PDI Reports 2012 Third Quarter Financial Results

               PDI Reports 2012 Third Quarter Financial Results

Management to Host Conference Call Tomorrow, November 6, 2012 at 8:30AM ET

PR Newswire

PARSIPPANY, N.J., Nov. 5, 2012

PARSIPPANY, N.J., Nov. 5, 2012 /PRNewswire/ -- PDI, Inc. (Nasdaq: PDII), today
reported financial and operational results for the third quarter ended
September 30, 2012. Summary of third quarter and subsequent financial and
operating highlights include:

  oSigned multi-year Sales Services contract valued at up to $150 million
    with Top 5 global pharmaceutical company.
  oGerald J. Melillo promoted to President, Sales Services.

                   Condensed Summary Statement of Continuing
                   Operations
                                     3rd Quarter Ended   Nine Months Ended
                                     September 30,*      September 30,*
                                     2012      2011      2012       2011
 Revenue, net                        $ 31,781  $ 36,069  $ 91,267   $ 119,008
 Gross profit                        5,939     7,675     19,875     23,770
 Operating expenses:
 Compensation expense                4,075     4,171     12,726     15,150
 Other SG&A                          2,620     3,309     8,442      10,885
 Total operating expenses            6,695     7,480     21,168     26,035
 Operating (loss) income             $ (756)   $ 195     $ (1,293)  $ (2,265)
 Other expense, net                  -         (48)      (15)       (122)
 Provision (benefit) for income tax  74        183       219        (512)
 Loss from continuing operations     $ (830)   $ (36)    $ (1,527)  $ (1,875)
 Diluted loss per share from         $ (0.06)  $ -       $ (0.10)   $ (0.13)
 continuing operations
 *Unaudited



CEO Comments
Commenting on the company's results, Nancy Lurker, chief executive officer of
PDI, Inc., noted, "As expected, third quarter revenue was below that of the
same period in 2011 due primarily to the timing and implementation of new
contracts. To date, we have won more than $250 million of new contracts and
renewals in 2012. Due to the timing of these wins and the execution timelines
of these contracts, we expect that only approximately $40 million will impact
revenue in 2012. Factoring in this activity, we now estimate that total
revenue for the full year of 2012 will be in the range of $127 - $130
million.

"Gross margins on our new Sales Services business in 2012 continue to trend
lower than historical rates, including the $150 million win announced
recently. We expect the gross margin percentage for the full year of 2012 to
remain essentially flat compared to 2011, and to decline in 2013 as new wins
with lower margins are executed. From an operating standpoint, we will
continue to maintain tight cost controls. For the full year of 2012, excluding
the previously announced fourth quarter charges for severance and facilities
realignment, we expect a small operating loss and positive adjusted EBITDA in
the range of 1% - 2% of revenue.

"We will enter 2013 with a strong backlog of business under contract.
Furthermore, we continue to be optimistic that outsourcing will continue to
grow and become more the standard in the pharmaceutical industry. I am also
pleased to have announced the promotion of Gerry Melillo to the position of
president, Sales Services. With this change, Gerry will bring increased focus
and leadership, as well as his rich and deep background in the pharmaceutical
industry, to our Sales Services segment."

Business Review - Continuing Operations
Revenue- For the third quarter of 2012, revenue of $31.8 million was $4.3
million lower than the third quarter of 2011. Revenue in the Product
Commercialization segment increased but was more than offset by a decrease in
revenue from both Sales Services and Marketing Services.

  oSales Services segment revenue for the third quarter of 2012 of $25.0
    million was $4.2 million lower than the third quarter of 2011. Due
    primarily to the timing of signing and start dates of new contract wins,
    revenue from these wins was not sufficient to offset certain contracts
    renewing for smaller amounts and the anticipated expiration of certain
    other contracts.
  oMarketing Services segment revenue for the third quarter of 2012 of $2.2
    million was $1.8 million lower than the third quarter of 2011. This
    decrease was primarily due to a decrease in Group DCA revenue due to fewer
    contract signings and delays in our customer's medical legal regulatory
    approval process.
  oProduct Commercialization Services segment revenue for the third quarter
    of 2012 was $4.6 million, $1.7 million higher than the third quarter of
    2011.

Gross Profit- For the third quarter of 2012, gross profit of $5.9 million was
$1.7 million lower than the third quarter of 2011. At the same time, the gross
profit percentage decreased to 19% in 2012 from 21% in 2011. The overall
decrease in gross profit dollars and percentage was driven primarily by the
decreases in both Sales and Marketing Services.

  oSales Services segment gross profit for the third quarter of 2012 of $4.2
    million was $1.4 million lower than the third quarter of 2011. This
    decrease was the result of lower revenue. Sales Services gross profit
    percentage declined in 2012 due primarily to lower margins being realized
    on new business.
  oMarketing Services segment gross profit for the third quarter of 2012 of
    $0.4 million was $1.2 lower when compared to 2011 as a result of lower
    revenue and a lower gross profit percentage within the segment.
  oProduct Commercialization Services segment gross profit for the third
    quarter of 2012 of $1.4 million was $0.8 million higher than 2011.

Total Operating Expenses- For the third quarter of 2012, total operating
expenses were $6.7 million; $0.8 million lower than the third quarter of 2011.
The decrease is a result of the company's continuing focus on cost reduction.

Operating Loss- For the third quarter of 2012 the operating loss from
continuing operations was $0.8 million, a decrease of approximately $1.0
million when compared to operating income of $0.2 million in the third quarter
of 2011. The decrease is primarily attributable to the decrease in revenue
and gross profit when compared to the prior year quarter.

Liquidity and Cash Flow- Adjusted EBITDA for the third quarter of 2012 was
$0.2 million compared to $1.3 million in 2011. Cash and cash equivalents as of
September 30, 2012 were $60.5 million, up $3.6 million from June 30, 2012 but
down $3.8 million from prior year end.

  oThe decrease in cash from year end is primarily attributable to the
    payments of severance and close-out costs associated with the fourth
    quarter 2011 sale of our Pharmakon business unit and right-sizing of the
    Group DCA unit and a 2012 scheduled $1.5 million payment to the sellers of
    Group DCA.
  oAs of September 30, 2012, the company's cash equivalents were
    predominantly invested in U.S. Treasury money market funds and the company
    had no commercial debt.

Non-GAAP Financial Measures
In addition to the United States generally accepted accounting principles, or
GAAP, results provided in this document, PDI has provided certain non-GAAP
financial measures to help evaluate the results of its performance. The
company believes that these non-GAAP financial measures, when presented in
conjunction with comparable GAAP financial measures, are useful to both
management and investors in analyzing the company's ongoing business and
operating performance. The company believes that providing the non-GAAP
information to investors, in addition to the GAAP presentation, allows
investors to view the company's financial results in the way that management
views financial results.

Adjusted EBITDA is a non-GAAP metric used by management to measure cash flow
of the core operating business and liquidity. Adjusted EBITDA is defined as
operating income (loss), plus depreciation and amortization, non-cash
stock-based compensation, and other non-cash expenses.

 Adjusted EBITDA (Unaudited)
                               3rd Quarter Ended  Nine Months Ended
                               September 30,      September 30,
                               2012      2011     2012       2011
 Operating (loss) income       $ (756)   $ 195    $ (1,293)  $ (2,265)
 Depreciation and amortization 494       693      1,490      2,066
 Stock compensation            484       424      1,520      1,683
 Adjusted EBITDA               $ 222     $ 1,312  $ 1,717    $ 1,484

The company also presented Adjusted EBITDA on a forward-looking basis as part
of its outlook for the full year 2012. Relative to the full year of 2012, the
company estimates depreciation of approximately $2.0 million, non-cash stock
compensation of $1.9 million and no other non-cash expenses.

Conference Call
As previously announced, PDI will hold a conference call tomorrow, Tuesday,
November 6, 2012 to discuss financial and operational results of the third
quarter ended September 30, 2012 as follows:

Time: 8:30 AM (ET)

Dial-in numbers: (866) 644-4654 (U.S. and Canada) or (706) 643-1203

Conference ID#: 34905834

Live webcast: www.pdi-inc.com, under "Investor Relations"

The teleconference replay will be available two hours after completion through
November 10, 2012 at (800) 585-8367 (U.S. and Canada) or (404) 537-3406. The
replay pass code is 34905834. The archived web cast will be available for one
year.

About PDI, Inc.
PDI is a leading health care commercialization company providing superior
insight-driven, integrated multi-channel message delivery to established and
emerging health care companies. The company is dedicated to enhancing
engagement with health care practitioners and optimizing commercial
investments for its clients by providing strategic flexibility, full product
commercialization services, innovative multi-channel promotional solutions,
and sales and marketing expertise. For more information, please visit the
company's website at http://www.pdi-inc.com.

Forward-Looking Statements
This press release contains forward-looking statements regarding future events
and financial performance. These statements are based on current expectations
and assumptions involving judgments about, among other things, 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. These statements also involve known and unknown
risks, uncertainties and other factors that may cause PDI's actual results to
be materially different from those expressed or implied by any forward-looking
statement. For example, with respect to statements regarding projections of
future revenues, growth and profitability, actual results may differ
materially from those set forth in this release based on the loss, early
termination or significant reduction of any of our existing service contracts,
the failure to meet performance goals in PDI's incentive-based arrangements
with customers or the inability to secure additional business. Additionally,
all forward-looking statements are subject to 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, 2011, and PDI's subsequently filed quarterly
reports on Form 10-Q and current reports on Form 8-K. Because of these and
other risks, uncertainties and assumptions, undue reliance should not be
placed on these forward-looking statements. In addition, these statements
speak only as of the date of this press release and, except as may be required
by law, PDI undertakes no obligation to revise or update publicly any
forward-looking statements for any reason.

(Tables to Follow)

 PDI, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 ($ in thousands, except per share data)
                              Three Months Ended        Nine Months Ended
                              September 30,             September 30,
                              2012         2011         2012       2011
 Revenue, net                 $        $        $        $  
                              31,781       36,069       91,267    119,008
 Cost of services             25,842       28,394       71,392     95,238
 Gross profit                 5,939        7,675        19,875     23,770
 Compensation expense         4,075        4,171        12,726     15,150
 Other selling, general and   2,620        3,309        8,442      10,885
 administrative expenses
 Total operating expenses     6,695        7,480        21,168     26,035
 Operating (loss) income      (756)        195          (1,293)    (2,265)
 Other expense, net           -            (48)         (15)       (122)
 (Loss) income from
 continuing operations before
 income tax                   (756)        147          (1,308)    (2,387)
 Provision (benefit) for     74           183          219        (512)
 income tax
 Loss from continuing         (830)        (36)         (1,527)    (1,875)
 operations
 (Loss) income from
 discontinued operations, net (189)        (166)        (204)      227
 of tax
 Net loss                    $        $       $       $    
                              (1,019)      (202)      (1,731)    (1,648)
 Basic and diluted (loss)
 income per share of common
 stock:
 From continuing operations   $       $       $      $     
                              (0.06)          -    (0.10)     (0.13)
 From discontinued operations (0.01)       (0.01)       (0.02)     0.02
 Net loss per basic and       $       $       $      $     
 diluted share of common      (0.07)      (0.01)      (0.12)     (0.11)
 stock
 Weighted average number of
 common shares and
 common share equivalents
 outstanding:
 Basic                        14,609       14,479       14,580     14,417
 Diluted                      14,609       14,479       14,580     14,417

 Segment Data (Unaudited)
 ($ in thousands)
                             Sales      Marketing    PC
                             Services   Services     Services*  Consolidated
 Three months ended
 September 30, 2012:
 Revenue, net                $       $        $       $    31,781
                             25,021    2,196       4,564
 Gross profit                $      $       $       $    
                             4,157      421       1,361      5,939
 Gross profit %              16.6%      19.2%        29.8%      18.7%
 Three months ended
 September 30, 2011:
 Revenue, net                $       $       $       $    36,069
                             29,267    3,952        2,850
 Gross profit                $      $       $      $    
                             5,574     1,575        526       7,675
 Gross profit %              19.0%      39.9%        18.5%      21.3%
 Nine months ended September
 30, 2012:
 Revenue, net                $       $       $        $    91,267
                             68,539    8,061        14,667
 Gross profit                $       $       $       $    19,875
                             13,138    2,691        4,046
 Gross profit %              19.2%      33.4%        27.6%      21.8%
 Nine months ended September
 30, 2011:
 Revenue, net                $        $       $       $   119,008
                             106,207   9,267        3,534
 Gross profit                $       $       $      $    23,770
                             20,713    2,247        810
 Gross profit %              19.5%      24.2%        22.9%      20.0%
 * Product
 Commercialization (PC)
 Services

 

 Selected Balance Sheet Data (Unaudited)
 ($ in thousands)
                            September 30,  December 31,
                            2012           2011
 Cash and cash equivalents  $ 60,529       $ 64,337
 Total current assets       $ 75,458       $ 80,360
 Total current liabilities  40,350         46,078
 Working capital            $ 35,108       $ 34,282
 Total assets               $ 106,079      $ 113,379
 Total liabilities          $ 46,894       $ 53,856
 Total stockholders' equity $ 59,185       $ 59,523

 Selected Cash Flow Data (Unaudited)
 ($ in thousands)
                                           September 30,
                                           2012             2011
 Net loss                                  $    (1,731)  $    (1,648)
 Non-cash items:
  Depreciation and amortization        1,490            2,352
  Stock-based compensation             1,520            1,683
  Other                                106              77
 Net change in assets and liabilities      (4,540)          621
 Net cash (used in) provided by operations $    (3,155)  $    3,085
 Change in cash and cash equivalents       $    (3,808)  $    2,740



SOURCE PDI, Inc.

Website: http://www.pdi-inc.com
Contact: Investor And Media Contact, Melody Carey, Rx Communications Group,
LLC, +1-917-322-2571, mcarey@rxir.com
 
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