BOSTON--(BUSINESS WIRE)--PAREXEL International Corporation (NASDAQ: PRXL) today reported financial results for the fourth quarter and Fiscal Year 2016, which ended on June 30, 2016.
“PAREXEL had a successful fourth quarter,” said Chairman and Chief Executive Officer Josef H. von Rickenbach. “We achieved strong year-over-year diluted EPS growth, driven by revenue growth and substantial year-over-year margin improvement in the quarter. Solid new business wins drove a net book-to-bill ratio of 1.20 in the quarter and speak to the potential for future revenue growth.
“This fourth quarter performance capped a productive Fiscal Year 2016. Diluted EPS in Fiscal Year 2016 grew 9.1% and 22.9% on a GAAP and adjusted basis, respectively. Adjusted operating margin improved 210 basis points during Fiscal Year 2016 to 12.8%. Record new business wins contributed to a Fiscal Year 2016 net book-to-bill of 1.24 and full-year backlog growth of 7.4%. We successfully completed our Margin Acceleration Program (MAP), exceeding our savings targets.
“Looking ahead, we expect continued success in Fiscal Year 2017 and beyond,” Mr. von Rickenbach continued. “We believe that the environment for new business continues to be encouraging, as the market for biopharmaceutical services continues to grow. We also remain fully committed to continuing our margin improvement efforts. Based on our solid prospects, we confirm our previous revenue guidance and increase our adjusted diluted EPS guidance for Fiscal Year 2017.”
Fourth Quarter Fiscal Year 2016 Results
For the three months ended June 30, 2016, PAREXEL’s service revenue increased 3.0% to $538.6 million, compared with $523.0 million in the prior year period. Income from operations as reported under Generally Accepted Accounting Principles (GAAP) totaled $66.0 million, or 12.3% of service revenue, in the fourth quarter of Fiscal Year 2016, as compared with $39.3 million, or 7.5% of service revenue, in the comparable quarter of the prior year. GAAP net income for the quarter totaled $44.3 million, or $0.83 per diluted share, compared with $34.2 million, or $0.61 per diluted share, for the quarter ended June 30, 2015. GAAP diluted earnings per share in the quarter increased 36.1% year over year.
The financial results of the June quarter in the current and prior year period each included items outside of the Company’s normal operations, as detailed in the financial tables within this press release. PAREXEL’s service revenue increased by 2.6%, on a constant currency basis to $538.6 million, compared with the prior year period. Excluding revenue of $7.8 million arising from the acquisition of Health Advances, revenue increased by 1.2% on a constant currency basis, compared to the prior year. Adjusted operating income in the fourth quarter of Fiscal Year 2016 was $73.9 million, or 13.7% of service revenue. Adjusted operating income in the fourth quarter of Fiscal Year 2015 was $56.5 million, or 10.8% of service revenue. Adjusted net income was $50.3 million, or $0.94 per diluted share, in the quarter ended June 30, 2016, and was $44.3 million, or $0.79 per diluted share, in the quarter ended June 30, 2015. Adjusted diluted earnings per share in the quarter grew 19.0% year over year.
On a segment basis, service revenue for the fourth quarter of Fiscal Year 2016 was $407.9 million in Clinical Research Services (CRS), $59.8 million in PAREXEL Consulting (PC), and $70.9 million in PAREXEL Informatics (PI).
Twelve Month Fiscal Year 2016 Results
For the twelve months ended June 30, 2016, service revenue was $2,096.3 million versus $2,016.0 million in the prior year period, an increase of 4.0%. GAAP operating income for the current twelve month period was $225.8 million, or 10.8% of service revenue, compared with $199.9 million, or 9.9% of service revenue in the prior year period. GAAP net income for the twelve months ended June 30, 2016 was $156.5 million, or $2.89 per diluted share, compared with $147.8 million, or $2.65 per diluted share, in the prior year period.
The financial results of the current and prior Fiscal Year each included items outside of the Company’s normal operations, as detailed in the financial tables within this press release. PAREXEL’s service revenue increased by 5.1% on a constant currency basis to $2,096.3 million for the twelve months ended June 30, 2016 compared to the prior year period. Excluding revenue of $37 million arising from the acquisitions of Health Advances and QSI, revenue increased by 3.2% on a constant currency basis, compared to the prior year. Adjusted operating income was $267.6 million, or 12.8% of service revenue, for the twelve months ended June 30, 2016, compared with $216.4 million, or 10.7% of service revenue, for the twelve months ended June 30, 2015. Adjusted net income for the twelve months ended June 30, 2016 was $185.9 million, or $3.43 per diluted share, compared with $155.9 million, or $2.79 per diluted share, in the comparable prior year twelve month period.
New Business and Backlog
Backlog as of June 30, 2016 was $5.7 billion, an increase of $400 million year over year. The reported backlog included gross new business wins in the fourth quarter of $967 million, cancellations of $322 million, and a negative impact from foreign currency exchange rates of $37 million. The net book-to-bill ratio was 1.20 in the quarter.
About PAREXEL International
PAREXEL International Corporation is a leading global biopharmaceutical services company, providing a broad range of expertise-based clinical research, consulting, medical communications, and technology solutions and services to the worldwide pharmaceutical, biotechnology and medical device industries. Committed to providing solutions that expedite time-to-market and peak-market penetration, PAREXEL has developed significant expertise across the development and commercialization continuum, from drug development and regulatory consulting to clinical pharmacology, clinical trials management, and reimbursement. PAREXEL Informatics provides advanced technology solutions, including medical imaging, to facilitate the clinical development process. Headquartered near Boston, Massachusetts, PAREXEL has offices in 84 locations in 51 countries around the world, and had approximately 18,600 employees in the fourth quarter. For more information about PAREXEL International visit www.PAREXEL.com.
