exv99w1

Exhibit 99.1


FOR IMMEDIATE RELEASE
Contact:
Richard Baron		Brett Maas
eResearchTechnology, Inc.		Hayden Communications
215-282-5566		646-536-7331

eResearchTechnology Reports Fourth Quarter Results

Reports Revenue of $19.9 Million and Earnings per Share of $0.04

PHILADELPHIA, Feb. 21, 2007 /PRNewswire-FirstCall/ — eResearchTechnology, Inc. (NASDAQ: ERES — News; “eRT” or “the Company”), a leading provider of technology and services to the pharmaceutical, biotechnology and medical device industries, announced results today for the quarter and year ended December 31, 2006.

The Company reported revenues of $19.9 million for the fourth quarter of 2006, compared to $25.4 million in revenue reported for the fourth quarter of 2005. The Company reported net income for the fourth quarter of 2006 of $2.2 million, or $0.04 per diluted share, based upon 51.4 million shares, versus net income for the fourth quarter of 2005 of $5.3 million, or $0.10 per diluted share, based upon 52.2 million shares. Adjusting for expenses associated with management changes and stock option expense (the Company adopted SFAS No. 123R in 2006) the Company’s net income and earnings per diluted share would have been $2.7 million and $0.05 for the fourth quarter of 2006 (there were no similar costs in the same period of 2005). The Company’s tax rate for the fourth quarter of 2006 was 32.6% compared to 38.3% in the fourth quarter of 2005.

For the year ended December 31, 2006, the Company reported revenues of $86.4 million, compared to revenues for the year ended December 31, 2005 of $86.8 million. The Company reported net income for the year ended December 31, 2006 of $8.3 million, or $0.16 per diluted share based upon 51.5 million shares, compared to net income for the year ended December 31, 2005 of $15.4 million, or $0.29 per diluted share based upon 52.9 million diluted shares. After adjusting for expenses associated with management changes, the settlement of a contract dispute and stock option expense (the Company adopted SFAS No. 123R in 2006), the Company’s net income and earnings per share would have been $12.3 million and $0.24 for the same period in 2006 (there were no similar costs in the same period of 2005). The Company’s tax rate was 37.1% for the year ended December 31, 2006 versus 37.0% for the same period in 2005.

eRT ended the quarter with $57.8 million in cash, cash equivalents and investments, an increase from $53.3 million at the end of the third quarter of 2006. The increase was predominately due to net cash from operations. During the year ended December 31, 2006, the Company purchased 400,000 shares of the Company’s common stock for $5.8 million; the Company did not purchase any shares during the fourth quarter of 2006.

Some of the highlights of the fourth quarter included:

	•		eRT signed $27.5 million and $121.1 million in new contracts and work orders for the fourth quarter and for the full year of 2006, respectively;

	•		The Company entered into seven new Thorough ECG study agreements valued at approximately $4.4 million in the quarter and 32 new agreements valued at $28.5 million in the full year;

	•		The Company reported a backlog of $96.4 million as of December 31, 2006, an increase of $4.3 million from the prior quarter;

	•		The Company completed the programming and testing of EXPeRT v 2, our new state-of-the-art cardiac safety system; and

	•		The Company will be making efficiency improvements in its Cardiac Safety Operations and General and Administrative cost structure. The effect on the current year will be minimal as severance and other transitional costs will largely offset efficiency savings; the overall effect on next year’s EPS should be approximately $0.05 for the full year in 2008.

“We will look back at 2006 as representing a favorable turning point for the Company; one that has allowed us to create a bridge to the future. We have had strong bookings, we have brought to production our state-of-the-art cardiac system, and we have transitioned to a new management team. We have accomplished all of this while still maintaining strong operating margins with attractive cash flows. The groundwork laid in 2006 combined with the outstanding work of our employees will lead to a successful and more profitable 2007,” commented Dr. Michael McKelvey, President and CEO of eRT.

2007 Guidance

The Company issued guidance for 2007. For the first quarter of 2007, the Company expects to report revenues of between $19.0 and $21.0 million and net income of $0.04 to $0.06 per diluted share. This does not include a charge of $0.01 to $0.02 per diluted share for the efficiency improvement in the first quarter of 2007. For the full year 2007, the Company expects revenue of between $95 million and $103 million and earnings per diluted share of $0.25 to $0.30. The effect of the efficiency improvements should be neutral for the last three quarters of 2007 as severance-related charges should be offset by the savings achieved.

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 4:30 p.m. EST on February 21, 2007. Interested participants should call 888-694-4702 when calling within the United States or 973-582-2741 when calling internationally. There will be a playback available until February 28, 2007. To listen to the playback, please call 877-519-4471 when calling within the United States or 973-341-3080 when calling internationally. Please use pass code 8419936 for the replay. This call is being webcast by ViaVid Broadcasting and can be accessed at eRT’s web site at http://www.eRT.com. The webcast may also be accessed at ViaVid’s website at http://viavid.net/dce.aspx?sid=00003AE5. The webcast can be accessed until March 21, 2007 on either site.

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, 2007 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, 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.

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


	Three Months Ended December 31,				Year Ended December 31,
	2005		2006		2005		2006
Net revenues:
Licenses	$	1,645	$	681	$	6,063	$	3,017
Services		17,528		13,269		59,712		55,309
Site support		6,257		5,975		21,072		28,042


Total net revenues		25,430		19,925		86,847		86,368


Costs of revenues:
Cost of licenses		117		58		436		286
Cost of services		6,163		6,301		24,337		25,431
Cost of site support		4,179		4,329		13,965		18,821


Total costs of revenues		10,459		10,688		38,738		44,538


Gross margin		14,971		9,237		48,109		41,830


Operating expenses:
Selling and marketing		2,469		2,364		9,122		11,051
General and administrative		3,238		2,910		11,458		14,668
Research and development		1,118		818		4,093		4,146


Total operating expenses		6,825		6,092		24,673		29,865


Operating income		8,146		3,145		23,436		11,965
Other income, net		450		183		936		1,250


Income before income taxes		8,596		3,328		24,372		13,215
Income tax provision		3,296		1,084		9,007		4,905


Net income	$	5,300	$	2,244	$	15,365	$	8,310


Basic net income per share	$	0.11	$	0.04	$	0.31	$	0.17


Diluted net income per share	$	0.10	$	0.04	$	0.29	$	0.16


Shares used to calculate basic net income per share		49,541		49,988		50,114		49,474


Shares used to calculate diluted net income per share		52,183		51,364		52,905		51,485

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


	December 31,			December 31,
	2005			2006
				(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	18,432		$	15,497
Short-term investments		33,569			41,416
Accounts receivable, net		15,178			17,866
Prepaid income taxes		27			2,819
Prepaid expenses and other		2,501			2,761
Deferred income taxes		841			912

Total current assets		70,548			81,271

Property and equipment, net		28,670			31,129
Goodwill		1,212			1,212
Long-term investments		3,008			928
Deferred income taxes		335			—
Other assets		993			524

Total assets	$	104,766		$	115,064


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	2,332		$	4,360
Accrued expenses		5,155			3,445
Income taxes payable		1,041			781
Current portion of capital lease obligations		153			40
Deferred revenues		16,072			11,325

Total current liabilities		24,753			19,951

Capital lease obligations, excluding current portion		40			—
Deferred tax liabilities		—			1,491


Total liabilities		24,793			21,442


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, 56,871,010 and 58,356,546 shares issued, respectively		569			584
Additional paid-in capital		73,290			83,493
Accumulated other comprehensive income		586			1,510
Retained earnings		61,915			70,225
Treasury stock, 7,847,119 and 8,247,119 shares at cost, respectively		(56,387	)		(62,190	)


Total stockholders’ equity		79,973			93,622


	$	104,766		$	115,064

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


	Year Ended December 31,
	2005			2006
Operating activities:
Net income	$	15,365		$	8,310
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		10,741			11,253
Cost of sale of equipment		1,018			3,722
Provision for uncollectible accounts		87			111
Non-cash share-based compensation		—			2,975
Stock option income tax benefits		2,107			—
Investment impairment charge		284			226
Changes in operating assets and liabilities:
Accounts receivable		(696	)		(2,567	)
Prepaid expenses and other		671			132
Accounts payable		(72	)		950
Accrued expenses		806			(1,779	)
Income taxes		(10	)		(2,104	)
Deferred revenues		(4,109	)		(4,897	)

Net cash provided by operating activities		26,192			16,332


Investing activities:
Purchases of property and equipment		(16,145	)		(15,181	)
Purchases of investments		(38,193	)		(46,425	)
Proceeds from sales of investments		24,558			40,658

Net cash used in investing activities		(29,780	)		(20,948	)


Financing activities:
Repayment of capital lease obligations		(233	)		(153	)
Proceeds from exercise of stock options		1,495			3,851
Excess tax benefit related to stock options		—			3,400
Repurchase of common stock for treasury		(24,832	)		(5,803	)

Net cash (used in) provided by financing activities		(23,570	)		1,295


Effect of exchange rate changes on cash		(216	)		386


Net decrease in cash and cash equivalents		(27,374	)		(2,935	)
Cash and cash equivalents, beginning of period		45,806			18,432


Cash and cash equivalents, end of period	$	18,432		$	15,497

eResearch Technology, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Information
For the Three and Twelve Months Ended December 31, 2005 and 2006
(in thousands)
(unaudited)


	Three Months				Year
	Ended December 31				Ended December 31
	2005		2006		2005		2006
Gross margin:
GAAP gross margin	$	14,971	$	9,237	$	48,109	$	41,830
Stock based employee compensation expense		—		182		—		791

Non-GAAP income gross margin	$	14,971	$	9,419	$	48,109	$	42,621


Reconciliation of GAAP to Non-GAAP operating income:
GAAP operating income	$	8,146	$	3,145	$	23,436	$	11,965

Stock based employee compensation expense		—		527		—		2,841
CEO and CFO transition		—		138		—		2,052
Settlement of contract dispute		—		—		—		646

Subtotal of reconciling items		—		665		—		5,539

Non-GAAP operating income	$	8,146	$	3,810	$	23,436	$	17,504


Reconciliation of GAAP to Non-GAAP net income and net income per diluted share:
GAAP net income	$	5,300	$	2,244	$	15,365	$	8,310

Stock based employee compensation expense		—		408		—		2,320
CEO and CEO transition		—		80		—		1,238
Settlement of contract dispute		—		—		—		390

Subtotal of reconciling items		—		488		—		3,948

Non-GAAP net income	$	5,300	$	2,732	$	15,365	$	12,258


GAAP net income per diluted share	$	0.10	$	0.04	$	0.29	$	0.16


Non-GAAP net income per diluted share	$	0.10	$	0.05	$	0.29	$	0.24