FORM 6-K
 
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 under
the Securities Exchange Act of 1934


For the month of October 2023


ICON plc
(Translation of registrant's name into English)


333-08704
 (Commission file number)


South County Business Park, Leopardstown, Dublin 18, Ireland
(Address of principal executive offices)



Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 
Form 20-F __X___
Form 40-F ______
 
Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
 
Yes______
No___X___
 
Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
 
Yes______
No___X___
 

 

EXHIBIT LIST
 
Exhibit
 
Description
 
 
 
 
 
 
 

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
ICON plc
 
 
 
 
 
 
 
 
 
 
 
/s/ Brendan Brennan
Date: October 25, 2023
 
Brendan Brennan
Chief Financial Officer


Exhibit 99.1

ICON Reports Third Quarter 2023 Results

Highlights

  • Net business wins in the quarter of $2,581 million; a net book to bill of 1.26 or 1.22 on a trailing twelve month basis and an increase of 10% on quarter three 2022.
  • Closing backlog of $22.2 billion, an increase of 2.6% on quarter two 2023 and an increase of 10.0% on quarter three 2022.
  • Quarter three revenue of $2,055.1 million representing an increase of 5.8% on prior year revenue. YTD revenue of $6,053.9 million representing a year on year increase of 4.8%.
  • Quarter three adjusted EBITDA of $432.5 million or 21.0% of revenue, an increase of 13.9% on quarter three 2022. YTD adjusted EBITDA of $1,245.9 million or 20.6% of revenue, representing a year on year increase of 16.0%.
  • GAAP net income attributable to the Group for the quarter of $163.7 million or $1.97 per diluted share. YTD GAAP net income of $395.9 million or $4.79 per diluted share.
  • Quarter three adjusted net income attributable to the Group was $273.9 million or $3.30 per diluted share, an increase of 10.0% on quarter three 2022 adjusted earnings per share. Year to date adjusted net income attributable to the Group of $770.7 million or $9.31 per diluted share, an increase of 8.0% on the prior year adjusted earnings per share.
  • Days sales outstanding decreased from 52 days at June 30, 2023 to 49 days at September 30, 2023.
  • $300.0 million repayment made on Term Loan B debt. Net debt balance of $3.7 billion with net debt to adjusted EBITDA ratio of 2.3x.
  • In October 2023, ICON acquired Philips Pharma Solutions, a leading provider of medical imaging and cardiac safety monitoring services.
  • In October 2023, S&P Global Ratings upgraded ICON to an investment grade credit rating.
  • Re-affirming full-year 2023 financial guidance of revenue of $8,070 - $8,210 million, representing a year over year increase of 4.3 to 6.1%, and adjusted earnings per share* in the range of $12.63 - $12.91, representing a year over year increase of 7.5 to 9.9%. Adjusted earnings per share to exclude amortization, stock compensation, restructuring, foreign exchange and transaction-related / integrated-related adjustments.

DUBLIN--(BUSINESS WIRE)--October 25, 2023--ICON plc (NASDAQ: ICLR), a world-leading healthcare intelligence and clinical research organization, today reported its financial results for the third quarter ended September 30, 2023.

CEO, Dr. Steve Cutler commented, “ICON delivered impressive results in the third quarter, with revenue growth of 6% year over year, as well as double digit adjusted EBITDA and adjusted earnings per share growth of 14% and 10%, respectively, over quarter three 2022. Our net book to bill improved to 1.26x in the quarter, reflective of the healthy demand for our market-leading offering across the customer segments we serve. We remain well positioned as a critical partner with new and existing customers to play a long-term role in accelerating their development portfolios.

Third Quarter 2023 Results

Gross business wins in the third quarter were $3,055 million and cancellations were $474 million. This resulted in net business wins of $2,581 million and a book to bill of 1.26.

Revenue for the third quarter was $2,055.1 million. This represents an increase of 5.8% on prior year revenue or 4.8% on a constant currency organic basis.

GAAP net income attributable to the Group was $163.7 million resulting in $1.97 diluted earnings per share in quarter three 2023 compared to $1.94 diluted earnings per share in quarter three 2022. Adjusted net income attributable to the Group for the quarter was $273.9 million resulting in an adjusted diluted earnings per share of $3.30 compared to $3.00 per share for the third quarter 2022.


Adjusted EBITDA for the third quarter was $432.5 million or 21.0% of revenue, a year-on-year increase of 13.9%.

The effective tax rate on adjusted net income in quarter three was 15.2%.

Cash generated from operating activities for the quarter was $341.5 million. During the quarter $29.1 million was spent on capital expenditure. At September 30, 2023, the Group had cash and cash equivalents of $313.1 million, compared to cash and cash equivalents of $270.2 million at June 30, 2023 and $609.2 million at September 30, 2022. $75 million of the revolving credit facility was drawn down in the quarter and $50 million was repaid. Additionally, $300.0 million of Term Loan B payments were made during the quarter resulting in a net indebtedness of $3.7 billion at September 30, 2023.

Year to date 2023 Results

Gross business wins year to date were $8,773 million and cancellations were $1,358 million. This resulted in net business wins of $7,415 million and a book to bill of 1.22.

Year to date revenue was $6,053.9 million. This represents a year on year increase of 4.8% on a reported and on a constant currency basis.

GAAP net income attributable to the Group year to date was $395.9 million resulting in $4.79 diluted earnings per share. Adjusted net income attributable to the Group was $770.7 million resulting in an adjusted diluted earnings per share of $9.31 compared to $8.62 per share for the equivalent prior year period.

Adjusted EBITDA year to date was $1,245.9 million or 20.6% of revenue, a year on year increase of 16.0%.

Other Information

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this press release contains certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income attributable to the Group and adjusted diluted earnings per share attributable to the Group. Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share exclude amortization, stock compensation, foreign exchange gains and losses, restructuring and transaction-related / integration-related adjustments. While non-GAAP financial measures are not superior to or a substitute for the comparable GAAP measures, ICON believes certain non-GAAP information is useful to investors for historical comparison purposes.

ICON will hold a conference call on October 26, 2023 at 08:00 EDT [13:00 Ireland & UK]. This call and linked slide presentation can be accessed live from our website at http://investor.iconplc.com. A recording will also be available on the website for 90 days following the call. In addition, a calendar of company events, including upcoming conference presentations, is available on our website, under “Investors”. This calendar will be updated regularly.

This press release contains forward-looking statements, including statements about our financial guidance. These statements are based on management's current expectations and information currently available, including current economic and industry conditions. These statements are not guarantees of future performance or actual results, and actual results, developments and business decisions may differ from those stated in this press release. The forward-looking statements are subject to future events, risks, uncertainties and other factors that could cause actual results to differ materially from those projected in the statements, including, but not limited to, the ability to enter into new contracts, maintain client relationships, manage the opening of new offices and offering of new services, the integration of new business mergers and acquisitions, the impact of COVID-19 on our business, as well as other economic and global market conditions and other risks and uncertainties detailed from time to time in SEC reports filed by ICON, all of which are difficult to predict and some of which are beyond our control. For these reasons, you should not place undue reliance on these forward-looking statements when making investment decisions. The word "expected" and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are only as of the date they are made and we do not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise. More information about the risks and uncertainties relating to these forward-looking statements may be found in SEC reports filed by ICON, including its Form 20-F, F-1, F-4, S-8, F-3 and certain other reports, which are available on the SEC's website at http://www.sec.gov.

* Our full-year 2023 guidance adjusted earnings per share measures are provided on a non-GAAP basis because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information.


ICON plc is a world-leading healthcare intelligence and clinical research organization. From molecule to medicine, we advance clinical research providing outsourced services to pharmaceutical, biotechnology, medical device and government and public health organizations. We develop new innovations, drive emerging therapies forward and improve patient lives. With headquarters in Dublin, Ireland, ICON employed approximately 41,150 employees in 106 locations in 53 countries as at September 30, 2023. For further information about ICON, visit: www.iconplc.com.

Source: ICON plc

ICON/ICLR-F


ICON plc

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND SEPTEMBER 30, 2022

(UNAUDITED)

 

Three Months Ended

 

Nine Months Ended

 

September 30,
2023

 

September 30,
2022

 

September 30,
2023

 

September 30,
2022

 

(in thousands except share and per share data)

 

 

 

 

 

 

 

 

Revenue

$ 2,055,099

 

$ 1,942,427

 

$ 6,053,928

 

$ 5,779,384

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Direct costs (excluding depreciation and amortization)

1,449,136

 

1,375,837

 

4,274,222

 

4,146,366

Selling, general and administrative expense

185,187

 

166,787

 

572,999

 

552,000

Depreciation and amortization

146,032

 

141,861

 

436,217

 

427,285

Transaction and integration-related expenses

10,433

 

8,001

 

34,516

 

28,970

Restructuring

 

6,197

 

45,390

 

32,890

 

 

 

 

 

 

 

 

Total costs and expenses

1,790,788

 

1,698,683

 

5,363,344

 

5,187,511

 

 

 

 

 

 

 

 

Income from operations

264,311

 

243,744

 

690,584

 

591,873

Interest income

1,273

 

1,434

 

3,294

 

1,727

Interest expense

(83,908)

 

(63,010)

 

(255,665)

 

(154,546)

 

 

 

 

 

 

 

 

Income before provision for income taxes

181,676

 

182,168

 

438,213

 

439,054

Provision for income taxes

(18,011)

 

(21,012)

 

(41,913)

 

(48,552)

 

 

 

 

 

 

 

 

Income before share of earnings from equity method investments

163,665

 

161,156

 

396,300

 

390,502

Share of losses in equity method investments

 

(1,002)

 

(383)

 

(2,643)

 

 

 

 

 

 

 

 

Net income attributable to the Group

$ 163,665

 

$ 160,154

 

$ 395,917

 

$ 387,859

 

 

 

 

 

 

 

 

Net income per Ordinary Share attributable to the Group:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$ 1.99

 

$ 1.96

 

$ 4.83

 

$ 4.76

Diluted

$ 1.97

 

$ 1.94

 

$ 4.79

 

$ 4.70

 

 

 

 

 

 

 

 

Weighted average number of Ordinary Shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

82,215,627

 

81,582,375

 

82,001,500

 

81,481,686

Diluted

82,972,888

 

82,493,211

 

82,737,073

 

82,473,521


ICON plc

CONDENSED CONSOLIDATED BALANCE SHEETS

AS AT SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

 

(Unaudited)

 

(Audited)

 

September 30,
2023

 

December 31,
2022

ASSETS

(in thousands)

Current Assets:

 

 

 

Cash and cash equivalents

$ 313,065

 

$ 288,768

Available for sale investments

1,954

 

1,713

Accounts receivable, net of allowance for credit losses

1,850,362

 

1,731,388

Unbilled revenue

941,884

 

957,655

Other receivables

121,687

 

63,658

Prepayments and other current assets

150,193

 

137,094

Income taxes receivable

42,039

 

48,790

Total current assets

3,421,184

 

3,229,066

 

 

 

 

Non-current Assets:

 

 

 

Property, plant and equipment, net

342,262

 

350,320

Goodwill

8,982,896

 

8,971,670

Intangible assets

3,934,673

 

4,278,659

Operating right-of-use assets

132,319

 

153,832

Other receivables

52,797

 

70,790

Income taxes receivable

40,481

 

21,380

Deferred tax asset

83,095

 

76,930

Investments in equity- long term

41,790

 

32,631

Total Assets

$ 17,031,497

 

$ 17,185,278

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current Liabilities:

 

 

 

Accounts payable

$ 87,317

 

$ 81,194

Unearned revenue

1,663,183

 

1,507,449

Other liabilities

948,829

 

1,005,025

Income taxes payable

41,518

 

41,783

Current bank credit lines and loan facilities

130,150

 

55,150

Total current liabilities

2,870,997

 

2,690,601

Non-current Liabilities:

 

 

 

Non-current bank credit lines and loan facilities

3,911,522

 

4,599,037

Lease liabilities

121,424

 

131,644

Non-current other liabilities

41,661

 

38,260

Non-current income taxes payable

242,972

 

239,188

Deferred tax liability

883,887

 

988,585

Total Liabilities

8,072,463

 

8,687,315

 

 

 

 

Shareholders' Equity:

 

 

 

Ordinary shares, par value 6 euro cents per share; 100,000,000 shares authorized,

 

 

 

82,326,976 shares issued and outstanding at September 30, 2023 and

6,688

 

6,649

81,723,555 shares issued and outstanding at December 31, 2022

 

Additional paid‑in capital

6,924,073

 

6,840,306

Other undenominated capital

1,162

 

1,162

Accumulated other comprehensive income

(190,190)

 

(171,538)

Retained earnings

2,217,301

 

1,821,384

Total Shareholders' Equity

8,959,034

 

8,497,963

Total Liabilities and Equity

$ 17,031,497

 

$ 17,185,278

 

 

 

 

 

 

 

 


ICON plc

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND SEPTEMBER 30, 2022

(UNAUDITED)

 

Nine Months Ended

 

 

September 30,
2023

 

September 30,
2022

 

 

(in thousands)

 

Cash flows from operating activities:

 

 

 

 

Net income

$ 395,917

 

$ 387,859

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization expense

436,217

 

427,285

 

Impairment of long lived assets

8,845

 

27,727

 

Reduction in carrying value of operating right-of-use assets

33,979

 

35,238

 

Loss on equity method investments

383

 

2,643

 

Acquisition related gain

(6,160)

 

 

Charge on cash flow hedge

3,335

 

 

Amortization of financing costs and debt discount

12,485

 

13,544

 

Stock compensation expense

47,303

 

55,703

 

Deferred taxes

(114,487)

 

(126,620)

 

Foreign exchange movements

(7,670)

 

(52,334)

 

Other non-cash items

21,966

 

18,595

 

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

(139,096)

 

(140,760)

 

Unbilled revenue

14,370

 

(221,104)

 

Unearned revenue

158,269

 

28,352

 

Other net assets

(144,760)

 

166,613

 

Net cash provided by operating activities

720,896

 

622,741

 

Cash flows from investing activities:

 

 

 

 

Purchase of property, plant and equipment

(87,980)

 

(85,145)

 

Purchase of subsidiary undertakings

(5,100)

 

 

Purchase of investments in equity - long term

(10,829)

 

(1,840)

 

Sale of available for sale investments

1,611

 

 

Purchase of available for sale investments

(1,852)

 

 

Net cash used in investing activities

(104,150)

 

(86,985)

 

Cash flows from financing activities:

 

 

 

 

Drawdown of bank credit lines and loan facilities

305,000

 

25,000

 

Repayment of bank credit lines and loan facilities

(930,000)

 

(625,000)

 

Proceeds from exercise of equity compensation

36,517

 

28,967

 

Share issue costs

(14)

 

(3)

 

Repurchase of ordinary shares

 

(99,983)

 

Share repurchase costs

 

(17)

 

Net cash used in financing activities

(588,497)

 

(671,036)

 

Effect of exchange rate movements on cash

(3,952)

 

(7,775)

 

Net increase/(decrease) in cash and cash equivalents

24,297

 

(143,055)

 

Cash and cash equivalents at beginning of period

288,768

 

752,213

 

Cash and cash equivalents at end of period

$ 313,065

 

$ 609,158

 


ICON plc

RECONCILIATION OF NON-GAAP MEASURES

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND SEPTEMBER 30, 2022

(UNAUDITED)

 

Three Months Ended

 

Nine Months Ended

 

September 30, 2023

 

September 30, 2022

 

September 30, 2023

 

September 30, 2022

 

(in thousands except share and per share data)

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

Net income attributable to the Group

$ 163,665

 

$ 160,154

 

$ 395,917

 

$ 387,859

Share of equity method investments

 

1,002

 

383

 

2,643

Provision for income taxes

18,011

 

21,012

 

41,913

 

48,552

Net interest expense

82,635

 

61,576

 

252,371

 

152,819

Depreciation and amortization

146,032

 

141,861

 

436,217

 

427,285

Stock-based compensation expense (a)

16,465

 

16,730

 

47,822

 

54,843

Foreign currency losses (gains), net (b)

(4,706)

 

(36,933)

 

(2,465)

 

(61,395)

Oncacare (gain) (g)

 

 

(6,160)

 

Restructuring (c)

 

6,197

 

45,390

 

32,890

Transaction-related / integration-related costs (d)

10,433

 

8,001

 

34,516

 

28,970

Adjusted EBITDA

$ 432,535

 

$ 379,600

 

$ 1,245,904

 

$ 1,074,466

 

 

 

 

 

 

 

 

Adjusted net income attributable to the Group and adjusted diluted net income per Ordinary Share attributable to the Group

 

 

 

 

 

 

 

Net income attributable to the Group

$ 163,665

 

$ 160,154

 

$ 395,917

 

$ 387,859

Provision for income taxes

18,011

 

21,012

 

41,913

 

48,552

Amortization

114,573

 

114,991

 

343,868

 

348,118

Stock-based compensation expense (a)

16,465

 

16,730

 

47,822

 

54,843

Foreign currency losses (gains), net (b)

(4,706)

 

(36,933)

 

(2,465)

 

(61,395)

Restructuring (c)

 

6,197

 

45,390

 

32,890

Oncacare (gain) (g)

 

 

(6,160)

 

Transaction-related / integration-related costs (d)

10,433

 

8,001

 

34,516

 

28,970

Transaction-related financing costs (e)

4,587

 

4,356

 

12,486

 

13,609

Adjusted tax expense (f)

(49,100)

 

(47,284)

 

(142,617)

 

(142,492)

Adjusted net income attributable to the Group

$ 273,928

 

$ 247,224

 

$ 770,670

 

$ 710,954

 

 

 

 

 

 

 

 

Diluted weighted average number of Ordinary Shares outstanding

82,972,888

 

82,493,211

 

82,737,073

 

82,473,521

 

 

 

 

 

 

 

 

Adjusted diluted net income per Ordinary Share attributable to the Group

$ 3.30

 

$ 3.00

 

$ 9.31

 

$ 8.62

 

 

 

 

 

 

 

 


(a) Stock-based compensation expense represents the amount of recurring non-cash expense related to the Company’s equity compensation programs (inclusive of employer related taxes).

(b) Foreign currency losses (gains), net relates to gains or losses that arise in connection with the revaluation of non-US dollar denominated assets and liabilities. We exclude these gains and losses from adjusted EBITDA and adjusted net income because fluctuations from period- to- period do not necessarily correspond to changes in our operating results.

(c) Restructuring charges incurred relate to charges incurred in connection with the termination of leases at locations that are no longer being used and amounts incurred in connection with the elimination of redundant positions within the organization.

(d) Transaction-related / integration-related costs include expenses/credits associated with our acquisitions and any other costs incurred directly related to the integration of these acquisitions.

(e) Transaction-related financing costs includes costs incurred in connection with changes to our long-term debt and amortization of financing fees. We exclude these costs from adjusted EBITDA and adjusted net income because they result from financing decisions rather than from decisions made related to our ongoing operations.

(f) Represents the tax effect of adjusted pre-tax income at our estimated effective tax rate.

(g) On April 20, 2023, the Company completed the purchase of the majority investor’s 51% majority voting share capital of Oncacare Limited (“Oncacare”). This gave rise to an acquisition-related gain of $6.2 million. This gain was excluded from adjusted EBITDA and adjusted net income.

ICON plc

http://www.iconplc.com

Contacts

Investor Relations +1 888 381 7923 or

Brendan Brennan Chief Financial Officer +353 1 291 2000

Kate Haven Vice President Investor Relations +1888 381 7923

All at ICON


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