On April 28, 2021 PRA Health Sciences, Inc. ("PRA," "we," "us" or the "Company") (NASDAQ: PRAH) reported financial results for the quarter ended March 31, 2021 (Press release, PRA Health Sciences, APR 28, 2021, View Source [SID1234578639]).
"I am delighted to report double-digit revenue and earnings growth for the first quarter of 2021" said Colin Shannon, PRA’s President and Chief Executive Officer. "The year has started on a strong note and we continue to be well-positioned for the remainder of 2021. We are working diligently preparing to close our merger with ICON, which is anticipated to close in July of this year."
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Net new business for our Clinical Research segment for the three months ended March 31, 2021 excluding reimbursement revenue was $797.2 million, representing growth of 31.8% and a net book-to-bill ratio of 1.24 for the period. Net new business for our Clinical Research segment for the three months ended March 31, 2021 including reimbursement revenue was $1,154.4 million, representing growth of 20.8% and a net book-to-bill of 1.33 for the period. We continue to see strength across the entire Clinical Research segment and our new business continues to be diversified across a number of different therapeutic areas. The mix of our new business awards continues to be in line with prior years with approximately 50% of our new business coming from large pharma and the remainder coming from mid-sized pharma and biotech. Net new business, excluding reimbursement revenue, contributed to an ending backlog at March 31, 2021 of $5.5 billion, an increase of 16.4% year over year.
For the three months ended March 31, 2021, revenue was $933.8 million, which represents an increase of 19.1%, or $150.1 million, compared to the three months ended March 31, 2020 at actual foreign exchange rates. On a constant currency basis, revenue increased $137.6 million, an increase of 17.6% compared to the first quarter of 2020. By segment, the Clinical Research segment generated revenues of $866.6 million, representing an increase of 19.3%, while the Data Solutions segment generated revenues of $67.1 million, representing an increase of 16.6%. Our customer concentration continues to be well-diversified, with our top five clients representing approximately 35% of revenue, with no client representing more than 10% of our revenue during the quarter.
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Direct costs, exclusive of depreciation and amortization, were $472.0 million during the three months ended March 31, 2021 compared to $403.9 million for the three months ended March 31, 2020 at actual foreign exchange rates. On a constant currency basis, direct costs increased $57.5 million compared to the first quarter of 2020. The increase in direct costs continues to be driven by increased labor costs in our Clinical Research segment as we continue to hire to support our growth and increased data costs in our Data Solutions segment as we renew existing contracts and add new data assets. Direct costs were 50.5% of revenue during the first quarter of 2021 compared to 51.5% of revenue during the first quarter of 2020.
Selling, general and administrative expenses were $122.8 million during the three months ended March 31, 2021 compared to $107.0 million for the three months ended March 31, 2020. Selling, general and administrative costs were 13.1% of revenue during the first quarter of 2021 compared to 13.6% of revenue during the first quarter of 2020.
GAAP net income was $56.9 million for the three months ended March 31, 2021, or $0.86 per share on a diluted basis, compared to GAAP net income of $40.7 million for the three months ended March 31, 2020, or $0.63 per share on a diluted basis.
EBITDA was $114.4 million for the three months ended March 31, 2021, representing an increase of 10.8% compared to the three months ended March 31, 2020. Adjusted EBITDA was $135.8 million for the three months ended March 31, 2021, representing an increase of 21.1% compared to the three months ended March 31, 2020.
Adjusted net income was $89.6 million for the three months ended March 31, 2021, representing an increase of 33.0% compared to the three months ended March 31, 2020. Adjusted net income per diluted share was $1.35 for the three months ended March 31, 2021, representing an increase of 28.6% compared to the three months ended March 31, 2020.
Acquisition by ICON plc
On February 24, 2021, we entered into the a definitive merger agreement with ICON plc (ICON), ICON US Holdings Inc. (US Holdco) and Indigo Merger Sub, Inc. (Merger Sub). Under the terms of the merger agreement, Merger Sub will merge with and into PRA, with PRA surviving as a wholly owned subsidiary of ICON and US HoldCo. Upon successful completion of the merger, our stockholders will receive $80.00 per share in cash and 0.4125 ICON ordinary shares for each share of our common stock.
Conference Call Details
PRA will not hold a first quarter 2021 conference call.
Additional Information
A reconciliation of our non-GAAP measures, EBITDA, adjusted EBITDA, adjusted net income, adjusted net income per share, to the corresponding GAAP measures is included in this press release.
A financial supplement with first quarter 2021 results, which should be read in conjunction with this press release, may be found in the Investor Relations section of our website at investor.prahs.com in a document titled "Q1 2021 Earnings Presentation."