CVGR Nasdaq 2.93 record results:
(COMTEX) B: Covalent Announces Record Second Quarter Results
B: Covalent Announces Record Second Quarter Results
WAYNE, Pa., Aug 13, 2002 /PRNewswire-FirstCall via COMTEX/ -- Covalent Group,
Inc. (Nasdaq: CVGR) today announced record financial results for the second
quarter ended June 30, 2002. Net revenue increased 30% to $6.2 million as
compared to $4.8 million for the same quarter last year. Net income for the
quarter increased by 18% to $773 thousand, or $0.06 per fully diluted share, as
compared to $653 thousand, or $0.05 per fully diluted share, for the second
quarter of 2001. The company's operating margin was 20.0% for the quarter. The
level of net revenues, net income and fully diluted earnings per share were all
new record highs for the company.
For the first six months of 2002, net revenues increased 37% to $11.6 million as
compared to $8.5 million for the first six months of 2001. Net income for the
first six months was $1.4 million, an increase of 33% over the prior year.
Earnings per fully diluted share for the first six months of 2002 were $0.11 vs.
$0.08 in 2001, an increase of 28% over the same period in 2001. Based upon these
results, Covalent reaffirmed its guidance for 2002 of growth in net revenues of
30-40% and fully diluted earnings per share in the range of $0.20 - $0.24.
Covalent's liquidity position continued to improve during the most recent
quarter. The level of costs and estimated earnings in excess of related billings
declined by 4% from the first quarter to $9.7 million at June 30. Net days
revenue outstanding, which captures the impact of both amounts due from and due
to sponsors, declined by 29 days from the prior quarter to 117 days at quarter
end. The company had $2.7 million in cash and cash equivalents and no
outstanding debt at June 30, 2002.
"I am proud of the financial results we achieved during the second quarter, both
in the United States and internationally. During the quarter, we closed $9
million in new business, which brings our total through June 30 to $12 million.
Our expertise in the design of complex clinical trials brings true value to our
customers. We believe this expertise will continue to serve the market well
during any period of consolidation within the pharmaceutical industry," said
Kenneth M. Borow, M.D., President and Chief Executive Officer.
Dr. Borow concluded, "Internationally, we made excellent progress this quarter.
We exceeded our mid-year goal to be operating in at least 12 countries in
Western and Eastern Europe, Scandinavia and the Middle East. Our wholly-owned
international subsidiary, Covalent Group, Ltd., had its first profitable quarter
and is expected to generate a profit for the full year 2002. We look forward to
continued growth across the entire company during the second half of 2002."
During the first quarter of 2002, Covalent adopted Emerging Issues Task Force
No. 01-14, "Income Statement Characterization of Reimbursements Received for
`Out-of-Pocket' Expenses Incurred." This new rule requires that we report
reimbursements received from our customers for out-of-pocket expenses, which we
incur on their behalf, as revenues. The associated out-of pocket expenses are
included as operating expenses. These changes result only in the gross-up of
revenues and expenses and have no impact on reported net income.
Covalent Group, Inc. will conduct a live conference call to discuss its second
quarter 2002 earnings on Monday, August 19, 2002 at 11:00 a.m. The call will
include brief remarks by management and a question and answer session. To
participate in the live call via telephone, please call (800) 473-8796. A replay
of the call will be available until August 30, 2002 by dialing (800) 252-6030,
confirmation number 13287784. Access to a replay of the call will also be
available on Covalent's website: www.covalentgroup.com, by the end of the day on
Monday August 26, 2002.
Covalent Group, Inc. is a comprehensive research management and drug development
organization supporting the pharmaceutical, biotechnology, and medical device
industries. Through its consultative, operational and technological expertise,
Covalent Group is a leader in setting the standard in new approaches to drug
development and clinical trial safety. In addition, through its proprietary
TeleTrial(R) interactive speech response and web- enabled system, Covalent Group
is on the cutting edge of advanced clinical trial processes. As of June 30, the
company had a total of 136 employees in the United States and Europe.
This press release contains forward-looking statements identified by words such
as "estimate," "project," "intend," "believe," "anticipate" and similar
expressions. Actual results might differ materially from those projected in,
expressed in or implied by the forward-looking statements. Potential risks and
uncertainties that could affect the Company's future operating results and
financial condition include, without limitation: (i) our success in attracting
new business and retaining existing clients and projects; (ii) the size,
duration, and timing of clinical trials; (iii) the termination, delay or
cancellation of clinical trials; (iv) the timing difference between our receipt
of contract milestone payments and our incurring costs to manage these trials;
(v) outsourcing trends in the pharmaceutical, biotechnology and medical device
industries; (vi) the ability to maintain profit margins in a competitive
marketplace; (vii) our ability to attract and retain qualified personnel; (viii)
the sensitivity of our business to general economic conditions; and (ix) other
economic, competitive, governmental and technological factors affecting our
operations, markets, products, services and prices. Additional information
concerning factors that could cause actual results to materially differ from
those in forward-looking statements is contained in Covalent Group's SEC
filings, including its Registration Statement on Form S-3, Annual Report on Form
10-KSB and other periodic reports under the Securities Exchange Act of 1934, as
amended, copies of which are available upon request from Covalent Group's
investor relations department.
Investor Relations Contact: Thomas Dean, (212) 421-2545
Contact us on-line: www.covalentgroup.com
Covalent Group, Inc.
Consolidated Statements Of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Net revenue $6,195,726 $4,761,702 $11,640,287 $8,516,831
Reimbursement
revenue 1,099,514 369,244 1,883,748 521,246
Total Revenue $7,295,240 $5,130,946 $13,524,035 $9,038,077
Operating Expenses
Direct 3,602,317 2,319,972 6,468,244 4,244,628
Reimbursement
out-of-pocket
expenses 1,099,514 369,244 1,883,748 521,246
Selling, general and
administrative 1,211,351 1,143,945 2,560,328 2,183,545
Depreciation and
amortization 142,729 122,417 289,977 234,683
Total Operating
Expenses 6,055,911 3,955,578 11,202,297 7,184,102
Income from Operations 1,239,329 1,175,368 2,321,738 1,853,975
Net Interest (Expense)
Income 2,738 (44,971) 4,279 (40,937)
Income before
Income Taxes 1,242,067 1,130,397 2,326,017 1,813,038
Income Tax Provision 469,000 477,766 921,476 757,917
Net Income $773,067 $652,631 $1,404,541 $1,055,121
Net Income per Common Share
Basic: $0.06 $0.05 $0.11 $0.09
Diluted: $0.06 $0.05 $0.11 $0.08
Weighted Average Common
and Common Equivalent
Shares Outstanding
Basic 12,584,900 12,388,345 12,543,291 12,354,787
Diluted 13,475,925 12,905,632 13,338,944 12,845,622
Covalent Group Inc.
Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
Assets 2002 2001
Current Assets
Cash and cash equivalents $2,736,658 $3,454,543
Restricted cash 989,219 652,047
Accounts receivable 4,051,051 2,092,854
Prepaid expenses and other 492,680 297,202
Costs and estimated earnings in excess of
related billings on uncompleted contracts 9,669,776 7,317,942
Total Current Assets 17,939,384 13,814,588
Property and Equipment, Net 1,187,073 1,260,197
Other Assets 35,107 38,070
Total Assets $19,161,564 $15,112,855
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $1,965,804 $1,582,248
Accrued expenses 531,704 561,600
Income tax payable - 628,898
Obligations under capital leases 69,217 66,668
Billings in excess of related costs and
estimated earnings on uncompleted
contracts 2,444,790 195,122
Customer advances 3,302,960 2,882,360
Total Current Liabilities 8,314,475 5,916,896
Long Term Liabilities
Obligations under capital leases 27,277 62,325
Deferred income tax 244,225 244,225
Total Long Term Liabilities 271,502 306,550
Total Liabilities 8,585,977 6,223,446
Stockholders' Equity
Common stock, $.001 par value 25,000,000 shares
authorized, 12,617,883 and 12,502,713
shares issued respectively 12,618 12,503
Additional paid-in capital 10,804,200 10,521,132
Accumulated deficit (197,752) (1,602,293)
Accumulated other comprehensive income 6,837 8,383
Less: 10,625,903 8,939,725
Treasury stock, at cost, 12,500 shares (50,316) (50,316)
Total Stockholders' Equity 10,575,587 8,889,409
Total Liabilities and Stockholders' Equity $19,161,564 $15,112,855
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SOURCE Covalent Group, Inc.
CONTACT: Thomas Dean of Covalent Group, +1-212-421-2545
/Company News On-Call:
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URL: covalentgroup.com
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