SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 13, 2001
---------------
PROFESSIONAL DETAILING, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 0-24249 22-2919486
- ---------------------------- ------------------------ --------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
10 Mountainview Road,
Upper Saddle River, NJ 07458
- ------------------------ -------------------------
(Address of principal (Zip Code)
executive office)
(201) 258-8450
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code:
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Item 5. Other Events
On August 13, 2001 the Registrant issued the following press release:
"PDI REPORTS SECOND QUARTER 2001 FINANCIAL RESULTS
Revenue of $143.9 million; Operating Income of $6.4 million; and Earnings of
$0.31 per share
Upper Saddle River, New Jersey (Monday, August 13, 2001). Professional
Detailing, Inc. (Nasdaq:PDII) today announced revenue, operating income, net
income and net income per share for the quarter and six months ended June 30,
2001.
Quarterly Results
Net total revenue for the quarter ended June 30, 2001 was $143.9 million, an
increase of 89.9% over net total revenue of $75.8 million for the quarter ended
June 30, 2000. Net product revenue was $79.2 million and was zero in the
comparable prior year period. Net service revenue was $64.8 million, 14.5% less
than net service revenue of $75.8 million for the quarter ended June 30, 2000.
Operating income was $6.4 million or 19.2% less than operating income of $7.9
million for the quarter ended June 30, 2000. Net income was $4.4 million, 8.3%
less than net income of $4.8 million for the quarter ended June 30, 2000.
Diluted net income per share for the quarter ended June 30, 2001 was $0.31
versus $0.35 for the quarter ended June 30, 2000.
Year-to-Date Results
Net total revenue for the six months ended June 30, 2001 was $317.0 million, an
increase of 115.5% over net total revenue of $147.1 million for the six months
ended June 30, 2000. Net product revenue was $174.1 million and was zero in the
comparable prior year period. Net service revenue was $142.9 million versus
$147.1 million for the six months ended June 30, 2000. Operating income was
$23.1 million versus $16.7 million for the six months ended June 30, 2000. Net
income was $15.3 million versus $10.5 million for the six months ended June 30,
2000. Diluted net income per share of $1.08 for the six months ended June 30,
2001 was 38.5% higher than diluted net income per share of $0.78 for the six
months ended June 30, 2000.
Charles T. Saldarini, Chief Executive Officer of Professional Detailing, Inc.
commented, "We are very pleased with our results for the second quarter which
reflects the current dynamics of the fee-for-service industry and the increasing
emphasis and investments that we are placing on our current co-promotion and
commercialization agreements."
Recent Developments
On August 8, 2001, Bayer Corporation announced that it was voluntarily
withdrawing Baycol from the U.S. market. PDI confirmed that it has an agreement
with Bayer, pursuant to which its sales force markets three different products
on Bayer's behalf, including Baycol. Based upon PDI's most recent discussions
with Bayer, Bayer has informed PDI that it has no present intention of modifying
its contract
2
with PDI at this time, although Bayer has a contractual right to terminate the
contract upon 75 days written notice.
Webcast
PDI will conduct a live webcast of its Earnings Release Briefing at 9:00 AM EDT
on August 14, 2001. 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.
Company Background & Services
Professional Detailing, Inc. is a leading provider of sales and marketing
services to the United States pharmaceutical industry. We have achieved our
leadership position based on more than 15 years of designing and executing
customized sales and marketing programs for many of the pharmaceutical
industry's largest companies and have long standing relationships with our major
clients.
The Company provides several principal services:
Dedicated Contract Sales Services, in which programs are customized to client
specifications;
Syndicated Contract Sales Services, provided through the Company's ProtoCall
unit, enabling clients to tap into an existing, large-scale sales team for
specific detail positions and periods;
LifeCycle X-Tension Services, provides sales, marketing and distribution
services for companies facing portfolio optimization challenges;
PDI Product Commercialization, provides commercial launch services for emerging
and biotechnology companies to independently launch new brands;
PDI Co-promotion, provides co-promotion opportunities through PDI's existing
sales teams;
Medical Education and Communication Services, provided through the Company's TVG
unit, in which clients can access continuing medical education, Sales Force
Tactical Briefings(TM) and peer to peer promotion; and
Marketing Research and Consulting Services, provided through the Company's TVG
unit, enabling clients to study qualitative and quantitative aspects of brand
performance on a pre-launch, launch and continuing basis.
In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the Company notes that statements in this
release which look forward in time involve risks and uncertainties that
may cause actual results or achievements to materially differ from those
indicated by the forward-looking statements. These forward-looking
statements include any statements relating to increased demand for the
Company's services, expansion of the Company's business as well as any
other statements which are not solely historical. The Company's plans and
objectives are based on 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 the control of the Company. Therefore, there
can be no assurance that the forward-looking statements will prove to be
accurate. The Company's documents filed with the SEC identify important
factors that may cause the actual results to differ materially from those
indicated by the forward-looking statements.
3
PROFESSIONAL DETAILING, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
June 30, December 31,
2001 2000
-----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents ......................................................... $77,408 $109,000
Short-term investments ............................................................ 41,900 4,907
Inventory, net .................................................................... 70,281 36,385
Accounts receivable, net of allowance for doubtful accounts of $2,566 and $250
as of June 30, 2001 and December 31, 2000, respectively ........................ 70,052 84,529
Unbilled costs and accrued profits on contracts in progress ....................... 10,809 2,953
Deferred training ................................................................. 10,645 4,930
Other current assets .............................................................. 2,936 4,541
Deferred tax asset ................................................................ 4,758 4,758
-------- --------
Total current assets ................................................................. 288,789 252,003
Net property, plant & equipment ...................................................... 14,332 9,965
Other investments .................................................................... 1,862 760
Other long-term assets ............................................................... 7,504 7,497
-------- --------
Total assets ......................................................................... $312,487 $270,225
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .................................................................. $42,921 $31,328
Accrued rebates and sales discounts ............................................... 53,561 24,368
Accrued incentives ................................................................ 20,748 19,824
Accrued salaries and wages ........................................................ 7,244 6,568
Unearned contract revenue ......................................................... 21,265 23,813
Other accrued expenses ............................................................ 11,669 25,382
-------- --------
Total current liabilities ............................................................ 157,408 131,283
-------- --------
Long-term liabilities:
Deferred compensation ........................................................... 169 169
Deferred tax liability ............................................................ 663 663
Other long-term liabilities .......................................................... -- --
-------- --------
Total long-term liabilities .......................................................... 832 832
-------- --------
Total liabilities .................................................................... $158,240 $132,115
-------- --------
Stockholders' equity:
Common stock, $.01 par value; 30,000,000 shares authorized; shares issued and
outstanding June 30, 2001 - 13,873,867; December 31, 2000 - 13,837,390;
restricted $.01 par value; shares issued and outstanding, June 30, 2001 - 7,972;
December 31, 2000 - 7,972 ...................................................... 139 138
Preferred stock, $.01 par value, 5,000,000 shares authorized, no
shares issued and outstanding .................................................. -- --
Additional paid-in capital ........................................................... 97,583 96,945
Additional paid-in capital, restricted ............................................... 217 217
Retained earnings .................................................................... 56,985 41,654
Accumulated other comprehensive loss ................................................. (63) (34)
Unamortized compensation costs ....................................................... (614) (810)
-------- --------
Total stockholders' equity ........................................................... 154,247 138,110
-------- --------
Total liabilities & stockholders' equity ............................................. $312,487 $270,225
======== ========
4
PROFESSIONAL DETAILING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
(unaudited)
Revenue
Service, net ............................................ $64,789 $75,789 $142,876 $147,078
Product, net ............................................ 79,155 -- 174,133 --
----------- ----------- ----------- -----------
Total revenue, net ................................... 143,944 75,789 317,009 147,078
----------- ----------- ----------- -----------
Cost of goods and services
Program expenses (including related party amounts of
$426 and $361 for the quarters ended June 30, 2001
and 2000, and $585 and $1,064 for the six months
ended June 30, 2001 and 2000, respectively) .......... 53,321 58,108 108,716 108,228
Cost of goods sold ...................................... 51,523 -- 115,738 --
----------- ----------- ----------- -----------
Total cost of goods and services ..................... 104,844 58,108 224,454 108,228
----------- ----------- ----------- -----------
Gross profit ............................................... 39,100 17,681 92,555 38,850
Compensation expense ....................................... 9,162 6,794 20,177 15,187
Other selling, general & administrative expenses ........... 23,546 2,972 49,273 6,979
----------- ----------- ----------- -----------
Total selling, general & administrative expenses ....... 32,708 9,766 69,450 22,166
----------- ----------- ----------- -----------
Operating income ........................................... 6,392 7,915 23,105 16,684
Other income, net .......................................... 1,537 255 3,407 939
----------- ----------- ----------- -----------
Income before provision for taxes .......................... 7,929 8,170 26,512 17,623
Provision for income taxes ................................. 3,527 3,332 11,181 7,171
----------- ----------- ----------- -----------
Net income ................................................. $4,402 $4,838 $15,331 $10,452
=========== =========== =========== ===========
Basic net income per share ................................. $0.32 $0.36 $1.11 $0.79
=========== =========== =========== ===========
Diluted net income per share ............................... $0.31 $0.35 $1.08 $0.78
=========== =========== =========== ===========
Basic weighted average number of shares outstanding ........ 13,855,662 13,592,028 13,849,327 13,298,612
=========== =========== =========== ===========
Diluted weighted average number of shares outstanding ...... 14,245,993 13,774,124 14,189,349 13,478,765
=========== =========== =========== ===========
5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PROFESSIONAL DETAILING, INC.
By: /s/Charles T. Saldarini
---------------------------------
Charles T. Saldarini
Chief Executive Officer
Date: August 14, 2001
6