With key indicators – such as earnings, new orders and order backlog – on the rise, PPD Chairman and CEO David Simmons announced that the third quarter of 2020 has been a “strong quarter” for the global clinical research organization based in Wilmington.
“We have continued to focus on executing for our customers as we navigate through the pandemic,” Simmons stated in a news release Tuesday. “This is evident in our continued momentum with double-digit growth in net authorizations, revenue and adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] over last year.
"Furthermore, we are proud that PPD is continuing to play a leading role in the development of vaccines and therapies for COVID-19, now having won more than 140 awards for work associated with the virus.”
In PPD’s earnings call Wednesday, Simmons said that COVID-related work has represented about 20% of its authorizations this past quarter. Even disregarding that segment of PPD’s work, growth was up in Q3 year over year, he said, attributing that growth partly to the company’s accelerated pace in starting work after contract awards.
Highlights of PPD’s third-quarter 2020 financial status include:
- The company’s net authorizations for new work totaled $1.2 billion, up 33.3% compared to $900 million at the end of Q3 2019.
- This past quarter’s revenue was more than $1.2 billion, up 20.5% over Q3 2019 revenue of just over $1 billion.
- Net income attributable to common stockholders for the quarter was $52 million, or 15 cents per diluted share, compared to $26.7 million, or 9 cents per diluted share, for the third quarter of 2019.
- The most recent quarter’s book-to-bill ratio was 1.35-times, compared to 1.14-times for Q3 2019.
- PPD ended Q3 2020 with what the company said was a record backlog of nearly $7.9 billion, a year-over-year increase of almost 16%. The backlog at the end of Q3 2019 was $6.8 billion.
PPD finished the quarter with $803 million in cash and total liquidity of $1.1 billion, “which represents the strongest quarter-end liquidity position in over 10 years,” officials stated.
Indicators were strong enough in mid-September that PPD revised its financial estimates upward, Simmons said during the earnings call, adding that those estimates were exceeded.
He and other company officials are bullish about the future.
Assuming no significant reduction in site access, patient enrollment and other key operating metrics in Q4 as a result of COVID-19, and that there are no major delays or cancellations of COVID-19 studies during the fourth quarter from safety concerns or other issues, PPD expects revenues for the fourth quarter to be in the $1.25 billion to nearly $1.3 billion range, a year-over-year increase of between 20% and 24%.
Looking at Fiscal Year 2020 as a whole, PPD expects revenues of between nearly $4.5 billion and $4.6 billion, which would be an increase of between 13.5% and 14.5% over those of Fiscal 2019.
Simmons said PPD is at a competitive advantage in the CRO industry because of its expertise and experience globally, its strategic investments aimed at improving both the quality and quantity of the work it performs, its collaborative customer engagement model and the “talent and tenure” of the company’s team.
The company’s adaptability in the face of coronavirus-related changes this year, he said, also worked to PPD’s advantage.
PPD's stock, which trades on Nasdaq, ended the day Wednesday at $33.16 per share. The stock price has shown a gradual rise since the company's debut on the exchange at about $24 per share.