ICON Public Limited Company (NASDAQ:ICLR) Q1 2017 Earnings Conference Call - Preliminary Transcript

Apr 27, 2017 • 09:00 am ET


ICON Public Limited Company (NASDAQ:ICLR) Q1 2017 Earnings Conference Call - Preliminary Transcript


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Unidentified Speaker

Thank you, Sarah. Good day, ladies and gentlemen. Thank you for joining us on this call covering the Quarter Ended March 31st, 2017. Also on the call today, we have our CEO, Dr. Steve Cutler; and our CFO, Mr. Brendan Brennan.

I would like to note that this call is webcast and that there are slides available to download on our website to accompany today's call. Certain statements in today's call will be forward-looking statements. Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business and listeners are cautioned that forward-looking statements are not guarantees of future performance. The company's filings with the Securities and Exchange Commission discuss the risks and uncertainties associated with the company's business.

This presentation includes selected non-GAAP financial measures. For a presentation of the most directly comparable GAAP financial measures, please refer to the press release statements headed Consolidated Income Statements Unaudited U.S. GAAP. While non-GAAP financial measures are not superior to or a substitute for the comparable GAAP measures, we believe certain non-GAAP information is more useful to investors for historical comparison purposes.

We'll be limiting the call today to one hour and would therefore ask participants to keep their questions to one each, with an opportunity to ask one related follow-up question.

I would now like to hand over the call to our CFO, Mr. Brendan Brennan.

Brendan Brennan

Thank you, Jonathan. In quarter one, we achieved gross business awards of $580 million and incurred $59 million of cancellations. As a result, net awards in the quarter were $521 million and net book to bill of 1.21 times. Net revenue in quarter one was $432 million. This represents year-on-year growth of 7.8% or 8.3% on a constant currency basis.

On a constant dollar organic basis, year-on-year revenue growth was 4.5%. For the quarter, our top clients represented 24% of revenue compared to 29% last year. Our top five customers represented 45% of revenue in both this quarter and the comparative quarter last year. Similarly, our top 10 customers represented 58% same as last year, while our top 25 customers represented 74% compared to 75% last year. We grew operation margin in quarter one, while effectively leveraging our existing headcount and ended the quarter with approximately 12,300 staffs.

Group gross margin for the quarter was 42%, which compared to 42.2% in quarter four and 42.9% in the comparable quarter last year. We continue to leverage our global business support model. And as a result, SG&A was 18.8% of revenue in the quarter. This compared to 19.2% last quarter and 20.2% in the comparable periods last year.

Operating income for the quarter was $85.7 million, a U.S. GAAP operating margin of 19.8%. This compared to 19.5% last quarter and 19% in the comparable quarter last year. The net interest expense for the quarter was $2.62 million and the effective tax rate was 14%. Net income for the quarter was $71.4 million, a margin of 16.5%,