PRA HEALTH SCIENCES, INC. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated condensed financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, with our audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2020 , as amended, or the Annual Report, and with the information under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report.
We use the terms "we," "us," "our," or the "Company" in this report to refer to
Overview
We are one of the world's leading global contract research organizations, or CROs, by revenue, providing outsourced clinical development services to the biotechnology and pharmaceutical industries. We believe we are one of a select group of CROs with the expertise and capability to conduct clinical trials across major therapeutic areas on a global basis. Our therapeutic expertise includes areas that are among the largest in pharmaceutical development, and we focus in particular on oncology, immunology, central nervous system inflammation, respiratory, cardiometabolic, and infectious diseases. We believe that we further differentiate ourselves from our competitors through our investments in medical informatics and clinical technologies designed to enhance efficiencies, improve study predictability, and provide better transparency for our clients throughout their clinical development processes. Our Data Solutions segment allows us to better serve our clients across their entire product lifecycle by (i) improving clinical trial design, recruitment, and execution; (ii) creating real-world data solutions based on the use of medicines by actual patients in normal situations; and (iii) increasing the efficiency of healthcare companies' commercial organizations through enhanced analytics and outsourcing services. OnFebruary 24, 2021 , we entered into the a definitive merger agreement with ICON plc (ICON),ICON US Holdings Inc. (US Holdco) andIndigo Merger Sub, Inc. (Merger Sub). Under the terms of the merger agreement, Merger Sub will merge with and into PRA, with PRA surviving as a wholly owned subsidiary of ICON and US HoldCo. Upon successful completion of the merger, our stockholders will receive$80.00 per share in cash and 0.4125 ICON ordinary shares for each share of our common stock. The merger, which is currently expected to close inJuly 2021 , is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, receipt of the required vote of our stockholders and the required vote of ICON shareholders, and obtaining all required approvals under antitrust and foreign direct investment laws of certain jurisdictions. The merger agreement contains certain termination rights for both us and ICON. If the merger agreement is terminated under certain specified circumstances, we will be required to payICON and ICON US Holdings Inc. , aDelaware corporation and wholly owned subsidiary of ICON ("US Holdco"), a termination fee of$277.0 million (including in connection with our entry into an agreement with respect to a superior proposal, as defined in the merger agreement, if certain conditions are met).
How We Assess the Performance of Our Business
The Company is managed through two reportable segments: (i) the Clinical Research segment and (ii) the Data Solutions segment. Our chief operating decision-maker uses segment profit as the primary measure of each segment's operating results in order to allocate resources and in assessing the Company's performance. In addition to our financial measures in conformity withU.S. generally accepted accounting principles, or GAAP, including revenue, costs, and expenses and other measures discussed below, we review various financial and operational metrics. For our Clinical Research segment, we review new business awards, cancellations, and backlog. Our gross new business awards for our Clinical Research segment for the three months endedMarch 31, 2021 and 2020 were$908.6 million and$657.9 million , respectively. New business awards arise when a client selects us to execute its trial and is documented by written or electronic correspondence, or for our Strategic Solutions offering when the amount of revenue expected to be recognized is measurable. The number of new business awards can vary significantly from year to year, and awards can have terms ranging from several months to several years. For our Strategic Solutions offering, the value of a new business award is the anticipated revenue to be recognized in the corresponding quarter of the next fiscal year. For the remainder of our Clinical Research segment, the value of a new award is the anticipated revenue over the life of the contract, which does not include reimbursable expenses. 21 -------------------------------------------------------------------------------- Table of Contents In the normal course of business, we experience contract cancellations, which are reflected as cancellations when the client provides us with written or electronic correspondence that the work should cease. During the three months endedMarch 31, 2021 and 2020, we had$111.4 million and$53.2 million , respectively, of cancellations for which we received correspondence from the client for our Clinical Research segment. The number of cancellations can vary significantly from period to period. The value of the cancellation is the remaining amount of unrecognized service revenue, less the estimated effort to transition the work back to the client. Our backlog consists of anticipated revenue from new business awards that either have not started or are in process but have not been completed for our Clinical Research segment. Backlog varies from period to period depending upon new business awards and contract modifications, cancellations, and the amount of revenue recognized under existing contracts. Our backlog atMarch 31, 2021 and 2020 was$5.5 billion and$4.7 billion , respectively.
Sources of Revenue
Total revenues are comprised of revenues from the provision of our services and revenues from reimbursed expenses and reimbursable investigator grants that are incurred while providing our services. We do not have any material product revenues.
Costs and Expenses
Our costs and expenses are comprised primarily of our direct costs, selling, general and administrative costs, depreciation and amortization expense, and income taxes.
Direct Costs (Exclusive of Depreciation and Amortization)
For our Clinical Research segment, direct costs consist primarily of labor-related charges. They include elements such as salaries, benefits, and incentive compensation for our employees. In addition, we utilize staffing agencies to procure primarily part time individuals to perform work on our contracts. Labor-related charges as a percentage of the Clinical Research segment's total direct costs were 96.9% for both the three months endedMarch 31, 2021 and 2020. The cost of labor procured through staffing agencies is included in these percentages and represents 3.8% and 2.9% of the Clinical Research segment's total direct costs for the three months endedMarch 31, 2021 and 2020, respectively. Our remaining direct costs are items such as travel, meals, postage and freight, patient costs, medical waste, and supplies. The total of all these items as a percentage of the Clinical Research segment's total direct costs were 3.1% for both the three months endedMarch 31, 2021 and 2020. Historically, direct costs have increased with an increase in revenues. The future relationship between direct costs and revenues may vary from historical relationships. Several factors will cause direct costs to decrease as a percentage of revenues. Deployment of our billable staff in an optimally efficient manner has the most impact on our ratio of direct cost to revenue. The most effective deployment of our staff is when they are fully engaged in billable work and are accomplishing contract related activities at a rate that meets or exceeds budgeted targets. We also seek to optimize our efficiency by performing work using the employee with the lowest cost. Generally, the following factors may cause direct costs to increase as a percentage of revenues: our staff are not fully deployed, as is the case when there are unforeseen cancellations or delays, or when our staff are accomplishing tasks at levels of effort that exceed budget, such as rework, as well as pricing pressure from increased competition. For our Data Solutions segment, direct costs consist primarily of data costs. Data costs as a percentage of the Data Solutions segment's total direct costs were 75.5% and 74.3% for the three months endedMarch 31, 2021 and 2020, respectively. Labor-related charges, such as salaries, benefits, and incentive compensation for our employees, were 19.9% and 20.2% of the Data Solutions segment's total direct costs for the three months endedMarch 31, 2021 and 2020, respectively. Our remaining direct costs are items such as travel, meals, and supplies, and were 4.6% and 5.5% of the Data Solutions segment's total direct costs for the three months endedMarch 31, 2021 and 2020, respectively.
Reimbursable Expenses
As is customary in our industry, we also routinely enter into separate
agreements on behalf of our clients with independent physician investigators in
connection with clinical trials. We also receive funds from our clients for
investigator fees. We are not obligated either to perform the service or to pay
the investigator in the event of default by the client. In addition, we do not
pay the independent physician investigator until funds are received from the
client. We include these investigator fees, as well as our out-of-pocket costs
that are reimbursable by our customers, as reimbursable expenses in our
consolidated condensed statements of operations.
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Reimbursable expenses are not included in our backlog because they are pass-through costs to our clients.
We believe that the fluctuations in reimbursable expenses are not meaningful to the final economic performance as measured on a net basis given that such costs are passed through to the client. The reimbursable expenses are included in our measure of progress for our long-term contracts.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist of administration payroll and benefits, marketing expenditures, and overhead costs such as information technology and facilities costs. These expenses also include central overhead costs that are not directly attributable to our operating business and include certain costs related to insurance, professional fees, and property.
Transaction-related Costs
Transaction-related costs include costs associated acquisition related earn-out liabilities or adjustments to the initial fair value estimates and expenses associated with our acquisitions, including the proposed merger with ICON.
Depreciation and Amortization Expense
Depreciation expense represents the depreciation charged on our fixed assets. The charge is recorded on a straight-line method, based on estimated useful lives of three to seven years for computer hardware and software and five to seven years for furniture and equipment. Leasehold improvements are depreciated over the lesser of the life of the lease term or the useful life of the improvements. Amortization expense consists of amortization recorded on acquisition-related intangible assets. Customer relationships, backlog, and finite-lived trade names are amortized on an accelerated basis, which coincides with the period of economic benefit we expect to receive. All other finite-lived intangibles are amortized on a straight-line basis. In accordance with GAAP, we do not amortize goodwill and indefinite-lived intangible assets.
Income Taxes
Because we conduct operations on a global basis, our effective tax rate has depended and will continue to depend upon the geographic distribution of our pre-tax earnings among several different taxing jurisdictions. Our effective tax rate can also vary based on changes in the tax rates of the different jurisdictions. Our effective tax rate is also impacted by tax credits and the establishment or release of deferred tax asset valuation allowances and tax reserves, as well as significant non-deductible items such as portions of transaction-related costs. In addition, our effective income tax rate is influenced byU.S. tax law which has been substantially modified by theU.S. Tax Cuts and Jobs Act of 2017, or the Act. The following provisions of the Act could have an adverse effect on our tax rate: •global intangible low-taxed income, or GILTI; •limitations on theU.S. deductions for net business interest; •base erosion anti-abuse provisions, or BEAT; and •performance-based compensation subject to$1 million limit. Significant judgment is required related to the application of the Act, particularly with respect to GILTI and BEAT provisions. If changes occur in the Company's tax structure, the structure of its customer arrangements, or interpretations of regulations that clarify these or other provisions of the Act, these changes could have a material effect on the Company's tax provision. Foreign subsidiaries are taxed separately in their respective jurisdictions. We have foreign net operating loss carryforwards in some jurisdictions. The carryforward periods for these losses vary from four years to an indefinite carryforward period depending on the jurisdiction. Our ability to offset future taxable income with the net operating loss carryforwards may be limited in certain instances, including changes in ownership.
Exchange Rate Fluctuations
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The majority of our foreign operations transact in the Euro, or EUR, or British
pound, or GBP. As a result, our revenue and expenses are subject to exchange
rate fluctuations with respect to these currencies. We have translated these
currencies into U.S. dollars using the following exchange rates:
Average Rate Closing Rate
Three Months Ended Three Months Ended March March 31, 2021 December 31, 2020
March 31, 2021 31, 2020
U.S. dollars per:
Euro 1.21 1.10 1.17 1.23
British pound 1.38 1.28 1.38 1.37
Results of Operations
Consolidated Results of Operations for the Three Months Ended
Three Months Ended March 31,
2021 2020
(in thousands)
Revenue $ 933,775 $ 783,708
Operating expenses:
Direct costs (exclusive of depreciation and amortization) 472,010 403,862
Reimbursable expenses 223,352 176,841
Selling, general and administrative expenses 122,778 106,957
Transaction-related costs 13,436 609
Depreciation and amortization expense 32,568 32,278
Loss (gain) on disposal of fixed assets 123 (19)
Income from operations 69,508 63,180
Interest expense, net (5,212) (13,487)
Foreign currency gains, net 12,388 7,842
Other expense, net (48) (4)
Income before income taxes 76,636 57,531
Provision for income taxes 19,696 16,871
Net income $ 56,940 $ 40,660
Revenue increased by $150.1 million , or 19.1%, from $783.7 million during the
three months ended March 31, 2020 to $933.8 million during the three months
ended March 31, 2021 . Revenue for the three months ended March 31, 2021
benefited from an increase in billable hours, an increase in the effective rate
of hours billed on our studies, and a favorable impact of $12.5 million from
foreign currency exchange rate fluctuations. The growth in revenue and the
increase in billable hours were due largely to the increase in our backlog as we
entered the year, the type of services we are providing on our active studies,
which was driven by the life cycles of projects that were active during the
period, the growth in new business awards as a result of higher demand for our
services across the industries we serve, more effective sales efforts, and the
growth in the overall CRO market. The increase in our effective rate of the
hours billed on our studies is attributable to the contract pricing terms on our
current mix of active studies and the mix of clients and services that we
provide to those clients.
Direct costs, exclusive of depreciation and amortization, increased by $68.1
million , or 16.9%, from $403.9 million during the three months ended March 31,
2020 to $472.0 million during the three months ended March 31, 2021 . Salaries
and related benefits in our Clinical Research segment increased $49.3
million due to the hiring of billable staff to support our portfolio of studies.
Data costs in our Data Solutions segment increased $4.1 million due to increased
costs on the renewal of existing contracts and the addition of new sources of
data to expand our data offerings. There was an unfavorable impact of $10.6
million from foreign currency exchange rate fluctuations. Direct costs as a
percentage of revenue were 50.5% and 51.5% during the three months ended March
31, 2021 and 2020, respectively.
Reimbursable expenses increased by $46.5 million from $176.8 million during the
three months ended March 31, 2020 to $223.4 million during the three months
ended March 31, 2021 . We believe that the fluctuations in reimbursable expenses
from period to period are not meaningful to our underlying performance over the
full terms of the relevant contracts.
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Selling, general and administrative expenses increased by $15.8 million , or
14.8%, from $107.0 million during the three months ended March 31, 2020 to
$122.8 million during the three months ended March 31, 2021 . The increase in
selling, general and administrative expenses is primarily related to an increase
in salaries and related benefits, including stock-based compensation expense,
driven by an increase in headcount as we continue to hire staff to support our
growing business. Selling, general and administrative expenses as a percentage
of revenue were 13.1% and 13.6% during the three months ended March 31, 2021 and
2020, respectively.
During the three months ended March 31, 2021 , transaction-related costs include
investment banking and legal fees primarily related to the proposed merger with
ICON. During the three months ended March 31, 2020 , transaction-related costs
included a $0.6 million adjustment to the fair value of the earn-out liability
associated with the acquisition of Care Innovations, Inc.
Depreciation and amortization expense was $32.6 million and $32.3 million during
the three months ended March 31, 2021 and 2020, respectively. The increase
period over period is due to the amortization of the intangible assets acquired
in connection with the acquisition of Care Innovations as well as an increase in
depreciation expense due to an increase in our depreciable asset base.
Depreciation and amortization expense as a percentage of revenue was 3.5% during
the three months ended March 31, 2021 and 4.1% during the three months ended
March 31, 2020 .
Interest expense, net, decreased by $8.3 million , or 61.4%, from $13.5 million
during the three months ended March 31, 2020 to $5.2 million during the three
months ended March 31, 2021 . The decrease is primarily due to the expiration of
our floating to fixed interest rate swaps.
Foreign currency gains, net, changed by $4.5 million , from $7.8 million during
the three months ended March 31, 2020 to $12.4 million during the three months
ended March 31, 2021 . Foreign currency gains and losses are due to fluctuations
in the U.S. dollar, gains or losses that arise in connection with the
revaluation of short-term inter-company balances between our domestic and
international subsidiaries, and gains or losses from foreign currency
transactions, such as those resulting from the settlement of third-party
accounts receivables and payables denominated in a currency other than the local
currency of the entity making the payment. During the three months ended March
31, 2021 , foreign currency gains were primarily due to movement of the U.S.
dollar versus the British pound and Euro.
Provision for income taxes increased by $2.8 million from $16.9 million during
the three months ended March 31, 2020 to $19.7 million during the three months
ended March 31, 2021 . Our effective tax rate was 29.3% and 25.7% during the
three months ended March 31, 2020 and 2021, respectively. The comparative
decrease in effective tax rate was primarily driven by the increase of foreign
tax credit resulting from the U.S. inclusion of amounts related to the estimated
tax on GILTI. For the three months ended March 31, 2021 , the annual estimated
effective tax rate varied from the U.S. statutory rate of 21% primarily due to
(i) geographic distribution of global pre-tax income, (ii) the U.S. inclusion of
amounts related to the estimated tax on GILTI, and (iii) the impact of state
income taxes.
Segment Results of Operations for the Three Months Ended
Clinical Research
Three Months Ended March 31,
2021 2020
(in thousands)
Revenue $ 866,628 $ 726,135
Segment profit 221,446 190,943
Segment profit % 25.6 % 26.3 %
Revenue increased by $140.5 million , or 19.3%, from $726.1 million during the
three months ended March 31, 2020 to $866.6 million during the three months
ended March 31, 2021 . Revenue for the three months ended March 31, 2021
benefited from an increase in billable hours and an increase in the effective
rate of hours billed on our studies. The growth in revenue and the increase in
billable hours were due largely to the increase in our backlog as we entered the
year, the type of services we are providing on our active studies, which was
driven by the life cycles of projects that were active during the period, the
growth in new business awards as a result of higher demand for our services
across the industries we serve, more effective sales efforts and the growth in
the overall CRO market. The increase in our effective rate of the hours billed
on our studies is attributable to
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the contract pricing terms on our current mix of active studies and the mix of
clients and services that we provide to those clients.
Segment profit increased by $30.5 million , or 16.0%, from $190.9 million during
the three months ended March 31, 2020 to $221.4 million during the three months
ended March 31, 2021 primarily due to an increase in revenue. Segment profit as
a percentage of revenue decreased from 26.3% during the three months ended March
31, 2020 to 25.6% for the same period in 2021. Segment profit as a percentage of
revenue decreased primarily due to the increase in reimbursable expenses.
Data Solutions
Three Months Ended March 31,
2021 2020
(in thousands)
Revenue $ 67,147 $ 57,573
Segment profit 16,967 12,062
Segment profit % 25.3 % 21.0 %
Revenue increased by $9.6 million , or 16.6%, from $57.6 million during the three
months ended March 31, 2020 to $67.1 million during the three months ended March
31, 2021 . The increase in revenue was due to strong contracting activity and
increased volumes across the entirety of Data Solutions' portfolio during the
quarter.
Segment profit increased by $4.9 million , or 40.7%, from $12.1 million during
the three months ended March 31, 2020 to $17.0 million during the three months
ended March 31, 2021 primarily due to an increase in revenue. Segment profit as
a percentage of revenue increased from 21.0% during the three months ended March
31, 2020 to 25.3% for the same period in 2021 primarily due to factors noted
above.
Seasonality
Although our business is not generally seasonal, we typically experience a
slight decrease in our revenue growth rate during the fourth quarter due to
holiday vacations and a similar decrease in new business awards in the first
quarter due to our clients' budgetary cycles and vacations during the year-end
holiday period.
Liquidity and Capital Resources
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing, and financing activities. Our principal source of liquidity is operating cash flows. As ofMarch 31, 2021 , we had$690.3 million of cash and cash equivalents of which$116.6 million was held by our foreign subsidiaries. Additionally, as ofMarch 31, 2021 our Revolver and Accounts Receivable Financing Agreement provided for$690.2 million of potential borrowings. Our expected primary cash needs on both a short and long-term basis are for capital expenditures, expansion of services, geographic expansion, debt repayments, acquisitions and other strategic transactions, and other general corporate purposes. We have historically funded our operations and growth, including acquisitions, with cash flow from operations, borrowings, and issuances of equity securities. We expect to continue expanding our operations through internal growth and strategic acquisitions and investments. We expect these activities will be funded from existing cash, cash flow from operations, and, if necessary or appropriate, borrowings under our existing or future credit facilities. Our sources of liquidity could be affected by our dependence on a small number of industries and clients, compliance with regulations, international risks (including the ongoing COVID-19 pandemic), and personal injury, environmental, or other material litigation claims.
Cash Collections
Cash collections from accounts receivable were$1.0 billion during the three months endedMarch 31, 2021 , including$236.7 million of funds received from customers to pay independent physician investigators, or investigators, as compared to$784.2 million during the three months endedMarch 31, 2020 , including$116.6 million of funds received from customers to pay investigators. The increase in cash collections during the three months endedMarch 31, 2021 is related to our increase in revenue, driven by an increase in new business awards and an increase in our backlog, as well as improvements in our days sales outstanding. Discussion of Cash Flows 26
-------------------------------------------------------------------------------- Table of Contents Cash Flow from Operating Activities During the three months endedMarch 31, 2021 , net cash provided by operations was$192.2 million compared to$60.6 million for the same period in 2020. Cash provided by operating activities increased over the prior year primarily due to improvements in cash flows from working capital changes, driven by an improvement in our days sales outstanding as compared to the prior year.
Cash Flow from Investing Activities
Net cash used in investing activities was$18.7 million during the three months endedMarch 31, 2021 compared to$181.3 million for the same period in 2020. The decrease in cash outflows is primarily attributable to the acquisition of Care Innovations in the prior year.
Cash Flow from Financing Activities
Net cash provided by financing activities was$12.0 million during the three months endedMarch 31, 2021 compared to$41.2 million for the same period in 2020. The decrease in cash inflows is primarily due to a decrease in our net borrowings of approximately$45.0 million when compared to the same period in 2020. This is offset by an increase in proceeds from stock option exercises of approximately$15.4 million when compared to the same period in 2020.
Indebtedness
As ofMarch 31, 2021 , we had$1,272.6 million of total indebtedness. We do not expect to pay dividends in the foreseeable future. Our long-term debt arrangements contain usual and customary restrictive covenants, and, as ofMarch 31, 2021 , we were in compliance with these covenants. See Note 9 to our consolidated condensed financial statements included in this Quarterly Report on Form 10-Q, and "Management's Discussion and Analysis of Financial Condition and Results of Operations- Liquidity and Capital Resources," and Note 11 to our audited consolidated financial statements, each included in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2020 , as amended, for additional details regarding our credit arrangements.
Contractual Obligations and Commercial Commitments
We have various contractual obligations, which are recorded as liabilities in our consolidated condensed financial statements. Other items are not recognized as liabilities in our consolidated condensed financial statements but are required to be disclosed. There have been no material changes, outside of the ordinary course of business, to our contractual obligations as previously disclosed in our Annual Report on Form 10-K for fiscal year endedDecember 31, 2020 , as amended.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies as
previously disclosed in our Annual Report on Form 10-K for the fiscal year ended
Disclosure Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. In addition
to historical consolidated condensed financial information, this Quarterly
Report on Form 10-Q contains forward-looking statements that reflect, among
other things, our current expectations and anticipated results of operations,
all of which are subject to known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements, market
trends, or industry results to differ materially from those expressed or implied
by such forward-looking statements. For this purpose, any statements contained
herein that are not statements of historical fact may constitute forward-looking
statements. Without limiting the foregoing, words such as "anticipates,"
"believes," "estimates," "expects," "intends," "may," "plans," "projects,"
"should," "targets," "will" and the negative thereof and similar words and
expressions are intended to identify forward-looking statements. These
forward-looking statements speak only as of the date hereof, and unless legally
required, we assume no obligation to update any such forward-looking information
to reflect actual results or changes in the factors affecting such
forward-looking information.
The Company cautions you that actual results may differ materially from the
Company's expectations due to a number of factors, including that: the potential
loss, delay or non-renewal of contracts by clients for services that the Company
has
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performed could adversely affect our results; the Company may underprice
contracts, overrun its cost estimates, or fail to receive approval for, or
experience delays in, documenting change orders; the historical indications of
the relationship of backlog to revenues may not be indicative of their future
relationship; client or therapeutic concentration or competition among clients
could harm the Company's business; the Company's relationships with existing or
potential clients who are in competition with each other may adversely impact
the degree to which other clients or potential clients use its services; the
Company may be unable to compete effectively with other players in the
fragmented and highly competitive biopharmaceutical services industry;
biopharmaceutical industry outsourcing trends and changes in spending and
research and development budgets could change and adversely affect the Company's
operations and growth rate; the effects of the current COVID-19 pandemic could
continue to affect adversely our business, results of operations and financial
condition; the Company could be unable to attract suitable investigators and
patients for its clinical trials and maintain its clinical development business;
the Company may lose key personnel or be unable to recruit and retain
experienced personnel; the Company's services could subject the Company to
potential liability, including as a result of direct interaction with clinical
trial patients and operation of clinical facilities; failure of the information
systems upon which the Company depends, including those used to provide services
to clients, could materially limit operations; a failure or breach of the
Company's IT systems could result in customer information being compromised or
otherwise significantly disrupt the Company's business operations; if the
Company does not keep pace with rapid technological changes, its services may
become less competitive or obsolete; inability to keep pace with rapid
technological changes may cause the Company's services to become less
competitive or obsolete; the Company's suppliers may increase its costs to
obtain, restrict its use of or refuse to license its data, or the Company may
otherwise be unable to continue to obtain products, services and licenses from
third parties; the Company has a limited ability to protect its intellectual
property rights domestically and internationally; the Company could be
unsuccessful at investing in growth opportunities; the Company may be unable to
successfully identify, acquire and integrate businesses, services and
technologies; the Company may experience challenges with the acquisition,
development, enhancement or deployment of the technology necessary to operate;
the Company's business is subject to economic, political and other risks
associated with international operations, including foreign currency exchange
rate fluctuations; the Company may be exposed to liabilities under
anti-corruption laws due to the global nature of its business; the Company's
failure to perform services in accordance with contractual requirements, certain
laws and regulatory standards, and ethical considerations may subject it to
significant costs or liability, damage its reputation and cause it to lose
existing business or not receive new business; the U.S. and international
healthcare industry is subject to political, economic and/or regulatory
influences and changes, such as healthcare reform; current and proposed laws and
regulations regarding the protection of personal data could result in increased
risks of liability or increased cost or could limit the Company's service
offerings; the Company may be unable to protect its intellectual property;
patent and other intellectual property litigation could be time-consuming and
costly; exchange rate fluctuations may affect the Company's results of
operations and financial condition; the Company's effective income tax rate may
fluctuate which may adversely affect its operations, earnings, and earnings per
share; the Company may not realize the full value of its goodwill and intangible
assets, and may be unable to use net operating loss carry-forwards; the Company
has substantial indebtedness, some of which have interest rates pricing using a
spread over LIBOR, and may incur additional indebtedness in the future, which
could adversely affect the Company's financial condition; the Company may not be
able to comply with the covenants in its financing agreements or generate
sufficient funds to service its indebtedness; interest rate fluctuations may
affect the Company's results of operations and financial condition; the
Company's corporate governance documents and Delaware law could make a change in
the board of directors or in control of the Company more difficult; and other
factors that are set forth in our filings with the Securities and Exchange
Commission , including our Annual Report on Form 10-K for the fiscal year ended
December 31, 2020 filed on February 24, 2021 , as amended, and other documents
subsequently filed with or furnished to the Securities and Exchange Commission .
Website and Social Media Disclosure
We use our website (www.prahs.com) as a channel of distribution of company information. The information we post through this channel may be deemed material. Accordingly, investors should monitor this channel, in addition to following our press releases,Securities and Exchange Commission , orSEC , filings and public conference calls and webcasts. The contents of our website are not, however, a part of this report.
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