FORM
10-Q
|
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Commission
File Number: 0-24249
|
PDI,
Inc.
|
|||||
(Exact name of registrant as specified in its charter) | |||||
|
Delaware
|
22-2919486
|
||||||
(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S
Employer
Identification
No.)
|
Saddle River Executive Centre | ||||||||
1 Route 17 South | ||||||||
Saddle River, New Jersey 07458 | ||||||||
(Address
of principal executive offices and zip code)
|
||||||||
(201)
258-8450
|
||||||||
(Registrant's
telephone number, including area
code)
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Large
accelerated filer £
|
Accelerated
filer Q
|
Non-accelerated
filer £
|
Smaller
reporting company£
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(Do
not check if a smaller
reporting
company)
|
Class
|
Shares
Outstanding
August
4, 2008
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Common
stock, $0.01 par value
|
14,259,768
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PDI,
Inc.
|
|||
Form
10-Q for Period Ended June 30, 2008
|
|||
TABLE
OF CONTENTS
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|||
Page No.
|
|||
PART
I - FINANCIAL INFORMATION
|
|||
Item
1.
|
Condensed
Consolidated Financial Statements
|
||
Condensed
Consolidated Balance Sheets
at
June 30, 2008 (unaudited) and December 31, 2007
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3
|
||
Condensed
Consolidated Statements of Operations
for
the three and six month periods ended June 30, 2008 and 2007
(unaudited)
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4
|
||
Condensed
Consolidated Statements of Cash Flows
for
the six month periods ended June 30, 2008 and 2007
(unaudited)
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5
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||
Notes
to Condensed Consolidated Financial Statements
|
6
|
||
Item
2.
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Management's
Discussion and Analysis of Financial
Condition
and Results of Operations
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14
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|
Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
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22
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|
Item
4.
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Controls
and Procedures
|
23
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PART
II - OTHER INFORMATION
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|||
Item
1.
|
Legal
Proceedings
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23
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|
Item
1A.
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Risk
Factors
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23
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|
Item
4.
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Submission
of Matters to a Vote of Security Holders
|
25
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|
Item
6.
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Exhibits
|
25
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|
Signatures
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25
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CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
(in
thousands, except share and per share data)
|
||||||||
June
30,
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December
31,
|
|||||||
2008
|
2007
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|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 95,964 | $ | 99,185 | ||||
Short-term
investments
|
6,662 | 7,800 | ||||||
Accounts
receivable, net
|
17,861 | 22,751 | ||||||
Unbilled
costs and accrued profits on contracts in progress
|
3,238 | 3,481 | ||||||
Other
current assets
|
6,322 | 7,558 | ||||||
Total
current assets
|
130,047 | 140,775 | ||||||
Property
and equipment, net
|
6,634 | 8,348 | ||||||
Goodwill
|
13,612 | 13,612 | ||||||
Other
intangible assets, net
|
14,028 | 14,669 | ||||||
Other
long-term assets
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1,975 | 2,150 | ||||||
Total
assets
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$ | 166,296 | $ | 179,554 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 2,203 | $ | 2,792 | ||||
Unearned
contract revenue
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4,239 | 8,459 | ||||||
Accrued
salary and bonus
|
6,354 | 7,136 | ||||||
Other
accrued expenses
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10,938 | 10,801 | ||||||
Total
current liabilities
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23,734 | 29,188 | ||||||
Long-term
liabilities
|
10,119 | 10,177 | ||||||
Total
liabilities
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33,853 | 39,365 | ||||||
Commitments
and contingencies (Note 7)
|
||||||||
Stockholders’
equity:
|
||||||||
Preferred
stock, $.01 par value; 5,000,000 shares authorized, no
|
||||||||
shares
issued and outstanding
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- | - | ||||||
Common
stock, $.01 par value; 100,000,000 shares authorized;
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||||||||
15,299,247
and 15,222,715 shares issued, at June 30, 2008 and
|
||||||||
December
31, 2007, respectively; 14,259,768 and 14,183,236 shares
|
||||||||
outstanding,
at June 30, 2008 and December 31, 2007, respectively
|
153 | 152 | ||||||
Additional
paid-in capital
|
121,243 | 120,422 | ||||||
Retained
earnings
|
24,481 | 33,018 | ||||||
Accumulated
other comprehensive (loss) income
|
(1 | ) | 30 | |||||
Treasury
stock, at cost - 1,039,479 shares
|
(13,433 | ) | (13,433 | ) | ||||
Total
stockholders' equity
|
132,443 | 140,189 | ||||||
Total
liabilities and stockholders' equity
|
$ | 166,296 | $ | 179,554 | ||||
The
accompanying notes are an integral part of these condensed consolidated
financial statements
|
||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(unaudited,
in thousands, except for per share data)
|
||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
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June
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Revenue,
net
|
$ | 30,399 | $ | 27,784 | $ | 62,628 | $ | 60,586 | ||||||||
Cost
of services
|
26,809 | 20,633 | 50,339 | 44,461 | ||||||||||||
Gross
profit
|
3,590 | 7,151 | 12,289 | 16,125 | ||||||||||||
Compensation
expense
|
7,177 | 6,327 | 13,310 | 12,425 | ||||||||||||
Other
selling, general and administrative expenses
|
4,313 | 4,711 | 8,587 | 9,830 | ||||||||||||
Total
operating expenses
|
11,490 | 11,038 | 21,897 | 22,255 | ||||||||||||
Operating
loss
|
(7,900 | ) | (3,887 | ) | (9,608 | ) | (6,130 | ) | ||||||||
Other
income, net
|
800 | 1,577 | 1,950 | 2,937 | ||||||||||||
Loss
before income tax
|
(7,100 | ) | (2,310 | ) | (7,658 | ) | (3,193 | ) | ||||||||
Provision
for income tax
|
377 | 187 | 879 | 1,205 | ||||||||||||
Net
loss
|
$ | (7,477 | ) | $ | (2,497 | ) | $ | (8,537 | ) | $ | (4,398 | ) | ||||
Loss
per share of common stock:
|
||||||||||||||||
Basic
|
$ | (0.53 | ) | $ | (0.18 | ) | $ | (0.61 | ) | $ | (0.32 | ) | ||||
Diluted
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(0.53 | ) | (0.18 | ) | (0.61 | ) | (0.32 | ) | ||||||||
Weighted
average number of common shares and
|
||||||||||||||||
common
share equivalents outstanding:
|
||||||||||||||||
Basic
|
13,986 | 13,931 | 13,978 | 13,920 | ||||||||||||
Diluted
|
13,986 | 13,931 | 13,978 | 13,920 | ||||||||||||
The
accompanying notes are an integral part of these condensed consolidated
financial statements.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(unaudited,
in thousands)
|
||||||||
Six
Months Ended
|
||||||||
June
30,
|
||||||||
2008
|
2007
|
|||||||
Cash
Flows From Operating Activities
|
||||||||
Net
loss from operations
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$ | (8,537 | ) | $ | (4,398 | ) | ||
Adjustments
to reconcile net loss to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Depreciation
and amortization
|
2,684 | 2,844 | ||||||
Deferred
income taxes, net
|
82 | 750 | ||||||
Provision
for bad debt
|
15 | 9 | ||||||
Recovery
of doubtful notes
|
- | (150 | ) | |||||
Stock-based
compensation
|
822 | 576 | ||||||
Other
(gains), losses and expenses, net
|
(7 | ) | 32 | |||||
Other
changes in assets and liabilities:
|
||||||||
Decrease
in accounts receivable
|
4,890 | 6,243 | ||||||
Decrease
in unbilled costs
|
243 | 1,741 | ||||||
Decrease
in other current assets
|
1,251 | 2,021 | ||||||
Decrease
in other long-term assets
|
175 | 175 | ||||||
Decrease
in accounts payable
|
(589 | ) | (1,928 | ) | ||||
Decrease
in unearned contract revenue
|
(4,220 | ) | (3,610 | ) | ||||
Decrease
in accrued salaries and bonus
|
(782 | ) | (3,651 | ) | ||||
Increase
(decrease) in accrued liabilities
|
409 | (3,164 | ) | |||||
Decrease
in long-term liabilities
|
(146 | ) | (265 | ) | ||||
Net
cash used in operating activities
|
(3,710 | ) | (2,775 | ) | ||||
Cash
Flows From Investing Activities
|
||||||||
Purchase
of available-for-sale investments
|
- | (11,700 | ) | |||||
Proceeds
from sales of available-for-sale investments
|
- | 32,585 | ||||||
Purchase
of held-to-maturity investments
|
(9,312 | ) | (6,692 | ) | ||||
Proceeds
from maturities of held-to-maturity investments
|
10,156 | 34,716 | ||||||
Loan
repayments
|
- | 150 | ||||||
Purchase
of property and equipment
|
(355 | ) | (567 | ) | ||||
Net
cash provided by investing activities
|
489 | 48,492 | ||||||
Cash
Flows From Financing Activities
|
||||||||
Cash
paid for repurchase of restricted shares
|
- | (138 | ) | |||||
Net
cash used in financing activities
|
- | (138 | ) | |||||
Net
(decrease) increase in cash and cash equivalents
|
(3,221 | ) | 45,579 | |||||
Cash
and cash equivalents – beginning
|
99,185 | 45,221 | ||||||
Cash
and cash equivalents – ending
|
$ | 95,964 | $ | 90,800 | ||||
The
accompanying notes are an integral part of these condensed consolidated
financial statements.
|
1.
|
BASIS
OF PRESENTATION:
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES:
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||||
June
30,
|
June
30,
|
||||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||||
Basic
weighted average number of
|
13,986 | 13,931 | 13,978 | 13,920 | |||||||||||
of
common shares
|
|||||||||||||||
Dilutive
effect of stock options, SARs,
|
|||||||||||||||
and
restricted stock
|
- | - | - | - | |||||||||||
Diluted
weighted average number
|
|||||||||||||||
of
common shares
|
13,986 | 13,931 | 13,978 | 13,920 |
3.
|
INVESTMENTS
IN MARKETABLE SECURITIES:
|
June
30,
|
December
31,
|
||||||
2008
|
2007
|
||||||
Investments
supporting Letters of Credit:
|
|||||||
Cash/money
accounts
|
$ | - | $ | 2,390 | |||
US
Treasury securities
|
1,474 | 1,498 | |||||
Government
agency securities
|
4,389 | 3,400 | |||||
5,863 | 7,288 | ||||||
Short-term
investments:
|
|||||||
Corporate
debt securities
|
6,385 | 7,340 | |||||
Government
agency securities
|
111 | - | |||||
Total
|
$ | 12,359 | $ | 14,628 |
4.
|
GOODWILL
AND OTHER INTANGIBLE ASSETS:
|
As
of June 30, 2008
|
As
of December 31, 2007
|
||||||||||||||||||||||
Carrying
|
Accumulated
|
Carrying
|
Accumulated
|
||||||||||||||||||||
Amount
|
Amortization
|
Net
|
Amount
|
Amortization
|
Net
|
||||||||||||||||||
Covenant
not to compete
|
$ | 140 | $ | 107 | $ | 33 | $ | 140 | $ | 93 | $ | 47 | |||||||||||
Customer
relationships
|
16,300 | 4,166 | 12,134 | 16,300 | 3,622 | 12,678 | |||||||||||||||||
Corporate
tradename
|
2,500 | 639 | 1,861 | 2,500 | 556 | 1,944 | |||||||||||||||||
Total
|
$ | 18,940 | $ | 4,912 | $ | 14,028 | $ | 18,940 | $ | 4,271 | $ | 14,669 |
2008
|
2009
|
2010
|
2011
|
2012
|
||||
$ 1,281
|
$ 1,272
|
$ 1,253
|
$ 1,253
|
$ 1,253
|
||||
5.
|
FACILITIES
REALIGNMENT:
|
Sales
|
Marketing
|
||||||||||
Services
|
Services
|
Total
|
|||||||||
Balance
as of December 31, 2007
|
$ | 274 | $ | 401 | $ | 675 | |||||
Accretion
|
3 | 4 | 7 | ||||||||
Payments
|
(58 | ) | (59 | ) | (117 | ||||||
Balance
as of June 30, 2008
|
$ | 219 | $ | 346 | $ | 565 |
6.
|
FAIR
VALUE MEASUREMENTS:
|
Carrying
|
Fair
|
Fair
Value Measurements at June 30, 2008
|
|||||||||||||||||
Amount
|
Value
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||||
Available-for-sale
securities
|
$ | 166 | $ | 166 | $ | 166 | $ | - | $ | - | |||||||||
Held-to-maturity
securities
|
12,359 | 12,359 | 12,359 | - | - | ||||||||||||||
Total
|
$ | 12,525 | $ | 12,525 | $ | 12,525 | $ | - | $ | - |
7.
|
COMMITMENTS
AND CONTINGENCIES:
|
8.
|
OTHER
COMPREHENSIVE LOSS:
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
loss
|
$ | (7,477 | ) | $ | (2,497 | ) | $ | (8,537 | ) | $ | (4,398 | ) | ||||
Other
comprehensive income
|
||||||||||||||||
Reclassification
adjustment for
|
||||||||||||||||
realized
gains
|
- | - | (18 | ) | - | |||||||||||
Unrealized
holding gain/(loss) on
|
||||||||||||||||
available-for-sale
securities
|
- | 15 | (14 | ) | 9 | |||||||||||
Other
comprehensive loss
|
$ | (7,477 | ) | $ | (2,482 | ) | $ | (8,569 | ) | $ | (4,389 | ) |
9.
|
STOCK-BASED
COMPENSATION:
|
10.
|
INCOME
TAXES:
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Income
tax expense
|
$ | 377 | $ | 187 | $ | 879 | $ | 1,205 | ||||||||
Effective
income tax rate
|
5.3 | % | 8.1 | % | 11.5 | % | 37.7 | % |
11.
|
PRODUCT
COMMERCIALIZATION
CONTRACT:
|
12.
|
SEGMENT
INFORMATION:
|
Sales
|
Marketing
|
Product
|
||||||||||||||
Services
|
Services
|
Commercialization
|
Consolidated
|
|||||||||||||
Three
months ended June 30, 2008:
|
||||||||||||||||
Revenue
|
$ | 23,401 | $ | 7,998 | $ | (1,000 | ) | $ | 30,399 | |||||||
Operating
(loss) income
|
(2,284 | ) | 119 | (5,735 | ) | (7,900 | ) | |||||||||
Capital
expenditures
|
107 | 27 | - | 134 | ||||||||||||
Depreciation
expense
|
778 | 182 | 42 | 1,002 | ||||||||||||
Three
months ended June 30, 2007:
|
||||||||||||||||
Revenue
|
$ | 19,538 | $ | 8,246 | $ | - | $ | 27,784 | ||||||||
Operating
(loss) income
|
(4,449 | ) | 562 | - | (3,887 | ) | ||||||||||
Capital
expenditures
|
265 | 49 | - | 314 | ||||||||||||
Depreciation
expense
|
858 | 206 | - | 1,064 | ||||||||||||
Six
months ended June 30, 2008:
|
||||||||||||||||
Revenue
|
$ | 48,657 | $ | 14,971 | $ | (1,000 | ) | $ | 62,628 | |||||||
Operating
(loss) income
|
(3,254 | ) | 187 | (6,541 | ) | (9,608 | ) | |||||||||
Capital
expenditures
|
305 | 50 | - | 355 | ||||||||||||
Depreciation
expense
|
1,622 | 372 | 42 | 2,036 | ||||||||||||
Six
months ended June 30, 2007:
|
||||||||||||||||
Revenue
|
$ | 45,705 | $ | 14,881 | $ | - | $ | 60,586 | ||||||||
Operating
(loss) income
|
(6,430 | ) | 300 | - | (6,130 | ) | ||||||||||
Capital
expenditures
|
472 | 95 | - | 567 | ||||||||||||
Depreciation
expense
|
1,796 | 392 | - | 2,188 |
13.
|
SUBSEQUENT
EVENT:
|
·
|
Changes
in outsourcing trends or a reduction in promotional, marketing and sales
expenditures in the pharmaceutical, biotechnology and life sciences
industries;
|
·
|
Loss
of one or more of our significant customers or a material reduction in
service revenues from such
customers;
|
·
|
Our
ability to fund and successfully implement our long-term strategic
plan;
|
·
|
Our
ability to successfully develop product commercialization
opportunities;
|
·
|
Our
ability to successfully identify, complete and integrate any future
acquisitions and the effects of any such acquisitions on our ongoing
business;
|
·
|
Our
ability to meet performance goals in incentive-based and revenue sharing
arrangements with customers;
|
·
|
Competition
in our industry;
|
·
|
Our
ability to attract and retain qualified sales representatives and other
key employees and management
personnel;
|
·
|
Product
liability claims against us;
|
·
|
Changes
in laws and healthcare regulations applicable to our industry or our, or
our customers’ failure to comply with such laws and
regulations;
|
·
|
Volatility
of our stock price and fluctuations in our quarterly revenues and
earnings;
|
·
|
Potential
liabilities associated with insurance claims;
and
|
·
|
Failure
of, or significant interruption to, the operation of our information
technology and communications
systems.
|
|
¨
|
Sales
Services, which is comprised of the following business
units:
|
|
·
|
Performance
Sales Teams; and
|
|
·
|
Select
Access.
|
|
¨
|
Marketing
Services, which is comprised of the following business
units:
|
|
·
|
Pharmakon;
|
|
·
|
TVG
Marketing Research and Consulting (TVG);
and
|
|
·
|
Vital
Issues in Medicine (VIM)®.
|
|
¨
|
Product
Commercialization (formally PDI Products
Group).
|
|
·
|
The
number of prescriptions filled in excess of the pre-established baseline
established in the agreement. The total number of prescriptions
filled in a quarter is based on information supplied by a major
independent supplier of industry prescription
data.
|
|
·
|
The
average net sales value per unit of the product as reported to us by the
customer.
|
|
·
|
The
revenue sharing percentage in the
agreement.
|
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
||||||
Operating
data
|
2008
|
2007
|
2008
|
2007
|
|||
Revenue,
net
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
|||
Cost
of services
|
88.2%
|
74.3%
|
80.4%
|
73.4%
|
|||
Gross
profit
|
11.8%
|
25.7%
|
19.6%
|
26.6%
|
|||
Compensation
expense
|
23.6%
|
22.8%
|
21.3%
|
20.5%
|
|||
Other
selling, general and administrative expenses
|
14.2%
|
17.0%
|
13.7%
|
16.2%
|
|||
Total
operating expenses
|
37.8%
|
39.7%
|
35.0%
|
36.7%
|
|||
Operating
loss
|
(26.0%)
|
(14.0%)
|
(15.3%)
|
(10.1%)
|
|||
Other
income, net
|
2.6%
|
5.7%
|
3.1%
|
4.8%
|
|||
Loss
before income tax
|
(23.4%)
|
(8.3%)
|
(12.2%)
|
(5.3%)
|
|||
Provision
for income tax
|
1.2%
|
0.7%
|
1.4%
|
2.0%
|
|||
Net
loss
|
(24.6%)
|
(9.0%)
|
(13.6%)
|
(7.3%)
|
Quarter
Ended
|
||||||||||||||||
June
30,
|
||||||||||||||||
2008
|
2007
|
Change
($)
|
Change
(%)
|
|||||||||||||
Sales
services
|
$ | 23,401 | $ | 19,538 | $ | 3,863 | 19.8 | % | ||||||||
Marketing
services
|
7,998 | 8,246 | (248 | ) | (3.0 | %) | ||||||||||
Product
commercialization
|
(1,000 | ) | - | (1,000 | ) | - | ||||||||||
Total
|
$ | 30,399 | $ | 27,784 | $ | 2,615 | 9.4 | % |
Quarter
Ended
|
Sales
|
%
of
|
Marketing
|
%
of
|
Product
|
%
of
|
%
of
|
|||||||||||||||||||||||||
June
30,
|
services
|
sales
|
services
|
sales
|
commercialization
|
sales
|
Total
|
sales
|
||||||||||||||||||||||||
2008
|
$ | 5,166 | 22.1 | % | $ | 3,380 | 42.3 | % | $ | (4,956 | ) | - | $ | 3,590 | 11.8 | % | ||||||||||||||||
2007
|
3,148 | 16.1 | % | 4,003 | 48.5 | % | - | - | 7,151 | 25.7 | % | |||||||||||||||||||||
Change
($)
|
$ | 2,018 | $ | (623 | ) | $ | (4,956 | ) | $ | (3,561 | ) |
Quarter
Ended
|
Sales
|
%
of
|
Marketing
|
%
of
|
Product
|
%
of
|
%
of
|
|||||||||||||||||||||||||
June
30,
|
services
|
sales
|
services
|
sales
|
commercialization
|
sales
|
Total
|
sales
|
||||||||||||||||||||||||
2008
|
$ | 4,392 | 18.8 | % | $ | 2,284 | 28.6 | % | $ | 501 | - | $ | 7,177 | 23.6 | % | |||||||||||||||||
2007
|
4,160 | 21.3 | % | 2,167 | 26.3 | % | - | - | 6,327 | 22.8 | % | |||||||||||||||||||||
Change
($)
|
$ | 232 | $ | 117 | $ | 501 | $ | 850 |
Quarter
Ended
|
Sales
|
%
of
|
Marketing
|
%
of
|
Product
|
%
of
|
%
of
|
|||||||||||||||||||||||||
June
30,
|
services
|
sales
|
services
|
sales
|
commercialization
|
sales
|
Total
|
sales
|
||||||||||||||||||||||||
2008
|
$ | 3,058 | 13.1 | % | $ | 977 | 12.2 | % | $ | 278 | - | $ | 4,313 | 14.2 | % | |||||||||||||||||
2007
|
3,437 | 17.6 | % | 1,274 | 15.4 | % | - | - | 4,711 | 17.0 | % | |||||||||||||||||||||
Change
($)
|
$ | (379 | ) | $ | (297 | ) | $ | 278 | $ | (398 | ) |
Six
Months Ended,
|
||||||||||||||||
June
30,
|
||||||||||||||||
2008
|
2007
|
Change
($)
|
Change
(%)
|
|||||||||||||
Sales
services
|
$ | 48,657 | $ | 45,705 | $ | 2,952 | 6.5 | % | ||||||||
Marketing
services
|
14,971 | 14,881 | 90 | 0.6 | % | |||||||||||
Product
commercialization
|
(1,000 | ) | - | (1,000 | ) | - | ||||||||||
Total
|
$ | 62,628 | $ | 60,586 | $ | 2,042 | 3.4 | % |
Six
Months Ended,
|
Sales
|
%
of
|
Marketing
|
%
of
|
Product
|
%
of
|
%
of
|
|||||||||||||||||||||||||
June
30,
|
services
|
sales
|
services
|
sales
|
commercialization
|
sales
|
Total
|
sales
|
||||||||||||||||||||||||
2008
|
$ | 11,045 | 22.7 | % | $ | 6,731 | 45.0 | % | $ | (5,487 | ) | - | $ | 12,289 | 19.6 | % | ||||||||||||||||
2007
|
8,987 | 19.7 | % | 7,138 | 48.0 | % | - | - | 16,125 | 26.6 | % | |||||||||||||||||||||
Change
($)
|
$ | 2,058 | $ | (407 | ) | $ | (5,487 | ) | $ | (3,836 | ) |
Six
Months Ended,
|
Sales
|
%
of
|
Marketing
|
%
of
|
Product
|
%
of
|
%
of
|
|||||||||||||||||||||||||
June
30,
|
services
|
sales
|
services
|
sales
|
commercialization
|
sales
|
Total
|
sales
|
||||||||||||||||||||||||
2008
|
$ | 8,052 | 16.5 | % | $ | 4,608 | 30.8 | % | $ | 650 | - | $ | 13,310 | 21.3 | % | |||||||||||||||||
2007
|
7,863 | 17.2 | % | 4,562 | 30.7 | % | - | - | 12,425 | 20.5 | % | |||||||||||||||||||||
Change
($)
|
$ | 189 | $ | 46 | $ | 650 | $ | 885 |
Six
Months Ended,
|
Sales
|
%
of
|
Marketing
|
%
of
|
Product
|
%
of
|
%
of
|
|||||||||||||||||||||||||
June
30,
|
services
|
sales
|
services
|
sales
|
commercialization
|
sales
|
Total
|
sales
|
||||||||||||||||||||||||
2008
|
$ | 6,247 | 12.8 | % | $ | 1,936 | 12.9 | % | $ | 404 | - | $ | 8,587 | 13.7 | % | |||||||||||||||||
2007
|
7,554 | 16.5 | % | 2,276 | 15.3 | % | - | - | 9,830 | 16.2 | % | |||||||||||||||||||||
Change
($)
|
$ | (1,307 | ) | $ | (340 | ) | $ | 404 | $ | (1,243 | ) |
2009- | 2011- |
After
|
||||||||||||||||||
Total
|
2008
|
2010
|
2012
|
2012
|
||||||||||||||||
Contractual
obligations (1)
|
$ | 4,977 | $ | 3,545 | $ | 1,432 | $ | - | $ | - | ||||||||||
Purchase
obligations (2)
|
28,000 | $ | 5,250 | $ | 14,000 | $ | 8,750 | |||||||||||||
Operating
lease obligations
|
||||||||||||||||||||
Minimum
lease payments
|
27,573 | 3,226 | 6,529 | 6,526 | 11,292 | |||||||||||||||
Less
minimum sublease rentals
(3)
|
(6,171 | ) | (1,058 | ) | (1,992 | ) | (1,357 | ) | (1,764 | ) | ||||||||||
Net
minimum lease payments
|
21,402 | 2,168 | 4,537 | 5,169 | 9,528 | |||||||||||||||
Total
|
$ | 54,379 | $ | 10,963 | $ | 19,969 | $ | 13,919 | $ | 9,528 |
|
(1)
|
Amounts
represent contractual obligations related to software license contracts,
data center hosting, and outsourcing contracts for software system support
as well a the $1 million payment made to Novartis as per the terms of the
Elidel contract.
|
|
(2)
|
Represents
minimum annualized purchase obligations associated with promotional
spending as per the terms of our agreement with
Novartis.
|
|
(3)
|
In
June 2005, we signed an agreement to sublease approximately 16,000 square
feet of the first floor at our corporate headquarters facility in Saddle
River, New Jersey. The sublease is for a five-year term
commencing July 15, 2005, and provides for approximately $2 million in
lease payments over the five-year period. In July 2007, we
signed an agreement to sublease approximately 20,000 square feet of the
second floor at our corporate headquarters. The sublease term
is through the remainder of our lease, which is approximately eight and
one-half years and will provide for approximately $4.4 million in lease
payments over that period. Also in 2007, we signed two separate
subleases at our facility in Dresher, Pennsylvania. These
subleases are for five-year terms and will provide approximately $0.7
million combined in lease payments over the five-year
period.
|
Exhibit
No.
|
Description
|
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, filed herewith as Exhibit 31.1.
|
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, filed herewith as Exhibit 31.2.
|
|
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith as Exhibit 32.1. | |
32.2
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith
as Exhibit 32.2.
|
Date: August
7, 2008
|
PDI,
Inc.
|
||
(Registrant)
|
|||
/s/
Jeffrey E. Smith
|
|||
Jeffrey
E. Smith
|
|||
Chief
Executive Officer
|
|||
/s/
James G. Farrell
|
|||
James
G. Farrell
|
|||
Chief
Financial Officer
|