medp-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________

FORM 10-Q

___________________________________________

(Mark One)


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

For the quarterly period ended September 30, 2022


o			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

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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 x No o

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 x No o

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	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

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. o

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

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						31,099,897 shares outstanding as of October 21, 2022

Table of Contents

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR QUARTERLY PERIOD ENDED SEPTEMBER 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 September 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 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	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

	PART II — OTHER INFORMATION	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
	EXHIBIT INDEX	30
	SIGNATURES	30

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Table of Contents

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
	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	31,007	$	461,304
Accounts receivable and unbilled, net (includes $3.0 million and $2.7 million with related parties at September 30, 2022 and December 31, 2021, respectively)	249,086		186,432
Prepaid expenses and other current assets	57,648		43,176
Total current assets	337,741		690,912
Property and equipment, net	104,719		93,153
Operating lease right-of-use assets	139,071		129,558
Goodwill	662,396		662,396
Intangible assets, net	38,846		41,360
Deferred income taxes	27,023		25,134
Other assets	18,629		17,422
Total assets	$	1,328,425	$	1,659,935
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable (includes $0.3 million with related parties at September 30, 2022 and December 31, 2021, respectively)	$	28,245	$	25,678
Accrued expenses	204,117		159,286
Advanced billings (includes $5.7 million and $8.3 million with related parties at September 30, 2022 and December 31, 2021, respectively)	417,927		344,641
Short-term debt	139,700		—
Other current liabilities	30,879		27,612
Total current liabilities	820,868		557,217
Operating lease liabilities	139,203		130,965
Deferred income tax liability	911		1,080
Other long-term liabilities	17,558		17,745
Total liabilities	978,540		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 September 30, 2022 and December 31, 2021, respectively	—		—
Common stock - $0.01 par-value; 250,000,000 shares authorized at September 30, 2022 and December 31, 2021, respectively; 31,098,397 and 36,006,778 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	309		360
Treasury stock - 81,573 and 180,000 shares at September 30, 2022 and December 31, 2021, respectively	(14,243)		(5,427)
Additional paid-in capital	759,986		727,857
(Accumulated deficit) Retained earnings	(380,115)		234,984
Accumulated other comprehensive loss	(16,052)		(4,846)
Total shareholders’ equity	349,885		952,928
Total liabilities and shareholders’ equity	$	1,328,425	$	1,659,935

See notes to condensed consolidated financial statements.

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Table of Contents

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


(Amounts in thousands, except per share amounts)	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue, net (includes $9.8 million and $8.7 million with related parties for the three months ended September 30, 2022 and 2021, respectively, and $40.3 million and $23.9 million with related parties for the nine months ended September 30, 2022 and 2021, respectively)	$	383,744	$	295,567	$	1,065,898	$	833,825
Operating expenses:
Direct service costs, excluding depreciation and amortization	136,648		112,540		394,200		322,160
Reimbursed out-of-pocket expenses	128,062		95,934		354,991		271,494
Total direct costs	264,710		208,474		749,191		593,654
Selling, general and administrative	35,418		28,046		97,999		80,757
Depreciation	4,951		4,056		13,928		11,819
Amortization	838		1,278		2,514		3,835
Total operating expenses	305,917		241,854		863,632		690,065
Income from operations	77,827		53,713		202,266		143,760
Other income, net:
Miscellaneous income, net	5,649		1,064		9,027		2,253
Interest expense, net	(1,584)		(41)		(2,078)		(82)
Total other income, net	4,065		1,023		6,949		2,171
Income before income taxes	81,892		54,736		209,215		145,931
Income tax provision	15,865		6,162		32,517		14,117
Net income	$	66,027	$	48,574	$	176,698	$	131,814
Net income per share attributable to common shareholders:
Basic	$	2.13	$	1.35	$	5.39	$	3.67
Diluted	$	2.05	$	1.29	$	5.18	$	3.49
Weighted average common shares outstanding:
Basic	31,009		35,816		32,791		35,822
Diluted	32,253		37,519		34,098		37,641

See notes to condensed consolidated financial statements.

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Table of Contents

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


(Amounts in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	66,027	$	48,574	$	176,698	$	131,814
Other comprehensive income
Foreign currency translation adjustments, net of taxes	(6,080)		(1,483)		(11,206)		(3,112)
Comprehensive income	$	59,947	$	47,091	$	165,492	$	128,702

See notes to condensed consolidated financial statements.

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Table of Contents

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)


(Amounts in thousands)	Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive 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)	$

SEC Form 10-Q filed by Medpace Holdings Inc.