PHILADELPHIA, Nov. 1 /PRNewswire-FirstCall/ -- eResearchTechnology, Inc. (eRT), , a leading provider of centralized ECG, eClinical technology, ePRO and other services to the pharmaceutical, biotechnology, medical device and related industries, announced today results for the third quarter of 2007 and nine-month period ended September 30, 2007.
The Company reported revenues of $24.0 million for the third quarter of 2007, a 7.9% increase from $22.2 million in the third quarter of 2006, which included $1.2 million for the ending of a franchise agreement during the same period in 2006. The Company reported net income of $3.7 million for the third quarter of 2007, a 50.3% increase from $2.5 million in the third quarter of 2006. This resulted in net income per diluted share of $0.07 in the third quarter of 2007, compared to $0.05 in the third quarter of 2006.
The Company’s gross margin percentage in the third quarter of 2007 was 48.0% compared to 49.2% in the third quarter of 2006. As previously noted, the third-quarter of 2006 included revenue of $1.2 million for the ending of a franchise agreement; without which the third quarter of 2006 gross margin would have been 46.3%. Pre-tax income margin in the third quarter of 2007 was 24.8% compared to 17.4% in the third quarter of 2006. The Company’s tax rate for the third quarter of 2007 was 37.7% compared to 36.3% in the third quarter of 2006.
For the nine months ended September 30, 2007, the Company reported revenues of $69.8 million compared to $66.4 million for the nine months ended September 30, 2006. The Company reported net income of $10.1 million, or $0.20 per diluted share, for the nine months ended September 30, 2007 compared to net income of $6.1 million, or $0.12 per diluted share, for the nine months ended September 30, 2006.
The Company’s gross margin percentage for the nine months ended September 30, 2007 was 49.9% compared to 49.1% for the nine months ended September 30, 2006. Pre-tax income margin for the nine months ended September 30, 2007 was 23.5% compared to 14.9% for the nine months ended September 30, 2006. The Company’s tax rate was 38.5% for the nine months ended September 30, 2007 compared to 38.6% for the nine months ended September 30, 2006.
eRT ended the quarter with $71.0 million in cash, cash equivalents and investments, an increase of $7.6 million from $63.4 million at the end of the second quarter of 2007.
“We are pleased with our third quarter results.” said Dr. Michael McKelvey, President and CEO of eRT. “Our Company demonstrated strong growth during the quarter, led by our core cardiac safety business. Both our volume and new bookings growth of 40% in the quarter were impressive. The third quarter is a seasonally slow period due to vacations and the tendency of sponsors to not initiate Thorough ECG trials in the summer months. We were able to leverage our SG&A structure to produce net income growth of 50.3% compared to the same quarter a year ago; year to date our net income is up 66.4% from the previous year. Our earnings per diluted share have already exceeded that attained in all of 2006.”
Dr. McKelvey continued, “The 23.4% growth in our backlog to $115.0 million from a year ago, combined with a continued robust sales environment and stabilizing prices shows a solid market demand for our services. We were particularly pleased with the strong showing of our bookings, which showed the fourth quarter in a row of growth quarter over quarter, and the growth of our newly-formed consulting business. In addition, we are working more closely with some of our key CRO partners in a number of different areas. Our operations team is executing very well and we continue to make good progress on the expense line; while we continue to invest in eClinical, Consulting and ePRO. The net effect of this is our achievement of pre-tax margins of 24.8% for the third quarter of 2007.”
2007 Guidance
The Company issued guidance for the fourth quarter of 2007. eRT anticipates revenues of between $27 million and $28.5 million and net income per diluted share of $0.09 to $0.11 for the fourth quarter ending December 31, 2007. For the full year ending December 31, 2007, management anticipates revenues will be around the midpoint of the previously issued guidance of $95 million and $103 million. Management raised its anticipated net income per diluted share to $0.29 to $0.31 from the previously issued guidance of the high end of the range of $0.25 to $0.30.
Conference Call
Dr. McKelvey and Richard Baron, the Company’s Chief Financial Officer, will hold a conference call to discuss these results. The conference call will take place at 5:00 p.m. EDT on November 1, 2007. For the conference call interested participants should dial 866-700-7173 when calling within the United States or 617-213-8838 when calling internationally along with the pass code 33801742. There will be a playback available through 11:59 p.m. (Eastern) on November 8, 2007. To listen to the playback, please call 888-286-8010 when calling within the United States or 617-801-6888 when calling internationally. Please use pass code 94063678 for the replay.
This call is being webcast by Thomson Financial and can be accessed at eRT’s web site at http://www.eRT.com. The webcast may also be accessed at http://www.streetevents.com. The webcast can be accessed until November 1,2008 on either site.
About eResearchTechnology, Inc.
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, 2007 financial 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.
CONTACT: Richard Baron of eResearchTechnology, Inc., +1-215-282-5566; or
Robert East of Westwicke Partners, LLC, +1-410-321-9652, for
eResearchTechnology, Inc.
Web site: http://www.eRT.com/
