Toronto Stock Exchange Symbol: LRI
Significant charges have impacted year-end results, while backlog
continues to grow rapidly across all sites.
LAVAL, QC, Feb. 6 /CNW Telbec/ - LAB Research Inc. ("LRI" or "LAB
Research" or the "Company") (TSX: LRI), a global Canadian-based non-clinical
contract research organization, today announced projected revenues of $12.8
million and a net loss of $4.2 million or $0.23 per share - basic for the
fourth quarter ended December 31, 2008. Considering the above preliminary
fourth quarter results, the 2008 year-end revenues are projected to reach
$58.5 million, a 6% increase over 2007, with a net loss and positive EBITDA of
$4.0 million (or $0.22 per share - basic) and $3.2 million, respectively.
These results are based on preliminary assessments and subject to finalization
This press release contains forward-looking information; investors are
cautioned that the statements are based on current information and assumptions
and that actual outcome may vary.
This press release refers to non-Generally Accepted Accounting Principles
("GAAP") measures, including EBITDA, Backlog, and Book to Bill ratio as
financial performance indicators. The Company believes such measures provide
meaningful information on its performance and operating results. However,
readers are cautioned that non-GAAP measures do not have a standardized
meaning under GAAP and, thus, they are unlikely to be comparable to similar
measures presented by other issuers. The EBITDA corresponds to net earnings
before interest on long-term debt, amortization and income taxes. The backlog
represents the value of client contracts for services that have not yet been
performed. The book to bill ratio refers to the value of signed contracts
(excluding any cancellations) in a particular period divided by the net
revenue reported during the same period.
Charges totalling $2.2 million impacted significantly our fourth quarter
2008 results. Restructuring and severance charges of $0.8 million were
accounted for in Denmark and Hungary, while $0.9 million loss in foreign
exchange, and professional fees totalling $0.6 million were incurred across
the Company. In addition to the above, the Canadian site has been impacted by
incremental operating charges following the commissioning of its recent
expansion. Notwithstanding a strong increase in their respective backlog, all
three sites have experienced weaker than expected revenues and profitability
due to continuous delays in starting of key studies previously scheduled. The
combination of specifically targeted business development initiatives, cost
containment measures put in place during the last quarter of 2008 to
compensate for uncertain market conditions, and increased backlog levels
should contribute to all sites profitability coming back in line with
corporate expectations over the coming quarters.
"Our 2008 financial performance has been seriously impacted by
significant charges. As study delays continue to cause operating and financial
challenges, we recognize that we have not yet been able to crystallize the
benefits of our corporate strategy on our bottom line. However, we are
confident that each of our sites are positioned to improve their respective
performance going forward including our Hungarian site which has regained
client confidence following its positive regulatory Good Laboratory Practices
("GLP") recertification last quarter. Proactive cost containment measures
totalling approximately $2 million implemented in the last few months to
offset the impact of delays in study starts will have short term and lasting
impacts on our performance. Cost reductions, increased contract signing and
record backlog provide some visibility for a turnaround in our profitability
in the first half of 2009." said Mr. Luc Mainville, President and CEO of LAB
2008 year-end Backlog
Although the 2008 performance has been less than optimal, the Company's
backlog has evidenced some of the benefits of the recently completed $65
million 3-yr expansion program. The expansion of the Company's service
offering, increased sites' capacity and enhanced business development
initiatives have helped the Company deliver a solid consolidated book-to-bill
ratio of 1.2:1 for the year and an impressive ratio of 1.5:1 for the last
quarter. Each of the Company's sites has seen its backlog grow in the last
quarter with a book-to-bill ratio of 1.5:1, 1.4:1 and 1.6:1 for the Canadian,
Danish and Hungarian sites respectively. At year-end 2008, the consolidated
backlog exceeded $38.2 million, a 19% increase since the end of the third
quarter and a 42% increase since year-end 2007.
The Company expects that the measures implemented during the last two
quarters will result in a progressing improvement of its overall financial
performance and profitability in 2009. More specifically, the Canadian site is
expected to benefit from the recent expansion of its site and services
offering while the Danish site should benefit from aggressive cost control
measures and revenues gradually returning to historical levels. The Hungarian
site is also expected to benefit from cost control measures and increased
revenues derived from the recently announced Japanese agency agreement, and
increase in pharmaceutical work following the favourable Federal and Drug
Administration ("FDA") and Hungarian authorities' audits.
"Having recently completed our strategy of building critical mass in
terms of both capacity and service offerings, along with additional enhanced
global business development initiatives, we are now well positioned to fully
address market demand in these challenging times. While our financial
resources remain limited, so are the Company's overall operating liquidity
needs, debt servicing requirements, and new capital investments going forward.
This provides visibility for an improvement of our overall cash position
during the course of 2009. We strongly believe that management's strategic
initiatives combined with increased backlog and capacity will generate
improved financial performance and we look forward to our 2009 first quarter
results to evidence this." concluded Mr. Mainville.
LAB Research expects to report audited results for the fourth quarter and
year-end 2008 on March 23, 2009. No further details on these results will be
communicated until then.
About LAB Research Inc.:
LAB Research is a Canadian global non-clinical contract research
organization that provides contract research services to the pharmaceutical,
biotechnology, agro-chemical, petro-chemical and industrial markets. LAB
Research supports the development of its customers' products from three
state-of-the-art facilities located in Canada, Denmark and Hungary.
LAB Research's shares trade on The Toronto Stock Exchange ("TSX") under
the symbol "LRI", with 18.1 million shares outstanding.
This news release contains certain forward-looking statements that
reflect the current views and/or expectations of LAB Research Inc. with
respect to its performance, business and future events. Such statements are
subject to a number of risks, uncertainties and assumptions. Actual results
and events may vary significantly.
For further information:
For further information: visit LAB Research's website at
www.labresearch.com or contact: Luc Mainville, Chief Executive Officer, (450)
973-2240 (ext. 1206), email@example.com; Frédéric Dumais, Partner,
Jasmin-Dumais Financial Communications, (514) 862-1251, firstname.lastname@example.org