The purchase of the Phase II-IV clinical services unit completed in August last and worth $215m (€157m) was still visible in the firm's quarterly performance leading to a whopping $4.3m interest expense in the period, due to debt incurred to finance the acquisition - interest expense in the second quarter of 2006 was $51,000. As a result, the company's pre-tax profit slightly fell 3 per cent in the quarter to $6.6m from $6.8m in the same period last year. Otherwise, Kendle posted very healthy financial results in the quarter which ended 30 June 2007. The contract research organisation (CRO) saw its operating income jump 70 per cent to $10.9m in the quarter, compared to $6.4m in the same quarter last year. This performance was largely driven by record net services revenues, which soared 58 per cent to $97.8m in the period, from $62.1m in the second quarter of 2006. Looking at net services revenues by geographic region for the second quarter, 50 per cent of revenue was generated in North America, 42 percent in Europe, 5 percent in Latin America and 3 percent in the Asia/Pacific region. Meanwhile, the company's top five customers based accounted for 28 per cent of sales for second quarter 2007 compared to 29 per cent of net service revenues for the second quarter of 2006. The Cincinnati-based firm recorded $165m in new business in the quarter, which represents a 96 per cent increase over the same quarter last year, largely offsetting the $13m it lost due to contract cancellations. Despite this, the firm reduced its full-year earnings per share (EPS) guidance by 18 cents, due to the write-off of term debt financing fees and now expects EPS to be between $1.32 and $1.52. However, Kendle said its earning outlook for 2007 in terms of revenues and operating margin remain unchanged. The firm expects to generate between $400m and $420m as previously announced while operating margin is forecast to be between 12 and 14 per cent.
