Highlights
- Excluding the impact of ASC 606, record
net business wins in the quarter of $600 million; a book to bill of
1.27.
- Excluding the impact of ASC 606,
closing backlog of $5.2 billion, an increase of 16% year on
year.
- Quarter 2 reported revenue of $641.6
million. Excluding the impact of ASC 606, quarter 2 revenue was
$473.9 million, representing a 10% increase year on year.
- Reported income from operations before
non-recurring charges was $94.4 million, or 14.7% of revenue.
Excluding the impact of ASC 606 income from operations before
non-recurring charges was $96.0 million or 20.2% of revenue, a 12%
increase year on year.
- Reported earnings per share before
non-recurring charges of $1.51. Year to date earnings per share
before non-recurring charges of $2.93, an increase of 13% on 2017.
Excluding the impact of ASC 606, earnings per share before
non-recurring items was $1.54, an 18% increase year on year.
- Revenue guidance increased from a range
of $2,520 - $2,640 million to a range of $2,560 - $2,640 million.
Earnings guidance increased from a range of $5.91 - $6.11 to a
range of $5.98 - $6.12.
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, 2018.
CEO Dr. Steve Cutler commented, “During the quarter we delivered
a new record $600 million of net business wins, representing a
quarterly book to bill of 1.27. Market demand fundamentals continue
to remain positive and supported by a strong trailing twelve month
book to bill of 1.29, our backlog grew to $5.2 billion, an increase
of 16% year over year. In quarter 2 revenues grew 10% over the same
period in 2017 and along with continued efficient cost management
and a quarterly effective tax rate of 10%, we delivered further
value to our shareholders with earnings per share increasing by
18%. We are increasing our revenue guidance to a range of $2,560 -
$2,640 million and our earnings guidance to a range of $5.98 -
$6.12.”
Second Quarter 2018 Results
Excluding the impact of ASC 606, gross business wins in the
second quarter were $720 million and cancellations were $120
million. This resulted in net business wins of $600 million, a book
to bill of 1.27.
Reported revenue for quarter 2 was $641.6 million. Excluding the
impact of ASC 606, quarter 2 revenue increased to $473.9 million
from $431.0 million in the same quarter last year, an increase of
10.0%.
Reported income from operations in the quarter before
non-recurring charges was $94.4 million or 14.7% of revenue.
Excluding the impact of ASC 606, income from operations before
non-recurring charges increased by 11.9% to $96.0 million, or 20.2%
of revenue, compared to $85.8 million or 19.9% for the same quarter
last year.
Reported net income for the quarter before non-recurring charges
was $82.9 million or 12.9% of revenue. Excluding the impact of ASC
606, net income before non-recurring charges increased by 17.7% to
$84.3 million, compared with $71.6 million in the same quarter last
year.
Reported earnings per share on a diluted basis before
non-recurring charges was $1.51. Excluding the impact of ASC 606,
diluted earnings per share before non-recurring charges increased
by 17.6% to $1.54, compared to $1.31 per share for the same quarter
last year.
Year to date 2018 Results
Excluding the impact of ASC 606, gross business wins year to
date were $1,423 million and cancellations were $233 million. This
resulted in net business wins of $1,190 million, a book to bill of
1.27.
Year to date reported revenue was $1,261.7 million. Excluding
the impact of ASC 606, year to date revenue increased to $936.5
million from $863.0 million in the same quarter last year, an
increase of 8.5%.
Reported income from operations year to date, before
non-recurring charges was $186.1 million or 14.7% of revenue.
Excluding the impact of ASC 606, income from operations before
non-recurring charges increased by 10.1% to $188.7 million, or
20.2% of revenue, compared to $171.4 million or 19.9% for the same
quarter last year.
Reported net income year to date, before non-recurring charges
was $161.0 million or 12.8% of revenue. Excluding the impact of ASC
606, net income before non-recurring charges increased by 14.2% to
$163.3 million, compared with $143.0 million in the same quarter
last year.
Reported earnings per share on a diluted basis before
non-recurring charges was $2.93. Excluding the impact of ASC 606,
diluted earnings per share before non-recurring charges increased
by 14.6% to $2.98, compared to $2.60 per share for the same quarter
last year.
We continued our share repurchase program in the quarter, buying
$16.0 million worth of stock at an average price of $134.22 per
share.
Days sales outstanding, comprising accounts receivable and
unbilled revenue less payments on account, were 49 days at June 30,
2018, compared with 51 days at the end of March 2018 and 53 days at
the end of June 2017.
Cash generated from operating activities for the quarter was
$39.2 million. Capital expenditure for the quarter was $8.9
million. As a result, at June 30, 2018, the company had net cash of
$23.9 million, compared to net cash of $4.6 million at March 31,
2018 and net debt of $33.8 million at the end of June 2017.
During the quarter the company recorded a charge of $12.5
million in relation to restructuring costs. US GAAP income from
operations after these items amounted to $81.9 million or 12.8% of
revenue. US GAAP net income for the quarter was $71.9 million or
$1.31 per diluted share.
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 six months ended June 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 second quarter conference call tomorrow, July
26, 2018 at 09:00 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 93 locations in 37 countries and has approximately
13,650 employees. Further information is available at
www.iconplc.com.
Source: ICON plcContact: Investor Relations +1888 381 7923
orBrendan Brennan Chief Financial Officer +353 1 291 2000Jonathan
Curtain Vice President Corporate Finance and Investor Relations +1
215 616 3000
All at ICON.
ICON plc Condensed Consolidated
Statements of Operations (Before restructuring and other
items) Three and Six Months ended June 30, 2018 and June 30,
2017 (Dollars, in thousands, except share and per share
data) (Unaudited)
Three Months Ended Six Months Ended
June
30,
June
30,
June
30,
June
30,
2018
2017
2018
2017
Revenue: Revenue 641,610 591,781 1,261,735 1,169,847
Reimbursable expenses (160,758)
(306,870) 431,023 862,977
Costs and expenses:
Direct costs
- Reimbursable expenses
(169,313) - (328,066) -
- Other direct costs
(279,913) (250,044) (551,752) (500,503) Selling, general and
administrative expense (80,936) (80,833) (161,851) (162,222)
Depreciation and amortization (17,046) (14,395)
(33,944) (28,843)
Total costs and expenses
(547,208) (345,272) (1,075,613) (691,568)
Income
from operations 94,402 85,751 186,122 171,409 Net
interest expense (2,285) (2,600) (5,257) (5,224)
Income before provision for income taxes 92,117
83,151 180,865 166,185 Provision for income taxes
(9,212) (11,550) (19,862) (23,175)
Net income
82,905 71,601 161,003 143,010 Net income per
Ordinary Share: Basic $1.53 $1.33 $2.98 $2.64
Diluted $1.51 $1.31 $2.93 $2.60
Weighted average number of Ordinary Shares outstanding:
Basic 54,109,702 53,846,544 54,017,631 54,109,800
Diluted 54,852,453 54,530,805 54,875,451
54,923,019
ICON plc Condensed Consolidated
Statements of Operations (US GAAP) Three and Six
Months ended June 30, 2018 and June 30, 2017 (Dollars, in
thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
June
30,
June
30,
June
30,
June
30,
2018
2017
2018
2017
Revenue: Revenue 641,610 591,781 1,261,735 1,169,847
Reimbursable expenses (160,758)
(306,870) 431,023 862,977
Costs and expenses:
Direct costs
- Reimbursable expenses
(169,313) - (328,066) -
- Other direct costs
(279,913) (250,044) (551,752) (500,503) Selling, general and
administrative expense (80,936) (80,833) (161,851) (162,222)
Depreciation and amortization (17,046) (14,395) (33,944) (28,843)
Restructuring costs (12,490) (7,753) (12,490) (7,753)
Total costs and expenses (559,698)
(353,025) (1,088,103) (699,321)
Income from
operations 81,912 77,998 173,632 163,656 Net interest
expense (2,285) (2,600) (5,257) (5,224)
Income before provision for income taxes 79,627 75,398
168,375 158,432 Provision for income taxes (7,759)
(10,581) (18,409) (22,206)
Net income
71,868 64,817 149,966 136,226 Net income per Ordinary
Share: Basic $1.33 $1.20 $2.78 $2.52
Diluted $1.31 $1.19 $2.73 $2.48 Weighted
average number of Ordinary Shares outstanding: Basic
54,109,702 53,846,544 54,017,631 54,109,800 Diluted
54,852,453 54,530,805 54,875,451 54,923,019
ICON plc Impact of the adoption of
ASC 606 on revenue Three and Six Months ended June 30, 2018
and June 30, 2017 (Dollars, in thousands)
(Unaudited)
Three Months Ended June 30, 2018
Three Months, Ended June 30,
2017
As Reported ASC 606 Adjustments
Balances without adoption of ASC 606
As Reported
Revenue: Revenue 641,610 1,614 643,224 591,781 Reimbursable
expenses (169,313) (169,313) (160,758)
641,610
(167,699) 473,911 431,023
Six Months Ended June 30, 2018
Six Months, Ended June 30, 2017
As Reported ASC 606 Adjustments
Balances without adoption of ASC 606
As Reported
Revenue: Revenue 1,261,735 2,845 1,264,580 1,169,847
Reimbursable expenses (328,066) (328,066) (306,870)
1,261,735 (325,221) 936,514 862,977
ICON plc Summary Balance Sheet
Data June 30, 2018 and March 31, 2018 (Dollars, in
thousands)
June 30, March 31, 2018
2018 (Unaudited) (Unaudited)
Cash and short-term investments 372,996 353,542 Debt (349,074)
(348,980) Net cash/(debt) 23,922 4,562 Net Accounts
Receivable 352,332 354,275 Working Capital 600,398 535,340
Total Assets 2,215,512 2,219,445 Shareholder's Equity
1,238,748 1,204,995
ICON/ICLR-F
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version on businesswire.com: https://www.businesswire.com/news/home/20180725005834/en/
ICON plcInvestor Relations+1-888-381-7923 ororBrendan
BrennanChief Financial Officer+353-1-291-2000orJonathan CurtainVice
President Corporate Finance & Investor
Relations+1-215-616-3000http://www.iconplc.com
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