eResearchTechnology Reports First Quarter 2008 Results

Q1 2008 Net Revenues — $33.7 million vs. $21.1 million in Q1 2007 — an increase of 59.7%; a record for eRT

Q1 2008 Diluted Net Income per Share — $0.11 vs $0.04 in Q1 2007 — an increase of 175.0%

Q1 2008 New Bookings increase to $50.1 million; a record for eRT

Increasing 2008 Guidance

PHILADELPHIA, May 5/PRNewswire-FirstCall/ — eResearchTechnology, Inc. (eRT), (Nasdaq: ERES - News), a leading provider of centralized ECG and eClinical technology, ePRO and other services to the pharmaceutical, biotechnology, medical device and related industries, announced today results for the quarter ended March 31, 2008.

Highlights for the first quarter of 2008 were:

•		Record quarterly net revenues of $33.7 million, including $3.3 million of net revenues from Covance Cardiac Safety Services, Inc. (CCSS), a 59.7% increase from the first quarter of 2007;
•		Diluted net income per share of $0.11, up 175.0% from the first quarter of 2007;
•		Gross margin of $17.7 million for a gross margin percentage of 52.5% up 4.9 percentage points from the first quarter of 2007. The gross margin percentage was negatively impacted by CCSS, which generated net revenues of $3.3 million while incurring expenses of $3.2 million;
•		Income before income taxes margin percentage of 26.5%, up 9.2 percentage points from the first quarter of 2007. The income before income taxes margin percentage was negatively impacted by CCSS and the integration of CCSS into eRT, which combined generated a loss before income taxes of $1.4 million;
•		Record bookings of $50.1 million, compared to $29.7 million for the first quarter of 2007;
•		Bookings included seven new Thorough ECG study agreements valued at an average of slightly greater than $1 million each;
•		The backlog was a record $151.4 million, a net increase of $11.2 million from December 31, 2007.
•		The cancellation rate was an annualized 15.6% as compared to an annualized cancellation rate of 15.0% in the first quarter of 2007;

“We are extremely pleased with the first quarter results where we saw record quarterly revenue, transactions, bookings and backlog for eRT,” commented Dr. Michael McKelvey, President and CEO of eRT. “We continue to execute very well on our projects. The integration of the CCSS acquisition is proceeding on schedule, and we are meeting with clients to begin the transition process of individual studies. Our services revenue grew by 80.9%, driven by outstanding growth in our core cardiac safety business. Bookings were strong across all phases, but especially in Phase I and Phase III studies. The quarter again demonstrated the leverage in our business model as evidenced by expanding gross margins and net income growth.”

The Company reported revenues of $33.7 million for the first quarter of 2008, an increase of 59.7% from $21.1 million in the first quarter of 2007. Net income was $5.7 million for the first quarter of 2008, an increase of 155.6% from $2.2 million for the first quarter of 2007. Diluted net income per share was $0.11 for the first quarter of 2008, up $0.07 from the $0.04 in the first quarter of 2007.

eRT ended the quarter with $48.9 million in cash, cash equivalents and investments, an increase of $2.0 million from $46.9 million at December 31, 2007. Operations generated $7.6 million, which was partially offset by payments to Covance under the terms of the CCSS acquisition.

“Our pipeline of new opportunities is strong, reflecting the continued emphasis on cardiac safety and eRT’s reputation for quality, medical and scientific leadership, project execution and technology innovation,” continued Dr. McKelvey. “The pricing environment continues to be stable. The Exclusive Marketing Agreement with Covance is adding to our pipeline, as are our continued strong relationships with other

key partnerships with CROs and Phase I units. While there are many areas in which we will continue to work to improve, the first quarter was an excellent start and bodes well for the remainder of 2008.”

2008 Guidance

The Company issued guidance for the second quarter of 2008 and for the full year 2008. eRT expects to report revenues of between $34.0 million and $36.0 million and diluted net income per share of between $0.10 to $0.12 for the second quarter ending June 30, 2008. For the full year 2008, the Company is increasing its guidance for revenue to between $133.0 million and $140.0 million and diluted net income per share to between $0.44 to $0.49; previously issued guidance for revenue was between $130.0 million and $137.0 million and for diluted net income per share was between $0.42 to $0.46.

Dr. McKelvey and Richard Baron, the Company’s Chief Financial Officer, will hold a conference call to discuss these results. The conference call will take place at 5:00 p.m. EDT on May 5, 2008. Interested participants should call 800-322-5044 when calling within the United States or 617-614-4927 when calling internationally. Please use pass code 13961971. There will be a playback available until May 12, 2008. To listen to the playback, please call 888-286-8010 when calling within the United States or 617-801-6888 when calling internationally. Please use pass code 12540628 for the replay.

This call is being webcast by Thomson Financial and can be accessed at eRT’s web site at www.eRT.com. The webcast may also be accessed at Thomson’s Institutional Investor website at http://phx.corporate-ir.net/playerlink.zhtml?c=119164&s=wm&e=1829106. The webcast can be accessed until May 5, 2009 on either site.

About eResearchTechnology, Inc.

Based in Philadelphia, PA, eResearchTechnology, Inc. (http://www.eRT.com) is a provider of technology and services to the pharmaceutical, biotechnology and medical device industries on a global basis. The Company is a market leader in providing centralized core-diagnostic electrocardiographic (ECG) technology and services to evaluate cardiac safety in clinical development. The Company is also a leader in providing technology and services to streamline the clinical trials process by enabling its customers to automate the collection, analysis, and distribution of clinical data in all phases of clinical development.

Statements included in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, including, but not limited to, 2008 financial guidance, involve a number of risks and uncertainties such as the Company’s ability to obtain new contracts and accurately estimate net revenues due to uncertain regulatory guidance, variability in size, scope and duration of projects, and internal issues at the sponsoring client, integration of acquisitions, competitive factors, technological development, and market demand. As a result, actual results may differ materially from any financial outlooks stated herein. Further information on potential factors that could affect the Company’s financial results can be found in the Company’s Reports on Form 10-K and 10-Q filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.

		Contact:
		Richard Baron		Robert East
		eResearchTechnology, Inc.		Westwicke Partners, LLC
		215-282-5566		410-321-9652

eResearchTechnology, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts)

		Three Months Ended March 31,
		2007				2008
		(unaudited)				(unaudited)
Net revenues:
Licenses		$	782			$	625
Services			13,968				25,273
Site support			6,334				7,775
Total net revenues			21,084				33,673
Costs of revenues:
Cost of licenses			66				200
Cost of services			6,790				10,514
Cost of site support			4,195				5,268
Total costs of revenues			11,051				15,982
Gross margin			10,033				17,691
Operating expenses:
Selling and marketing			2,538				3,323
General and administrative			3,469				4,873
Research and development			925				999
Total operating expenses			6,932				9,195
Operating income			3,101				8,496
Other income, net			550				427
Income before income taxes			3,651				8,923
Income tax provision			1,403				3,177
Net income		$	2,248			$	5,746
Basic net income per share		$	0.04			$	0.11
Diluted net income per share		$	0.04			$	0.11
Shares used to calculate basic net income per share			50,198				50,638
Shares used to calculate diluted net income per share			51,431				51,894

eResearchTechnology, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts)

		December 31, 2007				March 31, 2008
						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	38,082			$	40,568
Short-term investments			8,797				8,342
Accounts receivable, net			26,718				26,914
Prepaid income taxes			743				—
Prepaid expenses and other			3,087				3,197
Deferred income taxes			901				899
Total current assets			78,328				79,920
Property and equipment, net			33,347				30,826
Goodwill			30,908				31,737
Intangible assets			3,849				3,398
Deferred income taxes			1,011				1,375
Other assets			253				146
Total assets		$	147,696			$	147,402
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	3,505			$	2,869
Accrued expenses			12,103				7,710
Income taxes payable			2,352				1,675
Current portion of capital lease obligations			1,097				394
Deferred revenues			13,905				13,555
Total current liabilities			32,962				26,203
Capital lease obligations, excluding current portion			48				—
Other liabilities			1,174				1,167
Total liabilities			34,184				27,370
Stockholders’ equity:
Preferred stock-$10.00 par value, 500,000 shares authorized, none issued and outstanding			—				—
Common stock-$.01 par value, 175,000,000 shares authorized, 58,870,291 and 58,918,095 shares issued, respectively			589				589
Additional paid-in capital			87,957				88,734
Accumulated other comprehensive income			1,679				1,676
Retained earnings			85,477				91,223
Treasury stock, 8,247,119 shares at cost			(62,190	)			(62,190	)
Total stockholders’ equity			113,512				120,032
Total liabilities and stockholders’ equity		$	147,696			$	147,402

eResearchTechnology, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

		Three Months Ended March 31,
		2007				2008
Operating activities:
Net income		$	2,248			$	5,746
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			3,215				4,344
Cost of sales of equipment			383				414
Provision for uncollectible accounts			—				30
Share-based compensation			483				470
Changes in operating assets and liabilities exclusive of CCSS acqusition:
Accounts receivable			1,654				(222	)
Prepaid expenses and other			(681	)			(11	)
Accounts payable			(2,209	)			(984	)
Accrued expenses			84				(1,548	)
Income taxes			1,395				(299	)
Deferred revenues			(398	)			(344	)
Net cash provided by operating activities			6,174				7,596
Investing activities:
Purchases of property and equipment			(2,490	)			(1,430	)
Purchases of investments			(26,633	)			—
Proceeds from sales of investments			24,842				455
Payments for acquisition			—				(3,673	)
Net cash used in investing activities			(4,281	)			(4,648	)
Financing activities:
Repayment of capital lease obligations			(40	)			(751	)
Proceeds from exercise of stock options			879				189
Stock option income tax benefit			109				103
Net cash provided by (used in) financing activities			948				(459	)
Effect of exchange rate changes on cash			7				(3	)
Net increase in cash and cash equivalents			2,848				2,486
Cash and cash equivalents, beginning of period			15,497				38,082
Cash and cash equivalents, end of period		$	18,345			$	40,568