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/
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