eResearchTechnology Reports Revenue Growth of 29% in the Fourth
Quarter and 64% for the Full Year Net Income Increased 30% in the
Fourth Quarter and 106% for the Full Year, Resulting in Diluted EPS
of $0.13 and $0.54 for the Quarter and Full Year PHILADELPHIA, Feb.
9 /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 fourth quarter and full year results
for the period ended December 31, 2004. The company reported
revenues of $27.1 million for the fourth quarter, a 29% increase
compared to $21.0 million in revenue reported for the fourth
quarter of 2003. eRT reported net income for the fourth quarter of
2004 of $7.0 million, or $0.13 per diluted share, an increase of
30% compared with net income of $5.4 million, or $0.10 per diluted
share, for the fourth quarter of 2003. The company's tax rate for
the fourth quarter of 2004 was 40.0% compared to 42.8% in the third
quarter of 2004 and 38.9% in the fourth quarter of 2003. For the
year ended December 31, 2004, the company reported revenues of
$109.4 million, a 64% increase over revenues of $66.8 million for
the year ended December 31, 2003. Net income increased 106% to
$29.7 million, or $0.54 per diluted share, from $14.5 million, or
$0.27 per diluted share, for the year ended December 31, 2003. The
company's tax rate was 40.8% for the year ended December 31, 2004
versus 37.9% for the same period in 2003. "The company delivered
strong results in 2004," commented Joseph Esposito, eRT's President
and Chief Executive Officer. "I have great admiration and
appreciation for our employees who have dedicated themselves to
safely advancing clinical research. I want to recognize them for
their outstanding accomplishments, as well. In 2004, FORTUNE
Magazine recognized the company as the second fastest growing
company in the United States over the past three years. During this
time our employees improved business processes, enhanced our
technology and advanced our global infrastructure to address the
requirements of a growing customer base. Through the efforts of our
employees, the company strengthened its market leadership position.
The company is well positioned to capitalize on the growth
anticipated as a result of continued regulatory reinforcement of
vigorous drug safety testing in clinical trials." Some of the
highlights of the fourth quarter and full year included: -- eRT
signed more than $112 million in new contracts and work orders for
the full year 2004, the largest volume in the company's history. --
During 2004, the company signed 39 new cardiac safety accounts and
contracted for work on new studies for 119 new compounds. -- The
company entered into new Thorough Phase I definitive ECG study
agreements valued at approximately $6.6 million for the quarter and
$38.0 million for the full year. -- The company signed $6.0 million
in program level awards in the fourth quarter and $14.6 million for
the full year. -- eRT extended its EXPeRT(R) data handling
capability by reintroducing semi-automated machine based readings
in response to the regulatory guidance update in mid-September and
received more than $3.5 million in contracts related to this
service in the fourth quarter and more than $6.9 million for the
full year. -- The company signed $2.0 million in software and
related services agreements in the fourth quarter which included an
agreement for an end-to-end clinical research platform, electronic
data capture and web portal for PRACS Institute. eRT signed more
than $8.4 million in new software and related service agreements
for the full year. -- eRT completed the year with $68.7 million in
cash and short-term investments, an increase of $16.8 million from
the end of 2003. During the fourth quarter, the company repurchased
1.7 million shares of its stock at a cost of $21.6 million. In the
third quarter of 2004, eRT purchased 300,000 shares of its stock at
a cost of $6.6 million. -- The company's gross margin declined to
64.5% in the fourth quarter of 2004, from 66.2% in the fourth
quarter of 2003. The decline in the gross margin is due to
continued investment in personnel and technology to address future
growth. The gross margin for the full year increased to 66.8% from
63.0% in 2003. -- The company's operating margins improved to 41.9%
for the fourth quarter and 45.3% for the full year from 41.4% and
34.4% for the fourth quarter and full year 2003, respectively. The
operating margin was negatively affected by one-time expenses
incurred in the fourth quarter primarily for compliance with
internal control certification requirements. 2005 Guidance The
company issued the following guidance for 2005: It expects to
report first quarter of 2005 revenues of between $26.0 and $28.0
million and net income of $0.12 to $0.14 per diluted share. The
company reinforced guidance for 2005 and continues to expect full
year revenue between $130 and $140 million and diluted earnings per
share of $0.62 to $0.72 (excluding the impact of expensing stock
options under SFAS 123R). 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. EST on February 9, 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 March 9, 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 5606173 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=000021BA. The webcast can
be accessed until March 9, 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 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 at 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.
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) Three Months Ended Year Ended December
31, December 31, 2003 2004 2003 2004 (unaudited) (unaudited) Net
revenues: Licenses $882 $2,005 $5,738 $9,803 Services 15,192 18,176
46,791 76,340 Site support 4,945 6,952 14,313 23,250 Total net
revenues 21,019 27,133 66,842 109,393 Costs of revenues: Cost of
licenses 141 148 658 664 Cost of services 4,943 6,004 17,473 24,124
Cost of site support 2,017 3,492 6,610 11,486 Total costs of
revenues 7,101 9,644 24,741 36,274 Gross margin 13,918 17,489
42,101 73,119 Operating expenses: Selling and marketing 2,146 2,040
7,763 9,391 General and administrative 1,908 3,041 6,804 10,103
Research and development 1,164 1,044 4,564 4,090 Total operating
expenses 5,218 6,125 19,131 23,584 Operating income 8,700 11,364
22,970 49,535 Other income, net 83 243 310 690 Income before income
taxes 8,783 11,607 23,280 50,225 Income tax provision 3,417 4,643
8,817 20,501 Net income $5,366 $6,964 $14,463 $29,724 Basic net
income per share $0.11 $0.14 $0.29 $0.58 Diluted net income per
share $0.10 $0.13 $0.27 $0.54 Shares used to calculate basic net
income per share 50,517 51,038 49,461 51,375 Shares used to
calculate diluted net income per share 55,198 54,084 54,033 55,133
eResearchTechnology, Inc. and Subsidiaries Consolidated Balance
Sheets (in thousands, except share and per share amounts) December
31, 2003 December 31, 2004 (unaudited) ASSETS Current assets: Cash
and cash equivalents $38,364 $45,806 Short-term investments 13,558
22,942 Accounts receivable, net 13,947 14,798 Prepaid expenses and
other 2,219 3,522 Deferred income taxes 277 323 Total current
assets 68,365 87,391 Property and equipment, net 16,416 24,499
Goodwill 1,212 1,212 Other assets 677 782 Deferred income taxes
5,308 1,936 Total assets $91,978 $115,820 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,513
$2,455 Accrued expenses 4,446 3,613 Income taxes payable 1,584
2,147 Current portion of capital lease obligations 644 233 Deferred
revenues 12,401 20,325 Total current liabilities 22,588 28,773
Capital lease obligations, excluding current portion 131 193
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
56,376,696 shares issued, respectively 547 564 Additional paid-in
capital 54,238 69,694 Accumulated other comprehensive income 1,038
1,601 Retained earnings 16,826 46,550 Treasury stock, 4,062,519 and
6,067,519 shares at cost, respectively (3,390) (31,555) Total
stockholders' equity 69,259 86,854 Total liabilities and
stockholders' equity $91,978 $115,820 eResearchTechnology, Inc. and
Subsidiaries Consolidated Statements of Cash Flows (in thousands)
Year Ended December 31, 2003 2004 (unaudited) Operating activities:
Net income $14,463 $29,724 Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 5,306 8,706 Cost of sale of equipment - 1,152
Provision for uncollectible accounts - 171 Stock option income tax
benefits 9,895 12,173 Changes in operating assets and liabilities:
Accounts receivable (6,731) (815) Prepaid expenses and other 155
(1,541) Accounts payable 1,484 (1,093) Accrued expenses 720 (858)
Income taxes (2,258) 3,856 Deferred revenues 7,533 7,812 Net cash
provided by operating activities 30,567 59,287 Investing
activities: Purchases of property and equipment (8,887) (17,021)
Purchases of short-term investments (12,435) (23,351) Proceeds from
sales of short-term investments 8,184 13,967 Net cash used in
investing activities (13,138) (26,405) Financing activities:
Repayment of capital lease obligations (601) (720) Proceeds from
exercise of stock options 3,685 3,303 Repurchase of common stock
for treasury - (28,165) Net cash provided by (used in) financing
activities 3,084 (25,582) Effect of exchange rate changes on cash
408 142 Net increase in cash and cash equivalents 20,921 7,442 Cash
and cash equivalents, beginning of period 17,443 38,364 Cash and
cash equivalents, end of period $38,364 $45,806 DATASOURCE:
eResearchTechnology, Inc. CONTACT: Bruce Johnson of
eResearchTechnology, Inc., +1-215-282-5580; or Matt Hayden of
Hayden Communications, +1-858-456-4533, for eResearchTechnology Web
site: http://www.ert.com/
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