LSR Announces Third Quarter Results
Wednesday October 31, 4:01 pm ET
Highlights:
-- Revenues of $60.9 million
-- Operating income of $8.6 million, or 14.1%
-- Net Income of $5.9 million, or $0.39 per fully diluted share
-- Net new orders of $61.9 million, TTM book to bill ratio of 1.19
-- Cash of $37.2 million
EAST MILLSTONE, N.J.--(BUSINESS WIRE)--Life Sciences Research, Inc. (NYSE Arca: LSR) announced today that revenues for the quarter ended September 30, 2007 were $60.9 million, 23.1% above the revenues for the same period in the prior year of $49.5 million. Excluding the effect of exchange rate movements, revenues increased 16.1%. Operating income for the quarter ended September 30, 2007 was $8.6 million, or 14.1% of revenues, compared with $5.7 million, or 11.6% of revenues for the same period in the prior year. The quarter included FAS123R stock option expense of $0.4 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 for the quarter ended September 30, 2007 of $5.9 million compared with $2.7 million for the quarter ended September 30, 2006. Net income per common share was $0.47 for the three months ended September 30, 2007 compared with $0.21 for the three months ended September 30, 2006. Net income per fully diluted share was $0.39 for the three months ended September 30, 2007 compared with $0.18 for the three months ended September 30, 2006.
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The net income for the three months ended September 30, 2007 included Other Income of $0.02 million which comprised $0.5 million from the non-cash foreign exchange re-measurement gain on the March 2006 Financing denominated in US dollars and other exchange gains of $0.1 million, offset by finance arrangement fee amortization of $0.6 million. In the same period in the prior year, Other Expenses of $0.9 million was comprised of finance arrangement fees of $0.5 million, the non-cash cost of $0.7 million associated with the 100,000 warrants granted in January 2005 for advisory services, offset by $0.3 million non-cash re-measurement gain pertaining to the March 2006 Financing denominated in US dollars.
Revenues for the nine months ended September 30, 2007 of $173.4 million were 24.0% above revenues for the same period in the prior year of $139.8 million. Excluding the effect of exchange rate movements, the increase was 15.8%. Operating Income for the nine months ended September 30, 2007 was $22.3 million, or 12.9% of revenues, compared with $14.6 million, or 10.5% of revenues for the same period in the prior year. The Company reported net income of $14.8 million for the nine months ended September 30, 2007 compared with net income before the loss on deconsolidation of variable interest entity for the nine months ended September 30, 2006 of $4.3 million. Net income per common share was $1.17 for the nine months ended September 30, 2007 compared with net income before the loss on the deconsolidation of variable interest entity per common share of $0.34 for the nine months ended September 30, 2006. Net income per fully diluted share was $0.99 for the nine months ended September 30, 2007 compared with net income before the loss on deconsolidation of variable interest entity per fully diluted share of $0.29 for the nine months ended September 30, 2006.
Net income for the nine months ended September 30, 2007 included Other Income of $0.3 million which comprised $1.7 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 $0.3 million, offset by finance arrangement fee amortization of $1.7 million. In the same period in the prior year, Other Income of $0.4 million was comprised of $4.0 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 $3.1 million and the non-cash costs of $0.7 million associated with the 100,000 warrants granted in January 2005 for advisory services.
Cash on hand at September 30, 2007 was $37.2 million compared with $44.1 million at December 31, 2006. Operating activities generated cash of $30.8 million, of which $12.8 million was due to the reduction in DSOs. Net days sales outstanding at September 30, 2007 were 2 (15 at September 30, 2006 and 21 at December 31, 2006). This was offset by $26.1 million used in financing activities, predominantly including $10.8 million debt principal repayment, $4.8 million in costs associated with the August 1, 2007 loan amendment and $10.7 million used to repurchase stock and warrants. Capital expenditure totaled $3.7 million in the third quarter of 2007, compared to $4.2 million in the third quarter of 2006. Capital expenditure for the first nine months of 2007 totaled $12.4 million, compared to $8.2 million in the first nine months of 2006.
Long-term debt was $75.4 million at September 30, 2007, compared with $89.2 million at December 31, 2006. At September 30, 2007 long-term debt predominantly consisted of the $59.8 million outstanding from the March 2006 Financing Loan and the $23.5 million of finance leases associated with the June 2005 sale and leaseback, offset by unamortized lender warrant costs, and the unamortized closing fee associated with the August 1, 2007 loan amendment.
Net new business signings totaled $61.9 million for the third quarter of 2007. This represented an increase of 7% from the third quarter orders in 2006. Net new business signings for the nine months ended September 30, 2007 were $200.9 million, an increase of 21% on the nine months ended September 30, 2006. At September 30, 2007 backlog (booked on work) amounted to approximately $193 million.
Brian Cass, LSR’s President and Managing Director commented, “We have reported record revenues and operating profits for each quarter this year, and I am particularly pleased with this quarter’s 14.1% operating margin. Constant currency revenue growth of 16% year to date is fueling this performance, and this, in turn, is supported by a trailing twelve month book to bill ratio of 1.19. These results reflect not only the current strength of the outsourcing marketplace but, I believe, are also testament to our people’s endeavour to provide the highest standards of science, service and operational performance.”
Andrew Baker, LSR’s Chairman and CEO said, “I am proud and very pleased with this quarter’s results, showing further strong growth in revenues and earnings as well as solid performance in cash generation. EPS of 39 cents, including 4 cents of non-cash foreign exchange gains, is also meaningful further progress in creating shareholder value.”
LSR will hold an investor conference call to discuss the quarter’s results on November 1, 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. |
