EX-99 2 ex99-1.txt EX99-1.TXT EXHIBIT 99.1 FOR IMMEDIATE RELEASE ---------------------- CONTACT: BRUCE JOHNSON MATT HAYDEN eRESEARCHTECHNOLOGY, INC. HAYDEN COMMUNICATIONS 215-282-5580 858-704-5065 eRESEARCHTECHNOLOGY REPORTS THIRD QUARTER RESULTS Reports Revenue of $20.9 Million and Earnings per Share of $0.08 PHILADELPHIA, PA October 26, 2005/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 September 30, 2005. The company reported revenues of $20.9 million for the third quarter, compared to $28.0 million in revenue reported for the third quarter of 2004. eRT reported net income for the third quarter of 2005 of $4.0 million, or $0.08 per diluted share, versus net income of $7.4 million, or $0.13 per diluted share, for the third quarter of 2004. The company's tax rate for the third quarter of 2005 was 28.4% compared to 42.8% in the third quarter of 2004. For the nine months ended September 30, 2005, the company reported revenues of $61.4 million, compared to $82.3 million in revenues for the nine months ended September 30, 2004. eRT reported net income of $10.1 million, or $0.19 per diluted share for the nine months ended September 30, 2005, compared to net income of $22.8 million, or $0.41 per diluted share for the nine months ended September 30, 2004. The company's tax rate was 36.2% for the nine months ended September 30, 2005 versus 41.1% for the same period in 2004. eRT ended the quarter with $71.8 million in cash equivalents and short-term investments, a decrease from $73.9 million at the end of the second quarter of 2005. The decrease in the cash balance as of September 30, 2005, was due to eRT purchasing 479,600 shares of its common stock at a cost of $7.2 million during the quarter. The company signed a record $32.0 million in new business in the third quarter of 2005. Highlights included: o 9 new name accounts. o 31 new compounds. o 14 awards valued at more than $500,000. o 6 later phase program awards valued at $14.5 million. o 5 Thorough QT studies valued at $6.0 million. o 3 new EDC/data management contracts valued at $2.1 million. "This quarter represented an important milestone for the company as it was awarded a record $32 million in new signings demonstrating the importance of cardiac safety evaluation in clinical trials," commented Joseph Esposito, President and CEO of eRT. "The stage is now set for accelerated growth in 2006 commensurate with the increase in demand expected as a result of the global adoption of the E14 requirements." 2005 AND 2006 GUIDANCE The company issued the following update to guidance for 2005: For the fourth quarter of 2005, the company expects to report revenues of between $24.5 and $26.5 million and net income of $0.09 to $0.11 per diluted share. For the full year 2005, the company expects to report revenue of between $86 and $88 million and diluted earnings per share of $0.28 to $0.30. For 2006 the company expects revenue of $112 million to $118 million and earnings per diluted share of $0.42 to $0.48, which does not include the impact of expensing stock options under SFAS No. 123R. 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 October 26, 2005. Interested participants should call 888-874-9713 when calling within the United States or 973-935-8506 when calling internationally. There will be a playback available until November 26, 2005. 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 6583749 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=000029CA. The webcast can be accessed until November 26, 2005 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, 2005 and 2006 financial guidance, and the impact of regulatory 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 Nine Months Ended September 30, Ended September 30, 2004 2005 2004 2005 ------- ------- ------- ------- Net revenues: Licenses $ 2,675 $ 1,009 $ 7,798 $ 4,418 Services 19,845 15,037 58,163 42,184 Site support 5,484 4,880 16,299 14,815 ------- ------- ------- ------- Total net revenues 28,004 20,926 82,260 61,417 ------- ------- ------- ------- Costs of revenues: Cost of licenses 163 82 516 319 Cost of services 6,053 6,108 18,119 18,174 Cost of site support 3,050 3,455 7,995 9,786 ------- ------- ------- ------- Total costs of revenues 9,266 9,645 26,630 28,279 ------- ------- ------- ------- Gross margin 18,738 11,281 55,630 33,138 ------- ------- ------- ------- Operating expenses: Selling and marketing 2,534 2,208 7,351 6,653 General and administrative 2,562 2,685 7,062 8,220 Research and development 1,031 1,081 3,046 2,975 ------- ------- ------- ------- Total operating expenses 6,127 5,974 17,459 17,848 ------- ------- ------- ------- Operating income 12,611 5,307 38,171 15,290 Other income, net 255 321 447 486 ------- ------- ------- ------- Income before income taxes 12,866 5,628 38,618 15,776 Income tax provision 5,506 1,601 15,858 5,711 ------- ------- ------- ------- Net income $ 7,360 $ 4,027 $22,760 $10,065 ======= ======= ======= ======= Basic net income per share $ 0.14 $ 0.08 $ 0.44 $ 0.20 ======= ======= ======= ======= Diluted net income per share $ 0.13 $ 0.08 $ 0.41 $ 0.19 ======= ======= ======= ======= Shares used to calculate basic net income per share 51,951 50,158 51,488 50,305 ======= ======= ======= ======= Shares used to calculate diluted net income per share 55,473 52,979 55,483 53,145 ======= ======= ======= =======

eRESEARCHTECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts)

December 31, 2004 September 30, 2005 ----------------- ------------------ ASSETS (unaudited) Current assets: Cash and cash equivalents $ 45,806 $ 37,838 Short-term investments 22,942 33,984 Accounts receivable, net 14,798 11,632 Prepaid expenses and other 3,522 5,340 Deferred income taxes 323 323 --------- --------- Total current assets 87,391 89,117 Property and equipment, net 25,204 27,081 Goodwill 1,212 1,212 Other assets 782 1,100 Deferred income taxes 1,936 716 --------- --------- $ 116,525 $ 119,226 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,455 $ 3,097 Accrued expenses 4,318 4,619 Income taxes payable 2,147 1,106 Current portion of capital lease obligations 233 142 Deferred revenues 20,325 20,730 --------- --------- Total current liabilities 29,478 29,694 --------- --------- Capital lease obligations, excluding current portion 193 88 --------- --------- 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 56,751,843 shares issued, respectively 564 568 Additional paid-in capital 69,694 72,369 Accumulated other comprehensive income 1,601 868 Retained earnings 46,550 56,615 Treasury stock, 6,067,519 and 6,747,119 shares at cost, respectively (31,555) (40,976) --------- --------- Total stockholders' equity 86,854 89,444 --------- --------- $ 116,525 $ 119,226 ========= =========

eRESEARCHTECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)

Nine Months Ended September 30, 2004 2005 -------- -------- Operating activities: Net income $ 22,760 $ 10,065 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,330 7,940 Cost of sale of equipment 295 312 Provision for uncollectible accounts 126 88 Stock option income tax benefits 11,919 1,587 Investment impairment charge -- 284 Changes in operating assets and liabilities: Accounts receivable (4,569) 2,934 Prepaid expenses and other (1,988) (2,149) Accounts payable (525) 691 Accrued expenses (350) 257 Income taxes 2,393 195 Deferred revenues 10,651 522 -------- -------- Net cash provided by operating activities 47,042 22,726 -------- -------- Investing activities: Purchases of property and equipment (12,033) (10,842) Purchases of short-term investments (21,058) (29,077) Proceeds from sales of short-term investments 11,669 18,035 -------- -------- Net cash used in investing activities (21,422) (21,884) -------- -------- Financing activities: Repayment of capital lease obligations (608) (196) Proceeds from exercise of stock options 3,138 1,094 Repurchase of common stock for treasury (6,557) (9,421) -------- -------- Net cash used in financing activities (4,027) (8,523) -------- -------- Effect of exchange rate changes on cash 57 (287) -------- -------- Net increase (decrease) in cash and cash equivalents 21,650 (7,968) Cash and cash equivalents, beginning of period 38,364 45,806 -------- -------- Cash and cash equivalents, end of period $ 60,014 $ 37,838 ======== ========