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eResearchTechnology Reports Record First Quarter Revenues and
Earnings
Company Reports 92% Increase in Revenues to $26.1 Million and 196% Increase in
Net Income, Resulting in Diluted EPS of $0.20; eRT Raises 2004 Full Year EPS
Guidance to $0.88-$0.90
PHILADELPHIA, April 21 /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
first quarter results for the period ended March 31, 2004.
The company reported record first quarter revenues of $26.1 million, a 92%
increase compared to $13.6 million in revenue reported for the first quarter of
2003. The first quarter revenues also represented a 24% increase over revenue
for the fourth quarter of 2003. eRT reported net income for the first quarter
of 2004 of $7.3 million, or $0.20 per diluted share, an increase of 196%
compared with $2.5 million, or $0.07 per diluted share for the first quarter of
2003. The company's effective tax rate was 40.2% for the first quarter of
2004, versus 37.3% for the prior year quarter.
"The solid improvements in our results and subsequent increased guidance
reflect the strong demand for our technology and services," commented Joe
Esposito, eRT's President and Chief Executive Officer. "We continue to see
momentum across all our product and service offerings, as this quarter
represents further acceleration in our growth leading to record margins and
profitability for the company. Furthermore, the quarter served to reinforce
the strong demand for Thorough Phase I studies resulting in a record backlog
with excellent visibility for the future. Given the positive atmosphere,
record backlog, and strong demand for our products and services, the company
plans to continue investments in technology and infrastructure to ensure
uniform delivery of quality service worldwide."
Some of the highlights of the first quarter included:
-- The company completed the quarter with a backlog of $107 million, the
highest in its history and an increase from $102 million as of
December 31, 2003, and $44 million at the end of the prior year first
quarter. The backlog includes only $2 million for studies awarded
under the three-year, $15 million franchise agreement that was
recently announced.
-- The first quarter of 2004 marked the 13th consecutive quarter that the
company posted a sequential increase in revenues and operating income.
-- eRT completed the quarter with $62.1 million in cash and short-term
investments, an increase of $10.1 million from the fourth quarter of
2003.
-- The company's gross margin improved to 67.5% from 66.2% in the fourth
quarter of 2003 and from 60.8% in the first quarter of 2003.
-- The company increased its annual license revenues by 63% to $949,000
in the first quarter from the year earlier period and its cardiac
safety revenues by 105% from the year earlier period.
-- The company grew its EDC/Data Management products revenue by 46% to
$4.4 million, versus the year earlier period.
-- In the first quarter, eRT entered into nine Thorough Phase I
agreements for drugs in later stage development. The value of these
studies totaled more than $10 million.
-- eRT signed an agreement with Inveresk, one of the world's largest
clinical research organizations. Inveresk will conduct clinical
trials at its Phase I unit in Edinburgh, Scotland while eRT will
perform the digital collection and interpretation of cardiac safety
data. This will expand eRT's Thorough Phase I ECG partnership program
to Europe.
2004 Guidance
The company issued the following guidance for the remainder of 2004. It
expects to report second quarter revenues for the period ended June 30, 2004 of
$27.5 million to $28.0 million and to generate earnings of $0.21 to $0.22 per
diluted share. The company also raised its estimates for the full year. It now
expects revenues of $114 million to $116 million, exceeding the company's
previous guidance of $107 million to $109 million. The revised guidance
represents at least a 70% increase in revenues from the full year 2003. It
also expects full year diluted earnings per share of $0.88 to $0.90, exceeding
previous guidance of $0.82 to $0.84. The current guidance assumes a tax rate
of 40.2% for 2004, which is an increase from the previous guidance of 39.7%.
The revised guidance does not include the impact of any stock splits.
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 21, 2004. Interested participants should call
877-715-5321 when calling within the United States or 973-582-2785 when calling
internationally. There will be a playback available until May 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
4673109 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=00001AF9. The webcast can
be accessed until May 21, 2004 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, 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 Annual Report on Form
10-K 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 March 31,
2003 2004
Net revenues:
Licenses $1,189 $2,453
Services 12,394 23,639
Total net revenues 13,583 26,092
Costs of revenues:
Cost of licenses 144 122
Cost of services 5,187 8,348
Total costs of revenues 5,331 8,470
Gross margin 8,252 17,622
Operating expenses:
Selling and marketing 1,823 2,453
General and administrative 1,509 2,150
Research and development 1,064 973
Total operating expenses 4,396 5,576
Operating income 3,856 12,046
Other income, net 56 108
Income before income taxes 3,912 12,154
Income tax provision 1,457 4,886
Net income $2,455 $7,268
Basic net income per share $0.08 $0.21
Diluted net income per share $0.07 $0.20
Shares used to calculate basic
net income per share 32,202 33,955
Shares used to calculate diluted
net income per share 34,998 36,937
eResearchTechnology, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31, 2003 March 31, 2004
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $38,364 $41,192
Short-term investments 13,558 20,862
Accounts receivable, net 13,947 18,182
Prepaid expenses and other 2,219 3,203
Deferred income taxes 277 277
Total current assets 68,365 83,716
Property and equipment, net 16,416 18,519
Goodwill 1,212 1,212
Investments in non-marketable
securities 509 509
Other assets 168 175
Deferred income taxes 5,308 4,315
$91,978 $108,446
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,513 $3,507
Accrued expenses 4,446 3,780
Income taxes payable 1,584 1,590
Current portion of capital lease
obligations 644 590
Deferred revenues 12,401 17,784
Total current liabilities 22,588 27,251
Capital lease obligations, excluding
current portion 131 25
Stockholders' equity:
Preferred stock-$10.00 par value,
500,000 shares authorized,
none issued and outstanding - -
Common stock-$.01 par value,
50,000,000 shares authorized,
36,490,609 and 36,874,888 shares
issued, respectively 365 369
Additional paid-in capital 54,420 58,930
Accumulated other comprehensive
income 1,038 1,167
Retained earnings 16,826 24,094
Treasury stock, 2,708,346 shares
at cost (3,390) (3,390)
Total stockholders' equity 69,259 81,170
$91,978 $108,446
eResearchTechnology, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended March 31,
2003 2004
Operating activities:
Net income $2,455 $7,268
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and
amortization 1,097 2,006
Provision for
uncollectible accounts - 39
Stock option income tax
benefits 1,475 3,647
Changes in operating
assets and liabilities:
Accounts receivable (2,156) (4,188)
Prepaid expenses and other (151) (995)
Accounts payable (416) (14)
Accrued expenses (545) (669)
Income taxes (381) 960
Deferred revenues (248) 5,349
Net cash provided by
operating activities 1,130 13,403
Investing activities:
Purchases of property and equipment (1,677) (4,035)
Purchases of short-term investments (1,800) (10,900)
Proceeds from sales of short-term
investments 292 3,596
Net cash used in
investing activities (3,185) (11,339)
Financing activities:
Repayment of capital lease obligations (145) (161)
Proceeds from exercise of stock options 1,720 867
Net cash provided by
financing activities 1,575 706
Effect of exchange rate changes on cash (87) 58
Net increase (decrease) in cash and cash
equivalents (567) 2,828
Cash and cash equivalents, beginning
of period 17,443 38,364
Cash and cash equivalents, end of
period $16,876 $41,192
DATASOURCE: eResearchTechnology, Inc.
CONTACT: Bruce Johnson, eResearchTechnology, Inc., +1-215-282-5580; or
Matt Hayden, Hayden Communications, +1-858-456-4533, for eRT
Web site: http://www.viavid.net/detailpage.aspx?sid=00001AF9
Web site: http://www.ert.com/