Highlights
- Net business wins in the quarter of $2,419 million; a net book
to bill of 1.20 or 1.21 on a trailing twelve month basis.
- Closing backlog of $21.7 billion, an increase of 2.2% on
quarter one 2023 or an increase of 8.5% on quarter two 2022.
- Quarter two revenue of $2,020.3 million representing an
increase of 4.4% on prior year revenue and 4.3% on a constant
currency organic basis. YTD revenue of $3,998.8 million
representing a year on year increase of 4.2% and 4.7% on a constant
currency basis.
- Quarter two adjusted EBITDA of $414.2 million or 20.5% of
revenue, an increase of 16.9% on quarter two 2022. YTD adjusted
EBITDA of $813.4 million or 20.3% of revenue, representing a year
on year increase of 17.0%.
- GAAP net income attributable to the Group for the quarter of
$115.6 million or $1.40 per diluted share. YTD GAAP net income of
$232.3 million or $2.81 per diluted share, an increase of 1.8% on
the prior year.
- Quarter two adjusted net income attributable to the Group was
$256.9 million or $3.11 per diluted share, an increase of 8.7% on
quarter two 2022 adjusted earnings per share. Year to date adjusted
net income attributable to the Group of $496.7 million or $6.01 per
diluted share, an increase of 6.9% year on year.
- Days sales outstanding reduced to 52 days from 54 days at March
31, 2023.
- $150 million repayment made on Term Loan B debt. Net debt
balance of $4.0 billion with Net Debt to adjusted EBITDA ratio of
2.5x.
- Quarter two effective tax rate of 15.2%. Updated estimate for
full year 2023 effective tax rate of 15.5%, a decrease from prior
estimated effective tax rate of 16.5%.
- Updated full-year 2023 financial guidance for revenue by
narrowing the revenue range to $8,070 - $8,210 million,
representing a year over year increase of 4.3 to 6.1%, and adjusted
earnings per share* in the range of $12.63 - $12.91, representing a
year over year increase of 7.5 to 9.9%. This is an increase of $.04
at the midpoint from our previous adjusted earnings per share
guidance range. Adjusted earnings per share to exclude
amortization, stock compensation, foreign exchange and
transaction-related / integrated-related adjustments.
ICON plc (NASDAQ: ICLR), a world-leading healthcare intelligence
and clinical research organization, today reported its financial
results for the second quarter ended June 30, 2023.
CEO, Dr. Steve Cutler commented, “ICON delivered positive
results in the second quarter, with revenue growth of 4.4% year
over year and excellent adjusted EBITDA performance resulting in
17% year over year growth. We are encouraged by the positive
customer demand trends across our business and have confidence in
our long-term growth trajectory. We now expect revenue in the range
of $8,070 - $8,210 million for the full-year 2023, representing
growth of 4.3 to 6.1% on a year over year basis. Given our strong
margin performance, as well as a more favorable tax position, we
are revising our adjusted earnings per share* range to $12.63 -
$12.91, reflecting a year over year increase of 7.5 to 9.9%, an
increase of $.04 at the midpoint from our previous guidance
range.”
Second Quarter 2023 Results
Gross business wins in the second quarter were $2,860 million
and cancellations were $441 million. This resulted in net business
wins of $2,419 million and a book to bill of 1.20.
Revenue for the second quarter was $2,020.3 million. This
represents an increase of 4.4% on prior year revenue or 4.3% on a
constant currency organic basis.
GAAP net income attributable to the Group was $115.6 million
resulting in $1.40 diluted earnings per share in quarter two 2023
compared to $1.41 diluted earnings per share in quarter two 2022.
Adjusted net income attributable to the Group for the quarter was
$256.9 million resulting in an adjusted diluted earnings per share
of $3.11 compared to $2.86 per share for the second quarter
2022.
Adjusted EBITDA for the second quarter was $414.2 million or
20.5% of revenue, a year on year increase of 16.9%.
The effective tax rate in quarter two was 15.2%.
Cash generated from operating activities for the quarter was
$203.9 million. During the quarter $32.1 million was spent on
capital expenditure. At June 30, 2023, the Group had cash and cash
equivalents of $270.2 million, compared to cash and cash
equivalents of $279.9 million at March 31, 2023 and $614.9 million
at June 30, 2022. $50 million of the revolving credit facility was
drawn down in April 2023 and $80 million was repaid in June 2023.
Additionally, $150 million of Term Loan B payments were made during
the quarter resulting in a net indebtedness of $4.0 billion at June
30, 2023.
Year to date 2023 Results
Gross business wins year to date were $5,718 million and
cancellations were $884 million. This resulted in net business wins
of $4,834 million and a book to bill of 1.21.
Year to date GAAP revenue was $3,998.8 million. This represents
a year on year increase of 4.2% or 4.7% on a constant currency
basis.
GAAP net income attributable to the Group year to date was
$232.3 million resulting in $2.81 diluted earnings per share.
Adjusted net income attributable to the Group was $496.7 million
resulting in an adjusted diluted earnings per share of $6.01
compared to $5.62 per share for the equivalent prior year
period.
Adjusted EBITDA year to date was $813.4 million or 20.3% of
revenue, a year on year increase of 17.0%.
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 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 restructuring 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.
ICON will hold a conference call on July 27, 2023 at 08:00 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,
including statements about our financial guidance. 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.
* Our full-year 2023 guidance adjusted earnings per share
measures are provided on a non-GAAP basis because the company is
unable to predict with a reasonable degree of certainty certain
items contained in the GAAP measures without unreasonable efforts.
For the same reasons, the company is unable to address the probable
significance of the unavailable information.
ICON plc is a world-leading healthcare intelligence and clinical
research organization. From molecule to medicine, we advance
clinical research providing outsourced services to pharmaceutical,
biotechnology, medical device and government and public health
organizations. We develop new innovations, drive emerging therapies
forward and improve patient lives. With headquarters in Dublin,
Ireland, ICON employed approximately 41,160 employees in 108
locations in 53 countries as at June 30, 2023. For further
information about ICON, visit: www.iconplc.com.
ICON/ICLR-F
ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2023 AND JUNE 30, 2022
(UNAUDITED)
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
(in thousands except share and
per share data)
Revenue
$ 2,020,251
$ 1,935,193
$ 3,998,829
$ 3,836,957
Costs and expenses:
Direct costs (excluding depreciation and
amortization)
1,429,540
1,392,062
2,825,086
2,770,529
Selling, general and administrative
expense
187,806
189,953
387,812
385,214
Depreciation and amortization
145,059
144,019
290,185
285,424
Transaction and integration-related
expenses
12,701
8,884
24,083
20,969
Restructuring
35,661
22,486
45,390
26,693
Total costs and expenses
1,810,767
1,757,404
3,572,556
3,488,829
Income from operations
209,484
177,789
426,273
348,128
Interest income
949
166
2,021
293
Interest expense
(85,206)
(47,111)
(171,757)
(91,536)
Income before provision for income
taxes
125,227
130,844
256,537
256,885
Provision for income taxes
(9,629)
(14,254)
(23,902)
(27,540)
Income before share of earnings from
equity method investments
115,598
116,590
232,635
229,345
Share of equity method investments
—
(856)
(383)
(1,641)
Net income attributable to the Group
$ 115,598
$ 115,734
$ 232,252
$ 227,704
Net income per Ordinary Share attributable
to the Group:
Basic
$ 1.41
$ 1.42
$ 2.84
$ 2.80
Diluted
$ 1.40
$ 1.41
$ 2.81
$ 2.76
Weighted average number of Ordinary Shares
outstanding:
Basic
81,999,746
81,398,071
81,892,662
81,430,507
Diluted
82,627,933
82,312,946
82,617,391
82,462,842
ICON plc
CONDENSED CONSOLIDATED BALANCE
SHEETS
AS AT JUNE 30, 2023 AND DECEMBER 31,
2022
(Unaudited)
(Audited)
June 30, 2023
December, 31 2022
ASSETS
(in thousands)
Current Assets:
Cash and cash equivalents
$ 270,176
$ 288,768
Available for sale investments
1,653
1,713
Accounts receivable, net of allowance for
credit losses
1,759,111
1,731,388
Unbilled revenue
985,034
957,655
Other receivables
129,101
63,658
Prepayments and other current assets
152,774
137,094
Income taxes receivable
70,021
48,790
Total current assets
3,367,870
3,229,066
Non-current Assets:
Property, plant and equipment, net
346,521
350,320
Goodwill
8,993,583
8,971,670
Intangible assets
4,049,793
4,278,659
Operating right-of-use assets
144,514
153,832
Other receivables
64,140
70,790
Income taxes receivable
25,169
21,380
Deferred tax asset
80,772
76,930
Investments in equity- long term
35,298
32,631
Total Assets
$ 17,107,660
$ 17,185,278
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current Liabilities:
Accounts payable
$ 46,920
$ 81,194
Unearned revenue
1,573,311
1,507,449
Other liabilities
994,883
1,005,025
Income taxes payable
39,885
41,783
Current bank credit lines and loan
facilities
105,150
55,150
Total current liabilities
2,760,149
2,690,601
Non-current Liabilities:
Non-current bank credit lines and loan
facilities
4,206,936
4,599,037
Lease liabilities
129,079
131,644
Non-current other liabilities
39,438
38,260
Non-current income taxes payable
241,410
239,188
Deferred tax liability
934,208
988,585
Total Liabilities
8,311,220
8,687,315
Shareholders' Equity:
Ordinary shares, par value 6 euro cents
per share; 100,000,000 shares authorized,
82,151,049 shares issued and outstanding
at June 30, 2023 and
81,723,555 shares issued and outstanding
at December 31, 2022.
6,676
6,649
Additional paid‑in capital
6,891,494
6,840,306
Other undenominated capital
1,162
1,162
Accumulated other comprehensive income
(156,528)
(171,538)
Retained earnings
2,053,636
1,821,384
Total Shareholders' Equity
8,796,440
8,497,963
Total Liabilities and Equity
$ 17,107,660
$ 17,185,278
ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND
JUNE 30, 2022
(UNAUDITED)
Six Months Ended
June 30, 2023
June 30, 2022
(in thousands)
Cash flows from operating
activities:
Net income
$ 232,252
$ 227,704
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
290,185
285,424
Impairment of long lived assets
8,613
20,749
Reduction in carrying value of operating
right-of-use assets
23,607
23,570
Loss on equity method investments
383
1,641
Acquisition related gain
(6,160)
—
Charge on cash flow hedge
3,646
—
Amortization of financing costs and debt
discount
7,899
9,188
Stock compensation expense
31,357
38,186
Deferred taxes
(59,177)
(75,265)
Foreign exchange movements
(3,345)
(37,421)
Other non-cash items
18,202
9,159
Changes in assets and
liabilities:
Accounts receivable
(40,675)
(41,032)
Unbilled revenue
(27,210)
(33,187)
Unearned revenue
65,266
(176,904)
Other net assets
(165,462)
157,154
Net cash provided by operating
activities
379,381
408,966
Cash flows from investing
activities:
Purchase of property, plant and
equipment
(58,880)
(47,840)
Purchase of subsidiary undertakings
(5,100)
—
Purchase of investments in equity
(4,733)
(799)
Sale of available for sale investments
482
—
Purchase of available for sale
investments
(422)
—
Net cash used in investing activities
(68,653)
(48,639)
Cash flows from financing
activities:
Drawdown of bank credit lines and loan
facilities
230,000
25,000
Repayment of bank credit lines and loan
facilities
(580,000)
(425,000)
Proceeds from exercise of equity
compensation
20,177
15,140
Share issue costs
(9)
(3)
Repurchase of ordinary shares
—
(99,983)
Share repurchase costs
—
(17)
Net cash used in financing activities
(329,832)
(484,863)
Effect of exchange rate movements on
cash
512
(12,759)
Net decrease in cash and cash
equivalents
(18,592)
(137,295)
Cash and cash equivalents at beginning of
period
288,768
752,213
Cash and cash equivalents at end of
period
$ 270,176
$ 614,918
ICON plc
RECONCILIATION OF NON-GAAP MEASURES
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2023 AND JUNE 30, 2022
(UNAUDITED)
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
(in thousands except share and
per share data)
Adjusted EBITDA
Net income attributable to the Group
$ 115,598
$ 115,734
$ 232,252
$ 227,704
Share of equity method investments
—
856
383
1,641
Provision for income taxes
9,629
14,254
23,902
27,540
Net interest expense
84,257
46,945
169,736
91,243
Depreciation and amortization
145,059
144,019
290,185
285,424
Stock-based compensation expense (a)
16,598
18,893
31,357
38,113
Foreign currency losses (gains), net
(b)
903
(17,817)
2,241
(24,417)
Restructuring (c)
35,661
22,486
45,390
26,693
Transaction-related / integration-related
costs (d)
12,701
8,884
24,083
20,969
Oncacare (gain) (f)
(6,160)
—
(6,160)
—
Adjusted EBITDA
$ 414,246
$ 354,254
$ 813,369
$ 694,910
Adjusted net income attributable to the
Group and adjusted diluted net income per Ordinary Share
attributable to the Group
Net income attributable to the Group
$ 115,598
$ 115,734
$ 232,252
$ 227,704
Provision for income taxes
9,629
14,254
23,902
27,540
Amortization
114,617
118,325
229,295
233,127
Stock-based compensation expense (a)
16,598
18,893
31,357
38,113
Foreign currency losses (gains), net
(b)
903
(17,817)
2,241
(24,417)
Restructuring (c)
35,661
22,486
45,390
26,693
Transaction-related / integration-related
costs (d)
12,701
8,884
24,083
20,969
Transaction-related financing costs
(e)
3,401
3,504
7,899
9,255
Oncacare (gain) (f)
(6,160)
—
(6,160)
—
Adjusted tax expense (g)
(46,048)
(48,465)
(93,517)
(95,238)
Adjusted net income attributable to the
Group
$ 256,900
$ 235,798
$ 496,742
$ 463,746
Diluted weighted average number of
Ordinary Shares outstanding
82,627,933
82,312,946
82,617,391
82,462,842
Adjusted diluted net income per
Ordinary Share attributable to the Group
$ 3.11
$ 2.86
$ 6.01
$ 5.62
(a) Stock-based compensation expense represents the amount of
recurring non-cash expense related to the Company’s equity
compensation programs (inclusive of employer related taxes).
(b) Foreign currency losses (gains), net relates to gains or
losses that arise in connection with the revaluation or settlement
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.
(c) 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 organization.
(d) Transaction-related / integration-related costs include
expenses/credits associated with our acquisitions and any other
costs incurred directly related to the integration of these
acquisitions.
(e) 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.
(f) On April 20, 2023, the Company completed the purchase of the
majority investor’s 51% majority voting share capital of Oncacare
Limited (“Oncacare”). This gave rise to an acquisition-related gain
of $6.2 million. This gain was excluded from adjusted EBITDA and
adjusted net income.
(g) Represents the tax effect of adjusted pre-tax income at our
estimated effective tax rate.
http://www.iconplc.com
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version on businesswire.com: https://www.businesswire.com/news/home/20230726452737/en/
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 All at ICON
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