[PDI LOGO] NEWS RELEASE
10 Mountainview Road Suite C200
Upper Saddle River, New Jersey 07458
T:800.242.7494 F:201.258.8400
www.pdi-inc.com
FOR MORE INFORMATION CONTACT:
Stephen P. Cotugno
Executive Vice President-Corporate Development
PDI, Inc.
201.574.8617
PDI REPORTS $0.40 DILUTED EPS IN FIRST QUARTER 2004
RAISES 2004 DILUTED EPS ESTIMATES TO A RANGE
OF $1.20 TO $1.30 FROM A RANGE OF $1.15 TO $1.25
ANNOUNCES TWO NEW CONTRACT SALES PROGRAMS ANTICIPATED TO GENERATE
APPROXIMATELY $34 MILLION IN REVENUE IN 2004
Upper Saddle River, New Jersey (Monday, May 3, 2004). PDI, Inc. (Nasdaq:PDII) a
healthcare sales and marketing company, today announced its first quarter 2004
financial results and the execution of two new contract sales programs.
Additionally, the Company is increasing its 2004 diluted EPS estimates to a
range of $1.20 to $1.30 from a range of $1.15 to $1.25.
FIRST QUARTER RESULTS
Net revenue for the quarter ended March 31, 2004 was $88.4 million, 30.8% higher
than net revenue of $67.5 million for the quarter ended March 31, 2003.
Operating income was $9.8 million for the quarter ended March 31, 2004, compared
to operating income of $1.1 million for the quarter ended March 31, 2003. Net
income was $6.0 million for the quarter ended March 31, 2004, compared to net
income of $0.8 million in the quarter ended March 31, 2003. Diluted net income
per share for the quarter ended March 31, 2004 was $0.40 versus diluted net
income per share of $0.05 for the quarter ended March 31, 2003.
NEW CONTRACT SALES PROGRAMS
The Company announced that it has won two new contracts in its contract sales
business.
The first contract is with a major pharmaceutical company that is new to PDI's
contract sales services. The contract runs from April to December 2004 and is
anticipated to generate approximately $25 million in revenue.
The second program is a specialty sales team with Novartis Pharmaceuticals
Corporation, the U.S. pharmaceuticals affiliate of Novartis AG. The twelve-month
contract is anticipated to generate approximately $9 million in revenue in 2004
for a total amount of $14 million in revenue through the term of the contract.
Steven K. Budd, President of PDI's Global Sales and Marketing Services Group,
said, "We are pleased to be adding an important new client to our contract sales
business and welcoming back a company with whom we have had a ten year working
relationship. It is a testament to our ability to deliver value for both primary
care and specialty products."
Charles T. Saldarini, Vice Chairman and CEO, said, "We are pleased with our
performance in the first quarter which benefitted from performance incentives
and product royalties. As we have seen in past years, our business model
generates larger contributions in the 1st and 4th quarters due to recognition of
performance incentives earned in these periods. We believe that our business is
well positioned to add value to the pharmaceutical and medical device and
diagnostics manufacturers who are looking to improve the efficiency and
flexibility of their organizations through outsourcing."
WEBCAST CONFERENCE CALL
PDI will conduct a live webcast of its Earnings Release Briefing at 9:00 AM EDT
on Tuesday, May 4, 2004. The live webcast of the event will be accessible
through PDI's website, www.pdi-inc.com and will be archived on the website for
future on-demand replay. For those without internet access, the call can be
accessed by dialing 1-877-423-4030 within the US and 1-706-634-1929
internationally and asking for the PDI Earnings Release Conference Call. The
call will be archived for two weeks and can be accessed by calling
1-800-642-1687 or 1-706-645-9291 and entering the conference ID number 6774940.
ABOUT PDI
PDI, a premier healthcare sales and marketing company, provides strategic
alternatives to the portfolio challenges of biopharmaceutical and medical device
and diagnostics manufacturers. Focusing on two core businesses, sales and
marketing services and product commercialization, PDI leverages its expertise
and commercial infrastructure to maximize profitable brand growth. Manufacturers
choose the relationship which best meets their strategic and financial
objectives, ranging from individual or bundled service agreements to broader
commercial partnerships.
For more information, visit the Company's website at www.pdi-inc.com.
FORWARD LOOKING STATEMENT
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS REGARDING FUTURE EVENTS
AND FINANCIAL PERFORMANCE. THESE STATEMENTS INVOLVE A NUMBER OF RISKS AND
UNCERTAINTIES AND ARE BASED ON NUMEROUS ASSUMPTIONS INVOLVING JUDGMENTS WITH
RESPECT TO 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. SOME OF THE IMPORTANT
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
INDICATED BY THE FORWARD-LOOKING STATEMENTS ARE GENERAL ECONOMIC CONDITIONS,
CHANGES IN OUR OPERATING EXPENSES, ADVERSE PATENT RULINGS, FDA OR LEGAL
DEVELOPMENTS, COMPETITIVE PRESSURES, FAILURE TO MEET PERFORMANCE BENCHMARKS IN
SIGNIFICANT CONTRACTS, CHANGES IN CUSTOMER AND MARKET REQUIREMENTS AND
STANDARDS, AND 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,
2003, AND PDI'S PERIODIC REPORTS ON FORMS 10-Q AND 8-K FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION SINCE JANUARY 1, 2004. THE FORWARD LOOKING-STATEMENTS IN
THIS PRESS RELEASE ARE BASED UPON MANAGEMENT'S REASONABLE BELIEF AS OF THE DATE
HEREOF. PDI UNDERTAKES NO OBLIGATION TO REVISE OR UPDATE PUBLICLY ANY
FORWARD-LOOKING STATEMENTS FOR ANY REASON.
PDI, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
March 31, December 31,
2004 2003
----------- ----------
ASSETS
Current assets:
Cash and cash equivalents................................ $ 74,706 $113,288
Short-term investments................................... 44,166 1,344
Inventory, net........................................... -- 43
Accounts receivable, net of allowance for doubtful
accounts of $1,253 and $749 as of March 31, 2004 and
December 31, 2003, respectively...................... 28,004 40,885
Unbilled costs and accrued profits on contracts in progress 18,603 4,041
Deferred training........................................ 2,100 1,643
Other current assets..................................... 9,080 8,847
Deferred tax asset....................................... 11,046 11,053
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Total current assets........................................ 187,705 181,144
Net property and equipment.................................. 15,724 14,494
Deferred tax asset.......................................... 7,304 7,304
Goodwill.................................................... 11,132 11,132
Other intangible assets..................................... 1,495 1,648
Other long-term assets...................................... 3,901 3,901
-------- --------
Total assets................................................ $227,261 $219,623
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable......................................... $ 8,717 $ 8,689
Accrued returns.......................................... 22,523 22,811
Accrued incentives....................................... 11,093 20,486
Accrued salaries and wages............................... 11,077 9,031
Unearned contract revenue................................ 10,299 3,604
Restructuring accruals................................... 580 744
Income taxes and other accrued expenses.................. 17,305 15,770
-------- --------
Total current liabilities................................... 81,594 81,135
Total long-term liabilities................................. -- --
-------- --------
Total liabilities........................................... $ 81,594 $ 81,135
-------- --------
Commitments and Contingencies
Stockholders' equity:
Common stock, $.01 par value, 100,000,000 shares
authorized: shares issued and outstanding, March
31, 2004 - 14,484,341 and December 31, 2003 -
14,387,126; 161,115 and 136,178 restricted shares
issued and outstanding at March 31, 2004
and December 31, 2003, respectively................... $ 147 $ 145
Preferred stock, $.01 par value, 5,000,000 shares
authorized, no shares issued and outstanding........... -- --
Additional paid-in capital (includes restricted of
$4,955 and $2,361 as of March 31, 2004
and December 31, 2003, respectively) .................. 112,881 109,531
Retained earnings........................................... 35,480 29,505
Accumulated other comprehensive income...................... 54 25
Unamortized compensation costs.............................. (2,785) (608)
Treasury stock, at cost: 5,000 shares....................... (110) (110)
-------- --------
Total stockholders' equity.................................. $145,667 $138,488
-------- --------
Total liabilities & stockholders' equity.................... $227,261 $219,623
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PDI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended March 31,
2004 2003
----------- -----------
Revenue
Service, net.......................................................... $ 88,266 $ 67,511
Product, net.......................................................... 101 34
-------- --------
Total revenue, net.................................................. 88,367 67,545
-------- --------
Cost of goods and services
Program expenses (including related party amounts of
$180 and $73 for the periods ended
March 31, 2004 and 2003, respectively)............................... 61,707 49,881
Cost of goods sold.................................................... 145 62
-------- --------
Total cost of goods and services.................................... 61,852 49,943
-------- --------
Gross profit............................................................. 26,515 17,602
Operating expenses
Compensation expense.................................................. 10,216 8,874
Other selling, general and administrative expenses.................... 6,490 5,833
Restructuring and other related expenses (credits).................... - (270)
Litigation settlement................................................. - 2,100
-------- --------
Total operating expenses............................................ 16,706 16,537
-------- --------
Operating income......................................................... 9,809 1,065
Other income, net........................................................ 318 269
-------- --------
Income before provision for taxes........................................ 10,127 1,334
Provision for income taxes............................................... 4,152 556
-------- --------
Net income............................................................... $ 5,975 $ 778
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Basic net income per share............................................... $ 0.41 $ 0.05
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Diluted net income per share............................................. $ 0.40 $ 0.05
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Basic weighted average number of shares outstanding...................... 14,461 14,166
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Diluted weighted average number of shares outstanding.................... 14,767 14,237
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