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ICON Reports

ICON plc

Second Quarter 2017 Results






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. ~

Dublin, Ireland, July 27, 2017 – 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 n et 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.

Source: 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 and Investor Relations +1 215 616 3000
All at ICON.
ICON/ICLR-F


ICON plc
Consolidated 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, 2017
June 30, 2016
June 30, 2017
 June 30 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  566,587
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 cost 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)  (5,270)
Income before provision for income taxes
 83,151  75,182  166,185  148,311
Provision for income taxes
 (11,550)  (10,5250)  (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



ICON plc
Summary Balance Sheet Data
 June 30, 2017 and March 31, 2017
(Dollars, in thousand)

   June 30,2017
(Unaudited)

 March 31,2017
(Unaudited)

Cash and short-term investments
 314,918  318,966
Debt  (348,698)  (348,604)
Net (dept)/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 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

phone +353 1 291 2883
email info-clinical@iconplc.com
web www.iconplc.com
email ICON plc, Headquarters, South County Business Park, Leopardstown, Dublin 18, Ireland
 
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