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Medpace Holdings, Inc. Reports Second Quarter 2019 Results

July 29, 2019

CINCINNATI--(BUSINESS WIRE)--Jul 29, 2019--

Medpace Holdings, Inc. (Nasdaq: MEDP) (“Medpace”) today announced financial results for the second quarter ended June 30, 2019.

“In the second quarter, the business environment remained strong, and our competitive win rate remained healthy,” said August J. Troendle, President & Chief Executive Officer. “Cancellations in the quarter returned to an anticipated historical range from elevated levels the past two quarters.”

Second Quarter 2019 Financial Results

Revenue for the three months ended June 30, 2019 increased 25.8% to $214.1 million, compared to $170.1 million for the comparable prior-year period. On a constant currency organic basis, revenue for the second quarter of 2019 increased 26.0% compared to the second quarter of 2018.

Backlog as of June 30, 2019 grew 19.6% to $1.2 billion from $979.7 million as of June 30, 2018. Net new business awards were $279.2 million, representing a net book-to-bill ratio of 1.30x for the second quarter of 2019, as compared to $239.9 million for the comparable prior-year period. The Company calculates the net book-to-bill ratio by dividing net new business awards by revenue.

For the second quarter of 2019, total direct costs were $150.3 million, compared to total direct costs of $116.7 million in the second quarter of 2018. Selling, general and administrative (SG&A) expenses were $23.6 million, compared to SG&A expenses of $20.5 million in the second quarter of 2018.

GAAP net income for the second quarter of 2019 was $27.5 million, or $0.73 per diluted share, versus GAAP net income of $16.6 million, or $0.45 per diluted share, for the second quarter of 2018. This resulted in a net income margin of 12.8% and 9.7% for the second quarter of 2019 and 2018, respectively.

EBITDA for the second quarter of 2019 increased 20.3% to $40.2 million, or 18.8% of revenue, compared to $33.4 million, or 19.7% of revenue, for the comparable prior-year period. On a constant currency basis, EBITDA for the second quarter of 2019 increased 18.2% from the second quarter of 2018.

Adjusted Net Income for the second quarter of 2019 increased 35.7% to $30.4 million compared to $22.4 million for the comparable prior-year period. Adjusted Net Income per diluted share for the second quarter of 2019 was $0.81, representing an increase of 32.8%, compared to Adjusted Net Income per diluted share of $0.61 for the comparable prior-year period.

A reconciliation of the Company’s non-GAAP financial measures, including EBITDA, EBITDA margin, Adjusted Net Income, and Adjusted Net Income per diluted share to the corresponding GAAP measures is provided below.

Balance Sheet and Liquidity

The Company’s Cash and cash equivalents were $20.1 million at June 30, 2019, and the Company generated $46.6 million in cash flow from operating activities during the second quarter of 2019. Additionally, the Company paid off its remaining outstanding obligations against its term loan during the second quarter of 2019.

Financial Guidance

The Company forecasts 2019 revenue in the range of $840.0 million to $860.0 million, representing growth of 19.2% to 22.1% over 2018 revenue of $704.6 million. GAAP net income for full year 2019 is forecasted in the range of $93.4 million to $97.4 million. Additionally, full year 2019 EBITDA is expected in the range of $144.0 million to $150.0 million.

Based on forecasted 2019 revenue of $840.0 million to $860.0 million and GAAP net income of $93.4 million to $97.4 million, diluted earnings per share (GAAP) is forecasted in the range of $2.49 to $2.60. Adjusted Net Income for 2019 is forecasted in the range of $105.7 million to $109.7 million, compared to Adjusted Net Income of $95.5 million for 2018. Furthermore, Adjusted Net Income per diluted share for 2019 is expected in the range of $2.82 to $2.93 per share.

Conference Call Details

Medpace will host a conference call at 9:00 a.m. ET, Tuesday, July 30, 2019, to discuss its second quarter 2019 results.

To participate in the conference call, dial 800-219-7113 (domestic) or 574-990-1030 (international) using the passcode 6197355.

To access the conference call via webcast, visit the “Investors” section of Medpace’s website at medpace.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.

A supplemental slide presentation will also be available at the “Investors” section of Medpace’s website prior to the start of the call.

A recording of the call will be available at 12:00 p.m. ET on Tuesday, July 30, 2019 until 12:00 p.m. ET on Tuesday, August 13, 2019. To hear this recording, dial 855-859-2056 (domestic) or 404-537-3406 (international) using the passcode 6197355.

About Medpace

Medpace is a scientifically-driven, global, full-service clinical contract research organization (CRO) providing Phase I-IV clinical development services to the biotechnology, pharmaceutical and medical device industries. Medpace’s mission is to accelerate the global development of safe and effective medical therapeutics through its high-science and disciplined operating approach that leverages regulatory and therapeutic expertise across all major areas including oncology, cardiology, metabolic disease, endocrinology, central nervous system and anti-viral and anti-infective. Headquartered in Cincinnati, Ohio, Medpace employs approximately 3,200 people across 37 countries.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our anticipated financial results and effective tax rate used for non-GAAP adjustment purposes. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” “forecast,” “may,” “could,” “likely,” “anticipate,” “project,” “goal,” “objective,” similar expressions, and variations or negatives of these words.

These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our financial condition, actual results, performance (including share price performance), or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the potential loss, delay or non-renewal of our contracts, or the non-payment by customers for services we have performed; the failure to convert backlog to revenue at our present or historical conversion rate; fluctuation in our results between fiscal quarters and years; decreased operating margins due to increased pricing pressure or other pressures; failure to perform our services in accordance with contractual requirements, government regulations and ethical considerations; the impact of underpricing our contracts, overrunning our cost estimates or failing to receive approval for or experiencing delays with documentation of change orders; our failure to successfully execute our growth strategies; the impact of a failure to retain key executives or other personnel or recruit experienced personnel; the risks associated with our information systems infrastructure, including potential security breaches and other disruptions which could compromise our information; our failure to manage our growth effectively; adverse results from customer or therapeutic area concentration; the risks associated with doing business internationally, including the effects of tariffs and trade wars; the risks associated with the Foreign Corrupt Practices Act and other anti-corruption laws; future net losses; the impact of changes in tax laws and regulations; the risks associated with our intercompany pricing policies; our failure to attract suitable investigators and patients to our clinical trials; the liability risks associated with our research and development services; the risks related to our Phase I clinical services; inadequate insurance coverage for our operations and indemnification obligations; fluctuations in exchange rates; the risks related to our relationships with existing or potential customers who are in competition with each other; our failure to successfully integrate potential future acquisitions; potential impairment of goodwill or other intangible assets; our limited ability to utilize our net operating loss carryforwards or other tax attributes; the risks associated with the use and disposal of hazardous substances and waste; the failure of third parties to provide us critical support services; our limited ability to protect our intellectual property rights; the risks associated with potential future investments in our customers’ business or drugs; general economic conditions in the markets in which we operate, including financial market conditions; the impact of a natural disaster or other catastrophic event; negative outsourcing trends in the biopharmaceutical industry and a reduction in aggregate expenditures and research and development budgets; our inability to compete effectively with other CROs; the impact of healthcare reform; the impact of recent consolidation in the biopharmaceutical industry; failure to comply with federal, state and foreign healthcare laws; the effect of current and proposed laws and regulations regarding the protection of personal data; our potential involvement in costly intellectual property lawsuits; actions by regulatory authorities or customers to limit the scope of or withdraw an approved drug, biologic or medical device from the market; failure to keep pace with rapid technological changes; the impact of industry-wide reputational harm to CROs; the end result of any negotiations between the U.K. government and the EU regarding the terms of the U.K.’s exit from the EU, which could have implications on our research, commercial and general business operations in the U.K. and the EU; changes in U.S. generally accepted accounting principles, including the impact of the changes to the revenue recognition standards; risks related to internal control over financial reporting; our ability to fulfill our debt obligations; the risks associated with incurring additional debt or undertaking additional debt obligations; the effect of covenant restrictions under our debt agreements on our ability to operate our business; our inability to generate sufficient cash to service all of our indebtedness; fluctuations in interest rates; and our dependence on our lenders, which may not be able to fund borrowings under the credit commitments, and our inability to borrow.

These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on February 26, 2019, and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. We cannot guarantee that any forward-looking statement will be realized. Achievement of anticipated results is subject to substantial risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Non-GAAP Financial Measures

Certain financial measures presented in this press release, such as EBITDA, EBITDA margin, Adjusted Net Income, and Adjusted Net Income per diluted share, are not recognized under generally accepted accounting principles in the United States of America, or U.S. GAAP. Management uses EBITDA, EBITDA margin, Adjusted Net Income, and Adjusted Net Income per diluted share or comparable metrics as a measurement used in evaluating our operating performance on a consistent basis, as a consideration to assess incentive compensation for our employees, for planning purposes, including the preparation of our internal annual operating budget, and to evaluate the performance and effectiveness of our operational strategies.

EBITDA, EBITDA margin, Adjusted Net Income, and Adjusted Net Income per diluted share have important limitations as analytical tools and you should not consider them in isolation, or as a substitute for, analysis of our results as reported under U.S. GAAP. See the condensed consolidated financial statements included elsewhere in this release for our U.S. GAAP results. Additionally, for reconciliations of EBITDA, EBITDA margin, Adjusted Net Income, Adjusted Net Income per diluted share to our closest reported U.S. GAAP measures, refer to the appendix of this press release.

EBITDA and EBITDA margin

We believe that EBITDA and EBITDA margin are useful to provide additional information to investors about certain material non-cash and non-recurring items. While we believe these financial measures are commonly used by investors to evaluate our performance and that of our competitors, because not all companies use identical calculations, this presentation of EBITDA and EBITDA margin may not be comparable to other similarly titled measures of other companies and should not be considered as an alternative to performance measures derived in accordance with U.S. GAAP. EBITDA is calculated as net income attributable to Medpace Holdings, Inc. before income tax expense, interest expense, net, depreciation and amortization. EBITDA margin is calculated by dividing EBITDA by Revenue, net for each period. Our presentation of EBITDA and EBITDA margin should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Adjusted Net Income and Adjusted Net Income per diluted share

Adjusted Net Income measures our operating performance by adjusting net income attributable to Medpace Holdings, Inc. to include cash expenditures related to rental payments on leases classified for accounting purposes as deemed landlord liabilities, and exclude amortization expense, certain stock based compensation award non-cash expenses, certain litigation expenses, deferred financing fees and certain other non-recurring items. Adjusted Net Income per diluted share measures Adjusted Net Income on a per diluted share basis. Management uses these measures to evaluate our core operating results as it excludes certain items whose fluctuations from period-to-period do not necessarily correspond to changes in the core operations of the business, but includes certain items such as depreciation, interest expense and tax expense, which are otherwise excluded from EBITDA. We believe the presentation of Adjusted Net Income and Adjusted Net Income per diluted share enhances our investors’ overall understanding of the financial performance. You should not consider Adjusted Net Income or Adjusted Net Income per diluted share as an alternative to Net income or Net income per diluted share attributable to Medpace Holdings Inc., determined in accordance with U.S. GAAP, as an indicator of operating performance.

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Amounts in thousands, except per share amounts)

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue, net

 

$

214,104

 

 

$

170,144

 

 

$

414,845

 

 

$

333,221

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct service costs, excluding depreciation and amortization

 

 

79,327

 

 

 

61,478

 

 

 

154,436

 

 

 

121,819

 

Reimbursed out-of-pocket expenses

 

 

70,985

 

 

 

55,198

 

 

 

141,579

 

 

 

112,111

 

Total direct costs

 

 

150,312

 

 

 

116,676

 

 

 

296,015

 

 

 

233,930

 

Selling, general and administrative

 

 

23,556

 

 

 

20,507

 

 

 

44,864

 

 

 

36,506

 

Depreciation

 

 

1,982

 

 

 

2,226

 

 

 

3,973

 

 

 

4,540

 

Amortization

 

 

2,995

 

 

 

7,390

 

 

 

8,839

 

 

 

14,781

 

Total operating expenses

 

 

178,845

 

 

 

146,799

 

 

 

353,691

 

 

 

289,757

 

Income from operations

 

 

35,259

 

 

 

23,345

 

 

 

61,154

 

 

 

43,464

 

Other expense, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Miscellaneous (expense) income, net

 

 

(19

)

 

 

478

 

 

 

(301

)

 

 

325

 

Interest expense, net

 

 

(748

)

 

 

(2,308

)

 

 

(1,703

)

 

 

(4,617

)

Total other expense, net

 

 

(767

)

 

 

(1,830

)

 

 

(2,004

)

 

 

(4,292

)

Income before income taxes

 

 

34,492

 

 

 

21,515

 

 

 

59,150

 

 

 

39,172

 

Income tax provision

 

 

7,037

 

 

 

4,947

 

 

 

12,497

 

 

 

8,053

 

Net income

 

$

27,455

 

 

$

16,568

 

 

$

46,653

 

 

$

31,119

 

Net income per share attributable to common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.76

 

 

$

0.46

 

 

$

1.30

 

 

$

0.87

 

Diluted

 

$

0.73

 

 

$

0.45

 

 

$

1.24

 

 

$

0.85

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

35,839

 

 

 

35,519

 

 

 

35,772

 

 

 

35,503

 

Diluted

 

 

37,389

 

 

 

36,664

 

 

 

37,377

 

 

 

36,586

 

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Amounts in thousands, except share amounts)

 

As Of

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

20,098

 

 

$

23,275

 

Restricted cash

 

 

-

 

 

 

7

 

Accounts receivable and unbilled, net

 

 

149,860

 

 

 

133,449

 

Prepaid expenses and other current assets

 

 

24,386

 

 

 

21,383

 

Total current assets

 

 

194,344

 

 

 

178,114

 

Property and equipment, net

 

 

39,749

 

 

 

52,255

 

Operating lease right-of-use assets

 

 

51,809

 

 

 

-

 

Goodwill

 

 

662,427

 

 

 

660,981

 

Intangible assets, net

 

 

60,340

 

 

 

69,179

 

Deferred income taxes

 

 

313

 

 

 

713

 

Other assets

 

 

7,879

 

 

 

6,691

 

Total assets

 

$

1,016,861

 

 

$

967,933

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

22,691

 

 

$

16,737

 

Accrued expenses

 

 

93,604

 

 

 

87,493

 

Advanced billings

 

 

165,447

 

 

 

147,935

 

Other current liabilities

 

 

14,331

 

 

 

4,861

 

Total current liabilities

 

 

296,073

 

 

 

257,026

 

Long-term debt, net, less current portion

 

 

-

 

 

 

79,721

 

Operating lease liabilities

 

 

43,731

 

 

 

-

 

Deemed landlord liability, less current portion

 

 

-

 

 

 

24,484

 

Deferred income tax liability

 

 

4,599

 

 

 

439

 

Other long-term liabilities

 

 

14,403

 

 

 

16,560

 

Total liabilities

 

 

358,806

 

 

 

378,230

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock - $0.01 par-value; 5,000,000 shares authorized; no shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively

 

 

-

 

 

 

-

 

Common stock - $0.01 par-value; 250,000,000 shares authorized at June 30, 2019 and December 31, 2018, respectively; 35,894,048 and 35,665,910 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively

 

 

359

 

 

 

356

 

Treasury stock - 200,000 shares at June 30, 2019 and December 31, 2018, respectively

 

 

(6,030

)

 

 

(6,030

)

Additional paid-in capital

 

 

651,784

 

 

 

639,381

 

Retained earnings (accumulated deficit)

 

 

14,319

 

 

 

(41,487

)

Accumulated other comprehensive loss

 

 

(2,377

)

 

 

(2,517

)

Total shareholders’ equity

 

 

658,055

 

 

 

589,703

 

Total liabilities and shareholders’ equity

 

$

1,016,861

 

 

$

967,933

 

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Amounts in thousands)

 

Six Months Ended

 

 

 

June 30,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

46,653

 

 

$

31,119

 

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

 

 

 

 

 

 

 

 

Depreciation

 

 

3,973

 

 

 

4,540

 

Amortization

 

 

8,839

 

 

 

14,781

 

Stock-based compensation expense

 

 

8,568

 

 

 

2,954

 

Amortization of debt issuance costs and discount

 

 

874

 

 

 

317

 

Noncash lease expense

 

 

4,787

 

 

 

-

 

Deferred income tax provision (benefit)

 

 

1,840

 

 

 

(286

)

Amortization and adjustment of deferred credit

 

 

(400

)

 

 

(407

)

Other

 

 

10

 

 

 

743

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable and unbilled, net

 

 

(15,470

)

 

 

(20,289

)

Prepaid expenses and other current assets

 

 

(3,414

)

 

 

(804

)

Accounts payable

 

 

5,338

 

 

 

1,375

 

Accrued expenses

 

 

6,066

 

 

 

14,184

 

Advanced billings

 

 

17,546

 

 

 

15,846

 

Lease liabilities

 

 

(4,338

)

 

 

-

 

Other assets and liabilities, net

 

 

(237

)

 

 

568

 

Net cash provided by operating activities

 

 

80,635

 

 

 

64,641

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Property and equipment expenditures

 

 

(5,990

)

 

 

(9,793

)

Other

 

 

(1,292

)

 

 

(178

)

Net cash used in investing activities

 

 

(7,282

)

 

 

(9,971

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

3,891

 

 

 

1,175

 

Payment of debt

 

 

(80,438

)

 

 

(8,250

)

Payments on revolving loan

 

 

-

 

 

 

(50,000

)

Payment of deemed landlord liability

 

 

-

 

 

 

(910

)

Net cash used in financing activities

 

 

(76,547

)

 

 

(57,985

)

EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

 

10

 

 

 

(940

)

DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

 

(3,184

)

 

 

(4,255

)

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period

 

 

23,282

 

 

 

26,492

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period

 

$

20,098

 

 

$

22,237

 

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED)

(Amounts in thousands, except per share amounts)

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

RECONCILIATION OF GAAP NET INCOME TO EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

27,455

 

 

$

16,568

 

 

$

46,653

 

 

$

31,119

 

Interest expense, net

 

 

748

 

 

 

2,308

 

 

 

1,703

 

 

 

4,617

 

Income tax provision

 

 

7,037

 

 

 

4,947

 

 

 

12,497

 

 

 

8,053

 

Depreciation

 

 

1,982

 

 

 

2,226

 

 

 

3,973

 

 

 

4,540

 

Amortization

 

 

2,995

 

 

 

7,390

 

 

 

8,839

 

 

 

14,781

 

EBITDA (Non-GAAP)

 

$

40,217

 

 

$

33,439

 

 

$

73,665

 

 

$

63,110

 

Net income margin (GAAP)

 

 

12.8

%

 

 

9.7

%

 

 

11.2

%

 

 

9.3

%

EBITDA margin (Non-GAAP)

 

 

18.8

%

 

 

19.7

%

 

 

17.8

%

 

 

18.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED NET INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

27,455

 

 

$

16,568

 

 

$

46,653

 

 

$

31,119

 

Amortization

 

 

2,995

 

 

 

7,390

 

 

 

8,839

 

 

 

14,781

 

Corporate campus lease payments - principal portion (a)

 

 

-

 

 

 

(459

)

 

 

-

 

 

 

(910

)

Other transaction expenses (c)

 

 

-

 

 

 

448

 

 

 

-

 

 

 

448

 

Deferred financing fees (b)

 

 

736

 

 

 

158

 

 

 

874

 

 

 

317

 

Income tax effect of adjustments (d)

 

 

(821

)

 

 

(1,734

)

 

 

(2,197

)

 

 

(3,367

)

Adjusted net income (Non-GAAP)

 

$

30,365

 

 

$

22,371

 

 

$

54,169

 

 

$

42,388

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per diluted share (GAAP)

 

$

0.73

 

 

$

0.45

 

 

$

1.24

 

 

$

0.85

 

Adjusted net income per diluted share (Non-GAAP)

 

$

0.81

 

 

$

0.61

 

 

$

1.45

 

 

$

1.16

 

Diluted average common shares outstanding

 

 

37,389

 

 

 

36,664

 

 

 

37,377

 

 

 

36,586

 

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

FY 2019 GUIDANCE RECONCILIATION (UNAUDITED)

(Amounts in millions, except per share amounts)

 

Forecast 2019

 

 

Forecast 2019

 

 

 

 

 

 

Adjusted Net Income

 

 

Adjusted Diluted Earnings

Per Share

 

 

Year ended

December 31, 2018

 

 

 

Low

 

 

High

 

 

Low

 

 

High

 

 

Adjusted

Net Income

 

 

Adjusted

Net Income

per diluted

share

 

Net income and diluted earnings per share (GAAP)

 

$

93.4

 

 

$

97.4

 

 

$

2.49

 

 

$

2.60

 

 

$

73.2

 

 

$

1.97

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

 

14.8

 

 

 

14.8

 

 

 

0.39

 

 

 

0.39

 

 

 

29.6

 

 

 

0.80

 

Other transaction expenses (c)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.7

 

 

 

0.02

 

Corporate campus lease payments - principal portion (a)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1.9

)

 

 

(0.05

)

Deferred financing fees (b)

 

 

1.0

 

 

 

1.0

 

 

 

0.03

 

 

 

0.03

 

 

 

0.6

 

 

 

0.02

 

Income tax effect of adjustments (d)

 

 

(3.5

)

 

 

(3.5

)

 

 

(0.09

)

 

 

(0.09

)

 

 

(6.7

)

 

 

(0.18

)

Tax reform adjustments (e)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.1

)

 

 

-

 

Adjusted net income and adjusted net income per diluted share (Non-GAAP)

 

$

105.7

 

 

$

109.7

 

 

$

2.82

 

 

$

2.93

 

 

$

95.5

 

 

$

2.59

 

Depreciation

 

 

8.3

 

 

 

8.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

28.5

 

 

 

30.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

1.5

 

 

 

1.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (Non-GAAP)

 

$

144.0

 

 

$

150.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Represents cash rental payments on two corporate headquarter buildings that were accounted for as deemed assets and subject to depreciation expense over the life of the lease. Payments made for these leases were accounted for with a principal portion and an interest portion, consistent with deemed landlord liability accounting. The interest portion of these payments was included in net cash provided by operating activities in our statement of cash flows. The principal portion was reflected as a financing activity in our statement of cash flows. These adjustments for purposes of arriving at Adjusted Net Income had the effect of presenting these leases consistently with all other office lease rentals that we have globally. As of January 1, 2019, we converted these buildings from deemed assets and liabilities to operating leases due to the adoption of ASC 842. Therefore, we no longer have the adjustment.

 

(b)

Represents amortization of the discount and issuance costs deferred on the consolidated balance sheet associated with the issuance of the Senior Secured Credit Facility.

 

(c)

Represents advisory costs and other fees incurred in connection with the 2017 S-3 registration statement and follow-on offerings.

 

(d)

Represents the tax effect of the total adjustments at 23% for 2018. Second quarter of 2019 is reflective of an estimated effective tax rate of 22%. For full year 2019 guidance, a tax rate of 20.0% to 22.0% is assumed.

 

(e)

Consists of a one-time adjustment due to the finalization of U.S. federal tax reform.

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20190729005648/en/

CONTACT: Media Contact:

Julie Hopkins

Medpace Holdings, Inc.

513.579.9911 x12627

j.hopkins@medpace.comInvestor Contact:

investor@medpace.com

KEYWORD: OHIO UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: OTHER SCIENCE RESEARCH PHARMACEUTICAL ONCOLOGY MEDICAL DEVICES HOSPITALS SCIENCE CLINICAL TRIALS CARDIOLOGY FDA BIOTECHNOLOGY SURGERY HEALTH

SOURCE: Medpace Holdings, Inc.

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