What changed in this filing

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Item 1. Financial Statements

2023-04-25 compared with 2022-10-25 · 95 added, 140 removed, 348 unchanged (40% of the section changed)

4 unchanged sentences

(Amounts in thousands, except share amounts) As of

September 30,

2023 December 31,

1 unchanged sentence

Cash and cash equivalents $ 46,922 $ 28,265

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)

Accounts receivable and unbilled, net (includes $ 7.7 million with related parties at March 31, 2023 and December 31, 2022, respectively)

257,746 253,404

10 unchanged sentences

Current liabilities:

Accounts payable (includes $ 0.3 million with related parties at September 30, 2022 and December 31, 2021, respectively)

Accounts payable (includes $ 0.4 million and $ 0.3 million with related parties at March 31, 2023 and December 31, 2022, respectively)

$ 37,110 $ 33,069

Accrued expenses 201,201 210,125

Advanced billings (includes $ 5.7 million and $ 8.3 million with related parties at September 30, 2022 and December 31, 2021, respectively)

Advanced billings (includes $ 11.6 million and $ 8.8 million with related parties at March 31, 2023 and December 31, 2022, respectively)

466,040 462,729

Short-term debt 115,000 50,000

Other current liabilities 30,879 27,612

Other current liabilities (includes $ 12.5 million with related parties at March 31, 2023 and December 31, 2022, respectively)

62,538 47,547

Total current liabilities 881,889 803,470

7 unchanged sentences

5,000,000 shares authorized;

no shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

no shares issued and outstanding at March 31, 2023 and December 31, 2022, 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

Treasury stock - 81,573 and 180,000 shares at September 30, 2022 and December 31, 2021, respectively

250,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively;

30,623,655 and 31,091,694 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

Treasury stock - 70,573 and 71,573 shares at March 31, 2023 and December 31, 2022, respectively

( 12,322 ) ( 12,497 )

Additional paid-in capital 778,691 770,794

(Accumulated deficit) Retained earnings ( 380,115 ) 234,984

Accumulated deficit ( 408,099 ) ( 359,827 )

Accumulated other comprehensive loss ( 11,314 ) ( 12,392 )

6 unchanged sentences

(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)

Revenue, net (includes $ 15.8 million and $ 13.3 million with related parties for the three months ended March 31, 2023 and 2022, respectively.

$ 434,074 $ 330,947

8 unchanged sentences

Income from operations 86,204 64,203

Other income, net:

Other (expense) income, net:

Miscellaneous income, net 687 1,067

Interest expense, net ( 1,584 ) ( 41 ) ( 2,078 ) ( 82 )

Total other income, net 4,065 1,023 6,949 2,171

Interest (expense) income, net ( 861 ) 54

Total other (expense) income, net ( 174 ) 1,121

Income before income taxes 86,030 65,324

12 unchanged sentences

(Amounts in thousands) Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income $ 72,894 $ 61,311

8 unchanged sentences

Treasury Stock

Capital Retained

Capital (Accumulated

Comprehensive

4 unchanged sentences

Stock options exercised 3 13,894 13,897

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 ( 27 ) ( 14,243 ) ( 411,680 ) ( 425,950 )

BALANCE — June 30, 2021 $ 358 $ ( 5,578 ) $ 716,547 $ 142,315 $ ( 1,760 ) $ 851,882

Net income 48,574 48,574

Foreign currency translation ( 1,483 ) ( 1,483 )

Stock-based compensation expense 4,047 4,047

Stock options exercised 1 1,003 1,004

Repurchases of common stock ( 5,939 ) ( 5,939 )

BALANCE — September 30, 2021 $ 359 $ ( 5,578 ) $ 721,597 $ 184,950 $ ( 3,243 ) $ 898,085

Retirement of treasury stock 5,427 ( 5,427 ) —

BALANCE — March 31, 2022 $ 336 $ ( 14,243 ) $ 746,123 $ ( 120,812 ) $ ( 6,388 ) $ 605,016

Treasury Stock

7 unchanged sentences

Repurchases of common stock ( 7 ) ( 120,991 ) ( 120,998 )

Retirement of treasury stock 5,427 ( 5,427 ) —

Re-issuance of treasury stock 175 ( 175 ) —

BALANCE — March 31, 2023 $ 306 $ ( 12,322 ) $ 778,691 $ ( 408,099 ) $ ( 11,314 ) $ 347,262

Net income 49,360 49,360

Foreign currency translation ( 3,584 ) ( 3,584 )

Stock-based compensation expense 5,653 5,653

Stock options exercised 1,524 1,524

Repurchases of common stock ( 27 ) ( 374,690 ) ( 374,717 )

BALANCE — June 30, 2022 $ 309 $ ( 14,243 ) $ 753,300 $ ( 446,142 ) $ ( 9,972 ) $ 283,252

Net income 66,027 66,027

Foreign currency translation ( 6,080 ) ( 6,080 )

Stock-based compensation expense 5,794 5,794

Stock options exercised 892 892

BALANCE — September 30, 2022 $ 309 $ ( 14,243 ) $ 759,986 $ ( 380,115 ) $ ( 16,052 ) $ 349,885

See notes to condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Amounts in thousands) Nine Months Ended

September 30,

(Amounts in thousands) Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Noncash lease expense 4,757 4,537

Deferred income tax (benefit) provision ( 2,126 ) 3,299

Amortization and adjustment of deferred credit ( 465 ) ( 501 )

Deferred income tax benefit ( 1,063 ) ( 713 )

Other ( 1,455 ) ( 420 )

20 unchanged sentences

RESTRICTED CASH 767 ( 1,426 )

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 430,297 ) 120,621

INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 18,657 ( 378,461 )

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period 28,265 461,304

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2022

March 31, 2023

(1) Basis of Presentation

14 unchanged sentences

Share Repurchases

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

In the first quarter of 2022, the Board approved additional increases totaling $ 500.0 million to the Company's stock repurchase program.

In the second quarter of 2022, the Board approved further increases of $ 110.0 million to the Company's stock repurchase program.

During the nine months ended September 30, 2022, the Company repurchased 5,463,244 shares for $ 800.5 million.

During the three and nine months ended September 30, 2021, the Company repurchased 34,624 and 377,783 shares for $ 5.9 million and $ 62.1 million, respectively.

As of September 30, 2022, the Company has completed all authorized share repurchases under the repurchase program.

In 2018, the Board of Directors approved a stock repurchase program which has been amended several times to increase the aggregate amount of the stock repurchase authorization.

During the three months ended March 31, 2022, the Company repurchased 2,745,865 shares for $ 425.9 million.

In the fourth quarter of 2022, the Board approved a new stock repurchase program of up to $ 500.0 million.

During the three months ended March 31, 2023, the Company repurchased 654,787 shares for $ 120.1 million.

As of March 31, 2023, we have remaining authorization of $ 332.7 million under the new 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.

1 unchanged sentence

Retired share repurchase amounts paid in excess of par value are reflected within Accumulated deficit/Retained earnings in the Company’s condensed consolidated balance sheets.

Recently Issued Accounting Standards

In November 2021, the FASB issued ASU 2021-10, "Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance" which requires entities to provide disclosures on material government assistance transactions for annual reporting periods.

The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity's financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies.

The guidance is effective for annual periods beginning after December 15, 2021, with early adoption permitted.

The Company is currently evaluating the effect this standard will have on its condensed consolidated financial statements and related disclosures.

(2) Net Income Per Share

2 unchanged sentences

The computation of diluted EPS includes additional common shares, such as unvested Restricted Stock Units (“RSU”) and stock options with exercise prices less than the average market price of the Company’s common stock during the period (“in-the-money options”), which would be considered outstanding.

This assumes that additional shares would have to be issued in cases where the exercise price of stock options is less than the value of the common stock being acquired because the cash proceeds received from the stock option holder would not be sufficient to acquire that same number of shares.

This assumes that additional shares would have to be issued in cases where the exercise price of stock options is less than the value of the common stock being acquired because

the cash proceeds received from the stock option holder would not be sufficient to acquire that same number of shares.

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 and nine months ended September 30, 2022 and 2021 (in thousands, except for earnings per share):

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2023 and 2022 (in thousands, except for earnings per share):

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Weighted-average shares:

Common shares outstanding 31,008 34,918

RSAs 21 112 21 114

Total weighted-average shares 31,029 34,939

8 unchanged sentences

Net income per common share—Diluted $ 2.27 $ 1.69

During the three and nine months ended September 30, 2022, the Company had (in thousands) 274.4 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 months ended March 31, 2023 and 2022, the Company had (in thousands) 10 and 264 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 September 30, 2022.

There were no transfers between Level 1, Level 2 or Level 3 during the three and nine months ended September 30, 2022 or September 30, 2021.

The Company does not have material recurring fair value measurements as of March 31, 2023.

There were no transfers between Level 1, Level 2 or Level 3 during the three months ended March 31, 2023 or March 31, 2022.

(4) Contract Assets and Contract Liabilities

6 unchanged sentences

Accounts receivable and unbilled, net consisted of the following (in thousands):

September 30,

2023 December 31,

6 unchanged sentences

Advanced billings consisted of the following (in thousands):

September 30,

2023 December 31,

Advanced billings $ 466,040 $ 462,729

As of September 30, 2022, we had approximately $ 2.5 billion of performance obligations remaining to be performed for active projects.

As of March 31, 2023, we had approximately $ 2.9 billion of performance obligations remaining to be performed for active projects.

(5) Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):

September 30,

2023 December 31,

8 unchanged sentences

Total intangible assets, net $ 37,458 $ 38,008

As of September 30, 2022, 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 March 31, 2023, 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 2023

Later years 1,153

(6) Accrued Expenses

Accrued expenses consisted of the following (in thousands):

September 30,

2023 December 31,

3 unchanged sentences

Total accrued expenses $ 201,201 $ 210,125

Debt consisted of the following (in thousands):

September 30,

(7) Short-term Debt

Short-term debt consisted of the following (in thousands):

2023 December 31,

1 unchanged sentence

Short-term debt $ 115,000 $ 50,000

Principal payments on debt are due as follows (in thousands):

Principal payments on Short-term debt are due as follows (in thousands):

2023 (remaining)

Total $ 115,000

The estimated fair value of the Company’s debt based on Level 2 inputs using the market approach, which is primarily based on rates at which the debt is traded among financial institutions, approximates the carrying value as of March 31, 2023 and December 31, 2022.

On September 30, 2019 (the “Closing Date”), the Company obtained an unsecured credit facility in an aggregate principal amount up to $ 50.0 million (as amended from time to time, the “Credit Facility”) through its wholly owned subsidiaries, Medpace, Inc., as borrower (the “Borrower”), and Medpace IntermediateCo, Inc., as guarantor (the “Guarantor”).

On the Closing Date, the Borrower and lender entered into a Loan Agreement (as it may be amended from time to time, the “Loan Agreement”) providing for the Credit Facility, and the Guarantor executed a Guaranty Agreement providing for its guarantee of the payment and performance of the obligations under the Loan Agreement.

On December 27, 2021, the Company entered into Amendment No.

3 to the Loan Agreement, which, among other things, extends the expiration date of the revolving credit note to March 31, 2023, adds provisions for alternative rates of interest as a result of global reference rate initiatives and removes the Borrower's ability to obtain advances in any currency other than U.S.

After the LIBOR cessation date of December 31, 2021, the Credit Facility bears interest at a rate of the sum of The Secured Overnight Financing Rate (SOFR) and the benchmark replacement adjustment plus 100 basis points (1.00%).

On March 15, 2022, the Company entered into Amendment No.

4 to the Loan Agreement, which increased the aggregate principal amount that may be borrowed under the facility’s line of credit to up to $ 250.0 million.

As of September 30, 2022, there were $ 0.2 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

On March 31, 2023, the Company entered into Amendment No.

5 to the Loan Agreement, which changed the aggregate principle amount that may be borrowed under the

facility’s line of credit to up to $ 150.0 million, adjusted the interest rate and fee charged on the credit facility and extended the expiration date of revolving credit note to March 29, 2024.

The Credit Facility bears interest at a rate of the sum of The Secured Overnight Financing Rate (SOFR) plus 125 basis points ( 1.25 %) or the highest of the Prime Rate, the sum of the Overnight Bank Funding Rate plus 50 basis points ( 0.50 %) and the sum of Daily Simple SOFR plus 100 basis points ( 1.00 %).

As of March 31, 2023, the Credit Facility interest rate was 6.0 %.

The Loan Agreement contains other customary loan terms, representations and warranties, and affirmative and negative covenants, in each case, subject to customary limitations, exceptions and exclusions.

The Loan Agreement contains certain events of default, including, among others, non-payment of principal or interest and breach of the covenants.

As of March 31, 2023, there were $ 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 September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Operating lease cost $ 6,681 $ 6,500

1 unchanged sentence

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

Nine Months Ended September 30,

Three Months Ended March 31,

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

3 unchanged sentences

Supplemental balance sheet information related to the leases was as follows (in thousands):

September 30,

2023 December 31,

Operating lease right-of-use assets - related parties $ 87,600 $ 86,356

Operating lease right-of-use assets - non-related parties 55,709 52,712

Operating lease right-of-use assets $ 143,309 $ 139,068

Other current liabilities - related parties 5,305 5,409

Other current liabilities - non-related parties 13,934 13,863

Other current liabilities $ 19,239 $ 19,272

Operating lease liabilities - related parties 94,901 93,393

Operating lease liabilities - non-related parties 47,788 45,474

Operating lease liabilities 142,689 138,867

4 unchanged sentences

Operating leases 5.4 % 5.2 %

Lease payments due related to lease liabilities as of September 30, 2022 were as follows (in thousands):

Lease payments due related to lease liabilities as of March 31, 2023 were as follows (in thousands):

Related Party

13 unchanged sentences

Total $ 100,206 $ 61,722 $ 161,928

As of September 30, 2022, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $ 0.1 million.

As of March 31, 2023, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $ 0.3 million.

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

The Company granted 392,231 awards to employees under the 2016 Incentive Award Plan during the nine months ended September 30, 2022, consisting of 151,159 RSU and 113,838 stock option awards having four year vesting schedules and 127,234 stock option awards having two year vesting schedules.

The Company granted an additional 11,418 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the nine months ended September 30, 2022.

The Company granted 26,668 awards to employees under the 2016 Incentive Award Plan during the three months ended March 31, 2023, consisting of 25,418 RSU and 1,250 stock option awards having four year vesting schedules.

The Company granted an additional 573 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the three months ended March 31, 2023.

These awards are scheduled to vest on the earlier of (a) the day immediately preceding the date of the first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date.

1 unchanged sentence

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

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Stock Options Weighted Average

7 unchanged sentences

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

Nine Months Ended

September 30, 2022

Three Months Ended

March 31, 2023

Outstanding and unvested - beginning of period 523,377

5 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 September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Total direct costs $ 2,940 $ 2,440

2 unchanged sentences

(10) Income Taxes

The Company’s effective income tax rate was 19.4 % and 11.3 % for the three months ended September 30, 2022 and 2021, respectively.

The Company's effective income tax rate was 15.5 % and 9.7 % for the nine months ended September 30, 2022 and 2021, respectively.

The Company’s effective income tax rate for the three months ended September 30, 2022 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.

The Company's effective income tax rate for the nine months ended September 30, 2022 varied from the U.S.

statutory rate of 21 % due to the impact of the state taxes, which was favorably offset by excess tax benefits recognized from share-based compensation and benefits from uncertain tax positions.

The Company’s effective income tax rate was 15.3 % and 6.1 % for the three months ended March 31, 2023 and 2022, respectively.

The Company's effective income tax rate for the three months ended March 31, 2023 varied from the U.S.

statutory rate of 21 % due to the impact of the 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 September 30, 2022 and December 31, 2021.

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 September 30, 2022.

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, 2023.

Purchase Commitments

The Company has several minimum purchase commitments for project related supplies totaling $ 14.3 million as of September 30, 2022.

The Company has several minimum purchase commitments for project related supplies totaling $ 17.1 million as of March 31, 2023.

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 September 30, 2022 and December 31, 2021, 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.

Total receivables as a result of these employee advances of $ 0.3 million existed at March 31, 2023 and December 31, 2022, 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

3 unchanged sentences

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

The Company recognized total revenue from LIB of $ 9.5 million and $ 2.3 million during the three months ended September 30, 2022 and 2021, respectively, and $ 26.6 million and $ 5.6 million during the nine months ended September 30, 2022 and 2021, respectively, in the Company’s condensed consolidated statements of operations.

As of September 30, 2022 and December 31, 2021, respectively, the Company had Advanced billings from LIB of $ 4.7 million and $ 2.9 million in the condensed consolidated balance sheets.

In addition, as of September 30, 2022 and December 31, 2021, respectively, the Company had Accounts receivable and unbilled, net from LIB of $ 1.7 million and $ 0.5 million in the condensed consolidated balance sheets.

The Company recognized total revenue from LIB of $ 13.3 million and $ 7.4 million during the three months ended March 31, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations.

As of March 31, 2023 and December 31, 2022, respectively, the Company had Advanced billings from LIB of $ 10.1 million and $ 7.4 million in the condensed consolidated balance sheets.

In addition, as of March 31, 2023 and December 31, 2022, respectively, the Company had Accounts receivable and unbilled, net from LIB of $ 6.3 million and $ 5.5 million in the condensed consolidated balance sheets.

The Company had Other current liabilities with LIB of $ 12.5 million in the consolidated balance sheets at March 31, 2023 and December 31, 2022.

CinRX Pharma, subsidiaries and affiliates (“CinRx”)

1 unchanged sentence

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

The Company recognized total revenue from CinRx of $ 0.5 million and $ 6.4 million during the three months ended September 30, 2022 and 2021, respectively, and $ 13.8 million and $ 18.3 million during the nine months ended September 30, 2022 and 2021, respectively, in the Company’s condensed consolidated statements of operations.

As of September 30, 2022 and December 31, 2021, respectively, the Company had Advanced billings from CinRx of $ 1.0 million and $ 5.4 million in the condensed consolidated balance sheets.

As of September 30, 2022 and December 31, 2021 the Company had Accounts receivable and unbilled, net from CinRx of $ 1.3 million and $ 2.1 million, respectively, in the condensed consolidated balance sheets.

The Company recognized total revenue from CinRx of $ 2.5 million and $ 5.8 million during the three months ended March 31, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations.

As of March 31, 2023 and December 31, 2022, respectively, the Company had Advanced billings from CinRx of $ 1.4 million in the condensed consolidated balance sheets.

As of March 31, 2023 and December 31, 2022 the Company had Accounts receivable and unbilled, net from CinRx of $ 1.4 million and $ 2.2 million, respectively, in the condensed consolidated balance sheets.

Certain affiliates of CinRx included in previous reported quarters are no longer disclosed due to changes in the affiliate relationship.

The Summit Hotel (“The Summit”)

The Summit Hotel, located on the Medpace campus, is owned by the chief executive officer, and managed by an unrelated hospitality management entity.

Medpace incurs travel lodging and meeting expenses at The Summit.

Medpace incurred expenses of $ 0.1 million and $ 0.2 million during the three months ended September 30, 2022 and 2021, respectively, and $ 0.2 million and $ 0.3 million during the nine months ended September 30, 2022 and 2021 at The Summit, respectively.

Leased Real Estate

Headquarters Lease

The Company entered into an operating lease for its corporate headquarters with an entity that is wholly owned by the chief executive officer of the Company.

Campus Headquarters Leases

The Company entered into an operating lease for the occupancy of office space in a building in Cincinnati, Ohio with an entity that is wholly owned by the chief executive officer of the Company.

The Company has evaluated its relationship with the related party and concluded that the related party is not a variable interest entity because the Company has no direct ownership interest or relationship other than the lease.

The lease for headquarters is for an initial term of twelve years through November 2022 with a renewal option for one 10 -year term at prevailing market rates.

In Q3 2021, the Company accounted for the renewal option, as it became reasonably certain it would be exercised per the agreement, by extending the lease term through November 2032.

The lease was renewed in the first quarter of fiscal year 2023 for a term of ten years through December 2032 with a renewal option for one 10 -year term at prevailing market rates.

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

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 September 30, 2022 and 2021 was $ 0.6 million and $ 1.7 million and $ 1.6 million for the nine months ended September 30, 2022 and 2021, respectively.

Operating lease cost recognized for the three months ended March 31, 2023 and 2022 was $ 0.6 million, 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 September 30, 2022 and December 31, 2021 were $ 18.6 million and $ 19.7 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at September 30, 2022 were $ 1.5 million and $ 17.1 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 March 31, 2023 and December 31, 2022 were $ 20.6 million and $ 18.2 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at March 31, 2023 were $ 1.4 million and $ 19.3 million, respectively, 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, 2022 were $ 1.5 million and $ 16.7 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

6 unchanged sentences

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

Operating lease cost recognized for the three months ended September 30, 2022 and 2021 was $ 1.5 million and $ 4.3 million for the nine months ended September 30, 2022 and 2021.

Operating lease cost recognized for the three months ended March 31, 2023 and 2022 was $ 1.4 million, 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 September 30, 2022 and December 31, 2021 were $ 53.9 million and $ 55.1 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at September 30, 2022 were $ 1.1 million and $ 65.1 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 March 31, 2023 and December 31, 2022 were $ 53.1 million and $ 53.5 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at March 31, 2023 were $ 1.1 million and $ 64.5 million, respectively, 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, 2022 were $ 1.1 million and $ 64.8 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 September 30, 2022 and 2021 was $ 0.9 million and $ 2.7 million for the nine months ended September 30, 2022 and 2021.

Operating lease cost recognized for the three months ended March 31, 2023 and 2022 was $ 0.9 million.

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 September 30, 2022 and December 31, 2021 were $ 15.3 million and $ 17.2 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at September 30, 2022 were $ 2.7 million and $ 12.6 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 March 31, 2023 and December 31, 2022 were $ 13.9 million and $ 14.6 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at March 31, 2023 were $ 2.8 million and $ 11.1 million, respectively, 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, 2022 were $ 2.8 million and $ 11.9 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

1 unchanged sentence

The Company incurs expenses for travel services for company executives provided by private aviation charter companies which is a company controlled by the chief executive officer of the Company (each a “private aviation charter”).

The Company may contract directly with the private aviation charter for the use of its aircraft or indirectly through a third party

aircraft management and jet charter company (the “Aircraft Management Company”).

The Company may contract directly with the private aviation charter for the use of its aircraft or indirectly through a third party aircraft management and jet charter company (the “Aircraft Management Company”).

The travel services provided are primarily for business purposes, with certain personal travel paid for as part of the executives’ compensation arrangements.

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

The Company incurred travel expenses of $ 0.6 million and $ 0.4 million during the three months ended September 30, 2022 and 2021, respectively, and $ 1.6 million and $ 0.9 million during the nine months ended September 30, 2022 and 2021, respectively, related to these travel services.

The Company incurred travel expenses of $ 0.4 million during the three months ended March 31, 2023 and 2022, respectively.

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

As of September 30, 2022 and December 31, 2021, the Company had Accounts payable to the Aircraft Management Company of $ 0.2 million, respectively, in the condensed consolidated balance sheets.

As of March 31, 2023 and December 31, 2022, the Company had Accounts payable to the Aircraft Management Company of $ 0.3 million, respectively, in the condensed consolidated balance sheets.

(13) Entity Wide Disclosures

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Therapeutic Area

7 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