The Cincinnati-based company indicated that net service revenue for the fourth quarter increased 10% year over year to $52.8 million, while per-share earnings reached $0.25, up 56% from $0.16 per share in 2004's fourth quarter. For all of 2005, net service revenue rose 17% to $202 million, and EPS surged almost 182% to $0.76 from $0.27.
Kendle noted in its conference call that it has phase 3 and phase 3b business to thank for the strength of its recent performance. The nice thing for Kendle is that these advanced-stage trials tend to involve lots of patients and span several years. For Kendle, that means long-term, stable business. That's reflected in the company's 2006 guidance -- revenue is projected to rise 19% to 24% to between $240 million and $250 million. Pro forma earnings, which exclude stock option expenses and other one-time charges, are forecast at $1.40 to $1.50 per share, up 59% to 70% from 2005's pro forma EPS of $0.88.
The company also has been going to great lengths to stress the quality and diversity of its customer base. Kendle is going after clients that can deliver repeat business -- in Kendle's case, that means companies working in multiple therapeutic areas on a variety of products. As for diversity, Kendle noted that its top five customers accounted for 31% of net service revenue in the fourth quarter, down from 41% of net service revenue in the fourth quarter of 2004.
To be sure, Kendle has plenty of competition from companies such as PPD
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.