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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File Number: 0-24249
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||
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PDI, Inc.
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||
(Exact name of registrant as specified in its charter)
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||
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Delaware
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22-2919486
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(State or other jurisdiction of Incorporation or organization)
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(I.R.S. Employer Identification No.)
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Morris Corporate Center 1, Building A
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300 Interpace Parkway, Parsippany, NJ 07054
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(Address of principal executive offices and zip code)
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(800) 242-7494
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||
(Registrant's telephone number, including area code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
x
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|
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(Do not check if a smaller
reporting company)
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Class
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Shares Outstanding
August 12, 2012
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Common stock, $0.01 par value
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14,946,462
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Page No.
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|
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PART I - FINANCIAL INFORMATION
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|
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Item 1.
|
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Item 2.
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Item 3.
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Item 4.
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PART II - OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 5.
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Other Information
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Item 6.
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June 30,
2012 |
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December 31, 2011
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
56,938
|
|
|
$
|
64,337
|
|
Short-term investments
|
91
|
|
|
127
|
|
||
Accounts receivable, net
|
8,906
|
|
|
9,633
|
|
||
Unbilled costs and accrued profits on contracts in progress
|
2,215
|
|
|
2,593
|
|
||
Other current assets
|
4,704
|
|
|
3,670
|
|
||
Total current assets
|
72,854
|
|
|
80,360
|
|
||
Property and equipment, net
|
2,387
|
|
|
2,484
|
|
||
Goodwill
|
18,908
|
|
|
18,908
|
|
||
Other intangible assets, net
|
6,858
|
|
|
7,309
|
|
||
Other long-term assets
|
3,812
|
|
|
4,318
|
|
||
Total assets
|
$
|
104,819
|
|
|
$
|
113,379
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
3,567
|
|
|
$
|
4,139
|
|
Unearned contract revenue
|
16,416
|
|
|
15,882
|
|
||
Accrued salary and bonus
|
5,732
|
|
|
8,283
|
|
||
Other accrued expenses
|
12,660
|
|
|
17,774
|
|
||
Total current liabilities
|
38,375
|
|
|
46,078
|
|
||
Long-term liabilities
|
6,707
|
|
|
7,778
|
|
||
Total liabilities
|
45,082
|
|
|
53,856
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 7)
|
|
|
|
|
|
||
|
|
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|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, $.01 par value; 5,000,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value; 40,000,000 and 100,000,000 shares authorized, respectively;
|
|
|
|
|
|
||
16,036,098 and 15,820,373 shares issued, respectively;
|
|
|
|
|
|
||
14,944,932 and 14,744,924 shares outstanding, respectively
|
160
|
|
|
158
|
|
||
Additional paid-in capital
|
127,754
|
|
|
126,720
|
|
||
Accumulated deficit
|
(54,442
|
)
|
|
(53,731
|
)
|
||
Accumulated other comprehensive income
|
11
|
|
|
12
|
|
||
Treasury stock, at cost (1,091,166 and 1,075,449 shares, respectively)
|
(13,746
|
)
|
|
(13,636
|
)
|
||
Total stockholders' equity
|
59,737
|
|
|
59,523
|
|
||
Total liabilities and stockholders' equity
|
$
|
104,819
|
|
|
$
|
113,379
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
27,809
|
|
|
$
|
38,637
|
|
|
$
|
59,486
|
|
|
$
|
82,939
|
|
Cost of services
|
21,239
|
|
|
30,705
|
|
|
45,550
|
|
|
66,844
|
|
||||
Gross profit
|
6,570
|
|
|
7,932
|
|
|
13,936
|
|
|
16,095
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Compensation expense
|
4,069
|
|
|
5,702
|
|
|
8,651
|
|
|
10,979
|
|
||||
Other selling, general and administrative expenses
|
2,817
|
|
|
3,301
|
|
|
5,822
|
|
|
7,576
|
|
||||
Total operating expenses
|
6,886
|
|
|
9,003
|
|
|
14,473
|
|
|
18,555
|
|
||||
Operating loss
|
(316
|
)
|
|
(1,071
|
)
|
|
(537
|
)
|
|
(2,460
|
)
|
||||
Other expense, net
|
(15
|
)
|
|
(26
|
)
|
|
(15
|
)
|
|
(72
|
)
|
||||
Loss from continuing operations before income tax
|
(331
|
)
|
|
(1,097
|
)
|
|
(552
|
)
|
|
(2,532
|
)
|
||||
Provision (benefit) for income tax
|
63
|
|
|
185
|
|
|
145
|
|
|
(694
|
)
|
||||
Loss from continuing operations
|
(394
|
)
|
|
(1,282
|
)
|
|
(697
|
)
|
|
(1,838
|
)
|
||||
(Loss) income from discontinued operations, net of tax
|
(45
|
)
|
|
387
|
|
|
(14
|
)
|
|
393
|
|
||||
Net loss
|
$
|
(439
|
)
|
|
$
|
(895
|
)
|
|
$
|
(711
|
)
|
|
$
|
(1,445
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gain (loss) on available-for-sale securities, net
|
4
|
|
|
(1
|
)
|
|
(1
|
)
|
|
2
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive Loss
|
$
|
(435
|
)
|
|
$
|
(896
|
)
|
|
$
|
(712
|
)
|
|
$
|
(1,443
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted (loss) income per share of common stock from:
|
|
|
|
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(0.03
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.13
|
)
|
Discontinued operations
|
—
|
|
|
0.03
|
|
|
—
|
|
|
0.03
|
|
||||
Net loss per basic and diluted share of common stock
|
$
|
(0.03
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.10
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares and common share equivalents outstanding:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
14,569
|
|
|
14,413
|
|
|
14,553
|
|
|
14,386
|
|
||||
Diluted
|
14,569
|
|
|
14,413
|
|
|
14,553
|
|
|
14,386
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2012
|
|
2011
|
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net loss
|
$
|
(711
|
)
|
|
$
|
(1,445
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
996
|
|
|
1,564
|
|
||
Contingent consideration and realignment accrual accretion
|
71
|
|
|
179
|
|
||
Reversal of contingent accrual accretion
|
—
|
|
|
(191
|
)
|
||
Provision for bad debt
|
—
|
|
|
3
|
|
||
Stock-based compensation
|
1,036
|
|
|
1,259
|
|
||
Other changes in assets and liabilities:
|
|
|
|
|
|||
Decrease in accounts receivable
|
727
|
|
|
6,327
|
|
||
Decrease in unbilled costs
|
378
|
|
|
1,385
|
|
||
Increase in other current assets
|
(1,546
|
)
|
|
(302
|
)
|
||
Decrease (increase) in other long-term assets
|
1,018
|
|
|
(4
|
)
|
||
(Decrease) increase in accounts payable
|
(572
|
)
|
|
809
|
|
||
Increase in unearned contract revenue
|
534
|
|
|
1,849
|
|
||
Decrease in accrued salaries and bonus
|
(2,551
|
)
|
|
(754
|
)
|
||
Decrease in other accrued expenses
|
(5,079
|
)
|
|
(6,924
|
)
|
||
Decrease in long-term liabilities
|
(1,142
|
)
|
|
(2,188
|
)
|
||
Net cash (used in) provided by operating activities
|
(6,841
|
)
|
|
1,567
|
|
||
|
|
|
|
||||
Cash Flows From Investing Activities
|
|
|
|
|
|
||
Purchase of property and equipment
|
(448
|
)
|
|
(249
|
)
|
||
Net cash used in investing activities
|
(448
|
)
|
|
(249
|
)
|
||
|
|
|
|
||||
Cash Flows From Financing Activities
|
|
|
|
|
|
||
Cash paid for repurchase of restricted shares
|
(110
|
)
|
|
(9
|
)
|
||
Net cash used in financing activities
|
(110
|
)
|
|
(9
|
)
|
||
|
|
|
|
||||
Net (decrease) increase in cash and cash equivalents
|
(7,399
|
)
|
|
1,309
|
|
||
Cash and cash equivalents – beginning
|
64,337
|
|
|
62,711
|
|
||
Cash and cash equivalents – ending
|
$
|
56,938
|
|
|
$
|
64,020
|
|
1.
|
BASIS OF PRESENTATION
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||
Basic weighted average number of common shares
|
14,569
|
|
|
14,413
|
|
|
14,553
|
|
|
14,386
|
|
Dilutive effect of stock-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Diluted weighted average number of common shares
|
14,569
|
|
|
14,413
|
|
|
14,553
|
|
|
14,386
|
|
|
Three and Six Months Ended
|
||
|
June 30,
|
||
|
2012
|
|
2011
|
Options
|
84
|
|
143
|
Stock-settled stock appreciation rights (SARs)
|
582
|
|
363
|
Restricted stock/units
|
647
|
|
614
|
Performance contingent SARs
|
280
|
|
280
|
|
1,593
|
|
1,400
|
3.
|
INVESTMENTS IN MARKETABLE SECURITIES
|
|
|
|
Maturing
|
|
|
|
Maturing
|
||||||||||||||||
|
June 30,
2012 |
|
within
1 year
|
|
after 1 year
through
3 years
|
|
December 31,
2011 |
|
within
1 year
|
|
after 1 year
through
3 years
|
||||||||||||
Cash/money accounts
|
$
|
167
|
|
|
$
|
167
|
|
|
$
|
—
|
|
|
$
|
111
|
|
|
$
|
111
|
|
|
$
|
—
|
|
US Treasury securities
|
3,805
|
|
|
1,321
|
|
|
2,484
|
|
|
4,293
|
|
|
1,323
|
|
|
2,970
|
|
||||||
Government agency securities
|
1,284
|
|
|
439
|
|
|
845
|
|
|
871
|
|
|
—
|
|
|
871
|
|
||||||
Total
|
$
|
5,256
|
|
|
$
|
1,927
|
|
|
$
|
3,329
|
|
|
$
|
5,275
|
|
|
$
|
1,434
|
|
|
$
|
3,841
|
|
|
June 30,
2012 |
|
December 31,
2011 |
||||
Other current assets
|
$
|
1,927
|
|
|
$
|
1,434
|
|
Other long-term assets
|
3,329
|
|
|
3,841
|
|
||
Total
|
$
|
5,256
|
|
|
$
|
5,275
|
|
4.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
|
|
As of June 30, 2012
|
|
As of December 31, 2011
|
||||||||||||||||
|
Life
|
|
Carrying
|
Accumulated
|
|
|
Carrying
|
Accumulated
|
|
||||||||||||
|
(Years)
|
|
Amount
|
Amortization
|
Net
|
|
Amount
|
Amortization
|
Net
|
||||||||||||
Group DCA:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Technology
|
6
|
|
$
|
4,097
|
|
$
|
1,138
|
|
$
|
2,959
|
|
|
$
|
4,097
|
|
$
|
797
|
|
$
|
3,300
|
|
Healthcare professional database
|
10
|
|
2,203
|
|
367
|
|
1,836
|
|
|
2,203
|
|
257
|
|
1,946
|
|
||||||
Corporate tradename
|
NA
|
|
2,063
|
|
—
|
|
2,063
|
|
|
2,063
|
|
—
|
|
2,063
|
|
||||||
Total
|
|
|
$
|
8,363
|
|
$
|
1,505
|
|
$
|
6,858
|
|
|
$
|
8,363
|
|
$
|
1,054
|
|
$
|
7,309
|
|
2012
|
2013
|
2014
|
2015
|
2016
|
||||||||||
$
|
903
|
|
$
|
903
|
|
$
|
903
|
|
$
|
903
|
|
$
|
754
|
|
5.
|
FACILITIES REALIGNMENT
|
|
Sales
Services
|
|
Marketing
Services
|
|
Total
|
||||||
Balance as of December 31, 2011
|
$
|
3,417
|
|
|
$
|
1,072
|
|
|
$
|
4,489
|
|
Accretion
|
56
|
|
|
15
|
|
|
71
|
|
|||
Adjustments
|
—
|
|
|
(31
|
)
|
|
(31
|
)
|
|||
Payments
|
(746
|
)
|
|
(368
|
)
|
|
(1,114
|
)
|
|||
Balance as of June 30, 2012
|
$
|
2,727
|
|
|
$
|
688
|
|
|
$
|
3,415
|
|
6.
|
FAIR VALUE MEASUREMENTS
|
Level 1:
|
Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities.
|
Level 2:
|
Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities.
|
Level 3:
|
Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.
|
|
As of June 30, 2012
|
|
Fair Value Measurements
|
||||||||||||||||
|
Carrying
|
|
Fair
|
|
as of June 30, 2012
|
||||||||||||||
|
Amount
|
|
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
$
|
15,107
|
|
|
$
|
15,107
|
|
|
$
|
15,107
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money Market Funds
|
41,831
|
|
|
41,831
|
|
|
41,831
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
56,938
|
|
|
$
|
56,938
|
|
|
$
|
56,938
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Money Market Funds
|
$
|
48
|
|
|
$
|
48
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual Funds
|
43
|
|
|
43
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|||||
U.S. Treasury securities
|
3,805
|
|
|
3,805
|
|
|
3,805
|
|
|
—
|
|
|
—
|
|
|||||
Government agency securities
|
1,284
|
|
|
1,284
|
|
|
1,284
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
5,180
|
|
|
$
|
5,180
|
|
|
$
|
5,180
|
|
|
$
|
—
|
|
|
$
|
—
|
|
7.
|
COMMITMENTS AND CONTINGENCIES
|
8.
|
LONG-TERM LIABILITIES
|
|
June 30, 2012
|
|
December 31, 2011
|
||||
Rent Payable
|
$
|
1,895
|
|
|
$
|
2,070
|
|
Uncertain tax positions
|
2,887
|
|
|
2,887
|
|
||
Restructuring
|
1,783
|
|
|
2,679
|
|
||
Other
|
142
|
|
|
142
|
|
||
|
$
|
6,707
|
|
|
$
|
7,778
|
|
9.
|
STOCK-BASED COMPENSATION
|
|
|
Six Months Ended
|
|
|
June 30, 2012
|
Risk-free interest rate
|
|
0.31%
|
Expected life (in years)
|
|
3.5 years
|
Expected volatility
|
|
57.62%
|
Dividend yield
|
|
—%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Provision (benefit) for income tax
|
$
|
63
|
|
|
$
|
185
|
|
|
$
|
145
|
|
|
$
|
(694
|
)
|
Effective income tax rate
|
(19.0
|
)%
|
|
(16.9
|
)%
|
|
(26.3
|
)%
|
|
27.4
|
%
|
|
Sales
Services
|
|
Marketing
Services
|
|
Product Commercialization Services
|
|
Consolidated
|
||||||||
Three months ended June 30, 2012:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
20,149
|
|
|
$
|
2,802
|
|
|
$
|
4,858
|
|
|
$
|
27,809
|
|
Operating (loss) income
|
$
|
(560
|
)
|
|
$
|
(744
|
)
|
|
$
|
988
|
|
|
$
|
(316
|
)
|
Capital expenditures
|
$
|
435
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
438
|
|
Depreciation expense
|
$
|
171
|
|
|
$
|
67
|
|
|
$
|
30
|
|
|
$
|
268
|
|
|
|
|
|
|
|
|
|
||||||||
Three months ended June 30, 2011:
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
34,585
|
|
|
$
|
3,368
|
|
|
$
|
684
|
|
|
$
|
38,637
|
|
Operating income (loss)
|
$
|
202
|
|
|
$
|
(1,540
|
)
|
|
$
|
267
|
|
|
$
|
(1,071
|
)
|
Capital expenditures
|
$
|
111
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
121
|
|
Depreciation expense
|
$
|
371
|
|
|
$
|
87
|
|
|
$
|
—
|
|
|
$
|
458
|
|
|
|
|
|
|
|
|
|
||||||||
Six months ended June 30, 2012:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
43,518
|
|
|
$
|
5,865
|
|
|
$
|
10,103
|
|
|
$
|
59,486
|
|
Operating (loss) income
|
$
|
(1,130
|
)
|
|
$
|
(1,211
|
)
|
|
$
|
1,804
|
|
|
$
|
(537
|
)
|
Capital expenditures
|
$
|
440
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
448
|
|
Depreciation expense
|
$
|
373
|
|
|
$
|
135
|
|
|
$
|
36
|
|
|
$
|
544
|
|
|
|
|
|
|
|
|
|
||||||||
Six months ended June 30, 2011:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
76,940
|
|
|
$
|
5,315
|
|
|
$
|
684
|
|
|
$
|
82,939
|
|
Operating income (loss)
|
$
|
1,714
|
|
|
$
|
(4,441
|
)
|
|
$
|
267
|
|
|
$
|
(2,460
|
)
|
Capital expenditures
|
$
|
119
|
|
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
249
|
|
Depreciation expense
|
$
|
738
|
|
|
$
|
182
|
|
|
$
|
—
|
|
|
$
|
920
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Revenue, net
|
$
|
—
|
|
|
$
|
1,989
|
|
|
$
|
—
|
|
|
$
|
3,788
|
|
(Loss) income from discontinued operations, before income tax
|
(44
|
)
|
|
391
|
|
|
(11
|
)
|
|
220
|
|
||||
Provision (benefit) for income tax
|
1
|
|
|
4
|
|
|
3
|
|
|
(173
|
)
|
||||
(Loss) income from discontinued operations, net of tax
|
$
|
(45
|
)
|
|
$
|
387
|
|
|
$
|
(14
|
)
|
|
$
|
393
|
|
|
June 30,
2012 |
|
December 31,
2011 |
||||
Current assets
|
$
|
130
|
|
|
$
|
1,013
|
|
Non-current assets
|
475
|
|
|
625
|
|
||
Total assets
|
$
|
605
|
|
|
$
|
1,638
|
|
Current liabilities
|
$
|
567
|
|
|
$
|
1,865
|
|
Non-current liabilities
|
1,256
|
|
|
1,526
|
|
||
Total liabilities
|
$
|
1,823
|
|
|
$
|
3,391
|
|
•
|
The effects of the current worldwide economy;
|
•
|
Changes in outsourcing trends or a reduction in promotional, marketing and sales expenditures in the pharmaceutical, biotechnology and healthcare industries;
|
•
|
Our customer concentration risk in light of continued consolidation within the pharmaceutical industry and our current business development opportunities;
|
•
|
Early termination of a significant services contract, the loss of one or more of our significant customers or a material reduction in service revenues from such customers;
|
•
|
Our ability to obtain additional funds in order to implement our business model;
|
•
|
Our ability to successfully identify, complete and integrate any future acquisitions and the effects of any such acquisitions on our ongoing business;
|
•
|
Our ability to meet performance goals in incentive-based arrangements with customers;
|
•
|
Competition in our industry;
|
•
|
Our ability to attract and retain qualified sales representatives and other key employees and management personnel;
|
•
|
Product liability claims against us;
|
•
|
Failure to comply with laws and regulations or changes to such laws and regulations by us, our industry or our customers;
|
•
|
The sufficiency of our insurance and self-insurance reserves to cover future liabilities;
|
•
|
Failure of third-party service providers to perform their obligations to us;
|
•
|
Volatility of our stock price and fluctuations in our quarterly revenues and earnings;
|
•
|
Our largest stockholder continuing to have significant influence, which could delay or prevent a change in corporate control that may otherwise be beneficial to our other stockholders;
|
•
|
Our anti-takeover defenses could delay or prevent an acquisition and could adversely affect the price of our common stock;
|
•
|
Failure of, or significant interruption to, the operation of our information technology and communication systems; and
|
•
|
The results of any future impairment testing for goodwill and other intangible assets.
|
•
|
Sales Services, which is comprised of the following business units:
|
•
|
Dedicated Sales Teams;
|
•
|
Established Relationship Teams (formerly known as Shared Sales Teams); and
|
•
|
EngageCE.
|
•
|
Marketing Services, which is comprised of the following business units:
|
•
|
Group DCA; and
|
•
|
Voice.
|
•
|
Product Commercialization Services (PC Services) which is comprised of the following business unit:
|
•
|
Interpace BioPharma.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||
Revenue, net
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of services
|
76.4
|
%
|
|
79.5
|
%
|
|
76.6
|
%
|
|
80.6
|
%
|
Gross profit
|
23.6
|
%
|
|
20.5
|
%
|
|
23.4
|
%
|
|
19.4
|
%
|
|
|
|
|
|
|
|
|
||||
Compensation expense
|
14.6
|
%
|
|
14.8
|
%
|
|
14.5
|
%
|
|
13.2
|
%
|
Other selling, general and administrative expenses
|
10.1
|
%
|
|
8.5
|
%
|
|
9.8
|
%
|
|
9.1
|
%
|
Total operating expenses
|
24.8
|
%
|
|
23.3
|
%
|
|
24.3
|
%
|
|
22.4
|
%
|
Operating loss
|
(1.2
|
)%
|
|
(2.8
|
)%
|
|
(0.9
|
)%
|
|
(3.0
|
)%
|
|
|
|
|
|
|
|
|
||||
Other expense, net
|
(0.1
|
)%
|
|
(0.1
|
)%
|
|
—
|
%
|
|
(0.1
|
)%
|
Loss from continuing operations before income tax
|
(1.2
|
)%
|
|
(2.8
|
)%
|
|
(0.9
|
)%
|
|
(3.1
|
)%
|
Provision (benefit) for income tax
|
0.2
|
%
|
|
0.5
|
%
|
|
0.2
|
%
|
|
(0.8
|
)%
|
Loss from continuing operations
|
(1.4
|
)%
|
|
(3.3
|
)%
|
|
(1.2
|
)%
|
|
(2.2
|
)%
|
Compensation expense (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Three Months Ended
|
|
Sales
|
|
% of
|
|
Marketing
|
|
% of
|
|
PC
|
|
% of
|
|
|
|
% of
|
||||||||||||
June 30,
|
|
Services
|
|
Sales
|
|
Services
|
|
Sales
|
|
Services
|
|
Sales
|
|
Total
|
|
Sales
|
||||||||||||
2012
|
|
$
|
3,018
|
|
|
15.0
|
%
|
|
$
|
763
|
|
|
27.2
|
%
|
|
$
|
288
|
|
|
5.9
|
%
|
|
$
|
4,069
|
|
|
14.6
|
%
|
2011
|
|
3,828
|
|
|
11.1
|
%
|
|
1,865
|
|
|
55.4
|
%
|
|
9
|
|
|
1.3
|
%
|
|
5,702
|
|
|
14.8
|
%
|
||||
Change
|
|
$
|
(810
|
)
|
|
|
|
|
$
|
(1,102
|
)
|
|
|
|
|
$
|
279
|
|
|
|
|
|
$
|
(1,633
|
)
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
3.1
|
|
Certificate of Amendment to the Certificate of Incorporation of PDI, Inc., as filed with the Secretary of State of the State of Delaware on July 31, 2012.
|
|
|
|
18.1
|
|
Preferability letter from BDO USA, LLP regarding a change in accounting principle dated August 14, 2012.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
|
101
|
|
The following financial information from this Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012 formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Cash Flows; and (iv) the Notes to Condensed Consolidated Financial Statements.
|
Date:
|
August 14, 2012
|
PDI, Inc.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
/s/ Nancy S. Lurker
|
|
|
|
Nancy S. Lurker
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
/s/ Jeffrey Smith
|
|
|
|
Jeffrey Smith
|
|
|
|
Chief Financial Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 of PDI, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 14, 2012
|
/s/ Nancy S. Lurker
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 of PDI, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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August 14, 2012
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/s/ Jeffrey E. Smith
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Chief Financial Officer
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(Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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August 14, 2012
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/s/ Nancy S. Lurker
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Chief Executive Officer
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(Principal Executive Officer)
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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August 14, 2012
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/s/ Jeffrey E. Smith
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Chief Financial Officer
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(Principal Financial Officer)
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