Parexel says it has delivered revenue “beyond expectation” in one of its last financials before being merged into Pamplona Capital Management in a $5 billion deal.
The major CRO said in its fourth-quarter results that service revenue hit $557.2 million, with full-year service sales reaching $2.1 billion.
“Parexel’s revenue performance in the fourth quarter of fiscal year 2017 exceeded our expectations,” said Josef von Rickenbach, chairman and CEO.
“Revenue in the quarter increased 3.8% year over year, driven by growth in demand for our services and success in our efforts to generate near-term revenue. GAAP diluted EPS was impacted by this favorable revenue performance, as well as by charges from the company's restructuring program and transaction costs relating to the pending sale of the company. Adjusted diluted EPS benefited from this revenue performance and from effective cost control.”
But some of this growth in the fourth quarter was hit by foreign exchange rates, which reduced year-over-year growth by $4 million.
And when taking out $36.1 million in sales that came out of its buy of ExecuPharm, as well as The Medical Affairs Company, its sales were actually down 2.1% on a constant currency basis compared to the prior year.
Total sales for the year were up a steady 1.5% on a constant currency basis, according to its number crunching. But as with Q4, taking into account its recent buys, its annual revenue decreased by 4.2%.
The company has also been in the process of slimming down, as the CRO has had several rounds of job cuts since it dialed down its 2016 outlook in 2015. Those include 850 jobs announced 2015, in order to save about $20 million to $30 million a year from 2016, plus 1,100 to 1,200 worldwide announced just a few months ago, amid lingering buyout rumors.
In June, Pamplona Capital Management said it would be buying the CRO for $88.10 a share in cash (it ended the day before at just under $84 a share), which worked out at around $5 billion (including debt). The CRO will become a private company under the deal and no longer be listed on any public market.
Von Rickenbach added: “After the pending acquisition of Parexel by Pamplona Capital Management closes, we look forward to working with our new owner to expand our leadership position.”