Medpace Holdings, Inc. [MEDP] Filings

10-Q 1 medp-20220630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-37856

Medpace Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware

32-0434904

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

5375 Medpace Way, Cincinnati, OH 45227

(Address of principal executive offices) (Zip Code)

(513) 579-9911

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $0.01 par value	MEDP	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.


Class		Number of Shares Outstanding
Common Stock $0.01 par value		30,998,636 shares outstanding as of July 22, 2022

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR QUARTERLY PERIOD ENDED JUNE 30, 2022

TABLE OF CONTENTS


Item Number		Page
	PART I — FINANCIAL INFORMATION	3
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 and 2021	5
	Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended June 30, 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

	PART II — OTHER INFORMATION	24
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	26
	EXHIBIT INDEX	27
	SIGNATURES	28

- 2 -

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(Amounts in thousands, except share amounts)	As Of
	June 30,			December 31,
	2022			2021
ASSETS
Current assets:
Cash and cash equivalents	$	42,551		$	461,304
Accounts receivable and unbilled, net (includes $6.6 million and $2.7 million with related parties at June 30, 2022 and December 31, 2021, respectively)		225,695			186,432
Prepaid expenses and other current assets		60,641			43,176
Total current assets		328,887			690,912
Property and equipment, net		103,538			93,153
Operating lease right-of-use assets		135,389			129,558
Goodwill		662,396			662,396
Intangible assets, net		39,684			41,360
Deferred income taxes		26,441			25,134
Other assets		19,118			17,422
Total assets	$	1,315,453		$	1,659,935
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable (includes $0.3 million with related parties at June 30, 2022 and December 31, 2021, respectively)	$	28,800		$	25,678
Accrued expenses		173,192			159,286
Advanced billings (includes $12.0 million and $8.3 million with related parties at June 30, 2022 and December 31, 2021, respectively)		401,368			344,641
Short-term debt		249,700			-
Other current liabilities		25,899			27,612
Total current liabilities		878,959			557,217
Operating lease liabilities		134,977			130,965
Deferred income tax liability		1,002			1,080
Other long-term liabilities		17,263			17,745
Total liabilities		1,032,201			707,007
Commitments and contingencies (see Note 11)
Shareholders’ equity:
Preferred stock - $0.01 par-value; 5,000,000 shares authorized; no shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		-			-
Common stock - $0.01 par-value; 250,000,000 shares authorized at June 30, 2022 and December 31, 2021, respectively; 30,987,636 and 36,006,778 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		309			360
Treasury stock - 81,573 and 180,000 shares at June 30, 2022 and December 31, 2021, respectively		(14,243	)		(5,427	)
Additional paid-in capital		753,300			727,857
(Accumulated deficit) Retained earnings		(446,142	)		234,984
Accumulated other comprehensive loss		(9,972	)		(4,846	)
Total shareholders’ equity		283,252			952,928
Total liabilities and shareholders’ equity	$	1,315,453		$	1,659,935

See notes to condensed consolidated financial statements.

- 3 -

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


(Amounts in thousands, except per share amounts)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Revenue, net (includes $17.2 million and $9.9 million with related parties for the three months ended June 30, 2022 and 2021, respectively, and $30.5 million and $15.2 million with related parties for the six months ended June 30, 2022 and 2021, respectively)	$	351,207		$	278,293		$	682,154		$	538,258
Operating expenses:
Direct service costs, excluding depreciation and amortization		132,118			108,233			257,552			209,620
Reimbursed out-of-pocket expenses		120,093			95,409			226,929			175,560
Total direct costs		252,211			203,642			484,481			385,180
Selling, general and administrative		33,215			26,973			62,581			52,711
Depreciation		4,707			3,951			8,977			7,763
Amortization		838			1,279			1,676			2,557
Total operating expenses		290,971			235,845			557,715			448,211
Income from operations		60,236			42,448			124,439			90,047
Other income, net:
Miscellaneous income, net		2,311			265			3,378			1,189
Interest expense, net		(548	)		(27	)		(494	)		(41	)
Total other income, net		1,763			238			2,884			1,148
Income before income taxes		61,999			42,686			127,323			91,195
Income tax provision		12,639			2,752			16,652			7,955
Net income	$	49,360		$	39,934		$	110,671		$	83,240
Net income per share attributable to common shareholders:
Basic	$	1.52		$	1.11		$	3.28		$	2.32
Diluted	$	1.46		$	1.06		$	3.16		$	2.20
Weighted average common shares outstanding:
Basic		32,493			35,894			33,696			35,825
Diluted		33,695			37,714			35,034			37,737

See notes to condensed consolidated financial statements.

- 4 -

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


(Amounts in thousands)	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2022			2021		2022			2021
Net income	$	49,360		$	39,934	$	110,671		$	83,240
Other comprehensive income
Foreign currency translation adjustments, net of taxes		(3,584	)		506		(5,126	)		(1,629	)
Comprehensive income	$	45,776		$	40,440	$	105,545		$	81,611

See notes to condensed consolidated financial statements.

- 5 -


MEDPACE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

(Amounts in thousands)												Accumulated
							Additional					Other
	Common			Treasury			Paid-In		Retained			Comprehensive
	Stock			Stock			Capital		Earnings			Loss			Total
BALANCE — December 31, 2020	$	355		$	(5,578	)	$	695,904	$	115,229		$	(131	)	$	805,779
Net income										43,306						43,306
Foreign currency translation													(2,135	)		(2,135	)
Stock-based compensation expense								2,871								2,871
Stock options exercised		4						9,102								9,106
BALANCE — March 31, 2021	$	359		$	(5,578	)	$	707,877	$	158,535		$	(2,266	)	$	858,927
Net income										39,934						39,934
Foreign currency translation													506			506
Stock-based compensation expense								3,570								3,570
Stock options exercised		2						5,100								5,102
Repurchases of common stock		(3	)							(56,154	)					(56,157	)
BALANCE — June 30, 2021	$	358		$	(5,578	)	$	716,547	$	142,315		$	(1,760	)	$	851,882


									(Accumulated			Accumulated
							Additional		Deficit)			Other
	Common			Treasury			Paid-In		Retained			Comprehensive
	Stock			Stock			Capital		Earnings			Loss			Total
BALANCE — December 31, 2021	$	360		$	(5,427	)	$	727,857	$	234,984		$	(4,846	)	$	952,928
Net income										61,311						61,311
Foreign currency translation													(1,542	)		(1,542	)
Stock-based compensation expense								4,372								4,372
Stock options exercised		3						13,894								13,897
Repurchases of common stock		(27	)		(14,243	)				(411,680	)					(425,950	)
Retirement of treasury stock					5,427					(5,427	)					-
BALANCE — March 31, 2022	$	336		$	(14,243	)	$	746,123	$	(120,812	)	$	(6,388	)	$	605,016
Net income										49,360						49,360
Foreign currency translation													(3,584	)		(3,584	)
Stock-based compensation expense								5,653								5,653
Stock options exercised								1,524								1,524
Repurchases of common stock		(27	)							(374,690	)					(374,717	)
BALANCE — June 30, 2022	$	309		$	(14,243	)	$	753,300	$	(446,142	)	$	(9,972	)	$	283,252

See notes to condensed consolidated financial statements.

- 6 -

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


(Amounts in thousands)	Six Months Ended
	June 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	110,671	$	83,240
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		8,977		7,763
Amortization

Medpace Holdings, Inc. [MEDP] Filings
10-Q	[2022-07-26]
10-Q	[2022-04-26]
10-K	[2022-02-15]
10-Q	[2021-10-26]
10-Q	[2021-07-27]
10-Q	[2021-04-27]
10-K	[2021-02-16]
10-Q	[2020-10-27]
10-Q	[2020-07-28]
10-Q	[2020-04-29]
10-K	[2020-02-25]
10-Q	[2019-10-29]
10-Q	[2019-07-30]
10-Q	[2019-04-30]
10-K	[2019-02-26]
10-Q	[2018-10-30]
10-Q	[2018-07-31]
10-Q	[2018-05-01]
10-K	[2018-02-27]
10-Q	[2017-10-31]
10-Q	[2017-08-01]
10-Q	[2017-05-02]
10-K	[2017-02-28]
10-Q	[2016-11-03]
S-1	[2016-06-24]