PDI Reports 2014 Second Quarter Financial Results

              PDI Reports 2014 Second Quarter Financial Results

Management Will Host Conference Call Tomorrow August 14 at 8:30 am ET

PR Newswire

PARSIPPANY, N.J., Aug. 13, 2014

PARSIPPANY, N.J., Aug. 13, 2014 /PRNewswire/ --PDI, Inc. (Nasdaq: PDII),
today reported financial and operational results for the second quarter ended
June 30, 2014. Summary financial and operational accomplishments include:

  oRevenue of $31.6 million for the second quarter of 2014
  oAdjusted EBITDA (a non-GAAP financial measure) of $(1.5) million for the
    second quarter of 2014
  oOn August 13, 2014, PDI acquired Asuragen, Inc.'s miRInform Thyroid and
    miRInform Pancreas cancer test assets
  oSubsequent to the second quarter, Heiner Dreismann, Ph.D., a highly
    experienced molecular diagnostics executive and former President and CEO
    of Roche Molecular Systems, joined PDI's board of directors

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)
                              2nd Quarter Ended         Six Months Ended
                              June 30,*                 June 30,*
                              2014         2013         2014         2013
Revenue, net                  $       $       $       $    
                              31.6         37.2         64.4          80.2
Gross profit                  4.8          6.8          9.9          15.3
Operating expenses:
 Compensation expense       3.9          4.9          7.4          9.1
 Other SG&A                 3.5          2.8          6.5          4.8
 Total operating      7.3          7.7          13.9         13.9
expenses
Operating (loss) income      $       $       $       $    
                              (2.5)        (0.8)       (4.0)          1.4
Provision for income tax      0.1          0.1          0.1          0.1
(Loss) income from continuing $       $       $       $    
operations                    (2.6)        (0.9)       (4.2)          1.2
Diluted (loss) income per     $        $        $        $    
share from continuing         (0.17)       (0.06)      (0.28)        0.08
operations
 *Unaudited



CEO Comments

"We are extremely excited to announce the agreement to acquire specific
diagnostic assets from Asuragen, Inc. The transaction is the first step for
our Interpace Diagnostic subsidiary in expanding into higher growth, higher
margin markets and starts to establish Interpace as a commercially focused
molecular diagnostic subsidiary," said Nancy Lurker, CEO.

"The transaction includes two oncology assays, miRInform Thyroid and miRInform
Pancreas, associated intellectual property, a large biobank with over 5,000
patient tissue samples, as well as, additional thyroid tests in development."

"In addition, Heiner Dreismann, Ph.D., has joined our board of directors and
brings with him nearly 30 years of experience in the diagnostic industry and
extensive background in molecular diagnostics including his former tenure as
President and CEO of Roche Molecular Systems. We look forward to his
invaluable insight as we continue to evolve as a company."

"In terms of second quarter results, our revenue of $32 million were in line
with our expectations and continues to reflect the soft RFP volume we
experienced in our Sales Services business. Gross margins of 15%, while down
compared to last year, are in line with current industry norms. Our adjusted
EBITDA loss of $1.5 million in the quarter was primarily driven by spending on
our key strategic initiatives and lower gross profit," said Nancy Lurker, CEO.

Ms. Lurker continued, "As for our outlook for the remainder of the year, we
continue to expect revenue in our core business to be down in the third
quarter and for the full year compared to 2013. We still anticipate an
operating loss in the range of $4 - $5 million and approximately breakeven
adjusted EBITDA in the core business for the full year 2014. Given today's
Asuragen transaction, we now see a modest amount of revenues from Interpace
Diagnostic for 2014 and an operating loss in the range of $5 - $6 million from
all Interpace Diagnostics activities including additional selling and
marketing and pre-launch expenses to support the anticipated ramp up of
revenue from the acquired Asuragen assets."

Second Quarter Business Review

Revenue- For the second quarter of 2014, revenue of $31.6 million was $5.7
million or 15% lower than the second quarter of 2013 driven by the natural
expiration or reduction of contracts being executed in 2014 exceeding new
contracts entered into in the company's Sales Services segment.

  oSales Services revenue of $28.1 million was $4.2 million lower than the
    second quarter of 2013. New contract wins from the softer RFP volume
    experienced in the latter half of 2013 was not sufficient to offset the
    natural expiration or reduction of certain contracts.

  oMarketing Services revenue of $0.6 million was $1.0 million lower than the
    second quarter of 2013 due to fewer contract signings by Group DCA.

  oProduct Commercialization Services revenue of $2.9 million was $0.4
    million lower than the second quarter of 2013.

Gross Profit- For the second quarter of 2014, gross profit of $4.8 million was
$2.1 million lower than the second quarter of 2013 and, as anticipated, the
overall gross profit percentage decreased to 15% in 2014 from 18% in 2013.

  oSales Services gross profit of $4.8 million was $0.5 million lower than
    the second quarter of 2013 due primarily to lower revenue and previously
    disclosed competitive pricing pressures.

  oMarketing Services gross profit for the second quarter of 2014 was a
    negative $0.5 million due to the decrease in revenue and increased costs
    associated with the launch of our new product, PD One™.

  oProduct Commercialization Services gross profit of $0.6 million was $0.4
    million lower compared to the second quarter of 2013 primarily due to
    expenses related to one of our collaboration agreements for molecular
    diagnostic tests.

Total Operating Expenses- Total operating expenses for the second quarter of
2014 were $7.3 million as compared to $7.7 million for the same period in
2013. Included in second quarter 2014 expenses are $0.7 million of investment
costs related to our molecular diagnostics strategic initiative. Excluding
these costs, total operating expenses for the second quarter of 2014 were $6.6
million; $1.1 million lower than 2013 operating expenses.

Operating Income/Loss- The operating loss for the second quarter of 2014 was
$2.5 million, compared to $0.8 million for the same period in 2013. The 2014
operating loss was primarily the result of the anticipated lower revenue and
margins as well as the company's investment in strategic initiatives.

Liquidity and Cash Flow- Adjusted EBITDA (a non-GAAP measure defined in the
release) for the second quarter of 2014 was $(1.5) million compared to $0.2
million in the second quarter of 2013. Cash and cash equivalents at the end of
the second quarter were $35.6 million, down $10.0 million from December 31,
2013 due primarily to increases in working capital requirements, timing of
certain payments from customers and investments in our strategic initiatives.
Factoring in the Asuragen acquisition and anticipated additional spending in
Interpace Diagnostics, the company estimates year end 2014 cash of $22 - $25
million.

As of June 30, 2014, 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 a certain
non-GAAP financial measure to help evaluate the results of its performance.
The company believes that this non-GAAP financial measure, when presented in
conjunction with comparable GAAP financial measure, is useful to both
management and investors in analyzing the company's ongoing business and
operating performance. The company believes that providing 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)
                          2nd Quarter Ended           Six Months Ended
                          June 30,                    June 30,
                          2014           2013         2014          2013
Operating (loss) income  $           $       $          $    
                          (2,523)        (847)        (4,020)       1,406
Depreciation and          380            289          837           577
amortization
Stock compensation        668            722          1,358         1,073
Adjusted EBITDA           $           $       $          $    
                          (1,475)        164         (1,825)       3,056



Conference Call

As previously announced, PDI will hold a conference call Thursday, August 14,
2014 to discuss financial and operational results of the second quarter ended
June 30, 2014. Details as follows:

Time: 8:30 AM (ET)
Dial-in numbers: (855) 592-8761 (U.S. and Canada) or (724) 924-4975
Conference ID#: 27904432

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

The teleconference replay will be available three hours after completion
through September 13, 2014 at (855) 859-2056 (U.S. and Canada) or (404)
537-3406. The replay pass code is 27904432. The archived web cast will be
available for one year.

About PDI, Inc.

PDI is a leading healthcare commercialization company providing superior
go-to-market strategy and execution to established and emerging healthcare
companies through its three core business units. PDI's Interpace Diagnostics
division is working to develop and commercialize molecular diagnostic tests
leveraging the latest technology and personalized medicine for better patient
diagnosis and management. The company's Contract Sales business unit (CSO) is
a leading provider of outsourced pharmaceutical, medical device and
diagnostics sales teams. Its Group DCA division is a pioneer in insight-driven
digital communication services and integrated multichannel message delivery.

For more information about PDI, Inc. or Interpace Diagnostics, please visit
http://www.pdi-inc.com and www.interpacediagnostics.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 previously 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.



PDI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
                              Three Months Ended        Six Months Ended
                              June 30,                  June 30,
                              2014         2013         2014       2013
Revenue, net                  $        $        $        $   
                              31,578       37,245       64,356    80,168
Cost of services              26,787       30,396       54,456     64,846
Gross profit                  4,791        6,849        9,900      15,322
Compensation expense          3,862        4,914        7,403      9,069
Other selling, general and    3,452        2,782        6,517      4,847
administrative expenses
Total operating expenses      7,314        7,696        13,920     13,916
Operating (loss) income      (2,523)      (847)        (4,020)    1,406
Other expense, net            (13)         (24)         (30)       (34)
(Loss) income from continuing
operations before
income tax                    (2,536)      (871)        (4,050)    1,372
Provision for income tax      65           64           131        128
(Loss) income from continuing (2,601)      (935)        (4,181)    1,244
operations
(Loss) income from
discontinued operations, net  (57)         52           (89)       (2)
of tax
Net (loss) income            $        $       $       $    
                              (2,658)      (883)      (4,270)    1,242
Basic (loss) income per share
of common stock:
From continuing operations    $       $       $      $     
                              (0.17)      (0.06)      (0.28)      0.08
From discontinued operations  (0.01)       -            (0.01)     -
Net (loss) income per basic   $       $       $      $     
share of common stock         (0.18)      (0.06)      (0.29)      0.08
Diluted (loss) income per
share of common stock:
From continuing operations    $       $       $      $     
                              (0.17)      (0.06)      (0.28)      0.08
From discontinued operations  (0.01)       -            (0.01)     -
Net (loss) income per diluted $       $       $      $     
share of common stock         (0.18)      (0.06)      (0.29)      0.08
Weighted average number of
common shares and
common share equivalents
outstanding:
Basic                         14,910       14,713       14,860     14,691
Diluted                       14,910       14,713       14,860     15,154



Segment Data (Unaudited)
($ in thousands)
                     Sales        Marketing      PC
                     Services     Services       Services*    Consolidated
Three months ended
June 30, 2014:
Revenue, net         $        $        $         $    31,578
                     28,067       614           2,897
Gross profit (loss)  $       $         $       $     4,791
                     4,765        (526)         552
Gross profit %       17.0%        -85.7%         19.1%        15.2%
Three months ended
June 30, 2013:
Revenue, net         $        $         $         $    37,245
                     32,294       1,644          3,307
Gross profit         $       $        $       $     6,849
                     5,252        638           959
Gross profit %       16.3%        38.8%          29.0%        18.4%
                     Sales        Marketing      PC
                     Services     Services       Services*    Consolidated
Six months ended
June 30, 2014:
Revenue, net         $        $          $         $    64,356
                     56,862       1,617         5,877
Gross profit (loss)  $       $         $         $     9,900
                     9,508        (694)         1,086
Gross profit %       16.7%        -42.9%         18.5%        15.4%
Six months ended
June 30, 2013:
Revenue, net         $        $          $         $    80,168
                     70,519       3,185         6,464
Gross profit         $        $          $         $    15,322
                     12,571       1,022         1,729
Gross profit %       17.8%        32.1%          26.7%        19.1%
* Product Commercialization (PC) Services





Selected Balance Sheet Data (Unaudited)
($ in thousands)
                                     June 30,        December 31,
                                     2014              2013
Cash and cash equivalents            $     35,621  $     45,639
Total current assets                 $     53,176  $     62,709
Total current liabilities            25,621            31,400
Working capital                      $     27,555  $     31,309
Total assets                         $     59,459  $     69,064
Total liabilities                    $     30,107  $     36,585
Total stockholders' equity           $     29,352  $     32,479
Selected Cash Flow Data (Unaudited)
($ in thousands)
                                     June 30,
                                     2014              2013
Net (loss) income                    $    (4,270)   $    1,242
Non-cash items:
 Depreciation and amortization   837               577
 Stock-based compensation        1,358             1,073
 Other                           71                71
Net change in assets and liabilities (6,284)           (3,537)
Net cash used in operations          $    (8,288)   $     (574)
Change in cash and cash equivalents  $   (10,018)    $   (1,760)

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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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