ICON Reports 25% Increase in Net Revenue, 68% Increase in Operating Income, 69% Increase in EPS and Raises Guidance for 2006

ICON plc (NASDAQ:ICLR):

Highlights - Second Quarter Fiscal 2006

-- Second quarter net revenues increased 25% over the comparative
quarter to May 31, 2005, to $107.4 million.

-- Adjusted income from operations increased by 68% to $12.4
million.

-- Adjusted diluted earnings per share increased by 69% for the
second quarter to 71 cents.

-- $166 million of net new business awarded to ICON during the
quarter, an increase of 64%.

-- Revenue guidance raised to $425 - $440 million for 2006.

ICON plc (NASDAQ:ICLR), a global contract clinical research
organisation, which has over 3,600 employees providing services to the
pharmaceutical, biotech and medical device industries from 45
locations in 30 countries worldwide, today reported its financial
results for the second quarter ended June 30, 2006. As a consequence
of the recent change of its financial year, the comparative quarter
mentioned in this press release will be the quarter ended May 31,
2005.
Net revenues for the quarter were $107.4 million, representing a
25% increase over net revenues of $86.0 million for the comparative
quarter last year.
Income from operations, on a US GAAP basis, was $11.3 million and
net income was $9.3 million or 65 cents per share, on a diluted basis.
Adjusting for $1.1 million in relation to the expensing of stock
compensation in accordance with SFAS No.123(R), income from operations
was $12.4 million, compared to $7.4 million last year. Net income was
$10.3 million or a diluted 71 cents per share, compared with $5.9
million or 42 cents per share last year. Adjusted operating margin was
11.5%, compared with 8.6% for last year.
Year to date, net revenues were $205.9 million, a 22% increase
over the comparative period last year. Income from operations was
$21.4 million and net income was $16.8 million or $1.18 per share, on
a diluted basis. Adjusting these figures to exclude $2.0 million in
relation to the expensing of stock compensation in the current year
and the one-time charge of $11.3 million, relating primarily to the
impairment of goodwill in the prior year, income from operations for
the period ended June 30, 2006 was $23.4 million, an increase of 75%
from the $13.4 million last year. Operating margin was 11.3%, compared
with 7.9% for last year. Adjusted net income was $18.8 million or a
diluted $1.30 per share, compared with $11.0 million or 78 cents per
share last year.
Days sales outstanding, comprising accounts receivable and
unbilled revenue less payments on account, were 51 days at June 30,
2006, a decrease from the 56 days at March 31, 2006 and 65 days at
December 31, 2005.
For the quarter ending June 30, 2006, cash flows from operating
activities were $19.8 million and capital expenditure was $6.3
million, of which $1.4 million related to the extension of our Dublin
facility. Year-to-date, cash flows from operating activities were
$30.4 million and capital expenditure was $10.8 million. As a result,
the company's net cash, short-term debt and short-term investments
were $101.0 million at June 30, 2006, compared to $85.3 million at
March 31, 2006 and $82.3 million at December 31, 2005.
"It has been another quarter of strong growth for ICON", commented
Chairman Dr. John Climax. "Revenue grew by 25% and margin improved to
11.5%. The Central Laboratory continued its improvement, posting a
profit one quarter earlier than expected. As a result of all of these
factors, EPS grew by 69%. We won net new business of $166 million,
representing an excellent book-to-bill ratio of 1.55. We continue to
look forward with confidence to the rest of 2006."
"With our backlog at record levels, continuing good business flow
and the Central Laboratory reaching profit earlier than forecast, we
are upgrading our guidance for the rest of the year. We now expect
that 2006 revenues will be in the range of $425 - $440 million,
compared to the previous guidance of $395 - $410 million. We estimate
that we have approximately $360 million of the next 12 months revenue
in booked and awarded business, which represents approximately 77% of
our upgraded revenue forecasts."
The company will hold its first quarter conference call today,
July 26, 2006 at 08:00 EST (13:00 Ireland & UK). This call and linked
slide presentation can be accessed live from our website at
http://www.iconclinical.com. A recording will also be available on the
website for 90 days following the call. In addition, a calendar of
company events, including upcoming conference presentations, is
available on our website, under "shareholders services". This calendar
will be updated regularly.

The statements made in this Press Release may contain
forward-looking statements that involve a number of risks and
uncertainties. In addition to the matters described in this Press
Release, the ability to maintain large client contracts or enter into
new contracts, maintain client relationships and the ability to manage
the opening of new offices, the integration of new business mergers
and acquisitions, as well as other risks and uncertainties detailed
from time to time in SEC reports filed by ICON, including its Form
20-F, F-1, S-8 and F-3, may affect the actual results achieved by
ICON. ICON disclaims any intent or obligation to update these
forward-looking statements.

The financial information presented herein has been prepared in
accordance with U.S. GAAP.

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ICON plc

Consolidated Income Statements
(Unaudited)

Three and Six Months ended June 30, 2006 and May 31, 2005
(Dollars, in thousands, except share and per share data)

Three Months Ended Six Months Ended
June 30, May 31, June 30, May 31,
2006 2005 2006 2005

Gross Revenue 153,744 121,979 294,388 235,320

Subcontractor costs 46,308 36,010 88,457 66,496

----------- ----------- ----------- -----------
Net Revenue 107,436 85,969 205,931 168,824

Costs and expenses
Direct costs 60,014 47,529 114,718 93,537
Selling, general and
administrative 32,397 27,540 62,677 54,925
Depreciation and
amortization 3,689 3,549 7,134 6,973
One-time charges - - - 11,275

----------- ----------- ----------- -----------
Total costs and
expenses 96,100 78,618 184,529 166,710

Income from operations 11,336 7,351 21,402 2,114

Interest income (net) 938 381 1,585 636

----------- ----------- ----------- -----------
Income before provision
of income taxes 12,274 7,732 22,987 2,750

Provision for income
taxes 2,943 1,699 6,073 2,220
Minority Interest 34 84 76 109
----------- ----------- ----------- -----------

Net income 9,297 5,949 16,838 421
=========== =========== =========== ===========

Net income per ordinary
share
Basic $0.66 $0.43 $1.19 $0.03
----------- ----------- ----------- -----------

Diluted $0.65 $0.42 $1.18 $0.03
----------- ----------- ----------- -----------

Weighted average number
of ordinary shares
Basic 14,132,745 13,887,989 14,087,381 13,877,113

Diluted 14,347,765 14,100,098 14,249,678 14,089,004
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ICON plc

Adjusted Consolidated Income Statements *
(Unaudited)

Three and Six Months ended June 30, 2006 and May 31, 2005
(Dollars, in thousands, except share and per share data)

Three Months Ended Six Months Ended
June 30, May 31, June 30, May 31,
2006 2005 2006 2005

Gross Revenue 153,744 121,979 294,388 235,320

Subcontractor costs 46,308 36,010 88,457 66,496

----------- ----------- ----------- -----------
Net Revenue 107,436 85,969 205,931 168,824

Costs and expenses
Direct costs 59,441 47,529 113,633 93,537
Selling, general and
administrative 31,932 27,540 61,794 54,925
Depreciation and
amortization 3,689 3,549 7,134 6,973

----------- ----------- ----------- -----------
Total costs and
expenses 95,062 78,618 182,561 155,435

Income from operations * 12,374 7,351 * 23,370 ** 13,389

Interest income (net) 938 381 1,585 636

----------- ----------- ----------- -----------
Income before provision
of income taxes 13,312 7,732 24,955 14,025

Provision for income
taxes 2,943 1,699 6,073 2,945
Minority Interest 34 84 76 109
----------- ----------- ----------- -----------

Net income 10,335 5,949 18,806 10,971
=========== =========== =========== ===========

Net income per ordinary
share
Basic $0.73 $0.43 $1.33 $0.79
----------- ----------- ----------- -----------

Diluted $0.71 $0.42 $1.30 $0.78
----------- ----------- ----------- -----------

Weighted average number
of ordinary shares
Basic 14,132,745 13,887,989 14,087,381 13,877,113

Diluted 14,571,423 14,100,098 14,477,933 14,089,004
*T

* Excluded from the quarter to June 30, 2006, is the non-cash
stock compensation expense of $1.038 million ($1.968 million for the
six months to June 30, 2006) relating to stock options expensed in
accordance with SFAS No. 123(R). Also excluded from this quarter, is
the adjustment of 223,658 shares (and 228,255 shares for the six
months ended June 30, 2006) on the diluted share number which is a
consequence of the adoption of the standard.

** The six month period ended May 31, 2005, excludes a one-time
charge of $11.3 million, relating to the recognition in the quarter to
February 28, 2005, of an impairment of the goodwill associated with
the Central Laboratory business, certain assets, lease termination
costs and exit costs, net of the tax deduction thereon.

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ICON plc

Summary Balance Sheet Data

June 30, 2006 and December 31, 2005
(Dollars, in thousands)

December
June 30, 31,
2006 2005
(unaudited) (audited)
Cash and short-term investments 101,013 82,318
Short-term debt - 4,856
Net cash 101,013 77,462

Accounts receivable 81,233 71,450
Unbilled revenue 69,379 62,270
Payments on account (65,436) (50,211)
Total 85,176 83,509

Working Capital 153,261 132,312

Total assets 392,566 349,067

Shareholder's equity 269,329 241,558

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http://www.iconclinical.com