PDI Reports 2013 Fourth Quarter and Full Year Financial Results

       PDI Reports 2013 Fourth Quarter and Full Year Financial Results

Management Will Host Conference Call Today February 27 at 5:00 pm ET

PR Newswire

PARSIPPANY, N.J., Feb. 27, 2014

PARSIPPANY, N.J., Feb. 27, 2014 /PRNewswire/ --PDI, Inc. (Nasdaq: PDII),
today reported financial and operational results for the fourth quarter and
year ended December 31, 2013. Summary financial and operational
accomplishments include:

  oRevenues increased 19% to $150.8 million for the year and 2% to $36.4
    million for the fourth quarter of 2013 as compared 2012
  oAdjusted EBITDA (a non-GAAP financial measure) of $(1.1) million for 2013
    compared to $2.8 million for 2012
  oEntered into two collaboration agreements to commercialize molecular
    diagnostic tests in 2013

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.

Condensed Summary Statements of Continuing Operations (Unaudited)
($'s in thousands, expect per share data)
                              4th Quarter Ended     Year Ended
                              December 31,          December 31,
                              2013       2012       2013          2012
Revenue, net                  $        $       $  150,842  $  126,899
                              36,414    35,632
Gross profit                  4,392      6,985      24,410        26,860
Operating expenses:
 Compensation expense       4,105      3,688      17,405        16,414
 Other SG&A                 3,918      3,013      11,282        11,455
 Asset impairment           -          23,517     -             23,517
 Facilities realignment      -          706        -             706
 Total operating      8,023      30,924     28,687        52,092
expenses
Operating loss                $       $        $          $  
                              (3,631)    (23,939)   (4,277)       (25,232)
Other expense, net            (29)       (13)       (59)          (28)
(Benefit) provision for       (12)       (11)       180           208
income tax
Loss from continuing          $       $        $          $  
operations                    (3,648)    (23,941)   (4,516)       (25,468)
Diluted loss per share from   $      $      $         $    
continuing operations         (0.25)     (1.64)    (0.31)       (1.75)



CEO Comments

"PDI was able to execute well in 2013 within the context of a challenging CSO
environment," said Nancy Lurker, CEO. "During the year, we successfully
completed three key strategic initiatives: significantly upgrading internal
systems for our CSO business; completing and launching our innovative new
software platform, PD One; and most importantly for the company's long term
success, beginning the execution of our strategy to be a commercialization
partner for companies in the molecular diagnostics industry. As we head into
2014, we believe we remain very well positioned in the CSO industry and we are
excited about the long-term potential from our emerging PD One and Interpace
Diagnostic initiatives."

Ms. Lurker continued, "In terms of our 2014 outlook, which assumes a
reasonable level of new business wins and no early termination of existing
contracts, we anticipate revenue in our core business to be down slightly
compared to 2013, as a result of fewer new opportunities being available and
awarded in 2013. Gross profit dollars are projected to be approximately flat
compared to 2013, as profit from higher margin offerings and continued
improvements in cost of services offset much of the impact of lower revenue.
Operating expenses are projected to be modestly lower than 2013 resulting in
the projected annual operating loss being slightly better than 2013. Finally,
full year 2014 adjusted EBITDA from the core business is projected to be
slightly positive. This guidance excludes the impact of our Interpace
Diagnostic business. We estimate a minimum level of expenses of $3 million and
we do not foresee any material revenue in 2014. Expenses will be higher if we
move to phase two of either of the current opportunities or we contract for
new opportunities."

"As we've stated previously, we are fully committed to be a leading company in
the CSO industry and plan to maintain and grow our core business," Ms. Lurker
added. "At the same time, by leveraging our core business and infrastructure,
we plan to prudently, but aggressively build a presence as a leading
commercialization company for the molecular diagnostics industry."

Fourth Quarter Business Review

Revenue- For the fourth quarter of 2013, revenue of $36.4 million was $0.8
million or 2% higher than the fourth quarter of 2012 driven by an increase in
the company's Sales Services segment.

  oSales Services revenue of $32.7 million was $2.0 million higher than the
    fourth quarter of 2012 driven by 2012 multi-year new contract wins being
    executed in 2013 and contracts won earlier in 2013.
  oMarketing Services revenue of $0.6 million was $1.5 million lower than the
    fourth quarter of 2012 due primarily to fewer contract signings by Group
    DCA.
  oProduct Commercialization Services revenue of $3.1 million was $0.2
    million higher than the fourth quarter of 2012.

Gross Profit- For the fourth quarter of 2013, gross profit of $4.4 million was
$2.6 million lower than the fourth quarter of 2012 and, as anticipated, the
overall gross profit percentage decreased to 12% in 2013 from 20% in 2012.

  oSales Services gross profit of $4.4 million was $1.5 million lower than
    the fourth quarter of 2012 due primarily to previously disclosed
    competitive pricing pressures.
  oMarketing Services gross profit for the fourth quarter of 2013 was a
    negative $0.6 million due to the decrease in revenue and increased costs
    associated with the recently announced launch of our new product, PD
    One^™.
  oProduct Commercialization Services gross profit of $0.6 million was $0.2
    million lower compared to 2012 primarily due to expenses related to one of
    our collaboration agreements for a molecular diagnostic test.

Total Operating Expenses- Total operating expenses for the fourth quarter of
2013 were $8.0 million as compared to $30.9 million for the same period in
2012. Included in fourth quarter 2012 expenses are $23.5 million of asset
impairment and $0.7 million of facilities realignment charges. Excluding
these items, total operating expenses for the fourth quarter of 2012 were $6.7
million; $1.3 million lower than 2013 operating expenses. The increase in
2013 operating expenses was primarily driven by costs related to our strategic
initiatives, the two collaboration agreements, and an increase in incentive
compensation partially offset by the company's costs savings initiatives.

Operating Loss- The operating loss for the fourth quarter of 2013 was $3.6
million, compared to $23.9 million in the fourth quarter of 2012. Excluding
the impact of the asset impairment and facility realignment charges, Adjusted
Operating Income (a non-GAAP measure defined in the release) in the fourth
quarter of 2012 was $0.3 million. The 2013 operating loss was primarily the
result of the lower margins on new business and the company's investment in
strategic initiatives.

Liquidity and Cash Flow- Adjusted EBITDA (a non-GAAP measure defined in the
release) for the fourth quarter of 2013 was $(2.9) million compared to $1.1
million in the fourth quarter of 2012. Cash and cash equivalents at the end of
the year were $45.6 million, down $7.1 million from December 31, 2012 due
primarily to working capital changes and cash used in our investments in
strategic initiatives.

As of December 31, 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 Operating Income, a non-GAAP
financial measure. Adjusted Operating Income is a metric used by management to
measure the profitability of the ongoing business. Adjusted Operating Income
is defined as operating loss, plus asset impairment and facilities
realignment. The table below includes a reconciliation of this non-GAAP
financial measure to the most directly comparable GAAP financial measure.

Adjusted Operating Income (Loss) (Unaudited)
($ in thousands)
                         4th Quarter Ended           Year Ended
                         December 31,                December 31,
                         2013          2012          2013         2012
Operating loss           $          $           $         $  
                         (3,631)       (23,939)      (4,277)      (25,232)
Asset impairment         -             23,517        -            23,517
Facilities               -             706           -            706
realignment
Adjusted operating       $          $        $         $   
(loss) income            (3,631)       284          (4,277)      (1,009)



In this document, the company also 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)
                        4th Quarter Ended            Year Ended
                        December 31,                 December 31,
                        2013          2012           2013         2012
Operating loss          $          $            $         $  
                        (3,631)       (23,939)       (4,277)      (25,232)
Depreciation and        503           544            1,425        2,034
amortization
Stock compensation      204           271            1,723        1,791
Asset impairment        -             23,517         -            23,517
Facilities              -             706            -            706
realignment
Adjusted EBITDA         $          $          $         $    
                        (2,924)       1,099          (1,129)      2,816



Conference Call

As previously announced, PDI will hold a conference call Thursday, February
27, 2014 to discuss financial and operational results of the fourth quarter
and year ended December 31, 2013. Details as follows:

Time: 5:00 PM (ET)
Dial-in numbers: (855) 592-8761 (U.S. and Canada) or (724) 924-4975
Conference ID#: 33034617

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

The teleconference replay will be available three hours after completion
through March 27, 2014 at (855) 859-2056 (U.S. and Canada) or (404) 537-3406.
The replay pass code is 33034617. 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. The Company has begun leveraging these
substantial capabilities to become a commercialization partner for companies
in the molecular diagnostics industry. 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 subsequently filed Annual
Report on Form 10-K for the year ended December 31, 2013 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        Years Ended
                              December 31,              December 31,
                              2013         2012         2013       2012
Revenue, net                  $        $        $         $  
                              36,414       35,632       150,842   126,899
Cost of services              32,022       28,647       126,432    100,039
Gross profit                  4,392        6,985        24,410     26,860
Compensation expense          4,105        3,688        17,405     16,414
Other selling, general and    3,918        3,013        11,282     11,455
administrative expenses
Asset impairment              -            23,517       -          23,517
Facilities realignment        -            706          -          706
Total operating expenses      8,023        30,924       28,687     52,092
Operating loss                (3,631)      (23,939)     (4,277)    (25,232)
Other expense, net            (29)         (13)         (59)       (28)
Loss from continuing          (3,660)      (23,952)     (4,336)    (25,260)
operations before income tax
(Benefit) provision for       (12)         (11)         180        208
income tax
Loss from continuing          (3,648)      (23,941)     (4,516)    (25,468)
operations
(Loss) income from
discontinued operations, net  (18)         145          (49)       (59)
of tax
Net loss                     $        $         $       $  
                              (3,666)     (23,796)     (4,565)    (25,527)
Basic and diluted (loss)
income per share of common
stock:
From continuing operations    $       $       $      $     
                              (0.25)      (1.64)      (0.31)     (1.75)
From discontinued operations  -            0.01         -          -
Net loss per basic and        $       $       $      $     
diluted share of common stock (0.25)      (1.63)      (0.31)     (1.75)
Weighted average number of
common shares and
common share equivalents
outstanding:
Basic                         14,750       14,627       14,718     14,585
Diluted                       14,750       14,627       14,718     14,585



Segment Data (Unaudited)
($ in thousands)
                         Sales        Marketing    PC
                         Services     Services     Services*    Consolidated
Three months ended
December 31, 2013:
Revenue, net             $        $       $         $   
                         32,701         603      3,110       36,414
Gross profit             $       $       $       $    
                         4,393         (592)      591          4,392
Gross profit %           13.4%        -98.2%       19.0%        12.1%
Three months ended
December 31, 2012:
Revenue, net             $        $       $         $   
                         30,667       2,066        2,899       35,632
Gross profit             $       $       $       $    
                         5,938         196       851          6,985
Gross profit %           19.4%        9.5%         29.4%        19.6%
Year ended December 31,
2013:
Revenue, net             $         $       $          $   150,842
                         133,968      4,569        12,305
Gross profit             $        $       $         $   
                         21,002        420       2,988       24,410
Gross profit %           15.7%        9.2%         24.3%        16.2%
Year ended December 31,
2012:
Revenue, net             $        $        $          $   126,899
                         99,206       10,127       17,566
Gross profit             $        $       $         $   
                         19,076       2,887        4,897       26,860
Gross profit %           19.2%        28.5%        27.9%        21.2%
* Product
Commercialization (PC)
Services

Selected Balance Sheet Data (Unaudited)
($ in thousands)
                           December 31,
                           2013              2012
Cash and cash equivalents  $     45,639  $     52,783
Total current assets       $     62,709  $     71,583
Total current liabilities  31,400            36,390
Working capital            $     31,309  $     35,193
Total assets               $     69,064  $     78,447
Total liabilities          $     36,585  $     42,817
Total stockholders' equity $     32,479  $     35,630



Selected Cash Flow Data (Unaudited)
($ in thousands)
                                     December 31,
                                     2013                2012
Net loss                             $     (4,565)  $    (25,527)
Non-cash items:
 Depreciation and amortization   1,425               2,034
 Stock-based compensation        1,723               1,791
 Other                           151                 23,744
Net change in assets and liabilities (2,246)             (12,328)
Net cash used in operations          $     (3,512)  $    (10,286)
Change in cash and cash equivalents  $     (7,144)  $    (11,554)

Logo - http://photos.prnewswire.com/prnh/20140114/NY45872LOGO

SOURCE PDI, Inc.

Website: http://www.pdi-inc.com
Contact: INVESTOR CONTACT: Bob East, Westwicke Partners, (443) 213-0502,
bob.east@westwicke.com
 
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