EX-99 2 ex99-1.txt EXHIBIT 99.1 EXHIBIT 99.1 FOR IMMEDIATE RELEASE --------------------- CONTACT: BRUCE JOHNSON MATT HAYDEN eRESEARCHTECHNOLOGY, INC. HAYDEN COMMUNICATIONS 215-282-5580 858-456-4533 eRESEARCHTECHNOLOGY REPORTS RECORD SECOND QUARTER RESULTS Company Reports 91% Increase in Revenues to $28.2 Million and 194% Increase in Net Income, Resulting in Diluted EPS of $0.15; eRT Raises 2004 Full Year EPS Guidance to $0.62 - $0.63 PHILADELPHIA, PA July 21, 2004/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 second quarter and six month results for the period ended June 30, 2004. The company reported record revenues in the second quarter of $28.2 million, a 91% increase compared to $14.8 million in revenue reported for the second quarter of 2003. eRT reported net income for the second quarter of 2004 of $8.1 million, or $0.15 per diluted share, an increase of 194% compared with net income of $2.8 million, or $0.05 per diluted share, for the second quarter of 2003. For the six months ended June 30, 2004, the company reported revenues of $54.3 million, a 91% increase over revenues of $28.4 million for the six months ended June 30, 2003. Net income increased 195% to $15.4 million, or $0.28 per diluted share, from $5.2 million, or $0.10 per diluted share, for the six months ended June 30, 2003. The company's effective tax rate was 40.2% for the second quarter and six months ended June 30, 2004 versus 37.3% for the same periods in 2003. "Once again cardiac safety revenues grew more than 100% over last year indicating that the marketplace is experiencing dramatic growth as a result of regulatory guidance and customer adoption of this guidance. The company's solid performance and subsequent increase in guidance reflects the industry's strong demand for our technology and services," commented Joe Esposito, eRT's President and Chief Executive Officer. "Given the positive atmosphere, record backlog, and demand for our products and services, we plan to continue investments in technology, infrastructure and our sales force to ensure uniform delivery of our marketing message backed by quality service worldwide." Some of the highlights of the second quarter of 2004 included: o The company completed the quarter with a backlog of $110 million, the highest in its history and an increase from $107 million as of March 31, 2004 and $51 million as of June 30, 2003. o The second quarter of 2004 marked the 14th consecutive quarter that the company posted a sequential increase in revenues and operating income. o eRT completed the quarter with $77.2 million in cash and short-term investments, an increase of $15.1 million from the first quarter of 2004. o The company's gross margin improved to 68.4% in the second quarter of 2004, from 67.5% in the first quarter of 2004 and from 60.6% in the second quarter of 2003. o The company increased its annual license revenues by 42% to $996,000 in the second quarter of 2004, from the year earlier period and its cardiac safety revenues by 101% from the year earlier period. o The company grew its EDC/Data Management products revenue by 52% to $4.6 million, versus the year earlier period. The second quarter of 2004, included an agreement with SFBC International to provide the eResearch Network integrated suite of applications. o eRT entered into twelve new Thorough Phase I agreements plus three extensions for drugs in later stage development. The value of these studies totaled approximately $16 million. o The company announced a two-year, $6 million Franchise agreement with a multinational drug developer to provide comprehensive cardiac safety and related services for compounds in all phases of clinical development. o eRT announced the receipt of a United States Patent for various methods and systems for processing electrocardiograms during clinical trials. The patent includes more than 50 claims directed to various features of eRT's EXPeRT workflow-enabled data handling technology. 2004 GUIDANCE The company issued the following guidance for the remainder of 2004. It expects to report revenues for the third quarter ending September 30, 2004 of $30.0 million to $30.5 million and to generate earnings of $0.16 to $0.17 per diluted share. The company also raised its estimates for the full year. It now expects revenues of $117 million to $119 million, exceeding the company's previous guidance of $114 million to $116 million. The revised guidance represents at least a 75% increase in revenues from the full year 2003. It also expects full year diluted earnings per share of $0.62 to $0.63, exceeding previous guidance of $0.59 to $0.60. The current guidance assumes a tax rate of 40.2% for 2004. 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 21, 2004. Interested participants should call 877-826-1579 when calling within the United States or 973-935-8506 when calling internationally. There will be a playback available until August 21, 2004. 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 4964660 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 www.viavid.net/detailpage.aspx?sid=00001CFE. The webcast can be accessed until August 21, 2004 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, 2004 guidance, involve a number of risks and uncertainties such as competitive factors, technological development, market demand, and the company's ability to obtain new contracts and accurately estimate net revenues due to variability in size, scope and duration of projects, and internal issues in the sponsoring client. 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.

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, 2003 2004 2003 2004 ------- ------- ------- ------- Net revenues: Licenses $ 1,154 $ 2,670 $ 2,343 $ 5,123 Services 13,622 25,494 26,016 49,133 ------- ------- ------- ------- Total net revenues 14,776 28,164 28,359 54,256 ------- ------- ------- ------- Costs of revenues: Cost of licenses 188 231 332 353 Cost of services 5,630 8,663 10,817 17,011 ------- ------- ------- ------- Total costs of revenues 5,818 8,894 11,149 17,364 ------- ------- ------- ------- Gross margin 8,958 19,270 17,210 36,892 ------- ------- ------- ------- Operating expenses: Selling and marketing 1,924 2,364 3,747 4,817 General and administrative 1,569 2,350 3,078 4,500 Research and development 1,140 1,042 2,204 2,015 ------- ------- ------- ------- Total operating expenses 4,633 5,756 9,029 11,332 ------- ------- ------- ------- Operating income 4,325 13,514 8,181 25,560 Other income, net 88 84 144 192 ------- ------- ------- ------- Income before income taxes 4,413 13,598 8,325 25,752 Income tax provision 1,644 5,466 3,101 10,352 ------- ------- ------- ------- Net income $ 2,769 $ 8,132 $ 5,224 $15,400 ======= ======= ======= ======= Basic net income per share $ 0.06 $ 0.16 $ 0.11 $ 0.30 ======= ======= ======= ======= Diluted net income per share $ 0.05 $ 0.15 $ 0.10 $ 0.28 ======= ======= ======= ======= Shares used to calculate basic net income per share 49,203 51,580 48,753 51,256 ======= ======= ======= ======= Shares used to calculate diluted net income per share 53,666 55,571 53,082 55,488 ======= ======= ======= =======

eRESEARCHTECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) December 31, 2003 June 30, 2004 ----------------- ------------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 38,364 $ 55,772 Short-term investments 13,558 21,387 Accounts receivable, net 13,947 17,632 Prepaid expenses and other 2,219 3,662 Deferred income taxes 277 277 --------- --------- Total current assets 68,365 98,730 Property and equipment, net 16,416 19,617 Goodwill 1,212 1,212 Investments in non-marketable securities 509 509 Other assets 168 302 Deferred income taxes 5,308 4,920 --------- --------- Total assets $ 91,978 $ 125,290 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,513 $ 3,797 Accrued expenses 4,446 4,101 Income taxes payable 1,584 147 Current portion of capital lease obligations 644 452 Deferred revenues 12,401 19,431 --------- --------- Total current liabilities 22,588 27,928 --------- --------- Capital lease obligations, excluding current portion 131 - --------- --------- 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, 54,735,914 and 56,078,139 shares issued, respectively 547 561 Additional paid-in capital 54,238 66,856 Accumulated other comprehensive income 1,038 1,109 Retained earnings 16,826 32,226 Treasury stock, 4,062,519 shares at cost (3,390) (3,390) --------- --------- Total stockholders' equity 69,259 97,362 --------- --------- Total liabilities and stockholders' equity $ 91,978 $ 125,290 ========= =========

eRESEARCHTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) (unaudited) Six Months Ended June 30, 2003 2004 -------- -------- Operating activities: Net income $ 5,224 $ 15,400 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,323 4,143 Provision for uncollectible accounts - 84 Stock option income tax benefits 2,005 9,954 Changes in operating assets and liabilities: Accounts receivable (4,168) (3,716) Prepaid expenses and other (272) (1,577) Accounts payable 171 290 Accrued expenses (522) (348) Income taxes 484 (1,089) Deferred revenues 532 7,010 -------- -------- Net cash provided by operating activities 5,777 30,151 -------- -------- Investing activities: Purchases of property and equipment (2,775) (7,313) Purchases of short-term investments (3,825) (17,552) Proceeds from sales of short-term investments 3,539 9,723 -------- -------- Net cash used in investing activities (3,061) (15,142) -------- -------- Financing activities: Repayment of capital lease obligations (293) (324) Proceeds from exercise of stock options 2,193 2,681 -------- -------- Net cash provided by financing activities 1,900 2,357 -------- -------- Effect of exchange rate changes on cash 131 42 -------- -------- Net increase in cash and cash equivalents 4,747 17,408 Cash and cash equivalents, beginning of period 17,443 38,364 -------- -------- Cash and cash equivalents, end of period $ 22,190 $ 55,772 ======== ========