Medpace(MEDP) - 2022 Q2 - Quarterly Report

PART I Item 1. Financial Statements (unaudited) Unaudited financial statements detail significant cash and equity reductions from share repurchases, strong revenue and net income growth, and new short-term debt Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $42,551 | $461,304 | | Total Assets | $1,315,453 | $1,659,935 | | Short-term debt | $249,700 | $0 | | Total Liabilities | $1,032,201 | $707,007 | | Total Shareholders' Equity | $283,252 | $952,928 | Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Q2 2022 | Q2 2021 | 6M 2022 | 6M 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $351,207 | $278,293 | $682,154 | $538,258 | | Income from Operations | $60,236 | $42,448 | $124,439 | $90,047 | | Net Income | $49,360 | $39,934 | $110,671 | $83,240 | | Diluted EPS | $1.46 | $1.06 | $3.16 | $2.20 | Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $142,875 | $120,080 | | Net cash used in investing activities | ($22,335) | ($15,648) | | Net cash used in financing activities | ($535,546) | ($41,677) | - During the six months ended June 30, 2022, the company repurchased 5,463,244 shares for $800.5 million, completing all authorized share repurchases under the program as of that date[22] Revenue by Therapeutic Area - Q2 (in thousands) | Therapeutic Area | 2022 | 2021 | | :--- | :--- | :--- | | Oncology | $115,542 | $93,248 | | Metabolic | $55,600 | $38,143 | | Cardiology | $42,027 | $28,040 | | Central Nervous System | $38,906 | $28,551 | | AVAI | $25,577 | $26,191 | | Other | $73,555 | $64,120 | | Total revenue | $351,207 | $278,293 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses strong financial performance, highlighting revenue growth, increased backlog, and liquidity management focused on funding substantial share repurchases Key Performance Metrics (in millions) | Metric | Q2 2022 | Q2 2021 | 6M 2022 | 6M 2021 | | :--- | :--- | :--- | :--- | :--- | | Net New Business Awards | $450.6 | $387.6 | $873.6 | $743.7 | - Backlog increased by 24.4% to $2,168.3 million as of June 30, 2022, compared to the prior year, with an anticipated conversion of approximately $1,120 million to $1,140 million to revenue over the next twelve months[79] - Revenue for Q2 2022 increased 26.2% YoY to $351.2 million, and for the six months ended June 30, 2022, it increased 26.7% YoY to $682.2 million, primarily driven by Oncology, Metabolic, Cardiology, and Central Nervous System therapeutic areas[93] - Cash and cash equivalents decreased from $461.3 million to $42.6 million as of June 30, 2022, primarily due to $800.7 million in share repurchases funded by cash from operations and $299.2 million in proceeds from the company's credit facility[98][105] Quantitative and Qualitative Disclosures About Market Risk No material changes were reported regarding quantitative and qualitative disclosures about market risk compared to the prior annual report - No material changes to market risk disclosures were reported for the period[113] Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation by management, the company's disclosure controls and procedures were deemed effective as of the end of the period covered by the report[115] - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[117] PART II Legal Proceedings The company is involved in routine legal proceedings, with no expected material adverse effect on financial statements - The company is involved in routine legal proceedings incidental to its business and does not believe their resolution is reasonably likely to have a material adverse effect on its financial statements[118] Risk Factors New risk factors include potential operating margin decreases from pricing pressure and inflation, and heightened international risks from regulations, instability, and currency fluctuations - A new risk factor was added regarding the potential for operating margins to decrease due to increased pricing pressure from competition, inflation, or changes to the company's operating model[120] - The company detailed heightened international risks, including complex legal and regulatory environments, political and economic instability, currency exchange controls, and potential impacts from the Russian military action in Europe on clinical trials[121] Unregistered Sales of Equity Securities and Use of Proceeds This section details capital return activities, including significant share repurchases and minor unregistered equity sales from employee stock option exercises Share Repurchases - Q2 2022 | Period | Total Shares Purchased | Average Price Paid per Share | Total Value (approx.) | | :--- | :--- | :--- | :--- | | April 2022 | 231,727 | $135.71 | $31.4M | | May 2022 | 1,573,616 | $136.28 | $214.5M | | June 2022 | 912,036 | $141.15 | $128.7M | | Total | 2,717,379 | $137.86 | $374.6M | - During the quarter, 7,650 shares were issued to employees upon the exercise of stock options, which were exempt from registration under Rule 701[125] Defaults Upon Senior Securities No defaults upon senior securities were reported during the period - None[127] Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable[128] Other Information No other information was reported for this period - None[129] Exhibits This section lists exhibits filed with the 10-Q report, including CEO and CFO certifications and Inline XBRL data files - The report includes required exhibits, such as Rule 13a-14(a) and Section 1350 certifications from the CEO and CFO, and Inline XBRL documents[132]