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 Second Quarter Results

Reports Revenue of $17.6 Million and Earnings per Share of $0.04

PHILADELPHIA, PA July 27, 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 June 30, 2005.

The company reported revenues of $17.6 million for the second quarter, compared to $28.2 million in revenue reported for the second quarter of 2004. eRT reported net income for the second quarter of 2005 of $2.0 million, or $0.04 per diluted share, versus net income of $8.1 million, or $0.15 per diluted share, for the second quarter of 2004

For the six months ended June 30, 2005, the company reported revenues of $40.5 million, compared to $54.3 million in revenues for the six months ended June 30, 2004. eRT reported net income of $6.0 million, or $0.11 per diluted share for the six months ended June 30, 2005, compared to net income of $15.4 million, or $0.28 per diluted share for the six months ended June 30, 2004.

The company signed $25.6 million in new contracts and work orders in the second quarter of 2005, including $7.5 million for new Thorough Phase I ECG study agreements. eRT ended the quarter with $73.9 million in cash equivalents and short-term investments, an increase from $70.8 million at the end of the first quarter of 2005. During the second quarter of 2005, eRT purchased 200,000 shares of its common stock at a cost of $2.2 million.

“This quarter represents a potential turning point for the company as the global regulatory agreement to move ICH E14 ECG guidance to implementation as of May 12, 2005, solidifies the importance of cardiac safety evaluation in clinical trials, and serves to establish the standards by which such evaluation should be conducted particularly with respect to Thorough QTc studies,” commented Joseph Esposito, President and CEO of eRT. “We expect to see accelerated growth through the balance of 2005 into 2006 commensurate with the increase in demand expected as a result of the E14 requirements.”

 

 

2005 Guidance

The company issued the following update to guidance for 2005: For the third quarter of 2005, the company expects to report revenues of between $21 and $24 million and net income of $0.06 to $0.09 per diluted share. For the full year 2005, the company expects to report revenue of between $90 and $95 million and diluted earnings per share of $0.30 to $0.35.

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 July 27, 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 August 27, 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 6267293 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=00002719. The webcast can be accessed until August 27, 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 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 Ended June 30,   Six Months Ended June 30,
        2004     2005     2004     2005
     
 
 
 
Net revenues:                      
    Licenses $ 2,670   $ 1,746   $ 5,123   $ 3,409
    Services   20,308     11,245     38,318     27,147
    Site support   5,186     4,586     10,815     9,935
     
 
 
 
                           
Total net revenues   28,164     17,577     54,256     40,491
     
 
 
 
                           
Costs of revenues:                      
    Cost of licenses   231     104     353     237
    Cost of services   6,081     5,576     12,066     12,066
    Cost of site support   2,582     3,148     4,945     6,331
     
 
 
 
                           
Total costs of revenues   8,894     8,828     17,364     18,634
     
 
 
 
                           
Gross margin   19,270     8,749     36,892     21,857
     
 
 
 
                           
Operating expenses:                      
    Selling and marketing   2,364     2,107     4,817     4,445
    General and administrative   2,350     2,639     4,500     5,535
    Research and development   1,042     903     2,015     1,894
     
 
 
 
                           
Total operating expenses   5,756     5,649     11,332     11,874
     
 
 
 
                           
Operating income   13,514     3,100     25,560     9,983
Other income, net   84     170     192     165
     
 
 
 
                           
Income before income taxes   13,598     3,270     25,752     10,148
Income tax provision   5,466     1,304     10,352     4,110
     
 
 
 
                           
Net income $ 8,132   $ 1,966   $ 15,400   $ 6,038
     
 
 
 
                           
Basic net income per share $ 0.16   $ 0.04   $ 0.30   $ 0.12
     
 
 
 
                           
Diluted net income per share $ 0.15   $ 0.04   $ 0.28   $ 0.11
     
 
 
 
                           
Shares used to calculate basic net                      
    income per share   51,579     50,388     51,256     50,379
     
 
 
 
                           
Shares used to calculate diluted net                      
    income per share   55,571     53,133     55,488     53,229
     
 
 
 
                           

 

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

      December 31, 2004     June 30, 2005  
ASSETS         (unaudited)  
               
Current assets:            
  Cash and cash equivalents $ 45,806   $ 40,661  
  Short-term investments   22,942     33,217  
  Accounts receivable, net   14,798     11,055  
  Prepaid expenses and other   3,522     6,872  
  Deferred income taxes   323     323  
    Total current assets   87,391     92,128  
               
Property and equipment, net   25,204     25,882  
Goodwill   1,212     1,212  
Other assets   782     485  
Deferred income taxes   1,936     962  
               
    $ 116,525   $ 120,669  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY            
               
Current liabilities:            
  Accounts payable $ 2,455   $ 3,000  
  Accrued expenses   4,318     4,162  
  Income taxes payable   2,147     687  
  Current portion of capital lease obligations   233     141  
  Deferred revenues   20,325     20,742  
    Total current liabilities   29,478     28,732  
               
Capital lease obligations, excluding current portion   193     124  
               
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 56,619,865 shares issued, respectively
     564       566  
  Additional paid-in capital   69,694     71,402  
  Accumulated other comprehensive income   1,601     1,055  
  Retained earnings   46,550     52,588  
  Treasury stock, 6,067,519 and 6,267,519 shares at cost   (31,555 )   (33,798 )
               
    Total stockholders’ equity   86,854     91,813  
               
    $ 116,525   $ 120,669  

 

 

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

              Six Months Ended June 30,  
              2004     2005  
           
 
 
Operating activities:            
  Net income $ 15,400   $ 6,038  
  Adjustments to reconcile net income to net cash            
    provided by operating activities:            
      Depreciation and amortization   4,143     5,209  
      Cost of sale of equipment   —     281  
      Provision for uncollectable accounts   84     89  
      Stock option income tax benefits   9,954     993  
      Investment impairment charge   —     284  
      Changes in operating assets and liabilities:            
        Accounts receivable   (3,716 )   3,552  
        Prepaid expenses and other   (1,577 )   (3,026 )
        Accounts payable   290     569  
        Accrued expenses   (348 )   (211 )
        Income taxes   (1,089 )   (486 )
        Deferred revenues   7,010     524  
           
 
 
          Net cash provided by operating activities   30,151     13,816  
           
 
 
                       
Investing activities:            
  Purchases of property and equipment   (7,313 )   (6,726 )
  Purchases of short-term investments   (17,552 )   (23,025 )
  Proceeds from sales of short-term investments   9,723     12,750  
           
 
 
          Net cash used in investing activities   (15,142 )   (17,001 )
           
 
 
                       
Financing activities:            
  Repayment of capital lease obligations   (324 )   (161 )
  Proceeds from exercise of stock options   2,681     722  
  Repurchase of common stock for treasury   —     (2,243 )
           
 
 
          Net cash provided by (used in) financing activities   2,357     (1,682 )
           
 
 
                       
Effect of exchange rate changes on cash   42     (278 )
           
 
 
                       
Net increase (decrease) in cash and cash equivalents   17,408     (5,145 )
Cash and cash equivalents, beginning of period   38,364     45,806  
           
 
 
                       
Cash and cash equivalents, end of period $ 55,772   $ 40,661