Pharmaceutical Product Development Inc. (PPDI, Financial) filed Quarterly Report for the period ended 2009-06-30.
As a leading global provider of discovery and development services and products for pharmaceutical biotechnology and medical device companies PPD applies innovative technologies therapeutic expertise and a commitment to quality to help clients maximize the return on their R&D investments. With proven discovery through post-market resources the company also offers compound partnering opportunities. PPD has more than 6600 professionals in 27 countries around the world. For more information on PPD visit the Web site at http://www.ppdi.com. Pharmaceutical Product Development Inc. has a market cap of $2.41 billion; its shares were traded at around $20.47 with a P/E ratio of 13 and P/S ratio of 1.6. The dividend yield of Pharmaceutical Product Development Inc. stocks is 3%. Pharmaceutical Product Development Inc. had an annual average earning growth of 22.1% over the past 10 years. GuruFocus rated Pharmaceutical Product Development Inc. the business predictability rank of 5-star.
Total direct costs decreased $32.7 million to $183.3 million in the second quarter of 2009 primarily as the result of a decrease in Development segment direct costs. Development segment direct costs decreased $25.1 million to $158.5 million in the second quarter of 2009. This decrease was mainly attributable to a decrease in personnel costs of $18.1 million and a decrease in contract labor and subcontractor costs of $8.3 million, partially offset by an increase of $2.2 million related to losses on our foreign currency hedging position. Of the $25.1 million decrease in Development segment direct costs, $8.0 million of the decrease was due to the strengthening of the U.S. dollar relative to the euro, Brazilian real and pound sterling and $6.6 million of the decrease was attributable to a research credit recognized in the second quarter of 2009 associated with a foreign research incentive program. Of the $6.6 million, $4.9 million was related to qualifying foreign research credits incurred during 2008. We expect to receive quarterly research credits of approximately $0.9 million during the remainder of 2009.
SG&A expenses decreased $2.8 million to $97.8 million in the second quarter of 2009. The decrease in SG&A expenses was primarily related to a $4.6 million decrease in personnel costs attributable to $4.0 million in research credits mentioned above and a decrease in recruitment and relocation costs of $1.9 million, partially offset by a $1.6 million increase in bad debt expense.
Other income, net decreased $1.5 million to $1.1 million in the second quarter of 2009. This decrease was due primarily to a $3.0 million decrease in interest income from lower interest rates earned on cash balances, partially offset by a $0.7 million gain on the sale of investments. Changes in foreign currency exchange rates from the time we prepare invoices until the client pays also resulted in a net loss on foreign currency transactions of $0.6 million for the second quarter of 2009, down from a net loss of $1.5 million in the second quarter of 2008.
Discontinued operations, net of provision for income taxes was $19.4 million for the second quarter of 2009. In May 2009, we completed our disposition of Piedmont Research Center, our preclinical oncology services business, to Charles River Laboratories. As a result, this business unit has been shown as discontinued operations for the quarters ended June 30, 2008 and 2009. The gain from the sale of business of $19.5 million, net of provision for income taxes of $16.1 million was recognized in the second quarter of 2009.
Net income of $58.1 million in the second quarter of 2009 represents an increase of 18.5% from $49.0 million in the second quarter of 2008. Net income per diluted share of $0.49 in the second quarter of 2009 represents a 19.5% increase from $0.41 net income per diluted share in the second quarter of 2008.
Read the The complete ReportPPDI is in the portfolios of Third Avenue Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
As a leading global provider of discovery and development services and products for pharmaceutical biotechnology and medical device companies PPD applies innovative technologies therapeutic expertise and a commitment to quality to help clients maximize the return on their R&D investments. With proven discovery through post-market resources the company also offers compound partnering opportunities. PPD has more than 6600 professionals in 27 countries around the world. For more information on PPD visit the Web site at http://www.ppdi.com. Pharmaceutical Product Development Inc. has a market cap of $2.41 billion; its shares were traded at around $20.47 with a P/E ratio of 13 and P/S ratio of 1.6. The dividend yield of Pharmaceutical Product Development Inc. stocks is 3%. Pharmaceutical Product Development Inc. had an annual average earning growth of 22.1% over the past 10 years. GuruFocus rated Pharmaceutical Product Development Inc. the business predictability rank of 5-star.
Highlight of Business Operations:
As of June 30, 2009, we had $669.2 million of cash and cash equivalents and short- and long-term investments, after giving effect to the payment of our second quarter dividend of $17.7 million and capital expenditures of $9.2 million. In the second quarter of 2009, we generated $14.5 million in cash from operations. The number of days revenue outstanding in accounts receivable and unbilled services, net of unearned income, also known as DSO, was 32 days for the six months ended June 30, 2009, compared to 42 days for the year ended December 31, 2008. DSO decreased in the first six months of 2009 due to improved cash collections, the mix of contracts performed and their payment terms. We plan to continue to monitor DSO and the various factors that affect it. However, we expect DSO will continue to fluctuate from quarter to quarter depending on contract terms, the mix of contracts performed and our success in collecting receivables.Total direct costs decreased $32.7 million to $183.3 million in the second quarter of 2009 primarily as the result of a decrease in Development segment direct costs. Development segment direct costs decreased $25.1 million to $158.5 million in the second quarter of 2009. This decrease was mainly attributable to a decrease in personnel costs of $18.1 million and a decrease in contract labor and subcontractor costs of $8.3 million, partially offset by an increase of $2.2 million related to losses on our foreign currency hedging position. Of the $25.1 million decrease in Development segment direct costs, $8.0 million of the decrease was due to the strengthening of the U.S. dollar relative to the euro, Brazilian real and pound sterling and $6.6 million of the decrease was attributable to a research credit recognized in the second quarter of 2009 associated with a foreign research incentive program. Of the $6.6 million, $4.9 million was related to qualifying foreign research credits incurred during 2008. We expect to receive quarterly research credits of approximately $0.9 million during the remainder of 2009.
SG&A expenses decreased $2.8 million to $97.8 million in the second quarter of 2009. The decrease in SG&A expenses was primarily related to a $4.6 million decrease in personnel costs attributable to $4.0 million in research credits mentioned above and a decrease in recruitment and relocation costs of $1.9 million, partially offset by a $1.6 million increase in bad debt expense.
Other income, net decreased $1.5 million to $1.1 million in the second quarter of 2009. This decrease was due primarily to a $3.0 million decrease in interest income from lower interest rates earned on cash balances, partially offset by a $0.7 million gain on the sale of investments. Changes in foreign currency exchange rates from the time we prepare invoices until the client pays also resulted in a net loss on foreign currency transactions of $0.6 million for the second quarter of 2009, down from a net loss of $1.5 million in the second quarter of 2008.
Discontinued operations, net of provision for income taxes was $19.4 million for the second quarter of 2009. In May 2009, we completed our disposition of Piedmont Research Center, our preclinical oncology services business, to Charles River Laboratories. As a result, this business unit has been shown as discontinued operations for the quarters ended June 30, 2008 and 2009. The gain from the sale of business of $19.5 million, net of provision for income taxes of $16.1 million was recognized in the second quarter of 2009.
Net income of $58.1 million in the second quarter of 2009 represents an increase of 18.5% from $49.0 million in the second quarter of 2008. Net income per diluted share of $0.49 in the second quarter of 2009 represents a 19.5% increase from $0.41 net income per diluted share in the second quarter of 2008.
Read the The complete ReportPPDI is in the portfolios of Third Avenue Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
