For the three months ending June 30, 2013, Parexel’s consolidated service revenue increased by 18% to $463.1m compared with the same quarter last year, while net income totaled $30m, or $0.52 per diluted share, compared with net income of $17.8m, or $0.29 per diluted share for the same quarter in 2012. GAAP diluted earnings per share grew approximately 79% year-over-year, the company said.
“As we enter into our new fiscal year, I believe that we are well positioned to continue to deliver solid growth in revenue and earnings per share,” Josef Von Rickenbach said in the conference call. Revenue growth drivers include more “outsourcing penetration,” varied product offerings and the company’s “thought leadership position to take additional market share and potential acquisition activity.”
Parexel’s recent acquisitions of Heron and Liquent boosted its bottom line and CFO James Winschel reiterated his interest in acquiring a company in Turkey, according to a Seeking Alpha transcript of the conference call from last week.
Winschel noted that of the nearly 400 new employees who started at Parexel in the previous quarter, 140 came from the Heron acquisition. He also said about 280 employees added during the last quarter “were also replacing contractors.”
Clients and Growth Prospects
Like its competitor Icon, Von Rickenbach noted the company’s top clients are representing a higher share of Parexel’s revenue. The largest client in the June quarter represented 17% of revenue as compared to 11% in the fourth quarter one year ago, while the top five represented 50%, up from 40% a year ago.
“The majority of our business wins continue to be from strategic partnerships, but we did achieve solid double-digit growth in gross new business awards from the small and emerging biopharma company segment, compared with the fourth quarter of last year,” Von Rickenbach said.
The company’s revenue is also firmly concentrated in its Clinical Research Services business, which represented 74% of total revenue for this latest quarter, though that percentage was unchanged from a year ago.