity method investments
112,755
97,396
Share of equity method investments
(785)
(274)
Net income attributable to the Group
$ 111,970
$ 97,122
Net income per Ordinary Share attributable
to the Group:
Basic
$ 1.37
$ 1.84
Diluted
$ 1.36
$ 1.82
Weighted average number of Ordinary Shares
outstanding:
Basic
81,463,303
52,811,460
Diluted
82,613,098
53,310,453
ICON plc
CONDENSED CONSOLIDATED BALANCE
SHEETS
AS AT 31 MARCH 31, 2022 AND DECEMBER 31,
2021
(UNAUDITED)
March 31, 2022
December 31, 2021
ASSETS
(in thousands)
Current Assets:
Cash and cash equivalents
$ 559,098
$ 752,213
Available for sale investments
1,712
1,712
Accounts receivable, net of allowance for
credit losses
1,371,409
1,342,770
Unbilled revenue
674,509
623,121
Other receivables
60,233
56,760
Prepayments and other current assets
151,140
114,323
Income taxes receivable
52,245
50,299
Total current assets
2,870,346
2,941,198
Non-current Assets:
Property, plant and equipment, net
322,546
336,444
Goodwill
9,027,983
9,037,931
Intangible assets
4,592,587
4,710,843
Operating right-of-use assets
187,295
198,123
Other receivables
66,310
70,557
Income taxes receivable
13,841
18,637
Deferred tax asset
54,362
48,392
Equity method investments
1,588
2,373
Investments in equity- long term
25,996
22,592
Total Assets
$ 17,162,854
$ 17,387,090
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current Liabilities:
Accounts payable
$ 63,508
$ 90,764
Unearned revenue
1,300,980
1,323,961
Other liabilities
1,081,150
949,629
Income taxes payable
40,644
59,433
Current bank credit lines and loan
facilities
55,150
55,150
Total current liabilities
2,541,432
2,478,937
Non-current Liabilities:
Bank credit lines and loan facilities
5,086,943
5,381,162
Lease liabilities
154,345
159,483
Other liabilities
38,170
42,596
Income taxes payable
214,748
172,109
Deferred tax liability
1,057,899
1,085,976
Total Liabilities
9,093,537
9,320,263
Shareholders' Equity:
Ordinary shares, par value 6 euro cents
per share; 100,000,000 shares authorized,
81,293,012 shares issued and outstanding
at March 31, 2022 and
81,554,683 shares issued and outstanding
at December 31, 2021
6,622
$ 6,640
Additional paid‑in capital
6,760,238
$ 6,733,910
Other undenominated capital
1,162
1,134
Accumulated other comprehensive income
(126,755)
(90,937)
Retained earnings
1,428,050
1,416,080
Total Shareholders' Equity
8,069,317
8,066,827
Total Liabilities and Equity
$ 17,162,854
$ 17,387,090
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
AND MARCH 31, 2021
(UNAUDITED)
Three Months Ended
March 31, 2022
March 31, 2021
(in thousands)
Cash flows from operating
activities:
Net income
$ 111,970
$ 97,122
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
141,405
19,837
Impairment of long lived assets
3,574
—
Reduction in carrying value of
right-of-use assets
13,077
4,683
Loss on equity method investments
785
274
Charge on interest rate hedge
—
56
Amortization of financing costs and debt
discount
5,781
139
Stock compensation expense
18,903
6,394
Deferred tax benefit
(34,702)
(664)
Unrealised foreign exchange gain
(7,323)
(1,060)
Other non-cash items
(2,895)
(744)
Changes in assets and liabilities:
Accounts receivable
(35,461)
52,015
Unbilled revenue
(55,427)
11,796
Unearned revenue
(16,812)
(50,079)
Other net assets
84,041
(27,849)
Net cash provided by operating
activities
226,916
111,920
Cash flows from investing
activities:
Purchase of property, plant and
equipment
(19,632)
(8,704)
Sale/ (purchase) of investments in equity
- long term
96
(599)
Net cash used in investing activities
(19,536)
(9,303)
Cash flows from financing
activities:
Proceeds from exercise of equity
compensation
7,491
5
Share issue costs
(3)
(5)
Repurchase of ordinary shares
(99,983)
—
Share repurchase costs
(17)
—
Repayment of bank credit lines and loan
facilities
(300,000)
—
Net cash used in by financing
activities
(392,512)
—
Effect of exchange rate movements on
cash
(7,983)
(467)
Net increase in cash and cash
equivalents
(193,115)
102,150
Cash and cash equivalents at beginning of
period
752,213
840,305
Cash and cash equivalents at end of
period
$ 559,098
$ 942,455
RECONCILIATION OF NON-GAAP MEASURES
FOR THE THREE MONTHS ENDED MARCH 31, 2022
AND MARCH 31, 2021
(UNAUDITED)
Three Months Ended
March 31, 2022
March 31, 2021
(in thousands except share and
per share data)
Adjusted EBITDA
Net income attributable to the Group
$ 111,970
$ 97,122
Share of equity method investments
785
274
Provision for income taxes
13,286
16,148
Net interest expense (a)
44,298
2,470
Depreciation and amortization
141,405
17,405
Stock-based compensation expense (b)
19,220
6,835
Foreign currency losses (gains), net
(c)
(6,646)
(1,060)
Restructuring (d)
4,207
—
Transaction-related / integration-related
costs (e)
12,085
12,501
Adjusted EBITDA
$ 340,610
$ 151,695
Adjusted net income attributable to the
Group and adjusted diluted net income per Ordinary Share
attributable to the Group
Net income attributable to the Group
$ 111,970
$ 97,122
Provision for income taxes
13,286
16,148
Amortisation
114,802
4,683
Stock-based compensation expense (b)
19,220
6,835
Foreign currency losses (gains), net
(c)
(6,646)
(1,060)
Restructuring (d)
4,207
—
Transaction-related / integration-related
costs (e)
12,085
12,501
Transaction-related financing costs
(f)
5,781
354
Adjusted tax expense (g)
(46,744)
(20,872)
Adjusted net income attributable to the
Group
$ 227,961
$ 115,711
Diluted weighted average number of
Ordinary Shares outstanding
82,613,098
53,310,453
Adjusted diluted net income per
Ordinary Share attributable to the Group
$ 2.76
$ 2.17
ICON plc
RECONCILIATION OF NON-GAAP MEASURES
(COMBINED COMPANY)
FOR THE THREE MONTHS ENDED MARCH 31, 2022
AND MARCH 31, 2021
(UNAUDITED)
Three Months Ended
March 31, 2022
March 31, 2021
(in thousands except share and
per share data)
Combined Company adjusted
revenue
Revenue, as reported
$ 1,901,764
$ 858,198
Pre-merger PRA Health Sciences Revenue
-
933,775
Combined Company revenue
$ 1,901,764
$ 1,791,973
Combined Company adjusted
EBITDA
Net income attributable to the Group
$ 111,970
$ 97,122
Pre-merger PRA Health Sciences Net income
attributable to the Group
-
56,940
Combined Company Net income attributable
to the Group
$ 111,970
$ 154,062
Share of equity method investments
785
274
Provision for income taxes
13,286
35,844
Net interest expense (a)
44,298
7,682
Depreciation and amortization
141,405
49,973
Stock-based compensation expense (b)
19,220
25,607
Foreign currency losses (gains), net
(c)
(6,646)
(13,448)
Restructuring (d)
4,207
—
Transaction-related / integration-related
costs (e)
12,085
25,937
Combined Company adjusted
EBITDA
$ 340,610
$ 285,931
(a) Net interest expense includes losses on modification or
extinguishment of debt.
(b) Stock-based compensation expense represents the amount of
recurring non-cash expense related to the Company’s equity
compensation programs (inclusive of employer related taxes).
(c) Foreign currency losses (gains), net relates to gains or
losses that arise in connection with the revaluation of non-US
dollar denominated assets and liabilities. We exclude these gains
and losses from adjusted EBITDA and adjusted net income because
fluctuations from period- to- period do not necessarily correspond
to changes in our operating results.
(d) Restructuring charges incurred relate to charges incurred in
connection with the termination of leases at locations that are no
longer being used and amounts incurred in connection with the
elimination of redundant positions within the organisation.
(e) Transaction-related / integration-related costs include
expenses/credits associated with our acquisitions, share-based
compensation expense related to the acceleration of share-based
compensation awards and replacement share-based awards, contingent
consideration valuation adjustments, and any other costs incurred
directly related to the integration of these acquisitions.
(f) Transaction-related financing costs includes costs incurred
in connection with changes to our long-term debt and amortization
of financing fees. We exclude these costs from Adjusted EBITDA and
Adjusted Net Income because they result from financing decisions
rather than from decisions made related to our ongoing
operations.
(g) Represents the tax effect of adjusted pre-tax income at our
estimated effective tax rate.
http://www.iconplc.com
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Investor Relations +1888 381 7923
Brendan Brennan Chief Financial Officer +353 1 291 2000
Kate Haven Vice President Investor Relations +1888 381 7923
All at ICON
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