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PRA Health Sciences (PRAH)

Participants
Mike Bonello Senior Vice President and Corporate Controller
Colin Shannon Chief Executive Officer
Linda Baddour Chief Financial Officer
David Windley Jefferies
Tim Evans Wells Fargo
Eric Coldwell Baird
Michael Baker Raymond James
Courtney Owens William Blair
Jack Meehan Barclays
Hong Tran Credit Suisse
Donald Hooker KeyBanc
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2017 PRA Health Sciences Incorporated Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference over to our host for today, Mike Bonello, Senior Vice President and Corporate Controller.

You may begin.

Mike Bonello

Good morning and thank you for joining us for the PRA Health Sciences fourth quarter of 2017 earnings teleconference. Chief will and and discuss results. our Chief Baddour, full-year Shannon, Officer, Financial our Colin Executive Linda Officer; our financial Today fourth quarter

our questions. available Following we’ll for comments, opening be

investor In our is in Investor addition the website. additional portion our press an available of to Relations financial supplement release, information with

our materially remind by begin, may Actual statements. XX-K with include risk to February associated which the our from uncertainties are stated and implied our you the differ or those and risks we statements Before to like on in responses business, factors Annual remarks discussed due forward-looking SEC XXXX. XX, forward-looking results Report that I’d during filed teleconference in may included this on Form with

to over calculated the how would presented GAAP investor our like financial results. measure financial measures our I Please now the update will with We of time in accordance A Colin to investors helpful Our and providing are factors is financial in with complete statements. this call and supplement earnings CEO, in risk our a to call Investor these to note more measures obligation financial press to we the in Shannon. management non-GAAP of time release SEC. are results assume any website. no our comparable forward-looking discussed on understanding measures included Certain GAAP measures. of may available these with be most turn be portion from gain that our that reconciliation filings consistent believe helps viewed non-GAAP and and the updated Relation

Colin Shannon

of currency of quarter million full addition versus Health like joining net a the XXXX fourth fourth quarter am was strong adjusted despite increase fourth an on call of represents the I’d finishing of approximately increased and XX% million increase XX% a is of when sequential Sciences book-to-bill with conference a at basis. to quarter The results. business compared revenue constant XX% year-over-year, on quarter business year-over-year the net our morning. million unusually basis. increased increase $XXX quarter to quarter Adjusted service for another rates, of period $X.XX, for new XX% approximately thank had during awards to Service Adjusted $X.X our year-over-year XX% backlog an and were and approximately has income the approximately the financial XXXX resulted rate $XXX.X last new income constant Good was the record our basis which fourth at new Service foreign new same approximately approximately business revenue, PRA was billion. fourth net representing We in actual fourth revenues Symphony foreign that a for exchange Mike. report XX% and discuss of excluding growth. pleased and double-digit year income, $XXX of I actual exchange you, net approximately currency the at on you, all, per Thank and approximately our quarter. the diluted Net of revenue high awards, million, this XX% of times cancellations increasing X.X net X% $XX to net share of quarter year. XX% a XXXX. a XXXX.

sector. our the new our diversity We the short-term new awards business previous consistent business backlogs The awards with quarters our from be coming sector, pharmaceutical the to of solutions awards nature and coming will XX% be including contracts. reported with and of of approximately from not new segment approximately these data continues and to biotechnology XX% due

X% five well quarter be approximately revenue of XX% with our client base for diversified also clients with approximately top largest client the total representing our representing of total Our to revenue. continues our

trend the consistent continued growth XXXX We of operating and overall strong full-year margins. solid financial growth. improved and results revenue our reported Our

XX% of XX% basis. our growth at full-year and actual revenues approximately billion, XX% actual constant on rates $X.X currency growth approximately got have on approximately representing of service We and an currency Symphony was Revenue constant excluding approximately Health basis.

delighted wide with On forward During XXXX, business to future. a the that has acquisition strategic this We of have We significant Health our look I we well and we variety well our services Symphony provide a we made to that very and to investments allow continued their established in will expanded our clients. growth and that us believe to opportunities believe are on offer offerings. of gone the service foundation performance. acquisition sustainable provide will positioned am long-term

XXXX, by per the During share on are our integration in finalizing our Using integration and the diluted plan XXXX, formally be working end adjusted $X share our we completing anticipating QX per performance be between to we’ll XXXX. share. XXXX $X.XX solid earnings per be of we’ll and

the XXXX of of to As impact of staff provide Tax guidance foreign in clients this new and standard, adopting for our and In our about closing, rates discussed the the continued their thank call. guidance the Health in and revenue Cuts Jobs estimates. to press I entire our will become details Act, impact our Linda Sciences. commitment additional includes later PRA would like the enactment the updated release, exchange

hand in will Baddour, and XXXX. with like who would believe full-year for growth our strong and we Officer, results are financial call Chief the I detail. We go our in results through our are to quarterly Financial strong delighted over more to now financial well-positioned Linda

Linda Baddour

Thank Good everyone. Colin. morning, you,

fourth rates million compared quarter, $XXX.X on the grew currency reported revenue XXXX, quarter same constant actual year. of last For We basis. service for for the our exchange million $XXX.X the XX.X% of consolidated revenues to service a quarter XX.X% at and foreign

staff to midsized pharmaceutical large year. companies. quarter segment actual costs last rates our consistent revenue quarter earlier, million segment biotechnology and small mentioned direct in for basis. hire PRA XXXX fourth the in support fourth fourth excluding revenue Colin Revenue Solutions currency of was increase our continue As direct labor-related with XXXX other our biotechnology quarters. the to in Revenue to XX% XX% $XXX.X as were companies in a $XXX.X Symphony and quarter current from on pharmaceutical Clinical related Total XX% constant all Data our was service XX.X% segment the future compared from the in increase same revenue The Health year-over-year of prior portfolio cost $XXX.X the million companies, XX% at XX.X% costs approximately to from approximately for excluding an and Research increased of foreign the exchange billable primarily Solutions companies, million of approximately approximately Clinical and by studies We segment. derived was our Research $XX.X concentration, the million in for to from we large the XXXX, growth. of Data segment quarter

$XX.X as The offerings. fourth Data basis, service $XX.X of were in million $XX.X in Our the of the revenue This margins leverage SG&A by primarily service continued Solutions foreign is costs compared when expenses higher reported cost direct service decrease unfavorable year. revenue to or selling were million to for currency of the in quarter offerings the included clinical compared service a direct in quarter XX.X% direct XXXX. of segment last to and gross The due our of percentage efforts cost million service in to XXXX decrease research Solutions in cost revenue million increased percentage our compared Total quarter On effectively base to XX.X% to of increase compared the our SG&A revenue revenue a of currency XXXX. constant year. XXXX fourth service an the of quarter in for year-over-year. fourth to Data XX.X% costs quarter XX% segment same $X.X direct of our total last service our of the functions. same related administrative as effect is

primarily fourth During the XXXX, earn-out acquisition. fair $XX.X related of of of million expenses incurred to associated in value transaction-related liabilities our we the were changes quarter with which

our year-over-year period During secondary quarter expense costs. XXXX, the income XX.X% net compared fourth we to XXXX the items costs per the quarter excludes quarter incurred operating related the of which year. Adjusted $XX from $X.XX to options which period to related to were net XXXX. These certain XX.X% per primarily at November also stock-based grew the changes fourth last of share nonrecurring of quarter per XXXX, does offering. million share to million vesting certain fluctuation necessarily in Adjusted $XX.X compensation diluted performance-based and in share of in of income, our the not results, transaction-related fourth increased correspond $X.XX to in same

XX% comparable for prior the service exchange provided million XX% For actual months million approximately months approximately at ending on year-over-year finished by cash $X.X by $XX.X for the PRA billion at We operations excluding Cash XX% increased on revenues $X.X revenue, actual revenues basis. constant of foreign Health, constant foreign provided and same basis. XXXX, $XXX.X grew operations the to approximately consolidated currency the approximately currency XX, of of XXXX. was our the rates period compared December rates XXXX, exchange in to compared billion year with a service Symphony ended year. three XX

was The increase months working reduced payment result million million XXXX, our of our optimization interest an compared XX provided same the ended of XXXX. of by $XXX flow operational operations to in increase cash the for cash $XXX.X December in the For XX, capital. period was operating performance, and

XXXX our at information the the investment expenditures to December XX, our compared XXXX. to to our same Our in XXXX. facilities, Capital and our for XX, fourth expenditures December infrastructure months versus days December outstanding million increase at compared technology, Capital compared XX period in quarter net million days to XX, the XXXX months reflects were XXXX. $XX.X for for continued XX, was XX support growth. days expenditures for our XXXX expanding December $XX the The ended ended million $XX.X sales enhancing of capital current million were XX XX $X.X

$X.XX at million cash debt compared was overall cash increase quarter, $XXX.X subs. of fourth to Net at is Our in cash total XXXX. $XX.X was as XX, debt attributable equivalents defined the our was at which December XX, recent outstanding, end by XXXX, related million $XXX.X acquisition. million billion to borrowings held to foreign debt less The and net our our of December balance

quarter to our During retire able in senior were we XXXX. expense of XXXX, and notes will which the reduce our interest call fourth

entered order rate we in XXXX, variable January new minimize interest swaps in rate debt. to to two into our addition, exposure In

our quarters with were earned in and Regarding revenue XX% our expenses consistent in December XX% At dollars XXXX, total U.S. the revenue, our revenues denominated were were which concentration service America. consistent is North and levels. service XX, prior of XXXX our XX% of of geographic U.S. dollars of with in quarterly denominated

denominated is be have hedged. revenue currently denominated of continues GDP the approximately GDP. are in naturally in while to exposure X% We GDP, of expenses movements euro X% in do Our our to exposure at our

We ways are currently this reduce working on to exposure.

XXXX. Now, let’s guidance for our turn to

As we from our statement. life progress respective and portion our obligation. forecast the adopting current fees amount to difference reimbursable create magnitude the fee on reimbursement ASC investigator relative revenue investigative ASC XXX. our discussed amount for recognize grants requires the dependent financial revenue are percentage and of the service press the out-of-pocket release, completion revenue cost between the customers cost inclusion and in reimbursable out-of-pocket the cost of apply variability the are performance timing the timing X, service investigator as receive calculation project in accounting revenue, we and difference January our effective the The and to the and progress compared of XXX project. accounting one over we entitled provision to compared of is of that of of of to the The our to a this may we of

ASC net Although, GAAP a on or a adoption to our not income, net per impact material have expect XXX guidance. current the do adoption a actual our differ revenues, of income adjusted will future results will on impact update related have earnings material we we the from reported Should share. our expectations,

and growth ASC currency billion $X.XX of representing growth XXX. billion estimating as between are between XX% excluding and to reported the impact XX%, XX% XX% and service of of revenues constant We $X.XX

to mentioned, reprioritizing which cancellations were mainly in due had at As plans. pharma drug were we negative of Colin client cancellations, a growth still unusually the our XX% these Despite development XXXX to fourth organic on revenue XX% for Unfortunately, of of start to high these beginning and XXX. the one quarter projecting growth the the of their currency impact year. XXXX, we ASC constant large due revenue are studies had our excluding of impact

XXXX. nicely up book-to-bill double-digit set growth revenue us As Colin during mentioned XXXX our to has strong in deliver

GAAP share diluted and adjusted $X anticipating earnings per share are $X.XX $X.XX per and share per per between share per We diluted share. share between per $X.XX earnings and

XXXX. benefit interest per and year and incorporates Health retirement result of exchange anticipated of Act with expected XXXX a from and in of Cuts approximately rate Act, associated of of which be to $X.XX our expense $X.XX annual Jobs diluted depreciation, related impact to We the as notes, the additional to to the costs quarter Symphony this in expense Jobs and foreign benefit changes from be offset during $X.XX XXXX, $X.XX related $X.XX of of estimate, by made the primarily of and of increased the Japan and share tax levels a anticipate XX%, China, full our effective due the which the earnings investment enacted is income GBP. resulting $X.XX Our to Tax Tax to will was CapEx to of $X.XX reduced senior unfavorable $X.XX changes tax depreciation Cuts to from fourth $X.XX

Our may if estimate rate Jobs are the effective geographic or is changes analysis related of guidance dispersing and Tax we if additional differ earnings issued tax change what or to our the in from from estimated, there if have pre-tax the interpretation, Act. Cuts this

ASC XX% the Regarding growth of $XXX impact currency and excluding reported and XX% service QX representing, of are growth, million impact XX% million between the to organic constant growth XX% ASC as currency we revenues XXX. XX% XX%, excluding XXXX of of to guidance, XXX, constant of $XXX to estimating

as expectations earnings earnings Similar including anticipating GAAP quarterly to dilutive $X.XX. share per XX%. our quarter guidance recurring earnings taxes tax seasonality and This are rate share the diluted employee are Data the to $X.XX sequential depreciation impact Solutions guidance expectations. increase between our income and the related and in meetings. our includes our we impact of previously with effective will internal QX an are first to full-year in organizational negative adjusted with $X.XX that annual share line $X.XX our and expense such incurred in workload, XXXX, meet growth expenses enhancing of staff per per payroll be our and between We expenses ensure to are current and benefit, we Consistent guidance, as around segment, discussed, anticipating

of exchange XXXX. rates exchange rate of X.XX. Finally, X.XX and our British guidance January foreign exchange euro All XX a assumes other rate a of currency pound are as

the consistent Our prepared to prior questions. our may your open with Operator, where bank concludes determining XX years process evaluate use months. expected for we rates several is you questions. line remarks, to we exchange the happy are resources next rate for movements and now This for take

Operator

David Jefferies. [Operator Windley question comes first Instructions] of from Our

Your line is now open.

David Windley

to any you if of your your I Were both around provide adjustment higher your some comments among continues? Colin, around this wondering those. the about heightened am do? or - cancellations, risk able M&A studies you yourself can that assigned some those protect practices potential you against to color as base, typically out added as comments around your a if volatility broadening volatility bit, activity little And client type might of think be you then how had

Colin Shannon

a the in they different back year. There are a coming know not what within but one are. prudently another immune doing Obviously, the to We looks more be when, later decided on actually we reprioritize. a will the cancellation. And our if was study where don’t conduct and and we and the to the it where regulatory and cancellations, as about one of portfolio take study do that’s just it was those reprioritization change client was

be changing in coming future. again. back the It will So that’s

as more we a to to think have few be much have continuing we Dave, protection the few QX, other and expect a studies we up don’t strategies so bit We also through wanted prudent little in of were going and trend. much, well-diversified a There I can portfolio. running quarter. best forward-looking, a particularly QX, our is to reflect were in we saw because

And have quarter, selecting last which all are the clients. when We that And Typically, one fortunate things bit everything. of were accelerating. we enough felt careful about very areas in things other more was - been we in a stuff address the on side. little that in good a number us actually going It and significant go hiring trailing. the things direction just have have I’d got and to where negative about are got has through go not, be we like allowed a of lot say and

of taken that we all, have in all advantage situation. So,

what very And feel roughly so, we strong is growth.

David Windley

points If of labor and cancellations staff I impact and utilization. slippage of on ask could some made on one might one how last the the follow-up you

you I precise this get about in should that to think support little growth of talked and a pace you’re to little remarks, in utilization? slack creates your think bit hire quickly rate. prepared you of utilization how hiring Could and the how levels about about in we continuing hiring the of a more light fact

Colin Shannon

make which right right exactly clients, look expertise, sure we’ll the to utilized, and attrition actually, last have quarters try to therapeutic we When places hiring changing all just noticed time. number our is of portfolios to of slowed been we country get that rate. way not we right of for attrition what’s so we the in at are what our rate the our actually hire obviously area normally, and but never know in of hiring, the our the always people And has try little down. a the of are has going heads, try be key to Well, at because we

slippage of Sometimes, sync that we a periodically. and that out of little little address here. there’s gets then bit bit a of Obviously,

and the to waiting. We opportunity given reassess. just have us had projects some That’s some cancellations

lot earmarked be and will people actually that just with - to the highest starting size adjust the coming when when hired of number We’ll is studies be we’ll for ready Our for on and these team new we so were get later are ready. that could the a on. resolve clients board,

Operator

next comes Fargo. Tim of question Our from Evans Wells

Your open. line now is

Tim Evans

margin I with up then something trying Linda, of XX% revenue, And of be we under was A, be that lower way then just being at right look materially year. to could the an EBITDA should I what the is help about margin in for moving you might XXXX. maybe in the other us was on all like? guess, parts quarter margin is not, full that on kind any I was triangulate what would below-the-line XXX items, the out some up model thinking that on to through the thinking triangulate to expense EBITDA that of like meaningfully expense look what And you’re and for first kind to interest the the how compares with for coming ASC factored what year of if it? to with with other EBITDA about us the into going that XX% help stepping and better

Linda Baddour

in On between but year, XX% way down, the for and to somewhere - are right adjusted for to builds year. moved, the XX% It’s your on XX% XX% quarter. it it you and close It is the begins point. the all the QX margin, It’s fourth you XX% EBITDA then and the almost said. as

fact unusual depreciation - best it. year. we the much is except that’s the increased our So, look expense have over - And nothing to the the got below way where for at line, last

the million for $XX so closer it’s And year. to

Tim Evans

the phenomenon of know talked the really some with the QX, saw I because year. EBITDA or margin is in just about seasonality is kind on same there on last just business? the Dave, this that year, of you we to ramp And dynamics that the

Linda Baddour

to It’s related primarily the seasonality.

XX% in we extremely We these which are all meeting also to where important years, PTO two accruals and they so that sales enormous are expense payroll clients do a that us. have we throughout your got in, off we summit at to. your our it’s with the then company. pay valuable we you’ve business. do an And think a have got very, we and of our meetings payroll at combine that January to very We we But corporate-wide meeting, R&D invite dividends then, course, the of kick both taxes,

your with hire extent, mentioned, business time have have maybe for the then, in hiring. beginning, our evaluating the a we we lesser we segment, Solutions And slowing particular of quarter you looking finally, is it to areas very still as areas, have slow that QX and to - unit. Colin movement - other up a in any So, that a primarily are we then in are profitability the But, is affects certain profitability. big actually, also business, in at down again, may there the Data and in

Tim Evans

versus on basically we core you point, real Last quick to consolidate the were saying the decided maybe some were you the breakout forward, think I EBITDA CRO going some Solutions you color some EBITDA to margin. with stick get At question, on segment just going point? would Data at EBITDA. Have EBITDA or some get

Linda Baddour

recall we ever I don’t would saying that of our… get segment No, new breakout

Colin Shannon

reporting will be with idea, the think, And are first is I’ll that we requirements don’t for And we did Tim, time nothing see EBITDA going for because year, our saying there see to some would forward. very to information to and you when else the the are much intend there’ll run give obviously, just we be I for that everything. way going about integrated consolidating but breakout. short we we business. you it’s we And first be year, publish all the some a

Mike Bonello

when Tim, for segment margin that to those And, both you’ll we’ll see broken of our segments. down separate XX-K disclosures file we have gross

Operator

Baird. Our next Coldwell of Eric question comes from

line now open. is Your

Eric Coldwell

the in we I have this They Symphony, think direct. about in more be $XX addressed did ways, quarter. but different On million I’ll

million maybe it’s Should they had off massive guided we sure quarter, of we not were a up given question growth is am shooting also space fourth massive but for or pretty sustainable pretty our upside. how quarter quarters so My model the not that, they that XXXX? midpoint, a to can is had big I of for. obviously the XXXX earn-out You at throughout the what $XX that [ph] step just this Honestly, such make in year?

a just am that how full-year I sustainable Thanks. on basis. So, trying is to out figure

Colin Shannon

Eric, of can a quarter it. outperformance. best and seasonal the Obviously, is sure. quarter that’s months and every the you we their it very last business. fourth seasonal. was and year. gauge that. pleased Well, The is at is fourth of the the this quarter, are very best month quarter are year, It to multiply by It take during sustainable How four, the for try up we to ramps very

Our a towards clients most the typically will of at be year. buying of data the end

the got year And see you’re obviously the to time. we lot we we are excited is we for have budget and going we synergies saw hopefully how all same but not them impact year. Obviously, as help now, integration pretty said, a and tentative plans, of - always actually that first turnaround a year our going more through are accelerate see And see get a year, fourth reasonably the throughout the of so over in can to are up and before of QX next we I the operating saw it ramp should a prospect going good we the outperformance working you following can steadily that. full we quarter maybe with know forward, see time. XXXX, - this year them even to but we was

Eric Coldwell

you quarters closely operations? about on next how think over clinical your detail the the are four to And to the aligned as we integrate any bringing business? Colin, additional you can what this Maybe steps plan more you us give

Colin Shannon

took produce step slower X. just got we all a traditional through Well, as revenue we even synergies creating we pieces have utilize a a was one about that This We revenue do was synergistic always cost-cutting new groups pharma We taken QX, we models to pace opportunities. analysts little this see our are By more of and and can better And by lot we save bit how our lot data with can opportunities. big pieces of a of to X, of consultancy I can our recognitions January help different be just cost. in revenue data utilizing we with a January mean their of leverage for biotech. whole the we’ll the looking look number our data PRA’s costs, was never are running capability make the over streamlining we extra we company to over as to were working actually of rebuilding see savings. over models. the Then as some end financials. The all. of

at is why going So we’ll with year slowly little it during and interfere it deliberate these a want which we be much earn-out the more be very doing don’t Obviously, stages. during I the to to that are year, taking looking a fashion. bit in

the now end that, slowly that accelerate but obviously We year the we’ll to by will, want cautious capacity complete that’s have in we very but just are one. it up of just that and treading we be with it, why we

Operator

comes Michael Raymond question of next Baker from Our James.

open. Your line is now

Michael Baker

As business? from if to identified the you’ve this point wondering uniting I conversation, last at was the CRO a Symphony with deliverables core follow-up just customer specific

Colin Shannon

leverage book our our are clients data getting of of because be able to to Symphony. from There we going some business, switching and have been, to are yes, over

our So, been are part excited And is we approach. out that. actively do we selling it’s with that we how integration but not of something our have going plan that and yet,

it Symphony’s we we probed that, as yes, But - you, using with on yet. we have start closer to our other are are clients the I’ve some got marketing since by of not very that pleased really, than we So, relationship we to well, say, data. want have pressed been said,

Michael Baker

you some Can your or your remarks, expanded service of that in prepared offerings. that on some color And happened of give occurred on kind indicated then what’s you’ve us front? you

Colin Shannon

out health a that access patients and with helps has mobile given a models. X, us added leased becomes the we into data. capabilities and to are real-world which platform when type data, service. obviously, of acquired It other we Parallel Well, to move economics, evidence us and have wider more collect offering There’s those we like

it and expansion, gives us that clients. solution complete our offering for obviously end-to-end are we So, a

we’d be that. with And so, working

offering good embracing So, yeah, and pretty about service we technologies. overall, our our new feel using

Operator

John Our next comes from question Kreger William Blair. of

now line Your is open.

Courtney Owens

Owens. Kreger. on This I Courtney for is am John

first That’ll of end to by you kind just kind are question, kind if your of speak our leverage be Thanks. can So, goals of of XXXX? for what great. the

Colin Shannon

We obviously, debt make to in but and year. we million $XXX between to have are range make, payments that make mandatory the million of have somewhere - we we during $XXX the to expecting worth of - payments hoping are somewhere

Courtney Owens

And then just kind to kind hiring. of jumping back of over

of like in you past like pick-up that over kind or of or inflation trends or the seen any have kind you’ve months XX different that kind wage Thanks. seen any so? of So, anything

Colin Shannon

we obviously was countries XX% there’s we obviously, careful that excessive. high inflation, There’re very be to adjust. where Latin in that you’re increase have got America XX%, watch seeing some to have get Nothing you that which and where, felt particularly in we salaries,

not, of other in for So, we countries the all the than and inflation work that. all we we we for and obviously XX monitor would which model indices of

to retain that sure our staffs. Our we make goal is

saw has take got we a to every appropriate And actions. been inflation and anything significant have that watch change. country’s We rate have not

high pleasantly quite been as been not the have surprised it wage in is inflation we as past. fact, has that In the

Operator

question Meehan of comes from next Our Barclays. Jack

line now Your open. is

Jack Meehan

Symphony, six this segment just to updated through intended adding on for to you on wondering continue So, weigh of to could had thoughts I to house business? M&A how it I your follow-up if some and want in grow level this you’ve on that now you desire was in months,

Colin Shannon

there, imagine are excited very We you would as be it can acquisition.

word to allow because, got have to only are at the increase lots want service starting just the we of going are offerings mouth, excited planning to to at plans, looking we business to the point obviously, how to the to we manage integration we go to grow we goes integration distracting we of plan just our of well. the without internationally, and want We them But start continue them. getting got actually and are they’re

streamlining and of are better to we through the something we of So, our planning it the forward producing natural a the combining seems and a the and QX, and the time I year’s clients. and to effective know talents more offering through looking to organizations both bringing are start

there’s way looking it. the we are with add, we’ll opportunities pleased So, and be certainly it’s to going very if at

Jack Meehan

qualitative on front full great. versus there FSP you trends terms just noticed either any And quarter. in new Were would and the commentary the business service any be of just in

Colin Shannon

Typically, year. book normally It of when look at volumes, of little as RFP we rest - picks a the our business our bit lower QX go the through. than we is up

last it’s very with compared So, comparable. year, so

model. is the we are nothing that volume we seeing Most registration the traditional seeing so, product is are And in there RFP different. of

a that But what opportunities. of similar process. of the are to is last sale couple there’s very consultative we have over progress We a of services. nice been interesting board, we seeing happen for years, long always actually. quite in have But are are we our They bumps got a a strategic our sales and that in of seeing early - always slow period development in across couple seeing much solutions. seeing we opportunities are And the good time couple

Operator

of question of next de America. Bruin from Our comes Derik Bank

Your now is open. line

Unidentified Analyst

This XXXX Would under old is willing [ph] provide Swann XQ the revenue for and revenue be standard you Derik. XXXX? guidance to for

Colin Shannon

We will be providing Swann. that

financial because We disclosure in basis that are on modified include to are statements. adopting prospective required our we a

able see be will you So, that. to

Unidentified Analyst

So, the filing? you’ll in providing be that

Colin Shannon

XX-K. are filings. in filing and Yes, the in but future our in we’ll be that today, disclosures, our our one including XX-Q our Not we

Unidentified Analyst

year? magnitude we about the this How cadence details should of a guess different I And reimbursable question way expenses or think us is, seasonality of those? give would or on perhaps throughout you expressing the

Linda Baddour

I If my of excluding XXX growth of I of the to call currency that the you exclude from organic my constant the on XXX. you impact did XX% provide impact to did for earlier? Were XX% guidance Because ASC that ASC today, you’ll listen remarks provided back see QX.

the It’s And year. gave our results from was XX% then be for the for that you so, you full I growth. year. Obviously, able from guidance. And Yes. that last QX to calculate to should XX% just the

also XXX. So, excluding was that ASC

calculate that. to You should be all of able kind

Unidentified Analyst

And should we the for think clarification. how about… Thanks

Linda Baddour

you just under tell your requirement analysis, And to during old a can all companies be there able what would so to reiterate, that revenue have provide XXXX, method. the is that that been

Unidentified Analyst

paid XXXX refinanced a net we little expense that how the interest of and it? some debt about should given And of down think bit aspect also for you’ve

Colin Shannon

million between I $XX in be $XX and that it roughly would total. should think million

Operator

next Wright Our question Credit Suisse. comes of from Erin

is now line open. Your

Hong Tran

for on Erin. Thanks for This actually Hong taking question. our is

priorities a that you talk to sort your that of deleveraging capital Just IT Can sort mentioned in you deployment quick about be whether addition in one. further XXXX, of into of heading way some acquisitions, the investments, earlier? or tuck-in

Colin Shannon

just continued in investment there’s No, IT. our obviously, we -

to in year. see a of middle where we We implementation some are this point some systems want the of at

equipment bit. some and IT our because we our got new had have little and bulk you slow of new earmarked. of and that expenditures of down the like things of that’s know, other office growth, to these As the a we impact had capital and furniture offices, delay we to systems But than

or the Regarding can looking to offerings service prove into we a M&A, are and to tools some that always business where internally we our we should obviously and offering. potential better initiate where we see of it can our got utilize deliver have

of but of that down happen If couple there’s whether to are fruition. a But of it that Mike starting it’s got to to nothing scale. a have there interesting just mentioned. the We hard see beginning things that the at maybe will few or as ideas, nothing come happens, off not. be to exciting continue we’ll year, But massive

Hong Tran

the FX Thanks. you And on disclose then just a Linda. will what quick be follow-up year? expect by for chance, impact Did you

Linda Baddour

am gave we No, I we $X.XX we did not the provide not. but We are sorry, to did that $X.XX. them. assuming, rates you

Colin Shannon

$X.XX to foreign mentioned. exchange Linda $X.XX of impact, unfavorable

Operator

KeyBanc. Donald comes from [Operator of Our question Instructions] Hooker next

now open. is line Your

Donald Hooker

been questions asked. lot So, a of have

and in playing, there’s PRA there. there. there going interested and on think China a drug kind increasing I you there terms interested where was is I mentioned give So, kind update and Japan an particularly you was of in I just of China one I us China, in can investments and about you in know with I have how relationships growth of you how domestic do do obviously, established lot of you see companies are mean,

view So, curious and Thanks. PRA’s your of positioning?

Colin Shannon

with then changed you and we great private. they a venture and as joint WuXi Well, direction they know went had before

own Our operation our want in insisting have for have China. been they us to clients that

there. have hundred would building few a like people infrastructure. out. But we we stronger have to have that We been So, a do

our Chinese assist operations growth we just so, the region. that’s of China going in And to our a added and leader new for

still been looking cultural that would are a find we long acquire opportunity. that identify we are as we lot our needs, cetera. something - as - meets there not if We can - the right an to has opportunity But there’s et met we’d

However, - to to in to if continue something taken arise look Japan is Otherwise know that over with build organically. the you at. able was out JV a we’ll have invest and Takeda. then just as And get we

we within Japan build to current additional an We to that experience, that, help have sort still see a happen there some people we needs, that’s infrastructure. during own intend brought for CRO But that will other that Japan. out as have to XXXX. use working an our experienced so happening where future, foreseeable investment We our actually touched clients and meet that with continue the business we we use transition, of anticipated other partnerships we with within

Donald Hooker

the sort versus, Mainland follow-up, competition last - there nature What the of China interested your thank major Just curious in international when is But mean, the companies, just you the you I the do drug into and anything domestically in a environment, quick the see - you obviously, of nature of comment. notable? get with change in CROs? for other China, the you’re competitive

Colin Shannon

the to of really we clients are are as more concentrating doing within China, instead of local on looking working - China work needing part build with large then solution. out We global

- eventually have speaking be that type for different environment country. compete It’s on you’re to the lower-cost they the of a and an to We working capabilities English sure and the such build, wouldn’t want international type difficult And everybody the work. able which got so, meet is we always English-language environment, standards. make and type a of where language of local we when big in probably

out As we the we excited In you talked the there. opportunity of whether difficulties But can a of imagine, on we out own lots interest. a some where, meantime, an together to have of to - that there’s can build got something our continue prospect we that But by have that just way, got it’s to and with couple we we pursue get don’t got that we’ll growth. organic have companies know. solution but are

Operator

question follow-up have do of Windley we a David from And Jefferies.

is now line Your open.

David Windley

FSP issues the are to from that Thanks. smaller that and the of that influencing about mid-biotechs is Colin, financing think think you primary progress versus mix and more threads. - kind The trying then, come am different will mean, I of several biotech. popular you back and bookings or the guess influenced here. and strong all on I thinking am flowed wanted to a I first I to question if was in you’re maybe a pharma a and just those popular on how service, full commented about I about event talked FSP guess what the that. to how and the a might to FSP quarter I understand full have of has large And demand or renewal seeing quarter on that you and service - that that fairly the much remembering event in being dynamic quarter. fourth more large wanted also fourth among

Colin Shannon

But bookings. mentioned large of materially we the takes our opportunities where Dave, slow flow. that as to clients. it in And view renewal. within consulted the bond was new strategic occur and much nothing are RFP sale, event it, product bookings you are a factor typically client know affects I the that fourth only solutions, quite And to a strong then, where more there’s really account the that’s getting that materialize. case That’s take is as out while business. our really quarter of registration a we months we swing had of piece XX And our so

the board really don’t though across Looking I see…

Linda Baddour

primarily Well, related growth. And full service there. but the the to growth we still growth Strategic primarily Solutions the have from is in in is division, growth our XXXX

Colin Shannon

I what was looking Linda say this. to I on could see to

David Windley

companies So, a moving that are number large toward fact suggests my diligence FSP. in of pharma

then opposing But was full more toward R&D two. large FSP. so inclined a what more winning slightly on other those mid-clients full could between and tailwind trends. was And create I those from shift - pharma, are hand, spending that the And small the mix more like funding perhaps so and it kind that growth drive of could your figure stronger to services there’s that to and fair? sounds Is two trying equilibrium service, of out is or within

Colin Shannon

feel and our say a pretty got individual strong position that’s in both we us offerings right fair. allows elements good would in client. I I the to where think that for just we And have mix get

really help approach, need we work if they hybrid realign. with them and them assess can we a needs, So, their

So, kind one they them. can there all then in actually fits eggs situation. size we get achieve, basket of them to with no type of And want flex what really what one there. about do to talk We all or can is for and OpEx it to

David Windley

And last then question.

the seeing good. clearly in seem landscape in if I wondering any pretty still of you It changes would that much feel am You the same? position post are continuing to things strong competitors, very bookings. are or go-to-market very light competitive is your in competitive changes strategies, if of

Colin Shannon

at watch. through RFP any from Obviously, something point, not seeing anything Dave. volume trends it’s see we the that’s am or filtering of trend. to I discernible type this that’s And anything Difficult a

seeing not so Our win am rate change. is any I still pretty substantial consistent,

are moment, So we not seeing our competition, anything mean, the I we but that’s… underestimate never at

Linda Baddour

anything no unusual pricing like that. or Threatening or

Operator

would ladies to does the like Shannon, remarks. any Thank conclude I Colin you. question-and-answer and this President call for over session. our and turn gentlemen, CEO, And further now to back

Colin Shannon

everyone our in you call participating thank today. for Well,

to have If questions, additional rest We you Thank contact feel of your free you a you. great have please us. any hope day.

Operator

in This gentlemen, conference. program. today’s today’s for and thank Ladies concludes participating you

great You have disconnect. a day. Everyone, all may