What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-07-27 compared with 2021-04-27 · 86 added, 69 removed, 307 unchanged (34% of the section changed)

6 unchanged sentences

Cash and cash equivalents

Accounts receivable and unbilled, net (includes $ 2.2 million and $ 2.6 million with related parties at March 31, 2021 and December 31, 2020, respectively)

Accounts receivable and unbilled, net (includes $ 6.1 million and $ 2.6 million with related parties at June 30, 2021 and December 31, 2020, respectively)

Prepaid expenses and other current assets

6 unchanged sentences

Current liabilities:

Accounts payable (includes $ 0.1 million and $ 0.2 million with related parties at March 31, 2021 and December 31, 2020, respectively)

Accounts payable (includes $ 0.7 million and $ 0.2 million with related parties at June 30, 2021 and December 31, 2020, respectively)

Accrued expenses

Advanced billings (includes $ 6.1 million and $ 6.5 million with related parties at March 31, 2021 and December 31, 2020, respectively)

Advanced billings (includes $ 5.9 million and $ 6.5 million with related parties at June 30, 2021 and December 31, 2020, respectively)

Other current liabilities

8 unchanged sentences

5,000,000 shares authorized;

no shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

no shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Common stock - $ 0.01 par-value;

250,000,000 shares authorized at March 31, 2021 and December 31, 2020, respectively;

35,926,158 and 35,519,989 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

Treasury stock - 185,000 shares at March 31, 2021 and December 31, 2020, respectively

250,000,000 shares authorized at June 30, 2021 and December 31, 2020, respectively;

35,819,012 and 35,519,989 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Treasury stock - 185,000 shares at June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

9 unchanged sentences

Three Months Ended

Revenue, net (includes $ 5.3 million and $ 5.5 million with related parties for the three months ended March 31, 2021 and 2020, respectively)

Six Months Ended

Revenue, net (includes $ 9.9 million and $ 2.7 million with related parties for the three months ended June 30, 2021 and 2020, respectively, and $ 15.2 million and $ 8.2 million with related parties for the six months ended June 30, 2021 and 2020, respectively)

Operating expenses:

19 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive income

13 unchanged sentences

BALANCE — March 31, 2020

Foreign currency translation

Stock-based compensation expense

Stock options exercised

Repurchases of common stock

BALANCE — June 30, 2020

Comprehensive

4 unchanged sentences

BALANCE — March 31, 2021

Foreign currency translation

Stock-based compensation expense

Stock options exercised

Repurchases of common stock

BALANCE — June 30, 2021

See notes to condensed consolidated financial statements.

3 unchanged sentences

(Amounts in thousands)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

19 unchanged sentences

Repurchases of common stock

Net cash provided by (used in) financing activities

Net cash used in financing activities

EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND

3 unchanged sentences

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION—

Acquisition of property and equipment—non-cash

See notes to condensed consolidated financial statements.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2021

June 30, 2021

(1) Basis of Presentation

14 unchanged sentences

Share Repurchases

In the first quarter of 2018, the Board of Directors approved a share repurchase program authorizing up to $ 50.0 million in share repurchases.

In the first quarter of 2020, the Board of Directors approved an increase in the stock repurchase authorization by $ 50.0 million.

In the fourth quarter of 2020, the Board approved the stock repurchase authorization up to $ 150.0 million.

During the quarter ended March 31, 2020, the Company repurchased 661,637 shares for $ 43.2 million.

As of March 31, 2021, we have remaining authorization of $ 102.6 million remaining under the repurchase program.

In the second quarter of 2021, the Board approved an increase of $ 150.0 million to the stock repurchase program bringing the total repurchase authorization up to $ 300.0 million.

During the three and six months ended June 30, 2021, the Company repurchased 343,159 shares for $ 56.1 million, respectively.

During the three and six months ended June 30, 2020, the Company repurchased 110,488 and 772,125 shares for $ 7.6 million and $ 50.8 million, respectively.

As of June 30, 2021, we have remaining authorization of $ 196.4 million under the repurchase program.

Repurchases under the share repurchase program are executed in the open market or negotiated transactions under trading plans put in place pursuant to Rule 10b5-1.

2 unchanged sentences

Supplemental Cash Flow Disclosure

During the three months ended March 31, 2020, the company engaged in a non-cash financing activity of $ 1.4 million related to share repurchases executed, but not yet paid as of March 31, 2020.

During the six months ended June 30, 2021, the Company engaged in a non-cash financing activity of $ 0.3 million related to share repurchases executed, but not yet paid as of period end.

Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments” intended to provide financial statement users with more decision-useful information about expected credit losses and other commitments to extend credit held by the reporting entity.

The standard replaces the incurred loss impairment methodology with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The guidance is effective for fiscal years beginning after December 15, 2019 with early adoption permitted.

The Company adopted this standard in the first quarter of 2020 and it had no material impact to the condensed consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” The new guidance includes several provisions to reduce the complexity of accounting for income taxes for financial reporting purposes and increasing consistency and clarity for financial statement readers.

7 unchanged sentences

The Company does not compute diluted EPS in cases where the inclusion of such additional shares would be anti-dilutive in effect.

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2021 and 2020 (in thousands, except for earnings per share):

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2021 and 2020 (in thousands, except for earnings per share):

Three Months Ended

Six Months Ended

Weighted-average shares:

9 unchanged sentences

Net income per common share—Diluted

During the three months ended March 31, 2021 and 2020, the Company had 0 and 439,405 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

During the three and six months ended June 30, 2021, the Company had 0 and 273,588 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

During the three and six months ended June 30, 2020, the Company had 439,405 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

(3) Fair Value Measurements

6 unchanged sentences

The fair value of financial instruments such as cash and cash equivalents, accounts receivable and unbilled, net, accounts payable, accrued expenses and advanced billings approximate their carrying amounts due to their short term maturities.

The Company does not have any recurring fair value measurements as of March 31, 2021.

There were no transfers between Level 1, Level 2 or Level 3 during the three months ended March 31, 2021 or 2020.

The Company does not have any recurring fair value measurements as of June 30, 2021.

There were no transfers between Level 1, Level 2 or Level 3 during the three and six months ended June 30, 2021 or 2020.

(4) Contract Assets and Contract Liabilities

14 unchanged sentences

Advanced billings

As of March 31, 2021, we had approximately $ 1.8 billion of performance obligations remaining to be performed for active projects.

As of June 30, 2021, we had approximately $ 1.9 billion of performance obligations remaining to be performed for active projects.

(5) Intangible Assets, Net

9 unchanged sentences

Total intangible assets, net

As of March 31, 2021, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):

As of June 30, 2021, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):

Remainder of 2021

8 unchanged sentences

On March 29, 2021 the Company amended the credit facility expiration date to March 31, 2022 .

As of March 31, 2021, there were no outstanding borrowings under the Credit Facility and $ 0.2 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

As of June 30, 2021, there were no outstanding borrowings under the Credit Facility and $ 0.2 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

The Company enters into leases for real estate and equipment.

4 unchanged sentences

The components of lease expense were as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating lease cost

1 unchanged sentence

Supplemental cash flow information related to the leases was as follows (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Cash paid for amounts included in the measurement of lease liabilities:

11 unchanged sentences

Operating leases

Lease payments due related to lease liabilities as of March 31, 2021 were as follows (in thousands):

Lease payments due related to lease liabilities as of June 30, 2021 were as follows (in thousands):

Related Party

6 unchanged sentences

imputed interest

As of June 30, 2021, we have several additional leases with contractual obligations, which have not yet commenced, with future payment of $ 7.0 million.

(9) Shareholder’s Equity and Stock-Based Compensation

The Company granted no awards to employees under the 2016 Incentive Award Plan during the three months ended March 31, 2021.

The Company granted 312,897 awards to employees under the 2016 Incentive Award Plan during the three months ended March 31, 2020, consisting of 20,724 RSA and 92,768 restricted stock units RSU vesting after four years , and 199,405 fully-vested stock option awards.

The Company granted 337,381 awards to employees under the 2016 Incentive Award Plan during the six months ended June 30, 2021, consisting of 74,725 RSU and 205,086 stock option awards vesting after four and a half years , and 57,570 stock option awards vesting after two years .

The Company granted an additional 10,932 stock option awards, vesting after one year , to non-employee directors under the 2016 Incentive Award Plan, during the six months ended June 30, 2021.

The Company granted 319,397 awards to employees under the 2016 Incentive Award Plan during the six months ended June 30, 2020, consisting of 20,724 RSA and 96,768 RSU vesting after four years , 2,500 RSU vesting after three years , and 199,405 fully-vested stock option awards.

The Company granted an additional 23,148 stock option awards, vesting after one year , to non-employee directors under the 2016 Incentive Award Plan, during the six months ended June 30, 2020.

Award Activity

The following table sets forth the Company’s stock option activity:

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Weighted Average

2 unchanged sentences

Outstanding - beginning of period

Forfeited/Expired

Cancelled/Forfeited

Outstanding - end of period

1 unchanged sentence

The following table sets forth the Company’s RSA/RSU activity:

Three Months Ended

March 31, 2021

Six Months Ended

June 30, 2021

Outstanding and unvested - beginning of period

2 unchanged sentences

Stock-based compensation expense recognized in the condensed consolidated statements of operations related to all outstanding stock based compensation awards is summarized below (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Total direct costs

2 unchanged sentences

(10) Income Taxes

The Company’s effective income tax rate was 10.7 % and 20.6 % for the three months ended March 31, 2021 and 2020, respectively.

The Company’s effective income tax rate for the three months ended March 31, 2021 varied from the U.S.

statutory rate of 21 % primarily due to the impact of state taxes, which was favorably offset by tax benefits related to Foreign Derived Intangible Income (FDII) and excess tax benefits recognized from share-based compensation.

The Company’s effective income tax rate was 6.4 % and 20.6 % for the three months ended June 30, 2021 and 2020, respectively.

The Company’s effective income tax rate was 8.7 % and 20.6 % for the six months ended June 30, 2021 and 2020, respectively.

The Company’s effective income tax rate for the three and six months ended June 30, 2021 varied from the U.S.

statutory rate of 21 % primarily due to the impact of state taxes, which was favorably offset by excess tax benefits recognized from share-based compensation and tax benefits related to Foreign Derived Intangible Income (FDII).

(11) Commitments and Contingencies

1 unchanged sentence

The Company is involved in legal proceedings from time to time in the ordinary course of its business, including employment claims and claims related to other business transactions.

The Company cannot predict with certainty the outcome of such proceedings, but it believes that adequate reserves have been recorded and losses already recognized with respect to such proceedings, which were immaterial as of March 31, 2021 and December 31, 2020.

There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions;

however, the Company believes that such potential losses were immaterial as of March 31, 2021.

however, the Company believes that such potential losses were immaterial as of June 30, 2021.

Purchase Commitments

The Company has several minimum purchase commitments for project related supplies totaling $ 12.6 million as of March 31, 2021.

The Company has several minimum purchase commitments for project related supplies totaling $ 12.3 million as of June 30, 2021.

In return for the commitment, Medpace receives preferential pricing.

3 unchanged sentences

The Company periodically extends short term loans or advances to employees, typically upon commencement of employment.

Total receivables as a result of these employee advances of $ 0.2 million existed at March 31, 2021 and December 31, 2020, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the condensed consolidated balance sheets, respectively, depending on the contractual repayment date.

Service Agreements

Total receivables as a result of these employee advances of $ 0.2 million existed at June 30, 2021 and December 31, 2020, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the condensed consolidated balance sheets, respectively, depending on the contractual repayment date.

Service Agreement

LIB Therapeutics LLC and subsidiaries (“LIB”)

2 unchanged sentences

Subsequently, the Company and LIB have entered into several task orders for the Company to perform clinical trial related services.

During the three months ended March 31, 2021 and 2020, the Company recognized total revenue from LIB of $ 0.5 million and $ 1.0 million, respectively, in the Company’s condensed consolidated statements of operations.

As of March 31, 2021 and December 31, 2020, respectively, the Company had Advanced billings from LIB of $ 0.6 million and $ 0.7 million recorded in the condensed consolidated balance sheets.

In addition, as of March 31, 2021 and December 31, 2020, respectively, the Company had Accounts receivable and unbilled, net from LIB of $ 0.1 million and $ 0.3 million recorded in the condensed consolidated balance sheets.

The Company recognized total revenue from LIB of $ 2.8 million and $ 0.4 million during the three months ended June 30, 2021 and 2020, respectively, and $ 3.3 million and $ 1.4 million during the six months ended June 30, 2021 and 2020, respectively, in the Company’s condensed consolidated statements of operations.

As of June 30, 2021 and December 31, 2020, respectively, the Company had Advanced billings from LIB of $ 0.7 million in the condensed consolidated balance sheets.

In addition, as of June 30, 2021 and December 31, 2020, respectively, the Company had Accounts receivable and unbilled, net from LIB of $ 2.3 million and $ 0.3 million in the condensed consolidated balance sheets.

CinRX Pharma and subsidiaries (“CinRx”)

1 unchanged sentence

The Company and CinRx have entered into several task orders for the Company to perform clinical trial related services.

During the three months ended March 31, 2021 and 2020, the Company recognized total revenue from CinRx of $ 4.8 million and $ 4.4 million, respectively, in the Company’s condensed consolidated statements of operations.

As of March 31, 2021 and December 31, 2020, respectively, the Company had Advanced billings from CinRx of $ 5.5 million and $ 5.8 million recorded in the condensed consolidated balance sheets.

As of March 31, 2021 and December 31, 2020 the Company had Accounts receivable and unbilled, net from CinRx of $ 2.0 million and $ 2.2 million, respectively, in the condensed consolidated balance sheets.

The Company recognized total revenue from CinRx of $ 7.1 million and $ 2.4 million during the three months ended June 30, 2021 and 2020, respectively, and $ 11.9 million and $ 6.8 million during the six months ended June 30, 2021 and 2020, respectively, in the Company’s condensed consolidated statements of operations.

As of June 30, 2021 and December 31, 2020, respectively, the Company had Advanced billings from CinRx of $ 5.1 million and $ 5.8 million in the condensed consolidated balance sheets.

As of June 30, 2021 and December 31, 2020 the Company had Accounts receivable and unbilled, net from CinRx of $ 3.8 million and $ 2.2 million, respectively, in the condensed consolidated balance sheets.

The Summit Hotel (“The Summit”)

1 unchanged sentence

Medpace incurs travel lodging and meeting expenses at The Summit.

During the three months ended March 31, 2021 and 2020, Medpace incurred expenses of $ 0.1 million and $ 0.2 million at The Summit, respectively.

Medpace incurred expenses of less than $ 0.1 million during the three months ended June 30, 2021 and 2020, respectively, and $ 0.1 million and $ 0.2 million during the six months ended June 30, 2021 and 2020 at The Summit, respectively.

Leased Real Estate

5 unchanged sentences

Annual base rent for its corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index.

Operating lease cost recognized for the three months ended March 31, 2021 and 2020 was $ 0.5 million, respectively.

Operating lease cost recognized for the three months ended June 30, 2021 and 2020 was $ 0.5 million, respectively, and $ 1.0 million for the six months ended June 30, 2021 and 2020, respectively.

The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations.

The Operating lease right-of-use assets at March 31, 2021 and December 31, 2020 were $ 3.0 million and $ 3.5 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at March 31, 2021 were $ 1.9 million and $ 1.1 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at December 31, 2020 were $ 1.9 million and $ 1.6 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Operating lease right-of-use assets at June 30, 2021 and December 31, 2020 were $ 2.6 million and $ 3.5 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at June 30, 2021 were $ 1.9 million and $ 0.7 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The current and long-term

portions of the lease liabilities at D ecember 31, 2020 were $ 1.9 million and $ 1.6 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

In 2018, Medpace, Inc.

1 unchanged sentence

The Company began to occupy the premises in the second quarter of fiscal year 2020.

The lease expires in 2040 and the Company has two

10 -year options to extend the term of the lease.

The lease expires in 2040 and the Company has two 10 -year options to extend the term of the lease.

The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property.

Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in consumer price index.

Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index.

The Company has determined that the lease is an operating lease.

Operating lease cost recognized for the three months ended March 31, 2021 was $ 1.4 million.

Operating lease cost recognized for the three months ended June 30, 2021 and 2020 was $ 1.4 million and $ 0.9 million, respectively, and $ 2.8 million and $ 0.9 million for the six months ended June 30, 2021 and 2020, respectively.

The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations.

The Operating lease right-of-use assets at March 31, 2021 and December 31, 2020 were $ 56.2 million and $ 56.6 million in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at March 31, 2021 were $ 0.8 million and $ 66.6 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Operating lease right-of-use assets at June 30, 2021 and December 31, 2020 were $ 55.8 million and $ 56.6 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at June 30, 2021 were $ 0.8 million and $ 66.4 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at December 31, 2020 were $ 0.7 million and $ 66.8 million, respectively and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

4 unchanged sentences

The Company has determined that the leases are operating leases.

Operating lease cost recognized for the three months ended March 31, 2021 and 2020 was $ 0.9 million, respectively.

Operating lease cost recognized for the three months ended June 30, 2021 and 2020 was $ 0.9 million, respectively, and $ 1.8 million for the six months ended June 30, 2021 and 2020, respectively.

The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations.

The Operating lease right-of-use assets at March 31, 2021 and December 31, 2020 were $ 19.1 million and $ 19.7 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at March 31, 2021 were $ 2.5 million and $ 16.6 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Operating lease right-of-use assets at June 30, 2021 and December 31, 2020 were $ 18.5 million and $ 19.7 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at June 30, 2021 were $ 2.5 million and $ 15.9 million, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at December 31, 2020 were $ 2.4 million and $ 17.2 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

4 unchanged sentences

The Aircraft Management Company also makes the private aviation charter aircraft available to third parties.

The Company incurred travel expenses of $ 0.1 million and $ 0.2 million during the three months ended March 31, 2021 and 2020, respectively, related to these travel services.

The Company incurred travel expenses of $ 0.4 million and $ 0.2 million during the three months ended June 30, 2021 and 2020, respectively, and $ 0.5 million and $ 0.4 million during the six months ended June 30, 2021 and 2020, respectively, related to these travel services.

These travel expenses are recorded in Selling, general and administrative in the Company’s condensed consolidated statements of operations.

As of June 30, 2021 and December 31, 2020, the Company had Accounts payable to the Aircraft Management Company of $ 0.5 million and less than $ 0.1 million, respectively, in the condensed consolidated balance sheets.

(13) Entity Wide Disclosures

2 unchanged sentences

Three Months Ended

March 31, 2021

Three Months Ended

March 31, 2020

Six Months Ended

Therapeutic Area

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements