EX-99 4 ex99-2.htm EXHIBIT 99.2 Prepared and filed by St Ives Financial

Exhibit 99.2

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

eResearchTechnology Reports Fourth Quarter Results

Reports Revenue of $25.4 Million and Earnings per Share of $0.10

PHILADELPHIA, PA February 8, 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 December 31, 2005.

The company reported revenues of $25.4 million for the fourth quarter, compared to $27.1 million in revenue reported for the fourth quarter of 2004. eRT reported net income for the fourth quarter of 2005 of $5.3 million, or $0.10 per diluted share, versus net income of $7.0 million, or $0.13 per diluted share, for the fourth quarter of 2004. The company’s tax rate for the fourth quarter of 2005 was 38.3% compared to 40.0% in the fourth quarter of 2004.

For the year ended December 31, 2005, the company reported revenues of $86.8 million, compared to $109.4 million in revenues for the year ended December 31, 2004. eRT reported net income of $15.4 million, or $0.29 per diluted share, for the year ended December 31, 2005, compared to net income of $29.7 million, or $0.54 per diluted share, for the year ended December 31, 2004. The company’s tax rate was 37.0% for the year ended December 31, 2005 versus 40.8% for the same period in 2004.

eRT ended the quarter with $55.0 million in cash, cash equivalents and investments, a decrease from $71.8 million at the end of the third quarter of 2005. The decrease in the balance as of December 31, 2005 was due to eRT purchasing 1.1 million shares of its common stock at a cost of $15.4 million during the quarter. For the full year, the company purchased 1.8 million shares of its common stock at a cost of $24.8 million.

Some of the highlights of the fourth quarter and full year included:

  •   eRT signed a record $121.9 million in new contracts and work orders for the full year and a record $39.7 million in the fourth quarter.
  •   The company entered into new Thorough QT definitive ECG study agreements valued at approximately $13.5 million in the quarter and $35.5 million in the full year.
  •   During 2005, the company signed 36 new cardiac safety accounts and contracted for work on new studies for 102 new compounds.
  •   eRT signed $17.6 million in program level awards in the fourth quarter and $42.1 million for the full year.

 

 

“This quarter represented an important milestone for the company as it was awarded a record $40 million in new signings demonstrating the importance of cardiac safety evaluation in clinical trials,” commented Joseph Esposito, President and CEO of eRT. “As we move forward, the stage is now set for identifiable growth in 2006 commensurate with the increase in new signings that the company has experienced. The company has built a strong platform to capitalize on the growth ahead while fulfilling its mission to improve the quality of life for all. Our employees deserve special recognition for their relentless commitment to excellence. ”

2006 Guidance

The company issued the following update to guidance for 2006: For the first quarter of 2006, the company expects to report revenues of between $21.0 and $23.0 million and net income of $0.05 to $0.07 per diluted share. For the full year 2006, the company expects revenue of $112 million to $118 million and earnings per diluted share of $0.42 to $0.48. 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 first 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. EST on February 8, 2006. Interested participants should call 800-811-0667 when calling within the United States or 913-981-4901 when calling internationally. There will be a playback available until March 8, 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 5042035 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=00002CE9. The webcast can be accessed until March 8, 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 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,
        2004     2005     2004     2005
     
 
 
 
Net revenues:                        
  Licenses   $ 2,005   $ 1,645   $ 9,803   $ 6,063
  Services     18,177     17,528     76,340     59,712
  Site support     6,951     6,257     23,250     21,072
     
 
 
 
Total net revenues     27,133     25,430     109,393     86,847
     
 
 
 
Costs of revenues:                        
  Cost of licenses     148     117     664     436
  Cost of services     6,005     6,163     24,124     24,337
  Cost of site support     3,491     4,179     11,486     13,965
     
 
 
 
Total costs of revenues     9,644     10,459     36,274     38,738
     
 
 
 
Gross margin     17,489     14,971     73,119     48,109
     
 
 
 
Operating expenses:                        
  Selling and marketing     2,040     2,469     9,391     9,122
  General and administrative     3,204     3,238     10,276     11,458
  Research and development     1,044     1,118     4,090     4,093
     
 
 
 
Total operating expenses     6,288     6,825     23,757     24,673
     
 
 
 
Operating income     11,201     8,146     49,362     23,436
Other income, net     406     450     863     936
     
 
 
 
Income before income taxes     11,607     8,596     50,225     24,372
Income tax provision     4,643     3,296     20,501     9,007
     
 
 
 
Net income   $ 6,964   $ 5,300   $ 29,724   $ 15,365
     
 
 
 
Basic net income per share   $ 0.14   $ 0.11   $ 0.58   $ 0.31
     
 
 
 
Diluted net income per share   $ 0.13   $ 0.10   $ 0.54   $ 0.29
     
 
 
 
Shares used to calculate basic net                  
  income per share     51,038     49,541     51,375     50,114
     
 
 
 
Shares used to calculate diluted net                  
  income per share     54,084     52,183     55,133     52,905
     
 
 
 

 

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

        December 31, 2004     December 31, 2005  
   
 
ASSETS           (unaudited)  
               
Current assets:              
  Cash and cash equivalents   $ 45,806   $ 18,432  
  Short-term investments     19,158     33,569  
  Accounts receivable, net     14,798     15,178  
  Prepaid expenses and other     3,255     2,528  
  Deferred income taxes     323     841  
   
 
      Total current assets     83,340     70,548  
                 
  Property and equipment, net     25,204     28,670  
  Goodwill     1,212     1,212  
  Long-term investments     3,784     3,008  
  Other assets     1,049     993  
  Deferred income taxes     2,306     335  
   
 
      $ 116,895   $ 104,766  
   
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY              
                 
Current liabilities:              
  Accounts payable   $ 2,455   $ 2,332  
  Accrued expenses     4,318     5,155  
  Income taxes payable     2,517     1,041  
  Current portion of capital lease obligations     233     153  
  Deferred revenues     20,325     16,072  
   
 
      Total current liabilities     29,848     24,753  
   
 
                 
Capital lease obligations, excluding current portion     193     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,              
    56,396,696 and 56,871,010 shares issued, respectively     564     569  
  Additional paid-in capital     69,694     73,290  
  Accumulated other comprehensive income     1,601     586  
  Retained earnings     46,550     61,915  
  Treasury stock, 6,067,519 and 7,847,119 shares at cost, respectively     (31,555 )   (56,387 )
   
 
                 
      Total stockholders’ equity     86,854     79,973  
   
 
                 
      $ 116,895   $ 104,766  
   
 

 

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

              Year Ended December 31,  
              2004     2005  
           
 
 
Operating activities:              
  Net income   $ 29,724   $ 15,365  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     8,706     10,741  
    Cost of sale of equipment     1,152     1,018  
    Provision for uncollectible accounts     171     87  
    Stock option income tax benefits     12,173     2,107  
    Investment impairment charge     —     284  
    Changes in operating assets and liabilities:              
      Accounts receivable     (815 )   (696 )
      Prepaid expenses and other     (1,541 )   671  
      Accounts payable     (1,093 )   (72 )
      Accrued expenses     (524 )   806  
      Income taxes     3,856     (10 )
      Deferred revenues     7,812     (4,109 )
           
 
 
        Net cash provided by operating activities     59,621     26,192  
           
 
 
                       
Investing activities:              
  Purchases of property and equipment     (17,355 )   (16,145 )
  Purchases of investments     (23,351 )   (38,193 )
  Proceeds from sales of investments     13,967     24,558  
           
 
 
        Net cash used in investing activities     (26,739 )   (29,780 )
           
 
 
                       
Financing activities:              
  Repayment of capital lease obligations     (720 )   (233 )
  Proceeds from exercise of stock options     3,303     1,495  
  Repurchase of common stock for treasury     (28,165 )   (24,832 )
           
 
 
        Net cash used in financing activities     (25,582 )   (23,570 )
           
 
 
                       
Effect of exchange rate changes on cash     142     (216 )
           
 
 
                       
Net increase (decrease) in cash and cash equivalents     7,442     (27,374 )
Cash and cash equivalents, beginning of period     38,364     45,806  
           
 
 
                       
Cash and cash equivalents, end of period   $ 45,806   $ 18,432