PHILADELPHIA, Feb. 8 /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 results for the quarter ended December 31, 2005.
The company reported revenues of $25.4 million for the fourth quarter, compared to $27.1 million in revenue reported for the fourth quarter of 2004. eRT reported net income for the fourth quarter of 2005 of $5.3 million, or $0.10 per diluted share, versus net income of $7.0 million, or $0.13 per diluted share, for the fourth quarter of 2004. The company’s tax rate for the fourth quarter of 2005 was 38.3% compared to 40.0% in the fourth quarter of 2004.
For the year ended December 31, 2005, the company reported revenues of $86.8 million, compared to $109.4 million in revenues for the year ended December 31, 2004. eRT reported net income of $15.4 million, or $0.29 per diluted share, for the year ended December 31, 2005, compared to net income of $29.7 million, or $0.54 per diluted share, for the year ended December 31, 2004. The company’s tax rate was 37.0% for the year ended December 31, 2005 versus 40.8% for the same period in 2004.
eRT ended the quarter with $55.0 million in cash, cash equivalents and investments, a decrease from $71.8 million at the end of the third quarter of 2005. The decrease in the balance as of December 31, 2005 was due to eRT purchasing 1.1 million shares of its common stock at a cost of $15.4 million during the quarter. For the full year, the company purchased 1.8 million shares of its common stock at a cost of $24.8 million.
Some of the highlights of the fourth quarter and full year included: -- eRT signed a record $121.9 million in new contracts and work orders for the full year and a record $39.7 million in the fourth quarter. -- The company entered into new Thorough QT definitive ECG study agreements valued at approximately $13.5 million in the quarter and $35.5 million in the full year. -- During 2005, the company signed 36 new cardiac safety accounts and contracted for work on new studies for 102 new compounds. -- eRT signed $17.6 million in program level awards in the fourth quarter and $42.1 million for the full year.
“This quarter represented an important milestone for the company as it was awarded a record $40 million in new signings demonstrating the importance of cardiac safety evaluation in clinical trials,” commented Joseph Esposito, President and CEO of eRT. “As we move forward, the stage is now set for identifiable growth in 2006 commensurate with the increase in new signings that the company has experienced. The company has built a strong platform to capitalize on the growth ahead while fulfilling its mission to improve the quality of life for all. Our employees deserve special recognition for their relentless commitment to excellence.”
2006 Guidance
The company issued the following update to guidance for 2006: For the first quarter of 2006, the company expects to report revenues of between $21.0 and $23.0 million and net income of $0.05 to $0.07 per diluted share. For the full year 2006, the company expects revenue of $112 million to $118 million and earnings per diluted share of $0.42 to $0.48. The guidance estimates do not include the impact of expensing stock options under SFAS No. 123R, which is expected to reduce earnings per diluted share by $0.01 for the first quarter of 2006 and $0.03 to $0.04 for the full year 2006.
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 8, 2006. Interested participants should call 800-811-0667 when calling within the United States or 913-981-4901 when calling internationally. There will be a playback available until March 8, 2006. To listen to the playback, please call 888-203-1112 when calling within the United States or 719-457-0820 when calling internationally. Please use pass code 5042035 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=00002CE9. The webcast can be accessed until March 8, 2006 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, 2006 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.
eResearchTechnology, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) Three Months Ended Year Ended December 31, December 31, 2004 2005 2004 2005 Net revenues: Licenses $2,005 $1,645 $9,803 $6,063 Services 18,177 17,528 76,340 59,712 Site support 6,951 6,257 23,250 21,072 Total net revenues 27,133 25,430 109,393 86,847 Costs of revenues: Cost of licenses 148 117 664 436 Cost of services 6,005 6,163 24,124 24,337 Cost of site support 3,491 4,179 11,486 13,965 Total costs of revenues 9,644 10,459 36,274 38,738 Gross margin 17,489 14,971 73,119 48,109 Operating expenses: Selling and marketing 2,040 2,469 9,391 9,122 General and administrative 3,204 3,238 10,276 11,458 Research and development 1,044 1,118 4,090 4,093 Total operating expenses 6,288 6,825 23,757 24,673 Operating income 11,201 8,146 49,362 23,436 Other income, net 406 450 863 936 Income before income taxes 11,607 8,596 50,225 24,372 Income tax provision 4,643 3,296 20,501 9,007 Net income $6,964 $5,300 $29,724 $15,365 Basic net income per share $0.14 $0.11 $0.58 $0.31 Diluted net income per share $0.13 $0.10 $0.54 $0.29 Shares used to calculate basic net income per share 51,038 49,541 51,375 50,114 Shares used to calculate diluted net income per share 54,084 52,183 55,133 52,905 eResearchTechnology, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share amounts) December 31, 2004 December 31, 2005 ASSETS (unaudited) Current assets: Cash and cash equivalents $45,806 $18,432 Short-term investments 19,158 33,569 Accounts receivable, net 14,798 15,178 Prepaid expenses and other 3,255 2,528 Deferred income taxes 323 841 Total current assets 83,340 70,548 Property and equipment, net 25,204 28,670 Goodwill 1,212 1,212 Long-term investments 3,784 3,008 Other assets 1,049 993 Deferred income taxes 2,306 335 $116,895 $104,766 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $2,455 $2,332 Accrued expenses 4,318 5,155 Income taxes payable 2,517 1,041 Current portion of capital lease obligations 233 153 Deferred revenues 20,325 16,072 Total current liabilities 29,848 24,753 Capital lease obligations, excluding current portion 193 40 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 56,871,010 shares issued, respectively 564 569 Additional paid-in capital 69,694 73,290 Accumulated other comprehensive income 1,601 586 Retained earnings 46,550 61,915 Treasury stock, 6,067,519 and 7,847,119 shares at cost, respectively (31,555) (56,387) Total stockholders’ equity 86,854 79,973 $116,895 $104,766 eResearchTechnology, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) (unaudited) Year Ended December 31, 2004 2005 Operating activities: Net income $29,724 $15,365 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,706 10,741 Cost of sale of equipment 1,152 1,018 Provision for uncollectible accounts 171 87 Stock option income tax benefits 12,173 2,107 Investment impairment charge - 284 Changes in operating assets and liabilities: Accounts receivable (815) (696) Prepaid expenses and other (1,541) 671 Accounts payable (1,093) (72) Accrued expenses (524) 806 Income taxes 3,856 (10) Deferred revenues 7,812 (4,109) Net cash provided by operating activities 59,621 26,192 Investing activities: Purchases of property and equipment (17,355) (16,145) Purchases of investments (23,351) (38,193) Proceeds from sales of investments 13,967 24,558 Net cash used in investing activities (26,739) (29,780) Financing activities: Repayment of capital lease obligations (720) (233) Proceeds from exercise of stock options 3,303 1,495 Repurchase of common stock for treasury (28,165) (24,832) Net cash used in financing activities (25,582) (23,570) Effect of exchange rate changes on cash 142 (216) Net increase (decrease) in cash and cash equivalents 7,442 (27,374) Cash and cash equivalents, beginning of period 38,364 45,806 Cash and cash equivalents, end of period $45,806 $18,432
eResearchTechnology, Inc.
CONTACT: Bruce Johnson, eResearchTechnology, Inc., +1-215-282-5580; orMatt Hayden, Hayden Communications, +1-858-704-5065, foreResearchTechnology
Web site: http://www.ert.com/
