PPD reports net revenue of $383.2 million for first quarter 2011

PPD, Inc. (Nasdaq: PPDI) today reported its financial and operating results for the first quarter ended March 31, 2011.

PPD recorded net revenue of $383.2 million for the first quarter of 2011, an increase of 10.5 percent over net revenue of $346.8 million for the first quarter of 2010. First quarter 2011 income from operations was $52.4 million, compared to $27.7 million for the first quarter of 2010. Income from operations for the first quarter of 2011 was higher than the same period last year due primarily to higher net revenue, lower SG&A expense, and a decrease in research and development and operating expenses due to the June 2010 spin-off of Furiex Pharmaceuticals, Inc. Diluted earnings per share for the first quarter of 2011 were $0.32, compared to $0.14 for the first quarter of 2010.

"We were pleased to deliver solid gross and net authorizations in the first quarter of 2011, enhancing the future outlook of PPD," said David Grange, chief executive officer of PPD. "Clinical Development Services segment margins remained strong for the quarter, while Laboratory Services segment results were impacted by higher than normal project cancellations and postponements and increased investment in research and development to support the future growth of our drug discovery services business. Productivity improvement, cost control, and operational excellence remain top priorities for our global leadership team in the year ahead."

Clinical Development Services

Clinical Development Services segment net revenue for the first quarter of 2011 was $279.7 million, compared to $249.3 million for the first quarter of 2010. First quarter 2011 income from operations for this segment was $46.5 million, compared to $27.0 million for the first quarter of 2010.

Laboratory Services

Laboratory Services segment net revenue for the first quarter of 2011 was $76.5 million, compared to $74.5 million for the first quarter of 2010. First quarter 2011 income from operations for this segment was $6.0 million, compared to $9.5 million for the first quarter of 2010.

Other Financial Information

Gross authorizations for the first quarter of 2011 totaled $639.5 million. Backlog at March 31, 2011, was $3.6 billion. Contract cancellations and adjustments for the first quarter of 2011 were $174.1 million.

Cash flow from operations for the first quarter of 2011 was $41.9 million. At March 31, 2011, PPD had $452.6 million in cash and investments, after the payment of $200 million to repurchase shares of the company's common stock under its accelerated share repurchase program and $19.0 million for its first quarter dividend. During the first quarter of 2011, PPD retired 6.5 million shares of its common stock under its accelerated share repurchase program. The effective tax rate for continuing operations in the first quarter of 2011 was 32.0 percent.

"We continued to make progress executing our strategic initiatives during the first quarter, as evidenced by a net book-to-bill ratio of 1.31, double-digit net revenue growth year-over-year, and a significant year-over-year decrease in SG&A expense," said Fred Eshelman, executive chairman of PPD. "We remain committed to improving our operational execution, controlling costs, and differentiating our global service offerings to drive value for our clients and shareholders."