On February 15, 2021 Medpace Holdings, Inc. (Nasdaq: MEDP) ("Medpace") reported financial results for the fourth quarter and full year ended December 31, 2020 (Press release, Medpace, FEB 15, 2021, View Source [SID1234575076]).

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Fourth Quarter and Full Year 2020 Financial Results

Revenue for the three months ended December 31, 2020 increased 13.0% to $259.7 million, compared to $229.9 million for the comparable prior-year period. Revenue for the year ended December 31, 2020 increased 7.5% to $925.9 million, compared to $861.0 million for the year ended December 31, 2019. On a constant currency organic basis, revenue for the fourth quarter of 2020 increased 12.2% compared to the fourth quarter of 2019 and increased 7.3% for the year ended December 31, 2020 compared to the year ended December 31, 2019.

Backlog as of December 31, 2020 grew 20.1% to $1.5 billion from $1.3 billion as of December 31, 2019. Net new business awards were $358.6 million, representing a net book-to-bill ratio of 1.38x for the fourth quarter of 2020, as compared to $281.1 million for the comparable prior-year period. For the year ended December 31, 2020, net new business awards were $1,175.0 million, representing a net book-to-bill ratio of 1.27x, compared to $1,094.4 million for the year ended December 31, 2019. The Company calculates the net book-to-bill ratio by dividing net new business awards by revenue.

For the fourth quarter of 2020, total direct costs were $176.8 million, compared to total direct costs of $167.2 million in the fourth quarter of 2019. For the full year 2020, total direct costs were $647.2 million, compared to $615.3 million in the full year 2019. Selling, general and administrative (SG&A) expenses were $22.4 million in the fourth quarter of 2020, compared to SG&A expenses of $21.3 million in the fourth quarter of 2019. For the full year 2020, SG&A expenses were $92.2 million, compared to $95.2 million for the full year 2019.

GAAP net income for the fourth quarter of 2020 was $50.9 million, or $1.35 per diluted share, versus GAAP net income of $29.8 million, or $0.78 per diluted share, for the fourth quarter of 2019. This resulted in a net income margin of 19.6% and 13.0% for the fourth quarter of 2020 and 2019, respectively. GAAP net income for the full year 2020 was $145.4 million, or $3.84 per diluted share, versus GAAP net income of $100.4 million, or $2.67 per diluted share, for the full year 2019. This resulted in a net income margin of 15.7% and 11.7% for the full year 2020 and 2019, respectively.

EBITDA for the fourth quarter of 2020 increased 46.3% to $60.2 million, or 23.2% of revenue, compared to $41.1 million, or 17.9% of revenue, for the comparable prior-year period. EBITDA for the full year 2020 increased 25.5% to $187.8 million, or 20.3% of revenue compared to $149.6 million, or 17.4% of revenue, for the prior year. On a constant currency basis, EBITDA for the fourth quarter of 2020 increased 46.4% from the fourth quarter of 2019 and increased 24.6% for the full year 2020 compared to the full year 2019.

A reconciliation of the Company’s non-GAAP financial measures, including EBITDA and EBITDA margin to the corresponding GAAP measures is provided below.

Balance Sheet and Liquidity

The Company’s Cash and cash equivalents were $277.8 million at December 31, 2020, and the Company generated $105.5 million in cash flow from operating activities during the fourth quarter of 2020. During the fourth quarter of 2020, the Company repurchased approximately 0.41 million shares at an average price of $115.42 per share for a total of $47.4 million. The Company had $102.6 million remaining under its authorized share repurchase program at the end of the quarter.

Financial Guidance

The Company forecasts 2021 revenue in the range of $1.075 billion to $1.175 billion, representing growth of 16.1% to 26.9% over 2020 revenue of $925.9 million. GAAP net income for full year 2021 is forecasted in the range of $154.5 million to $170.5 million. Additionally, full year 2021 EBITDA is expected in the range of $205.0 million to $225.0 million. Based on forecasted 2021 revenue of $1.075 billion to $1.175 billion and GAAP net income of $154.5 million to $170.5 million, diluted earnings per share (GAAP) is forecasted in the range of $4.08 to $4.50. This guidance assumes a full year 2021 tax rate of 15.0% to 16.0% and does not reflect the potential impact of any share repurchases the Company may make pursuant to the share repurchase program.

Conference Call Details

Medpace will host a conference call at 9:00 a.m. ET, Tuesday, February 16, 2021, to discuss its fourth quarter 2020 results.

To participate in the conference call, dial 800-219-7113 (domestic) or 574-990-1030 (international) using the passcode 9646903.

To access the conference call via webcast, visit the "Investors" section of Medpace’s website at medpace.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.

A supplemental slide presentation will also be available at the "Investors" section of Medpace’s website prior to the start of the call.

A recording of the call will be available until Tuesday, February 23, 2021. To hear this recording, dial 855-859-2056 (domestic) or 404-537-3406 (international) using the passcode 9646903.