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inVentiv Health (Formerly Ventiv Health) Reports Record Financial Results for Fourth Quarter and Full Year 200516 March 2006
inVentiv Health (Ventiv Health, Inc., Nasdaq: VTIV, "inVentiv" or the "Company"), a leading provider of commercialization services to the global pharmaceutical and life sciences industries, today announced financial results for the fourth quarter and full year of 2005 and updated its 2006 guidance.
Fourth Quarter 2005 results from continuing operations:
* Total revenues increased 49% to $175.3 million for the fourth quarter of
2005, compared to $117.4 million for the fourth quarter of 2004.
* Earnings before income taxes(1) increased 61% to $15.9 million for the
fourth quarter of 2005, compared to $9.9 million for the fourth quarter
of 2004.
* Income from continuing operations was $9.8 million for the fourth
quarter of 2005, compared to $6.1 million for the fourth quarter of
2004, excluding tax benefits of $9.1 million in the fourth quarter of
2004 (as detailed in Table II).
* Diluted net earnings per share after income taxes were $0.34 for the
fourth quarter of 2005, compared to $0.23 for the fourth quarter of
2004, excluding tax benefits of $0.34 in the fourth quarter of 2004 (as
detailed in Table II).
Full Year 2005 results from continuing operations:
* Total revenues increased 58% to $556.3 million for 2005, compared to
$352.2 million for 2004.
* Earnings before income taxes(1) increased 69% to $57.4 million for 2005,
compared to $33.9 million for 2004.
* Income from continuing operations was $34.8 million for 2005, compared
to $21.0 million for 2004, excluding tax benefits of $8.3 million in
2005 and $9.1 million in 2004 (as detailed in Table II).
* Diluted net earnings per share after income taxes were $1.24 for 2005,
compared to $0.83 for 2004, excluding tax benefits of $0.29 in 2005 and
$0.35 in 2004 (as detailed in Table II).
(1) Excludes $0.1 million of minority interest and equity earnings in
investments.
Eran Broshy, Chief Executive Officer of inVentiv Health, commented, "I am extremely pleased with inVentiv's record fourth quarter and full year results, which have substantially exceeded our expectations. These results were driven by strong performance in each of our divisions, underscoring our strong market positioning and effective execution across all of our businesses.
"As announced today in a separate press release, we have made the decision to change our corporate name to inVentiv Health. This change reflects our new capabilities and broad range of bundled and integrated solutions to accelerate our clients' vision from clinical development through market success."
2005 Highlights / Key Accomplishments
* Strong annual growth at inVentiv Commercial: Annual revenue and
profitability increased 19% and 34%, respectively, at inVentiv
Commercial. This growth was driven primarily by strong revenue and
earnings increases in sales teams and patient assistance business.
* Strong sequential quarterly growth at inVentiv Clinical: Quarterly
revenue and profitability increased 25% and 37% from the first to the
fourth quarter of 2005, driven by strong management focus on margin
management in staff augmentation and increasing traction in functional
outsourcing.
* Established inVentiv Communications with acquisition of inChord: The
accretive acquisition of inChord Communications, previously the world's
largest independently-held global healthcare marketing and
communications company, has added a comprehensive pharmaceutical
advertising, branding and marketing business to inVentiv's top tier
sales team, planning and analytics, compliance management and clinical
staffing and data management businesses.
* Broadened inVentiv Communications with acquisition of Adheris: More
recently, inVentiv announced the acquisition of Adheris, Inc., a
Massachusetts-based industry leader in the area of patient compliance
and persistency programs. The acquisition adds a unique patient
education component to inVentiv Communications, with a proven history of
improving medication adherence across nearly every chronic therapeutic
category.
* Business strengthened with bolt-on acquisitions of PRS, JSAI and
Synergos: The acquisition in August 2005 of PRS, a leading provider of
regulatory compliance management and marketing support services, further
strengthened inVentiv Commercial's regulatory compliance offerings. The
acquisition announced yesterday of JSAI, Canada's leading healthcare
marketing and communications company, further strengthens inVentiv
Communications' presence in the important Canadian healthcare
marketplace. In addition, the acquisition announced yesterday of
Synergos, a focused clinical services provider with expertise in
clinical trial management services, enhances inVentiv Clinical's
offerings in project management and monitoring as well as investigator
and patient recruitment services.
* Reduced business and client concentration: The contribution of sales
teams to inVentiv's total operating profit has decreased from
approximately 80% in the first half of 2004 to less than 30% expected
for 2006. Furthermore, inVentiv's five largest client contracts have
decreased from two-thirds of total company revenues in the first half of
2004 to less than one quarter expected for 2006.
* Cash generation: Ventiv generated $55 million of cash flow from
operations during the year and ended the year with $77 million of cash
on hand.
2006 Guidance
inVentiv is increasing its 2006 revenue guidance from $685-$705 million to $705-$725 million and its 2006 earnings per share guidance from $1.39-$1.44 to $1.43-$1.48. Both the previous and updated earnings per share guidance exclude potential tax benefits and expense related to equity-based compensation.
Conference Call Information:
Tuesday, March 14, 2006, 9:00 a.m. Eastern Time
Call in number: 877-336-9182 (Domestic) or 706-634-1065 (International)
Live and archived webcast: http://www.ventiv.com
A replay of the call will be available immediately following the call through March 21, 2006 at 800-642-1687. The conference ID number for the replay is 5181917.
About inVentiv Health
inVentiv Health (Ventiv Health, Inc., Nasdaq: VTIV) is the leading provider of commercialization and complementary services to the global pharmaceutical, life sciences and biotechnology industries. inVentiv delivers its customized clinical, sales, marketing and communications solutions through its three core business segments: inVentiv Clinical, inVentiv Communications, and inVentiv Commercial. inVentiv Health works with over 150 pharmaceutical and life sciences clients, including 18 of the top 20 global pharmaceutical companies. For more information, visit http://www.inventivhealth.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks that may cause Ventiv Health's performance to differ materially. Such risks include, without limitation: changes in trends in the pharmaceutical industry or in pharmaceutical outsourcing; our ability to compete successfully with other services in the market; our ability to maintain large client contracts or to enter into new contracts; and, our ability to operate successfully in new lines of business. Readers of this press release are referred to documents filed from time to time by Ventiv Health, Inc. with the Securities and Exchange Commission for further discussion of these and other factors.
Table I
Ventiv Health, Inc.
Consolidated Statements of Operations
(in 000's, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
Revenues $175,307 $117,449 $556,312 $352,184
Operating expenses:
Cost of services 125,788 91,104 417,025 279,733
Selling, general and
administrative expenses 31,232 16,365 79,313 38,539
Other operating income -- -- -- (264)
Total operating expenses 157,020 107,469 496,338 318,008
Operating income 18,287 9,980 59,974 34,176
Interest expense (2,913) (314) (3,955) (922)
Interest income 568 250 1,409 678
Income from continuing
operations before income
tax provision, minority
interest in income of
subsidiary and income from
equity investments 15,942 9,916 57,428 33,932
Income tax (provision)
benefit (6,000) 5,324 (14,229) (3,802)
Income from continuing
operations before minority
interest in income of
subsidiary and income from
equity investments 9,942 15,240 43,199 30,130
Minority interest (224) -- (224) --
Equity earnings in
investments 107 -- 107 --
Income from continuing
operations 9,825 15,240 43,082 30,130
(Losses) gains on
disposals of discontinued
operations (859) (1,130) 781 1,002
Net income 8,966 14,110 $43,863 $31,132
Earnings (losses) per share:
Continuing operations:
Basic $0.35 $0.60 $1.60 $1.26
Diluted $0.34 $0.57 $1.53 $1.18
Discontinued operations:
Basic (0.03) (0.04) $0.03 $0.04
Diluted (0.03) (0.05) $0.03 $0.04
Net income:
Basic $0.32 $0.56 $1.63 $1.30
Diluted $0.31 $0.52 $1.56 $1.22
Weighted average common
shares outstanding:
Basic 27,680 25,233 26,875 23,951
Diluted 28,941 26,929 28,165 25,437
Table II
Ventiv Health, Inc.
Reconciliation of Non-GAAP Financial Information
(in 000's, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
Income from continuing operations,
as reported $9,825 $15,240 $43,082 $30,130
Deduct: Tax benefits included in
reported income -- (9,100)(1) (8,282)(2) (9,100)
Income from continuing operations
without tax benefits $9,825 $6,140 $34,800 $21,030
Diluted shares 28,941 26,929 28,165 25,437
EPS:
Income from continuing operations,
as reported $0.34 $0.57 $1.53 $1.18
Subtract: Tax benefits -- (0.34) (0.29) (0.35)
Income from continuing operations
without tax benefits $0.34 $0.23 $1.24 $0.83
(1) Difference of $9.1 million is due to a tax benefit recorded during the
fourth quarter of 2004 relating to the utilization of net operating
losses of divested entities and one-time tax adjustments.
(2) Difference of $8.3 million is primarily related to the divestiture and
shutdown of certain former subsidiaries and prior period tax
contingencies.
Table III
Ventiv Health, Inc.
Selected Financial Data
($'s in 000's)
December 31, December 31,
2005 2004
Cash (1) $76,980 $53,297
Account Receivable, Net $112,782 $56,534
Unbilled Services $41,206 $36,130
Client Advances & Unearned Revenue $29,393 $9,184
Working Capital (2) $113,557 $67,565
Long-term debt (3) $174,563 --
Capital Lease Obligations (3) $28,554 $36,902
Depreciation (4) $15,491 $15,602
Amortization (4) $1,934 $306
Days Sales Outstanding (5) 79 71
(1) Cash includes restricted cash of $3.9 million at December 31, 2005 and
$2.5 million at December 31, 2004.
(2) Working Capital is defined as total current assets less total current
liabilities.
(3) Liabilities are both current and noncurrent.
(4) Depreciation and amortization are reported on a year-to-date basis.
(5) Days Sales Outstanding is measured using the combined amounts of
Accounts Receivable and Unbilled Services outstanding as of the
Balance Sheet date, against Revenues for the trailing 3-month period
then ended.
Source: prnewswire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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