Exhibit 99.1
[LOGO] PDI
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 1st QUARTER 2003 EPS OF $0.02 ON REVENUE OF $67.5M
PDI reports adjusted EPS of $0.14, excluding litigation reserve
PDI announces late stage negotiations for large-scale contract sales teams with
projected sales of $40M - $50M annually
PDI revises guidance for 2003 EPS to $0.48 to $0.53, excluding litigation
reserve, up from $0.40 to $0.45
Upper Saddle River, New Jersey (Tuesday, May 6, 2003). PDI, Inc. (Nasdaq:PDII) a
commercial sales and marketing provider to the biopharmaceutical and medical
devices and diagnostics industries, today announced its first quarter 2003
financial results.
Net total revenue for the quarter ended March 31, 2003 was $67.5 million, 8.6%
lower than net total revenue of $73.9 million for the quarter ended March 31,
2002. Operating income for the quarter ended March 31, 2003 was $165,000,
compared to an operating loss of $4.5 million for the quarter ended March 31,
2002. Net income for the quarter ended March 31, 2003 was $253,000 compared to a
net loss of $2.3 million for the quarter ended March 31, 2002. Diluted net
income per share was $0.02 for the quarter ended March 31, 2003 compared to a
net loss per share of $0.16 for the quarter ended March 31, 2002.
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Quarter ended
March 31, 2003
(in thousands except per share
data)
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**Excluding
Litigation
As Reported Reserve
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Net Revenue $ 67,545 $ 67,545
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Operating income 165 165
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Special items:
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Litigation settlement 3,000
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Operating income 165 3,165
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Net income $ 253 $ 2,002
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Income per share $ 0.02 $ 0.14
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** Adjusted amounts are not in accordance with GAAP, but are presented for
analytical purposes.
Vice Chairman and CEO, Chuck Saldarini, stated, "The quarter shows our strategy
to expand our business model is working. Excluding the reserve taken in
anticipation of a potential litigation settlement, the results for the quarter
are strong. They show investors that our Sales and Marketing Services Group has
an encouraging pipeline of new business opportunities, strong margins from
current business and an ability to deliver impressive operating income."
Mr. Saldarini continued, "Our results also illustrate continuing performance in
excess of baseline for Lotensin, which supports potential upside for our
Pharmaceutical Products Group in the year. This performance plays an important
role in helping PDI source new products that will compliment the launch of
Fortigel, the testosterone replacement product, which we licensed from Cellegy
Pharmaceuticals, is currently pending approval at FDA. We are adjusting our
estimates upward for 2003. I am quite pleased overall with the efforts in the
quarter."
Contract Sales Announcement
PDI announced that it is in late stage negotiations for two contract sales
agreements which could represent between $40 and $50 million dollars on an
annual basis to begin in the latter part of the second quarter. A preliminary
engagement related to the contract sales agreements has been executed. The
contract sales agreements are subject to the finalization of definitive
agreements and there can be no assurances that such agreements will be
finalized.
Auxilium Litigation Settlement Reserve
PDI further announced that it is currently in settlement discussions with
Auxilium Pharmaceuticals, Inc. relating to the previously announced pending
litigation. While no settlement has been reached and no amount has been agreed
upon, the Company has booked a litigation settlement reserve in the first
quarter in the amount of $3.0 million, the Company's best estimate of the
potential settlement amount. There are no assurances that settlement
negotiations will be successful.
Webcast Conference Call
PDI will conduct a live webcast of its Earnings Release Briefing at 9:00 AM EDT
on Wednesday, May 7, 2003. 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 9881314.
About PDI
PDI is an innovative commercial sales and marketing provider to the
biopharmaceutical and medical devices & diagnostics industries. Its three
business units offer service and product-based capabilities for companies
seeking to maximize profitable brand sales growth. The three units include the
PDI Pharmaceutical Products Group, the PDI Sales and Marketing Services Group
and the PDI Medical Devices and Diagnostics Group.
For more information, visit the Company's website at www.pdi-inc.com.
Page 2 Structure/Strategy/Vision
This press release contains forward-looking statements regarding the timing and
financial impact of the Company's ability to implement its business plan,
expected revenues, finalization of contract negotiations, settlement of the
Auxilium litigation, earnings per share and success during 2003. These
statements involve a number of risks and uncertainties and 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 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, FDA or
legal developments, competitive pressures, 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, 2002. The forward looking-statements in this press release are based upon
management's reasonable belief as of the date hereof. PDI disclaims any
obligation to update these statements.
Page 3 Structure/Strategy/Vision
PDI, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share data)
March 31, December 31,
2003 2002
----------- ----------
ASSETS
Current assets:
Cash and cash equivalents ................................................ $ 64,255 $ 66,827
Short-term investments ................................................... 4,094 5,834
Inventory, net ........................................................... 964 646
Accounts receivable, net of allowance for doubtful accounts of
$798 and $1,063 as of March 31, 2003 and December 31, 2002,
respectively ......................................................... 34,887 40,729
Unbilled costs and accrued profits on contracts in progress .............. 9,472 3,360
Deferred training ........................................................ 2,168 1,106
Prepaid income tax ....................................................... 16,579 18,856
Other current assets ..................................................... 5,960 4,804
Deferred tax asset ....................................................... 7,420 7,420
--------- ---------
Total current assets ........................................................ 145,799 149,582
Net property and equipment .................................................. 17,266 18,295
Deferred tax asset .......................................................... 7,820 7,820
Goodwill .................................................................... 11,132 11,132
Other intangible assets ..................................................... 2,108 2,261
Other long-term assets ...................................................... 1,749 1,849
--------- ---------
Total assets ................................................................ $ 185,874 $ 190,939
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ......................................................... $ 5,011 $ 5,374
Accrued returns, rebates and sales discounts ............................. 16,186 16,500
Accrued incentives ....................................................... 9,936 11,758
Accrued salaries and wages ............................................... 7,191 6,617
Unearned contract revenue ................................................ 8,164 9,473
Restructuring accruals ................................................... 1,851 4,699
Other accrued expenses ................................................... 13,929 13,307
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Total current liabilities ................................................... 62,268 67,728
Total long-term liabilities ................................................. -- --
--------- ---------
Total liabilities ........................................................... $ 62,268 $ 67,728
--------- ---------
Stockholders' equity:
Common stock, $.01 par value, 100,000,000 shares authorized: shares issued
and outstanding, March 31, 2003 and - 14,165,880, December 31, 2002 -
14,165,880; 44,325 restricted shares issued and outstanding at March 31,
2003 and December 31, 2002 ............................................. $ 142 $ 142
Preferred stock, $.01 par value, 5,000,000 shares authorized, no
shares issued and outstanding .......................................... -- --
Additional paid-in capital (includes restricted of $1,547 at
March 31, 2003 and December 31, 2002) .................................. 106,673 106,673
Retained earnings ........................................................... 17,500 17,247
Accumulated other comprehensive loss ........................................ (69) (100)
Unamortized compensation costs .............................................. (530) (641)
Treasury stock, at cost: 5,000 shares ....................................... (110) (110)
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Total stockholders' equity .................................................. $ 123,606 $ 123,211
--------- ---------
Total liabilities & stockholders' equity .................................... $ 185,874 $ 190,939
========= =========
Page 4 Structure/Strategy/Vision
PDI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three Months Ended March 31,
2003 2002
-------- --------
Revenue
Service, net ....................................... $ 67,511 $ 68,160
Product, net ....................................... 34 5,723
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Total revenue, net ............................... 67,545 73,883
-------- --------
Cost of goods and services
Program expenses (including related party amounts of
$73 and $97 for the periods ended
March 31, 2003 and 2002, respectively) ............ 49,881 67,277
Cost of goods sold ................................. 62 --
-------- --------
Total cost of goods and services ................. 49,943 67,277
-------- --------
Gross profit .......................................... 17,602 6,606
Operating expenses
Compensation expense ............................... 8,874 7,759
Other selling, general and administrative expenses . 5,833 3,325
Restructuring and other related expenses ........... (270) --
Litigation settlement .............................. 3,000 --
-------- --------
Total operating expenses ......................... 17,437 11,084
-------- --------
Operating income (loss) ............................... 165 (4,478)
Other income, net ..................................... 269 889
-------- --------
Income (loss) before provision for taxes .............. 434 (3,589)
Provision (benefit) for income taxes .................. 181 (1,322)
-------- --------
Net income (loss) ..................................... $ 253 $ (2,267)
======== ========
Basic net income (loss) per share ..................... $ 0.02 $ (0.16)
======== ========
Diluted net income (loss) per share ................... $ 0.02 $ (0.16)
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Basic weighted average number of shares outstanding ... 14,166 13,969
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Diluted weighted average number of shares outstanding . 14,237 13,969
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Page 5 Structure/Strategy/Vision