PHILADELPHIA, April 30 /PRNewswire-FirstCall/ -- eResearchTechnology, Inc. (ERT), (Nasdaq: ERES), a leading provider of centralized ECG, eClinical technology, ePRO and other services to the biopharmaceutical, medical device, and related industries, announced today results for the first quarter of 2009. Unless otherwise noted, all comparative numbers refer to changes from the same period a year ago.
Highlights of the first quarter were:
"The results for this quarter were in line with our expectations, as given by our guidance in February," commented Dr. Michael McKelvey, President and CEO of ERT. "The first quarter was marked by a significant decline in revenue, in large part due to a sharp reduction in Thorough QT revenue. This reflects the ability of companies to delay the running of Thorough QT trials until later in the drug development cycle, though current regulatory guidance ultimately requires that they be performed. Routine revenue (Phase I through Phase IV trials) was also impacted as a result of the larger percentage of our past business being booked in Phase III trials, which are longer-term trials and thus take longer to turn into revenue, as well as a slower rate of spending by our pharmaceutical and biotechnology clients. The latter reflects the current difficult economic environment and the uncertainty seen in pharmaceutical sponsors' spending. Despite the revenue decline, our gross margin percentage remained above 50%. We continue to be pleased with our strong operational performance and with the results of our discussions with key pharmaceutical and biotechnology companies on strategic outsourcing relationships."
"We made good progress on our strategic priorities in the first quarter," continued Dr. McKelvey. "We continue to be successful in winning new and expanded exclusive or near-exclusive long-term enterprise partnerships with large clients, which should positively impact our future levels of new booking activity. We successfully launched two significant efforts aimed at expanding industry penetration of centralized ECGs by focusing on how centralization of ECGs can reduce our clients' costs. We began to see the results of our new marketing programs in increased market awareness. Despite the difficult economic and financial environment we feel that the fundamentals of our industry remain strong and that we are successfully positioning ourselves for additional growth in the future."
The Company issued guidance for the second quarter of 2009 and for the full year 2009. For the quarter ending June 30, 2009, management anticipates net revenues of between $23.0 million and $26.0 million and diluted net income per share between $0.03 and $0.06. ERT expects full year 2009 net revenues of between $100.0 million and $115.0 million with diluted net income per share of between $0.20 and $0.35.
Dr. McKelvey and Keith Schneck, the Company's Chief Financial Officer, will hold a conference call to discuss these results. The conference call will take place at 5:00 PM EDT on April 30, 2009. For the conference call, interested participants should dial 1-800-901-5241 when calling within the United States or 1-617-786-2963 when calling internationally. Please use pass code 33830510. There will be a playback available as well. To listen to the playback, please call 1-888-286-8010 when calling within the United States or 1-617-801-6888 when calling internationally. Please use pass code 52329119 for the replay.
This call is being webcast by Thomson Financial and can be accessed at ERT's web site at www.ert.com. The webcast may also be accessed at Thomson's Institutional Investor website at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=119164&eventID=2132871. The webcast can be accessed for up to one year 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 biopharmaceutical, medical device and related 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 also provides 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.
This release may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current views as to future events and financial performance with respect to our operations. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as "aim," "anticipate," "are confident," "estimate," "expect," "will be," "will continue," "will likely result," "project," "intend," "plan," "believe," "look to" and other words and terms of similar meaning in conjunction with a discussion of future operating or financial performance.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that might cause such a difference include: unfavorable economic conditions; our 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; integration of future acquisitions; competitive factors; technological development; and market demand. There is no guarantee that the amounts in our backlog will ever convert to revenue. Should the current economic conditions continue or deteriorate further, the cancellation rates that we have historically experienced could increase. 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. Guidance is based on management's good faith expectations given current market conditions but that continued or further deterioration of general economic conditions, in addition to other factors cited elsewhere, could result in the company not achieving the revenue and earnings per diluted share guidance provided.
Forward-looking statements speak only as of the date made. We undertake no obligation to update any forward-looking statements, including prior forward-looking statements, to reflect the events or circumstances arising after the date as of which they were made. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included in this release or that may be made in our filings with the Securities and Exchange Commission or elsewhere from time to time by, or on behalf of, us.
eResearchTechnology, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) Three Months Ended March 31, 2008 2009 Net revenues: Licenses $625 $709 Services 25,273 16,817 Site support 7,775 6,260 Total net revenues 33,673 23,786 Costs of revenues: Cost of licenses 200 205 Cost of services 10,514 7,954 Cost of site support 5,268 3,635 Total costs of revenues 15,982 11,794 Gross margin 17,691 11,992 Operating expenses: Selling and marketing 3,323 3,426 General and administrative 4,873 4,077 Research and development 999 1,149 Total operating expenses 9,195 8,652 Operating income 8,496 3,340 Other income, net 427 116 Income before income taxes 8,923 3,456 Income tax provision 3,177 1,386 Net income $5,746 $2,070 Basic net income per share $0.11 $0.04 Diluted net income per share $0.11 $0.04 Shares used to calculate basic net income per share 50,638 50,879 Shares used to calculate diluted net income per share 51,894 51,164
eResearchTechnology, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share amounts) December 31, 2008 March 31, 2009 ASSETS (unaudited) Current assets: Cash and cash equivalents $66,376 $65,518 Short-term investments 50 50 Accounts receivable, net 29,177 21,676 Prepaid income taxes 1,892 1,818 Prepaid expenses and other 2,885 3,285 Deferred income taxes 1,831 1,703 Total current assets 102,211 94,050 Property and equipment, net 29,639 27,105 Goodwill 34,603 34,653 Intangible assets 2,149 2,012 Other assets 520 447 Total assets $169,122 $158,267 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,971 $5,153 Accrued expenses 8,140 4,690 Income taxes payable 2,492 805 Current portion of capital lease obligations 43 - Deferred revenues 12,276 12,608 Total current liabilities 26,922 23,256 Deferred rent 2,183 2,296 Deferred income taxes 1,332 1,326 Other liabilities 1,257 1,117 Total liabilities 31,694 27,995 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, 59,950,257 and 59,974,108 shares issued, respectively 600 600 Additional paid-in capital 93,828 94,826 Accumulated other comprehensive income (2,716) (2,948) Retained earnings 110,479 112,549 Treasury stock, 8,686,868 and 10,652,320 shares at cost, respectively (64,763) (74,755) Total stockholders' equity 137,428 130,272 Total liabilities and stockholders' equity $169,122 $158,267
eResearchTechnology, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended March 31, 2008 2009 Operating activities: Net income $5,746 $2,070 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,344 3,404 Cost of sales of equipment 414 7 Provision for uncollectible accounts 30 105 Share-based compensation 470 901 Deferred income taxes (362) 111 Changes in operating assets and liabilities: Accounts receivable (222) 7,331 Prepaid expenses and other (11) (459) Accounts payable (984) 143 Accrued expenses (1,413) (3,436) Income taxes 63 (1,601) Deferred revenues (344) 384 Deferred rent (135) 107 Net cash provided by operating activities 7,596 9,067 Investing activities: Purchases of property and equipment (1,430) (1,613) Proceeds from sales of investments 455 - Payments for acquisition (3,673) - Net cash used in investing activities (4,648) (1,613) Financing activities: Repayment of capital lease obligations (751) (43) Proceeds from exercise of stock options 189 59 Stock option income tax benefit 103 38 Repurchase of common stock for treasury - (8,190) Net cash used in financing activities (459) (8,136) Effect of exchange rate changes on cash (3) (176) Net increase (decrease) in cash and cash equivalents 2,486 (858) Cash and cash equivalents, beginning of period 38,082 66,376 Cash and cash equivalents, end of period $40,568 $65,518
|SOURCE eResearchTechnology, Inc.|
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