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eResearchTechnology Reports Second Quarter Results
Reports Revenue of $17.6 Million and Earnings per Share of $0.04
PHILADELPHIA, July 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 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 http://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. (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 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 Six Months Ended
June 30, 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
DATASOURCE: eResearchTechnology, Inc.
CONTACT: Bruce Johnson, eResearchTechnology, Inc., +1-215-282-5580; or
Matt Hayden, Hayden Communications, +1-858-704-5065
Web site: http://www.ert.com/