EX-99 3 ex99-1.htm EXHIBIT 99.1 Prepared and filed by St Ives Financial

Exhibit 99.1

FOR IMMEDIATE RELEASE  
Contact:  
Bruce Johnson Matt Hayden
eResearchTechnology, Inc. Hayden Communications
215-282-5580 858-704-5065

eResearchTechnology Reports First Quarter Results

Reports Revenue of $21.4 Million and Earnings per Share of $0.04, Including $0.01
Impact of Stock Option Expense under SFAS No. 123R

PHILADELPHIA, PA April 26, 2006/PRNewswire-FirstCall/ – eResearchTechnology, Inc. (Nasdaq: ERES) (“eRT” or the “company”), a leading provider of technology and services to the pharmaceutical, biotechnology and medical device industries, announced today results for the quarter ended March 31, 2006.

The company reported revenues of $21.4 million for the first quarter, compared to $22.9 million in revenue reported for the first quarter of 2005. eRT reported net income for the first quarter of 2006 of $1.9 million, or $0.04 per diluted share, versus net income of $4.1 million, or $0.08 per diluted share, for the first quarter of 2005. The results for the 2006 first quarter include stock option compensation expense of $728,000, or $0.01 per diluted share, pursuant to the provisions of SFAS No. 123R, Share-Based Payment, which was adopted on January 1, 2006. The company’s tax rate for the first quarter of 2006 was 40.1% compared to 40.8% in the first quarter of 2005.

eRT ended the quarter with $47.3 million in cash, cash equivalents and investments, a decrease from $55.0 million at December 31, 2005. The decrease in the balance as of March 31, 2006 was primarily due to eRT purchasing 400,000 shares of its common stock at a cost of $5.8 million during the quarter.

Some of the highlights of the first quarter included:

  • eRT signed $29.9 million in new contracts and work orders.
  • The company entered into new Thorough QT definitive ECG study agreements valued at approximately $11.0 million in the quarter.
  • eRT signed $7.4 million in program level awards.

“The stage is now set for identifiable growth during the remainder of 2006 commensurate with the increase in collective signings that the company has experienced during the past several quarters,” commented Joseph Esposito, President and CEO of eRT. “The company has established a strong platform to capitalize on this growth opportunity while fulfilling its mission to improve the safety of pharmaceutical and biotechnology products for consumers. Our employees deserve special recognition for their contribution to growing and improving our overall organization.”

 

 

2006 Guidance

The company issued the following update to guidance for 2006: For the second quarter of 2006, the company expects to report revenues of between $25.0 million to $27.0 million and net income of $0.08 to $0.10 per diluted share. For the full year 2006, the company expects revenue and earnings per diluted share to be in the lower end of previously provided guidance of $112 million to $118 million for revenue and $0.42 to $0.48 for earnings per diluted share. The guidance estimates do not include the impact of expensing stock options under SFAS No. 123R, which is expected to reduce earnings per diluted share by $0.01 for the second quarter of 2006 and $0.03 to $0.04 for the full year 2006.

Mr. Esposito and Bruce Johnson, the company’s Chief Financial Officer, will hold a conference call to discuss these results. The conference call will take place at 4:45 p.m. EDT on April 26, 2006. Interested participants should call 800-562-8369 when calling within the United States or 913-312-1299 when calling internationally. There will be a playback available until May 26, 2006. To listen to the playback, please call 888-203-1112 when calling within the United States or 719-457-0820 when calling internationally. Please use pass code 6149062 for the replay.

This call is being webcast by ViaVid Broadcasting and can be accessed at eRT’s web site at www.eRT.com. The webcast may also be accessed at ViaVid’s website at http://viavid.net/dce.aspx?sid=00002F98. The webcast can be accessed until May 26, 2006 on either site.

Based in Philadelphia, PA, eResearchTechnology, Inc. (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, 2006 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 Report on Form 10-K 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 March 31,  
                       
2005
    
2006
  
                     
 
 
      Net revenues:                    
            Licenses         $ 1,663   $ 638  
            Services           15,902     14,725  
            Site support           5,349     6,036  
                     
 
 
      Total net revenues           22,914     21,399  
                     
 
 
      Costs of revenues:                    
            Cost of licenses           133     76  
            Cost of services           6,490     6,156  
            Cost of site support           3,183     4,153  
                     
 
 
      Total costs of revenues           9,806     10,385  
                     
 
 
      Gross margin           13,108     11,014  
                     
 
 
      Operating expenses:                    
            Selling and marketing           2,338     3,038  
            General and administrative     2,788     3,839  
            Research and development     991     1,314  
                     
 
 
      Total operating expenses           6,117     8,191  
                     
 
 
      Operating income           6,991     2,823  
      Other income (expense), net     (113 )   390  
                     
 
 
      Income before income taxes     6,878     3,213  
      Income tax provision           2,806     1,289  
                     
 
 
      Net income         $ 4,072   $ 1,924  
                     
       
      Basic net income per share   $ 0.08   $ 0.04  
                     
 
 
      Diluted net income per share   $ 0.08   $ 0.04  
                     
 
 
      Shares used to calculate basic net income per share     50,370     49,102  
                     
 
 
      Shares used to calculate diluted net income per share     53,324     51,685  
                     
 
 

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

      December 31, 2005     March 31, 2006  
ASSETS           (unaudited)  
               
Current assets:              
   Cash and cash equivalents   $ 18,432   $ 7,518  
   Short-term investments     33,569     36,754  
   Accounts receivable, net     15,178     14,890  
   Prepaid income taxes     27     1,814  
   Prepaid expenses and other     2,501     3,747  
   Deferred income taxes     841     864  
   
 
 
      Total current assets     70,548     65,587  
               
Property and equipment, net     28,670     30,461  
Goodwill     1,212     1,212  
Long-term investments     3,008     2,993  
Deferred income taxes     335     558  
Other assets     993     924  
   
 
 
    $ 104,766   $ 101,735  
   
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY              
               
Current liabilities:              
   Accounts payable   $ 2,332   $ 2,943  
   Accrued expenses     5,155     4,133  
   Income taxes payable     1,041     1,008  
   Current portion of capital lease obligations     153     156  
   Deferred revenues     16,072     13,948  
   
 
 
      Total current liabilities     24,753     22,188  
   
 
 
Capital lease obligations, excluding current portion     40     —  
   
 
 
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 57,304,927 shares issued, respectively     569     573  
   Additional paid-in capital     73,290     76,606  
   Accumulated other comprehensive income     586     719  
   Retained earnings     61,915     63,839  
   Treasury stock, 7,847,119 and 8,247,119 shares at cost,              
      respectively     (56,387 )   (62,190 )
   
 
 
      Total stockholders' equity     79,973     79,547  
   
 
 
    $ 104,766   $ 101,735  
   
 
 

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

      Three Months Ended March 31,  
     
2005
2006
  
Operating activities:    
   
 
   Net income   $ 4,072   $ 1,924  
   Adjustments to reconcile net income to net cash              
      provided by operating activities:              
         Depreciation and amortization     2,630     2,819  
         Cost of sale of equipment     269     420  
         Provision for uncollectible accounts     45     —  
         Non-cash share-based compensation     —     730  
         Stock option income tax benefits     540     —  
         Investment impairment charge     284     —  
         Changes in operating assets and liabilities:              
            Accounts receivable     (120 )   301  
            Prepaid expenses and other     (238 )   (1,171 )
            Accounts payable     (275 )   607  
            Accrued expenses     (119 )   (1,030 )
            Income taxes     (1,370 )   (2,070 )
            Deferred revenues     (672 )   (2,135 )
   
 
 
               Net cash provided by operating activities     5,046     395  
   
 
 
Investing activities:              
   Purchases of property and equipment     (3,148 )   (4,923 )
   Purchases of investments     (15,175 )   (7,436 )
   Proceeds from sales of investments     6,175     4,266  
   
 
 
               Net cash used in investing activities     (12,148 )   (8,093 )
   
 
 
Financing activities:              
   Repayment of capital lease obligations     (100 )   (37 )
   Proceeds from exercise of stock options     326     1,099  
   Excess tax benefit related to stock options     —     1,493  
   Repurchase of common stock for treasury     —     (5,803 )
   
 
 
         Net cash provided by (used in) financing activities     226     (3,248 )
   
 
 
Effect of exchange rate changes on cash     (53 )   32  
   
 
 
Net decrease in cash and cash equivalents     (6,929 )   (10,914 )
Cash and cash equivalents, beginning of period     45,806     18,432  
   
 
 
Cash and cash equivalents, end of period   $ 38,877   $ 7,518