PDI Reports 2009 Third Quarter Financial Results

Management will host Conference Call at 4:30 PM ET Today

SADDLE RIVER, N.J., Nov. 5 /PRNewswire-FirstCall/ -- PDI, Inc. (Nasdaq: PDII),
a leading provider of sales and marketing support to U.S. pharmaceutical
companies, today reported financial and operational results for the third
quarter ended September 30, 2009.

Commenting on today's announcement, Nancy Lurker, Chief Executive Officer of
PDI, Inc., stated, "Third quarter 2009 revenues of $21.0 million were lower
than last year by approximately 14%. Higher revenue in our Marketing Services
business was offset by reductions in our Sales Services business. Despite
lower revenue, this year's third quarter operating loss was reduced by more
than 50% compared to last year. The reduction in operating loss was in large
part due to the absence of the impact of the product commercialization
contract that was in effect in 2008. However, on an adjusted basis, excluding
the loss from the product commercialization contract, facilities realignment
and severance charges, the third quarter 2009 operating loss is still 38%
lower than last year, in large part due to our ongoing cost reduction
initiatives and higher revenue in Marketing Services.

"While revenues were down in the third quarter compared to last year, as
expected, they were up almost 30% over the second quarter of this year.
However, the current economic climate coupled with pharmaceutical industry
consolidation and downsizing, has led to a delay in gaining significant new
business as many pharmaceutical companies have slowed their sales force
initiatives while they continue to implement their integration and cost
cutting strategies. Our continuing discussions with current and potential
clients have confirmed their intent to expand their use of CSOs as an integral
part of their business strategy, although it is still too early to predict
with any certainty how robust the demand will be when the market recovers.
That said, we have recently experienced an increase in the number of new
business opportunities before us, lending credence to our belief that as
recessionary pressures ease, the industry, and PDI, should benefit.
Considering these factors and the uncertainty surrounding the duration of the
U.S. recession, we approach year end and enter 2010 with a sense of caution as
to the timing of gaining significant new business.

"In the interim, PDI continues to develop plans to manage in today's
environment and we are executing on our goals, including focusing on our core
business, identifying areas in which to drive down expenses while reinvesting
in order to bolster our competitive position, and improving asset utilization.
A new virtual call center, which went live in early October, and our recently
announced co-marketing agreement with Physicians Interactive, will allow us to
further expand the range of integrated, value-added services we provide. We
expect these and other initiatives, including a new sales force automation
system designed to lower costs while enhancing the effectiveness and
efficiency of our field force, to make a positive impact on both existing and
new client engagements moving forward.

"We continue to focus aggressively on gaining new business while working in
parallel to reduce our cost structure so that as the market improves, the
impact on our earnings and profitability will be that much more pronounced. As
evidence of our progress, on an adjusted basis, even with reduced revenue, we
significantly reduced our operating loss in part due to our ongoing cost
reduction initiatives. Our next most visible sign of cost reduction efforts
will come at the end of the fourth quarter of this year when we will be
relocating our corporate offices to smaller, less costly facilities in
Parsippany, New Jersey. While this move will require a charge to earnings of
up to $5 million, we anticipate that it will result in savings beginning in
2010."

Financial Overview - Third Quarter 2009

For the quarter ended September 30, 2009, net revenue totaled $21.0 million,
compared to $24.5 million in the same period last year. Revenue in the Sales
Services segment for the third quarter of 2009 was $17.8 million, compared to
$20.0 million in the same period of 2008. While Sales Services has gained
revenue as a result of new contracts and the expansion of existing contracts,
these gains were more than offset by lost revenue from the internalization of
a contract sales force by a long-term client and the expiration or termination
of other sales force arrangements in effect during 2008. Revenue in the
Marketing Services segment for the third quarter of 2009 was $5.1 million
compared to $4.5 million in 2008. A 30% increase in our Pharmakon business
unit due to an increase in the number of projects was partially offset by a
decrease in revenue from closing the VIM business unit in 2009.

Gross profit for the third quarter of 2009 was $6.9 million compared to $0.4
million in the same period last year. Gross profit for the Sales Services
segment increased to $4.3 million from $2.8 million last year and gross profit
in the Marketing Services segment increased to $2.4 million from $1.7 million
in the year ago period. The impact on gross profit of lower revenue in the
Sales Services segment was more than offset by lower operating costs, in large
part resulting from the Company's cost savings initiatives as well as the
recognition of higher performance related fees in 2009. The increase in gross
profit in the Marketing Services segment was primarily attributable to higher
revenue from our Pharmakon business unit. The Company's third quarter 2008
gross profit was negatively impacted by $4.1 million from the execution of the
product commercialization agreement which was mutually terminated in the
second quarter of 2009.

Total operating expenses for the third quarter of 2009 were $11.4 million
compared to $10.0 million in the same period in 2008.

Other income, which is primarily interest income, declined to $30,000 in the
third quarter of 2009 compared to $600,000 in 2008 due to a combination of
significantly lower interest rates and lower average cash balances.

The operating loss for the third quarter of 2009 declined to $4.6 million
compared to $9.6 million in the same period of 2008. On an adjusted basis,
which excludes the loss from the product commercialization contract,
facilities realignment and severance charges, the operating loss for the third
quarter of 2009 declined 38% to $2.7 million from $4.4 million in 2008.

The net loss per share for the third quarter of 2009 was $0.32 compared to
$0.63 in 2008.

Cash and cash equivalents as of September 30, 2009 were $70.6 million, a $5.6
million decline from June 30, 2009 and a $19.5 million decline from December
31, 2008. This decrease is primarily attributable to the Company's operating
losses and cash expenses related to fulfillment of commitments, which extend
through December 31, 2009, under the terminated product commercialization
contract. As of September 30, 2009, the Company's cash equivalents were
predominately invested in Treasury money market funds and the Company had no
commercial debt.

Conference Call

As previously announced, PDI will hold a conference call today, to discuss
financial and operational results of the third quarter ended September 30,
2009 as follows:

Time: 4:30 pm (ET)
Dial-in numbers: 866-644-4654 (U.S. & Canada) or (706) 643-1203
Conference ID#: 38133586
Live webcast: www.pdi-inc.com

The teleconference replay will be available three hours after completion
through Saturday, November 7, 2009 by dialing 800-642-1687 (U.S. & Canada) or
706-645-9291 and entering conference ID 38133586. The archived webcast will be
available for one year on the Company's investor website, www.pdi-inc.com.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures. A
reconciliation of these to the comparable GAAP measures is included as Exhibit
A.

About PDI

PDI provides commercialization services for established and emerging
biopharmaceutical companies. The Company is dedicated to maximizing the return
on investment for its clients by providing strategic flexibility, sales,
marketing and commercialization expertise.

For more information, please visit the Company's website at www.pdi-inc.com.

Forward-Looking Statements

This press release contains forward-looking statements regarding future events
and financial performance. These statements are based on current expectations
and assumptions involving judgments about, among other things, future
economic, competitive and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which
are beyond PDI's control. These statements also involve known and unknown
risks, uncertainties and other factors that may cause PDI's actual results to
be materially different from those expressed or implied by any forward-looking
statement. For example, with respect to statements regarding projections of
future revenues, actual results may differ materially from those set forth in
this release based on the loss, early termination or significant reduction of
any of our existing service contracts or the failure to meet performance goals
in PDI's incentive-based arrangements with customers. In addition, with
respect to statements regarding the prospects for PDI's future growth, actual
results may differ materially based on adverse market conditions, PDI's
inability to successfully implement its strategic initiatives relating to
leveraging and expanding its core CSO capabilities, expanding its range of
integrated, value-added services and reducing expenses, adverse changes in
outsourcing trends in the pharmaceutical industry or a reduction or
elimination of the role of pharmaceutical sales representatives. Also, with
respect to statements regarding anticipated future savings relating to the
impending relocation of our corporate headquarters, these savings may be
offset in whole or in part by expenses associated with the lease for our
current corporate headquarters unless we are able to successfully sublet this
facility in a timely manner. Additionally, all forward-looking statements are
subject to the risk factors detailed from time to time in PDI's periodic
filings with the Securities and Exchange Commission, including without
limitation, PDI's Annual Report on Form 10-K for the year ended December 31,
2008, and PDI's subsequently filed quarterly reports on Form 10-Q and current
reports on Form 8-K. Because of these and other risks, uncertainties and
assumptions, undue reliance should not be placed on these forward-looking
statements. In addition, these statements speak only as of the date of this
press release and, except as may be required by law, PDI undertakes no
obligation to revise or update publicly any forward-looking statements for any
reason.

PDI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except for per share data)

Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----

Revenue, net $21,041 $24,496 $60,863 $87,124
Cost of services 14,182 24,084 42,152 74,423
------ ------ ------ ------
Gross profit 6,859 412 18,711 12,701

Compensation expense 5,774 5,696 17,820 19,006
Other selling, general and
administrative expenses 4,431 4,305 12,690 12,892
Facilities realignment 1,220 - 3,030 -
----- - ----- -
Total operating expenses 11,425 10,001 33,540 31,898
------ ------ ------ ------
Operating loss (4,566) (9,589) (14,829) (19,197)

Other income, net 30 629 194 2,579
-- --- --- -----
Loss before income tax (4,536) (8,960) (14,635) (16,618)
Provision for income tax 26 44 477 923
-- -- --- ---

Net loss $(4,562) $(9,004) $(15,112) $(17,541)
======= ======= ======== ========

Loss per share of common stock:
Basic $(0.32) $(0.63) $(1.06) $(1.23)
Diluted $(0.32) $(0.63) $(1.06) $(1.23)

Weighted average number of
common shares and common share
equivalents outstanding:
Basic 14,216 14,243 14,216 14,253
Diluted 14,216 14,243 14,216 14,253

Segment Data (Unaudited)
(in thousands)

Product
Sales Marketing Commercial-
Services Services ization Eliminations Consolidated
-------- -------- ----------- ------------ ------------
Three months
ended September
30, 2009:
Revenue $17,800 $5,081 $- $(1,840) $21,041
Gross profit 4,347 2,447 - 65 6,859
Gross
profit % 24.4% 48.2% 0.0% NM 32.6%
Three months
ended September
30, 2008:
Revenue $19,979 $4,517 $- $- $24,496
Gross profit 2,831 1,710 (4,129) - 412
Gross
profit % 14.2% 37.9% NM 0.0% 1.7%
Nine months
ended September
30, 2009:
Revenue $52,230 $12,036 $- $(3,403) $60,863
Gross profit 10,308 5,617 2,486 300 18,711
Gross
profit % 19.7% 46.7% 0.0% NM 30.7%
Nine months
ended September
30, 2008:
Revenue $68,636 $19,488 $(1,000) $- $87,124
Gross profit 13,876 8,441 (9,616) - 12,701
Gross
profit % 20.2% 43.3% NM 0.0% 14.6%

NM - Not Meaningful

Selected Balance Sheet Data (Unaudited)
(in thousands)

September 30, December 31,
2009 2008
---- ----

Cash and cash equivalents $70,551 $90,074

Total current assets $93,707 $112,999
Total current liabilities 20,107 31,360
------ ------
Working capital $73,600 $81,639
------- -------

Total assets $124,925 $149,036
Total liabilities $31,781 $41,929
Total stockholders' equity $93,144 $107,107

Selected Cash Flow Data (Unaudited)
(in thousands)

September 30, September 30,
2009 2008
---- ----

Net loss $(15,112) $(17,541)
Non-cash items 4,605 4,992
Net change in assets and liabilities (8,371) 6,229
------ -----
Net cash used in operations $(18,878) $(6,320)

Change in cash and cash equivalents $(19,523) $(4,875)

Exhibit A

Non-GAAP Financial Measures
When we evaluate the performance of our business as a whole, we focus on
results (such as gross profit, operating expense and operating income/loss)
before certain types of gains and charges because such gains and charges are
not a component of our ongoing income or expenses and/or may have a
disproportionate positive or negative impact on the results of our ongoing
underlying business operations. These non-GAAP results should not be
considered in isolation and are not in accordance with, or a substitute for,
GAAP results. Our non-GAAP results may differ from similar measures used by
other companies, even if similar terms are used to identify such measures.
PDI's management believes non-GAAP results are useful in evaluating the
performance of its business; however, its reliance on these measures is
limited since items excluded from such measures may have a material impact on
our revenue, gross profit, operating expenses and operating loss calculated in
accordance with GAAP. Therefore, investors should consider these limitations
and evaluate non-GAAP results in conjunction with GAAP.

Reconciliation from GAAP to non-GAAP ("Adjusted") Financial Measures
(Unaudited)
(in thousands)

Three Months Ended Three Months Ended
September 30, 2009 September 30, 2008
------------------ ------------------
Gross Operating Gross Operating
Revenue Profit (Loss) Revenue Profit (Loss)
------- ------ --------- ------- ------ ---------
GAAP $21,041 $6,859 $(4,566) $24,496 $412 $(9,589)
Product
commercialization(1) - - - - 4,129 4,785
Facilities
realignment(2) - - 1,220 - - -
Severance(3) - - 600 - - 400
--- --- --- --- --- ---
non-GAAP
("Adjusted") $21,041 $6,859 $(2,746) $24,496 $4,541 $(4,404)
======= ====== ======= ======= ====== =======

(1) Represents costs from our PC Services segment in connection with the
promotional contract that was mutually terminated in April 2009. $4.1
million is recorded within Cost of services, $0.4 million is recorded
within Compensation expense and $0.3 million is recorded within
Selling, general and administrative expense in the Company's
Condensed Consolidated Statement of Operations.
(2) Relates to charges for exiting and subleasing the first floor of our
Saddle River, New Jersey facility in connection with our cost savings
initiative and is recorded within Facilities Realignment in the
Company's Condensed Consolidated Statement of Operations.
(3) Relates to severance charges at our TVG business unit during the
three months ended September 30, 2009 and severance charges for an
executive departure during the three months ended September 30, 2008
and is recorded within Compensation expense in the Company's
Condensed Consolidated Statement of Operations.

SOURCE PDI, Inc.

Amy Lombardi of PDI, Inc., +1-201-574-8663, ALombardi@pdi-inc.com; or
investors, Melody Carey of Rx Communications Group, +1-917-322-2571,
MCarey@RxIR.com