Highlights
- Record net business wins in the quarter of $990 million; a book
to bill of 1.41.
- Record closing backlog of $9.4 billion, an increase of 11.8%
year on year.
- Quarter 3 reported revenue of $701.7 million representing a
year on year decrease of 1.2% and 13.1% increase on Quarter 2
2020.
- Adjusted earnings per share attributable to the Group for the
quarter of $1.72, compared to $1.74 in Quarter 3 2019. Year to date
earnings per share* attributable to the group of $4.63, compared to
$5.06 for the equivalent prior year period.
- Strong balance sheet and liquidity position remains,
exceptional cash generation delivers net cash position of $360
million. Days sales outstanding reduced to 45 days from 56 days at
September 30, 2019.
- Successful refinance of the existing private placement $350
million senior notes on a delayed drawdown basis.
- Raising full year 2020 revenue guidance to a range of $2,750 -
$2,810 million. Full Year 2020 earnings per share guidance in the
range of $6.35 - $6.50.
*before non-recurring charges.
ICON plc (NASDAQ: ICLR), a global provider
of outsourced drug and device development and commercialisation
services to pharmaceutical, biotechnology, medical device and
government and public health organisations, today reported its
financial results for the third quarter ended September 30,
2020.
CEO Dr. Steve Cutler commented, “Driven by positive market
demand in conjunction with our ability to win COVID-19 related
opportunities we delivered a new record $990 million of net
business wins during quarter three. This represented a quarterly
book to bill of 1.41 and resulted in our backlog growing to $9.4
billion, an increase of 12% year over year. Our financial position
remains robust with a strong balance sheet supplemented further by
solid quarterly cash collections helping to improve days sales
outstanding to 45 days.
We remain well placed to face the challenges of COVID-19 and
take advantage of opportunities into the future. We are therefore
increasing our 2020 revenue guidance from a range of $2,650 million
- $2,750 million to $2,750 million - $2,810 million and narrowing
our earnings guidance from a range of $6.00 - $6.50 to a range of
$6.35 - $6.50.”
Third Quarter 2020 Results
Gross business wins in the third quarter were $1.2 billion and
cancellations were $190 million. This resulted in net business wins
of $990 million and a book to bill of 1.41.
Reported revenue for Quarter 3 was $701.7 million. This
represents a year on year decrease of 1.2% or 1.9% on a constant
currency basis.
Reported income from operations in the quarter was $108.4
million or 15.4% of revenue compared to $110.0 million or 15.5% of
revenue for Quarter 3 2019.
Reported net income attributable to the Group for the quarter
was $91.6 million or 13.1% of revenue compared with $94.8 million
or 13.3% of revenue in Quarter 3 2019.
Adjusted earnings per share attributable to the Group on a
diluted basis was $1.72, compared to $1.74 per share for Quarter 3
2019. GAAP earnings per share attributable to the Group on a
diluted basis was $1.72, compared to $1.72 per share for Quarter 3
2019.
On a comparative basis, non-GAAP days sales outstanding were 45
days at September 30, 2020, compared with 53 days at the end of
June 2020 and 56 Days at the end of September 2019.
Cash generated from operating activities for the quarter was
$112.0 million and capital expenditure was $6.9 million. As a
result, at September 30, 2020, the Group had net cash of $359.8
million, compared to net cash of $244.0 million at June 30, 2020
and net cash of $121.7 million at the end of September 2019.
During the quarter the company completed the successful
refinance of the existing private placement of $350 million senior
notes maturing on December 15, 2020. The transaction has been
successfully priced over three and five year tenors at a blended
rate of 2.41% compared to the current private placement blended
rate of 3.37%. The drawdown of funds will coincide with the
maturity of the senior notes in December 2020.
Year to date 2020 Results
Gross business wins year to date were $3.3 billion and
cancellations were $520 million. This resulted in net business wins
of $2.8 billion and a book to bill of 1.36.
Year to date reported revenue was $2,037 million. This
represents a year on year decrease of 2.1% or 2.0% on a constant
currency basis.
Reported income from operations* year to date was $289.7 million
or 14.2% of revenue compared to $318.1 million or 15.3% of revenue
for the equivalent prior year period.
Reported net income* attributable to the Group year to date was
$246.9 million or 12.1% of revenue compared with $275.0 million or
13.2% of revenue for the equivalent prior year period.
Adjusted earnings per share* attributable to the Group on a
diluted basis was $4.63, compared to $5.06 per share for the
equivalent prior year period.
During the year the company recorded a charge of $18.1 million
in relation to restructuring costs. US GAAP income from operations
year to date amounted to $271.6 million or 13.3% of revenue. US
GAAP net income attributable to the Group year to date was $231.1
million or $4.25 per diluted share, compared to $5.03 per share for
the equivalent prior year period.
*before non-recurring charges.
COVID-19 Update
ICON continues to closely monitor and assess the evolving
pandemic situation. The welfare and safety of ICON’s employees,
customers and patients remains the Company’s highest priority. ICON
is taking guidance from global health authorities, such as World
Health Organisation (WHO) and Centers for Disease Control and
Prevention (CDC), as well as regional health authorities and
governments to ensure that ICON protects the safety and welfare of
employees and abides by government directives in various
jurisdictions.
COVID-19 continues to affect our global business. However, the
impact has reduced in recent months as sites reopened and patient
recruitment gradually improved. Where on-site monitoring is not
possible we continue to use alternative approaches including remote
and risk based monitoring and ‘at home’ services delivered through
our Symphony Clinical Research group.
Since February, ICON has mobilised its vaccine resources to
address the COVID-19 global threat, including its ability to
conduct home-based trials to minimise infection. The company is
currently providing clinical monitoring and safety oversight on
more than 100 COVID-19 trials for both the private and government
sectors.
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
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.
Adjusted earnings per share attributable to the Group (Non-GAAP)
has been computed by dividing non-GAAP net income attributable to
the Group by the weighted average number of shares outstanding.
GAAP earnings per share attributable to the Group has been computed
by dividing net income attributable to the Group plus a GAAP charge
associated with non-controlling interest in MeDiNova Research
(“MeDiNova”) by the weighted average number of shares outstanding.
ICON purchased a majority shareholding in MeDiNova on May 23, 2019.
ICON exercised its call on the outstanding shares in MeDiNova and
derecognized the non-controlling interest effective from March
2020.
The Company entered into an agreement with a third party to
jointly establish Oncacare. Oncacare will operate a specialized
oncology site network in the US and EMEA regions. The Company holds
a 49% interest in the voting share capital of Oncacare. The
Company’s investment in Oncacare is accounted for under the equity
method and records its pro rata share of the earnings/losses of
this investment in Share of equity method investments in the
Condensed Consolidated Statement of Operations.
ICON will hold its third quarter conference call tomorrow,
October 22nd, 2020 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, 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,
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 outsourced drug and device
development and commercialisation services to pharmaceutical,
biotechnology, medical device and government and public health
organisations. 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 15,250 employees in 94 locations in 40
countries as at September 30, 2020. Further information is
available at www.iconplc.com.
Source: ICON plc Contact: Investor Relations +1888 381 7923 or
Brendan Brennan Chief Financial Officer +353 1 291 2000 Jonathan
Curtain Vice President Corporate Finance and Investor Relations
+353 1 291 2000 All at ICON.
ICON plc Condensed Consolidated Statements
of Operations (Non-GAAP) Three and Nine Months ended September 30,
2020 and September 30, 2019 (Dollars, in thousands, except share
and per share data) (Unaudited)
Three Months Ended
Nine Months Ended
September
September
September
September
30, 2020
30, 2019
30, 2020
30, 2019
Revenue
701,729
710,441
2,037,059
2,080,430
Costs and expenses:
Direct costs
(493,410)
(499,791)
(1,444,536)
(1,465,944)
Selling, general and administrative
expense
(83,117)
(85,449)
(253,812)
(250,564)
Depreciation and amortization
(16,801)
(15,157)
(48,981)
(45,842)
Total costs and expenses
(593,328)
(600,397)
(1,747,329)
(1,762,350)
Income from operations
108,401
110,044
289,730
318,080
Net interest expense
(2,971)
(1,541)
(7,122)
(4,569)
Income before provision for income
taxes
105,430
108,503
282,608
313,511
Provision for income taxes
(13,706)
(13,020)
(34,967)
(37,516)
Income before share of earnings from
equity method investments
91,724
95,483
247,641
275,995
Share of equity method investments
(83)
-
(83)
-
Net income
91,641
95,483
247,558
275,995
Net income attributable to non-controlling
interest
-
(658)
(633)
(1,016)
Net income attributable to the
Group
91,641
94,825
246,925
274,979
Adjusted net income per Ordinary Share
attributable to the Group:
Adjusted basic (non-GAAP)
$1.74
$1.76
$4.67
$5.10
Adjusted diluted (non-GAAP)
$1.72
$1.74
$4.63
$5.06
Weighted average number of Ordinary Shares
outstanding:
Basic
52,737,299
54,004,963
52,885,252
53,935,939
Diluted
53,194,327
54,550,672
53,283,680
54,386,066
ICON plc Condensed Consolidated Statements
of Operations (US GAAP) Three and Nine Months ended September 30,
2020 and September 30, 2019 (Dollars, in thousands, except share
and per share data) (Unaudited)
Three Months Ended
Nine Months Ended
September
September
September
September
30, 2020
30, 2019
30, 2020
30, 2019
Revenue
701,729
710,441
2,037,059
2,080,430
Costs and expenses:
Direct costs
(493,410)
(499,791)
(1,444,536)
(1,465,944)
Selling, general and administrative
expense
(83,117)
(85,449)
(253,812)
(250,564)
Depreciation and amortization
(16,801)
(15,157)
(48,981)
(45,842)
Restructuring costs
-
-
(18,089)
-
Total costs and expenses
(593,328)
(600,397)
(1,765,418)
(1,762,350)
Income from operations
108,401
110,044
271,641
318,080
Net interest expense
(2,971)
(1,541)
(7,122)
(4,569)
Income before provision for income
taxes
105,430
108,503
264,519
313,511
Provision for income taxes
(13,706)
(13,020)
(32,706)
(37,516)
Income before share of earnings from
equity method investments
91,724
95,483
231,813
275,995
Share of equity method investments
(83)
-
(83)
-
Net income
91,641
95,483
231,730
275,995
Net income attributable to non-controlling
interest
-
(658)
(633)
(1,016)
Net income attributable to the
Group
91,641
94,825
231,097
274,979
Net income per Ordinary Share attributable
to the Group:
Basic
$1.74
$1.73
$4.28
$5.08
Diluted
$1.72
$1.72
$4.25
$5.03
Weighted average number of Ordinary Shares
outstanding:
Basic
52,737,299
54,004,963
52,885,252
53,935,939
Diluted
53,194,327
54,550,672
53,283,680
54,386,066
ICON plc Summary Consolidated Balance Sheet
Data September 30, 2020 and June 30, 2020 (Dollars, in
thousands)
September 30,
June 30,
2020
2020
(Unaudited)
(Unaudited)
Cash and short-term investments
709,724
593,828
Debt
(349,923)
(349,828)
Net cash/(debt)
359,801
244,000
Net Accounts Receivable
500,109
490,200
Working Capital
528,001
408,405
Total Assets
3,065,298
2,858,720
Shareholder's Equity
1,711,116
1,578,483
ICON/ICLR-F
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201021005879/en/
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 +353 1
291 2000 http://www.iconplc.com
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