Exhibit 99.1
News Release
[LETTERHEAD OF PDI]
For more information contact:
Stephen P. Cotugno
Executive Vice President-Corporate Development
PDI, Inc.
201.574.8617
PDI REPORTS FOURTH QUARTER AND YEAR END 2003 FINANCIAL RESULTS
2003 EPS $0.85 as reported, $1.43 excluding litigation settlement and
Ceftin reserve increase
Upper Saddle River, New Jersey (Wednesday, March 3, 2004). PDI, Inc.
(Nasdaq:PDII) a healthcare sales and marketing company, today announced its
fourth quarter and year end 2003 financial results.
Fourth Quarter Results
Net revenue for the quarter ended December 31, 2003 was $92.4 million, 16.9%
more than net revenue of $79.0 million for the quarter ended December 31, 2002.
Operating income was $7.4 million for the quarter ended December 31, 2003,
compared to an operating loss of $8.3 million for the quarter ended December 31,
2002. Net income was $4.5 million for the quarter ended December 31, 2003,
compared to a net loss of $5.0 million in the quarter ended December 31, 2002.
Diluted net income per share for the quarter ended December 31, 2003 was $0.31
versus a net loss per share of $0.35 for the quarter ended December 31, 2002.
Twelve Months Results
Net revenue for the twelve months ended December 31, 2003 was $317.4 million,
11.8% higher than net revenue of $284.0 million for the twelve months ended
December 31, 2002. Operating income was $19.6 million for the twelve months
ended December 31, 2003 compared to an operating loss of $50.2 million for the
twelve months ended December 31, 2002. Net income was $12.3 million for the
twelve months ended December 31, 2003 compared to a net loss of $30.8 million
for the twelve months ended December 31, 2002. Diluted net income per share for
the twelve months ended December 31, 2003 was $0.85 compared to a net loss per
share of $2.19 for the twelve months ended December 31, 2002.
In the fourth quarter, the Company increased its reserve to account for
anticipated returns of Ceftin, a cephalosporin antibiotic, by $12 million,
bringing the total amount in reserve to $22.8 million. During the fourth
quarter, PDI was made aware by certain wholesalers of previously undisclosed
amount of Ceftin that remained in inventory. A full explanation is enclosed in
the Company's 2003 annual report on form 10-K.
2003 operating income and net income per share results, excluding the litigation
settlement recorded in the first quarter and Ceftin reserve increase recorded in
the fourth quarter, are as follows:
- -----------------------------------------------------------------------------------------------------------------------------------
Twelve Months Ended
December 31, 2003
(in thousands except per share data)
- -----------------------------------------------------------------------------------------------------------------------------------
Diluted
Net Gross Operating Net Net Income
Revenue Profit Income Income Per Share
------------------------------------------------------------------
As reported $317,448 $ 89,081 $19,590 $12,258 $0.85
- -----------------------------------------------------------------==================================================================
After adjustment for:
*Litigation settlement ($2.1 million pretax) $317,448 $ 89,081 $21,690 $13,503 $0.94
- -----------------------------------------------------------------==================================================================
After adjustment for:
*Ceftin reserve increase ($12.0 million pretax)
and Litigation settlement ($2.1 million pretax) $329,448 $101,081 $33,690 $20,621 $1.43
- -----------------------------------------------------------------==================================================================
* Adjusted amounts are not in accordance with GAAP, but are
presented for analytical purposes.
Excluding the Ceftin reserve increase referred to above, operating income for
the fourth quarter of 2003 exceeded our previous estimates for the quarter by
approximately $12 million. Operating income increased by approximately $2
million due to additional revenue generated by the Lotrel/Diovan team and by
other operating units within the sales and marketing services segment.
Approximately $4 million of operating income was generated by our Lotensin team
as the team successfully achieved certain prescribed target levels for
prescriptions; the prescription data necessary to calculate the attainment of
this target became available in mid-January 2004. The fourth quarter also
benefited from the lower than anticipated costs of approximately $2.3 million
for program expenses and approximately $3.3 million for SG&A.
Charles T. Saldarini, Vice Chairman and CEO of PDI, stated, "The year 2003 was a
pivotal one for PDI. We set out to return our organization to profitability. Due
to significant new business wins and program execution in the contract sales
business and an impressive performance turned in by our Lotensin team, we feel
that our goals were achieved over the course of the year. Overall, I am pleased
with our efforts and optimistic about what we can accomplish in 2004."
Webcast Conference Call
PDI will conduct a live webcast of its Earnings Release Briefing at 9:00 AM EDT
on Thursday, March 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 5549828.
Page 2 structure/strategy/vision
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, 2003. 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.
Page 3 structure/strategy/vision
PDI, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
2003 2002
--------- ---------
ASSETS (in thousands)
Current assets:
Cash and cash equivalents .............................................. $ 113,288 $ 66,827
Short-term investments ................................................. 1,344 5,834
Inventory, net of obsolescence reserve of $818 and $0 as of
December 31, 2003 and 2002, respectively .............................. 43 646
Accounts receivable, net of allowance for doubtful accounts of
$749 and $1,063 as of December 31, 2003 and 2002, respectively ........ 40,885 40,729
Unbilled costs and accrued profits on contracts in progress ............ 4,041 3,360
Deferred training ...................................................... 1,643 1,106
Prepaid income tax ..................................................... -- 18,856
Other current assets ................................................... 8,847 4,804
Deferred tax asset ..................................................... 11,053 7,420
--------- ---------
Total current assets ...................................................... 181,144 149,582
Net property and equipment ............................................. 14,494 18,295
Deferred tax asset ..................................................... 7,304 7,820
Goodwill ............................................................... 11,132 11,132
Other intangible assets ................................................ 1,648 2,261
Other long-term assets ................................................. 3,901 1,849
--------- ---------
Total assets .............................................................. $ 219,623 $ 190,939
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ....................................................... $ 8,689 $ 5,374
Accrued rebates, sales discounts and returns ........................... 22,811 16,500
Accrued incentives ..................................................... 20,486 11,758
Accrued salaries and wages ............................................. 9,031 6,617
Unearned contract revenue .............................................. 3,604 9,473
Restructuring accruals ................................................. 744 4,699
Other accrued expenses ................................................. 15,770 13,307
--------- ---------
Total current liabilities ................................................. 81,135 67,728
--------- ---------
Long-term liabilities ..................................................... -- --
--------- ---------
Total liabilities ......................................................... $ 81,135 $ 67,728
--------- ---------
Commitments and Contingencies
Stockholders' equity:
Common stock, $.01 par value; 100,000,000 shares authorized; shares
issued and outstanding, 2003 - 14,387,126; 2002 - 14,165,880;
restricted $.01 par value; shares issued and outstanding,
2003- 136,178; 2002 - 44,325 ......................................... $ 145 $ 142
Preferred stock, $.01 par value; 5,000,000 shares authorized, no
shares issued and outstanding ........................................ -- --
Additional paid-in capital (includes restricted of $2,361 and $1,547
in 2003 and 2002, respectively) ...................................... 109,531 106,673
Retained earnings ......................................................... 29,505 17,247
Accumulated other comprehensive income (loss) ............................. 25 (100)
Unamortized compensation costs ............................................ (608) (641)
Treasury stock, at cost: 5,000 shares at December 31, 2003 and 2002 ....... (110) (110)
--------- ---------
Total stockholders' equity ................................................ $ 138,488 $ 123,211
--------- ---------
Total liabilities & stockholders' equity .................................. $ 219,623 $ 190,939
========= =========
Page 4 structure/strategy/vision
PDI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Twelve Months
Ended December 31, Ended December 31,
----------------------- ------------------------
2003 2002 2003 2002
--------- -------- --------- ---------
Revenue
Service, net .................................................... $ 104,173 $ 79,029 $ 329,061 $ 277,575
Product, net .................................................... (11,810) -- (11,613) 6,438
--------- -------- --------- ---------
Total revenue, net ........................................... 92,363 79,029 317,448 284,013
--------- -------- --------- ---------
Cost of goods and services
Program expenses (including related party amounts of $194
and $213 for the quarters ended December 31, 2003 and 2002,
respectively and $983 and $516 for the twelve months ended
December 31, 2003 and 2002, respectively) ..................... 65,077 53,667 227,080 254,140
Cost of goods sold .............................................. 190 -- 1,287 --
--------- -------- --------- ---------
Total cost of goods and services ............................. 65,267 53,667 228,367 254,140
--------- -------- --------- ---------
Gross profit ....................................................... 27,096 25,362 89,081 29,873
Compensation expense ............................................... 9,607 6,459 36,901 32,670
Other selling, general and administrative expenses ................. 9,632 24,956 30,347 44,163
Restructuring and other related expenses ........................... 413 2,243 143 3,215
Litigation settlement .............................................. -- -- 2,100 --
--------- -------- --------- ---------
Total operating expenses ........................................ 19,652 33,658 69,491 80,048
--------- -------- --------- ---------
Operating income (loss) ............................................ 7,444 (8,296) 19,590 (50,175)
Other income, net .................................................. 332 263 1,073 1,967
--------- -------- --------- ---------
Income (loss) before provision for taxes ........................... 7,776 (8,033) 20,663 (48,208)
Provision (benefit) for income taxes ............................... 3,290 (3,044) 8,405 (17,447)
--------- -------- --------- ---------
Net income (loss) .................................................. $ 4,486 $ (4,989) $ 12,258 $ (30,761)
========= ======== ========= =========
Basic net income (loss) per share .................................. $ 0.31 $ (0.35) $ 0.86 $ (2.19)
========= ======== ========= =========
Diluted net income (loss) per share ................................ $ 0.31 $ (0.35) $ 0.85 $ (2.19)
========= ======== ========= =========
Basic weighted average number of shares outstanding ................ 14,320 14,097 14,231 14,033
========= ======== ========= =========
Diluted weighted average number of shares outstanding .............. 14,677 14,097 14,431 14,033
========= ======== ========= =========
Page 5 structure/strategy/vision