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PDI Reports 2009 Fourth Quarter And Full Year Financial Results

Dial-in numbers: (866) 644-4654 (U.S. and Canada) or (706) 643-1203

Conference ID#: 54709533

Live webcast: www.pdi-inc.com

The teleconference replay will be available three hours after completion through Saturday, March 6, 2010 by dialing (800) 642-1687 (U.S. and Canada) or (706) 645-9291 and entering conference ID 54709533. The archived webcast will be available for one year on the Company's investor website, www.pdi-inc.com.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures. A reconciliation of these to the comparable GAAP measures is included as Exhibit A.

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 and marketing expertise. For more information, please visit the company's website at 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, growth and profitability, 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, the failure to meet performance goals in PDI's incentive-based arrangements with customers or the inability to secure additional business. 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, 2009, 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.
    
    
    
    
    
                                PDI, INC.                            
       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)   
                   (in thousands except per share data)              
                                                                     
                              Three Months Ended      Years Ended    
                                  December 31,        December 31,    
                                  ------------        ------------    
                                  2009      2008      2009      2008 
                                  ----      ----      ----      ---- 
                                                                     
    Revenue, net               $24,008   $25,404   $84,871  $112,528 
    Cost of services            16,440    33,593    58,591   108,015 
                                ------    ------    ------   ------- 
       Gross profit              7,568    (8,189)   26,280     4,513 
                                                                     
    Compensation expense         4,710     5,069    22,310    22,838 
    Executive severance              -         -       221     1,237 
    Other selling, general                                           
     and administrative 
     expenses                    4,785     3,898    17,474    16,767 
    Asset impairment            18,118         -    18,118        23 
    Facilities realignment       5,704        75     8,734        75 
                                 -----        --     -----        -- 
       Total operating 
        expenses                33,317     9,042    66,857    40,940 
                                ------     -----    ------    ------ 
       Operating loss          (25,749)  (17,231)  (40,577)  (36,427)
    Other income, net              (10)      263       183     2,841 
                                   ---       ---       ---     ----- 
       Loss before income tax  (25,759)  (16,968)  (40,394)  (33,586)
    (Benefit) provision                                              
     for income tax             (7,312)      (48)   (6,834)      875 
                                ------       ---    ------       --- 
       Net loss               $(18,447) $(16,920) $(33,560) $(34,461)
                              ========  ========  ========  ======== 
                                                                     
    Loss per share of                                                
     common stock:                                                   
       Basic                    $(1.30)   $(1.19)   $(2.36)   $(2.42)
       Diluted                  $(1.30)   $(1.19)   $(2.36)   $(2.42)
                                                                     
    Weighted average number                                          
     of common shares and                                            
     common share equivalents                                        
     outstanding:                                                    
       Basic                    14,227    14,202    14,219    14,240 
       Diluted                  14,227    14,202    14,219    14,240 
    
    
    
                                    Segment Data (Unaudited)     
                                           (in thousands)                
                                                                         
                        Sales   Marketing    PC                  
                       Services Services  Services  Eliminations Consolidated
                       -------- --------  --------  ------------ ------------
    Three months ended                                                   
     December 31, 2009:                                                  
       Revenue          $21,002   $4,712        $-       $(1,706)     $24,008
       Gross profit       5,382    2,427        11          (252)       7,568
          Gross profit %   25.6%    51.5%        -            NM         31.5%
    Three months ended                                                
     December 31, 2008:                                                  
       Revenue          $21,020   $4,384        $-            $-      $25,404 
       Gross profit       4,513    1,310   (14,012)            -       (8,189) 
          Gross profit %   21.5%    29.9%        -             -        -32.2%
    Year ended                                                         
     December 31,                                                      
     2009:                                                             
       Revenue          $73,232  $16,748        $-       $(5,109)     $84,871
       Gross profit      15,691    8,044     2,497            48       26,280  
          Gross profit %   21.4%    48.0%        -            NM        31.0%
    Year ended                                                           
     December 31,                                                        
     2008:                                                               
       Revenue          $89,656  $23,872   $(1,000)           $-     $112,528
       Gross profit      18,390    9,751   (23,628)            -        4,513
          Gross profit %   20.5%    40.8%       NM             -          4.0%
                                                                         
    NM - Not Meaningful                                                  
    
    
    
                         Selected Balance Sheet Data (Unaudited) 
                                   (in thousands)        
    
                                                  December 31,   December 31,
                                                      2009            2008 
                                                      ----            ---- 
                                                                           
    Cash and cash equivalents                      $72,463         $90,074 
                                                                           
    Total current assets                           $96,511        $112,999 
    Total current liabilities                       24,880          31,360 
                                                    ------          ------ 
    Working capital                                $71,631         $81,639 
                                                   -------         ------- 
                                                                           
    Total assets                                  $109,776        $149,036 
    Total liabilities                              $34,886         $41,929 
    Total stockholders' equity                     $74,890        $107,107 
                                                                           
                                                                           
    
                         Selected Cash Flow Data (Unaudited)   
                                    (in thousands)                 
    
                                                  December 31,   December 31,
                                                      2009            2008 
                                                      ----            ---- 
                                                                           
    Net loss                                      $(33,560)       $(34,461)
    Non-cash items                                  23,552           6,522 
    Net change in assets and liabilities            (6,457)         11,948 
                                                    ------          ------ 
    Net cash used in operations                   $(16,465)       $(15,991)
                                                                           
    Change in cash and cash equivalents           $(17,611)        $(9,111)
    
    
    

Exhibit A

Non-GAAP Financial Measures

When we evaluate the performance of our business as a whole, we focus on results (such as revenue, gross profit, operating expense and operating income/loss) before certain types of gains and charges because such gains and charges are not a component of our ongoing income or expenses and/or may have a disproportionate positive or negative impact on the results of our ongoing underlying business operations. These non-GAAP results should not be considered in isolation and are not in accordance with, or a substitute for, GAAP results. Our non-GAAP results may differ from similar measures used by other companies, even if similar terms are used to identify such measures. PDI's management believes non-GAAP results are useful in evaluating the performance of its business; however, its reliance on these measures is limited since items included in or excluded from such measures may have a material impact on our revenue, gross profit, operating expenses and operating loss calculated in accordance with GAAP. Therefore, investors should consider these limitations and evaluate non-GAAP results in conjunction with GAAP.
    
    
    
    
    
     Consolidated Reconciliation from GAAP to non-GAAP ("Adjusted Basis")  
                         Financial Measures (Unaudited)                    
                      (in thousands except per share data)                 
                                                                           
                                       Three Months Ended December 31,      
                                                    2009                    
                                                    ----
                                             Gross     Operating           
                                   Revenue   Profit      (Loss)   Net Loss 
                                   -------  -------    ---------  -------- 
    GAAP                           $24,008    $7,568    $(25,749) $(18,447)
         Operations under                                                  
          terminated                                                       
          contract(1)                1,706       252         252       252 
         Asset impairment(2)             -         -      18,118    18,118 
         Facilities realignment(3)       -         -       5,704     5,704 
         PC Services (4)                 -         -           -         - 
         Tax benefits(5)                 -         -           -    (7,015)
                                   -------    ------     -------    ------ 
    non-GAAP ("Adjusted Basis")    $25,714    $7,820     $(1,675)  $(1,388)
                                   =======    ======     =======   ======= 
                                                                           
                                                                           
                                                                           
                                       Three Months Ended December 31,     
                                                    2008                
                                                    ----
                                             Gross     Operating           
                                   Revenue   Profit      (Loss)   Net Loss 
                                   -------  -------    ---------  -------- 
    GAAP                           $25,404   $(8,189)   $(17,231) $(16,920)
         Operations under                                                  
          terminated                                                       
          contract(1)                    -         -           -         - 
         Asset impairment(2)             -         -           -         - 
         Facilities realignment(3)       -         -          75        75 
         PC Services (4)                 -    10,325      10,325    10,325 
         Tax benefits(5)                 -         -           -         - 
                                   -------    ------     -------   ------- 
    non-GAAP ("Adjusted Basis")    $25,404    $2,136     $(6,831)  $(6,520)
                                   =======    ======     =======   ======= 
    
    
    
                                           Years Ended December 31,      
                                                    2009                  
                                                    ---- 
                                              Gross     Operating           
                                    Revenue   Profit      (Loss)   Net Loss 
                                    -------  -------    ---------  -------- 
    GAAP                            $84,871   $26,280    $(40,577) $(33,560)
         Operations under                                                   
          terminated                                                        
          contract(1)                 5,109       313         313       313 
         Asset impairment(2)              -         -      18,118    18,118 
         Facilities realignment(3)        -         -       8,734     8,734 
         PC Services (4)                  -    (2,534)     (2,534)   (2,534)
         Tax benefits(5)                  -         -           -    (7,015)
                                    -------   -------    --------    ------ 
    non-GAAP ("Adjusted Basis")     $89,980   $24,059    $(15,946) $(15,944)
                                    =======   =======    ========  ======== 
                                                                            
                                                                            
    
                                           Years Ended December 31,      
                                                     2008                
                                                     ----    
                                              Gross     Operating           
                                    Revenue   Profit      (Loss)   Net Loss 
                                    -------  -------    ---------  -------- 
    GAAP                           $112,528    $4,513    $(36,427) $(34,461)
         Operations under                                                   
          terminated                                                        
          contract(1)                     -         -           -         - 
         Asset impairment(2)              -         -          23        23 
         Facilities realignment(3)        -         -          75        75 
         PC Services (4)                  -    10,325      10,325    10,325 
         Tax benefits(5)                  -         -           -         - 
                                   --------   -------    --------  -------- 
    non-GAAP ("Adjusted Basis")    $112,528   $14,838    $(26,004) $(24,038)
                                   ========   =======    ========  ======== 
    
    
    
    
    Exhibit A (continued)
                                                     
                                   Three Months      Years Ended    
                                  Ended December     December 31,   
                                  --------------     ------------   
                                   2009    2008       2009    2008 
                                   ----    ----       ----    ---- 
    GAAP EPS                     $(1.30) $(1.19)    $(2.36) $(2.42)
         Operations under                                          
          terminated                                               
          contract(1)              0.02       -       0.02       - 
         Asset impairment(2)       1.27       -       1.27       - 
         Facilities                                                
          realignment(3)           0.40       -       0.62       - 
         PC Services (4)              -    0.73      (0.18)   0.73 
         Tax benefits(5)          (0.49)      -      (0.49)      - 
                                  -----    ----      -----    ---- 
    non-GAAP ("Adjusted                                            
     Basis") EPS                 $(0.10) $(0.46)    $(1.12) $(1.69)
                                 ======  ======     ======  ====== 
                                                                   
    (1) - Represents the amount for which no revenue or gross profit was 
          recognized on a GAAP basis due to the credit provided by the 
          Company via an amendment to an existing fee for service program in 
          connection with the promotional contract that was mutually 
          terminated in April 2009. 
    (2) - Represents a goodwill impairment charge or approximately $8.5 
          million related to annual impairment testing and an other 
          intangible assets charge of $9.6 million at the Pharmakon business 
          unit. 
    (3) - Represents charges related to exiting the Company's Saddle River, 
          New Jersey facility and down sizing its Dresher, Pennsylvania 
          facility and impairment charges for furniture, leasehold 
          improvements and office equipment at these facilities related to 
          our cost savings initiative. 
    (4) - $10.3 million represents the 2008 accrued contract loss from our PC 
          Services segment in connection with the product commercialization 
          contract that was mutually terminated in April 2009.  In connection 
          with the mutual termination, an existing fee for service contract 
          was amended in April 2009 resulting in a $2.5 million reversal of 
          estimated accrued contract loss. 
    (5) - Represents a $3.3 million monetized benefit related to the November 
          2009 Worker, Homeownership, and Business Assistance Act (the "Act"),
          a $2.2 million reversal of uncertain tax provisions in connection 
          with the Act and a $1.4 million reversal of a deferred tax 
          liability due to the goodwill impairment charge described in (2). 
    
    
    
     Segment Reconciliation from GAAP to non-GAAP ("Adjusted Basis") 
                      Financial Measures (Unaudited)                 
                              (in thousands)                         
                                                                     
                                  Three Months Ended December 31,    
                                  -------------------------------    
                                     2009                2008 
                                     ----                ---- 
    Product Commercialization           Gross                Gross   
     Segment                  Revenue   Profit   Revenue     Profit  
    ------------------        -------  -------   -------    -------  
    GAAP                           $-       $11       $-    $(14,012)
         PC Services (1)            -         -        -      10,325 
                              -------  --------  -------    -------- 
    non-GAAP ("Adjusted                                              
     Basis")                       $-       $11       $-     $(3,687)
                                   ==       ===       ==     ======= 
                                                                     
                                                                     
                                                                     
                                                                     
                                    Years Ended December 31,       
                                    ------------------------       
                                    2009                2008 
                                    ----                ---- 
    Product Commercialization           Gross                Gross   
     Segment                  Revenue   Profit   Revenue     Profit  
    ------------------        -------  -------   -------    -------  
    GAAP                           $-    $2,497  $(1,000)   $(23,628)
         PC Services (1)            -    (2,534)       -      10,325 
                              -------  -------   -------    -------
    non-GAAP ("Adjusted                                              
     Basis")                       $-      $(37) $(1,000)   $(13,303)
                                   ==      ====  =======    ======== 
                                                                     
    (1) - $10.3 million represents the 2008 accrued contract loss from our PC
          Services segment in connection with the promotional contract that 
          was mutually terminated in April 2009.  In connection with the 
          mutual termination, an existing fee for service contract was 
          amended in April 2009 resulting in a $2.5 million reversal of
          estimated accrued contract loss. 
    
    

SOURCE PDI, Inc.

Copyright 2009 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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