Management will host Conference Call at 4:30 PM ET Today SADDLE
RIVER, N.J., Aug. 5 /PRNewswire-FirstCall/ -- PDI, Inc. (NASDAQ:
PDII), a leading provider of sales and marketing support to U.S.
pharmaceutical companies, today reported financial and operational
results for the second quarter ended June 30, 2009. Recent
highlights include: -- Four new business wins expected to exceed
$18 million in revenue over 12 months -- Signed agreement with The
Medical Affairs Company (TMAC ) to enhance our service offerings --
Facilities realignment and continued cost reductions -- Mutual
termination of product commercialization contract -- Appointment of
current director Gerald P. Belle to the newly-established position
of lead independent director Commenting on today's announcement,
Nancy Lurker, Chief Executive Officer of PDI, Inc., stated, "While
we recognize that the first half of the year has been difficult,
with operating losses of $4.7 million and $10.3 million for the
second quarter and first six months, respectively, we are working
diligently to improve the Company's financial position and are
optimistic that these efforts will pay off. Thus far in 2009, we
have implemented a number of initiatives to advance PDI to a more
solid competitive stance, including leveraging and expanding our
core CSO capabilities, strategically adding to management, reducing
expenses and taking appropriate charges in order to better
structure the Company for future success. We are confident that
adherence to this strategy will put us on a trajectory toward
profitability as we strategically align the business units to be
profitable while adding new, high quality personnel with the
experience and drive to build our business. "Notably, during the
quarter we announced four key new business wins expected to exceed
$18 million in revenue over 12 months in our Sales Services
segment, two of which are prior PDI customers and two of which are
new. These additional client engagements, coming during what has
been a slow period in the industry, and given the strategic shift
in how big pharmaceutical companies are approaching outsourced
sales, speaks positively about the value of the services we offer
and our strong reputation and position in the industry." Ms. Lurker
continued, "We are also pleased to have signed an agreement with
The Medical Affairs Company which will allow us to meet a wider
variety of client demands for best-in-class field resources. This
further expands our product offerings while leveraging our core
abilities. "In addition, we continue to manage costs and have
consolidated office space in our marketing services business,
resulting in a one-time charge of $1.8 million, which will generate
future cost reductions for the Company moving forward. As
previously disclosed, we also mutually terminated our product
commercialization contract. "We were also pleased to announce the
appointment of current Director, Gerald Belle, as lead independent
director. Jerry brings a wealth of strong leadership to the Board
and I look forward to working more closely with him in the months
and years to come. "Finally, I want to note that while we have
begun to benefit from the pharmaceutical industry's strategic shift
in outsourced sales, the first half of 2009 was particularly
challenging for our Marketing Services segment, as it was for
similar companies across the industry. However, over the second
half of the year, we expect to see an upswing in activity and we
remain optimistic about the opportunity for this business segment
going forward." Financial Overview - Second Quarter 2009 For the
quarter ended June 30, 2009, net revenue totaled $16.3 million,
compared to $30.4 million in the same period last year. Revenue in
the Sales Services segment for the second quarter of 2009 was $13.9
million, compared to $23.4 million in the same period of 2008.
While Sales Services has gained revenue as a result of new
contracts and the expansion of existing contracts, these gains were
more than offset by lost revenue from the internalization of a
contract sales force by a long-term client and the expiration or
termination of other sales force arrangements in effect during
2008. Revenue in the Marketing Services segment for the second
quarter of 2009 was $3.9 million compared to $8.0 million in 2008.
The decline was primarily attributable to the overall continued
softness in the market for these types of services. Gross profit
for the second quarter of 2009 was $6.9 million, a $3.3 million
increase over the same period last year. Gross profit for the Sales
Services segment declined to $2.3 million from $5.2 million last
year, while gross profit in the Marketing Services segment totaled
$1.8 million compared to $3.4 million in the year ago period. These
declines are primarily due to lower revenue. The overall increase
in second quarter 2009 gross profit margin was attributable to
increased gross profit in the Product Commercialization Services
segment. This segment recognized a negative gross profit of $5.0
million in 2008 related to the execution of a product
commercialization contract and a $2.5 million benefit in 2009 due
to a reduction in the loss contract accrual associated with the
mutual termination of this contract. Total operating expenses for
the second quarter of 2009 were $11.6 million compared to $11.5
million in the same period in 2008. Excluding the impact of $1.8
million of facility realignment costs related to excess office
space in the Company's Marketing Services business in 2009 and the
impact of $0.7 million in costs associated with the retirement of
our former Chief Executive Officer in 2008, 2009 operating expenses
were $1.0 million, or 9%, lower than 2008. This decline is
primarily attributable to the Company's ongoing cost-reduction
initiatives. Other income, which is primarily interest income,
declined by $0.7 million in 2009 compared to 2008 due to a
combination of lower available cash and cash equivalents and the
Company's more conservative investing practices in 2009 compared to
2008. Total operating loss for the second quarter of 2009 was $4.7
million compared to $7.9 million in the same period of 2008. Net
loss per share for the second quarter of 2009 was $0.34 compared to
$0.52 in 2008. Cash and cash equivalents as of June 30, 2009 were
$76.2 million, a $4.7 million decline from March 31, 2009 and a
$13.9 million decline from December 31, 2008. This decrease is
primarily attributable to the operating loss and cash expenses
relating to the Company's commitments under its product
commercialization contract. As of June 30, 2009, the Company's cash
equivalents were predominately invested in Treasury money market
funds and the Company had no commercial debt. Conference Call As
previously announced, PDI will hold a conference call today, to
discuss financial and operational results of the second quarter
ended June 30, 2009 as follows: Time: 4:30 pm (ET) Dial-in numbers:
866-644-4654 (U.S. & Canada) or 706-643-1203 Conference ID#:
22718573 Live webcast: http://www.pdi-inc.com/ The teleconference
replay will be available two hours after completion through Friday,
August 7, 2009 by dialing 800-642-1687 (U.S. & Canada) or
706-645-9291 and entering conference ID 22718573. The archived
webcast will be available for one year on the Company's investor
website, http://www.pdi-inc.com/. About PDI PDI provides
commercialization services for established and emerging
biopharmaceutical companies. The Company is dedicated to maximizing
the return on investment for its clients by providing strategic
flexibility, sales, marketing and commercialization expertise. For
more information, please visit the Company's website at
http://www.pdi-inc.com/. Forward-Looking Statements This press
release contains forward-looking statements regarding future events
and financial performance. These statements are based on current
expectations and assumptions involving judgments about, among other
things, future economic, competitive and market conditions and
future business decisions, all of which are difficult or impossible
to predict accurately and many of which are beyond PDI's control.
These statements also involve known and unknown risks,
uncertainties and other factors that may cause PDI's actual results
to be materially different from those expressed or implied by any
forward-looking statement. For example, with respect to statements
regarding projections of future revenues, actual results may differ
materially from those set forth in this release based on the loss,
early termination or significant reduction of any of our existing
service contracts or the failure to meet performance goals in PDI's
incentive-based arrangements with customers. In addition, with
respect to statements regarding the prospects for PDI's future
growth and/or profitability, actual results may differ materially
based on adverse market conditions, PDI's inability to successfully
implement its strategic initiatives relating to leveraging and
expanding its core CSO capabilities, strategically adding to
management and reducing expenses, adverse changes in outsourcing
trends in the pharmaceutical industry or a reduction or elimination
of the role of pharmaceutical sales representatives. Additionally,
all forward-looking statements are subject to the risk factors
detailed from time to time in PDI's periodic filings with the
Securities and Exchange Commission, including without limitation,
PDI's Annual Report on Form 10-K for the year ended December 31,
2008, and PDI's subsequently filed quarterly reports on Form 10-Q
and current reports on Form 8-K. Because of these and other risks,
uncertainties and assumptions, undue reliance should not be placed
on these forward-looking statements. In addition, these statements
speak only as of the date of this press release and, except as may
be required by law, PDI undertakes no obligation to revise or
update publicly any forward-looking statements for any reason.
(Tables to follow) PDI, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED) (in thousands, except for per share data)
Three Months Ended Six Months Ended June 30, June 30,
------------------ ------------------- 2009 2008 2009 2008
--------- -------- --------- -------- Revenue, net $16,291 $30,399
$39,822 $62,628 Cost of services 9,409 26,809 27,969 50,339
--------- -------- --------- -------- Gross profit 6,882 3,590
11,853 12,289 Compensation expense 5,754 7,177 12,047 13,310 Other
selling, general and administrative expenses 4,000 4,313 8,258
8,587 Facilities realignment 1,810 - 1,810 - --------- --------
--------- -------- Total operating expenses 11,564 11,490 22,115
21,897 --------- -------- --------- -------- Operating loss (4,682)
(7,900) (10,262) (9,608) Other income, net 60 800 163 1,950
--------- -------- --------- -------- Loss before income tax
(4,622) (7,100) (10,099) (7,658) Provision for income tax 213 377
451 879 --------- -------- --------- -------- Net loss $(4,835)
$(7,477) $(10,550) $(8,537) --------- -------- --------- --------
Loss per share of common stock: Basic $(0.34) $(0.52) $(0.74)
$(0.60) Diluted $(0.34) $(0.52) $(0.74) $(0.60) Weighted average
number of common shares and common share equivalents outstanding:
Basic 14,210 14,292 14,216 14,257 Diluted 14,210 14,292 14,216
14,257 Segment Data (Unaudited) (in thousands) Product Elimin-
Sales Marketing Commercial- ation Services Services ization Company
Consolidated -------- -------- -------- -------- ------------ Three
months ended June 30, 2009: Revenue $13,936 $3,918 $ - $(1,563)
$16,291 Gross profit 2,323 1,837 2,486 236 6,882 Gross profit %
16.7% 46.9% 0.0% NM 42.2% Three months ended June 30, 2008: Revenue
$23,401 $7,998 $(1,000) $ - $30,399 Gross profit 5,166 3,380
(4,956) - 3,590 Gross profit % 22.1% 42.3% NM 0.0% 11.8% Six months
ended June 30, 2009: Revenue $34,430 $6,955 $ - $(1,563) $39,822
Gross profit 5,962 3,169 2,486 236 11,853 Gross profit % 17.3%
45.6% 0.0% NM 29.8% Six months ended June 30, 2008: Revenue $48,657
$14,971 $(1,000) $ - $62,628 Gross profit 11,045 6,731 (5,487) -
12,289 Gross profit % 22.7% 45.0% NM 0.0% 19.6% NM - Not Meaningful
Selected Balance Sheet Data (Unaudited) (in thousands) June 30,
December 31, 2009 2008 ------------- ------------- Cash and cash
equivalents $76,202 $90,074 Total current assets $92,113 $112,999
Total current liabilities 16,867 31,360 ------------- -------------
Working capital $75,246 $81,639 ------------- ------------- Total
assets $125,692 $149,036 Total liabilities $28,257 $41,929 Total
stockholders' equity $97,435 $107,107 Selected Cash Flow Data
(Unaudited) (in thousands) June 30, June 30, 2009 2008
------------- ------------- Net loss $(10,550) $(8,537) Non-cash
items 3,184 3,596 Net change in assets and liabilities (6,253)
1,231 ------------- ------------- Net cash used in operations
$(13,619) $(3,710) Change in cash and cash equivalents $(13,872)
$(3,221) DATASOURCE: PDI, Inc. CONTACT: Amy Lombardi, PDI, Inc.,
+1-201-574-8663, ; INVESTOR: Melody Carey, Rx Communications Group,
+1-917-322-2571, Web Site: http://www.pdi-inc.com/
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