PAREXEL International Outlines Growth Strategy and Updates Financial Guidance at Investor Day

  • 10–18% diluted EPS growth expected in Fiscal Year 2017*, driven by continued revenue growth and margin improvement
  • Long-term target range for adjusted operating margin increased to 14–16%
  • Long-term target of double-digit revenue and adjusted diluted EPS growth
  • PAREXEL’s growth strategy built on focus on its core business while capturing new growth from adjacent markets
  • Company believed to be well-positioned to take advantage of paradigm shifts in its business environment

BOSTON--()--PAREXEL International Corporation (Nasdaq: PRXL) today presents its strategy for growth and its expectations for Fiscal Years 2016 and 2017 performance to investors and analysts at an Investor Day in New York City.

Josef H. von Rickenbach, PAREXEL’s Chairman and Chief Executive Officer, provides an overview of Company performance, industry dynamics, and the Company’s strategy. Mr. von Rickenbach states that PAREXEL’s strategy is to enhance its leadership in the biopharmaceutical services industry by focusing on its core business and capturing new growth from adjacent markets. The Company reiterates its long-term financial goals, including:

  • 10–12% annual revenue growth, consisting of 7–8% growth from ongoing operations and 3–4% growth from acquisitions
  • 100–120 basis points of annual adjusted operating margin improvement, with the long-term goal of an adjusted operating margin range of 14–16%
  • 15–20% annual adjusted diluted EPS growth

In discussing industry trends, Mr. von Rickenbach says, “Several paradigm shifts in the biopharmaceutical marketplace—changing biopharmaceutical pipelines, the increasing importance of payers, advances in information technology, and virtualization of biopharmaceutical companies—provide us with major new market opportunities. Our strategy extends our competencies into new markets, including market access and commercialization, that are large and growing faster than our traditional clinical business.”

Mark A. Goldberg, President and Chief Operating Officer, describes plans for executing the Company’s strategy. PAREXEL will grow the core business by leveraging strategic partnerships and enhancing service offerings to small and midsized companies. Operations in Asia are expected to produce strong growth. Dr. Goldberg describes the differentiated capabilities of PAREXEL Informatics. He outlines continuing and new initiatives to improve profitability. Joshua Schultz, Corporate Vice President, provides an expanded discussion of the capabilities and strategy of the Company’s recently launched PAREXEL Access, which offers an integrated suite of post-approval clinical services, market access consulting, medical communications, and pharmacovigilance.

Ingo Bank, Senior Vice President and Chief Financial Officer, presents a financial overview. Mr. Bank discusses the drivers of past and future revenue performance of the Company and its segments. He describes the results of the Company’s margin improvement initiatives, including the successful Margin Acceleration Program (MAP), and details of future margin improvement efforts.

Mr. Bank comments, “In recent years, we have seen strong growth in new business and backlog but also a delay in converting backlog into revenue. This has been caused by a trend toward smaller, more complex clinical trials, particularly those in oncology, which take longer to start and complete. We expect this trend to continue in Fiscal Year 2017, when we project revenue growth of 4–5.5%, with year-over-year growth rates likely to improve throughout the year. We believe that during the latter part of Fiscal Year 2017, the prolongation of trials will have reached steady state, at which point revenue growth should start to align more closely with backlog growth. The long-term driver of our revenue growth expectations remains our encouraging new business performance.”

Mr. Bank’s presentation provides financial guidance for the fourth quarter of Fiscal Year 2016 (ending June 30, 2016) and for full Fiscal Years 2016 and 2017, as summarized below:

Guidance Issued 6/30/16 Guidance Issued 4/27/16
Q4 FY 2016 Revenue $528–$538 million $528–$538 million
Q4 FY 2016 GAAP EPS $0.79–$0.87 $0.87–$0.95
Q4 FY 2016 Non-GAAP EPS** $0.89–$0.97 $0.89–$0.97
FY 2016 Revenue $2.085–$2.095 billion $2.085–$2.095 billion
FY 2016 GAAP EPS $2.85–$2.93 $2.93–$3.01
FY 2016 Non-GAAP EPS** $3.38–$3.46 $3.38–$3.46
FY 2017 Revenue $2.175–$2.205 billion N/A
FY 2017 GAAP EPS $3.68–$3.96 N/A
FY 2017 Non-GAAP EPS* $3.75–$4.03 N/A

* Projected growth of 10–18% in adjusted diluted EPS for Fiscal Year 2017 is based on the midpoint of guidance for adjusted diluted EPS for Fiscal Year 2016. Please see the GAAP to Non-GAAP reconciliation table later in this release.

**Adjusted diluted EPS guidance for Q4 FY 2016 excludes expected Q4 Fiscal Year 2016 restructuring charges related to our Margin Acceleration Program (MAP) as well as acquisition-related charges. In addition, adjusted diluted EPS guidance for the full Fiscal Year 2016 excludes the impact of certain items that were recorded in the first nine months, as detailed in a chart contained within this release. The MAP is now expected to achieve the high end of its pretax savings targets of $20–$30 million in Fiscal Year 2016. Total charges relating to the MAP are expected to be $47–$52 million, including $4-$9 million in the fourth quarter of Fiscal Year 2016.

Those who wish to listen to the Company’s Investor Day presentations today and to view the accompanying slides should log onto the Company’s website at and click on the PAREXEL International 2016 Investor Day link under the “Upcoming Events” section at the bottom of the Investors homepage at least 15 minutes prior to the event’s broadcast, which will start at 9:00 a.m. ET. Users should follow the instructions provided to assure that the necessary audio applications are downloaded and installed. In addition, an archived version of the event’s presentations may be found in the Investor Relations section of PAREXEL’s website.

In addition to the financial measures prepared in accordance with GAAP, the Company uses certain non-GAAP financial measures. The Company believes that presenting the non-GAAP financial measures contained in this press release assists investors and others in gaining a better understanding of its core operating results and future prospects, especially when comparing such results to previous periods or forecasted guidance, because such measures exclude items that are outside of the Company’s normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. Management uses non-GAAP financial measures, in addition to the measures prepared in accordance with GAAP, as the basis for measuring the Company’s core operating performance and comparing such performance to that of prior periods and to the performance of its competitors for the same reasons stated above. Such measures are also used by management in its financial and operating decision-making. Non-GAAP financial measures should not be considered superior to nor a substitute for the Company’s results of operations prepared in accordance with GAAP.

About PAREXEL International

PAREXEL International Corporation is a leading global biopharmaceutical services organization, providing a broad range of expertise-based contract research, consulting, medical communications, and technology solutions and services to the worldwide pharmaceutical, biotechnology and medical device industries. Committed to providing solutions that expedite time-to-market and peak-market penetration, PAREXEL has developed significant expertise across the development and commercialization continuum, from drug development and regulatory consulting to clinical pharmacology, clinical trials management, medical education and reimbursement. PAREXEL Informatics, Inc. provides advanced technology solutions, including medical imaging, to facilitate the clinical development process. Headquartered near Boston, Massachusetts, PAREXEL operates in 82 locations in 51 countries around the world, and had approximately 18,450 employees in the third quarter. For more information about PAREXEL International visit

PAREXEL and PAREXEL Informatics are trademarks or registered trademarks of PAREXEL International Corporation or its affiliates.

This release contains “forward-looking” statements regarding future results and events, including, without limitation, statements regarding expected financial results, future growth and customer demand. For this purpose, any statements contained herein that are not statements of historical fact may be deemed forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “intends,” “appears,” “estimates,” projects,” “will,” “would,” “could,” “should,” “targets,” and similar expressions are also intended to identify forward-looking statements. The forward-looking statements in this release involve a number of risks and uncertainties. The Company’s actual future results may differ materially from the results discussed in the forward-looking statements contained in this release. Important factors that might cause such a difference include, but are not limited to, risks associated with: actual operating performance; actual expense savings and other operating improvements resulting from restructurings, including the restructuring activities referenced in this release; the loss, modification, or delay of contracts which would, among other things, adversely impact the Company’s recognition of revenue included in backlog; the Company’s dependence on certain industries and clients; the Company’s ability to win new business, manage growth and costs, and attract and retain employees; the Company’s ability to complete additional acquisitions, and to integrate newly acquired businesses including the acquisition of Health Advances, or enter into new lines of business; the impact on the Company’s business of government regulation of the drug, medical device and biotechnology industry; consolidation within the pharmaceutical industry and competition within the biopharmaceutical services industry; the potential for significant liability to clients and third parties; the potential adverse impact of health care reform; and the effects of foreign currency exchange rate fluctuations and other international economic, political, and other risks. Such factors and others are discussed more fully in the section entitled “Risk Factors” of the Company’s most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q, as filed with the Securities and Exchange Commission, which “Risk Factors” discussion is incorporated by reference in this press release. The Company specifically disclaims any obligation to update these forward-looking statements in the future. These forward-looking statements should not be relied upon as representing the Company’s estimates or views as of any date subsequent to the date of this press release.

PAREXEL International Corporation
Reconciliation of Non-GAAP Measures for Guidance Issued on June 30, 2016
Certain Line Items
(in millions, except per share data) Guidance for the Three Months Ending Guidance for the Twelve Months Ending
June 30, 2016 June 30, 2016
GAAP Measure   Adjustments Non-GAAP Measure GAAP Measure   Adjustments Non-GAAP Measure
Direct costs $ (1.6



(a) $ (3.4 ) (a)
Gross profit $ 1.6 $ 3.4
Selling, general and administrative $ $ (8.7 ) (b)
Restructuring charge $ (6.5


(c) $ (29.9 ) (c)
Income from operations $ 8.1 $ 42.0
Income before income taxes $ 8.1 $ 42.0
Provision for income taxes $ 2.4 (d) $ 12.9 (d)
Net income $ 5.7 $ 29.1
Diluted earnings per common share $ 0.79–$0.87 $ 0.10 $ 0.89–$0.97 $ 2.85–$2.93 $ 0.53 $ 3.38–$3.46
(a) Impact of net adjustments for acquisition- and integration-related charges in our PC segment
(b) Impact of net adjustments for acquisition- and integration-related charges, including the revaluation of earn-out contingent consideration liabilities associated with certain acquisitions
(c) Severance, facility costs and changes in estimates related to the Margin Acceleration Program
(d) Tax effect on non-GAAP adjustments
PAREXEL International Corporation
Reconciliation of Non-GAAP Measures for Guidance Issued on June 30, 2016
Certain Line Items
(in millions, except per share data) Guidance for the Twelve Months Ending
June 30, 2017
GAAP Measure   Adjustments Non-GAAP Measure
Direct costs $ (7.3 ) (a)
Gross profit $ 7.3
Income from operations $ 7.3
Income before income taxes $ 7.3
Provision for income taxes $ 3.5 (b)
Net income $ 3.8
Diluted earnings per common share $3.68–$3.96 $ 0.07 $3.75–$4.03
(a) Impact of net adjustments for acquisition and integration related charges in our PC segment
(b) Tax effect on non-GAAP adjustments


Ingo Bank, Senior Vice President and Chief Financial Officer
Investor Relations, PAREXEL International
+ 1-781-434-4118
Ronald Aldridge, Senior Director of Investor Relations
Investor Relations, PAREXEL International
+ 1-781-434-4753

Release Summary



Ingo Bank, Senior Vice President and Chief Financial Officer
Investor Relations, PAREXEL International
+ 1-781-434-4118
Ronald Aldridge, Senior Director of Investor Relations
Investor Relations, PAREXEL International
+ 1-781-434-4753