Icon improves its position, Kendle slips again

By Kirsty Barnes

- Last updated on GMT

Related tags: Cent, Generally accepted accounting principles

Icon has improved its financial position significantly during its
third quarter, while its smaller US rival Kendle saw its profit
slip again, weighed down by charges from a 2006 acquisition.

Ireland-based Icon reported an operating profit and pre-tax profit $18.7m (€12.9m), a gain of 48 per cent and 38 per cent respectively on 2006. Revenues were also up by 38 per cent, reaching $166.9m, as were costs. Operating margins however, expanded from 10.4 per cent to 11.2 per cent year over year. The contract research organisation (CRO) was most frequently mentioned as favourite vendor in a CRO quality survey recently published by William Blair & Company. Meanwhile, Kendle reported a whopping 76 per cent rise in its operating profit during the third quarter, to $14.2m, but a huge chunk of this was eroded by charges, leaving the firm with only $5m in pre-tax profit, a 16 per cent decline on last year. Kendle's financial results are still being clouded by residual debt from the acquisition of the Phase II-IV clinical services unit of Charles River Laboratories over year ago. This quarter, the $215m purchase resulted in an interest expense of $3.3m, a $2.0m charge for amortization of the acquired intangibles, and a $4.2m charge for the write-off of deferred financing costs related to the company's term debt, which was paid off during the third quarter of 2007. Otherwise, Kendle posted a healthy 33 per cent jump in revenue to hit the $100m mark, while operating margin jumped up 3.5 percentage points to 14.2 per cent.

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