Contract research organization Kendle International (NASDAQ: KNDL) saw its stock tumble 12 percent a day after it announced a $9 million fourth-quarter loss.
Kendle’s stock was trading at $10.66 Thursday afternoon, after the Cincinnati company reported its fourth-quarter and full-year earnings after market close the prior day. Kendle lost $9 million, or 62 cents per share, in the fourth quarter compared with net income of $2 million, or 16 cents per share, in the fourth quarter of 2009.
Fourth-quarter revenue dropped 18 percent to $108 million.
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The quarterly loss was driven largely by declining revenue, plus two charges associated with the closing of an early stage operating unit in the Netherlands, which eliminated about 60 jobs. The company’s early stage unit dragged down its finances, posting a $10.7 million operating loss in the quarter. Nonetheless, new CEO Steve Cutler said in a conference call with analysts that Kendle remains “firmly committed” to its early stage business, which maintains offices in Toronto and West Virginia.
Kendle’s late-stage segment posted $13 million in operating income for the quarter.
The company announced last month that Cutler would succeed founder Candace Kendle in the CEO role. Cutler, who joined Kendle in 2009 after 14 years at rival Quintiles, will officially take over the CEO role on May 1, though he did more talking than Kendle on the conference call.
For the full year, Kendle lost $4.6 million, or 31 cents per share, compared with net income of $15 million, or $1.03 per share, in the prior year.
Despite the down-trending numbers, Cutler said he didn’t anticipate making big changes once he takes the company’s helm. “I don’t see any dramatic changes in the short term or medium term,” he said. “We believe we’re on the right track going forward.”
“Going forward, the priority is to return to sustainable growth,” Cutler added.
Company officials said they were confident in the contract research organization (CRO) market, projecting annual growth of 8 percent to 10 percent in the late-stage segment over the next three years.
