Vipyr
14 years ago
eResearch Technology (ERES) shares have been on a downward trend since the company decided not to bring its previously announced share offering to market—due to lackluster share prices.
Investors punished the company by taking its shares down further, but they are missing out on a fabulous growth story. Its spring acquisition of CareFusion stands to increase its sales more than 50% this year and 30% next year, translating into greater earnings on the bottom line.
But the acquisition isn't the only story with ERES. It is continuing its internal growth with a launch of a comprehensive suite of electronic patient-reported outcome (ePRO) solutions. According to the company, its solutions include "the VIAPhone, VIAPad, VIAPen and VIAWeb, all of which offer the advantages of simplicity, mobility and immediacy of use over traditional paper based methods."
Throughout the recession, ERES continued to pump out new products, hone its balance sheet and look for profitable growth arenas. The shares are trading at a very discounted level; you may purchase them on any pullbacks below $6, with a first target of $15
TREND1
21 years ago
Press Release Source: eResearchTechnology, Inc.
eResearchTechnology Reports Record Third Quarter Revenues and Earnings
Wednesday October 22, 4:13 pm ET
Company Reports 60% Increase in Revenues to $17.5 Million and 184% Increase in Net Income; Diluted EPS of $0.16, Beats Consensus by $0.02; eRT Raises 2003 Full Year EPS Guidance to $0.57-0.58 and 2004 Guidance to $1.02-1.05; Backlog Grows to $94 Million from $51 Million
PHILADELPHIA, Oct. 22 /PRNewswire-FirstCall/ -- eResearchTechnology, Inc. (Nasdaq: ERES - News); (eRT or the company), a leading provider of technology and services to the pharmaceutical, biotechnology and medical device industries, announced today third quarter results for the period ended September 30, 2003. The company reported record third quarter revenues of $17.5 million, a 60% increase over revenue for the third quarter of 2002 of $10.9 million. The third quarter revenues also represented an increase of 18% over the second quarter of 2003 and exceeded the company's previous guidance of $16.4 to $16.6 million. eRT reported net income for the third quarter of 2003 of $3.9 million, or $0.16 per diluted share, an increase of 184% compared with $1.4 million, or $0.06 per diluted share (split-adjusted) for the third quarter of 2002. The net income of $0.16 per diluted share beat analysts' consensus estimate by $0.02 per diluted share. The company's effective tax rate was 37.25% for the third quarter of 2003. eRT had an effective tax rate of 32.0% for the 2002 third quarter.
For the nine months ended September 30, 2003, the company reported revenues of $45.8 million, a 56% increase versus the same period in 2002, when the company reported revenues of $29.4 million. eRT generated net income of $9.1 million in the first nine months of 2003, or $0.38 per diluted share, 181% above the $3.2 million, or $0.14 per diluted share (split adjusted) it earned in the first nine months of 2002. The company's effective tax rate for the first nine months of 2003 was 37.25%, versus 32.0% in the year earlier period.
"Our strong results, growing backlog, and increased guidance reflect the high demand for our technology and services," said Joe Esposito, eRT's president and chief executive officer. "We continue to see growing momentum in our commercial business, and we have active discussions with both large and mid-tier pharmaceutical companies who are seeking to secure committed ECG capacity through "Franchise" agreements such as the one we announced in the third quarter for $36 million. We believe that this trend could continue, which creates the potential for substantial agreements as companies increasingly seek to secure ECG capacity well in advance of clinical trials. In addition, we are now beginning to see increased thorough Phase I activity as a result of regulatory guidance and an improving outlook for EDC based on our customers expanding the use of our technology. As a result, we have made additional investments this past quarter in key personnel, technology enhancements and increased capacity so that we can address the continued flow of our commercial contracts, larger franchise relationships, incremental thorough Phase I business, and the larger EDC trials in the highest quality manner. Our strong balance sheet also affords us the opportunity to make additional investments to build on our leadership position in these rapidly growing markets."
Some of the highlights of the third quarter included:
-- The company completed the quarter with a backlog of $94 million,
including the $36 million Franchise agreement, an increase from $51
million at the end of the second quarter.
-- The third quarter of 2003 marked the eleventh consecutive quarter that
the company posted a sequential increase in revenues and operating
income.
-- eRT completed the quarter with $41.5 million in cash and short-term
investments, an increase of $9.7 million from the second quarter.
-- The company's gross margin was 62.8%, compared to 60.6% during the
second quarter and 53.8% for the third quarter of 2002. eRT maintained
high gross margins despite increasing investments in personnel and
technology due to increased cardiac safety volume and license revenue.
-- The company increased its technology recurring license/subscription
revenues by 132% to $744,000 in the third quarter from the year-earlier
period and its cardiac safety revenues by 47% from the year-earlier
period.
-- eRT grew its EDC/Data Management products revenue by 113% versus the
year earlier period and continues to pursue enterprise opportunities in
the EDC sector.
-- As previously announced in late September, eRT entered into its second
Franchise agreement with a top ten pharma company with a two-year value
of $36 million. A Franchise agreement provides the sponsor with a
virtual extension of its clinical development teams by providing
dedicated resources (people, process, and technology) to address
cardiac safety monitoring in compliance with emerging regulatory
guidance. A Franchise arrangement utilizes the sponsor's standard
operating procedures, eRT's regulatory compliant methods, and scalable
cardiac safety data handling technology provided by eRT. The Franchise
model is designed to address a sponsor's commitment for a large volume
of ECG processing enabling the sponsor to accelerate study conduct,
reduce administrative costs, ensure quality, and gain competitive
advantage.
-- eRT has now entered into definitive agreements with Pharmaceutical
Product Development, Inc., SFBC International, Inc., PRACS Institute,
Ltd., and California Clinical Trials Medical Group, to provide cardiac
safety testing for trials being conducted by these organizations. The
company believes such alliances provide a single source for clients
seeking to outsource the collection and processing of cardiac safety
and clinical data management. These alliances enhance the company's
competitive position, increase the company's distribution channels, and
enhance the company's delivery capabilities with respect to performing
thorough Phase I trials that have short completion windows. These
alliances demonstrate that eRT has become the supplier of choice for
ensuring that capacity and quality requirements are met.
2003 and 2004 Guidance
The company issued the following guidance for the remainder of 2003. It expects to report fourth quarter revenues for the quarter ended December 31, 2003 of $18.7 to $19.0 million and earnings of $0.19 to $0.20 per diluted share. As a result, the company raised its estimates for the full year. It now expects revenues for 2003 of $64.5 to $64.8 million and expects diluted earnings per share of $0.57 to $0.58, exceeding its previous guidance of $0.52 to $0.53. On September 29, 2003, eRT raised its 2004 guidance and announced expectations for revenue of between $96 and $98 million and earnings of $0.92 to $0.94 per diluted share. Due to increased backlog visibility and improved margins, eRT now expects to report revenues of $99 to $101 million and earnings of $1.02 to $1.05 per diluted share for 2004. The 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 October 22, 2003. Interested participants should call 877-780-2271 when calling within the United States or 973-582-2737 when calling internationally. There will be a playback available as well. 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 4245348 for the replay.
This call is being webcast by ViaVid Broadcasting and can also be accessed at eRT's web site
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