VENTIV HEALTH INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities

Exchange Act of 1934

For the quarterly period ended March 31, 2005

[_] 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 0-30318

VENTIV HEALTH, INC.

(Exact name of registrant as specified in its charter)

Delaware 52-2181734

(State or other jurisdiction (IRS Employer

of incorporation or organization) Identification No.)

200 Cottontail Lane

Vantage Court North

Somerset, New Jersey 08873

(Address of principal executive office and zip code)

(800) 416-0555

(Registrant's telephone number, including area code)

Indicate by check mark whether 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 [_]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [_]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, par value $0.001, 26,728,664 shares outstanding as of April 28, 2005.

VENTIV HEALTH, INC.

INDEX TO QUARTERLY REPORT ON

FORM 10-Q

	Page
PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2005
and December 31, 2004 (unaudited)	1

Condensed Consolidated Statements of Operations for the three-months
ended March 31, 2005 and 2004 (unaudited)	2

Condensed Consolidated Statements of Cash Flows for the three-months
ended March 31, 2005 and 2004 (unaudited)	3

Notes to Condensed Consolidated Financial Statements	4

ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations	11

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	19

ITEM 4. Controls and Procedures	19

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings	20

ITEM 6. Exhibits and Reports on Form 8-K	20

SIGNATURES	21

EXHIBITS	22

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

VENTIV HEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

(unaudited)

	March 31,			December 31,
	2005			2004

ASSETS
Current assets:
Cash and equivalents	$	44,401		$	50,809
Restricted cash		4,219			2,488
Accounts receivable, net of allowances for doubtful accounts of $1,478 and $1,980 at March 31, 2005 and December 31, 2004, respectively		59,825			56,534
Unbilled services		46,858			36,130
Prepaid expenses and other current assets		3,537			2,755
Current deferred tax assets		8,706			8,226
Total current assets		167,546			156,942
Property and equipment, net		38,929			40,226
Goodwill		64,830			64,823
Other intangibles, net		21,069			21,370
Deferred tax assets		3,269			3,583
Deposits and other assets		2,146			508
Total assets	$	297,789		$	287,452

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease obligations	$	11,853		$	12,004
Accrued payroll, accounts payable and accrued expenses		49,119			56,076
Current income tax liabilities		8,199			12,113
Client advances and unearned revenue		6,626			9,184
Total current liabilities		75,797			89,377
Capital lease obligations, net of current portion		23,685			24,898
Other non-current liabilities		3,487			733
Total liabilities		102,969			115,008

Commitments and contingencies

Stockholders' equity:
Preferred stock, $.001 par value, 10,000,000 shares authorized, none issued
and outstanding at March 31, 2005 and December 31, 2004, respectively		--			--
Common stock, $.001 par value, 50,000,000 shares authorized; 26,685,963 and
25,705,012 shares issued and outstanding at March 31, 2005 and
December 31, 2004, respectively		27			26
Additional paid-in-capital		206,437			193,061
Deferred compensation		(692	)		(420	)
Accumulated other comprehensive earnings		300			320
Accumulated deficit		(11,252	)		(20,543	)
Total stockholders' equity		194,820			172,444
Total liabilities and stockholders' equity	$	297,789		$	287,452

The accompanying notes are an integral part of these condensed consolidated financial statements.

VENTIV HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	For the Three-Months
	Ended March 31,
	2005			2004
Revenues	$120,859			$70,661
Operating expenses:
Cost of services	93,712			56,311
Selling, general and administrative expenses		14,401			6,271
Total operating expenses		108,113			62,582

Operating earnings		12,746			8,079
Interest expense		(388	)		(181	)
Interest income		253			83
Earnings from continuing operations before income taxes		12,611			7,981
Income tax provision		3,419			3,033
Earnings from continuing operations		9,192			4,948

Earnings from discontinued operations:
Gains on disposals of discontinued operations, net of taxes		99			155
Net earnings from discontinued operations		99			155

Net earnings	$	9,291		$	5,103

Earnings per share (see Note 5):
Continuing operations:
Basic	$	0.35		$	0.22
Diluted	$	0.33		$	0.20
Discontinued operations:
Basic	$	0.01		$	--
Diluted	$	0.01		$	0.01
Net earnings:
Basic	$	0.36		$	0.22
Diluted	$	0.34		$	0.21