East Resources Acquisition (NASDAQ:ERES)
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eResearchTechnology Reports First Quarter Results
Reports Revenue of $22.9 Million and Earnings per Share of $0.08
PHILADELPHIA, April 27 /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 March 31, 2005.
The company reported revenues of $22.9 million for the first quarter, compared
to $26.1 million in revenue reported for the first quarter of 2004. eRT
reported net income for the first quarter of 2005 of $4.1 million, or $0.08 per
diluted share, versus net income of $7.3 million, or $0.13 per diluted share,
for the first quarter of 2004. The company's tax rate for the first quarter of
2005 was 40.8% compared to 40.2% in the first quarter of 2004.
The company signed $24.5 million in new contracts and work orders in the first
quarter of 2005, including $9.1 million for new Thorough Phase I definitive ECG
study agreements. eRT ended the quarter with $70.8 million in cash and
short-term investments, an increase from $68.7 million at the end of 2004.
"Recent industry communications serve to reinforce that there is considerable
debate over the current regulatory guidance for cardiac safety evaluation in
clinical trials, and such uncertainty continues to impact our ability to
accelerate new contract signings including Thorough QTc studies," commented
Joseph Esposito, President and CEO of eRT. "We will continue to maintain our
infrastructure to ensure that we deliver the highest quality services to our
clients and remain prepared for accelerated growth prospects that could result
from regulatory guidance expected from the next step of the ICH process," Mr.
Esposito added.
2005 Guidance
The company issued the following guidance for 2005: For the second quarter of
2005, the company expects to report revenues of between $20 and $23 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 $96 and $104 million and diluted
earnings per share of $0.36 to $0.44.
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 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 May 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
5952291 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://www.viavid.net/detailpage.aspx?sid=000024A0. The webcast can
be accessed until May 27, 2005 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, 2005 financial guidance, and
the timing 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 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,
2004 2005
Net revenues:
Licenses $2,453 $1,663
Services 18,010 15,902
Site support 5,629 5,349
Total net revenues 26,092 22,914
Costs of revenues:
Cost of licenses 122 133
Cost of services 5,985 6,490
Cost of site support 2,363 3,183
Total costs of revenues 8,470 9,806
Gross margin 17,622 13,108
Operating expenses:
Selling and marketing 2,453 2,338
General and administrative 2,150 2,896
Research and development 973 991
Total operating expenses 5,576 6,225
Operating income 12,046 6,883
Other income (expense), net 108 (5)
Income before income taxes 12,154 6,878
Income tax provision 4,886 2,806
Net income $7,268 $4,072
Basic net income per share $0.14 $0.08
Diluted net income per share $0.13 $0.08
Shares used to calculate basic net
income per share 50,933 50,370
Shares used to calculate diluted
net income per share 55,405 53,324
eResearchTechnology, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31, 2004 March 31, 2005
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $45,806 $38,877
Short-term investments 22,942 31,942
Accounts receivable, net 14,798 14,814
Prepaid expenses and other 3,522 3,831
Deferred income taxes 323 323
Total current assets 87,391 89,787
Property and equipment, net 25,204 25,310
Goodwill 1,212 1,212
Other assets 782 498
Deferred income taxes 1,936 1,332
$116,525 $118,139
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,455 $2,169
Accrued expenses 4,318 4,269
Income taxes payable 2,147 176
Current portion of capital lease
obligations 233 167
Deferred revenues 20,325 19,614
Total current liabilities 29,478 26,395
Capital lease obligations, excluding
current portion 193 159
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 56,506,808
shares issued, respectively 564 565
Additional paid-in capital 69,694 70,558
Accumulated other comprehensive
income 1,601 1,395
Retained earnings 46,550 50,622
Treasury stock, 6,067,519 shares
at cost (31,555) (31,555)
Total stockholders' equity 86,854 91,585
$116,525 $118,139
eResearchTechnology, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended March 31,
2004 2005
Operating activities:
Net income $7,268 $4,072
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 2,006 2,630
Cost of sale of equipment - 269
Provision for
uncollectable accounts 39 45
Stock option income tax benefits 3,647 540
Investment impairment charge - 284
Changes in operating
assets and liabilities:
Accounts receivable (4,188) (120)
Prepaid expenses and other (995) (238)
Accounts payable (14) (275)
Accrued expenses (669) (119)
Income taxes 960 (1,370)
Deferred revenues 5,349 (672)
Net cash provided
by operating activities 13,403 5,046
Investing activities:
Purchases of property and equipment (4,035) (3,148)
Purchases of short-term investments (10,900) (15,175)
Proceeds from sales of short-term
investments 3,596 6,175
Net cash used in
investing activities (11,339) (12,148)
Financing activities:
Repayment of capital lease
obligations (161) (100)
Proceeds from exercise of stock
options 867 326
Net cash provided
by financing activities 706 226
Effect of exchange rate changes on cash 58 (53)
Net increase (decrease) in cash and
cash equivalents 2,828 (6,929)
Cash and cash equivalents, beginning
of period 38,364 45,806
Cash and cash equivalents, end of
period $41,192 $38,877
DATASOURCE: eResearchTechnology, Inc.
CONTACT: Bruce Johnson, eResearchTechnology, Inc., +1-215-282-5580; or
Matt Hayden, Hayden Communications, +1-858-704-5065, for eResearchTechnology
Web site: http://www.ert.com/