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PDI Reports Third Quarter 2013 Financial Results

               PDI Reports Third Quarter 2013 Financial Results

PR Newswire

PARSIPPANY, N.J., Nov. 12, 2013

PARSIPPANY, N.J., Nov.12, 2013 /PRNewswire/ --PDI, Inc. (Nasdaq: PDII),
today reported financial and operational results for the third quarter ended
September 30, 2013. Third quarter and subsequent financial and operational
accomplishments include:

  oRevenues increased 8% to $34.3 million for the third quarter of 2013 and
    25% to $114.4 million for the nine months of 2013 compared to the same
    periods last year
  oAdjusted EBITDA (a non-GAAP financial measure) of $(1.3) million for the
    2013 third quarter and $1.8 million for the nine months of 2013
  oEntered into two collaboration agreements to commercialize molecular
    diagnostic tests in concert with our strategic plan
  oSigned new sales services contracts during the third quarter, totaling
    approximately $8.0 million



Condensed Summary Statements of Continuing Operations
($'s in millions, expect per share data)
                                          3rd Quarter Ended  Nine Months Ended
                                          September 30,*     September 30,*
                                          2013      2012     2013      2012
Revenue, net                              $34.3     $31.8    $114.4    $91.3
Gross profit                              4.7       5.9      20.0      19.9
Operating expenses:
 Compensation expense                   4.2       4.1      13.3      12.7
 Other SG&A                             2.5       2.6      7.4       8.4
 Total operating expenses         6.7       6.7      20.7      21.2
Operating loss                            $(2.1)    $(0.8)   $(0.6)    $(1.3)
Provision for income tax                  0.1       0.1      0.2       0.2
Loss from continuing operations           $(2.1)    $(0.8)   $(0.9)    $(1.5)
Diluted loss per share from continuing    $(0.14)   $(0.06)  $(0.06)   $(0.10)
operations
 *Unaudited



CEO Comments

Nancy Lurker, Chief Executive Officer of PDI, Inc. commented, "Revenues for
the third quarter and nine months were up 8% and 25%, respectively, driven by
contracts signed at the end of 2012 and early 2013. While gross profit as a
percentage of net revenues, as anticipated, was down compared to last year and
the first half of this year, operating costs were essentially flat compared to
last year and lower compared to the second quarter of 2013, as a result of
continuing expense controls.

"We now anticipate our operating loss for the full year to be less than
previously estimated. Even though we are now targeting revenue growth of
roughly 20% for 2013, due to a lack of FDA approval on one assignment, and a
pending product acquisition not occurring on another assignment, we still
anticipate full year gross profit dollars to approach last year's levels.
While we continue to fully invest in our previously disclosed strategic
initiatives, these related expenses should be offset to a large degree by our
ongoing expense control efforts. We now anticipate that total operating
expenses will increase only modestly for the full year, resulting in operating
income better than originally expected. We also expect Adjusted EBITDA, our
measure of cash flow from operations, to be positive for the year."

Ms. Lurker further commented, "During the third quarter, we continued to
execute on our strategic initiatives of enhancing systems in our core
business, investing in new technology for our Group DCA segment, and launching
our molecular diagnostic strategy. Over the last several months, we have
announced two significant opportunities to commercialize innovative molecular
diagnostics tests. These types of opportunities allow us to leverage our
existing capabilities and enter into new, high growth markets. By positioning
PDI as a premier commercialization partner to both the life science and
molecular diagnostic industries, we expect to deliver more predictable, higher
growth, and higher margin revenue to our shareholders.

"Further strengthening our molecular diagnostic strategy, we recently
announced that John Climaco joined our board of directors. John has had an
extensive career as a CEO in the molecular diagnostic field and we look
forward to his active contribution and pertinent perspective."

Third Quarter Business Review

Revenue- For the third quarter of 2013, revenue of $34.3 million was $2.5
million or 8% higher than the third quarter of 2012 driven by an increase in
the company's Sales Services segment.

  oSales Services revenue of $30.7 million was $5.7 million higher than the
    third quarter of 2012 driven by 2012 multi-year new contract wins being
    executed in 2013 and contracts won earlier this year.
  oMarketing Services revenue of $0.8 million was $1.4 million lower than the
    third quarter of 2012 due primarily to fewer contract signings by Group
    DCA.
  oProduct Commercialization Services revenue of $2.7 million was $1.8
    million lower than the third quarter of 2012 due to the internalization of
    selected commercialization activities by a customer effective October 1,
    2012.

Gross Profit- For the third quarter of 2013, gross profit of $4.7 million was
$1.2 million lower than the third quarter of 2012 and, as anticipated, the
overall gross profit percentage decreased to 14% in 2013 from 19% in 2012.

  oSales Services gross profit of $4.0 million was $0.1 million lower than
    the third quarter of 2012 due to previously disclosed competitive pricing
    pressures.
  oMarketing Services gross profit for the third quarter of 2013 was
    approximately breakeven due to the decline in this segment's revenue.
  oProduct Commercialization Services gross profit of $0.7 million was $0.7
    million lower compared to 2012 as a result of lower revenue due to the
    internalization of commercialization activities by a customer as
    previously mentioned.

Total Operating Expenses- Total operating expenses for the third quarter of
2013 of $6.7 million was essentially flat compared to the same period in 2012.
The company's costs savings initiatives offset the company's investment in
strategic initiatives.

Operating Loss- The operating loss for the third quarter of 2013 was $2.1
million, compared to $0.8 million in the third quarter of 2012. The $1.3
million increase in 2013 operating loss was primarily the result of lower
margins on new business in our Sales Services segment.

Liquidity and Cash Flow- Adjusted EBITDA (a non-GAAP measure defined in the
release) for the third quarter of 2013 was $(1.3) million compared to $0.2
million in the third quarter of 2012. Adjusted EBITDA year to date was $1.8
million as compared to $1.7 million last year. Cash and cash equivalents at
the end of the third quarter were $49.6 million, down $3.2 million from
December 31, 2012, due primarily to working capital changes and capital
expenditures.

As of September 30, 2013, 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 throughout 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.

In this document, the company discusses Adjusted EBITDA, a non-GAAP financial
measure. Adjusted EBITDA is a metric used by management to measure cash flow
of the ongoing business. Adjusted EBITDA is defined as operating income or
loss, plus depreciation and amortization, non-cash stock-based compensation,
and other non-cash expenses. The table below includes a reconciliation of this
non-GAAP financial measure to the most directly comparable GAAP financial
measure.



Adjusted EBITDA (Unaudited)
($ in thousands)
                              3rd Quarter Ended  Nine Months Ended
                              September 30,      September 30,
                              2013      2012     2013    2012
Operating loss                $(2,052)  $ (756)  $(646)  $ (1,293)
Depreciation and amortization 345       494      922     1,490
Stock compensation            446       484      1,519   1,520
Adjusted EBITDA               $(1,261)  $222     $1,795  $1,717



Conference Call

As previously announced, PDI will hold a conference call Tuesday, November 12,
2013 to discuss financial and operational results of the third quarter ended
September 30, 2013. Details as follows:

Time: 5:00 PM (ET)
Dial-in numbers: (866) 644-4654 (U.S. and Canada) or (706) 643-1203
Conference ID#: 89659377

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

The teleconference replay will be available three hours after completion
through November 17, 2013 at (855) 859-2056 (U.S. and Canada) or (404)
537-3406. The replay pass code is 89659377. 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, 2012, 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,
                                        2013      2012      2013      2012
Revenue, net                            $34,260   $31,781   $114,428  $91,267
Cost of services                        29,564    25,842    94,410    71,392
Gross profit                            4,696     5,939     20,018    19,875
Compensation expense                    4,231     4,075     13,300    12,726
Other selling, general and              2,517     2,620     7,364     8,442
administrative expenses
Total operating expenses                6,748     6,695     20,664    21,168
Operating loss                          (2,052)   (756)     (646)     (1,293)
Other income (expense), net             3         -         (30)      (15)
Loss from continuing operations before
income tax                              (2,049)   (756)     (676)     (1,308)
Provision for income tax                64        74        192       219
Loss from continuing operations         (2,113)   (830)     (868)     (1,527)
Loss from discontinued operations, net  (28)      (189)     (31)      (204)
of tax
Net loss                                $(2,141)  $(1,019)  $(899)    $(1,731)
Basic and diluted loss per share of
common stock:
From continuing operations              $(0.14)   $(0.06)   $(0.06)   $(0.10)
From discontinued operations            (0.01)    (0.01)    -         (0.02)
Net loss per basic and diluted share of $(0.15)   $(0.07)   $(0.06)   $(0.12)
common stock
Weighted average number of common
shares and
common share equivalents outstanding:
Basic                                   14,740    14,609    14,708    14,580
Diluted                                 14,740    14,609    14,708    14,580



Segment Data (Unaudited)
($ in thousands)
                                  Sales     Marketing  PC
                                  Services  Services   Services*  Consolidated
Three months ended September 30,
2013:
Revenue, net                      $30,748   $781       $2,731     $34,260
Gross profit                      $4,038    $(10)      $668       $4,696
Gross profit %                    13.1%     -1.3%      24.5%      13.7%
Three months ended September 30,
2012:
Revenue, net                      $25,021   $2,196     $4,564     $31,781
Gross profit                      $4,157    $421       $1,361     $5,939
Gross profit %                    16.6%     19.2%      29.8%      18.7%
Nine months ended September 30,
2013:
Revenue, net                      $101,267  $3,966     $9,195     $114,428
Gross profit                      $16,609   $1,012     $2,397     $20,018
Gross profit %                    16.4%     25.5%      26.1%      17.5%
Nine months ended September 30,
2012:
Revenue, net                      $68,539   $8,061     $14,667    $91,267
Gross profit                      $13,138   $2,691     $4,046     $19,875
Gross profit %                    19.2%     33.4%      27.6%      21.8%
* Product Commercialization (PC)
Services



Selected Balance Sheet Data (Unaudited)
($ in thousands)
                           September 30,      December 31,
                           2013                2012
Cash and cash equivalents  $      49,627  $       52,783
Total current assets       $      66,524  $       71,583
Total current liabilities  31,626              36,390
Working capital            $      34,898  $       35,193
Total assets               $      73,214  $       78,447
Total liabilities          $      37,207  $       42,817
Total stockholders' equity $      36,007  $       35,630



Selected Cash Flow Data (Unaudited)
($ in thousands)
                                        Nine Months Ended September 30,
                                        2013                   2012
Net loss                                $        (899)  $       
                                                               (1,731)
Non-cash items:
 Depreciation and amortization      922                    1,490
 Stock-based compensation           1,519                  1,520
 Other                              115                    106
Net change in assets and liabilities    (1,420)                (4,540)
Net cash provided by (used in)          $         237  $       
operations                                                     (3,155)
Change in cash and cash equivalents     $      (3,156)   $       
                                                               (3,808)



SOURCE PDI, Inc.

Contact: INVESTOR: Bob East, Westwicke Partners, (443) 213-0502,
bob.east@westwicke.com