PHILADELPHIA, April 26 /PRNewswire-FirstCall/ -- eResearchTechnology, Inc. (“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 http://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. (http://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
eResearchTechnology, Inc.
CONTACT: Bruce Johnson of eResearchTechnology, Inc., +1-215-282-5580; orMatt Hayden of Hayden Communications, +1-858-704-5065, foreResearchTechnology
Web site: http://www.ert.com/
