Company Announcements

ICON Reports Third Quarter 2021 Results

Highlights

  • Record net business wins in the quarter of $2,374 million; a net book to bill of 1.27.
  • Closing backlog of $18.6 billion, an increase of 3% on our Combined Company Backlog since the closing of the PRA acquisition on 1 July 2021, or an increase of 14% year over year on a Combined Company basis.
  • Quarter 3 adjusted revenue of $1,870.4 million representing a year on year increase of 167%.
  • Adjusted EBITDA of $324.9 million or 17.4% of adjusted revenue, a year on year increase of 143%.
  • Adjusted net income attributable to the Group was $209.8 million or $2.55 per diluted share.
  • GAAP revenue for Quarter 3 was $1,866.4 million. GAAP net loss attributable to the Group of $94.3 million.
  • Days sales outstanding reduced to 26 days from 64 days at September 30, 2020 on a comparable basis.
  • Full year 2021 revenue guidance issued in the range of $5,430 - $5,530 million, representing a year over year increase of 94% - 98%.
  • Full year 2021 adjusted earnings per share guidance issued in the range of $9.55 - $9.75. Adjusted earnings per share to exclude amortization, stock compensation, foreign exchange and transaction-related / integration-related adjustments.

 

DUBLIN--(BUSINESS WIRE)--Nov. 3, 2021-- ICONplc (NASDAQ: ICLR), a world-leading healthcare intelligence and clinical research organisation, today reported its financial results for the third quarter ended September 30, 2021.

CEO Dr. Steve Cutler commented, “I’m delighted with new ICON’s strong start as a combined organisation as shown by record new business wins of $2,374 million resulting in a net book to bill of 1.27 and backlog growth over the initial three month period since closing of 3% to $18.6 billion. The response to the acquisition by our customers has been excellent and we are already engaging in a number of more strategic discussions which we expect will drive further growth over the long term. With the strong performance in the third quarter, we are revising our full year 2021 guidance to revenue of $5,430 - $5,530 million, an increase of 96% at the midpoint of the range, and adjusted earnings per share of $9.55 - $9.75”.

Third Quarter 2021 Results

Gross business wins in the third quarter were $2,720 million and cancellations were $346 million. This resulted in net business wins of $2,374 million and a book to bill of 1.27.

GAAP revenue for Quarter 3 was $1,866.4 million. Adjusted revenue for Quarter 3 was $1,870.4 million. This represents a year on year increase of 167% or 165% on a constant currency basis.

GAAP net loss attributable to the Group was $94.3 million. Adjusted net income attributable to the Group for the quarter was $209.8 million resulting in an adjusted diluted earnings per share of $2.55 compared to $1.92 per share for Quarter 3 2020.

Adjusted EBITDA for Quarter 3 was $324.9 million or 17.4% of revenue, a year on year increase of 143%.

Cash generated from operating activities for the quarter was $299.0 million. During the quarter, $24.4 million was spent on capital expenditure. At September 30, 2021 the Group had cash and cash equivalents of $1,008.5 million, compared to cash and cash equivalents of $1,055.5 million at June 30, 2021 and $708.0 million at the end of September 2020.

Year to date 2021 Results

Gross business wins year to date were $5,330 million and cancellations were $750 million. This resulted in net business wins of $4,580 million and a book to bill of 1.27.

Year to date GAAP revenue was $3,595.7 million. Year to date adjusted revenue was $3,599.7 million. This represents a year on year increase of 76.7% or 76.1% on a constant currency basis.

GAAP net income attributable to the Group year to date was $76.7 million. Adjusted net income attributable to the Group was $448.4 million resulting in an adjusted diluted earnings per share of $7.11 compared to $5.26 per share for the equivalent prior year period.

Adjusted EBITDA year to date was $637.4 million or 17.7% of revenue, a year on year increase of 74.8%.

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 adjusted revenue, adjusted EBITDA, adjusted net income attributable to the Group and adjusted diluted earnings per share attributable to the Group. Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share exclude amortization, stock compensation, foreign exchange gains and losses and transaction-related / integration-related adjustments. 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.

To assist investors and analysts with year-over-year comparability for the merged business, we have included Combined Company Backlog information. This Combined Company information is not intended to represent pro forma financial information prepared in accordance with GAAP or Regulation S-X.

Adjusted earnings per share attributable to the Group (Non-GAAP) has been computed by dividing adjusted net income attributable to the Group by the weighted average number of shares outstanding. For the nine months ended 30 September 2020, 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 derecognised the non-controlling interest effective from March 2020.

ICON will hold a conference call tomorrow, November 4th, 2021 at 09:00 EDT [13:00 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, F-4, S-8, F-3 and certain other reports, which are available on the SEC's website at http://www.sec.gov.

ICON plc is a world-leading healthcare intelligence and clinical research organisation. From molecule to medicine, we advance clinical research providing outsourced services to pharmaceutical, biotechnology, medical device and government and public health organisations. We develop new innovations, drive emerging therapies forward and improve patient lives. With headquarters in Dublin, Ireland, ICON employed approximately 37,960 employees in 159 locations in 53 countries as at September 30, 2021. For further information about ICON, visit: www.iconplc.com and www.iconplc.com/pra.

Source: ICON plc

Contact: Investor Relations +1888 381 7923 or

Brendan Brennan Chief Financial Officer +353 1 291 2000

Kate Haven Vice President Investor Relations +1888 381 7923

All at ICON.

ICON plc

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND SEPTEMBER 30, 2020

(UNAUDITED)

 

Three Months Ended

Nine Months Ended

 

September 30,
2021

September 30,
2020

September 30,
2021

September 30,
2020

 

(in thousands except share and per share data)

 

 

 

 

 

Revenue

$ 1,866,352

$ 701,729

$ 3,595,705

$ 2,037,059

 

 

 

 

 

Costs and expenses:

 

 

 

 

Direct costs (excluding depreciation and amortization)

1,357,942

493,410

2,615,309

1,444,536

Selling, general and administrative expense

206,713

82,715

382,614

254,309

Depreciation and amortization

140,636

16,801

175,317

48,981

Transaction and integration-related expenses

149,791

402

182,309

(497)

Restructuring

6,162

6,162

18,089

 

 

 

 

 

Total costs and expenses

1,861,244

593,328

3,361,711

1,765,418

 

 

 

 

 

Income from operations

5,108

108,401

233,994

271,641

Interest income

53

268

496

2,518

Interest expense

(102,306)

(3,239)

(129,584)

(9,640)

 

 

 

 

 

(Loss) income before provision for income taxes

(97,145)

105,430

104,906

264,519

Benefit arising/(provision) for income taxes

3,563

(13,706)

(26,718)

(32,706)

 

 

 

 

 

(Loss) income before share of earnings from equity method investments

(93,582)

91,724

78,188

231,813

Share of equity method investments

(688)

(83)

(1,471)

(83)

 

 

 

 

 

Net (loss) income

(94,270)

91,641

76,717

231,730

Net income attributable to noncontrolling interest

(633)

Net (loss) income attributable to the Group

$ (94,270)

$ 91,641

$ 76,717

$ 231,097

 

 

 

 

 

Net (loss) income per Ordinary Share attributable to the Group:

 

 

 

 

 

 

 

 

 

Basic

$ (1.17)

$ 1.74

$ 1.23

$ 4.28

Diluted

$ (1.17)

$ 1.72

$ 1.22

$ 4.25

 

 

 

 

 

Weighted average number of Ordinary Shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

80,771,397

52,737,299

62,264,851

52,885,252

 

 

 

 

 

Diluted

80,771,397

53,194,327

63,095,857

53,283,680

ICON plc
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT SEPTEMBER 30, 2021 AND DECEMBER 31, 2020

 

(Unaudited)

 

(Audited)

 

September 30,
2021

 

December 31,
2020

ASSETS

(in thousands)

Current Assets:

 

 

 

Cash and cash equivalents

$ 1,008,524

 

 

$ 840,305

 

Available for sale investments

1,712

 

 

1,729

 

Accounts receivable, net of allowance for credit losses

1,338,326

 

 

715,271

 

Unbilled revenue

550,692

 

 

428,684

 

Other receivables

60,376

 

 

35,394

 

Prepayments and other current assets

131,554

 

 

53,477

 

Income taxes receivable

38,484

 

 

28,118

 

Total current assets

3,129,668

 

 

2,102,978

 

 

 

 

 

Other Assets:

 

 

 

Property, plant and equipment, net

319,457

 

 

174,343

 

Goodwill

8,935,212

 

 

936,257

 

Operating right-of-use assets

238,107

 

 

84,561

 

Other non-current assets

57,637

 

 

20,773

 

Non-current income taxes receivable

16,119

 

 

17,230

 

Non-current deferred tax asset

117,313

 

 

12,705

 

Equity method investments

3,062

 

 

4,534

 

Investments in equity-long term

22,758

 

 

15,765

 

Intangible assets, net

4,815,184

 

 

66,460

 

Total Assets

$ 17,654,517

 

 

$ 3,435,606

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current Liabilities:

 

 

 

Accounts payable

$ 62,576

 

 

$ 51,113

 

Unearned revenue

1,349,000

 

 

660,883

 

Other liabilities

794,879

 

 

399,769

 

Income taxes payable

39,614

 

 

12,178

 

Current bank credit lines and loan facilities

55,150

 

 

 

Total current liabilities

2,301,219

 

 

1,123,943

 

Other Liabilities:

 

 

 

Non-current bank credit lines and loan facilities

5,872,720

 

 

348,477

 

Non-current operating lease liabilities

190,912

 

 

60,801

 

Non-current other liabilities

73,917

 

 

26,366

 

Non-current government grants

760

 

 

838

 

Non-current income taxes payable

18,868

 

 

14,539

 

Non-current deferred tax liability

1,227,535

 

 

10,406

 

Commitments and contingencies

 

 

 

Total Liabilities

9,685,931

 

 

1,585,370

 

 

 

 

 

Shareholders' Equity:

 

 

 

Ordinary shares, par value 6 euro cents per share; 100,000,000 shares authorised,

 

 

 

81,397,821 shares issued and outstanding at September 30, 2021 and

 

 

 

52,788,093 shares issued and outstanding at December 31, 2020

6,629

 

 

4,580

 

Additional paid-in capital

6,700,407

 

 

617,104

 

Other undenominated capital

1,134

 

 

1,134

 

Accumulated other comprehensive loss

(79,196)

 

 

(35,477)

 

Retained earnings

1,339,612

 

 

1,262,895

 

Total Shareholders' Equity

7,968,586

 

 

1,850,236

 

Total Liabilities and Shareholders' Equity

$ 17,654,517

 

 

$ 3,435,606

 

ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND SEPTEMBER 30, 2020
(UNAUDITED)

 

Nine Months Ended

 

September 30,
2021

 

September 30,
2020

 

(in thousands)

Cash flows from operating activities:

 

 

 

Net income

$ 76,717

 

 

$ 231,730

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization expense

175,317

 

 

48,981

 

Impairment of right-of-use assets

5,731

 

 

5,411

 

Reduction in carrying value of operating right-of-use assets

30,607

 

 

21,367

 

Unrealised foreign currency gains, net

(7,374)

 

 

(3,982)

 

Loss on issuance of debt

59,460

 

Loss on equity method investments

1,471

 

 

83

 

Stock compensation expense

114,791

 

 

20,157

 

Loss/(gain) on interest rate hedge

891

 

 

(725)

 

Amortization of financing costs

4,448

 

 

368

 

Loss on extinguishment of debt

14,434

 

 

 

Deferred taxes

(26,532)

 

 

1,416

 

Other non-cash items

(1,592)

 

 

(121)

 

Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:

 

 

 

Accounts receivable

123,413

 

 

24,623

 

Unbilled revenue

49,203

 

 

(17,635)

 

Unearned revenue

(60,514)

 

 

82,386

 

Other assets and liabilities

(21,147)

 

 

(41,446)

 

Net cash provided by operating activities

539,324

 

 

372,613

 

Cash flows from investing activities:

 

 

 

Purchase of property, plant and equipment

(46,067)

 

 

(28,026)

 

Purchase of subsidiary undertakings, net of cash acquired

(5,914,475)

 

 

(37,761)

 

Purchase of equity method investments

(2,450)

 

 

(2,450)

 

Sale of available for sale investments

17

 

 

47,902

 

Purchase of investments in equity - long term

(2,243)

 

 

(2,737)

 

Net cash used in investing activities

(5,965,218)

 

 

(23,072)

 

Cash flows from financing activities:

 

 

 

Financing related costs

(30,349)

 

 

 

Proceeds from exercise of equity compensation

104,070

 

 

12,349

 

Share issue costs

(848)

 

 

(10)

 

Repurchase of ordinary shares

 

 

(175,000)

 

Share repurchase costs

 

 

(140)

 

Drawdown of bank credit lines and loan facilities, net of debt issuance costs and debt discount withheld

5,905,100

 

 

 

Repayment of bank credit lines and loan facilities

(377,780)

 

 

 

Net cash provided by (used in) financing activities

5,600,193

 

 

(162,801)

 

Effect of exchange rate movements on cash

(6,080)

 

 

946

 

Net increase in cash and cash equivalents

168,219

 

 

187,686

 

Cash and cash equivalents at beginning of period

840,305

 

 

520,309

 

Cash and cash equivalents at end of period

$ 1,008,524

 

 

 

$ 707,995

 

ICON plc
RECONCILIATION OF NON-GAAP MEASURES
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND SEPTEMBER 30, 2020
(UNAUDITED)

 

Three Months Ended

 

Nine Months Ended

 

September 30,
2021

September 30,
2020

 

September 30,
2021

September 30,
2020

 

(in thousands except share and per share data)

 

 

 

 

 

 

Adjusted revenue

 

 

 

 

 

Revenue, as reported

$ 1,866,352

$ 701,729

 

$ 3,595,705

$ 2,037,059

Acquisition related deferred revenue adjustment (a)

4,000

 

4,000

Adjusted revenue

$ 1,870,352

$ 701,729

 

$ 3,599,705

$ 2,037,059

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

Net income/(loss) attributable to the Group

$ (94,270)

$ 91,641

 

$ 76,717

$ 231,097

Net income/(loss) attributable to non-controlling interest

 

633

Share of equity method investments

688

83

 

1,471

83

Provision for income taxes

(3,563)

13,706

 

26,718

32,706

Net interest expense (b)

102,253

2,971

 

129,088

7,122

Depreciation and amortization

140,636

16,801

 

175,317

48,981

Stock-based compensation expense (c)

26,355

7,260

 

41,987

21,431

Foreign currency losses (gains), net (d)

(7,185)

596

 

(6,347)

4,977

Restructuring (e)

6,162

 

6,162

18,089

Acquisition related deferred revenue adjustment (a)

4,000

 

4,000

Transaction-related / integration-related costs (f)

149,791

402

 

182,309

(497)

Adjusted EBITDA

$ 324,867

$ 133,460

 

$ 637,422

$ 364,622

 

 

 

 

 

 

Adjusted net income attributable to the Group and adjusted diluted net income per Ordinary Share attributable to the Group

 

 

 

 

 

Net income/(loss) attributable to the Group

$ (94,270)

$ 91,641

 

$ 76,717

$ 231,097

Provision for income taxes

(3,563)

13,706

 

26,718

32,706

Amortisation

115,874

4,890

 

124,615

14,427

Stock-based compensation expense (c)

26,355

7,260

 

41,987

21,431

Foreign currency losses (gains), net (d)

(7,185)

596

 

(6,347)

4,977

Restructuring (e)

6,162

 

6,162

18,089

Acquisition related deferred revenue adjustment (a)

4,000

 

4,000

Transaction-related / integration-related costs (f)

149,791

402

 

182,309

(497)

Transaction-related financing costs (g)

55,773

 

78,252

Adjusted tax expense (h)

(43,121)

(16,119)

 

(85,993)

(41,825)

Adjusted net income attributable to the Group

$ 209,816

$ 102,376

 

$ 448,420

$ 280,405

 

 

 

 

 

 

Diluted weighted average number of Ordinary Shares outstanding

82,293,287

53,194,327

 

63,095,857

53,283,680

 

 

 

 

 

 

Adjusted diluted net income per Ordinary Share attributable to the Group

$ 2.55

$ 1.92

 

$ 7.11

$ 5.26

 

 

 

 

 

 

 

 

 

 

 

(a)

Acquisition related deferred revenue adjustment represents non-cash adjustments resulting from the revaluation of deferred revenue and the subsequent charge to revenue in connection with business combinations.

(b)

Net Interest expense includes losses on modification or extinguishment of debt.

(c)

Stock-based compensation expense represents the amount of recurring non-cash expense related to the Company’s equity compensation programs

(d)

Foreign currency losses (gains), net relates to gains or losses that arise in connection with the revaluation of non-US dollar denominated assets and liabilities. We exclude these gains and losses from adjusted EBITDA and adjusted net income because fluctuations from period- to- period do not necessarily correspond to changes in our operating results.

(e)

Restructuring charges incurred relate to charges incurred in connection with the termination of leases at locations that are no longer being used and amounts incurred in connection with the elimination of redundant positions within the organisation.

(f)

Transaction-related / integration-related costs include expenses/credits associated with our acquisitions, share-based compensation expense related to the acceleration of share-based compensation awards and replacement share-based awards, contingent consideration valuation adjustments, and any other costs incurred directly related to the integration of these acquisitions.

(g)

Transaction-related financing costs includes costs incurred in connection with changes to our long-term debt and amortization of financing fees. We exclude these costs from Adjusted EBITDA and Adjusted Net Income because they result from financing decisions rather than from decisions made related to our ongoing operations.

(h)

Represents the tax effect of adjusted pre-tax income at our estimated effective tax rate.

ICON/ICLR-F

Contact:
Investor Relations +1 888 381 7923 or
Brendan Brennan Chief Financial Officer +353 1 291 2000
Kate Haven Vice President Investor Relations +1888 381 7923
http://www.iconplc.com

Source: ICON plc