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ICON Reports First Quarter 2024 Results
CEO, Dr. Steve Cutler commented, "ICON reported a strong start to the year in quarter one, with revenue growth of 6% year over year, and net bookings up 10% over quarter one 2023, resulting in a net book to bill ratio of 1.27 times. Adjusted earnings per share grew a robust 20% on a year over year basis, reflecting our efficient service delivery and strong cost control. Our performance is reflective of the current favorable demand trends across our industry, as well as the further development of strategic customer partnerships.
With the positive results in quarter one and consistent outlook for the year, we are updating our full-year financial guidance range for 2024, with revenue in the range of $8,480 - $8,720 million, representing growth of 6% year over year at the midpoint, and adjusted earnings per share of $14.65 - $15.15, an increase of 16% year over year at the midpoint of the range."
First Quarter 2024 Results
Gross business wins in the first quarter were $3,114 million and cancellations were $460 million. This resulted in net business wins of $2,654 million and a book to bill of 1.27.
Revenue for the first quarter was $2,090.4 million. This represents an increase of 5.7% on prior year revenue or 5.4% on a constant currency basis.
GAAP net income was $187.4 million resulting in $2.25 diluted earnings per share in quarter one 2024 compared to $1.41 diluted earnings per share in quarter one 2023. Adjusted net income for the quarter was $288.5 million resulting in an adjusted diluted earnings per share of $3.47 compared to $2.90 per share for the first quarter 2023.
Adjusted EBITDA for the first quarter was $444.0 million or 21.2% of revenue, a year-on-year increase of 11.3%.
The effective tax rate on adjusted net income in quarter one 2024 was 16.5%.
Cash generated from operating activities for the quarter was $327.1 million. During the quarter $27.2 million was spent on capital expenditure. At March 31, 2024, the Group had cash and cash equivalents of $396.1 million, compared to cash and cash equivalents of $378.1 million at December 31, 2023 and $279.9 million at March 31, 2023. $50 million of the revolving credit facility was drawn down in the quarter and $55 million was repaid. Additionally, a $275.0 million Term Loan B payment was made during the quarter resulting in a net indebtedness of $3.1 billion at March 31, 2024.
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 and adjusted diluted earnings per share. 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 April 25, 2024 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, 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 2024 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 41,150 employees in 102 locations in 54 countries as at March 31, 2024. For further information about ICON, visit: www.iconplc.com.
ICON/ICLR-F
ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND MARCH 31, 2023
(UNAUDITED)
Three Months Ended
March 31, 2024 March 31, 2023
(in thousands except share and per share data)
Revenue $ 2,090,386 $ 1,978,578
Costs and expenses:
1,471,367 1,395,546
Direct costs (excluding depreciation and amortization)
177,350 200,006
Selling, general and administrative
149,181 145,126
Depreciation and amortization
6,991 11,382
Transaction and integration related
-- 9,729
Restructuring
------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- ---------- --------------------
1,804,889 1,761,789
Total costs and expenses
------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- ---------- --------------------
Income from operations 285,497 216,789
1,930 1,072
Interest income
(71,665 ) (86,551 )
Interest expense
------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- ---------- --------------------
Income before income tax expense 215,762 131,310
(28,324 ) (14,273 )
Income tax expense
------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- ---------- --------------------
Income before share of losses from equity method investments 187,438 117,037
-- (383 )
Share of losses from equity method investments
------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- ---------- --------------------
Net income $ 187,438 $ 116,654
============================================================ ==================== ============== ==================== ==================== ==================== ========== ====================
Net income per Ordinary Share:
$ 2.27 $ 1.43
Basic
$ 2.25 $ 1.41
Diluted
============================================================ ==================== ============== ==================== ==================== ==================== ========== ====================
Weighted average number of Ordinary Shares outstanding:
82,579,203 81,784,389
Basic
ICON plc
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT MARCH 31, 2024 AND DECEMBER 31, 2023
(UNAUDITED)
March 31, 2024 December 31, 2023
ASSETS (in thousands)
Current assets:
$ 396,082 $ 378,102
Cash and cash equivalents
1,955 1,954
Available for sale investments
1,862,468 1,790,322
Accounts receivable, net of allowance for credit losses
993,141 951,936
Unbilled revenue
76,638 65,797
Other receivables
149,127 132,105
Prepayments and other current assets
75,544 91,254
Income taxes receivable
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
$ 3,554,955 $ 3,411,470
Total current assets
Non-current assets:
353,302 361,184
Property, plant and equipment
9,018,301 9,022,075
Goodwill
3,748,939 3,855,865
Intangible assets
159,620 140,333
Operating right-of-use assets
87,193 78,470
Other receivables
74,777 73,662
Deferred tax asset
51,164 46,804
Investments in equity- long term
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
Total Assets $ 17,048,251 $ 16,989,863
================================================================================= ==================== ============== ==================== ==================== ==================== ============== ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
$ 113,579 $ 131,584
Accounts payable
1,709,938 1,654,507
Unearned revenue
1,000,760 915,399
Other liabilities
41,905 13,968
Income taxes payable
79,762 110,150
Current bank credit lines and loan facilities
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
$ 2,945,944 $ 2,825,608
Total current liabilities
Non-current liabilities:
3,419,734 3,665,439
Non-current bank credit lines and loan facilities
145,542 126,321
Lease liabilities
45,988 45,998
Non-current other liabilities
188,876 186,654
Non-current income taxes payable
869,520 899,100
Deferred tax liability
-- --
Commitments and contingencies
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
$ 7,615,604 $ 7,749,120
Total Liabilities
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
Shareholders' Equity:
Ordinary shares, par value 6 euro cents per share; 100,000,000 shares authorized,
82,683,805 shares issued and outstanding at March 31, 2024 and
6,711 6,699
82,495,086 shares issued and outstanding at December 31, 2023
6,970,079 6,942,669
Additional paid-in capital
1,162 1,162
Other undenominated capital
(166,462 ) (143,506 )
Accumulated other comprehensive loss
2,621,157 2,433,719
Retained earnings
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
$ 9,432,647 $ 9,240,743
Total Shareholders' Equity
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
Total Liabilities and Shareholders' Equity $ 17,048,251 $ 16,989,863
================================================================================= ==================== ============== ==================== ==================== ==================== ============== ====================
ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND MARCH 31, 2023
(UNAUDITED)
Three Months Ended
March 31, 2024 March 31, 2023
(in thousands)
Cash flows from operating activities:
Net income $ 187,438 $ 116,654
Adjustments to reconcile net income to net cash provided by operating activities:
149,181 145,126
Depreciation and amortization expense
-- 6,933
Impairment of long lived assets
11,472 11,304
Reduction in carrying value of operating right-of-use assets
-- 383
Loss on equity method investments
3,907 4,497
Amortization of financing costs and debt discount
13,181 14,759
Stock compensation expense
(35,145 ) (43,823 )
Deferred tax benefit
(1,027 ) (1,319 )
Unrealized foreign exchange movements
4,629 17,534
Other non-cash items
Changes in operating assets and liabilities:
(80,431 ) (93,259 )
Accounts receivable
(42,546 ) (18,346 )
Unbilled revenue
56,485 80,990
Unearned revenue
59,932 (65,933 )
Other net assets
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
Net cash provided by operating activities 327,076 175,500
Cash flows from investing activities:
(27,152 ) (26,744 )
Purchase of property, plant and equipment
(7,831 ) --
Purchase of subsidiary undertakings (net of cash acquired)
1,005 482
Sale of available for sale investments
(1,006 ) (422 )
Purchase of available for sale investments
(4,381 ) (1,358 )
Purchase of investments in equity - long term
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
Net cash used in investing activities (39,365 ) (28,042 )
Cash flows from financing activities:
50,000 180,000
Drawdown of credit lines and loan facilities
(330,000 ) (350,000 )
Repayment of credit lines and loan facilities
16,305 12,940
Proceeds from exercise of equity compensation
(4 ) (4 )
Share issue costs
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
Net cash used in by financing activities (263,699 ) (157,064 )
(6,032 ) 718
Effect of exchange rate movements on cash
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
Net increase / (decrease) in cash and cash equivalents 17,980 (8,888 )
Cash and cash equivalents at beginning of period 378,102 288,768
--------------------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
ICON plc
RECONCILIATION OF NON-GAAP MEASURES
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND MARCH 31, 2023
(UNAUDITED)
Three Months Ended
March 31, 2024 March 31, 2023
(in thousands except share and per share data)
Adjusted EBITDA
Net income $ 187,438 $ 116,654
Share of losses from equity method investments -- 383
Income tax expense 28,324 14,273
Net interest expense 69,735 85,479
Depreciation and amortization 149,181 145,126
Stock-based compensation expense (a) 13,181 14,759
Foreign currency (gains)/losses, net (b) (10,814 ) 1,338
Restructuring (c) -- 9,729
Transaction and integration related costs (d) 6,991 11,382
---------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- ---------- --------------------
Adjusted EBITDA $ 444,036 $ 399,123
====================================================================== ==================== ============== ==================== ==================== ==================== ========== ====================
Adjusted net income and adjusted diluted net income per Ordinary Share
Net income $ 187,438 $ 116,654
Income tax expense 28,324 14,273
Amortization 116,498 114,678
Stock-based compensation expense (a) 13,181 14,759
Foreign currency (gains)/losses, net (b) (10,814 ) 1,338
Restructuring (c) -- 9,729
Transaction and integration related costs (d) 6,991 11,382
Transaction-related financing costs (e) 3,907 4,498
Adjusted tax expense (f) (57,012 ) (47,469 )
---------------------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- ---------- --------------------
Adjusted net income $ 288,513 $ 239,842
====================================================================== ==================== ============== ==================== ==================== ==================== ========== ====================
Diluted weighted average number of Ordinary Shares outstanding 83,249,303 82,605,659
---------------------------------------------------------------------- ------------------------------------------------------ -------------------- --------------------------------------------------
Adjusted diluted net income per Ordinary Share $ 3.47 $ 2.90
====================================================================== ==================== ============== ==================== ==================== ==================== ========== ====================
(a) Stock-based compensation expense represents the amount of recurring expense related to the company's equity compensation programs (inclusive of employer related taxes). (b) Foreign currency (gains)/losses, net relates to gains or losses that arise in connection with the revaluation 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 relates to charges incurred in connection with the company's realignments of its workforce, with the elimination of redundant positions as well as reviewing its global office footprint and optimizing its locations to best fit the requirements of the company. (d) Transaction and 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.
Source: ICON plc
View source version on businesswire.com: https://www.businesswire.com/news/home/20240424083968/en/
SOURCE: ICON plc
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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 http://www.iconplc.com All at ICON
COMTEX_451358083/1006/2024-04-24T16:15:08