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Biotech / Medical : Life Sciences Research, Inc (LSRI)

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From: leigh aulper8/1/2007 6:57:55 PM
   of 22
 
Wednesday August 1, 4:06 pm ET
Highlights:
-- Revenues of $58.2 million
-- Operating income of $7.5 million
-- Net Income of $5.5 million, or $0.36 per fully diluted share
-- Net new orders of $72.6 million, book to bill ratio of 1.25
-- Cash of $49.6 million

EAST MILLSTONE, N.J.--(BUSINESS WIRE)--Life Sciences Research, Inc. (NYSE Arca: LSR) announced today that revenues for the quarter ended June 30, 2007 were $58.2 million, 21.6% above the revenues for the same period in the prior year of $47.9 million. Excluding the effect of exchange rate movements, revenues increased 14.0%. Operating income for the quarter ended June 30, 2007 was $7.5 million, or 12.9% of revenues, compared with $4.8 million, or 10.1% of revenues for the same period in the prior year. The quarter included FAS123R stock option expense of $0.5 million, or $0.03 per fully diluted share compared with $0.2 million or $0.01 per fully diluted share in the same quarter last year. The Company reported net income before the loss on deconsolidation of variable interest entity for the quarter ended June 30, 2007 of $5.5 million compared with $1.1 million for the quarter ended June 30, 2006. Net income before the loss on deconsolidation of variable interest entity per common share was $0.43 for the three months ended June 30, 2007 compared with $0.09 for the three months ended June 30, 2006. Net income before the loss on deconsolidation of variable interest entity per fully diluted share was $0.36 for the three months ended June 30, 2007 compared with $0.08 for the three months ended June 30, 2006.
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The net income for the three months ended June 30, 2007 included Other Income of $0.7 million which comprised $1.1 million from a non-cash foreign exchange re-measurement gain on the March 2006 Financing denominated in US dollars and other exchange gains of $0.2 million, offset by finance arrangement fee amortization of $0.6 million. In the same period in the prior year, Other Income of $2.2 million was comprised of $3.3 million from the non-cash foreign exchange re-measurement gain on the Convertible Capital Bonds and March 2006 Financing denominated in US dollars and other exchange gains of $0.3 million offset by finance arrangement fee amortization of $1.4 million.

Revenues for the six months ended June 30, 2007 of $112.5 million were 24.6% above revenues for the same period in the prior year of $90.3 million. Excluding the effect of exchange rate movements, the increase was 15.6%. Operating Income for the six months ended June 30, 2007 was $13.7 million, or 12.2% of revenues, compared with $8.9 million, or 9.8% of revenues for the same period in the prior year. The Company reported net income before the loss on deconsolidation of variable interest entity of $9.0 million for the six months ended June 30, 2007 compared with net income for the six months ended June 30, 2006 of $1.6 million. Net income before the loss on deconsolidation of variable interest entity per common share was $0.70 for the six months ended June 30, 2007 compared with $0.13 for the six months ended June 30, 2006. Net income before the loss on deconsolidation of variable interest entity per fully diluted share was $0.59 for the six months ended June 30, 2007 compared with $0.11 for the six months ended June 30, 2006.

Net income in the six months ended June 30, 2007 included Other Income of $0.3 million which comprised $1.2 million from the non-cash foreign exchange re-measurement gain pertaining to the March 2006 Financing denominated in US dollars and other exchange gains of $0.2 million, offset by finance arrangement fee amortization of $1.1 million. In the same period in the prior year, Other Income of $1.3 million was comprised of $3.7 million from the non-cash foreign exchange re-measurement gain pertaining to the Convertible Capital Bonds and March 2006 Financing denominated in US dollars and other exchange gains of $0.2 million, offset by finance arrangement fee amortization of $2.6 million primarily reflecting gains of Alconbury Estates, LSR's landlord, which were consolidated under FIN46.

Cash on hand at June 30, 2007 was $49.6 million compared with $44.1 million at December 31, 2006. The increase in cash on hand was due to the continuing improvement in operating performance and the reduction in DSOs over the period offset by the $4.0 million share repurchase. Net days sales outstanding at June 30, 2007 were 8 (12 at June 30, 2006 and 21 at December 31, 2006). Capital expenditure totaled $4.7 million in the second quarter of 2007, compared to $2.3 million in the second quarter of 2006. Capital expenditure for the first six months of 2007 totaled $8.7 million, compared to $4.0 million in the first six months of 2006.

Long-term debt was $89.3 million at June 30, 2007, compared with $89.2 million at December 31, 2006. At June 30, 2007 long-term debt predominantly consisted of the $69.9 million outstanding from the March 2006 Financing and the $23.4 million of finance leases associated with the sale and leaseback, offset by unamortized lender warrant costs.

Net new business signings totaled $72.6 million for the second quarter of 2007. This represented an increase of 43% from the second quarter orders in 2006. Net new business signings for the six months ended June 30, 2007 were $139.0 million, an increase of 29% on the six months ended June 30, 2006. At June 30, 2007 backlog (booked on work) amounted to approximately $192 million.

Brian Cass, LSR's President and Managing Director commented, "We are delighted to report another record quarter for revenues and operating profits. The second quarter was also a record for orders which at $72.6 million, were 35% up on the same quarter last year in constant currency terms. This brought the increase for the first half of 2007 over the same period in 2006 to 20% again in constant currency terms. With the growth in revenues we have seen an improvement in our operating margins, and our book to bill ratio was maintained at a healthy 1.25 during the quarter. The results reflect our continuing success in growing the business and the strength and growth of the outsourcing market."

Andrew Baker, LSR's Chairman and CEO said, "I am proud and pleased with today's announcements; not only the excellent operating performance and financial results announced in this earnings release, but equally in the principal and interest reduction amendment to our financing agreement that we separately announced today. Both of these announcements reflect our ongoing efforts to maximize Company performance and shareholder value, and, I believe, indicate positive developments on these important fronts."

LSR will hold an investor conference call to discuss the quarter's results on August 2, 2007 at 9:00 a.m. Eastern Time. That call can be listened to by dialing (210) 839-8508 pass code 3316789. We suggest calling five minutes prior to the scheduled call.
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