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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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27-3403111
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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x
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Item 1.
|
||
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||
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||
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||
|
||
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Item 2.
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Item 3.
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Item 4.
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||
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Item 1.
|
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Item 1A.
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Item 2.
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Item 5.
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Item 6.
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Three Months Ended
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||||||
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March 31, 2015
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March 31, 2014
|
||||
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(In thousands, except per share data)
|
||||||
Net service revenue
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$
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211,514
|
|
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$
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184,700
|
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Reimbursable out-of-pocket expenses
|
97,403
|
|
|
82,077
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|
||
Total revenue
|
308,917
|
|
|
266,777
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|
||
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|
|
|
||||
Costs and operating expenses:
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|
|
|
||||
Direct costs
|
125,448
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|
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120,764
|
|
||
Reimbursable out-of-pocket expenses
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97,403
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|
|
82,077
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|
||
Selling, general and administrative
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35,800
|
|
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32,185
|
|
||
Restructuring and other costs
|
(418
|
)
|
|
758
|
|
||
Transaction expenses
|
122
|
|
|
2,042
|
|
||
Asset impairment charges
|
3,931
|
|
|
—
|
|
||
Depreciation
|
4,766
|
|
|
6,869
|
|
||
Amortization
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9,478
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7,502
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Total operating expenses
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276,530
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|
|
252,197
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|
||
Income from operations
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32,387
|
|
|
14,580
|
|
||
|
|
|
|
||||
Other income (expense), net:
|
|
|
|
||||
Interest income
|
84
|
|
|
182
|
|
||
Interest expense
|
(5,389
|
)
|
|
(16,083
|
)
|
||
Other income, net
|
3,466
|
|
|
1,378
|
|
||
Total other expense, net
|
(1,839
|
)
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(14,523
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)
|
||
Income before provision for income taxes
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30,548
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|
|
57
|
|
||
Income tax expense
|
(5,292
|
)
|
|
(1,609
|
)
|
||
Net income (loss)
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25,256
|
|
|
(1,552
|
)
|
||
Class C common stock dividends
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—
|
|
|
(125
|
)
|
||
Net income (loss) attributable to common stockholders
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$
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25,256
|
|
|
$
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(1,677
|
)
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|
||||
Income (loss) per share attributable to common stockholders:
|
|
|
|
||||
Basic
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$
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0.41
|
|
|
$
|
(0.03
|
)
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Diluted
|
$
|
0.40
|
|
|
$
|
(0.03
|
)
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Weighted average common shares outstanding:
|
|
|
|
||||
Basic
|
61,244
|
|
|
51,897
|
|
||
Diluted
|
63,103
|
|
|
51,897
|
|
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Three Months Ended
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||||||
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March 31, 2015
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|
March 31, 2014
|
||||
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(In thousands)
|
||||||
Net income (loss)
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$
|
25,256
|
|
|
$
|
(1,552
|
)
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Foreign currency translation adjustments, net
of tax benefit of $0 and $979, respectively |
(9,218
|
)
|
|
(1,601
|
)
|
||
Comprehensive income (loss)
|
$
|
16,038
|
|
|
$
|
(3,153
|
)
|
|
March 31,
2015 |
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December 31, 2014
|
||||
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(In thousands, except share data)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
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$
|
156,349
|
|
|
$
|
126,453
|
|
Restricted cash
|
480
|
|
|
505
|
|
||
Accounts receivable:
|
|
|
|
||||
Billed, net
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149,745
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|
|
130,270
|
|
||
Unbilled
|
122,701
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|
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118,101
|
|
||
Current portion of deferred income taxes
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17,082
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|
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16,177
|
|
||
Prepaid expenses and other current assets
|
30,965
|
|
|
35,393
|
|
||
Total current assets
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477,322
|
|
|
426,899
|
|
||
Property and equipment, net
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41,813
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|
|
43,725
|
|
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Goodwill
|
553,597
|
|
|
556,863
|
|
||
Intangible assets, net
|
180,801
|
|
|
190,359
|
|
||
Deferred income taxes, less current portion
|
11,355
|
|
|
15,665
|
|
||
Other long-term assets
|
11,615
|
|
|
11,576
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|
||
Total assets
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$
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1,276,503
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|
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$
|
1,245,087
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LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
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|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
14,010
|
|
|
$
|
16,548
|
|
Accrued liabilities
|
97,026
|
|
|
111,655
|
|
||
Deferred revenue
|
282,510
|
|
|
246,902
|
|
||
Current portion of long-term debt
|
4,250
|
|
|
4,250
|
|
||
Current portion of capital lease obligations
|
254
|
|
|
441
|
|
||
Total current liabilities
|
398,050
|
|
|
379,796
|
|
||
Long-term debt, less current portion
|
414,450
|
|
|
415,277
|
|
||
Capital lease obligations, less current portion
|
—
|
|
|
11
|
|
||
Deferred income taxes
|
28,526
|
|
|
30,368
|
|
||
Other long-term liabilities
|
26,523
|
|
|
27,426
|
|
||
Total liabilities
|
867,549
|
|
|
852,878
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $0.01 par value; 30,000,000 authorized, 0 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively
|
—
|
|
|
—
|
|
||
Common stock $0.01 par value; 600,000,000 and 600,000,000 shares authorized; 61,253,673 and 61,233,850 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively
|
612
|
|
|
612
|
|
||
Additional paid-in-capital
|
635,653
|
|
|
634,946
|
|
||
Accumulated other comprehensive loss
|
(35,418
|
)
|
|
(26,200
|
)
|
||
Accumulated deficit
|
(191,893
|
)
|
|
(217,149
|
)
|
||
Total stockholders' equity
|
408,954
|
|
|
392,209
|
|
||
Total liabilities and stockholders' equity
|
$
|
1,276,503
|
|
|
$
|
1,245,087
|
|
|
Three Months Ended
|
||||||
|
March 31, 2015
|
|
March 31, 2014
|
||||
|
(In thousands)
|
||||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
25,256
|
|
|
$
|
(1,552
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
14,244
|
|
|
14,371
|
|
||
Amortization of capitalized loan fees
|
441
|
|
|
2,944
|
|
||
Stock-based compensation
|
707
|
|
|
531
|
|
||
Allowance for doubtful accounts
|
211
|
|
|
566
|
|
||
Deferred income taxes
|
939
|
|
|
513
|
|
||
Foreign currency adjustments
|
(2,389
|
)
|
|
(2,328
|
)
|
||
Asset impairment charges
|
3,931
|
|
|
—
|
|
||
Other adjustments
|
(116
|
)
|
|
9
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable billed and unbilled
|
(28,001
|
)
|
|
12,176
|
|
||
Accounts payable and accrued expenses
|
(14,078
|
)
|
|
(10,705
|
)
|
||
Deferred revenue
|
39,803
|
|
|
11,942
|
|
||
Other assets and liabilities
|
2,683
|
|
|
2,743
|
|
||
Net cash provided by operating activities
|
43,631
|
|
|
31,210
|
|
||
Investing activities
|
|
|
|
||||
Acquisition of business, net of cash acquired
|
—
|
|
|
(2,302
|
)
|
||
Purchase of property and equipment
|
(4,870
|
)
|
|
(4,624
|
)
|
||
Net cash used in investing activities
|
(4,870
|
)
|
|
(6,926
|
)
|
||
Financing activities
|
|
|
|
||||
Payments on long-term debt
|
(1,063
|
)
|
|
(5,453
|
)
|
||
Principal payments toward capital lease obligations
|
(199
|
)
|
|
(813
|
)
|
||
Dividends paid
|
—
|
|
|
(125
|
)
|
||
Net cash used in financing activities
|
(1,262
|
)
|
|
(6,391
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(7,603
|
)
|
|
(706
|
)
|
||
Net change in cash and cash equivalents
|
29,896
|
|
|
17,187
|
|
||
Cash and cash equivalents at the beginning of the period
|
126,453
|
|
|
96,972
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
156,349
|
|
|
$
|
114,159
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Accounts receivable, billed
|
$
|
153,751
|
|
|
$
|
133,997
|
|
Less allowance for doubtful accounts
|
(4,006
|
)
|
|
(3,727
|
)
|
||
Accounts receivable billed, net
|
$
|
149,745
|
|
|
$
|
130,270
|
|
|
Total
|
|
Clinical Development Services
|
|
Phase I Services
|
|
Global Consulting
|
||||||||
Balance at December 31, 2014:
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
$
|
570,106
|
|
|
$
|
542,683
|
|
|
$
|
8,142
|
|
|
$
|
19,281
|
|
Accumulated impairment losses
|
(13,243
|
)
|
|
—
|
|
|
(5,219
|
)
|
|
(8,024
|
)
|
||||
Total goodwill and accumulated impairment losses
|
556,863
|
|
|
542,683
|
|
|
2,923
|
|
|
11,257
|
|
||||
2015 Activity:
|
|
|
|
|
|
|
|
||||||||
Impairment of goodwill
|
(2,923
|
)
|
|
—
|
|
|
(2,923
|
)
|
|
—
|
|
||||
Impact of foreign currency translation
|
(343
|
)
|
|
(343
|
)
|
|
—
|
|
|
—
|
|
||||
Balance at March 31, 2015:
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
569,763
|
|
|
542,340
|
|
|
8,142
|
|
|
19,281
|
|
||||
Accumulated impairment losses
|
(16,166
|
)
|
|
—
|
|
|
(8,142
|
)
|
|
(8,024
|
)
|
||||
Total goodwill and accumulated impairment losses
|
$
|
553,597
|
|
|
$
|
542,340
|
|
|
$
|
—
|
|
|
$
|
11,257
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Compensation, including bonuses, fringe benefits, and payroll taxes
|
$
|
54,707
|
|
|
$
|
64,555
|
|
Accrued interest
|
2,492
|
|
|
2,678
|
|
||
Accrued taxes
|
9,918
|
|
|
10,784
|
|
||
Accrued rebates to customers
|
3,171
|
|
|
7,742
|
|
||
Accrued professional services
|
3,832
|
|
|
6,614
|
|
||
Accrued restructuring costs, current portion
|
1,903
|
|
|
1,777
|
|
||
Contingent consideration payable on acquisitions
|
1,113
|
|
|
1,113
|
|
||
Current portion of deferred income tax liability
|
394
|
|
|
319
|
|
||
Other liabilities
|
19,496
|
|
|
16,073
|
|
||
Total accrued liabilities
|
$
|
97,026
|
|
|
$
|
111,655
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Uncertain tax positions
|
$
|
12,421
|
|
|
$
|
13,012
|
|
Accrued restructuring costs, less current portion
|
3,514
|
|
|
4,367
|
|
||
Other liabilities
|
10,588
|
|
|
10,047
|
|
||
Total other long-term liabilities
|
$
|
26,523
|
|
|
$
|
27,426
|
|
|
Three Months Ended
|
||||||
|
March 31, 2015
|
|
March 31, 2014
|
||||
Net realized foreign currency gain (loss)
|
$
|
792
|
|
|
$
|
(1,090
|
)
|
Net unrealized foreign currency gain (loss)
|
2,389
|
|
|
2,328
|
|
||
Other, net
|
285
|
|
|
140
|
|
||
Total other income (expense), net
|
$
|
3,466
|
|
|
$
|
1,378
|
|
2015 (remaining 9 months)
|
$
|
3,187
|
|
2016
|
4,250
|
|
|
2017
|
4,250
|
|
|
2018
|
4,250
|
|
|
2019
|
4,250
|
|
|
2020 and thereafter
|
403,750
|
|
|
Original issue discount
|
(5,237
|
)
|
|
Total long-term debt
|
418,700
|
|
|
Less current portion
|
(4,250
|
)
|
|
Long-term debt, less current portion
|
$
|
414,450
|
|
|
|
Facility Closure Charges
|
||
Balance at December 31, 2014
|
|
$
|
6,144
|
|
Expenses incurred, net
|
|
(418
|
)
|
|
Payments made
|
|
(309
|
)
|
|
Balance at March 31, 2015
|
|
$
|
5,417
|
|
|
Net Income (Loss) (Numerator)
|
|
Number of Shares (Denominator)
|
|
Per-Share Amount
|
|||||
For the three months ended March 31, 2015
|
|
|
|
|
|
|||||
Basic net income per share
|
$
|
25,256
|
|
|
61,244
|
|
|
$
|
0.41
|
|
Effect of dilutive securities
|
—
|
|
|
1,859
|
|
|
|
|||
Diluted net income per share
|
$
|
25,256
|
|
|
63,103
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|||||
For the three months ended March 31, 2014
|
|
|
|
|
|
|||||
Basic net loss per share
|
$
|
(1,677
|
)
|
|
51,897
|
|
|
$
|
(0.03
|
)
|
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
|
|||
Diluted net loss per share
|
$
|
(1,677
|
)
|
|
51,897
|
|
|
$
|
(0.03
|
)
|
|
Three Months Ended March 31,
|
||||
|
2015
|
|
2014
|
||
Weighted average number of stock options and restricted stock units calculated using the treasury stock method that were excluded due to the exercise/threshold price exceeding the average market price of our common stock during the period
|
3
|
|
|
1,148
|
|
Weighted average number of stock options and restricted stock units calculated using the treasury stock method that were excluded due to the reporting of a net loss for the period
|
—
|
|
|
50
|
|
Total common stock equivalents excluded from diluted net income (loss) per share computation
|
3
|
|
|
1,198
|
|
|
|
Number of Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Grant Date Fair Value
|
|||||
Outstanding at December 31, 2014
|
|
3,930,220
|
|
|
$
|
11.64
|
|
|
|
||
Granted
|
|
15,289
|
|
|
$
|
31.24
|
|
|
$
|
10.63
|
|
Exercised
|
|
(29,585
|
)
|
|
$
|
8.45
|
|
|
|
||
Forfeited
|
|
—
|
|
|
$
|
—
|
|
|
|
||
Expired
|
|
—
|
|
|
$
|
—
|
|
|
|
||
Outstanding at March 31, 2015
|
|
3,915,924
|
|
|
$
|
11.74
|
|
|
|
||
Vested and exercisable at March 31, 2015
|
|
1,485,694
|
|
|
$
|
9.97
|
|
|
|
|
Number of RSUs
|
|
Weighted Average
Grant Date Fair Value |
|||
Non-vested at December 31, 2014
|
674
|
|
|
|
||
Granted
|
7,645
|
|
|
$
|
31.24
|
|
Vested
|
—
|
|
|
|
||
Forfeited
|
—
|
|
|
|
||
Non-vested at March 31, 2015
|
8,319
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Direct costs
|
$
|
383
|
|
|
$
|
245
|
|
Selling, general and administrative
|
324
|
|
|
286
|
|
||
Total stock-based compensation expense
|
$
|
707
|
|
|
$
|
531
|
|
|
Three Months Ended
|
||||||
|
March 31, 2015
|
|
March 31, 2014
|
||||
Revenue:
|
|
|
|
||||
Clinical Development Services
|
$
|
206,777
|
|
|
$
|
179,926
|
|
Phase I Services
|
3,101
|
|
|
2,466
|
|
||
Global Consulting
|
1,636
|
|
|
2,308
|
|
||
Segment revenue
|
211,514
|
|
|
184,700
|
|
||
Reimbursable out-of-pocket expenses not allocated to segments
|
97,403
|
|
|
82,077
|
|
||
Total revenue
|
$
|
308,917
|
|
|
$
|
266,777
|
|
Direct costs:
|
|
|
|
||||
Clinical Development Services
|
$
|
121,216
|
|
|
$
|
116,049
|
|
Phase I Services
|
2,531
|
|
|
2,554
|
|
||
Global Consulting
|
1,701
|
|
|
2,161
|
|
||
Segment direct costs
|
125,448
|
|
|
120,764
|
|
||
Reimbursable out-of-pocket expenses not allocated to segments
|
97,403
|
|
|
82,077
|
|
||
Direct costs and reimbursable out-of-pocket expenses
|
$
|
222,851
|
|
|
$
|
202,841
|
|
Segment contribution margin:
|
|
|
|
||||
Clinical Development Services
|
$
|
85,561
|
|
|
$
|
63,877
|
|
Phase I Services
|
570
|
|
|
(88
|
)
|
||
Global Consulting
|
(65
|
)
|
|
147
|
|
||
Segment contribution margin
|
86,066
|
|
|
63,936
|
|
||
Less expenses not allocated to segments:
|
|
|
|
||||
Selling, general and administrative
|
35,800
|
|
|
32,185
|
|
||
Restructuring and other costs
|
(418
|
)
|
|
758
|
|
||
Transaction expenses
|
122
|
|
|
2,042
|
|
||
Asset impairment charges
|
3,931
|
|
|
—
|
|
||
Depreciation and amortization
|
14,244
|
|
|
14,371
|
|
||
Consolidated income from operations
|
$
|
32,387
|
|
|
$
|
14,580
|
|
|
Three Months Ended
|
||||||
|
March 31, 2015
|
|
March 31, 2014
|
||||
Net service revenue:
|
|
|
|
||||
North America(1)
|
$
|
151,665
|
|
|
$
|
130,568
|
|
Europe, Middle East and Africa
|
55,331
|
|
|
47,695
|
|
||
Asia-Pacific
|
4,517
|
|
|
6,436
|
|
||
Latin America
|
1
|
|
|
1
|
|
||
Total net service revenue
|
211,514
|
|
|
184,700
|
|
||
Reimbursable-out-of-pocket expenses
|
97,403
|
|
|
82,077
|
|
||
Total revenue
|
$
|
308,917
|
|
|
$
|
266,777
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Total property and equipment, net:
|
|
|
|
||||
North America(1)
|
$
|
28,226
|
|
|
$
|
28,287
|
|
Europe, Middle East, and Africa(2)
|
8,918
|
|
|
10,212
|
|
||
Asia-Pacific
|
3,990
|
|
|
4,473
|
|
||
Latin America
|
679
|
|
|
753
|
|
||
Total property and equipment, net
|
$
|
41,813
|
|
|
$
|
43,725
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
March 31,
2015 |
|
March 31,
2014 |
|
Change
|
|||||||||
Net service revenue
|
$
|
211,514
|
|
|
$
|
184,700
|
|
|
$
|
26,814
|
|
|
14.5
|
%
|
Reimbursable out-of-pocket expenses
|
97,403
|
|
|
82,077
|
|
|
15,326
|
|
|
18.7
|
%
|
|||
Total revenue
|
308,917
|
|
|
266,777
|
|
|
42,140
|
|
|
15.8
|
%
|
|||
Direct costs
|
125,448
|
|
|
120,764
|
|
|
4,684
|
|
|
3.9
|
%
|
|||
Reimbursable out-of-pocket expenses
|
97,403
|
|
|
82,077
|
|
|
15,326
|
|
|
18.7
|
%
|
|||
Selling, general and administrative
|
35,800
|
|
|
32,185
|
|
|
3,615
|
|
|
11.2
|
%
|
|||
Restructuring and other costs
|
(418
|
)
|
|
758
|
|
|
(1,176
|
)
|
|
(155.1
|
)%
|
|||
Transaction expenses
|
122
|
|
|
2,042
|
|
|
(1,920
|
)
|
|
(94.0
|
)%
|
|||
Asset impairment charges
|
3,931
|
|
|
—
|
|
|
3,931
|
|
|
—
|
%
|
|||
Depreciation
|
4,766
|
|
|
6,869
|
|
|
(2,103
|
)
|
|
(30.6
|
)%
|
|||
Amortization
|
9,478
|
|
|
7,502
|
|
|
1,976
|
|
|
26.3
|
%
|
|||
Total operating expenses
|
276,530
|
|
|
252,197
|
|
|
24,333
|
|
|
9.6
|
%
|
|||
Income from operations
|
32,387
|
|
|
14,580
|
|
|
17,807
|
|
|
122.1
|
%
|
|||
Total other expense, net
|
(1,839
|
)
|
|
(14,523
|
)
|
|
(12,684
|
)
|
|
(87.3
|
)%
|
|||
Income before provision for income taxes
|
30,548
|
|
|
57
|
|
|
30,491
|
|
|
53,493.0
|
%
|
|||
Income tax expense
|
(5,292
|
)
|
|
(1,609
|
)
|
|
3,683
|
|
|
228.9
|
%
|
|||
Net income (loss)
|
$
|
25,256
|
|
|
$
|
(1,552
|
)
|
|
$
|
26,808
|
|
|
1,727.3
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
March 31,
2015 |
|
March 31,
2014 |
|
Change
|
|||||||||
Net service revenue
|
$
|
211,514
|
|
|
$
|
184,700
|
|
|
$
|
26,814
|
|
|
14.5
|
%
|
Reimbursable out-of-pocket expenses
|
97,403
|
|
|
82,077
|
|
|
15,326
|
|
|
18.7
|
%
|
|||
Total revenue
|
$
|
308,917
|
|
|
$
|
266,777
|
|
|
$
|
42,140
|
|
|
15.8
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
March 31,
2015 |
|
March 31,
2014 |
|
Change
|
|||||||||
Direct costs
|
$
|
125,448
|
|
|
$
|
120,764
|
|
|
$
|
4,684
|
|
|
3.9
|
%
|
Reimbursable out-of-pocket expenses
|
97,403
|
|
|
82,077
|
|
|
15,326
|
|
|
18.7
|
%
|
|||
Total direct costs and reimbursable out-of-pocket expenses
|
$
|
222,851
|
|
|
$
|
202,841
|
|
|
$
|
20,010
|
|
|
9.9
|
%
|
|
Three Months Ended March 31,
|
||
|
2014 to 2015
|
||
Change in:
|
|
||
Salaries, benefits, and incentive compensation
|
$
|
8,081
|
|
Other
|
(3,397
|
)
|
|
Total
|
$
|
4,684
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
March 31,
2015 |
|
March 31,
2014 |
|
Change
|
|||||||||
Selling, general and administrative
|
$
|
35,800
|
|
|
$
|
32,185
|
|
|
$
|
3,615
|
|
|
11.2
|
%
|
Percentage of net service revenue
|
16.9
|
%
|
|
17.4
|
%
|
|
|
|
|
|
Three Months Ended March 31,
|
||
|
2014 to 2015
|
||
Change in:
|
|
||
Salaries, benefits, and incentive compensation
|
$
|
2,054
|
|
Professional services fees
|
812
|
|
|
Allowance for doubtful accounts
|
(355
|
)
|
|
Marketing
|
551
|
|
|
Facilities and IT related costs
|
545
|
|
|
Other
|
8
|
|
|
Total
|
$
|
3,615
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
March 31,
2015 |
|
March 31,
2014 |
|
Change
|
|||||||||
Interest income
|
$
|
84
|
|
|
$
|
182
|
|
|
$
|
(98
|
)
|
|
(53.8
|
)%
|
Interest expense
|
(5,389
|
)
|
|
(16,083
|
)
|
|
(10,694
|
)
|
|
(66.5
|
)%
|
|||
Other income, net
|
3,466
|
|
|
1,378
|
|
|
2,088
|
|
|
151.5
|
%
|
|||
Total other income (expense), net
|
$
|
(1,839
|
)
|
|
$
|
(14,523
|
)
|
|
$
|
(12,684
|
)
|
|
(87.3
|
)%
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Balance sheet statistics:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
156,349
|
|
|
$
|
126,453
|
|
Restricted cash
|
480
|
|
|
505
|
|
||
Working capital
|
78,792
|
|
|
46,598
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
March 31, 2015
|
|
March 31, 2014
|
|
Change 2014 to 2015
|
|||||||||
Net cash provided by operating activities
|
$
|
43,631
|
|
|
$
|
31,210
|
|
|
$
|
12,421
|
|
|
39.8
|
%
|
Net cash used in investing activities
|
(4,870
|
)
|
|
(6,926
|
)
|
|
(2,056
|
)
|
|
(29.7
|
)%
|
|||
Net cash used in financing activities
|
(1,262
|
)
|
|
(6,391
|
)
|
|
(5,129
|
)
|
|
(80.3
|
)%
|
•
|
the size, complexity and duration of projects or strategic relationships;
|
•
|
the cancellation or delay of projects;
|
•
|
the failure of one or more business awards to go to contract; and
|
•
|
changes in the scope of work during the course of projects.
|
•
|
conducting a single trial across multiple countries is complex, and issues in one country, such as a failure to comply with or unanticipated changes to local regulations or restrictions such as restrictions on import or export of clinical trial material or availability of clinical trial data may affect the progress of the trial in the other countries, resulting in delays or potential termination of contracts, which in turn may result in loss of revenue;
|
•
|
the United States or other countries could enact legislation or impose regulations or other restrictions, including unfavorable labor regulations, tax policies, data protection regulations or economic sanctions, which could have an adverse effect on our ability to conduct business in or expatriate profits from the countries in which we operate;
|
•
|
foreign countries are expanding or may expand their banking regulations that govern international currency transactions, particularly cross-border transfers, which may inhibit our ability to transfer funds into or within a jurisdiction, impeding our ability to pay our principal investigators, vendors and employees, thereby impacting our ability to conduct trials in such jurisdictions;
|
•
|
foreign countries are expanding or may expand their regulatory framework with respect to patient informed consent, protection and compensation in clinical trials, additional transparency reporting requirements (similar to the Physician Payment Sunshine Act in the United States), which could delay, inhibit or prohibit our ability to conduct trials in such jurisdictions;
|
•
|
the regulatory or judicial authorities of foreign countries might not enforce legal rights and recognize business procedures in a manner in which we are accustomed or would reasonably expect;
|
•
|
changes in political and economic conditions, including inflation, may lead to changes in the business environment in which we operate, as well as changes in foreign currency exchange rates;
|
•
|
potential violations of existing or newly adopted local laws or anti-bribery laws, such as the United States Foreign Corrupt Practices Act, or FCPA, and the UK Bribery Act of 2010, may cause a material adverse effect on our business, financial condition, results of operations, cash flows or reputation;
|
•
|
customers in foreign jurisdictions may have longer payment cycles, and it may be more difficult to collect receivables in those jurisdictions;
|
•
|
natural disasters, pandemics or international conflict, including terrorist acts, could interrupt our services, endanger our personnel or cause project delays or loss of trial materials or results;
|
•
|
political unrest, such as the current situation in the Ukraine, could delay or disrupt the ability to conduct clinical trials; and
|
•
|
foreign governments may enact currency exchange controls that may limit the ability to fund our operations or significantly increase the cost of maintaining operations.
|
•
|
increase our vulnerability to adverse general economic, industry or competitive developments;
|
•
|
require us to dedicate a more substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing the availability of our cash flows to fund working capital, investments, acquisitions, capital expenditures, and other general corporate purposes;
|
•
|
limit our ability to make required payments under our existing contractual commitments, including our existing long-term indebtedness;
|
•
|
limit our ability to fund a change of control offer;
|
•
|
require us to sell certain assets;
|
•
|
restrict us from making strategic investments, including acquisitions or cause us to make non-strategic divestitures;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
•
|
place us at a competitive disadvantage compared to our competitors that have less debt;
|
•
|
cause us to incur substantial fees from time to time in connection with debt amendments or refinancings;
|
•
|
increase our exposure to rising interest rates because a substantial portion of our borrowings is at variable interest rates; and
|
•
|
limit our ability to borrow additional funds or to borrow on terms that are satisfactory to us.
|
|
|
|
Incorporated by Reference (Unless Otherwise Indicated)
|
|||
Exhibit Number
|
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
10.1
|
|
Amendment to Executive Service Agreement, effective as of January 1, 2015, by and between INC Research Holdings Limited and Alistair Macdonald
|
—
|
—
|
—
|
Filed herewith
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
Filed herewith
|
31.2
|
|
Certification of Executive Vice President and 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 Section 906 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
Furnished herewith
|
32.2
|
|
Certification of Executive Vice President and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
Furnished herewith
|
101.INS*
|
|
XBRL Instance Document.
|
—
|
—
|
—
|
Furnished herewith
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
—
|
—
|
—
|
Furnished herewith
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
—
|
—
|
—
|
Furnished herewith
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
—
|
—
|
—
|
Furnished herewith
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
—
|
—
|
—
|
Furnished herewith
|
101.PRE*
|
|
Taxonomy Extension Presentation Linkbase Document.
|
—
|
—
|
—
|
Furnished herewith
|
|
|
|
|
|
INC RESEARCH HOLDINGS INC.
|
|
|
|
Date: April 27, 2015
|
|
/s/ Gregory S. Rush
|
|
|
Gregory S. Rush
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
|
|
Incorporated by Reference (Unless Otherwise Indicated)
|
|||
Exhibit Number
|
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
10.1
|
|
Amendment to Executive Service Agreement, effective as of January 1, 2015, by and between INC Research Holdings Limited and Alistair Macdonald
|
—
|
—
|
—
|
Filed herewith
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
Filed herewith
|
31.2
|
|
Certification of Executive Vice President and 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 Section 906 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
Furnished herewith
|
32.2
|
|
Certification of Executive Vice President and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
Furnished herewith
|
101.INS*
|
|
XBRL Instance Document.
|
—
|
—
|
—
|
Furnished herewith
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document.
|
—
|
—
|
—
|
Furnished herewith
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
—
|
—
|
—
|
Furnished herewith
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
—
|
—
|
—
|
Furnished herewith
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
—
|
—
|
—
|
Furnished herewith
|
101.PRE*
|
|
Taxonomy Extension Presentation Linkbase Document.
|
—
|
—
|
—
|
Furnished herewith
|
AMENDMENT TWO TO THE EXECUTIVE SERVICE AGREEMENT
Between
INC Research Holding Limited
And
Alistair MacDonald
|
1.
|
SALARY
|
2.
|
JOB TITLE
|
Signed on behalf of INC Research:
|
|
/s/ Christopher L. Gaenzle
|
|
Dated: 22 April 2015
|
|
|
Christopher L. Gaenzle
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
Signed by the Employee:
|
|
/s/ Alistair Macdonald
|
|
Dated: 18 April 2015
|
|
|
Alistair MacDonald
|
|
|
/s/ D. Jamie Macdonald
|
D. Jamie Macdonald
|
Chief Executive Officer
|
(Principal Executive Officer)
|
/s/ Gregory S. Rush
|
Gregory S. Rush
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
/s/ D. Jamie Macdonald
|
D. Jamie Macdonald
|
Chief Executive Officer
|
(Principal Executive Officer)
|
/s/ Gregory S. Rush
|
Gregory S. Rush
|
Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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