ICON second quarter net revenue increases 4.2% to $233 million

ICON (NASDAQ:ICLR) (ISIN:IE0005711209), a global provider of outsourced development services to the pharmaceutical, biotechnology and medical device industries, today reported its financial results for the second quarter ended June 30, 2011.

Net revenue for the quarter was $233 million, an increase of 4.2% on the prior year. Year-to-date, net revenues were $462 million, representing a 4.4% increase over the same period last year.

Income from operations was $15.5 million or 6.7% of revenue, compared to $25.7 million or 11.5% for the same quarter last year. Net income was $13 million or 21 cents per share on a diluted basis, compared with $22.9 million or 38 cents per share last year.

Year-to-date income from operations was $31.5 million (before restructuring charges), compared to $52.5 million last year representing a margin of 6.8% in 2011 and a margin of 11.8% in 2010. Net income was $25.9 million or 42 cents per share (before restructuring charges), compared with $45 million or 74 cents per share last year.

Days sales outstanding, comprising accounts receivable and unbilled revenue less payments on account, were 49 days at June 30, 2011, the same as at March 31, 2011.

For the quarter ended June 30, 2011, cash used in operating activities was $6.4 million and capital expenditure was $7 million. The company's net cash amounted to $215 million at June 30, 2011, compared to net cash of $232 million at March 31, 2011.

"Our second quarter was in line with our guidance, and new business bookings continued to strengthen, leading to our order backlog exceeding $2bn for the first time" commented CEO Peter Gray. "The investments we have been making in developing the business are progressing satisfactorily".

"The major achievement of the quarter was our selection by Pfizer as one of their two partners for clinical development", he continued. "Significant work will be transitioned to ICON over the next two years as this partnership develops which should drive an acceleration in our growth over that time. We are thus increasing our hiring drive and expect to add significant cost in the next two quarters as we gear up to handle work which will be transitioned to us in Q4 and throughout 2012. As a result, while we are not changing our revenue guidance for 2011, we are lowering our EPS guidance to 50c-70c, reflecting significantly increased costs in Q3 without compensating revenue, followed by further cost growth in Q4 with revenues beginning to build".