PharmaNet Development Group Reports Earnings from Continuing Operations of $0.19 Per Diluted Share for the Fourth Quarter 2006

Share Name	Share Symbol	Market	Type
Pharmanet Development Grp (MM)	NASDAQ:PDGI	NASDAQ	Common Stock

Pharmanet Development Grp (MM) (NASDAQ:PDGI)
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PharmaNet Development Group, Inc. (NASDAQ: PDGI), a leading provider of drug development services to branded pharmaceutical, biotechnology, generic drug and medical device companies, today reported GAAP net earnings from continuing operations for its fourth quarter 2006 of $3.5 million ($0.19 per diluted share) and for the full year ended December 31, 2006 of $6.1 million ($0.33 per diluted share). "The fourth quarter and full year 2006 financial results demonstrate the determination and commitment of the entire management team and all PharmaNet Development Group employees to make continued progress while overcoming the significant challenges of 2006,� commented Jeffrey P. McMullen, president and chief executive officer. Mr. McMullen added, �While addressing certain events related to its discontinued operations, the Company continued to build an organization and infrastructure that has achieved robust revenue growth, strengthened its cash position and solidified its financing allowing us to continue to build upon the momentum of the early and late stage businesses and 2007 growth in backlog.� Basis of presentation Due to the Company's decision to discontinue certain operations in 2006, all financial results for the periods presented reflect the Company's continuing operations only, unless otherwise stated. To better reflect ongoing operations for investors for the periods presented, adjusted (non-GAAP) results are used throughout this press release and the accompanying tables. The three months ended December 31, 2006 adjusted financial results exclude the following costs: a) a tax valuation allowance of $2.6 million ($0.14 per diluted share) recorded within earnings from continuing operations. The valuation allowance results from the Company's 2006 domestic financial results (which have created U.S. Net Operating Loss (NOL) carry-forwards of approximately $40 million) and short-term projections for the geographic distribution of income and losses which preclude realizing any current tax benefit from certain of the Company�s domestic losses until the Company restores its domestic profitability to utilize its NOLs, b) non-cash amortization ($0.7 million) and c) non-cash compensation expense resulting from the adoption of SFAS 123(R) ($0.1 million). For the full year 2006, adjusted financial results exclude the following costs: a) an impairment of goodwill related to the Clinical Pharmacology Services (CPS), now named Specialty Pharmaceutical Services ($7.9 million), b) a non-cash financing charge related to the Company�s credit facility ($1.2 million), c) non-cash amortization ($3.0 million), d) a tax valuation allowance of $2.6 million ($0.14 per diluted share) and e) non-cash compensation expense resulting from the adoption of SFAS 123(R) ($1.1 million). The Company adopted SFAS No. 123(R), Share Based Payment, on January 1, 2006. A reconciliation of GAAP results to adjusted (non-GAAP) results can be found in the unaudited financial tables included in this press release. A further explanation of the reasoning behind the use of non-GAAP financial results can be found at the end of this press release. Fourth Quarter 2006 Financial Summary GAAP direct revenue, which does not include reimbursed out-of-pocket expenses, increased 3.3% to $79.1 million in the fourth quarter 2006 compared to $76.6 million in the fourth quarter 2005 primarily due to strong growth in the late stage segment offset by lower direct revenue in the early stage segment. Compared to the previous quarter, fourth quarter direct revenues increased 4.1% sequentially. GAAP corporate SG&A expenses increased to $4.6 million in fourth quarter 2006 compared to $4.2 million in fourth quarter 2005. Adjusted corporate expenses, which exclude 123(R) expenses and non-recurring legal and professional fees, increased to $4.3 million in the fourth quarter 2006 from $3.5 million in the fourth quarter 2005 primarily due to non-cash amortization of restricted stock units. GAAP operating margin was 9.4% in the fourth quarter 2006 compared with 12.5% in the fourth quarter 2005. Adjusted operating margin for the fourth quarter 2006 decreased to 10.5% from 13.7% in the fourth quarter 2005 primarily due to lower direct revenues in the early stage segment, continued investment in early stage clinical and laboratory facilities and higher corporate expenses. GAAP net earnings were $3.5 million ($0.19 per diluted share) in the fourth quarter 2006 compared to $6.1 million ($0.47 per diluted share) in the fourth quarter 2005. Adjusted net earnings for the fourth quarter 2006 were approximately $6.8 million ($0.36 per diluted share) compared to $9.5 million ($0.51 per diluted share) for the fourth quarter 2005 primarily due to lower profits in the early stage segment and increased corporate expenses partly offset by increased profitability in the late stage segment. The Company�s backlog was $352.7 million at December 31, 2006 compared to $357.0 million at September 30, 2006. Backlog consists of anticipated direct revenue from signed contracts and letters of intent that either have not started or are in process and have not been completed. As of February 28, 2007, the Company�s backlog grew to $417.8 million. Cash, cash equivalents, and investments in marketable securities at December 31, 2006 were $53.8 million compared to $53.8 million at September 30, 2006 and $37.4 million at December 31, 2005. Net cash used in continuing operations was $2.6 million. Capital expenditures were $9.6 million (of which $5.8 million was invested in the new Quebec City facility and reimbursed to the Company as part of the sale lease back transaction announced in October 2006), depreciation was $2.8 million and amortization was $0.7 million in the fourth quarter 2006 compared with $6.7 million, $2.7 million and $0.9 million, respectively, in the fourth quarter 2005. Net Days Sales Outstanding for continuing operations, which include accounts receivable and unbilled services less current and long-term advanced billings, were 34 days at December 31, 2006, reflecting a more normalized level, compared with 23 days at September 30, 2006. The Company�s effective tax rate in the fourth quarter 2006 was 38.7% compared to 12.3% benefit in the fourth quarter 2005. Excluding the valuation allowance described above, the Company�s effective tax rate would have been a benefit of 5.2% in the fourth quarter 2006. During the fourth quarter 2006, the Company and its advisors re-evaluated whether the Company would be able to realize the deferred tax asset primarily created by the operations that were discontinued during the second quarter 2006. After completing its analysis, the Company determined that it is unlikely that the deferred tax asset could be realized in the immediate future. As a result, the Company recorded a tax valuation allowance of approximately $2.6 million in continuing operations and $12.7 million in discontinued operations. For the segment financial results provided below, the Company has excluded an allocation of corporate expenses related to certain adjusted selling, general and administrative ("SG&A") expenses. Early Stage PharmaNet Development Group, Inc.�s early stage segment primarily includes the areas of Phase I clinical trials, support services and bioanalytical services. For the early stage segment, GAAP direct revenue, which does not include reimbursed out-of-pocket expenses, was approximately $30.3 million in the fourth quarter 2006 compared to $34.6 million in the fourth quarter 2005 and $25.9 million in the third quarter 2006. Direct revenues were lower in the fourth quarter 2006 compared with the fourth quarter 2005 due to lower volume and pricing. The continued sequential improvement resulted primarily from higher volume through the laboratories. Early stage segment GAAP operating margins decreased to 17.3% in the fourth quarter 2006 compared to 26.8% in the fourth quarter 2005. Early stage segment adjusted operating margins decreased to 17.7% in the fourth quarter 2006 compared to 27.4% in the fourth quarter 2005 primarily due to lower direct revenues. The backlog for the early stage segment increased to $43.1 million from $37.6 million reported at September 30, 2006 due to improving visibility in new generic, Phase I and bioanalytical business. As of February 28, 2007, the early stage backlog is $40.5 million. The construction plan is on schedule for the new Quebec City facility that will replace the two existing facilities that comprise Anapharm headquarters. Approximately 90% of the building and tenant improvements are completed. The Company expects to begin occupying the facility during March 2007 and complete the move by the end of May 2007. The Company is completing the leasehold improvements at its Toronto site which will house clinical facilities. Currently, these improvements are expected to be completed by early April 2007. The Company expects to open the Toronto facility mid-year 2007. Capital expenditures for the Quebec City facility were $5.8 million in the fourth quarter 2006 and $13.3 million for the full year (these amounts have been reimbursed to the Company through the sale lease back transaction). The Company plans to invest approximately $2.1 million (which will not be reimbursed) in 2007 to complete the fit out of the facility. Effective January 1, 2007, the Company will begin reporting its Specialty Pharmaceutical Services business in the late stage segment rather than the early stage segment. Direct revenues were approximately $3.7 million in 2006. Late Stage PharmaNet Development Group, Inc.�s late stage segment primarily conducts Phase II through IV clinical trials, data management and biostatistics, medical and scientific affairs, regulatory affairs and submissions, and provides software tools and services for use in clinical trials. For the late stage segment, GAAP direct revenue, which does not include reimbursed out-of-pocket expenses, were $48.8 million in the fourth quarter 2006 compared to $41.9 million in the fourth quarter 2005. Late stage segment GAAP operating margins were 13.9% in the fourth quarter 2006 compared to 10.8% in the fourth quarter 2005. Late stage segment adjusted operating margins were 15.0% in the fourth quarter 2006 compared to 12.5% in the fourth quarter 2005 primarily due to higher volume. The backlog for the late stage segment was $309.6 million at December 31, 2006 compared to $319.4 million at September 30, 2006. As of February 28, 2007, the late stage backlog was $377.3 million. Full Year 2006 Financial Summary Full year 2006 GAAP direct revenue, which does not include reimbursed out-of-pocket expenses, increased 12.2% to $302.4 million compared to $269.6 million in 2005 primarily due to strong growth in the late stage segment offset by lower direct revenue in the early stage segment. GAAP corporate SG&A expenses increased to $21.0 million in 2006 compared to $12.3 million in 2005 primarily due to additional professional, legal and accounting fees ($3.0 million), non-cash compensation expense resulting from the adoption of SFAS 123(R) ($1.1 million), 2005 management bonuses not paid out ($1.0 million), amortization of RSUs ($2.0 million) and additional insurance, travel expense and salaries ($1.7 million). GAAP operating margin was 4.3% in 2006 compared with 11.1% in 2005. Adjusted operating margin for 2006 decreased to 8.3% from 12.5% in 2005 primarily due to lower direct revenues in the early stage segment, continued investment in early stage clinical and laboratory facilities and higher corporate expenses. GAAP net earnings were $6.1 million ($0.33 per diluted share) in 2006 compared to $17.2 million ($0.94 per diluted share) in 2005. Adjusted net earnings for 2006 were approximately $17.4 million ($0.94 per diluted share) compared to $23.3 million ($1.27 per diluted share) for 2005 primarily due to lower profits in the early stage segment and increased corporate expenses partly offset by increased profitability in the late stage segment. Discontinued operations The Company has a remaining $3.3 million balance of expected cash costs relating to discontinued operations for completion of the site clean-up, severance related costs and contracted services. The Company is assessing its options with respect to the sale of the land relating to its discontinued operations. The Company also recorded a $12.7 million ($0.68 per diluted share) valuation allowance within the loss from discontinued operations, net of tax, to write down the value of certain U.S. non-cash deferred tax assets. Guidance For continuing operations in 2007, the Company expects: direct revenues to be in the range of $334 � $339 million, with approximately one third of the revenues coming from the early stage segment and two thirds of the revenues coming from the late stage segment, Adjusted EBIT margin to be in the range of 9.5% - 9.8%, corporate expenses to be approximately $20 � $21 million, adjusted pre-tax earnings to be in the range of $26 � $28 million, GAAP fully diluted EPS of $0.93 - $1.08 and adjusted fully diluted EPS of $1.06 � $1.21, capital expenditures to be in the range of $16 � $18 million, of which $2.1 million will be used to complete the expansion in Quebec City, depreciation to be in the range of $12 � $13 million, amortization to be approximately $2.8 million, and tax rate to be in the range of 15% - 20%. The Company�s 2007 guidance takes into consideration the impact of the recently recorded valuation allowance on the tax rate and future 2007 diluted earnings per share. Conference Call and Webcast A conference call and webcast to discuss fourth quarter and full year 2006 financial results will be held on Thursday, March 1, 2007 at 8:30 a.m., Eastern Time. Dial-in: (866) 713-8563 for U.S. (617) 597-5311 for International Pass code: 65023741 � Dial-in Replay: (888) 286-8010 for U.S. (617) 801-6888 for International Pass code: 53682689 � � The dial-in replay will be available approximately two hours after the call through Thursday, March 8, 2007.� � Webcast: Please visit www.pharmanet.com and select the investor tab to access the webcast or alternatively, you may click on the following hyperlink: � http://ir.pharmanet.com/phoenix.zhtml?c=124176&p=IROL-Guestbook&UniqueId=1453069&mp=irol-eventdetails&mpdp=EventId~1453069!WebCastId~608399!StreamId~831375&pp=IROL-BasicWebCast&ppdp=EventId~1453069!WebCastId~608399!StreamId~831375&pph=339&ppw=270&rdu=&rdt=&upv= � (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.) � The archived webcast will be available for approximately thirty (30) days following the conference call. Non-GAAP Financial Measures This press release contains non-GAAP financial measures, which exclude, among other items, amortization of acquisition-related intangible assets, non-recurring charges related to financing, non-cash compensation expense resulting from SFAS 123(R) and non-cash impairment charges. PDGI excludes these items from the non-GAAP financial measures because they are outside of its operations and are a useful indicator, which allows management to monitor PDGI�s underlying business performance. Non-GAAP results also allow investors to compare the reported GAAP results and the non-GAAP First Call consensus estimate and to compare the Company�s operations against the financial results of other companies in the industry. The non-GAAP financial measures included in this press release should not be considered superior to or a substitute for results of operations prepared in accordance with GAAP. Reconciliations of the non-GAAP financial measures used in this press release to the most directly comparable GAAP financial measures are set forth in the text of, and the accompanying tables to, this press release, and can also be found on the Company�s website. About PharmaNet Development Group, Inc. PharmaNet Development Group, a global, drug development company, provides a comprehensive range of services to the pharmaceutical, biotechnology, generic drug, and medical device industries. The Company offers clinical-development solutions including early and late stage consulting services, Phase I clinical studies and bioanalytical analyses, and Phase II, III and IV clinical development programs. With approximately 2,200 employees and more than 35 facilities throughout the world, PharmaNet is a recognized leader in outsourced clinical development. For more information, please visit our website at www.pharmanet.com. Forward-Looking Statements Certain statements made in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Additionally, words such as "seek," "intend," "believe," "plan," "estimate," "expect," "anticipate" and other similar expressions are forward-looking statements within the meaning of the Act. Some or all of the results anticipated by these forward-looking statements may not occur. Factors that could cause or contribute to such differences include, but are not limited to, industry trends and information; the Company's ability to determine its impairment charges and costs of discontinued operations; whether the Company will achieve its estimated value relating to discontinued operations; developments with respect to the SEC's inquiry and securities class action lawsuits and derivative lawsuits; the Company�s ability to successfully achieve and manage the technical requirements of specialized clinical trial services, while complying with applicable rules and regulations; regulatory changes; changes affecting the clinical research industry; a reduction of outsourcing by pharmaceutical and biotechnology companies; the Company�s ability to compete internationally in attracting clients in order to develop additional business; the Company�s evaluation of its backlog and the potential cancellation of contracts; its ability to retain and recruit new employees; its clients' ability to provide the drugs and medical devices used in its clinical trials; the Company�s future stock price; its assessment of its effective tax rate and tax allowance; the Company�s financial guidance; the future effective tax rate; our anticipated capital expenditures; our costs associated with compliance of Section 404 of the Sarbanes-Oxley Act; the impact of foreign currency transaction costs and the effectiveness of any hedging strategies that we implement; and the national and international economic climate as it affects drug development operations. Further information can be found in the Company�s risk factors contained in its Annual Report on Form 10-K for the year ended December 31, 2005, which were originally filed as SFBC International, Inc. (NASDAQ: SFCC) and its most recent Quarterly Report on Form 10-Q. The Company does not undertake to update the disclosures made herein, and you are urged to read our filings with the Securities and Exchange Commission. PharmaNet Development Group, Inc. and Subsidiaries Statement of Operations- (Unaudited) For the Three Months Ended December 31, 2006 � (Unaudited) (As Revised) 3 Months 3 Months Ended Ended � � December 31, 2006 � December 31, 2005 REVENUE � � � � Direct revenue 79,104,468� 76,568,709� Reimbursed out-of-pockets � 24,451,526� � 26,543,635� TOTAL REVENUE � 103,555,994� � 103,112,344� COSTS AND EXPENSES � � � � Direct costs 45,672,200� 43,810,787� Reimbursable out-of-pocket expenses 24,451,526� 26,543,635� Selling, general and administrative expenses 26,008,738� 23,179,905� Impairment of goodwill -� -� Impairment of long-lived assets � -� � -� TOTAL COSTS AND EXPENSES � 96,132,464� � 93,534,327� EARNINGS FROM CONTINUING OPERATIONS 7,423,530� � 9,578,017� OTHER INCOME (EXPENSE) � � � � Interest income 585,711� 196,005� Interest expense (1,681,962) (1,672,135) Foreign exchange transaction loss, net � (339,804) � (170,849) TOTAL OTHER INCOME (EXPENSE) � (1,436,055) � (1,646,979) EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 5,987,475� 7,931,038� � Income tax (benefit) � 2,316,900� � (977,718) EARNINGS FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST IN JOINT VENTURE 3,670,575� � 8,908,756� Minority interest in joint venture � 173,729� � 185,546� NET EARNINGS FROM CONTINUING OPERATIONS 3,496,846� � 8,723,210� Loss from discontinued operations, net of tax � (15,409,221) � (25,249,699) NET LOSS � (11,912,375) � (16,526,489) � � � � � BASIC EARNINGS (LOSS) PER SHARE: � � � � Continuing operations $0.19� $0.48� Discontinued operations ($0.84) ($1.39) Net loss � ($0.65) � ($0.91) DILUTED EARNINGS (LOSS) PER SHARE: � � � � Continuing operations $0.19� $0.47� Discontinued operations ($0.83) ($1.35) Net loss � ($0.64) � ($0.88) SHARES USED IN COMPUTING EPS: � � � � Basic 18,438,517� 18,247,667� Diluted � 18,653,190� � 18,753,018� PHARMANET DEVELOPMENT GROUP, INC. AND SUBSIDIARIES Reconciliation of GAAP Operating Margin for Continuing Operations to Non GAAP Operating Margins for Continuing Operations For the Three and Twelve Months Ended December 31, 2006 and 2005 � Three Months Ended Twelve Months Ended December 31, 2006 December 31, 2006 � � 2006� � 2005� � 2006� � 2005� DIRECT REVENUE � 79,104,468� � 76,568,709� � 302,384,611� � 269,622,415� � � � � � � � � � EARNINGS FROM CONTINUING OPERATIONS GAAP � 7,423,530� � 9,578,017� � 13,005,918� � 29,844,155� � � � � � � � � � OPERATING MARGIN GAAP � 9.4% � 12.5% � 4.3% � 11.1% � � � � � � � � � ADD BACK: � � � � � � � � FAS 123R expense 149,061� -� 1,107,576� -� Amortization of acquisition related intangibles 708,517� 901,290� 2,982,876� 3,932,607� Impairment of goodwill � -� � -� � 7,873,000� � -� NON GAAP OPERATING EARNINGS � 8,281,108� � 10,479,307� � 24,969,370� � 33,776,762� � � � � � � � � � NON GAAP OPERATING MARGIN � 10.5% � 13.7% � 8.3% � 12.5% � Statement of Operations- (Unaudited) For the Twelve Months Ended December 31, 2006 � (Unaudited) (As Revised) 12 Months 12 Months Ended Ended � � December 31, 2006 � December 31, 2005 REVENUE � � � � Direct revenue 302,384,611� 269,622,415� Reimbursed out-of-pockets � 104,570,757� � 91,883,814� TOTAL REVENUE � 406,955,368� � 361,506,229� COSTS AND EXPENSES � � � � Direct costs 181,556,250� 155,900,530� Reimbursable out-of-pocket expenses 104,570,757� 91,883,814� Selling, general and administrative expenses 99,949,443� 83,877,730� Impairment of goodwill 7,873,000� -� Impairment of long-lived assets � -� � -� TOTAL COSTS AND EXPENSES � 393,949,450� � 331,662,074� EARNINGS FROM CONTINUING OPERATIONS � 13,005,918� � 29,844,155� OTHER INCOME (EXPENSE) � � � � Interest income 1,635,771� 890,646� Interest expense (8,114,581) (12,016,506) Foreign exchange transaction loss, net � (3,341,930) � (849,108) TOTAL OTHER INCOME (EXPENSE) � (9,820,740) � (11,974,968) EARNINGS FROM CONTINUING OPERATIONS 3,185,178� 17,869,187� BEFORE INCOME TAXES � � � � Income tax (benefit) � (3,557,552) � 153,606� EARNINGS FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST IN JOINT VENTURE � 6,742,730� � 17,715,581� Minority interest in joint venture � 690,527� � 552,401� NET EARNINGS FROM CONTINUING OPERATIONS � 6,052,203� � 17,163,180� Loss from discontinued operations, net of tax � (42,076,773) � (12,384,375) NET (Loss) Earnings � (36,024,570) � 4,778,805� � � � � � BASIC EARNINGS (LOSS) PER SHARE: � � � � Continuing operations $0.33� $0.97� Discontinued operations ($2.31) ($0.70) Net loss � ($1.98) � $0.27� DILUTED EARNINGS (LOSS) PER SHARE: � � � � Continuing operations $0.33� $0.94� Discontinued operations ($2.28) ($0.68) Net loss � ($1.95) � $0.26� SHARES USED IN COMPUTING EPS: � � � � Basic 18,221,418� 17,701,810� Diluted � 18,447,048� � 18,356,030� PHARMANET DEVELOPMENT GROUP, INC. AND SUBSIDIARIES Reconciliation of GAAP Net Earnings for Continuing Operations to Non GAAP Net Earnings from Continuing Operations For the Three and Twelve Months Ended December 31, 2006 and 2005 � Three Months Ended Twelve Months Ended December 31, 2006 December 31, 2006 2006� 2005� 2006� 2005� � Net earnings from continuing operations GAAP 3,496,846� 8,723,210� 6,052,203� 17,163,180� � Add: Impairment of goodwill -� -� 7,873,000� -� � Add: Non-recurring charge related to financing -� -� 1,214,306� 3,278,279� � Add: Non-cash compensation from the 149,061� 1,107,576� adoption of SFAS 123R � Add: Non-cash amortization 708,517� 901,290� 2,982,876� 3,932,607� � Subtotal 4,354,424� 9,624,500� 19,229,961� 24,374,066� � Less: Tax effect of non-GAAP adjustments 221,955� 148,348� 4,429,204� 1,057,778� � Add : Tax valuation allowance 2,629,968� -� 2,629,968� -� � Non-GAAP net earnings 6,762,437� 9,476,152� 17,430,725� 23,316,288� � Diluted non-GAAP net earnings per share $ 0.36� $ 0.51� $ 0.94� $ 1.27� � Number of shares used in computing diluted non-GAAP earnings per share 18,653,190� 18,753,018� 18,447,048� 18,356,030� Summary of Operations of Early and Late Stage Clinical Development Segments For the Three and Twelve Months Ended December 31, 2006 and 2005 � � Three Months Ended Twelve Months Ended December December EARLY CLINICAL DEVELOPMENT � 2006� � 2005� � � % variation � 2006� � 2005� � � % variation � Direct revenues 30,283,571� 34,630,401� -12.6% 106,975,586� 112,093,006� -4.6% � GAAP operating earnings 5,237,538� 9,277,492� (1) -43.5% 4,860,397� 24,876,063� (1) -80.5% � Amortization of intangibles 133,716� 226,983� -41.1% 683,675� 1,244,341� -45.1% � Non-GAAP operating earnings 5,371,254� 9,504,475� -43.5% 5,544,072� 26,120,404� -78.8% � GAAP operating Margin 17.3% 26.8% 4.5% 22.2% � Non-GAAP operating margin 17.7% 27.4% 5.2% 23.3% � � Three Months Ended Twelve Months Ended December December LATE CLINICAL DEVELOPMENT � 2006� � 2005� � � % variation � 2006� � 2005� � � % variation � Direct revenues 48,820,897� 41,938,308� 16.4% 195,409,025� 157,529,409� 24.0% � GAAP operating earnings 6,771,250� 4,547,140� (1) 48.9% 29,189,705� 17,242,117� (1) 69.3% � Amortization of intangibles 574,800� 674,307� -14.8% 2,299,200� 2,688,266� -14.5% � Non-GAAP operating earnings 7,346,050� 5,221,447� 40.7% 31,488,905� 19,930,383� 58.0% � GAAP operating Margin 13.9% 10.8% 14.9% 10.9% � Non-GAAP operating margin 15.0% 12.5% 16.1% 12.7% � (1) Prior year results have been reclassified, to conform to current year treatment, to exclude foreign exchange gain or loss PHARMANET DEVELOPMENT GROUP, INC. AND SUBSIDIARIES Selected Consolidated Balance Sheet Information December 31, 2006 and 2005 � The allocation of assets and liabilities between continuing and discontinued operations, in this selected balance sheet information is preliminary and may change upon the company's filing of its from 10-K for the period ended December 31, 2006 � (Unaudited) (As Revised) December 31, December 31, � � 2006� � 2005� ASSETS � � � � � Cash, equivalents and investments in marketable securities from continuing operations � 53,754,183� 37,413,251� � Cash, equivalents and investments in marketable securities from discontinued operations -� 1,421,451� Total cash, equivalents, and investments in marketable securities 53,754,183� 38,834,702� � Accounts receivable from continuing operations 109,187,958� 91,446,190� Accounts receivable from discontinued operations 3,572,556� 26,425,479� Accounts receivable 112,760,514� 117,871,669� � Current assets from continuing operations 189,735,483� 148,692,703� Current assets from discontinued operations 3,572,556� 29,335,006� Total current assets 193,308,039� 178,027,709� � Fixed assets from continuing operations 68,085,924� 48,563,461� Fixed assets held available for sale from discontinued operations 3,286,619� 24,701,651� Total fixed assets 71,372,543� 73,265,112� � Total assets from continuing operations 576,358,562� 514,328,567� Total assets from discontinued operations 6,859,175� 58,208,529� Total assets 583,217,737� 572,537,096� � � � � � LIABILITIES AND STOCKHOLDERS' EQUITY � � � � Current liabilities from continuing operations 134,556,549� 120,493,672� Current liabilities from discontinued operations 6,144,643� 5,940,389� Total current liabilities 140,701,192� 126,434,061� � Total liabilities from continuing operations 317,907,226� 284,315,108� Total liabilities from discontinued operations 6,144,643� 5,940,389� Total liabilities 324,051,869� 290,255,497� � Stockholders' equity 259,165,868� 282,281,599� � Total liabilities and stockholders' equity 583,217,737� 572,537,096�

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PDGI Pharmanet Development Grp (MM)