PPD Reports Third Quarter and Year-To-Date 2021 Results
PPD, Inc. reported strong financial results for Q3 2021, with revenues increasing by 26.5% year-over-year to $1,560.8 million. Net income rose significantly to $152.9 million, compared to $52.0 million in Q3 2020. Key metrics also showed growth, such as adjusted EBITDA of $280.3 million and a 20.3% increase in ending backlog to $9,492.5 million. Net authorizations grew 12.7%, while diluted earnings per share improved to $0.43. The company’s workforce expanded by 19% year-over-year, supporting its growth strategy. Due to an upcoming merger, financial guidance was not provided.
- Revenue increased 26.5% to $1,560.8 million in Q3 2021.
- Net income rose to $152.9 million from $52.0 million in Q3 2020.
- Adjusted EBITDA increased to $280.3 million from $232.6 million year-over-year.
- Ending backlog grew 20.3% to $9,492.5 million.
- Net authorizations grew 12.7% to $1,352.7 million.
- No financial guidance provided due to proposed merger with Thermo Fisher Scientific.
Highlights
-
Net authorizations growth of
12.7% over third quarter 2020 to$1,352.7 million -
Ending backlog growth of
20.3% over third quarter 2020 to$9,492.5 million -
Revenue of
$1,560.8 million 26.5% over third quarter 2020 -
Net income attributable to common stockholders of
$152.9 million $52.0 million -
Adjusted EBITDA of
$280.3 million $232.6 million -
Diluted earnings per share of
$0.43 $0.15 -
Adjusted diluted earnings per share of
$0.43 $0.30
“PPD’s strong results reflect solid performance against our strategy to help customers bend the cost and time curve of drug development,” said
Third Quarter 2021 Results
Revenue for the three months ended
Net income attributable to common stockholders for the three months ended
Adjusted EBITDA for the three months ended
Important disclosures about, and reconciliations of, non-GAAP measures to their most directly comparable GAAP measures, including adjusted net income, adjusted diluted earnings per share and adjusted EBITDA, are provided in the “Non-GAAP Financial Measures” section of this press release.
Year-to-Date 2021 Results
Revenue for the nine months ended
Net income attributable to common stockholders for the nine months ended
Adjusted EBITDA for the nine months ended
Backlog and Net Authorizations
The following table provides select information related to PPD’s backlog and net authorizations as of and for the three months ended
|
|
Historical Basis |
|
ASC 606 Direct Basis |
|
ASC 606 Basis |
||||||
(dollars in millions) |
|
2021 |
|
% Change |
|
2021 |
|
% Change |
|
2021 |
|
% Change |
Net authorizations |
|
|
|
|
|
|
|
|
|
|
|
|
Ending backlog |
|
9,492.5 |
|
|
|
9,867.2 |
|
|
|
14,592.0 |
|
|
Backlog conversion |
|
|
|
|
|
|
|
|
|
|
|
|
Net book-to-bill |
|
1.19x |
|
|
|
1.21x |
|
|
|
1.44x |
|
|
Financial Position
As of
As of
Financial Guidance
Due to the proposed merger with Thermo Fisher Scientific previously announced on
Webcast and Conference Call Details
PPD will host a conference call on
Investors and other interested parties also may listen to a live webcast of the conference call by logging on to the investors section of PPD’s website at https://investors.ppd.com. A replay will be available after the call and can be accessed by dialing +1 844 512 2921, or for international callers, +1 412 317 6671. The passcode for the live conference call and the replay is 13724407. The audio replay will be available until
About PPD
PPD is a leading global contract research organization providing comprehensive, integrated drug development, laboratory and lifecycle management services. Our customers and partners include pharmaceutical, biotechnology, medical device, academic and government organizations. With more than 30,000 professionals worldwide, PPD has conducted clinical trials in more than 100 countries to help customers deliver life-changing therapies to improve health. We apply innovative technologies, therapeutic expertise and a firm commitment to quality to bend the cost and time curve of drug development and optimize value. For more information, visit www.ppd.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements reflect our current views with respect to, among other things, the following: our proposed merger with Thermo Fisher Scientific Inc. (“Thermo Fisher”), our current expectations and anticipated results of operations, our financial performance, the impact from the novel coronavirus disease (“COVID-19”) pandemic, the continued reliance of the biopharmaceutical industry on outsourcing to contract research organizations, the continued growth in research and development spending in the biopharmaceutical industry, estimated growth rates in addressable markets and our ability to effectively recruit, train, develop and retain talented individuals. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends or industry results to differ materially from those expressed or implied by such forward-looking statements. Therefore, any statements contained herein that are not statements of historical fact may be forward-looking statements and should be evaluated as such. These statements often include words such as “anticipate,” “expect,” “suggest,” “plan,” “believe,” “intend,” “project,” “forecast,” “estimates,” “targets,” “projections,” “should,” “could,” “would,” “may,” “might,” “will,” and other similar expressions. We base these forward-looking statements on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances at this time, including the impact from the COVID-19 pandemic and the proposed merger with Thermo Fisher. As you consider this press release, you should understand that these statements are not guarantees of performance or results. The forward-looking statements contained herein are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, actual results might differ materially from those expressed in the forward-looking statements. Some of the factors, risks and uncertainties that might materially affect the forward-looking statements contained herein and may make an investment in our securities speculative or risky include, but are not limited to, the following: uncertainties associated with the proposed merger with Thermo Fisher; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the inability to complete the proposed merger due to the failure to satisfy conditions to completion of the proposed merger, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the proposed merger; risks related to disruption of management’s attention from our ongoing business operations due to the proposed merger; the effect of the announcement of the proposed merger on our relationships with our customers, operating results and business generally; the risk that the proposed merger will not be consummated in a timely manner; the costs of the proposed merger if the proposed merger is not consummated; restrictions imposed on our business during the pendency of the proposed merger; potential litigation instituted against us or our directors challenging the proposed merger; any failure of our backlog to accurately predict or convert into future revenue; the fact that our customers can terminate, delay or reduce the scope of our contracts with them upon short notice or with no notice; the impact of industry, customer and therapeutic area concentration; consolidation amongst our customers, and the potential for rationalization of the combined drug development pipeline, resulting in fewer products in clinical development; our ability to accurately price our contracts and manage our costs associated with performance of such contracts; any failures in our information and communication systems, including cybersecurity breaches, impacting us or our customers, clinical trial participants or employees; our dependence on our technology network, and the impact from upgrades to the network; any failure to perform services in accordance with contractual requirements, regulatory standards and ethical standards; our ability to access clinical research sites, attract suitable investigators or enroll a sufficient number of patients for our customers’ clinical trials; any failure by us to comply with numerous privacy laws; our ability to keep pace with rapid technological changes that could make our services less competitive or obsolete; our ability to recruit, retain and motivate key personnel, including the loss of any key executive; our dependence on third parties for critical goods and support services, including a significant impact from the COVID-19 pandemic on our suppliers; any violation of laws, including laws governing the conduct of clinical trials or other biopharmaceutical research, and anti-corruption laws, such as the
Backlog and Net Authorizations
Revenue is comprised of direct, third-party pass-through and out-of-pocket revenue from providing services to customers. Direct revenue represents revenue associated with the direct services. Third-party pass-through and out-of-pocket revenue (collectively, “indirect revenue”) represents the reimbursement by customers of third-party pass-through and out-of-pocket costs incurred by PPD under its contracts with customers.
PPD has continued to report backlog and net authorizations on a basis that excludes indirect revenues and the impact of Accounting Standards Codification (“ASC”) 606 (“ASC 606”) on direct revenue (“Historical Basis”). PPD also assesses backlog and net authorizations on an ASC 606 direct revenue basis (“ASC 606 Direct Basis”) and on an ASC 606 total direct and indirect revenue basis (“ASC 606 Basis”).
Net authorizations represent new business awards, net of award or contract modifications, contract cancellations, foreign currency fluctuations and other adjustments. Backlog for all periods represents anticipated revenues for work not yet completed or performed (i) under signed contracts, letters of intent and, in some cases, awards that are supported by other forms of written communication and (ii) where there is sufficient or reasonable certainty about the customer’s ability and intent to fund and commence the services within six months. Backlog conversion represents quarterly revenues for the period divided by opening backlog for that period. The net book-to-bill ratio represents the amount of net authorizations for the period divided by revenues recognized in that period.
Backlog might not be a reliable indicator of future revenue and PPD might not realize all or any part of the revenue from the authorizations in backlog as of any point in time.
Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles in
Adjusted EBITDA consists of net income or loss attributable to common stockholders of PPD, adjusted for changes in recapitalization investment portfolio consideration and net income or loss attributable to noncontrolling interest and before interest expense, net, provision for or benefit from income taxes and depreciation and amortization and eliminates (i) non-operating income or expense and (ii) impacts of certain non-cash, unusual or other items that are included in net income or loss that we do not consider indicative of our ongoing operating performance. Adjusted net income (and adjusted diluted earnings per share) consists of net income or loss (and diluted earnings or loss per share) attributable to common stockholders of PPD before the provision for income taxes, amortization and the elimination of (i) non-operating income or expense and (ii) impacts of certain non-cash, unusual or other items that are included in net income or loss that we do not consider indicative of our ongoing operating performance. In the case of adjusted EBITDA, adjusted net income and adjusted diluted earnings per share, we believe that making such adjustments provides management and investors meaningful information to understand our operating performance and the ability to analyze financial and business trends on a period-to-period basis. Although we exclude amortization of acquired intangible assets from our non-GAAP expenses, we note that revenue generated from such intangibles is included within revenue in determining net income or loss attributable to common stockholders of PPD. Net debt consists of the outstanding principal balance of the term loan, senior unsecured notes, finance lease obligations and revolving credit borrowings, less cash and cash equivalents, and the net leverage ratio is equal to net debt divided by trailing 12-month adjusted EBITDA.
Other companies in our industry may calculate adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, net debt, net leverage ratio and total liquidity differently than we do. As a result, these non-GAAP financial measures have limitations as analytical and comparative tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, net debt, net leverage ratio and total liquidity should not be considered as measures of discretionary cash available to us to invest in the growth of our business. In calculating these performance and liquidity financial measures, we make certain adjustments that are based on assumptions and estimates that may prove to have been inaccurate. Our presentation of adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, net debt, net leverage ratio and total liquidity should not be construed as an inference that our future results and financial position will be unaffected by unusual items.
Beginning in the first quarter of 2021, PPD made certain presentation changes as described below to the reconciliations of (i) adjusted EBITDA and (ii) adjusted net income, in each case, to net income (loss) calculated in accordance with GAAP. The presentation changes had no impact on previously reported adjusted EBITDA or adjusted net income for any prior period. In order to provide comparability between the 2021 periods and the corresponding 2020 periods, PPD recast its historical reconciliations of adjusted EBITDA and adjusted net income to net income (loss) calculated in accordance with GAAP to conform to the new presentation.
For the purposes of reconciling both adjusted EBITDA and adjusted net income to net income (loss) calculated in accordance with GAAP, PPD now presents the provision for (benefit from) income taxes as a separate reconciling item. In addition, for the purposes of reconciling adjusted net income to net income (loss) calculated in accordance with GAAP, each of (i) adjusted income before provision for (benefit from) income taxes and (ii) adjusted provision for (benefit from) income taxes are now presented as reconciling items. The new presentation differs from PPD’s historical practice of aggregating periodic reconciling items to present a total of all such adjustments in connection with the calculation of adjusted net income. PPD believes the new presentation will assist investors and other users of the supplemental non-GAAP financial information, primarily in evaluating the periodic adjusted provision for (benefit from) income taxes and related periodic adjusted tax rates.
In addition, for both the reconciliation of adjusted EBITDA and the reconciliation of adjusted net income to GAAP net income, the amount of PPD’s equity in losses of unconsolidated affiliates is now presented as a separate reconciling item as opposed to the historical practice of being included within the reconciling item titled “other adjustments”. PPD believes the separate presentation of equity in losses of unconsolidated affiliates provides additional detail that will assist investors and other users of the financial statements in evaluating the differences between non-GAAP financial measures and their most directly comparable GAAP measures.
|
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(unaudited) |
|||||||||||||||
(in thousands, except per share data) |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenue |
$ |
1,560,796 |
|
|
$ |
1,233,802 |
|
|
$ |
4,514,648 |
|
|
$ |
3,317,182 |
|
|
|
|
|
|
|
|
|
||||||||
Operating costs and expenses: |
|
|
|
|
|
|
|
||||||||
Direct costs, exclusive of depreciation and amortization |
529,690 |
|
|
433,422 |
|
|
1,507,510 |
|
|
1,222,700 |
|
||||
Reimbursed costs |
433,358 |
|
|
335,866 |
|
|
1,330,704 |
|
|
810,523 |
|
||||
Selling, general and administrative expenses |
335,624 |
|
|
249,320 |
|
|
959,587 |
|
|
734,712 |
|
||||
Depreciation and amortization |
74,028 |
|
|
71,317 |
|
|
227,426 |
|
|
206,395 |
|
||||
Long-lived asset impairment |
— |
|
|
1,414 |
|
|
1,584 |
|
|
1,414 |
|
||||
Total operating costs and expenses |
1,372,700 |
|
|
1,091,339 |
|
|
4,026,811 |
|
|
2,975,744 |
|
||||
Income from operations |
188,096 |
|
|
142,463 |
|
|
487,837 |
|
|
341,438 |
|
||||
Interest expense, net |
(46,231) |
|
|
(49,882) |
|
|
(139,577) |
|
|
(165,995) |
|
||||
Loss on extinguishment of debt |
— |
|
|
— |
|
|
(10,677) |
|
|
(93,534) |
|
||||
Gain (loss) on investments |
18,971 |
|
|
(53,100) |
|
|
(28,127) |
|
|
16,649 |
|
||||
Other income (expense), net |
21,022 |
|
|
(17,153) |
|
|
17,392 |
|
|
(14,097) |
|
||||
Income before provision for income taxes |
181,858 |
|
|
22,328 |
|
|
326,848 |
|
|
84,461 |
|
||||
Provision for income taxes |
39,993 |
|
|
11,169 |
|
|
81,421 |
|
|
20,682 |
|
||||
Income before equity in earnings (losses) of unconsolidated affiliates |
141,865 |
|
|
11,159 |
|
|
245,427 |
|
|
63,779 |
|
||||
Equity in earnings (losses) of unconsolidated affiliates, net of income taxes |
27,250 |
|
|
(2,057) |
|
|
22,488 |
|
|
(5,686) |
|
||||
Net income |
169,115 |
|
|
9,102 |
|
|
267,915 |
|
|
58,093 |
|
||||
Net income attributable to noncontrolling interest |
(2,044) |
|
|
(1,587) |
|
|
(3,955) |
|
|
(4,499) |
|
||||
Net income attributable to |
167,071 |
|
|
7,515 |
|
|
263,960 |
|
|
53,594 |
|
||||
Recapitalization investment portfolio consideration |
(14,150) |
|
|
44,468 |
|
|
22,189 |
|
|
(6,529) |
|
||||
Net income attributable to common stockholders of |
$ |
152,921 |
|
|
$ |
51,983 |
|
|
$ |
286,149 |
|
|
$ |
47,065 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to common stockholders of |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.44 |
|
|
$ |
0.15 |
|
|
$ |
0.82 |
|
|
$ |
0.14 |
|
Diluted |
$ |
0.43 |
|
|
$ |
0.15 |
|
|
$ |
0.80 |
|
|
$ |
0.14 |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
351,351 |
|
|
348,672 |
|
|
350,974 |
|
|
338,277 |
|
||||
Diluted |
359,538 |
|
|
354,830 |
|
|
358,826 |
|
|
343,159 |
|
||||
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(unaudited) |
|||||||
(in thousands, except par value) |
|||||||
|
|
|
|
||||
Assets |
|||||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
1,172,716 |
|
|
$ |
767,999 |
|
Accounts receivable and unbilled services, net |
2,071,676 |
|
|
1,609,718 |
|
||
Income taxes receivable |
12,312 |
|
|
22,386 |
|
||
Prepaid expenses and other current assets |
172,363 |
|
|
146,100 |
|
||
Total current assets |
3,429,067 |
|
|
2,546,203 |
|
||
|
|
|
|
||||
Property and equipment, net |
509,314 |
|
|
496,474 |
|
||
Investments in unconsolidated affiliates |
78,037 |
|
|
43,178 |
|
||
Investments |
241,482 |
|
|
265,894 |
|
||
|
1,798,369 |
|
|
1,820,208 |
|
||
Intangible assets, net |
619,749 |
|
|
748,404 |
|
||
Other assets |
191,923 |
|
|
201,643 |
|
||
Operating lease right-of-use assets |
160,076 |
|
|
171,839 |
|
||
Total assets |
$ |
7,028,017 |
|
|
$ |
6,293,843 |
|
Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Deficit |
|||||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
181,499 |
|
|
$ |
176,341 |
|
Accrued expenses: |
|
|
|
||||
Payables to investigators |
524,647 |
|
|
404,654 |
|
||
Accrued employee compensation |
354,604 |
|
|
331,156 |
|
||
Other accrued expenses |
202,465 |
|
|
195,779 |
|
||
Income taxes payable |
26,453 |
|
|
21,206 |
|
||
Unearned revenue |
1,429,817 |
|
|
1,060,544 |
|
||
Current portion of operating lease liabilities |
44,555 |
|
|
51,643 |
|
||
Current portion of long-term debt and finance lease obligations |
34,521 |
|
|
36,238 |
|
||
Total current liabilities |
2,798,561 |
|
|
2,277,561 |
|
||
|
|
|
|
||||
Accrued income taxes |
22,198 |
|
|
18,658 |
|
||
Deferred tax liabilities |
50,827 |
|
|
54,535 |
|
||
Recapitalization investment portfolio liability |
169,734 |
|
|
191,923 |
|
||
Long-term operating lease liabilities, less current portion |
128,382 |
|
|
137,657 |
|
||
Long-term debt and finance lease obligations, less current portion |
4,207,811 |
|
|
4,226,192 |
|
||
Other liabilities |
37,191 |
|
|
98,908 |
|
||
Total liabilities |
7,414,704 |
|
|
7,005,434 |
|
||
Redeemable noncontrolling interest |
37,734 |
|
|
34,929 |
|
||
Stockholders’ deficit: |
|
|
|
||||
Preferred stock - None issued and outstanding |
— |
|
|
— |
|
||
Common stock -
352,029 shares issued and 351,390 shares outstanding as of
350,858 shares issued and 350,132 shares outstanding as of |
3,520 |
|
|
3,509 |
|
||
|
(11,928) |
|
|
(13,268) |
|
||
Additional paid-in-capital |
1,865,963 |
|
|
1,819,892 |
|
||
Accumulated deficit |
(1,985,659) |
|
|
(2,271,808) |
|
||
Accumulated other comprehensive loss |
(296,317) |
|
|
(284,845) |
|
||
Total stockholders’ deficit |
(424,421) |
|
|
(746,520) |
|
||
Total liabilities, redeemable noncontrolling interest and stockholders’ deficit |
$ |
7,028,017 |
|
|
$ |
6,293,843 |
|
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(unaudited) |
|||||||
(in thousands) |
|||||||
|
Nine Months Ended
|
||||||
|
2021 |
|
2020 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
267,915 |
|
|
$ |
58,093 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
227,426 |
|
|
206,395 |
|
||
Stock-based compensation expense |
33,548 |
|
|
16,099 |
|
||
Operating lease right-of-use asset expense |
34,174 |
|
|
34,625 |
|
||
Amortization of debt issuance costs and debt discounts |
6,046 |
|
|
8,263 |
|
||
Loss (gain) on investments |
28,127 |
|
|
(16,649) |
|
||
Deferred income tax (benefit) expense |
(8,907) |
|
|
5,770 |
|
||
Loss on extinguishment of debt |
10,677 |
|
|
93,534 |
|
||
Amortization of costs to obtain a contract |
11,793 |
|
|
7,973 |
|
||
Equity in (earnings) losses of unconsolidated affiliates, net of income taxes |
(22,488) |
|
|
5,686 |
|
||
Other |
(1,280) |
|
|
256 |
|
||
Change in operating assets and liabilities: |
|
|
|
||||
Accounts receivable and unbilled services, net |
(516,639) |
|
|
(148,501) |
|
||
Prepaid expenses and other current assets |
(24,150) |
|
|
26,908 |
|
||
Other assets |
(6,570) |
|
|
(39,813) |
|
||
Income taxes, net |
22,101 |
|
|
(21,445) |
|
||
Accounts payable, accrued expenses and other liabilities |
167,687 |
|
|
116,503 |
|
||
Operating lease liabilities |
(38,203) |
|
|
(33,165) |
|
||
Unearned revenue |
395,136 |
|
|
(52,065) |
|
||
Net cash provided by operating activities |
586,393 |
|
|
268,467 |
|
||
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
(88,213) |
|
|
(116,418) |
|
||
Capital contributions paid for investments |
(3,827) |
|
|
(5,382) |
|
||
Distributions received from investments |
112 |
|
|
19,704 |
|
||
Investment in unconsolidated affiliate |
(5,000) |
|
|
(10,000) |
|
||
Other |
(1,600) |
|
|
321 |
|
||
Net cash used in investing activities |
(98,528) |
|
|
(111,775) |
|
||
Cash flows from financing activities: |
|
|
|
||||
Proceeds from New Term Loan |
3,034,750 |
|
|
— |
|
||
Redemption of 2015 Term Loan |
(3,064,006) |
|
|
— |
|
||
Borrowing on revolving credit facility |
— |
|
|
150,000 |
|
||
Repayment of revolving credit facility |
— |
|
|
(150,000) |
|
||
Proceeds from issuance of 2025 and 2028 Notes |
— |
|
|
1,200,000 |
|
||
Redemption of HoldCo Notes |
— |
|
|
(1,464,500) |
|
||
Redemption of OpCo Notes |
— |
|
|
(1,160,865) |
|
||
Payments on long-term debt and finance leases |
(18,118) |
|
|
(32,080) |
|
||
Payment of debt issuance costs |
(24,120) |
|
|
(18,525) |
|
||
Payment of contingent consideration for acquisition of business |
— |
|
|
(4,338) |
|
||
Net proceeds from initial public offering |
— |
|
|
1,772,960 |
|
||
Recapitalization investment portfolio distribution |
(12,819) |
|
|
— |
|
||
Proceeds from exercise of stock options |
16,075 |
|
|
14,272 |
|
||
Payments related to tax withholdings for stock-based compensation |
(2,314) |
|
|
— |
|
||
Purchase of treasury stock |
— |
|
|
(626) |
|
||
Net cash (used in) provided by financing activities |
(70,552) |
|
|
306,298 |
|
||
Effect of exchange rate changes on cash and cash equivalents |
(12,596) |
|
|
(5,087) |
|
||
Net increase in cash and cash equivalents |
404,717 |
|
|
457,903 |
|
||
Cash and cash equivalents, beginning of the period |
767,999 |
|
|
345,187 |
|
||
Cash and cash equivalents, end of the period |
$ |
1,172,716 |
|
|
$ |
803,090 |
|
|
|||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
|||||||||||||||||||
(unaudited) |
|||||||||||||||||||
(in thousands, except per share amounts) |
|||||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
Twelve Months Ended
2021 |
||||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|||||||||||
Net income attributable to common stockholders of |
$ |
152,921 |
|
|
$ |
51,983 |
|
|
$ |
286,149 |
|
|
$ |
47,065 |
|
|
$ |
359,237 |
|
Recapitalization investment portfolio consideration |
14,150 |
|
|
(44,468) |
|
|
(22,189) |
|
|
6,529 |
|
|
4,820 |
|
|||||
Net income attributable to noncontrolling interest |
2,044 |
|
|
1,587 |
|
|
3,955 |
|
|
4,499 |
|
|
6,321 |
|
|||||
Net income |
169,115 |
|
|
9,102 |
|
|
267,915 |
|
|
58,093 |
|
|
370,378 |
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net |
46,231 |
|
|
49,882 |
|
|
139,577 |
|
|
165,995 |
|
|
190,514 |
|
|||||
Provision for income taxes |
39,993 |
|
|
11,169 |
|
|
81,421 |
|
|
20,682 |
|
|
79,544 |
|
|||||
Depreciation and amortization |
74,028 |
|
|
71,317 |
|
|
227,426 |
|
|
206,395 |
|
|
300,147 |
|
|||||
Stock-based compensation expense |
12,600 |
|
|
5,409 |
|
|
33,548 |
|
|
16,099 |
|
|
38,723 |
|
|||||
Option holder special bonuses (a) |
45 |
|
|
1,486 |
|
|
1,234 |
|
|
5,629 |
|
|
1,893 |
|
|||||
Other (income) expense, net |
(21,022) |
|
|
17,153 |
|
|
(17,392) |
|
|
14,097 |
|
|
31,251 |
|
|||||
Long-lived asset impairment |
— |
|
|
1,414 |
|
|
1,584 |
|
|
1,414 |
|
|
1,584 |
|
|||||
Severance and charges for other cost reduction activities (b) |
173 |
|
|
(178) |
|
|
1,369 |
|
|
2,060 |
|
|
1,614 |
|
|||||
Transaction-related and public company transition costs (c) |
2,184 |
|
|
2,886 |
|
|
14,363 |
|
|
8,944 |
|
|
15,596 |
|
|||||
Loss on extinguishment of debt |
— |
|
|
— |
|
|
10,677 |
|
|
93,534 |
|
|
10,677 |
|
|||||
(Gain) loss on investments (d) |
(18,971) |
|
|
53,100 |
|
|
28,127 |
|
|
(16,649) |
|
|
(7,961) |
|
|||||
Equity in (earnings) losses of unconsolidated affiliates (e) |
(27,250) |
|
|
2,057 |
|
|
(22,488) |
|
|
5,686 |
|
|
(19,987) |
|
|||||
Other adjustments (f) |
3,209 |
|
|
7,789 |
|
|
11,288 |
|
|
41,838 |
|
|
16,536 |
|
|||||
Adjusted EBITDA |
$ |
280,335 |
|
|
$ |
232,586 |
|
|
$ |
778,649 |
|
|
$ |
623,817 |
|
|
$ |
1,030,509 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation to Adjusted Net Income: |
|
|
|
|
|
|
|
|
|
||||||||||
Net income |
$ |
169,115 |
|
|
$ |
9,102 |
|
|
$ |
267,915 |
|
|
$ |
58,093 |
|
|
|
||
Provision for income taxes |
39,993 |
|
|
11,169 |
|
|
81,421 |
|
|
20,682 |
|
|
|
||||||
Amortization of intangible assets |
37,783 |
|
|
39,513 |
|
|
122,517 |
|
|
118,598 |
|
|
|
||||||
Amortization of debt issuance costs and debt discounts |
2,077 |
|
|
2,250 |
|
|
6,046 |
|
|
8,263 |
|
|
|
||||||
Amortization of accumulated other comprehensive income on derivatives |
— |
|
|
(3,107) |
|
|
— |
|
|
(9,253) |
|
|
|
||||||
Stock-based compensation expense |
12,600 |
|
|
5,409 |
|
|
33,548 |
|
|
16,099 |
|
|
|
||||||
Option holder special bonuses (a) |
45 |
|
|
1,486 |
|
|
1,234 |
|
|
5,629 |
|
|
|
||||||
Other (income) expense, net |
(21,022) |
|
|
17,153 |
|
|
(17,392) |
|
|
14,097 |
|
|
|
||||||
Long-lived asset impairment |
— |
|
|
1,414 |
|
|
1,584 |
|
|
1,414 |
|
|
|
||||||
Severance and charges for other cost reduction activities (b) |
173 |
|
|
(178) |
|
|
1,369 |
|
|
2,060 |
|
|
|
||||||
Transaction-related and public company transition costs (c) |
2,184 |
|
|
2,886 |
|
|
14,363 |
|
|
8,944 |
|
|
|
||||||
Loss on extinguishment of debt |
— |
|
|
— |
|
|
10,677 |
|
|
93,534 |
|
|
|
||||||
(Gain) loss on investments (d) |
(18,971) |
|
|
53,100 |
|
|
28,127 |
|
|
(16,649) |
|
|
|
||||||
Equity in (earnings) losses of unconsolidated affiliates (e) |
(27,250) |
|
|
2,057 |
|
|
(22,488) |
|
|
5,686 |
|
|
|
||||||
Other adjustments (f) |
3,209 |
|
|
7,789 |
|
|
11,288 |
|
|
41,838 |
|
|
|
||||||
Adjusted income before adjusted provision for income taxes |
199,936 |
|
|
150,043 |
|
|
540,209 |
|
|
369,035 |
|
|
|
||||||
Adjusted provision for income taxes (g) |
(44,422) |
|
|
(41,854) |
|
|
(121,528) |
|
|
(97,196) |
|
|
|
||||||
Adjusted net income |
$ |
155,514 |
|
|
$ |
108,189 |
|
|
$ |
418,681 |
|
|
$ |
271,839 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted weighted-average common shares outstanding |
359,538 |
|
|
354,830 |
|
|
358,826 |
|
|
343,159 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted diluted earnings per share |
$ |
0.43 |
|
|
$ |
0.30 |
|
|
$ |
1.17 |
|
|
$ |
0.79 |
|
|
|
||
|
||||
Reconciliation of GAAP to Non-GAAP Measures |
||||
(unaudited) |
||||
(in thousands, except net leverage ratio) |
||||
Calculation of Net Leverage Ratio as of |
|
|
||
Gross debt |
|
$ |
4,292,047 |
|
Less: Cash and cash equivalents |
|
1,172,716 |
|
|
Net debt |
|
$ |
3,119,331 |
|
Trailing 12 month adjusted EBITDA |
|
$ |
1,030,509 |
|
Net leverage ratio (net debt/trailing 12 month adjusted EBITDA) |
|
3.0 |
x |
|
____________________ |
||||
(a) Represents PPD’s costs associated with special cash bonuses paid to PPD’s option holders. (b) Represents employee separation costs, exit and disposal costs associated with the full or partial exit of certain leased facilities, costs associated with planned employee reorganizations and other contract termination costs from various cost-reduction activities. (c) Represents integration and transaction costs incurred with completed or contemplated acquisitions, costs incurred in connection with PPD’s initial public offering (“IPO”), secondary offering, costs associated with PPD’s public company transition, costs associated with the proposed merger with Thermo Fisher, which is subject to regulatory approvals in addition to the satisfaction of customary closing conditions, and other transaction costs.
(d) Represents the fair value accounting gains or losses primarily from PPD’s investments in
(e) Represents unconsolidated earnings or losses from PPD’s equity method investments in
(f) Other adjustments include amounts that management believes are not representative of our operating performance. These adjustments include implementation costs associated with a new enterprise resource planning application, one-time costs incurred in 2020 associated with the termination of a long-term incentive program which was replaced by a traditional stock-based program in 2020, advisory costs associated with the adoption of new accounting standards, one-time costs and income associated with the COVID-19 pandemic, management fees incurred under consulting services agreements with certain investment funds of (g) Represents the estimated tax effect on adjusted income before adjusted provision for income taxes using applicable statutory rates and other adjustments that are not representative of PPD’s operating performance. |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20211027006089/en/
PPD Contacts
Media:
+1 910 558 8760
media@ppd.com
Investors:
+1 910 558 4186
investors@ppd.com
Source:
FAQ
What were PPD’s Q3 2021 revenue figures?
How much did PPD’s net income increase in Q3 2021?
What is PPD's ending backlog as of September 30, 2021?
How did PPD's net authorizations change in Q3 2021?
Is there a financial guidance forecast from PPD for the upcoming quarters?
